Archive for the ‘Retirement’ Category
5 simple steps to retiring rich – CNNMoney
Posted: August 22, 2017 at 4:43 am
by Christy Bieber for The Motley Fool @CNNMoney August 21, 2017: 10:16 AM ET
Well, the bad news is Americans are woefully behind on saving for retirement. The good news is, you don't have to be one of the millions of retirees struggling to live on a bare bones budget.
By following just five steps, you'll set yourself up for a retirement spent traveling the world, spoiling your grandkids, or, at the very least, not losing sleep over money.
1. Invest as early and as aggressively as possible
Investing early is the best way to get rich, because you'll need to invest more later to catch up if you wait. No matter when you start investing, though, the amount you invest should increase with your salary.
If you invest a fixed percentage of your income, then your contributions will automatically increase along with your salary. The question is: What percentage of your income is appropriate? While many think 10% is enough, this is actually low.
Consider how much money you'd accumulate if your investments returned an average of 7% per year, you earned the median income for an American worker (about $45,000 a year recently), you got small annual raises, and you contributed 10% of your salary to a tax-deferred account.
Age 25-34
$3,362.67
$336.27
$58,156.00
Age 35-44
$4,229.33
$422.93
$189,915.00
Age 45-54
$4,225.00
$422.50
$454,706.00
Age 55-64
$4,186.00
$418.60
$986,154.00
Your retirement income would be around $40,000, assuming you drew from your account for 25 years and continued to earn a conservative return of around 3.25% during retirement. That would put you far ahead of the average American retiree -- but you wouldn't quite be living in the lap of luxury.
These numbers also assume you started at 25, which many people don't. If you waited until 40, you'd need to save more than $1,200 a month -- about 35% of your wages -- to save up the same amount.
But what if you started early, invested aggressively (earning 7% per year), and saved 20% of your median income?
Age 25-34
$3,362.67
$672.53
$116,312.00
Age 35-44
$4,229.33
$845.87
$380,004.00
Age 45-54
$4,225.00
$845.00
$909,936.00
Age 55-64
$4,186.00
$837.20
$1,970,000.00
When you retired, your income will be around $81,000, which should be plenty -- especially when combined with Social Security -- to provide you with financial freedom.
If you've started later, you can still achieve a comparable income, but you'll need to save much more aggressively.
2. Automate your saving
When saving money takes effort, you're less likely to do it. In fact, one in six Americans responding to a survey weren't saving more because they hadn't gotten around to it.
Most people tend to stick with the status quo -- in fact, studies found participation rates in a 401(k) jump from 40% when employees must opt in to almost 100% when they must opt out. So use your natural inertia to your advantage: Automate investments by having a percentage of income diverted to your 401(k) or IRA. You're less likely to skip a contribution if it means having to submit paperwork.
3. Manage your risk appropriately
It's not just how much you invest that matters, but also what you invest in. If your portfolio is too conservative, your savings won't grow fast enough to provide you with a sizable retirement income. On the other hand, if you chase growth recklessly and ignore the inherent risks of your investments, you could be left with nothing.
Consider the difference between a conservatively invested traditional IRA and an aggressively invested IRA, assuming you contribute $5,500 per year to this tax-advantaged retirement account from age 25 to age 65:
If you invest in a conservative blend of stocks and bonds and earn 4%, your account will be worth $543,546.
If you earn a 7% return by investing primarily in stocks, your account will be worth $1,174,863.
Over time, that 3% difference in performance would more than double your money. Ironically, investing too much money in "safe" investments like bonds can be more risky than keeping most of your portfolio in stocks, because the stock market is much more likely to turn your small monthly investments into a livable income many years down the road.
You should tailor your investing strategy to your personal risk tolerance, but err on the side of being aggressive when you're young and still have time to recover from downturns. As you near retirement, you can gradually switch to safer investments in order to protect the capital you've built up.
4. Watch out for fees
Investing is typically not free. Some 401(k) accounts have fees, and mutual funds generally charge both annual fees and transaction fees. While you can't entirely escape these costs, you should know what you're paying and do everything you can to minimize the fees you pay.
Lets say you start saving at age 25, invest $5,500 for 40 years until age 65, and earn a 7% return on your investments. How much could fees ding your savings?
