All articles tagged with #retirement planning
Research shows that following Dave Ramsey's advice to claim Social Security at 62 is financially disadvantageous, as it results in significantly lower benefits compared to delaying until 70, which increases benefits by 24%. Early claiming incurs penalties that reduce monthly benefits by 30%, making it a costly mistake for most retirees.
A new rule allows penalty-free 401(k) withdrawals for long-term care insurance, but experts warn it may not be practical due to limitations and high costs of insurance premiums, and the potential tax implications of using retirement funds for this purpose.
Gen Z is starting to save for retirement, but primarily driven by anxiety about their uncertain future rather than confident financial planning, highlighting a need for better financial education amidst economic challenges.
The article reviews top personal finance tools to help achieve six financial goals by 2026, including building an emergency fund, managing spending, paying off high-interest debt, raising credit scores, contributing to retirement, and saving for big goals, highlighting apps, strategies, and investment options for each.
Many older Americans are planning to unretire or return to work in 2026 due to financial insecurity, rising costs, and concerns about savings lasting through retirement, with experts calling for better support and flexible job opportunities for seniors.
Many investors, especially self-directed ones with small balances, miss their required minimum distributions (RMDs) from IRAs, leading to potential tax penalties totaling up to $1.7 billion annually. Vanguard estimates that 6.7% of IRA holders aged 73+ missed RMDs in 2024, with larger account holders facing higher penalties. Automating RMDs and consolidating accounts can help prevent these costly mistakes.
Many Americans missed their required minimum distributions (RMDs) in 2024, resulting in significant penalties that could total around $1.7 billion nationally. The main issue appears to be a lack of awareness and education about RMD obligations, which are mandatory withdrawals from retirement accounts starting at age 73. Experts emphasize the importance of understanding these rules and utilizing available tools like automated withdrawals to avoid costly penalties, and highlight the role of family members and financial professionals in ensuring compliance.
Many affluent Americans underestimate key retirement risks like inflation and healthcare costs, which can significantly impact their financial security if not properly planned for, especially considering long-term care expenses and inflation's effect on expenses over time.
The full retirement age for Social Security benefits is gradually increasing due to demographic shifts and fiscal pressures, with the new rules pushing the age higher for many beneficiaries, encouraging delayed claiming for higher monthly benefits and requiring retirees to adjust their long-term financial plans.
Experts warn that overlooking beneficiary designations on IRAs is a major mistake, as it can lead to unintended heirs, costly probate, and unfavorable tax consequences. Properly updating beneficiaries is crucial to ensure assets go to the intended recipients and to optimize tax planning.
Most Americans, about 90%, choose to claim Social Security benefits early despite expert advice to delay until age 70, due to factors like financial necessity, health, life circumstances, and personal preferences, making early claiming a strategic choice for many.
A new study finds that 90% of Americans plan to claim Social Security benefits before age 70, despite expert advice to delay for higher payments, due to concerns about financial stability and lack of retirement savings, amid ongoing debates about the program's future.
The article explains that while delaying Social Security benefits increases monthly payments, it may not always be the best choice due to factors like longevity risk and opportunity costs. A personalized approach, considering individual health, savings, and investment returns, is recommended, ideally with professional financial advice, to optimize retirement benefits.
Experts forecast a 2.7% to 2.8% increase in Social Security benefits for 2026, based on inflation measures, with the actual COLA to be announced in October 2025. The increase will be reflected in benefits starting January 2026, alongside other changes like the retirement age and tax limits.
Vanguard has shifted its recommended investment strategy to a 70% bond and 30% stock allocation, diverging from the traditional 60/40 split, citing better prospects for bonds over stocks in the next decade, which has sparked controversy and criticism.