Savings Plans for the Year Ahead

By Jorden Meltz

A recent survey shows that Americans plan to make saving for retirement a priority during the next year. TD Ameritrade reports 66% of women surveyed and 59% of men plan to save more money for retirement in 2010. This is yet another lesson learned by many Americans over the past year and a half that budgeting and savings plans are essentials of personal finance and are things that cannot be ignored. Economists predict that in 2010 the personal savings rate will be 4%, the highest level in over a decade. These predictions correlate with the survey results, showing that hopefully many Americans will realize the importance of personal savings and the benefits they can realize from being more financially responsible.

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Benefits of sticking with Retirement Plans

By Jorden Meltz

The recent economic struggles that many have faced impacted the way they planned for retirement and the contribution, if any, they made towards retirement accounts. Although many may have needed the money elsewhere recent reports have shown that if people would have continued to invest and followed their retirement plans they would have more money in their accounts then before the economic downturn. The Vanguard Group Inc. recently announced that 60% of people with retirement accounts who kept their money invested and continued to invest have more money in their accounts then before the market started to decline. Much of these results were dependent upon investment risk, as younger investors were able to recover more of their money at a much quicker and more successful rate than older investors, whom are less likely to take risks while investing. The results of better market performance have also been seen on a larger scale as net worth has increased for the second straight quarter, this time increasing by five percent. Although many may have needed the money for current expenses a lesson to be learned from the past year and a half is that if you have the ability it is worth investing during times of economic downturn as there is great potential to realize large returns.

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Strategies for Retirements

By Jorden Meltz


With the Baby Boomers starting to enter into their retirement years, retirement planning will continue to play a bigger role in financial talks. Included in these talks will be a recent change in the rules governing Roth IRA's. Starting January 1st of next year, the $100,000 limit for converting other types of retirement accounts to Roth IRA's will be removed, providing many who take advantage of this new policy regarding Roth IRA's with great tax benefits. For those who currently have retirement accounts this comes as great news, but what about for those just starting their careers. According to a recent study 30% of workers between 21 and 24 do not take advantage of employer sponsored retirement plans. What these people fail to realize is the benefits of compound interest and that by starting to save today it can greatly increase how much they have saved in retirement accounts when they eventually retire. With the economy the way it has been as of recent it is very possible that people have preferred to have their money then put it away in savings but as the economy starts to recover this rationale will probably change and people will begin to realize the benefits of starting to retire at a young age.

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Divorce = Retirement?

By Jameel Murray

Has Shaquille O’neal’s recent divorce situation forced him to retire early? Shaquille O’neal has stated that he would retire after this 2009-2010-basketball season. Although we do not expect him to pull off the Brett Favre approach, rumors are swirling that Shaq is deciding to announce his retirement from the game of basketball before the end of this season. Shaq has been a dominant player in the NBA for 17 seasons and is considerably now facing the effects of the wear and tear of the league. Although the NBA can take a toll on players, players of Shaq’s caliber have endured the game for a longer period. Is it possible that Shaq is retiring due to his recent divorce process? Shaq’s wife, Shaunie O’neal has recently filed for divorce from the Cleveland Cavaliers center. Since the announcement of the divorce, Shaq’s stats have considerable decreased. Shaq is averaging a career low 10.9 points per game and has missed a couple of games due to injury. If O’Neal does decide to retire, he would be considered one of the greatest big men to ever play the game of basketball.

http://www.nba.com/playerfile/shaquille_oneal/index.html

http://blog.seattlepi.com/glamgirlsguidetosports/archives/185489.asp

http://www.theonlinewire.com/19/6001/GAMBLING-ARTICLE/Shaq-Retires--Rumors-Swirling-About-Retirement.aspx

Life after the game

by Jameel Murray

When an athlete finally dips into the tricky life of fame and stardom, they never seem to understand that all great things must come to an end. There would come a point in time where what once was great would be outdated someday. All athletes must retire at a point in time due to the weariness and instability of their bodies that eventually relegates them to live a normal life after retirement. Some professional athletes are prepared for life after retirement, using their athletic careers, as a tool to serve as businessmen, commentators, coaches, and other careers.
However, there are many sport icons who are not prepared for a life after professional sports and consequently engage in detrimental activity. For example, after O.J Simpson retired from football, he never engaged in a career that occupied his time after a short-lived career. As a result, Simpson seemed to take part in reckless activities and had multiple issues with the law. Athletes must value education and recognize that there is life after sports. Athletes such as Michael Jordan have utilized their abilities to venture off into successful post retirement careers. Jordan is now the CEO and chairman of the Jordan Brand while former Phoenix Suns guard, Kevin Johnson has enjoyed a career as the mayor of Sacramento.

