By Penelope Wang
September 30, 2016

This week a new retirement savings plan was signed into law in California, which may eventually spur new options for savers around the country.

The California Secure Choice plan, which is designed to expand coverage to some seven million workers who lack employer plans, will require small business owners to auto-enroll workers in a 401(k). California, the largest state, adds critical mass to a fast-growing trend—some 30 states are in different stages of developing and launching state savings plans.

Only about half of private-sector workers have access to a plan, which is a critical ingredient to achieving retirement success. Some 90% of employees with plans save for retirement vs. just 20% of those who lack them. If you have a 401(k) or a similar plan, you’re fortunate—so save to the max. If you don’t have one, check out this chart, which shows your savings options, including individual IRAs and plans for the self-employed. An employer nudge is great, but in the end, retirement saving is up to you.

Best wishes,

Penny

P.S. If you like this weekly newsletter, please send it to a friend. And if you got it from a friend, you can sign up for it here.


THIS WEEK’S RETIREMENT NEWS, INSIGHTS, AND ADVICE

5 Smart Moves to Make With Your 401(k) Now

For retirement investors, the past seven years have delivered terrific returns, as long as you stuck with stocks. But the bull won’t run forever, and your retirement date is drawing closer. Writer Carrie Bigda offers tips on the best ways to fine-tune your portfolio now. MONEY

Millennials: You’re Still Not Saving Enough

If you’re a young adult enrolled in a 401(k), you might think you’re off to a decent start. But are you saving 22% of your pay? That’s the amount that new study says a 25-year-old needs to be putting away. (Gulp.) Other experts say that’s too high, but check out the numbers, if only to spur you to save more. Perhaps 15% would be a good target. CNBC

This Is Gen X’s Biggest Retirement Mistake

Generation X has reached its 30s and 40s, and they’re coping with competing demands: raising children, building careers, and caring for aging parents. Caught in this juggling act, many are failing to save. But there’s still time. See what getting serious about saving now can mean for your retirement. MONEY

Military Prepares for Overhaul in Retirement Benefits

Next year the U.S. armed forces will adopt a new retirement plan, one that blends a defined benefit pension plan for career personnel with a 401(k)-style account for those who don’t intend to stay in the military for life. As writer Mark Miller reports, this change is a mix of good news and bad news. On the bad news front, there will be a reduction in defined benefit pay, plus a big learning curve. If you or someone you know is in the military, this will help you get up to speed. RETIREMENT REVISED

Are You Overconfident About Retirement? Here’s a Reality Check

In a recent survey, some 60% of people were confident they’ll be able to get enough retirement income from their savings. Yet fewer than half knew how much they had saved. Time to get real. Contributor Walter Updegrave provides three questions that will help you figure out if you’re on track. MONEY

Social Security Timing Can Affect Medicare Premiums

The Social Security cost-of-living adjustment is likely to be increased only slightly for next year. That will have a ripple effect on the Medicare premiums for those who are enrolled in Medicare but not yet collecting Social Security. As columnist Mary Beth Franklin explains, if you’re in this group, you could see a big increase in premiums. INVESTMENT NEWS

How Social Security Misleads About Claiming Benefits

It’s hard to point to a government program more complex than Social Security, and almost none is as important to the nation’s financial security. But that complexity, coupled with recent budget cutbacks, means that many retirees are likely to receive wrong benefit information from the agency’s reps, says economist Larry Kotlikoff, a Social Security expert. Here’s what you need to know. NEXT AVENUE

The 50 Cheapest Places to Retire in the U.S.

If you’re arriving at retirement and feeling a bit short of cash, it’s smart to consider relocating to a less costly area. The good news is you may not have to give up quality of life to do it. This list of inexpensive locales includes a mix of towns that offer culture and outdoor activities at a reasonable cost. Austin, anyone? MONEY

How to Get More Pleasure Out of Retirement Spending

Many retirees use a set withdrawal rate that is carefully calibrated to avoid running out money. Sensible, but it limits your fun. UCLA behavioral economist Shlomo Benartzi says that more flexible withdrawal strategies, such as occasional splurges, can help you squeeze more enjoyment out of your savings. Works for me.MARKETWATCH


YOUR RETIREMENT QUESTIONS ANSWERED

How Do I Use the Bucket Approach for Retirement Income?

Q.: When using the bucket approach to retirement investing, what is the timing and strategy for replenishing the money market bucket? How do you do this and try to avoid moving money from the more risky buckets during a market downturn? C. Hill, Hoover, Ala.

A.: The goal of the bucket approach is to “immunize near-term expenses from market fluctuations,” says Michael Falk, partner at Focus Consulting Group in Chicago, which advises investment firms. In other words, if you’re living off your investments in retirement and the stock market tanks, you want to make sure you can keep paying your bills. READ MORE


WORDS OF WISDOM

“Many a grand theory has died under the onslaught of real data.”

– mathematician and author Benoit Mandelbrot


ABOUT PENNY: Penelope Wang is editor at large at MONEY with a focus on retirement planning. A graduate of Swarthmore College and Columbia University School of International Affairs, she was recently ranked among the “top social influencers in personal finance and wealth.” You can email her at retirewithmoney@moneymail.com and follow her on Twitter @PennyWriter.

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