 |
|
|
|||||
Standard financial advice starts with the assumption that 40-year-old investment newbies are getting a late start. So what if you’re a card-carrying member of AARP without a portfolio? How do you start investing when youre in your 60s? Recently, a family friend reached out for some advice on how to start investing for retirement. At 61 years old, he was afraid it was useless because he had heard the standard tut-tutting about how he should have started earlier. Once I got over my shock at his age (because that means Ive reached my late 40s and I have no idea how that happened), I assured him that its not too late. Just because a lot of retirement math starts with the wonders of compound interest over time doesnt mean your retirement is doomed. Becoming a first-time investor in your 60s may feel scary, but its the best way to ensure you have a financially secure retirementunless you can get your hands on some kind of time traveling phone booth. Heres what you need to know about beginning your investment journey long after hitting the big 60. Start setting money aside right away And when I say right away, I mean right this minute. Putting money aside for retirement is the kind of important-but-not-urgent task that is very easy to put off, which is why 20% of Americans over the age of 50 have nothing set aside for retirement, according to a 2024 AARP survey. If you already have an IRA, 401(k), or other retirement vehicle, transfer whatever amount you can afford today, and set up an automatic contribution to come out of every paycheck. If you dont already have a retirement account, take a half hour today to set one up with a reputable brokerage like Vanguard, Fidelity, or Schwab. Each of these brokerage firms offer retirement accounts, education, and tools for newbie investors. Additionally, each major brokerage has customer service available by phone and online chat that can walk you through the process of opening an account and setting up a recurring contribution. Asset allocation in your 60s Of course, its not enough to set up your retirement account and your contributions. You will also have to decide how to invest your contributions, which feels a little more complicated in your 60s than it is for younger investors. Thats because the traditional advice for retirement investors is to buy-and-hold index funds, allowing time and compound interest to perform their magic on your money. But sixtysomethings dont have the same luxury of time enjoyed by whippersnappers in their 20s, 30s, 40s, and 50s. Except, thats not necessarily true, is it? The Social Security Administration estimates that a current 60-year-old man has a life expectancy of 80 and a 60-year-old woman has one of nearly age 84which means investors in their 60s can and should invest some portion of their money for a longer time horizon. Older first-time investors need to allocate their retirement money the same way every investor doesby when they expect to need it. This is often referred to as the bucket method, and is often broken down into three investment buckets. Short-term investments: Since you will use it for living expenses in the first one to five years after you retire, you want this money to be invested in assets that are reasonably stable and liquid. Medium-term investments: This money will provide you with retirement income for years six to 15, so youll invest it in slightly more aggressive investments that still aim to protect your principal. Long-term investments: You wont plan to touch this money until at least 16 years in the future, so you can afford to invest in higher-risk-higher-return investments, giving you time to ride out market volatility. Put away as much as you can While your future self will be glad for whatever amount you can put aside for retirement today, more is definitely better in this scenario. Luckily, the IRS agrees with the importance of saving for retirement. Contributions to traditional IRA and 401(k) accounts are tax-deductible, meaning the money you put in those accounts lower the amount of your taxable income for the year. The IRS allows the gray-haired set to make tax-advantaged catch-up retirement contributions to IRA and 401(k) accounts. For 2025, the IRA contribution limit is $7,000 for anyone under the age of 50, and $8,000 for anyone over the age of 50. For 401(k) accounts, the contribution limit is $23,500 for those under age 50, $31,000 for anyone between the ages of 51 and 59, $34,750 for those between the ages of 60 and 63, and it drops down to $31,000 to anyone 64 