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Yahoo
20-04-2025
- Business
- Yahoo
3 retirement risks that older Americans often forget to budget for. How to protect your nest egg
Planning for retirement is something that's best to do throughout your career, not just when you're approaching that milestone and have a year or two left to work. Only half of Americans have tried to calculate how much money they'll need in retirement, according to a 2024 survey by the Employee Benefits Research Institute (EBRI). I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how However, among those workers who did the calculation, 52% were inspired to save more. Even if you feel confident in your ability to cover your retirement expenses, it's important to be mindful of hidden costs that could impact your retirement finances. Here are three to keep on your radar. Fidelity Investments expects the typical 65-year-old to spend $165,000 on healthcare during retirement. That may sound surprising, but even with Medicare coverage, several expenses could arise. For one thing, Medicare isn't entirely free. Most enrollees don't pay a premium for Part A, which covers hospital care. However, Part B, which covers outpatient care, charges a monthly premium, as do some Part D drug and Medicare Advantage plans. Plus, higher earners risk surcharges on their Medicare premiums. Premiums aside, there are a number of expenses that original Medicare (Parts A and B plus a Part D drug plan) does not cover, which retirees commonly need. These include dental care, eye exams, prescription glasses and hearing aids. You'll also face copays and coinsurance under Medicare that you must pay out of pocket. If enrolled in original Medicare, you can buy supplemental insurance known as Medigap to help offset those costs. But then you're looking at premiums for Medigap, too. Read more: The US stock market's 'fear gauge' has exploded — but this 1 'shockproof' asset is up 14% and helping American retirees stay calm. Here's how to own it ASAP It's a big misconception that Medicare will pay for you to live in a nursing home or cover the cost of a home health aide. Medicare's scope of coverage is typically limited to medical issues only. So while Medicare might pay for rehab or physical therapy because you broke a hip, it won't pay for a home health aide because you're getting older and need help dressing yourself and using your kitchen. Meanwhile, the cost of long-term care can be astronomical. According to Genworth, here are the annual median costs for certain long-term care services in the U.S. for 2024: One option for defraying these costs is to buy long-term care insurance. But that might bust your budget, too. The American Association for Long-Term Care Insurance says an average $165,000 policy with no inflation protection purchased at age 55 by a single male costs $950 a year. For a 55-year-old female, that policy costs an average of $1,500. And for a 55-year-old opposite-gendered couple, the average price is $2,080 combined. Of course, the actual cost of long-term care will depend on factors such as where you're located, your age at the time of your application and the state of your health. But all told, you might spend a lot of money to put that coverage in place. In recent years, retirees and working Americans alike have experienced their share of rampant inflation. But even when inflation isn't as aggressive, it's still a hidden cost that can upend your retirement budget. Social Security benefits are, thankfully, designed to keep up with inflation. They're eligible for an annual cost-of-living adjustment tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, a subset of the more widely known Consumer Price Index. But ensuring that your savings can keep up with inflation is also critical. One way to do this is to avoid eliminating equities from your portfolio in retirement. You need some growth in your portfolio to make up for rising living costs. You can work with a financial advisor to develop an appropriate asset mix based on your income needs and risk appetite. A financial advisor can also help set you up with assets in your portfolio that generate income. These could include dividend stocks, bonds and real estate investment trusts (REITs). It could also be a good idea to delay your Social Security claim past your full retirement age, which is 67 for anyone born in 1960 or later. For each year you do, until age 70, your benefits rise 8%. And that boost is guaranteed for life. Having a larger monthly benefit gives you more leeway to tackle not only inflation, but also surprise medical and health-related expenses. So it's a move worth considering if you don't need to sign up for Social Security sooner. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
Yahoo
20-04-2025
- Business
- Yahoo
3 retirement risks that older Americans often forget to budget for. How to protect your nest egg
Planning for retirement is something that's best to do throughout your career, not just when you're approaching that milestone and have a year or two left to work. Only half of Americans have tried to calculate how much money they'll need in retirement, according to a 2024 survey by the Employee Benefits Research Institute (EBRI). I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how However, among those workers who did the calculation, 52% were inspired to save more. Even if you feel confident in your ability to cover your retirement expenses, it's important to be mindful of hidden costs that could impact your retirement finances. Here are three to keep on your radar. Fidelity Investments expects the typical 65-year-old to spend $165,000 on healthcare during retirement. That may sound surprising, but even with Medicare coverage, several expenses could arise. For one thing, Medicare isn't entirely free. Most enrollees don't pay a premium for Part A, which covers hospital care. However, Part B, which covers outpatient care, charges a monthly premium, as do some Part D drug and Medicare Advantage plans. Plus, higher earners risk surcharges on their Medicare premiums. Premiums aside, there are a number of