Latest news with #pre-retirees
Yahoo
11-08-2025
- Business
- Yahoo
Nearly 1 in 4 Americans over 50 are delaying retirement over concerns about money — here's what's worrying them
More Americans are delaying retirement over fears about the economy and their own financial safety net. Nearly 1 in 4 (23%) pre-retirees over 50 polled in a survey commissioned by F&G Annuities & Life say they've decided to delay retirement — up from 14% a year ago — due to financial concerns. Of those who are postponing their retirement, 48% are worried they won't have enough money, 44% are worried about inflation and 34% are worried about a recession or plunging stock market. Don't miss 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 I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now David John, a senior strategy policy advisor at AARP, told CBS he's seen people cut back on saving for retirement or pull money out of their savings to deal with unexpected costs or inflationary pressures. 'Of course, that helps in the short run, but that means that you have even more people who have worries once they start to get to retirement,' he said in a story published July 17. But whether or not these financial fears are justified, there are good reasons Americans might want to slow their roll toward retirement. Social Security The earliest age you can begin claiming Social Security retirement benefits is 62, but you can earn a bigger check each month if you wait up until age 70 to apply. So, if you're able to work a few extra years, or can survive off of your savings without Social Security for a while, you can end up with a larger monthly benefit for life. Plus, if you work those extra years, you may end up with more savings in the end. Catch-up contributions Once you reach age 50, you can contribute additional funds to tax-advantaged retirement plans, including 401(k) ($7,500) and IRA ($1,000) accounts. The longer you work into your 50s, the more you could potentially take advantage of these added contributions — called catch-up contributions. Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Furthermore, thanks to the SECURE 2.0 Act, workers aged 60-63 may have a higher catch-up limit for their 401(k) plans. In 2025, the higher limit is $11,250 instead of $7,500. Take control of your finances Despite ongoing concerns about the economy, there are steps you can take to set yourself up for a strong future. Build a budget: If you haven't done so already, creating a budget can help you control your spending now, while setting you up for disciplined spending in retirement. Pay down debt: The longer you work, the better opportunity you have of shedding all debt and maximizing your savings by the time you retire. Emergency fund: Building an emergency fund can prevent you from falling further into debt in case of an unexpected expense. Experts recommend setting aside three-to-six months' worth of expenses in a high-interest savings account for this purpose. Get expert advice: Planning one's retirement can be a complicated process, and there's no shame in asking for help. A financial advisor can help you come up with a blueprint that best suits your needs and desires, including when to retire and apply for Social Security, as well as an appropriate withdrawal strategy. In the meantime: 'Save and continue to save,' John advised. 'Because any amount of retirement savings is going to be better than no retirement savings.' What to read next 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 Here are 5 simple ways to grow rich with real estate if you don't want to play landlord. And you can even start with as little as $10 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
06-08-2025
- Business
- Telegraph
Half of ‘richest generation in history' won't be able to afford a decent retirement
They have been labelled the richest generation in history, with bumper pensions and mortgage-free homes ensuring comfortable retirements. But the baby boomers may not be as financially secure as their reputation suggests. Half of the generation born between 1946 and 1964 are expected to fall short of achieving an adequate income in retirement, according to research by asset manager Vanguard. The report assessed 'retirement readiness' – whether pre-retirees had the savings needed to maintain their current lifestyle in retirement, or enough to achieve Pensions UK's 'moderate' retirement living standard. It found that 62pc of high-income baby boomers – earning over £74,600 – have sufficient savings to meet their income goals in retirement. Most low-income workers (74pc) on less than £17,700 a year will be able to maintain their lifestyle due to reliance on the state pension, even though many will fall short of the 'minimum' retirement living standard. However, middle-income baby boomers are most at risk of falling short, according to the report. Just 40pc of those in the middle income bracket of between £32,600 and £46,599 were projected to meet their expected retirement income. Overall, 51pc of boomers are expected to do so. Having a 'gold-plated' defined benefit pension was the biggest factor influencing whether baby boomers were on track for retirement, according to the research. These lucrative pension schemes guarantee an inflation-linked income in retirement, based on final or average