What the experts say

Saving your way to security

A decade of “power saving” can transform your retirement account, said Donna Rosato in Money. Research shows that nearly two thirds of so-called burst savers can “build a nest egg equal to at least 10 times their annual pay.” The crucial move is to save 15 percent or more of your income for at least 10 years. You can take the sting out of this extra saving by timing bursts to pay hikes or periods when your expenses fall, like when a grown child leaves home. Next, try to keep transportation and housing bills low; though reining in latte spending is important, big-ticket items are more likely to take your plan off course. Finally, try to supplement your income with side work that you’re passionate about. It might just lead to a fruitful, flexible retirement career.

The next bubble?

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Cash is flooding into dividend stocks, said Dan Kadlec in Time.com, and market watchers see signs of a bubble. Investors have plowed $16 billion into dividend-paying stocks this year, and are now paying 25 percent more for them than for classes of stocks that don’t pay. Because dividend industries like telecom and health care are seen as less vulnerable to market hiccups, they often attract investors in turbulent times. But “bubbleologists may be misreading” this latest frenzy. It’s mostly attributable not to safe-haven investors but to retirees “so desperate to secure an income stream that they have begun moving up the risk ladder” from bonds paying record low returns. And as long as interest rates remain low, that trend will continue, meaning “this bubble won’t burst for a while.”

Stop fretting over the market

Many people worry needlessly about the ups and downs of the market, said Carl Richards in NYTimes.com. If you don’t need your retirement money for the next, say, 20 years, the latest stock fluctuations shouldn’t keep you up at night. It’s usually best to tune out the daily market news, which can feed an urge for unnecessary trading. People with different investment time frames than your own can also lead you astray. Resist the “classic mistake” of projecting the recent past onto the future; next year’s market will not be like today’s. Stick to making investment decisions “based on what your time frame requires and not what the talking heads on TV are saying.” You’ll sleep far better.