Retirement Education

If you have any money in the market, chances are you have heard of recent slumps in U.S. market indexes.

From February 21st to February 28th, the Dow Jones Industrial Average index fell 12.4%. That drop was quickly followed by a couple of record setters in March. The worst drop in three decades came on March 13th.

The Dow fell 10%, its then-worst decline since the 1987 Black Monday market crash. Then, on March 16th, the market indexes had another record-setting drop. The Dow fell 12.9% and the S&P 500 declined 12% in one day, respectively.

On the whole, investor concerns over the novel coronavirus and the oil supply feud between Russia and Saudi Arabia have sent global financial markets into a tailspin. For those on the cusp of retirement, the timing couldn’t be worse.

Of course, every market is different. As a result, no one can be 100% sure of what will happen next. Even so, what might retirement investors face in the near future?

The decline has actually taken us into bear territory, which is typically defined a market drop of 20% or greater.

But as Peter Oppenheimer, chief global equity strategist at Goldman Sachs, observes, there hasn’t ever been a bear market spurned by a viral outbreak. Read More

Tune into a financial show on TV or the radio dial, and chances are you have heard it.

The retirement income shortfall among Americans has been a hot topic in the financial advisory community for a long time now. But, surprisingly, what hasn’t received as much attention is the issue of carrying debt into retirement.

It’s a serious matter. More retirees are carrying larger amounts of debt into their non-working years than ever before.. With its rapid pace of growth, this trend is threatening to further disrupt the retirement plans of many seniors.

According to blogger Chris Farrell, the median total consumer debt for retiree-led households (age 65+) was $31,300 in 2016.

That was 250% more than it was in 2001 ($12,250) and nearly 450% more than the level in 1989 ($7,250). Some 60% of senior households carried some of debt, up from 42% in 1992.

Other studies have similar findings. According to one study by researchers at the Ohio State University, among households ages 55-70, some 75% of households had some sort of debt load. That is up from 64% of households in 1989.

As Farrell mentioned on a podcast with NextAvenue: “Over the past ten years — since the financial crisis — one thing that is really striking is how much debt consumers have taken on, particularly in the past couple of years. And people over 60 are increasingly comfortable taking on debt.” Read More

Retirement today isn’t the same as your grandparents’ or even your parents’ retirement. It’s a whole new ballgame. Many trends are changing the face and length of retirement as we know it.

Retirees today face the possibility of a much longer retirement lifespan than their predecessors. They also have several issues to contend with that, for the most part, their forebears didn’t have as much pressure to address. What are those issues?

Rising health costs, changing definitions of a traditional retirement, increasing costs of living. And, in the present time, an uncertain global landscape and its economic effects. All of this can make retirement tricky to navigate, let alone to enjoy a financially comfortable lifestyle.

Here are a few retirement trends that are likely to change at some point during your post-career years — and that might affect you in the process: Read More

Retirement planning is, in many ways, a guessing game. You can’t be sure of exactly how long you will live. How much income you will need might not be clear. And you don’t know if you will need long-term care support.

Even so, prudence dictates that we have some roadmap for these unknowns. It’s better to plan for these contingencies. Otherwise, you could wind up in financial trouble at some point in your retirement years.

Here are five financial fails to avoid in retirement so you will be better prepared when you retire. Read More

As you gear up for retirement, you may have heard of “safe money solutions.” Are they right for you? It’s an important question, especially since retirement planning is more difficult than it’s ever been in history.

Past generations could count on company pensions that would pay them every month without fail until they died. But the disappearance of these pensions, coupled with the increase in longevity for retirees, has left many people with more questions than answers.

While Social Security will cover at least some of their expenses, most retirees will have to rely on income from their own investments and savings to make up the difference.

However, what many call a bewildering amount of financial choices in today’s market can leave people feeling frustrated.

According to the Investment Company Institute, nearly 120,000 regulated investment funds are available to retirement savers today. And what about other options? There are more annuities than hedge funds available, which doesn’t even begin to cover the universe of countless other instruments that can be tapped for retirement goals. Read More

If you are gearing up for retirement, take heed. Here are eight common mistakes that people make when engaging a financial advisor. These blunders occur more than they should, but the good news is they are easily preventable.

Up until this point, you may have worked with a financial advisor in growing the value of your nest egg. With their help, you created a personal investment strategy and built a portfolio to meet your goals.

But with people spending as long as one-third of their lives in retirement, your next phase-of-life requires careful planning as your working years did. This calls for a financial professional who can help you navigate the unique retirement challenges facing you.

Those new trials include the questions of how to convert your portfolio assets into dependable streams of monthly income that last as long as you need them – and how to manage risks that come with decades-long retirement life. Read More

Editor’s Note: The following article is a retirement guest post that has been authored and contributed by Katherine Brown.

Have you already saved money for your retirement years, or are you playing catch-up now? You need to be aware of certain myths and misconceptions about retirement.

Surviving and thriving during your retirement years entails knowing the truth behind these misconceptions. When you are armed with the right information, it’s easier to turn your lifelong savings into dependable strategies that can help you retire comfortably. Read More

For some time now, small business owners and their employees have had only a limited menu of effective workplace retirement-saving options.

High plan fees and other barriers have kept traditional retirement planning tools, such as 401(k)s, and income tools, such as annuities, beyond their reach.

A new bill, recently passed by the House of Representatives, aims to level the playing field for small businesses. It would also change some rules for required minimum distributions, or RMDs, which could help simplify retirement distribution planning.

The Setting Every Community Up for Retirement Enhancement Act (the “SECURE” Act) passed the House by a 417-3 vote in late May.

Now it’s on track to move forward to the Senate. With unprecedented bipartisan support in both houses, the bill is expected to have a good chance of sailing through.

If the president signed it into law – or if Congress overturned a presidential veto – the Act would represent the most substantial changes to the U.S. retirement landscape in a decade. Read More

“The Breakfast Club” was a classic coming-of-age film. The stars of the movie? Gen X misfits dreaming of their futures during a fateful day-long detention in their high school library.

What they couldn’t have foreseen is that many Gen Xers would grow up to be responsible not only for their own well-being, but for the care and livelihood of their parents and their grown children as well.

So, if a sequel about Gen Xers was made today, it might be called “The Breakfast Sandwich Club.” And why? Many members of Gen X struggle to plan for their own futures while facing the financial impact of caring for the generations before and after them. Read More

Most people consider investment returns as a benchmark for judging the performance of their portfolio. This may be especially true for retirees and pre-retirees who likely have been invested in the market for some time. That experience might have been through brokerage mutual fund investments, brokerage accounts, or even retirement savings plans such as 401(k)s or IRAs.

But the reality is that many financial concepts rely on average returns to forecast future portfolio activity. Yet compounding growth and compounding losses are the real-life factors that will potentially affect a portfolio’s value. 

This is strongly exemplified in sequence of returns risk, a potential hazard for American retirees. And that doesn’t apply to only retired households.

Sequence risk can also linger for soon-to-be-retirees, especially during the “retirement red zone,” that critical decade of five years before and five years after one retires. Read More