NEED CASH? AVOID TAPPING YOUR RETIREMENT ACCOUNT
Imagine if your 35-year-old self magically appeared in front of you one day and asked for a percentage of your retirement savings or a bit of your retirement income. While this would never happen, something financially analogous happens in the lives of too many people.
EVALUATING AN OPPORTUNITY FOR AN EARLY RETIREMENT
The pandemic has hastened the retirement of some baby boomers, and the linked furloughs and layoffs in many industries have led others to wonder if a retirement transition might come sooner than they think. Buyouts became common last year as businesses cut costs. What if you receive one this year?
TO RETIRE, OR NOT TO RETIRE?
For some of us, the coronavirus pandemic has complicated the question. As Yahoo! Finance reports, a Harris Poll study conducted this past summer found that 25% of Gen Xers and 14% of baby boomers think they will retire later than they planned, because of the pandemic's financial impact on their lives.
THIS YEAR, THERE IS MORE INCENTIVE TO GIVE
When the Coronavirus Aid, Relief, and Economic Security (CARES) Act became law in March, it broadened charitable tax deduction opportunities.
ARE CAR OR TRUCK COSTS BLOCKING THE ROAD TO RETIREMENT?
On a purely logical level, investing tens of thousands of dollars toward retirement may make more sense than adding an equivalent consumer debt here and now. On a practical level, though, we need a good car or truck, and on an emotional level, we get a kick out of driving something new. So, we buy (and often finance) new vehicles.
COULD YOU RETIRE AT 55?
Suppose you suddenly had to, or the opportunity presented itself. This prospect would not call for disregarding your carefully considered retirement strategy, but it would create some challenges.
FIGURING OUT WHEN TO START YOUR SECOND ACT
Many Gen Xers and baby boomers look forward to retiring on their terms. In such a circumstance, the key question becomes when to walk away from work.
HAS THE PANDEMIC AFFECTED THE RETIREMENT MINDSET?
Each year, the Transamerica Center for Retirement Studies surveys baby boomers, Gen Xers, and millennials to gauge their perceptions about retiring.
YOU MIGHT SPEND LESS – LATER IN RETIREMENT
A 2019 whitepaper by the Employee Benefit Research Institute (EBRI) indicates that Americans tend to spend less as they age.
HOW SHOULD PRE-RETIREES VIEW ILLIQUID ASSETS?
Some people approach their retirement years owning illiquid assets worth more than their liquid ones. While long-held illiquid assets, such as a business or home, may become highly valued or appreciated over time, it can be wise to be frank and conservative when estimating their worth, especially if an owner wants to sell them to help fund their “second act.”
Using Your Quarantine as a Trial Run For Retirement.
Staying productive in the time of COVID-19 can be a challenge. Rather than pulling out the board games, you might want to use the opportunity to stress-test your plans for early retirement. Specifically, if you are preparing to retire soon, you might be able to examine a few aspects of your future life and look at ways to improve or rework them ahead of time.
Good Career Choices May Lead to an Improved Retirement.
What is your most powerful tool for building retirement savings? Perhaps, your income. For that matter, the path of your career could influence when and how well your retirement begins.
What Matters More In Retirement: Income, or Savings?
Retirement saving is not just about accumulating assets. It is also about laying the groundwork for retirement spending. Any retirement strategy has a core goal: the goal of helping an individual or couple pursue their retirement dreams once their careers have concluded. So, from that perspective, the amount that needs to be saved directly relates to the amount a retiree household may need to spend. To live your best retirement, your degree of retirement savings needs to be great enough to try and correspond to that vision.
How the SECURE ACT Impacts Retirement Accounts
A new federal law, the Setting Up Every Community for Retirement Enhancement (SECURE) Act, directly affects retirees and retirement savers. It changes the rules regarding “stretching” an Individual Retirement Account (IRA) as well as longstanding retirement account rules keyed to age 70½.
Ready For More Time Together?
A career-focused couple may spend as little as 5 to 6 hours interacting with each other on most days, given hours spent working, commuting, shopping, and running errands apart. Once retired, that same couple may spend as many as 15 to 16 hours together each day, with work and commuting out of the way. When you hear stories of retired spouses or partners getting on each other’s nerves, this difference may have something to do with it.
Working a Little in Retirement May Be Easier Than You Think
Increasingly, Americans older than 65 are finding compelling reasons to return to the workforce, whether part time or full time. Some want the money; some want the challenge and sense of purpose.
Generating Retirement Income
Each day, more than 10,000 Americans celebrate their 65th birthday. It’s a milestone, and for some, it signifies the beginning of retirement. Your friends, family, and coworkers may know you’re planning to retire. Some might even ask “When’s the big day?” If you have concerns about maintaining retirement income, you may not know whether you’re ready.
