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The Formula You Are Using To Determine How Much To Save For Retirement Is Broken

If you are trying to figure out how much money you need to save for retirement, there’s an easy rule of thumb that you can use: simply multiply your expected annual expenses in retirement by twenty-five.

For example, if you expect to spend $100,000 annually once you’re retired, you’ll want to have a $2.5 million portfolio saved up. If you’d like to play around with the numbers to estimate your own retirement needs, you can use this simple retirement calculator.

This retirement savings rule of thumb is based on the 1998 landmark study conducted by Carl Hubbard, Philip Cooley and Daniel Walz, in their seminal study known as the Trinity Study. They built on the 1994 work of William Bengen, who originally coined the ‘4% Rule’.

Today In: Money

The Trinity Study evaluated safe retirement withdrawal rates, and found that 4% was sufficient for the majority of retirees. A safe withdrawal rate simply refers to the amount of money that can be taken out of an account and allow you to reasonably expect the portfolio to not fail, or run out of money. In this case, the 4% withdrawal rate refers to the amount of money that will be withdrawn from the balance of the retirement portfolio in the first year of retirement. In subsequent years, the balance withdrawn will simply be an inflation adjusted number based on the total dollar amount withdrawn the year prior.

The Trinity Study has become so well-known, that it has been adopted by hopeful retirees from all walks of life, including those hoping to retire early. The FIRE movement (Financial Independence, Retire Early) is a lifestyle movement with the goal of allowing individuals to retire as early and quickly as possible.

However, one detail that the movement is getting wrong and completely missing, is the fact that the Trinity Study’s 4% rule of thumb was based on a 30 year retirement period. This time horizon was determined to be on the conservative end of retirements by the authors of the study. If you work until you’re 65, having a 30 year retirement seems pretty reasonable. I don’t think many would argue that living until the age of 95 is a short life by any means.

The problem arises due to the FIRE movement seeking a much longer retirement period. If you retire at 45 years old, you may need a portfolio that will survive another 45 to 50 years in order to avoid running out of money. In this case, making a judgement error could end up meaning re-entering the workforce at an advanced age. For this reason, relying on a 4% withdrawal rate is an extremely risky decision if you plan to retire early.

This begs the question of what a more appropriate withdrawal rate is if you plan to retire early. The answer is that it depends. In general, the study found that as the balance between stocks and bonds shifts towards equities, a portfolio is more likely to withstand the test of time. So inherently, your risk tolerance will need to be factored into the equation. If you are comfortable with 75%+ of your portfolio being in stocks (and stomaching the increased risk), you might be safe with a 3% withdrawal rate. If you prefer less volatile investments, a lower rate is more conservative.

This is bad news for a lot of you hoping to retire early.

For one, it would mean having to save an additional $833,000 if you hope to spend $100,000 annually like in the example above. Unless you are an exceptionally high earner, it’ll likely mean having to work for several additional years or having to continue to earn additional income even after retirement.

With the buzz surrounding the gig economy and the seemingly endless ‘side-hustle’ opportunities available, this seems like a surmountable hurdle. The deficit in retirement savings required also highlights the impact of having to save for retirement as efficiently as possible.

This means fully taking advantage of your 401(k), IRA, and other tax-advantaged accounts. It also means evaluating whether it makes sense to refinance your student loans or not. Avoiding credit card interest fees and other forms of high interest debt are a must. In addition, maximizing your earning potential will also help safeguard your nest egg from market turbulence and economic uncertainty.

Just as important, you’ll also want to avoid making costly investment mistakes. One that comes to mind is erroneously viewing your vehicle as a sound investment. Another pitfall is picking individual stocks in lieu of index funds or ETFs. To set yourself up for success, minimizing fees and diversifying your investments is the name of the game.

Does all of this mean that the 4% rule is futile and should be completely ignored? Absolutely not. The authors of the Trinity Study ran simulations to find what the safe withdrawal rate would be for varying time horizons. But at the end of the day, they were just that: simulations. Even if you only had an expected 15 year retirement and used a conservative withdrawal rate, there is always the chance that your portfolio could fail. The same is true in the opposite direction: there’s always the chance that a 4% withdrawal could be sufficient for a 50 year retirement.

The question you have to answer is whether you are comfortable taking that risk. I know I’m not.

Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.

Camilo Maldonado is Co-Founder of The Finance Twins, a personal finance site showing you how to budgetinvestbanksave & refinance your student loans. He also runs Contacts Compare.

Source: The Formula You Are Using To Determine How Much To Save For Retirement Is Broken

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There are many financial gurus out there that tell you how much to save for retirement, but how did they come up with that number? Honestly they are all just using each others guesses, but as financial advisors we need to do better. While others guess that you should save 10, 12,15% for retirement we can actually figure out how much you should save…to the penny! The first thing we want to know is how much income are you looking for in retirement? Typically we say that you should aim to have 75% of your current income replaced for retirement. The reason is that social security and other savings may make up the difference. Today we will calculate how much a 30 year old couple should save for retirement given that they each have income of $50,ooo per year. We will adjust this to account for inflation and make some assumptions about their retirement age and life expectancy. After calculating this along with expected returns we can see that they need to save 11.9% of their income yearly to have 75% of their income in retirement. We love doing this for our clients and if you are considering a place for your retirement investments then we hope you will consider jazzWealth.com We’re an investing service that also helps you keep your dough straight. We’ll manage your retirement investments and, using NestEgg we can help you with every penny! —Ready to subscribe— https://www.youtube.com/jazzwealth?su… For more information visit: www.JazzWealth.com — Instagram @jazzWealth — Facebook https://www.facebook.com/JazzWealth/ — Twitter @jazzWealth Investment related questions 📧 Dustin@JazzWealth.com Business Affairs 📧Carolyn@JazzWealth.com

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What Is The Average Retirement Savings in 2019?

