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Retirement

47% of Americans Say Achieving Retirement Security Will Take a Miracle

September 13, 2023 Leave a Comment

Almost half of Americans, 47%, say achieving retirement security will take a miracle, according to a new survey from Natixis Investment Managers. CNBC reports:

That is up “quite a bit” from about 40% of respondents who said the same two years ago, according to Dave Goodsell, executive director of the Natixis Center for Investor Insight.

The results come as research from the firm shows the U.S. has improved its overall score for retirement security compared to last year, with 71% versus 69% in 2022.

Most of the 44 countries included in the firm’s ranking also received higher overall scores compared to last year.

Early Retirement May Speed Up Cognitive Decline

October 31, 2019 Leave a Comment

While retiring ahead of schedule may be easier on the body, a new set of research has found that it may not be so beneficial for the mind. The study, conducted at Binghamton University, finds that an early retirement can accelerate the usual rate of cognitive decline among the elderly. Study Finds reports:

The research team analyzed China’s new rural pension scheme (NRPS), as well as China’s most recent Retirement Longitudinal Survey (CHARLS), in order to investigate the effects of early retirement and pension benefits on individual cognition among adults over the age of 60. For reference, CHARLS is a representative national survey of China’s population over the age of 45 that tests respondents regarding mental cognition, episodic memory, and overall mental wellbeing.

After going over all of the data, the research team noted a clear trend: individuals receiving pension benefits were experiencing much more rapid mental decline than their counterparts still on the workforce. The most prominent indicator of mental decline among retirees was delayed recall, a trait widely considered to be an accurate predictor of dementia. Surprisingly, females seemed to experience even sharper mental decline after retiring early. Overall, the results support the hypothesis that decreased mental activity accelerates cognitive decline.

The Boomer Generation is Becoming One of Haves and Have-Nots

October 22, 2019 Leave a Comment

Four recent studies reveal that wealth inequality among boomers specifically has been growing, turning this massive generation into one of haves and have nots. The nonpartisan reports, which analyzed boomers’ retirement security, financial assets and housing status, come from the U.S. Government Accountability Office (GAO); the National Institute on Retirement Security think tank; the St. Louis Fed’s Center for Household Financial Stability and the Harvard Joint Center for Housing Studies.

MarketWatch reports:

Wealth disparities continue as we age. The GAO reviewed the Federal Reserve’s Survey of Consumer Finances data for households with people 55 or older and said that although disparities in income decreased as older Americans aged from their 50s into their 70s, “disparities in wealth persisted.” The continued wealth disparities among older Americans, the GAO noted, “may be due to significant differences in the median value of retirement accounts and home equity between higher- and lower-earning households.”

This finding echoes what the St. Louis Fed determined looking at wealth inequality overall in America. It determined that “wealth inequality has grown tremendously from 1989 to 2016, to the point where the top 10% of families ranked by household wealth own 77% of the wealth ‘pie.’ The bottom half of families ranked by household wealth own only 1% of the pie.”

These Retirees Couldn’t Afford America — Now They Live Their Dream Life on $2,000 a Month in Ecuador

September 28, 2019 Leave a Comment

At 72, Jacqueline Mackenzie has lived in nearly every state in the U.S. But it’s in Vilcabamba — an Andean foothills town in southern Ecuador — where the retired teacher plans to spend the rest of her life. MarketWatch reports:

The Mackenzies live on about $2,000 a month, most of that coming from Don’s pension (he’s retired from the military), they say. “We couldn’t afford the States, but here we are rich,” Jacqueline says — adding that they now live in a home with a “million-dollar view.”

Their biggest expense when they first moved to Ecuador was rent: They paid $400 a month for a three-bedroom house on a quarter-acre of land before they moved to the eco-village last year; now they don’t pay rent, having built their home for about $38,000. They lease the land for free because they help out at the eco-village; when they die their home and most of its contents will go to the owner of the eco-village. They paid for the house through a combination of savings and loans.

Now they spend the biggest proportion of their money on food — roughly $375 a month — in part because, as Jacqueline says, they are committed to eating organic whenever they can. Other significant expenses include transportation — they don’t own a car but spend about $350 a month on taxis — and health insurance. That costs them about $100 a month, though they do have out-of-pocket health-care costs like doctor’s appointments and prescriptions, which can add up. Internet service costs them a little over $80 a month, and a mobile-phone plan costs $28 a month. They also spend money on things like gardening tools, gardeners, seeds, trees and soil.

