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Protect your retirement against stock market crashes

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Protect your retirement against stock market crashes
History shows that market corrections are inevitable, and investors should protect their retirement from future downturns, writes a Forbes contributor. To do this, “older workers and retirees can develop a portfolio of retirement income that’s appropriate for retirement in the 21st century,” writes the expert. “You’ll want to shift your thinking from building a diversified portfolio of retirement assets (which you did while you were working) to designing a diversified portfolio of retirement income that will last the rest of your life no matter how long you live.”

97% of seniors miss out on this key opportunity to boost their Social Security benefits
A majority of Americans opt to file for Social Security benefits before or upon reaching full retirement age, missing out on the chance to collect a higher benefit amount, according to this article on personal finance website Motley Fool. Retirees who wait until age 70 to file for Social Security can expect an increase of 8% per year. Seniors who will depend on Social Security for income should consider this strategy, as receiving bigger benefits can help them cover rising medical costs and other unforeseen expenses.

Who should consider a backdoor Roth IRA?
An expert says that clients cannot make 2018 contributions directly to a Roth IRA if their income exceeded $135,000 (for singles) or $199,000 (married couples) last year, according to this article on Morningstar. However, they may opt for a backdoor Roth IRA, which allows them to make nondeductible contributions to a traditional IRA and convert the assets into a Roth, says the expert. “If you did not have any capital appreciation on the holdings within that IRA between the time you funded it and converted it, the tax bill should, in many cases, not be much at all, if anything.”

Maxing out a 401(k) is surprisingly rare — but may be easier than you think
Workers may be signed up automatically by their employer to the 401(k) plan, but they need to adjust their contribution rate and consider contributing the maximum amount, according to this article on MarketWatch. An expert with Fidelity suggests that participants think of their contributions in percentages, possibly 15%, and not in dollar figures, which can overwhelm them. “This is not something everyone can do right away so the most important thing is to start early and increase over the course of years.”

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