Are Swing States Doing Better at Retirement Savings Than the Rest? For one more week, politicians and election followers will focus their attention on voters in swing states that are likely to be the key to victory in the Presidential race. Amid the many questions those voters will get asked, how much they've managed to save for retirement isn't likely to be near the top of the list. But that didn't stop online investment advisory firm FutureAdvisor from asking how well people around the country are doing in saving for retirement. Its state-by-state breakdown sheds some light on where people are getting ahead, and where they're falling behind. Beating Volatility For its analysis, FutureAdvisor looked at figures from the beginning of 2008 to the beginning of 2011.
That period includes one of the worst years ever in stock market history, as well as two subsequent years of impressive gains that helped the S&P 500 cut its 2008 losses and post a cumulative total loss of about 8%. Who Saves More: Red vs. Swinging Higher. What's Happening to Social Security Next Year? If you're receiving Social Security benefits, your check will rise by 1.7% in 2013, thanks to that program's most recent annual cost-of-living adjustment. The average monthly benefit check to a retiree will increase from around $1,240 to $1,261 -- an increase of $21 per month, or $0.70 per day. If, on the other hand, you're still working and paying into Social Security, your taxes are going up next year. For all workers who pay into the system, the temporary 2% payroll tax holiday is expected to expire, so Social Security taxes will eat an additional 2% of much, if not all, of your income.
The amount of income that the payroll tax reaches is rising, as well -- to $113,700 from $110,100. Higher Taxes, Lower Real Benefits That 1.7% benefit increase is based on the official CPI-W inflation number, the version of the Consumer Price Index that measures inflation on "urban wage earners and clerical workers. " What Can You Do About It? Also on DailyFinance: Share Facebook Twitter Google+ Email Pinterest. 5 Years From Retirement? 5 Things to Do Right Now. With just five years left before you retire, you need to begin solidifying your plans. Make sure you're still on track, but also nail down where you'll live (the largest expense in retirement) and how you'll meet your health care needs (the second biggest). What to do 1. See if you need a course correction. You're not out of luck: You may be able to retire on less than you'd hoped or get to your goal by working longer. A one-time review with a financial planner who charges by the hour (find one at napfa.org) can be worth the $1,000 or so investment to help you figure out where you stand.
At a minimum, plug your info into T. 2. If you'll retire before Medicare kicks in at 65, you could have a big expense ahead. Exchanges created under the 2010 reforms may reduce costs, but you'll still pay more than you do now. You may also have the option to buy into your work plan for 18 months through COBRA; ask HR what that will cost. Related Stories 3. 4. Downsize, and you'll bank even more. 5. One Year From Retirement? Prepare to Make the Break. By Donna Rosato With one year left until retirement, you're in the final stretch. It's time to prepare for the transition. Practice your budget, plan your income sources, and take action on health insurance. What To Do Now dial back on stocks. The max you should have in stocks: 40% to 50%. Stress-test your spending. As a rule, you can withdraw up to 4% of savings the first year, then adjust by inflation in subsequent years, and have a good shot at your money lasting 30 years. Whatever budget you decide on, practice living on it now.
Shore up your income. One solution: a lifetime immediate annuity. You can't access money you put in, however, so invest only enough to cover the shortfall in basic living costs left after other guaranteed income. Also, don't go all in right away, since interest rates partly determine payouts. Pick up the pension check. "You don't get a second chance on this decision," says New York elder-law attorney Ann-Margaret Carrozza. Stockpile cash. Retiring around 65? How to Ruin Your Retirement in 3 Steps.
By Jeff Rose Most of us say that we want a successful retirement. Unfortunately, too many of us don't think things through, and could end up unprepared for retirement. It's remarkably easy to wreck your retirement years. Here are three steps that are likely to ruin your retirement: 1. Forgo a plan. Planning often seems overrated. A retirement plan forces you to look beyond what you think you want right now. Create a realistic retirement plan that allows you to save up for the retirement you want, and that encourages you to start taking the steps that lead to a successful retirement later. 2. Instead of getting into debt now, live within your means. Learn to live without debt, and your retirement will be more successful in the long run. 3. Take care of yourself now.
If you stay active, body and mind, you can improve the odds that you will need fewer medical services. Consider your current situation, and think about what you want for the future. See more stories on U.S.