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<a href="https://www.businessinsider.com/category/rethinking-retirement"></a><div type="image" title="rebecca chamaa and husband" height="1967" width="2623" msid="91320308" hostid="261"></div><ul class="summary-list"><li>Experts recommend having enough money saved to live on 80% of your pre-retirement income.</li><li>My husband and I hope to retire in a few years, so we're doing a "test run" this year.</li></ul>My husband is eligible for <keyword id="11909870" type="UNKNOWN" weightage="60" keywordseo="retirement" source="Orion">retirement</keyword> this year, but he's not quite ready to hang up his button-down shirts and the occasional tie. For now, we're reading, prepping, talking about, and experimenting with what retirement will look like financially for us. We're treating this year as a retirement test drive, keeping a close eye on our spending to see how we can afford to make retirement work.Besides talking about our love of road trips and the possibility of taking more of those, we read that most experts recommend that you have 80% of your pre-retirement income available to you when you retire. Those experts are saying if you make $70,000, you need to have access to $56,000 a year in savings and investments to live comfortably. If you make $100,000, you need to have $80,000. We don't plan to fully retire, continuing to work in at least some capacity, but we don't want to be tied to jobs, so we need to have a good sense of how much retirement will actually cost.<h2>We're tracking our expenses to see how much we really need to have saved</h2>In our case, the numbers seem almost impossible, so we are spending our "test" year tracking our expenses to see how much of our income we spend and how much we will need to have saved to retire comfortably. To start, we're keeping close track of our spending, looking at our grocery bills, take-out, and entertainment spending (streaming services and cultural events like museums included). We are also keeping track of the bills, like homeowners and car insurance, cell phones, electricity, the occasional trip to see family, or a short vacation. This year we aren't cutting back on anything because we want to see how much we spend in a typical year. We are trying to see if we live the way we want to live, how much does that cost? The biggest problem with our plan is guessing the monthly cost of healthcare. How can anyone predict how much getting older will cost, with office visits, medication, surgeries, etc.? So, we are factoring in our insurance costs plus $300 per month for co-pays (our co-pays average $35) and medication (our medications now cost approximately $15 per month). Medication is tricky, though, because if my husband needs a new EpiPen for an allergic reaction or an inhaler for his breathing, that could easily wipe out a month or more of what we are anticipating. <h2>There's room to cut back</h2>One place we know we could cut back if it turns out we need to is in entertainment. For instance, we don't need two streaming services when one has more than we could watch in a year. Also, we could cut back on take-out and buy annual passes to our local attractions, like the zoo and museums, and that would give us fun things to do any day in retirement but only cost us one fee instead of repeatedly paying each time we felt like going. Another way to save that we will be researching, even if it turns out we don't need to, is shopping around for less expensive carriers for our insurance and possibly dropping some coverage (like earthquake) altogether because it is so costly.I'm hoping by December 31, we will discover that we live below 80% of our pre-retirement income. Still, if we don't, we will be able to calculate how much money we will have to bring in every month from side gigs to live comfortably, because neither my husband nor I plan on retiring 100%. These figures will be valuable for knowing how much we both have to work in our retirement. It could be the difference between working when we feel like it and taking a consistent, 20-hour-a-week job.

We're doing a retirement 'test run' this year, and by December 31 we'll know exactly how much we need to leave our jobs

<ul class="summary-list"><li>Thirty-six percent of older Americans can't afford one year of basic <keyword id="12243971" type="UNKNOWN" weightage="60" keywordseo="elder-care" source="Orion">elder care</keyword>, a Boston College study found.</li><li>The share is higher for uneducated Americans, racial minorities, and unmarried women.</li><li>The findings paint a bleak picture for the millions who retired early due to the COVID crisis.</li></ul>Americans are retiring earlier than ever, but many won't be financially prepared.Some exited the workforce during the pandemic because <a href="https://www.businessinsider.com/record-americans-millionaires-401k-ira-retirement-accounts-fidelity-stock-market-2021-8">soaring stocks boosted their retirement savings</a>. Some <a href="https://www.businessinsider.com/3-things-labor-shortage-people-quitting-work-afl-cio-spriggs-2021-7">retired early</a> because they lost their jobs and struggled to find new work. And as virus cases remain at elevated levels, some are just too worried about the pandemic to keep working.Yet a <a href="https://crr.bc.edu/briefs/what-resources-do-retirees-have-for-long-term-services-supports/">recent study</a> from Boston College suggests a large share of retirees can't really afford it.Americans' odds of retiring before 62 <a href="https://www.businessinsider.com/new-retirement-age-labor-market-great-resignation-boomers-golden-decade-2021-9">rose to roughly 50% in July</a>, according to a survey from the Federal Reserve Bank of New York. That's the highest reading dating back to 2014 and caps a steady decline in <keyword id="11909870" type="UNKNOWN" weightage="60" keywordseo="retirement" source="Orion">retirement</keyword> age over the last several years.But 36% of Americans aged 65 to 69 aren't able to cover just one year of minimal care, according to the<a href="https://crr.bc.edu/briefs/what-resources-do-retirees-have-for-long-term-services-supports/"> study</a> from Boston College's Center for Retirement Research. Only 21% of Americans can cover a year of severe needs, such as dementia or physically debilitating health issues.The team's calculations include the need for paid and unpaid care. It also uses the median hourly rate for a home health aide for paid-care calculations, which totaled $22 per hour in 2018.The ability to pay for <keyword id="12243967" type="UNKNOWN" weightage="60" keywordseo="elderly-care" source="Orion">elderly care</keyword> also varies widely depending on marital status, education, and race and ethnicity, researchers Anek Belbase, Anqi Chen, and Alicia Munnell said in the September paper. While 31% of married people aren't able to cover a year of care, the share climbs to 33% for unmarried men and 56% for unmarried women.College graduates are also much more prepared to cover care costs than less-educated Americans. Just 14% of people with college degrees can't afford a year of minimal care, according to the study. Conversely, 65% of those who never graduated high school don't have the means to pay for care.And white Americans are generally much better equipped for retirement than racial minorities. Just 32% of white Americans can't cover minimal elderly care, according to the study. That jumps to 49% for Black Americans and doubles to 64% for Hispanic Americans.The findings paint a bleaker picture of retirement at a time when millions of Americans - many unwillingly - have yet to return to the workforce. The labor force participation rate for Americans aged at least 55 years <a href="https://www.businessinsider.com/3-things-labor-shortage-people-quitting-work-afl-cio-spriggs-2021-7">sits near 15 year lows</a> after tumbling at the start of the pandemic, while the broader rate has staged a much more significant recovery. The data, along with booming retirement accounts, suggest many Americans were forced into early retirement due to the pandemic.Many of those who haven't retired yet have done little to prepare. Twenty-six percent of non-retired Americans <a href="https://www.businessinsider.com/personal-finance/quarter-of-americans-have-no-retirement-savings-2019-6">haven't saved a penny</a> for their eventual exits from the workforce, according to a 2019 Fed study. That means a significant number of Americans didn't benefit from the stock market's boom through the pandemic recovery, and are likely to have little financial cushion if any by the time they retire.With the pandemic now in its 19th month and <a href="https://www.businessinsider.com/jobs-report-august-235000-payrolls-unemployment-rate-labor-market-recovery-2021-9">the hiring recovery running on fumes</a>, people who left the workforce are unlikely to come back. The country may still be rebounding, but the new study suggests millions of old Americans are entering a new phase of economic turmoil.

