If you're feeling behind when it comes to saving for retirement, you're not alone: Most Americans, 62%, say they need to catch up.

That's according to a 2019 TD Ameritrade report, which surveyed 1,015 U.S. adults ages 23 and older with at least $10,000 in investable assets.

When asked why they've fallen behind on their retirement savings, the responses varied by generation: The No. 1 response for millennials (ages 23-38) was housing costs (37% cited it), while the top response for Gen X (ages 39-54) was inadequate income (31% cited it).

No matter where you're starting, there are ways to increase your savings without without feeling cash strapped or making any drastic lifestyle changes. Here are four effective strategies.

The sooner you start saving and investing, the less you'll have to save each month to reach your goals, thanks to the power of compound interest.

If you start at 23, for instance, you only have to save about $14 a day,or$420amonth, to be a millionaire by 67. That's assuming a 6% average annual investment return. If you start at 35, on the other hand, you'd have to set aside $30 a day, or $900 a month, to reach seven figures by 67.

One of the simplest ways to get started is to fund your employer-sponsored 401(k) plan. If your company doesn't offer one, or you're self-employed, consider other options, like contributing to a traditional or Roth IRA.

If you automate your retirement savings meaning, you have a portion of your paycheck sent directly to a retirement account, such as a 401(k), Roth IRA or traditional IRA you'll never even see the money you're setting aside and will learn to live without it.

Ideally, you'll want to work your way up to saving at least 10% of your pretax income, but if you're only comfortable with putting away 1%, start there and gradually increase your contributions.

Once you've set up automatic transfers, check to see if you can also set up "auto-increase," which allows you to choose the percentage you want to increase your contributions by and how often. This way, you won't forget to up your savings or talk yourself out of setting aside a larger chunk when the time comes.

If you can't find the feature online, call your retirement plan provider to find out if it's possible.

If your company offers a 401(k) plan, they may also offer a 401(k) match, which is essentially "free" money. But it's up to you to take advantage of it.

These programs are pretty straightforward. Typically, your employer will match whatever contribution you put toward your 401(k) up to a certain amount. If you choose to put 5% of your salary directly into your account and your employer matches dollar-for-dollar, then it will put that same amount in as well, in effect doubling your contribution. And whatever money your company contributes doesn't count towards the IRS contribution limit. The median matching level is 4% among Vanguard 401(k) plans.

Note that depending on where you work, the match sometimes comes with stipulations. You may have to work at the company for a certain amount of time before it goes into effect, for instance.

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62% of Americans say they're behind on saving for retirementhere are 4 ways to catch up - CNBC

If youre like most Americans, you may be struggling to save money for retirement. Around 22% of Americans have less than $5,000 in retirement savings, according toNorthwestern Mutuals 2019 Planning & Progress study. But the future doesnt have to be grim.

RELATED:1 in 4 Americans dont plan to retire, new poll shows

Working in retirement may sound daunting, but there are plenty of reasons to keep up the daily grind later in life. People often decide to keep working or take up partial employment so they can supplement their retirement savings, for social interaction or to keep a sense of structure, according toNerdWallet.

The gap in retirement savings has a lot to do with the fact that many Americans plan to work during retirement nearly 19%, or 9 million, are working part or full time, according to thePew Research Center.

RELATED:Why WalletHub says Atlanta is pretty good place to retire

While your household income may get a boost, working in retirement could affect other sources of income, like Social Security or even your taxes. According to the financial planning websiteSmartAsset, here are the rules for working while receiving benefits:

For each year you delay your benefits beyond your normal retirement age, up to age 70, your benefit amount increases. If youre able to wait until age 70, youd receive 132% of your benefit amount.

RELATED:Wes Moss: Its never too late to save for retirement

Another factor to consider is that for a traditional 401(k) or IRA, you have to start taking the minimum distribution amount when you hit 70.

If youre wondering if your employer can cancel your health insurance when you turn 65, the answer is yes, but only if you work at a company with fewer than 20 employees.

As for how working in retirement will affect your taxes, if youre working and receiving Social Security benefits or have a pension, some of your benefits might be taxed. Since Social Security is based on combined income, if that adjusted gross income is more than $25,000 for single filers and $32,00 for joint, up to 50% of your Social Security benefits could become taxable income, according to NerdWallet.

Need more information on whether you should work in retirement? Check our NerdWalletsretirement calculator.

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Planning to work in retirement? Heres what you need to know - Atlanta Journal Constitution

Ramsey Solutions financial expert Chris Hogan on how Americans can set a budget, tackle their debt and boost their retirement savings.

