Alex Green, the Chief Investment Strategist of The Oxford Club, and I were having dinner last week, and I mentioned that 401(k)s are now offering a brokerage option. Alex asked if that meant anyone could trade their 401(k) just like a discount brokerage account.
When I said yes, he got a terrified look on his face.
He then said this will be a disaster.
Here’s one of the best retirement ideas I have ever heard, and it comes from, of all places, the ultimate puzzle palace, Social Security.
It’s called file and suspend. You file for benefits at age 66 – this only works at age 66 or older – and immediately suspend your payments. Not delay, suspend.
Sounds silly, I know. Why file and then suspend?
One of the costliest and least addressed issues in retirement is taxes. Everyone’s focus is on saving enough to retire, but few look at how taxes will affect their income over 20 to 30 years of unemployment.
And it’s a big problem.
The numbers coming from the money press about how well Americans are prepared for retirement are all over the boards.
Depending on who you read and who they are writing for and, in many cases, their politics, the predictions range from Armageddon to not too bad.
A recent Barron’s article stated that people without access to employer-sponsored retirement plans are the worst prepared of all.
Stanford and Harvard are offering something new for retired and about to retire boomers: a college refresher in retirement.
Stanford’s Distinguished Careers Institute is offering a program that is designed to help the transition to the later part of a career or a new one in retirement.
And it is no slouch summer program of just auditing or skipping classes. It is described as academically rigorous, can cover everything from business to medicine and includes a final review before an academic panel.
In a recent Merrill Lynch/Age Wave survey, almost three-fourths of respondents over 55 said they wanted to work in retirement. They didn’t need to work in retirement, but wanted to.
Seems strange, right?
But, keep in mind, in 1900 the life expectancy was 47 and the average retirement age was 76. Today it is 64 to retire, and if you make 65, you can expect to live to 85.
Here’s a birthday gift your kids can give you. And, unlike most gifts, it is a sound financial decision.
Long-term care insurance (LTC)! I’m not kidding!
Ninety percent of people never discuss long-term care with their children or even their spouse. And it is the kids whose inheritance will be drained away when – not if – but when one or both of you require either in-home or inpatient long-term care.
This gift idea really is a sound financial decision. Here’s why!
The greatest fear in our culture used to be public speaking, followed by the fear…
This week’s Two-Minute is about your child’s and your grandchild’s retirement. And we will be using our backward thinking again.
If you missed the think backward segment a few weeks ago, it means looking at money and investment decisions from the perspective of how much you would lose if you don’t do something, rather than how much you can make.
Cars are the second biggest expense we face in and out of retirement, and the single worst investment you can make. They will rust, break down, cost you inordinate amounts of money to repair and eventually be worthless.
It’s time to get over our love affair with cars, especially in retirement.
Not managing your car expenses in a reasonable manner will wipe out a huge percentage of your annual income.