I was having lunch the other day with a retired colleague and friend. We catch up periodically, filling each other in on our children’s activities and our lives. This time, he really wanted to spend some talking about the retirement experience.
He’s not your ordinary retiree. In his last several years with Vanguard, he studied for and passed all the Certified Financial Planner™ exams, because he thought it would be helpful personally and as an alternate career option.
We recently asked college students for their thoughts about retirement—when they want to retire, when they’ll start saving, and what they hope to do once they’re retired. Here’s what they told us.
According to a recent survey, more than 70% of participants in 401(k) retirement plans think they pay no fees on their accounts. Less than a quarter got the answer right, acknowledging that they do, in fact, pay fees.
It’s enough to drive true-blue Vanguard investors to despair. But before we give up entirely on our fellow investors, I’d like to suggest that there are some important issues here at play.
In my last post, I asked if you have a specific number in mind when it comes to saving for retirement, how you arrived at that number, whether you’re on track to reaching it—and, if not, what it would take to get you there.
Your response was tremendous, with more than 300 of you writing in. As Philip Moeller wrote in his blog, “the responses to Rinaldi’s blog post are uniformly thoughtful and heartfelt. Rinaldi learned a lot from them. So did I. So can you. Enormous amount of information, wise counsel, and guidance shared.”
We’ve just launched some new content on vanguard.com designed to provide insights into generating and taking income in retirement, and we’re interested in hearing your thoughts about it.
Our new web content is based on 3 ideas. First, if you’re comfortable with your existing portfolio, the question may be how to generate a reasonable income from your portfolio in a tax-efficient way. The process starts with redirecting income distributions (i.e., dividend and interest income) from taxable accounts into a cash buffer account, such as a money market fund. You would then direct withdrawals from tax-deferred accounts into that same cash buffer. Over time, you also need to think about how quickly you are “spending down” your savings.
