Welcome back to my fourth and final post on retirement calculators. These online tools help you determine how much you'll need to save for retirement. My first post showed the wide range of contribution amounts that several different calculators would suggest for a hypothetical couple, while my second post provided in-depth results about each calculator and identified two of my favorites. The third post offered some thoughts on how best to select and use a retirement calculator that fits your needs.

This final article coaches you on how to answer a few common questions that retirement calculators ask to help estimate how much you should save for retirement.

Tip #1: What rate of return do you expect on your retirement savings?

Some calculators ask for your input about the rate of return you expect to get on your retirement savings and the future rate of inflation, while others make these assumptions for you. The assumed rate of return is a crucial assumption that can significantly impact the answer to the question, "How much you should save?"

Your assumption for the rate of return on your retirement savings should match the method you've used to invest these savings. For a portfolio balanced between stocks and bonds, I'd use no more than a 6 percent annual rate of return, given today's low-interest environment. If you really feel lucky, go ahead and use 7 percent, but I wouldn't go any higher.

These suggested assumptions assume you're using index funds with very low expenses. If you're using mutual funds with expenses well above 0.50 percent (50 basis points), reduce your expected rate of return by the level of investment expenses you're paying. This will increase the amount you need to save, which might cause you to take a hard look at the level of expenses that you're paying (a good thing, in my opinion).

I'd use a rate of inflation that's 2 or 3 percent lower than the expected rate of return on your savings; again, use a 4 percent difference only if you feel real lucky.

If you're invested entirely in bonds, determine the current interest yield on your investments and use that rate; it might be in the 3 to 5 percent range. If you're invested entirely in savings accounts or money market funds, you're earning almost nothing, and a calculator will tell you that you'll need to save a boatload of money. This should also cause you to rethink your investment strategy.

It's definitely worth the effort to try a few different assumptions to see how they affect the results. Eventually, however, you'll need to pick one set of assumptions that you're comfortable with.

Tip #2: When do you expect to retire?

View original post here:
5 Tips for Using Retirement Calculators

MILWAUKEE, Aug. 21, 2012 /PRNewswire/ -- In a recent survey of 412 employers offering retirement plans, nearly half expect U.S. companies to benefit from baby boomer employees who prolong their careers past age 65. Only 4% of respondents believe employees who postpone retirement will be a negative for companies, whereas 45% anticipate that protracted careers will yield a positive result for employers.

The survey was conducted by an independent market research firm on behalf of BMO Retirement Services.

"Although some companies will continue to offer buyouts and retirement packages to their older staff, our survey suggests that many businesses will be pleased to retain selected boomer employees," said Todd Perala, Director of Relationship Management at BMO Retirement Services."There appears to be a growing recognition in corporate America that employees in their sixties possess valuable institutional experience and expertise."

Perala noted that older employees were once widely perceived to create a greater burden on a company's health plan, limit the job opportunities of younger workers and be less proficient using new technologies. "Despite these common perceptions, our findings suggest that a significant contingent of today's companies see value in maximizing experience," he said.

Among the other survey results, close to a quarter of surveyed employers estimate that the percentage of working boomers who postpone retirement could exceed 50% in the years ahead. Nearly half of respondents predict that more than 30% of boomers will fall into this category.

Perala also observed that some boomers may be motivated to work longer due to insufficient savings, but believes many others find work personally fulfilling. "As life spans increase, retirement at age 65 may increasingly be seen by employers and employees alike as a relic from the prior century," he added.

The survey also reported the Net Promoter Scores for BMO Retirement Services, a client loyalty metric introduced in the Harvard Business Review in 2003. Derived from client feedback analysis by the independent research firm, the score once again placed BMO Retirement Services within the "star performer" range.

The Net Promoter Score for BMO Retirement Services has generally trended upward since 2007, and this year was significantly above the level required for the star performer designation, according to Phil Enochs, Managing Director and Head of Relationship Management. "The score validates our intensive client service model and confirms that clients value our efforts," he said.

The survey is based on interviews with 412 retirement plan sponsors that have a minimum of $2 million in trust assets and use the BMO Retirement Services recordkeeping platform.

About BMO Financial GroupBMO Retirement Services is a part of BMO Global Asset Management and is a premiere, award-winning provider of retirement, trust and custody services.

