Retirement insights from a Colorado PERA perspective

A distant view shows a mountainous landscape with sloping peaks, green trees in the foreground, and a cloudy sky above.

A digest of news from publications around the nation about finance, investing, and retirement.



<a aria-label="undefined (opens in a new tab)" href="https://files.constantcontact.com/701ae45c001/d1f735ad-5232-45d2-baa4-2794c32b641e.pdf" target="_blank" rel="noreferrer noopener">Sudden-Stop Recession Pressures U.S. States&#8217; Funding For Pension And Other Retirement Liabilities</a> | <a label="undefined (opens in a new tab)" href="https://content.copera.org/retirement-roundup-recession-effects-on-state-pensions/" target="_blank" rel="noreferrer noopener">S&amp;P Global</a>



Nationally, pensions have been improving funding discipline, according to this report. But economic woes could undermine some of this progress. Colorado was mentioned for its “notable reforms,” though the story also noted the suspension of the direct distribution will have an effect.



<a href="https://www.kiplinger.com/retirement/601107/2020-election-retirement-security" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">2020 Election: Retirement Security</a> | <a href="http://www.kiplinger.com" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">Kiplinger</a>



Presidential campaigns are full of ideas. Many of these ideas wouldn’t get off the ground without Congress agreeing to pass the necessary legislation. So why listen? Presidents have the ability to shape debate, set priorities, and persuade the public, which can end up making a difference. So when Presidents share ideas to, for example, change the way Medicare works, people listen.



<a href="https://www.napa-net.org/news-info/daily-news/selecting-tdfs-ending-zero-can-affect-your-retirement-savings" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">Selecting TDFs Ending in Zero Can Affect Your Retirement Savings?</a> &nbsp;| <a href="https://www.napa-net.org/" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">National Association of Plan Advisors</a>



Do you invest in a target date fund? If so, what’s your birthday? That might seem like a strange question, but researchers found that your birth year can influence your investment choices, and not always for the best. People have a tendency to choose target date funds that end in a zero (2020, 2030, etc.) over those that end in a five, even if the latter is closer to their target date. As a result, people with a birth year of eight or nine tend to select funds designed for retirement around age 60, while those born in years ending with zero, one, or two tend to select funds with a retirement age closer to 70.



<a href="https://money.yahoo.com/expert-the-donothing-approach-to-retirement-is-not-good-advice-now-140035637.html" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">Retirement expert: The ‘do-nothing’ approach is not great advice right now</a> | <a href="https://money.yahoo.com/" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">Yahoo! Money</a>



Are you a do-nothing retirement planner? This article shows two types of “do-nothing” approaches to beware of. The first is never reviewing or updating your retirement plan. While many retirement plans allow you to put your investments on “autopilot,” this doesn’t take into account changes that take place in your life and outlook. The second “do-nothing” approach is to avoid the topic of retirement savings altogether.

Retirement Roundup: Recession Effects on State Pensions

A digest of news from publications around the nation about finance, investing, and retirement.



<a href="https://money.com/esg-investing-criteria/" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">Investors Love &#8216;Socially Responsible&#8217; Companies. But Sorting the Good from the Bad Is Harder Than It Looks</a> | <a href="http://www.money.com" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">Money</a>



ESG funds—those that screen investments for environmental, social, and governance factors—have risen in popularity in the past few years. But distinguishing “good” from “bad” can quickly become complicated. Black and white quickly become gray when assessing global companies with dozens or hundreds of product lines, clients, and supply chains. One researcher compared various ESG funds and found an average correlation of 0.54. This suggests that, while the concept of ESG is gaining popularity, finding a consistent model to implement is not as easy as ABC.



<a aria-label="undefined (opens in a new tab)" href="https://www.ai-cio.com/news/us-public-pensions-bounce-back-dismal-first-quarter/" target="_blank" rel="noreferrer noopener">US Public Pensions Bounce Back from Dismal First Quarter</a> | <a aria-label="undefined (opens in a new tab)" href="https://www.ai-cio.com/" target="_blank" rel="noreferrer noopener">Chief Investment Officer</a>



You might have heard the term “V-shaped recovery” (a recovery that’s as swift as the decline) when experts discuss the future of the economy. While many components used to measure the economy have not fully recovered, like the unemployment rate, many investors have seen their portfolios recoup much of their earlier losses, including many public pensions. The 100 largest public pension systems regained $308 billion in market value between March and July. Experts quoted in the article state that, despite the quick market recovery, the future remains uncertain.