http://www.kevinjohnsonformayor.com/

http://istadia.com/article/peterdanton/110

http://thejakartaglobe.com/sports/for-some-athletes-life-begins-after-retirement/278773

Be smart: start saving

By Alma Zhumagulova

Many baby-boomers watched large portion of their savings get lost in the financial crisis. Some of them might now be considering taking their money out of the market to be on the safe side; however, this is not the right move. Even if it will take some time, the market will recover and your savings will go up. So don’t stop investing and try to maximize your contribution, change your investment strategy to more conservative investments, such as certificates of deposit and mutual funds and invest less into stocks.
Now for the younger generation: it is vital to remember that at some point you will grow old and stop working. So be a responsible adult and start planning for your future.
When saving for your retirement you should have at least some picture of how you want to spend your retirement. This will give you an idea of how much you need to save.
Since it is hard to restrain yourself from overspending, “put your savings on autopilot,” i.e. enroll in 401(k), open a traditional or Roth IRA, so that some portion of your paycheck goes directly to your savings account. Roth IRA is probably the most preferable option if you qualify.
Even though it might seem that the retirement planning is such a complicated process you should not procrastinate to start this process. Make decisions, make mistakes and learn from them.
And finally, make sure that you are saving regularly; this will ensure that your investment will steadily grow even if at a slower pace.

Sources:
http://www.marketwatch.com/story/translating-nest-eggs-into-retirement-income-2009-12-10?reflink=MW_news_stmp
http://money.cnn.com/2009/12/10/pf/expert/early_saving.moneymag/index.htm
http://www.echo-pilot.com/lifestyle/x490334692/The-still-possible-dream-Saving-for-retirement

401 K Plans Face Criticism

By, Meredith Anderson

A 401K plan is a pension plan that allows you to put aside and save for retirement throughout your years of work. It was originated in 1978 with the passing of the Tax Reform Act. The government thought that Americans needed and little push and incentive to save for retirement. Its a way to put aside a portion of your pay check directly into an investment account and defer income taxes until withdrawal. Once you have retired you are given back the money and the profit you have earned on the investment. If you decide to retrieve your money before the age of 59.5 you will receive a penalty of 10% additional taxes. The plan was titled after the section 401 paragraph K in the Internal Revenue Code.

With a 401K you have a side saving. With many people struggling to pay bills and keep their lives moving day by day 401K plans are being viewed in a less positive light. Many feel that they need to focus on today and not 20 years from now. People are willing to dip into their retirement funds to stay alive today without realizing how much harder it could be in the future. There is much debate between experts whether or not this is a smart move. Most will agree that taking out of this plan to simply pay of credit card debt is not smart, however there is much debate on whether or not there are better places to be investing you money. Some are saying GOLD is the way to invest rather then your retirement?

Sources:

http://money.howstuffworks.com/personal-finance/financial-planning/401k.htm

http://www.irs.gov/taxtopics/tc424.html

http://www.cbsnews.com/stories/2009/12/11/earlyshow/series/main5967017.shtml

Types of Retirement Plans

By Shawn Chandok

One of the most troublesome scenarios a lot of people face during their lifetimes is savings required for retirement. Although it is generally true you should start saving at least 20% of your income when your 18, not everyone does it. Once you begin working, there are several types of retirement plans you might consider. First and foremost there are defined benefit (DB) plans. In a DB plan you are guaranteed a minimum monthly amount of money upon retirement based upon a mathematical formula on how long you worked for the firm and your average salary. On the other hand, in a defined contribution plan (DC) your employer promises to provide a certain amount of money to you after retirement. However this money doesn’t have to be cash, instead it can be a form of company stock or mutual fund, which translates to a higher risk and higher possible return. A popular type of DC plan includes a cash or deferred arrangement (CODA) in which you can also make donations to your account in addition to your employer. A good strategy is to choose a retirement plan that gives you after tax dollars upon retirement because at age 59.5+ you do not want to worry about a substantial portion of your income depleting to past taxes.

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Early Retirement...What's a good offer?

