I read a couple of thoughtful articles this week about growing retirement savings and then using those savings the most effectively in retirement.
6 Strategies to Extend Savings Without Working Longer
While I’m not generally a fan of the “x reasons why” stories, I recommend this article to followers of the plot, particularly to the audience of Baby Boomers who have financial resources, but not enough to live off the investment earnings in retirement. Very few investors can simply “clip coupons” in retirement to make ends meet.
To develop the best retirement income plan, however, some of these strategies can be executed in combination. For example, proceeds from downsizing can be used in part to fund an annuity, which in turn is tax-efficient.
Planning ahead to maximize your retirement income requires maintaining a balance between earning more, spending less and reducing taxes whenever possible.
Beyond Auto-Enrollment: Decumulation and Retirement Income
Another thoughtful article about retirement income. It’s clear that plan sponsors need to do more regarding the 50% of the retirement plan that occurs when the 401(k) savings are turned into income.
DC plan participation rates, account balances increase
Retirement plan sponsors have tried to make it easy for employees to participate in their plans and save enough for retirement and their efforts appear to be paying off.
While it’s good news that participation and account balances in Defined Contribution (DC) plans are increasing, plan sponsors are still not addressing the retirement needs of their participants. What’s needed is the recognition, after all these years, that DC plans are a sorry substitute for Defined Benefit (DB) plans. It’s absolutely critical that plan sponsors take steps to DB-ize their plans or let employees do it on their own.