Latest news with #StateofRetirementPlanning
Yahoo
15-04-2025
- Business
- Yahoo
Most Retirees Saved Enough for a Comfortable Retirement: 9 Lessons Pre-Retirees Can Learn
Despite major challenges including a pandemic, market volatility and rising costs, most recent retirees feel good about their current financial situations. According to the latest Fidelity Investments State of Retirement Planning study, 72% of recent retirees said their retirement is going as planned, and 70% said they have saved and planned appropriately for a comfortable retirement. Find Out: Read Next: Pre-retirees are not feeling as optimistic, however. According to the report, 62% of Americans in their retirement planning years are uncertain whether their retirement savings will last forever. Here's a closer look at the possible reason for this generational divide, plus, what pre-retirees can learn from current retirees. The report found that most current retirees believe they have saved enough for a comfortable retirement, while the majority of those in the planning stages believe they will run out of money in retirement. 'The optimism many current retirees feel can be attributed to the fact that a majority of them have access to multiple sources of predictable retirement income, like pensions and Social Security,' said Rita Assaf, VP of retirement products at Fidelity. 'This helps make budgeting for things like housing and food a lot simpler, since their living necessities are covered by a fixed stream of retirement income each month.' Many current retirees can cover all their needs with pensions and Social Security, allowing for wiggle room in their budgets. 'Their retirement savings can be used for their discretionary expenses — those 'nice to haves' that so many envision during their golden years — like travel and hobbies,' Assaf said. Learn More: While current retirees may have a financial leg up over future generations who may not have access to the same guaranteed income sources, there are still some valuable lessons pre-retirees can learn from this generation. According to Assaf, 'Our study finds the top pieces of advice retirees have for people who are starting their retirement [preparation] include: Starting to save as early as possible, even in small amounts Taking advantage of employer-sponsored retirement plans like 401(k) [plans] Paying down high-interest debt before focusing heavily on retirement savings Making sure you are educated on Social Security and retirement benefits in general.' Retirees also offered advice specifically those who are nearing retirement age. 'For those just five to 10 years out from retirement, retirees say some of the best actions you can take include: Paying off any remaining debts, like mortgages and credit cards Maximizing contributions to retirement accounts Leveraging catch-up contributions when possible Planning for healthcare costs, including Medicare and long-term care Practicing living on a retirement budget to prepare yourself for a reduced retirement income.' More From GOBankingRates 5 Types of Vehicles Retirees Should Stay Away From Buying 5 Cities You Need To Consider If You're Retiring in 2025 4 Things You Should Do if You Want To Retire Early Here's the Minimum Salary Required To Be Considered Upper Class in 2025 This article originally appeared on Most Retirees Saved Enough for a Comfortable Retirement: 9 Lessons Pre-Retirees Can Learn Sign in to access your portfolio
Yahoo
15-04-2025
- Business
- Yahoo
Most Retirees Saved Enough for a Comfortable Retirement: 9 Lessons Pre-Retirees Can Learn
Despite major challenges including a pandemic, market volatility and rising costs, most recent retirees feel good about their current financial situations. According to the latest Fidelity Investments State of Retirement Planning study, 72% of recent retirees said their retirement is going as planned, and 70% said they have saved and planned appropriately for a comfortable retirement. Find Out: Read Next: Pre-retirees are not feeling as optimistic, however. According to the report, 62% of Americans in their retirement planning years are uncertain whether their retirement savings will last forever. Here's a closer look at the possible reason for this generational divide, plus, what pre-retirees can learn from current retirees. The report found that most current retirees believe they have saved enough for a comfortable retirement, while the majority of those in the planning stages believe they will run out of money in retirement. 'The optimism many current retirees feel can be attributed to the fact that a majority of them have access to multiple sources of predictable retirement income, like pensions and Social Security,' said Rita Assaf, VP of retirement products at Fidelity. 'This helps make budgeting for things like housing and food a lot simpler, since their living necessities are covered by a fixed stream of retirement income each month.' Many current retirees can cover all their needs with pensions and Social Security, allowing for wiggle room in their budgets. 'Their retirement savings can be used for their discretionary expenses — those 'nice to haves' that so many envision during their golden years — like travel and hobbies,' Assaf said. Learn More: While current retirees may have a financial leg up over future generations who may not have access to the same guaranteed income sources, there are still some valuable lessons pre-retirees can learn from this generation. According to Assaf, 'Our study finds the top pieces of advice retirees have for people who are starting their retirement [preparation] include: Starting to save as early as possible, even in small amounts Taking advantage of employer-sponsored retirement plans like 401(k) [plans] Paying down high-interest debt before focusing heavily on retirement savings Making sure you are educated on Social Security and retirement benefits in general.' Retirees also offered advice specifically those who are nearing retirement age. 'For those just five to 10 years out from retirement, retirees say some of the best actions you can take include: Paying off any remaining debts, like mortgages and credit cards Maximizing contributions to retirement accounts Leveraging catch-up contributions when possible Planning for healthcare costs, including Medicare and long-term care Practicing living on a retirement budget to prepare yourself for a reduced retirement income.' More From GOBankingRates 5 Types of Vehicles Retirees Should Stay Away From Buying 5 Cities You Need To Consider If You're Retiring in 2025 4 Things You Should Do if You Want To Retire Early Here's the Minimum Salary Required To Be Considered Upper Class in 2025 This article originally appeared on Most Retirees Saved Enough for a Comfortable Retirement: 9 Lessons Pre-Retirees Can Learn Sign in to access your portfolio
Yahoo
30-03-2025
- Business
- Yahoo
Fidelity Reveals Top 3 Sources of Retiree Income Today: Should You Diversify Yours?
