Kiplinger's Personal Finance

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I did the usual analysis of my projected cash flow in retirement and where Social Security would fit in (“From the Editor,” Jan.). The bird in the hand prevailed, and my wife and I both claimed at 66, the full retirement age for each of us. While I don’t expect to see an overt reduction in our benefits over our lifetimes, I do expect to see, more likely, covert reductions via means testing, a larger percentage of benefits being taxed, or adjustments to increases whereby low-dollar beneficiaries may get a higher percentage increase than high-dollar beneficiaries. Also, the taxes—or whatever you want to to call them—for Medicare Parts B and D based on income will also continue to erode benefits without actually “reducing” them. The Feds have enough smart people…

If you have more than a passing interest in investing, you’re probably familiar with Burton Malkiel and his modern investing classic, A Random Walk Down Wall Street. I’ve heard this book cited as a must-read my entire four-decade career in personal finance publishing. I am mildly surprised each time he updates it and does another round of author interviews, because it makes me think, Man, this guy must be at least 90. Random Walk, first published 50 years ago, just came out in its 12th edition—and Malkiel turns 91 this year. Senior associate editor Kim Clark recently interviewed Malkiel to find out what’s new in the book and what’s been on his mind lately (see page 32). Doubling down on indexing. When the first edition was published, index funds weren’t readily available…

HOURS BEFORE HUSTLING OUT of town in December, Congress passed a federal spending bill that includes SECURE Act. 2.0, a potpourri of provisions that could affect the way you save for retirement and manage your nest egg after you stop working. New distribution rules. In 2023, the starting age for taking required minimum distributions from traditional individual retirement accounts, 401(k)s and other tax-deferred plans increases to 73, up from 72. In 2033, the starting age will increase to 75. The change means that individuals who turn 72 this year will get a one-year delay in RMDs, says Tim Steffen, director of advanced planning for Baird. (Technically, you can wait until April 1, 2025, to take your first RMD, but that means you’ll need to take two RMDs in 2025.) The legislation isn’t…

Starting in 2024, employers can make a matching contribution to an employee’s retirement plan account based on the individual’s student loan payment amount. This change is designed to address concerns that student loan payments prevent young workers from saving for retirement. Beginning in 2027, the Saver’s Credit, which is designed to encourage low-income workers to save for retirement, will be simplified. Eligible individuals will receive a credit of up to 50% of the first $2,000 contribution to an IRA or other retirement plan. Instead of reducing the individual’s tax bill, the credit will be deposited directly into a retirement account. Starting in 2024, employers will be allowed to offer employees a Roth-like emergency savings account of up to $2,500 a year, which could include matching contributions. Employees will be permitted…

Andrew Hartnett is deputy commissioner of the Iowa Insurance Division and president of the North American Securities Administrators Association (NASAA), which represents state securities regulators and advocates for investor protection and education. Protecting seniors from fraud and exploitation is part of NASAA’s mission. What types of scams are targeting seniors lately? States and the Commodity Futures Trading Commission have brought several actions against sellers of precious metals who were using fear to convince investors to move their retirement savings to self-directed IRAs and use the funds to buy precious metals coins. The sellers did not disclose large mark-ups on the coin prices, and the states and the CFTC alleged that the investors might lose one-third to one-half of their retirement savings just by saying yes. We also continue to see classic…