The rest is here:
BMO Retirement Services Survey: Many U.S. Employers Want Boomers to Continue Working Past Retirement Age

retirement

Highlights

Financial Security Index Charts Retirement Savings Picture Improves A Tad

Americans have made some headway with their retirement savings after the last few disastrous years. Nearly one-fifth of Americans (18 percent) are saving more for retirement this year than last year, according to Bankrate's August Financial Security Index. When we asked this same question in 2011, 15 percent said they were saving more than the previous year -- not a significant difference.

But the same proportion of people, 18 percent, say they are saving less than they did last year. That's actually much better than last year, when 29 percent of Americans said they were contributing a smaller amount to retirement savings than the previous year.

"The fact that people have stopped saving less is good -- but are they saving enough? The data (are) showing, in aggregate, no," says Certified Financial Planner David Littell, co-director of the New York Life Center of Retirement Income and professor of taxation at The American College in Bryn Mawr, Pa.

The combined retirement income deficit for baby boomers and Generation Xers is estimated to be $4.3 trillion, according to a May 2012 report from the Employee Benefit Research Institute, or EBRI.

Ideally, people would increase retirement contributions every year, but they don't because it's very likely that most people have no idea how expensive 30 years of retirement will be.

According to a March 2012 report from EBRI, 56 percent of workers say they haven't calculated how much they need to save for retirement.

Calculating retirement income needs is the first step to establishing an effective retirement savings rate. It may be higher than you think, particularly if you're older than 30.

Read this article:
Retirement savings picture improves a tad

LONDON -- The last five years have been tough for those in retirement. Portfolio valuations have been hammered, and annuity rates have plunged. There's no sign things will improve anytime soon, either, as the eurozone and the U.K. economy look set to muddle through at best for some years to come.

A great way to protect yourself from the downturn, however, is to build your retirement fund with shares of large, well-run companies that should grow their earnings steadily over the coming decades. Over time, such investments ought to result in rising dividends and inflation-beating capital growth.

In this series, I'm tracking down the U.K. large caps that have the potential to beat the FTSE 100 over the long term and support a lower-risk, income-generating retirement fund (you can see all of the companies I've covered so far on this page).

Over the last week or so, I've looked at Standard Chartered (LSE: STAN.L) , Legal & General Group (LSE: LGEN.L) , Rio Tinto (LSE: RIO.L) , GlaxoSmithKline (LSE: GSK.L) , and SABMiller (LSE: SAB.L) . Let's take a look at how each of them scored against my five key retirement share criteria:

Criterion

Legal & General

Rio Tinto

GlaxoSmithKline

Standard Chartered

SABMiller

Originally posted here:
Are These the Ultimate Retirement Shares?

(MoneyWatch) Welcome back to my third post on retirement calculators, online tools that help you determine how much to save for retirement. My first post showed the wide range of contribution amounts that the different calculators might suggest for you, while my second post provided in-depth results about each calculator and identified two of my favorites.

This third post provides some tips for selecting and using calculators so you can determine just how much you should save for retirement, given your circumstances and just how much information you need to provide.

Retirement calculators can vary widely in the number of questions they'll ask you. In theory, the more questions a calculator asks, the more accurate the results will be. But any estimate is only as good as the assumptions you make, which can often turn out to be much different from your actual experience. For people who are a few decades away from retirement, I doubt if much accuracy is gained when you're asked a lot of questions about factors you can't control or don't know much about.

For example, some calculators ask for your input about future rates of inflation, rates of return on your retirement savings, your marginal income tax rates today and in the future, and so on. Now if you're an economist, financial advisor, or actuary, you might feel comfortable offering an answer to these questions -- you might even feel frustrated by a calculator that doesn't make it easy to input your own assumptions.

But most people's answer to these types of questions is, How the hell should I know? If this sounds like you, you might be more comfortable with a calculator that makes these assumptions for you. So look for a calculator that matches your level of interest in attention to detail.

Regardless of the level of detail in your retirement calculator, be sure to look for a calculator that shows its default assumptions and makes it easy to change these assumptions. With some calculators, that's difficult, and I'd avoid any calculators that make it hard to understand their assumptions.

Can you trust retirement calculators? What are the best retirement calculators?

