Retirement

Retirement

Currently, pension savings are not used for estate valuations when calculating IHT charges when someone dies. This means money left in a pension can be passed on without worrying about generating a tax bill. But from the new tax year in April 2027, pensions will be included in estate calculations. This creates a higher chance of pushing the value of an estate above the IHT threshold, currently 325,000.

Aggressively invest in high-yielding stocks and reinvest the dividends continuously until you consider retirement. After all, each reinvested dividend payout buys you more income-producing shares without any out-of-pocket expenses. Better, by doing so, you're compounding the earnings and expediting the growth of your portfolio.

At 2.16% annual inflation, purchasing power erodes slowly but steadily. Using the 4% withdrawal rule, $800,000 supports roughly $32,000 per year in initial withdrawals, adjusted annually for inflation. The critical nuance: withdrawing 4% during the first 7 years exposes you to sequence-of-returns risk. A 20% market drop in year one means selling assets at depressed prices, permanently reducing recovery potential.

A 65-year-old man today can expect to live to 84 years old, while a 65-year-old woman can expect to live until 86. For plan sponsors and advisers, that translates into a potential distribution horizon of at least 20 to 30 years. Without incorporating realistic longevity assumptions into glide path design, withdrawal strategies and income solutions, participants face a heightened risk of outliving their savings.

Social Security benefits rose by 2.8% in January 2026, adding roughly $56 per month to the average retiree's check. Year-over-year inflation is running at 2.2%, which means the COLA is actually outpacing current price increases by a small margin. The catch is Medicare. Medicare Part B premiums increased in 2026, and since those premiums are deducted directly from your Social Security payment, some of that $56 gain disappears before it reaches your bank account.

He said that while many people set target retirement ages, people in the FIRE movement set target portfolio numbers. Unfortunately, he believes this is "inherently riskier" because you're biased towards being exposed to risk as long as possible to help your wealth grow quickly - unlike people who usually rebalance their portfolios and shift to safer assets as their retirement age nears.

The Schwab US Dividend Equity ETF (SCHD) is an exchange-traded fund managed by the professionals at the Schwab Asset Management team. It invests in a basket of individual stocks and tracks the Dow Jones U.S. Dividend 100 Index. This index tracks the returns of high-yielding dividend stocks that show a consistent record of payments and are fundamentally strong.

When I was 22, my grandmother died. She was my favorite person. She didn't have a lot of money, but each of us grandchildren got a check for $3,000 from the will. I really, really wanted to do something special with that money, something to honor my grandmother, but I was young and dumb and broke, and it evaporated into rent and burritos and drinks and cigarettes and all the other "necessities" of my young, dumb 22-year-old life. I have had an "IOU" to myself for that money ever since and promised myself that one day, when I had an "extra" $3,000, that would be "grandma's money," and I'd do something special with it.

In an era in which "get rich quick" schemes involving cryptocurrency and day trading dominate social media feeds, a quiet army of everyday workers is building substantial wealth using a strategy that is remarkably boring-and effective. According to financial expert and best-selling author David Bach, recent data reveals a specific asset allocation formula shared by hundreds of thousands of retirement account millionaires: the 70/30 rule.

The tax-free growth advantage compounds dramatically over time. A modest S&P 500 investment from a decade ago would have nearly quadrupled in value. The real difference emerges at withdrawal, where a taxable account surrenders roughly 15% to capital gains taxes while a Roth account preserves every dollar. That difference doesn't just represent savings-it represents money that stays invested and continues compounding in your favor, creating a widening gap between the two account types over decades.

Silver just delivered one of its worst weeks in recent history. The iShares Silver Trust ( NYSE:SLV) plunged 35.6% to around $68, erasing months of gains in just five trading days. The speed and severity of the collapse has retirees asking whether this represents a rare buying opportunity in precious metals or a warning sign that commodity exposure doesn't belong in retirement portfolios.

A traditional IRA allows you to contribute with pre-tax dollars and pay taxes on withdrawals in retirement, while a Roth IRA allows you to take tax-free withdrawals as a retiree, although you will have to contribute with after-tax dollars. Provided your income isn't too high, you can make tax-advantaged contributions to these accounts this year, up to a total limit of $7,500 if you're under 50 or a limit of $8,600 if you're 50 or older and eligible for catch-up contributions.

What gets glossed over in most of these conversations is taxes, as everyone focuses on the accumulation phase by maxing out your 401(k), funneling money into accounts like the Vanguard Total Stock Market Index Fund, and watching your net worth compound. However, when you retire early and need your portfolio to generate income, the tax bill can be significantly higher than you planned for, particularly if most of your money is in tax-deferred accounts or you've accumulated large unrealized gains in taxable accounts.