If you paid a 0.25% fee, you'd end up with an account worth $1,099,175
If you paid a 1% fee, you'd end up with an account worth $902,262
If you paid a 1.5% fee, you'd end up with an account worth $792,654
Over the course of 40 years, paying a 1.5% fee instead of a 0.25% fee would cost you $306,500 -- enough to cover expensive healthcare or a few nice trips around the world.
If you're investing through a 401(k), then your options are somewhat limited, and most of the mutual funds you can choose from will likely charge around 1%. However, if you invest through an IRA, your choices are almost limitless. There are plenty of low-cost exchange-traded funds that charge 0.25% or less for a diversified basket of stocks. A fund that tracks an index is a great choice for an investor who wants to benefit from the stock market's growth without assuming the risk and work involved in picking individual stocks.
5. Stick to the plan
Once you've carefully laid your plan for retiring rich, you need to adhere to it religiously. Even a slight and temporary deviation from the plan -- say, suspending your contributions for a few months, tapping your retirement account to cover unrelated expenses, or selling a holding early in an attempt to reap short-term gains -- could set you back big-time.
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If you put your contributions on hold, you'll lose out on both the money you should have contributed and the compound interest it would have achieved. If you make an early withdrawal from a tax-advantaged retirement account, not only will you cost your future self far more than you're withdrawing, but you may also incur income tax and penalties on the amount you distribute. It's not worth giving up your future financial security for anything you'd do today. When you're retired and living in comfort and financial security, you'll thank your former self for the years of discipline and sacrifice.
CNNMoney (New York) First published August 21, 2017: 10:16 AM ET
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5 simple steps to retiring rich - CNNMoney
Could you live off Social Security alone? – Washington Post
Posted: at 4:43 am
When it comes to retirement, theres one question that is sure to get a lot of people to save: Could you survive if you only received Social Security?
But the fact is millions live off their monthly Social Security benefit check. How do they do it?
Barbara Woodruff, 65, of St. Louis told Grandparents.com how she manages.
Her check: $633 a month. This is much less than the national average.
As of June, the average Social Security benefit was $1,254.78 per month.
Woodruff is collecting less than many folks because health problems reduced her working years, she told Grandparents.coms Daisy Chan. As Chan points out, Social Security benefits are based on your earnings during your working years.
Part of the reason Woodruff can survive on just Social Security is that she gets subsidized housing. She pays $189 for a one-bedroom apartment. She also receives $33 a month in food stamps.
Read more about how Woodruff gets by.
Woodruff has a lot of company in trying to survive on Social Security. As Rebecca Lake reported for Investopedia.com, 21 percent of married couples and 43 percent of single seniors count on Social Security for 90 percent or more of their income.
Social Security isnt a substitute for building a solid retirement base, and if youve still got time before you retire, consider looking for ways to shore up your savings, Lake wrote. Start by chipping in as much as you reasonably can to your employers retirement plan, especially if it comes with a matching contribution. If you dont have a 401(k) or similar plan at work, an individual retirement account (IRA) is another way to grow your savings. The more you set aside now, the less pressure youll feel to make your Social Security benefits stretch.
If you think youll be relying just on Social Security, here are some articles with tips on how to make the money stretch.
How to Have a Comfortable Retirement on Social Security Alone
9 Ways to Retire on Social Security Alone
11 Ideas for Living on Nothing More than Social Security in Retirement
Are you living on just Social Security? If so, how do you do it? Send your comments to colorofmoney@washpost.com.
Retirement rants and ravesIm interested in your experiences or concerns about retirement. Did you retire early and if so, how did you do it?
Is retirement everything you hoped for? Are you scared youll run out of money?
What you share might help others. So send your comments to colorofmoney@washpost.com. Please include your name, city and state. In the subject line put Retirement Rants and Raves.
One recent rant came from a friend.
So, you worked hard, saved your money, cut off your adult children, and retired, Maribel Soto of Burke, Va. Are you prepared for retirements close companion: aging? The consequences of aging will have a monumental effect on your financial position. It will not be enough to have perfect adult children who did not deflate your retirement wealth. Do your adult children/loved ones have the competence and capability to navigate the health care, legal, and social services systems to ensure your well-being and quality of life?
Soto asks some good questions considering her own experience.
Try telling the Social Security Administration that the court has declared you as your mothers legal guardian, she wrote. Show up with all your court records, and they will say, We do not recognize the courts assessment, we have to conduct our own, meanwhile we cant tell you why her benefits have been stopped. Yet, the assisted living facility has to be paid. That is just the tip of the iceberg.