expenses that original Medicare (Parts A and B plus a Part D drug plan) does not cover, which retirees commonly need. These include dental care, eye exams, prescription glasses and hearing aids. You'll also face copays and coinsurance under Medicare that you must pay out of pocket. If enrolled in original Medicare, you can buy supplemental insurance known as Medigap to help offset those costs. But then you're looking at premiums for Medigap, too. Read more: The US stock market's 'fear gauge' has exploded — but this 1 'shockproof' asset is up 14% and helping American retirees stay calm. Here's how to own it ASAP It's a big misconception that Medicare will pay for you to live in a nursing home or cover the cost of a home health aide. Medicare's scope of coverage is typically limited to medical issues only. So while Medicare might pay for rehab or physical therapy because you broke a hip, it won't pay for a home health aide because you're getting older and need help dressing yourself and using your kitchen. Meanwhile, the cost of long-term care can be astronomical. According to Genworth, here are the annual median costs for certain long-term care services in the U.S. for 2024: One option for defraying these costs is to buy long-term care insurance. But that might bust your budget, too. The American Association for Long-Term Care Insurance says an average $165,000 policy with no inflation protection purchased at age 55 by a single male costs $950 a year. For a 55-year-old female, that policy costs an average of $1,500. And for a 55-year-old opposite-gendered couple, the average price is $2,080 combined. Of course, the actual cost of long-term care will depend on factors such as where you're located, your age at the time of your application and the state of your health. But all told, you might spend a lot of money to put that coverage in place. In recent years, retirees and working Americans alike have experienced their share of rampant inflation. But even when inflation isn't as aggressive, it's still a hidden cost that can upend your retirement budget. Social Security benefits are, thankfully, designed to keep up with inflation. They're eligible for an annual cost-of-living adjustment tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, a subset of the more widely known Consumer Price Index. But ensuring that your savings can keep up with inflation is also critical. One way to do this is to avoid eliminating equities from your portfolio in retirement. You need some growth in your portfolio to make up for rising living costs. You can work with a financial advisor to develop an appropriate asset mix based on your income needs and risk appetite. A financial advisor can also help set you up with assets in your portfolio that generate income. These could include dividend stocks, bonds and real estate investment trusts (REITs). It could also be a good idea to delay your Social Security claim past your full retirement age, which is 67 for anyone born in 1960 or later. For each year you do, until age 70, your benefits rise 8%. And that boost is guaranteed for life. Having a larger monthly benefit gives you more leeway to tackle not only inflation, but also surprise medical and health-related expenses. So it's a move worth considering if you don't need to sign up for Social Security sooner. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Yahoo
23-02-2025
- Business
- Yahoo
Why Vanguard High Dividend Yield Index Adm (VHYAX) Is Among the Best Vanguard Funds to Invest In For Retirees
We recently compiled a list of the . In this article, we are going to take a look at where Vanguard High Dividend Yield Index Adm (NASDAQ:VHYAX) stands against the other Vanguard funds. Every year, a significant number of Baby Boomers retire, and millennials are increasingly interested in planning their own retirement, considering the majority of people rely on their jobs as their primary source of income. Unless they have a large inheritance, it is critical to start retirement planning early and carefully, especially in a world rife with income inequity. In a 2024 study evaluating the match formulas of over 1300 employer-sponsored retirement plans, Vanguard discovered that employer contributions around 401(k)s are highly concentrated, with 44% of dollars going to the top 20% of earners. On the other hand, when it comes to retirement planning, Americans are increasingly selecting professionally managed accounts and services. To that purpose, Vanguard offers a variety of target-date retirement funds, some of which appear on our list. These funds have slowly gained traction over the years. Numerous surveys show that Americans are inadequately prepared for retirement. A poll from the American Savings Education Council, which surveyed more than 2,000 American adults in early 2024, revealed that those aged 45-54 feel the least prepared to retire. Although 76% of Americans feel that saving for retirement is essential, just 39% of respondents had a plan in place to allow them to retire when they want. Furthermore, inflation remains a major issue for retirees, according to an Employee Benefits Research Institute (EBRI) survey, with 31% of workers and 40% of retirees citing it as a primary cause for their lack of trust in retirement funds. Alarmingly, an increasing number of Americans are continuing to work after the age of 65, which was traditionally considered retirement age. This tendency should be more visible than ever in 2025, when more Americans are predicted to reach 65 than in any previous year, according to research by the Alliance for Lifetime Income called the "Peak 65 zone." On a brighter note, over 80% of employees believe the SECURE 2.0 Act of 2022's provision for employer-sponsored emergency savings accounts is seen as beneficial. Recent advice from the Department of Labor and the IRS has also clarified how plan sponsors can incorporate these emergency savings accounts into their offers. Moreover, the retirement industry has invested heavily in programs to address the retirement savings gap and inadequate preparedness of many Americans. These include automatic