Late Start? Retirement Planning is Still Critical

By Eric Gursky

It is an unfortunate fact that 28% of workers 55 or older have less than $10,000 saved. Those who have waited too long should not grieve about the past and take action as soon as possible. The road to having a retirement will not be an easy one and some sacrifices need to be made. It is a lot harder to start saving after 35 but even when this is the scenario, people still need to come up with a magic number or the amount they want to acquire by retirement. For example, someone who is 55 years old and earns $40,000 a year would need to save 27% of their income to be able to retire at 65.

Those who have waited to retire now need to put away as much as they can. To be in the position to put away more money, a person may have to relocate to find a higher paying job, pick up an extra part time job, and cut other expenses. Some suggestions for cutting expenses include selling your house to rent, selling off excess property you don't need, and eating at home instead of dining out. Other recommendations lean towards working until 70 because it gives you more time to save and your actual retirement length will be shorter. Along with working longer comes the option of waiting to receive social security. If you wait until your full retirement age, the social security benefit will not be reduced. This reduction can reach 30% if you choose to take it early. There is also an option to delay your benefit until after your full retirement age which can increase it by up to 8% a year.

For specific retirement options, it is still not to late if you are 50 or older to start an IRA. Even though you will not be able to take full advantage of compound interest, the money can still experience nice growth before being tapped. People over 50 who are saving in a regular or Roth IRA can save an extra $1,000 a year bringing the total allowed savings to $6,000 annually. Likewise, individuals who are 50 and over that have a 401k can save an extra $5,000 a year making the maximum contribution $20,500. While IRAs and 401(k) plans have tax deferred growth, the Roth IRA has tax free growth. While these are great options, you actually need to be making the money to save. For those who can't, social security should not be underestimated and may replace up to 25% or more of your current income.

Source 1
Source 2
Source 3

A GOOD STRATEGY FOR RETIREMENT PLANS

By Eric Gursky

IF your retirement assets took a beating in the recent stock market decline, converting a traditional I.R.A. to a Roth I.R.A. may be one of the best tax strategies this year.

When you do the conversion, you must pay income tax on the amount you are converting. This can be the whole account or a portion of it. But, subject to certain restrictions, no tax is assessed when the money is withdrawn. You also avoid the requirement to take yearly minimum distributions beginning at age 70 1/2, which can leave more for your heirs if you don’t use the money yourself.

How much you benefit from the conversion will depend on how the investments do subsequently, but there is great potential. Consider Albert Horrigan, 66, a semi-retired real estate broker in Sarasota, Fla., who converted a $50,000 I.R.A. to a Roth I.R.A. in 1998.

Click Here to Read More

By Eric Gursky

Retirement means saving and securing a future after work. There are necessary steps that must be taken in order to see the best returns. There are three things to consider when planning for your retirement. First you should
1) Assess your retirement.
a. You can keep track of your progress with retirement savings calculators such as the one available on Charles Schwab’s website.

2) Develop a retirement savings plan.
a. You should consider some strategies for saving. Most strategies fall under three types of plans. Qualified plans, which are plan set up by employers to give employees retirement saving opportunities. Individual Retirement Accounts, which is a personal savings plan that provides tax advantages. The three main advantages is that you may be able to deduct your contributions in whole or in part during the tax year you make the contribution, contributions are generally not taxed until distributed, and the IRA fills in the gaps in other tax-favored ways to save for retirement. And last there are Non-qualified Plans, which is an employer-sponsored retirement or other deferred compensation plan that does not meet the tax-qualification in a lower tax bracket.
b. You should diversify your retirement savings into a variety of asset classes
c. Build a portfolio in line with your long-term goals and risk tolerance

3) Explore ways to save
a. Maximize contributions to your existing 401k, 403b, 457
b. Establish a traditional or Roth IRA
c. Consider an individual 401(k), SEP-IRA, or profit-sharing plan if you own a small business.

Source 1
Source 2
Source 3

Obama Seeks New Payments for Retirees

By Eric Gursky
WASHINGTON - President Barack Obama called on Congress Wednesday to approve $250 payments to more than 50 million seniors to make up for no increase in Social Security next year.

The White House put the cost at $13 billion.

The Social Security Administration is scheduled to announce Thursday that there will be no cost of living increase next year. By law, increases are pegged to inflation, which has been negative this year.

Click Here to Read More

Covering college-tuition loans -- somebody give me some credit!

Posted by Nick Porcell

With two daughters in college, tuition loan repayments were stacking up, and my wife and I felt the weight of multiple monthly payments kicking in. We began to realize what a job it was to keep track of all the loans, and figured there had to be a better way.

Remembering we'd gotten good advice from the credit union on retirement accounts and mortgage refinancing, and eager to avoid any lender that smelled like last year's banking industry meltdown, we called our adviser to set up a new strategy for squeezing tuition payments into the family budget.

The good news came quickly. "Call the loan office in the morning," our adviser said. He agreed that using the equity we'd built up in our home to pay tuition bills would liberate us from the structured federal loan programs. If things went as expected, it would allow us to repay on our own terms, at 3.99 percent (I know!), and 'defer' if we needed to, by making only minimum payments in tight months.

Click here to read more

Surprise! That 401(k) Account Is Looking Good

By: Shea McCabe

Written by Karen Blumenthal

Get this: despite the biggest and broadest decline in financial markets in a generation, the median 401(k) retirement account at Vanguard Group on September 30, 2009 was up 7% from where it was two years earlier, when the market was at an all time high.

Seems impossible, doesn't it?

If you've looked at your investments lately, you might be surprised at how much they've rebounded as the DOW Jones Industrial Average has climbed back above 10,000, especially if you've got a healthy mix of stocks and bonds and you've continued to make contributions.

Click HERE to read more...

Best Ways to Save for Retirement!

By Eric Gursky
If your a young college student like me and the rest of our class you are probably wondering what are the best ways to secure a safe future. In order to best prepare for your eventual retirement there are keys steps that need to taken which will ensure a smooth ride to the finish. Start early: You can't predict market downturns or what happens to Social Security. But you can control how much you save, and the sooner you start, the easier it is to build a rock-solid nest egg
.
Save regularly: Saving $4,000 might be a stretch if you're just getting on your feet. But putting away even small amounts now can make a difference.

Say you land a job making $45,000. You sign up to contribute 3 percent to the company 401(k) plan, or about $52 every other week. If you do just that for the next 40 years, you'd have about $400,000 as you near retirement

Don't Confuse Saving with Investing.

I am sure many of you are intent on saving for a house, a car, higher education or something else. By all means, continue saving, but don't invest your savings in stocks and stock mutual funds if you plan to make a large purchase within the next four to five years. Remember, investing will work wonders for you, if and only if, you put time on your side. Time periods of less than five years may not give you enough time to recover from a substantial market drop.

Though some of you have never experienced a sustained down market ( otherwise known as a "Bear Market"), let me assure you that they are not a thing of the past.

Source 1

Source 2

Source 3

Retirement Readiness Falls on Housing Market

By: Eric Gursky

Oct. 27 (Bloomberg) -- Fewer U.S. households are prepared for retirement after the value of their homes and investment portfolios declined in the recession, Nationwide Mutual Insurance Co. said.

Fifty-one percent of Americans would be unable to maintain their standard of living if they retired at age 65, compared with 44 percent in 2007, the insurer said today in a statement, citing the National Retirement Risk Index it developed with the Center for Retirement Research at Boston College. The estimate is “conservative” because it doesn’t include medical costs or long-term care, the insurer said.

“The real problem behind this is that so many households were dependant on their home values,” Paul Ballew, a senior vice president of customer insights and analytics at Nationwide, said in an interview. “Once home prices came back down to normal levels, we wake up one day and realize we don’t have adequate savings.”

Americans are facing a decline in the value of their homes and other assets at the same time the U.S. government is pushing back the age that retirees qualify for full Social Security benefits. The average 401(k) retirement savings account fell by almost one-third in 2008, and people aren’t saving enough to make up the difference, Ballew said.

Click Here to Read More

Is Working Through Retirement the New Trend?

By: Eric Gursky
When people think of retirement they imagine the days playing golf and sipping on an umbrella drink somewhere warm. That society norm was 10 years ago, now that our economy has rapidly changed and people's 401k futures are less secure we are seeing an increasing number of 65+ workers still playing a major role in the workforce. In fact, Marc Freedman, author of Prime Time, describes how the baby boomers will transform how society views retirement -- bringing about a new image of aging, retirement, and the role of older Americans in our society. He cites statistics that show that in just a few years the number of folks over age 50 will surpass a quarter of the U.S. population. And the U.S. Bureau of Labor Statistics reports that baby boomers are reaching the age of 60 at the rate of one every seven seconds. Many of these folks will be searching for something beyond a leisurely retirement. Whether you work after age 65 will depend on many factors -- whether you have a defined-benefit plan or retiree health insurance, whether you are in good health, whether you can find work. But make no mistake about it: Some of you will work past age 65 and earned income will play a significant role in your finances. Of course, this new reality is often a function of need, particularly with the recent downturn, Freedman said. "But social norms are fast changing," he said. "Many folks simply want to continue to go to work to engage with other people. It makes them happier and gives them a greater sense of purpose." After all, earning a paycheck in your latter years can make a huge difference in retirement living standards. Pocketing even a slim income often allows retirement portfolios to compound over a longer period of time.

Source 1
Source 2
Source 3

Best Countries for Retirement

By: Eric Gursky
If you could move to any country of your choice to retire with the most secure pension benefits, which would you pick? By and large, experts who study pension systems say no country is a retirement Shangri-La, though certainly some places do better than others in providing for retirees' financial security.

"I am having a hard time dredging up a country where things are copacetic," said Olivia S. Mitchell, a professor and director of the Boettner Center for Pensions and Retirement Research at The Wharton School. "Everyone pretty much has been hit by the global financial crisis and virtually everyone is confronting the aging revolution."

Others agreed. "We always regard this as a dreaded question: Which country has the best pension system?" said Edward Whitehouse of the Organization for Economic Cooperation and Development (OECD), which this summer published a definitive examination of pensions in 30 developed countries.

Click Here to Read More

Singers Never Retire

Posted By Shawn Gao

Many people plan to make their retirement in their golden year; however; some of people may not want to retire. These people are singers who are enjoying making their music. Even though these people are making millions of money for one year, they don't even think how they will do after they retire. The most famous rap singer- Jay- Z announced that he would never retire. Also, some of singers, like Tom Jones, said no to retirement. Why are singers so different from residents? Why don't they want to have early retirement?
Singers like Tom Jones who are nearly 70 years old, are enjoying their musical journeys, and have no plans to make. Tom Jones said that the older he gets, he enjoys what he has done and what's happened through his career. Most of singers have the same ideas as Tom Jones has. When they get elder and elder, they want to keep making more music as they could. Also, they do not want to make their fans sad.
Some singers, like country singer Garth Brooks, has announced he is ending his semi- retirement and signed up for an extended run of dates in Las Vegas. Many singers retire in their middle career, and return to the platforms later on.
For those fans, they are lucky enough to follow their never ever retired singers.
Reference
1.http://news.bbc.co.uk/2/hi/entertainment/8311133.stm
2.http://www.entertainmentandshowbiz.com/tom-jones-tom-jones-says-no-to-retirement-2009101220593
3.http://www.entertainmentandshowbiz.com/jay-z-jay-z-will-never-announce-retirement-2009092019313

Work Keeps You Healthy In Retirement

Posted by Shawn Gao

A new study informs it is better to continue to work after retiring, as it helps in having fewer diseases and fewer functional limitations than those who quit work completely.