It costs over $1 million to retire at age 65. Are you expecting to be a millionaire in your mid-60s?

If you’re like the average American, the answer is absolutely not.

The Emptiness of the Average American Retirement Account

The first thing to know is that the average American has nothing saved for retirement, or so little it won’t help. By far the most common retirement account has nothing in it.

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Sources differ, but the story remains the same. According to a 2018 study by Northwestern Mutual, 21% of Americans have no retirement savings and an additional 10% have less than $5,000 in savings. A third of Baby Boomers currently in, or approaching, retirement age have between nothing and $25,000 set aside.

The Economic Policy Institute (EPI) paints an even bleaker picture. Their data from 2013 reports that “nearly half of families have no retirement account savings at all.” For most age groups, the group found, “median account balances in 2013 were less than half their pre-recession peak and lower than at the start of the new millennium.”

The EPI further found these numbers even worse for millennials. Nearly six in 10 have no retirement savings whatsoever.

But financial experts advise that the average 65 year old have between $1 million and $1.5 million set aside for retirement.

What Is the Average Retirement Account?

For workers who have some savings, the amounts differ (appropriately) by generation. The older you are, the more you will have set aside. However there are two ways to present this data, and we’ll use both.

Workers With Savings

Following are the mean and median retirement accounts for people who have one. That is to say, this data only shows what a representative account looks like without factoring in figures for accounts that don’t exist. This data comes per the Federal Reserve’s Survey of Consumer Finances. (Numbers rounded to the nearest hundred.)

• Under age 35:

Average retirement account: $32,500

Median retirement account: $12,300

• Age 35 – 44:

Average retirement account: $100,000

Median retirement account: $37,000

• Age 45 – 55:

Average retirement account: $215,800

Median retirement account: $82,600

• Age 55 – 64:

Average retirement account: $374,000

Median retirement account: $120,000

• Age 65 – 74:

Average retirement account: $358,000

Median retirement account: $126,000

For households older than 65 years, retirement accounts begin to decline as these individuals leave the workforce and begin spending their savings.

Including Workers Without Savings

When accounting for people who have no retirement savings the picture looks considerably worse. Following are the median retirement accounts when including the figures for people with no retirement savings. The following do not include mean retirement accounts, as this would be statistically less informative than median data.

• Age 32 – 37: $480

• Age 38 – 43: $4,200

• Age 44 – 49: $6,200

• Age 50 – 55: $8,000

• Age 56 – 61: $17,000

How Much Should You Have Saved For Retirement?

So that’s how much people have saved for retirement, or more often don’t. Now for the more useful question: How much should you have saved for retirement?

The truth is that there’s no hard and fast rule. It varies widely by your age, standard of living and (perhaps most importantly) location. Someone who rents an apartment in San Francisco needs a whole heck of a lot more set aside than a homeowner in the Upper Peninsula of Michigan.

The rule of thumb is to estimate by income. Decide the income you want to live on once you retire, then picture your life as a series of benchmarks set by age. At each age you want a multiple of this retirement income saved up. Your goal is to have 10 to 11 times your desired income in savings by retirement.

• By age 30: between half and the desired income in savings

• By age 35: between the desired amount and double the desired income in savings

• By age 40: between double and triple the desired income in savings

• By age 45: between triple and quadruple the desired income in savings

• By age 50: between five times and six times desired income in savings

• By age 55: between six times and seven times desired income in savings

• By age 60: between seven times and nine times desired income in savings

• By age 65: between eight times and 11 times desired income in savings

So, if you earn $50,000 per year, by age 40 you will want to have between $100,000 and $150,000 in retirement savings set aside. The formula grows later in life for two reasons. First, as your savings accumulate they will grow faster. Second, as you approach retirement it is often wise to accelerate your savings plan.

What You Should Do Next for Your Retirement Savings

Retirement is approaching a crisis. In the coming decades millions of Americans will get too old to continue working without the means to stop. Millennials, crippled by debt from graduation, will turn this crisis into a catastrophe in about 40 years. And Social Security, designed to prevent exactly this problem, covers less than half of an average retiree’s costs of living.

It’s beyond the scope of this article to discuss exactly how this happened, but if you’re one of the many people who have fallen behind on retirement savings, don’t panic. There’s plenty you can do. But… it might not necessarily be easy.

The key is to think about retirement savings like a debt. This is money you owe to yourself and it charges reverse interest. Every day you go without adding money to your retirement account is a day you lose investment income. That’s money that you’ll need someday and won’t have.

Next, take stock of where you are. How much will you want to live on in retirement and how much do you have saved today? Use our chart above. That will tell you how far behind you are compared to where you need to be. Are you a 40 year old with $25,000 in savings who will want to live on $50,000 per year in retirement? Then you’ve got $75,000 you need to make up for.

Now, begin catching up. Chip away at that debt every week and every month. Pay into your 401k and IRA the same way you would whittle down a credit card. By thinking about it this way, as a specific goal, you can take away some of the fear of saving for retirement and turn it into an achievable (if large) amount. It’s not just some big, black hole you can never fill. It’s a number, and numbers can go down.

It won’t necessarily be fun. You might have to cut back on luxuries or take on some extra work, but even if you start late in life you can catch up on your retirement.

Now’s the right time to start.

By:

Source: What Is The Average Retirement Savings in 2019?

Dimensional Vice President Marlena Lee, PhD, explains how her research on replacement rates can help you prepare for a better retirement outcome. See more here: https://us.dimensional.com/perspectiv…

Great Places To Follow Your Passions In Retirement In 2019

Want to be happy in retirement? Then cultivate relationships and spend more money on leisure activities—at least that’s what new academic research (as well as common sense) suggests.

