Latest news with #JeanChatzky
Miami Herald
6 days ago
- Business
- Miami Herald
Jean Chatzky sends sharp message on 401(k)s, Roth IRAs
With growing concerns about market fluctuations and the potential for an economic downturn, many American workers are focused on managing the financial pressures of everyday life - covering housing costs, keeping up with rising grocery prices, fuel expenses, and other necessities. Even as they navigate these immediate financial demands, they continue planning for the future, actively contributing to 401(k) plans and Individual Retirement Accounts (IRAs) to build a secure retirement and maintain financial resilience in an unpredictable economy. Jean Chatzky, a well-known author and former financial editor for NBC's Today Show, offers insightful perspectives on 401(k) plans and IRAs - including one tactic regarding an intriguing strategy for handling IRAs that many will have an interest in exploring. Don't miss the move: Subscribe to TheStreet's free daily newsletter Overall, U.S. employees acknowledge the value of retirement savings tools such as 401(k) plans and IRAs, even during periods of market uncertainty. Enrolling in an employer-sponsored 401(k) plan remains one of the most effective ways to save for retirement, particularly when employers provide matching contributions. With automatic deductions taken directly from paychecks, this system ensures consistent savings without requiring extra effort, making it both practical and seamless. The contribution limit for 401(k) plans has increased to $23,500 in 2025, compared to $23,000 in 2024. Employees aged 60 to 63 can now make larger catch-up contributions of up to $11,250, while those aged 50 to 59 can contribute up to $7,500 in catch-up funds. Related: Jean Chatzky warns Americans on Social Security, 401(k)s IRAs offer additional investment options that may not be accessible through a 401(k), making them an appealing choice for certain savers. However, IRAs require a more proactive approach, as individuals must set up the account and arrange automatic contributions independently. This added level of responsibility can lead some to overlook their advantages. The contribution cap for IRAs remains at $7,000 in 2025, with an additional $1,000 available for those aged 50 and above. Chatzky advises beginning 401(k) contributors to start small but consistently increase contributions. She suggests beginning with 3% of one's pay, then raising it by 2% annually. For most people, an eventual goal of contributing 10% of one's income to a 401(k) is sufficient, Chatzky recommends. For those beginning to establish 401(k) contributions later in their careers, 15% is an appropriate figure. The automatic deduction featured by 401(k) plans and the opportunity to take advantage of employer matching are strategies Chatzky endorses. In fact, Chatzky suggests the automatic deduction concept as an ideal for which to strive in other areas of one's financial savings approach. More on retirement: Dave Ramsey sounds alarm for Americans on Social SecurityScott Galloway warns Americans on 401(k), US economy threatShark Tank's Kevin O'Leary has message on Social Security, 401(k)s "The reason 401(k) plans work is because you set them up and then the money gets zapped from your paycheck before you can see it or touch it or spend it," Chatzky wrote. "It disrupts human impulsivity." Chatzky emphasizes the importance of extending automation beyond retirement savings. If one's workplace offers a health savings account, one can arrange payroll deductions to streamline contributions. A person can ensure consistent funding for 529 plans and other investments by scheduling automatic transfers directly from their checking account. "If you're not someone who will regularly rebalance your investments, put your money in a target date or balanced fund that will do the work for you," Chatzky wrote. "Auto-paying select bills is a big help, too." Related: Shark Tank's Kevin O'Leary sends big Social Security message to all Americans A traditional IRA allows tax-deductible contributions, but withdrawals in retirement are taxed. A Roth IRA has after-tax contributions, but withdrawals are tax-free. Many high earners aim to minimize taxes in retirement, often considering converting a traditional IRA to a Roth IRA if they expect lower tax rates later. Chatzky addresses this strategy, known as a backdoor Roth IRA. She cautions that converting assets requires paying taxes upfront, which can be costly. Using IRA funds to cover taxes is discouraged, as it could significantly reduce savings. This approach is only advisable for those with sufficient funds outside their IRA to handle the tax burden, Chatzky stresses. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
27-05-2025
- Business
- Yahoo
Tips from a financial expert on saving for specific goals
Most Americans feel financially ready to reach their goals, but wish they had a plan in place. HerMoney Media CEO Jean Chatzky joins Wealth to share how automation, behavioral finance, and visible goals can help savers build better habits. To watch more expert insights and analysis on the latest market action, check out more Wealth here.
