Your Retirement | WYPR

Your Retirement

Thursdays at 3:04 P.M.

From WYPR 88.1 FM.  Anirban Basu reviews retirement news.

The Silver Tsunami

Jun 20, 2019

Virtually everyone has heard of the silver tsunami in America, the notion that America’s population of senior citizens is surging.  There are many implications associated with a rapidly growing older population, including for healthcare, government finances, and housing.  According to Harvard University’s Joint Center for Housing Studies, the number of households with people age 80 or over jumped 71 percent from 4.4 million in 1990 to 7.5 million in 2016. 

Unplanned Retirement

Jun 13, 2019

For many people, preparation for retirement largely revolves around a plan to work for as long as possible.  In other words, many people are planning for retirement by planning not to have one or at least not much of one. According to the Employee Benefit Research Institute, 33 percent of workers expect to retire between the ages of 65 and 69, and 43 percent at the age of 70, or beyond, or not at all. But such planning, if it can be called that, is far from perfect.  

As indicated by writer Nir Kaissar, the Government Accountability Office recently updated its sweeping 2015 report on retirement security in America.  The new numbers offer no more comfort than the old ones.  The most worrisome figures remain stubbornly consistent.  Nearly 30 percent of households aged 55 years and older have no retirement savings and no pension. 

Anirban tells us more.

While there’s no place like home, when it comes to retirement, that’s not always the case.  Seduced by superior weather, lower taxes, or simply a change of scenery, many seniors choose to relocate upon retirement.  As indicated by CNBC, more often than not, that means moving to a state like Florida, Arizona, or to the Carolinas.  Fresh information emerges from SmartAsset’s annual study regarding where retirees are moving.  

Anirban tells us more. 

Here’s some optimism for you – more than half of Millennials, those born between 1981 and 1996, believe that they will be millionaires at some point in their lives – this according to a TD Ameritrade survey.  But as indicated by a Brookings Institution report, reality could prove to be far less pleasant. According ot that report, median wealth among Millennials in 2016 was lower than among similarly aged cohorts during any year from 1989 to 2007. 

Anirban tells us more. 

According to a Gallup poll, the average working America expects to retire at the age of 66–that’s up from 63 in 2002. While a considerable amount of conventional wisdom suggests that many people will have to work well past their intended retirement age, the fact is that many people end up retiring before they thought they would.  As indicated by writer Emily Brandon, a plan to work longer isn’t the same as being able to remain on the job into one’s mid-or late 60s.  

Anirban tells us more. 

As indicated by Forbes, when it comes time to pick a place for retirement, the majority of Americans end up staying put or moving within their own state. But there are many others who move to states like South Carolina, Arizona and of course Florida. There are still others who leave America altogether.  

We often discuss the benefits that come from garnering professional advice regarding one’s finances and retirement planning. However, recent research indicates that most Americans are content simply to manage matters on their own. Despite reports indicating that many workers live paycheck to paycheck and that fewer than half of all adults would be able to cover an unexpected $1,000 expense, the majority of Americans decline any financial help or advice.  

Anirban tells us more. 

It's Retirement Time

Apr 18, 2019
Flickr/Creative Commons

Anirban discusses the "fragile decade" and approaching retirement.

Usually, we spent this time talking about preparing for retirement or living during it.  Today, we take things one step further and talk about funerals.  I know, not fun, but funerals can be expensive and it makes some sense to speak to the relevant economics. 

Anirban tells us more.

Many financial advisors will tell you that you may need about a million dollars or more saved if you retire at the age of 65. So how much money does the average American have in retirement savings? As indicated by writer Eric Reed, the answer is about nothing. While sources of data differ, the broader story remains the same.  

When people consider how much financial wealth they will need in retirement, they may have a relatively simple time calculating things like property taxes, groceries or even travel. But healthcare costs are extremely difficult to estimate, and that makes it all the more important that people save with regularity even in their 30s, 40s, and 50s.  

Many financial advisors will tell you that you may need about a million dollars or more saved if you retire at the age of 65. So how much money does the average American have in retirement savings? As indicated by writer Eric Reed, the answer is about nothing. While sources of data differ, the broader story remains the same.  

Shifts in public policy have rendered it more appealing to put more money into your retirement accounts in 2019. Anirban tells us about new limits.

Trying to determine how much one needs to save for retirement is likely one of the most challenging computations that one faces in life.  One can simply avoid such complexities by not even trying to save for retirement and living off of Social Security, but that could render retirement unpleasant.  As indicated by the Retirement Living Information Center, the average Social Security payout these days is approximately $1300 per month.  

Anirban tells us more. 

Many of those who are presently working believe that coming generations will be worse off in retirement that the retirees of today – this according to a recent report from insurance company Aegon. This is not simply a belief among Americans, this is increasingly the view in much of the world. The most significant trend impacting retirement is an aging population. As indicated by writer Tom Sightings, in 1950, there were 205 million people over the age of 60 globally.  

Anirban tells us more. 

A new study supplied by a pair of Harvard Business School researchers finds that employers often underappreciate the struggles their employees face in balancing their professional are caregiving responsibilities. Caregiving will expand as both more children and older people come to depend on those of prime working age. Nearly three quarters of workers in America face some form of caregiving responsibility. Among those workers, 32% indicate that they have left a job because they could not balance work and family duties.  