To help you with the leisure part, Forbes presents its 2019 list of 25 great places to pursue seven retirement passions: arts, fine dining, lifelong learning, volunteering, outdoor activities on water, outdoor activities on land and (in its own category) golf.

Most are recommended for multiple passions and two—Seattle and Austin, Texas—excel in all seven categories. Our picks are spread across 21 states in all four continental time zones.

While our flagship Best Places To Retire list highlights locations that offer the best retirement value for the buck, our passions list doesn’t disqualify places simply because they’ve got high costs or taxes. Athens, Georgia, our most affordable passions pick, has a median home price of just $178,000, while San Francisco, our most expensive, has a median home price of $1.36 million. Although high costs (or high taxes) won’t keep a city from making this new list, we do take into account such practical quality of life factors as air quality, crime, doctor availability and how walkable and bikeable a city is. You can read more about our selection method here.

Legend:

  • Arts 🎨
  • Fine dining 🍴
  • Lifelong learning 🎓
  • Volunteering ❤️
  • Outdoor activities on water ⛵
  • Outdoor activities on land 🍁
  • Golf ⛳

Annapolis, Maryland

PASSIONS: ❤️ ⛵

Great for volunteering and outdoor water activities

POPULATION: 39,000

MEDIAN HOME PRICE: $428,000

Water on three sides, good air quality and a moderate climate make this charming historic Chesapeake Bay city an ideal spot for those who love boating, fishing or a waterfront view. For the newbie, the city offers lots of recreational boating schools and chartering opportunities. There’s a high rate of local volunteerism and the downtown area, which doubles as Maryland’s state capital (and was the U.S. capital for a year starting in 1783) is very walkable. Doctors per capita are at the national average. Elevation is 40 feet. On the downside, cost of living is 41% above the national average and the crime rate is above the national average. Taxes are on the high side, too; while Social Security benefits are exempt from tax, the top state/local income tax rate is 8.31% and the state has both an estate and inheritance tax.

Ashland, Oregon

PASSIONS: 🎨 🎓 🍁

Great for arts, lifelong learning and outdoor land activities

POPULATION: 21,000

MEDIAN HOME PRICE: $462,000

Located 285 miles south of Portland, this cultural outpost offers art galleries and the nine-month a year Oregon Shakespeare Festival, all set amid scenic mountains and forests. Southern Oregon University hosts an Osher Lifelong Learning Institute and allows free auditing of regular college classes. The highly walkable downtown (elevation: 1,950 feet) is set in a moderate climate with little snow, good air quality, a low serious crime rate and a high number of doctors per capita. Nature trails are just outside town. But the cost of living is 40% above the national average and Oregon makes up for its lack of a sales tax with an income tax rate that hits 9% at just $50,000 of income (with Social Security excluded). There is also a state estate tax.

Athens, Georgia

PASSIONS: 🎨 🎓 🍁

Great for arts, lifelong learning and outdoor land activities

POPULATION: 127,000

MEDIAN HOME PRICE: $178,000

This affordable college town, just 70 miles east of Atlanta, has a vibrant arts scene. The  University of Georgia hosts an Osher Lifelong Learning Institute, plus offers seniors free admission to regular classes. Mild terrain and climate (the nation’s first garden club was founded here in 1891) and good air quality are all conducive to warm-weather outdoor activities at an elevation of 600 feet. The ratio of doctors per capita is sufficient. Cost of living is 7% below the national average and the serious crime rate is low. Georgia doesn’t tax estates or Social Security benefits and offers a generous additional break for other retirement income. Top state income rate is 5.75%. One notable downside: Not very walkable.

Austin, Texas

Passions: 🎨 🍴 🎓 ❤️ ⛵ 🍁 ⛳

Great for arts, fine dining, lifelong learning, volunteering, outdoor water and land activities and golf

POPULATION: 950,000

MEDIAN HOME PRICE: $369,000

Sunny capital of Texas offers scores of dining and entertainment venues (including the annual SXSW festival), plus learning opportunities at the University of Texas, all surrounded by dozens of golf courses. The city boasts a high number of physicians per capita, good air quality, a good economy and a high rate of volunteering. The impressive state capitol building is higher than the one in Washington, D.C. At an elevation of 300 feet, the city is very bikeable and somewhat walkable. While there is no state income or estate/inheritance taxe, the cost of living is 30% above the national average and the serious crime rate is slightly above the national average.

Bend, Oregon

PASSIONS: ⛵ 🍁

Great for outdoor water and land activities

POPULATION: 98,000

MEDIAN HOME PRICE: $440,000

Lots of snow guarantees vibrant downhill and cross-country skiing in this scenic “Outdoor Playground of the West” 160 miles southeast of Portland. Other outdoor pursuits at an elevation of 3,600 feet around the north-flowing Deschutes River include fishing, tubing, hiking, rock climbing, bicycling and paragliding. Besides good air quality, a low serious crime rate and a high number of doctors per capita, the area boasts a strong economy. But Oregon makes up for its lack of a sales tax with an income tax rate that reaches 9% on just $50,000 of taxable income (which excludes Social Security). There’s also a state estate tax. The town itself is not very walkable. Cost of living is 34% above the national average.