Americans expect to retire earlier than ever, but nearly 40% of retirees can't afford to take care of themselves for just one year

Americans are wrapping up the year feeling pretty dismal about their <keyword id="415826" type="UNKNOWN" weightage="100" keywordseo="retirement-savings">retirement savings</keyword>, according to a new survey from NerdWallet: Less than a third say they feel good about how much they put away this year. 
 The year-end survey, which was conducted online by <keyword id="1268949" type="PERSON" weightage="100" keywordseo="Harris-Poll">Harris Poll</keyword>, found that while 70% of Americans are saving for <keyword id="25452" type="UNKNOWN" weightage="100" keywordseo="retirement">retirement</keyword>, only 21% plan to max out an individual retirement account like a traditional or Roth IRA in 2016. 
 Of those who have a workplace <keyword id="854889" type="UNKNOWN" weightage="100" keywordseo="retirement-plan">retirement plan</keyword> like a 401(k), only 15% intend to max it out. Both are opportunities that won’t come back around, as retirement plans have annual contribution limits that make it hard to make up for lost time. 
 
The potentially bigger problem, though, is that most people are unlikely to do better next year, with only 32% of those who have a workplace retirement account reporting plans to increase contributions in 2017. That’s despite potential 3% pay raises — the expected average, according to a survey of U.S. companies — and a median income that was up last year for the first time since 2007. 
 
But there’s still time to sing a more positive tune, and you can use the momentum of the New Year to help you. Here are three ways to make 2017 the year of the retirement savings comeback. 
 
1. Calculate retirement savings needs 
You can’t save for retirement if you don’t know how much you need for retirement; without running the numbers, you’re likely to save too little or too much. Though the results of the NerdWallet survey reinforce the fact that the latter scenario is relatively rare, it’s worth identifying a target. 
 
Luckily, this isn’t an exercise that requires math, or even pencil and paper. An online retirement calculator will quickly tell you how much you should save on a monthly basis based on factors you plug in: your income, age, expected spending needs and investment return. The next step is hitting that monthly target. 
 
2. Make small increases part of your annual routine 
The easiest way to save more is one step at a time, so consider this a new ritual: Take 10 minutes on Jan. 1 to bump up your retirement contribution by 1%. With all due respect to the old Southern tradition of eating black-eyed peas and greens to bring on luck and money, these incremental but annual increases will actually bring on money, in the form of investment returns. 
 
Consider this: NerdWallet’s math found that if someone earning $40,000 and currently saving 5% increases his savings rate 1% per year until he’s saving 15% of income — the typical retirement savings goal — he’ll have $1,053,455 after 40 years (the analysis also assumes a 6% return and 2% annual raises). That’s over twice what the same earner would wind up with had he held steady to that 5% savings rate. 
 
One note here: Some employers do this for you by automatically escalating your contribution to a 401(k) plan each year. If you’re worried about accidentally doubling your increase — though that wouldn’t necessarily be a bad thing — check in to see if your plan automates this before bumping the contribution up manually. (You can also try a 401(k) calculator to see how the numbers add up.) 
 
3. Use the right retirement accounts 
According to the NerdWallet survey, 55% of Americans who are saving for retirement — and 63% of those ages 18 to 34 — report doing so at least in part within a bank savings account. 
 
Those consumers could be missing out on the big tax savings of tax-advantaged retirement accounts, not to mention employer matching dollars in workplace plans and the opportunity to invest their money for a higher return rather than settle for a bank interest rate of 1% or less. 
 
Retirement savings dollars should always go into a workplace plan with matching dollars first. Once that match is fully captured, investors can consider a Roth or traditional IRA. The difference there comes down to taxes; generally, the money in a Roth will be more valuable. (To see just how valuable, plug your numbers into a Roth IRA calculator). 
 
If all retirement account options are maxed out for the year, the last stop for extra dollars is a taxable brokerage account. 
 
Read the <a href="https://www.nerdwallet.com/blog/investing/americans-anxious-about-retirement-3-tips-to-save-more-in-2017/">original article</a> on <a href="https://www.nerdwallet.com/">NerdWallet</a>. Copyright 2016. 
 
(Image Credits: Thinkstock)

3 tips for saving more for retirement in 2017

For <keyword id="159074" type="ORGANIZATION" weightage="100" keywordseo="RETIREMENT-PLANNING">retirement planning</keyword>, determining your <keyword id="775334" type="UNKNOWN" weightage="100" keywordseo="retirement-corpus">retirement corpus</keyword> amount is only half the work done. Any plan not backed by action can fall flat. So, you need to start investing for retirement once you have figured how much you need. 
 
Here’s how you should work towards accumulating your retirement corpus: 
 
1. Start investing early 
 
Take advantage of the power of compounding to amplify your investments. If you need to save Rs 5 crores for retirement in 35 years, then you need to invest Rs 13,060 per month for 35 years (at 10% p.a.). If you delay this by another 5 years, you will need to invest Rs 21,926 per month for 30 years. And with a further 10 year delay you will need to set aside Rs 37,370 per month. Thus, you can see the benefit of starting early; the monthly burden is lessened, when you have more time in hand. Don’t wait till your late thirties or early forties to start planning for your retirement. 
 
2. Do not play too safe 
 
Higher return is usually associated with higher investment risk. Our parents saved for their retirement by investing in safe products such as fixed deposits, EPF, PPF and traditional insurance plans which may not help you beat inflation when the returns are adjusted for tax. 
 
Using the same example, when returns are 8% p.a. you need to invest Rs 21,652 per month for 35 years, whereas you invest Rs 13,060 when returns are 10% p.a. If you settle an instrument that is safer but gives you 8% instead of 10%, you need to invest one and a half times the amount. 
 
3. Investment discipline is paramount 
 
It is easy to compromise on a financial goal that is still many years away. You might feel tempted to make a down-payment for a new car from your retirement corpus, because you’ve got time for retirement. In fact retirement savings are the first to get compromised in case of a short term cash flow crisis. 
 
It is essential to maintain investment discipline, set up SIPs and auto-debit instructions for investments in mutual funds, recurring deposits etc. 
 
4. Diversify your assets 
 
Although you need to invest in equity mutual funds, it does not mean you must invest exclusively in equity investments for retirement. Do not ignore other asset classes, having a 100% equity portfolio for retirement at the age of 58 is as or even more foolish than having a 100% debt portfolio, when you’re 25. 
 
An equity heavy portfolio near retirement, when the equity markets are in the bear period can lead to a lifetime of financial misery. Diversification across asset classes is important; start with an equity heavy portfolio and shift to debt instruments as you move closer to retirement. 
 
5. Review and rebalance your portfolio 
 
Review your portfolio regularly to see how your investments are doing and use this opportunity to eliminate underperformers. If your portfolio has underperformed, you may need to increase the investment amount. A bull or a bear run can skew the asset allocation, so you must review and rebalance your retirement portfolio at regular intervals. 
 
