Archive for the ‘Retirement’ Category
fnatic’s cArn about his retirement and IEM’s World Championship – Video
Posted: March 8, 2012 at 10:40 pm
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fnatic's cArn about his retirement and IEM's World Championship - Video
Dravid likely to announce his retirement tomorrow-NewsX – Video
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Dravid likely to announce his retirement tomorrow-NewsX - Video
Prudential Retirement Calls for Establishment of Multiple Small Employer Plans
Posted: at 10:40 pm
NEWARK, N.J.--(BUSINESS WIRE)--
Prudential Retirements Jamie Kalamarides, senior vice president of Institutional Investment Products, testified today during a U.S. Senate Special Committee on Aging hearing on the shortage of retirement savings plans among small businesses.
Kalamarides discussed Prudential Retirements support for expanding retirement coverage through multiple small employer plans, which would allow groups of employers to pool resources under a single defined contribution plan, resulting in lower costs and simplified administrative requirements. Kalamarides testified that the establishment of multiple small employer plans may help close the retirement income gap for the more than 78 million employees who do not have a retirement plan, and help improve overall retirement security.*
During his testimony, Kalamarides explained that compliance with ERISAs reporting, disclosure and fiduciary requirements may be a concern for many small employers and, the ability to reallocate these responsibilities to professionals through a multiple employer plan would remove a major impediment to small employers extending retirement savings opportunities to their employees. Kalamarides further explained that, if multiple employer plans are to play a meaningful role in closing the retirement coverage gap clarifications and changes in the law are necessary, including expanding multiple employer plan sponsorship, reallocating fiduciary and plan administration responsibilities and eliminating nondiscrimination testing. For full version of testimony (link to testimony) and white paper, (link to whitepaper).
Prudential Retirement delivers retirement plan solutions for public, private, and non-profit organizations. Services include state-of-the-art record keeping, administrative services, investment management, comprehensive employee investment education and communications, and trustee services. With over 85 years of retirement experience, Prudential Retirement helps meet the needs of over 3.6 million participants and annuitants. Prudential Retirement has $229.5 billion in retirement account values as of December 31, 2011. Retirement products and services are provided by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT, or its affiliates.
Prudential Financial, Inc. (NYSE: PRU - News), a financial services leader with approximately $901 billion of assets under management as of December 31, 2011, has operations in the United States, Asia, Europe, and Latin America. Prudentials diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudentials iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit http://www.news.prudential.com/.
* Employee Benefit Research Institute, Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 010, Issue Brief No. 363, October 2011
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Prudential Retirement Calls for Establishment of Multiple Small Employer Plans
WWE 12 – Brock Lesnar’s UFC Retirement
Posted: March 7, 2012 at 5:52 pm
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WWE 12 - Brock Lesnar's UFC Retirement
How low must retirement withdrawals go?
Posted: at 5:52 pm
By Linda Stern
WASHINGTON (Reuters) - After a lifetime of diligently saving, retirees are faced with a new question: How much can they take out during retirement?
Retirement -- or the "withdrawal phase of life" as actuaries and other numbers wonks refer to it -- can present a psychological challenge. It's often hard to spend money that took decades to save.
But it's also a mathematical challenge. Spend too much, and you can find yourself running out around the time you hit 75 or 80. Spend too little and you can live a retirement life of ascetic self-denial, only to enrich your kids when you die.
For many years, retirement experts have been telling retirees that 4 percent is a safe withdrawal rate. The theory, supported with lots of backtesting, holds that if you keep your portfolio diversified and start your retirement with a 4 percent withdrawal, you can increase your withdrawal by the inflation rate every year and be almost certain your money will last for 30 years. T. Rowe Price, for example, has suggested retirees can increase their withdrawals by 3 percent every year to cover inflation.
But events and developments of the last few years have cast some doubt on a 4 percent solution. In the first place, many people are retiring at 62 or under, and living into their 90s, so 30 years isn't always enough. Even more significantly, the market meltdown of 2008-2009 drove home the weakness of the 4 percent rule. When stocks and bonds deliver poor returns, even 4 percent isn't safe enough.