You'll also see a wide range of sophistication in the results. Some simple calculators will just tell you how much to save, while others will give a range of estimates based on more complicated Monte Carlo analyses. In this latter case, you'll see the odds of success of different strategies. For instance, you might see a contribution strategy that gives you a 50 percent chance of success or a 90 percent chance of success, or some result between.

While a more detailed Monte Carlo analysis gives the appearance of increased sophistication, eventually you'll need to choose a specific amount to save. If you really want to be safe, you should save the amount that gives you a 90 percent chance of success, though it's likely that will require a boatload of savings. If you just want to get in the ballpark -- and you can make adjustments in your life as you age -- you might be comfortable using a 50 percent chance of success, though I wouldn't go any lower.

Because your results can vary based on the various assumptions the program makes, I'd suggest you use two or three different calculators and compare the results. If they produce different answers, it's probably not the case that one is wrong and one is right; each will use its own methodology and assumptions. Understand how each works so you can understand the reasons for the differences in output. Eventually you'll probably settle on a favorite calculator, which is fine, but you should do so only after you've initially made the effort to investigate a few others.

Excerpt from:
How to choose and use a retirement calculator

LOS ANGELES--(BUSINESS WIRE)--

Transamerica Retirement Services today announced the findings of the 2012 Gregory Group Plan Sponsor Survey, an annual study of retirement plan sponsors that identifies performance improvement opportunities for third party administrators (TPAs) of 401(k) plans. In a report published by Transamerica entitled Increasing Client Satisfaction in a Low-Margin World, the survey finds communication to be a leading driver of satisfaction for plan sponsors.

Among all factors influencing survey respondents perceptions of value delivered by their TPA, frequency of communication proved to be one of the most important. In general, plan sponsors who indicated they received more regular contact from their TPA rated the quality of service from their TPA higher. Additionally, the survey finds that frequency of communication can impact satisfaction with a TPA both positively and negatively. Plan sponsors who indicated they are contacted quarterly by their TPA were most satisfied.

This years study focuses on drivers of client satisfaction, and shines a light on the important role of communications in regard to plan sponsor satisfaction of TPAs, said Deb Rubin, vice president and national director of TPA Services for Transamerica Retirement Services. The survey shows that plan sponsors want face-to-face interaction for both an annual visit and during problem resolutions. This face-to-face communication is a significant benefit for plan sponsors who utilize the services of a local TPA. The TPA, in turn, has a dynamic opportunity to be aware of the clients business situation and to proactively help the client, resulting in higher satisfaction among plan sponsors.

The Gregory Group survey was commissioned by Transamerica and was developed to help TPAs understand what keeps clients satisfied. The report also offered action items and best practices to help enhance TPAs business.

TPAs provide unique value in todays competitive environment and Transamerica listens closely to what they say they need to be successful, said Rubin. Transamerica is dedicated to the success of our TPA partners, and this survey is just one of many services we provide to help TPAs achieve their business goals.

More information on the survey is available to third party administrators by calling Transamerica at (877) 398-7526 Monday through Friday, 9 a.m. - 8 p.m. Eastern Time.

About Transamerica Retirement Services Corporation

Transamerica Retirement Services Corporation (Transamerica or Transamerica Retirement Services), which is headquartered in Los Angeles, CA, designs customized retirement plan solutions to meet the unique needs of small- to mid-sized businesses. Transamerica and its affiliates have more than 17,0001 retirement plans totaling more than $20 billion1 in assets. For more information about Transamerica, please refer to http://www.TA-Retirement.com.

About the 2012 Gregory Group Plan Sponsor Survey

See the original post here:
Transamerica Retirement Services Reveals Findings of 2012 Client Satisfaction Survey of TPAs

Americans have made some headway with their retirement savings after the last few disastrous years. Nearly one-fifth of Americans (18%) are saving more for retirement this year than last year, according to Bankrate's August Financial Security Index. When we asked this same question in 2011, 15% said they were saving more than the previous year -- not a significant difference.

But the same proportion of people, 18%, say they are saving less than they did last year. That's actually much better than last year, when 29% of Americans said they were contributing a smaller amount to retirement savings than the previous year.