Based on your investment horizon and risk tolerance, you must keep 60% in equities and 40% in debt. If required, sell some equity investments to invest in debt products during a bull run and vice versa during a bear phase. 
 
6. Don’t have irrational expectations 
 
Don’t fool yourself! If you have 30 years to accumulate Rs 5 crores, you need to invest Rs 21,936 per month, at 10% p.a. and only Rs 2,140 per month at 20% p.a. But to expect 20% p.a. return for 35 years is a recipe for disaster. 
 
 
7. Purchase adequate insurance 
 
You do not just need comfortable retirement for yourself but for your spouse too. Purchase adequate life cover to ensure comfortable retirement for your spouse. You should also purchase adequate health cover to avoid a dent in your retirement savings due to prolonged hospitalization or illness. 
Additionally, also set up a medical emergency fund to cover medical expenses not covered under your health insurance plan. You can also maintain an emergency corpus of funds to tide over short term cash flow crisis. 
 
8. Let your children share some responsibility 
 
Parents would do anything to keep their kids happy. However, don’t go overboard. If you don’t want to depend on your children during retirement, let them share some responsibility. For instance, if you fall short of their higher education corpus or the amount required is more than you expected, ask them to take a loan to cover the shortfall. Don’t sacrifice your retirement savings! 
 
<a href="http://blogs-images.forbes.com/rbcwealthmanagement/files/2015/11/Retirement-Risks-1200x802.jpg">Image source</a>

8 Steps to plan your investments for retirement

<a href="https://www.businessinsider.com/category/rethinking-retirement"></a><div type="image" title="A photo of a mountain biker helping their companion jump across a crack in a desert landscape." height="600" width="1200" msid="90827847" hostid="261"></div><ul class="summary-list"><li>Mini-retirements are planned breaks from the workforce, usually for a few months or up to a year.</li><li>You should save 50% more than you expect to need during your mini-retirement. </li></ul>From the day you enter the workforce, it's normal to start planning your exit. Whether through a <a href="https://www.businessinsider.com/what-is-401k" target="_blank" rel="noopener">401(k)</a>, <a href="https://www.businessinsider.com/what-is-ira" target="_blank" rel="noopener">IRA</a>, or some other investment savings vehicle, one of the primary goals of working is often to save enough so that one day, you don't have to anymore. But what if instead of viewing work and <keyword id="11909870" type="UNKNOWN" weightage="60" keywordseo="retirement" source="Orion">retirement</keyword> as two large, successive chunks of time, they were braided together throughout the middle decades of your life? This is where mini-retirements come into play. <h2>What is a mini-retirement?</h2>"I look at mini-retirements as something that's intentional, and it's not necessarily a permanent retirement. It's stepping away," says <a href="https://atlantic-liberty.equitableadvisors.com/Jody--Dagostini,-CFP,-CDFA,-RICP.e1122190.htm" target="_blank" rel="noopener">Jody D'Agostini</a>, a certified financial planner at <a href="https://atlantic-liberty.equitableadvisors.com/" target="_blank" rel="noopener">Equitable Advisors</a> and a <keyword id="13613020" type="UNKNOWN" weightage="60" keywordseo="retirement-planning" source="Orion">retirement planning</keyword> specialist.Similar to a sabbatical, mini-retirements generally last anywhere from three months to a year and provide the opportunity to take a break from work for a specific period before re-entering the workforce."It's to provide some oversight of where you are and a pause in the action," D'Agostini explains. "Usually to re-energize and take some time for reflection." Though they often involve traveling or time away from home, this is not a requisite by any means. The timing and frequency of mini-retirements is also completely up to the individual. It could be one in the middle of your career, many throughout your entire work life, or whatever makes the most sense in your circumstances. The concept of a mini-retirement is often <a href="https://www.businessinsider.com/early-retirement-vs-mini-retirement-advice-how-to-save-2018-6#:~:text=That's%20where%20a%20mini%2Dretirement,final%20retirement%20at%20the%20end." target="_blank" rel="noopener">credited to Tim Ferris</a> and his book, "The 4-Hour Work Week." The idea of taking these purposeful step-backs has grown more popular as the COVID-19 pandemic <a href="https://www.businessinsider.com/100-people-transforming-business-presents-future-of-work-leaders-2021-11" target="_blank" rel="noopener">reshaped the workforce</a> and significantly changed the way a lot of people think about their jobs and work in general.<h2>Why take a mini-retirement? </h2>While there is no singular reason to take a mini-retirement, there are a few commonly cited ones."For me, it was the benefit of refocusing," says <a href="https://kovarwealth.com/team/" target="_blank" rel="noopener">Taylor Kovar</a>, a certified financial planner at <a href="https://kovarwealth.com/" target="_blank" rel="noopener">Kovar Wealth Management</a>. He took a nine-month mini-retirement in 2016 and has since taken a few three-month ones as well. It was also a way for Kovar to combat burnout and think about the future he wanted for himself and his family. "It's really not just an extended vacation," he says. "It was more about my mental health, me, and my family." Mini-retirements can also be good trial runs and give people the opportunity to think about the ways they may want to spend their time in end-of-career retirement. They can also be a way to enjoy specific experiences that may be more difficult in older age. There's also the reality that not everyone will live to full-retirement age, so mini-retirements can be a way to reclaim some agency and ensure your lifetime isn't consumed entirely by work. <h2>How much should you save for a mini-retirement? </h2>At a minimum, you'll want to save enough to cover your living expenses for the amount of time you're not working. However, most experts recommend saving more than that. "I always tell people to have 50% more than you expect," Kovar says. It's also helpful to save an extra few months past your intended return date in case you have trouble finding a job or re-entering the workforce. "You really have to create the budget first," D'Agostini says. This means considering all aspects of your current life — everything from mortgages to car payments and student loans — and determining how you'll afford them while you're not working. Maybe that means selling your home or car, or renting them out if you plan to travel. Just make sure you've got a plan for any "back home" expenses in addition to the money you'll need during your time off.Taking on some kind of side hustle or remote part-time work could help with the budget, but it's important to remember not to overcommit since the purpose of the mini-retirement is to take a break from work. You'll also want to make sure you've implemented a solid budget while you're taking the mini-retirement and check in frequently to make sure your savings will last as long as you need.Quick tip: End-of-career retirement saving is often done with investment accounts, but the same isn't necessarily true for mini-retirements. Consider your risk tolerance and time horizon when deciding where to save your mini-retirement money.<h2>Can you do a mini-retirement if you have debt?</h2>Having debt can complicate mini-retirement planning but doesn't necessarily rule it out. However, it greatly depends on where your debt is coming from. If it's a mortgage or a car payment with a relatively low-interest rate, the math may work out in your favor — especially if you can rent the asset if you're not using it. Having a lot of credit-card or other high-interest debt is another story. "With a ton of bad debt and you're barely making those debt payments, then you should probably get to a better financial place first," Kovar says. "What's going to happen is you'll be chasing your tail when you get back. It's also going to dictate the kind of job you have to get on your return," D'Agostini added.Quick tip: If you have high-interest debt, don't assume a mini-retirement is never in your future. <a href="https://www.businessinsider.com/personal-finance/how-to-pay-off-debt-fast-strategy" target="_blank" rel="noopener">Make a plan</a> to address the debt and use the mini-retirement as motivation. <h2>Are there other factors to consider when taking a mini-retirement? </h2>Financial planning is one of the most important considerations when thinking about a mini-retirement. But there are others to take into account as well. Potential career setbacks are a common concern. However, D'Agostini says she's finding many employers now are allowing their employees to take this time away. If you're worried about the impacts a mini-retirement could have on your career trajectory, it may be worth having the conversation with your employer to see if you'd be able to agree on a plan for your return.Health care is another important factor to consider. A continuation of your employer-sponsored health insurance under the federal law commonly known as <a href="https://www.businessinsider.com/personal-finance/what-is-cobra-insurance-healthcare-early-retirement-job-loss" target="_blank" rel="noopener">COBRA</a> may be an option. If not, you'll want to factor the cost of a state-sponsored plan into your budget. It's also good to be proactive and think about the timeline for saving for a mini-retirement so that when the need arises to take one, you'll already have the cushion.<h2>How do mini-retirements affect long-term financial planning? </h2>There's no one answer to how a mini-retirement can impact your long-term financial planning. It will depend on many factors including your age, how much you already have saved or invested, and how long you're taking off. However, know that a mini-retirement can affect other financial goals, like end-of-career retirement, if not planned effectively. It's often best to talk with a professional who can look at your situation specifically and map out exactly how various scenarios would impact your financial future. "We use financial planning software," D'Agostini explains. "We can see the two or three scenarios." From there, you'll be able to decide what option makes the most sense and any steps you'll need to take prior to or on return from the mini-retirement. Still, if planned correctly, mini-retirements can be an investment in themselves. By taking the time to refocus, you may come out of them with new goals, values, or even perspectives. "My mini-retirement changed how I thought about money, and I'm a certified financial planner," Kovar said. "Look at it as an investment in yourself."