Planning for a successful retirement isn't just about saving enough, it's about creating a reliable mix of income streams that can support your lifestyle in a tax-efficient and sustainable way. Find Out: Read Next: Fidelity's 2025 State of Retirement Planning study revealed the top three sources of retiree income today: Social Security: 77% Pensions: 48% Personal savings (such as checking or savings accounts): 41% These remain the most common ways retirees support themselves, but financial experts say that diversifying income sources, especially in an uncertain economic landscape, may be key to long-term stability and peace of mind. Before making changes to a retirement portfolio, individuals should first consider their broader financial objectives. This includes factors like cash flow needs, expected retirement expenses and longer-term plans such as buying property or supporting children or grandchildren with educational costs. As Jennifer Kohlbacher, CPA and director of wealth strategy at Mariner Wealth Advisors, pointed out, understanding these goals helps inform decisions around rebalancing and aligning your portfolio with risk tolerance and liquidity needs. Learn More: One of the biggest concerns in retirement is the possibility of outliving your money, according to Yehuda Tropper, CEO of Beca Life Settlements. This risk is magnified by the rising costs of healthcare and long-term care. 'If your savings run out, you may find yourself relying only on Social Security, and with the average monthly benefit hovering around $1,900, that likely won't be enough to cover all your basic living expenses,' Tropper said. Diversifying income sources can be a practical way to help prevent this scenario. Tropper recommended combining 'guaranteed assets' — such as Social Security, pensions and annuities — with 'liquid assets,' like cash reserves or dividend-paying stocks. Additional sources like real estate or commodities (like gold) may also provide inflation protection and help diversify income. This approach creates flexibility while supporting both day-to-day needs and long-term goals. Kohlbacher also emphasized the importance of evaluating all investment accounts and your full financial picture before making portfolio adjustments. For example, those with significant real estate holdings may not need more exposure to the same asset class elsewhere in their portfolio. A complete review of your assets, including retirement and taxable accounts, can lead to smarter, more strategic rebalancing decisions. Tax planning is also important in your retirement income strategy, especially for those with taxable investment accounts. One technique to consider is direct indexing, which involves purchasing individual securities that mirror a market index rather than buying a bundled fund. This can provide more control over specific stock exposure and concentration risk, Kohlbacher said. Direct indexing also enables tax-loss harvesting, a way of selling underperforming assets to offset capital gains and potentially reduce tax liabilities. For those with charitable intentions, a charitable remainder trust (CRT) may offer both tax benefits and an opportunity to give back. A CRT is an irrevocable trust that can be established during a person's lifetime or as part of an estate plan, Kohlbacher said. By donating assets to a CRT, individuals may qualify for an immediate income tax deduction and remove those assets from their taxable estate. The donor can retain an income stream from the trust for life or for a fixed period (up to 20 years), after which the remaining assets are transferred to the designated charity. Kohlbacher noted that CRTs are exempt from federal income tax, which means that highly appreciated assets can be sold within the trust without triggering capital gains — providing flexibility and tax efficiency. While Social Security, pensions and savings remain key income sources for many retirees, building a more diversified and tax-smart plan can help protect your retirement lifestyle. More From GOBankingRates4 Things You Should Do if You Want To Retire Early 12 SUVs With the Most Reliable Engines 6 Big Shakeups Coming to Social Security in 2025 This article originally appeared on Fidelity Reveals Top 3 Sources of Retiree Income Today: Should You Diversify Yours?
