Retirement Planning

With age comes wisdom – and apparently the ability to better handle unexpected expenses, according to the Society of Actuaries (SOA).

In their recent study, the SOA analyzed financial risk management across generations. Chief among their findings? That “the ability to handle unforeseen expenses increases with age, peaking with Early Boomers and then declining for the Silent Generation.” 

It’s one of many findings according to the study, “Financial Risk Concerns and Management Across Generations.” The Silent Generation refers to those born between 1925 and 1945.

The SOA based its finding on the fact that 6 in 10 Early Boomers say they could afford a $10,000 expense using their savings or emergency funds. Yet “only 46% of Millennials would use their savings, which is not surprising since they have lower assets and more competing financial priorities.”

Those in the Silent Generation remain vulnerable. The SOA reports that half of them aren’t able to use their savings for an unexpected $10,000 expense. Read More

If you have already created a confidence-boosting retirement plan, congratulations! You are on track to achieving the rewarding retirement of your dreams.

But what happens if you put this necessary task off? If you take a “someday” approach to stopping to assess your needs in retirement and exploring strategies and solutions that can help you achieve them?

It’s not hard to find out. You may even have watched people you know and care about struggle financially in their golden years. A time in their lives that was supposed to be free of financial pressures — or at least relatively, so we think — instead forces them to make unpleasant choices just to stay afloat.

Most often, poor financial decisions (or a lack of planning) — fueled by the emotional pressures of life changes or financial stressors — tip that first domino that can begin to topple a care-free retirement.

It takes discipline in matters of money and financial planning to ensure your money works for you, instead of the other way around.

Because you don’t want to find yourself going down the wrong path to retirement, consider these consequences of not taking action to create a plan that can provide you benefits such as reliable income for life. Read More

Like other folks, you probably see waves of retirement advice from the papers, financial talkshows, online news sources, and other outlets. Much of that advice assumes that among couples, both spouses are approximately the same age. That often results in solutions designed to address the needs of couples entering their retirement years together.

But what about couples with sizable age differences? Their different retirement timelines are likely to present unique problems. When such is your situation, how can you plan for your retirement effectively?

If one spouse is eligible to retire 10 or more years ahead of the other, that spouse will be making choices that not only affect their own retirement. It impacts their partner’s retirement, as well. Those decisions could have a dramatic impact on the younger spouse’s lifestyle now and during their own golden years.  

Not only does their age disparity affect their retirement plan, it means that life events, both those foreseen (e.g., retirement or required minimum distributions) and unforeseen (e.g., the need to help care for aging parents), will be faced at different stages in their lives. Read More

It’s well documented that women often earn less than men in the workforce. While progress toward pay equality is a hot topic, less discussed are the factors women face when trying to plan for their ideal retirement.

Among the hurdles that are unique to women:

• lower lifetime earnings
• wages lost when leaving the workforce for child rearing or caregiving
• part-time work without access to benefits, including retirement benefits
• longer lifespans leading to longer retirements
• longer exposure to retirement risks

These factors can definitely affect the quality of life women enjoy during their retirement. Which makes having a strong retirement plan more critical than ever. Read More

Divorce can be one of life’s most challenging experiences. Not only is it distressing, but it also brings financial upheaval. And depending on your age, divorce may pose yet another risk: taking what was an on-track retirement plan squarely off balance.

For people in their 50s and up, the challenges are particularly acute. There will be less time to make up for what you will have lost. You will have a shorter timespan to gather earnings, put away savings, and accumulate more wealth from portfolio investment growth. Your goals and plan for retirement will also change, since you likely counted on a financial future with your partner.    

Later-in-life breakups are a growing trend, as researchers at Bowling Green State University discovered. They found that, from 1990 to 2010, the divorce rate among couples in their 50s and beyond more than doubled. In that same period, the overall divorce rate remained relatively flat.

While it may be tempting to put finances on the back-burner, now isn’t optimal to fall back on planning ahead. Your financial security is at stake. If anything, it’s time to refocus on your financial progress and create a new plan for your personal retirement goals.

Here are some tips to help you get back into the driver’s seat of your money matters. Read More

In the last three years, Americans have reported they have become more accustomed to market volatility. But a lingering anxiety over this market uncertainty has led them to seek, in record numbers, strategies to protect a portion of their retirement savings.

