How America’s Retirement Dream Became a Nightmare

It’s not too late to protect yourself from being left out in the cold. February 12, 2020 5 min read Opinions expressed by Entrepreneur contributors are their own. A recent report by the Economic Policy Institute (EPI) makes it clear: The 401(k) plans Americans rely upon for retirement income are “inadequate and unequal,” and have increased gaps in retirement preparedness based on income, race, ethnicity, education and marital status. Moreover, the net worth of households approaching retirement fell by half in wake of the Great Recession and has only slightly improved since then. The report states unequivocally that 401(k) plans have “proven to be a disaster” since the government authorized them 42 years ago, underscoring something I’ve been saying for years: For many participants, government-sponsored plans have turned out to be less effective than stuffing cash in a mattress. As the EPI report explains in detail, “The shift from pensions to account-type savings plans has been […]

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The Most Critical Question to Ask About Your Retirement Plan

December 6, 2019 5 min read Opinions expressed by Entrepreneur contributors are their own. “Stocks escaped a scary October and set records. So what’s next for your 401(k) in 2019?” USA Today recently posed this question, noting that the stock market made it through October without crashing, as it did in October of 1929, Black Monday in 1987 and in the 2008 financial crisis, which started on Sept. 29. It was also a big change from October 2018, when the Dow fell by more than 1,000 points in two days, making that month the most volatile for stocks in 118 years.  But while the financial media are crowing that stocks made it through October unscathed, nobody can answer the second half of the question: What’s next? That’s a big problem for Americans, many of whom are heavily invested in the market through their 401(k) and other conventional government-sponsored retirement plans. In fact, […]

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How Much Money Do You Really Need in Retirement?

The “Rule of 25” is a good starting point to find your number. October 31, 2019 4 min read Opinions expressed by Entrepreneur contributors are their own. Have you taken the time to run the numbers and determine exactly how much money you need to save for retirement? Have you looked at how much you have saved so far and calculated how many years that money will last? If you’ve gotten serious in your retirement planning, you may have spent some restless nights calculating and recalculating just how much money you’ll need during your elder years and comparing it to what you have saved. On average, the top 10 percent of wage earners have saved about two years worth of income, according to a study of federal data by the Schwartz Center for Economic Policy Analysis. “Among workers in the top 10 percent of the income distribution (above $115,000 a year), the median […]

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Why You May Be Forced to Retire Sooner Than Planned

Many Americans aiming to work past 65 to cushion their savings are seeing those hopes foiled. September 6, 2019 4 min read Opinions expressed by Entrepreneur contributors are their own. As an entrepreneur, your work is such a big part of your life that it may be hard to imagine not doing it. But if, like many people, you are planning to keep working past 65, a recent study from Boston College’s Center for Retirement Research (CRR) may give you pause. “The share of workers reporting that they expect to work past age 65 rose from 16 percent in 1991 to 48 percent in 2018,” write the authors. “But such intentions often go awry.” In fact, the same study reveals that 37 percent of all workers retire earlier than they had planned. (Other studies suggest that number is much higher.) The three main reasons CCR points to are unexpected changes in […]

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Want to Become a Billionaire? Invest in Your Own Business, Not Your 401(K).

Many investors haven’t kept up with inflation over the last 20 years. Have you? June 18, 2019 5 min read Opinions expressed by Entrepreneur contributors are their own. Entrepreneurs are, by nature, risk-takers, so investing in the stock market may be appealing, a side hustle that just might make you rich. After all, a few top investors have become billionaires playing the Wall Street casino, so why not you? Related: Millennials Scared of the Stock Market Risk Being Broke When It’s Time to Retire But I have to burst your bubble here because, for starters, you probably are not Warren Buffett. And even the Oracle of Omaha, one of the most successful investors of all time, has been sounding alarms about the perils of the market. In a recent annual letter to shareholders, the Berkshire Hathaway CEO said that market losses of 50 percent or more would not only be possible but […]

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How a 10 Percent Loss Raises Mortality Levels

Stock market declines are linked to early death, illness, and fatal accidents. Are you at risk? May 28, 2019 4 min read Opinions expressed by Entrepreneur contributors are their own. Losing money in the stock market can cost you your life, and I’m not just talking about the old cliché of people jumping out of skyscraper windows when markets crash. Related: Stock Market Rebounds After October Plunge In fact, people with as little as 10 percent of their wealth in the stock market who experience a 10 percent loss stand an increased risk of dying early or suffering health problems such as high blood pressure and depression. That’s according to a study published in the American Economic Journal, which looked at booms and busts in the U.S. stock market between 1998 and 2011. In the study, Hannes Schwandt, assistant economics professor at the University of Zurich Department of Economics, determined that what he […]

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Will Your Money Last as Long as You Do?

