"Participation in retirement savings plans is highly unequal across income groups," the EPI reports. "In 2013, nearly nine in 10 families in the top income fifth had retirement account savings, compared with fewer than one in 10 families in the bottom income fifth."

While retirement inequality is growing, the EPI notes, the good news is, you don't need a lot of money to start investing and building your nest egg. A simple starting point is to contribute to your 401(k) plan, if your employer offers one. Regardless of whether you have a retirement savings plan at work, you can contribute to other tax-advantaged accounts designed for retirement, such as a traditional IRA or Roth IRA.

Even if you're only comfortable with setting aside one percent of your paycheck, it's better to start there than to not get started at all.

After all, that's what self-made millionaire and author of "The Automatic Millionaire" David Bach did.

"I was in my mid-20s, and I wanted to make sure it didn't hurt," he writes of the first time he started paying himself first. "Within three months, I realized that 1 percent was easy, so I increased the amount to 3 percent."

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How much the richest Americans have saved for retirement - CNBC

by Anna Bahney @annabahney August 2, 2017: 11:38 AM ET

On a recent Wednesday afternoon, 29-year-old J.P. Livingston sat at an outdoor cafe in New York's West Village, wrapped in a cozy sweater, sipping tea and talking about her current project: retirement.

Livingston says she quit the workforce last year with $2.25 million after working in finance for only 7 years.

Let the Baby Boomers have their "retirement," with its delayed gratification and uncertain benefits, say an increasing number of young people like Livingston. Instead, they are gaming their income, saving rates and investments to become financially independent and retire early -- a process known as FIRE.

While Americans commonly spend most of what they earn and fall short on traditional retirement savings, today's young people are the first generation to plan for financial freedom: 63% of affluent Millennials prefer financial freedom over retirement, while 37% are saving to leave the workforce altogether, according to a study from Merrill Edge.

Anyone can achieve financial independence simply by saving a lot. Most people who are able to quit the workforce at a very young age do it by saving at least half their income.

And Livingston sets the bar pretty high. She saved at least 70% of everything she made for 7 years. And she chose a career -- and a city -- that would help her do that by maximizing her income, despite the high cost of living.

She had a mission. What else would you call it, when you start planning your retirement as a teen?

"I've wanted to be financially independent and retire early for years," Livingston said, recalling wandering around bookstores as a tween and being drawn to books on early retirement.

Related: How to become financially independent in 5 years

Sure, she had a few things going for her -- more than most: She managed to graduate from Harvard University in three years with no debt and some savings. She also landed a very high-paying job in finance that came with a six-figure income that increased exponentially over time. And she had a plan that made it possible for her to reach financial independence before she and her husband started a family and expenses inevitably grew. (A new project for her retirement: having a baby. She recently learned she's pregnant.)

But her nest egg is self-made. Even though her husband still works, Livingston's own savings are enough to cover both their living expenses -- around $67,000 per year -- for the rest of their lives.

"I came from a family that grew up really poor," said Livingston, who now writes under that pen-name on her blog about retiring early, TheMoneyHabit.org. "My family constantly reminded me that it was important to focus on providing for yourself." She prefers to remain anonymous to protect her privacy in revealing sensitive financial information. (CNNMoney has independently confirmed her identity.)

Livingston's fast-track to financial freedom was strategic, with each stage building on the next. First, she focused on her income, then on building her savings, followed by investment growth. Now that she's reached retirement, she's focused on tax optimization.

Here's how she did it.

Super-charge your income

Instead of moving to an area with a low cost of living (an easy way to slash expenses) Livingston doubled down on New York City.

"You can find the best job opportunities here," Livingston said. "I couldn't have found my job in Omaha, Nebraska. Maybe in Chicago, but I'd be paid less. I was paid the most here."

She worked hard to continually boost her income, which came through salary, raises, bonuses and commissions. When she first started working she was earning six-figures right out of the gate. Her starting salary was $60,000, plus incentives, which could easily double her yearly pay. But it only went up from there. Over the years, she increased her salary significantly, earning promotions with raises upwards of 30% along the way. By the time she quit her job, her paycheck was in the mid-six-figures.

Related: This couple is on track to retire -- before they turn 40

A major feather in her cap was not having any debt, especially student loans.

"I was very aware of how expensive Harvard was," said Livingston. "I decided I should just get out early." She paid for school through scholarships and her family's savings. Graduating early allowed her to avoid paying additional expenses and move directly into earning an income.