or older, because the IRS is nothing if not confusing. In 2025, if you areYou can contribute this much to an IRAYou can contribute this much to a 401(k)Under 50$7,000$23,50050 to 59 years old$8,000$31,00060 to 63 years old$8,000$34,50064+ years old$8,000$31,000 Find other sources of investment money If every dollar is spoken for before your paycheck even hits your account, the idea of maximizing your retirement account contributions may feel quaint. So its helpful to start identifying some other sources of investment money. You may have more cash available to invest than you realize. Check for old 401(k) accounts Once youre blowing out 60 candles on your birthday cake, you likely have multiple careers under your belt, let alone shorter-term jobs youve forgotten about. You may have unclaimed retirement benefits gathering dust. A quick search of the National Registry of Unclaimed Retirement Benefits can let you know if youve got some retirement money languishing in an old account. See if you have unclaimed funds An estimated one out of every seven Americans is owed unclaimed property totaling $70 billion as of 2023. You can search for unclaimed funds by visiting the National Assoiation of Unclaimed Property Administrators and searching any states where you have lived. Sell things you no longer want or need You probably have a lifetimes worth of accumulated clutter, some of which may actually be worth some money. Cleaning out your stuff to find hidden gems will not only help you pad your retirement accounts, but it will also help you with any downsizing you may want to do before retirement. But DO NOT invest your Social Security benefits If youre looking for other sources of investment money, taking your Social Security benefits as soon as you turn 62 and investing that money may seem like a no-brainer. But it is nothing short of a terrible idea. Thats because your Social Security benefits are as close to a financial guarantee as youre going to get in this world. Your Social Security benefits are backed by the full faith and credit of the United States governmentwhich, admittedly, has lost a little of its luster and reputation recently. But you can absolutely count on the monthly amount promised to you, the approximate 8% per year delayed retirement credit for waiting to take your benefits, and the annual cost of living adjustment. No investment can promise any of those things. Investing your Social Security benefits means you could lose that money. Taking your benefits as of age 62 means you will lose out on the guaranteed delayed retirement credit of 8% per year. And no investment can guarantee an annual return of 8%, let alone a cost of living adjustment to account for inflation. If you are able to delay taking your Social Security benefits, it is generally best to wait to take them until you have reached age 70 so you can maximize your monthly benefit amount. Other than yesterday, the best time is now There is no point in beating yourself up with coulda-shoulda-woulda thinking if you get started investing later in life. Its counterproductive to ruminate over things you cant change, especially since theres still a lot of good you can do as a 60-something newbie investor. The first thing to do is start right away. If you have a retirement plan, move money into it today and set up a recurring contribution. If you dont, open one with a reputable brokerage firm today, taking advantage of the customer service phone or chat options to help you lower the barrier to entry. Once you have the account and automatic transfer in place, plan your asset allocation. Even though you don’t have the luxury of time like a young investor, you can still set up a three-tiered investing strategy. Your short-term, stable investments are for the money youll need in the next one to five years. The medium-term, slightly more aggressive investments will be accessed in years six to 15. And your long-term, higher-risk, higher-return investments will be left alone until year 16 and beyond. Its important to put aside as much money as you can. If youre able to maximize your 2025 tax-deductible IRA and 401(k) contributions, that will lower your tax burden, which may help you afford the contributions. But you could also look for other sources of investment money, such as searching for forgotten retirement accounts and unclaimed funds, or by selling off some of your accumulated stuff as part of a downsizing effort. But do not use your Social Security benefit as a source of investment money. Thats trading a guarantee for a risk.