enrollment, matching contributions, financial literacy education, and institutional programs like multiple employer plans (MEPs). Legislative policies, like the aforementioned SECURE 2.0 Act, are also involved in making retirement more accessible for long-term workers. In addition, a large element of retirement relates to the assisted living community sector, commonly known as old-age homes. These facilities provide seniors with companionship and care in their final years. According to a report by Grand View Research, the assisted living market was valued at roughly $91.8 billion in 2022 and is expected to rise at a compound annual rate (CAGR) of 5.53% from 2023 to 2030. In that vein, the number of seniors aged 65 and over is predicted to grow from 52 million in 2018 to 95 million by 2060. For this list, we looked at Vanguard's retirement-oriented funds and compiled a list of eight funds that retirement specialists and market watchers perceive as safe and popular. Furthermore, we have highlighted the top holdings of these ETFs, when appropriate. These Vanguard ETFs have grown significantly over the last five years, and the list is arranged in increasing order according to their five-year performance as of February 18, 2025. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here). A snapshot of investment fund manager overseeing the financial performance of component securities in a public company. 5-Year Share Price Performance as of February 18: 43.12% The Vanguard High Dividend Yield Index Adm (NASDAQ:VHYAX) offers wide exposure to U.S. companies that routinely generate higher-than-average dividends. In addition to conventional stock market risks, the fund's concentration on slower-growing, higher-yielding firms may result in a lower overall return during a big bull market. However, pre-retirees can profit from an all-equity portfolio's long-term growth potential, which is boosted by dividend reinvestment. Meanwhile, retirees may enjoy the dividend income stream as well as some much-needed capital appreciation to keep up with inflation throughout their retirement years. Walmart Inc. (NYSE:WMT), the world's largest brick-and-mortar retailer, is one of the top holdings in Vanguard High Dividend Yield Index Adm (NASDAQ:VHYAX). The company operates an amazing 100,000 outlets worldwide, leveraging its financial strength to maintain competitive and consistent profits in a typically low-margin industry. In the first nine months of 2024, Walmart Inc. (NYSE:WMT) earned $22.9 billion in operational cash flow. Its free cash flow increased by $1.9 billion to $6.2 billion throughout this time. This financial position allowed the company to increase dividends for 51 years in a row. As of February 18, the retailer delivered a dividend of $0.21, at a yield of 0.81%. Overall VHYAX ranks 4th on our list of the best Vanguard funds to invest in for retirees. While we acknowledge the potential of VHYAX as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than VHYAX but that trades at less than 5 times its earnings, check out our report about the . READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
18-02-2025
- Business
- Yahoo
Millions Of Americans Could Get Up To $1,000 A Year Under New Retirement Match Program
A new federal retirement savings program could boost wealth by up to 12% for eligible Americans, with single women and minorities standing to gain the most, according to a Morningstar report last month. The Saver's Match program, launching in 2027, will replace the current Saver's Credit and could benefit 21.9 million Americans, the Employee Benefits Research Institute reports. The program offers up to $1,000 in annual federal matching contributions for retirement savings. Single taxpayers earning up to $20,000 annually, or joint filers making up to $40,000, can receive a 50% match on retirement contributions up to $2,000. Reduced benefits extend to single filers earning between $20,000 and $35,000. Don't Miss: The average American couple has saved this much money for retirement —? Can you guess how many Americans successfully retire with $1,000,000 saved?. The program particularly benefits single women, who could see retirement wealth increases of up to 13.13%, according to Morningstar. Non-Hispanic Black and Hispanic Americans could experience gains of 14.57% and 12.10% respectively. 'It's a great tool to help incentivize savings and build on the principles of behavioral finance,' Spencer Look, associate director of retirement studies at Morningstar Retirement, told CNBC. 'Even if people only qualify for a partial match, this is free money to get from the government for retirement.' The new program improves upon the current Saver's Credit, which only 5.7% of taxpayers claimed in 2021, according to Internal Revenue Service data. Unlike its predecessor, the Saver's Match doesn't require tax liability to claim benefits. Trending: Workers in industries prone to retirement income shortfalls, including agriculture and retail, are projected to see larger wealth increases compared to other sectors. The program deposits matching funds directly into qualified retirement accounts. Successful implementation will require coordinated promotion between the Treasury Department and retirement plan sponsors to reach eligible participants, Morningstar researchers said. The long-term impact of the matching contributions could be substantial. A 22-year-old investing $2,000 annually with an 8% return could accumulate roughly $835,000 by retirement at age 67. Adding the maximum $1,000 match would increase the annual contribution to $3,000, potentially growing the retirement savings to $1.25 million. 'Seemingly small amounts of money may not feel like they'll make a huge difference. But they do when they can compound and add up over time,' Look told CNBC. Read Next: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are using retirement income calculators to check if they're on pace — Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Millions Of Americans Could Get Up To $1,000 A Year Under New Retirement Match Program originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