In addition to their simple lifestyle, they save money by not having a television — “we’ve not had access to a TV for eight months, so we are entertained by nature’s sunrises and sunsets,” Jacqueline says — and by not traveling a lot and not eating out. “We like the rural lifestyle,” says Jacqueline. “Eating out is not a big deal to us. We’ve already been to bazillions of concerts and plays. Now we listen to music with a glass of wine on the patio.”

Orlando is the Best City to Retire

September 4, 2019 Leave a Comment

With only 23 percent of Americans reporting that they are “very confident” they will have enough money for retirement, the personal-finance website WalletHub released its report on 2019’s Best & Worst Places to Retire as well as accompanying videos. Orlando is ranked as the best city to retire.

To help Americans plan for a comfortable retirement without breaking the bank, WalletHub compared more than 180 U.S. cities across 46 key measures of affordability, quality of life, health care and availability of recreational activities. The data set ranges from cost of living to retired taxpayer-friendliness to share of the population aged 65 and older.

Best Cities to Retire   Worst Cities to Retire
1 Orlando, FL   173 Providence, RI
2 Tampa, FL   174 Baltimore, MD
3 Scottsdale, AZ   175 Rancho Cucamonga, CA
4 Charleston, SC   176 Fresno, CA
5 Miami, FL   177 Newark, NJ
6 Denver, CO   178 Bakersfield, CA
7 Fort Lauderdale, FL   179 San Bernardino, CA
8 Cape Coral, FL   180 Warwick, RI
9 Minneapolis, MN   181 Bridgeport, CT
10 Cheyenne, WY   182 Stockton, CA

How Much Money You Need to Retire at 35 and Live on Investment Income Alone Until 90

August 23, 2019 1 Comment

With an early retirement craze taking hold in the US, you’d probably be in the minority if you haven’t wondered, How much money do I need to quit my job and never work again? Tanza Loudenback consulted Brian Fry, a certified financial planner and the founder of Safe Landing Financial, and wrote on Business Insider:

  • To retire early at 35 and live on investment income of $100,000 a year, you need to have at least $5.22 million invested on the day you leave work.
  • If you reduce your annual spending target to $65,000, you’ll need a starting balance of about $3.25 million in a taxable investment account.
  • To ensure the account’s growth, Brian Fry, a certified financial planner at Safe Landing Financial, recommends an “aggressive” asset allocation of 80% stocks and 20% bonds.
 
 

Retirement? Four in 10 Americans Don’t See It Ever Happening

June 7, 2019 Leave a Comment

Almost 40% of Americans lack confidence they will ever save enough money to retire. That number climbs even higher among older Americans, age 54 or more. Bloomberg reports: 

That’s despite nearly one in five Americans who said having enough money saved to be able to retire is their most important financial goal, according to a survey of 1,000 adults conducted by LendEDU in May.

More Americans said saving for retirement is more important versus those that indicated paying off credit card debt or building an emergency fund, according to the survey. However, slightly more respondents said buying their own house or apartment was their most important financial goal.

On average, monthly benefits for a retired worker from the Social Security Administration are $1,468.39 or only about $17,600 per year.

Adult Children Are Costing Many Parents Their Retirement Savings

April 24, 2019 Leave a Comment

Financial independence, once a hallmark of adulthood, has gone by the wayside as adult children increasingly depend on their parents to help them cover the cost of rent, student loans, health insurance and more. But parents’ desire to give their children a financial assist could be misguided — and even backfire in the long run. Half of American parents are unable to save as much as they’d like to for retirement, and their grown offspring — whom they still count as dependents — are to blame, according to a new Bankrate.com study.

CBS News reports:

Half of American parents have cut back on their retirement savings to help pay their children’s bills, a Bankrate.com study shows. 

Parents are putting their kids’ car insurance, cell phone bills, credit card debt and health care costs ahead of their own needs to grow their retirement funds.

Kids miss out on learning to be independent. “When you write your first rent check or car loan check it feels so good to be able to face some problem and fix it for yourself,” says one expert.

