Retirement: Planning a financial future

If you’re self-employed, don’t count on retiring anytime soon, said Elaine Pofeldt in CNBC.com. Many business owners “have trouble committing to saving regularly for retirement because they have an unsteady income or need to invest in their business.” They don’t reap the benefits of corporate 401(k) programs, such as matching contributions from employers or automatic contributions. And since “many entrepreneurs take full advantage of business-related write-offs to reduce taxable income,” their Social Security payments—and therefore their benefits—are often reduced. That’s why business owners, freelancers, and self-employed professionals “who are slow to save for retirement” might want to keep a close eye on their statement from the Social Security Administration, so they’re not shocked by the meagerness of their benefits when they begin to collect them.

You won’t be alone if you do delay retirement, said Constantine von Hoffman in CBSNews.com. According to a new poll, 82 percent of workers 50 and older say “they are somewhat likely to work well into their golden years” One in four is saving nothing for retirement beyond Social Security. Good luck with that. “While the exact amount needed for retirement depends on the individual,” experts say you should aim for between eight and 11 times your annual earnings. If you’re trying to boost your savings, one tip for workers with 401(k)s is to be more proactive in managing your retirement plan’s investment portfolio.

Luckily, there are services to help you plan for retirement, said Kelly Greene in The Wall Street Journal. Many 401(k) administrators offer online income-estimation tools you can use to calculate the amount of income you will need for retirement, how much you can expect to generate from your savings, and how much you should start putting away. Some companies are now offering annuity-based plans, providing guaranteed lifetime incomes to retired workers. But these plans can have drawbacks: They’re typically more expensive and can’t be rolled over to a new employer’s plan.

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Some advisers are pushing a novel way to turn retirement money into seed capital for new businesses, said Paul Sullivan in The New York Times. Enterprising retirees can convert their 401(k)s into “rollovers as business startups,” or ROBS. But beware: Those attempting this complicated conversion risk “running afoul of the Internal Revenue Service or the Department of Labor.” And consider that the failure of a new venture funded with those funds triggers the “triple-whammy loss of a person’s retirement savings, the business, and a source of income.”