Even if you go to a less expensive school, she says, if you can get it together to graduate a year early, you can avoid taking a loan for that year or, if you have the savings, "you can park that $20,000 in the market and start earning."

Crank the savings rate sky-high

Livingston's hard-core formula to reach a 70%-plus savings rate: income minus expenses equals savings.

When friends called her to go out, she'd steer them toward the most affordable social engagements: "I'd love to see you! Can I join you for drinks after? Or are you free for brunch?"

In addition to offering her a high income, New York's higher density offered her ways to save. She was able to live car-free and found that higher earning people getting rid of great stuff led to super deals on Craigslist or curbside.

"We had a gorgeous, pristine storage bench my roommate found on the street with a 'free' sign on it," she said. "It was one of the nicest pieces of furniture in the whole apartment."

She also had a broad choice of living situations. She opted for a third-floor walk-up where she had a mattress on the floor and paid $1,100 a month, her first year out of college. After that she moved to a 325-square-foot fifth-floor walk-up where she still lives with her husband and dog.

While building up her savings she started out living on $25,000. Even as her salary grew, her spending only went up to $30,000 a year.

"Incremental improvements that you build into your routine will pay out not just once, but it will pay off multifold," says Livingston. Lowering your rent by adding another roommate, saying you'll only meet friends for brunch, coffee or drinks (as opposed to more expensive dinners), "that will keep paying off for you year after year."

Grow the money

But you're not going to get to $2.25 million just by skipping a few dinners. About 60% of Livingston's net worth came from savings, and about 40% came from investing, primarily in a combination of low-cost index funds, options and municipal bonds, depending on the market.

Her expertise in the financial industry certainly helped juice her investment returns.

Once your savings are substantial, she says, the tweaks you make to your investments will have much more impact than any changes to your spending or saving habits.

For example, if you earn $70,000 a year and have regularly saved a significant portion for a few years, you may have between $120,000 to $150,000 in savings. If you can get a 10% return on your investments, you'll add $12,000 to $15,000 to your savings.

Among the proponents of FIRE, who support each other on various spaces on-line, Livingston's accomplishment is called "Fat FIRE," which is like FIRE, but with much bigger monthly budgets, and therefore much larger nest eggs.

She and her husband now live on $67,000 a year, an annual budget others on the path to FIRE may balk at as very high.

"That buys us a lot of cushy luxuries which include maid service and sending laundry out," she said. "We skimp on a lot of things, but those actually end up being quite affordable in Manhattan because of the density, and are offset by the cheap rent we pay." Plus: they don't have a washing machine.

While her expenses are completely covered by her savings, her husband still works, but by choice.

These days Livingston is working on growing her money and helping others to do the same through her blog.

"The you that is intentional with your money and constantly looking for improvement will be that much wealthier than the one that isn't, whatever your starting circumstances may be."

CNNMoney (New York) First published August 2, 2017: 11:38 AM ET

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She retired at 28 with $2.25 million - CNNMoney

Individuals in the United States face pressing challenges when it comes to saving for retirement, according to a study by the International Longevity Centre-UK (ILC), supported by Prudential.

The research found that in order to secure a comfortable retirement, Americans now must save between 11% and 18% of their annual income. If individuals today fail to save, they would face a projected intergenerational gap of $10,000 a year or 20% of earnings.

However, the ILC says several changes can be made to reverse this trend. These include increasing private pension coverage and contributions. While the former would rely on a political victory, the latter may depend on how effective those in the retirement services industry are in helping participants manage their finances in order to save more for retirement. Another task would be encouraging participants, especially younger ones, to start saving as soon as possible.

The ILC notes that With increasing emphasis on personal responsibility for retirement planning, people will need to be able to understand the benefits of deferring consumption for a later date, the value of investing in assets other than cash, the importance of asset diversification, and the virtues of buying some form of longevity insurance at the point of retirement.

These efforts can be facilitated through soundfinancial wellness programs. Considering the national student loan debt is at a record high, participants young and old can benefit fromstudent loan repayment assistance. And while products such asannuitiesare gaining considerable notice in the industry, they remain complex contracts for many Americans. Thus, robust and targeted education is also an essential piece to closing the intergenerational savings gap.