About 10,000 Baby Boomers reachretirement age each day, and some are choosing to leave their homes behind in search of a more desirable place to live out their senior years.

But where are they headed?

U.S. News & World Report unveiled its annual best places to retire rankings on Tuesday with Florida scoring four of the top 10 spots, including threeof the top five.

That may come as no surprise considering the favorable tax laws in the stateincluding no statewide income tax.

"Deciding where to retire is an important part of your life plan," Emily Brandon, senior editor for Retirement at U.S. News, said in a statement. "When considering potential retirement spots, you should look for an affordable cost of living, proximity to health care services and a strong economy, especially if you plan to work part-time.

Last years top retirement spot, Lancaster, Pennsylvania, lost the crown this year falling to the third place spot.

The rankings are based on an analysis of the 125 largest metropolitan areas in the United States, based on a weighted average of scores on six items, including housing affordability, happiness, desirability, retiree taxes, job market and health care quality.

Heres a look at the results:

Ft. Myers jumped from its second-place ranking last year to the top spot for 2020.

The city has a population of about 700,160 people and an average high temperature of more than 84 degrees.

The median home price is $219,200, while the unemployment rate is below the national average, at 3.4 percent.

More than 25 percent of the population is over the age of 65.

Another Florida metro, Sarasota, ranked second.

Slightly larger than Ft. Myers, Sarasota has population of about 768,380 people.

The average salary in the city is $42,680 and the median home price is $237,260.

The report notes that a migration of wealthy residents has pushed housing prices higher 30.6 percent of the population is over the age of 65.

Separately, Sarasota ranked 18th on the best places to live, overall.

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Lancaster fell from its top-ranking last year primarily due to decreases in both its happiness and housing affordability scores.

The median home price in Lancaster is $196,025.

There is also a large proportion of younger residents in the town. More than 26 percent of residents are under the age of 20.

Asheville, North Carolina, another metro in the South, ranked fourth on the list.

The median home price is $248,500.

The average annual salary is $41,210 lower than the national average of $50,620. The local unemployment rate is low, at 3.2 percent.

The city has 22 public schools and 43 private schools.

Floridas Port St. Lucie followed Asheville, taking this years fifth spot. It is located roughly halfway between Miami and Orlando, with a population of 454,482.

The median home price is $211,083, andthe average annual salary is $42,500.

Local housing prices are likely to rise in the near future, however, as the city prepares for a building boom.

For sports fans, the New York Mets also have their spring training facility in Port St. Lucie.

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Rounding out the top 10 are: 6. Jacksonville, Florida; 7. Winston-Salem, North Carolina; 8. Nashville, Tennessee; 9. Grand Rapids, Michigan;and 10. Dallas-Fort Worth, Texas.

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Best places to retire in 2020 - Fox Business

Fort Myers, Florida.

Philippe TURPIN | Photononstop | Getty Images

There's no place like home. Unless, of course, you are retired.

Lured by better weather, lower taxes or an improved quality of life, many older Americans consider relocating to stateS like Florida or the Carolinas.

To that end, U.S. News & World Report determined the best places to retire based on criteria such as housing affordability, taxes, health care and overall happiness, using data from sources including the Tax Foundation, Census Bureau and Bureau of Labor Statistics.

This year, Fort Myers, Florida, came in at No. 1, fueled by increases in health-care quality and a strong jobs market, followed by Sarasota, Florida. Lancaster, Pennsylvania, was third, down from last year's top position, in part because of a decrease in housing affordability.

The Sunshine State claimed four of the top 10 spots, according to the 2020 rankings released Tuesday.

Here are the top 10:

1. Fort Myers, FloridaMedian home price: $219,200Unemployment rate: 3.4%Average annual rainfall: 53.2 inches

2. Sarasota, Florida Median home price: $237,260 Unemployment rate: 3.3% Average annual rainfall: 53 inches

3. Lancaster, PennsylvaniaMedian home price: $196,025Unemployment rate: 3.4%Average annual rainfall: 42 inches

4. Asheville, North CarolinaMedian home price: $248,500 Unemployment rate: 3.2% Average annual rainfall: 37 inches

5. Port St. Lucie, FloridaMedian home price: $211,083Unemployment rate: 4.1%Average annual rainfall: 54 inches

6. Jacksonville, FloridaMedian home price: $174,658Unemployment rate: 3.3%Average annual rainfall: 49.2 inches

7. Winston-Salem, North CarolinaMedian home price: $145,725Unemployment rate: 3.7%Average annual rainfall: 46.9 inches

8. Nashville, TennesseeMedian home price: $248,883Unemployment rate: 2.8%Average annual rainfall: 47.3 inches

9. Grand Rapids, Michigan Median home price: $181,533Unemployment rate: 3.1%Average annual rainfall: 38.3 inches

10. Dallas-Fort Worth, TexasMedian home price: $248,375Unemployment rate: 3.5%Average annual rainfall: 36.1 inches

"Deciding where to retire is an important part of your life plan," Emily Brandon, a senior editor for Retirement at U.S. News, said in a statement. "When considering potential retirement spots, you should look for an affordable cost of living, proximity to health care services and a strong economy, especially if you plan to work part-time."

U.S. News & World Report evaluated 125 of the country's largest metropolitan areas. Here is the complete list of the best places to retire.

Still, most American retirees ultimately decide to stay put, and those who do move usually don't go far, according to Rodney Harrell, vice president of AARP's livable communities and long-term services and supports program.

More from Personal Finance:Worried about health-care costs in retirement? Here are 4 ways to keep costs downNearly half of empty nesters still support adult childrenHow much money do you need to retire? Try $1.7 million

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The top 10 best places to retire - CNBC

There are plenty of charts on the internet and in books about financial planning that suggest how much someone needs to save to retire with millions of dollars but theres not as much explanation as to how that money will grow.

Calculating future savings requires numerous factors, including current age and predicted retirement age, any current assets, how the portfolio is invested and at what rate a person can realistically expect that money to grow. The latter, known as a rate of return, includes inflation, interest and dividend payments, and many experts disagree on what individuals can anticipate that rate to be.

Conservative advisers will argue individuals should bank on 4% or 5%, while some advisers track indexes and say 7% or 8% is reasonable. There are also established financial authors who occasionally tout the 12% rate of return, as Suze Orman did when she suggested a daily to-go coffee habit could deter Americans from having $1 million in retirement. Financial advisers argued then, and now, that such a return is unreasonable and far too idealistic.

See: Youd save more for retirement if only you had this

How the rate of return is calculated and used can be a bit complex, as there are two ways the rate is often expressed: either as a nominal rate of return or a real rate of return. A nominal rate of return does not include inflation, whereas the real rate of return does (which would make the real rate of return lower than the nominal rate). With a real rate of return, if a person is talking about current dollars and future dollars, the value of those dollars is the same. Ignoring inflation could result in thousands of dollars or more lost in purchasing power.

A higher rate of return may also be assumed for portfolios comprised entirely of equities, which is usually not the case for 401(k) and similar retirement accounts even for young investors, who are typically advised to invest more in stocks than bonds. The average historical return, since 1987, for the total U.S. stock market is around 11.2%, whereas the total U.S. bond market is approximately 5.9%, said Bijan Ramirez, a financial consultant at SVA Financial. Most peoples retirement accounts will be a mix of all of these asset classes, giving them returns between 5.9% and 11.2% depending on weighting in this example, he said.

Also see: 4 critical questions to ask during a market downturn and how financial advisers answer them

Analysts have their own projected return rates for various types of assets as well, such as short-term or long-term bonds and large cap or mid cap value stocks. Projections also vary if they are based on historical returns versus current market data, said Benjamin Yeung, lead adviser of FAI Wealth in Columbia, Md.

Gregory Hart, founder and managing director of Haddon Wealth Management in Haddonfield, N.J., said he looks at the past 10 or more years of average rates of return for various asset classes when he builds a financial plan for clients that looks 10 to 30 years into the future.

As with most other facets of retirement planning, an assumed rate of return can be different from one person to the next, said Eric Reich, an adviser at Reich Asset Management in Marmora, N.J. The reality is that it is almost entirely dependent upon your own personal allocation, he said. Many advisers also have their own way of creating projections, and will show clients a few estimates from conservative to aggressive when making a financial plan. There is no one perfect number to use, Hart said.

Still, investors may want to err on the conservative side, as its better to save too much than end up in retirement with too little, Yeung said. And investors, especially younger ones, should not be chasing returns.

Participating in the plan is the number one most important factor, said Jeffrey Edwards, president of Atlas Financial Plans in Irvine, Calif. The second would be to invest those contributions according to their time horizon and risk tolerance. Do that and the returns will follow.

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If you want to have enough money when you retire, you need to know this - MarketWatch

Walser Asset Management President Rebecca Walser on the state of the U.S. economy and markets and the outlook for Federal Reserve policy.