By Robert Katz

With the economy the way it is right now and the exceptionally high rate of unemployment, companies are continuously looking for ways to decrease their costs. One of the common strategies they would use would be to encourage older employees to consider early retirement plans. Yet, when preparing for retirement we usually have a set date in mind in which we would have, or hope to have, met our financial goals. So, when considering and early retirement package you must be very careful to make sure the deal is substantial enough to cover the loss of your expected future income. There are some important things to consider such as the financial health of the company; for if you think you may loss your job before you planned to retire any package may look that much more attractive. Also assess the market to see if there are any other opportunities for you in the job market else where. Review what you are being offered and always make sure you know how you are going to be receiving the packages benefits. Making sure to assess your expenses and the taxes you'll have to pay due to the acceptance the package as well because these can make it seem significantly more attractive than it actually is. You should also always make a counter offer because it is more likely than not that due to the economic situation they will initially offer you less than what they are actually able to give you to save on costs. Finally, always make sure to read the fine print.

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Best 401k Plans

By: Nicole Nelson

401k plans can be a great help when planning for retirement. A 401k is a plan that when an employee takes part in, they defer income taxes on the money saved. Employers that offer these plans have the choice to match a portion or all of the employee’s contributions. A company that offers employees the choice of enrolling in a 401k plan, is a great benefit that potential employees should consider when researching companies and jobs. Recently, Brightscope who is a company that provides independent retirement plan ratings has released its first ever top 30 rating list of 401k plans of companies that have more than $1 billion in assets. Topping this list includes Saudi Arabian Oil, Bank of New York Mellon, Southwest Airlines, Nucor and FedEx. Other recognizable companies that made the list include ExxonMobil, Pfizer, Nokia, Charles Schwab, IBM, Microsoft and UBS. These companies were ranked on criteria such as participation rate, default rate, fees and employer match. Over the years this company has rated more than 26,000 plans. This has included more than 30 million workers and over $1.9 trillion in assets. Although working for a company on this list is great in terms of 401k, 401k’s are not the only thing that should be considered when completing a job search and planning for retirement. It is the combination of a good 401k, personal savings and other retirement planning that makes a good retirement plan.

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Invest in Several Asset Classes

By: Zachary Pienkowski

One of the top priorities for many young professionals is being able to save enough money in order to retire comfortably. A lot of companies will offer retirement programs like 401k's, but while that is a good start for retirement, in most cases it will fall short of meeting goals. People need to diversify their retirement portfolio not only with different stocks and bonds, but also with different assets. Everyone knows that you shouldn't put all your eggs in one basket, but that doesn't mean they know where to put them either. One important aspect of retirement planning that is greatly overlooked is permanent life insurance. 401k's and many other retirement vehicles are deceiving to the average person because they are not aware of the tax consequences in these accounts. All withdrawals from a 401k are subject to taxation on the way out. Some might say that is not a big deal tho because you are deferring the taxes and not paying them when you put into the account. Now what happens if you enter a much higher tax bracket because you are making more money later in life? That is something that needs to be considered because proper tax planning is just as important as what investments you choose. Permanent Whole Life insurance is an investment that gains cash value and can be taken out of the policy completely tax free. Most insurance professionals advise not to take the entire amount of the cash value out so that the policy does not lapse, but if you feel there is no need for the insurance anymore but there is $2 million in cash value and you want it, then you are entitled to the entire $2 million which is 100% payable to you.

Sources:

http://money.cnn.com/2009/11/12/pf/expert/401k_investments.moneymag/index.htm
http://money.cnn.com/2009/11/10/pf/expert/make_retirement_last.moneymag/index.htm
http://finance.yahoo.com/news/Financial-Advice-That-Could-fool-80243252.html?x=0&.v=1

The 10 Best Retirement Havens

Posted by Ahmed Al-Salem
Forbes has compiled its own list of the 10 best retirement havens, based on a wide variety of criteria ranging from safety to retiree-friendly visa requirements to decent medical care. The countries on the list: Austria, Thailand, Italy, Panama, Ireland, Australia, France, Malaysia, Spain and Canada. No place is perfect. Some countries rank high in one area but lower in others. Australia is by one well-regarded rating, the Country Brand Index, the most livable place in the world. But if you plan to return to the U.S. frequently, Australia makes for a long slog. Canada is No. 2 in the Country Brand ratings and certainly convenient for Americans, but its harsh winters are well-known. Italy scores high on quality of life, medical care, and even cost of living and climate for retirees residing in the Southern parts of the country. But its complicated taxes and bureaucracy require patience. So, the key to any decision: Know yourself and do your homework. If you're a sun-worshiper determined to protect your assets from overreaching Western governments, consider countries like Panama or Malaysia. If you are solidly middle-class with a taste for high culture, then there are pleasant surprises to be found in Europe. Are you eager to live abroad but totally tone-deaf to foreign languages? That's a fine argument for Australia, Ireland or Canada.

