A digest of timely information and insight about finance, investing, and retirement.

How much retirement savings will you need? Try 16.4 times your salary | USA Today
One of the most challenging elements of saving for retirement is figuring out how much money to sock away for it. While it’s possible to estimate some of your senior living costs, factors outside your control, like inflation, tax increases, and health problems, can render your savings insufficient even if you’ve done a pretty respectable job of building a retirement nest egg. Now when you sit down to estimate how much income you’ll need to retire with, it’s common to calculate that number as a multiple of your ending salary. For example, investing giant Fidelity says older workers should aim to sock away 10 times their ending salary by age 67. But global professional services firm Aon disagrees, and in a recent report, it finds that the average retiree will need 16.4 times his or her ending salary to cover the cost of retirement.

Retired people share the secrets of early retirement | MarketWatch
The idea of retiring early might sound heavenly, but there’s plenty to learn before taking the leap. One person asked Quora, in a questions-and-answers forum, “What is something that almost nobody knows about retiring early?” Many answers were from people who retired in their 50s, either because they chose to retire or were forced to leave. A few responses were from those of the “Financial Independence, Retire Early” (FIRE) movement, where people quit their jobs in their 20s and 30s and live off of the money they saved while living frugally and investing. The upshot: Depending on how you prepare, early retirement can be a blessing or a curse.

Why a Nobel laureate’s plan to use Social Security to fix retirement won’t work | Forbes
Nobel Prize-winning economist Richard Thaler made a splash recently by slamming 401(k)s and promoting Social Security. It was a bit surprising given Thaler’s conservative bent. He proposed that the Social Security Administration should get into the annuity business by allowing retirees to direct some of their retirement savings toward their Social Security balances to beef up their monthly payments. Thaler wants to solve a problem that all Americans with 401(k) and IRA plan balances face. How do you take $92,000 — the median level of holdings for workers approaching retirement age — and make it last a lifetime? That is, how do you avoid outliving your money? Unfortunately, there are three problems with this proposal.

Howdo Medicare options factor into retirement plans? | Kiplinger
If you have a financial adviser, he probably spends a fair amount of time talking about the risks you’ll face in retirement. He’ll test for risk tolerance and discuss how your investing philosophy should change as you age. He’ll set up an income plan and help find ways to fill any gaps between the income sources you can rely on and what you think you’ll need for the lifestyle you want. He may even get into the rising costs of health care — especially long-term care — and how to better provide for those costs. But what a lot of advisers don’t talk about, or help their clients navigate, are the health care coverage options available through Medicare when you become eligible at age 65. That’s a big omission, considering that in a 2018 online survey by the Nationwide Retirement Institute, conducted by The Harris Poll, seven in 10 respondents said they wished they better understood Medicare coverage.

Gen X struggling most with retirement readiness and confidence | PlanSponsor
A recent report, “What is ‘Retirement’? Three Generations Prepare for Older Age,” prepared by the Transamerica Center for Retirement Studies, looked at the retirement outlook of Baby Boomers, Generation X and Millennials. All generations — Baby Boomers, Generation X and Millennials — associate retirement with freedom, enjoyment, and being stress-free. Among those of all ages, 72 percent are looking forward to retirement. Among Baby Boomers, this is 81 percent. For Gen Xers, it is 70 percent, and Millennials, 68 percent. However, among all age groups, 76 percent think people in their generation will have a harder time achieving financial security in retirement than their parents. This is slightly lower for Baby Boomers (69 percent), but higher for Generation X (81 percent) and Millennials (79 percent).

Saving for retirement vs. college? There’s a clear winner | Cincinnati.com
Given that the average 2018 college graduate with loans left school with about $29,800 in student debt (according to studentloanhero.com), the urge to shield your kids from such a crushing burden is probably as strong as ever. The best-case scenario is that you save for retirement and for your kids’ college fund simultaneously. But if you’re thinking of putting all or the majority of your savings towards college costs, resist. There are no scholarships for retirement. There are no loans. If you’re not setting enough money aside now, you’ll be out of luck once retirement arrives. And if you look at retirement as basically being ‘unemployed’ for 20 or 30 years, that’s a daunting, if not terrifying, prospect. Even scarier? You then become your kids’ problem at some point. Do you really want to spend retirement living in their basement?