Boise, Idaho

PASSIONS: 🎓 ❤️ 🍁

Great for lifelong learning, outdoor land activities and volunteering

POPULATION: 227,000

MEDIAN HOME PRICE: $299,000

The surprisingly mild climate in Idaho’s capital city, nicknamed “City of Trees,” is conducive to outdoor land activities, while Boise State University hosts an Osher Lifelong Learning Institute and offers free auditing of regular classes for seniors. Other pluses include a high level of volunteerism, a high number of physicians per capita, a low serious crime rate, good air quality and a good economy. With an elevation of 2,700 feet, the city is very bikeable, though not as walkable. Cost of living is only 7% above the national average. There is no state income tax on Social Security earnings, nor a state estate/inheritance tax. Idaho’s income tax rate for married couples is 6.925% on taxable income above $23,000.

Boston, Massachusetts

PASSIONS: 🎨 🍴 🎓 ❤️ ⛵ 🍁

Great for arts, fine dining, lifelong learning, volunteering and outdoor water and land activities

POPULATION: 685,000

MEDIAN HOME PRICE: $604,000

This buzzy historic coastal state capital city of 685,000 offers a wealth of cultural. and educational activities. Not too surprising, considering there are more than 50 area colleges. Boston has good air quality, abundant doctors per capita, and a good economy. At an elevation of 140 feet, the city, named for an English town, is both highly walkable and bikeable. The top state income tax rate is only 5% and there’s no state income tax on Social Security earnings. On the negative side, there’s a state estate tax and a higher than average serious crime rate. But the big downside is the cost of living: 82% above the national average.

Boulder, Colorado

PASSIONS: 🎨 🎓 ❤️ 🍁

Great for arts, lifelong learning, volunteering and outdoor land activities

POPULATION: 107,000

MEDIAN HOME PRICE: $742,000

This city, 30 miles northwest of Denver, is at the center of a huge recreational open space abutting the Rockies at 5,400 feet of elevation, which can be enjoyed in 10 months of annual sunshine. It’s also the home the University of Colorado, which allows seniors to audit courses for free. Boulder is a walkable and bikeable city with a low serious crime rate, good air quality, abundant doctors and a strong economy. Volunteering is a way of life here. While there is no state estate/inheritance tax, the state income tax (a flat 4.63%) does hit Social Security benefits. One big downside is the cost of living: 87% above the national average.

Chandler, Arizona

Passions: ❤️ 🍁 ⛳

Great for volunteering, outdoor land activities and golf

POPULATION: 235,000

MEDIAN HOME PRICE: $317,000

This Phoenix suburb, named for Arizona’s first veterinary surgeon, offers myriad outdoor activities, including 185 golf courses in the region. There’s a low serious crime rate, a good economy and a high rate of volunteering. With an elevation of 1,200 feet, the city is very bikeable, although not all that walkable. There is no state income tax on Social Security earnings and no state estate/inheritance. The sate income tax rate tops out at just 4.54% on a married couple’s taxable income above $317,900. On the downside, the number of doctors per capita is below the national average and the air quality is poor. Cost of living is 23% above the national average.

Chapel Hill, North Carolina

PASSIONS: 🎨 🍴 🎓 🍁

Great for arts, fine dining, lifelong learning and outdoor land activities

POPULATION: 60,000

MEDIAN HOME PRICE: $376,000

The home of the University of North Carolina, which offers free auditing of classes for senior citizens, this college town has been called America’s “foodiest small town” for its range of culinary options. It also has a high number of physicians per capita, good air quality, a low serious crime rate, a strong economy—and quirky blue fire trucks. There’s no North Carolina income tax on Social Security benefits and no state estate/inheritance tax. The state income tax rate is a flat 5.499%. At an elevation of 500 feet, the city is somewhat bikeable, but not very walkable. Cost of living is 30% above national average.

Charleston, South Carolina

PASSIONS: 🎨 🍴 ⛵ ⛳

Great for arts, fine dining, outdoor water activities and golf

POPULATION: 130,000

MEDIAN HOME PRICE: $322,000

This historic coastal city brims with activities, both indoors and out. (The first game of golf in the U.S. took place here.)  Pluses include a high number of doctors per capita, good air quality and a good economy. There’s no state estate/inheritance tax, no state income tax on Social Security benefits and there are additional tax breaks on pension income. But the state income tax rate tops out at an above average 7% on taxable income of just $14,860. At an elevation of 20 feet, the city is somewhat bikeable, but not very walkable. Cost of living is 22% above national average.

Dallas, Texas

PASSIONS: 🍴 ❤️ ⛳

Great for fine dining, volunteering and golf

POPULATION: 1.34 million

MEDIAN HOME PRICE: $217,000

Scores of public golf courses plus fine dining (far beyond the nation’s first drive-in restaurant, which opened here in 1921) and what is said to be the nation’s largest arts district distinguish the Big D. At an elevation of 430 feet, the city is somewhat walkable and bikeable and has an adequate number of physicians per capita and support for volunteering. Atop of a strong economy, there is no state taxation of income, estates or inheritances. Cost of living is only 8% higher than the national average. On the downside, the serious crime rate is above the national average and the air quality is poor.

Fayetteville, Arkansas

PASSIONS: 🎓

Great for lifelong learning

POPULATION: 85,000

MEDIAN HOME PRICE: $219,000

The University of Arkansas offers free tuition to senior citizens at its flagship campus in this Ozarks city 200 miles northwest of Little Rock. Besides a cost of living 1% below the national average, other pluses include good air quality, adequate number of physicians per capita and a good economy. At an elevation of 1,400 feet, the city (originally named Washington) is somewhat bikeable, although not that walkable. There is no state estate/inheritance tax and there’s no state income tax on Social Security benefits, plus there’s a small additional break for pension income. But the state income tax reaches 6.9% on a married-couple’s income above $35,099. The serious crime rate is above national average.