Sunnier prospects for working as a senior
In recent years, a steady stream of articles has appeared, questioning baby boomers’ hopes to keep working part time in their retirement years. These articles have tended to take a skeptical view of such ambitions. Well, maybe it is time to sweep some of the skepticism away.
Thinking about leaving work a little early?
The so-called "FIRE" movement (FIRE stands for financial independence, retire early) has garnered so much attention lately, even those who anticipate retiring in their sixties are wondering if they should make a sacrifice or two to exit their careers or businesses a bit earlier. A poll, commissioned by personal finance website FinanceBuzz, highlights what some pre-retirees would be willing to give up, so they could do just that - at least, in theory.
How Retirement Saving Relates to Retirement Spending
Sometimes an article will present a generic retirement forecast, stating that the average person may need “X” dollars in savings to retire confidently. Stories like these appear every so often on financial websites, and they must be taken with a grain of salt.
Can You Stay on a Company Health Plan After Age 65?
Generally, Medicare is available for people age 65 or older; this is well-known. What is less well-known is the fact that some companies can legally cancel group health insurance for a worker reaching this milestone. Baby boomers who aspire to keep working into their mid-sixties may want to take note of this.
Retiring With A Cash Reserve
Many people want to enter retirement with a) investments that may have benefited from years of growth and compounding, b) a manageable debt position, and c) a cash reserve for emergencies. Just how large should that cash reserve be? There is no simple answer to that question because the answer is different for each retiree.
In Retiremnet, Your Spending Could Fluctuate
Your retirement income strategy will almost certainly evolve. How much you spend will vary from year to year, and in some years, you will spend more on some things than others.
Dealing With A "Suprise" Retirement
For years, you have imagined the way your “second act” will unfold: when it will start, what you will do, and where you will be. Then life hands you a wild card. You are forced to retire years earlier than you planned and with little notice. How do you adjust?
How Can A Women Prevent Outliving Her Money?
Certain financial decisions may help a woman grow and sustain her retirement assets across the decades to make up for time out of the workforce and the prevalent earnings gender gap. Obviously, one fundamental move would be to start saving and investing for retirement as early as possible – but other, sometimes underrecognized choices may also allow a woman to make more financial progress.
THINK OF THESE FACTORS AS YOU THINK ABOUT RETIREMENT INCOME
Can You Psych Yourself Up To Save More?
You have probably spent decades saving for retirement, and you might have a decade or more of saving to go before you actually retire. At times, your resolve may be tested.
Retirement Planning Continues After Your Retire
It can be easy think of retirement planning as a means to an end: a series of purposeful meetings leading up to a life transition. This transition is not the end of retirement planning.
Three Years Or Less To Retirement? Get Ready
If retirement feels less like a possibility and more like an oncoming certainty, then it is time to respond. This is the time to firmly decide whether you want to “age in place” in your current home or relocate.
Think Of Your Retirement In Three Phases
Many baby boomers are vowing to work past age 65, even into their seventies. You may be one of them, and you may realize that ambition. Keep in mind, though, that some people end up retiring prior to age 60 and not by choice.
Think Of Your Retirement In Three Phases
Phases, stages, acts, chapters, steps. Whatever you want to call them, consider that your retirement may unfold in a way many others have, in three successive financial segments.
Why Take On Debt To Help Your Kids With College?
An unsettling trend is emerging among pre-retirees and retirees.
When It Comes to Retirement Savings, How Much Is Enough?
While it is hard for any pre-retiree to determine an exact answer to that question, it seems some are just stumped.
Would You Pay More for a Better Employee Retirement Plan?
If that trade-off sounds worthwhile, rest assured you are not the only one who feels that way.
What That First Year of Retirement May Teach You
When any plan is followed through, there are lessons to be learned, refinements to be made. That certainly holds true for retirement plans.
What Will $50,000 Be Worth in 25 Years?
If you are on the verge of retiring, this question is well worth asking. You cannot know what the exact answer will be; you can, however, anticipate that it will be worth less.
After 55, Double-Check Your Preparations for Retirement
When you enter your mid-fifties, your retirement plan enters its countdown phase. This is the time to examine key aspects of your retirement strategy.
3 Important Retiree Tax Considerations
After you retire, your tax situation will change. Recognizing that oncoming change is crucial.
Are You Really Saving Enough for Retirement?
On your way to retiring, you may question whether you have saved enough. Three factors promote this anxiety, and you can take steps to counter them.
