Summary of “When should you retire? Don’t die at your desk, but don’t outlive your money either”

Fritz Gilbert knew in his 20s that he did not want to die at his desk.
“Every one of us is making a decision on retirement every day, in the way we live and spend our money,” Gilbert said.
Gilbert is a case study on how to mentally and financially ready yourself to retire.
Do something, she says, because “Dying at your desk is not a retirement plan.”
The rest of his investments are split between 60 percent stocks and 40 percent bonds, consistent with the playbook that most financial experts recommend for someone in his 50s and 60s. “Somewhere between 40 percent to 60 percent equities is a great place for most folks entering retirement age,” said David Blanchett, head of retirement research at Morningstar Investment Management.
“Assuming retirement is going to last 30 years, I think 70/30 stocks to bonds could be more aggressive.”
“It’s moving to a lower cost of living for retirement to allow retirement funds to stretch further.”
Gilbert is cruising into an affordable retirement that includes camping in national parks, fly-fishing, mountain biking, kayaking and his favorite – cold-water, long-distance swimming.

The orginal article.

Summary of “Millennials and retirement: How bad is it?”

There’s been a lot of hand-wringing over the retirement prospects of young Americans, and the huge millennial generation in particular.
My research suggests that those concerns are real, and millennials really are building wealth more slowly than the other working generations.
A comparison of millennials with earlier cohorts when they were the same age shows that even though a higher percentage of both millennial men and women have college degrees, they are behind in almost every economic dimension.
In terms of preparing for retirement, millennials have three strikes against them.
First, because of limited access to retirement plans at work, millennials will struggle to build retirement savings, since experience shows that people have a great deal of trouble saving on their own.
An easy way to gauge retirement preparedness is to measure the ratio of wealth to income-in other words, how much millennials have been able to save or invest in assets like 401(k) plans or home equity compared to their incomes.
The good news for millennials is that retirement is still a long way off.
My research shows that the vast majority of millennials will be fine if they work to age 70.

The orginal article.

Summary of “Here’s How the Social Security Retirement Benefit Formula Works”

Social Security is the largest retirement program in the United States, but far too many people don’t understand how their retirement benefit is determined.
Knowing how Social Security benefits are calculated can help you make smart decisions when it comes to claiming your own benefit, and can help you estimate your eventual retirement income for planning purposes.
With that in mind, here’s a quick guide to how the Social Security Administration, or SSA, determines the size of your monthly retirement benefit checks.
The first step in the Social Security formula is determining your average indexed monthly earnings, or AIME. To calculate your AIME, the SSA takes each year of earnings throughout your working lifetime, up to the Social Security taxable maximum.
Calculating your PIA. Your average indexed monthly earnings are then used to determine your basic Social Security retirement benefit, which is officially referred to as your primary insurance amount, or PIA. This is the number that, along with your age at the time you apply, determines your initial Social Security benefit.
The other major consideration is if I’m claiming Social Security retirement benefits earlier or later than my full retirement age.
If you decide to claim Social Security before reaching your full retirement age, the benefit amount calculated by the previous steps will be reduced at a rate of 0.56% per month for as many as 36 months before reaching full retirement age, and at a rate of 0.42% per month beyond 36 months early, until as early as age 62.
On the other hand, if you wait until after full retirement age, your retirement benefit will be permanently increased at the rate of 0.67% per month, and this delayed retirement credit can continue to accumulate until you reach age 70.

The orginal article.

