Tag Archives: Retirement

3 reasons investors might not be benefiting from rock-bottom fund fees – MarketWatch

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There’s more to successful investing than just watching costs

The index fund fee-cutting battle reached its seemingly inevitable conclusion more than a year ago, when Fidelity Investments launched four zero-cost index funds. You can’t get any lower than zero, right? Apparently, you can. One small fund company is now effectively paying investors to own one of its index funds.

Still, the price war among financial companies has clearly moved on, with some firms eliminating brokerage commissions in 2019 or touting the high interest rate paid by their brokerage cash account. Cutting index-fund expenses is, it seems, so last year.
— Read on www.marketwatch.com/story/3-reasons-investors-arent-benefiting-from-rock-bottom-fund-fees-2019-12-18

Don’t just drift in retirement—here are 3 ways to find meaning, purpose and have an impact – MarketWatch

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“You can’t always choose the path you walk in life, but you can always choose the manner in which you walk it.”  John O’ Leary,

The author of ‘Replace Retirement’ explains how your second half of life can be invigorated and energized.
— Read on www.marketwatch.com/story/dont-just-drift-in-retirementhere-are-3-ways-to-find-meaning-purpose-and-have-an-impact-2019-12-13

To Retire in Harmony, Get Your Plan in Sync

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Must have a fundamental knowledge of all the investments and strategies available, as well as the ability to put together a comprehensive retirement plan that addresses each individual client’s needs, goals, strengths and weaknesses.

There are five important parts in a comprehensive retirement plan that should play well together.

— Read on www.kiplinger.com/article/retirement/T047-C032-S014-to-retire-in-harmony-get-your-plan-in-sync.html

Retiree Taxes: Pitfalls, Overlooked Deductions, Social Security Withholding – Barron’s

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Retirees preparing to file their taxes for this year should be aware of a number of common pitfalls, often-overlooked deductions, and changes that stem from the tax overhaul two years ago.
— Read on www.barrons.com/articles/retiree-taxes-pitfalls-overlooked-deductions-social-security-withholding-51572696002

3 secrets for women to conquer money stress | Fidelity

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3 secrets for women to conquer money stress

Fidelity research shows how to live financially stress-free.

FIDELITY VIEWPOINTS – 06/20/2019

  • Key takeaways
      • Many women who feel financially secure and stress-free say they have put a financial plan in place.
      Women who annually save 10%-15% of their income in tax-advantaged savings accounts like traditional 401(k)s and IRAs are generally on track to meet their retirement savings goals.
      Having an emergency fund of at least 6 months’ of necessary expenses can help reduce stress and bring peace of mind.

    3 strategies to reduce financial stress

    What can you do to help improve your financial security and overall wellbeing? The women in our survey who aren’t stressing out over money and health share 3 secrets to success.

    1. Build an emergency fund of at least 6 months’ of expenses so you can weather the unexpected

    Are you financially stressed? 7 telltale signs

    1. Missing work
    2. Difficulty thinking clearly
    3. Depression
    4. Sickness
    5. Gaining weight
    6. Not exercising enough
    7. Not taking vacation

    In everyday life, stuff happens. The roof leaks. The car breaks down. The kids need a cash infusion. That’s why it’s critical to have an emergency fund, no matter your life stage, gender, marital status, or income.

    Overall, Fidelity research finds that less than half of Americans have an adequate emergency fund. Our stress-free ladies break the mold: 77% have one.

    If you don’t, here are 3 simple steps to get started:

    • Look for ways to cut down on nice-to-haves like eating out or buying that extra pair of shoes.
    • Put savings on autopilot. Set up regular withdrawals from your paycheck to a separate rainy-day fund until you reach your goal.
    • Explore a side gig to supplement your income.

    Tip: Save a little bit each week or month until you reach that 6-month target and then you’ll feel better about the unexpected.

