3 Better Retirement Strategies for Women

Do women approach retirement differently than men? I wish I could say “no.” But my own personal experience with clients over the last decade-plus indicates otherwise. Check out these helpful retirement-planning ideas for women.

80% of men die married but 80% of women die single, says the Women’s Institute for a Secure Retirement. That means they’ll likely have to manage their own financial future. Yet many women tend to approach retirement planning cautiously, if at all. Some are afraid of making a mistake. Others worry they’re not knowledgeable enough, and retreat from financial decisions – or avoid the topic altogether. Here are 3 ways women can plan for a better retirement.

RMD’s – the Biggest Blind Spot on the Road to Retirement

According to a recent survey, almost half of new retirees wish they had planned better for handling taxes in retirement. The big tax “gotcha” is RMD’s – required minimum distributions. The fact is, most men and women don’t understand them or how to project the impact on their retirement tax bill. https://www.cnbc.com/2018/11/01/6-ways-to-cut-retirement-tax-surprises.html?__source=yahoo%7Cfinance%7Cheadline%7Cstory%7C&par=yahoo&yptr=yahoo

The tax burden of RMD’s is bad enough. And if you don’t pay the proper amount, you’re hit with a 50 percent tax penalty on the shortfall. Ouch! Learn how to maximize your retirement income and minimize your retirement taxes at: https://www.cnbc.com/2018/11/01/6-ways-to-cut-retirement-tax-surprises.html?__source=yahoo%7Cfinance%7Cheadline%7Cstory%7C&par=yahoo&yptr=yahoo

Why a “Sleep Easy” Portfolio May Lead to Retirement Nightmares

It’s the foundation behind most financial advice proffered today. It’s the methodology taught in most finance courses. It’s the doctrine that powers most “robo advisors.” Unfortunately, it also may be totally wrong.

A “balanced” portfolio made up of 60% stocks and 40% bonds has long been championed as the safest, most conservative investment allocation for retirement planning. Recent research shows that this “sleep at night” approach may be far riskier than we’ve been told. You owe it to yourself to check this out: https://www.marketwatch.com/story/your-portfolio-may-be-riskier-than-you-think-2018-10-11

10 Retirement Commandments to Obey

When the markets get jumpy people start to wonder whether their retirement savings are going to go the distance. Now might be a good time to review the basics, aka “The 10 Commandments of Retirement.”

My favorite is Commandment #10: “Invest in ways that will provide a steady income stream in retirement. In many ways, retirement is no different from your working years: You want a steady flow of income. Do not be totally exposed to stock market fluctuations. You don’t want to worry about where [your withdrawals] will come from each year.”

One decree some might take exception to is using municipal bonds to reduce retirement taxes. It may be just a question of timing, but one has to consider whether bond funds make sense in a rising interest rate environment. There’s also the default risk some municipalities may pose.

See what you think at: https://www.marketwatch.com/story/the-10-commandments-of-retirement-2018-08-21?siteid=yhoof2&yptr=yahoo

Retirees Get Biggest Cost-of-Living Raise in Years

Social Security beneficiaries will receive 2.8% higher benefits in 2019. This is the biggest COLA increase since benefits went up 3.6% in 2012.

Read more at:  https://sagefinancialpartners.com/retirees-get-biggest-cost-of-living-raise-in-years/

Are You Budgeting Enough for Health Care in Retirement?

Health care costs are increasing faster than any other expense (except maybe the cost of college). Which probably explains why one of the most common questions we hear is, “How much should I budget for health care costs in retirement?” My knee-jerk response usually is, “It depends.” That’s such a weaselly answer. This article is much better. It tells you how much health care will cost in retirement – at every age. For example, you’ll see why health care costs will soak up 48% of a 66-year-old couple’s lifetime Social Security benefits and 72% of a 45-year-old couple’s. Our experience is that this is an issue that many retirees and pre-retirees don’t want to face. But it might be even more expensive to ignore it.

How Does Your Retirement Savings Compare to Others?

Ever wonder how your retirement savings compares to others? America’s largest retirement-plan provider has just released the average 401(k) balances according to age. For example, in the 2nd quarter of 2018, the average Fidelity 401(k) account balance for workers age 50 to 59 was $174,200. Fidelity also reports the average contribution rates by age. Keep in mind that these are folks with Fidelity 401(k) accounts – not the average Joe. Sadly, 1 out of 3 American citizens have under $5,000 saved for retirement. Fidelity estimates you need 10 times your final salary in savings if you want to retire by age 67. See what they recommend you have saved by your age:

An Odd Way to Retire?

Earlier this month, professional football player Vontae Davis of the Buffalo Bills announced his retirement – effective immediately – during halftime of their game against the Los Angeles Chargers. Yes, he retired in the middle of an NFL game. “He said he’s not coming out [of the locker room]. He retired,” Bills linebacker Lorenzo Alexander told reporters. Given the latest research on concussions and head trauma for football players, perhaps Mr. Davis made a wise choice. However, not sure he gave much thought to retirement planning. Here, Sara Zeff Geber, Ph.D., gives a bit more thought to the question of when to retire:

The Psychology of Money

I’d like to launch this new section of the website by referencing one of the best articles on retirement investing (or any kind of investing, actually) I’ve read in years. The author is Morgan Housel of The Collaborative Fund, and his writing focuses on the part of investing that gets scant attention: what’s going on in our heads as we make investment choices.

The Psychology of Money is the title of the article. My favorite part is where Morgan discusses the underappreciated effects of compound interest:

When compounding isn’t intuitive, we often ignore its potential and focus on solving problems through other means. Not because we’re overthinking, but because we rarely stop to consider compounding potential.

There are over 2,000 books picking apart how Warren Buffett built his fortune. But none are called “This Guy Has Been Investing Consistently for Three-Quarters of a Century.” But we know that’s the key to the majority of his success; it’s just hard to wrap your head around that math because it’s not intuitive. There are books on economic cycles, trading strategies, and sector bets. But the most powerful and important book should be called “Shut Up And Wait.” It’s just one page with a long-term chart of economic growth.

The counter intuitiveness of compounding is responsible for the majority of disappointing trades, bad strategies, and successful investing attempts. Good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that kill your confidence when they end. It’s about earning pretty good returns that you can stick with for a long period of time. That’s when compounding runs wild.

If you’re an investor, this is an article to save, print out and refer to over and over IMHO. Here’s the link again.