Chocolate or vanilla? Coke or Pepsi? Cheeseburger happy meal or chicken nuggets, and so on. We Americans love choices.

Retirement is no different. As we head into unchartered waters, as a tax attorney, its clear that our tax choices in building our retirement are the most important.

With designated retirement accounts, we really have two tracks the employer-platform track and the individual track. Most typically, these break down into the 401(k) and the IRA (Individual Retirement Account).

IRAs were created in 1974, the 401(k) in 1978, but we didnt get options within them until the late Senator Roth spurred the creation of the Roth IRA, some 20+ years later in 1997. And the Roth 401(k) is the newest kid on the block, just available in 2006.

Traditional IRAs and 401(k)s are pre-tax meaning that your contribution is made with current earnings that escape present income taxation, deferring those taxes until you withdraw the funds in retirement.

(If you withdraw funds before 59 years old, you pay the tax plus a 10 percent tax penalty, unless you have separated from your employer at age 55 or older and withdraw the funds directly from a 401(k) not an IRA.)

With the Roth versions, your contributions are made with after tax funds, where you pay the income taxes first and the net amount is invested.Although less goes in upfront, your original investment plus all of its earnings come out tax free.

Americans have gotten addicted to kicking the can down the road by paying taxes later now is the BEST time since the Reagan years to pay taxes, because President Trumps tax reform lowered rates and widened brackets.

THAT IS HUGE as the CBO reported in 2008 that tax rates will need to rise enormously as the Baby Boomers retire en masse, which really starts in 2022. And while Americans have gotten addicted to kicking the can down the road by paying taxes later now is the BEST time since the Reagan years to pay taxes, because President Trumps tax reform lowered rates and widened brackets.

The Roth has some special rules like you cannot access growth tax free until you have had a Roth for at least five years and your 401(k) employer match, if you get one, will still go into the traditional 401(k).

There are also income limits on utilizing an IRA, although increased in 2019, but there are no income limits on a Roth 401(k) so you cannot be income phased-out like you can with a Roth IRA.

And the Roth, because the tax has already been paid, eliminates the requirement of RMDs (required minimum distributions) at age 70 - providing much more flexibility. And if you have already built your dollars in the traditional accounts, then a Roth conversion could be an excellent option if it fits your circumstances.

And Roth IRAs eliminate the requirement of RMDs at 70 - providing much more flexibility.

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The bottom line is retirement strategy now goes well beyond just making contributions.

We must especially prepare for the tax consequences well face once we are living off those funds in retirement and that means we should consider whether to leverage the beneficial Trump tax table now, or take our chances on where taxes are headed in the future, knowing the government has already told us that they must go up.

Rebecca Walser is a licensed tax attorney and certified financial planner and author of the bookWealth Unbroken, who specializes in the strategic planning of maximizing lifetime wealth while minimizing tax through her practice,Walser Wealth Management. She earned her juris doctor degree from the University of Florida and her Master of Law degree in taxation from New York University. She is a frequent national media contributor.

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The best retirement advice you've probably never heard - Fox Business

Heres why they are related

The financial advice industry is known for having strong opinions. Politics is like that too. Especially these days. To be clear, this is NOT a political commentary. I direct you to a zillion other locations on the internet for that.

Likewise, it seems to me that people within 10 years either side of retirement (hoping to retire within 10 years or retired within the last 10 years) are bombarded with confident (dare I say arrogant?) opinions from my industry. Whether it is the future direction of the stock market, the economy, political winds, etc., it is a lot to take in. And now, impeachment of a U.S. President is top of the news. What should we make of that?

Left, right and blue?

If you are right-leaning politically, you think impeachment is a hoax, or at least over-hyped. If you are left-leaning, you think its about time, and that it needs to happen. And, naturally, there are plenty of folks in the middle. I dont care about any of that here and now. What I care about is what you should as well. Specifically, to size up the potential impact on your retirement lifestyle of whatever happens.

This is not just an attitude I possess about impeachment, or politics in general. And, I am not a bull or a bear on markets. I am realist, and a historian of sorts. More than anything, I am determined to strike a balance. That balance is between the potential pursuit of growth and income (a.k.a. the good stuff) and the realistic risk of major loss in value (the bad stuff). The latter is what can ruin all the work you have done for decades to set yourself up to retire as you wish. So, with impeachment as the news topic de jour, here is my take on striking that balance. It is more deductive reasoning than shouting at whoever disagrees with me. I hope you find that refreshing.