    2. Save at least 10% of your income a year so you are prepared for retirement

    Taking care of your future self is as important as making time for yourself today. It can give you peace of mind too. Of the financially-zen in our survey, 29% say they have been saving at least 10% for retirement year after year.

    To be confident you’ll have enough money to maintain your lifestyle in retirement, Fidelity recommends aiming to save 15% each year—but that includes any contributions from your employer. If you are fortunate enough to have one who matches your contributions in a 401(k) or 403(b) retirement account, grab it. That is like free money! And invested well, that money can grow over time.

    This year you can contribute up to $19,000 to a 401(k) or 403(b)—and save on taxes too. No 401(k) at work? No worries. You can contribute up to $6,000 a year to an IRA (short for individual retirement account). Lastly, if you’re over age 50, you can contribute even more with catch-up contributions.

    Tip: If you cannot save 10% or 15% at first, try to save at least enough to receive the full employer match at work.

    3. Have a financial plan

    Ready to take the first step?

    Here are a few key elements of a strong financial plan:
    • An emergency fund
    • A budget
    • Paying down debt
    • Health and disability insurance
    • Saving and investing for retirement
    • Saving and investing for college
    • Saving and investing for shorter term goals like vacations or a home purchase
    • Wills and estate planning

    Planning for life’s goals—a new house, a vacation, your retirement—is likely on your to-do list. But have you taken the first step?

    While 72% of women surveyed say they want to begin a financial plan, only 52% are confident about doing so. Worse yet, 40% of all women say they lose sleep over money matters.

    Our financially stress-free women know the power of planning for the life they want and deserve: 95% have some kind of financial plan in place, and 80% have a long-term plan.
    — Read on www.fidelity.com/go/womens-investing/women-conquer-money-stress

    Five retirement income planning tips. | New York Life

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    Save, invest, start early and delay retirement as long as possible are the conventional points of wisdom about retirement planning. But an investor should also consider what their income needs will be in retirement.

    Here are some tips to move your thinking from saving for to living in retirement:

    THINK INCOME, NOT JUST DOLLARS SAVED.
    Instead of focusing on a target number (i.e., “I want to save $500,000 by age 60”), think about income. 

    • What are your monthly expenses and are you able to cover them?
    • Do you plan to downsize? Or would you like to treat yourself to some luxuries in retirement? Do you want travel?
    • Do you want to leave a legacy to your family?
    • How will your savings fare against inflation?
  • There are many great online tools to help you nail down those details—take a look at some of our planning tools.
      • REVISIT YOUR INITIAL WITHDRAWAL RATE.
      You may start off your retirement with certain needs, but those needs inevitably will change. Make sure you evaluate your withdrawal rate with your financial professional at least annually to make sure you are not drawing too much or too little, and are taking life changes into account.
      TO TAKE OR NOT TO TAKE SOCIAL SECURITY.
      Deciding when to take Social Security varies by individual. Conventional wisdom suggests taking Social Security as late as possible, but that may not be the best decision for you, depending on your health, marital, and financial status. A financial professional can help you determine your ideal time.
      TRANSITION YOUR PORTFOLIO FOR RETIREMENT.
      Build in time to make necessary changes to your portfolio before you retire. That way you are ready and are not making any unnecessary shifts during retirement. In general, a retirement portfolio is less about growth and more about income.
      PLAN FOR A LONG LIFE.
      Life expectancy is on the rise, thanks to advances in health care. This means your money will have to last longer. Consider long-term income vehicles, such as fixed immediate annuities, that provide a steady stream of income for life.
      Making sure you have enough income to live comfortably can help ensure that you don’t tarnish your golden years. By using these tips, you can plan today for a better tomorrow.
      — Read on www.newyorklife.com/articles/5-retirement-income-planning-tips

    Juggling Competing Priorities | T. Rowe Price

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    How to balance your own needs with those of your children and aging parents.

