If you are near retirement, you will hear this advice very often: Stay in your job for a few more years. This is good advice, but it isnt very palatable or always possible. Some of us may have to leave a career due to family reasons, a health issue, or a company layoff. If your retirement fund is a little low, then its wise to keep working. However, there is an alternative to delaying retirement: Phase into your retirement and delay withdrawals instead.

Phase into retirement. Phasing into retirement will let you stay active in your most healthy years of retirement. Most of us still want to work and contribute to society when we are 55 or 60 years old, but may be bored with our careers or want to spend more time with family. One way to phase into retirement is to transition to part time. Another is to change careers to a more interesting and fulfilling job. These options will most likely reduce your income, but they will enable you to delay withdrawals from your retirement fund. Many of us are uninspired by our jobs after working for 30 years, and perhaps the change will enable us to delay full retirement.

Delay withdrawals. Delaying withdrawals has a big impact because the extra time will let your investments continue to grow, and you will spend less time in retirement. For example, lets say you expect to live until age 80. Robert retires at 60 and he needs to spread his retirement fund withdrawals over 20 years. Jane also leaves her full-time career at 60, but delays her withdrawals by 5 years. Jane will have 15 years of full retirement to cover. Lets assume they both have $500,000 in their retirement funds at age 60, earn a 6 percent annual return on their investments, and encounter an inflation rate of 3 percent.

By delaying withdrawals, Janes retirement fund will have a longer period of time to grow. We estimated the annual growth rate to be 6 percent, but it will be up and down in real life. After 5 years, Janes retirement fund will grow to $669,100. In addition, her withdrawal period will shrink to 15 years instead of 20. This enables Jane to have 44 percent bigger annual withdrawals in her retirement. Jane has more money to cover expenses and less time she needs her money to last, so she will be much better off than Robert during her retirement.

Early retirement. So far we looked at the effects of delaying withdrawals, but it works the other way, too. Lets add another example. Dora accumulates $500,000 by the time shes 55, and then phases into her retirement without withdrawing from her nest egg until shes 65.

Each year, Dora will have 66 percent more money than Robert and 15 percent more than Jane. More importantly, she can quit her job at 55 and work minimally for 10 years before retiring full time.

Its important to note that these calculations did not include tax rates or Social Security payments, but the point is still applicable. Saving up early and then delaying retirement withdrawals will enable you to have more income when you retire full time. Even if you cant put off retirement, consider putting off retirement account withdrawals if at all possible.

Joe Udo is planning an exit strategy from his corporate job by reducing expenses and increasing passive income. He blogs about his journey to early retirement at Retire by 40.

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Why You Should Delay Retirement Fund Withdrawals

A bout of long-term unemployment can trigger trauma and uncertainty. Some have equated the emotional fallout with that of a divorce or the death of a loved one.

But Alan Moore, founder of Serenity Financial Consulting in Milwaukee sees potential opportunities for smart retirement planning moves.

"If properly managed, I believe this time can be one of the most beneficial periods in my clients' career(s)," he says.

Following are three ways to turn the sour lemons of job loss into the sweet lemonade of financial security in retirement.

Certified Financial Planner professional Clark Kendall, founder of Kendall Capital, has watched many clients struggle with employment income issues over the last decade.

"First it was the IT people who went through an economic fallout, then real estate people, then bankers," says Kendall, whose firm is based in Rockville, Md. "It's been kind of like a rolling recession."

However, people usually overcome hard times and thrive again in the future, he says. His message to hardworking, out-of-work taxpayers is upbeat: "Your income's falling off, your tax rates are falling off -- let's take advantage of that," he says.

Converting a traditional individual retirement account to a Roth IRA is one of the best ways to plant financial seeds that will bloom in later years, Kendall says.

Small-business owners sometimes use this strategy if they anticipate little or no taxable income in the venture's first several years, Kendall says. Each year, the entrepreneur converts tax-deferred retirement savings earned earlier in his or her career to a Roth IRA.

The entrepreneur pays "a little bit of taxes, maybe at 5%" on the converted retirement savings once deductions and write-offs are figured in, Kendall says.

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Turn Job-Loss Lemons into Retirement Lemonade

BOSTON--(BUSINESS WIRE)--

Fidelity Investments, a leading provider of not-for-profit workplace retirement savings plans to higher education employees1, today published a best practices guide for plan sponsors in higher education. The insights in the report are based on plan data and millions of employee-level transactions from 415 higher education plans, representing more than $52 billion in assets and over one million participants. The reports purpose is to illustrate ways that Americas academic institutions can improve retirement readiness among employees.

