Retirement

Let’s talk about the “4% rule,” originally from Bill Bengen’s seminal retirement distribution strategy research published in the Journal of Financial Planning in 1994.  In his research, Bengen found that historically at that time, you could have taken 4%, adjusted for inflation each year from an investment portfolio of a 50/50 mix of large cap U.S. stocks and government bonds, and it would not have run out of money in a 30

Wealth depletion by retirees reduces the size of their estates. This is seldom an issue for those who retire wealthy, or for those without any heirs they care about. For the larger group of non-affluent retirees who do care, however, the conflict is inescapable. The retiree, for example, may have to choose between taking a

Series I Savings Bonds (aka I bonds) have several features that can be particularly useful for middle-income pre-retirees and retirees building their retirement income portfolio. They offer high interest rates (currently yielding 7.12% per year), guarantees of principal and interest, and long-term liquidity (with a few caveats).   My last two posts described I bonds in

Forrest Gump, the lead character played by actor Tom Hanks in the 1994 film of the same name, left audiences with many memorable quotes. One that stands out is when Forrest says, “My mama always said life was like a box of chocolates. You never know what you’re gonna get.” I consider chocolate to be

By Chris Farrell, Next Avenue The grassroots movement toward working longer looks like it’s at a moment of reckoning. The ranks of retirees 55 + have grown by 3.5 million over the past two years, according to the Pew Research Center, much higher than the pre-pandemic rate. This shift is one reason some employers are struggling to have

By Richard Eisenberg, Next Avenue Editor In her thought-provoking new book, “The End of Bias: A Beginning,” science and culture journalist Jessica Nordell probes the science and practice of overcoming unconscious bias. That’s what happens quickly when we encounter a person or a situation and our reaction conflicts with our professed values. We see it a lot with

Dave thought his mom had done everything right: invested her savings, done great estate planning and appointed him her only son, to take over when needed. And the time came for Dave to step in. Dave’s elderly mom, Agnes began to lose her memory. She had been living with a companion for years before that

If you are the beneficiary of someone’s IRA (individual retirement account), what do you do if the IRA owner dies? To find out how to handle the deceased owner’s IRA, the key contact is the IRA custodian, the firm that “custodies” the IRA. (You can find the name of the custodian on the IRA statement.)

By Lazetta Rainey Braxton, Next Avenue Sixteen years ago, when I became a new mom, my boomer dad wisely shared with this Gen Xer that parenting doesn’t come with a handbook. If it did, financial education would surely have one of its very own chapters. Although we often focus on teaching our children values, life skills

Soon after Hollywood writer/director/actor Peter Antico read my book Who Stole My Pension? last year, he called me on behalf of a group of SAG/AFTRA members, including Ed Asner (of Lou Grant television fame), and Titanic film star, Frances Fisher.  The group of actors was outraged that, in the midst of a global pandemic, the

Colorado and New Mexico recently announced an innovative approach to managing their new state-facilitated retirement saving programs. Under a Memorandum of Cooperation, the Colorado Secure Savings Program and New Mexico Work and $ave will collaborate on program administration and financial services, marketing, data collection, and participant privacy. Such partnerships can provide a cost-effective way for

If you inherited an individual retirement account (IRA) in 2021 from someone who was taking RMDs (required minimum distributions), are you aware that you might need to take action before the year ends? You, the beneficiary, may face a steep penalty if the deceased owner did not withdraw his or her full RMD for 2021. 

The estate tax changes that were anticipated in the final months of 2021 are apparently not materializing, leaving some people scratching their heads as to what they should do next.   Two recent pieces of legislation – the Infrastructure Investment and Jobs Act (IIJA) and the Build Back Better (BBB) bill – were expected to include

Saving enough for early retirement often takes a few variables to succeed. You need enough income to stash money away to last over a 40- or 50-year retirement, a disciplined plan to methodically invest the funds and some luck. The luck can run out if, say, you lose your job for an extended period of

Ever since the coronavirus pandemic reached the United States, baby boomers have been accelerating their retirement plans, and many Americans have been migrating to new states. For retirees, the non-financial considerations often revolve around weather, proximity to grandchildren, and access to quality healthcare and other services. However, if you are retired and no longer generating

To deny state and local government retirement savers—investors who cannot afford to gamble—critical investment information which is routinely provide to wealthy investors globally in prospectuses is unfair. Are we now a nation of two classes of investors? Most investors are familiar with work of the Securities and Exchange Commission, the federal agency which regulates the

The SECURE Act of 2019 passed with big changes to retirement income planning. It created a Fiduciary Safe Harbor Provision for employers which allows them to offer certain annuities inside 401(k) plans without worrying about their fiduciary liability if the insurance company defaulted on their annuity payments.  While having access to annuities inside a 401(k)

Series I Savings Bonds guaranteed by the U.S. government (aka I bonds) are currently earning 7.12% annual interest. This is great news for middle-income retirees who may have recently watched the interest income from their CDs and savings accounts dwindle to just a few pennies. For pre-retirees and retirees building their retirement income portfolio, the

As part of your estate plan, you need to consider whether it’s possible your IRA or 401(k) could end up in the hands of creditors of one of your heirs. A general rule is that qualified retirement plans are exempt from bankruptcy claims. But that general rule applies only to the original owner of the

No one likes sudden change. We like to ease into things – transition with time. Yet we talk about retirement as an event. One day you’re a working stiff; the next day, you’re a retiree. Wouldn’t it be nice if you could phase into retirement? With planning, you can. So-called “phased retirement” is a hot