Miami Herald
26-05-2025
- Business
- Miami Herald
Jean Chatzky warns Americans on Social Security, 401(k)s
Preparing for retirement requires careful consideration of numerous factors, primarily centered on maintaining financial security and sustaining one's preferred way of life. Key issues include estimating anticipated Social Security benefits and determining how much one can depend on accumulated savings and investments, such as those in 401(k) plans. Daily costs - covering essentials such as food, utilities, transportation, and recreational activities - play a significant role in shaping retirees' budgets and drive the amount of money one has available to save and invest for retirement. Additional concerns include the risk of outliving one's financial resources, inflation eroding the value of fixed income, and managing continuously rising health care expenses. Jean Chatzky, the well-known author and former financial editor for NBC's Today Show, has a strong warning for Americans on Social Security and 401(k)s as U.S. workers prepare for their retirement years. Don't miss the move: Subscribe to TheStreet's free daily newsletter Recent reductions in staff have seemingly caused inefficiencies in federal program services, leading to longer wait times for phone inquiries - raising concerns among both current and future Social Security beneficiaries. A more pressing issue is long-term financial viability. Without legislative intervention, Social Security's trust funds could be depleted by 2034. In that scenario, monthly payments might drop to around 80% of what recipients currently anticipate. With an average Social Security monthly check of $1,976 ($23,712 annually), many retirees find it inadequate for financial security. Additionally, cost-of-living adjustments often fail to keep pace with inflation. U.S. workers understand the value of retirement savings tools like 401(k) plans and IRAs, even amid market volatility, as they seek to enhance their future income. Related: Dave Ramsey sounds alarm for Americans on Social Security Enrolling in a company-sponsored 401(k) plan is a dependable way to accumulate retirement funds, particularly when employers provide matching contributions. With automatic payroll deductions, this strategy guarantees steady savings without extra effort, offering both simplicity and effectiveness. Considering these realities, Chatzky shares a warning and offers some recommendations for Americans on both Social Security and 401(k) plans. Chatzky warns people against claiming Social Security too early, as doing so results in lower monthly payments. For single individuals expecting a lengthy retirement, she recommends delaying withdrawals until age 70 to maximize benefits. For couples, Chatzky suggests that the higher-earning spouse postpone distributions if at least one partner anticipates a longer lifespan, ensuring greater financial stability. She also highlights another viable strategy: continuing to work while receiving Social Security benefits. Some people remain employed out of necessity to supplement their income, while others appreciate the sense of purpose and engagement work provides in retirement. More on retirement: Dave Ramsey sounds alarm for Americans on Social SecurityScott Galloway warns Americans on 401(k), US economy threatShark Tank's Kevin O'Leary has message on Social Security, 401(k)s Regarding retirement savings accounts such as 401(k) plans that are also vital components of one's retirement income, Chatzky shared another urgent warning. "You have a 50 percent chance of running out of money in retirement," she wrote in her book, Money Rules: The Simple Path to Lifelong Security. Chatzky then offered some advice and how one can cut their odds of this happening to them. Related: Shark Tank's Kevin O'Leary makes bold prediction on U.S. economy Chatzky explained her view that automating one's 401(k) investments and increasing contribution percentages with every pay raise is an effective stategy to get retirement savings moving in the right direction in a hurry. "If you've never saved before and money's tight, start with 3 percent of your pay - if money's not tight, start higher - then increase your contribution 2 percent a year until you max out," Chatzky wrote. "The goal is to be socking away 10 percent a year if you start before your mid-thirties (that can include matching contributions from your employer) and 15 percent a year if you start later than that." Simply participating in an employer-based retirement plan decreases the chance of running out of money during retirement to 20 percent, Chatzky clarified. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
06-05-2025
- Business
- Miami Herald
Jean Chatzky sends surprising message on 401(k) plans
Business Jean Chatzky sends surprising message on 401(k) plans As financial pressures mount due to rising costs in housing, groceries, and fuel, many American workers are focusing on managing their daily expenses. Growing concerns about market instability and a potential economic downturn have made it increasingly difficult for individuals to balance short-term financial obligations with long-term savings goals. Jean Chatzky, the well-known financial expert and former NBC Today Show editor, has surprising words for workers about common pitfalls in retirement planning, especially when it comes to 401(k) plans. Don't miss the move: Subscribe to TheStreet's free daily newsletter She emphasizes the widespread issue of inadequate savings, encouraging individuals to take a more proactive approach. Despite immediate financial challenges, retirement planning remains a priority. Workers are actively contributing to 401(k) plans and Individual Retirement Accounts (IRAs) to safeguard their future financial security. Employer-sponsored 401(k) plans provide a reliable avenue for retirement savings, particularly with matching contributions that enhance savings potential. Automatic paycheck deductions further streamline the process, ensuring consistent contributions without requiring extra effort. Related: Jean Chatzky warns Americans on Social Security, retirement money For 2025, the maximum contribution limit for 401(k) plans has increased to $23,500, compared to $23,000 in 2024. Catch-up contributions for workers aged 60 to 63 now reach $11,250, significantly higher than the $7,500 limit for those aged 50 to 59. IRAs, on the other