Impeachment and market history

I will skip over the impeachment of Andrew Johnson. If you dont remember, he was the one who reluctantly replaced Abraham Lincoln after the tragic assassination of our 16th President. Markets are just a bit differenttoday, so well ignore what happened then.

Nixon

The impeachment of Richard Nixon is knowntodayas a case of a crime and a cover up. The latter is what did the damage. Back then, we had a functioning U.S. Congress. So once the information became available about what had actually happened, the process was followed, and Nixon resigned before he could be convicted. Gerald Ford became U.S. President, and the country slowly recovered from the psychological impact.

In 1974, the 10-year U.S. Treasury Bond yield was in the 7-8% range. As I write this, it is at 1.52%. So, bonds as a long-term retirement portfolio anchor are just not there.

The markets were roiled from that, and the threatening economic conditions that preceded it. The result was one of the worst stock bear markets in recorded history, from 1973-1974. Interest rates were much higher then, as was inflation. Still, I would say that one of the key long-term retirement cushions of that era does not existtoday.

Clinton

Then, there was the impeachment of Bill Clinton. That occurred in October, 1998. The S&P 500 was around 1,000. Short-term, the stock market went much higher. This was the late stages of the Dot-Com era. The peak around 1,500 occurred about 17 months later. However, as of the summer of 2010, nearly 12 years after Clintons impeachment, the S&P 500 was again around that same 1,000 level.

Naturally, a lot happened in between. But, my point is that if you are setting up for a long-term use of all the wealth you accumulated over decades, you cant just do it in a pot-shot manner. Its not impeachment, though that is one of many factors that can impact market psychology and confidence.

And that, after all, is what takes modest market moves in both directions, and turns them into major ones. So, we cant ignore impeachment, but we do have to account for it.

A short list of must care abouts for retirees

Here is where your focus should be right now:

Income investing: think differently

Growth investing: its a cyclical thing

I cringe whenever I see a buy and hold portfolio for a retiree or someone nearing retirement. I love the concept of buy and hold. But the current times make it many times riskier for those in the waning years of the primary career.

There is currently a unique combination at work to threaten retirees. We have an extended bull market on the back of cheap-money policies that have not been addressed, much less resolved. And the mountain of debt at the government, corporate and consumer levels that existstodayis potentially toxic to the wealth of those in the retirement/pre-retirement phase.

Business is cyclical, so are markets. The old recency effect is your enemy. That is, dont let recent strong returns in the stock market blind you to the reality that its easy to give it back. I think that many investors would benefit from learning more about hedging strategies, and about tactical approaches to equity investing. There are plenty out there, but they tend to get drowned out by the set it and forget it machine that istodays financial advisory business.

Turning the impeachment era into action

What I have done in this article is to help you identify the opportunities and threats to your accumulated wealth. Nothing here is a forecast. Instead, it is a call to action. Get more sensitized and less complacent. Or, if none of this balancing act mantra I speak of is new to you, congratulations! You are in good position to weather whatever investment climate results from impeachment and anything else that comes along.

Comments provided are informational only, not individual investment advice or recommendations. Sungarden provides Advisory Services through Dynamic Wealth Advisors

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Impeachment And Your Retirement - Forbes

General Electric is pulling the plug on its pension plan, and thats a surefire way to derail workers retirement planning.

GE GE, +4.14% announced on Monday it was freezing pensions for 20,000 employees with salaried benefits in an attempt to reduce its $8 billion pension deficit, and that it would also freeze supplementary pension benefits for about 700 workers. Current retirees already receiving their pension payments will not be affected and no new hires have been enrolled in the pension plan since 2012.

When a pension is frozen, it is no longer earning benefits, but it is still federally insured and employees do receive whatever amount of money was already accrued. Still, it means potential earnings are lost and workers must scramble to create a plan to ensure they have enough money in the future for their retirements (usually by saving their own dollars, as opposed to relying on their company to do so).

Every time we see someone lose a defined-benefit plan, we see that theyve lost all of the sacrifices theyve made, Teresa Ghilarducci, a labor economist and director of The New Schools Schwartz Center for Economic Policy Analysis. Almost all workers in defined-benefit plans have given up a lot of raises in the past so not only do they lose a secure income for the rest of their lives they also lost all of those past wages theyll never get back.

See: Even people with pensions work into their retirement years

Many private companies have moved away from pension plans, known as defined-benefit plans, since the 1980s, especially after the introduction of 401(k) plans, which put the responsibility on employees to save for their own futures. There are different types of pensions, however, including single-employer plans (where just one company controls the pension), multiemployer plans (where numerous companies band together to offer its employees a pension) and public pensions, which are typically for teachers, law enforcement and other government workers.

