Wednesday, March 25, 2009

Retirees Working Longer

By Lindsay Chin

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

Source 1, Source 2, Source 3

Baby Boomers Generation

Posted by:  Joseph Owen

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

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.

Monday, March 23, 2009

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.

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.

Homes Show Unexpected Strength

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

Source 1, Source 2, Source 3

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

By Lindsay Chin

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

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

Retirement Planning In Your Twenties

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

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

Click here to

Written By Lee Ruth

Retirement; Obama

Posted by; Joseph Owen

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

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

Source #1

Save Your Portfolio

By Angelo Orlando Jr.

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

Caution: Retirement Ahead

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

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

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

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

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

click here for the full article
by Rob Wildhack

Securing Your Nest of Eggs Against Layoffs

By Lindsay Chin

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

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

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

Avoiding Risks to your Retirement Income

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

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

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

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

Posted By Lee Ruth

Top Ten Retirement Trends of 2009

Created by: Joseph Owen

I was reading this great article that I had found on google.  The article is titled,  "Top Ten Retirement Trends to watch for in 2009."  Listed below is the bulleted format of these trends.  If you wish to view the article as a whole, and would like to learn of these trends more in depth, click the link below to direct you to the article.
  • Health Care Refrom
  • People Working Longer
  • People Working Longer with a purpose
  • Fear will be the emotion experience the most
  • More families will stick living together due to the fact that everyone can't afford their own apt. or home
  • Networking of life reinvention
  • Pension tension
  • Retirement Security Overhaul (debt issues with SS, etc.)
  • Steadying the 401K

Wednesday, March 18, 2009

Retirement Guide for 60-Something

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

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

Click Here To

written by Lee Ruth

Retirement Statistics

Created by: Joseph Owen

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

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

Getting an early start on retirement

By Angelo Orlando

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

Tuesday, March 17, 2009

Deferring Social Security Benefits

By Lindsay Chin

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

Monday, March 16, 2009

Retirement: Pension Planning

Created by: Joseph Owen

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


By Angelo Orlando Jr.

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

A Strategy for Retirement Portfolios That Have Sagged

By Lindsay Chin

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

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

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

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

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

Thursday, March 5, 2009

Saving for the future

By Lindsay Chin

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

Wednesday, March 4, 2009

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

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

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

click here for full article

by Rob Wildhack

Tuesday, March 3, 2009

Retirement; The One Thing Couples Shouldn't Do Together

Created by: Joseph Owen

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

Monday, March 2, 2009

Retirement Planning

Created by: Joseph Owen

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

Spending Confidently in Retirement

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

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

Click here to

By Lee Ruth

Retirement Fact or Fiction

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

1- You need to diversify your 401(k)

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

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

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

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

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


by Rob Wildhack

Working Longer as Jobs Contract

By Lindsay Chin

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

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

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

Link to Article

The Worst Move You Could Make.....

By Angelo Orlando

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