Earlier this summer, a Barron’s cover story advanced the claim that this is “the worst time to retire since just before the dot-com bubble burst”, pointing to the nearly decade-long stock bull market (and even older bond bull market) – and the “rising market volatility, rising inflation, rising interest rates and an uncertain economic outlook” expected to result – as the reasons why. The author of today’s article, however, has a different take – and argues that soon-to-be retirees who succumb to this thinking are hurting their retirement portfolios. For more, CLICK HERE.
While there are some general rules of thumb for retirement income-replacement rates (e.g. 75% to 80% of working income), pinning down your individualized retirement cash flow needs can be difficult. As the author of today’s article notes, “higher-income, higher-saving households may well need just 60% (or even less) of their pre-retirement income during retirement, while lower-earning, lower-saving households may need closer to 90%.” So how can you come up with as realistic a figure as possible for yourself? The author outlines seven steps to take. CLICK HERE.
When it comes to 401(k)s and IRAs, the author of today’s article argues that “Gambling away your retirement funds in a government-sponsored game of chance is a game you have little hope of winning.” Instead, he asserts that if you want to retire for real (and early), the key is attaining financial freedom – which requires focusing on cash flow rather than capital gains. For more – including the opportunity the author sees in a coming depression – CLICK HERE.
Having an employee stock option plan is a fortunate position to be in as, if well-managed, these plans can fund major financial goals, including retirement. However, the author of today’s article cautions that “Stock option plans are often misunderstood and choices are often made that leave people paying substantially more taxes on this employee benefit than is absolutely necessary. Small mistakes could result in hundreds of thousands of dollars in extra taxes due, in some cases.” So how can you maximize the value of your company stock options – and navigate the “crazy taxation” that surrounds them? CLICK HERE.
There’s an investment retirees can make that could provide them with a guaranteed return of over 17% – an investment that the author of today’s article notes is “simple, straightforward and right under our noses—and yet way too often overlooked or ignored.” What is this investment, why do so many not take advantage of it – and why do many of the retirees that do try to take advantage of it still come up short? CLICK HERE.
Today’s article outlines how an initial investment of $300,000 in six specific funds (from “an obscure corner of the market”) can create a significant, reliable income stream for retirement. Specifically, “this portfolio has a 7.9% yield, meaning our $305,000 initial investment is going to give us $24,000 in annual income—that’s $2,000 per month!” Moreover, these six funds offer growth in addition to income, with impressive annualized returns over the last decade. For more, CLICK HERE.
Amid the low interest rate environment of recent years, many income-seeking investors have turned to high-yield bond funds and dividend mutual funds in the search for higher income. However, with interest rates now rising, these funds are becoming riskier – leading the author of today’s article to suggest an alternate strategy to generate income: investing in pass-through securities, which “are required to pay out almost all their earnings in cash distributions.” For the four main categories of pass-through securities, how to take a diversified approach to them – and which may perform best at this point in the market cycle – CLICK HERE.
The FIRE (Financial Independence, Retire Early) movement has been gaining traction – but, as today’s article seeks to make clear, as wonderful as the prospect may seem, extra-early retirement isn’t for everyone. Specifically, the author outlines some of the financial and emotional consequences of early retirement – as well as some questions to ask yourself if you are still considering leaping into the FIRE. For more, CLICK HERE.
The author of today’s article is no fan of 401(k) plans, asserting that they don’t work. On the other hand, traditional pensions are largely obsolete. However, he notes that “There is one widely overlooked option that combines the best of the two retirement savings plans.” That option? Cash-balance plans, which are hybrids of traditional defined-benefit pensions plans and 401(k)s – and which are soaring in popularity. For more on cash-balance plans – including why they may be especially advantageous for older workers – CLICK HERE.
There are still a few weeks left of summer, but now may be time to start thinking about the end of the year – especially if you are in or nearing retirement. Today’s article outlines a number of ways that retirees and those planning their retirements can benefit by getting an early start on their year-end financial planning. For more – including what one expert describes as “two gifts of the tax code” to consider as part of this process – CLICK HERE.