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Are Happy Retirements Out of the Picture?

By, Meredith Anderson

Retirement seems like a distant fantasy to many people. With this economy in the shape it is today people are focusing on surviving year by year rather then planning their futures on the beach. People are thinking about how much they lost rather then what they can still save.

Its been over a year since the recession began and 401k plans and IRAs are almost back to where they were. A lot was lost in the recession and there is no argument that retirement took a big hit. Money does not grow on trees and unless you win the lottery you will have to suffer a little from this loss. However, this doesn't mean all we have to look forward to is number crunching and trying to scramble for money with no income. We just need to reevaluate our priorities and realize that retirement can still be easy and enjoyable. By changing our lifestyles now we are already headed in the right direction. Realizing retirement is about your happiness means that you might need to cut the grandchildren spending a bit, but you can still sit on the beach without worrying about money if you face reality that retirement will come. There are unless plans and companies willing to help you with your specific needs. Asking for help is the hardest part.

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401K recovery leaves people with more money in their account than before

Posted By Pete Hill

DES MOINES — Another major provider of 401(k) accounts says the typical retirement saver now has more money in their account than they did before the stock market began tumbling two years ago.

The Vanguard Group said Wednesday that 60% of participants who continued to contribute and stayed invested have more money in their accounts than they had in September 2007 — before the market decline.

IF YOU DIDNT KEEP INVESTING? For stocks, be prepared to wait 5 years
That means 40% of continuous participants have lower balances, although Vanguard said most of them are less than 20% below their earlier peak value.

Younger workers with smaller balances caught up the quickest. Nine in 10 participants under age 25 were flat or were ahead of their balance two years ago. About eight in 10 workers in their mid-20s to mid-30s had recovered to 2007 levels. However, just half of the participants in their 50s and 60s have recovered or gained slightly while half have not.


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When is the Correct Time to Retire?

Post by David Held

All Americans look forward to the day he/she can stop working and retire. The big question is when you retire will you be financially secure? In today’s day and age the true answer to that question could be NEVER! With the terrible economy many people lost upward of 50% of their retirement savings, in the forms of IRA’s, Mutual Funds, Stocks, and defaulted bonds. Now, the next place to look for money is social security, but is the social security program going to be around in the next 10 years? Also, if the program is still around you cannot collect on Social Security until you are 67 years old.

The safest way to save for retirement is by putting your money away in money market accounts and CDs, through your bank. The key is to start saving early! There is a huge difference when you start saving for retirement in your twenties rather than your thirties. Another important thing is, when looking for jobs make sure the retirement benefits are good. Defined Benefit and Define Contribution Plans can really help put a lot of money toward your retirement.

All in all, you have to invest wisely. The economy is cyclical and somewhat predictable. Consult a financial advisor early, so you can be financially stable when you retire!

Sources #1, #2, #3

Social Security and Its Future

By Laura Reginelli

According to eHow, Social Security is “the common term for the U.S. government's group of public disability and pension schemes. Starting in 1935, they have collectively become the single largest social program in the United States. In modern times, the stability of Social Security has come into question due to an increasingly aging population placing greater demands on a stagnant or shrinking pool of resources.”

Due to shaky economic times recently, the future of Social Security is constantly being questioned. Many fear that it may disappear by the time that they can retire. According to experts, the system will be functioning to its maximum capacity until 2042, but around there the returns to workers will start to decrease quite dramatically.

In the meanwhile, Social Security serves as a means for both retirement and disability income which is funded by payroll taxes. Social Security essentially works in a cyclic pattern in which you give money to the system through your paycheck and that money goes to current retirees. Then when you are retired the money will be coming from payroll taxes of current employees.

Social Security is generally a heated topic of debate. Many are unsure of the future for the program, if it will continue and if it should be reformed to work differently. It is clear that it will continue to be an important topic of discussion as we go through this economically changing time period.

