Retirement insights from a Colorado PERA perspective

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



<a href="http://time.com/money/5398093/every-retiree-should-make-this-tax-move-right-now-according-to-a-new-warning-from-the-irs" target="_blank" rel="noreferrer noopener">Every retiree should make this tax move right now, according to a new warning from the IRS</a> | <a href="http://www.time.com/money" target="_blank" rel="noreferrer noopener">Time-Money</a> The IRS has a message for retirees: make sure you’re paying enough federal income tax. The Tax Cuts and Jobs Act of last December changed the income tax calculations for most filers, and employees aren’t the only ones who need to double check they’re withholding the right amount. On average, most retirees will likely see a decrease in tax liability and owe slightly less, although it varies by individual. Retirees who receive monthly pension income or annuity checks may well need to increase or lower the amount of taxes they pay. The easiest way to simplify your tax payments and get back to enjoying retirement is to use the <a href="https://apps.irs.gov/app/withholdingcalculator/" target="_blank" rel="noreferrer noopener">IRS’ online withholding calculator</a>, which incorporates the new tax law rule changes.



<a href="https://www.planadviser.com/newly-suggested-strategy-managing-health-costs-retirement/" target="_blank" rel="noreferrer noopener">A new strategy for managing health costs in retirement</a> |&nbsp;<a href="https://www.planadviser.com" target="_blank" rel="noreferrer noopener">PlanAdviser</a> Health care cost projections illustrate how managing medical conditions through simple, positive lifestyle choices can result in measurable savings for health expenses in retirement, according to a new report from Healthy Capital in collaboration with the Insured Retirement Institute. In addition, the report explains how utilizing annuities to provide guaranteed income helps address Americans’ concern for affording health care in retirement. A case study details how utilizing the savings through condition management can fund staggered annuities and create a lifetime income stream.



<a href="https://www.washingtonpost.com/business/2018/10/01/yes-you-should-pay-off-your-mortgage-before-retiring/?utm_term=.03ffb0b024d4" target="_blank" rel="noreferrer noopener" class="broken_link">Yes, you should pay off your mortgage before retiring</a> |&nbsp;<a href="https://www.washingtonpost.com/" target="_blank" rel="noreferrer noopener" class="broken_link">Washington Post</a> Four reasons why it makes sense—with one caveat: You shouldn’t empty out your savings to pay off your mortgage. That is not a wise financial move. You don’t want to end up house rich and cash poor, meaning all your money is locked into the equity in your home.



<a href="https://www.cnbc.com/2018/09/27/americans-think-61-is-the-ideal-age-to-retiremoney-experts-disagree.html" target="_blank" rel="noreferrer noopener">Americans think 61 is the ideal age to retire; is it?</a> |&nbsp;<a href="https://www.cnbc.com/" target="_blank" rel="noreferrer noopener">CNBC</a> Americans think the ideal age to retire is 61. Unfortunately, it may be wise to wait longer. In a recent&nbsp;<a href="https://www.bankrate.com/personal-finance/smart-money/experts-when-to-reach-financial-milestones/" target="_blank" rel="noreferrer noopener">survey</a> from financial website Bankrate, 10 certified financial planners from different parts of the country said that 63 is a more realistic age for retirement, and many experts believe you should wait until you’re at least 70.



<a href="https://www.forbes.com/sites/johnwasik/2018/10/01/3-easy-ways-to-boost-retirement-emergency-savings-by-30/#4087907a50c8" target="_blank" rel="noreferrer noopener">Three easy ways to boost retirement, emergency savings by 30%</a> |&nbsp;<a href="https://www.forbes.com/" target="_blank" rel="noreferrer noopener">Forbes</a> No, the lottery isn’t the answer, nor is thinking positive thoughts. If you want to save more, you have to spend less. Stay home more. It’s that simple. Just go out to eat and drink less. It really adds up. The latest&nbsp;<a href="https://www.bankrate.com/personal-finance/smart-money/financial-vices-september-2018/?utm_source=Think+Glink+Newsletter&amp;utm_campaign=63986965af-EMAIL_CAMPAIGN_2018_09_20_04_38&amp;utm_medium=email&amp;utm_term=0_bb01ffa411-63986965af-137683530" target="_blank" rel="noreferrer noopener">bankrate.com</a>&nbsp;survey lays it out: Nearly four out of 10 Americans polled go out three times a week to eat or for coffee or drinks. They spend more than $2,400 on restaurant meals and takeout meals alone.



