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January 20, 2017

Penelope WangWith the inauguration of President Donald Trump, retirement investors may be feeling nervous as new policies and programs take shape. So here’s a timely reminder: A well-thought-out retirement plan will help you ride out times of turmoil, whether it’s a market downturn or Washington upheaval. Stay focused and take maximum advantage of all your opportunities to save and invest. Many employers are offering new tools and services to help you manage your 401(k), as well as your overall finances, which may be helpful. You can also review this checklist to make sure you’re on track to a comfortable retirement. Remember, you’re investing not just for the next four years, but for decades ahead—and staying the course with steady saving and a diversified portfolio remains the best strategy for achieving your financial goals.

Best wishes,

Penny

P.S. If you like this newsletter, please pass it on to a friend! And if you got it from a friend, sign up here to make sure you don’t miss the next issue.

THIS WEEK’S RETIREMENT NEWS, INSIGHTS AND ADVICE

5 Ways Your 401(k) Will Make You Richer by Retirement

You may not have noticed, but there have been a lot of changes in your 401(k). Your employer is pushing you to save more and invest better by offering new services and tools. Here’s how to make the most of them, as well as advice on when to overrule the autopilot settings. MONEY

How to Pick the Right Way to Save for Retirement

Retirement saving, like everything else, has become more complicated—you’ve got more accounts (IRAs, 401(k)s, HSAs) and different tax treatments to consider. Which accounts to fund first? Writer Robert Powell offers some guidelines. MARKETWATCH

5 Practical Steps for Creating a Retirement Backup Plan

You’ve got your goals—say, retirement by age 65 and enough income to travel a bit. But what if life intervenes—in the form of health issues or a layoff—and you retire earlier than you planned? There are ways to ease the blow, but it’s best to have a Plan B ready. CBS MONEYWATCH

3 Secrets to a Comfortable Retirement

The main goal in retirement is to avoid a drop in your standard of living when you stop working. How to avoid that? Contributor Walter Updegrave offers three key steps. My favorite: Learn to enjoy the small things in life. MONEY

2.8 Million Seniors Have College Debt

The number of Americans age 60 or older who are paying back student loans has quadrupled over the past 10 years, a report by the Consumer Financial Protection Bureau (CFPB) found. Many borrowers, who may have taken loans for their kids or grandkids, also face egregious debt servicing problems, which led the CFPB to file lawsuits this week against one major loan processor. SQUARED AWAY

The (Un)Importance of Social Security Full Retirement Age

When it comes to claiming Social Security, you’ve probably heard about waiting until what’s called full retirement age (FRA). It’s the traditional benchmark that’s used to calculate benefits. But as CPA and blogger Mike Piper points out, your FRA is less crucial than other considerations. OBLIVIOUS INVESTOR

Working ‘Til You Die Is a Lousy Financial Plan

No question, millennials face some big financial challenges right now, including paying off student debt and finding spare cash to put away for retirement. That’s probably why some young adults say they’ll never retire. Contributor Dan Kadlec explains why that’s a bad idea and how to get a start on retirement savings. MONEY

When Will You Be Ready to Call It Quits?

Choosing when to stop working is both a psychological and financial decision. Writer Bart Astor interviewed several couples about how they made that choice, and their answers may resonate with you. By the way, Astor has retired himself. NEXT AVENUE

After Retirement, Finding a "Second Career" as a Volunteer

Many older Americans choose to volunteer in retirement. But you’re unlikely to find many as dedicated as Anne Davis. At age 76, this former lawyer is coping with cancer and multiple sclerosis, yet continues to volunteer as a financial counselor to low-income clients. Inspiring. THE NEW YORK TIMES

YOUR RETIREMENT QUESTIONS ANSWERED

How Long Must I Keep All My IRA Paperwork for Taxes?

Q: We have been keeping all our IRA documentation since the IRS guidelines (to my understanding) say that you need to keep it forever. However, withdrawals from the IRAs that we have are all taxable income, so why is it necessary to keep the very old statements?

A: Record-keeping requirements are stringent for traditional IRAs, whose contributions are generally tax-deductible on the way in while withdrawals are taxable on the way out. “The paperwork you keep is to validate your claim of what’s taxable and what isn’t,” says Greg McBride, chief financial analyst for Bankrate.com. READ MORE

WORDS OF WISDOM

“What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as freedom should not be highly rated.

--Founding father Thomas Paine

ABOUT PENNY: Penelope Wang is editor at large at MONEY with a focus on retirement planning. A graduate of Swarthmore College and Columbia University School of International Affairs, she was recently ranked among the "top social influencers in personal finance and wealth." You can email her at retirewithmoney@moneymail.com and follow her on Twitter @PennyWriter.

 
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