Las Vegas, Nevada

PASSIONS: 🎨 🍴 ⛵ 🍁 ⛳

Great for arts, fine dining, outdoor water and land activities and golf

POPULATION: 2 million (Las Vegas Valley)

MEDIAN HOME PRICE: $277,000

World-class entertainment centered around the hotels and casinos, famous chefs, and nearby water and land activities, including golf, grace this exploding desert valley. (In 1900, the population was just 18.) While summers are hot and dry, the other nine months are quite pleasant, and sun is year-round. At an elevation of 2,000 feet, the area is somewhat walkable and bikeable. A good economy is bolstered by no state income or estate/inheritance tax. Downsides include poor air quality, low ratio of physicians per capita and a high serious crime rate. Cost of living is 18% above the national average.

Los Angeles, California

PASSIONS: 🎨 🍴 🎓 ⛵ 🍁 ⛳

Great for arts, fine dining, lifelong learning, outdoor water and land activities and golf

POPULATION: 4 million

MEDIAN HOME PRICE: $686,000

The City of Angels has multiple colleges and universities offering reduced-price programs for senior citizens, world-class restaurants, numerous performance venues, a wide range of outdoor activities and many golf courses. Pluses include 28 days a year of sun, sufficient physicians per capita and a strong economy. Despites its reputation as car dependent and congested, the city, with an elevation of 300 feet, is both very walkable and bikeable (despites safety concerns for bikers). There is no state tax on Social Security benefits, estates or inheritances. But the state income tax hits a hefty 9.3% on taxable income above $150,000 per couple and goes up to 12.3% for the very wealthy. Among the drawbacks: poor air quality (although better than it used to be) and a serious crime rate above national average. Cost of living is 95% above national average.

New York, New York

PASSIONS: 🎨 🍴 🎓 ⛵ ⛳

Great for arts, fine dining, lifelong learning, outdoor water activities and golf

POPULATION: 8.6 million

MEDIAN HOME PRICE: $682,000

Dozens of colleges, fabulous arts and dining, and even golf courses accessible via subway can be found in the country’s largest city. Pluses include a high number of physicians per capita, good air quality and a strong economy. With an elevation of 30 feet, the Big Apple is very walkable and bikeable, despite concerns about bicyclist safety. There is no state income tax on Social Security benefits, plus there are additional state tax breaks on pension income. But there is a state estate tax, the combined state and city income tax rate can reach a whopping 12.696% and the cost of living is 109% above national average.

Pinehurst, North Carolina

PASSIONS:

Great for golf

POPULATION: 13,000

MEDIAN HOME PRICE: $281,000

Some 40 golf courses, led by famous century-old Pinehurst Resort, plus golf schools surround this scenic village 90 miles east of Charlotte. Pluses include an extremely low serious crime rate, above-average rate of doctors per capita and good air quality. At an elevation of 600 feet, the town, originally named Tuftstown, is somewhat walkable and bikeable. There are no state taxes on Social Security earnings, estates or inheritances. The state income tax rate is a flat 5.499% and the cost of living is 11% above the national average.

Portland, Maine

PASSIONS: 🍴 ⛵ 🍁

Great for fine dining and outdoor water and land activities

POPULATION: 67,000

MEDIAN HOME PRICE: $314,000

This coastal city offers a wide variety of water and land recreation, including boating, kayaking, rafting, cross-country skiing, hiking and bicycling. There’s a good restaurant scene, a low serious crime rate, a high ratio of doctors per capita and good air quality. The city—named after an island in the English Channel—has an elevation of 60 feet and is very walkable and bikeable.  There is no state income tax on Social Security earnings, but there is a state estate tax. The state income tax rate reaches 7.15% at taxable income above $103,400 for a couple. The

Portland, Oregon

PASSIONS: 🎨 🍴 🎓 ❤️ 🍁 ⛳

Great for arts, fine dining, lifelong learning, volunteering, outdoor land activities and golf

POPULATION: 648,000

MEDIAN HOME PRICE: $426,000

City affords wide range of pursuits, including free senior citizen auditing of classes at Portland State University. Pluses include a high ratio of physicians per capita, good air quality, a high rate of volunteering and a good economy. At an elevation of 50 feet the city—named after Portland, Maine—is highly walkable and bikeable. The state makes up for its lack of a sales tax with an income tax rate that hits 9% on just $50,000 of income (with Social Security excluded). There is also a state estate tax. Cost of living is 48% above the national average.

Salt Lake City, Utah

PASSIONS: 🎓 ❤️ ⛵ 🍁

Great for lifelong learning, volunteering and outdoor water and land activities

POPULATION: 201,000

MEDIAN HOME PRICE: $402,000

Mountains, lakes and rivers create a choice of outdoor activities, including skiing, bird watching and fishing around this state capital city. Indoors, the University of Utah offers courses a wide range of courses for seniors in concert with the Osher Lifelong Learning Institute. The city has a high rate of volunteering, a high rank on the Milken Institute list of best cities for successful aging and a strong economy. At an elevation of 4,300 feet, it is very walkable and bikeable. There is no state estate tax, but the state income, levied at a flat 4.95% rate, hits Social Security benefits. The cost of living is 27% above the national average.

San Francisco, California

PASSIONS: 🎨 🍴 🎓 ⛵

Great for arts, fine dining, lifelong learning and outdoor water activities

POPULATION: 860,000

MEDIAN HOME PRICE: $1.36 million

Surrounded by water, this scenic city is a mecca of culture and food, with 57 Michelin starred restaurants (compared to 76 in 10 times more populous New York). Opportunities for senior learning are offered at an Osher Lifelong Learning Institute at San Francisco State and at other venues. There’s a high ratio of doctors per capita, good air quality and a strong economy. Despite the famed hills, the city, with an elevation of 50 feet, is very walkable and bikeable, with both trails and protected bike lanes. There is no state estate/inheritance tax and no income tax on Social Security benefits, but the state income tax rate is a hefty 9.3% on income above $150,000 per couple and goes up to 12.3% for the very wealthy. The serious crime rate is above the national average, but the biggest downside is the cost of living: a stunning 205% above the national average.

