A digest of timely information and insight about finance, investing, and retirement.
You can’t be Warren Buffett. You won’t be Warren Buffet. But you can invest in exactly the way that Warren Buffett advises. In fact, Warren Buffett tries to remind his children that they are not Warren Buffett, and he advises them to invest his fortune in index funds rather than try to emulate what he did. But the financial industrial complex has no vested interest whatsoever in telling that what they do is simple.
One-size-fits-all advice about retirement is just about impossible to come by, but there’s one nugget of truth that everyone should consider. When you decide to raid your 401(k) or Individual Retirement Account for any reason that’s not directly related to providing income in retirement (known as leakage), the effects can be significant. Researchers at Boston College’s Center for Retirement Research predicted that retirement savers with average leakage rates of 1.5 percent per year would end up with retirement accounts 20 percent smaller than those who left all their savings in their accounts until retirement.
Retirement can be a source of great anxiety and uncertainty. Going from the accumulation to the dispersion phase of your life can be emotionally challenging and the “what if’s” can become debilitating if you let them. Like learning any new skill, it takes willingness, a little patience and the real desire to get through the bumps to enjoy a more satisfying and meaningful life. A few tips can help reset your thinking.
Authors of a recently published book for women in their 70s and beyond looked at important issues facing women as they age and how society might help ease their way into the future. And with a quarter of American women age 65 expected to live into their 90s, there could be quite a lot to think about. The authors explore topics including ageism, adjusting to loss and death, social connections, grandparenting, work and retirement, reporting that “women seemed to fear retirement before the deed was done, and then to relish their newfound opportunities afterward.”
High fees, often hidden from view, are still enriching many advisers and financial services companies at the expense of ordinary people who are struggling to salt away savings. A new analysis of mutual fund data confirms its severity.
That’s why the Labor Department announcement early this month is so important. (Read more about the new fiduciary rule from the Department of Labor). For the first time, all financial advisers dealing with retirement accounts will be required to act in their clients’ best interests. The announcement is long overdue and a big step forward. But don’t rejoice just yet: It is only a step.
Transamerica Center for Retirement Studies has released a report laying out the top concerns of retirees and how they are faring after the Great Recession of 2008. More than half (55 percent) report lingering consequences of the recession, including those who say they have only somewhat recovered (35 percent), have not begun to recover (8 percent) or don’t expect to ever recover (12 percent). Conversely, 45 percent said they either have fully recovered or were not impacted. The report indicates that retirees’ first priority is just covering basic living expenses, cited by 42 percent. This is followed by health care expenses (37 percent), paying down credit card debt (25 percent), paying off mortgages (21 percent) and continuing to save for retirement (20 percent).