A carefully planned mini-retirement can provide a remedy for burnout without derailing your financial goals

<a href="https://www.businessinsider.com/category/rethinking-retirement"></a><div type="image" title="A photo of a senior woman working in a laptop in an office with younger co-workers in the background." height="600" width="1200" msid="91497660" hostid="261"></div><ul class="summary-list"><li>Semi-retirement has become increasingly common as more people slowly transition to life after work.</li><li>People may pursue their passion, work part-time, or consult instead of stopping work altogether.</li></ul>Under the traditional idea of <keyword id="11909870" type="UNKNOWN" weightage="60" keywordseo="retirement" source="Orion">retirement</keyword>, you work for decades, all the while saving up enough money to ultimately cut the career cord and live a life free from work. The dream is to be able to visit family, travel, volunteer, maybe pursue a favorite hobby. Full retirement was the ultimate goal, representing freedom and stress-free living.There was a clear separation between working and retiring. You either did one or the other. That was then. Nowadays, more people nearing or at retirement age are choosing a lifestyle known as semi-retirement, which combines the two.<h2>What is semi-retirement? </h2>When a person works full time and decides, instead of fully retiring, to work part-time, become a consultant, or work at a more fun or meaningful, they are considered semi-retired. Rather than diving into retirement, they're wading in slowly. A person might choose semi-retirement for a variety of reasons.Justin Stevens, a CFP® professional with <a href="https://okeefestevens.com/" target="_blank" rel="noopener">O'Keefe Stevens Advisory</a>, points out that financial necessity is often behind the decision. With increased wealth, education, and advancements in medicine leading to longer lives, "retirement today might be a four-decade endeavor," he says. "Coupled with a steadily rising cost of living, there is a higher probability today of running out of money later in life," Stevens says. "Some people prefer to work longer and delay spending their hard-earned savings, delay taking Social Security, and let their money continue to compound."Jordan Grumet, <a href="https://www.amazon.com/Taking-Stock-Financial-Independence-Regret-Free/dp/1646043545/ref=tmm_pap_swatch_0?_encoding=UTF8&amp;qid=1650916761&amp;sr=1-1" target="_blank" rel="noopener">author</a> of "Taking Stock: A Hospice Doctor's Advice on Financial Independence, Building Wealth, and Living a Regret-Free Life," notes that just a small amount of income during semi-retirement can make a big difference."Even funding 25% of yearly spending with outside sources can make a previously shakey retirement portfolio rock solid," Grumet says. "Furthermore, employer-sponsored healthcare and access to retirement savings vehicles like 401(k)s with an employer match make semi-retirement an even a wiser choice."Others choose semi-retirement simply to remain active. The thought of retirement may strike them as boring. They want a reason to get up in the morning and like a routine. Some retirement-aged people leave their regular jobs and take positions that give back or make a difference, even if the pay is a fraction of what they made at their full-time jobs. Still others choose to continue working after retirement to remain engaged with the community. This group might decide to find a job just to be around people, whether they need the money or not. <h2>Types of work for the semi-retired</h2>There are many options available for semi-retired folks to stay employed in some capacity. They may decide to stay at their current company part-time or decide to consult in their specialty. They might switch gears altogether and try something new that aligns with their hobbies and passions. Or they may take a job with less stress — at a library or grocery store, for example — to pass the time and make some extra money. Many employers who once only hired full-time positions are seeing the benefit of keeping retirement-age employees around longer. These employees are loyal, have good work ethics, and offer decades of knowledge and experience. Part-time work and flexible positions are expected to become more common in the next decade.And there are likely to be many retirees willing to take them. A 2022 <a href="https://www.ebri.org/" target="_blank" rel="noopener">survey</a> commissioned by the Employee Benefit Research Institute found that 70% of workers think they'll work for pay in retirement. It also showed that only 27% of current retirees are doing so.The outlook for work after retirement is changing, says Alan Kirby, a chartered financial consultant with <a href="https://ridgebrooke.com/" target="_blank" rel="noopener">Ridge Brooke Tax and Retirement Planning</a> in Tennessee. There are more options than ever for retirement-age people who want to continue working, either in a scaled-down version of their current role or in a totally different job."Semi-retirement of today has evolved way beyond the idea of leaving a good job to go be a greeter at Walmart," Kirby says.