While the exact details are still under wraps, Social Security recipients will be pleased to know that their benefits will be receiving a boost in 2020.
Every October, the Social Security Administration releases information regarding Cost-of-Living Adjustments to benefits. This year is no exception. On October 10th, the SSA will be releasing official details regarding the Cost-of-Living Adjustment that applies to 2020 Social Security payouts.
Expect a Social Security Benefits Boost of 1.6%
According to The Senior Citizen League, a nonpartisan group focused on senior issues, Social Security recipients will likely receive a 1.6% boost to their payouts, starting in 2020.
Mary Johnson, TSCL’s Social Security policy analyst, mentions that this increase will be smaller than prior raises. She said that it “would raise an average retiree benefit by about $23.40 per month, a big drop from the $40.90 that people with that level of benefits received this year.” Read More
When it comes to taxes, you can be sure that Uncle Sam will want his share. Retirement tax planning can help you make the most of your money. Tax-wise strategies let you maximize your income and keep more of what you have accumulated over a lifetime of hard work.
But while Uncle Sam’s tax collections are a certainty, what is less than clear for millions of retirees is their own tax bills. Many don’t know whether they are paying too much in taxes or not – and how, in turn, that affects their retirement income streams.
Fortunately, there are several ways that you can reduce your tax bill after you stop working through the proper use of annuities and IRAs.
Nobel prize winner William Sharpe calls it the “nastiest, hardest problem in finance.” What is that? Decumulation, or the process of building a dependable lifelong income stream from your retirement savings.
It’s no wonder millions of Americans are asking if they will have enough money to retire comfortably. Between rising health costs, multiplying risks, and the real possibility of “lifelong” referring to what can be a very long time, there are multiple priorities to juggle as you build a personal retirement strategy.
Many Americans worry about whether their life savings and income will last for the rest of their lives, as a recent survey found.
In the poll of 3,119 adults, aged 25-74, the majority of retired individuals (71%) felt confident that their savings and income would last. Meanwhile, just 42% of working-age Americans said they had that confidence.
The survey findings were published by the Alliance for Lifetime Income, a non-profit funded by life insurance carriers and asset managers to educate the public on annuities. Read More
As an annuity owner, you take comfort in knowing that you have planned for an uninterrupted lifelong retirement income stream. Working alongside other income sources from your nest egg, it will pay out, like clockwork, to fund the retirement you have always imagined.
But have you considered whether your income streams are as “efficient” as possible? Whatever retirement strategy you choose — income and all — needs to be “tax-efficient” to ensure you get the most mileage out of your money.
This is just one more piece in the retirement planning puzzle that each of us must solve. When we don’t plan for retirement, we run the risk of underspending or overspending our retirement dollars.
What if underspending doesn’t seem like a problem, but rather like an advantage? Consider what events and opportunities to which you may say “no.” And simply because underspending pressures you to have a scarcity mentality, or when you don’t really know if you can afford them.
Perhaps you might pass on an important family event or skip that overseas vacation you always expected to be a highlight of your retirement years. All because you didn’t have a true picture of your anticipated income compared to your expenses. 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.
Today, Americans bear more financial responsibility for their retirement than ever.
The days of receiving monthly pension checks are gradually fading. According to Willis Towers Watson, only 16% of Fortune 500 companies were offering pensions to new hires in 2017, down from 59% of firms in 1998.
Defined-contribution plans like 401(k) accounts are taking their place. And this shift is huge. Now, people must count on them, IRA assets, and personal savings to create income streams that might need to last for a very long time.
How long? Potentially decades. The Society of Actuaries estimates that among married couples who are 65, there is a 72% chance that one spouse will live to 85. Not just that, one of them has a 45% chance of reaching age 90.
In other words, someone may spend as much as one-third of their life in retirement. In the face of that, how do you ensure your nest egg lasts for the rest of your lifetime?
While the answer is different for everyone, a new study offers some fresh insights. The Georgetown University Center for Retirement Initiatives partnered with Willis Towers Watson to explore different ways to generate income in defined-contribution retirement plans.
Their findings show how various lifetime income options, whether as a combination or as stand-alones, can help retirees better enjoy lifelong financial confidence. Read More
With more Americans turning 65 every day, one of the most pressing questions in financial planning is: How to make your money last in retirement? Today’s retirees are redefining aging, diving into second-act careers, entrepreneurship, volunteering, and travel. However, longer lifespans also bring challenges, such as creating a dependable monthly income stream that lasts. While there isn’t a one-size-fits-all answer, new research offers insights. Experts from the Stanford Center on Longevity and the Society of Actuaries tested nearly 300 strategies to help retirees generate income safely and efficiently, especially for middle-income households.
Editor’s Note: This article presents some simple ways to strengthen your income confidence in retirement. As you read about how you can make your money last in retirement with different income strategy options at your disposal, check out this debate by two economists on the security of the $3 trillion Social Security trust fund. It’s just another personal reminder of how our personal financial security is ultimately up to each of us.
Photo Credit: Reason.com and Soho Forum, Featured in Reason.com podcast, Source Link. Photo is strictly the intellectual property of its owner. All rights reserved.
Millions of retirees depend on Social Security benefits as a major income source. For many people, it’s their primary income stream.
According to data from the Social Security Administration, and analysis by the Center on Budget and Policy Priorities, nearly two-thirds of elderly benefits recipients count on Social Security as their major cash income source.
But some news headlines in recent years have stirred public concerns about the program’s future. Dour, and even alarmist, news coverage of reports by the program trustees led many onlookers to wonder about the program’s solvency.
To help cut through lingering confusion, two economists participated in a public debate, hosted by the Soho Forum. Set up as an Oxford-style debate, the discussion tackled this resolution: “Given Social Security’s nearly $3 trillion trust fund, the system cannot add to the federal deficit.” Read More
While retirement has many hard-to-predict moving parts, like what your spending might look like, perhaps one of the most difficult questions to answer is this: “How long will you live?”
Thanks to advances in healthcare and technology, people are living longer. According to the Social Security Administration, the statistical average for a 65-year-old man is to age 84. For a 65-year-old woman, it’s 87.
Economists call the possibility of spending decades in retirement a “longevity risk.” Still, keep in mind those numbers are just averages. What someone’s longevity looks like on a personal level will depend on their family history, health status, and lifestyle choices over the years, among other things.
For many people, the uncertainty adds up to financial concern. In one survey, almost two-thirds of surveyed Americans said they worried about running out of money in retirement more than death!
However, if you are to have a Retirement Plan that guides you across the Arc of Retirement, you will need some guestimate of how long you might live. That way you don’t underspend or overspend your financial resources.
Here are five steps to help keep longevity risk at bay and tame the uncertainty. Read More
Before you add an annuity to your income strategy, it’s prudent to understand what an annuity does and what it doesn’t do.
Essentially, annuities are insurance contracts. They are built to pay lifelong streams of fixed income, protect money from market losses, or offer tax-deferred money growth.
Indeed, billions of dollars sit in these contracts. A large part of that is due to their popularity for lifetime income, or for higher growth potential than with other low-risk interest-earning vehicles.
Nonetheless, there are still a number of myths and misconceptions about annuities. That might be attributable to a few factors, from annuities being fairly complex to misleading annuity marketing and sales tactics being touted.
This isn’t to say that annuities don’t have a place in a retirement portfolio.
Just like with any other financial vehicle, though, they must have a specified role. That can include solving for particular retirement risks, working in tandem with other parts of a portfolio to reach certain goals, or even simply providing peace of mind with predictable retirement income streams.
Let’s break down some annuity myths and misunderstandings, one-by-one, and learn more about them. Read More
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