Avery Dennison AVY, +1.86% was one of the last companies to terminate its pension plan last year, eight years after freezing the program. Other major corporations to freeze their plans in recent years include UPS UPS, +0.64%, IBM IBM, +1.15% and DuPont DD, +3.20%, according to the Pension Rights Center, a nonprofit consumer advocacy group.

The state of single-employer pensions are improving and moving away from a deficit, according to the Pension Benefit Guaranty Corporation, the federally-instated insurer of private pension plans, but multiemployer plans are in trouble. About 130 of these plans, which cover 1.3 million people, are at risk of running out of money within the next 20 years, and if nothing changes, the multiemployer branch of the PBGC that insures these plans will also be out of business by 2025.

This is how the GE pension freeze works: employees with these frozen pensions wont see any additional benefits nor have access to contribute to their plan, beginning Jan. 1, 2021. The company will, however, contribute 3% of those workers salaries to a 401(k) plan and provide a 50% matching contribution for up to 8% of employee contributions. The company is offering a lump-sum payment plan, for a limited time, to 100,000 former employees who have yet to start receiving their benefits.

Also see: Want a pension in retirement? Heres how to create one

GE employees, or those in similar situations, should look into their benefits to see how much theyve accrued, and how much more they may need to reach their retirement goals. Workers should also assess what other retirement income they can expect in retirement not just whatever payment theyd get from their pension if they decide not to take the lump sum, but also any 401(k) savings, Social Security and spouses benefits and savings.

Employees should consider discussing whether they should take monthly payments or choose a lump-sum with a financial professional, who can calculate how much more or less theyd get in total over their lifespan depending on which avenue they take.

If the companys financial situation is somewhat in question, it may make sense to take the money and run, said Nate Wenner, principal and senior financial adviser at Wipfli Financial in Missoula, Minn. If they do decide to take the lump sum, workers should consider rolling that money into an individual retirement account to avoid any tax surprises in April, he said. Doing so will keep the money tax-deferred until retirement, as would rolling that money into a company 401(k) plan.

And of course, employees should plan to save more between now and retirement, said Edward Snyder, a financial adviser at Oaktree Financial Advisors in Carmel, Ind. Workers should boost or max out their 401(k) contributions, if they can, and also stash more in health savings accounts, if possible. (Health savings accounts are a tax-friendly way to save and invest for current or future health expenses, although they are only available for people with high-deductible health plans, which can be expensive.)

Saving is imperative to ensuring a comfortable retirement. I always advise clients to try to plan with what you can definitely control, said Kashif Ahmed, president of American Private Wealth in Bedford, Mass. Sadly, most of those workers probably were only counting on this pension to survive retirement. They are now in a precarious, if not death sentence position.

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GE freezes worker pensions what to do if your employer changes the terms of your retirement plan - MarketWatch

Former participants in the AT&T Pension Benefit Plan have sued AT&T and the plan claiming their benefits were reduced because of the way benefits are calculated for those who retire before age 65.

According to the complaint, the plaintiffs and proposed class members are forced to forfeit accrued, vested pension benefits if they retire before age 65 and/or receive their pension benefit in the form of a Joint and Survivor Annuity. They say this is because the plans terms reduce these alternative forms of benefits using Early Retirement Factors and Joint and Survivor Annuity Factors, which result in plan participants receiving less than the actuarial equivalent of their vested accrued benefit, as required by the Employee Retirement Income Security Act (ERISA).

The plaintiffs explain that a participants pension benefit is expressed as a monthly pension payment beginning at normal retirement age, which is age 65 under the AT&T plan. This monthly payment is a single life annuity because it pays a monthly benefit to the participant for the participants entire life. Under ERISA, if an employees accrued benefit is to be determined as an amount other than an annual benefit commencing at normal retirement age [of 65] . . . the employees accrued benefit . . . shall be the actuarial equivalent of such benefit . . . .

Thus, the complaint says, ERISA requires that if a plan allows a participant to retire early with a reduced monthly pension, the value of his reduced monthly pension must be actuarially equivalent to the participants monthly pension benefit commencing at age 65. The case concerns two ways in which the AT&T plan improperly reduces pension benefits, in violation of ERISAs actuarial equivalence rules.