In fact, someone calculating their safe withdrawal rate in 2008 might only be able to take 1.5 percent of their money out, according to a paper from retirement expert Wade Pfau published in the Journal of Financial Planning. Pfau, an associate professor at the National Graduate Institute for Policy Studies in Tokyo, doesn't actually suggest that retirees restrict themselves to that degree. Rather he suggests that retirees amend their withdrawals by considering how their investments are doing and staying flexible.
"It would be a great pity if recent retirees scaled down their retirement expenditures and loved a more frugal lifestyle only to find at the end that a higher withdrawal rate could have been sustainable," he wrote.
Some financial firms have considered lowering their recommended withdrawal rate to 3 percent but have found it hard to gain traction. That's a safer rate, concedes T. Rowe Price spokeswoman Heather McDonold, but it may be "difficult and unrealistic for some folks."
For example, at the end of 2010, the average 401(k) balance held by a worker in his or her 60s, who had been on the job for between 20 and 30 years, was $159,654, according to the Employee Benefit Research Institute. Note that figure is probably high, because it only focuses on people with a long history on the job. A retiree who started pulling 3 percent a year out of that would be able to withdraw only $400 a month, enough for groceries perhaps but not much else.
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How low must retirement withdrawals go?
Retirement savings to spending: How to handle the transition
Posted: at 5:52 pm
Saving for retirement is a long journey with a destination that, at many times, feels far off. But once that last day of employment rears its mixed-emotions head, fantasies about pursuing sports, hobbies and travel are often displaced by anxiety about what lies ahead. How will you spend your time? Where will you live? And, perhaps most importantly, how will you pay for it all?
After so many years of marching to the beat of the save-for-retirement drum, it can be hard to imagine spending that money when the time comes. Indeed, drawing down your retirement savings is not a simple affair; taking too little can leave you with few options with respect to how to spend your senior years, while taking too much could leave you with years to live - and nothing to live on. Before you sit down with an advisor to discuss your options, here are some factors to consider. [More: Find out why you should contribute to your RRSP this year]
Start early Nearly every piece of retirement advice revolves around a simple edict you probably learned when you were young: always be prepared. The final stage of your working years is no different. According to personal finance expert and author, Gordon Pape, those who are approaching retirement need to start preparing their portfolios at least five years in advance. This involves winding down higher-risk investments in favour of low-risk dividend stocks, bonds and anything with a regular cash flow. Why? Because you don't want to be forced to switch your portfolio in a hurry - especially if market conditions are not in your favour.
"As you approach retirement, your focus shifts from growth to safety and income," Pape advises. "Make the transition gradually so that when the time comes to stop work, your portfolio is set up." [More: Retirement 101: Your guide to saving and planning for your retirement]
Demolish debt Nearly half of Canadians (47 percent) are concerned about the debt they'll be carrying into retirement, according to a poll released by Sun Life Financial in February. According to Pape, that's a huge mistake.
Think debt's no big deal? Not so fast. Current interest rates are at a historic low, which means that big, old debt is likely to cost you a whole lot more in the future up to 50 percent more, according to Pape's estimate. In other words, that mortgage or line of credit could be a financial disaster just waiting to happen, especially for someone on a fixed income.
The solution? Make sure your debt retires before you do, Pape says, even if it means keeping that 9-to-5 for a few more years than you'd planned. [More: Does it make sense to borrow for your RRSP? Here's what you need to consider...]
Slow and steady Many retirees have big plans for their post-work years. Unfortunately, the increasing health and longevity that many people now enjoy put them in a tough position. It's only natural to want to kick your retirement off by getting out and enjoying your free time. But if you take that round-the-world cruise early on, you might be left with very little to keep you afloat in your final years, pun intended. This doesn't mean you have to abandon all your grand plans; just be sure to consider the long-term picture before throwing down a lump sum for a luxury.