Sources: http://www.ehow.com/about_4587684_what-social-security.html?ref=fuel&utm_source=yahoo&utm_medium=ssp&utm_campaign=yssp_art

http://www.aflcio.org/issues/retirementsecurity/socialsecurity/ss_whatis.cfm

http://www.wisegeek.com/what-is-social-security.htm

Retirement Planning Strategies

Posted By: Pete Hill

Retirement savings is a main priority for many people once they graduate from college. However, many people do not know how to appropriately take risks and when to play it safe throughout their lives. In these articles, they describe the best times to take on risk, and the best time to be safe.

Retirement planning for people in their twenties is classified as “starting out strong”. The first investment goal is to build up the emergency fund. In addition, using bonuses achieved through work, and left over profits each month, after paying the bills, will give young people a strong foundation.

Once you reach your mid-career point, it is time to reduce retirement plan risk. With college and retirement worries forming, it is important to take less risk with the retirement portfolio.

Once you have retired it is important to remember to not invest like you are thirty years old, and create a safety net under you. A safe way to reduce risk and create a safety net is by raising their bond and cash allocation to 30 percent while reducing exposure to small-cap stocks and foreign funds.

Sources:
http://money.cnn.com/2007/12/26/pf/funds/strategies_marlowe.moneymag/index.htm
http://money.cnn.com/2007/12/26/pf/funds/strategies_morrow.moneymag/index.htm
http://money.cnn.com/2007/12/26/pf/funds/strategies_lewis.moneymag/index.htm

Building a Nest Egg

Article by Matthew Maillet

It is never too early to plan for your retirement. There are many strategies for saving for retirement that will help you be in better position once you decide to finally retire. While many of these strategies seem obvious at first, it is very important to take advantage on some of these basic ideals. Try finding a strategy that meets your current working conditions as well as your retirement goals.

Saving as much as possible from your regular income is the easiest way to protect your retirement fund. Obviously, the earlier you start saving the better. Building a strong nest egg will help you in avoiding market fluctuations in the future. The greater the nest egg the greater your financial security going into retirement.

Always stay focused on keeping your current job security. The longer you keep your current job and the more you postpone social security, the bigger your social security check will eventually be. Staying in the current workforce allows you to avoid having to tap in to your nest egg—thus, make sure to postpone having to spend your current savings as long as possible.

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How to get started in a 401 (k)

Posted by: Christina Dove

With the current recession going on right now, many people are weary about investing too much money in their 401(k)'s. However, although this may be somewhat justified, the best advice is to still invest the maximum amount that you can and participate in the catch up contributions as soon as you turn 50. Many people are under the misconception that is it not worth putting the money away now if retirement is so far off. It is a known fact that the more money that you save and the earlier you start, the more enjoyable your retirement years will be.

The other reason you don't want to focus on the short-term fluctuations and flows of the economy is that such an approach is antithetical to retirement planning. Only by saving and investing regularly throughout our working years will most of us accumulate a sum large enough to maintain our pre-retirement standard of living. The 401(k) makes that sort of regular saving and investing possible in large part because of the ease and convenience of payroll deductions. The 401 (k) is crucial aspect of the 3-legged stool that makes up people's retirement income, the other 2 stools being social security and personal savings.

The last important point about 401 (k)'s is that it is important to diversify your portfolio. Many people learned that lesson the hard way lost at lot of money once the tech bubble bursted. Employees should remember to include a variety of stocks that both do well when the economy is up or down.


Sources:

http://money.cnn.com/2009/10/26/pf/expert/401k_contributions.moneymag/index.htm

http://www.forbes.com/bow/b2c/category.jhtml?id=204

http://www.irs.gov/retirement/article/0,,id=119625,00.html

The Future of Social Security

Posted by Lindsey Connell

As many of us have heard, it is true that Social Security benefits are experiencing financial problems. It is expected that over the next 75 years, there will be a massive and growing shortfall and because people are living longer, the worker to beneficiary ration has decreased from 16-1 in 1950 to 3-1 currently. If Social Security is not increased, there will be higher taxes to pay and benefits for younger employees will have to be cut. The government also will have to eventually pay back all the money it borrowed to provide Social Security, but how can it do that if they are currently looking to borrow more? As a country we now look to our President to fix the mess that we currently have and will have in the future unless corrected. When many people plan on retiring, they factor in receiving Social Security as part of their income but it seems that this reassurance of money is slipping away. People planning for retirement at the early stages of their lives can no longer count on Social Security to be there in the future because it is unknown if there will be enough money left to benefit them by the time they consider retiring.

