Social Security is approaching a fiscal cliff, with its trust fund reserves possibly being bankrupt by 2033 – a scenario that would result in a 25% reduction in monthly payments for recipients. Yet there is a solution to address most of the financing deficit, say policy experts.
Planning financially can help you ease into retirement if you require time to replenish your nest egg or want to take it easy for a while.
Spending in retirement might be scary. Inflation reaching a 40-year high is not the only factor that may keep you from indulging; there are several uncertainties and unanticipated threats. Even if hunkering down keeps you up at night, if you don’t spend your retirement funds, you defeat the purpose of collecting a nest egg in the first place.
Understanding how your financial adviser is compensated might be your most significant investment. If you have no idea how much you are paying for your financial advisor’s advice, you are in good company. In 2017, a Harris Poll revealed that over sixty percent of respondents had no clue how much they paid in fees on all their money accounts or how they were assessed.
Revenge spending can adversely affect retirement savings if it is not managed carefully. Individuals engaging in excessive or impulsive spending may deplete their savings and investments, leaving them with fewer resources for retirement.
A HSA is a Health Savings Account that offers a tax-advantaged savings account for individuals with high-deductible health plans. Not all employers offer HSA accounts to their employees, but many do. If you’re unsure whether your employer offers a HSA, check with your HR department or benefits administrator. Ideally, they can tell you about your employer’s benefits package, including whether a HSA is offered, the contribution limits, and any other details you need to know.
Among all the policy levers we can pull to help address the retirement issue in the United States, the most effective may be astonishingly straightforward. According to a stunning new study, merely speaking with a financial counselor may be enough to increase people’s savings rates significantly.
You are not alone if you are in your 60s or 70s and have no urgent plans to retire. In reality, you are in decent company. Warren Buffett, at age 92, is still recognized as one of the most brilliant minds in finance. Jane Fonda, at 85, is as active as ever as an actor and campaigner. Bob Iger has just resumed his position as Disney’s CEO at 72. In her recent victory speech at the Screen Actors Guild Awards, Jamie Lee Curtis stated, she is 64 years old, and this was amazing.
In retirement, how much of your savings and investment can you spend without running out of money? William Bengen, a financial counselor, produced a paper answering this subject in 1994
Retirement is a great thing if done right. When you’ve put in your time and effort for decades, it’s time to relax and do anything you want.