The study published in the October issue of the Journal of Occupational Health Psychology shows, a part-time job or self-employment or ‘bridge employment’ is generally good for health after retiring officially.
Read More

When Early Retirement Is The Only Option

By Quang Nguyen



Many people have their life plan mapped out since they are in their 20s. People like artist Richard Freund knew that he would work until he was 70 years old while his wife, a psychotherapist planned to work until she turned 62. They planned how their retirement was going to be with all of their investments and work benefits. And then came the recession. People just simply can't find work. For the more educated and wealthier group of people, things might come easy as they have the resources to work out a deal somehow, but for the majority of the labor market, things do not look too well. For many of them, retirement is the only option. It is a terrible situation to be in, but there is nothing they can do about it.

People are feeling scared. This is the first time since the great depression that put people into this situation. Some might try to find another job and get back to work. Most economists would suggest people to try to find another job to get that extra income that they don't have. Some are thinking of getting their social security benefits. However, they must work at least 10 years in order to qualify for the benefits. One good thing about the social security system is that they adjust the money amount into today dollar. For example, if you earn $5,000 in 1967, it will be $39,000 today.

The government is also doing its best to improve the situation. In October, President Obama called for Congress to approve $250 payment to as much as 50 millions seniors to make up for the fact that Social Security will not increase next year. The White House estimated that the cost to this plan will be $13 billion. Although $250 might not be that much, it would really help those who are in trouble. Although the result of this program is not yet to know, it sure would calm people down and support them through this difficult time.

Sources:

http://www.msnbc.msn.com/id/33231989/ns/business-personal_finance/

http://money.cnn.com/2009/10/13/pf/expert/retired_early.moneymag/index.htm?postversion=2009101310

http://www.msnbc.msn.com/id/33316549/ns/business-personal_finance/

Is the Recession Helping Us Live Longer?

posted by Jameel Murray

Last week I posted an article discussing the effects of the recession, which are forcing citizens to work through retirement. Because employees do not have the proper savings to retire due to the recession, many are forced to work past the retirement age minimum. Even though it may sound a bit difficult, it may actually be a great thing for most. Recent studies have shown that those who work temporary or part time jobs after the retirement age are physically and mentally healthier than those that are fully retired. Researchers interviewed an estimated amount of 12,200 people every two years over a six-year period. This may not seem surprising for most but can we actually give credit to a grueling recession for keeping our citizens healthy?
Retirees who continue to work past the retirement age function better daily and suffer 17 percent fewer diseases than those who actually retire. Studies have also discovered that those who do tend to fully retire often die sooner. According to Professor Cary Cooper, an occupational psychologists at the University of Lancaster, if one’s mental wellbeing is depleted it will affect you physically. In conclusion, the recession has condensed our wealth, however it has proven to complement our health.

Sources: http://www.themedguru.com/20091014/newsfeature/employment-post-retirement-leads-better-health-study-86129713.html

http://www.stuff.co.nz/life-style/2969037/Retirement-is-not-the-healthy-option

http://www.nepalnews.net/story/554409

Retirement: When time IS an issue

By Jonathan Tse



It is very important to start saving up for retirement early on in one's life because unexpected things can happen later on, so one must be prepared to have enough money to last until long after retirement. For those who started later, there are still ways to live comfortably and not have to save massive amounts of money in the last few years of work.
In this type of situation, one must continue to invest no matter what the amount. Also, the investment should contain a good mix of something like 50% stocks, 40% bonds and 10% cash. One should not only rely on stocks because it is very risky to only rely on stocks, so bonds should also take up a big part of one's portfolio. Even though stocks are not earning as much as they did, having a diverse portfolio of stocks and holding them for a longer time will still give one decent profits in any type of economic situation. Holding too much of only one company's stock would be risky no matter how well a company is doing because of the uncertainties of business, so diversification helps reduce these risks. Some other things that can be done is to max out one's 401(k) and to take advantage of the $5000 provision for people over the age of 50. Try to find more ways to get the most out of investments and savings by finding and switching over to ones with the most interest rates and lower fees.
It pays to start early and save as much as one can when one has the ability to earn more.

http://money.cnn.com/2008/07/08/pf/retirement/boomer_july.moneymag/index.htm?postversion=2008071510
http://money.cnn.com/2008/09/05/retirement/retirement_perfectplan_60s.moneymag/index.htm?postversion=2008090912
http://money.cnn.com/2008/08/15/pf/millionaires.moneymag/

The right way to unretire

Posted by Quang Nguyen



Tom Wogan loves working with his hands, especially building fishing rods and restoring World War II Army knives. So when he retired in June 2006 at age 60 from his $110,000-a-year job as a shift manager at the Florida City nuclear power plant near his home in Palmetto Bay, Fla., he looked forward to spending carefree days puttering around his garage working on his hobbies. With a retirement portfolio worth $1.1 million, Wogan thought he was all set.

Then the bottom fell out of the stock market. Wogan's cool million plummeted 36% in a matter of months; since then, as he's tapped savings to meet living expenses, his portfolio has dropped further and is now worth just $630,000. That's hardly enough to last Wogan and his wife, Pamela, 55, into ripe old age -- especially since her job as a graphic designer pays only $32,000 a year and the Wogans still pay a mortgage and aren't done with college tuition for three of their four children yet.

Click here to read more

Millionaires in the making: The Rodrigueses

posted by Jonathan Tse

Only 27 years old, prodigious savers Gina and John Rodrigues are determined to retire with a million-dollar nest egg by the time they turn 40. Here's the odd part: They just might make it.



(Money Magazine) -- John and Gina Rodrigues have always been good with numbers. John is a software engineer who manages a team at Microsoft, and Gina spent years processing mortgages at Wells Fargo and Countrywide Home Loans. But the numbers they are especially good at are the kind with dollar signs in front of them.

At age 27, John and Gina already earn a combined $174,000 a year, save half of what they make and have built a formidable portfolio of $380,000 in stocks, mutual funds and cash. Their goal: to become millionaires and retire by the time they turn 40, just 13 years from now.

To make that dream a reality, they have become black-belt practitioners of an art rarely practiced in America these days: While others with their earning power might indulge in fancy dinners, luxury vacations and designer wardrobes, the Rodrigueses live like young couples did before the era of easy credit. They rent the house where John grew up in the San Francisco Bay Area for a mere $650 a month; rarely travel; split an entrée on the rare occasions they eat out; and spend almost nothing on clothes (John wears free Microsoft T-shirts, while Gina gets hand-me-downs from her sister).

Click here to read more

Gulf Between Rich And Poor Seniors Could Widen

by Ashlea Ebeling
posted by Jameel Murray

The current downturn will likely sharpen the financial gulf between the most affluent, best-educated retirees and the poorest ones. That, at least, is the conclusion suggested by new data from the Social Security Administration and a new study by Phillip Levine, chair of the Department of Economics at Wellesley College.

For all their bellyaching about declines in the value of their 401(k)s, the best-educated older workers, whose skills are most in demand, usually have a way to make up for their losses: work longer. The less educated, particularly during a recession, often do not have that luxury and end up forced into an early retirement.

click here to read more

During Retirement, You Can’t Afford to Coast

Posted by Alma Zhumagulova
By PAUL B. BROWN
Published: October 10, 2009


FOR those of us who, thanks to the market’s recent climb, are now feeling slightly better when we look at our retirement accounts, Daniel R. Solin offers this splash of cold water in the face:
Skip to next paragraph

“How you invest during retirement is as critical as how you invest in preparing for retirement.”

And he contends in “The Smartest Retirement Book You’ll Ever Read” (Perigee, $21.95) that we are not prepared for that second phase of our investing lives.

Click here to read more.

How to have you dream retirement come true!

By Alma Zhumagulova


In this current situation almost everyone is worse-off: recent graduates, who can’t find job, middle-aged people being laid-off, even the older generation that cannot leave their jobs and retire as planned.
In order to learn from the older generation’s mistakes, you should start saving for retirement as early as you can and save regularly. The dollar that you did not save in your 20s becomes $8 you have to save if you start saving in 50s. When you are just starting to acquire the basic fixed assets such as home, car, or are paying of student loans, it is fine to save only 3% of income, but as time goes on you should progressively increase the share of income you are putting aside to about 10-12% which is the optimal desirable amount.
If, however, you procrastinate saving early, it is not too late to start saving 15 years before your retirement. At this moment you should establish a financial plan for saving and retiring, gradually get rid of any debts, and try to pay off your mortgage. According to CNNMoney, one should aim for 80% of their income before taxes for heir retirement income to maintain the same level of life. Everyone is unique and everyone has their own “dream” retirement vision, so adjust your savings not only according to your income but also to your desired lifestyle after retirement. Always have a cushion, i.e. save more than average for your income level, just to be on the safe side.
When you are very close to your retirement, try to use up your benefits provided by your employer and take the vacation days you haven’t taken either as cash or a nice break. Decide on how you will withdraw your savings, sign up for Social Security and Medicare and then start enjoying your retirement.

References:
http://www.chicagotribune.com/business/yourmoney/chi-tc-biz-ym-started-1004oct04,0,7403517.story

http://www.hometownannapolis.com/news/bus/2009/10/04-29/Ways-to-prepare-early-for-your-retirement.html

http://money.cnn.com/2009/10/08/pf/expert/retirement_incom.moneymag/index.htm?postversion=2009100810

It is not late to start your retirement planning

posted by Shawn Gao

When people are fifty or more years old, they are wondering whether they start their retirement saving too late.
One recent research by HSBC shows that only 13 percent of people around the world have already prepared for their retirement saving, and another 43 percent of people have undertaken some planning without clear mind of how much income they have from the plans.
Depending on the current situations, elder people have to deposit more than teenagers and adults. Since elder people have already passed their golden years of working, they need to consider more about their saving plans.
However, during the downturn economy years, financial advisors offer some special retirement plans for those elder people who didn't start their retirement savings early. It is fair that elder people need to expand their working years with enough saving s for another 15 years. Financial advisors suggest that elder people could be in self- employment or part- time in order to increase their income and expand working years. To build enough wealth to support their rest of lives need to set more time and meaningful amount of money.
reference:
1.http://gulfnews.com/business/your-money/retirement-planning-for-late-starters-1.512484
2.http://www.onlinenews.com.pk/details.php?id=153295
3.http://www.kaiserhealthnews.org/Columns/2009/October/101209Gleckman.aspx

Retirement planning for late starters

Posted by Shawn Gao

If you're in your 50s and haven't set aside money for your retirement, you may have a big problem.
If you're in your 50s and haven't set aside money for your retirement, you may have a big problem. But you're not alone. Across all age groups, only a few people have actually prepared for their golden years.
According to a study by HSBC, just about 13 per cent of people around the world feel they are very well prepared to cope with their retirement. Although 43 per cent have undertaken some planning, they lack a clear sense of what their retirement income will be like.
read more

Retire in Style

By Quang Nguyen



During this economics downturn, many people are struggling just to live by. It's easy to read on the news that many people are considering working after retirement. However, there are a number of people are living it up and enjoying the best that retirement brings. These people are the one who save through their working years after years. It is estimated that in order to have a good time during retirement, you should save as much as 80% of your salary. And that is just for people who make under $100,000 a year. For others, who made around $250,000, they save as much as 88% of their salary toward retirement. The advice is that give yourself some cushion for the golden ages.

The average age for retirement is 65. However, many executives, professionals, and business owners retire at 60 or earlier. Some people who work for large organizations even get a better deal to retire in their mid-50s when the companies are looking for ways to downsizing. When you retire at age 65, the only benefit you get is the full benefit from Social Security, which is around $1,200 a month. For people who have saved and invested for their retirement, this money is sure nothing compare to many years in their early retirement.