Heres Sotos poetic take on aging:Loving father,Loving mother,Loving son,Loving daughter,Only one faces Medicaid, Social Security, the court system, the banks, and the creditors.. . . and she is not enough.
Retirement blogI believe that wealth happens intentionally and for me this means reading as much as I can about all things financial, especially retirement.
Since were talking about retiring on just Social Security, heres a blog post that you may find helpful: 5 American Cities Where You Can Retire On Just Social Security
Retirement assignment
Theres so much to know and keep watch on when it comes to retirement planning. So every week Ill have a home assignment for you.
This week, if you havent done it already, set up your online Social Security account, which allows you to check your information, including how much youll get once you start collecting benefits. Knowing this information is key to retirement planning.
Heres the direct link for my Social Security.
Before you get started, watch the video created by Social Security on how to create your account. Youll find it at the bottom of the page.
I also recommend you read the Frequently Asked Questions (FAQ) posting by Social Security on setting up an online account.
I want to hear how your home assignment went. What did you learn? Did the assignment make you change any of your plans?
Send your comments to colorofmoney@washpost.com. Put Retirement Assignment in the subject line. Ill also be open to suggestions for assignments.
Newsletter comments policyPlease note it is my personal policy to identify readers who respond to questions I ask in my newsletters. I find it encourages thoughtful and civil conversation. I want my newsletters to be a safe place to express your opinion. On sensitive matters or upon request, Im happy to include just your first name and/or last initial. But I prefer not to post anonymous comments (I do make exceptions when Im asking questions that might reveal sensitive information or cause conflict.)
Have a question about your finances? Michelle Singletary has a weekly live chat every Thursday at noon where she discusses financial dilemmas with readers. You can also write to Michelle directly by sending an email to michelle.singletary@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writers name, unless otherwise requested. To read more Color of Money columns, go here.
If youre viewing this post online sign up to receive Michelle Singletarys free newsletters right into your email box: Your Retirement on Mondays & Personal Finance on Thursdays
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Could you live off Social Security alone? - Washington Post
Women Spending Fewer Years Married, Shifting Retirement Outlook – Planadviser.com
Posted: at 4:43 am
Due to women getting married later, fewer women gettingmarried and, among those who do marry, an increase in divorce, women arespending fewer years married overall, according to the Center for Retirement Researchat Boston College.
If women as a group now spend about half of their adultyears unmarried, it probably makes sense to explore their savings andinvestment behavior separately from men, the center says. This change hassignificant implications for financial planning.
For the oldest cohort, those born between 1931 and 1941, 72% of womens yearsbetween the ages of 20 and the last interview were spent married. Looking at mid-Boomers, i.e. those born between 1954 and 1959, the years spentmarried in that same timeframe had dropped to 54%. There is strong evidence to show that an individual's marital statusespecially an unexpected change in marital statushas a big impact on financial security over time.
The reason why the number of years women are married has declined is because,among the oldest cohort, the average age that women got married was 21.4. Formid-Boomers, this has crept up to 24.3. Among the oldest cohort, 3.9% nevermarried, and for mid-Boomers, this has risen to 12.2%. Just over one-third,33.9%, of the oldest cohort divorced, and today, 49.3% of mid-Boomer women aredivorced.
The Center for Retirement Research at Boston Collegesreport on this issue, Do Women Still Spend Most of Their Lives Married?, canbe downloaded here.
Excerpt from:
Women Spending Fewer Years Married, Shifting Retirement Outlook - Planadviser.com
NFL Notes: Bills’ Anquan Boldin announces retirement – Comcast SportsNet Philadelphia
Posted: at 4:43 am
Don't give that fourth running back spot to Corey Clement just yet.
Wendell Smallwood isn't going to go down quietly.
Smallwood, the Eagles' second-year running back from West Virginia, is back practicing with no restrictions after missing nearly two weeks with a hamstring injury.
Smallwood has yet to play in a preseason game, and with undrafted rookieClement acquitting himself well both at practice and in the first couple preseason games, the pressure is on Smallwood to produce soon to secure a roster spot.
It was real frustrating," Smallwood said after practiceMonday. "Just missing those reps, missing two straight preseason games, not being able to get better. You get better with those game reps and those practice reps, so I think I need to start taking advantage of every one I have."