Why many people will outlive their money in retirement and what they can do to prevent that scary scenario. March 29, 2019 5 min read Opinions expressed by Entrepreneur contributors are their own. My 95-year-old mother-in-law is one person I never suspected would run out of money, but that’s exactly what’s happening. When her husband died, she received a life insurance settlement, and she’s received a nice pension payout every year since, taking care to preserve that pension by living a frugal lifestyle. Still, the assisted-living facility where she lives raises the rent every year — more than the increases in her pension and social security. And, something else: She’s living longer than everyone expected. Related: Does Your Retirement Plan Pass the 3-Point Check-Up? In fact, she’s still going strong and could easily live another five years or more — that’s wonderful news. And, thankfully, our family is prepared to help if, […]

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How a Subprime Banking Workaround Could Crush Your Retirement

December 10, 2018 4 min read Opinions expressed by Entrepreneur contributors are their own. The devastating housing crash of 2008 is now 10 years in the rearview mirror, but the danger of another financial crisis looms despite assurances to the contrary. Related: When Facing a Stock Market Crash, Here’s How to Still Make Money We’ve been told that the housing bubble and collapse was about predatory lending and high-risk borrowers who were duped into loans they couldn’t afford. So, we can assume that the massive regulatory response to the subprime crisis meant that banks are no longer allowed to behave badly, right? If only it were that simple . . . I’ve previously written about the various warnings out there that say the current booming economy is on shaky ground and about some potential causes of the next crash. Looming large among the latter is the increasing economic clout of pseudo-banks and their […]

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Scrimp and Sacrifice in Retirement? Don’t Let That Be You. Here’s How.

Don’t ignore the instability of social security and government-sponsored retirement accounts. Instead, confront these issues head-on August 22, 2018 5 min read Opinions expressed by Entrepreneur contributors are their own. Many Americans will spend their “golden years” of retirement scrimping and sacrificing, according to a new study reported by the Wall Street Journal. Related: How to Pay Zero Taxes Legally in Retirement “A combination of economic and demographic forces has left older Americans with bigger bills and less money to pay them,” the report states. The report adds that Americans approaching retirement today face: Stagnant incomes: “Americans are reaching retirement age in worse financial shape than the prior generation, for the first time since Harry Truman was president … Their median incomes, including Social Security and retirement-fund receipts, haven’t risen in years, after having increased steadily from the 1950s.” High debt: “Gains in life expectancy, combined with the soaring price of […]

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Does Your Retirement Plan Pass the 3-Point Check-Up?

Consider these factors to bolster tour financial self-sufficiency. June 8, 2018 5 min read Opinions expressed by Entrepreneur contributors are their own. Retirement plan fees, taxes and healthcare costs are among the biggest threats to Americans’ financial security. Many workers aren’t just financially unprepared for retirement — they haven’t done the basic calculations to determine how much money they will need. Related: This Innocuous Sounding Phrase Is Actually a Mortal Threat to Your Retirement Planning That’s one of the findings of the 28th annual Retirement Confidence Survey just released by the nonprofit Employee Benefit Research Institute (EBRI) and the research firm Greenwald & Associates. The annual survey, conducted in January among 1,002 workers and 1,040 retirees, found that only about half of workers 55 and older had calculated their cost of living and how much money they would need to have saved to pay their bills. And despite healthcare costs in retirement […]

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3 Reasons Why You Can’t Trust Your Personal Balance Sheet

Do you know what your net worth would be if you subtracted taxes, changes in the value of your retirement account or even yourself (i.e., you died)? April 10, 2018 5 min read Opinions expressed by Entrepreneur contributors are their own. If you’re like most people, you may think you have a general idea about your balance sheet. You may know, for instance, how much you owe on your mortgage, car payments and other loans and debts. And you may know approximately how much equity you have in your home, the cash you have in savings and the value of your retirement accounts. Or do you? Related: How to Work Toward Retirement From Your Small Business While it’s easy to see the balance on your mortgage and how much cash you have in savings, you face a much trickier proposition getting a handle on the real value of your retirement […]

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