These tasks are ever more important as the firm points out that public expenditures on Social Security in the U.S. is relatively low as a proportion to Global Domestic Product (GDP). Moreover, the pension system itself seems to be diminishing in the U.S. The report found that only 28% of those earning at least $75,000 a year are saving in a pension, and that figure drops to 3% when it comes to those making $25,000 a year or less.

Getting people to save more in their pensions can also be assisted by plan design tweaks. Much research in the defined contribution space points to thebenefits of automatic featureslike auto enrollment and auto escalation.

The ILC states Two public policy options look to be particularly successful in this regard, one which compels people to save as per the Singaporean, Hong Kong and French systems and another which nudges people to save as per the UKs auto-enrolment system. Simply hoping that people will save is unlikely to be sufficient. Furthermore, an opt-out option to automatic features can prevent significant backlash from employees not interested in saving. But with that regard, education and financial wellness can come into play in order to spread awareness of the importance of saving, while boosting participation.

The ILC concludes that Raising capability does not just happen overnight. This must be supported by a financial advice market that works for the many and not the few, in conjunction with new advice models that utilize technological advancements such as robo advice to make advice more accessible, understandable and cost effective. Finally, there will always be people who are inert and do nothing in the face of complex decisions. Good product defaults that avoid the worst outcomes will be important in this regard.

"The Global Savings Gap" by ILC- UK can be downloaded atilcuk.org.

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Sound Advice Can Propel Retirement Savings Contributions - Planadviser.com

You can be a master at planning, but then life happens.

This week, I wanted to focus the newsletter on a retirement scare that many people dont anticipate: What if you have to retire sooner than you planned?

Only 54 percent of Boomers have retirement savings, according to a report by the Insured Retirement Institute.

Although thats a scary statistic many people manage figure out how to retire with less than they planned. An email from Cynthia Smith of Lawrence, Kan.,is an example of someone forced into early retirement but made the numbers work.

I am retiring from my career in a legal specialty, but not by choice, Smith wrote. I was laid off in a merger in 2012 when I was already in my 50s. I moved away from my spouse (we are childless) to take the only job offered in almost three years of actively looking, but it was also eliminated after only one year. Even though I have a stellar resume, a great network and was a finalist for many jobs, in my late 50s I couldnt compete with younger, qualified people for jobs in my field.

Smith goes on to write, Besides juggling the finances, I think I have done a pretty good job making the best of unplanned early retirement. I gave myself license to spend some money on travel, golf, volunteering and other retirement activities, even though I thought I would still be working at my age. The retirement calculators show we should not run out of money, even if one of takes Social Security at 62. The thing I miss most in unplanned early retirement is being generous with our money, spending freely on family and friends and charitable causes, which we dont do anymore because my income didnt continue like we had expected.

Douglas Keder of Vancouver, Wash.,also found himself retired sooner than he had planned. He was forced into retirement unexpectedly at age 54.

While on vacation in 2015 I was enjoying one of my favorite hobbies, hiking in the mountains, when I had a very bad heart attack, Keder wrote. After some testing it was determined that the lack of oxygen caused damage and I would never work again. I was put on disability. Im just fortunate that I had over 36 years of railroad service, therefore my disability pays almost as much as retirement. We have downsized and are able to get by. It has been a wild and uncontrollable journey, but I am loving life. We do a little traveling. And I now have more time for my hobbies, mostly hiking and photography.

I believe we can learn from other peoples experiences, so the recommendation to read the following articles comes from Smith and Keders testimonies.

5 Ways to Handle a Forced Early Retirement

What Retirement Will Look Like Without Savings

Be sure as you plan for retirement or continue to assess your needs in retirement that you factor in health care costs. Eighty-two percent of Baby Boomers underestimate the percentage of their income theyll need to pay for health care, according to the report from the Institute.

Medical costs for retirees still rising

Im interested in your experiences or concerns about retirement.

Did you retire early and if so, how did you do it?

Is retirement everything you hoped for?

Are you scared youll run out of money?

Sharing your storymight help others. So send your comments to colorofmoney@washpost.com. Please include your name, city and state. In the subject line put Retirement Rants and Raves.

Retirement bloggersI believe that wealth happens intentionally and that means for me reading as much as I can about all things financial, especially retirement.

In this section of the newsletter, Ill feature postings from various retirement blogs.

In Smiths testimony she mentioned that she used some calculators to determine if she and her husband would run out of money. The report from the Insured Retirement Institute found that only four in 10 Baby Boomers have tried to calculate how much they need to save to retire, and of these, only six in 10 included estimates of health care costs in their calculations.