Smallwood got hurt two weeks agoMonday, and although he returned on a limited basis last week, Monday'spractice with the Dolphins was his first with no restrictions since he got hurt.
He looked good. He looked fast and physical. And he said he finally feels 100 percent.
I think so," he said. "I feel good. Today I forgot about it. Wasnt even thinking about the injury. Didnt think twice about cuts, running, bursting, anything like that. I think I got it back.
"Its a huge relief just because last week practicing I could sense that it was still there and I was still kind of thinking about it, and the coaches could sense it, so being this week, Im full go, its not bothering me. You could see I got some of my burst back. Im good."
Eagles offensive coordinator Frank Reich saidMondaythat Smallwood is more of an every-down back than he first realized.
"You know, I think Wendell is a truethree-down back," he said. "When we first drafted him, I kind of looked at him as more like a first- and second-down back. I thought he would be OK on third down, but really he's turned out to be better on third down than I thought.
"So really I think he is a very versatile back who knows protections very well, who runs good routes, who catches the ball well. And then I think he's a slashing runner on firstand seconddown, so we like that combination. He's done very well. He works very hard at it. Love him mentally, and really glad he's in the mix."
Smallwood played well early last year before he admittedly got out of shape, hurt his knee and wound up on injured reserve.
He ran for 79 yards against the Steelers and 70 against the Falcons the Eagles' two biggest wins of the year before fading later in the season.
He said learning how to work through an injury is an important lesson for a young NFL player.
"Im definitely more equipped in my second year getting hurt than my first year because I dealt with it differently," he said. "I let it get to me a lot and kind of shied away from the game, but this year I got more into the game.
It was frustrating, but I stayed into the game plan, stayed in my playbook,[and]I didnt let it get to me. I stayed dialed in. It was frustrating to me, but I know what I can do and I know what Im capable of. Im right back out here and Im ready to go, and Im full go."
Much has been made of the Eagles' struggles running the ball this preseason.
LeGarrette Blount is averaging 1.9 yards on nine carries, rookie fourth-round pick Donnel Pumphrey has two yards on seven carries, Clement and Byron Marshall are both averaging under 4.0 yards per carry, and Darren Sproles and Smallwood haven't gotten any carries.
As a group, the Eagles' running backs are averaging 2.4 yards per carry.
The Eagles finish the preseason against the Dolphins at the LincThursday the first offense is expected to play into the third quarter and at the Meadowlands against the Jets, when most starters won't paly.
Smallwood knows people are already questioning the Eagles' running game.
We sense it, we hear it, but like Doug (Pederson) said, were not going to overreact, were not going to underreact," he said. "Its preseason, were going to get better at it, we know what were capable of doing. Were not going to let it get to us that much.
This game is going to be the one where we dial up the run and show how we can run the ball."
And it needs to be the game that Smallwood does the same thing.
Im definitely very hungry," he said. "I missed a lot of reps and missed a lot of game reps that could have made me better. So this is my chance to take it and go full throttle.
Its the game, man. Its my welcome home party. Im back on the field, going to go out there, I'm going to get some plays, Im going to get some runs, going to get some passes. Its real important for me."
Smallwood finished last year with a 4.1 rushing average, becoming only the fourth Eagles rookie running back to rush for 300 yards with an average of 4.0 or more in the last 35 years (also Correll Buckhalter, LeSean McCoy and Bryce Brown).
And he felt before the injury he had come a long way from his rookie year.
I definitely think I took that step," he said. "From last year to this year, I took that leap that I needed, and I think just my running, I was more dialed in, my shoulder pads were getting low, I was running through people instead of trying to run around. I wasnt thinking so much. I was just playing with confidence.
"Now Ive just got to do itThursdaynight and every day were out here at practice."
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NFL Notes: Bills' Anquan Boldin announces retirement - Comcast SportsNet Philadelphia
80 Percent Rule for Retirement – FEDweek
Posted: at 4:43 am
How do you determine how much money you will need in retirement? A lot depends on the retirement lifestyle that you desire. A person who wants to travel and has a large bucket list will need more money than one who has simpler needs. There are many schools of thought about how much money is necessary and we will look at one of them here.