<h2>9 tips to set yourself up for semi-retirement </h2>If you've researched semi-retirement and think it sounds like a good option for you, start preparing for the change now. Just like full retirement, the sooner you take action the easier the transition will be. These nine tips will help pave the way to a smooth transition into semi-retirement and beyond. <h3>1. Make a realistic plan</h3>You can't effectively move to the next stage of your life until you know where you are now."One of the most important aspects of semi-retiring is ensuring that you have enough saved up to cover your costs," says Linda Chavez, founder and CEO of <a href="https://seniorslifeinsurancefinder.com/" target="_blank" rel="noopener">Seniors Life Insurance Finder. </a>"Take some time to assess your current financial situation and set goals for how much money you will need to support yourself during semi-retirement." Look at your current spending and debts compared to the retirement assets you'll be tapping. Measuring both gives you an idea of how much income you'll need in semi-retirement. <h3>2. Pay off your home</h3>Your home is most likely one of your most valuable assets, and your <a href="https://www.businessinsider.com/personal-finance/paying-off-mortgage-early-pros-cons" target="_blank" rel="noopener">mortgage</a> may be your single biggest monthly bill. Taking it out of your budget decreases your expenses significantly. Plus, you have the stability of housing taken care of already.<h3>3. Simplify your life and belongings</h3>Getting ready to semi-retire is the perfect time for cutting out extraneous expenses and pricey possessions that don't add value to your life. Focus on what matters most to you and eliminate the rest."Before pursuing the semi-retirement lifestyle, you should ask yourself why you want to semi-retire," says Greg Middendorf, a CFP® professional at <a href="https://hcmwealthadvisors.com/about-us/team" target="_blank" rel="noopener">HCM Wealth Advisors</a>. "Having clarity around your reasoning will help you achieve these goals. For a successful outcome, give priority to the things important to you."<h3>4. Focus on getting out of debt </h3>High debt loads and big monthly payments can strain your budget, especially if you're making less than you did when working full time. Decreasing your debt as much as possible helps semi-retirement go more smoothly. "When you decide to live a semi-retired life, it's important that you concentrate on repaying any existing debt you may have," says Middendorf. "Long-standing debt can seriously hamper your financial stability and your dream of semi-retirement."<h3>5. Find ways to earn passive income</h3>The money you've saved so far is vital, as is the money you'll be able to make in semi-retirement. Consult your financial advisor before you take the plunge to ensure you aren't sabotaging yourself down the road. Find investments that create a <a href="https://www.businessinsider.com/personal-finance/investing-after-retirement" target="_blank" rel="noopener">passive income stream</a>. Dividend-paying stocks, certificates of deposit (CDs), annuities, and bonds are among the options. Rental property is another way. Some people create YouTube channels or websites that they can use to generate income. Fall back on your talents to build income helps fund your semi-retired lifestyle.<h3>6. Figure out how to make money from your passion</h3>Semi-retirement can come sooner if you convert your passion into a money-making stream. Always loved woodworking, gardening, photography, sewing, or drawing? Figure out a way to use those interests to generate income. That way, you get to do what you love and make money. <h3>7. Get your health insurance plans sorted</h3>One of the most substantial expenses people who semi-retire fail to plan for is their health insurance costs. Many full-time jobs foot the bill for most or all of their employees' health insurance premiums. Those will be your responsibility when you leave your position. "Health insurance before Medicare begins is expensive!" says Patti Black, a CFP® professional at <a href="https://bridgeworthfinancial.com/our-people/patti-b-black/" target="_blank" rel="noopener">Bridgeworth LLC</a>. "Continuing on group health insurance or working part-time may help offset that cost, which can help boost your chances of a financially successful retirement."According to <a href="https://justcareusa.org/2022-what-will-your-health-care-costs-be-in-retirement/" target="_blank" rel="noopener">JustCare USA</a>, a digital platform that provides data and information to help baby boomers navigate health-care choices, women who are 65 should have $159,000 set aside for health-care costs. Men who are 65, because they have slightly shorter lifespans, should have $142,000 set aside. <h3>8. Look for deals to stretch your dollars</h3>In addition to cutting your expenses, take advantage of programs that offer discounts to semi-retired folks.Katie Ross, executive vice president at <a href="https://www.consumercredit.com/" target="_blank" rel="noopener">American Consumer Credit Counseling,</a> recommends looking to national and local organizations for discounts on everyday expenses."Organizations like AARP or the Association of Mature American Citizens can help you save money," Ross says. "Your local senior center and town offices might also be of help. Some towns offer seniors abatements on things like real estate taxes and water and sewer bills if you qualify." <h3>9. Keep your options open</h3>Moving into semi-retirement doesn't mean you'll never be in the full-time workforce again. In most cases, the move is a step toward full retirement, but not always. "If you have any kind of professional credential, license, certification, or security clearance, it's highly recommended that you find a way to maintain them," says Brad Nelson, a CFP® professional at <a href="http://www.lyonparkadvisors.com">Lyon Park Advisors, LLC.</a> "You worked hard for them and they're nearly always much easier to maintain than to regain if you let them drop. The purpose, of course, is to keep your options open if you find that retirement is not for you."