When to withdraw You can begin collecting Canada Pension at age 60 and you can convert your RRSP to a RRIF and begin receiving regular payments whenever you choose. Indeed, after all your hard work, you probably can't wait to get your hands on this money. Unfortunately, there's a cruel trick to spending retirement income the longer you put it off, the more you'll have to spend.
Sticking it out to age 70 before collecting CPP can mean a payment that's a full 42 percent higher than it would be if you started collecting your payments at age 60. As for your RRSPs, Pape recommends that you avoid converting them to RRIFs until absolutely necessary to avoid minimum withdrawal requirements until they become mandatory at age 71. Receiving a payout from an RRIF means pulling your nest egg out of its cozy tax-sheltered refuge, thus subjecting yourself to more tax and lower investment returns. Pape says it may be worth converting a small RRIF earlier to receive $2,000 per year and capitalize on the Pension Income Tax Credit. Overall though, it's best to tuck those RRSPs in for a few extra years. You'll thank yourself later. [More: Cracking the golden nest egg of retirement: Can you retire and still have debt?]
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Retirement savings to spending: How to handle the transition
Retirement Income Industry Association Creates Retirement Market Insight Initiative to Bring Database Analytics and …
Posted: at 5:52 pm
BOSTON, MA--(Marketwire -03/07/12)- The Retirement Income Industry Association (RIIA) announces the launch of the RIIA Market Insight (RMI) initiative, a research program that transcends traditional product and organizational silos by bringing together industry leaders, researchers and their collective data to create a 360-degree view of consumer households who buy and depend upon the industry's products and services. RIIA invites firms to join an advisory board to guide the RMI research and collaborate with board members and participating firms in the execution of the program.
Joining with RIIA as members of the RMI are the Depository Trust and Clearing Corporation (DTCC), Turner Consulting, LLC, Strategic Business Insights (SBI), Sagence Group, GDC Research, CANNEX, Ernst & Young and Price Waterhouse Cooper (PwC) with the goal of delivering a sophisticated, strategic use of analytics applied to rich, high quality market data which develop and expand insights that lead to accelerated business success.
The first member of the RMI Advisory Board is the National Association for Fixed Annuities (NAFA). NAFA is a national trade association exclusively dedicated to promoting the awareness and understanding of fixed annuities. "We are pleased to have NAFA as a founding Advisory Board member," says Francois Gadenne, Executive Director and Chair of RIIA. "We anticipate that NAFA will bring their depth of experience and focus on fixed annuities to our program and will help guide research related to this important product."
Eric Thomes, NAFA's Chair, agrees, "As a premier annuity-based association and chief advocate for fixed annuities, we need to understand the trends that affect our products and our members. Our seat on the Advisory Board will help us achieve this objective."
The RMI is seeking additional working group members and sponsors to help guide the development of the various databases, reports and services. "While we are starting with annuity database analytics, the RMI members and sponsors will expand that view across product, service and distribution silos," explains Elvin Turner, President of Turner Consulting, LLC, and RIIA's Director of Research.
To create a cross-silos retirement income research platform, RIIA is building a RMI Advisory Board that represents various views and expertise across the industry, with members from the annuity, mutual fund, investments, insurance, distribution, DC plans and other communities. Their common goal is to gain actionable information about market share, distribution channels, products, customer profiles and household spending, now and in the future, that will result in data-based decisions that improve business performance.
"The bottom line for us," concludes Kim O' Brien, NAFA's CEO, "is being able to view actual sales and sales potential of fixed annuities quickly after those sales occur and with a level of insight and understanding that was not possible before. That is the opportunity offered by this initiative."
To join the RMI or to request more information, please contact Francois Gadenne, Chairman and Executive Director, RIIA at (781) 738-0484 or Elvin Turner, Director of the Research Business Unit, RIIA at (860) 242-4878.