Santa Fe, New Mexico

PASSIONS: 🎨 🍴 🍁

Great for arts, fine dining and outdoor land activities

POPULATION: 84,000

MEDIAN HOME PRICE: $397,000

Scores of art galleries, fine restaurants and museums, plus world-class skiing, distinguish this scenic state capital mountain town (elevation 7,200 feet), 60 miles north of Albuquerque. Somewhat walkable and bikeable, the city has a high number of doctors per capita, good air quality and a low serious crime rate. There is no state estate tax, but the state income tax does hit Social Security benefits. The state income tax rate is 4.9% on taxable income of married couples above $24,000. The cost of living is 21% above national average.

Sarasota, Florida

PASSIONS: 🎨 🍴 🎓 ❤️ ⛵ 🍁 ⛳

Great for arts, fine dining, lifelong learning, volunteering, outdoor water and land activities and golf

POPULATION: 57,000

MEDIAN HOME PRICE: $261,000

Nearby beaches, fishing, boating, a big arts/cultural scene and 30 golf courses dominate this Gulf Coast city 60 miles south of Tampa. With an elevation of 16 feet, the area is very walkable and bikeable, with good air quality, a strong economy and an adequate number of physicians per capita. The cost of living is only 9% above national average. There is no state income or estate tax. One downside: a serious crime rate above the national average.

Seattle, Washington

PASSIONS: 🎨 🍴 🎓 ❤️ ⛵ 🍁 ⛳

Great for arts, fine dining, lifelong learning, volunteering, outdoor water and land activities and golf

POPULATION: 725,000

MEDIAN HOME PRICE: $730,000

Still-booming Puget Sound city offers all the passions, including an Osher Lifelong Learning Institute at the University of Washington. At an elevation up to 500 feet, the city is extremely walkable, bikeable and even boatable, with good mass transit. Other pluses include good air quality, a high ratio of doctors per capita, a very strong economy, and a good volunteering culture. There is no state income, estate or inheritance tax. But the cost of living is a whopping 104% above the national average and the serious crime rate is also higher than average.

Traverse City, Michigan

PASSIONS: 🎨 🍴 ⛵ ⛳

Great for arts, fine dining, outdoor water activities and golf.

POPULATION: 16,000

MEDIAN HOME PRICE: $255,000

Frontage on Lake Michigan, the famed Interlochen Center for the Arts, 50 area golf courses and a reputation as a top foodie town all make his city, 250 miles northwest of Detroit, a top passions choice. There’s good air quality, above-average doctors per capita and a decent economy. At an elevation of 600 feet the city—center of the nation’s largest area for growing tart cherries—is very walkable and bikeable. Cost of living is only 2% above national average.  There’s no state estate or inheritance tax and no tax on Social Security benefits, plus additional breaks for pension income. The state income tax rate is a flat 4.25%. One downside: The serious crime rate is above the national average.

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A journalist for nearly five decades, I’ve written for Forbes since 1987. I’ve covered personal finance, taxes, retirement, nonprofits, scandals and other topics that interest me. I also am the author of a novel, OFFSIDE: A Mystery. Email me at: wbarrett.forbes@gmail.com .

Source: Great Places To Follow Your Passions In Retirement In 2019

The World’s Retirement Havens – Top 10 Best Places To Retire In The World For 2018. ============= ► Subscribe for latest video ! ► https://goo.gl/lOasu9 ► Follow me on Twitter: https://goo.gl/srKHao ► Facebook: https://goo.gl/yB9XvG ============= Today, retiring abroad is about launching a new life in a new country, starting over someplace sunny and exotic with white-sand beaches or Old World culture. But there is no one way to determine the best place to retire for every person. And with a seemingly endless amount of choices, how will you ever find the right one for you. International Living’s most recent Annual Global Retirement Index 2018 compares 24 countries that give you the maximum return for your money and promise to deliver a better quality of life. Overall, the Index is based on ratings in 12 categories: buying and investing, renting, benefits and discounts, visas and residence, cost of living, fitting in, entertainment and amenities, healthcare, healthy lifestyle, development, climate, and governance. Here are the 10 retirement destinations in the world for 2018: 1. Costa Rica – The World’s Best Retirement Haven 2. Mexico – Convenient, Exotic, First-World Living 3. Panama – Friendly, Welcoming, and Great Benefits 4. Ecuador – Diverse, Unhurried, and Metropolitan 5. Malaysia – Easy, English-Speaking, and First World. 6. Colombia – Sophisticated and Affordable 7. Portugal – Europe’s Best Retirement Haven 8. Nicaragua – Best Bang-for-Your Buck in Latin America 9. Spain – Romance, History, and Charming Villages 10. Peru – Low Cost Living, Vibrant, and Diverse. Thanks for watching this video. I hope it’s useful for you. (This article is an opinion based on facts and is meant as infotainment) ============= If you have any issue with the content used in my channel or you find something that belongs to you, please contact: ►Business email: truthseekerdailys@gmail.com Music by: Nicolai Heidlas (https://soundcloud.com/nicolai-heidlas) Title: 50 New Cities

A Recession Won’t Wreck Your Retirement…But This Will

Here is what matters if you’ve made it and want to keep it.Do the financial markets have your attention? I assume so. After all, Wednesday’s 800-point drop in the Dow was the worst day in the U.S. stock market this year. And while many investors missed it, the December 2018 plunge in stock prices capped off a 20% decline which started in October. That could have put a big divot in the plans of folks recently retired or in the late stages of their careers.