General Motors, Sears and Toys R Us: Layoffs Across America Highlight Our Shredding Financial Safety Net

November 27, 2018 Leave a Comment

Millions of Americans are in danger of entering their final decades unable to afford ballooning medical bills and cost-of-living expenses. NBCNews reports:

Today’s aging workforce faces an uncertain future. The announcement this week that General Motors will lay off 15 percent of its salaried workforce and shutter multiple plants in North America was a sobering reminder of how far the American worker has fallen. Unlike most large private sector corporations today, thousands of employees at GM still enjoy some union benefits. The company has reportedly set aside $2 billion for layoffs and buyouts. It’s not much, but it’s something — many workers, if they are laid off en masse, will be far less lucky. Some older Americans are lucky enough to have been grandfathered into generous pension plans and others hope social security and personal savings will be enough to sustain themselves. But for millions of younger people, the outlook is bleaker — an ever-diminishing social safety net, with retirement dependent almost entirely on how well they manage savings. Two-thirds of millennials have nothing saved for retirement.

The private sector pension as we once knew it is all but dead. Public sector pensions, meanwhile, are under attack at the state level. “Companies don’t offer pensions anymore. Social security, when it was established, was meant to be one leg of a stool,” says Gerald Friedman, an economist at the University of Massachusetts at Amherst. “One leg would be the private pension through employment, a second leg personal savings, and a third leg social security. Social security is now the only source of income of a lot elderly have.” What, if anything, are our politicians doing about this? Progressives rail against President Donald Trump, but real retirement security has not been a big enough part of the conversation on either side of the political spectrum. Millions of Americans are in danger of entering their final decades unable to afford ballooning medical bills and cost-of-living expenses. This is a huge problem, and one that liberals in particular should have capitalized on this election cycle.

IRS Increases Contribution Limits for Retirement Accounts

November 2, 2018 Leave a Comment

The IRS has increased the contribution limits for various retirement accounts for 2019.

The Internal Revenue Service said Thursday that the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000.

The catch-up contribution limit, which is a higher threshold for employees 50 years or older using these accounts, remains unchanged at $6,000. The changes were among several inflation adjustments announced by the IRS.

The limit on annual contributions to an IRA, which hadn’t increased since 2013, were also raised to $6,000 from $5,500.

40% of American Middle Class Face Poverty in Retirement, Study Concludes

October 13, 2018 Leave a Comment

Nearly half of middle-class Americans face a slide into poverty as they enter their retirement, a recent study by the Schwartz Center for Economic Policy Analysis at the New School has concluded. CNBC reports:

Roughly 40 percent of Americans who are considered middle class (based on their income levels) will fall into poverty or near poverty by the time they reach age 65, according to the study.

The study also concluded that if workers age 50 to 60 decide to retire at age 62, 8.5 million of them are projected to fall below twice the Federal Poverty Level, with retirement incomes below $23,340 for singles and $31,260 for couples. Further, 2.6 million of those 8.5 million downwardly mobile workers and their spouses will have incomes below the poverty level — $11,670 for an individual and $15,730 for a two-person household.

1 in 3 Americans Have Less Than $5,000 Saved for Retirement

August 27, 2018 Leave a Comment

The vast majority of Americans, 78 percent, say they’re “extremely” or “somewhat” concerned about not having enough money for retirement, according to Northwestern Mutual’s 2018 Planning & Progress Study. CNBC reports:

A shocking 21 percent of Americans have nothing at all saved for the future, and another 10 percent have less than $5,000 tucked away, the study finds.

That means about a third of Americans have only a few thousand dollars, or less, put away for their golden years.

Of course, some people are more prepared: A quarter report having $200,000 or more stashed away, while 16 percent have between $75,000 and $199,999. But overall, Northwestern Mutual found that Americans with retirement savings have an average of $84,821 saved, which is far from enough. Experts typically recommend trying to accumulate at least $1 million.

The World Isn’t Prepared for Retirement

June 10, 2018 Leave a Comment

It’s not just America. New data show people all over the globe don’t understand basic concepts of investment and inflation. Suzanne Woolley writes on Bloomberg:

Most online quizzes are relatively mindless, promising to reveal which vegetable, sandwich or rock band best represents your personality. That was not the case for a short online test given to 16,000 people in 15 countries this year. It revealed just how unprepared a good chunk of the world is for retirement. The three-question test, given as part of the Aegon Retirement Readiness Survey 2018, measured how well people understand basic financial concepts. Many of the participants failed the quiz, with big potential consequences for their future security.

