Like most of us, chances are years ago you imagined the ideal age you would stop working and start living your dream retirement. A new study reveals that the answer to “what’s the optimal retirement age” depends on the age of the person you ask.
Bankrate.com surveyed Americans of different generations. While each had its own idea of the ideal retirement age, on average those surveyed believe the best age to retire to be 61.
Gen Xers and Millennials chose 61 and 60, respectively, as their ideal ages. Baby boomers (ages 64-72) and the silent generation (age 73+), possibly making a more seasoned estimate of the optimal retirement age, chose age 64 to 65.
Everyone wants to retire comfortably, especially after years of hard work. But age forecasting isn’t necessarily the best way to approach this. Just-as-critical questions to ask (if not more so) are: “What income do I want to retire at?” and “What financial resources will I need to enjoy my preferred lifestyle?” Read More
What do you plan to do the first day you actually retire? Plan that dream trip? Write that first page of your novel? Explore new opportunities to partake in hobbies or other interests? Just take a deep breath and learn to relax?
If you are like most of the retirees surveyed in the 2018 Retirement Preparedness Study, your retirement years may look a lot like your working years.
Or, at least, that is what working-age Americans foresee for their retirement futures. Commissioned by PGIM Investments and conducted by The Harris Poll, the study found that 52% of pre-retiree baby boomers expect to have a full-time or part-time job during retirement.
This finding is in sharp contrast to the lifestyle of current retirees, with only 6% of them working for a paycheck. Pre-retiree Gen Xers are even more convinced they will need to work in retirement, according to the study, as a substantial 58% responded this way. Read More
When Roger Ibbotson recently published a new report on fixed indexed annuities and their place in an optimized retirement portfolio, everyone took notice. Few economists and financial researchers garner the attention and level of respect that he does.
He is Professor Emeritus at Yale School of Management, former chairperson of research firm Ibbotson Associates, and chairman as well as chief investment officer at Zebra Capital Management. Ibbotson is also a prolific author, having conducted financial research on many topics including investment returns, mutual funds, international markets, portfolio management, and valuation.
In past studies, his analysis has been groundbreaking and his principles adopted by financial markets at large. So, it’s not surprising why his research on fixed index annuities has gained such wide attention.
In his latest study, Fixed Indexed Annuities: Consider the Alternative, Ibbotson expands his view of the use of a fixed index annuity (FIA). Here, he defines a fixed index annuity as a tax-deferred retirement savings vehicle that “eliminates downside risk while allowing for the opportunity to participate in upside market returns.”
As baseline benefits, he believes that fixed index annuities, if properly structured, can help control financial market risk and mitigate longevity risk. Read More
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
Once a retirement staple, pensions have been gradually disappearing. Now we hold more responsibility for retirement than ever. That has its own challenges, including how to overcome longevity risk. You have to figure out how to pay for potentially decades of retired living.
Arguably one of the best ways to combat longevity risk is with annuities. However, as you come into the home-stretch and explore your income options, it’s natural to ask, “How safe are annuities for my retirement?”
The good news is they can be quite safe. But there will be some legwork involved to make any annuity-buying decisions that are right for you. Here are some pointers to follow as you consider an annuity for your retirement portfolio. Read More
For many soon-to-retire households, the timing of when to take Social Security benefits is an important choice. David Freitag, a Social Security expert with Mass Mutual, says that if you calculate the present value of a couple’s monthly benefits, it could exceed $1 million.
And it’s largely due to longevity risk, as the head of MassMutual in the U.S. explains: “This is not a retirement planning conversation. This is a longevity planning conversation, and near-retirees have the power and responsibility to ensure that they protect and receive every dollar they deserve in Social Security retirement benefits when the time comes.”
Even so, a large number of people take Social Security benefits before their full retirement age. In doing so, they may begin receiving income from Social Security sooner. But there are trade-offs, which vary depending on just how early you start benefits. Read More
Have you heard that the average retiree couple may pay as much as $280,000 in total healthcare costs in retirement? That certainly is a big price tag to mull over. And as Vanguard notes in a recent report, cost-of-retirement-healthcare estimates as a lump sum often keep people in a stop-and-shrug zone.