salary. They are close to extinction in the private sector, as they have become too expensive for employers to maintain. They have instead been replaced by much less generous defined contribution schemes, where the final value depends on how well investments perform. The report found that 69pc of baby boomers with defined benefit pensions were 'retirement ready', compared with just 28pc of those without. The problem of retirement adequacy is set to become more acute for younger generations without access to defined benefit schemes, it added. Experts have warned that Britain faces a 'pension savings crisis' as the current minimum contribution level is not enough to fund adequate retirements. Under auto-enrolment rules, employees put at least 5pc of their salaries into a pension, in addition to a minimum 3pc employer contribution and government tax relief. The Government's pensions review will look at whether these minimum contributions need to be raised, although the Chancellor has committed to not making any changes this Parliament. Separate research by Phoenix Insights has found that Britain's retirement crisis is set to peak in 2040 when the incomes of almost three million pensioners will no longer be enough to cover their needs. Georgina Yarwood, of Vanguard Europe, said: 'Despite common perceptions, many UK baby boomers aren't as financially secure as assumed, with only around half being retirement ready. 'Middle-income boomers face the greatest shortfall, and without access to generous defined benefit workplace pensions, many risk falling short in retirement. Our findings show that overall, baby boomers with defined benefit pensions are twice as likely to meet their retirement goals than those without. 'Bridging the gap could require some tough choices like tapping into home equity, delaying retirement or cutting back spending.' Ian Cook, of wealth manager Quilter Cheviot, said: 'Although boomers benefitted from house price inflation, many will be forced to downsize and release equity or take out loans to fund their lifestyles in retirement. There's a perception they are better off but this isn't always the case. 'A lot of this is down to the switch from defined benefit to defined contribution. It means many people are sleepwalking into retirement without the income they hoped for.'
CBS News
31-07-2025
- Business
- CBS News
Should you roll over your 401(k) to an annuity this August?
Today's uncertain economic environment, dotted by sticky inflation, high interest rates and market volatility, has many pre-retirees rethinking their long-term financial strategy. And, if you're sitting on a sizable 401(k) balance, you might also be wondering whether now is the right time to shift gears. For some, that means converting a portion of their retirement savings into a guaranteed income stream, such as an annuity. After all, predictable monthly income can be a welcome buffer against inflation and market swings. But making a substantial move, like rolling over your 401(k) to an annuity, isn't a good decision for every soon-to-be retiree. Doing so can offer long-term security, but it can also limit your flexibility and tie up your funds in ways that might not align with your goals. This is especially relevant now, as annuity rates have remained high amid the Federal Reserve's extended rate pause, but so have rates on other fixed-income investments, like certificates of deposit (CDs) and Treasury bonds. So, how do you know if this August is the right time to take the plunge and roll over your 401(k) balance to an annuity? Below, we'll take a look at what you need to know before making that move, along with some key considerations that can help you determine if it makes sense for your retirement plan. Find the right annuity to help meet your retirement goals today. Converting a 401(k) into an annuity can make sense in some situations, especially if your primary retirement goal is to secure a steady income that lasts for life. With interest rates still elevated, many types of annuities are offering more attractive payout rates than they have in recent years. That means your rollover dollars could now generate higher monthly income with an annuity than if you made the move in a different climate. And, with stock market volatility remaining a concern in the current economic landscape, some retirees and near-retirees are looking for ways to protect their nest eggs from downturns, which is where fixed annuities, in particular, come in. This type of annuity can provide principal protection and peace of mind, which can be hard to come by if your 401(k) is invested primarily in stocks or mutual funds. That said, rolling over your entire 401(k) into an annuity isn't always the best approach. These unique insurance products tend to come with fees, surrender charges and limited liquidity. Once your money is in an annuity, it's often locked in for years, and getting it out early could cost you. And, if you're still relatively young or want more control over your investments, moving a large portion (or all) of your retirement funds into an annuity may limit your growth potential. If you're still employed, there's also a chance that this isn't an option. Not all 401(k) plans allow rollovers while you're working, so you may need to wait until retirement or a job change before this