Here's how much you have to save every month to retire with $750,000

Register now

Our daily roundup of retirement news your clients may be thinking about.

Here's how much you have to save every month to retire with $750,000
A 20-year old client would need to set aside $239 per month in order to save $750,000 by age 67, according to this article on CNBC. A 50-year old client would have to save $2,123 monthly, according to the article, which cited data from personal finance website NerdWallet and assumed a 6% average annual return. "The difference between starting at age 20 and starting at age 50 is striking. Someone who consistently saves from age 20 is able to build a $750,000 balance by saving nearly 90% less per month than someone who gets a later start at age 50," says an analyst with NerdWallet.

Guess how many working Americans have less than a year's worth of income saved for retirement
Data from the National Institute on Retirement Security show that 80% of American workers have saved less than a year's worth of salary for their golden years, according to this article from personal finance website Motley Fool. Data also show that 57% of workers have not socked away any savings in a 401(k) or similar employer-sponsored retirement plan. Clients who are behind their retirement savings goals are advised to make the most of their 401(k)s, max out their IRA contributions and consider investing in a taxable brokerage account, which can also help build wealth even without the tax benefits.

Smart strategies for giving to charity
Retirees who want to donate to charity will have to change their strategies under the new tax law to continue getting the tax breaks, according to this article on Kiplinger. For example, seniors who are at least 70½ have the option of donating directly to charity via a qualified charitable distribution. The QCD will be counted towards their required minimum distribution and will be excluded from their taxable income. Other options are using donor-advised funds and donating appreciated stock.

Opinion: These are the bad things about early retirement that no one talks about
Seniors are very likely to suffer an identity crisis for a longer period if they decide to retire early, writes an expert for MarketWatch. Early retirees are highly likely to suffer depression and disappointment, and could end up being a social outcast, writes the retiree. "Early retirement can get extremely mundane and boring because you have nobody to spend time with. As a result, you’re repeatedly forced to will yourself into action."

What is an inherited IRA? Distribution rules and examples
Non-spouse beneficiaries of an inherited IRA have the option of cashing out the assets, according to this article on TheStreet. The proceeds will be subject entirely to ordinary taxes, and many heirs decide not to withdraw all the inheritance to avoid triggering a hefty tax bill and consequently moving to a higher tax bracket. A more tax-efficient strategy is the "stretch option," which allows the beneficiaries to withdraw the inherited assets over a period based on life expectancy.

This article originally appeared in Financial Planning.
For reprint and licensing requests for this article, click here.
Retirement education Charitable deductions Philanthropy IRAs 401(k)