The report, the first in a series, examines trends in mandatory and voluntary plan design, and highlights three key areas for improvements in plan design, employer and employee contributions, as well as plan participation rates.

Higher education plan sponsors are increasingly looking to their retirement plan to help them attract and retain top talent and increase employee engagement, while ensuring cost effectiveness, said John Ragnoni, executive vice president, Fidelity Tax-Exempt Retirement Services. In order to achieve these goals, its essential for employers to assess and benchmark how elements of their plan design could ultimately impact employees retirement readiness and satisfaction with their benefits offering.

Key Findings:

Fidelitys Six Best Practices for Higher-Education Plan Sponsors

1. Target employee and employer contributions totaling 1015 percent of an employees annual salary to increase retirement readiness.

2. Administer a combined benefits plan of contribution and employer match to increase total contributions, employee engagement and potentially lower costs.

3. Use employer match to increase voluntary participation rates and employee contributions.

4. Consider automatic enrollment to raise voluntary plan participation rates.

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Fidelity® Report Defines Best Practices for Retirement Plan Sponsors in Higher Education

MILWAUKEE, Oct. 10, 2012 /PRNewswire/ -- Retirement planning is cited as a top reason individuals 18 and older obtain life insurance as part of an overall financial security strategy, according to new research from Northwestern Mutual. The research found that one in four Americans is incorporating life insurance into their retirement planning efforts.

(Logo: http://photos.prnewswire.com/prnh/20120126/CG42140LOGO)

Marriage stood out as the most common driver (32 percent) for purchasing life insurance, while other factors included the birth of a child (22 percent) and home ownership (19 percent).

"Individuals have long recognized the importance of life insurance in terms of providing financial protection to loved ones in the event of their death. However, these new study results show that people of all ages are also leveraging the flexibility of permanent life insurance to help meet long-term financial goals," said David Simbro, senior vice president of life and annuity products at Northwestern Mutual.

Simbro notes that life insurance plays a crucial role in planning, particularly as people grapple with the challenges of managing longevity in retirement.

The poll also found that:

Northwestern Mutual has a range of resources available to individuals seeking to learn more about longevity risk, life insurance and retirement planning, including:

Survey Methodology

This survey was conducted online by Harris Interactive on behalf of Northwestern Mutual from August 10-14, 2012, among 2,097 American adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. Contact Northwestern Mutual for complete survey methodology, including weighting variables.

About Northwestern Mutual The Northwestern Mutual Life Insurance Company Milwaukee, WI (Northwestern Mutual) among the "World's Most Admired" life insurance companies in 2012 according to FORTUNE magazine has helped clients achieve financial security for more than 155 years. As a mutual company with $1.2 trillion of life insurance protection in force, Northwestern Mutual has no shareholders. The company focuses solely and directly on its clients and seeks to deliver consistent and dependable value to them over time. Northwestern Mutual and its subsidiaries offer a holistic approach to financial security solutions including: life insurance, long-term care insurance, disability insurance, annuities, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC, broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company, limited purpose federal savings bank; and Northwestern Long Term Care Insurance Company; and Russell Investments.

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Retirement Planning Reported as a Top Reason for Obtaining Life Insurance

SEATTLE--(BUSINESS WIRE)--

Global asset manager Russell Investments has launched the Russell Retirement Lifestyle Solution, a planning and investment program designed to help build a portfolio specifically for retirement goals. Available only through financial advisors, the program features an adaptive investment model strategy that aims to maintain a suitable clients funded status above 100% in retirement. The three-pronged framework easily leveraged and scalable for the advisor targets the primary concerns of many of their clients, that is, consistent income (reliability), not running out of money (sustainability) and maintaining control of their assets (flexibility).

The new program is initially available through two established partners Cambridge Investment Research and Lincoln Investment Planning and some of Russells largest clients in the Registered Investment Advisor channel.

Advisors are preparing for a sea change in their practices. Clients need more from them more time, more advice, more reassurance they are on track with their savings, and more personalized portfolios, said Sandy Cavanaugh, CEO for Russells advisor-sold business. Advisors know there isnt a magic bullet, but arent completely satisfied with the retirement income options available to them currently. They want to be sure they have the right tools to meet clients needs, while also managing their own practices efficiently and productively. Given this, we think advisors are going to find the Russell Retirement Lifestyle Solution to be a unique and valuable program that will help them navigate the retirement process, deliver a customized solution and provide ongoing support to their clients.