This latest snapshot of Americans’ attitudes toward market volatility, and its effect on their retirement planning, comes from Allianz Life’s 2018 Market Perceptions Study.

Conducted this April, the online study surveyed a nationally representative sample of more than 1,000 respondents. Of this population, more than half had investable assets above $200,000.

Chief among the findings? A growing number of Americans said they are comfortable with market conditions and are ready to invest. That share of people was 35% in the 2018 study, compared to 26% in a similar Allianz study published in 2015. Read More

Whether you are one of the estimated 75 million Baby Boomers, 66 million Gen Xers or 75 million Millennials, you have an opinion on your retirement, whether it’s now or not quite here yet.

What’s also important are the concerns you most worry about most and how ready you think you will be when your retirement day finally arrives. Perhaps not surprisingly, many of us differ in those retirement views by generation. And it matters because of how millions of Americans approach their financial affairs.

Spouses, parents, children, family members, friends, colleagues. These people are a few of many folks to whom Americans may turn for seeking second opinions, weighing their retirement anxieties against others’ own, gauging their financial progress, and dealing with other money matters.

Luckily for all of us, companies conduct periodic research to give us insight into what drives our attitudes and behavior on planning for and living in retirement. Their studies can also show how our expectations may actually match up—or in many cases—differ from what we believe lies ahead for us. These results have the potential to enlighten us into action to better help us achieve what we each want for our own retirement.

In its just-published seventh annual Retirement Income Strategies and Expectations (RISE) survey of investors, Franklin Templeton Investments sought to understand perceptions and concerns about retirement savings strategies. The RISE survey specifically looked at how retirement concerns differ by generation.

Not only did the survey find differences between generations, it also uncovered differences between genders within the same generation. Read More

Once upon a time, pensions were a staple of the U.S. retirement system. But in the last 20 years there has been a seismic shift in the way employees fund their retirement. In 1998, an estimated 50% of current Fortune 500 companies still offered their salaried employees a pension, or also known as a defined benefit plan. Today that number sits at just 5%.

With this type of plan, a company makes regular contributions to their pension fund and then provides monthly payments or “partial paychecks” to retired employees throughout their retirement. In that sense, pensions give retirees a source of ‘guaranteed income.’

Working tenures in previous decades generally lasted much longer than they do now in our current highly-mobile, job-hopping workplace. You could be with the same employer for 20 or more years, with your defined-benefit pension accruing value over your career. Pensions were often a main motivation for people to stay with the same employer. After investing your work life with that company, you were financially rewarded in retirement.

At retirement, the pension would give the financial comfort of knowing where your money was coming from, month to month, from guaranteed monthly paychecks coming in the mail. For years, the U.S. retirement system was built on this foundation. Then, bit by bit, employer pension circumstances gradually began to change.

Company pensions started to dwindle in number, and while today’s continuing shrinkage in pension plans can be attributed to many factors, one well-respected economist points out the effects of recent economic events. Read More

It would be nice to think that, once you retire and no longer are “bringing home the bacon,” worrying about paying taxes would be a thing of the past. But that is not the way Uncle Sam works. 

In fact, unanticipated taxes in retirement can disrupt an otherwise well-crafted retirement plan. Perhaps it’s not surprising as to why financial professionals call this situation a “tax time bomb.” For this reason, it’s important to consider the impact of taxes when preparing your retirement plan, so you can make well-informed choices ahead of time and budget for taxes as part of your retirement expenses.

What you will pay in taxes during retirement is unique to you and to the make-up of your retirement income sources. But one thing that seems to be universal can be this: how big a tax bite that retirees may face. Read More

Editor’s Note: This is Part 2 of a two-part series on different ways that a retirement plan can go bust. You can find Part 1 of this two-part series here.

In many ways, retirement is like a puzzle. It’s a matter of fitting different pieces together. You probably know what you want your retirement lifestyle to be. The next step is making that vision real. You put together a financial plan to make things happen.

But just planning for retirement isn’t a guaranteed formula for success. We also have to stick to the plan and, at times, revisit it to see if any adjustments should be made. After all, life throws curveballs and life situations change.

Even so, there are many situations that can throw a retirement plan off balance. Those variables can vary, from suddenly finding oneself as a surviving spouse to having personal health decline or taking on the responsibility of caregiver for parents.

While it isn’t a complete solution, understanding some situations that might put a financial plan on the rocks is a good starting point. Read More