First, the plaintiffs allege the plans Early Retirement Factors reduce benefits to less than the actuarial equivalent amount of the participants monthly benefits commencing at age 65. The earlier the participant retires, the greater the reduction to his benefits. For example, under most programs of the plan, if a participants normal pension benefit beginning at age 65 is $10,000 per month, and he retires at age 60, his monthly benefit is reduced by a factor of 0.58. As a result, the value of his monthly benefit is 58% of $10,000, or $5,800 per month, when the actuarial equivalent benefit he is entitled to receive under ERISA is approximately $7,090 per month.

Second, the plaintiffs point to applicable Treasury regulations that say, A qualified joint and survivor annuity must be at least the actuarial equivalent of the [single life annuity]. Equivalence may be determined, on the basis of consistently applied reasonable actuarial factors. A joint and survivor annuity is expressed as a percentage of the benefit paid during the retirees life. For example, a 50% joint and survivor annuity provides a surviving spouse with 50% of the amount that was paid during the retirees life.

The plaintiffs allege that the plans Joint and Survivor Annuity Factors reduce benefits to less than the actuarial equivalent amount of a participants benefit expressed as a single life annuity. For example, if a participants single life annuity benefit is $10,000 per month, and he is married, his default form of benefit is a 50% joint and survivor annuity, which is reduced by a factor of 0.90 for most programs under the plan. As a result, the participants monthly benefit is 90% of $10,000 per month, or $9,000 per month, when the actuarial equivalent benefit he is entitled to receive under ERISA is approximately $9,200 per month.

The plaintiffs say the to the best of their knowledge based on the available information, the Early Retirement Factors and the Joint and Survivor Annuity Factors in the AT&T plan applicable to the class have not been updated in over a decade, despite dramatic increases in longevity. Because the Early Retirement and the Joint and Survivor Annuity Factors have not been updated to be in line with reasonable actuarial assumptions, they do not yield actuarially equivalent payments to Class members as required by ERISA. As a result, Defendants have improperly reduced Class members pension benefits in violation of ERISAs actuarial equivalence requirements, the complaint says.

In addition, the plaintiffs say, ERISA Section 203(a) provides that an employees right to his or her vested retirement benefits is non-forfeitable and states that paying a participant less than the actuarial equivalent value of his accrued benefit results in an illegal forfeiture of his benefits. Thus, the Plans terms that reduce participant benefits to less than their actuarial equivalent value violate ERISAs anti-forfeiture requirement set forth in [Section] 203(a).

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A blue-chip dividend portfolio pays about 2% today. Put a million bucks into a bucket of these stocks and youll bank just $20,000 in yearly dividends. Thats barely extra changeon a million invested!

Theres a better way. I prefer to focus on stocks and funds that simply arent as familiar as the big names to most investors. They do offer growth potential. But most importantly, they dont sacrifice yield for perceived safety. In fact, they yield roughly 3x to 4x the blue-chip stocks, providing a lot more retirement-income cushion in years where the market stalls.

Most people love the idea of this Perfect Income Portfolio, yet millions of retirees across the country find themselves piled into the same group of overowned, overpriced blue chips because the traditional wisdom says thats what retirement is supposed to look like.

We can avoid that trap and indeed live on dividends for the rest of our lives.

Sure, retiring well isnt as easy as just finding any stock with a high yield and blindly buying with both hands. For example, first-level income investors thought they couldnt lose with Guess? (GES) a couple years ago. Its sinking share prices drove its yield to as high as 9%what a bargain!

But, had they looked past the first level, they wouldve seen the rapidly declining cash and terrible payout coverage figuresthen bolted for greener pastures and avoided a 25% payout cut.

The key is sustainability, and a dividend payment (blue line above) thats higher than the cash flows that fund it (orange line above) is not built to last.

Thats exactly what Contrarian Income Report subscribers got with Cohen & Steers Infrastructure Fund (UTF), which I recommended in February 2016. This closed-end fundwhich focuses on energy, water, transportation and other infrastructure-related companieswas distributing a whopping 8.8% at the time. That hefty yield propelled 70% in total returns in just three years!

Today, lets explore some high-dividend picks doling out fat yields ranging from 7.5% to 12.2%. Well highlight a couple of near-perfect retirement dividends, and two more flawed payouts to avoid.

Altria (MO)

Dividend Yield: 8.2%

Tobacco stocks have traditionally been high yielders, but Altrias (MO) sudden ascendency to 8% territory truly grabs my attention.

Too bad this isnt a screaming dividend growth story.

Altria has long had to deal with mounting pressures in the U.S.: greater health-consciousness, governmental anti-smoking campaigns, escalating taxation of its products. But now it has a new anchor strapped to its ankle.

