Core Insights - A significant concern for preretirees is the fear of outliving their savings, with 53% expressing this worry according to the Schroders 2025 US Retirement Survey [1] Financial Requirements - Experts suggest that individuals need approximately 80% of their pre-tax earnings to maintain their standard of living post-retirement, which for Darren translates to $4,667 monthly [2] - Darren believes he can retire comfortably with a combination of Social Security benefits and additional income, estimating he will receive nearly $1,700 monthly from Social Security and an extra $2,000 [2] Savings and Withdrawal Strategy - Using the 4% rule, Darren's $500,000 savings would yield about $1,667 monthly, which is insufficient for his needs, prompting the search for alternative income sources [3] Retirement Delay Options - Delaying retirement is a viable option, as nearly 25% of Americans choose to do so, which can help reduce the amount needed from savings and increase overall savings [4] - Contributing maximally to retirement plans, especially if employer matching is available, can significantly enhance retirement savings. In 2025, Darren can contribute up to $31,000 to his 401(k), or $77,500 including employer contributions [5] Social Security Benefits - Delaying retirement can also lead to increased Social Security benefits. If Darren postpones retirement until age 66, his monthly benefit would rise to approximately $1,850, and if he waits until 67, it would exceed $2,000 [6]

Many companies offer help when it comes to helping workers pay down student loan debt. By offering student loan repayment matching programs, employers can improve employee loyalty by helping millennials manage their debt while simultaneously building their retirement savings.Millennials are juggling the dual pressures of managing near-term expenses and saving for the future. With millennial student loan borrowers reportedly carrying an average of around $40,000 in student loan debt, retirement often takes a ...

Core Insights - The article discusses the importance of Health Savings Accounts (HSAs) for long-term investment and retirement planning, highlighting their tax benefits and the growing trend of investing HSA funds [1][6][4] HSA Overview - As of December 31, 2024, over 59 million Americans had an HSA, with the expansion of HSA eligibility due to recent legislative changes [3] - HSAs provide triple-tax benefits: contributions are tax-deductible, funds grow tax-free, and withdrawals for medical expenses are tax-free [6] Investment Trends - Despite the tax advantages, most HSA participants do not invest their funds, with only 20% investing in 2024, an increase from 18% in 2023 [8] - Two-thirds of employers offered investment options for HSA contributions in 2024, but minimum balance requirements hinder participation [8][7] Retirement Costs - The average healthcare cost for a 65-year-old retiring in 2025 is projected to be $172,500, reflecting a more than 4% increase from 2024 [4] - The rising costs of medical expenses in retirement underscore the importance of utilizing HSAs for long-term savings [4]

The average number of years spent in retirement continues to grow, but many boomers aren’t planning to spend several decades retired. According to the TIAA Institute’s “Retired for How Long?” report, most boomers (57%) plan to retire between ages 60 and 69 and nearly half (46%) believe they will live to age 90 or older. That means a significant portion of boomers will spend 30-plus years in retirement. Yet, only 9% are planning to spend that long in retirement. Be Aware: The Most Common Retirement Mistake, ...

Your current spending isn’t just reflective of how you live now; it can be a predictor of how much money you’ll need in retirement if you extrapolate into the future. Find Out: How Long $2 Million in Retirement Will Last in Every State Read Next: 10 Used Cars That Will Last Longer Than the Average New Vehicle While some expenses do change in retirement, trying to plan for a lifestyle that is similar to the one you live now can help you make sure you have enough saved and invested when the time comes. Reti ...

is what's interesting is that many people say that they're optimistic about their retirement. They're confident that they'll have enough money to be able to cover retirement um essential costs and things that they're going to need to pay for. The reality is though that they haven't done the planning to make sure that they are going to be able to do that.What the survey show is when you look at the essential expenses in retirement, 89% of people in the United States that they'll be able to cover them. 90% in ...

Core Insights - The article discusses the benefits and strategies for converting a traditional IRA to a Roth IRA, emphasizing the importance of strategic execution to minimize tax implications during retirement [2][3]. Summary by Sections Roth Conversion Overview - A Roth conversion allows individuals to transfer funds from a traditional IRA to a Roth IRA, incurring income taxes on the converted amount, which can lead to tax-free growth and withdrawals in retirement [3][4]. Tax Minimization Strategies - The Schwab Center for Financial Research suggests three strategies to reduce the tax burden during a Roth conversion: 1. Max out the current tax bracket by performing partial conversions to avoid moving into a higher tax bracket [4]. 2. Spread conversions over multiple years to manage taxable income effectively and stay within the current tax bracket [5]. 3. Plan for potential tax changes early, converting more funds now to avoid higher rates in the future [5]. Example Scenario - A hypothetical example illustrates a single retirement saver with $200,000 in a traditional IRA and an annual income of $150,000, currently in the 24% tax bracket. The next tax bracket starts at $182,101, with a rate of 32% [7].

Core Insights - Less than half of Americans are adequately prepared for retirement, with Vanguard indicating that this group may struggle to maintain their current lifestyles in retirement [1] - The importance of early retirement planning is emphasized, as relying solely on Social Security is insufficient for most individuals [2] Generation Analysis - Vanguard estimates that only 40% of baby boomers are on track for retirement, while Gen Z shows a more favorable statistic with 47% on track [3] - Millennials and Gen X are in the middle, with 42% and 41% respectively [3] Technological Impact - Technology has contributed to Gen Z's preparedness, with automatic wealth-building strategies and accessible financial tools allowing earlier engagement in wealth accumulation [4] - Features such as autoenrollment and target-date funds have significantly improved savings behavior and investment outcomes [4] Homeownership Influence - Homeownership is a critical factor that can enhance retirement preparedness, giving baby boomers an advantage over younger generations [5] - Nearly 90% of baby boomers own homes, providing them with options like home equity loans and reverse mortgages to facilitate retirement [6] - For baby boomers in the lower 30th income percentile, having home equity increases their retirement preparedness from 15% to 42% [7]

Core Insights - Retirement planning is essential not only for ensuring sufficient funds for leisure activities but also for mitigating financial risks post-retirement [1][2] Group 1: Financial Risks in Retirement - Longevity risk is a significant concern, as retirees may outlive their savings due to various factors [4] - Sequence-of-returns risk can severely impact retirement savings if a market downturn occurs early in retirement [5] - Inflation, rising healthcare costs, and the IRMAA surcharge can further strain financial resources, with human behavior also posing risks through panic selling or chasing trends [5] Group 2: Strategies for Retirement Planning - A recommended approach is to engineer cash flow first and optimize returns second, ensuring a stable income that retirees cannot outlive [6] - Maintaining 12 to 24 months of essential expenses in cash can prevent forced selling during market dips [6] - Focusing on steady income allows retirees to balance safety and growth, enabling them to pursue higher-risk investments when their cash flow is secure [6][7]

The September consumer price index, which is a key gauge of inflation, and 2026 cost of living adjustment for social security benefits, will be released this morning at 8:30. That's an hour from now. These data points can have a pretty significant impact on the financial security of retirees and aspiring retirees, but it may not be factored into their planning.Sharon Eper joins us right now with exclusive reporting on a new global survey. And Sharon, good morning. >> Good morning, Becky.You know, believing ...