Time's ticking away in the fourth quarter and you're down, but not out. Is it time to throw caution to the wind, put in the spread offense, and start throwing long to the end zone?

If we're talking about football, the answer may indeed be yes. However, if we're talking about your retirement, you'd better think again. A financial advisor with your best interests in mind would likely counsel you to be realistic about your retirement -- that is, if funds are short, smart moves might be increasing your current contributions, planning to retire later, or adjusting your expected budget in retirement. Drastically increasing your portfolio's risk profile, on the other hand, would almost certainly be a gamble not worth taking.

Yet when it comes to the country's major pension funds, many are doing just that in an attempt to overcome recent poor returns and sizable funding gaps. As Reuters reported yesterday, many major pension funds are ditching stocks and bonds, the traditional mainstay of pension funds, and turning to riskier alternative investments like hedge funds, venture capital, and even catastrophe reinsurance.

There may be some upside to the shift -- for instance, many alternative investments aren't correlated to stocks, which means that when stocks zig the alternatives may zag, increasing stability for the funds. But alternative investments tend to be far more expensive, with many hedge funds and private equity funds charging something near the classic "2 and 20" that hits investors for 2% of assets for management and also grabs 20% of profits. Alternative investments also tend to be riskier. As Brad Pacheco of the giant California Public Employees' Retirement System, or CalPERS, fund put it: "There is a premium that goes with investing in alternative investments because they typically are a little bit riskier."

For some funds, like CalPERS, the turn to alternatives has been fairly measured. Reuters noted that CalPERS upped its exposure to alternatives to 14% in 2011, up from 12.5% in 2010. For other funds though, the move has been far more drastic.

South Carolina's South Carolina Retirement System, the largest pension fund in the state, faces a 35% funding gap with assets more than $13 billion short of its liability based on actuarial assessments. Back in 2006, that fund had more than 40% of its funds in various flavors of bonds, and 53% in equities through common stocks and trust funds. The 7% of the fund in "Financial & Other" was a small part of the picture. That was hardly the case in 2011, as the SCRS fund is now more than half alternative investments. Stocks now make up just over 12% of the portfolio.

Not only is this change an expensive one -- thanks to the high fees involved with alternatives -- and a risky one -- because of the higher risk involved with the asset class -- it also appears to have been an ill-timed one. Though the fund's annual report lauded hedge-fund and private-equity returns of 11.6% and 20.2%, respectively, as a highlight of fiscal 2011, the return on its U.S. stock portfolio roundly topped both with a 39% return.

Looking at the entire investment universe, it was a pretty terrible year overall to be heavily weighted toward hedge funds. A handy table included in the SCRS' annual report showed that the HFRX Global Hedge Fund Index returned 4.2% for the fiscal year, while the S&P 500 (INDEX: ^GSPC) delivered 31% and the Barclays Capital Global Aggregate fixed income index returned 10.5%. Heck, the Barclays Capital U.S. Aggregate bond index nearly matched the hedge funds with a 3.9% return.

I can't sit here and say that the shift that SCRS made absolutely isn't going to work -- if for no other reason than the fact that even a low-probability gamble can pay off if you're lucky enough. But the moves that they've made provide a good opportunity for retirement investors to remind themselves of a couple of key points:

For the sake of South Carolina public employees -- of which my sister is one -- I hope that the current SCRS portfolio works out. But investors saving for retirement on their own probably don't want to take their cues from its hail-mary approach.

Originally posted here:
How Not to Save for Retirement

On August 18, 1992 the great Larry Bird announced his retirement from the NBA. A Boston Celtics legend and one of the greatest basketball players of all time, Bird was a basketball hero of mine and single-handedly got me interested in the game as a child. When he retired 20 years ago today, I was 14 years old--old enough to know what was happening, but not mature enough to grasp the concept that an icon was leaving the game for good.

Bird finished his 13-year career playing in 897 games with career average of 24.3 points per game, 10.0 rebounds per game, and 6.3 assists per game. He shot .496 from the field, .376 from the three-point line, and boasted a .886 free-throw percentage. To say his career was phenomenal would still be an understatement.

Bird along with Los Angeles Lakers legend Magic Johnson can be credited with making the NBA what it is today in terms of popularity. When both entered the league in the late 1970s the NBA was suffering from poor attendance and minimal television interest. It was the Lakers vs. Celtics, and more specifically Magic vs. Bird through the 1980s that rejuvenated the league. Basketball became exciting again as the two teams continually battled it out for the title. It is difficult to think of a rivalry greater than this.

After his final season, Bird joined fellow NBA stars Johnson, Michael Jordan, and others to represent the United States in the 1992 Olympic Games in Barcelona, Spain. It was the first time in Olympic history the United States sent professional athletes to compete in the games. The squad was referred to as the "Dream Team" where they went on to win the gold medal in men's basketball.

