In 1841, Ralph Waldo Emerson wrote an essay called, “Self Reliance”. The title tells you all you need to know about the author’s take on how individuals should conduct their affairs and live their lives.
A few years ago, the author of an article called “What 30 Years of 401k Mistakes Teach Us” shared some research that said that less than 42% of Working Americans have ever attempted to estimate how much money they will need to last during the 20-30 years they may live after they turn 65 and stop working full time (commonly referred to as “retirement”). The question that naturally arises from the above observation is, who do these 42% of Americans expect to look out for them financially when they reach retirement age?
Clearly, through social security and other kinds of federal and state-sponsored retirement plans, government agencies will play a role. But Emerson would suggest the larger role should be played by the individual and so would the author of the 401k article mentioned above. He had the following advice:
"Don't waste another weekend without taking the time to calculate what you will need in terms of retirement income during the 20-30 years you will likely live in retirement and compare that estimate with what assets/retirement income you will likely have in retirement and make any necessary lifestyle changes immediately!"
Sounds like good advice. Let us know if you need help.
Thing Two
Good States For Your Golden Years
Income from retirement plans (401ks, 403bs, pensions, etc.) is typically taxed at the federal and state level, but the following states exempt retirement plans and social security income from state taxes:
Alaska, Florida, Illinois, Mississippi, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wyoming
Certainly, this is subject to change. For anyone paying attention to the ever-mounting debt burdens at the state and federal levels, it’s clear that taxes will have to rise over time. So retirement income may or may not remain sacred in that regard. But for now, at least, it is sacred in these states. So if you or someone you know is considering a change of scenery at retirement and retirement income is a key consideration, these states should be on your list.
