The New “Magic Retirement Savings Number”: $3 Million or More

If you’re like a lot of people, you may have a goal of saving $1 million for retirement.

After all, that would make you a “millionaire” and should give you a comfortable retirement lifestyle, right?

Not so fast, according to a number of retirement planning experts cited in an article last month in Fortune magazine.

It’s time for a dose of reality, the experts say: You now need to save $3 million – or more – to enjoy a decent retirement lifestyle.

Here Are 3 Reasons Why $3 Million is the New $1 Million When it Comes to Saving for Retirement…

Reason #1: That $1 million number was never adjusted for inflation or corrected for today’s low-interest-rate environment.

[Read more…] “The New “Magic Retirement Savings Number”: $3 Million or More”

Case Study: Enjoy a Guaranteed Lifetime Income and Reduce Your Taxes in Retirement

Tom Justice is a 59-year-old chemical engineer who has three major concerns about his retirement plan…

His first concern is about outliving his retirement savings

He’s read the statistics and knows that in spite of experiencing the longest bull market in history, the average 65-year-old will outlive their savings by almost a decade, according to the World Economic Forum.

Tom doesn’t have anywhere near the amount of savings recommended by many experts. According to the “Rule of 25,” you should have 25 times your total annual expenses saved by the time you retire if you don’t want to run out money.

Tom wants to live on at least $100,000 a year, which means he needs at least $2.5 million saved up. And that’s a far cry from the $750,000 he’s managed to save in his 401(k)… and it’s all invested in a stock market that he knows is past due for a major market crash.

Tom’s second concern is he believes tax rates can only go up over the long term

[Read more…] “Case Study: Enjoy a Guaranteed Lifetime Income and Reduce Your Taxes in Retirement”

3 Reasons Why the Money in Your 401(k)/IRA Doesn’t Belong to You

If you get regular account statements, you probably know the approximate current value of your 401(k) and/or IRAs, so please write that total down now.

Do you think all that money belongs to you?

It doesn’t… and what people find most surprising is how little of your account value actually does belong to you.

3 Reasons the Money in Your 401(k) Doesn’t Belong to You…

Reason #1: You May Not Be Fully Vested

[Read more…] “3 Reasons Why the Money in Your 401(k)/IRA Doesn’t Belong to You”

The Wall Street Journal Podcast Interview with Pamela Yellen: The Biggest 401(k) Mistake People Make

I was just interviewed again by the Wall Street Journal for an episode of their “Your Money Briefing” podcast.

The episode is described as, “Financial security expert Pamela Yellen explains why employees should take control of their 401(k) retirement investments and not rely on their employer to invest for them.”

In this eye-opening interview I discuss:

  • Why it’s very likely that your 401(k) money is in a Target Date Fund (TDF) – even if you didn’t authorize it or request it – and three reasons that should concern you
  • 98% of all employers use TDFs, and 90% have it as the “default option,” which means they automatically put your money there unless you specifically direct them to do otherwise – and almost no one does
  • Near retirement? You’re not protected! TDFs are supposed to dial back risk as you near retirement, but in practice, that hasn’t happened. In 2008, some TDFs designed for participants expecting to retire in two years lost as much as 40%!
  • How the shockingly high fees of TDFs devour your hard-earned savings
  • The dangers of having your retirement savings in a one-size-fits-all financial vehicle
  • How to quickly and easily do your own research to compare the mutual fund options your 401(k) offers
  • How to protect your retirement savings from market volatility and ensure a guaranteed income for life

[Read more…] “The Wall Street Journal Podcast Interview with Pamela Yellen: The Biggest 401(k) Mistake People Make”

Can You Answer This Critical Question About Your Retirement Plan? (Most People Can’t)

Here’s the most critical question you must be able to answer about your retirement plan…

Do you know what your retirement account(s) will be worth on the day you plan to tap into them?

If you’re saving for retirement the way most people do, you couldn’t answer this question if your life depended on it!

And When You Get Right Down to it, Your Life Does Depend on it!

Here are three reasons why… [Read more…] “Can You Answer This Critical Question About Your Retirement Plan? (Most People Can’t)”

The Wall Street Journal Podcast Interview with Pamela Yellen: Why You Won’t Work as Long as You Planned

I was recently interviewed by the Wall Street Journal for an episode of their “Your Money Briefing” podcast.

The episode is described as, “Financial security expert Pamela Yellen explains why most people stop working earlier than planned, and offers safe investment tips to reduce the chances of running out of money in retirement.”

