Saving for retirement can be a challenge in the best of times. After a year like 2020, the task may seem almost insurmountable. Millions of people—including many older workers—were furloughed or downsized. Many families had to raid their savings to pay for health care. And even near-retirees who managed to avoid those hazards face years of record low interest rates, which threaten to lower returns on the money they’ve worked so hard to save. On the following pages, we help you get your retirement plan out of the rough and onto the fairway.
PROBLEM
You lost your job, or your income was cut.
SOLUTION Consider starting a business or finding part-time work or a gig-economy job.
One of the most effective ways to shore up your retirement security is to work as long as you can, but sometimes life intervenes. Even before the pandemic, many older workers were forced to leave their jobs earlier than expected, due to downsizing, health problems or family circumstances. The Employee Benefit Research Institute’s annual retirement confidence survey has consistently found that about half of the respondents retired earlier than they had planned. The pandemic will likely lead to an even higher number of early retirees, as older workers are pushed out and are unable to find new employment.
Faced with a sudden loss of income, you may be tempted to file for Social Security. Many took that route in 2008 and 2009, during the Great Recession, when the percentage of workers who claimed benefits at age 62 rose following several years of declines. Although claiming early could enable you to postpone tapping your retirement savings, it will permanently reduce your benefits by up to 30% (see page 56).
Denne historien er fra February 2021-utgaven av Kiplinger's Personal Finance.
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Denne historien er fra February 2021-utgaven av Kiplinger's Personal Finance.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
FREE HELP FOR COLLEGEBOUND STUDENTS
This program’s mentors assist applicants as they fill out the FAFSA, write essays and more.
WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS
You typically need earned income to contribute to an individual retirement account, but a spousal IRA provides an important exception to this rule.
SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS
ET'S say you've been regularly buying shares in a booming tech company over the past few years, but now you want to start taking some of those profits, perhaps to rebalance your portfolio.
Strategies for Novice Investors
AS part of a lifes kills program for young, single mothers, I was asked to teach a class on how to get on top of your finances.
ANSWERS TO YOUR 529 PLAN QUESTIONS
Thanks to recent policy changes, families have more options for what to do with money sitting in these tax-advantaged accounts.
Rate-Cut Winners and Losers
NOW that the Federal Reserve has cracked the interest rate ice, the next development will be to separate winners from losers.
SHOULD YOU BUY THESE RED-HOT FUNDS?
Covered-call ETFs are popular but come with plenty of caveats.
DIVIDEND STOCKS ARE READY TO REBOUND
Our favorite dividend payers are poised to benefit as falling interest rates lure investors back.
IS A 55+ COMMUNITY RIGHT FOR YOU?
These age-restricted developments appeal to older adults seeking abundant amenities and an active lifestyle.
AT LONG LAST, RATES ARE DROPPING
Consider these portfolio moves now that the Federal Reserve has cut its benchmark interest rate.