Retirement Column


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 Retirement 
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New calculator helps answer a big question:

When should you start collecting Social Security?

January 14, 2016
Quick. At what age should you start collecting Social Security?

It’s not an easy question to answer, right?

Fortunately, the Consumer Financial Protection Bureau recently put out a calculator that helps you decide.

The tool allows you to explore how your claiming age impacts your retirement benefits. It also offers customized tips and provides next steps – somewhat of a guide for claiming Social Security.

Of course, when to claim Social Security is one of the biggest decisions many of us will make about retirement.

Indeed, claiming benefits is a one-time thing. Once you claim, there’s no turning back. That makes it crucial to carefully, and accurately, weigh your options.

“We want consumers to use our tool to know and understand what it means to claim at their full retirement age vs. several years before and several years after,” Richard Cordray, director of the Consumer Financial Protection Bureau, told USA Today.
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 Retirement 
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The secrets to saving $1 million in your 401(k)


If you’re striving to save for retirement take some cues from the 401(k) millionaires over at Fidelity Investments.

According to recent Fidelity data, 72,379 of its 13 million 401(k) accounts now have balances of over $1 million.

That’s more than twice as many as in 2012.

And while the average annual compensation for these individuals was $359,000, between 1,000 and 1,200 of them made under $150,000.

How’d they save $1 million or more?

These individuals average 60 years old and had been with the same company for somewhere around 30 years. So stability at work is key.

But it’s not just one thing that these individuals did. It’s a lot of different things.
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 Retirement 
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Pros and cons of the new myRA

The myRA may help some people start saving, but it won't save your retirement.The best thing about the awkwardly named “myRA” (indistinguishable from “Myra” for Google’s algorithms, which is fun) recently unveiled by President Barack Obama is that it may be a sign Washington is seriously worried about our retirement.

They should be. We’re in the middle of a long-term transition from a defined benefit retirement system, where workers get to finance their retirement with pension checks from their former employers until they go to that big RV park in the sky, to a defined contribution system, where workers are pretty much on their own to save.
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 Retirement 
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401(k) open enrollment season at work? 3 things you need to know

Growing retirement savings starts in 401k open enrollmentDuring fall benefits enrollment season, many employees focus mainly on health care. This makes sense because, most of the time, you only get one chance each year to make changes to your health plan.

“When it comes to 401(k) plans, most companies try to allow employees to enroll whenever they can,” says Andrew Meadows, consumer and brand ambassador at The Online 401(k). “But some companies only do it on an annual basis, either in the fall or the spring.”


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 Retirement 
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Imagining your future self, continued

Visualizing yourself living with today's decisions 40 years from now can helpLast week I wrote about a study that suggested visualizing your future self is a good way to get motivated to save for the future. I had a chance to speak to Hal Hershfield, marketing professor at New York University’s Stern School of Business and one of the authors of the study, about what his work means for all of us trying to whip our finances into shape.

First off, if you have a hard time caring about that wrinkled old person you’ll one day become, you’re not alone. A lot of research suggests that most people have a really hard time prioritizing their financial future over their present wants and needs, Herschfield says.

“One of the reasons why people fail to save in a way that puts themselves in a better position in the future is they fail to feel connected to that distant self who will exist down the line,” Herschfield says. “They fail to vividly imagine what their future selves will want and desire and need, and it’s much easier to think about what you need and desire today.”


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 Personal Finance, Retirement 
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Will your future self thank you, or curse you?

What will your future self's life look like?I don’t remember when my wife and I started talking about our past selves and our future selves, but for years we’ve been doing it as a way to motivate ourselves through tough moments, especially when we’re making our lives difficult in the present to help ourselves in the future.

“My future self had better appreciate this,” we’d say as we pulled old carpets up on New Year’s Eve so we wouldn’t have to do it after we had moved in and put all our furniture on top of it. Or when we set up an automatic direct deposit to a savings account that tended to leave our checking account pretty empty by the time the next paycheck rolled around.

Somehow, picturing our future selves not having to stress about a flat tire or unexpected medical bill made it easier to save in the here and now.

We may have been on to something with that.
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 Retirement 
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4 red flags of a bad 401(k) plan

Some 401(k)s have big red flags like these.One of the great advantages of working for “the man” is retirement benefits, including the possibility of contributing to a 401(k) plan that offers you the chance to save for retirement with pre-tax dollars.

But are all 401(k) plans created equal? Certainly not. Right now, Fidelity Investments is being sued by some of its current and former employees due to the nature of its plan. According to the lawsuit, Fidelity’s plan funnels employees into investments that have high costs, and might not provide the best bang for the buck. (Fidelity plans to fight the suit, and counters that there are plenty of low-cost choices available with its plan.)

Seeing a lawsuit like this hit one of the biggest providers of workplace retirement plans in the country should make you wonder: How does your own plan stack up?
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 Investing, Retirement 
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How to choose between a traditional 401(k) and a Roth 401(k)

401KIt’s been several years since the Roth 401(k) was introduced to the American retirement scene. As this retirement planning option has become more well-known, and as more employers offer the Roth version of the venerable 401(k), more workers are faced with making a decision about which is more likely to help them reach their retirement goals.

If your employer offers access to a Roth 401(k), it makes sense to rethink your retirement contribution plan. Here’s how to decide which type of 401(k) to use for your retirement investment.


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