<a href="https://content.copera.org/retirement-roundup-esg-is-easier-said-than-done/" target="_blank" label="undefined (opens in a new tab)" rel="noreferrer noopener">Take this Social Security quiz and see if you are smarter than the average American</a> | <a href="http://cnbc.com" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">CNBC</a>



Social Security is a program entirely separate from PERA. However, many PERA members rely on their own or a spouse’s Social Security benefit to some extent in retirement. Understanding Social Security is not easy according to a 12-question poll conducted by insurance company MassMutual. One in two respondents received a grade of D or F when asked true-false questions about the program. How does your knowledge stack up against the average?



<a href="https://www.forbes.com/sites/suzytaherian/2020/07/17/the-dirty-dozen-tax-scams-of-2020/#458c449734a1" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">The ‘Dirty Dozen’ Tax Scams Of 2020: $27 Billion Hit To Business</a> | <a href="http://www.forbes.com" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">Forbes</a>



Tax scams peak after tax day, which was delayed until July 15 this year. Last year, the FBI received about 300,000 complaints about possible scams, though they suspect that if every scam were reported that number would be closer to 20 million. This article summarizes common scams so you can be better prepared to spot them. Nobody thinks they’ll be scammed, but the truth is that scams cost Americans billions every year.

Retirement Roundup: ESG is Easier Said Than Done

A digest of news from publications around the nation about finance, investing, and retirement.



<a href="https://content.copera.org/retirement-roundup-estate-planning-tips/" target="_blank" rel="noreferrer noopener">Crisis Makes Estate Planning More Urgent</a> | <a href="https://content.copera.org/retirement-roundup-estate-planning-tips/" target="_blank" rel="noreferrer noopener">Morningstar</a>



The risk of suddenly falling gravely ill—or worse—is suddenly a watercooler topic. Considering these situations can be unpleasant, but it could provide the impetus to do something constructive about it: create or update your estate plan. In this Q&amp;A, learn how and where to get started.



<a href="https://www.sun-sentinel.com/florida-jewish-journal/opinion/fl-jj-finance-rosner-what-if-covid-19-forces-retirement-20200602-kyns5yhgszax7dgdflwzj2tg5i-story.html" target="_blank" rel="noreferrer noopener">Are you considering a COVID-19 induced early retirement?</a> | <a href="https://www.sun-sentinel.com/florida-jewish-journal/opinion/fl-jj-finance-rosner-what-if-covid-19-forces-retirement-20200602-kyns5yhgszax7dgdflwzj2tg5i-story.html" target="_blank" rel="noreferrer noopener">South Florida Sun Sentinel</a>



The global pandemic has upended more than summer plans. People are reconsidering where they live, how they’ll work, and, in some cases, if they’ll work for much longer. If you suddenly find yourself drawn to the idea of beginning retirement sooner than you had planned this time last year, think through these important questions first.



<a rel="noreferrer noopener" href="https://www.plansponsor.com/retirement-age-households-show-chunk-nothing-withdrawal-pattern/" target="_blank">Retirement-Age Households Show a ‘Chunk or Nothing’ Withdrawal Pattern</a> | <a rel="noreferrer noopener" href="https://www.plansponsor.com/" target="_blank">PlanSponsor</a>



How do you think you&#8217;ll use your 401(k), 457, or other retirement account in retirement? Will you withdraw a set amount every month or year, or will you take withdrawals for big-ticket items? This article shares research that shows that nearly half of retirees take out nothing, letting their investments grow, or take out a &#8220;chunk,&#8221; defined to be eight percent of the account balance or more.



<a href="https://www.pressherald.com/2020/06/02/three-vital-estate-planning-documents-for-graduating-seniors/" target="_blank" rel="noreferrer noopener">Three vital estate planning documents for graduating seniors</a> | <a href="https://www.pressherald.com/2020/06/02/three-vital-estate-planning-documents-for-graduating-seniors/" target="_blank" rel="noreferrer noopener">Portland Press Herald</a>



Turning 18 marks the beginning of adulthood, symbolically and legally. While, to this point, paperwork has meant homework, it now means something different. The author of this article suggests 18 is not too young to sign your name on documents indicating your healthcare proxy, HIPPA release, and power of attorney. You might not need them for decades, but you’ll be thankful you have them if you need them sooner.