"The fact that people have stopped saving less is good -- but are they saving enough? The data (are) showing, in aggregate, no," says Certified Financial Planner David Littell, co-director of the New York Life Center of Retirement Income and professor of taxation at The American College in Bryn Mawr, Pa.

The combined retirement income deficit for baby boomers and Generation Xers is estimated to be $4.3 trillion, according to a May 2012 report from the Employee Benefit Research Institute, or EBRI.

Ideally, people would increase retirement contributions every year, but they don't because it's very likely that most people have no idea how expensive 30 years of retirement will be.

According to a March 2012 report from EBRI, 56% of workers say they haven't calculated how much they need to save for retirement.

Calculating retirement income needs is the first step to establishing an effective retirement savings rate. It may be higher than you think, particularly if you're older than 30.

For instance, with 30 years to save for a 30-year retirement, someone with an investment portfolio split between 60% stocks and 40% bonds would need to save 16.62% of her income per year in order to replace 50% of her income in retirement. Those numbers are from the work of Wade D. Pfau, an associate professor at the National Graduate Institute for Policy Studies in Tokyo.

His findings were published in an article titled "Safe savings rates: A new approach to retirement planning over the life cycle," which appeared in the May 2011 issue of the Journal of Financial Planning.

Under the same circumstances, someone with 40 years to save would only need to put away 8.77% of his yearly income, according to the study.

See the article here:
Retirement Savings Poll: Don't Call it a Comeback

Video Link: https://www.youtube.com/watch?v=0GwaQVSIAkQ

18-08-2012 13:20 Indian cricketer VVS Laxman who retired from international cricket on Saturday said his exit will give ample opportunities to budding youngsters to prepare for the upcoming overseas tours. Laxman said in a press conference, "I have always kept my country's success and need ahead of my personal aspirations. The Hyderabadi batsman surprisingly chose to hang his boots with immediate effect without taking the opportunity to bow out of international cricket in front of his home crowd. Laxman, who was picked in the Indian squad for the two-match Test series against New Zealand beginning here from August 23, surprisingly chose to hang his boots with immediate effect without taking the opportunity to bow out of international cricket in front of his home crowd.

The rest is here:
VVS Laxman Announces Retirement From International Cricket - Video

Published: Sunday, August 19, 2012 at 4:01 a.m. Last Modified: Sunday, August 19, 2012 at 9:26 a.m.

But the county pension that he now receives is based on a much higher figure, his final earnings of $174,857.

The 30 percent boost came from Kerns cashing out $12,850 in accrued administrative leave and the inclusion of nearly $28,000 in other non-salary pay and benefits the county owed him.

Kerns worked 12 years for the county, so his annual pension of $53,542 is not one of the six-figure payments that has fueled public outrage over county retirement benefits. But like the top earners getting those pensions and hundreds of other former county employees, Kerns benefited from a system that allows workers to increase their retirement checks by including a wide range of pay and benefits outside of salary.

He makes no apologies.

"You play by the rules," he said. "I don't begrudge anyone taking what they have coming to them. ... If people find that objectionable, then maybe they need to change the rules."

County pension costs are up more than 400 percent since 2000 and the average annual compensation on which pensions are computed has risen 75 percent during that time to nearly $92,000 for workers retiring in 2011.

The Board of Supervisors, in charge of setting benefits for a retirement system they acknowledge is unsustainable, has made no changes despite public outcry that bloated pensions are compromising essential public services.

But last week, they indicated add-ons like the ones that raised Kerns' pension would be high on their list of fixes. They proposed to eliminate some and exempt others from retirement calculations. Supervisors also proposed to cut pay and make longer-range pension changes, including setting lower benefits for future hires. The moves won't take effect unless unionized employees agree.

A Press Democrat analysis shows that when they retire, Sonoma County government workers boost their final earnings, and thus their pensions, by an average of more than 12 percent over their annual salaries. The average increase for sheriff's deputies and other public safety workers is higher, more than 14 percent.

View original post here:
Sonoma County employee perks pay off in retirement

Video Link: https://www.youtube.com/watch?v=fZcVh1soFmA

18-08-2012 07:12 Veteran Indian batsman VVS Laxman announced on Saturday that he would be retiring from international cricket with immediate effect.

Follow this link:
VVS Laxman announces retirement - Video