By Penelope Wang
December 23, 2016

Back in the day, reaching your retirement goals meant building a sizable portfolio and paying off your mortgage. Both goals are a lot harder to achieve in today’s economy. To amass adequate retirement savings, you’ll have to commit to a high contribution rate, given forecasts of lower returns. Paying off your mortgage is also a challenge, given that more and more older Americans are entering retirement still carrying housing debt. Worse, many seniors are retiring with defaulted student loans, and that’s led to their Social Security benefits being garnished, according to a new GAO report. These unlucky retirees may have co-signed loans for their kids or grandkids, or they may have sought a degree that failed to pay off. Whatever the reason, it’s a reminder that financial choices that may appear low-risk at the time can have big unintended consequences. So as the New Year approaches, be sure to review your retirement plan to avoid unpleasant surprises later in life. Your future self will thank you.

Speaking of the New Year, Retire with Money will be taking a holiday break next week. The next issue will appear on January 6.

Best wishes,

Penny

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THIS WEEK’S RETIREMENT NEWS AND INSIGHTS

2 Financial Resolutions You Need to Make for the New Year

No question, keeping your New Year’s resolutions can be challenging. But if you commit to these two financial pledges, you will greatly improve your retirement security, says contributor Walter Updegrave. They’re smart moves that will leave you feeling better prepared for whatever 2017 brings on. MONEY

How to Build a Multimillion-Dollar Retirement Fund

Achieving a seven-figure retirement portfolio isn’t something you can do overnight, or even in a few years. Still, for a couple with decent salaries, if you stick with a long-term savings plan, and don’t get hit by too many bear markets, it’s actually doable. Take a look at the numbers, and start boosting your 401(k) contributions. USA TODAY

Overcoming a Late Start to Saving for Retirement

Okay, maybe most of us weren’t model retirement savers back in our 30s and 40s. So what to do if you’re in your 50s and haven’t put away nearly enough? Don’t panic. There’s actually a lot you can do to improve your financial security—if you start saving now. Portfolio manager Ben Carlson lays out a helpful roadmap. A WEALTH OF COMON SENSE

The Best Money Bloggers of 2016

Some of the best insights on retirement investing are be found among independent bloggers. Darrow Kirkpatrick, an early retiree and blogger himself, rounds up his pick of the best blogger articles for this past year. Take a look and bookmark these websites. MONEY

Retirement Savings Moves That Cut Your Tax Bill

As 2016 winds to a close, it’s a great to time to review strategies for lowering your tax bill next year. Using your retirement savings accounts to the max can help with that, as well as help you reach your financial goals faster. Reporter Kelli Grant lays out some tax-smart strategies. CNBC

A Baby Boom Couple Assesses Their Retirement Readiness

This couple in their early 60s has amassed a $1.1 million portfolio, plus they have a pension. But given their level of expenses, are they on track to a secure retirement. Morningstar’s Christine Benz takes a look and makes some recommendations. Spoiler: they need to streamline a mish-mosh of 401(k)s and IRAs and plan for RMDs. MORNINGSTAR

Is a Continuing Care Retirement Community Right for You?

When trying to plan ahead for retirement, whether for yourself or an older relative, one of the biggest decisions is choosing where to live. The ideal location will allow for independence yet provide supports if they’re needed later on. Continuing-care retirement communities offer that balance. But you need to do your research. Contributor Carla Fried tells you what questions to ask. MONEY

How Much Cash Would It Take to Delay Your Retirement?

As everyone knows, Social Security is headed for a funding shortfall that may lead to benefit reductions. Recently, two researchers have proposed one possible solution that might help delay an insolvency. If people delay claiming, offer a lump-sum payment of those forgone benefits. The idea is just theory right now, but it could get you thinking about the value of delaying your own retirement. BLOOMBERG

Boomerang Boom: More Employers Tap the Skills of the Recently Retired

As more and more boomers retire, a lot of skills and experience are walking out the door. Finally, employers are starting to realize this, and increasingly they’re bringing back retirees to work part-time. As Chris Farrell reports, these programs can be tricky to run. But done right, they can work out well for both retirees and their employers. NEW YORK TIMES

YOUR RETIREMENT QUESTONS ANSWERED

Q: I have about $40,000 in an IRA which I do not need. I am 78 and would like to do something with it before the end. I know if I take it all out at one time, the tax would be heavy. Any suggestions?

A: First, run the numbers and make sure you definitely won’t need that money for future income, health care expenses, or other essentials. READ MORE

WORDS OF WISDOM

“The most incredible thing about miracles is that they happen.”

–writer G.K. Chesterton

 

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