Many Workers Have to Retire Earlier Than Planned. Here’s Why

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Retire with Money
Elizabeth O'Brien
Many Americans sensibly expect to retire at 65. In this country, that’s considered the traditional retirement age. It’s when you become eligible for Medicare, after all. But guess the median age when workers actually retire? Age 62, according to a longstanding survey by the Employee Benefit Research Institute. Some folks peace out of the workforce when they reach their financial goals ahead of schedule. But many others are forced to retire early due to layoffs, their own illness or that of a loved one. So it’s best not to count on working as long as you want to plug any savings shortfalls. If that works out, great. But it’s smart to have a Plan B. Learn more about what to consider in today’s edition.

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5 Essential Money Moves for May

It’s the last month to make 2020 contributions to your IRA and HSA.

This week in our Retire with Money Facebook group, members discussed umbrella insurance. A poster asked, “Is umbrella insurance worth buying or a scam?" Umbrella coverage sits on top of your existing insurance — auto, homeowners, etc. — and provides additional liability protection. It’s definitely not a scam, but whether it’s right for you is another question. Members were generally in favor. “I have one for $2mil. It’s certainly worth the $120 per year.” Another said she paid $300 for the same $2 million of coverage. Your costs will depend on your individual risk profile, where you live and other factors. My family has had an umbrella policy for about 10 years, and while we've never used it, it gives me peace of mind.
You have until May 17 to contribute to an IRA. Traditional IRAs give you the opportunity to help reduce your taxable income. Roth IRAs allow you to grow your potential earnings tax-free, and qualified withdrawals in retirement are also tax-free. You can also roll over your old 401(k)s to an IRA, so you have one centralized location for your retirement savings. With a Fidelity retail IRA, there are no account fees and no minimums to open. Act soon—you can still contribute up to $6,000 ($7,000 if you are over age 50).
Investing involves risk, including risk of loss.
Fidelity Brokerage Services LLC, Member NYSE, SIPC. © 2021 FMR LLC. All rights reserved. 964071.1.0
Why Investors Should Ignore the Old Wall Street Adage ‘Sell in May and Go Away’
“Any investment strategy that you can summarize in a rhyme is probably a bad strategy.” CNBC
Finding Your Purpose by Helping Nonprofits in the Pandemic
Meet three older adults who are sharing their talents and learn more about doing it yourself. NEXT AVENUE
5 Mistakes Couples Make When Planning for Retirement
Take the taboo out of the money conversation, and other tips. AARP
What Happens to Your Digital Assets When You Die?
Don’t neglect this important part of estate planning. KIPLINGER
Elizabeth O'Brien is deputy editor at Money. She has covered retirement and health care for nearly a decade. A Brooklyn resident and mom of two boys, she navigates the alphabet soup of Medicare and the New York City subway system with equal ease. You can email her at and follow her on Twitter at @elizobrien.

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