Squared Away blogger Kim Blanton tested three retirement calculators. Try one or all of them. Cant hurt.

Read: Retirement Calculators: 3 Good Options

Newsletter comments policyPlease note it is my personal policy to identify readers who respond to questions I ask in my newsletters. I find it encourages thoughtful and civil conversation. I want my newsletters to be a safe place to express your opinion. On sensitive matters or upon request, Im happy to include just your first name and/or last initial. But I prefer not to post anonymous comments (I do make exceptions when Im asking questions that might reveal sensitive information or cause conflict.)

Have a question about your finances? Michelle Singletary has a weekly live chat every Thursday at noon where she discusses financial dilemmas with readers. You can also write to Michelle directly by sending an email to michelle.singletary@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writers name, unless otherwise requested. To read more Color of Money columns, go here.

If you are reading this newsletter online you can it automatically sent to your inbox. Sign up for Michelle Singletarys free newsletters: Your Retirement on Mondays & Personal Finance on Thursdays http://wapo.st/personalfinance

Read & share Michelle Singletarys Color of Money Column on Wednesdays and Sundays: http://wapo.st/michelle-singletary

Follow Michelle Singletary on Twitter (@SingletaryM) and Facebook http://www.facebook.com/MichelleSingletary

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How would you handle a forced retirement? - Washington Post

Seniors are working at the highest rates in 55 years, according to a recent U.S. jobs report. Sean Dowling (@seandowlingtv) has more. Buzz60

retirement plan label on document folder(Photo: cacaroot, Getty Images/iStockphoto)

Decades ago, saving for retirement was fairly easy. You set aside 10% of your income in a taxable account. But over the years its become especially complicated given the many ways we can now save for retirement.

In addition to taxable accounts, we now have traditional IRAs, Roth IRAs, traditional 401(k)s, Roth 401(k)s, health savings accounts or HSAs, and all sorts of annuities including, qualifying longevity annuity contracts (QLACs) and deferred income annuities. Plus, retirees can generate income from any number of resources, such as a reverse mortgage or cash value life insurance, when the time comes to fund their living expenses.

To be sure, many experts are focused on helping retirees determine the most tax-efficient way to generate income in retirement from their various accounts, investments, and products, in combination with other sources such as earnings, Social Security, and, for some, a defined benefit plan.

But experts are starting to help pre-retirees learn how to prioritize their savings, learn how to save in the most tax-efficient way possible given all the various accounts, products, strategies and tactics.

And the reason is simple. Some dollars given all the different ways you can save on a pre-tax and after-tax basis, given your marginal tax rate in the year you contribute to your retirement account and your withdrawal year tax rate are worth more than others in retirement.

For instance, you might need to set aside twice as much money in a taxable account as you would in an HSA to generate the same amount of income in retirement. Thats because money goes into a taxable account after taxes and distributions are taxed at the capital gains rate. By contrast, money goes into an HSA pre-tax, grows tax-free, and withdrawals used for qualified medical expenses are tax-free.

Unlike 401(k)s, HSAs are quadruple-tax advantaged, said Keith Whitcomb, director of analytics at Perspective Partners. There are no payroll taxes on employee contributions. The money contributed reduces taxable income. It grows tax-free. And withdrawals are tax-free as long as they're used for qualified health expenses. This means HSAs can have a big impact on long-term retirement savings.

Conventional thinking, however, is that HSAs are for high deductibles and that 401(k)s are for retirement, said Whitcomb. This approach can be costly because paying for retirement medical expenses with 401(k) funds may be more expensive than using HSA funds, he says. For example, to get the same after-tax spendable amount in retirement, for every $1 deferred into an HSA it could take $1.44 deferred into a 401(k).

There are, of course, some rules of thumb to follow when thinking about how best to prioritize your retirement savings. For instance, William Reichenstein, a professor at Baylor University and a principal with Social Security Solutions, says those choosing whether to save first in a Roth 401(k) or traditional 401(k) must compare their marginal tax rates in the contribution year and the withdrawal year.

Same marginal tax rate. If you have the same marginal tax rate in the contribution year and the withdrawal year it doesnt much matter if you save in a Roth or traditional 401(k), according to Reichenstein.

High current marginal, low withdrawal marginal. If, however, youll have a lower marginal tax rate in retirement then in your contribution year, the tax-deferred accounts (a 401(k), traditional IRA, SEP-IRA) is the better savings vehicle, says Reichenstein.