About the Retirement Income Industry Association (www.riia-usa.org)
Founded in 2006 by leading financial companies, advisors, associations and academics, the Retirement Income Industry Association (RIIA) provides a rigorous, research-driven, household-focused foundation for developing retirement solutions to serve retirees today and into the future. A non-profit organization, RIIA achieves its mission through a unique View Across the Silos allowing members to see change and disruption before others while achieving competitive advantage through diverse discussions, advanced education, market insight, research, comprehensive data, standards and thought leadership for successful retirement income management. RIIA members span the entire industry and include banks, insurers, mutual fund companies, brokerage houses, financial advisors and distributors, plan sponsors, researchers, technology companies, marketing firms, academics, and industry media.
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Retirement Income Industry Association Creates Retirement Market Insight Initiative to Bring Database Analytics and ...
Pity the Retirement Hoarder
Posted: at 5:12 am
BOSTON (MainStreet) -- Few days pass without some new study or survey reinforcing a dire message that Americans are not saving enough for a comfortable retirement. For some, that message may actually be detrimental. While true that many -- perhaps most -- are dangerously behind with their savings timeline, even those with a suitable nest egg are prodded continually into saving more. Some run the risk of saving too much, of letting their lives be dictated by compulsive frugality. Think of them as the financial equivalent of hoarders. They're so dead set on accumulation that they find it psychological torture to spend anything. Ted Bovard, principal and financial consultant for Fort Pitt Capital Group in Pittsburgh, says his firm has high net worth clients who fall into this category. Even though they could never spend all of their money, given their frugality, they still worry about running out of money in retirement or not having an inheritance to leave their children. As an example, one client, despite having a $9 million nest egg, called to seek advice on whether she could afford to buy a new clothes dryer. "We have clients who have $6 million to $7 million saved and they ask, 'We were thinking about giving money away to this school, or this charity, or the grandkid -- do you think we can do it?' Well, how much money are you thinking of giving away? 'Probably just the gifting limit for the grandkids, maybe $13,000 times three or four.' Well, I think with $7 million you are OK," Bovard says. "There is nothing wrong with being careful, but you can overdo it, says Peter D'Arruda, president of Capital Financial Advisory Group in Cary, N.C. "It's like the skinny squirrel who stores a bunch of nuts in a tree over and over again, but doesn't eat them. He just runs off looking for more nuts. Then termites get in there and when squirrel comes back the tree's not there anymore." D'Arruda uses that fable-like example to explain that the fear of depleting assets doesn't just lead investors to take on an unhealthy degree of risk; they can also err on the side of perceived safety. The fear of running out of money isn't always without merit, he says, pointing to the "biggest risk of all" -- the eventual need for long-term care. With these needs in mind, he urges clients to create an income stream and hedge against future expenses with various annuity and life insurance policies that include long-term care riders. What he doesn't advocate is relying on so-called "safe" investments -- including cash, CDs and other bank products -- to provide peace of mind. "CD accounts are not earning anything," D'Arruda says. "I refer to it as losing money safely. Look at inflation right now. You can go to the grocery store now and see how expensive it is, and there are also rising fuel costs and increasingly expensive health care. You need to be keeping up with inflation if you want to make sure you have money for the future." Bovard sees several reasons for why some people have a hard time accepting that their savings are, in fact, sufficient. Factors include a lifetime of frugality, over-reacting to market fluctuations and the intangibility of wealth that is in investments, not in physical cash, gold or even stock certificates. "A lot of time, I think I, as their adviser, am the person who can help them relax," he adds. "For the folks we have had longer-term relationships with, they look to you to tell them what they can do and what they can't do. If we tell them they can do it, they are more comfortable." A challenge, he says, is getting clients to move past an all-encompassing drive to save and accumulate wealth and to focus as well on enjoying the fruit of their labor. "People ask, 'How much do I need, do I have enough?' We don't really focus so much on the total number. We see how do you want to live and what it's going to cost," Bovard says. "If it is $500,000 a year, your $2 million isn't going to get you very far. If it is $50,000 a year then yes, you are probably