Beyond the sobering lack of financial literacy, there were some rather curious data in Aegon’s annual survey, published on Tuesday. For example, some 20 percent of workers surveyed in China envisioned spending retirement with a robot companion. But before we get to that, take a look at this question — which only 45 percent of people around the world got right: The possible answers? True, false, do not know and refuse to answer. Sixteen percent of people got it wrong. “Do not know” was chosen by 38 percent. In the U.S., 46 percent of workers got it right. Good for you, America — though Germany beat you handily. (The answer, in case you were wondering, is false.) It was an inflation question that had the highest percentage of wrong answers, however. More than 20 percent of workers didn’t grasp how higher inflation hurts their buying power. Given that declining health was the most-cited retirement worry, at 49 percent, and health care is an area (in the U.S., especially) with high cost inflation, well, that makes the subject something older folks should have down cold.

20% of Americans Save Nothing for Retirement

March 16, 2018 Leave a Comment

Despite a low unemployment rate and stronger economy, 20 percent of Americans don’t save any of their income at all and even those who do save aren’t putting away enough for retirement. According to a new survey from Bankrate.com, one-fifth of Americans are adding nothing to their savings. Among respondents, 2 in 5 cite life’s high expenses, while another 1 in 6 blame their crummy job.

“With a steady, significant share of the working population saving nothing or relatively little, it’s virtually guaranteed that they’ll be unable to afford a modest emergency expense or finance retirement,” says Bankrate senior economic analyst Mark Hamrick. “That amounts to a financial fail.”

Bankrate also reports that the average American has less than $5,000 in a financial account, a quarter to a fifth of what you should have, and those aged 55 to 64 who have retirement savings only carry $120,000 – which won’t last long in the absence of paychecks.

What Are The New Trends In Health Insurance

February 13, 2018 Leave a Comment

Medical insurance is a huge topic. It was talked about continually during the presidential election in the United States. However, we have not seen any significant changes yet. 2018 promises changes. However, experts warn us not to expect all of the changes to be positive.

What the future holds

Citizens and companies are in a holding pattern. During the recession, many people lost their jobs. Others were kept on but their hours were reduced to allow the companies to take advantage of them to the maximum point before they would be eligible for full benefits.

There was a big swing in people going back to school, and gaining training to make them more valuable. Though the recession seems to be over, experts warn another may come very soon. People are being selective about the positions they take. They refuse to be underpaid and seek positions that will be less likely cut if the recession hits again.

Benefits offered to employees is equally as important to them as their salary. The average citizen had no idea how financially difficult it would be when we suddenly faced double and triple insurance premiums, extremely expensive co-pays and deductibles, and in some cases, the loss of company shared insurance expenses altogether.

Companies are staggering and trying to get to their feet to be in the position to attract good people. If a company has less than 50 employees they usually opt for insurance policies with high deductibles. But, by law, they do not have to offer health coverage. Companies with more than 50 employees must offer “acceptable” insurance and they are expected to pay at least ½ of the premium.

Trends for 2018

  • More Increases in health insurance rate. In 2017, insurance premiums went up dramatically in 2017. They will continue to rise. The increases vary from state to state. Some show a rise of 6%-7% and others show increases well into the double digits.
  • Companies will have to balance the premium increase with the need of retaining good employees. This will mean a narrowing of the illness coverages.
  • There will be a major drop in prescription drugs (more than 80) that are covered in 2018. There will be some that have generic replacements. You should check with your insurance company to see how this affects you, Here is a list of drugs that are being dropped from coverage.

  • More use of technology. Expect chronic patients to have more virtual care. Technology will be more available to interact with their doctors without the need of going to the office. Use of devices to monitor their health through virtual means. The goal is to reduce the amount of money it cost to help them maintain.
  • Use of technology to allow doctors to work without having to document everything that is said. You surely have noticed that doctors today show up in your examination room with a laptop computer. They are typing away as you describe your concerns. They have to do this because they simply do not have the time to see their patient load and document everything. Soon, doctors will be able to wear a special pair of goggles which will streamline the visit to a data center which will create the documentation. This is a highly efficient method which will save the doctor money and lower costs of visits.

These are just some of the trends showing up just in time for the new year. If this is all a bit confusing to you, this can help you. There is much work to do. It is clear that the rise in health care costs is a critical issue. There must be a ceiling on the rise in costs. American workers need healthcare they can afford. We are all waiting for Congress to make healthcare affordable and health service better. Maybe this will be our lucky year.

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