Good news, Social Security beneficiaries! Every year in mid-October, the Social Security Administration announces any cost-of-living adjustments to benefits – or “COLAs.” On October 12, the agency said that Social Security recipients would see a 2.8% COLA in 2019.
A rise in the cost of energy products, not to mention an increasing cost of shelter, were big inflationary contributors, according to experts. Both of those cost categories have heavy weightings within the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the Department of Labor index on which COLAs are based.
For Social Security beneficiaries, the increased benefit payouts will start in January 2019. People receiving SSI benefits will see the increase on December 31, 2018. Read More
If you have contributed for a long time to a 401(k) plan, chances are you have built up considerable assets. You are to be commended for this effort. It takes discipline and focus to accumulate wealth over time.
Having reached this point, you may now want to explore options outside of your plan. If you are past your late 50s, you might have an opportunity with an in-service withdrawal. Many people with 401(k) accounts assume that their funds are locked tight until they retire.
What they don’t know is that they might be able to access their funds while still working at their employer. This mechanism is formally called an in-service withdrawal.
But what exactly is an 401(k) in-service withdrawal, under what conditions can you take one, and what consequences are there for doing so? Read More
For skiing enthusiasts, the concept of ups-and-downs is quite exhilarating. Just the thought of cutting powder on tall, sloping moguls can make even the “hard cores” blush.
But as recent market volatility reminds us, the goodwill doesn’t apply to ups-and-downs in every situation. Sometimes it can bring just the opposite.
Earlier this month on Morningstar, Director of Personal Finance Christine Benz observed how equity market down-spurts can disrupt a retirement portfolio.
Portfolio losses might not matter as much as when people are younger, as they have time to recover – and to grow past the point when portfolio asset values dipped. In fact, Benz writes, for those with many years to retirement (or under age 50), “not taking full advantage of the historical outperformance of riskier asset classes is a bigger risk than being too conservative.”
But as retirement draws near, some flight to safety may well be a prudent course of action. Benz explains: “At that life stage, you’re much more vulnerable to what retirement planners call sequence of return risk. That means that if you encounter a calamitous equity market early on in retirement and need to spend from the declining equity portfolio, that much less of your investments will be left to recover when stocks finally do.”
And what if a portfolio has gone into reverse mode? “Your only choice to mitigate sequence of return risk–assuming your stock portfolio is in the dumps and you don’t have enough safe investments to spend from–will be to dramatically ratchet down your spending,” Benz says. “Needless to say, that’s not something most young retirees are in the mood to do.” Read More
Photo Credit: Associated Press. All rights reserved, source link.
Nobel laureates are certainly top achievers. In 1988, Leon Lederman won a Nobel Prize for his work in physics. Apart from award-winning research into subatomic particles, he is famous for coining the infamous name of the Higgs bosin: the “God particle.”
Lederman passed away in a nursing home in Idaho on October 4. He was 96, according to the Associated Press. The AP describes him as a “giant in his field who also had a passion for sharing science.”
While Lederman’s contributions to science speak volumes, another striking story of him emerges from a past headline by NBC News.
And what happened? In 2015, the physicist was forced to auction his Nobel medal so he and his family could cover healthcare expenses. The medal sold for $765,000. It was a winning bid of $633,335 plus a buyer’s premium that drove the medal to its $765k sell price.
It’s yet another example of how high-cost retiree healthcare needs can change the financial situation of any of us. Read More
Rising interest rates and an easing regulatory environment are contributing to near-record levels of fixed annuity sales. It’s good news for people who might rely on these fixed contracts for guaranteed income or protection. A strong marketplace can lend to new innovations, contract benefits, and contract features.
In the second quarter of 2018, total fixed annuity sales reached $33.7 billion, an 18% increase over second quarter 2017 sales. That figure shattered the quarterly benchmark, according to the LIMRA Secure Retirement Institute (LIMRA), a financial industry research firm.
Year-to-date, total fixed annuity sales were $60.9 billion, 9% higher than the first half of 2017, LIMRA reported.
Why all the excitement and elevated interest in fixed annuities? Two possible reasons – rising interest rates and relaxing regulatory pressures on financial markets.
“These products offer a unique value for retirees and pre-retirees seeking protected accumulation and guaranteed lifetime income features,” says Todd Giesing, LIMRA’s annuity research director, in an interview with InvestmentNews. “Clearly, with the Department of Labor’s (DOL) fiduciary rule vacated and the prospect of continued rising interest rates, demand for this product is high.” Read More
Do you know what the average retirement income is in the United States? A typical retiree household brings in $49,097 annually before taxes. The Bureau of Labor Statistics (BLS) defines retiree households as those led by someone who is 65 or older.
And what about their spending? On average, a retiree household spends roughly $49,542 per year, which is slightly more than the average retirement income mentioned earlier.
Meanwhile, the average annual pre-tax income for all U.S. households is $73,573. And as for household spending across all age groups, the BLS estimates average expenditures to be $60,060 annually. Read More
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
As a postal or federal employee, you have high-quality federal benefits. In time, they will play directly into your retirement, whether you will be eligible to retire in the next 15 years or are a new career hire.
Among your many benefits are programs that directly affect your financial future. Tax-advantaged retirement savings plans, guaranteed-pension payouts, and cost-efficient life insurance coverage are just a few of those programs.
Your challenge is to ensure that you maximize what is available to you. Making smart choices early will help you reap rewards for the rest of your life. So, it’s important to weave your federal employee benefits into your complete financial picture to set yourself up for the most successful retirement possible.
To get there, you need to avoid the mistakes some federal employees make with their benefits and retirement planning. These slip-ups can cost you tens of thousands of dollars in lost benefits. And what’s more, once these mistakes are made, they can’t be reversed or changed. Read More
Photo Credit: Fisher Investments, Featured in USA Today Special, Source Link. Photo is strictly intellectual property of its owner. All Rights Reserved.
Long-time money manager Ken Fisher says he hates annuities. And he isn’t exactly shy about it. Since 2013, the head of Fisher Investments has run many blistering anti-annuity promotions – from critical columns and print ads to aggressive TV spots and online display advertising.
Over time, those promotional spots have driven market awareness, boosting Fisher’s profile as a well-recognized annuity critic. Many campaigns still run today, with the ads building on the Fisher celebrity, retirement tips, annuity leg sweeps, or other stickler points.
But while the annuity marketing blitz has been a success, a recent article raises questions about Fisher’s strong public stand against annuities.
It may point to what some call a contradiction between the “I hate annuities” mantra of Fisher advertising campaigns and the investment holdings of Fisher’s firm.
At InvestmentNews, reporter Greg Iacurci writes that while the infamous anti-annuity ads were running, Fisher Investments itself was invested in companies with large annuity business. Read More
Before you commit to an annuity as part of your retirement plan, it’s good to know the basics of this retirement tool. Every year, Americans put hundreds of millions of dollars into new annuity policies. Yet there still seems to be a measure of annuity misconceptions and confusion among consumers.
You may have seen that a quick internet search of the word “annuity” delivers a wildly diverse set of opinions! And every financial pundit has their own take on annuities. Some of the loudest voices on the internet even claim to be against them, all the while offering annuity or annuity-like solutions to their following.
To help you sort through the noise, we break down common annuity myths and supplement the conversation with some facts. Read More
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