going to be in very good shape." A persistent voice warning that some are saving too much for retirement is Laurence Kotlikoff, an outspoken economics professor at Boston University. In a past interview, Kotlikoff, who co-wrote the book Spend 'Til the End -- The Revolutionary Guide to Raising Your Living Standard, Today and When You Retire (Simon & Schuster, 2008) with Scott Burns, put much of the blame on the retirement calculators companies such as Fidelity, TIAA-CREF, Vanguard, Schwab and T. Rowe Price deploy on their Web sites. "Financial advisers are giving bad advice using bad financial tools that aren't remotely capable of dealing with the question that they are trying to answer," he said, noting that advisers can profit from their inadequate assessments. "The bottom line is that if you over-recommend products, you sell more," he said. "If you get compensated, either directly or indirectly, based on your sales, there is an incentive to make recommendations that are, on average, too high." Kotlikoff, who has crafted his own retirement software tool, ESPlanner, estimates that about 20% of households are likely saving too much for retirement, compared with the 40% he believes are saving dangerously too little. "I think under-saving is probably a bigger problem, but there is still a risk with over-saving," he said. "You could save like crazy and then you can drop dead when you hit 55. It is not only that you may die young, it is also that you can be induced into much riskier securities than you should be investing in because you think that this is the only way you can make your target. The whole focus is on making a target that is ridiculous to begin with." Bovard says many retirees who have saved and invested appropriately throughout their life follow a similar pattern of financial realization. They start out very nervous they don't have enough. That persists for the first seven years or so. Then they start to breathe a sigh of relief and get comfortable with the idea that they can enjoy life and spend down some of their assets. Later, they fully grasp that they have more money than they can ever spend and face regrets over what they wish they had done. Bovard isn't surprised by the psychology at play among those who resist post-retirement spending. "You spent 40 to 45 years accumulating this pot of money, and you did it by saving and saving and scrimping," he says. In response, he tries to work with clients, especially during the early years of retirement, to "bump that expense level up a bit" and factor in the cost of various trips and activities they have expressed an interest in but haven't had the time to do until retirement. "Sometimes part of our job is not just to be your financial adviser, but also a counselor," Bovard says. "It's all about striking a balance. If there are a couple of things you want to get done, lets figure out how to do them and still feel comfortable whether the markets are up or down or back and forth. While you still have the health and energy and desire, let's make these things you want to do happen." "If you can't actually do that and relax, why retire? Maybe you are just tired of work, and that's fine, but if the idea is to retire because there are things you want to do and enjoy, then you are going to have to learn to relax a little bit," he adds. "It is a very different thought process for people when they've spent years pumping money in and now they turn around and have to take money out. Psychologically it is a huge transformation and if they are a workaholic, this can be a very difficult transition." The balancing act between preserving financial security and enjoying your money differs from person to person, Bovard says. It is hardest for those he describes as "worrywarts." "You have to deal with that personality differently, and they may never be comfortable," he says. "You say that they can afford to do something and they reply, 'Oh, I'd better not.' As soon as you go through the first downturn together -- and if you look at them long enough you are going to go through at least one or two or maybe three -- they are like, 'See, I knew it, I've got to pull back, I knew I shouldn't have gone on that trip.' What I have to say to them is that we've got the money set aside and life is going to move on whether the markets are up or down." Bovard says having a solid financial plan in place helps investors learn to enjoy life in retirement. It also keeps them from taking on excessive risk in the name of returns. "It's important to have the ability to stick to that plan through the good the bad and the ugly," he says. "It is not just when things are bad that people go off the reservation. When things are great, people believe they are much less risk averse. 'Oh look, everybody is making tons of money and I'm not making as much.' Well, remember that we have a balanced portfolio because when things are down you get really upset. We'll still get to the same place, we are just going to do it with less bumps." --Written by Joe Mont in Boston. >To contact the writer of this article, click here: Joe Mont. >To follow the writer on Twitter, go to http://twitter.com/josephmont.
