Retirement investors can ward off sequence risk, or the risk of succeeding periods of bad returns during the early part of the golden years, by creating a portfolio with less stock exposure and more fixed-income securities in the years before and after they retire, according to this article on The Wall Street Journal. They also may want to use an “absolute return” strategy for a portion of their portfolio, with the aim of getting broad diversification across asset classes, with preference for risk-adjusted returns to traditional equity and bond strategies. Creating other sources of guaranteed income purposely for the early retirement years, such as a 10-year immediate annuity, is another option worth looking at. --The Wall Street Journal
More seniors are beginning to see the advantages of delaying their Social Security retirement benefits, according to this article on CBS Moneywatch. A report from the Stanford Center on Longevity found the number of seniors who reached their full retirement age but opted to defer their benefits rose to 26% in 2012 from about 13% in 2000. The report also indicates that many older workers started collecting their retirement benefits as soon as they turned 66 because they lost interest in their jobs. Seniors who are in the same situation may consider delaying their benefits and look for a different job that will allow them to work part-time and receive a salary that is enough to replace the amount of deferred benefits. --CBS Moneywatch
An analysis by the Employee Benefit Research Institute shows that the median balance for 401(k) account stood at $18,127 at the end of 2014, according to this article on Yahoo Finance. While that was the average, many 401(k) participants had very low or very high balances, as the study found that 40% of these workers had less than $10,000 in their plans, while 20% had a balance exceeding $100,000. High-income workers with more years on the job to look forward to are more likely to save in their retirement accounts, and stand to gain significantly from the tax deduction for retirement plan contributions. The article compares workers' retirement saving behavior based on age and salary, and offers tips on how participants in different income levels can make the most of their retirement accounts. --Yahoo Finance
While seniors can start collecting their Social Security retirement benefits between ages 62 and 70, it is important that they know the outcome if they opt to file for their benefits at a given age, according to this article on Mainstreet. For instance, filing at age 62 would mean a 25% reduction in their full retirement benefits, but this recommendation applies if the person doesn't expect to live long or he has no other income in retirement. Delaying the benefits until the age of 70 is advised if the person expects to reach the age of 81, an expert says. --Mainstreet