becomes available. In short, while current conditions may make annuities more appealing than they were in the recent past, a rollover should be part of a broader retirement income strategy, not a standalone solution. Learn more about how an annuity offers you guaranteed income during retirement. If you're considering this type of rollover, start by thinking about your retirement income needs. Ask yourself: Do I have enough in Social Security and other sources to cover my basic expenses? Or would a guaranteed income stream from an annuity help fill the gap? You'll also want to consider your tolerance for market risk. If you're risk-averse and don't want to worry about portfolio performance in retirement, an annuity could offer a helpful safeguard. Some people choose to roll over just part of their 401(k) — generally enough to purchase an annuity that covers their core expenses — while keeping the rest invested for growth or flexibility. Another factor to consider is how close you are to retirement. If you're within five years of retiring, locking in current annuity rates could work in your favor, especially if you anticipate rates dropping again soon. On the other hand, if you're younger, your money may have more earning potential if left in a well-diversified portfolio. You should also evaluate the type of annuity you're considering. Immediate annuities start paying income right away, while deferred annuities build value over time. Fixed annuities offer predictable payouts, while variable annuities carry market exposure and typically higher fees. The right option generally depends on your timeline, risk tolerance and income needs. If you still aren't sure, consider meeting with a trusted financial advisor or retirement planner. These experts can help you crunch the numbers and map out whether rolling your 401(k) into an annuity makes sense for your specific goals. Rolling over your 401(k) into an annuity this August might make sense, especially if you're looking to lock in higher payouts, protect your principal or create guaranteed income for retirement. But doing so is not the right move for everyone, and the timing alone shouldn't drive your decision. So, before making any changes, take a close look at your retirement needs, investment goals and overall financial picture. A partial rollover may offer the best of both worlds — security and flexibility — but every retirement plan is different, and it's important to build a strategy that fits your life, not just the current market.
Yahoo
22-06-2025
- Business
- Yahoo
Should You Buy the 3 Highest-Paying Dividend Stocks in the S&P 500?
Dividend-paying stocks are generally powerful performers. But not all are alike -- some are riskier than others. Be especially careful with ultra-high-yielders. 10 stocks we like better than Dow › It's hard to argue with dividend investing. Many assume dividends are mainly for retirees, and it's true that dividend income can be critically important when you're living on a fixed or semi-fixed income. But pre-retirees can benefit greatly from dividends, too -- for example, that income can be used to buy more stock! So, if you're hunting for dividend payers for your portfolio, you may be tempted to buy into the highest-paying dividend stocks. Think twice before doing so, though. Here's why, including a look at the three highest payers in the S&P 500. First, here's why dividend-paying stocks deserve your attention: Dividend-Paying Status Average Annual Total Return, 1973-2024 Dividend growers and initiators 10.24% Dividend payers 9.20% No change in dividend policy 6.75% Dividend non-payers 4.31% Dividend shrinkers and eliminators (0.89%) Equal-weighted S&P 500 index 7.65% Data source: Ned Davis Research and Hartford Funds. Their outperformance isn't that surprising since dividend payers have generally grown enough to have somewhat reliable income that supports a commitment to a dividend. When you start comparing dividend payers, though, here are some things to keep in mind. Don't focus just on the amount of the dividend -- for example, favoring a $3 annual payout to a $1 one. To really compare apples to apples, you need to look at the dividend yield. Let's say the $3 payout belongs to a $240 stock. Its yield would be 1.25% ($3 divided by $240). If the $1 payout belonged to a $40 stock, its dividend yield would be 2.5% ($1 divided by $40). You would get more dividend income per dollar spent on the second stock. That said, though, a very high yield is often a sign of trouble because when a stock's price drops, its yield goes up. So, it can be best to seek relatively high yields, but not necessarily the highest yields you can find. Here's a look at the three highest payers in the S&P 500 as of mid-June. Shares of Dow (NYSE: DOW) recently sported a whopping dividend yield of 9.8%. Not surprisingly, the stock is down -- recently by more than 40% over the past year. Its five-year average annual gain is 1%, too. That's not pretty, but the dividend yield certainly is fetching. So, why is the stock down? Well, per my colleague Daniel Foelber, it's facing weak customer demand, global competition, and high costs. Yikes. Such problems don't always last, though, and Dow is working to cut its costs and diversify even further, which can spread its risks across multiple kinds of operations. (It's