    Key Points

    • Putting your own financial security first is the best way to ensure your ability to help others.
    • An open and honest conversation about finances is a critical first step in helping parents.
    • Set clear expectations about what support you can provide for your grown children.

    Feeling pulled in different directions raising children while caring for aging parents? You’re not alone. According to a recent T. Rowe Price survey, as many as a third of parents with school-age children are facing the same challenge. Often referred to as the “sandwich generation,” they find themselves wedged between competing priorities across multiple generations. And this group is growing, so it’s possible you could find yourself in this situation in the future.  

    The impacts are real

    There may be direct financial impacts for those in this situation—for example, our survey found nearly a third of those caring for an aging parent or relative spend $3,000 a month or more to do so. “The reality is that your resources are limited,” says Judith Ward, CFP®, a senior financial planner with T. Rowe Price. “Remember to first focus on taking care of yourself, which will better position you to help your loved ones.”
    — Read on www.troweprice.com/personal-investing/planning-and-research/t-rowe-price-insights/retirement-and-planning/personal-finance/juggling-competing-priorities.html

    Retirement Planning: The Big Lesson of 2016 for Investors | Money

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    Don’t let the constant flow of predictions and prognostications about the markets and the economy—no matter how prescient they may seem—divert you from a comprehensive plan designed to achieve success over the long term.

    If you’ve ever been inclined to try to improve your retirement prospects by closely tracking the financial news and then shifting your strategy to stay a step ahead of the market’s twists and turns, 2016 seemed to provide a bounty of opportunities.

    — Read on money.com/money/4618089/big-lesson-from-2016-retirement-planning-investing/

    Sequence of Return Risk & Your Nest Egg | Personal Capital

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    Sequence risk refers to the order or the timing in which your investment returns occur. It specifically relates to the risk of early declines and ongoing withdrawals impacting your spending during a certain period of time, most often in retirement.
    — Read on www.personalcapital.com/blog/retirement-planning/sequence-return-risk-your-nest-egg/

    The Social Security timing debate | Vanguard Blog

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    Social Security benefit may be subject to 1 of 3 potential tax treatments depending on your income at the time you collect:

    It won’t be subject to federal income tax.
    Up to 50% of it will be subject to federal income tax.
    Up to 85% of it will be subject to federal income tax.
    Let’s say you retire at age 62 and cover your living expenses by taking withdrawals from a tax-deferred retirement account—a traditional IRA. The amount you withdraw from your traditional IRA will lower your account balance. This may reduce your future required minimum distributions (RMDs), which are calculated by dividing your retirement account balance (as of December 31 of the previous year) by the IRS’s life expectancy factor.

    Since your RMD is considered ordinary income, smaller distributions can help you control your income when you begin collecting Social Security at age 70.

    if you defer your benefit until you’re age 70 and live until age 90, you’ll collect $652,560 in Social Security over the course of your lifetime. If you don’t defer your benefit and begin collecting at your full retirement age (66), you’ll collect almost $80,000 less over the course of your lifetime.

    Lifetime benefit based on age you collect

     

    Note: Example excludes inflation.

    The choice is yours

    A timeless debate perseveres because it’s a fair fight—both sides of the argument hold water. Folding your pizza makes it easier to eat; not folding it makes it last longer. Cats are independent; dogs are loyal. No matter what you call it, a sandwich is delicious—so just enjoy it. Taking Social Security at full retirement age means you may be able to preserve other financial resources; deferring until age 70 means you’ll get more money when you do collect.

    Several personal factors will likely influence when you decide to collect Social Security. At the risk of sounding morbid, you won’t know whether you’ve truly made the “right” decision until it’s too late. So the best advice I have to offer is to choose your Social Security start date based on the facts you know right now. If you get a good night’s sleep after you’ve made your decision, you’re on the right track.

    *Source: longevityillustrator.org, supported by the Society of Actuaries.
    — Read on vanguardblog.com/2018/05/30/the-social-security-timing-debate/