By Nance Ebert
Contributing Writer
REGION – Living in Massachusetts is expensive and many aging residents struggle to make ends meet while still working, let alone think about retirement.
If you’re retiring in Massachusetts, the good news is that the state doesn’t tax Social Security payments at all. In addition, if you have a government pension, those payments may also be state tax-exempt.
Photo/Pexels/Cristian Rojas
A variety of approaches
Sherri Gorelick of Southfield has worked at her current firm for fifteen years. She works in insurance employee benefit sales. Her company has an optional forced savings plan, which she took advantage of. It’s pre-tax but this is in addition to having a 401(k) plan.
“Years ago, my financial advisor suggested that whatever I make in my 401(k), I roll over to him and he, being a better investor that I am, invests my money wisely,” said Gorelick. “In addition, he suggested that I put some of my savings in Roth dollars which I have been doing for about ten years now, so I do feel confident with the portfolio I have created.”
The advantage of a Roth 401(k) or Roth IRA is that it is not subject to required minimum distributions (RMDs).
American retirees receive a monthly income in a variety of ways that include Social Security, pension, retirement accounts, workplace retirement savings plans, investments, Roth IRAs, real estate (home equity), family assistance and more.
Best prepared in some ways
Massachusetts residents are among the best prepared in the United States with the second-highest median retirement savings nationwide. However, there are many inequality issues that exist. For people who work at non-profits, the Massachusetts Core Plan (MA CORE) assists workers without employer sponsored plans.
In May 2025, Luc Schuster, executive director of Boston Indicators, the research center at the Boston Foundation, wrote, “The reward of a comfortable, secure retirement is one of the unwritten expectations of the American worker but for too many Massachusetts seniors, the combination of Social Security, retirement savings and other programs doesn’t quite cover what is needed. As a result, the low-income seniors we interviewed are forced to use an array of strategies to make ends meet.”
The level of retirement savings, while high in Massachusetts, varies a good amount from town to town statewide and even within the Boston metro area.
Establish your priorities with an active approach
Gary Schiff, an experienced wealth management professional with extensive client service, financial planning, portfolio management and business development experience shared a number of observations in helping to prepare his clients for retirement.
“One common approach for a broad section of people is to prioritize their income into a number of buckets to include current expense needs and future expense needs so that you end up with retirement security,” said Schiff. “The optimal idea is to start young and don’t wait until the last minute to start saving.”
He also encourages his clients to make a list of priorities. With each paycheck there are fixed costs (food, fuel, rent, etc.), more intermediate costs (like education and vehicles, purchase of a home) as well as contributions to a company 401(k). Some companies will match some percentage of your 401(k) contribution, which is essentially free money and should always be taken advantage of. In addition, putting some money into a discretionary IRA is also a good idea.
Some in the Baby Boomer generation are waiting for an assumed inheritance. “This is a poor strategy,” said Schiff. “Sometimes it works and often times it doesn’t. There is a grab bag of solutions that a person who takes ownership of their future has with an active approach.”
The power of compounding is magic. For example, an investment earning five percent a year will double in value in about 14 years. An investment earning 10 percent a year will double in value in about seven years. So, the key is to start young and over time, even saving a small amount each year, will grow to a much larger sum that you can look forward to using in your retirement years.
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