Yahoo
13-03-2025
- Business
- Yahoo
Why it's harder for Generation X to save for retirement than it was for baby boomers
Generation X, a cohort that never got quite as much attention as its baby-boomer elders or its millennial younger siblings, will begin turning 60 this year, and many are worried about their retirements. One of the biggest reasons for that lack of confidence? They're juggling too many financial responsibilities, such as mortgages, children's education, and the rising cost of living, a new report from Fidelity has found. Generation X has almost become synonymous with the 'sandwich generation,' taking care of aging parents and children at the same time. 'Is it finally time to freak out?' I'm in my 50s and worried about the $650K in my 401(k). Why should I tip servers who earn $20 an hour? I invested $4,000 in 2020. It's now worth $55,000 with a 65% concentration in Nvidia. Am I now in trouble? Why a 'good' CPI report on Wednesday may not be enough to turn stock-market carnage around One of Wall Street's biggest bulls now says a flash crash can't be ruled out Financial advisers have taken notice of the generation's worries. 'This complex web of financial obligations makes it incredibly difficult to prioritize retirement savings,' said Ashley Folkes, a certified financial planner at Farther Financial. 'It's imperative to understand that, while this stage of life presents unique challenges, it's not insurmountable. The key is to take a holistic view of your financial situation, clearly define your values and goals, and engage in open discussions about what truly matters.' Among all workers, Generation X was the most mixed in characterizing its confidence in retiring on its own terms, according to Fidelity Investments' latest 2025 State of Retirement Planning report. Almost half, or 45%, of Gen X said they weren't confident, compared with 30% of baby boomers, 26% of millennials and 20% of Gen Z who said the same. Overall, 67% of Americans in their 'planning years,' as Fidelity put it, said they are confident about their retirement prospects, though that is down seven percentage points from the previous year. Read: 'Is it finally time to freak out?' I'm in my 50s and worried about the $650K in my 401(k). Another factor contributing to retirement insecurity is that Gen X represents a tipping point in retiree reliance on 401(k) plans instead of pensions, said Rita Assaf, vice president of retirement at Fidelity. More than six in 10 respondents in their planning years, or 61%, said their own retirement accounts, including 401(k) plans, IRAs and small-business plans, will be their biggest retirement income streams, compared with about half of current retirees, the report found. Another 62% of respondents said they're not sure if those savings will last their lifetimes. With the bulk of their retirement savings in self-directed investments, near-retirement Gen X–ers will only have anxiety levels heightened by stock-market volatility. The generation has weathered the tech-stock bust and the Great Recession during their working and saving years, in addition to smaller market disruptions, and Fidelity's report comes as the U.S. stock market has been suffering declines across the board, pressured by worries about a trade war, a possible recession and declining consumer confidence. Deep Dive: These 10 stocks beating the market's recent Trump slump have this in common Also see: The anywhere-but-America trade has been working. But there are limits. Retiring in the midst of a down market can throw careful retirement planning into turmoil. Advisers typically suggest avoiding withdrawals from investment accounts when the market is in a downturn because it could require taking a larger chunk of the portfolio and thus potentially hurting future returns, known as sequence-of-returns risk. Hope is not lost for Gen X–ers, advisers say. And this generation, importantly, should create a retirement plan if they haven't already, experts said. 'If you're planning for something, you feel better,' Assaf said. 'You don't have to do it alone, especially with retirement planning. There's a lot of help.' A retirement plan involves assessing current finances, determining clear goals for the future and doing the math to attain those goals, Jon Ulin, a certified financial planner and managing principal of Ulin & Co. Wealth Management. 'A well-structured, written plan acts as a roadmap with measurable milestones,' he said. 'Rule of thumb: Understanding how much you'll need as a lump sum to fund a multidecade retirement — while accounting for inflation and taxes — is essential for long-term financial security.' Other tasks include boosting retirement contributions while still able to do so, paying down debts (especially high-interest debts) and planning for healthcare expenses, Ulin said. Engaging a financial adviser can help. Read: Retiree healthcare costs jump almost 5% to $165,000 — more than double the 2002 rate The financial-services industry lately has put a spotlight on annuities, which are investment products that offer guaranteed income. Investors contribute a certain amount of money with the expectation of receiving a stream of income in the future. Annuities have had an imperfect reputation in the past — and investors should scrutinize any product before taking part, regardless of where they heard the recommendation — but having these additional sources of income in retirement can help reduce anxiety. When looking for an adviser, search for professionals who will look at the full financial picture — as opposed to just recommending investment products — and ask about fees, retirement-planning strategies, their client base and how they will communicate with you as life twists and turns into, and in, your retirement years. These 13 growth stocks are expected to roar back from their declines so far this year Goldman Sachs flinches and lowers its S&P 500 target. The mechanics are the interesting part. Tariffs are causing stock-market panic and leading investors into riskier options trading Stock market's worst day of 2025 is stoking Nasdaq bear-market fears. Here's why. I viewed a $600K house. I discovered it has an unsafe kitchen extension with no foundation. Do I speak up? Sign in to access your portfolio