Anirban tells us more. 

Presently, the U.S. labor market is very strong.  Unemployment is low and there are nearly seven million available, unfilled jobs in America.  But at some point, the economy will find its way into another recession, layoffs will rise, and unemployment will head higher. As indicated by Forbes, recent survey data indicate that older workers may bear a disproportionate share of those layoffs when they arrive.  Anirban tells us more. 

It was Mark Twain who said “Find a job you enjoy doing, and you will never have to work a day in your life.”  While that may be true, most of us still want to retire eventually. Many of us dream about early retirement.  Alas, the bulk of people appear to retire in their 60s. According to SmartAsset’s analysis of U.S. Census Bureau data, the average retirement age in America is 63-years-old.  The average retirement age varies by state, with a low of 62-years-old and a high of 65-years-old. New Englanders are associated with the highest average retirement age.  

Anirban tells us why that may be the case. 

You may be among the millions of U.S. workers who will say farewell to full time employment in 2019. Roughly 10,000 baby boomers turn 65 every day, the age most often associated with retirement. Of course, many people do not retire at the age of 65. Approximately 60 percent of workers had to stop working before they intended due to reasons such as layoffs or health issues according to a 2015 Voya Financial Study. 

If you are intending to retire this year, you will want to be able to check all the right boxes. 

The tide may have finally turned for retirement savings in the U.S. According to a GoBankingRates survey, from 2016 to 2017, the percentage of Americans with nothing saved for retirement increased. But in 2018, the percentage lacking any retirement savings fell dramatically. Moreover, the percentage of those with $300,000 or more in retirement savings increased.  

Pension Problems

Jan 3, 2019

Many of us envy those who have public pensions. Public pensions produce income during retirement – sometimes elevated levels of income that far exceed Social Security benefits. But while having a pension is wonderful, it’s not so great when there’s a governmental bankruptcy, which can put those pension benefits at risk. According to a report released by the Pew Charitable Trusts, many pension funds for public workers already owe far more in retirement benefits than they have in the bank.

Let’s say that you are a recent college graduate and that you’re trying to determine how you can save for retirement while paying down your student loans. Most advisors seem to agree that at any given moment, you should be doing a bit of both – paying down your loans while saving for retirement. One of the first things you’ll want to consider is the interest rate on your student loans. When you pay down your debt, essentially, your rate of return is guaranteed. If you pay down your debt by let’s say a thousand dollars, it means that you won’t have to pay any interest on that amount into perpetuity. Still, the math is complicated.  

Anirban tells us why. 

As people age, the need for care rises. The population of older Americans is surging.  Accordingly, an estimated forty million people in America supplied unpaid care in some form or fashion in 2014, the last year for which data are available. As indicated by writer Christian Weller in Forbes, unpaid care added an estimated $470 billion in economic value in 2013. While the provision of care is to be celebrated, there are some negative consequences. Unpaid care worsens an already large gender gap since women are more likely to be caregivers and therefore to save less due to less availability in the job market.

Listen for more. 

It’s fair to suggest that virtually all of us would like a financially comfortable retirement. Many of us take significant steps toward achieving this goal, including setting aside money and working long hours. One of the other things we could do is pay more attention to the fees charged to our retirement accounts. These fees may appear small, but can produce large, negative impacts over time. 

Anirban tells us more. 

Here are some good ideas for preparing for retirement – save, invest, work longer, and wait to collect Social Security. But all of these tactics may not amount to much if you are unable to form a permanent bond with your current spouse. According to new findings from the Center for Retirement Research at Boston College, when all is said and done, ending a marriage can be nearly as destructive to your retirement savings as say the Great Recession was. Divorce implies legal fees, splitting assets in two, and shifting from a two-income household to a one-income household.  

One of the reasons that many of us have failed to save adequately for retirement is that we love to purchase new cars. It is of course tempting to immerse oneself in that new car smell, as well as to find oneself benefiting from new technology like heated steering wheels, Bluetooth, and automatic braking. The average car payment in the U.S. is estimated at $523 per month.  

Anirban tells us more.

If you intend to work for income after you retire, you need to be aware of how your Social Security income may be taxed.  In a recent AARP survey, 37 percent of people indicated that they plan to work either full or part time during retirement.  As indicated by Fidelity Investments, many older workers believe that working after retirement can supply valuable structure to their day and provide the mental stimulation that emerges from interacting with clients and co-workers.  There are of course those who intend to work in retirement out of financial necessity.

Anirban tells us more. 

As indicated by CNBC, overall inflation in the United States averaged 2.1 percent during the first half of 2018. But the annual median cost of a room at an assisted living facility is expanding by a rate closer to seven percent. Genworth Financial reports that the average annual cost of a private room in a nursing home recently surged past the six-figure mark. 

Anirban tells us more. 

When we discuss delayed retirement, we often fixate on factors such as inadequate savings. But there are other explanations for why people are working for many more years than they anticipated, including policy changes made to Social Security during the early 1980s. As indicated by writer Peter Orszag, in 1997, 57 percent of men claiming their retirement benefits were 62 years old, the earliest age at which one can do that.

Anirban tells us more.