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Pity the Retirement Hoarder
Am I saving too much for retirement?
Posted: at 5:12 am
NEW YORK (CNNMoney) -- I'm 28 and on track to save 40% of my salary in retirement and other accounts this year. I wonder, though, whether I'm focusing too much on stashing away money rather than enjoying it more at my age. Am I overdoing it? -- Adam, Minneapolis
There's no question that you're socking away money at a much higher rate than most people are able to manage financially or would chose to do.
A 2010 Aon Hewitt survey of contribution rates to 401(k) plans shows participants in their 20s contribute 5% of salary on a pre-tax basis compared to a rate of about 7% for participants of all ages.
Clearly, you're a champion saver. Does the fact that you're saving so much more than your peers mean you're overdoing it?
If overdoing it means saving more than is necessary to fund a comfortable retirement, then sure, it's possible you're going overboard in that sense.
Say you want to retire at age 65 on 80% of your pre-retirement salary. If you go to our What You Need to Save calculator and plug in your age and an annual salary of, say, $40,000, you'll see that the recommended savings rate is just over 9% -- and that's if we assume you haven't saved a dime to date.
Of course, you'll have to save considerably more if you want to retire early or live large after you call it a career. You can try different retirement ages and target retirement incomes using T. Rowe Price's calculator. But it's hard to imagine you'll fall short of a secure retirement at any reasonable age if you consistently save 40% of your salary a year.
Ah, but is it really likely you'll be able to continue this pace throughout your career? My guess is that as you get older and take on more financial obligations like maintaining a house and raising kids, you'll find that it gets tougher to save.
There may also be periods where saving is a challenge. At some point over the next few decades, you could find yourself out of work due to a layoff or health issues or some other reason, for example.
If things get bad enough, you could end up having to draw down your savings in order to get by, as many diligent savers have been forced to do as a result of the recession.
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Am I saving too much for retirement?
BMO Financial Group Launches the BMO Retirement Institute in the U.S.
Posted: at 5:12 am
CHICAGO, ILLINOIS and TORONTO, ONTARIO--(Marketwire -03/06/12)- BMO Financial Group today announced the expansion of the BMO Retirement Institute into the United States. The BMO Retirement Institute provides thought-provoking insight and financial strategies for Americans planning for, or currently in, their retirement years.
"With BMO Financial Group's recent growth in the U.S., we thought it was an ideal time to bring the BMO Retirement Institute into the country," said Tina Di Vito, Head, BMO Retirement Institute. "We look forward to sharing our insights in this important market, and assisting Boomers in making a smooth transition into retirement."
The BMO Retirement Institute will examine a variety of topics related to retirement and issue comprehensive reports on the financial and non-financial aspects of this milestone. Its inaugural report, Single in Retirement, was released today.
"BMO is recognized around the globe for their excellence in programming, products and services and for their commitment to define great customer experience," noted Kenneth Krei, executive vice president, BMO Private Bank. "The similarities in the Canadian and U.S. marketplaces offer a unique opportunity to expand the reach of the BMO Retirement Institute to better serve all of our clients."
BMO Retirement Institute Report: Single in Retirement
The odds of being single at some point during retirement are high. In fact, 43 per cent of Americans aged 65 years and older are single due to divorce, having never married, or the death of a partner.(1)
Outlined in the report are a unique set of financial, emotional, and planning challenges for those who are "Suddenly Single" (unexpectedly widowed or divorced) or "Ever Single" (never married) in retirement. These include:
Planning for retirement
The report notes that, as the cost of living for singles is 40 to 50 per cent higher than for married individuals, singles are at greater risk of not having enough saved for retirement.(2)
The report found that married couples are more likely than their Ever Single counterparts to have a financial plan, to receive help in preparing their plan, and to have a more up-to-date financial plan.(3)
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BMO Financial Group Launches the BMO Retirement Institute in the U.S.