9 tips to set yourself up for semi-retirement

<div type="image" title="signs not ready for retirement in 40s" height="1414" width="2121" msid="79293062" hostid="261"></div><ul class="summary-list"><li><keyword id="159074" type="ORGANIZATION" weightage="60" keywordseo="RETIREMENT-PLANNING">Retirement planning</keyword> is a process that takes years, but the signs that you're not going in the right direction are apparent even when you're young.</li><li>If you haven't saved at least three times your income by age 40, you may not be on track for <keyword id="25452" type="ORGANIZATION" weightage="60" keywordseo="retirement">retirement</keyword>. </li><li>And, if you've borrowed money from retirement accounts without replacing it or still have yet to reach saving 15% of your income, you may need to do some extra work to catch up.</li><li>Anyone who hasn't touched their portfolio in years or checked to see if their investments are properly balanced recently should consider doing so to get back on track for retirement.</li></ul>For anyone who has had a few years to save for retirement but is still decades from leaving work, you're probably starting to ask yourself some questions about how you're saving and if you're doing it right. <a href="https://www.businessinsider.com/personal-finance/retirement-tips-that-work-from-people-who-used-them-2020-10" target="_blank" rel="noopener">Saving for retirement</a> is essential — after all, you'll depend on that money to live on someday. But, retirement planning is also a long-term process that unfolds over a number of years. In a way, that's a good thing: The sooner you catch any potential problems, the sooner you can fix them. And luckily, the signs that something is off with your <a href="https://www.businessinsider.com/personal-finance/retirement-advice-from-retirees" target="_blank" rel="noopener">retirement planning</a> will be pretty apparent when you check in on your savings. Here are four very apparent signs you'll notice if you're not on track for retirement, even in your younger years. <h2>1. You don't have at least three times your income saved by age 40</h2>"The general rule of thumb is that you want to have an amount equal to your annual income saved for retirement by the time you're 30. You want to have two times [your income] by the time you're 35, and at age 40, you should have three times your annual salary saved," says Tara Fung, chief revenue officer at investing platform <a href="https://www.altoira.com/" target="_blank" rel="noopener">AltoIRA</a>. In many cases, the math here is simple. "If you're making $100,000 a year, you should have $300,000 saved for retirement by the time you're 40," she says. If you're not quite there yet, it might be a sign that you're not on track. But, saving more to catch up in the coming years is a smart move. And the sooner you start, the easier saving will be. <h2>2. You've taken money from your retirement accounts and not replaced it</h2>"In a lot of countries, they actually don't allow you to borrow money from your retirement account — the US is one of the few that does," says Fung. Besides the fact that your retirement funds are meant to be the cash you'll live on for decades, even simply borrowing money from your retirement accounts can impede the growth and compound interest that retirement accounts rely on. "If you're borrowing against retirement accounts now, you're really putting yourself at a disadvantage to be able to be ready," Fung says. If you have taken <a href="https://www.businessinsider.com/personal-finance/retirement-account-withdrawal-covid-2020-9" target="_blank" rel="noopener">money from a retirement account</a>, have a plan to replace it if you haven't already.<h2>3. You're still not saving at least 15% of your income for retirement</h2>"You should be saving around 15% of your income to go towards retirement your entire working life," Fung says. She also suggests taking this amount directly out of your paycheck so you never miss it. Your office's 401(k) plan is the first place to start. "Set it up so that your money is going directly from your paycheck to your retirement account if you're lucky to have a retirement account accessible from your employer," she says. If you never see the 15%, it's far easier to save it. In a 401(k), not only will you be more inclined to save through the automatic savings, but you'll also have access to a match to double your savings up to a certain percentage of your contributions, if offered, and some tax benefits, too.<h2>4. You haven't considered how your portfolio is invested</h2>In <keyword id="415826" type="PERSON" weightage="60" keywordseo="retirement-savings">retirement savings</keyword>, having your portfolio invested appropriately is as important as saving itself. Former financial advisor and founder of <a href="https://www.buildingbread.com/">Building Bread</a> Kevin Matthews explains that having money saved for retirement and having that money invested properly are two different things. Not investing your retirement savings "is almost like putting food into the microwave, or putting food into the oven, and not actually turning it on," he <a href="https://www.businessinsider.com/smart-investor-toolkit-tips-building-wealth-investing-2020-9#manage-market-downturns" target="_blank" rel="noopener">previously told Business Insider</a>. Fung says that it's not something that should be <a href="https://www.businessinsider.com/importance-of-rebalancing-your-portfolio-2014-7" target="_blank" rel="noopener">left alone forever</a>, either. "Set it and forget it in terms of how much is coming out of your paycheck every month. But go back and check to make sure that it's the right mix [in your] portfolio on a quarterly basis," she says. "You want to do quarterly rebalancing, where you're going back and saying, 'Is this still diversified, or have the returns made is such that it's not the right mix anymore?'" If you haven't checked in on your retirement accounts in a while, it might be time to check and make sure you're <a href="https://www.businessinsider.com/personal-finance/signs-too-agressive-with-investments-2020-10" target="_blank" rel="noopener">invested appropriately</a>.<ul class="read-more-links"><li>More <keyword id="9177069" type="UNKNOWN" weightage="60" keywordseo="milestone-moments">Milestone Moments</keyword> coverage:</li><li><a href="https://www.businessinsider.com/personal-finance/things-that-change-when-own-home-2020-7">4 things that change when you go from renting to owning a house</a></li><li><a href="https://www.businessinsider.com/personal-finance/how-to-invest-for-retirement-decades-before">How to invest if you have 30 years before retirement</a></li><li><a href="https://www.businessinsider.com/personal-finance/parents-estate-plan-how-to-talk-about">How to talk with your parents about their estate plan, even if they don't want to</a></li><li><a href="https://www.businessinsider.com/personal-finance/strategies-dual-income-couples-manage-money-2020-6">5 strategies any dual-income couple can use to manage their money</a></li></ul>

4 signs you won't be ready for retirement that are obvious by age 40

No one can hope for a steady income throughout life. The earning potential significantly comes down during old age and hence you can never overlook the importance of saving money for retirement. With proper planning, this is never a difficulty. What you must know on saving for retirement <ul><li>To <keyword id="7839787" type="UNKNOWN" weightage="20" keywordseo="save-for-retirement">save for retirement</keyword>, it is never too early or too late. </li><li>When you are starting to save money for the future, try to save as much as you can.</li><li>If you are already nearing the retirement age, you must increase the percentage of your saving. </li><li>Nevertheless, the earlier you start saving for retirement, the better for you.</li><li>Even if you have started late there are ways to increase your retirement savings. </li></ul>Tips on saving for retirement Never wait for it. Start saving for retirement today. Saving, investing, and reinvesting can move you forward successfully. If you can invest a good amount of money when you are young, it is going to benefit you immensely during your old age. Contribute to EPF If you are a salaried employee and if your employer contributes to EPF, nothing like that. You are already travelling safely. However, ensure that you do not withdraw or take loans from the EPF accumulations. If you take loans from EPF or close it down before you retire, the whole purpose of EPF is falsified. Also, contribute to EPF as much as you can. Senior Citizens' Saving Scheme (SCSS) This scheme is the most popular choice for retirees. Available only to senior citizens or those that retire early, you can avail of the SCSS from a bank or post office. Those retiring early avail of this scheme within a month of receiving their funds on retirement. Post Office Monthly Income Scheme POMIS is a five-year investment. The maximum cap of this investment is Rs 9 lakhs in case of joint ownership and Rs 4.5 lakhs in case of single ownership. For every quarter, the interest rate is set. It is roughly about 7.8% at present. The interest is payable monthly. The interest amount can also be credited to the same account. Fixed deposits FD or bank fixed deposits are yet another popular choice among retirees for saving money. FDs are easy to operate. They are safe and provide fixed returns in a risk-free way. Though the interest rates are falling with the years passing by, senior citizens get to earn an extra percentage of interest. In terms of tenure, fixed deposits also offer flexibility. Mutual funds Following retirement, the non-earning period might extend to two decades or more. Hence a portion of the investment needs to be backed by equity. Retirement income will be subject to inflation. Equities assure returns that are inflation-adjusted and are a better choice in several regards. Tax-free bonds Tax-free bonds are issued to government-backed institutions. These are listed securities and hence can be sold on stock exchanges. Since tax-free bonds mature only after 10, 15 or 20 years, you must make sure you will not need the invested funds in between.