Larry Bird is the reason I cheer for the likes of Paul Pierce, Kevin Garnett, and Rajon Rondo today. It is players like him, that was a super-hero me as a child, that allowed me to develop a lifelong love for the game--and especially the Celtics.

More Boston Celtics Commentary from Paul Rados:

Boston Celtics release preseason schedule, play two games overseas: A fan's reaction

Sullinger, Christmas shine in Boston Celtics' summer league: A fan's reaction

Jason Collins set to become the newest member of the Boston Celtics: A fan's reaction

Courtney Lee joins the Boston Celtics: A fan's reaction

See the rest here:
Larry Bird Announces His Retirement, August 18, 1992: A Fan’s Reflection

A sizable percentage of Americans don't expect to stop working -- ever.

That's according to the 2011 Risks and Process of Retirement Survey Report from the Society of Actuaries, which found that 35 percent of pre-retirees surveyed in 2011 do not expect to ever leave the workforce. That is up from the 29 percent of pre-retirees who reported the same in 2009.

For the vast majority of pre-retirees who don't expect to retire, remaining active and engaged during their senior years is of importance. Of the 35 percent not expecting to retire, 89 percent said staying active was one reason to remain working.

However, financial concerns also weighed heavily on the minds of many pre-retirees. The survey found 45 percent of those not expecting to retire believe they will be financially unable to do so.

Pre-retirees not expecting to retire also gave the following reasons for being unable to stop working:

Although many pre-retirees have a negative view of their retirement prospects, their expectations differ significantly from the reality of when older workers are actually retiring.

"There is a big gap in the age at which pre-retirees expect to retire and actual retirement ages of those who have retired from their primary occupation," said Carol Bogosian, an actuary and retirement expert, in a written statement issued by the Society of Actuaries."This may be partially due to involuntary retirement and health problems."

In the Society of Actuaries report, half of pre-retirees say that will wait until at least age 65 before leaving the workforce. Only 12 percent felt they would be able to retire early. However, 51 percent of retirees surveyed for the same report said they left employment before age 60.

Those findings echo a similar report published by the MetLife Mature Market Institute earlier this spring. That report found the average retirement age for those born in 1946 was 59.7 for men and 57.2 for women.

"Many of the Boomers weathered the recession well and have been able to stop working," said Sandra Timmermann, director of the MetLife Mature Market Institute, in a statement issued with the institute's findings. "Half of all Boomers feel confident that they are on track or have already hit their retirement goals."

See the original post here:
Study: One-third of workers see no retirement ahead

SPRINGFIELD, Mass., Aug. 17, 2012 /PRNewswire/ -- More than 100 retirement plan sponsors attended MassMutual's Retirement Services Division's first-ever PlanSmartSM online seminar, Who is Gen Y and Why It's Important to Know.

The July 24 live webcast, featuring returning guest speaker Farnoosh Torabi, independent Generation Y money coach, best-selling author and personal finance journalist, reviewed how plan sponsors can best connect with and motivate this younger generation. Specifically, Ms. Torabi reviewed how sponsors can:

All attendees who completed MassMutual's brief post-event survey had the opportunity to opt-in to a drawing to win a one-hour onsite employee presentation with Ms. Torabi and members of the MassMutual Retirement Education Specialist team. MassMutual is pleased to announce that Allen, Allen, Allen & Allen of Richmond, Va. won the drawing. Allen, Allen, Allen & Allen is one of the oldest and largest law firms in Va. and has been a valued client of MassMutual for more than 10 years.

Results from the seminar's post-event survey were very positive, with 90 percent of the plan sponsors in attendanceratingthe online format, presenter, and information presented as Very Good (4) or Excellent (5).Additionally, all attendees completing the survey received a copy of Farnoosh Torabi's book, Psych Yourself Rich.

"MassMutual Retirement Services is pleased to deliver our first-ever PlanSmart online seminar, developed specifically for plan sponsors, to help them engage and motivate their Gen Y employee population," says Elaine Sarsynski, executive vice president of MassMutual's Retirement Services Division and chairman and CEO of MassMutual International LLC. "It is vital that we reach this generation early and in the ways that work for them to help drive healthier retirement outcomes in the future," adds Sarsynski.

Prior to the seminar, registered plan sponsors were provided with a heartfelt 31/2 minute video introduction to Maria, a Gen-Y retirement plan participant who shares her personal perspective on retirement and how best to reach her generation.

A free replay of the Who is Gen Y and Why It's Important to Know seminar is available for anyone who missed the live event. For more information about MassMutual Retirement Services, please contact your retirement plan advisor or call MassMutual at 1-866-444-2601.

The information within this presentation is solely the opinion of the speaker, an independent orator, who is not an employee of MassMutual Financial Group.