<a href="https://www.cnbc.com/2018/09/28/why-these-teachers-retirement-plans-arent-making-the-grade.html" target="_blank" rel="noreferrer noopener">Why these teachers’ retirement plans aren’t making the grade</a> | <a href="http://www.cnbc.com" target="_blank" rel="noreferrer noopener">CNBC</a>Here’s what you need to know about 403(b) plans for public school workers. Other deferred compensation plans for public employees such as 401(k)s or 457 plans may be available to teachers in public schools. Find out if you have access, and see how the costs compare to your 403(b).

Retirement Roundup: The tax move every retiree should make right now

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



<a href="https://content.copera.org/retirement-roundup-interim-ceo-baker-tapped-to-join-institutional-investor-group/" target="_blank" rel="noreferrer noopener">Council of Institutional Investors taps Ash Williams as new chairman</a> |&nbsp;<a href="https://www.copera.org/federal-legislation-hurt-institutional-investors-main-street-retirees" target="_blank" rel="noreferrer noopener" class="broken_link">Pensions &amp; Investments</a>The Council of Institutional Investors on Wednesday announced that Ron Baker, PERA’s Interim Executive Director, has joined their board and Ashbel Williams, executive director and chief investment officer of the $209.7 billion Florida State Board of Administration, Tallahassee, was named chairman. Other new board members for 2018-2019 include Jerry Albright, CIO of the $146 billion Texas Teacher Retirement System, Austin; Renaye Manley, deputy director, strategic initiatives department at the Service Employees International Union; Thomas McIntyre, international representative at the International Union of Bricklayers and Allied Craftworkers; Hope Mehlman, chief governance officer and assistant corporate secretary at Regions Financial Corp.; and Jennifer Peet, corporate governance director for the Oregon State Treasury and the $78.9 billion Oregon Public Employees Retirement Fund, Salem.



<a href="https://www.nytimes.com/2018/03/16/business/fiduciary-rule-retirement-planning.html" target="_blank" rel="noreferrer noopener">Court overturns Obama-era rule on retirement planners</a>&nbsp;|&nbsp;<a href="https://www.nytimes.com" target="_blank" rel="noreferrer noopener">The New York Times</a> A federal appeals court has ruled that the Department of Labor overstepped its authority when it wrote a rule that required financial professionals, including brokers and insurance agents, to put their customers’ financial interests ahead of their own. The United States Court of Appeals for the Fifth Circuit overturned a lower court’s ruling in a 2-to-1 decision siding with the plaintiffs, which include several groups representing the financial services industry. The strongly worded decision is not necessarily the end of the <a href="https://www.copera.org/retirement-roundup-long-1-million-last" target="_blank" rel="noreferrer noopener" class="broken_link">fiduciary rule</a>, lawyers said, but its future is highly uncertain.



<a href="https://www.courier-journal.com/story/news/politics/2018/03/14/stivers-dont-see-lot-hope-pension-bill/424601002/" target="_blank" rel="noreferrer noopener">Kentucky&#8217;s pension reform bill is unlikely to pass</a> |<a href="https://www.courier-journal.com" target="_blank" rel="noreferrer noopener">Louisville Courier-Journal </a>Key Senate Republican leaders acknowledged last Wednesday there is little hope for passage of the pension reform bill during the 2018 General Assembly and began warning of serious ramifications if the bill is not passed. &#8220;I don’t see a lot of hope for it. That’s just the reality,” Senate President Robert Stivers said Wednesday of the status of the pension measure, Senate Bill 1. The Senate president said, &#8220;I am looking at legislation to introduce later on. I do not want to come into a special session, but it may be necessary.&#8221;



<a href="https://www.cnbc.com/2018/03/09/women-fail-to-save-enough-for-retirement-heres-how-to-fix-that.html" target="_blank" rel="noreferrer noopener">Women fail to save enough for retirement. Here&#8217;s how to fix that</a> |<a href="https://www.cnbc.com" target="_blank" rel="noreferrer noopener">CNBC</a>When it comes to saving for retirement, most women aren&#8217;t giving themselves a passing grade. Only 12 percent of working women are &#8220;very confident&#8221; that they will be able to retire comfortably, according to new research from the Transamerica Center for Retirement Studies. Another 46 percent of women are &#8220;not too confident&#8221; or &#8220;not at all confident&#8221; about their retirement, according to the survey. That insecurity highlights the unique challenges women face when it comes to saving for their later years.