So what options do you have when you get into the old people's world with money in your pocket? Well there is the continuing-care retirement community that you can check in. This amazing place offers gourmet restaurants, infinity pools, gyms, spas and concierges. Some even have cinema and putting green. The greatest luxury of it is health care for life. There are currently 1,800 continuing-care retirement community in the country, and right now is the best time to get into one. For the past couple years, applicants have to be on a long waiting list and some never actually get in. What is the cost you might ask. Well there is an up-front cost that ranges from $20,000 to $1 million, and it averages out to be $250,000. And this is just for getting in. Once you in, there's a monthly cost of around $2,750. You can also pay around $7,000 to $8,000 a month for the skilled nursing care. So assuming a person is going to live 15 years at the community, and spends around $2,000 for the monthly fee, it will be $360,000 plus the entrance fee. How can people afford this you might ask. Most sell their house for the entrance fee, and their saving for retirement works perfectly fine with the monthly fee.

Sources:

http://money.cnn.com/2009/10/08/pf/expert/retirement_incom.moneymag/index.htm

http://findarticles.com/p/articles/mi_m1365/is_n3_v26/ai_17464077/?tag=content;col1

http://money.cnn.com/2009/02/12/retirement/Gengler_living_up_retirement.moneymag/index.htm?postversion=2009021304

Recent findings show that many Americans are planning to work past retirement

By Jameel Murray

When it comes to financial planning, retirement can be a scary thing to think about for most people. Given that most citizens are not familiar with their own retirement planning, retirement is becoming a problem for many employees. According to a recent study conducted by Bankrate, more Americans are planning to work past retirement. While 39 percent of citizens are planning to work past retirement because they simply enjoy working, 55 percent of retirees worry that they have not saved enough and would be required to work in order to have a substantial living situation. Because of the recent economic turmoil, 40 percent of Americans are planning to postpone their retirement. Other percentages display that 40 percent of Americans are solely investing for retirement while 27 percent receive aid from a financial adviser.
Even though the financial crisis has altered the retirement plans of many Americans, studies have also discovered that the majority of workers worried about their retirement plans are those with a high school education or less. These recent findings have outnumbered historical statistics and therefore provide us an example of the importance of financial planning. It is required that employees get some source of aid or advisory when making their retirement planning decisions.

Source: http://www.prnewswire.com/news-releases/75-of-americans-plan-on-working-as-long-as-they-can-63589602.html

http://www.google.com/hostednews/ap/article/ALeqM5jnz6k_0akwWFZa3GkQ7tmoZP3RwAD9B5Q5V82

http://philadelphia.bizjournals.com/philadelphia/stories/2009/10/05/daily28.html

Roth IRA, the savior of retirement funds?

by Jonathan Tse


Traditionally, the Roth IRA accounts were only open to people with incomes of less than $100,000. But beginning January 1, 2010, people with incomes greater than $100,000 can transfer their assets to Roth accounts. Unlike most other IRAs, the money grows tax free and there is no tax on withdrawals after the age of 59.5. The only problem is that no one knows about these benefits of the Roth, so there are very few people who would know to take advantage of this. Many employers are now trying to promote this to improve on their own offered retirement packages. Normally, in the IRA system, money placed in its account will grow tax free, but withdrawals made will be taxable.

For younger people who want to start saving up for retirement, Ross is very useful when used in conjunction with a pre-tax 401(k)plan so that they will have access to both a taxable and tax-free source of retirement funds. For younger people, since they are usually starting off in low income bracket, Ross benefits them greatly.

Many people are contemplating transferring the money in their 401(k)s directly to Ross accounts, but professionals warn that there are dangers to this. A danger is that the transfer may lead to IRA accounts being dropped. One would receive a tax bill with more value at the time of conversion, but may also later end up with an account that is worth significantly less. Although there are dangers to doing this, the benefits would mostly outweigh the dangers.

http://www.smartmoney.com/personal-finance/retirement/which-ira-is-best-7968/
http://www.thestreet.com/story/10608381/1/confusion-about-roth-iras-abounds.html?cm_ven=GOOGLEN
http://www.detnews.com/article/20091005/BIZ01/910050304/1010/Time-to-move-the-nest-egg

Now's the time to apply online for retirement

by Chuck Stovall
posted by Jameel Murray

If you’re planning on retiring sometime early in the new year, now is the time to apply for retirement benefits. The most convenient way to apply for Social Security benefits is online—from the comfort of your home or office. Just go to www.socialsecurity.gov/applyonline.

Our website will walk you through the online retirement application process. We will tell you what information you will need to answer the questions on the application. Further, we will describe the documents you might need to present once you have submitted your application.

Before you start your application, we recommend you get an estimate of your retirement benefit. This too, you can do on the Social Security website at www.socialsecurity.gov/estimator. The Retirement Estimator uses your personal employment history to estimate your retirement benefit. It also will help you to answer some of the questions on the retirement application.

You can use the online application to apply for Social Security retirement or spouses benefits if you:

Are at least 61 years and nine months old;
Want to start your benefits in the next four months; and
Live in the United States.
You will want to be fully informed of your options and their consequences before applying. The website will tell you everything you need to know about the Social Security “basics” so you’ll be ready to retire when you apply online.

click here to read more

When the golden years include a commute

Posted by Quang Nguyen



At an age when many people start envisioning retirement, John Hanna was thinking about how he could keep on working.

“I didn’t want to retire,” he recalls.

Hanna, who is now 83, held on to his full-time job as an insurance broker until finally retiring at age 72. But without work, the Lititz, Pa., resident soon found that he was bored and restless.

nd so, about a year later, Hanna went back to work as a notary for a car auction company. He continues to work two days a week and has no intention of giving it up.

“I see what happens to guys that retire and just sit around,” Hanna said. “You know, we turn to mush.”

A combination of good health, economic necessity and the other rewards of work are pushing some Americans to stay in the work force long past traditional retirement age. About 7 percent of people age 75 or older were in the labor force as of June, up from about 5 percent a decade ago, according to the Bureau of Labor Statistics. That translates to more than 1.1 million people working past age 74, up from 750,000 a decade ago.

Click here to read more

Time to move the nest egg?

Changes in Roth IRA rules next year could benefit your retirement fund
Brian J. O'Connor / Detroit News Finance Editor
Posted by Jonathan Tse



Having money means having choices, and soon the two or three people left in the U.S. with any kind of sizeable income will have to make one: whether to convert their IRAs.
Starting in 2010, high-income savers can convert their regular Individual Retirement Accounts to Roth IRAs. This allows them to pay taxes on the accounts now and forever escape taxes on future investment gains.
The timing couldn't be better for anyone who's seen their IRA balance drop in the market meltdown, since many personal finance experts expect tax rates to go up in the next few years. Converting a regular IRA to a Roth now allows savers to trim their tax bills two ways: They pay taxes on their temporarily lower balances now and do it at the current lower tax rates, instead of paying higher tax rates on bigger balances later, when their accounts have (we hope) regained their losses.

Click here to read more

Tips for young investors who hope to retire some day

By Alma Zhumagulova

If you've ever calculated how much you'll need for retirement, you know the number can be big.

So it's no surprise that with stocks still down some 30 percent from their peak in 2007, few people are confident about their savings.

Even Social Security is feeling the strain: With more people out of work, the program is on track to pay out more in benefits than it collects in 2010 and 2011, according to reports last week.

What's a young investor to do?

Click here to read more

Employees are getting early retirement

Posted by Shawn Gao

Since GE went bankruptcy, there have been many blue collars brought their package back to their home. Things did not just happen recently. The previous, many blue collars went to street and strike on the bankruptcy of GE.
Till now, things didn't go so well. Still, many companies were announcing cut down employees in order to help themselves getting out the recession. It is true that cutting numbers of employees will reduce cost of one company; however; how about the people who just got their” early retirements”? Actually, people are still respecting what US government could make. After many polices came out, the way of living during the recession was not better. Even if some developed counties announced the economy is getting better. Many people didn't find the way to get their jobs again. So far, job markets doesn't seem as it pass the recession time. Not only those blue collars, but also the graduated students will get their early retirements. What else will the governments do for future years? The question has many answers, but people need their jobs back. It is the way to figure out their debts.
reference:
1.http://www.goerie.com/apps/pbcs.dll/article?AID=/20091004/NEWS02/310049940
2.http://online.wsj.com/article/BT-CO-20091002-701224.html
3.http://www.google.com/hostednews/ap/article/ALeqM5h6BfoloJOnV0TeI7eIHC1ZWuBxygD9AVS0202

Ways to prepare early for your retirement

posted by Shawn Gao

You can buy a "Retirement Countdown Clock" online for about $30. You program the kitschy timepiece to count down the number of days, minutes and seconds until your desired retirement date.
It's cute, but to be truly useful it needs an additional feature: an alarm that goes off periodically to signal you that it's time to take care of pre-retirement business.
Until someone invents a clock that helps you with your actual planning, you can use Consumer Reports Money Adviser's timetable to keep your retirement plans on track.

Read More

Social Security During This Big Wave of Retirement

By Quang Nguyen



The current economic downturn has forced many Americans to lose their jobs. With big job losses and early retirement from laid-off seniors making it difficult for the Social Security to pay out benefits. It is expected that for the next two years, the Social Security will have to pay out more benefits than it collects in taxes. The deficits will be $10 Billions in 2010 and $9 Billions in 2011. Even though it will not affect the payments to retirees since the surpluses of Social Security is $2.5 Trillions from previous years, it will add to the overall federal deficit. According to the Social Security, the application for retirement benefits are as much as 23% higher than last year, and claims for disability also increased to 20% higher.

Furthermore, the high number of baby-boomers getting to their retirement plus the number of other unemployed people chosen to retire early have added up to a 19% jump in 2009. There are approximately 2.6 million people entering to the Social Security benefits this year in comparison to 2.2 people in 2008. Just during last August, the government has paid out $6 Billion in benefits more than it took in taxes.

Social Security officers commented that they have already had prediction on the high number of retirees due to the great number of baby-boomers, however they did not think it would be this high. The people who retire early have to cut out a big portion of their benefits. Many of whom do not have a choice since they lose their jobs and could not afford to raise a family. Some people tried to find another job but the current economy does not guarantee it.

Sources:

http://finance.yahoo.com/news/Job-losses-early-retirements-apf-161066651.html?x=0&.v=6

http://www.usatoday.com/news/nation/2009-10-01-social-security_N.htm?csp=34

http://www.msnbc.msn.com/id/33043206/ns/business-us_business/

http://www.washingtontimes.com/news/2009/sep/28/job-losses-hurt-social-security/

Recession Gets in Way of Retirement Planning

by Jameel Murray

The recent economic downturn has affected our living. Because of the recent recession, Americans are seemingly more responsible with their money. Since the recession, people’s savings have drastically increased, fearing the idea that the recession is not going to end anytime soon. Even though people are starting to save more, the investment in retirement has been somewhat stalled. According to the 2009 Benefits and Talents survey, 87% of respondents have stated that they are delaying retirement plans, due to the economic conditions. Employers have also taken the same attitude toward their retirement planning programs, but due to the high cost of company required contributions, companies are not changing their pension, benefit programs anytime soon.
Although stalling retirement planning may seem like a bad thing for employees, studies have shown that most of these employees have little or no knowledge of the amount of money needed to retire. Many believe that retirement would eventually become a challenge for many Americans in the future because very few employees know how much to save for retirement.

http://sev.prnewswire.com/banking-financial-services/20090930/CG8410530092009-1.htmlhttp://www.news-insurances.com/recession-makes-employees-worry-about-their-retirement/01675307http://charlotte.bizjournals.com/charlotte/stories/2009/09/28/daily40.html

Baby boomers in their retirement

By Alma Zhumagulova

Currently there are around 77 million baby boomers that are at or near their retirement age. The 401(k) retirement plan along with the two financial crises in the 2000s is going to turn their retirement planning into a nightmare. Thousands of savers lost huge parts of their savings in the burst of the dot-com bubble in 2000 and the current recession. According to Associated Press about 20% of their retirement savings were lost in the crisis, and even though they were restored to some extent, they were still 2.6% lower than in the previous year. Additionally, many of the baby boomers have not been saving enough throughout their careers. This is causing the baby boomers to continually postpone their retirement and to give up on their “dream” retirement: travelling, buying a second home etc. In order to maintain the lifestyle they were used to after they stop working many elderly people are forced to work longer than they expected. In 2008 around 25% of Americans in the age bracket of 65 to 74 were employed, and at this moment, around 9% of Americans between the ages 75 to 84 are still working.

