Retiring wasn’t easy — even after years of writing about it

A couple of years ago, I wrote a column about how to have a retirement worth saving for. It ended with a quote from personal finance educator Barbara O’Neill, who reflected on how the pandemic disrupted many retirees’ plans.

“It wasn’t just two years lost, it was two good years,” O’Neill said then. “You don’t know how many of those you have left.”

One of my younger colleagues objected to that sentiment, saying it was a jarring ending to an otherwise upbeat column. But my older co-workers got it. Those of us who currently have good health and energy don’t know how long those blessings will last. There’s no guarantee we’ll get to enjoy the retirements we have planned.

That lesson was driven home in July 2023, when a longtime colleague died at age 61. We’d had many talks over the years about the retirement he had envisioned. It’s heartbreaking that his dreams will never happen.

But his death was the push I needed to make my own decision. By the time you read this, I will have retired from my job at personal finance site NerdWallet.

In my latest for ABC News, learn how I made the decision to retire.

This week’s money news

This week’s top story: Smart Money podcast on using AI to budget and save and debit vs. credit card pros and cons. In other news: What the 2024 Social Security COLA could mean for your retirement, what parents of college students need to know about new FAFSA, and first-time home buyer affordability report.

Smart Money Podcast: Using AI to Budget and Save and Debit vs. Credit Card Pros and Cons
Learn how to use AI for help with budgeting and saving money, then learn whether credit cards or debit cards are safer.

What the 2024 Social Security COLA Could Mean for Your Retirement
Social Security benefit amounts adjust for inflation every year; here’s how to make the most of those changes for 2024.

New FAFSA: What Parents of College Students Need to Know
The new 2024-25 FAFSA will have a greater impact on divorced parents, undocumented parents and those with multiple kids in school.

First-Time Home Buyer Affordability Report — Q3 2023
High mortgage rates sidelined home buyers and sellers alike in the third quarter, making the already lofty financial goal of homeownership potentially unattainable for would-be first-timers.

Why retirees may want to buy an immediate annuity now

An immediate annuity is an insurance product that provides guaranteed income: You give an insurer a chunk of money, and the company gives you a stream of payments that can last for life. The payments begin within 12 months of purchase.

Now may be a good time for retirees to buy an immediate annuity, since payouts are the highest they’ve been in a decade, says Rob Williams, managing director of wealth management at Charles Schwab.

But buying an immediate annuity — also known as an income annuity or a fixed immediate annuity — is effectively irreversible, so you’ll want to choose carefully.

In my latest for ABC News, learn why retirees may want to buy an immediate annuity now.

Don’t let your credit scores retire

Getting rid of debt before retirement is often a good idea. Getting rid of your credit scores? Not so much.

People who stop using credit also stop generating enough data to produce credit scores, the three-digit numbers used to gauge creditworthiness. Not having scores can make it harder and more expensive to get loans. Even if you’re sure you’ll never borrow again, lacking credit scores also can make insurance, cellphone plans and security deposits more expensive.

Fortunately, you don’t have to be in debt to have good credit scores. You do have to use credit, however. In my latest for the Washington Post, learn how not to let your credit scores retire.

This week’s money news

 This week’s top story: Smart Money podcast on spring-cleaning, and paying off different types of debt. In other news: What could happen if Congress doesn’t make changes to Social Security by 2035, mortgage could be harder to get in a credit-tightening era, and 4 tips for a meaningful and successful retirement.

Smart Money Podcast: Spring-Cleaning, and Paying Off Different Types of Debt
This week’s episode starts with tips for financial spring-cleaning.

Will Social Security Run Out?
If Congress doesn’t make changes to Social Security by 2035, benefits may be reduced. Here’s what could happen next.

Mortgages Could Be Harder to Get in a Credit-Tightening Era
Mortgage rates are likely to rise in April because of persistent inflation and stricter lending.

4 Tips for a Meaningful and Successful Retirement
From planning your days to preparing for your health, financial planners and other experts weigh in on how to make the most of your retirement.

How to spot a great 401(k)

Any 401(k) can help you save for retirement. A great 401(k) allows you to save a whole lot more.

The difference between a mediocre plan and a great one could translate into tens of thousands of dollars in future retirement money. Plus, a 401(k)’s quality can show how serious a company is about attracting and retaining good workers.

That’s not to say you should leave or turn down a job if it doesn’t offer a great 401(k). But knowing how to spot a best-in-class retirement plan can help you evaluate job offers, negotiate a raise to compensate for what you’re missing and perhaps encourage your employer to make its plan better. In my latest for the Associated Press, learn three features of great 401(k)s.

 

Thursday’s need-to-know money news

Today’s top story: 3 ways to fight inflation and win the long game. Also in the news: Why you shouldn’t bank on your business to fund your retirement, how to save on school supplies by tapping your community, and how to tell if a credit card annual fee is worth it.

3 Ways to Fight Inflation and Win the Long Game
Three areas where smart strategies become even smarter when prices are rising.

Don’t Bank on Your Business to Fund Your Retirement
A business failure, health issues or shifting market conditions can leave you unable to fully retire.

How to Save on School Supplies by Tapping Your Community
It’s that time again: back to school, back to spending so much money on supplies.

How to Tell If a Credit Card Annual Fee Will Pay for Itself
Annual credit card fees can be worth the cost, depending on your situation.

Monday’s need-to-know money news

Today’s top story: After a fall, crypto winter sets in. Also in the news: A new episode of the Smart Money podcast for kids on where money comes from, can job-hopping help retirement savings, and these states are having a tax-free back to school shopping weekend.

After a Fall, Crypto Winter Sets In
Cryptocurrencies hit a rough patch in 2022, with prices falling and some companies facing serious financial issues.

Smart Money Podcast for Kids: Where Does Money Come From?
This week’s episode we take on money questions from two kids, Ellington and Langston, who want to know where money comes from, where it goes after you spend it and how to decide how much you need to save.

Can Job-Hopping Help Retirement Savings?
Changing jobs often has its pros and cons, but understanding how it hurts or helps your retirement savings can help you make more informed decisions

These States Are Having a Tax-Free Back-to-School Shopping Weekend This Month
You may be able to purchase some of your supplies without involving Uncle Sam.

Q&A: Consider taxes before retirement

Dear Liz: I began converting two 401(k)s from previous employers to Roth IRAs. To lessen the huge tax hit, I decided to do the conversions over the course of seven years. Even with that, the tax hit is higher than I realized and too painful. Now that partial conversions have begun annually, am I required to complete the total conversion to 100%? Or can I stop midway and leave the remainder in the original accounts? Also, is there an age limit before which Roth conversions must be completed?

Answer: You don’t have to continue making conversions. (Before 2018, you could have even reversed conversions you already made, but that’s no longer possible.) There’s also no age limit for conversions, but the older you get, the less likely conversions are to make financial sense.

Conversions are a good bet if you expect to be in the same or a higher tax bracket in retirement. If you’re young and in a low tax bracket now, you can reasonably expect that to be the case.

As you approach retirement, though, the opposite may be true. Many people find their tax bracket drops once they retire. Why pay a big tax bill now if you can access the money at a lower tax rate later?

Then again, if you’re a good saver, you may discover you’ve accumulated so much that your tax bill will soar once you’re required to start taking minimum distributions at age 72. If that’s the case, then converting some of your retirement money might save you on taxes overall.

But you’ll want to discuss this with a tax pro or financial planner who can model how the conversions are likely to affect your overall finances, including any Medicare premiums, since those can increase with income.