<a href="http://time.com/money/5187025/what-retirees-can-learn-from-this-years-oscar-winners/" target="_blank" rel="noreferrer noopener">What retirees can learn from this year&#8217;s Oscar winners</a> |&nbsp;<a href="http://time.com/money/" target="_blank" rel="noreferrer noopener">Time-Money</a>This year’s Oscars delivered a powerful and inspiring message for anyone who’s nearing or is at retirement age: Achievement doesn’t have an expiration date, and success and fulfillment are still possible even as you’re increasingly reeling in the years.



<a href="https://www.marketwatch.com/story/the-irrational-time-people-save-for-retirement-2018-03-19" target="_blank" rel="noreferrer noopener">The irrational thing some people do when they retire</a> |&nbsp;<a href="https://www.marketwatch.com/" target="_blank" rel="noreferrer noopener">MarketWatch</a>The best time to save for retirement is decades before it starts, but some people get into the habit of squirreling away money only after calling it quits. Researchers from Columbia Business School and Copenhagen Business School <a href="http://www.nber.org/papers/w24405" target="_blank" rel="noreferrer noopener">found</a> that after retirement, retirees were more inclined to reduce consumer debt and increase their liquid savings. The data doesn’t give a definitive explanation, but researchers call it the “retirement-consumption puzzle,” suspecting it is a mix of work-related expenses disappearing and more leisure time to spend cooking and looking for better deals.

Retirement Roundup: Interim CEO Baker tapped to join institutional investor group

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



<a href="https://www.yahoo.com/news/apos-long-1-million-retirement-195553143.html" target="_blank" rel="noreferrer noopener">Here&#8217;s how long $1 million in retirement savings will last in your state</a> | <a href="http://www.yahoo.com" target="_blank" rel="noreferrer noopener">Yahoo</a>



Would $1 million really last you through your entire retirement? That all depends on where you choose to live out your golden years according to <a href="https://www.gobankingrates.com/retirement/how-long-million-last-retirement-state/?ncid=edlinkushpmg00000313">a new study</a>. Find out how Colorado stacks up against the other states.



<a href="https://www.bloomberg.com/news/articles/2017-08-24/health-care-costs-could-eat-up-retirement-funds-forecast-shows" target="_blank" rel="noreferrer noopener" class="broken_link">Health care costs could eat up your retirement savings |</a> <a href="https://www.bloomberg.com/news/articles/2017-08-24/health-care-costs-could-eat-up-retirement-funds-forecast-shows" target="_blank" rel="noreferrer noopener" class="broken_link">Bloomberg</a>



According to experts at <a href="https://www.fidelity.com/" target="_blank" rel="noreferrer noopener">Fidelity</a>, health care costs are going to eat up a substantial amount of your retirement savings. And if you think waiting until age 65 when you reach Medicare eligibility is going to save you—think again.



<a href="https://www.copera.org/retirement-roundup-older-workers-new-problems" target="_blank" rel="noreferrer noopener" class="broken_link">OMB approves delay of fiduciary rule to mid-2019 |</a> <a href="https://content.copera.org/retirement-roundup-dont-count-on-social-security/" target="_blank" rel="noreferrer noopener">Pensions &amp; Investments</a>



Federal officials seeking to delay the implementation of a rule designed to compel financial advisors to act in the best interest of their clients were successful in delaying its implementation. Although the decision by the White House’s <a href="https://www.whitehouse.gov/omb" target="_blank" rel="noreferrer noopener">Office of Management and Budget</a> won’t prevent the rule from being implemented eventually, this is a major defeat for proponents. [<a href="https://www.copera.org/retirement-roundup-long-1-million-last" target="_blank" rel="noreferrer noopener" class="broken_link">Read more</a> about the federal rule as it was first introduced in April 2016.]