Retirement Roundup: Estate Planning Tips

A digest of news from publications around the nation about finance, investing, and retirement.



<a rel="noreferrer noopener" href="https://money.com/stock-market-valuations-price-to-earnings/" target="_blank">Stocks Are Still Down. But Are They Actually Cheap?</a> | <a rel="noreferrer noopener" href="http://www.money.com" target="_blank">Money</a>



The stock market has settled down since the dramatic volatility experienced during the first few weeks after COVID-19 appeared in the United States. But that doesn’t mean questions have gone away. Most major indexes, like the S&amp;P 500, are down for the year. However, stocks mounted a vigorous comeback at the end of April despite a historic rise in unemployment and reports of serious economic consequences for states and local governments. What’s an investor to do? This story unpacks a few of the variables to consider.



<a href="https://states.aarp.org/colorado/health-food-help-coronavirus-covid-19-colorado" target="_blank" rel="noreferrer noopener">Information, Health and Food Assistance During COVID-19 Outbreak in Colorado</a> | <a href="https://states.aarp.org/colorado/?cmp=RDRCT-ICM-WELCOMEKIT-STATES-CO" target="_blank" rel="noreferrer noopener">AARP Colorado</a>



AARP has compiled a list of helpful resources Coloradans can use if you, a friend, or neighbor needs assistance. &nbsp;



<a href="https://content.copera.org/retirement-roundup-conflicting-signals-in-the-stock-market/" target="_blank" rel="noreferrer noopener">2020 Presidential Candidates&#8217; Proposed Changes to the Social Security Retirement Program</a> | <a href="https://crr.bc.edu/about-us/" target="_blank" rel="noreferrer noopener">Boston College, Center for Retirement Research</a>



The Center for Retirement Research has updated this list throughout the 2020 Presidential campaign. PERA On The Issues shared the document when there were still a number of candidates. Now that the race is down to two, see which Social Security policies each candidate has backed.



<a href="https://www.kiplinger.com/slideshow/retirement/T055-S001-questions-retirees-get-wrong-on-retirement-taxes/index.html" target="_blank" rel="noreferrer noopener">10 Questions Retirees Often Get Wrong About Taxes in Retirement</a>&nbsp; | <a href="https://www.kiplinger.com/" target="_blank" rel="noreferrer noopener">Kiplinger</a>



Understanding your income in retirement requires understanding your tax situation. Your tax bracket might change, you might have multiple sources of income, and you might face Required Minimum Distributions at some point. This overview can help get you started.

Retirement Roundup: Conflicting signals in the stock market

A digest of news from publications around the nation about finance, investing, and retirement



<a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.npr.org/sections/health-shots/2020/01/14/796246568/medicare-for-all-a-public-option-health-care-terms-explained" target="_blank">Medicare for All? A Public Option? Health Care Terms, Explained</a> | <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.npr.org/" target="_blank">NPR </a>



What’s the different between single-payer, Medicare for All,
and a public option? Especially during this presidential election year, health
care terms flood the airwaves. The large field of Democratic contenders makes keeping
track of the various policy ideas that much more challenging, even for those
who closely follow political or health care news. This article summarizes some
of the most common terms you’re hearing.



<a href="https://squaredawayblog.bc.edu/squared-away/retiree-living-standards-ranked-by-state/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Retiree Living Standards, Ranked by State</a> | <a href="https://squaredawayblog.bc.edu/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Squared Away Blog</a>



Money in, money out. Understanding what retirement looks
like requires thinking about both income and spending. Doing so can illustrate,
for example, why states with low costs of living can still have high
percentages of retirees with low standards of living. A new study by the
University of Massachusetts’ Gerontology Institute in Boston uses these factors
to identify retirees who live in the “gap”—above the poverty line but still
saddled with economic insecurity. 



