Choosing the right age to claim Social Security benefits is crucial for retired individuals. However, a study reveals that financial advisors may guide clients toward options that benefit their own compensation rather than prioritizing client interests. While working with advisors can encourage delaying claims, it is important to select an advisor who fully understands the complexities of Social Security claiming to ensure an informed decision that maximizes lifetime income.
The U.S. government's I bonds, which are linked to inflation and offer a nearly risk-free investment, will now pay 4.28% annual interest until October 2024. The fixed rate makes them attractive for long-term investors despite falling rates. However, they may not be suitable for short-term savers with better options available.
The Dow Jones Industrial Average could soon reach 40,000, but experts warn of a potential market pullback and caution investors to be mindful of uncertainties such as the upcoming election. They advise diversifying portfolios and avoiding market timing. Younger investors may consider global holdings, while older investors should focus on income-generating assets. Despite concerns, experts emphasize that long-term market investments tend to rise over time.
Inflation is slowing, which means Social Security checks may not increase as much in the future. To prepare, retirees can:
* Earmark extra cash to stash away for emergencies.
* Take advantage of higher interest rates on savings accounts and certificates of deposit.
* Review monthly expenses and cut back where possible.
* Consider investments, such as annuities, to supplement income.
* Seek guidance from a financial advisor to plan for retirement needs.
Target-date funds automatically adjust portfolios based on age and retirement goals, aiming to simplify retirement planning. Passively managed funds offer low fees but may be too conservative for younger investors. Actively managed funds can be expensive. The age-based approach may not account for individual risk tolerance, and the funds may be inflexible for complex financial situations or those seeking customization.
Gold is considered a safe haven during economic turmoil, but its returns are historically modest compared to stocks and bonds. Experts suggest investing a small portion (less than 5%) of one's portfolio in gold as a financial safeguard, but it's unlikely to generate substantial gains during stable market conditions.
