Retirement generally refers to the period of time when an individual leaves the workforce on a full-time basis; historically, that’s been when we reach the age of 65. A comfortable retirement was the goal for which people worked and saved.
Today, roughly 10,000 baby boomers enter retirement every day and will continue to do so until 2029. Because of our improved standard of living, we are living longer and longer.
In 1916, the average lifespan for an American male was just 49.6 years, while women could expect to live until they reached 54.3 years. One hundred years later, the average life expectancy in the U.S. is 76.4 years for males and 81.2 years for females. Many will live much longer. In fact, for those retiring at 65, it’s quite possible that they’ll spend roughly 35% of their lives in retirement.
Saving for retirement is not just about putting money in the bank. It’s about replacing your main source of income when you retire with another source of income. To retire comfortably, it’s important to set goals.
Retirement income comes from three different sources: Social Security, pension plans, and investments. The average retired worker in the U.S. will receive approximately $16,092 per year, or $1,341 per month, from Social Security. On top of that, only 50% of the U.S. workforce is covered by a work sponsored pension plan.
Since Social Security cannot fully replace retirement income, it’s imperative to adopt a diversified investment strategy that includes 401(k)s, stocks, bonds, mutual funds, real estate, and more. That said, it isn’t easy to create a viable retirement investment plan, especially in a low-interest-rate environment. Artificially low interest rates have essentially removed the word “income” from income investing.
While interest rates have been near record-lows, inflation can still have a powerful impact over the course of your retirement. For example, if the inflation rate is two percent, in 25 years, you would need more than $82,000 to purchase something that costs $50,000 today.
There is no easy way to retire comfortably. But there are a number of investment options that can help those nearing retirement increase their income and reduce their risk.
Can You Live Off Dividends? Recently, I came across a book about living off of dividends. It’s called Stop Working, Here’s How You Can by Derek Foster, and it delivers exactly what it promises. Foster, Canada’s self-proclaimed youngest retiree, outlines.
What to Look for in Retirement Stocks With a huge market sell-off still in the rearview mirror, investors have been wondering whether 2019 will be a rough year for stocks. If you’re a retirement investor, you should be extra careful.
The Biggest Retirement Mistake Aliens. Men in black. Roswell, New Mexico. This might sound like the ranting of a sandwich board-wearing conspiracy nut on the street corner. But for some investors, such topics represent very real risks to their investment.
These Retirement Stocks Pay Big Dividends For the most part of the last decade, the U.S. Federal Reserve has kept its benchmark interest rates at artificially low levels. As a result, retirement investors had a hard time finding a decent.
The U.S. economy seems to be doing great right now, but for investors planning their retirement savings, it’s still important to watch out for the next downturn. Recent economic data has been quite positive. America’s real gross domestic product (GDP).
New Study Reveals Shocking Stats on America’s Retirement Crisis Tens of millions of American are collecting Social Security checks. And for many of them, these checks represent a major source of retirement income. However, the purchasing power of Social Security.
Who Else Wants More Income? When it comes to retirement savings, the United States is on the verge of a crisis. The Harvard Business Review says the median retirement account balance sits at just $14,500, while MarketWatch says one in.
Earn More Retirement Income Many baby boomers have accepted the blunt new reality of financial planning: the combination of low interest rates, rising life expectancy, and the decline of pension plans has turned retirement into an anxious proposition. With 10,000.
Retiring…or Not Do you have enough savings to live comfortably in retirement? I hope your answer is “Yes.” But, according to a new study by Northwestern Mutual, a shockingly high number of Americans answered “No” to that question. The study.
When to Collect Social Security Benefits? One question I get a lot from family and friends nowadays concerns Social Security. “Rob, I’m trying to figure out when to start collecting benefits. What’s the right age to enroll?” Apparently, they’re not.