Saturday, December 12, 2009

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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Friday, December 11, 2009

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.

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.

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.


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?


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.


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.


Thursday, December 10, 2009

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.


Tuesday, December 8, 2009

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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Monday, December 7, 2009

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.

Sunday, December 6, 2009

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!

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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.


Saturday, December 5, 2009

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.


Friday, December 4, 2009

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.


Wednesday, December 2, 2009

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.

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.

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.

Tuesday, December 1, 2009

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.

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.


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.