Tag: retirement planning

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Thinking about Retiring in 5 or 10 Years? What You Need to Know Now

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If you are 55 and older you probably start thinking about your retirement a bit more seriously now than before. You may even have set a date when you leave your work behind once and for all. Because you have saved and invested diligently your whole life, and you will retire when you have planned for.

In reality though, studies from 2024 to 2025 show that roughly only 3 out of 10 working Americans actually retire according to their planned retirement age, the other 7 are forced to retire early due to health reasons or company-related issues, or are still working in their 70s or even 80s due to insufficient funds, and may never be able to retire.

When things are going well, we tend to think that they will always stay that way. But many life changing events happened when you least expect them, disrupting your plan. Can you say, at this moment, with confidence that if you have to retire tomorrow, you have sufficient funds to support your preferred life style for 30, possibly 40 years?

If you are an investor, you have probably read in the news that lately S&P 500 stock index keeps reaching new record highs. Does this mean that US stock market has reached “bubble” level? There is some consensus among investment professionals that the current US stock market is richly valued according to historical standards. If you recall, we had a so called “dot com” bubble in early 2000. When that “bubble” busted, from peak to bottom, the market actually went down 49% and the correction lasted 56 months. For investors at that time, especially those who were either retired or living off of their portfolios, it was tough time trying to determine how long the downturn would last or how deep it would go. People who had, at one time, $1 million suddenly saw half of that amount on their brokerage statements. It was a scary time, especially if you were a retiree and taking income from your portfolio. Could it happen again? I think we all know the answer is “yes, it could happen again; the question is, “When?” What if you are forced to retire at a market high and subsequently comes a correction, are your assets well positioned to withstand a market correction?

While media and ads implant in our brain the images of silver-haired retirees traveling around the world, trips to the emergency rooms are far more prevalent as people age. Financial professionals see first-hand many aging retirees face the harsh reality of financial stress on how to afford the care they need. For example, in 2025 the average annual cost of a nursing home room ranges from $80,000 to over $100,000 in Dallas-Fort Worth metro area. Besides cost, when dressing or bathing become difficult for you, or driving becomes dangerous, have you thought about who will step in to take care of you, or make crucial medical treatment decisions if you are unable to? What about if you and your spouse both need such care?

These are some of the key questions people age 50 and older should ask themselves about. When financial markets are doing well like now, complacency tends to brew. Don’t let the complacency ruin your dream retirement.

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Why Women Need to Pay More Attention to Social Security Benefits

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Why do women need to pay more attention to social security benefits? Let’s look at a set of data*:

 • Most social security recipients are women: 54% of women between the ages of 60 and 79; 67% of women over the age of 90

• Social security benefits have saved 9.4 million women from living below the poverty line

• 44% of retired women get 50% or more of their income from social security benefits

One obstacle that prevents women from maximizing their social security benefits is that the rules for applying for social security are complicated and constantly evolving. For example, at the end of last year, Congress introduced a major social security benefit update bill. This bill is called the Social Security Fairness Act. This bill abolished a previous provision: Government Pension Offset for Social Security. The pension offset rule reduced Social Security benefits for people who received pensions from jobs that didn’t pay Social Security taxes. Before the passage of Social Security Fairness Act teachers and public employees who received their public employee pensions were basically unable to receive part or all of the Social Security spousal benefits. After the new law is implemented, if the spouses of teachers and government employees are eligible for social security benefits, then they can also apply for spousal benefits.

Like the US tax law, the laws that govern Social Security is one of the most complicated. You need to keep an eye on the latest developments and update your knowledge. Women who want to learn more about social security benefits can visit the official website of the US Social Security Administration: www.ssa.gov. If the complexity of Social Security rules makes you feel overwhelmed, you can also seek help from a financial advisor. Any financial advisor you trust can help you calculate the benefit amounts for you and your spouse as well as the best timing to collect them.

We all know some of the challenges women face in personal finance: for example, women tend to live longer, and their careers are sometimes interrupted by childbirth and/or other care-giving obligations, resulting in less social security benefits in the end. Even if you are a high-net-worth woman, how to maximize a stable source of income – social security benefits, is the kind of financial knowledge that women, especially those over 50 years old, need to know.

*Data credit: Marcial Mantell

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Empowering Futures: The Vitality of Planning Now for Generation X

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Millennials and Baby boomers tend to get a lot of media attention, whether it’s good or bad. Generation X, not so much. As we enter the year 2025, the oldest members of Generation X are turning 60 this year, while the youngest members are now in their mid-40s. Gen Xers, as they are often called, are in their prime earning years, but at the same time, they need to balance various financial obligations, such as paying for their kids’ education, caring for aging parents, paying down debts while trying to save and invest for their own retirement.

While most Gen Xers are aware of the basics of retirement planning, such as the importance of saving and investing for the future, yet many Gen Xers are lagging behind when it comes to retirement readiness. For example, many people underestimate the amount of savings they will need to fund their retirement. A general rule of thumb is to aim for a retirement income that is 70-80% of your pre-retirement income. However, the actual amount you will need will depend on your individual circumstances.

Besides saving and investing, there are many lesser-known retirement facts that Gen Xers are not aware of that can have a big impact on their financial security in retirement. For instance, retirement could last longer than many think. People are living longer than ever before, which means that retirement could last as long as 35 to 40 years. As a result, many Gen Xers underestimate the cost of healthcare in retirement. In reality, healthcare costs can be a major expense with long-term care costs especially being a significant one in retirement. According to the U.S. Department of Health and Human Services, the average cost of a semi-private room in a nursing home is $7,756 per month.

Another retirement facts that many Gen Xers don’t know is that Social Security benefits may be reduced if you work in retirement. If you claim Social Security benefits before your full retirement age and continue to work, your benefits may be reduced. Depending on your income, up to 85% of your Social Security benefits may be taxable.

Retirement planning is a complex and ever-changing process. From planning for healthcare costs to factoring in inflation and understanding the tax implications of your retirement income, there are many factors to consider when planning for retirement. Numerous surveys revealed that one of the biggest regrets of people who have already retired is not saving and planning for retirement earlier. Today, whether you are 40 or 60, it’s never too early or too late to plan for your future. But it’s vital that you take action. The action, or inaction, you take now could be the difference between a secure and comfortable retirement, and one that running out of money before you run out of time.