Around 66 million workers in the US are currently covered by a 401(k) retirement plan which was not even initially designed as pension plan but instead as “a tax shelter for end-of-the-year bonuses for bankers”. Many experts now argue that the 401(k) plan is very difficult to arrange even for professionals let alone the baby boomers that were used to the old defined-benefit pension plan. They don’t know how much they will need after retirement, how much to put aside, and what to invest in. In order to prevent these retirement problems for the future generations of Americans it is necessary to either alter the retirement planning system or to teach them how to save so as to have the dream retirement they deserve.

Source 1
Source 2
Source 3
Source 4

Job losses, early retirements hurt Social Security

by Steven Olemacher
posted by Jameel Murray

WASHINGTON — Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that's happened since the 1980s.
The deficits — $10 billion in 2010 and $9 billion in 2011 — won't affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.
Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn't expect the increase to be so large.
What happened? The recession hit and many older workers suddenly found themselves laid off with no place to turn but Social Security.

click here to read more

Workers discover 401(k) plans are failing them in retirement

By Brian J. O'Connor / Detroit News Finance Editor
Posted by Alma Zhumagulova


If you're one of the more than 66 million workers covered by a 401(k) retirement plan, Nancy Hwa has some news for you.

"It was a tax shelter for end-of-the-year bonuses for bankers," says Hwa, spokeswoman for Retirement USA, a group working to improve retirement plans. "The 401(k) was never even intended to be a retirement plan."

And now, many workers are discovering, it isn't.

By the end of last year, the average 401(k) balance dropped to $57,200, down 28 percent from $79,600 in 2007, according to consulting firm Hewitt Associates. Forty-four percent of workers lost at least 30 percent.

Click here to read more

The new ‘retirement’ plan: Just keep working

Posted by Quang Nguyen



When Kathy Corrigan, 64, was let go last September from her job with a trade association, she already had begun to think about retiring after a 25-year career as a meeting planner.

But when she sat down and looked over her savings, she realized the 30 percent hit she took from the market meltdown meant her shrunken nest egg wouldn’t go far enough.

“The numbers just were not crunching right,” she said. “I don’t think I ever intended to fully retire. But it’s definitely not an option now — at least not for the immediate future. I’m still hoping that it will be no more than 5 years, but you have to continually reassess.”

Even before the collapse of the housing and financial markets last year, Americans were woefully unprepared to pay retirement in the traditional sense of a post-career period of leisure and personal pursuits supported by a pension, well-managed nest egg and Social Security.

Click here to read more

The old people are coming back!

by Jonathan Tse



The current economic situation of America is leading to many different changes. Probably one of the most drastic is the retirement plans of the elderly. No longer are people past the age of retirement staying at home relaxing and going on vacations all over the world. In fact, the new retirement plan for the elderly is to stay in the workforce.
The recession has made it so that the elderly cannot support themselves after retirement, so they are left with only two choices: to reduce their standards of living and spend less or to re-enter the workforce. Many more senior citizens are choosing to continue working and delay retirement either because of the fact that they are not able to reduce their spending by much, or because it is humiliating to admit a loss of wealth in front of family and friends. The current generation of senior citizens were expected to be growing and among the richest. Due to the recession, they are not pouring nearly as much into the economy as predicted earlier.
Many elderly people are re-entering the workforce in fields that they did not previously work in. In order to gain more of an advantage, more elderly people are also re-educating themselves by attending community colleges and attaining quick degrees so that they may quickly start working again. With the increasingly competitive working environment, and also stereotypical beliefs about older people, it is becoming much more difficult for the elderly to find and maintain long-term occupations.

http://www.msnbc.msn.com/id/32087898/ns/business-personal_finance/page/2/

http://hr.blr.com/news.aspx?id=4276

http://www.nytimes.com/2009/04/02/business/retirementspecial/02reskill.html?pagewanted=3&_r=1&ref=retirementspecial

As work force grays, employers lag behind

posted by Jonathan Tse

Older workers need flexibility, training, but often fail to get it



By Eve Tahmincioglu
msnbc.com contributor
updated 9:56 a.m. ET, Thurs., July 30, 2009


Eve Tahmincioglu
• Profile
• E-mail
Anne Staats was 75 when she took a year off work to care for her ailing husband.

After her husband passed away, she was ready to go back to her job as a receptionist for a home care and medical staffing company but didn't want to work full time. Fortunately for her the company, Interim HealthCare in Sunrise, Fla., had a program in place to hire older workers and allowed her to return to work three days a week with full benefits, including vacation and sick time.

“I was lucky to be working for Interim,” says Staats, now 85. “Other companies would look at you and say, ‘You’re too old.’”

Click here to read more

How Retirement Planning Has Changed

By Jorden Meltz

After the events of last year, many soon to be retirees were left asking how will I still be able to retire at the age that I previously planned on retiring at? The realization for some is that they won't and instead face several more years of working ahead of them. Since 1992 there has been a dramatic drop in company pensions, 40% to 17%, and a rise in 401k Plans, 32% to 80%. The reason why the change in the two has affected so many is that 401k Plans depend upon how successfully the employee has invested their money and unfortunately even prior investing success did not prevent many from losing large percentages of their retirement funds. It is estimated 401k Plans lost 40% as the country entered into a recession over the past year. With a much greater emphasis now on 401k Plans people will be forced to take a more active role in their investments and it is now recommended people look to bond indexes and stocks that pay dividends for better performing investments. The events of the past year has lead most people looking to retire towards reevaluating their plans and investments and has hopefully left many of those people more knowledgeable and prepared to deal with the market then before.

Source 1
Source 2
Source 3

Health Care Costs and Retirement

by Leah Gorham

Proper planning for retirement is not only important for retirees to maintain the lifestyle they had before retirement, but may also be crucial for paying for the high cost of health care. Retirement health care costs are rising due to factors such as the increased use of technology and prescription drugs and at the same time, personal savings are decreasing and the Social Security system will likely fail to provide adequate support in the future.

In 2008 an analysis by the Employee Benefit Research Institute said that a couple currently at the age of 65 would need $635,000 to cover healthcare costs in retirement, not including long-term care costs. This estimate gives the retired couple a 90 percent chance of having enough money to cover all health bills beyond what Medicare covers as opposed to lower estimates.

Options for paying for health care and long-term care include Medicaid buying long-term care insurance, selling the family home when long-term care is needed, or tapping into the value of the home through a reverse mortgage. Many poor seniors will rely on Medicaid, while those with a higher income may prefer to buy insurance, which can cost about $3,500 a year if acquired at age 65. According to the American Council of Life Insurers approximately 48% of long-term care recipients and their families pay long-term care costs out of their own pockets, 41% qualify for Medicaid, 8% are getting temporary coverage provided by Medicare. and only 3% are paying with private long-term care insurance.

It is important to think about the options for long-term health care before the need is dire and prepare adequately for retirement health care costs early.

Source 1, Source 2, Source 3

The "Working Retirement" Conundrum

By Mary Clare McGraw

An increasing number of retirees are taking up a second job, even a second career, often totally unrelated to their pre-retirement career, with the underlying motivation of paying the bills. For a variety of reasons, surveys have shown that the majority of aging baby boomers are planning on working in retirement. That second job can be a great way for a retired individual to take up what was perhaps just an enjoyable hobby earlier in life and turn it into a source of income that acts as a security net in this unsure recession. Although it may be a necessity in order to maintain an income during a longer life expectancy, that second job owning a restaurant or a floral shop can be a pure joy and a way to stay occupied almost.
As enjoyable as a hobby-turned job can be, it is dangerous to depend on the possibility of that supplemental income later in life because there are a number of things that can happen to prevent an individual from being able to work. Studies have shown that one in four Americans won’t be able to work in retirement for one reason or another, whether it is a health problem, accident, or any unforeseen event. Working in retirement can be a blessing or a curse, but regardless of whether or not an individual plans to work in retirement, it is essential to save and invest years in advance.

Source 1, Source 2, Source 3

7 Ways to Mess up Your 401K

posted by Leah Gorham

By Liz Pulliam Weston

Not contributing at all is the biggest mistake people make, but there are others that can cost you substantially as well.

In many ways, the 401(k) picture looks bright.

Most folks who have access to a 401(k) take advantage of their workplace retirement plans. Average balances are up over the past few years. And workers seem to have finally gotten the message that company stock is not their best investment option.

But millions of workers are still blowing it every day when dealing with their retirement plans. Here are the seven biggest blunders you can make:

1. Not signing up
I've seen a few awful 401(k) plans in my time. One was run by a dentist who forced his employees to help him buy raw land. (That was their only investment option.) Another offered only high-cost, poorly performing variable annuities with surrender charges that lasted 16 years, meaning workers often had to forfeit a good chunk of their money if they left their jobs and wanted to roll over their accounts.

But such truly heinous plans are few. Most participants get a decent range of investment options (17 choices is typical), reasonable fees and a company match. About 98% of the large-company plans that Hewitt Associates surveyed contribute to employee plans, with two-thirds offering matches.

Click here to read more.

How to make your money last

Posted by Nick Porcell

Once you have your Social Security strategy down, there's just one little retirement question left to consider: How can you make the money that you've so diligently saved provide the life you want for as long as you live? Oh. That.

Figuring out how to draw secure retirement income from a portfolio is a challenge in the best of times; today it's made more complicated by fear. Having seen the worst-case scenario unfold in the past year, you've probably gone into loss-avoidance mode. But deflecting market risk leaves you vulnerable to inflation risk -- and the risk that you'll outlive your money. So hiding in cash won't save you.

"No one investment can protect you from every risk you'll face," says John Ameriks, head of Vanguard Investment Counseling & Research. What you need, rather, is a basket of investments that provides:


Click here to read more

how Individual Retirement Acccounts (IRAs) help you save for retirement.

Posted by Mary Clare McGraw

A traditional IRA (individual retirement account) is a critical retirement planning opportunity. Tax-deferred growth and a potential tax deduction are among its most important features. Traditional IRA considerations include:
Why Open an IRA

A traditional IRA is particularly attractive to those who are not eligible for a workplace retirement plan (like a 401(k)) or whose earnings limit their ability to contribute to a Roth IRA. With opportunities for tax-deferred growth limited, a traditional IRA can be a great way to increase the likelihood that your retirement years are prosperous ones.


How and Where to Open an IRA

You can open an IRA at nearly any bank or brokerage house, either in-person or online. Opening an IRA is a very simple process, typically with help readily available. Often, there are just a few forms for you to complete. Bring your Social Security number with you as well as the Social Security numbers and addresses of any potential beneficiaries of your account.

Click here to learn more about IRAs

Putting the eggs back in the nest

Posted by Jorden Meltz

Like millions of Americans who have painfully watched their home's value collapse and their 401(k) crumble, the Lineberrys are being forced to make major lifestyle changes they never imagined.

It's natural when you lose money to want to make it back. Research shows that the pain of financial loss is much more acute than the satisfaction of a gain. Losses of course are particularly hard on retirees, who no longer have the time to recoup them and need regular income from a portfolio.