How to save Money for Retirement

<ul class="summary-list"><li>Shannon and Sergio are on the path to join the <a href="https://www.businessinsider.com/early-retirement-isnt-about-being-rich-2018-8">FIRE (financial independence/retire early)</a> community.</li><li>Each of the past two years, they only spent $7,000 while traveling the country full-time.</li><li>They shared their <keyword id="25450" type="ORGANIZATION" weightage="60" keywordseo="savings">savings</keyword> strategies with Insider, from house-sitting to <a href="https://www.businessinsider.com/flight-attendants-reveal-best-travel-hacks-2019-9">travel-hacking</a>.</li></ul>You might want to take a page out of Shannon and Sergio's <a href="https://www.businessinsider.com/personal-finance/best-budgeting-advice-from-financial-planner">budget</a> playbook.For each of the past two years, they lived off just $7,000 ($3,500 each), all while traveling the country full-time. The <keyword id="6358021" type="ORGANIZATION" weightage="60" keywordseo="budget">budget</keyword> is part of their journey to join the <a href="https://www.businessinsider.com/personal-finance/self-made-millionaire-early-retirement-habits-2019-12">FIRE (financial independence/retire early) community</a>.The couple, who are in their late 30s and early 40s and declined to give their last names for privacy reasons, have been aspiring to <a href="https://www.businessinsider.com/early-retirement-advice-what-to-know-before-retiring-early-2018-6">retire early</a> since the mid-2000s. Sergio, who works as an independent IT consultant, began his path to <keyword id="65469" type="PERSON" weightage="60" keywordseo="Financial-independence">financial independence</keyword> in 2006 and introduced Shannon, who works as a program management and corporate training consultant, to it in 2007 when they met. They've been saving ever since, documenting their experiences on the blog <a href="https://www.screwtheaverage.com/starthere">Screw the Average</a>."We're incredibly fortunate to have very similar financial philosophies, instead of constantly being at odds with each other over how each of us spends money," they told Insider.Depending on the month, they said, they tuck away 75% to 85% of their income. The chart below shows a breakdown of their $7,000 budget in 2019 and 2020, the latter of which they said wasn't affected by the pandemic.<div type="image" title="Screw The Average Yearly Expenses" height="632" width="706" msid="80482777" hostid="261"></div>And here's how that breaks down by a monthly average.<div type="image" title="Screw The Average Monthly Expense Averages" height="637" width="706" msid="80482779" hostid="261"></div>Shannon and Sergio shared with Insider the key strategies they used to cut their expenses over the past two years.<h2>House sitting, travel hacks, and self-control</h2>Housing Housing is usually the largest budget line item, but Shannon and Sergio don't own or rent. Instead, they <a href="https://www.screwtheaverage.com/blog/the-ultimate-guide-to-house-sitting-jobs-1-what-is-house-sitting-is-it-for-you">house-sit</a> full-time, in which they typically take over housing responsibilities while a homeowner is away in exchange for free lodging. Currently, they told Insider they're house-sitting in Carlsbad, California.In between house-sitting, they fill in gaps with hotels and Airbnb stays, which they said they often nab by employing <a href="https://www.screwtheaverage.com/blog/budget-award-travel-2018-category-1-2-3-hotel-maps-hilton-radisson-marriott-spg-hyatt">travel-hacking</a> via miles, points, and promotions. That kept their lodging under $300 annually in both 2019 and 2020.Travel and transportation Shannon and Sergio also don't own a car, choosing instead to take public transportation or walk. When traveling by plane, they once again break out the travel-hacking, using airline miles and, when possible, the Southwest Companion pass for 2-for-1 flights.<a href="https://www.screwtheaverage.com/blog/financial-freedom-real-world-travel-budget-deal-and-life-hacking-2001#southwest-companion-pass">In a blog post</a>, they called it "one of the best travel-hacking tools in the industry." They said it helped them save over 60% when booking a cross-country flight in 2019.Food Food is typically the second-biggest budget line item after housing, they said. But they managed to spend only $82 eating out in 2019 and $22 in 2020 (the latter likely due to the pandemic)."We limit our eating out, but when we do it we like to do it for the experience and great conversation with friends and family, rather than just having a meal," they said.In both years, they spent around $150 a month on groceries. They said they keep their grocery budget low because they eat "very little meat" and buy in-season produce. "Our goal, while not always possible, is to keep it at a $1 per pound or less," they said.They also <a href="https://www.screwtheaverage.com/blog/how-we-lived-on-7000-3500-budget-each-all-inclusive-for-one-year#entertainment-sightseeing-budget">practice intermittent fasting</a> for 18-plus hours a day, which they say makes them feel better. This means they're eating one, very large meal a day.But they also have some extra help in the food department: Sometimes the homeowners they house-sit for offer them meals and groceries, and Shannon's company provides a per diem when she's traveling for work plus meals in the office when she chooses to work from there.Medical After running the numbers on their health insurance plan in relation to their medical needs, Shannon and Sergio found it's less expensive for them to pay out-of-pocket costs than higher premiums."Because we're both relatively healthy and don't (fortunately) have debilitating health conditions, we're able to purchase a high-deductible health plan that has lower monthly premiums," they said. Their medical budget also includes supplemental medical expenses, such as cold medicine and prescriptions.Goods Ultimately, Shannon and Sergio prefer to focus on experiences rather than material items, they said.When purchasing items such as business expenses, they said they look at how they can stack promotions to get the best deals, from credit card offers and cash-back portals to sales and clearance items. For example, they <a href="https://www.screwtheaverage.com/blog/financial-freedom-real-world-travel-budget-deal-and-life-hacking-2001?rq=samsung#topcashback-chase-sale-samsung">once combined</a> a sale with a Chase Offer and a TopCashback offer to save over 40% on upgraded Samsung SSD's (hard drives) for our laptops.Self-proclaimed minimalists, they rarely buy clothing, only replacing it when it's well worn and beyond repair. When they do buy clothing, they try to purchase it secondhand but are willing to spend more on well-made, durable products that won't need to be replaced as often - like their backpacks, which they said are still in great condition four years later."We ask ourselves, can we do without, can we postpone, or can we find an alternative instead of immediately buying something we need," they said.<h2>A few years away from FIRE</h2>While some of Shannon and Sergio's budget categories, like medical expenses, business expenses, and groceries, increased in 2020, they were offset by less spending in other categories, like travel and personal care."The pandemic has affected the amount that we travel and move around, but because we utilize travel-hacking whenever possible, we've been very fortunate that the pandemic didn't really increase our expenses or make our lifestyle harder," they said. In some instances, their house-sits in 2020 were actually extended. Shannon and Sergio hope to match, if not best, their expenses from the past two years in 2021. With budgets like these, they're a few years away from achieving their version of FIRE, which they said is less about formally retiring and more about having options and the freedom of choice in our lives."We're simply not the type to stop working in all capacities, as we enjoy what we do," they said. "Instead, we want the freedom (via financial independence) to not have to work, if we don't want to. For us it's about choosing when we want to work, who we want to work with and how much we want to work."

A couple who live off $7,000 a year share the exact budget sheet they use en route to early retirement

