A digest of
timely information and insight about finance, investing, and retirement.
the new retirement spending spree | Kiplinger
Congratulations, you’re retired! After 30 years of hard work and
savings, you have over $1 million in your 401(k). Wow, that’s a lot of money,
you would think. Feeling flush with cash, however, can lead to a problem.
Overspending during the first few years of retirement is one of the biggest mistakes a
recent retiree can make. Here’s what happens: After spending decades hard at
work, many newly minted retirees jump into all the fun vacations and other
bucket list items they had been dreaming of with both feet – like taking six
cruises during the first year of retirement, paying off a child’s college debt or
putting a down payment on a child’s new house. While this is may be admirable,
it’s not the best financial plan.
participants keeping retirement plan balances invested
recent Alight Solutions study examining defined contribution (DC) plans has
found that more participants are keeping retirement plan balances invested when
leaving the plan due to either termination or retirement. The “2019 Universe
Benchmarks” report, conducted with 121 plans and covering more than three
million eligible participants, was split in categories between participation
rates, plan balances, account distributions, and more by age, gender, tenure,
and industry. Thirty-two percent of participants who left their job during the
first nine months of 2018 kept their balances in the plan as of year-end.
Seventy-seven percent of dollars that left plans were moved to individual
retirement accounts (IRAs).
The art of doing
nothing in retirement
| US News
The experts are never shy about telling retirees to
go out and volunteer for a worthy cause, take a part-time job,
attend a class, babysit grandchildren, or otherwise check off some item on a
bucket list. Retirees are often advised to stay busy and do something
meaningful. For the most part this is good advice. No one wants to feel bored
and useless in retirement. But sometimes it’s nice to just relax and do
absolutely nothing. It’s possible to adjust to a relaxing pace of life in
retirement by navigating feelings of guilt, adjusting to your new pace,
lowering your stress levels, and beginning to live the life you dreamed about.
How well does your
job prepare you for retirement?
Most would agree that
the type of job you hold determines how you feel about working. Some jobs just
offer more and better benefits. The tasks associated with prestigious and
professional occupations make them more ego-gratifying and intellectually
stimulating, not to mention better paying. These jobs contribute greatly to
one’s emotional well-being because they’re personally fulfilling. As a result
of all this good stuff, professionals rely more heavily on their jobs for
defining themselves. So it stands to reason that those holding such jobs would
be less enthusiastic about leaving them, and would have a harder time adjusting
to retirement. But that’s not the case – they actually adjust better.
spending habits that could ruin your retirement |
After years of hard work, many Americans look to
kick back and enjoy their golden years. However, there are dozens of habits
that can impact the different ways people save for retirement – some good,
others bad. Financial expert Chris Hogan told Fox Business that “retirement is
not an age; it’s a financial number.” So when it comes to saving, be
“intentional,” but also be “careful.” In
addition, he broke down three habits that could ruin your retirement savings.
super-savers who plan to retire early are doing differently |
If you want to retire early, just setting and
forgetting when it comes to your savings strategy won’t cut it. Just ask a new
crop of investors dubbed “super savers.” These Americans, ages 45 and up, are
putting away at least 20 percent of their income. That’s $1 out of every $5.
And their efforts are paying off, according to an online survey from TD
Ameritrade. The results show that 57 percent of super savers plan to retire
earlier than their parents did, versus 46 percent of non-savers. “Most are
choosing this path because they’re looking at the freedom and flexibility it
offers,” said Dara Luber, senior manager of retirement product at TD
Ameritrade. “They are looking for financial security and peace of mind, and
they’re thinking that their retirement will be like a second childhood.” If you
want the same freedom in your golden years (or earlier), there are a few ways
to get started.