Summary of “Don’t cheat yourself with the 4% rule”

It’s a rule of thumb that says you can withdraw 4% of your portfolio value each year in retirement without incurring a substantial risk of running out of money.
Unless we see the return of a Great Depression era, followers of the 4% rule “Will most commonly just leave a huge amount of money left over,” says Michael Kitces in his research piece, entitled “How Has The 4% Rule Held Up Since The Tech Bubble And The 2008 Financial Crisis?”.
In addition to being incredibly conservative, the 4% rule does not consider other sources of income you have and the timing of when each source begins.
Why scrimp by only withdrawing 4% of your portfolio while waiting for Social Security? It often makes more sense to withdraw more than 4% during that window of time – yet many retirees won’t do this because the popularized rule of thumb has made them fearful that they’ll run out of money if they don’t follow the rule each year.
It’s much easier to write about a rule of thumb or sensationalize the latest stock market gyration.
Be cautious of a financial adviser who uses a rule of thumb to determine your retirement withdrawal amounts.
There is nothing unprofessional about using a rule of thumb to set broad, general expectations.
Retirement is the biggest financial decision you’ll make and you need a customized plan, not a rule of thumb.

The orginal article.

Summary of “How Different Retirement Income Is Taxed”

While you’ll have a million considerations at this time in your life about what to do with your time and money, there’s one more to take into account that can significantly impact your planning: Just how much of your retirement income will be taxed.
To simplify, here’s how 13 different types of retirement income streams are taxed.
Contributions and gains in these tax-deferred accounts are taxed at your income tax rate in retirement when you withdraw funds.
Pensions are typically taxed at your income tax rate, as they’re funded with pre-tax dollars.
Determining your provisional income gets a bit complicated, but basically, half of your Social Security income is added to your other retirement income, and if that amount exceeds $32,000 annually for couples and $25,000 for singles, your Social Security benefits will be taxed: up to 50 percent if your income is between $32,0000 and $44,000, and up to 85 percent if you’re earning more than $44,000.
Qualified dividends-those that meet requirements for a specific holding period-are taxed at long-term capital gains rates, while non-qualified dividends are taxed at your ordinary income rate.
A few years back, I finally opened up an individual retirement account, or IRA. money, then 100 percent of payouts are taxed as ordinary income.
Interest payments on these funds are taxed at your ordinary income rate.

The orginal article.

Summary of “The Death of the Fiduciary Rule Is Bad News for Your Retirement”

The Fiduciary Rule is one step closer to death, and that means it’s once again A-ok for your retirement planner to scam you.
The Fiduciary Rule, crafted by the Obama Administration, would have required that all financial professionals to adhere to the “Fiduciary” standard-meaning they’d have to work in your best interest if they were advising you on your retirement investments.
So Republicans delayed the implementation of the rule for almost a year-lucky for them, “Fiduciary” is such an aggressively boring word it’s easy for the average person to overlook its importance, and hard to get riled up about.
Today, a federal appeals court ruled that the Department of Labor overstepped its authority when it wrote the rule.
The Republican argument against the Fiduciary Rule is that it would make it hard for lower income people to see a financial planner.
To cut through the doublespeak, what that means is it would have made it harder for lower income people to be tricked and ill-advised by planners who have no qualms siphoning away the minuscule retirement savings the average American manages to stash away, under the guise of “Advising” them.
Who else is held to a fiduciary duty? Lawyers are a typical example.
Lobby your state government to institute its own version of the Fiduciary Rule.

The orginal article.

Summary of “The Most Motivating Financial Chart I’ve Ever Seen”

The grid shows that each of them would only need to work 16.6 years to fund their retirement at their current spending levels.
Someone taking home $100,000 a year after taxes would have to keep working almost 66 years if they spent most of that money each year.
If he’s able to increase his take-home pay by $10,000, whether through a promotion at work or a side hustle, and he keeps his spending at the same $40,000 a year, he can shave more than 11 years off his work career.
Another interesting aspect of the grid is that it doesn’t crunch numbers for those who spend below $20,000 per year.
Think about how many years you could knock off your working life if you only spent $15,000 per year? Or $10,000?
Jacob Lund Fisker, author of the popular blog and book “Early Retirement Extreme,” famously lives on $7,000 per year.
Considering the average person works for over 40 years, getting that number down to 28 is no small feat! That represents 12 extra years of your life where you get to do what you want, when you want, on your own terms.
You can cut chunks of years off your working career with relatively small spending reductions, which is amazing to behold.

The orginal article.