<a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.healthcarevaluehub.org/application/files/5315/7851/5839/Healthcare_Affordability_Scorecard_-_Summary_Report.pdf" target="_blank">Healthcare Affordability State Policy Scorecard</a> | <a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://altarum.org/" target="_blank">Altarum</a> 



A study released in January examined health care policy and
outcomes at the state level for all 50 states and Washington, D.C. In
particular, the study tracked state policies that:



<ul>
<li>Extend health care coverage to all residents and
policies</li>



<li>Make out-of-pocket costs more affordable for
consumers</li>



<li>Reduce low-value care</li>



<li>Address excess prices</li>
</ul>



Overall, Colorado ranked eleventh among all states. 



<a href="https://www.consumerfinance.gov/consumer-tools/financial-well-being/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Find out your financial well-being</a> | <a href="https://www.consumerfinance.gov/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Consumer Financial Protection Bureau</a>



The Consumer Financial Protection Bureau has a ten-question
survey to see how your financial well-being compares to your peers, and to the
population as a whole. After you’ve finished the short quiz, you’ll find useful
resources for more information on debt, home ownership, retirement planning, and
other common financial topics.



<a href="https://www.usatoday.com/story/money/2020/01/15/retirement-planning-americans-give-themselves-c-lower/4465141002/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Here&#8217;s the grade most Americans give themselves for retirement readiness</a> | <a href="https://www.usatoday.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">USA Today</a>



A study conducted by Harris Poll for TD Ameritrade shows that
many Americans don’t feel ready for retirement. Some key findings: 



<ul>
<li>Fewer than half of those in their 50s have at
least $100,000 saved</li>



<li>The vast majority are changing plans due to the
fact that average lifespans are increasing</li>



<li>About 60 percent don’t plan to cut back on
spending until they retire </li>



<li>Nearly 70% wish they had started saving earlier</li>
</ul>

Retirement Roundup: Medicare for All? A Public Option? Health Care Terms, Explained.

A digest of news from publications around the nation about finance, investing, and retirement. 



<a rel="noreferrer noopener" label=" (opens in a new tab)" href="https://content.copera.org/retirement-roundup-how-all-50-states-tax-retirees/" target="_blank">How all 50 states tax retirees</a> | <a href="http://www.kiplinger.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Kiplinger</a>



Retirees relocate for lots of different reasons, from the weather to proximity to grandchildren. Moving from a pricey part of the country to one with low housing prices could also lower your expenses and make your retirement savings last longer. But as you consider the cost of living in potential retirement destinations, don’t overlook the impact of state taxes on your bottom line. Spoiler alert: <a href="http://www.kiplingers.com/tool/retirement/T055-S001-state-by-state-guide-to-taxes-on-retirees/index.php?map=&amp;state_id=6&amp;state=Colorado" target="_blank" rel="noreferrer noopener" label=" (opens in a new tab)" class="broken_link">Colorado</a> is in the middle of the pack.



<a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.cnbc.com/2019/11/29/tips-to-make-required-minimum-distributions-easy-and-tax-penalty-free.html" target="_blank">These tips can help retirees make required minimum distributions easy and tax penalty free</a> | <a href="http://cnbc.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">CNBC</a>



If you’re 70½
or older and have, or inherited, a retirement account, you need to take your
required minimum distribution (RMD) by December 31. Miss that deadline, and
you’ll face a tax penalty. RMDs are the minimum amount that must be withdrawn
from retirement funds, such as an individual retirement account (IRA) or
employer-sponsored plans like 401(k)s. The amount you need to take out varies
from year to year and is based on specific calculations. But simple tips, like
getting paperwork in order and double-checking your math, can make the process
easier.



<a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.nextavenue.org/dont-tell-me-how-to-retire/" target="_blank">Don’t tell me how to retire</a> | <a href="http://www.nextavenue.org/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">NextAvenue</a>



The traditional definition of retirement – stop working at 65, full stop – is outdated. An episode of <a href="https://friendstalkmoney.org/">Friends </a><a href="https://friendstalkmoney.org/" target="_blank" rel="noreferrer noopener" aria-label="T (opens in a new tab)">T</a><a href="https://friendstalkmoney.org/">alk Money</a>, a podcast on personal finances after 50, looks at examples where retirement in 2019 looks very different from that traditional picture.