Do you really want to know the quickest ways to replace lost wealth? It's not by pouring money into stocks or other speculative investments. The answer is to follow a financial plan that brings down the cost of your lifestyle.

Click here to read more

Investing Safely for Retirement: If there Is Such a Thing

By Jorden Meltz

With many having lost large portions of their retirement savings last year, the question on most peoples minds is how do I make it back? To some the answer is to invest in riskier securities in hopes of making the money back sooner and to others the answer is to avoid risk and work longer. There is no wrong or right answer and instead it is truly a matter of opinion and personal comfort zone. Experts have spoken out about the issue though, and have made strong cases for both sides. Economist Zvi Bodie believes that stocks are always risky and contrary to common belief do not lose their risk over time. It is with this mindset that might lead some to believe investing in treasuries or high rated bonds is their best bet, even at the expense of working several years more. Another less risky approach some are advising their clients to take on is bringing their stock to bond ratio closer together: having a 54% to 46% split versus a more traditional 60% to 40%. With the market still in a state of uncertainty, bonds have continued to perform well, and thus some believe currently they are the better investment. Lastly, since many consider bonds safer investments, are high yield bonds the way to go?. Granted they bring higher returns, but they also have a higher chance of defaulting and thus become a risky investment. Year to date high yield bonds, also known as junk bonds, have been the top performer in the bond category and it will be interesting to see if that statement holds true for the rest of the year. With retirement on the minds of many, there are many questions all having a variety of answers. Although the answer may not be what they want to hear, with retirement approaching quickly for many, they are answers that must be taken into consideration.

Source 1
Source 2
Source 3

Retirement Savings Challenges for Women

by Leah Gorham

Studies have shown that women tend to lag behind men in saving for retirement. In a 2008 survey of over 1,300 workers or retirees over age 25 by nonpartisan Employee Benefit Research Institute (EBRI) and Matthew Greenwald & Associates it was found that 58% of women and 64% of men said they were contributing to a workplace retirement account. Also, while 70% of men said that they were "currently saving," only 59% of women said the same.

There are several factors that account for why women save less then men for retirement. First, the wage gap between men and women result in lower median pay for women, then resulting in a reduced ability to save for retirement. However, behavioral differences can also impact the gender gap in retirement savings. Many women make choices to provide care for their children and/or aging family members and in doing so may give up their careers or significantly decrease their earnings. Women are also more likely to work for non-profits and small firms that are less likely to offer employer-based retirement plans. Women need to consider these challenges seriously when thinking about saving for their retirement. Another factor to consider is that women generally live longer then men and therefore need to plan for a longer retirement.

There are several strategies that women can use in order to ensure a secure retirement and lessen the gender gap in retirement savings. These strategies include:
-Starting your own retirement account and putting your retirement savings first.
-Seek employment with retirement benefits.
-Always keep a portion of investments in stocks.
-Consider opening a spousal IRA.
-Check your Social Security record.
-Continue to play an active role in the financial planning process.

Source 1, Source 2, Source 3

What Social Security's Underfunding Means for Your Retirement

The baby boomers will get their payouts, but what about the rest of us?

Posted by Mary Clare McGraw

Social Security and Medicare's annual checkup revealed that the recession
and longer life expectancies are taxing the health of the entitlement system. The Social Security Board of Trustees report found that program costs will exceed tax revenues in 2016, a year sooner than predicted in last year's report. The trust fund will be exhausted in 2037, four years sooner than the 2008 estimate. Here's a look at how the projections could affect your retirement plans.

Smooth sailing for the baby boomers. In 2037, the year the trust fund is currently projected to be depleted, the youngest baby boomers, currently age 45, will be 73. It's highly unlikely that baby boomers will face a rise in the retirement age or cuts in benefits. "The good news for current beneficiaries and those nearing retirement is that your benefits will remain secure and intact for the foreseeable future," says Nancy LeaMond, executive vice president of AARP, a lobbying group for older Americans.

Changes for younger people. Social Security and Medicare will still be around for younger generations. But there is some uncertainty about whether there will be tax increases, benefit cuts, some combination of the two, or other fixes to correct the underfunding.

Click to read more

Not much retirement security from government

Posted by Leah Gorham

Federal entitlement programs are critical to retirement security, but these programs are rapidly moving into the red. New projections by the trustees of the Social Security and Medicare trust funds released May 11 indicate that both funds will run out of money even sooner than estimated in last year's report.

The Social Security trust fund is in better shape than Medicare. Revenues still exceed benefits by a comfortable amount. Unfortunately, the wave of baby boomer retirements will change that picture. The new trustees report still expects the surplus to continue until 2015 but move into deficit thereafter. This report projects that by 2037, revenues will be only 75 percent of benefit payments.

An increase in average retirement age could help extend the period of surplus, but probably not by much. If workers delay retirement, they will continue to pay taxes into the system and not take money out, but when they do retire they will also get higher benefits. A net improvement in the trust fund results, but the change mostly delays the problem rather than reduces it.

Click here to read more.

Posted by Nick Porcell

Tapping 401(k) retirement funds to meet expenses is a last resort for many investors, but the relentless economic downturn took its toll this year, as hardship withdrawals saw double-digit increases, according to record keepers.

Hardship withdrawals among the 2.8 million participants in 1,500 plans served by Bank of America Merrill Lynch increased 23 percent year to date through August 31 compared with the year-earlier period, said Kevin Crain, managing director of plan participant solutions at Bank of America Merrill Lynch, the institutional retirement, philanthropy and investments business unit at Bank of America.

Click here to read more

Retirement: Goal-Based Investing Gains Traction

Posted by Jorden Meltz


As defined benefit plans fade into history, more American workers are confronting the fact that they will need to be much more active in deciding how to marshal their retirement savings than their parents had to be. But how best to line up what you have now with what you'll need later?

That's where goal-based investing, or what some people call liability-driven investing, comes in. This increasingly popular approach is yet another example of the retail investing world borrowing a page from institutional investors' playbook—trying to manage people's assets so they better match their liabilities, which has long been a focus of pension funds.

Click here to read more

Points to Remember When Saving For Retirement

By Mary Clare McGraw

Saving and planning for retirement is no walk in the park, although one may think putting money aside is enough, it is essential to adequately plan for risks and road blocks that may occur along the way. It is crucial to take into account the possibility that inflation will deplete the value of your income in the future, as well as the troubling effects of outliving your assets. Experts estimate that in order to maintain the same standard of living after retirement as before, you would have to maintain at least 70% of your preretirement income, which is very generous and not always possible to obtain.
The possibility of outliving your assets is strengthened by the fact that health care costs are rising and simply the fact that people are living longer postretirement lives. A longer life is often accompanied by increased medical expenses, so the two go hand in hand, draining a retiree’s assets completely.
A major goal in retirement planning should be to not only put aside money and assets for your retirement years, but to ideally create a sustainable, predictable stream of income that even has the potential to increase over time. A way to maintain a steady income could be to hold a part-time job doing something you enjoy and may not have had the opportunity to pursue earlier in life when you had a career. It is never too early to plan for retirement and there are limitless ways in which you can save, with proper planning, retirement should be a relaxing, stress-free time in your life, and well-deserved of course!

Source 1
Source 2
Source 3

The Retirement Dilemma: Keep Working?

Posted by Mary Clare McGraw

As the first cohort of the baby boom generation this year hits 63—which is the average age of retirement in the U.S.—the big question is: Are they financially ready to retire? That question is only going to gain urgency in the next several years as more and more boomers jump into the pool of retired Americans. Unfortunately, statistics suggest that retirement isn't going to be nearly as comfortable as most boomers had hoped.

Declining wealth, brought about by lower stock prices and falling home values, has hurt older households substantially. Americans lost 18% of their net worth last year, and the decline has disproportionately hit households of those nearing retirement. But even before the asset bubble burst, Americans looked ill-prepared for retirement. A year later the situation is no better.

The Center for Retirement Research (CRR) at Boston College estimates that 43% of Americans are "at risk," meaning they would be unable to maintain their current standard of living in retirement. The good news: Most Americans seem to understand their situation. Only 19% of the population says they are prepared when they really aren't, according to a CRR survey. The bad news is that they don't seem to be doing much about it, whether through saving, paying off debt, or taking advantage of preretirement investment opportunities available to them.

Click to read more

Investment Decisions for Those Nearing Retirement

By Jorden Meltz

During the current recession, and the past year more specifically, exposure to equities has left many retirement portfolios with substantial losses that could take years to make back.
For those not planning on retiring in the near future, they can follow the cyclical nature of the market and hope to make back their money over time; but those looking to retire in the near future lack this luxury. In the beginning of the year 2008 the Employee Benefit Research Institute released a study saying 40% of investors between the ages of 56 and 65 had 70% of their retirement accounts in equities. This age range is a crucial point where many begin to contemplate retirement, and thus heavy exposure to equities has left many of these people adjusting their retirement plans. Advisors are now recommending reducing equity possessions by 1-2% each year after a certain age; in an effort to minimize potential losses as one nears retirement. With that said though, it is still important to maintain a diversified portfolio, as this can be the key to your retirement portfolio’s recovery. A recent study showed that the combination of delaying retirement by one to two years and maintaining a well diversified portfolio would help those looking to retire in the near future return their portfolios to an adequate level faster then if the same people would have converted their money to cash, as they will be required to work even longer. For those looking to invest wisely as their potential retirement date approaches, it seems making adjustments towards safer levels of diversification each year may be the most effective way to keep one on their route to retirement.


Source 1
Source 2
Source 3

Planning for Late Retirement

By Leah Gorham

The vision of retirement in the United States is rapidly changing and we are beginning to see the workforce age as many people continue to work well into their 60’s, 70’s, and 80’s. According to the AARP Bulletin, the Bureau of Labor Statistics reports that between the years 2000 and 2008 the number of workers aged 65 to 69 rose 25 percent. Moreover, increases for workers in their 70’s were even higher- the 70 to 74 age group rose by 32 percent and 75 to 79 rose by 38 percent. As our economy struggles and drug and health care costs rise, many baby boomers and even Gen X-ers may not be able to comfortably retire in their lifetime. Debt is also a huge issue for Americans and recent studies show that many workers are approaching retirement with large amounts of debt. This is not the ideal situation one would like to be in as they approach retirement age.

However, late retirement may not always be a bad thing. Many people reach peak earning power in their 60’s and their expenses decrease as their kids finish college and they finish paying off mortgages. It is possible to rebuild savings and plan for a late retirement even in your 50’s and 60’s. In order to successfully plan for retirement in a relatively short time it is important to take stock of your current financial situation, think about potential opportunities and risks, look ahead and forecast where your current plan will take you, and then revise your plan with investment vehicles that fit suit your needs.

Source 1, Source 2, Source 3

Are fees draining your 401(k) retirement savings?

Posted by Leah Gorham

Quick question: How much are 401(k) fees removing from your retirement nest egg each year?

If you are either unaware of such fees or don't know their amounts, don't worry: Nearly 83% of Americans don't know, either, according to AARP.

But the coming months may change that.

Congress and the Department of Labor are working on legislation and regulation that would require employers to disclose more information about administration and management fees in an understandable way. And an independent website, Brightscope.com, seems to be gaining traction as it aims to provide workers with company 401(k) plan ratings that include fee information.

More workers are relying on 401(k) plans for retirement funding, as pension plans are frozen or no longer offered. The recession and stock market losses battered 401(k)s over the past year. But associated fees — often hidden or extremely confusing to find and understand — haven't helped.

Click here to read more

3 Ways Obama’s Saving Initiatives Will Affect Your Retirement

Posted by Nick Porcell


President Obama announced several new federal initiatives to promote retirement savings today. “I’ve heard from so many who’ve had to put off retirement, or come out of retirement, to make ends meet,” Obama said during his weekly radio address today. “And having too little in savings not only leaves people financially ill-prepared for retirement, but also for whatever challenges life brings.” Obama cited the approximately $2 trillion in retirement savings Americans have lost over the past 2 years.

