Posts filed under “401(k)”
It’s tax day. Perhaps like millions of your fellow Americans, you waited to the last minute to file and will be trudging off to the post office or filing electronically later today. I’m not going to lecture about your procrastination. However, I am going to ask you two somewhat tax-related questions:
1. How much have you saved for your retirement?
2. On how much of those savings were taxes deferred?
Your answers will determine how you will spend your golden years when you no longer earn an income but need money for life’s necessities. This is more than a personal question; it is an issue with tremendous national ramifications.
As Charles Ellis and Alicia Munnell warn in their recent book, “Falling Short: The Coming Retirement Crisis and What to Do About It,” we have a retirement problem:
Because of economic and demographic developments, our retirement income systems are contracting just as our need for retirement income is growing. On the income side, Social Security is replacing less of our preretirement income; traditional defined benefit pension plans have been displaced by 401(k)s with modest balances; and employers are dropping retiree health benefits. On the needs side, longer lifespans, rising health care costs, and low interest rates all require a much bigger nest egg to maintain our standard of living. The result of all these changes is that millions of us will not have enough money for the comfortable retirement that our parents and grandparents enjoyed.
Don’t say you weren’t warned.
We know exactly what we need to do — save more and begin earlier to build our own nest eggs.
Continues here: Three Ways to Boost Retirement Savings
About 9,000 U.S. taxpayers have each accumulated at least $5 million in individual retirement accounts, said the Government Accountability Office, raising questions about some investors’ tax-advantaged returns. Zimmerman Edelson Partner Robert Zimmerman and Bloomberg’s Peter Cook also discuss tax inversions on “Street Smart.”
Source: Bloomberg, Sept. 16 2014
A recent Gallup poll asked working Americans what they expected in retirement. “Half of Americans think they will have enough money to live comfortably after they retire.” This is the first time since before the financial crisis that a majority of Americans have felt this way. The poll is very revealing about both investing psychology…Read More
From Bloomberg Visual Data: The IRS collected more than $5 billion in 2011 from penalties incurred by taxpayers who withdrew money from tax-deferred retirement accounts before the age of 59 1/2. The people who pay the penalty include younger workers who switch jobs and don’t bother to roll over their accounts and older workers who…Read More
There’s nothing wrong with 401(k)s, except the players involved Barry Ritholtz Washington Post March 9, 2014 This past year has seen a firestorm of criticism casting 401(k)s as mostly terrible. Their performance is too poor, and the fees too high, with poor investment choices built into most of them. Typical plans are complicated…Read More
> My Sunday Washington Post Business Section column is out. This morning, we look at the 401k. The print version headline was What’s the problem with 401(k)s? You while the online version was There’s nothing wrong with 401(k)s, except the players involved. Here’s an excerpt from the column: “What’s wrong with these plans? Human behavior,…Read More
How much more would you have for retirement, if only you could squeeze 1% more per year? The answer, as it turns out, is alot. Click below to find out . . . Click here for an interactive calculator. Source: NY Times From the article Disadvantages of a Lump Sum 401(k)
From Bloomberg: The expectation that each successive generation will be better off financially than the prior is no longer valid. Contributing to this new reality has been the diminishing role of traditional pension plans with defined benefits in favor of 401(k) savings plans. Source: Bloomberg