Stumbling at the finish line?

Demographics tell us that there is massive group of people who are between 55 and 70 years old. They are the majority of the “Baby Boomer” generation. Many of them have built very nice nest eggs, thanks to a robust U.S. economy over the last 40 years. That period of technological innovation and globalization of the economy also produced four decades of generally falling interest rates. That’s provided a historic opportunity to build wealth, if you saved well and invested patiently.

But now here we are, with a stock market near all-time highs and interest rates crashing toward zero. The tailwind that lifted Baby Boomers in their “accumulation” years may flip to a headwind, just in time for them to start using the money.

Focus on what matters

At this stage of their investment life, Baby Boomers are tempted from all directions. They are told to bank on index funds, 60/40 portfolios, structured products and private partnerships. And, while there are merits to each, I am telling you what I see as someone who has been hanging around investment markets since this Baby Boomer was a Wall Street rookie in the beloved World Trade Center in NYC: much of it is bunk. It’s a distraction. It’s a sales pitch.

Take these over-hyped attempts by wealth management firms to boost their bottom line and scale their businesses, and bring your attention to your own priorities. Today, as much as any time in the past 10 years, your focus should be on true risk-management.

That does not necessarily mean running to cash. That is an outright timing move, and it borders on speculation. But it does mean that the intended use of your accumulated assets (when you need it, how much you need, and how you will navigate the markets of the future) should be

inward-looking. It should not be based on trying to guess what the stock market is going to do.

Rate cut? Check. Inversion? Check. Giant stock market drop? We’ll see.

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Source: ycharts.com

The big news on Wednesday was the “inversion” of a closely-watched part of the U.S. Treasury yield curve. Translated to English, that means for the first time since 2007, U.S. Bonds maturing in 10 years yielded less than those due in 2 years. This is far from the first inversion we have seen between different areas of the Treasury market. However, it is the one that is most widely-followed as a recession warning signal.

The chart above shows 3 things that were essentially in sync around the time the last 2 stock bear markets began. The 10-2 spread inverted, but then quickly reverted to normal. The Fed cut interest rates for the first time in a while. And, the S&P 500 peaked in value, and fell over 40% from that peak.

Let that sink in, given what we have witnessed in just the past 2 weeks. Then, fast-forward to today, where we find ourselves in a very similar situation regarding inversion and the Fed. See this chart below:

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Source:ycharts.com

What stands out the most to me in that chart is how the spread between the 10-year and 2-year yields is almost perfectly opposite that of the S&P 500’s price movement. That is, when the 10-2 spread is dropping, the S&P 500 is usually moving higher. But when that spread starts to rise, at it is likely to soon, the S&P 500 falls…hard. As a career chartist, I just can’t ignore that.

I have been writing about the threat of an eventual “10-2 inversion” in Forbes.com since April, 2017. It finally happened this week, 19 months into what increasingly looks like a period of muted returns for investors. That is, if they follow rules identical to those they followed for the past 10 years.

Recessions are bad, but this is worse

We saw on display this week what I have been talking about since early last year: that it will not take the declaration of a recession to tip the global stock market into a panic-driven selloff that rips through retirement efforts. All that is needed is for stock prices to follow through to the downside is to actually see the market react to the preponderance of evidence that has been building for a while now.

In other words, it is the market’s fear of the future (recession) and not the actual event that is most important. By the time a recession is officially declared, you won’t need to react. The damage will already be done.

Specifically, a slowing global economy, excessive “easy money” policies by the Fed and its global counterparts, and a frenzied U.S. political environment. This has shaken investor confidence, and now the only thing that ultimately matters in your retirement portfolio: the prices/values of the securities you own, is under pressure.

What to do about it

First, don’t fall prey to the hoards of market commentators whose livelihood depends on progressively higher stock prices. Corrections are not always healthy, diversification is often a ruse, and long-term investing is for 25 year-olds!

For those who have “fought the good fight” to get to the precipice of a retirement they have darn well earned, the last thing they want is to have this inanimate object (the financial markets) knock them back toward a more compromised retirement plan.

The best news about today’s investment climate is that the tools we have to navigate through them are as plentiful as ever. Even in a period of discouragingly low interest rates for folks who figured on 4-6% CDs paying their bills in retirement, bear markets in stocks and bonds can be dealt with, and even exploited for your benefit.

Bull or bear? You should not care!

Maybe this is not “the big one” that bearish pundit have been warning about. Perhaps it is just another bump in the road of a historically long bull market for both stocks and bonds. But again, market timing and headline events like 10-2 spreads, recessions and the like are not your priority.

What your priority is, if you want to improve your chances of success toward and through retirement, is something different. Namely, to get away from the jargon and hype of financial media, simplify your approach, and take a straightforward path toward preserving capital in a time of uncommon threats to your wealth. I look forward to sharing insight on that in the coming days.

Comments provided are informational only, not individual investment advice or recommendations. Sungarden provides Advisory Services through Dynamic Wealth Advisors

To read more, click HERE

Follow me on Twitter or LinkedIn. Check out my website.

I am an investment strategist and portfolio manager for high net worth families with over 30 years of industry experience. A thought-leader, book author and founder of a boutique investment advisory firm in South Florida. My work for Forbes.com aims to break investment myths and bring common sense analysis to my audience. Connect with me on Linked In, follow me on Twitter @robisbitts. Visit our website at www.SungardenInvestment.com

Source: A Recession Won’t Wreck Your Retirement…But This Will

Creative Planning President and Founder Peter Mallouk discusses why he thinks the economy is in good shape, who should look to alternative investing and how to invest for retirement. He also discusses why he is not a fan of crypto.