The three-pronged approach

The Retirement Lifestyle Solution consists of:

"Many of our independent advisors strive to provide their clients with financial plans and solutions that lead up to and through retirement, and this is important as clients consider how to plan their retirement spending and make their assets last, said Bobbi Martin, First VP, Marketing, at Cambridge Investment Research. Russells solution serves that effort well and provides advisors with a comprehensive support program to help them engage clients in meaningful, productive conversations on these vital questions.

In developing the Russell Retirement Lifestyle Solution, Russell leveraged proprietary research focused on advisors and their clients, in addition to leveraging its more than 40 years experience applying strategic market insights, global money manager research and rigorous investment processes to create and implement multi-asset portfolios for some of the largest institutional investors.

Investors need and want help managing their retirement assets. Our new offering and related resources aim to help advisors be more relevant, realistic and responsive to their clients, said Tim Noonan, director, Capital Markets Insights for Russells advisor-sold business. Reengaging investors around retirement planning is key in helping individuals avoid the scenario they fear most: running out of money before running out of life. The Russell Retirement Lifestyle Solution is an important element of Russells efforts to help advisors reengage their clients.

Central to the planning process is Russells Adaptive Investing approach to help manage the risk of an investor outliving their assets, which starts by evaluating whether the investor is sufficiently funded to meet their desired lifestyle in retirement. By measuring and managing the clients funded ratio (or ratio of assets to liabilities), an advisor can help answer their clients three key questions: How much can I spend? Will my money last? Am I on track?

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Russell Launches Retirement Lifestyle Solution

Video Link: https://www.youtube.com/watch?v=kjYEL7N6kxA

07-10-2012 18:18

Continued here:
Reginald is not retiring - Video

Last year a Gallup poll revealed that over 70 percent of Americans are "not engaged" or else totally "disengaged" from their work. Obviously, people who spend 40 hours a week doing something they don't like report a lower level of overall well-being compared to people who are "actively engaged" in their jobs. The lower satisfaction not only affects their careers, but also the social, financial, and physical aspects of their lives.

Even people dedicated to their work admit they're often in a bad mood if they have to work extra long hours, are not able to take advantage of flextime, or feel shortchanged on vacation.

Working too much, or too hard, is not conducive to your sense of well-being, especially if you don't like your job. It's no wonder that a lot of people in their 50s and early 60s look forward to retirement, and try to figure out how they can leave behind the daily grind.

A few select people, through some combination of high income and economical living, achieve true financial independence at an early age. They have the option to retire early, no problem.

Maybe you, too, want to leave an unsatisfying job, or are just tired of the rat race. But you feel trapped because you need the income. Honestly, who can afford to retire these days when the economy is bad, interest rates on your savings are low, and Social Security is under attack? Financial independence may seem farther away than ever before.

But John Nelson, co-author of What Color Is Your Parachute for Retirement: Planning a Prosperous and Happy Future, looks at things a little differently. When it comes to financial independence, we can get caught in all-or-none thinking, he says. Especially for our jobs, we think that financial independence means not working at all. If our work is drudgery, then of course wed like to have none of it.

But retirement is not necessarily an all-or-nothing proposition. And neither is financial independence.

Even retirees who are truly financially independent, the retirement experts tell us, should find something to do that engages their interests. Nobody can expect to be happy sitting in front of the TV for the rest of their lives. Retirees need activities that stimulate their imagination, connect them to other people, and help them develop a commitment to something more than their own self-interest.

For the financially independent this may mean doing volunteer work or pursuing a long-neglected hobby. For those of us who may have a reasonably solid financial foundation, but still need additional income, the pursuit of something meaningful to occupy our time can lead us to a middle grounda period between career and retirement when we take a pay cut in favor of other benefits that are more important at this stage of life.

The kids are grown up and gone, and maybe the mortgage is paid off, so we can afford to work at something thats easier and more fun than our old job. The result: Instead of suffering through work that no longer engages us, we can set forth on a new path that 's more fulfilling and more meaningful.

Originally posted here:
The Middle Way to Retirement

WASHINGTON, Oct. 9, 2012 /PRNewswire/ --According to a brief released by ICMA-RC and the Center for State and Local Government Excellence (SLGE), one-third of human resource executives made changes to the retirement plans they offer to employees within the past 12 months.[1] The brief, Local Government Employment, Benefits, and Retirement Issues, was released to thousands of public employees at the 98th Annual ICMA Conference in Phoenix, Arizona this past weekend.

