Over the past few years, economists have expended a lot of time and energy attempting to explain what they call ” the annuity puzzle.” The puzzle is this: A guaranteed lifetime income is a valuable thing (especially if it comes with regular cost-of-living adjustments), and people who receive one through a traditional state or corporate pension are generally very happy with it.
Strong negative reaction to a prominent investment adviser’s offensive remarks at an industry conference earlier this week could signal a change in what kind of language and atmosphere will be tolerated at such gatherings. Ken Fisher, founder of Fisher Investments, reportedly laced his fireside chat at the Tiburon CEO Summit in San Francisco with references to genitalia, seducing women and taking drugs, among other awkward topics.
As we approach the end of our working lives, it’s natural to look forward to having more free time and perhaps finally getting around to doing some things we’ve always wanted to do. It’s also natural to worry about whether we will have enough money throughout our retirement.
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Tax-deferred retirement accounts are a great place to tuck away money for your later years. Your dollars can grow without having to pay Uncle Sam, and the power of compounding works to your advantage. But don’t forget that the tax man cometh, and the IRS will be looking for its share of your retirement pot once you turn 70 1/2.