Low current marginal, high withdrawal marginal. If you will have a lower marginal tax rate in contribution year than the withdrawal year then the Roth is the better savings vehicle, says Reichenstein. The investor either pays taxes at this years (contribution years) tax rate or at the withdrawal years tax rate, he says.

So, for instance, a new 2017 grad may be in the 10% tax bracket this year and that represents, he says, a great opportunity to invest in the Roth 401(k) instead of the 401(k) or the Roth IRA instead of the traditional IRA.

The key comparison is the marginal tax rates in the contribution year and withdrawal year, notes Reichenstein. In the work years the contribution year the marginal tax rate will likely be the same as the tax bracket. But the marginal tax rate in the withdrawal year could be 50% or 85% higher than the tax bracket due to taxation of Social Security benefits.

Thus, he notes that a somewhat below-average to somewhat above-average income retiree would likely be in the portion of income where each additional dollar withdrawn from the tax-deferred account, a 401(k) or IRA for instance, causes an extra $0.85 of Social Security benefits to be taxed.

Retirement columnist Robert Powell(Photo: USA TODAY, USA TODAY)

For many taxpayers, they would be in the low end of the 25% tax bracket, says Reichenstein. Thus, withdrawing say an extra $100 from the 401(k) may cause an extra $85 of Social Security benefits to be taxed, so taxable income rises by $185.

Withdrawals from IRAS and 401(k) plans in retirement, which get taxed as ordinary income, could cause a wealthy investor to pay a higher Medicare Part b and D premium two years hence, which is effectively a tax on the wealthy, says Reichenstein.

In short, the withdrawal year marginal tax rate could be higher than the tax bracket, he says. So, someone who expects to be in the same tax bracket in the contribution year and withdrawal year should probably save in the tax-exempt Roth.

Reichenstein also notes that most preretirees have lots more money funds in tax-deferred accounts (TDAs) than in tax-exempt Roths. If tax rates are raised down the road, it will hit the TDA withdrawals, but not the Roth withdrawals, he says. As a type of tax diversification, this suggests investing in the Roth and paying taxes this year to reduce the negative consequences of potential higher tax rates in the future on our large amount of TDA funds. Given the huge deficits, a general tax rate increase is certainly possible even likely.

Of course, if have an HSA as well as a Roth and traditional 401(k), save there first. The HSA offers the best of both account types, says Reichenstein. Contributions to it reduce taxable income like a tax-deferred account and withdrawals from it are tax free if used for qualified medical expenses.

The right strategy. To be fair, the right savings strategy is based on ones personal financial goals, and not just tax rates, as well as which investments and accounts and products you have access to.

For instance, Empower Retirement recently sought to determine which is better: saving money after taxes in a Roth 401(k) or pretax in a traditional 401(k). And what they found is this: Most auto-enrolled participants are defaulted to pretax contributions. However, that may not be the ideal contribution type for many participants. Given the uncertainty of future tax rates, a personalized contribution strategy that considers age, income and earned income tax credit (EITC) is ideal for most participants because it reduces tax risk while improving retirement outcomes in most scenarios.

Get help. To be fair, few have modeled how best to prioritize retirement savings if you have to factor in the vast array of products and accounts that you could use in addition to HSAs, Roths, and traditional 401(k)s.

Given that, experts suggest working with a financial adviser to personalize a plan that works for you. For some, saving in an HSA and Roth and using a reverse mortgage might create the most after-tax income. For others, adding a QLAC to the mix might make sense. But finding the right mix and savings order will require some number crunching. And leaving it to chance or just winging it could leave you short of the necessary funds youll need to fund your desired lifestyle in retirement.

MORE POWELL:

Robert Powell is editor of Retirement Weekly, contributes regularly to USA TODAY, The Wall Street Journal, TheStreet and MarketWatch. Got questions about money? Email Bob at rpowell@allthingsretirement.com.

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Powell: Saving for retirement in the most tax-efficient manner possible - USA TODAY

While most people retire in their 60s or 70s, Britain's Prince Philip performed his last official engagement today at the age of 96.

The Duke of Edinburgh braved pouring rain today at Buckingham Palace to meet with Royal Marines, some of who participated in the Royal Marines Global 1664 Challenge -- 100 challenges completed over the course of 100 days.