http://www.thenation.com/doc/20090316/exchange

http://seniorliving.about.com/od/retirement/a/ssbenefitsfaq.htm

http://www.newyorklife.com/nyl/v/index.jsp?vgnextoid=219cce42249d2210a2b3019d221024301cacRCRD

Where to Retire to: Considerable Factors

Posted by Lindsey Connell

Although the average retirement age has increased recently, people are still planning ahead as to where they would like to spend their retirement days. When considering where to live, most people consider factors such as city/town profile, tax information, education opportunities, and more minor things such as weather and art and cultural activities. A great area to live in is a college area and more people are beginning to move there as they discover the great benefits of doing so. In a college town there are cultural activities, athletic events, and good medical facilities which make the area so appealing to retirees. Florida seems to be up there as a top state to retire to mainly for the attractions, and the fact that there are great places to fish and go on a cruise. According to MSN Money Staff, the best place to retire to is Cuenca, Ecuador. They chose this area because it is in a sunny, cosmopolitan, and inexpensive location. Although areas have been voted best or worst places to retire to, everyone’s opinion is different. When choosing a place to move to, you should consider what is most important to you. If safety comes before weather to you, thank you may have to choose an area that has little to no crime but is often rainy. At the end of the day, you probably won’t be able to get everything you want but in some areas you can definitely get pretty close.

https://www.retirementliving.com/GPR_intro.php

http://money.cnn.com/galleries/2009/moneymag/0909/gallery.bpretire_top25.moneymag/index.html

http://articles.moneycentral.msn.com/RetirementandWills/RetireInStyle/the-worlds-best-places-to-retire.aspx

Retirement: The Scary Truth About What The Future Holds

Posted by Lindsey Connell

When people thought of retirement they used to think of vacationing and living life without a worry about working or making money. Today, this idea of retirement is completely different because of the thought that social security will probably not be around forever, and for the fact that there are more people in the world now, less jobs available than before, and the value of money has decreased. To make up for these changes, many people choose to either work for more years prior to retiring or to work part-time during their planned retirement years. For the average person, the retirement age used to be 65 years old, but today it has increased to 67. This may seem like a small increase to some, but because the number has been consistently at 65 for so long, the sudden jump in age is a concern about not only the present, but about what it can increase to in the future. This is also concerning because it makes you wonder at what age will the increase stop. Will the average retirement age increase to 70? 75? If the retirement age increases more than an increase in the average life expectancy than there will come a point where people will be literally working until the day they die.

http://www.ssa.gov/pubs/ageincrease.htm

http://www.epi.org/publications/entry/briefingpapers_raisingretirement_raisingretirement/

http://www.urban.org/publications/311413.html

Consider a Career in Health Care

By Lingxiao Li


Senior year means job unting and heavy schoolwork. Recently, for most of us, job security could mean a lot.
For all the hand-wringing about the weaknesses of health care, one aspect of it has remained strong: its ability to provide jobs. In fact, health care employment has increased during the recession, while employment as a whole has declined, according to data from the Bureau of Labor Statistics. Within the private sector, more than 11 percent of the American work force is engaged in health care work, compared with just 3 percent before 1960, the bureau says.
Regardless of how health care reform shakes out, the industry jobs picture is likely to remain robust, given the aging population and technological advances in medicine.
High school and college students take note: the positions expected to post some of the largest increases include registered nurses; personal and home care aides; home health aides; nursing aides, orderlies and attendants; medical assistants; licensed practical and licensed vocational nurses; pharmacy technicians; and physicians and surgeons.

http://www.nytimes.com/2009/11/15/business/15count.html
http://topics.nytimes.com/top/reference/timestopics/subjects/r/recession_and_depression/index.html?inline=nyt-classifier
http://www.bls.gov/spotlight/2009/health_care/home.htm

Changing Expectations for Retirement

By: Kelsey Hoffman

People have expectations for their lives and how they want to live them. By the time it is ready to retire, many people would rather continue their lives of luxury than sacrifice anything to cut costs. There is a new trend in the older generation where people, even though they are eligible for Social Security, continue to work longer so that when they do finally retire they don’t need to change their lifestyles. 95% of people say they would not be willing to spend less during retirement.

To go along with this, the younger generations are starting to save money sooner so that they will be able to retire more easily. They are also increasing their contributions to their retirement funds.