Category:
E-Commerce
The United States has a well-developed digital economy, encompassing about 18% of its total economy, according to several sources and research from the International Data Center Authority (IDCA). This is above the world average of 15%. But the U.S. can always do better. The IDCA defines a digital economy as representing all economic activities that are reliant on or significantly enhanced by the use of digital technologies, including digital infrastructure, AI, and digital services. Having worked with hundreds of public data sources and its own surveys to create its Digital Readiness of Nations Index, the IDCAs Global Digital Economy Report (2025) is a unique deep dive into the current development of the world’s digital economies. Digging Into Digital Economy Data This Index places the digital economies of the nations of the world into four categories: Phase III (Advanced), Phase II (Significantly Developed), Phase I (Early-Stage), and a Pre-Phase. It examines all the data sets across four broad categorieseconomy, environment, social, and governanceto rank the nations on a scale of 0 to 100. The Index considers relative progress, that is, how well each nation has developed its digital economy with respect to its economic resources and social development. Doing this shows only six nations that are currently in an advanced, Phase III stage of development. Surprisingly enough, despite its economic size and potential, the United States is not one of them. In fact, none of the world’s G7 or even G20 nations have reached this advanced status, either. Today, Phase III has been accomplished only by the small nations of Scandinavia, Finland, and Switzerland. An aggressive commitment to the use of sustainable energy, relative income parity, and strong government institutions are all characteristics of this group. The U.S. Is Not the Exemplar So far the largest nations of the world, including the United States, have not been able to match these smaller countries. The U.S. and its G7 cohort are instead ensconced among a group of a few dozen nations within the Phase II group, all of which show significantly developed digital economies. Digging into the data finds that within this group, the U.S. lags Canada, France, Germany, Japan, South Korea and the U.K. in its commitment to sustainable energy, income parity, and strong government institutions. Expanding the focus to the G20 group of nations finds more diffuse progress. Because membership in the G20 club is simply based on the size of a nation’s overall economy, not its relative development or wealth, there are several still-developing nations in the G20, including Brazil, China, India, Indonesia, Mexico, and South Africa. There are also the troubled economies of Argentina and Russia in this group. All the nations cited here are in Phase I, still at an early stage of their digital economies. It must be noted, though, that Brazil, China, and to some degree India, continue to make considerable progress toward fully developed economies and a higher stage of digital economy development. So despite leading the world in the size of its overall economy and digital economy, having reached its status on the back of compounded historic economic dominance, the U.S. is not truly an exemplar for the world. What can the nation do to improve its standing? Create a national strategy and policies American business and government leaders pride themselves on how the U.S. has long been the world’s capital of innovation and IT development without the help of national strategies or focused policies. But ad hoc development on the scale envisioned for the AI age will end up being more chaoticand less effectivethan necessary. The U.S. does not need to reach EU levels of regulation and enforcement, but its federal government can do more to meet today’s Sputnik challenge, or watch China and the EU run away with leadership of AI and digital economies. Build more sustainable energy Renewable energy delivers 20.3% of the electricity consumed within the United States, below the world average of 30%. Nuclear energy adds another 18.2% to the U.S. grid, which technically brings it close to the world average for sustainable energy. But this is not good enough. The U.S. remains the world’s second-largest producer of greenhouse gases and lacks a true commitment to sustainable energy progress. Focus on workforce development Even though the U.S. has the world’s largest IT-skilled workforce, it needs to upskill and retrain millions of people to prepare for the skills demanded by the continued growth of AI development and AI-driven data centers. The IDCAs own report recently found a workforce deficit of over 100 million IT workers globally. There are already several hundred billion dollars worth of large, advanced AI data centers being planned in the U.S., but without a workforce adequate to the challenge, these new facilities will be underused and mismanaged. Tapping into a holistic and dynamic set of professional training programs is key here. Ensure smart buildouts More than 40% of the world’s data centers are located in the U.S., and projections show that this dominance will continue. But it will be a grave mistake to build data centers along the same old, general purpose, inefficient lines. The new data centers, whether a small 10-megawatt building or sprawling gigawatt-sized campus, must all be built to suit, with the most efficient energy management and computational efficiency available. Developers must not only be smart about building them but also focus on smart environments that support more robotic manufacturing, autonomous transportation, sensor-driven energy management, and AI-driven services to businesses and consumers. A high bar In summary, it would be unfair to say that the U.S. significantly lags the G7, or any other group of nations, in the development of its digital economy. The situation is not dire, and the U.S. has not already given away the game. In fact, we see an influx of announcements for data centers and AI investments committing to the U.S. economy. However, due to its sheer size and potential, what might be great for some countries is considered poorly accomplished by our benchmark. The world’s largest economic power needs to judge itself solely by the standards of what it can accomplish, comparisons be damned. U.S. government and business leaders must work much harder to deliver on the nation’s potential.