Philip attended the Royal Marines' parade at Buckingham Palace to mark the end of the challenge. Queen Elizabeth was at Balmoral and missed the tribute, which included cheers and a rousing hip-hip hooray as Philip left his final engagement.

After today's event, Philip will no longer undertake royal engagements on his own, although he may still choose to attend certain events alongside Queen Elizabeth, 91, from time to time.

In a statement when his retirement was announced in May, Buckingham Palace said Philip "has the full support of the Queen."

Philip joked soon after the announcement was made with a well-wisher at an event who told him, "Im sorry to hear youre standing down."

Philip shot back, Well I cant stand up much longer.

Philip married then-Princess Elizabeth in 1947 and has been fulfilling his royal duties ever since.

He has completed 22,220 solo engagements since 1952 and given 5,496 speeches in his travels to more than 76 countries, according to Buckingham Palace. He has also authored 14 books, served as patron to 785 organizations and made 637 solo overseas visits.

Upon retirement, Philip is expected to spend more time at Windsor Castle.

He still is actively involved in carriage driving and is expected to carry on his association with the more than 750 charitable organizations for which he is royal patron. Queen Elizabeth has given up long-haul travel but still routinely attends more than 400 engagements a year and will continue to carry on her full schedule.

Younger members of the royal family, including Prince William, Prince Harry and Princess Kate, will also be stepping in and accompanying Queen Elizabeth to events that Prince Philip would have attended with her previously.

William, 35, completed his last shift as an air ambulance pilot last week. He and Kate, also 35, will live in London and take on royal duties full-time starting this fall.

The end of William's tenure as an air ambulance pilot coincides with his grandfather's retirement and plans for William's son, Prince George, 4, to attend school in London this fall.

Earlier today, the U.K.'s The Telegraph accidentally published an article announcing Prince Philip's death.

The news outlet published an inaccurate article today on its website that read, "The Duke of Edinburgh, the longest-serving consort to a monarch in British history, has died at the age of XX, Buckingham Palace has announced."

The Telegraph quickly issued an apology and removed the story from its website.

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Prince Philip, 96, attends final official engagement before retirement - ABC News

If you have a little extra cash at the end of each month, it's wise to put it toward long-term financial goals. But how do you know which goals should come first? Is it more worthwhile to put your extra money toward your mortgage or your retirement fund?

The short answer is that they're both good options. About 36% of American households have a mortgage, and of those people, the average household owes about $168,000. And in regards to retirement planning, the median amount working-age American families have saved is just $5,000 -- not even enough to see them through one year in retirement. In other words, a little extra cash would benefit most people in either of these situations.

But if you only have a couple hundred dollars (or less) to spare each month, where will you get the most bang for your buck?

Image source: Getty Images.

Before you start paying off your mortgage or saving for retirement, you should build a solid emergency fund to cover six months' worth of expenses. And if you have a 401(k), it's also a good idea to contribute enough to get your employer's full match, because that is essentially free money, and you'd be foolish to turn it down.

After you have those basics covered, it's time to compare the pros and cons of paying off your mortgage and saving for retirement.

The best time to start aggressively paying off your mortgage is in the first few years, because at this point, most of your payments are going toward interest and not the principle. So by paying as much as you can right away, you can pay less in interest overall. However, because the amount you pay in interest is tax-deductible (assuming you qualify and itemize your deductions),paying interest isn't quite as terrible as it may sound.

At the same time, it's also wise to start investing for retirement as early as possible in order to take full advantage of compound interest. Investments tend to gain value exponentially, so every year you delay saving for retirement will set you back to a disproportionately large degree. Money invested now has much more value than the money you'll invest five or 10 years from now.

This is where interest rates come into play. If you have an unusually high interest rate on your mortgage,then it makes financial sense to pay down that debt first. Because the stock market has historically gained about 7% per year, if your interest rate is higher than that, then you're likely paying your lender more than you could earn by investing the money instead.

Say, for example, you just took out a 30-year mortgage of $150,000 and are trying to decide whether to put your extra money toward the mortgage or your retirement savings.Also assume an interest rate of 4.5% per year on your mortgage, a 25% federal tax rate, and an 8% state tax rate. Finally, let's say that your interest payments are tax-deductible, so your after-tax rate is 3.105%.

Here's what your financial future could look like based on how fast you pay off your mortgage:

If you pay only the minimum mortgage payments over the course of 30 years, you'll end up paying a grand total of $123,609 in interest alone. However, if you bump up your monthly payment by about $200 and pay off your mortgage 10 years early, you'll pay only $77,754. In other words, you could save about $46,000.

