The Social Security annual cost-of-living adjustment is likely to increase next year because of inflation spurred by the recent hurricanes, according to this article on MarketWatch. The COLA could increase by as much as 2% next year. This means that a retiree receiving $1,360 monthly this year can expect $26.40 more per month or $326 for the entire year.
When tapping into retirement portfolio, experts commonly suggest that retirees start with their taxable assets, then their tax-deferred assets such as 401(k)s and traditional IRAs, before touching Roth IRAs and other tax-free accounts, according to this article on Kiplinger. However, withdrawal strategy should be different for every retiree depending on their circumstances. Read the articles for tips on how to develop an effective withdrawal strategy.
Retirees are advised to check the tax impact of their decision of relocating to another state, according to this article on CNBC. While they may be drawn to a certain state because it does not impose an individual income tax, it may levy other tax laws. For example, retirees should check whether the state where they intend to relocate charge taxes on Social Security benefits, pension and other types of income. "Lots of times the type of income they expect to rely on during their retirement years can be a bigger factor," says a state tax analyst.
A survey by the Center for Retirement Research of Boston College has found that Americans cannot secure their retirement if they rely solely on 401(k) plans, according to this article on Los Angeles Times. Many employers do not offer 401(k) plans, not many workers sign up for the plan, and many people don't have a balance that would be enough for a comfortable retirement, the study found. “They face the risk of either spending too quickly and outliving their resources or spending too conservatively and depriving themselves of necessities. Individuals are on their own.”
Women need to prioritize their future financial health even as they face unique challenges when saving for retirement, according to this article on Forbes. They are advised to have an emergency fund, put retirement saving ahead of other financial obligations, and become comfortable talking about financial matters. They should also determine their retirement numbers, explore a spousal IRA, and develop a claiming strategy that will maximize their Social Security benefit.