<a rel="noreferrer noopener" aria-label=" (opens in a new tab)" href="https://www.plansponsor.com/help-needed-curtail-gen-xs-anxiety-retirement/" target="_blank">Help needed to curtail Gen X’s anxiety about retirement</a> | <a href="http://www.plansponsor.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">PlanSponsor</a>



Generation X investors are less confident about their financial future than Millennials or Baby Boomers, according to E*TRADE’s quarterly <a href="https://content.copera.org/retirement-roundup-how-all-50-states-tax-retirees/" target="_blank" rel="noreferrer noopener" label=" (opens in a new tab)">StreetWise survey</a>. Not having enough saved for retirement tops the list of worries for Gen X (ages 35 to 54), with nearly one-third (32%) choosing it. 



<a rel="noreferrer noopener" label=" (opens in a new tab)" href="http://money.com/money/5663058/free-stock-trades/" target="_blank" class="broken_link">Thousands of Americans are signing up to trade stocks for free. Here’s what to do instead</a> | <a href="http://money.com/" target="_blank" rel="noreferrer noopener" aria-label=" (opens in a new tab)">Money</a>



In October,
the discount brokerage Charles Schwab announced a new policy of commission-free
stock, ETF and option trades. Following that announcement, rivals E*Trade,
Fidelity and Ameritrade quickly followed suit. Schwab, which&nbsp;agreed in
November to purchase Ameritrade&nbsp;for $26 billion,&nbsp;recently said it signed
up&nbsp;142,000 new customers in October, up 30 percent from the number it
signed up in September. When it comes to investing, costs do matter. And
anything that promises to lower investors’ costs is worth applauding. But your
investment horizon should also be long-term. Making trades free seems to run
counter to that, encouraging people to trade more.

Retirement Roundup: How All 50 States Tax Retirees

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



<a href="https://www.wsj.com/articles/is-there-really-a-retirement-savings-crisis-1492999861">Is There Really a Retirement-Savings Crisis?</a>&nbsp; <a href="https://www.wsj.com/">Wall Street Journal</a>



Two experts look at the same data and come to different conclusions. What’s your take?



<a href="https://www.usatoday.com/story/money/personalfinance/retirement/2017/04/19/how-fix-americas-broken-retirement-system/100185208/">Analysis: How to fix America’s broken retirement system</a>&nbsp;|&nbsp;<a href="https://www.usatoday.com/">USAToday</a>



The 401(k) isn’t working. So what to do: Tweak, replace, or come up with something completely different? Read more about current thinking on how to fix America’s broken retirement system.



<a href="http://time.com/money/4741103/retirement-jobs-social-contact/">This Is the Biggest Reason to Work After You Retire (Besides Money)</a>&nbsp;|&nbsp;<a href="http://time.com/money/">Money</a>



Forty-five percent of middle-income baby boomers expect to work part-time in retirement, allowing retirees to socially reconnect while filling an empty schedule.



<a href="http://www.benefitspro.com/2017/04/24/10-misconceptions-about-saving-for-medical-care-in?page_all=1">10 misconceptions about saving for medical care in retirement</a>&nbsp;|&nbsp;<a href="http://www.benefitspro.com/">BenefitsPro</a>



Where Americans plan to get the money to pay for health care in retirement, and how far they think that money will stretch when it also has to pay for food, clothing, shelter and any activities or other necessities that come along with retirement.



<a href="http://time.com/money/4743298/retirement-plan-happiness/">4 Smart Tips for a Happy Retirement &#8211; From Someone Who’s Been There</a>&nbsp;|&nbsp;<a href="http://time.com/money/">Money</a>



Multiple transitions, grounding, type of retirement, and dreams – four key insights from someone who has been there.



<a href="http://www.marketwatch.com/story/how-to-deal-with-the-haters-who-dont-support-your-early-retirement-dreams-2017-04-26">How to deal with the haters who don’t support your early-retirement dreams </a>|&nbsp;<a href="http://www.marketwatch.com/">MarketWatch</a>



Many see public employees as those who are lucky enough to retire “early.” Read more about strategies to deal with unsolicited input on your retirement decision.



<a href="https://www.brookings.edu/blog/up-front/2017/04/26/the-hutchins-center-explains-prescription-drug-spending/">The Hutchins Center Explains: Prescription drug spending</a>&nbsp;|&nbsp;<a href="https://www.brookings.edu/">Brookings</a>



How much do Americans spend on prescription drugs, the trend, and comparisons to other countries are included in this Brookings “explainer.”

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