The changes give employers an easier way to automatically enroll workers in retirement plans and the option to contribute compensation for unused vacation and sick days to 401(k)s, but doesn’t require companies to do so. Taxpayers will also get a new way to save their tax refunds. “Working Americans should be able to retire with dignity and security, but nearly half of the nation's workforce has little or nothing beyond Social Security benefits to get by on in old age,” said Treasury Secretary Tim Geithner in a statement. “The measures we are announcing today will give more choices to families who want to save.” Here is how the new retirement savings options could affect your retirement plans.





Click Here to Read More

The future of the 401(k)

Posted by Jorden Meltz

The average 401(k) investor lost under a third of their assets in 2008; and returns have obviously been much more positive this year than they were last year. The reduction in volatility and generally the positive momentum in the stock market has gone a long way to reassuring plan participants.

Nonetheless, I think participant anxiety over the dramatic move downward does highlight a very real issue, which is the importance a guaranteed income that allows you to plan for a floor on your spending in retirement. This guaranteed income in essence functions much more like a defined benefit program.

So while I would say that the events of 2008 were not catastrophic for the majority of 401(k) investors, they offer us an opportunity to recognize some of the deficiencies in the 401(k). Sponsors are now looking for a way to provide guaranteed income.

Click here to read more

Baby Boomers are Not Saving Enough for Retirement

Posted by Lily Chung

The baby boomer group is one of the largest generations as well as the most prosperous in U.S. history. One of the biggest concerns is that baby boomers are not saving enough for retirement and this can be seen through a study done by MetLife. Studies show that 46% of the older baby boomers and 57% of the younger baby boomers have not saved enough for retirement. With changes in the financial environment, you have to be older than 65 to collect full social security benefits and lower interest rates will surely affect their investments. About two thirds of the older boomers are still in the work force and the longer they remain in the work force without collecting their social security benefits will increase it by several percent. So one of the biggest advice anyone can receive is to delay claiming your social security benefits as long as possible. The study done by MetLife also shows that the older group of baby boomers is delaying both social security and retirement, especially because of economic situations that have impacted their retirement savings. Due to the financial troubles the economy is having, younger generations have more of an advantage of saving for retirement.

Sources:
Retirement Planning: All God's Children Still Not Saving Enough
Boomers aren’t saving enough for retirement
The Retirement Prospects of the Baby Boomers

Get Your Finances Ready for Retirement

Posted by Lily Chung

Retirement Tips for Women

Posted by Lily Chung

On average, women work fewer years than men and they make $300,000 less than men, but over a lifetime, women live six years longer than the average man. For every $1 earned by men, women earn an average of $0.77. Preparing for retirement in the early stages may be the best decision a woman can make.

That is one of the first tips experts give to women. Start early. First you should figure out how much you would need in order to retire comfortably. You can do this by going to professionals that know how to work a "retirement calculator". After you figure that out, make sure you have a savings plan! You can get one through an IRA, TSP or employer-sponsored plan. But try to diversify your investings. Start investing assets in stocks, bonds and some in cash savings account. The best thing to do now is to keep your job and build up your assets. You need to be able to have a source to contribute to a 401(k) and no matter what you do, try your best NOT to borrow or take withdrawals from a 401(k). Try your best just to NOT touch anything that you have saved for retirement!

Another tip many experts would suggest is to retire later. Wait on social security if possible. When you claim your social security earlier, there is a huge difference in the benefits. Reports have shown that someone who claimed their social security at the age of 62, claimed about 50% less than someone who claimed their social security at the age of 67.

Sources:
Top Ten Retirement Tips For Women
5 Retirement Tips...For Women Only
Retirement Tips for Women

How Social Security Reform Affects Women

Copied and Pasted by Lily Chung

"There is broad, deep opposition among women to any reforms that would weaken Social Security and undermine their retirement security," said National Partnership President Debra L. Ness. "Women want lawmakers to ensure that they will get the benefits they are paying for-not privatize the system."

The poll also found that when told that private accounts would reduce Social Security's guaranteed monthly benefit, women's support for privatization drops to just 33 percent.

Click Here to Read More

Top Ten Steps for Retirement Preparedness

Copied and Pasted by Lily Chung

As with any large undertaking, preparing for retirement can be less daunting if broken down into smaller, achievable goals.

Allstate's fourth annual "Retirement Reality Check" survey shows that in 2004, overall, Americans believe they're taking the right steps to prepare for retirement, with 76 percent of respondents saying they are "somewhat" or "very" prepared financially. Yet, many still have some looming concerns about retirement expenses.

Despite these concerns, a mere eight percent of survey respondents have implemented all 10 recommended retirement preparation steps, which could be an indicator that someone is on track to meeting their retirement goals. By establishing retirement goals and the cost to achieve those goals early on, Americans can be on the path to a solid financial future.

Click Here to read more

Retirees Working Longer

By Lindsay Chin

Retirees are now brushing up on their skills. The reason for this is because the economic downturn has forced many retirees to go back into the work force or continue working. Retirees must have the skills and tools as newcomers into the market. Last June, Joliet Junior College now offers a program called the Mature Workforce Center. The center offers workshops, courses, and services to help baby boomers retool and brush up their skills. Moreover, at Wake Technical Community College, it offers a program called Plus 50 Initiative, which retrains older students for the job market. These colleges are among 15 colleges participating in the Plus 50 Initiative which begun last spring by the American Association of Community Colleges. The program is supported by a $3.2 million grant from the Atlantic Philanthropies. Not only colleges but also community centers and web sites across the nation are increasingly offering programs for those who want to “recareer”. No matter the place, the starting points are to determine your interests and priorities and then move to refresh and update your skills or learn new skills. According to the U.S. News and World Report, working longer does not necessarily mean working forever. It will take about 1 year and 9 months in the workforce to recoup market losses for employees who have spent 20 and 29 years on the job.

Source 1, Source 2, Source 3

Baby Boomers Generation

Posted by:  Joseph Owen

The following youtube video is based on the several issues arising in retirement for the Baby Boomer Generation.  Due to this extremely populated generation, social security seems to be unsustainable, and other retirement statistics are alarming for our future.  Listed below is the link to get full coverage of the topic.

Click here for video...

Staying Happy and Healthy After Retirement

By Angelo Orlando Jr.

What happens after retirement can be a big question to Americans that are on the brink of retirement. Uncertainty can bring about stress and anxiety as Americans may struggle with what turn their life will take in the near future. Once you retire it is a good idea to continue to do some sort of work activity. Retiring and leaving the career that you have been in for many years provided you with much more than you think. The sense of pride and accomplishment, friends, and influence in the workplace cannot stop once you enter retirement. A good idea is to do something that you have passion for and to also make a difference in what you are doing. This helps you stay sharp and focused while in retirement. Having another part time job during retirement can also provide a great supplement to your retirement income to help out with expenses and at the same time keep you healthy. Margaret Altmix, director of coaching services at Navigating Your Retirement, an online coaching program recently launched by Employee & Family Resources in Des Moines, Iowa states that, “The most important factor in a successful retirement is the strength of your social network." Keeping your old friends and also making new ones to add to your social network while in retirement is a very big factor to staying physically and mentally healthy during your retirement years.

Source 1

Source 2

Source 3

Stocks Rise On Banks Toxic Assets Plan

By Angelo Orlando Jr.

The US government has decided to commence with a plan that will help banks free up toxic debt off their balance sheets in order for these struggling banks to be able to raise private capital. The new plan calls to help banks get rid of up to $1 billion in toxic assets that are causing them lending problems. “The US Treasury said it will launch the program with $75 to $100 billion from existing financial rescue funds with the aim of thawing the frozen market for mortgage backed securities and other hard to sell assets,” said David Lawder and Glenn Somerville of Reuters. Though there is concern that the US government will carry the burden by providing more that 90 percent of the funds to purchase the assets. Other sources of financing are expected to be the Federal Deposit Insurance Corp. and also the Federal Reserve. Treasury secretary Timothy Geithner believes that the plan will help set prices for poorly performing debt left over from the US housing market bust, while involving the market to avoid the risk taxpayers will overpay. As a result of the toxic asset buyback plan stocks have jumped 6.8 percent Monday coupled with an increase in housing sales.

Source 1

Source 2

Source 3

AIG Bonuses to Executives

By Angelo Orlando Jr.

Edward Liddy, chief executive of AIG, yesterday tried to soothe anger against the bailed-out insurance group by urging employees to give back the $165m (€122m, £115m) in bonuses that have sparked a political firestorm.
He told legislators he had asked employees of AIG Financial Products - the arm that brought the group to the brink of collapse - to "step up and do the right thing". The concession came as President Barack Obama defended Timothy Geithner, Treasury secretary, amid criticism of the administration's handling of the controversy.
Mr Obama said he had "complete confidence" in Mr Geithner as the Treasury chief faced calls to quit from at least two Republican legislators. Republicans want to know why he did not challenge the bonuses before approving $30bn of fresh federal aid to AIG this month. Congressman Connie Mack said Mr Geithner "should either resign or be fired for the good of the country".
The president praised Mr Geithner for tackling the crisis with "intelligence and diligence", arguing that he faced the toughest challenge of any Treasury secretary since Alexander Hamilton after the Revolutionary War. "Nobody's working harder than this guy," he said.

Click To Read

Homes Show Unexpected Strength

By Lindsay Chin

Throughout February the sales of previously owned homes in United States showed unexpected strength. Just in February the sales of exisiting homes rose 5.1 percent after a 5 percent decline in January. From seeing the outlook of February sales, economists in March are concluding that the worst parts of the country hit by the housing bust are now beginning to emerge. Sales in the west grew 30 percent from a year earlier. The Obama administration and the Federal Reserve have introduced aggressive moves to try to lower borrowing costs, prevent homeowners from going into foreclosure and reduce the losses in the housing market. Along with sales, initial construction of U.S. homes unexpectedly surged in February. New construction of single-family homes along rose by 1.1%. However, last month (February) Obama had unveiled at $275 billion plan to help homeowners refinance and avoid foreclosure. The administration also included a $8,000 tax credit for first-time homebuyers in the stimulus package. In 2008, stimulus package provided this First-Time Home Buyer Tax Credit which gives people who had not previoulsy owned a home a $7,500 tax credit if they bought a home between April 9, 2008 and July 1, 2009; moreover, it required that the tax credit be paid back over 15 years. Now, the ARRA increased the credit from $7,500 to $8,000 and eliminated the repayment requirement for those who own to occupy their homes for at least 36 months. The market for homes seems on the rise and should be carefully watched.

Source 1, Source 2, Source 3

U.S. Lays Out Plan to Buy Up to $1 Trillion in Risky Assets

By Lindsay Chin

WASHINGTON — The Obama administration formally presented the latest step in its financial rescue package on Monday, an attempt to draw private investors into partnership with a new federal entity that could eventually buy up to $1 trillion in troubled assets that are weighing down banks and clogging up the credit markets.

The Dow Jones industrial average was up sharply in afternoon trading on Monday, gaining more than 270 points. When the Treasury secretary, Timothy F. Geithner, spoke on Feb. 10 of a bank rescue plan without offering much detail, investors took that as a worrying sign and the Dow fell sharply, losing 380 points.
The Treasury secretary did not deny the uncertainties inherent in the new program on Monday but defended it as a practical approach. “There is no doubt the government is taking a risk,” Mr. Geithner said, “the only question is how best to do it.”
President Obama said later that he and his economic advisers were “very confident” that the program outlined by Mr. Geithner would start to unclog the credit markets.
“It’s not going to happen overnight,” the president said after meeting with his economic team. “There’s still great fragility in the financial systems. But we think that we are moving in the right direction.”

