Retire With Money: Finally, Some Good News on Family Finances
You may not be feeling it, but the average family’s finances have nearly recovered from the ravages of the last recession. That’s according to the latest data from the U.S. Census Bureau, which found that median household income surged 5.2% last year to $56,516 from $53,718 in 2014. That’s one of the fastest increases in history, and it was seen across most regions and demographics. Still, it’s a mixed picture. Much of the increase reflected people rejoining the workforce, rather than an increase in wages, which continue to stagnate. So there’s that. For retirement savers, it’s encouraging that fewer seniors are struggling financially—just 8.8% of those 65 and older were living in poverty vs. 10% in 2014. But that’s not adjusted for rising health care expenses. Using a more accurate formula that reflects costs for seniors, the Census Bureau said the poverty rate is a steep 13.7% for older Americans. Ouch. So keep plowing money into your 401(k) plan and don’t skip those trips to the gym. (Guilty.) Staying as healthy as you can, as long as you can, is a crucial financial investment.
Best wishes,
Penny
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THIS WEEK’S RETIREMENT NEWS, INSIGHTS AND ADVICE
How to Double Your Nest Egg for Retirement
Given the latest stock market dips, you may feel tempted to pull your money out—at least until November is over. But new data reinforces the value of a buy-and-hold strategy. Consistent savers build twice the wealth of others, as contributor Dan Kadlec explains. Money
How to Save for Retirement While Paying for a Child’s College
It’s a difficult message for a parent, but the reality is, your retirement savings should take priority over your kids’ college. Your kids will have other options (financial aid), but you’re on your own when it comes to retirement. Still you may be able to free up more cash with these smart money moves. US NEWS
Retirees, Here’s an Easy Way to Check Your Portfolio Once a Year
By the time you reach retirement, you may not want to spend hours overseeing your portfolio. The good news is you can simplify the process into an annual check-up that will let you review your holdings, rebalance and fill up your cash buckets—with just a few moves. Morningstar’s Christine Benz lays out the steps. MORNINGSTAR
The Right—and Wrong—Investing Risks in Retirement
Many retirees seek out investments that pay rich yields, say, 5% or more. But too often those payouts come from complicated and risky investments, warns financial planner Allan Roth. Here’s a safer, balanced strategy to keep your income flowing. Money
Social Security Staff Cuts Mean Longer Waits for Service
Even as a huge wave of retiring baby boomers is piling into Social Security offices to file for benefits, the agency is struggling with major funding shortfalls, a new report finds. Staffing is being cut, and many offices are closing. Meanwhile, seniors are being pushed to use online services, which hasn’t worked out so well. Be warned. THE FISCAL TIMES
Why Working Longer Is Good for Your Health
There’s been a major change in our understanding of health, work and aging. Studies show that older people can work longer, and continuing to work helps you stay healthier—and happier. It’s a virtuous cycle, says writer Chris Farrell, and it runs counter to the conventional wisdom that traditional retirement is the ideal, and that older people are less productive. Yes, experience matters. NEXT AVENUE
How to Prevent Forced Retirement from Ruining Your Golden Years
Speaking of working longer, more Americans say they want to stay on the job. But nearly half of retirees say they left work earlier than they expected, often because of layoffs or health issues. Best to plan ahead so you won’t get caught short financially if that happens. Contributor Walter Updegrave lays out three basic steps to follow. Money
Watch Out for Auto Enrollment in This Medicare Alternative
Medicare enrollment, which is already complicated, is getting more fraught. Insurers are seeking permission to “seamlessly” enroll members of some non-Medicare plans into Medicare Advantage plans, a managed option, when they turn 65. In other words, you may miss a letter and end up enrolled. As reporter Mark Miller warns, these plans aren’t right for everyone, so heads up. Money
The Latest in High-Tech, Low-Cost Hearing Aids
Hearing deficits are increasingly common as we age. And the solutions have been, up till now, mainly expensive hearings aids (often $3,000 or more) that often worked poorly. Now technology is finally driving down costs and providing more options. $250 for wireless ear buds? That frees up a lot more cash for retirement savings. SENIOR PLANET
YOUR RETIREMENT QUESTIONS ANSWERED
Are Roth IRA Withdrawals Required If I’m Working at 70½?
Q: If I’m still working at 70½, do I have to take money out of my Roth IRA? I plan to work until I’m 75. –A reader in Aventura, Fla.
A: Good news: Owners of Roth IRAs do not have to take required minimum distributions (RMDs). Never, even if they are past 70½, the age at which withdrawals must begin from traditional IRAs. But if you’re planning to avoid RMDs by converting your traditional IRAs to new Roths, better check these rules. READ MORE
WORDS OF WISDOM
“I think age is a very high price to pay for maturity.”
--Playwright Tom Stoppard