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

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.

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Avoid the Myths of Retirement Saving

Post By: Dana Sunderlin

There are many things that people do not know about preparing for retirement, especially in terms of saving their money. There is an excess of information on retirement planning available to those who need it; however, amongst this information are myths and misinformation about saving your money.

There are three major retirement-savings myths floating around society today. The first is that you should “replace a certain percentage of your income in retirement.” People are typically told to replace around 74% of their income in retirement. This replacement rate winds up being much too high and was developed solely to promote sales of products, such as mutual funds. The second myth is that you should “hold a combination of stocks and bonds in your 401K.” Although it is not argued that a person’s financial assets should have diversity, it is not necessary for a 401K to be diversified. You should hold bonds in your retirement accounts and stocks in regular accounts to receive the best tax rewards. The third myth that people often come across is that “a broker can help you get higher returns.” It has been proven that around 80% of mutual funds managers underperform the market. You need to pay a high price for someone to manage your money, and it is a risky investment!

Since there are so many myths and so much false information available, the Retirement Savings Education Campaign was founded. It contains information for employees, small businesses, and employers about saving for retirement. It has separate sections of information depending on your employment status, and it has detailed information on investing and diversification. It’s definitely important to start saving early and to get the right mix of stocks, bond, and cash in your retirement portfolio. However, to do this, it is necessary to gather information that is not only useful, but 100% correct. Don’t fall for the myths of retirement saving!

Sources:

http://www.dol.gov/ebsa/savingmatters.html

http://articles.moneycentral.msn.com/RetirementandWills/CreateaPlan/3-big-retirement-savings-myths.aspx?page=2

http://www.mint.com/solutions/retire/

Pay Dirt: Retirement funds often below costs

Post By: Dana Sunderlin

What does it take for Minnesota's seniors to make ends meet? More money than many have.

Kim Oseira imagined a fun retirement spent going to movies, driving the grandkids and visiting her native Alaska. But today, the St. Paul 68-year-old rations gasoline, hasn't seen a movie for two years and hasn't been back to Alaska since her job ended.

"I'm worried right now about how I'm going to pay my electric bill," said Oseira, who lives on $1,100 a month from Social Security and a part-time job. "I try not to let [money] bother me, but it does."

Bonnie Watkins, executive director of the Minnesota Women's Consortium, hears such stories all the time. "These are the women that did what society told them, nice ladies like my mom," said Watkins. "The status of older women is really the most heartbreaking feminist story to me."

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Mission on Retirement - life is unpredictable

Posted by Po-cheng Huang



Link: http://www.youtube.com/watch?v=xGMhTaRaw2c

Get ready for retirement

By Po-cheng Huang

Everybody wants enjoy their retirement and not having any financial difficulties that just keep bothers them day and night. To plan for retirement, there are several things that an individual should focus on. First, when do you want to retire, where do you want to live after you retire, what’s you expected living standard for retirement, and where are you income during your retirement. One should try his best to force himself to save part of one’s salaries on a regular basis, and to gain knowledge in the field of finance that can better allocate their asset for future growth. This is especially critical because even though the habit of saving is the fundamental element to prepare for retirement, without properly allocate the cash to investments will result in the money getting “eat up” by inflation or even worse, to lose their value in poor investment decisions.
As people gets closer, or even already into their retirements, it’s inevitable that other than their usual living expenses, medical and leisure expenses will come along with retirements. As the result of that, without well planned source of income during retirement, it’s reasonable to assume that an individual will most like to at least at some point faces financial stress that makes his retirement life looks terrible. Planning, and getting prepared for retirement is never too late to start, but it’s about consistency, determine to execute the plan, and having good knowledge to grow one’s wealth.

References

http://www.forbes.com/2008/10/03/early-retirement-savings-pf-money-in_avb_1003youngmoney_inl.html

http://www.forbes.com/2008/10/03/early-retirement-savings-pf-money-in_avb_1003youngmoney_inl.html

http://www.fool.com/personal-finance/retirement/2007/01/18/the-millionaire-delusion.aspx

Gambling with your Retirement Stash

Post By: Dana Sunderlin

NEW YORK (Money) -- Question: I'm 57 and planning to retire at 66. Before this year's stock market turmoil my 401(k) was balanced at 70% stock mutual funds and 30% bond funds. Now it's 59% stock and 41% bonds. To take advantage of very low stock prices I was thinking about re-balancing to 75% stocks and 25% bonds. Does this sound like a good plan or should I just re-balance to 70% and 30%?

The Mole's Answer: Well, you're doing two things right already:

1)You are not in a panic mode, as many are, and haven't sold your remaining stock.
2)You are going against the herd and considering buying when others are selling.

There is still the current problem to deal with, however: As the value of your stocks dropped and your bonds increased, your portfolio became more heavily weighted in bonds. Now you are wondering if you should go back to your original allocation target or even go beyond that target and increase your stocks from the original 70% target to 75%.

My advice is to stick with your target and I'll tell you why.

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Apprehensive Retirement Planning

It seems that in today’s economic state, retirement is slipping away into oblivion, being pushed back further and further into Americans golden years. It has brought to our attention the importance of saving our income so that we may draw from it when we need it most. In this day in age, it pays off to be more conservative with your money, especially when the economic climate is so bleak.
Today, many young Americans are apprehensive about investing into a retirement account because of the economic climate and the rates they will be receiving. This is understandable, but a representative from TIAA-CREF would submit that that apprehension is a short-term way of thinking. (watch video) He, along with other speculators, is confident that our current economic condition is only temporary, merely part of the ups and downs of our economy. To anticipate the economies eventual rebound from this downturn is to think in a different way about retirement investments. Instead of being apprehensive, one should invest confidently into retirement plans, and may end up paying less now for them than they would have if the economy was healthier.
Today, people are feeling more apprehensive, however, rather than confident. “Only 28 percent say that they will be able to retire comfortably. One-third (33 percent) say they'll have just enough finances to get by when retired. Nineteen percent say they are afraid they’ll never be able to retire” (Bankrate Survey). The international foundation recommends to young retirement planners to save two percent more than originally planned in order to retire comfortably in this economic state. (international foundation)

-Matt Smith

Avoid these Retirement Planning Mistakes

Post by: Dana Sunderlin

The turmoil in the economy today is enough to make us want to avoid putting money away for retirement for fear of needing it now. That's natural. Most Americans feel they need to have all of their money available now.

We often are scared of locking up our money, or we have the attitude that putting away even a little won't be enough to build a decent retirement - so why bother? But those who do let go now and invest for the future understand that a little can go a long way, thanks to the power of compounding. For example, saving $100 a month for 10 years at 4 percent interest will build to almost $15,000.

For longer time frames, more monthly savings and higher returns, that not only can build up a retirement fund, but may create a longer and happier life. Research in the Journal of Financial Service Professionals found evidence that financial strain in retirees is accompanied by depression and negative feelings, while financial security exudes improved health and contentment.

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Two-thirds of Americans don't save enough

Post by Po-cheng Huang

Americans face immediate financial concerns on a day-to-day basis, and these take priority over long-term retirement goals. In Bankrate's retirement savings poll, taken in mid-September, seven in 10 Americans (68 percent) said they are not able to reach their monthly retirement savings goal because of other financial responsibilities.

About one-third said they are putting some money away, but not enough. Another third aren't saving anything at all. Only about 28 percent said they are meeting their monthly retirement savings target.

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