<a href="https://www.consumerreports.org/retirement-planning/why-saving-for-retirement-is-getting-harder-and-what-you-can-do-about-it/" target="_blank" rel="noreferrer noopener">Why saving for retirement is getting harder, and what you can do about it |</a> <a href="https://www.consumerreports.org" target="_blank" rel="noreferrer noopener">Consumer Reports</a>



It’s <a href="http://www.nirsonline.org/index.php?option=com_content&amp;task=view&amp;id=882&amp;Itemid=48">no secret</a> that the trend to 401(k) plans from traditional pensions has put more pressure on individuals to save enough for retirement. Combine that with recent moves by the federal government to roll back rules that might have made saving easier, and the retirement landscape has never been more treacherous. Fortunately, there are still some common-sense steps you can take to make your financial future more secure.



<a href="http://squaredawayblog.bc.edu/squared-away/401k-saving-harder-at-lower-incomes/" target="_blank" rel="noreferrer noopener">401(k) saving harder at lower incomes |</a> <a href="http://squaredawayblog.bc.edu" target="_blank" rel="noreferrer noopener">Squared Away Blog</a>



Saving for retirement is no picnic even for upper-middle-income earners who have access to workplace retirement savings plans. A new study sheds light on just how difficult it is for those in the lower- and middle-income brackets to save through 401(k) plans. The study from researchers at the <a href="https://www.stevens.edu/" target="_blank" rel="noreferrer noopener">Stevens Institute of Technology</a> and the <a href="https://www.newschool.edu/nssr/" target="_blank" rel="noreferrer noopener">New School for Social Research</a> sheds some light on how things like temporary unemployment, poor health, and divorce—all circumstances that hit lower-income earners the hardest—affect retirement plans.



<a href="http://time.com/money/4909241/wall-street-financial-firms-protect-seniors/" target="_blank" rel="noreferrer noopener">Wall Street is failing to protect seniors from fraud, say regulators</a> | <a href="http://time.com/money/" target="_blank" rel="noreferrer noopener">Time-Money</a>



An international group of investment regulators say the industry isn’t doing enough to keep elderly investors from falling victim to scams. According to a new survey from the <a href="http://www.nasaa.org/" target="_blank" rel="noreferrer noopener">North American Securities Administrators Association</a>, 75 percent of those who responded said financial firms could be doing more to protect older clients. And a near-unanimous sentiment among those surveyed was that when fraud does take place, it goes on for far too long. Colorado is one of only 13 states that have enacted laws designed to encourage financial advisors to report fraud when they see it happening.

Retirement Roundup: How Long Will $1 Million Last You?

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



<a href="http://www.plansponsor.com/Taxpayers-Not-Burdened-by-Public-Pensions/">Taxpayers not burdened by public pensions |&nbsp;</a><a href="http://www.plansponsor.com">PlanSponsor</a>



Taxpayers only contribute about 20 cents on the dollar toward public pensions plan contributions, according to a <a href="http://www.ncpers.org/files/NCPERS%20Research%20Series_2017%20Public%20Pensions%20Are%20A%20Good%20Deal%20for%20Taxpayers_Web.pdf" target="_blank" rel="noreferrer noopener">recent paper</a> by the <a href="http://www.ncpers.org/" target="_blank" rel="noreferrer noopener">National Conference on Public Employee Retirement Systems</a> (NCPERS). And <a href="http://www.nirsonline.org/index.php?option=com_content&amp;task=view&amp;id=945&amp;Itemid=76" target="_blank" rel="noreferrer noopener">research</a> from the <a href="http://www.nirsonline.org" target="_blank" rel="noreferrer noopener">National Institute on Retirement Security</a> (NIRS) indicates that every dollar paid in pension benefits creates $2.21 in economic output.