Now let's assume that you only make the minimum mortgage payments and instead put that extra $188 per month into your retirement savings, rather than your mortgage payment. Assuming you start with $0 in savings and earn an average of 7% per year on your investments, in 20 years you'd wind up with about $96,000 in your retirement account -- about $45,000 in contributions and $51,000 in earnings. That only puts you slightly ahead of the $46,000 in interest you'd save by paying off your mortgage 10 years early. However, if you continued to invest that $188 per month until the end of your 30-year loan term, your retirement savings would swell to $221,000 -- that's $153,420 in earnings on top of your $67,680 investment. All in all, you'd come out $30,000 ahead by investing your spare cash, rather than using it to pay off your mortgage 10 years early.

To sum it up, you can save more money in the short term by paying down your mortgage faster, but in the long term, you'll likely come out far ahead by saving more for retirement. In any case, you certainly shouldn't completely neglect your retirement savings while you pay off your mortgage. Even if you choose to repay your loan on an accelerated schedule, make sure you save something for retirement while you have time -- and compound interest -- on your side.

Ready to find out which option is right for you based on your unique situation? First, use a compound interest calculator to determine how much your retirement savings can grow over time. Then use a mortgage calculator to see how much you'll be paying in interest over the course of your loan.

After you compare these numbers, you'll have a better idea of how much you can earn on your investments compared to how much you can save in interest payments.

Every situation is different, so there's no one-size-fits-all answer as to whether you should use your extra cash to pay down your mortgage or save for retirement. But by creating a plan and calculating where your money will be best spent, you're setting yourself up for future financial success.

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Should You Pay Down Your Mortgage or Save for Retirement ... - Motley Fool

When the Patriots officially begin their title defense in early September they'll be withoutRob Ninkovich. The veteran defensive end is expected to announce his retirement Sunday, reports ESPN.com's Mike Reiss.

Ninkovich, 33, was originally a 2006 fifth-round pick of the Saints. He signed with the Patriots in 2009, had four sacks in 2010, and by 2011 he had earned the starting job. From 2011-2016 he started 91 of a possible 96 games and registered 41 sacks. He also appeared in 17 postseason games, was the Patriots team captain in 2013 and 2015 and earned two Super Bowl rings.

Ninkovich retires from a Patriots squad that has the potential to be better than the group that won the Super Bowl in February. New England spent the offseason restocking a roster that was already among the best in the league. The Patriotssigned cornerback Stephon Gilmore and veteran linebacker David Harris, and traded for pass rusher Kony Ealy, who may have been acquired as insurance against Ninkovich calling it a career; Ealy now projects as the starter.

Ninkovich had been absent during Patriots' training camp for what coach Bill Belichick called personal reasons.

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Spending rose for more than half of taxpayers during the first three years after claiming Social Security, according to a report based on tax data and analyzed by economists at the Investment Company Institute and the IRS.

Those with lower incomes were most likely to be spending more than they were pre-retirement. Middle-income earners spent about the same, and the higher-income earners spent slightly less.

The report didn't measure actual spending, but how much income an individual had left after taxes. It included salary and wages, Social Security benefits, and distributions from retirement accounts and pensions.

"For many individuals, retirement appears to be a multi-year transition rather than an action taken at a discrete point in time," the researchers wrote.

In fact, nearly half of people were still working three years after claiming Social Security.

Related: How do I know how much I'll need in retirement?

But this doesn't mean spending won't slow later in retirement, researchers said.

Of course, your spending could drastically fluctuate from year-to-year, especially if you plan to be retired for 30 years or longer. (Most people followed in this report claimed Social Security at age 62.)

It's tough to save for a moving target, but there is one rule of thumb experts recommend. It suggests people prepare to spend about 70% of your pre-retirement income in retirement.

People expect to spend less because they're no longer saving for retirement and your tax bill is likely to drop. Maybe your transportation costs will fall if you're no longer commuting to work. Or you could have your mortgage paid off.

But on the other hand, you'll have more time to travel and might spend more money on leisure activities -- which could be more likely in the beginning of your retirement.

Calculator: Will you have enough to retire?

The median taxpayer's spendable income at three years after claiming Social Security was 103% of their income from one year before collecting, the report said. It followed individuals from 1999 to 2010.