About MassMutual

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) [of which Retirement Services is a division] and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, Member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.

Read more from the original source:
MassMutual Retirement Services' First-Ever Sponsor-Specific PlanSmart(SM) Seminar Welcomes 100+ Attendees

Taxpayers in Los Angeles will see retirement costs for police officers and firefighters climb by 56% over the next four years, even after voters approved a March 2011 ballot measure that trimmed the pension benefits paid to new hires, according to projections released by city budget officials.

Pensions and retiree healthcare costs for sworn employees are projected to consume $789 million of the city's general fund budget in 2016, up from $506 million this year, according to figures prepared by budget analysts. Every dollar in the general fund that goes for retirement costs cannot be used for other expenditures, such as library books, park programs and police salaries.

The numbers were prepared for the city's labor negotiations committee, which consists of Mayor Antonio Villaraigosa and four City Council members. That panel met Tuesday to consider the mayor's plan for rolling back pensions for newly hired civilian employees, such as librarians, landscapers and street repair workers.

The changes, which include a bid to increase the retirement age to 67, would not apply to police and firefighters. City Administrative Officer Miguel Santana defended the current focus on civilian workers, saying L.A. leaders already have wrung savings from the public safety retirement system, thanks to last year's ballot measure.

"It wasn't that we picked one [group of employees] over the other," he said. "The mayor and the council directed us to address both the civilian and sworn pension systems. The difficulty is that we weren't able to reach a consensus with civilians."

When Villaraigosa took office in 2005, public safety retirement costs consumed 4.2% of the city's general fund. The number is expected to reach 11.1% this year and 15.6% by 2016, according to budget officials.

Santana said the increased costs for firefighters and police officers have been caused, in part, by the buildup of the force at the Police Department and the poor performance of the investment portfolio managed by the city's Fire and Police Pensions system. The city also has to pay more, he said, because the pension board recently lowered its investment assumptions in the wake of those losses, forcing the general fund to make up the difference.

Business leaders, along with former Mayor Richard Riordan, have been pressing Villaraigosa and the council to take new action on steadily rising pension costs, saying the growing retirement costs will force officials to cut additional services. Those cuts, they said, will drive businesses away, further cutting tax revenue and forcing the city into a financial tailspin.

The leaders submitted a proposal that would, among other things, freeze the pay of firefighters and police officers if retirement costs consume more than 25% of those employees' salaries.

Public safety unions have responded angrily to the proposal and to the projections released by Santana's office. Tyler Izen, president of the Police Protective League, questioned the accuracy of the numbers and said his members have already made sacrifices by giving up millions of dollars in overtime pay and taking time off instead.

More here:
Retirement costs will take a larger share of L.A. budget, estimates show

(MoneyWatch) You might have heard some sound bites lately that report good news about retirement savings:

-- Fidelity recently revealed that average contributions to IRAs have increased by 15 percent since 2007, from $3,420 to $3,930.

-- A recent bulletin from the Social Security administration shows that retirement savings have been understated in previous analyses on retirement resources, due to underreporting of savings in IRAs and employer-sponsored plans such as 401(k)s.

-- Another recent report from Fidelity on combined 401(k) and IRA retirement savings shows that for investors on the verge of retirement -- those between ages 65 and 69 -- the average combined retirement savings is $359,999.

While this is indeed good news, don't breathe a sigh of relief just yet and think that we've solved the significant retirement savings challenge facing most Americans. Perhaps the image to keep in mind is that of a person running down the deck of the Titanic who finds an inflatable inner tube and says "Look what I found! Heck, this situation isn't as bad as I thought."

Let's dig deeper into these numbers so you can see why I believe we're not out of the woods yet. Let's start with the IRA numbers: If you contribute $4,000 per year for 20 years and earn 6 percent interest each year, you'll accumulate a little over $150,000. While that's not bad, you'll only generate a lifetime retirement income of about $6,000 per year with that amount of savings if you use the popular four percent withdrawal rule. Of course this is better than nothing, but your retirement years won't exactly be golden with this amount of retirement income, even when you add in your Social Security benefits.

Now let's address the Social Security bulletin, which documents inadequacies in income amounts of the aged as reported by the Census Bureau's Current Population Survey (CPS). The CPS includes pension income, but it under-reports distributions to retirees from IRAs and employer-sponsored savings plans such as 401(k)s. As we shift from relying on traditional defined benefit pension plans to 401(k) plans as our primary retirement delivery system, this under-reporting presents a problem to analysts who want to determine if our retirement system generates sufficient retirement income.

Make no mistake -- I'm all for improving the accuracy of data analyses on retirement resources. But the improvements cited by the Social Security bulletin will barely make a dent in the problem. It reports that ownership of IRA and 401(k) accounts among people aged 65 and older has increased from 24.3 percent in 1998 to 37.4 percent in 2009. While that's a nice improvement, it still means that barely more than one-third of Americans own such an account.