Link to Article

Retirement Planning In Your Twenties

Retirement planning while you’re at your first or second job? You’re probably not making a lot of money yet, but compared to just a few years ago when you were primarily a student, you’re taking home a decent income. Still, you have plenty of bills to pay and you’re only earning an entry-level salary. You might wonder if retirement planning matters at all when you're only in your twenties.

Every dollar saved while you are young is potentially several dollars you won’t need to save later. Here are the top three most important steps to successfully begin retirement planning when you’re in your twenties.

Click here to read more...

Written By Lee Ruth

Retirement; Obama

Posted by; Joseph Owen

As I was viewing the Barack Obama and Joe Biden website, I wanted to take a look to see their views on Retirement.  I am interested to see what their plans on in regards to Social Security and Medicare.  These are two vital issues that will affect us as adults.  Social Security may not be able to support and remain affective by the time I am looking to retire.  As this is an extremely important issue for my age group, I was curious to see Obama's perspective on Retirement.  

Obama and Biden are committed to ensuring Social Security is solvent and viable for the American people, now and in the future. Obama and Biden will be honest with the American people about the long-term solvency of Social Security and the ways we can address the shortfall. Obama and Biden will protect Social Security benefits for current and future beneficiaries alike. And they do not believe it is necessary or fair to hardworking seniors to raise the retirement age. Obama and Biden are strongly opposed to privatizing Social Security. As part of a bipartisan plan that would be phased in over many years, they will ask those making over $250,000 to contribute a bit more to Social Security to keep it sound.

Source #1

Save Your Portfolio

By Angelo Orlando Jr.

The last year and a half has taken nearly everyone's portfolio for a loop. If you were considering early retirement and had almost reached your financial goals, you've had a bucket of cold water thrown in your face.
Most of us have seen big losses from our investments. But if you're in your late 50s or early 60s, you've probably suffered a lot more than most others have. Unlike those younger than you, you had already amassed a substantial nest egg toward your retirement -- a nest egg that you planned would last you for the rest of your life. Yet unlike those older than you, you still needed a few years of growth to feel comfortable quitting your job -- so you probably took more risk than they did.
Now, unfortunately, you may need a few more years to get to where you want to be. But the good news is that each extra year you work can make a huge difference to the quality of your retirement when you do decide to tender your resignation. Here's why.

Click To Read More

Caution: Retirement Ahead

Here's an excerpt from a really interesting article from Yahoo Finance about how you can ruin your retirement savings.

If 50 is the new 30, then 80 must be the new 60. Good thing, because otherwise a lot of people won't be retiring before they draw their last breath.

Last year Bankrate's Financial Literacy survey found that one in five people expect to work until they die. This year one in five people say they're afraid they'll never be able to retire. It's true; we asked the same question two different ways, and the results are unsettlingly identical.

At this rate, the competition for greeting jobs at Wal-Mart will be as fierce as the struggle to get into Harvard.

For the dedicated workers who aspire to devote their entire lives to propelling the economy forward with their unceasing toil, the dream of not retiring can be achieved in any number of ways. We came up with eight.

click here for the full article

by Rob Wildhack

Securing Your Nest of Eggs Against Layoffs

By Lindsay Chin

Americans lost 2.4 million jobs last year. And more workers are worried about getting a pink slip any day now.
This economic blizzard has many people in both groups -- as well as retirees -- wondering how safe their workplace retirement funds are.
If you're laid off -- or, even worse, your employer folds -- how do you get your pension benefits? How about your 401(k) account? Is there anything you can do now to protect access to workplace retirement assets after a layoff or bankruptcy?

In a season of bleak headlines, the good news is that at least limited safeguards exist for both traditional pensions as well as 401(k) plans.
And the more you know in advance, the easier it can be to maintain unimpeded access to your retirement benefits and unimpeded control over your 401(k) account.
No one protects you from market impact on investments in your account. But any difficulties faced by your employer, including bankruptcy or going out of business, should not interfere with your access.

"It's your money inside the account," said Barbara Fallon-Walsh, head of Vanguard group's institutional retirement plan services. "You are not a creditor of the company. You don't have to get into a line of creditors to get your own assets."
In almost all cases, plans are run by companies separate from your employer. "The record keeper doesn't fold just because your employer might," Fallon-Walsh said. "So you can still get information about your account. The record keeper's name, phone number and maybe Web site are on your statements."

Link to Article

Avoiding Risks to your Retirement Income

I was looking around the Internet trying to find a good article to use for my daily blog when I came across this article. It talks about ways to avoid risk when planning for retirement. I thought this would be a good article due to the fact that its not simply just a list of ways to retire but things to avoid doing when starting to plan for your retirement. With the economy the way it is right now it is important to know the right and wrong way to plan for your retirement that way when it comes time for your to retire they will be able to sit back and relax and enjoy retirement. Below is the article entitled"Avoiding Risks to your Retirement Income".

The risk of outliving your savings is greater than ever, thanks to factors such as longer life expectancies and the diminishing role of pensions and Social Security. According to the Society of Actuaries' 2000 Mortality Tables, 82% of couples who are age 65 can expect to live until age 85; 60% to age 90 and 33% to age 95. By having a plan to secure a comfortable retirement and making the right financial choices, you can help ensure your retirement income lasts.

"The biggest risk that future retirees face is running out of money — and losing financial independence," says Craig Brimhall, vice president of retirement wealth strategies for Ameriprise Financial. "You've got to plan ahead so your money lasts as long as you do."

Click here for more information and the rest of the article.

Posted By Lee Ruth

Top Ten Retirement Trends of 2009

Created by: Joseph Owen

I was reading this great article that I had found on google.  The article is titled,  "Top Ten Retirement Trends to watch for in 2009."  Listed below is the bulleted format of these trends.  If you wish to view the article as a whole, and would like to learn of these trends more in depth, click the link below to direct you to the article.

• Health Care Refrom
• People Working Longer
• People Working Longer with a purpose
• Fear will be the emotion experience the most
• More families will stick living together due to the fact that everyone can't afford their own apt. or home
• Networking of life reinvention
• Pension tension
• Retirement Security Overhaul (debt issues with SS, etc.)
• Steadying the 401K

Click here for full Trends artcile.

Retirement Guide for 60-Something

Workers in the final stretches toward retirement have had a rude awakening: The seemingly well-laid plans that they saved for during their working years probably won't pan out in their post-working ones. In fact, given the double-digit losses incurred in 401(k)s, as well as rising health-care costs, many fear that they won't be able to retire at all.

However, there are ways to salvage your retirement. While you may not recoup all your losses or get to retire exactly as you planned, you can lessen some of the pain that’s been inflicted on your retirement savings.

Click Here To Read More...

written by Lee Ruth

Retirement Statistics

Created by: Joseph Owen

I was reading an article on interesting retirement facts, when I ran into a statistics page about retirement.  Presented below will be a thorough list of intriguing retirement statistics.

• One of the 77 million baby boomers reaches 50 every seven seconds. That is around 11,960 people a day and 4 million a year.
• The age for retirement was set at 65 by Kaiser Willhelm in the late 1800's. It is now generally accepted among gerontologists that life expectancy may exceed 85 years-- and may, in fact, approach the biblical life span of 120.
• In 2001, 77 million Americans were 50 and older (comprising 28% of the population). By 2020 that segment will be 36% of the population.
• Nearly 6,000 Americans turn 65 every day, that figure will jump to 9,000 as the baby boomers age.
• Nearly 35 million Americans were 65 or older in year 2000.
• Consumers 65 and over make up 13% of the population but account for only 2% of the characters on prime-time TV.
• In the next 25 years, there will be over a million centenarians in this country.

If you would like to review the rest of the article, click here...

Getting an early start on retirement

By Angelo Orlando

When should we begin to think about retirement planning? When you are young you may think that you don’t need to start thing about retirement until you are well into your thirties. Or you may say to yourself, “I don’t even have enough money right now to even think about saving for retirement.” Well those days are over and young people should start thinking about retirement well before they think they have to. The fact is today young people should begin thinking about their retirement and saving in their twenties. When you first get out of college and land your first job you may be in a sea of debt. What you should do is begin to pay off your debt, especially the debt with the highest interest charge attached because now you are not paying out all these expenses when in fact you could be saving for retirement. At your first job, enroll in your employers 401k matching program it is available at your place of employment. This is a very good way to save for retirement because your employer matches your contribution with no cost to you. Another benefit of 401k matching plans is that your contribution is tax deductible. Your 401k plan is also tax free and you do not pay taxes on the growth of your account until you cash it in after you are retired. Combining your 401k matching plan with saving in your twenties can lead to a great saving base that will only grow as you get older. Saving for retirement in your twenties and enrolling in a 401k matching plan is a good idea because of the uncertainty involving the social security plan in the future.

Source 1

Source 2

Source 3

Deferring Social Security Benefits

By Lindsay Chin

The Social Security system allows workers to begin collecting reduced benefits at age 62. However, those who wait until full retirement age are not ranging from 66 to 67 people. Get some 30 percent higher monthly benefits than those who received benefits at 62. Also those who wait until 70 see about a 60 percent more monthly benefits. Another way to maximize Social Security benefits is for couples to use a strategy known as voluntary suspension or file-and-suspend. However, your spouse must agree by signing the Voluntary Suspension of Retirement Benefits Form. Voluntary Suspension of Payments meaning that you have retired and want to stop your benefit now so you can receive a higher early retirement benefit later or receive a late retirement increase. For example a husband who earned more than his wife would be eligible for more than double her benefits. If he starts collecting early he would reduce his wife’s lifetime benefits and his own. Under the Senior Citizens’ Freedom to Work Act of 2000, which eliminates the Social Security “earnings test” which currently limits the amount of outside income retirees can make without suffering a reduction in Social Security benefits. Under the Act if the husband files for benefits but defers collecting them, and they wife starts to collect on his employment record while he accrues credits for the delay.

Source 1, Source 2, Source 3

Retirement: Pension Planning

Created by: Joseph Owen

The video posted below discusses retirement counseling.  In order for people to have enough savings when they retire, a correct retirement pension plan must be in place.  Retirement counseling can help provide aid for those who are looking to secure a retirement pension plan.

Click here for Retirement Counseling youtube video.

"Unretirement"

By Angelo Orlando Jr.

"The Unretirement Index, after polling American workers in August 2008, polled them again in December," said David Jacobson, associate director with Sun Life Financial. "As a result, the latest findings are the first to measure how American attitudes and expectations of retirement have changed since the economic crisis last fall."
The Index, released several times each year, gauges how economic, financial, and societal forces affect working Americans, and forecasts their future retirement decisions which will have an impact on individuals, the government, employers, and the broader economy. "The last few months have been so extraordinary, we had to go back and check on people’s attitudes," Jacobson explains.
Sun Life’s research showed that while the number of Americans who expect to work at least 20 hours a week after age 67—defined as "unretirement"—is largely unchanged, their reasons for continuing to work have shifted dramatically. The most popular reason cited by American workers for why they would continue to work switched from "to stay mentally engaged" to "earn enough money to live well." In the number two position staying mentally engaged remained important, but the number of Americans who cite they will continue working "for health care benefits" rose from the sixth primary reason to the third most common answer, with 64% now listing it as a reason to postpone retirement.

Click to Read

A Strategy for Retirement Portfolios That Have Sagged

By Lindsay Chin

IF your retirement assets took a beating in the recent stock market decline, converting a traditional I.R.A. to a Roth I.R.A. may be one of the best tax strategies this year.

When you do the conversion, you must pay income tax on the amount you are converting. This can be the whole account or a portion of it. But, subject to certain restrictions, no tax is assessed when the money is withdrawn. You also avoid the requirement to take yearly minimum distributions beginning at age 70 1/2, which can leave more for your heirs if you don’t use the money yourself.

