For a better retirement, work longer - Before politicians can fix Social Security, they need to ensure that older Americans feel more secure about their financial future thanks to the fruits of their own labor instead of any form of entitlement.
In September, a fascinating study done by economists affiliated with the University of Michigan Retirement Research Center may have outlined a way to do that. The study was nonpartisan and apolitical, which is precisely why it makes so much sense that neither the Democrats nor the Republicans are likely to pick up this particular ball and run with it. But for those who are staring retirement in the face, the research has some interesting implications, even if Congress never uses it as a blueprint for doing the right thing. Incentives now reward retiring The basic concept that economists John Laitner and Dan Silverman set out to study was whether heightened longevity might lead to longer, more-productive work careers. The incentive they came up with is compelling: a 10% pay raise.
How Anyone Can Retire In 10 Years (Or Less!) Surprisingly, it’s not that hard.
It doesn’t require hitting the lottery or inheriting a windfall from ol’ Aunt Myrtle. Similarly, you don’t have to become a brilliant investor or possess any unusual skill. Also, the title claimed “anyone” can do it so the strategy has to be repeatable and predictable. We’re talking science – not random luck. In a word, the answer is “frugality” – extreme frugality by most people’s standards – accompanied by basic investing. Anyone can do it, but almost nobody will… and therein lies the rub. Let’s start by proving the theory with mathematics, and then we will explore the rest of the strategy in greater depth… How The Math of Saving Your Way To Early Retirement Works Let’s play with some simple equations to illustrate the point… We will assume $48,000 per year earned income to keep the taxes low and the math easy. (BTW – the actual income level is irrelevant to the calculation as you will see below so use whatever income works for you.
Quieting the Naysayers. Retirement Planning Process. Retirement planning: The basics You may have a very idealistic vision of retirement — doing all of the things that you never seem to have time to do now.
But how do you pursue that vision? Social Security may be around when you retire, but the benefit that you get from Uncle Sam may not provide enough income for your retirement years. To make matters worse, few employers today offer a traditional company pension plan that guarantees you a specific income at retirement. On top of that, people are living longer and must find ways to fund those additional years of retirement. But there’s good news: Retirement planning is easier than it used to be, thanks to the many tools and resources available. Health Insurance in Retirement. All-new On Investing® for iPad® app.
Now get access to Schwab experts’ ideas, plus new tools and checklists to help you take action. Zoom in on what’s most important to you. Review the latest market perspectives and investing strategies. Explore our experts’ top picks for mutual funds and ETFs. Watch video commentaries on the market and the economy. 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. 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.
Jeff Rose is a certified financial planner and U.S. combat veteran.