"State and local government leaders face difficult issues involving retirement and health care benefits," said ICMA-RC President and CEO and Vice Chair of the Center for State and Local Government Excellence Joan McCallen. "Preparing public employees for retirement is a challenge made easier by understanding workplace priorities and behaviors. We hope this brief will contribute to the existing dialogue and encourage public sector employers and employees to take advantage of opportunities available to them."

"With a growing wave of retirements and sustained fiscal constraints, local government leaders could be surprised at how difficult it is to fill key positions," said Elizabeth Kellar, President and CEO of SLGE. "Part of the solution is to help employees develop critically important skills. Equally important is to build 21st Century human resources practices that will appeal to the next generation of public servants."

Additional brief highlights:

During the past six years, with ICMA-RC's support, SLGE has released more than 35 studies with the goal of educating local and state public employees and employers, other sectors and levels of government, the media, and the public about a range of issues facing governments.

About ICMA-RC

Founded in 1972, ICMA-RC is a non-profit independent financial services corporation focused on providing retirement plans and related services for more than a million public sector participant accounts and approximately 9,000 retirement plans. Our mission is to help build retirement security for public employees. We deliver on our mission by focusing on service, quality and value. All of our retirement programs, administrative services and educational tools have been developed specifically for public sector retirement plan administrators and participants. For more information, visit http://www.icmarc.org.

About the Center for State and Local Government Excellence The Center for State and Local Government Excellence helps state and local governments become knowledgeable and competitive employers so they can attract and retain a talented and committed workforce. The Center identifies best practices and conducts research on competitive employment practices, workforce development, pensions, retiree health security, and financial planning. The Center also brings state and local leaders together with respected researchers and features the latest demographic data on the aging workforce, research studies, and news on health care, recruitment, and succession planning on its website, http://www.slge.org. AC 0912-5999

[1] Survey Findings: State and Local Government Workforce: 2012 Trends. Center for State and Local Government Excellence. http://slge.org/wp-content/uploads/2012/04/S-L-Govt-Workforce-2012_12-195_web.pdf.

[2] Current Employment Statistics - CES (National). Bureau of Labor Statistics. U.S. Department of Labor. http://www.bls.gov/ces/. (not seasonally adjusted)

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Public Sector Retirement Plan Changes Identified in ICMA-RC/SLGE Brief

Video Link: https://www.youtube.com/watch?v=RodRrSpJh00

08-10-2012 18:56 A Consumer Reports experts advises people on how to figure out how much money they will need in retirement and what to do if they come up short.

Original post:
How much money do you need for retirement? - Video

Retirement Tax-Savvy Retirement Plan Distributions

What's your biggest challenge in retirement, besides making your money last for your lifetime? It's taking retirement plan distributions in such a way as to best minimize income tax so more money is left for you.

In each scenario, a hypothetical couple has $600,000 in assets. To maintain their lifestyle, they need $42,000 of income per year in retirement, $24,000 of which will come from Social Security. They must rely on their retirement funds to provide income of at least $18,000 per year.

Assuming that tax rates don't change drastically in the foreseeable future, let's look at the best way to take distributions when retirement assets are invested in various vehicles, including pretax accounts such as traditional 401(k) plans, individual retirement accounts and pension plans; after-tax vehicles such as Roth IRAs and Roth 401(k)s; and nonretirement vehicles, such as a brokerage account containing stocks.

"The name of the game is planning. A builder doesn't build a house without a blueprint. A retiree can't navigate a multidecade retirement without one either. One key tool in that planning toolbox is minimizing taxation," says Rob O'Blennis, Chartered Retirement Planning Counselor at The Retirement Planning Group in Overland Park, Kan.

Here are the three scenarios, with tips on how to take retirement plan distributions with tax efficiency in mind.

In this scenario, Bankrate's hypothetical couple has invested all $600,000 of their nest egg in a traditional, pretax 401(k) plan and traditional IRA, or they have a traditional pension plan with annuity payments.

Our hypothetical couple has $400,000 of their nest egg invested in a traditional, pretax 401(k) plan or traditional IRA and $200,000 in a Roth 401(k) plan or a Roth IRA.

In this scenario, Bankrate's hypothetical couple has evenly divided their nest egg into three parts: $200,000 is invested in a traditional pretax 401(k) or IRA, $200,000 in a Roth 401(k)/IRA and $200,000 in a regular brokerage account containing stocks.

Retirement Tax-Savvy Retirement Plan Distributions

Originally posted here:
Tax tactics to make your retirement cash last