Category:
E-Commerce
As the labor market tightens and job seekers leverage AI to apply for jobs en masse, recruiters are receiving hundreds or thousands of applicants for a single position. To deal with the deluge, many employers are adopting new tools, often powered by AI, to make recruiting more efficient, and, in some cases, replace human contact. A Resume Builder survey from last year suggested that nearly 70% of companies would use AI in their hiring process by the end of 2025. Talent acquisition leaders tout the effectiveness of new recruiting tech: virtual assessments, asynchronous and AI-powered interviewing, chatbots, and the like. But what do job seekers think? According to applicants, what new recruiting tech has going for it is speed. What it lacks, often, is clarity. IT WAS SHORTER AND MORE SUCCINCT One of the most common additions is the asynchronous video interview, in which applicants record answers that a recruiter reviews later. It often replaces screening calls, and sometimes, later-stage interviews. While recruiters dont have time to schedule and conduct calls with a hundred applicants, they can review prerecorded answers from as many. More than half a dozen job seekers told Fast Company they spend anywhere from 30 minutes to two hours getting their two- to five-minute videos just right, worrying over lighting and sound and their own appearance, tweaking their answers, and recording multiple takes. Yet overall, the reviews are positive. Many say its still more convenient than a screening call with a recruiter. Sarah, whos spent 20 years in HR, doesnt want her employer to know shes job shopping, so she asked that we withhold her last name. Following a recent asynchronous interview, she was notified that a recruiter had looked at her answers. Even though she didnt advance, the rejection was more palatable as I knew they had at least reviewed my information, Sarah says. Most of the time, shes been left to wonder whether anyone even bothered to set eyes on her résumé. Some employers ask applicants to participate in video interviews with AI-generated bots that look and sound human. Nola Johnson, who works in customer success, met a series of three AI interviewers for an early-stage screening. She feels positively about the experience, even if the AI interviewer was glitchy and unable to end the conversation when time expired. It was shorter and more succinct than talking to a real recruiter, she says. If some employers are betting that an AI-generated contact is better than no contact at all, they may be right. According to a recent survey of 1,000 U.S. adults, conducted by recruiting software firm iCIMS, 40% of workers say that never hearing from an organization after applying is their number-one frustration. Indeed, what video modules lack in humanity they make up for in speed. Nola, after comparing notes with other job seekers, learned she heard back from the AI interviewer faster than her friends heard back from human interviewers. But many of these tools are new, and stories of glitchy AI abound. Among the worst culprits are chatbots that employers embed in their career pages. Ostensibly, the purpose is to answer basic questions that would otherwise consume valuable recruiter time. Jessica is a legal analyst who works at a law firm in Louisiana. (She also doesnt want us to use her last name since she doesnt want her employer to know shes looking around.) Jessica uses chatbots regularly and likes that she gets immediate answers, but says they dont always work as advertised. Some are so tightly scripted that theyre unable to handle basic questions about the job description or the benefits the company offers. APPLICANTS ACCEPT THE TECH, BUT STILL QUESTION ITS INTENT While some HR tech improves efficiency, others confound. Among the most confusing elements of job seeking in the age of HR tech: personality assessments. Personality assessments in the workplace arent new, but they are becoming more common thanks to how easy it is to insert them into a digital hiring process. Its another screening tool hiring teams are using to vet applicants. Yet job seekers dont know why theyre being made to take them. Jessica was asked to take an assessment similar to the Myers-Briggs test. But she didnt understand what they were evaluating her for, or how it related to the job. She didnt even get to see the results. Sarah was also asked to take a personality test while interviewing, a request shes okay with as long as its relevant to the job, but Sarah worries that companies are relying on tired stereotypes to eliminate or advance applicantsthat only extroverts succeed in certain roles, for example. Lack of clarity can bruise the employer-applicant relationship. According to the same iCIMS report, the most frustrating parts of job searching are the ones that leave applicants wondering, why? Lack of transparency and relevant information leave 77% of job seekers frustrated. When applicants interact with interfaces more than humans, theres little room to ask why somethinglike a personality test, for exampleis being used. Nola has applied to jobs where she was given the option to opt out of having her résumé reviewed by an AI tool. Yet, she says, what I would be curious about is not when or if, its how. Is it ranking me? Do I get a flag? If I remove myself from it being reviewed by AI, will I automatically move to the bottom of the list? Its never been clear. What bothers her most is that she doesnt know how all of these new tools and evaluations are being used, tools that introduce a certain level of tedium to the process. And in some cases, her patience is exhausted. Now, if Nola is asked to submit an asynchronous video interview, she just moves onshe doesnt think its worth her time.
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||