CNNMoney (New York) First published July 28, 2017: 10:43 AM ET

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Americans are spending more money after they retire - CNNMoney

Older adults employed in Clark County

Employed population

Year age 65 and older

1990 4.6%

1995 5.6%

2000 6.6%

2005 8.0%

2010 9.6%

2015 11.0%

2016 11.1%

Note: All years use second-quarter data.

Source: State Employment Security Department

In his nearly 40 years in the jewelry business, it hasnt been uncommon for Joe Lanning to work six days a week. Three of those days, he would drive back to work after dinner to chisel out a few more hours.

Long hours, he said, go hand-in-hand with running your own business, as he and his wife do at My Jeweler, 809 Main St. And, despite turning 70 this month, Lanning said he has no plans to retire, though he has cut back his hours.

I am going to work, probably, until I die, he said with a shrug.

There is no macabre tone to how he says it, nor any undercurrents of a workaholic. Lanning, a Portland native, has been working since he was a teenager. Retirement really doesnt appeal to him, he said.

I would be doing something anyhow, because I couldnt just sit, he said.

Lanning isnt alone. As baby boomers age, they seem to be retiring at a slower rate than prior generations. The reasons for this can vary, but financial planners and economists interviewed for this article say many either havent saved enough money or, like Lanning, simply feel too healthy to hang it up.

I think there are a lot of people of my generation that have worked since they were teenagers, and to stop what are they going to do? Lanning said. I think there are a lot of them that enjoy working. They just want to talk and be with people, rather than sit at home with a cat or a dog and have that for their only company.

While there isnt centralized retirement data for private industries, economists with the Employment Security Department do track workforce demographics.

A statistic called the employment-to-population ratio measures the number of employed persons of a specific age against the total size of that age group. For Clark County residents aged 65 and older, the number of people working has grown from 4.6 percent in 1990 to 11 percent today.

Factors contributing to such a rise seem tied with both the recession and generational trends, said Scott Bailey, a regional economist who examines Clark, Cowlitz and Skamania counties. In other words, baby boomers saved less, yet they are living longer.

One (reason for the increase in older people working) is they kind of say, Hey, I feel good. Im healthy. I like my job. Why quit? Bailey said. A second (reason) is them saying: Savings? What savings?

The trend isnt restricted to Southwest Washington. Almost 19 percent of people aged 65-plus in the country held at least a part-time job, according to a jobs report from the U.S. Bureau of Labor Statistics released this month.

The workforce participation rate for those older workers hasnt been that great since American retirees were first awarded Medicare benefits in the 1960s.

From April to June of this year, 32 percent of Americans ages 65 to 69 were employed. And the numbers of 70- to 74-year-olds working rose from 11 percent in 1994 to 19 percent.

Russell Brent, who owns Battle Grounds Mill Creek Pub, is one of those boomers who plans to keep working. Brent, 56, said he would like to be in a position to retire at 65, but he doesnt expect he will want to.

Seventy is the new 60, he said. My dad is 89 years old and holds a part-time job.

According to the U.S. Bureau of Labor Statistics report, by 2024, 36 percent of 65- to 69-year-olds will be active in the labor market.

Finances play a major factor in peoples decision to retire. Some have assumed that more people might retire with the economy, and stock market, swinging upward.

That doesnt appear to be the case, at least not decisively so, according to financial planners in Clark County. People may be feeling better about their retirement funds, but they weigh that against many factors, such as their family situation and health care costs and access.

The general trend is people are optimistic about whats going on with the economy, but I dont see more people retiring, said Matt Henderson, a financial adviser with Edward Jones in Battle Ground.

The reason may be because people try not to be reactive with their financial plans, he said.

I see people say, I want to work to age 65, and have an income of XYZ. If you get to XYZ before that retirement date, people still want to work, Henderson said. I havent heard a client come in and say Ive made an extra $20,000; Im ready to pull the trigger.

Business owners, like Lanning and Brent, might be in a better position to retire with the economys stronger performance.

Matt Bisturis, an attorney with Schwabe Williamson & Wyatt who helps business owners plan for retirement, said the recession created a pent-up supply of entrepreneurs who are interested in retiring. Now they could be sitting prettier because they could get a higher asking price when they sell their business.

I think theres a lot of people who put those transactions on hold three to five years ago who are now getting ready to pull the trigger, he said.

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Baby boomers in Clark County delay retirement - The Columbian