How much you benefit from the conversion will depend on how the investments do subsequently, but there is great potential. Consider Albert Horrigan, 66, a semi-retired real estate broker in Sarasota, Fla., who converted a $50,000 I.R.A. to a Roth I.R.A. in 1998.

Through a series of investments since then, including Apple stock and what he called a shack on 40 acres in Lamoille, Nev., the account grew to be worth more than $1 million. Had Mr. Horrigan held the same assets in a traditional I.R.A. account, all that growth would have been subject to income tax when he withdrew the money.

Now Mr. Horrigan is thinking of converting another traditional I.R.A. that declined in value by 20 percent this year. If the investment springs back, that appreciation will be free from income tax. And if tax rates increase later, he will have done the conversion at today’s lower rates.

Link to Article

Saving for the future

By Lindsay Chin

Retirement means saving for the future. A person needs to consider how they will fund their future. However a personal saving rate alone tell us little about the adequacy of workers’ preparation for retirement. There are three things to consider when planning for your retirement. First you should
1) Assess your retirement.
a. You can keep track of your progress with retirement savings calculators such as the one available on Charles Schwab’s website.
2) Develop a retirement savings plan.
a. You should consider some strategies for saving. Most strategies fall under three types of plans. Qualified plans, which are plan set up by employers to give employees retirement saving opportunities. Individual Retirement Accounts, which is a personal savings plan that provides tax advantages. The three main advantages is that you may be able to deduct your contributions in whole or in part during the tax year you make the contribution, contributions are generally not taxed until distributed, and the IRA fills in the gaps in other tax-favored ways to save for retirement. And last there is Nonqualified Plans, which is an employer-sponsored retirement or other deferred compensation plan that does not meet the tax-qualification in a lower tax bracket.
b. You should diversify your retirement savings into a variety of asset classes
c. Build a portfolio in line with your long-term goals and risk tolerance
3) Explore ways to save
a. Maximize contributions to your existing 401k, 403b, 457
b. Establish a traditional or Roth IRA
c. Consider an individual 401(k), SEP-IRA, or profit-sharing plan if you own a small business.

Source 1, Source 2, Source 3

Here's an article from the Social Security Administration about the basics of social security and other retirement info.

Social Security is part of the retirement plan of almost every American worker. If you are among the 96 percent of workers who are covered under Social Security, you should know how the system works and what you should receive from Social Security when you retire. This booklet explains how you qualify for Social Security benefits, how your earnings and age can affect your benefits, what you should think about in deciding when to retire and why you should not count only on Social Security for your retirement income.

This booklet provides basic information on Social Security retirement benefits and is not intended to answer all questions. For specific information about your situation, you should talk with a Social Security representative.

click here for full article

by Rob Wildhack

Retirement; The One Thing Couples Shouldn't Do Together

Created by: Joseph Owen

Upon searching through Investopedia.com, I found this great article illustrating different benefits couples can receive (financial/emotional) if they were to retire at different periods.  Financially speaking, the advantages are threefold.  When one spouse works longer, the amount of SS benefits the couple is entitled to will increase.  In addition, the continued income from the working spouse gives the couple a few more years to save for retirement.  Lastly, a spouse who works an extra 3-5 years will likely have a shorter period over which to draw on his or her retirement assets, allowing for larger withdrawal amounts each year.  Emotionally speaking, retirement is a tough process.  People loss self identity, and if both spouses were to loose self identity in the same time period, it would only lead to negative effects.  If you would like to read the rest of this article, the link is listed below.

Click here for link.

Retirement Planning

Created by: Joseph Owen

The below link discusses how to create a successful retirement plan even in times of a tough economy.  In today's economy, saving money and planning for retirement can be difficult for elders.  The youtube video below discusses different alternative plans for retirement, and lays out a plan to allocate your assets and savings.  Click below to learn more.

Click here for video.

Spending Confidently in Retirement

Most investors want a comfortable retirement. Yet many of us, particularly the baby boomers, could do a better job of planning for this most important of goals.

Ultimately, financial planning isn't just about rates of return or picking the right stocks. It's about peace of mind and achieving your dreams. Nowhere is this more important than in planning for a retirement that lets you spend reasonably, with confidence.

Click here to read more...


By Lee Ruth

Retirement Fact or Fiction

As we already know, retirement is not an easy thing to plan for. While there is almost limitless information available on the internet about the subject, like everything else on the web, not all of it is true. To help get rid of some of the confusion, here is some retirement fact or fiction, unfortunately without Skip.

1- You need to diversify your 401(k)

Fiction. It isn’t necessary to diversify your 401(k) like it is necessary to diversify your portfolio. To make the most out of tax breaks, it’s best that you hold bonds in your retirement accounts and stocks in regular accounts. As always, younger people should have a higher equity to fixed income ratio, but as you get older, you want more fixed income.

2- You should replace a certain amount of income during retirement

Fact. This is true, but most of the time, the recommended replacement is too high. Usually, a professional will recommend around 75%, but in reality, the needed number is much lower.

3- You don’t need to beat the market, you just need to be making money.

Fiction. You would probably make out okay if you made money all the time but did not beat the market, but that’s just leaving money on the table. If you aren’t beating the market after taxes and commissions, you’re leaving money out there and you should then reconsider your approach or hire/change brokers.

Sources
mint.com
msn.com
cnnmoney.com

by Rob Wildhack

Working Longer as Jobs Contract

By Lindsay Chin

IN recent years, many retirement experts have been giving the same unwelcome advice: American workers who are not as rich as Warren E. Buffett should retire three or so years later than they had planned — to ensure that they have a large enough nest egg.

But now, in these extraordinarily turbulent times, with the stock market declining sharply and millions of 401(k) plans plunging in value, many workers are suddenly facing a starker situation — they worry that they might have to work 5, 7, even 10 years later than planned, perhaps well into their 70s.
But that’s not the only problem. Even as workers in their 40s, 50s and 60s accept having to work years longer than anticipated, many companies are laying off employees amid the economic downturn. This often means that older workers are pushed out first, because they are usually the highest-paid employees.

“You have 401(k) plans going into the tank and the cost of health insurance rising, so many people see they need to work longer,” said Karen Ferguson, director of the Pension Rights Center, an advocacy group for retirees in Washington. “At the same time, many employers don’t have money to hire people, and they’re getting rid of their more expensive employees, so it’s kind of a perfect storm.”


Link to Article

The Worst Move You Could Make.....

By Angelo Orlando

Everywhere I go, I hear stories of people in dire financial straits, considering actions they never would have taken during less desperate times. Things like raiding your IRA -- once seen as a last-gasp measure -- now appear to some like reasonable steps to help make ends meet.
But the news isn't all bad. According to a report last month from the Investment Company Institute on the role that IRAs play in people's financial planning, many investors have a strong investing plan to follow to ride out the recession -- and should be able to avoid ruining their future retirement prospects by dipping into IRAs.
Not pulling out The best news from the report, which covered the 2007 tax year, was that the vast majority of people didn't tap their IRAs for purposes other than retirement. Among the households that took money out of their IRAs, more than 80% were made by people who were already retired. Just 5% of those 59 and younger -- who would generally have to pay a 10% penalty to get at their IRA money -- made IRA withdrawals.
Moreover, it's apparent that most retirees see IRA money as a backup for their other savings. Over 60% plan not to take money out of their IRAs until age 70 1/2, when the tax laws force them to start making withdrawals.

Click To Read

Social Security

By Lindsay Chin

Social security was designed to provide security for individuals, to protect individuals from unforeseen catastrophes. It spreads the risks among members of a society so no one single family bears the burden. Social Security was created in 1935 to provide old age, survivors, and disability insurance benefits to workers and their family. Depending on an individual or his or her family contributed depends on the benefits that are paid to the individual. Social security is one of the three things to consider when planning for your retirement. Social security Opponents to social security have been striving to convince American workers that social security will not exist by the time they retire. And many people believe that social security is going broke and there will not be enough funds for the future. However that is not a truth. Social security can pay 100% of promised benefits until 2040 and any incoming revenues are enough to pay more than 70% of the benefits in the future. To be fair for future generations there the government would need to strengthen social security. Those who oppose can be considered alarmist, those who are hostile to the government and favor replacing all or part of the nation’s successful and essential programs with private investment accounts.

Source 1

Source 2

Source 3

Ways to Plan For Your Future.

When planning for retirement it is important to plan ahead. This can be done in a few steps. If you plan ahead then there should be no reason for you to be in financial trouble for when the day comes where you finally decide to retire. It is very important that you diversify your investments. Never put all you money in one investment in case something was to happen. Look into all option whether it be municipal bonds or even government bonds but make sure that the yield on these bonds are not too farfetched and actually obtainable. A good way to plan for the stock market and a helpful way of deciding which stocks to put into your portfolio is by looking at the stocks dividends. Generally this will help you decide between which stocks are too risky and which stocks are really realistic for you. If you are someone that is not a believer in the stock market due to risk then a good game plan would be to look for alternatives in the investment field. Overall, though in order to be set for the future when you decide to retire, it is very important to start in the present and plan ahead.

SOURCE

Written By Lee Ruth

Retirement Ideas for Younger People

How many times have you heard that you should start saving for retirement as soon as possible? I know I’ve heard it tons of times, but that advice is no good if you don’t know where or how to start. Obviously, most people will have loans coming out of school, so it’s a good idea to pay those off first. That being said, T. Rowe Price recommends that anyone in their thirties save at least 10-15% of their annual salary. Another important idea is taking advantage of employers matching your savings. Most employers will match 50 cents per dollar on what you save, so it is important to use this to your benefit. Another important idea is risk. When you are younger, it might not be a bad idea to take a somewhat riskier approach that relies more on equity than on fixed income. As you get older, the opposite becomes more and more the recommended method. It is also a good idea to take advantage of a Roth IRA, especially if you have hit the limit on what your employer will match. This is a great way to protect against future tax rates because Roth IRAs are tax free, assuming you’re at least 59 ½ years old when you withdraw.

For more detailed information, look at these three articles

bankrate.com

smartmoney.com

Poise Magazine

by Rob Wildhack

Will I Lose All My Retirement Savings?

Here's an article from CNN's Gerri Willis for people worried about losing their retirement money.

Stocks Friday plummeted on fears that the banks might be nationalized by the federal government. The move took the S&P 500 index to its lowest levels in nearly 11 years.
Are we going to lose all our money? And, how can I protect myself?

There have been losses in retirement accounts. The average 401(k) balance is nearly $50,000, which is enough to keep a couple going for a couple of years in retirement at best. 401(k) balances dropped 27% last year from $69,200 to $50,200 according to Fidelity.
The fears that the financial rescue attempts are doomed to fail is overblown.

Click here for full article

by Rob Wildhack

Planning for Retirement?

The following youtube video is of John Piper discussing retirement planning.  John Piper is a broadcaster familiar with financial topics such as retirement.  Listed below is the link to the video.

Click here for youtube video.

Created by: Joseph Owen

Saving for the Future

By Lindsay Chin

You salt away 10% of your pay into a retirement plan, but this "retirement" thing can feel pretty abstract. What will it be like? To judge by the pictures in personal-finance magazines (including Money), there will be a house by the water. And Adirondack chairs. And the occasional sea kayaking expedition.
Perhaps. But there will also be, well, an older person. An older person with your name and your Social Security number but maybe not so much of your hair. You'll have a lot in common with this later you but not everything. You'll have some different desires and different fears. And even where the present and the future you agree, that older person's feelings aren't that vivid to you now. It's easier and more enjoyable to think about sea kayaking. That's a bit of a problem for your financial planning.

Link back to Article