<a href="http://time.com/money/4902055/retirement-planning-mistakes-fix/">This is what retirees would do differently if they could go back in time |&nbsp;</a><a href="http://www.time.com/money">Time-Money</a>



A little bit of practical advice or a fresh perspective on the retirement savings journey could come from recent and soon-to-be-retirees who shared some of the lessons they learned on their own retirement paths.



<a href="http://www.denverpost.com/2017/08/09/modern-wealth-index-denver-lower-than-national/">Denverites define $2 million as the entryway to wealth, lower than national mark |&nbsp;</a><a href="http://www.denverpost.com">The Denver Post</a>



Being wealthy can mean different things to different people, but for residents of the Mile High City, the threshold is a net worth of $2 million, according to the new <a href="https://content.copera.org/retirement-roundup-pensions-taxpayers/" target="_blank" rel="noreferrer noopener">Modern Wealth Index for Denver</a> from Charles Schwab &amp; Co. Nationally, the “wealthy” mark was $2.4 million and the “financially comfortable” mark was $1.1 million. In metro Denver, financially comfortable was defined as $541,700.



<a href="https://www.nytimes.com/2017/08/09/business/labor-department-fiduciary-rule.html">Labor Dept. seeks delay of consumer protection rule for financial advisors |&nbsp;</a><a href="http://www.nytimes.com">The New York Times</a>



Regulators are seeking to delay the deadline for financial advisors to fully comply with a rule that would require them to act in their customers’ best interest, according to a federal court filing earlier this month. [<a href="https://www.copera.org/retirement-roundup-long-1-million-last" target="_blank" rel="noreferrer noopener" class="broken_link">Read more</a> about the federal rule as it was first introduced in April, 2016.]



<a href="https://www.nytimes.com/2017/08/12/business/why-the-dow-isnt-really-the-stock-market.html">Why the Dow isn’t really the stock market |&nbsp;</a><a href="http://www.nytimes.com">The New York Times</a>



The <a href="https://content.copera.org/retirement-roundup-pensions-taxpayers/" target="_blank" rel="noreferrer noopener">Dow Jones</a> Industrial Average, the oldest and best-known measuring stick for the American stock market, has risen more than 18 percent over the last 12 months, a spectacular return. Meanwhile, the <a href="https://content.copera.org/retirement-roundup-pensions-taxpayers/" target="_blank" rel="noreferrer noopener">Standard &amp; Poor’s 500-stock index</a>, the benchmark for large companies used by many stock professionals, has been far less impressive, with a gain in the last 12 months of a little over 12 percent.&nbsp; To a surprising extent, the divergence depends on just two stocks, Apple and Boeing, and on the ways in which the two indexes are constructed. The Dow is an old and simple index, including only 30 stocks that are weighted by price, meaning that the highest-priced share of a stock – which happens to be <a href="http://www.boeing.com/" target="_blank" rel="noreferrer noopener">Boeing</a> at the moment – has the greatest sway in the index. The S.&amp;P. is known as a “market-weighted index” and is used by professionals much more widely than the Dow.



<a href="http://www.marketwatch.com/story/why-loneliness-is-more-dangerous-than-obesity-2017-08-10">Why loneliness is more dangerous than obesity |&nbsp;</a><a href="http://www.marketwatch.com">MarketWatch</a>



Loneliness is just as much of a public health hazard as obesity, according to research presented at the American Psychological Association annual conference. Research from a large number of studies showed people who had greater social connections had a 50 percent reduced risk of dying early, and social isolation, loneliness or living alone each played a significant role in premature death. Over 42 million Americans over the age of 45 suffer from chronic loneliness, according to the <a href="http://www.aarp.org/research/topics/life/info-2014/loneliness_2010.html" target="_blank" rel="noreferrer noopener">AARP</a>. People that considered themselves lonely were less likely to engage in social activities, such as going to religious services, volunteering or finding a hobby. (The AARP <a href="https://content.copera.org/retirement-roundup-pensions-taxpayers/" target="_blank" rel="noreferrer noopener">promotes group activities</a> for seniors.)

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Retirement Roundup: The tax move every retiree should make right now

Retirement Roundup: Interim CEO Baker tapped to join institutional investor group

Retirement Roundup: How Long Will $1 Million Last You?

Retirement Roundup: Pensions Benefit Taxpayers

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