In this past year many people realized how important their retirement funds are. Before the recession, 43% of American households were “at risk” of not being able to maintain their current lifestyles during retirement. After the second quarter in 2009, this number increased to 51%. There were many factors that affected retirement funds but the real estate market decline, the drop in the stock market, and the increase in the costs of health care were three major aspects that influenced the funds.

Sources:
http://www.rttnews.com/ViewPR.aspx?PrID=515913&SMap=1
http://www.dispatch.com/live/content/business/stories/2009/
11/27/Retirement_Problems.ART_ART_11-27-09_A16_MPFQ
78D.html?sid=101
http://www.boston.com/business/personalfinance/articles/2009
/12/01/half_of_americans_at_risk_for_not_having_enough_in_
retirement_survey_says/

Retirement plans- 401(k) benefits

Posted by Lindsey Connell

A company’s retirement plan may be exactly what you were looking for bit it will not be as beneficial as it seems unless you know how to use it. Many companies provide great benefits but without providing knowledge on how to extend the life of the benefits or how to plan for your retirement properly, you won’t be able to get the most out of what is provided to you. Traditional pensions where employers send retired employees a check every month for the rest of their lives are becoming increasingly rare. As for Social Security, the average benefit is less than $13,000 a year and the future of social security benefits is rocky for the future. 401(k) plans are types of tax-qualified deferred compensation plan where an employee can elect to have their employer contribute a portion of their wages before taxes are taken out. It is important to note that if you withdraw money from your retirement plan before the age of 59 ½, you are subject to an early distribution penalty of 10% additional tax. Retirement may seem like a long ways away but it is important to plan for it early if you want to receive benefits in the future such as free money from your employer, lower taxable income, savings that accumulate without you having to make deposits, and the opportunity to retire knowing that you are financially secure.

http://www.irs.gov/taxtopics/tc424.html

http://money.howstuffworks.com/personal-finance/financial-planning/401k.htm

http://www.fool.com/retirement/401k/401kintro-is-your-retirement-plan-foolish.aspx?source=ircsitcl30000001

Health Care Savings Could Start in the Cafeteria

By Lingxiao Li

Obesity alone threatens to overwhelm the system. In a recent study, Kenneth Thorpe, chairman of the department of health policy and management at the Rollins School of Public Health at Emory University, found that if trends continued, annual health care costs related to obesity would total $344 billion by 2018, or more than 20 percent of total health care spending. (It now accounts for 9 percent.)At first blush, the notion of eating our way out of huge public health challenges like obesity, diabetes and heart disease may seem an overly simplistic and idealistic fix for complex, multifaceted problems. But health experts say that, in fact, an apple a day does keep the doctor away, and that many studies prove it.As part of the program, the Full Yield will give employees access to nutrition coaches by phone, as well as personalized online health pages containing the biometric data, exercise and eating tracking tools and information on things like how to cook whole grains and make salad dressing.We feel certain this will have an effect on our bottom line,” she says, “but it will probably take a few years to get there.


http://www.nytimes.com/2009/11/29/health/policy/29diet.html?pagewanted=1
http://health.nytimes.com/health/guides/specialtopic/food-guide-pyramid/overview.html?inline=nyt-classifier
http://www.nytimes.com/2005/04/10/politics/10pyramid.html

Retire In Style

By Eric Gursky

It's said that human beings stand out from other species by virtue of our ability to think and plan ahead. While that may be true, most of us also have great trouble thinking about or preparing for the long term in the middle of our daily tasks and toil. Heck, it's difficult enough to plan something just six months ahead, like a summer vacation. How on earth are we supposed to be able to think about something in the distant future -- like retirement?

However, thinking in advance, and acting on those thoughts, are keys to being ready when the future becomes the present. The younger you are, the more distant your retirement -- and the greater your ability to compound your returns over time. That paradox can work to your advantage.

In this collection, we try to answer the important questions:

• How much will I need for my retirement in order to live comfortably?
• What are my goals?
• When should I start?
• What should I do?
• How much can I count on from Social Security?
• What costs might I run into once I've actually retired?

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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.

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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.

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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
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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.

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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.

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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.

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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

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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.

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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.

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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.

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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.
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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.

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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).

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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.

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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:
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“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.
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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.

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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.

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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?

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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.

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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.

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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.

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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.’”

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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.

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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.

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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.

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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.

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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!

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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.

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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.


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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.

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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.

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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.





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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.”

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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.

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Written By Lee Ruth