For decades, American retirees have come to depend on Social Security for at least a part of their retirement income. While many retirees have made their own retirement plans and only rely on Social Security for supplemental income, many have planned for Social Security to make up the bulk of their retirement income. That was never the intent of the...
Business cycles are funny things. No one realizes that the top of the market has been reached until months after the decline has already started. And no one realizes the bottom has been reached until months into the recovery. That’s why so many financial advisers recommend against trying to time markets. You just can’t ever tell for sure whether...
One aspect of the post-financial crisis recovery that is of particular concern is that people’s attitudes towards their financial well-being seems not to have recovered. Many of the benefits of the recovery accrued to those most connected to the financial sector, those who received the benefit of government bailouts and Federal Reserve liquidity facilities. But for the average family...
Everyone has dreams of retiring some day. For many people, that’s the motivation that keeps them coming into work every day, the knowledge that every day they’re building up more and more money in their nest egg to enable themselves to finally quit the rat race in the future. But for many potential retirees, the timing of their retirement...
Despite the reams of retirement planning advice out there, there will always be some people, many through no fault of their own, who are unable to save enough money to retire comfortably. That was the impetus behind the creation of the Social Security System, to provide a backstop so that those whose retirement savings were insufficient would have an...
The retirement savings gap is the difference between what people have saved for retirement and how much they actually need to save in order to retire comfortably. Many people are aware that Americans are highly indebted and have a low savings rate, but just how much that contributes to the retirement savings gap and how large that gap is...
The biggest question that most people have when saving for retirement is what assets they should invest in to maximize their investment growth. For most people that ends up being stocks. Many will try to diversify their assets by holding a mix of stocks, bonds, mutual funds, CDs, and other financial investments. But in almost all cases investors will...
The policymakers at the Federal Reserve, and at most central banks for that matter, have a horrible track record when it comes to figuring out when an economy is in a bubble. By the time they realize that the bubble has even existed, it has already burst. They end up playing catch-up, reacting to a financial crisis months after...
Anyone who has been paying attention to Social Security’s fiscal problems knows that the system is woefully underfunded. Years of surpluses and interest income have lulled everyone into a false sense of security. But now total Social Security tax receipts plus interest income on the trust fund are not enough to pay the total amount of Social Security payments...
If you’re saving and investing, it’s probably for a reason. For most people that means saving for retirement. And that requires a long time horizon and a great deal of discipline. It also leads to a great deal of uncertainty, as the 30-40 years or more of saving and investing will almost necessarily mean that investors will have to...