<ul class="summary-list"><li><keyword id="11909874" type="UNKNOWN" weightage="60" keywordseo="fidelity" source="Orion">Fidelity</keyword>'s plan to offer 401(k) savers an option to invest in <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> is concerning, a Labor Department official said.</li><li>There's a lot of hype around "you have to get in now because you will be left behind otherwise," Ali Khawar told the WSJ.</li></ul>The US Labor Department is worried that Fidelity's plan to allow <a href="https://www.businessinsider.com/personal-finance/what-is-401k">401(k)</a> customers to invest in <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a> is risky for the <keyword id="11909870" type="UNKNOWN" weightage="60" keywordseo="retirement" source="Orion">retirement</keyword> savers.The agency has "grave concerns" about the move, Ali Khawar, one of its officials, told the <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Flabor-department-criticizes-fidelitys-plan-to-put-bitcoin-on-401-k-menu-11651197309%3Fpage%3D1">Wall Street Journal</a>.Khawar, who is acting assistant secretary of the Employee Benefits Security Administration, said in the report Thursday that he regards <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword>currencies as speculative. He said crypto is surrounded by hype urging people to invest, with the message "You have to get in now, because you will be left behind otherwise."Fidelity, which manages $2.7 trillion in assets for 20 million clients, said Tuesday it will <a href="https://markets.businessinsider.com/news/currencies/fidelity-bitcoin-401k-largest-retirement-plan-provider-cryptocurrency-2022-4?utm_medium=ingest&amp;utm_source=markets">open its 401(k) plans to bitcoin</a> by the middle of this year. It's the first major retirement-plan provider to do this.It will let customers put up to 20% of their savings into bitcoin. Other cryptocurrencies will likely be added in the future.The Labor Department regulates 401(k) plans sponsored by companies, and Khawar cautioned in a March blog post that providers should use "extreme care" before adding cryptocurrencies to their plans. Meanwhile, the <a href="https://www.washingtonpost.com/business/2022/03/18/crypto-bitcoin-retirement-401k/">Justice Department has warned</a> that the volatile swings in crypto prices mean the digital assets are too risky for retirement savers. Bitcoin has fallen 40% since hitting a record high of about $69,000 in November, and crypto assets have lost ground across the board in 2022 so far.Khawar said he was notified by Fidelity just one day before the provider revealed it would open up the bitcoin option to the 23,000 companies that use its service."For the average American, the need for retirement savings in their old age is significant," he said. "We are not talking about millionaires and billionaires that have a ton of other assets to draw down."In March, the Labor Department <a href="https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/compliance-assistance-releases/2022-01">issued guidance</a> to companies marketing investments in cryptocurrencies to 401(k) plans.It said its Employee Benefits Security Administration plans to question companies offering crypto retirement "about how they can square their actions with their duties of prudence and loyalty.""Extreme volatility can have a devastating impact on participants, especially those approaching retirement and those with substantial allocations to cryptocurrency," it said. Officials at the agency will talk to Fidelity about concerns in relation to that guidance, Khawar said. The 20% bitcoin allocation to savings is one concern, the WSJ reported, citing a senior department official.Fidelity did not immediately respond to an Insider request for comment.Read More: <a href="https://www.businessinsider.com/how-to-tell-bottom-in-stocks-to-watch-roberts-2022-4">A 26-year market vet lays out 3 indicators that show stocks could be making a near-term bottom — and shares 7 stocks and 2 bond ETFs to watch in the months ahead</a>

Fidelity's plan to add bitcoin for 401(k) retirement saving raises grave concerns, US Labor Department says

<ul class="summary-list"><li><keyword id="21281743" type="General" weightage="100" keywordseo="yaron-goldstein" source="Orion">Yaron Goldstein</keyword> achieved <keyword id="20257332" type="General" weightage="20" keywordseo="financial-independence" source="keywords">financial independence</keyword> at the age of 36.</li><li>Goldstein's strategy included mindful spending and investing a big portion of his income.</li></ul><a target="_blank" href="https://www.linkedin.com/in/goldsteiny/">Yaron Goldstein</a> was 25 when he decided to start working toward financial independence. Goldstein was working toward a Ph.D. in computational and advanced mathematics in Berlin, his hometown. While on a research internship in New York City in 2010, he connected with a Wall Street investment advisor who would become his unofficial mentor. His mentor gave him a list of what he considered "required reading." The list included Tim Ferriss' "4-Hour Workweek" and Malcolm Gladwell's "Outliers.'" From his readings, Goldstein started to think about how happiness and money are related. "This guy is making quite a good case for: Maybe 40 years from now, I don't want to be the guy who focuses his whole life on doing a career," he said about his reaction to reading Ferriss' book. <h2>Investing early</h2>Over the next 10 years, Goldstein went on to work at Boston Consulting Group, Google, and Meta. His career took him from Tel Aviv and Zurich to Mountain View, California. And while his career spanned continents and big-name companies, his ultimate goal was to not have to worry about money forever. Investment-wise, he started off small. When he got his first job as a post-doctoral student at a university in Berlin, he started putting away a few hundred euros every month. Goldstein's first job out of academia was working for BCG in Berlin. He increased his contributions to between 1,000 and 1,500 euros a month. In the summer of 2017, four years after he set off on his financial-independence journey, Goldstein devised a rough goal for his retirement years: He wanted to have a stable, risk-free income of 5,000 euros a month to live off of during his retirement. He lived on about two-thirds of his income at the beginning of his career and later cut his expenses to about 50% of his income. He saved all his annual bonuses and stocks that were part of his salary. Goldstein kept about 10,000 euros in a bank account and invested everything else in stocks. <h2>Mindful purchasing</h2>Within seven years of starting his career as a data scientist, Goldstein more than doubled his salary. By 2020, he was making about 330,000 euros.As his salary rose, he put more money toward retirement. He said the mindset that helped him came down to evaluating what gave him happiness and avoiding lifestyle inflation. Before any purchases, he would ask himself: "Is there something else that would satisfy me in a similar way for a third of the price?" He cited his passion for green tea as one example. "Even if I buy luxury tea, which is $50 per 50 grams, at the end of the month, it's still cheaper than going to Starbucks every single day and getting coffee," Goldstein said. "But I have this much more exclusive thing in my life that gives me a lot of joy." He said he never bought a car because Berlin and Zurich, where he spent a big part of his career, both had strong public-transportation systems. "I did not have this large or potentially huge expense, and I could put that money instead in the stock market," he said of his decision to remain car-free. Goldstein said luck also played a role in jumpstarting his investments. He was an early investor in Tesla and put a "huge amount" of his net worth into Tesla stock in 2016, which rallied after the launch of Model X. He said he also spent many years of his career in Switzerland, where taxes are very low. <h2>Retirement approach</h2>Goldstein retired in May 2023, about 10 years after he first began earning money. He follows the 4% rule, which is common in the FIRE — financial independence, retire early — community and which suggests it's safe to withdraw about 4% of your total portfolio in each year of retirement. It aims to help retirees find a safe withdrawal rate but should be customized depending on the number of years expected in retirement, according to <a target="_blank" href="https://investor.vanguard.com/investor-resources-education/article/fueling-the-fire-movement-updating-the-4-rule-for-early-retirees">Vanguard</a>. <a target="_blank" href="https://www.businessinsider.com/investing-strategy-to-achieve-financial-independence-fire-movement-index-funds-2023-12">Jamila Souffrant</a>, who set herself a seven-year retirement goal when she turned 33, approached <keyword id="21281746" type="General" weightage="20" keywordseo="early-retirement" source="keywords">early retirement</keyword> in a similar way. A key component of her plan was putting her money to work. "I realized that, while saving is good and important, it's not going to get me to wealth or financial independence," Souffrant previously told BI. "I was losing out by not investing." Souffrant and her husband, who have three children, set up automatic contributions from their paychecks to their investment and retirement accounts, which forced them to manage with the remaining. Others who have reached FIRE reject the 4% rule, saying it amounts to an unnecessarily large number. <a target="_blank" href="https://www.businessinsider.com/early-retirees-say-4-percent-rule-overrated-for-fire-retirement-2024-2">Lauren and Steven Keys</a> quit full-time work in their 20s but continue to work on side gigs. "So this idea of needing 25 times your annual expenses to feel like you can quit your full-time job became kind of laughable to us," Steven previously told BI about the 4% rule. Adjusted for taxes, Goldstein says he aims to live on 3% of his portfolio a year, which he believes can last him the rest of his life, especially if he's "more frugal" in his early retirement years. "No one can ever force you to say success means joining a big company and staying there for 40 years and going up the career ladder," he said.

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