hand, offer access to a broader range of investment opportunities not available in 401(k) plans. But IRAs require a more hands-on approach, as individuals must set up their accounts and arrange automatic contributions themselves - something that can deter some from taking full advantage of their benefits. The contribution limit for IRAs remains at $7,000 in 2025, with an additional $1,000 catch-up contribution available for those 50 and older. With economic uncertainty lingering, Chatzky's surprising thoughts about retirement planning are particularly relevant. A retired couple is seen holding hands and walking on a beach. Former NBC Today Show financial editor Jean Chatzky discusses the importance of saving as a key to free up money for 401(k) plan contributions. Shutterstock Shutterstock Jean Chatzky has surprising words on saving and 401(k) values Chatzky offers advice that might surprise some about how saving money is more important to people's investments and 401(k) plans than may be obvious. "The amount of money you manage to sock away is much more important than the return on that money," she wrote in her book, Money Rules: A Simple Path to Lifelong Security. Chatzky wrote that readers can take her word for it, or take a look at an "eye-opening" example that has major implications. More on retirement: If you set aside $250 each month and invest it, likely in a 401(k), your savings will grow, Chatzky explained. After a year, with a 6 percent return, you'd accumulate $3,267. If the return is 10%, your total would rise to $3,311 - an additional $44. However, delaying your savings by a single month would reduce your total 401(k) contribution, even at the higher 10% return, to $3,052 - meaning you'd have $215 less. Similarly, if you opted to save only $200 per month instead of $250, your balance after a year at a 10% return would be $2,649 - a difference of $618. These numbers highlight how consistency and early action can significantly impact one's long-term financial growth. "As your nest-egg grows and gets into the six figure range, the return on investment starts to matter more," Chatzky wrote. "But you can't get to that level if you don't start to save now. Right now." Related: Shark Tank's Kevin O'Leary sends strong message on Social Security Jean Chatzky offers another word about prioritizing 401(k)s and retirement Chatzky makes an additional point about the importance of 401(k)s and a person's retirement savings and investments, particularly for those who have children and are making every effort to help them in any way they can - and even save for their kids' college education. "You know when you're on an airplane and they always tell you to put your oxygen mask on first before assisting a child?" she asks. "Saving for long-term financial needs is the same. If you don't save for your own future first, you won't be able to help your children when they need it." "Worse, they may be forced to help you just when they're trying to put their own kids through school," she added. "There is no financial aid for retirement. There is plenty of financial aid for college. Don't feel guilty about this." Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc. This story was originally published May 6, 2025 at 10:33 AM.
Yahoo
02-04-2025
- Business
- Yahoo
Recession risk: Here's how to safeguard your finances
Several Wall Street firms have raised their expectations of a potential recession in the next year. CEO and host of the HerMoney podcast Jean Chatzky joins Wealth to share actionable steps to prepare for the possibility of a recession, like focusing on your finances and staying aware of signs like rising unemployment and declining consumer confidence. To watch more expert insights and analysis on the latest market action, check out more Wealth here. Some of the biggest firms on Wall Street are raising their expectations of a recession in the next 12 months. While it's far from certain that it's in the cards, we are bringing you some steps you can take today to prepare just in case. Joining me is Jean Chatzky, CEO of and host of the podcast, Her Money with Jean Chatzky. And Jean, we should say here, a lot of these folks are not predicting a recession. They're just raising the chances that it could happen. Most of them are predicting a slowdown from the growth where we are right now. What should people be looking out for? Uh, what signs that could signal a slowdown or even a recession is coming? We'll keep an eye on unemployment. Unemployment is likely to start ticking up if if there is a recession. We'll look at consumer spending. Consumers often lose confidence. We're starting to see declining consumer confidence already. If we see a slowdown in consumer spending, that can, uh, be another sign that we are headed into recession. But the the tricky part about a recession is that we could be in one already and not know it, uh, simply because the data lags. And so for individual investors, the thing to keep an eye on is your own finances. You want to focus on controlling the things that you can control, making sure that your job is shored up as much as possible. And if you feel that it's tenuous, making sure that you are taking steps right now in in terms of, uh, brushing up your LinkedIn, brushing up your resume. You want to make sure that you're keeping a little bit of extra powder dry in terms of savings in case you need it in an emergency. You're not going to be able to control the roller coaster markets, but you are going to be able to keep an a lid on your own wallet, at least to some degree. And speaking of controlling things you can control, Jean, you know, it's a good reminder what you were saying about your LinkedIn. Also that we're not at the, you know, the job market is not necessarily weak right now, but it's not at the height it was a couple of years ago. So if someone's preparing to leave a job voluntarily, they should probably have another one lined up. Yeah, absolutely. I mean, we we stop and think, oh my gosh, a recession. I'm never going to be able to get a job. No. Hiring happens continually. It just happens a little more slowly in a recession, which means it may take you a little bit longer to get that next job. And so Julie, exactly what you're saying is what I would say. Don't quit the job until you've got the next one lined up. Now is not the time to do that. Sign in to access your portfolio
