Get Your Finances Ready for Retirement

Posted by Lily Chung

How Social Security Reform Affects Women

Copied and Pasted by Lily Chung

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

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

Click Here to Read More

Top Ten Steps for Retirement Preparedness

Copied and Pasted by Lily Chung

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

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

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

Click Here to read more

Retirees Working Longer

By Lindsay Chin

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

Source 1, Source 2, Source 3

Staying Happy and Healthy After Retirement

By Angelo Orlando Jr.

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

Source 1

Source 2

Source 3

Save Your Portfolio

By Angelo Orlando Jr.

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

Click To Read More

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

A Strategy for Retirement Portfolios That Have Sagged

By Lindsay Chin

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

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

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

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

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

Link to Article

Saving for the future

By Lindsay Chin

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

Source 1, Source 2, Source 3

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

Saving for the Future

By Lindsay Chin

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

Link back to Article

5 New Investing Rules For Retirement

Many of the old rules for retirement investing no longer apply. Facing longer life spans, increasing healthcare costs, and a market in crisis, retirees will need more growth in their portfolios during the coming years and decades. At the same time, they need the assurance that a 37 percent market drop--as we saw in 2008--won't completely devastate their remaining nest egg. A growing number of financial planners are rethinking the conventional wisdom. (Remember the old adage that you should subtract your age from 100, and devote that percentage of your portfolio to stocks?) Here are five new rules to consider:

Separate your investments into different pots. Often, investors in retirement lump all of their money together, with which they pursue one strategy, says Eric Bailey, managing principal of Captrust Advisers in Tampa. His firm, which works with pensions, endowments, and high net-worth individuals, takes an approach ripped straight from the institutional investors' playbook. Clients' money is separated into three categories: Short-term funds reside in very low-risk investments, such as high-quality bonds; intermediate-term money goes in a balanced mix of stocks and bonds--such as a 50-50 or 60-40 split; and long-term investments starting with five-year time horizons are heavier on stocks. "This way, you can take advantage of a market sell-off with your long-term investments and you'll avoid needing to liquidate investments when stocks are down," Bailey says.


CLICK HERE TO READ MORE!!!

Written By Lee Ruth

The Weakening Economy and Retirement

By Lindsay Chin

The 2008 Bank of America Retirement Savings Survey, which reflects the mindset and behavior of approximately 1,000 people across the country, finds that six in ten (60%) Americans are spending less than they were three months ago as a result of the current economic climate. However, even with this decreased spending, more than half (51%) of the general public and 40 percent of affluent Americans are also saving less than they were three months ago - with approximately one in five citing that they're saving "much less."

The survey, conducted by Braun Research, sampled the general public and "affluent Americans," identified as individuals with investable assets between $100,000 and $3 million. Initial findings underscore how deeply troubled Americans are about their retirement savings and financial well-being, with close to one quarter (23%) of respondents indicating that the 'impact of economic turbulence on their retirement savings' is the financial issue that concerns them most.

Link back to article