Economic Impact of Government Shutdown - The ongoing federal government shutdown has resulted in the delay of various economic reports, including jobs and inflation figures, which could affect financial planning and market expectations [1][2] - Historical data shows that stock market performance during shutdowns has been relatively flat, with an average decline of 4% in 1979 and a gain of around 10% during the last shutdown in 2018 [2] Identity Theft and Fraud Risks - A recent case highlighted the rise of ACATS fraud, where scammers opened an IRA in a victim's name and transferred funds without detection [2][3] - Financial institutions are encouraged to enhance notification systems and security features to protect against unauthorized transfers [3] Inflation and Consumer Price Index - 60% of items in the consumer price index experienced annualized month-over-month growth rates above 3%, a significant increase from 35% a year ago, indicating rising inflation pressures [3] Retirement Spending Patterns - Research indicates that retirees often do not increase their spending in line with inflation, with many spending about 5% less upon retirement [9][10] - The assumption that retirees will need to increase spending annually is challenged, suggesting that financial plans should consider the likelihood of reduced spending [9][10] Savings and Income Growth - Many individuals under-save for retirement as their income increases, often adjusting their spending to match raises, which can lead to inadequate retirement savings [6][8] - A recommendation is made to save a portion of any salary increase to better prepare for retirement [8] Retirement Satisfaction - Over 90% of retirees report being satisfied with their retirement, with satisfaction levels increasing with age, suggesting that concerns about a retirement crisis may be overstated [19] 401(k) Accounts and Retirement Planning - There are approximately 31.9 million forgotten 401(k) accounts worth about $2.1 trillion, highlighting the importance of tracking retirement savings [21][22] - Individuals are advised to consolidate old 401(k) accounts into current plans or IRAs to reduce fees and increase investment options [22]

SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. When I retired in September 2022, my 401(k) was invested aggressively (90/10 split between stocks to bonds) and lost approximately 30%. I left the 401(k) invested in mutual funds in hopes it would gain back some of the losses. A year later it has gained back approximately 20%. I’m not required to take RMDs for another five years. My question is should I transfer the 401(k) funds to my traditional IRA accoun ...

Core Insights - The article explores the realities of aging in America, focusing on the challenges faced by the elderly population, particularly in terms of financial stability and care options [4][5]. Group 1: Demographics and Wealth Distribution - By 2025, the elderly population over 60 will primarily consist of the Baby Boomer generation, which holds 50% of the wealth in the U.S. [7][17]. - The average 401(k) balance for those over 60 is approximately $250,000, equivalent to about 1.7 million RMB, which is significantly higher than the average pension accounts in the UK [17][18]. Group 2: Cost of Elder Care - The costs of elder care facilities in the U.S. are exorbitant, with independent living communities costing around $30,000 to $40,000 per year, assisted living facilities around $70,000, and nursing homes approximately $100,000 annually [22][27]. - A typical $250,000 pension may only last five to six years in a standard retirement community, and even less if chronic health issues arise [29][30]. Group 3: Caregiver Shortages and Challenges - There is a significant shortage of caregivers in the U.S., leading to a high caregiver-to-resident ratio, often as poor as 1:10, which affects the quality of care [30][33]. - The concept of "Aging in Place" emphasizes the ability to live independently at home, but many elderly individuals face challenges in affording necessary care services [43][50]. Group 4: Social Isolation and Community Engagement - Approximately one-third of Americans aged 65 and older live alone, contributing to feelings of loneliness and social isolation [52]. - Community programs and activities are essential for combating loneliness, with many elderly individuals participating in volunteer work and local clubs [54]. Group 5: Financial Assistance and Economic Challenges - Many elderly individuals face financial crises, with 20% of those over 60 having no assets and a median income of $18,000, which is below the Elder Index standard [61]. - Supplemental Security Income (SSI) is a common form of assistance for low-income seniors, with average monthly payments around $593.96 [62].