Back in March, when I highlighted MO as a clearly cheap high-dividend stock, I pointed out Altrias efforts to stem the tide by taking a $12.8 billion, 35% stake in e-cigarette company Juul. I also pointed out that Altria still could be in long-term jeopardy regardless because Juul is increasingly finding itself in a similar regulatory pickle.

Juul isnt immune from the same pressures. The company faces class-action lawsuits in Philadelphia and New York federal courts over the companys marketing tactics and over its disclosure of nicotine levels. Juul also temporarily halted sales of most of its flavored nicotine pods in November in hopes of getting out in front of aggressive federal regulators worried about spiking e-cigarette use.

It has gotten worse since then.

Reports of vaping-related illnesses have sprung up across the country. The Centers for Disease Control says 12 deaths and 805 cases of lung injury have been linked to vaping. The CDC has warned against e-cigarette use while it investigates. Several states have either banned or are working on bans of flavored vaping products. The upheaval essentially forced Altria to scuttle merger discussions with Philip Morris International (PM).

Altria has lost a quarter of its value since my warning, and its possible this gets much worse before it gets better.

New Mountain Finance (NMFC)

Dividend Yield: 10.0%

Business development companies (BDCs) were created by Congress to provide capital to small- and midsize companies. Its a noble cause, but a difficult trade to ply. In fact, its one of the few industries I advise against investing in via funds, because all the duds tend to drown out the handful of stars in the space.

New Mountain Finance (NMFC) is one of the few BDCs that inspire a little confidence.

The quick hits on its business: It invests between $10 million to $50 million by issuing debt all across the capital structure and most of that is floating-rate. Its target businesses generate annual EBITDA of $10 million to $200 million. Portfolio companies tend to have barriers to competitive entry, recurring revenues and strong free cash flow.

These businesses provide strong profits to help fund NFMCs payouts. And its not every day you can get a double-digit dividend at a discount, but here we are. NMFC has a net asset value of $13.41, and at last check, it traded at $13.30 per share.

So while recession worries are going to rattle BDCs of all stripes, New Mountains high credit quality makes it a safer bet than most.

Armour Residential (ARR)

Dividend Yield: 12.2%

I quipped in a June 12 column that ARMOUR Residential REIT (ARR) is taking a rare multi-year break from cutting its dividend.

Not so fast, my dividend friend.

On June 24, the company tucked this into a press release: The Company also announced today the expected July 2019 cash dividend rate for the Companys Common Stock of $0.17 per common share with an anticipated record date of July 15, 2019, and anticipated payment date of July 29, 2019.

Thats how you tell investors you just cut the dividend without actually telling them you cut the dividend.

Ill keep this quick. Through a long series of dividend cuts, this mortgage real estate investment trust (mREIT) has reduced its monthly payout by 82% since 2011. Ive mentioned before that stock prices typically chase dividends higher. Well, the same goes for the other direction.

Armour even boasted in its most recent quarterly report that Core Income exceeded dividends paid for the twelfth straight quarter, referring to its non-GAAP measure of profitability.

Thats not much to crow about when youre OK with adjusting the dividend lower. Also, heres what Core Income has been up to over the past few years.

Contrarian Outlook

Lets move on.

New America High Income Fund (HYB)

Dividend Yield: 7.5%

New America High Income Fund (HYB), a closed-end fund (CEF) focused on junk debt, isnt immune from the occasional downtick in its distributions, either. But its a far more common (expected, even) issue in debt funds, which serve at the whims of the debt market.

Whats important is that HYB maintains a fairly high yield level, and that active management has proven its worth over time by walloping the indexes.

New America High Income is a primarily U.S.-focused junk bond fund. But it does offer a little international diversification, investing a little less than 20% of its portfolio in countries such as Canada, Luxembourg and Brazil.

Credit quality is middlingabout 40% of its bonds are in the higher tiers of non-investment-grade debt. But here, youre trusting managements judgment to not only spy values in this kind of debt, but to properly use leverage to make the most of its bets.

Its not a smooth ride, for sure. HYBs ebbs and flows are far more exaggerated than index funds such as the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), thanks in part to that leverage.

But its hard to argue with the results. Theyre certainly better than its junk bond ETF counterparts!

Brett Owens is chief investment strategist for Contrarian Outlook. For more great income ideas, click here for his latest report How To Live Off $500,000 Forever: 9 Diversified Plays For 7%+ Income.

Disclosure: none

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How To Build The Perfect Retirement Income Portfolio - Forbes