In this interview I discussed: [Read more…] “The Wall Street Journal Podcast Interview with Pamela Yellen: Why You Won’t Work as Long as You Planned”

Retirees Will Outlive Their Savings by 10 Years, According to a New Study by the World Economic Forum

The typical 65-year-old has only enough savings to cover 9.7 years of retirement income. That leaves the average American man with a gap of 8.3 years, and women (who live longer) face a 10.9-year gap with no savings left.

That’s according to a scary new study by the World Economic Forum. This assumes you live an average lifespan. If you’re one of the “lucky” ones who lives longer, you could outlive your money by 20 to 25 years or more.

6 Challenges You Face that Could Turn Your Retirement Dreams into a Retirement Nightmare…

How many of these challenges have you prepared for?

Challenge #1: The typical household nearing retirement has an average of only $135,000 in their combined retirement accounts – enough to provide at most $600 per month income. (Source: Federal Reserve Survey of Consumer Finances)

Challenge #2: Even healthy couples will face extreme health care costs in retirement. [Read more…] “Retirees Will Outlive Their Savings by 10 Years, According to a New Study by the World Economic Forum”

There’s a Good Chance You May Be Forced to Retire Sooner Than You Expect

Perhaps you’ve heard that the best way to make God laugh is to tell him your plans. … Particularly your plans for retirement!

And you’ve probably heard that with the unpredictability of the markets – stocks, bonds, real estate, whatever – you’re going to need to work longer than you had planned, in order to have enough to live on in retirement.

But that doesn’t mean the universe will cooperate.

Research from the Center for Retirement Research reveals that on average 21 percent of workers intend to work to age 66 or later. But more than half of them fail to reach this target.

The share of workers who say they expect to work past age 65 rose from 16% in 1991 to 48% in 2018. But the study shows that 37 percent of all workers end up retiring earlier than they had planned.

How can this be?

Why Are Hard-Working Americans Retiring Earlier Than Planned?

[Read more…] “There’s a Good Chance You May Be Forced to Retire Sooner Than You Expect”

Inside Mayer Rothschild’s Secret Counting House: How to Live Like the Rich Do

Ah, to be of the privileged and cultured class – butlers, trust funds, planes, yachts, and race cars. What’s it like to have all that money? Dudley Moore, in the 1981 film Arthur, a comedic flick about a cavorting socialite and heir to a massive fortune put it most succinctly – “It doesn’t suck.”

Wealth Doesn’t Just Happen

While it certainly helps to inherit millions, according to Forbes, an astonishing 67% of the world’s billionaires, made it on their own. And the majority started out as either middle class or downright poor.

Likewise, most of America’s wealthy didn’t win the lottery or inherit their money. Many current millionaires have earned their fortunes in tech, finance, fashion, and media, while prior affluent generations took advantage of the rapid advancements of the industrial revolution by investing in railroads, oil, steel and land.

Mayer Amschel Rothschild, the founder of one of the world’s most storied banking dynasties, was an orphan from a Jewish ghetto in Frankfurt. He went to work at 13 with little formal instruction in money or finance and taught himself the intricacies of collectible coins.

John D. Rockefeller, the oil tycoon and America’s first billionaire, grew up middle class. His father was a traveling salesman who sold a tonic and elixir called “Rock Oil” that he claimed cured cancer. The younger Rockefeller went to work at 16 as a bookkeeper earning 50 cents a day.

The forefathers of these influential families shared common traits of hard work, discipline, and principled investing.

Their rise to power and prosperity was neither haphazard nor accidental. Rather, it was part of a careful plan that involved the strategic growth and preservation of wealth

[Read more…] “Inside Mayer Rothschild’s Secret Counting House: How to Live Like the Rich Do”

When Will the Next Market Crash Occur… and What Will Cause It?

I recently promised to answer two questions we’ve been getting…

When will the next market crash happen? And what will cause it

As the physicist Niels Bohr noted,

Prediction is very difficult, especially if it’s about the future.”

But here are five things we do know…

  1. Last month we entered the longest-running bull market in history, at 9½ years
  2. No bull market has ever made it to its 10th birthday
  3. The second-longest bull market was the dot-com-fueled rally of the 1990s which caused investors losses of nearly 80% when it flamed out
  4. While there’s no guarantee this bull market will crash before it hits its 10th birthday in early 2019, we do know that, historically, the longest-running bull markets go out “with a bang, not a whimper”
  5. As the experts who study behavioral finance note again and again, we humans have an enormous capacity for forgetting the lessons and pain of past crashes, and most people will be as woefully unprepared for the next crash as they were for the previous ones

Let’s Look at What Will Cause the Crash…

There are a number of things brewing that might trigger the next collapse. Take your pick: [Read more…] “When Will the Next Market Crash Occur… and What Will Cause It?”