Summary of “Here’s Why I Plan to Take Social Security at 62”

Instead of waiting to claim Social Security at my full retirement age or later, I plan on taking my Social Security at age 62, the earliest age possible.
Although my full retirement age is 67, I can start receiving Social Security as early as age 62.
Specifically, because Social Security reduces full retirement age benefits by 5/9 of 1% per month for the first 36 months and 5/12 of 1% for each additional month I claim early, I’ll only receive 70% of my full retirement-age benefit if I begin receiving benefits at age 62.Alternatively, if I delay claiming my Social Security, I can receive a bigger payment.
Specifically, Social Security awards delayed retirement credits that can increase my payment by two-thirds of 1% for every month I delay beyond full retirement age, up to age 70.
If I take Social Security at age 62, then I’ll receive $1,525 per month.
If I claim at age 62 and invest my $1,525 monthly Social Security check into an S&P 500 index fund that returns a hypothetical average 6.5% annually, the value of my estate will be $593,104.
In 2018, people can earn as much as they want without it reducing their Social Security income after they reach full retirement age, but if their income exceeds $17,040 per year and they’re between age 62 and full retirement age, it lowers their Social Security income by $1 for every $2 earned.
In my case, I believe the right approach is to claim Social Security at age 62, but that doesn’t necessarily mean it’s the right choice for you.

The orginal article.

Summary of “A Retirement-Savings Crisis Is Making Never-Ending Work”

“I’m a working woman again,” she told me, in the common room of the senior apartment complex where she now lives, here in California’s Inland Empire.
Gordon has worked dozens of odd jobs throughout her life-as a house cleaner, a home health aide, a telemarketer, a librarian, a fundraiser-but at many times in her life, she didn’t have a steady job that paid into Social Security.
Many people reaching retirement age don’t have the pensions that lots of workers in previous generations did, and often have not put enough money into their 401(k)s to live off of; the median savings in a 401(k) plan for people between the ages of 55 and 64 is currently just $15,000, according to the National Institute on Retirement Security, a nonprofit.
“In the early decades of our work, we were serving communities that had been poor when they were younger,” Prindiville told me.
If today’s seniors are struggling with retirement savings, what will become of the people of working age today, many of whom hold unsteady jobs and have patchwork incomes that leave little room for retirement savings? The current wave of senior poverty could just be the beginning.
In 1979, 28 percent of private-sector workers had participated in defined-benefit retirement plans-by 2014, just 2 percent did, according to the Employee Benefit Research Institute, a nonprofit.
At least Belleau and others are physically able to work.
She’s still working at 76, but she feels a little more secure now that she has more help.

The orginal article.

Summary of “It’s Time to Say It: Retirement Is Dead. This Is What Will Take Its Place”

The truth is that we are doing an enormous disservice to society by setting retirement as an end goal to a long career.
Advances in longevity are making supporting retirement for another 20 to 30 years impossible for 90 percent of all U.S. workers, whose only source of income is Social Security, which only pays from an average of just over $1,300 per month to a max of just over $2,600 per month.
While paid media ads that talk about retirement planning seem to be everywhere, the reality is that very few people are actually benefiting from retirement savings or planning.
Even if you’re lucky enough to be among the 20 percent, who have a $1 million-plus net worth and enough saved up to retire, there is some evidence that the classic notion of retirement may actually be harmful to your health.
Even the unhealthy group reduced their likelihood of dying by 9 percent if they delayed retirement.
What amazes me is that every financial institution’s white paper, study, or promotional piece about retirement planning is missing one critical thing: any mention of continuing to work! We need to wake up.
Rather than perpetuate the mythology of work as penance and retirement as a time to be liberated from it, what if you replaced the concept of retirement with that of a third act in which you can continue to create value and receive value for those things that you truly love to do, while you also establish a balance with other personally fulfilling activities you may want to do more of?
The bottom line is that the old rules were built for an economy and a society in which retirement was seen as a release from bondage-the liberating act from a lifetime of work.

The orginal article.