The Social Security bulletin also reports dramatic increases in the median account value of all tax-advantaged accounts, including IRAs and 401(k)-type savings. The median value for people ages 55 to 64 increased from $43,400 in 1992 to $100,000 in 2007. Again, this is a significant increase, but the annual retirement income generated by $100,000 will be about $4,000 per year if you again use the four percent rule for annual withdrawals.

It's a little more encouraging to consider the numbers reported at the beginning of this post by Fidelity on the average combined 401(k) and IRA accounts held at their firm. Retirement savings of $360,000 could generate a retirement income of almost $15,000 per year, using the four percent rule. Such an investor could generate an even higher retirement income if they bought an annuity. Combine this amount with a Social Security retirement income of $44,400 per year for a couple aged 70, and they might be able to retire with enough money to live on.

Continued here:
Feel relieved that retirement savings are up?

Video Link: https://www.youtube.com/watch?v=JH1CwHYktS8

16-08-2012 21:43 Novak Djokovic talks about Nikolay Davydenko's retirement in their third-round match Thursday at the Western & Southern Open. Video courtesy TennisTV.com. Watch live matches:

Read the rest here:
Djokovic On Davydenko's Retirement In Cincinnati - Video

This post comes from Richard Barrington at partner site MoneyRates.com.

When it comes to retirement savings, many Americans seem to be "winging it" -- or heading for retirement without a realistic plan of how to fund it.

Or so suggests a recent survey (.pdf file) by the Transamerica Center for Retirement Studies. The survey indicates that "retirement planning" is a very loose concept among Americans. In many cases, the approach could be better described as wishful thinking.

The following are some points of concern raised by the study:

Savings rates remain very low.

The median contribution level for workers in 401kor similar plans is 7%. This is up from 6% in 2011, but still too low a savings rate to fund a comfortable retirement. Think about it: Retirement is likely to last roughly half as many years as a career. How can you expect to replace most or all of your income if you are settingaside only 7% of that income each year? With diminished expectations for the stock market, and bond yields and savings account interest rates approaching zero, most people are not going to be able to grow their way to adequate funding. Saving more is the only way to make it work. (Post continues below.)

Go here to see the original:
'Winging' retirement plans

NEW YORK (BankingMyWay) -- Talk to any financial adviser about how to save for retirement and you'll get two instructions: save as much as you can, and focus on asset allocation -- your portfolio's diversification between stocks, bonds and cash.

But a new academic study finds this to be misplaced emphasis. Advisers should be preaching the bigger, more dependable benefits of working longer, trimming spending and planning on using a reverse mortgage, the research suggests.

Get alerts before Link and Cramer make every trade

On the plus side, this means many people have more control over their financial fate than they think, because they're less dependent on the whims of the stock market and can rely a bit more on safe holdings like bank savings that make it easier to sleep at night. The downside, of course, is that spending less and working to 70 isn't so appealing.

A careful look at asset allocation tools

Where to keep a rainy day fund.

Using home equity in retirement. Follow TheStreet on Twitter and become a fan on Facebook.

See the original post here:
Road to Retirement Shouldn't Be Paved With Stocks

The individually designed units in New Zealand's first large retirement village were pretty comfortable.

The sunny units at Parkwood, about an hour from Wellington, ranged from 70 to 110 sq m, then about the average size for a new house, with a decent-sized master bedroom and guest room. It was the early 1970s so nobody expected ensuites or wifi for their iPads. That was then.

When the newest units were built about fifteen years ago the standard floor was 142 sq m with some units reaching 160 sq m. Older units were being puffed up with ensuites and open showers and walls were being knocked out for open plan living areas.

"There is the odd bath floating around because that is what people want but they'll be whipped out as soon as the next person comes," says manager Mark Rouse.

He mentions the new shared swimming pool, the gym, and the popular yoga classes. "At some point in the future I would expect wifi in our social centre."

If Parkwood, a charity, feels the need to upgrade, the pressure is greater on stock-market-listed retirement villages such as Summerset, Ryman and Metlifecare. New developments have barely paused for breath during years of widespread slump for ordinary residential construction.

"Ryman is the fourth biggest residential builder in the country," says John Collyns of the Retirement Villages Association. "We are signing up new villages every two or three weeks."

Statistics NZ began tracking new retirement units in 2009 after it noticed an upwards surge. Since then developers have built almost 2,000 new units worth a combined $263 million. Half of them were built in the last year, says Collyns. Forget students. In some months, every new apartment built in New Zealand was for retirees.

"The whole social area of a village is undergoing quite a substantial re-think," says Collyns.

"Restaurants and cafes are now very common, and libraries and computer rooms and decent cinemas are quite standard in the new villages."

See the original post here:
Retirement villages go cool