Such a substantial sum seems hard to account for. Not only that, a number of national healthcare cost surveys leave out the costs of long-term care in their estimates. Others treat long-term care as a separate area of expenses from retirement health costs. Either way, many Americans don’t know where to even start with planning for potentially high-cost health events during their golden years.
Well, here’s some good news: planning for retiree health and long-term care costs is well within reach. In that Vanguard report, researchers found a more palatable way for educating people to take action about their retirement health needs: framing healthcare costs as annual expenses, not as a substantial lump sum. Read More
Do you have a current annuity or insurance policy that doesn’t fit your needs well? If you are on the lookout for a new policy, a 1035 exchange may be a worthwhile option.
A 1035 exchange is a section of the U.S. tax code that lets policyholders replace an existing annuity or insurance policy with a new policy – and with no tax consequences. This tax-free exchange may be used for life insurance policies, modified endowment contracts (MECs for short), and non-qualified annuities toward a new policy.
With new waves of innovation available – such as living benefits for terminal illnesses or long-term care situations – you might wish to explore new options. The good news is you don’t have to keep your current policy forever.
Let’s take a closer look at how a 1035 exchange may and may not benefit a policyholder looking for new annuity or insurance choices. Read More
According to the American Psychological Association, about 40 to 50 percent of married couples get divorced. While it’s no secret that divorce disrupts lives, it can also threaten a divorcing couple’s financial future, according to new research.
The Center for Retirement Research at Boston College (CRR), with the support of Prudential Financial, just released a study. Their findings? Divorced Americans are at greater risk of not being able to maintain their standard of living in retirement.
The study compared the risk divorced households face using the center’s National Retirement Risk Index (NRRI). It revealed divorced households have a 7-percentage-point greater risk of not having adequate retirement income than households not experiencing divorce. Among all households, exactly half are at risk of not having adequate retirement income.
“Millions of American households are at risk for not having adequate retirement income, and the challenge is even more acute among divorcees,” said Kent Sluyter, president of Prudential Annuities. “These are sobering numbers that highlight a fundamental shift that needs to take place in the way we think about retirement. Instead of solely thinking about accumulating savings, people also need to consider a plan for protecting and generating retirement income.” Read More
If you are gearing up for retirement, chances are you have seen the headlines. Earlier this June, the trustees of Social Security and Medicare published their annual reviews of both programs. And, at first glance, their news isn’t good.
The trustees acknowledged the programs face funding challenges. But that is a far cry from them being completely emptied. Even so, it wasn’t long before the Internet was flooded with alarmist headlines on the outlooks for Medicare and Social Security. As we will see in a bit, even some prominent news organizations had a few of the critical details wrong.
Like many people, you may have thought at some point: “Will Medicare and Social Security be there when I retire?” It’s a legitimate question, especially considering how you have paid into these program funds for your entire working life.
Let’s try to get to the bottom of these worries—and clear up some confusion—by consulting the latest research and findings on the one issue that affects every American who plans to retire one day. Read More
Start a Conversation About Your Retirement What-Ifs
Start a Conversation About Your Retirement What-Ifs
Already working with someone or thinking about getting help? Ask us about what is on your mind. Learn More
What Independent Guidance Does for You
What Independent Guidance
Does for You
See how the crucial differences between independent and captive financial professionals add up. Learn More
Stories from Others Just Like You
Stories from Others
Just Like You
Hear from others who had financial challenges, were looking for answers, and how we helped them find solutions. Learn More
Sign Up for Our Newsletter
Get a monthly email on the latest news, tips, and practical strategies involving your retirement and money.
Among many other topics, learn how you can make your money last for as long as you need it, can protect your wealth against current and evolving risks, can maximize your income, and can stay retired comfortably.