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Tune Up Your 401(k) For 2019

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How comfortable are you with how much risk you’re taking in your 401(k)? Does your employer offer a Roth option? Are you getting the full employer match? Those are some of the pertinent questions you should be asking about your workplace retirement account, says Denis Higgins, a CPA with Edelstein Wealth Management in Boston.

Higgins looked at a new client’s 401(k) and saw he wasn’t getting the full employer match money because he frontloaded his contributions and the employer didn’t have a true-up provision to make him whole. There was nothing that could be done for that plan year, but management at the small healthcare company where he worked added a true-up provision for the next plan year, so the exec got thousands more in employer match money in his 401(k) account.

There’s no check engine light that goes on, so it’s easy to ignore a poorly tuned 401(k). Easy, but hazardous to your retirement wealth.

Here are some things to check for under the hood.

Check your plan documents. “Know that the plan rules are the rule book,” says Ed Slott, a retirement plan expert and CPA in Rockville Centre, New York. You should download a copy of your 401(k)’s summary plan description (SPD) so you have it to double-check what HR tells you. Does your plan have a brokerage window (you can invest in more than just what’s on the limited plan menu)? Does it allow in-service distributions where you can take penalty-free withdrawals at age 59 ½ even if you’re still working? Does it let you delay required distributions if you work past age 70 ½? Does it allow for traditional aftertax contributions that can help you (combined with your employer) save up to $56,000 a year? These are all provisions that the law allows for, but your employer plan might not.

Fine tune your contributions level. If you are relatively new on the job, you may have been automatically enrolled in your 401(k), with contributions set at just 3% of salary. That’s not enough to fund retirement and might not be enough to capture your full employer match. If money is tight, raise your contributions when you get your next raise. Check if your employer offers automatic escalation, which increases your contribution level for you. If you’re able to save big, aim to contribute the legal max: That’s $19,000 if you’re under 50 and $25,000 if you’re 50 or older (you usually must separately choose to make all or part of the $6,000 catch-up contribution).

Look into the Roth option. Check if your employer offers a Roth option. Instead of making pretax salary deferrals, you contribute on an aftertax basis. Roth money grows tax-free and comes out tax-free, giving you tax flexibility when you start taking money out.

Reassess your asset allocation. If you were automatically enrolled, your money is probably in a target date fund, which reduces your exposure to stocks as you age. That’s not a bad choice, if fees are reasonable. If you’re older and picked your own investments years ago, the bull market may have left you more heavily in stocks than you want. Use an asset allocation tool provided by your plan or a free one such as PersonalCapital.com.

Rebalance. Higgins recommends the auto-rebalancing feature that more employers are offering. “It takes out the emotional decisions,” he says. Otherwise, get quarterly statements and rebalance at least annually to keep on track. At the same time, you should reassess your risk level, taking into consideration any life changes, he adds.

Confirm your beneficiary designations. Remember it’s your beneficiary form—not your will or living trust—that controls who gets your 401(k) when you die. Make sure to name both primary and contingent (alternate) beneficiaries.

Run a lifetime income illustration. Have you modeled how long your 401(k) balance will last over your lifetime? “The challenge a lot of people are having is that they’ve built up this war chest and don’t have any idea what to do next,” says Joseph Adams, an employee benefits lawyer with Winston & Strawn in Chicago. Some employer plans include lifetime income illustrations on your statement. If not, run one on your own. Vanguard has a free retirement income calculator here.

Fees. Some target date funds charge less than 0.10% of assets a year, while others charge more than 1%. You can see how the fees in your company’s 401(k) compare overall at Brightscope.com.  Analyze your own fund fees at Personal Capital or FeeX.com.

Author’s note: This is an updated version of an article that ran in 2017.

I’m an associate editor on the Money team at Forbes based in Fairfield County, Connecticut, leading Forbes’ retirement coverage. I manage contributors who cover retirement and wealth management. Since I joined Forbes in 1997, my favorite stories have been on how people fuel their passions (historic preservation, open space, art, for example) by exploiting the tax code. I also get into the nitty-gritty of retirement account rules, estate planning and strategic charitable giving. My favorite Forbes business trip: to Plano, Ill. to report on the restoration of Ludwig Mies van der Rohe’s Farnsworth House, then owned by a British baron. Live well. Follow me on Twitter: http://www.twitter.com/ashleaebeling Send me an email: aebeling@forbes.com

Source: Tune Up Your 401(k) For 2019

Too Many Americans Will Never Be Able to Retire

Traditionally, Americans could look forward to a comfortable retirement. After four decades in an office or a factory, sometime in their 60s they would lay down their burdens and enjoy a final couple of decades with time to relax, spend time with family and friends, and reflect on their life. But since the financial crisis, older Americans have been increasingly staying in the workplace……

Source: https://www.bloomberg.com/opinion/articles/2019-01-23/america-needs-more-young-workers-to-support-aging-population

Retirement Savings By Age: How Does Your 401K Balance Stack Up – Personal Capital

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401ks are one of the most common investment vehicles that Americans use to save for retirement. The 401k is an employer-sponsored plan that allows you to save for retirement in a tax-sheltered way (up to $18,500 per year in 2018, with a $6,000 catch-up contribution limit) to help maximize your retirement dollars. According to a Personal Capital-sponsored study conducted by ORC International, a majority of Americans (63%) with full-time or part-time employment participate in an employer-sponsored retirement program, yet just 21% max it out…..

Read more: https://www.forbes.com/sites/personalcapital/2018/10/16/retirement-savings-by-age-how-does-your-401k-balance-stack-up/#1d3009f047c1

 

 

 

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