Ways to Possibly Produce More Retirement Income
Your income determines your level of financial comfort in retirement more than any other factor. Some mid-life financial moves may help to boost it. One important move is to max out retirement accounts. Yearly contributions of $5,500 to an IRA starting at age 45 will grow to $214,460 by age 65 at a 6% annual return. At an 8% annual return, that becomes $271,826.
A Retirement Plan… or a College Plan?
Some parents feel they should pay for all or part of their children’s college education. They make it a financial priority and put saving for retirement further down on their to-do list. If their kids can graduate without any student loan debt, the thinking goes, they will be better positioned to provide financial support to mom and dad one day.
Retirement Calculators May Not Add in Everything
You may turn to an online retirement calculator for a simple snapshot of your retirement income needs and your retirement savings progress. These calculators are everywhere and so easy to use – but just how realistic are their projections?
Address These Retirement Planning Priorities After 50
When you turn 50, you start to think practically about the steps of your retirement transition. A to-do list emerges of tasks to try and accomplish, as well as things to consider.
When Baby Boomers Become Elders, Will Their Kids Provide Care?
Right now, millions of baby boomers provide informal, unpaid eldercare to parents in their eighties and nineties. This obligation has led some boomers to retire earlier. The Center for Retirement Research at Boston College says that men who play these caregiving roles are 2.4% less likely to stay in the workforce than their peers. Women are more likely to leave the office under such stress, and the CRR estimates that those who do balance a career and eldercare work 3-10 hours less a week and earn an average of 3% less than other working women.
Can Your Life Insurance Policy Help You Out in Retirement?
Under certain circumstances, it can play a crucial financial role. Besides a death benefit, a permanent life insurance policy can accrue cash value over time (provided the premiums are paid). That cash value could prove useful in or near retirement. If you need to, you could withdraw some of it to pay for medical procedures, home improvements, long-term care, or a child’s college education. It could even provide you with additional retirement income. Moreover, distributions from a permanent life insurance policy are tax free as opposed to distributions from traditional IRAs (and some other retirement plans), which are taxed at regular rates.
Is Social Security Coming Up Short for Retirees?
The non-partisan Senior Citizens League says yes, charging that the wrong metric is being used to determine cost of living adjustments (COLAs) to retiree benefits. The federal government uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to figure various COLAs. Younger, employed people usually have lower medical expenses than older people; they also spend more money on gasoline and transportation than retirees do. Senior advocates argue that the Consumer Price Index for the Elderly (CPI-E) should be used instead of the CPI-W, especially since medical costs have risen quickly in recent years, while gasoline prices and transportation costs have fallen.
Why You Might Not Want a Lump-Sum Retirement Payout
Do you have the option of receiving your retirement money as a lump sum? You may want to turn that choice down. A new MetLife study, Paycheck or Pot of Gold, warns of the “lottery effect” that can occur when all that money makes its way into a household at once. Surveying more than 1,050 retirement plan participants who had taken lump-sum payouts, MetLife found that 21% had already used up 100% of that money; on average, it had disappeared in less than six years.
How Much of Your Retirement Savings Should You Withdraw Each Year?
When Fidelity Investments asked more than 1,000 pre-retirees to guess the percentage that retirement planners would recommend, 19% said 7-9% a year. (A typical recommendation might be 4%.) Additionally, another 19% of pre-retirees responding to the investment company’s Retirement IQ survey thought they could safely draw down their retirement funds at a rate of 10-15% a year. At that pace, they could risk outliving their money by their mid-seventies.1
Retiring with an Age Difference
If you are 10 or 15 years older than your spouse or partner, to what degree should that age gap influence your retirement planning? You will want to consider this question, for it may affect many aspects of your financial future – such as your planned retirement dates, how you decide to claim Social Security, and how you choose to invest.
Can You Work Your Way into Retirement?
As 2016 ended, the 17th Annual Transamerica Retirement Survey appeared and noted a preference for a phased retirement among a majority (53%) of workers polled by the insurance and investment company’s Center for Retirement Studies. In fact, 48% of the pre-retirees surveyed felt that their current employer would allow them to continue working in some capacity after age 65.
Teamwork Counts for Couples Close to Retirement.
Talking about a few lifestyle and financial matters in the years immediately before your retirement transition may help you and your spouse find more happiness in your “second act.”
Could Some Simple Moves Help You Reduce Your Taxes?
Quite possibly. Elaborate tax management strategies aside, you might find ways to cut your tax bill for 2016 and beyond through a few, straightforward steps.
Most baby boomers know that their Social Security benefits can be reduced if they earn too much in retirement. While 76% of baby boomer respondents to a 2015 AARP survey understood this fact, 57% also thought they would never recoup those surrendered benefits. That is incorrect.