Core Insights - Converting retirement funds from a 401(k) to a Roth IRA allows for tax-free growth and withdrawals, while avoiding Required Minimum Distribution (RMD) rules, but incurs a significant upfront tax bill [2][4][5] - Gradual conversions can mitigate the tax burden by keeping individuals in lower tax brackets, potentially resulting in lower overall tax payments compared to a lump-sum conversion [5][6] Summary by Sections Roth Conversion Benefits - Roth conversions enable tax-free investment earnings and withdrawals, providing better control over retirement funds due to the absence of RMD rules [4] - Funds in a 401(k) are subject to federal and possibly state taxes upon withdrawal, creating a tax burden for retirees [3] Tax Implications - The upfront tax bill for converting a sizable 401(k) can be substantial, potentially pushing earners into higher tax brackets [5] - For instance, a single earner making $100,000 in the 22% tax bracket could face a one-time tax bill of approximately $177,000 when converting a $500,000 401(k) [5] Gradual Conversion Strategy - Gradual conversions can help manage tax consequences, allowing individuals to convert amounts that keep them in lower tax brackets [6] - A single earner could convert up to $91,950 in a year, resulting in a one-time tax bill of about $36,000, which is more manageable than a lump-sum conversion [6] - Over a seven-year period, this strategy could lead to a cumulative federal tax bill of approximately $153,000, saving about $10,000 compared to a one-time conversion [6]

The U.S. Treasury Department and the Internal Revenue Service (IRS) have issued the final regulations for retirement “catch-up” contributions, outlining the application of the SECURE 2.0 Act provisions. New SECURE 2.0 Rules Impact High-Income Workers The finalized rules, released this week, detail the implementation of the Roth catch-up requirement, which will affect certain higher-income workers. “Catch-up” contributions allow employees aged 50 and older to contribute additional funds to workplace reti ...

Key Points Summary Group 1: U.S. Pension Policy Changes - The Trump administration signed an executive order on August 7 to ease restrictions on alternative investments in 401(k) accounts, including private equity, real estate, and cryptocurrencies. This move aims to enhance retirement savings opportunities for individuals [1][5][6] - The order directs the Secretary of Labor to review guidelines regarding fiduciary responsibilities related to alternative asset investments in 401(k) plans, indicating a potential shift in regulatory stance [5][6] - There are concerns that relaxing investment restrictions may lead to increased management fees, reduced transparency, and liquidity issues, despite the potential for greater investment flexibility [1][5] Group 2: Argentina's Pension Policy - On August 4, Argentine President Milei vetoed a law aimed at increasing pensions for the elderly and disabled, citing fiscal sustainability as the reason for the decision. This move affects a significant portion of the population, as over 40% of jobs in Argentina are informal and many are excluded from the national pension system [2][6][7] - The government argues that increasing pensions would jeopardize efforts to achieve fiscal balance, with projected additional costs of $5 million this year and $12 million by 2026 [7] Group 3: China's Social Security Policy - On August 1, the Supreme People's Court of China clarified that social insurance contributions are mandatory, reinforcing the legal framework around labor disputes and social security compliance [8][10] Group 4: International Pension Developments - Germany is considering comprehensive reforms to strengthen its occupational pension system, which may include expanding the applicability of the "social partner model" to non-collectively bargained employers [11][12] - Norway's sovereign wealth fund, GPFG, is reviewing its investments in Israel following public outcry over its holdings in a military-related company, indicating a focus on ethical investment practices [12][13] - Harvard and Brown University endowment funds have increased their exposure to Bitcoin ETFs, reflecting a growing interest among traditional institutions in cryptocurrency investments [15][16] Group 5: U.S. Independent Contractor Retirement Benefits - Republican senators have proposed the "Independent Retirement Fairness Act" to establish a portable benefits system for independent contractors, allowing employers to voluntarily contribute to retirement accounts, which could enhance retirement security for this growing workforce [17][20] - The proposal aims to balance flexibility and basic welfare protections for independent contractors, amidst ongoing debates about their classification and benefits [18][20] Group 6: U.K. Sustainability Reporting - The U.K. Financial Conduct Authority (FCA) plans to simplify sustainability reporting requirements for asset managers and insurers, aiming to reduce compliance burdens while enhancing transparency [20][21] Group 7: New York City Pension System Performance - New York City's pension systems achieved a 10.3% investment return for the fiscal year 2024, exceeding the actuarial target of 7%, which is expected to save approximately $2.18 billion in pension contributions over the next five years [22][23]

Are you expecting a year-end bonus? If so, you’re probably dreaming up all the ways you could spend that windfall. The average bonus was $2,503 in December of last year, according to payroll company Gusto. That’s a sizeable chunk of change — one that could put you in a better place financially in 2026 with proper planning. 5 smart ways to use a year-end bonus If you expect a bonus to land in your account soon, it may be tempting to splurge. And that’s perfectly fine. After all, you deserve a reward aft ...