First, the good news: it is entirely within your power to make a significant difference in your retirement income security. Now, the bad news: because it is within your power, you have to do the work. You cannot rely on the investment markets to carry you to a comfortable retirement. Your level of retirement savings—not the performance of your retirement […]
IRA owners who don’t think they will use all of their accounts in retirement have been given a brief opportunity to make charitable gifts directly from their accounts. A temporary tax rule approved this year allows IRA owners who are 70.5 or older to contribute up to $100,000 to a charity without recognizing the contribution as taxable income. Direct contributions […]
Ask the average person who is planning to retire and will have to depend on an investment portfolio for part of his income and he will tell you one of his biggest concerns: losing his principal. Then he’ll often add that perhaps it is time to get more conservative with his investments in order to avoid volatility that could destroy his […]
Upper income retirement savers are about to get in on tax-free Roth IRAs beginning in 2010, due to a recently enacted tax law change. Roth IRAs promise completely tax-free withdrawals of principal and earnings in retirement, unlike traditional IRAs, whose withdrawals are taxed as ordinary income. When Roths were established, upper-income married taxpayers with incomes over $160,000 were prohibited from […]
The biggest question facing a retiree who wants to live partly off of an investment portfolio is this: Will the portfolio sustain my withdrawal rate, and keep up with inflation, throughout my retirement? Retirees don’t want to run out of money before they die. But they also want a reasonable income that isn’t devastated by inflation. Much has been written […]
When Social Security was put in place in the 1930s, the retirement age for full benefits was set at 65. That number was picked for a good reason: the majority of workers—worn out by a lifetime of manual labor—didn’t live much beyond that age, on average. Things are different today. The life expectancy of a woman age 65 is approaching […]
Don’t fall into the trap that has grabbed a lot of your fellow workers: they have unrealistic expectations about investment returns and retirement assets and face disappointment in their golden years. A recent survey by Merrill Lynch uncovered some not so surprising mistakes workers are making in their retirement planning. Two of the top concerns of the 1,100 survey participants […]
Despite all the attention being paid to the problems that may be caused by the imminent retirement of the Baby Boomers and the threat to Social Security, most Americans still aren’t saving enough money for retirement. A new study identifies groups that are most at risk for income shortfalls in retirement. Number one on the list is the low-income single […]
You would think that after the horror stories about Enron employees who lost their job and their retirement savings more employees would diversify out of their own company’s stock. Not so, according to a recent survey by Hewitt Associates, a benefits consulting firm. It found that at the end of 2002 some 28% of all 401k plan money was invested […]
President Bush has proposed sweeping changes in taxation of retirement and other savings. If enacted, his proposals could profoundly affect the way Americans save. It could also lead to major federal and state budget deficits in the future. The proposal is far more important to most working and retired Americans than is the proposed elimination of dividend taxation. Bush’s plan […]
