| It’s one of those days when anxious investors check their 401(k)s. Markets are reeling as traders see their worst-case scenario for US tariffs coming to fruition. As of 1 p.m. in New York, the S&P 500 was down 3.8%, bringing its year-to-date losses to about 7%. See more on our markets coverage here: Steep losses can tempt people to adjust their 401(k) allocations. But most financial advisers will tell you not to make any sudden moves. Tweaks can prove to be too little too late, setting you up for an even greater loss. That said, if you find yourself compelled to act, there is a case for using your energy (or anxiety) to re-evaluate your long-term goals. So, with that in mind, this week’s reader question I asked financial advisers to respond to is about ways to catch up on retirement savings. This subscriber said he had spent the first 25 years of his career working for the government and other organizations in Afghanistan, Syria, Yemen, Iraq, Sudan and Haiti — and that while he has a wealth of (non-financial) memories, his pension is almost non-existent (about $50,000). “I am putting everything I can into my pension, and buying US and European shares,” he wrote. “But by all calculations, I will need to work until I am at least 75 years old to make up for the 25 years I lost. Am I missing something obvious with retirement planning and saving?”
After calling advisers on behalf of this subscriber, my main conclusion is no. He’s not missing anything obvious. But, when behind on savings, there are a few strategies you can deploy to get yourself back on track. First, get a grip on your cash flow People who fall behind on their retirement savings may have an imbalance in the amount of money coming in and out of their bank accounts. This makes it “impossible to plan effectively,” said Trevor Ausen, founder of Authentic Life Financial Planning in Minneapolis. You need a clear, realistic sense of your daily expenses versus how much you can afford to stash away. More is generally better, but one adviser said to aim for about 20% of your income for 25 years. Maximize your tax-advantaged accounts Our reader says he is putting everything he can into his pension in Sweden, where he currently lives, which advisers say is the right idea. Use any tax-advantaged accounts you have access to (in the US, people sometimes overlook a Health Savings Account) and be sure you are making catch-up contributions where allowed. Of course, not everyone has a workplace pension or 401(k). And if that’s the case for you, Noah Damsky, of Marina Wealth Advisors in Los Angeles, recommends automating your contributions to an Individual Retirement Account — just like a workplace would for a 401(k) — to stay disciplined about stashing away cash. Work longer — and hopefully better I hate to say it, but I will: Someone who feels very behind at age 47 may need to stay in the workforce longer. Carlie Ransom, co-founder of Equal Path Investments in Tacoma, Washington, says doing so in a sustainable, purposeful way could have serious benefits. Most notably, it gives a portfolio more time to benefit from compound interest. Take this reader’s $50,000. If he kept his investment fees low and kept contributing $1,000 a month for another 28 years, he’d have well over $1 million in retirement, assuming a standard 7% rate of return. Scale back your retirement expenses Finally, remember many retirees are able to spend less on a day-to-day basis after leaving the workforce — and there are ways to reduce your expenses even more than you think. One area where Damsky, of Marina Wealth Advisors, says retirees can sometimes spend too much is on insurance. Having adequate cover for emergencies is crucial, but he’ll occasionally see widowed retirees spending thousands on life-insurance policies they don’t actually need. Additionally, Marta Haydym-Silver of Silver Financial Service in Westbrook, Maine, said savers can get “ahead” by moving somewhere cheaper, such as a country where the dollar goes further. That may not sound entirely convincing on a day when the US currency is headed south. But, remember, I told you this week’s note is all about making plans for the long (perhaps very long) term. — Charlie Wells P.S. Send questions about your own financial dilemmas to bbgwealth@bloomberg.net. We may get expert answers for you, and feature your question and the answer in an upcoming newsletter. Gold fell after hitting an all-time high of $3,167.84 an ounce. While the yellow metal is typically seen as a safe haven in times of heightened uncertainty, it can also join pronounced selloffs as investors are forced to raise cash to offset losses in other markets. The US dollar tumbled 2.1%, the most on record. A Bloomberg gauge of the dollar showed the greenback’s sharpest intraday decline since its launch in 2005, as fears grew that President Donald Trump’s sweeping trade tariffs would batter the US economy. The biggest gainers and losers on the Bloomberg Billionaires Index over the past week: Francoise Bettencourt Meyers gained the most in dollar terms. Meyers controls one-third of L’Oreal, the world’s largest cosmetics maker, and saw her wealth increase $3.5 billion to $81.1 billion. Shares in the company are up over 5% from a week ago in the wake of a share buyback announcement. Mark Zuckerberg lost the most in dollar terms. The chief executive of Meta Platforms clocked a $9.4 billion loss, which brought his net worth down to $215.9 billion. (He is still the world’s third-richest person.) The majority of Zuckerberg’s fortune is derived from a stake of about 13% in Meta, which is down some 3% from a week ago. US Families Are Packing Generations Under One Roof to Save Money  Photographer: Granger Wootz/Tetra images RF A record 17% of home purchases last year were “multigenerational” properties, up from 11% in 2021 and the highest share in data going back to 2012, according to a report from the National Association of Realtors. Among buyers of all ages, 36% said cost savings was the top reason for purchasing a multigenerational home, according to NAR. Members of Generation X, roughly aged 45 to 59, were the most likely to make a such purchase, citing the need to take care of aging parents and because their adult children never left home or are moving back. Manhattan Home Sales Soar as Buyers Seize on Mortgage Rate Dips  Photographer: Ismail Ferdous/Bloomberg Manhattan home sales had a strong start to the year as a bigger share of buyers chose to bite the bullet and accept elevated mortgage rates. The number of transactions completed in the first quarter jumped 29% from a year earlier to 2,560, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman. The median price of those deals rose 11% to $1.165 million. The increase in sales was driven in part by buyers taking advantage of small dips in mortgage rates over the past few months, rather than holding out for sharper declines, said Jonathan Miller, president of Miller Samuel. This week, we’re looking for law school students (or family members of them) who are rethinking going into “Big Law.” If this is you, or someone you know, we would love to talk. Some of our best journalism at Bloomberg Wealth comes from your own stories and we want to hear from you, your friends or clients. Please email bbgwealth@bloomberg.net if you’d like to get in touch. Like Bloomberg Wealth? Here are a few other newsletters we think you might enjoy: - Pursuits for a guide to the best in travel, eating, drinking, fashion, driving, and living well
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