been investing in recycling plastic waste, for example.) The company hasn't been generating sufficient cash to cover its dividend payout, so unless things change, it may have to shrink the dividend. But even if the payout is cut in half, a roughly 5% dividend yield would still be way above average. LyondellBasell Industries N.V. (NYSE: LYB) is another chemical company that has seen its fortunes -- and its share price -- fall. Over the past year, it's down about 31%, and its dividend yield was recently 9.2%. It, too, isn't generating enough in earnings to cover its dividend yield, so a dividend cut is not out of the question. Interestingly, though, the company announced a (modest) dividend increase in May. So management isn't looking very pessimistic. CEO Peter Vanacker said: LYB continues to reward shareholders with a strong and growing dividend in 2025, which will mark 15 consecutive years of dividend growth of our dividend reaffirms confidence in our disciplined capital deployment, our value-driven strategy and our capability to navigate the cycle during these challenging times. Alexandria Real Estate Equities (NYSE: ARE) is a real estate investment trust (REIT) -- a company that owns many real estate properties, charging its tenants rent. REITs are required to pay out at least 90% of their taxable earnings as dividends, and the dividend yield for Alexandria Real Estate Equities was recently a fat 7.5%. The company specializes in leasing offices to the life sciences industry, and the fact that many people are working from home these days has put pressure on office real estate. Indeed, this REIT's stock has also fallen hard over the past year -- down nearly 34%. Founded in 1994, Alexandria describes itself as "the pioneer of the life science real estate niche." The company owns, operates, and develops what it calls "collaborative Megacampus ecosystems in AAA life science innovation cluster locations." These are spread out among such places as Boston, San Francisco, Seattle, Maryland, Research Triangle Park, and New York City. So, take a closer look at any of these high yielders that interest you, but know that there are plenty of other solid dividend payers out there, many with less murky near-term futures. Before you buy stock in Dow, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Dow wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alexandria Real Estate Equities. The Motley Fool has a disclosure policy. Should You Buy the 3 Highest-Paying Dividend Stocks in the S&P 500? was originally published by The Motley Fool
Forbes
20-06-2025
- Business
- Forbes
How Retirees Can Prepare for Stagflation Risks
Red warning lights are flashing that the U.S. might be entering into a period of stagflation. Key concerns include: What can pre-retirees and retirees do to protect themselves if we experience stagflation? Let's take a look, but first, let's define the term. Stagflation is a period when the price of consumer goods rises at the same time that the economy slows down. The potential impact on retirees' finances comes from stock market returns that could be flat or negative while the cost of their living expenses rises due to inflation. Fortunately, stagflation has been rare in the U.S. We last experienced stagflation in the late 1970s and early 1980s, attributed to oil price shocks and policy mistakes. At the time, Federal Reserve Chairman Paul Volcker significantly increased interest rates to tame inflation, which led to a recession with high unemployment in the early 1980s. However, these events also helped set the stage for economic growth later in the 1980s with reduced inflation. Stagflation can negatively impact both sides of the common-sense formula for retirement security: If you depend on stock market investments to generate regular systematic withdrawals to cover your living expenses, you could see your retirement income drop. To add to the pain, your living expenses are likely to have increased. Pre-retirees and retirees can prepare for stagflation by adopting strategies that improve both sides of the common-sense formula for retirement security described above. Here are some ideas for protecting your retirement income: Here are some ideas for managing your living expenses: Periods of stagflation are generally a bad time to retire, since your finances are under pressure and there's a lot of uncertainty. Retiring when your stock market investments have dropped and withdrawing too much from those savings can permanently depress your retirement investments. However, as evidenced by our experience in the 1970s and 1980s, it might take several years for our economy to overcome a period of stagflation. Given that, you might not want to wait that long to retire or you may be forced to retire if your employer is under stress. In this case, you might want to consider semi-retirement as a strategy to allow your Social Security benefits to grow and to delay tapping into your retirement savings. We also need to encourage our political leaders to manage the federal debt more responsibly and allow the Federal Reserve to adopt the appropriate policy moves. Today's pre-retirees and retirees lived through the stagflation of the 1970s and 1980s. It might have been painful, but we survived by being resilient and making smart choices. We can do it again!
