Retirement

Many of us grew up with the concept that making regular, periodic contributions to our retirement account was a sound investment strategy. The idea was that, in a fluctuating market, regularly investing a set amount would enable an individual to buy more shares when prices were low and fewer shares when prices were high.¹ Does this mean that taking regular, periodic withdrawals during retirement makes similar good sense? Actually, it can be quite problematic. Systematic [...]

A recent survey found that 17% of people were very confident about having enough money to live comfortably through their retirement years. At the same time, 36% were not confident.¹ Congress in 2001 passed a law that can help older workers make up for lost time. But few may understand how this generous offer can add up over time.² The “catch-up” provision allows workers who are over age 50 to make contributions to their qualified [...]

Thanks to healthier lifestyles and advances in modern medicine, the worldwide population over age 60 is growing. The United Nations estimates that by 2050 the number of people aged 60 and older will have more than doubled.¹ As our nation ages, many Americans are turning their attention to caring for aging parents. For many people, one of the most difficult conversations to have involves talking with an aging parent about extended medical care. The shifting [...]

Despite not being as well known as some other retirement tools, annuities account for 8% of all assets earmarked for retirement. With about $2.2 trillion in assets, annuities hold more funds than Roth IRAs.¹ An annuity is a contract with an insurance company. In exchange for a premium or a series of premiums, the insurance company agrees to make regular payments to the contract holder. The funds held in an annuity contract accumulate tax deferred. For [...]

In a recent survey, 79% of current workers stated they plan to work for pay after retiring.¹ And that possibility raises an interesting question: How will working affect Social Security benefits? To answer that question requires an understanding of three key concepts: full-retirement age, the earnings test, and taxable benefits. Full Retirement Age Most workers don’t face an “official” retirement date, according to the Social Security Administration. The Social Security program allows workers to start [...]

Most children stop being “and-a-half” somewhere around age 12. Kids add “and-a-half“ to make sure everyone knows they’re closer to the next age than the last. When you are older, “and-a-half” birthdays start making a comeback. In fact, starting at age 50, several birthdays and “half-birthdays” are critical to understand because they have implications regarding your retirement income. Age 50 At age 50, workers in certain qualified retirement plans are able to begin making annual [...]

For many people, retirement income may come from a variety of sources. Here’s a quick review of the six main sources: Social Security Social Security is the government-administered retirement income program. Workers become eligible after paying Social Security taxes for 10 years. Benefits are based on each worker’s 35 highest earning years. If there are fewer than 35 years of earnings, non-earning years are averaged in as zero. In 2017, the average monthly benefit was estimated [...]

When financial markets turn volatile, some investors show their frustration by fleeing the markets in search of alternatives that are designed to offer stability. For example, in the first quarter of 2018, investors pulled $63 billion from U.S. stock funds based on uncertainty over market direction.1 For those looking for a way off Wall Street’s roller-coaster ride, annuities may offer an attractive alternative. Annuities are contracts with insurance companies. The contracts, which can be funded [...]

Traditional IRAs, which were created in 1974, are owned by roughly 35.1 million U.S. households. And Roth IRAs, created as part of the Taxpayer Relief Act in 1997, are owned by nearly 24.9 million households.1 Both are IRAs. And yet each is quite different. Up to certain limits, traditional IRAs allow individuals to make tax-deductible contributions into the account. Distributions from traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be [...]

About 70% of American workers are confident they will have enough money to pay for medical expenses in retirement. In a 2018 survey, 30% of all workers reported they were “not too” or “not at all” confident they would have enough money to pay for their medical expenses in retirement.¹ Regardless of whether you’re confident or not, it’s important to have an idea about how much healthcare may cost in retirement. By putting the costs [...]