The 80% Rule is a good guideline for those a long way from retiring who want to, at a minimum, retain the standard of living they had before retirement. Many financial planners suggest that 80% of your pre-retirement income will give you a retirement standard of living that is substantially similar to your pre-retirement standard of living. This is based on three assumptions:
First, you will not be paying payroll taxes (Social Security and Medicare) or making pension contributions (CSRS or FERS). For most federal employees, these mandatory taxes and contributions take 8.45% out of our paycheck. You will also not be contributing to the TSP out of your retirement income. Some employees (those hired on or after 01/01/2013 and special category employees) contribute more for their FERS pension and will, thereby save more after they retire.
The second assumption is that your mortgage will be paid off. Only you know if this will be true. A 2011 report from the Consumer Financial Protection Bureau said almost 1/3 of Americans 65 and over still had a mortgage and the average balance was $79,000. This report, though five years old, was cited in recent articles in the Los Angeles Times and on Bloomberg.com.
Third, your other expenses will be lower. Expenses that might go down are commuting, clothing, and food outside the home. Of course travel and recreation expenses might increase.
So, how do you get to the point where you will have 80% of your pre-retirement income? It requires significant and disciplined saving in the TSP and other retirement investments. Well look at a couple of examples and try to estimate how much we will need to save over and above our federal pension and Social Security. In these examples, we are looking at a federal employee who retires at age 62 after 32 years of service with a high-three salary of $100,000. Both of the examples are for regular employees.
If this employee were CSRS, her pension would be $60,250 and she would likely have no (or very limited) Social Security. She would be roughly $20,000 short of the 80% goal.
If this employee were FERS, her pension would be $35,200. Her Social Security would likely be in the vicinity of $20,000, giving her a total of $55,000. She would be roughly $25,000 short of the 80% goal.
This shortfall of 20% to 25% would have to be made up from sources such as the TSP or other retirement savings if these individuals were to have the same standard of living after retirement as they did before retirement. If we were to use another Rule put forth by financial planners, the 4% Rule, this would argue for a TSP balance in the vicinity of $500,000. The 4% Rule states that an individual has an excellent chance of not running out of money over a 30 year period (the age of 92 for the person in our example) if they begin withdrawing from a balanced portfolio at a 4% rate and then adjust that rate annually for inflation.
So, is it possible to have a half million dollar balance in your TSP at the time you retire? Well, it depends on how much money you have in your TSP today and how many more years you have to work. If youre in the early part of your career its not at all out of the realm of possibility that you could have more than $500,000 at retirement. The TSP website has several calculators available, including one called How Much Will My Savings Grow?, that can help you determine where you will be in the future. Of course, it asks you to make assumptions about your future salary and future investment growth, but it can give you an idea.
This article has looked at only your federal retirement benefits (CSRS or FERS pension, TSP and Social Security); we havent looked at other resources you might have such as IRAs, real estate, etc. Regardless of what were looking at, it is to your advantage to save early and save often.
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80 Percent Rule for Retirement - FEDweek
This person asked the internet if it was necessary to save so much for retirement the response was surprising – MarketWatch
Posted: August 15, 2017 at 2:48 am
When VintageBurtMacklin, as the Reddit user goes by, asked why everyone is advised to save so much for retirement and if it is really the right move the commenters of the personal finance thread of the online discussion site responded in full force.
Apparently, they have been paying attention to the news of the looming retirement crisis affecting the country.
VintageBurtMacklin shared his scenario: he took a new job after welcoming a new baby, and analyzed his budget, keeping in mind the typical advice that retirement savings should be maxed out before moving on to other financial goals, such as paying off a house or saving for college and new cars. While I understand the importance of saving for retirement, it seems to me that saving 12% of my pre-tax income will generate more than enough savings for our retirement goals, the Redditor said. He is 25, earns $80,000, expects to retire at 65 with a 6% estimated return and is contributing $900 a month before the 4% employer match that would leave him with about $2.5 million, or about $75,000 withdrawn annually, he estimated). He wondered if prioritizing retirement was the right decision, or overkill.
See: Money Milestones: This is how your finances should look in your late 20s
He got his answer. Reddit users took to the platform reminding him of other expenses hes not considering, such as possible illness, job loss, divorce, a stock market crash, health care and other long-term care planning, and even taking care of parents when they get older (caregiving is not just a physically demanding role, but a financially demanding one).
Your calculations are figured for perfection, one user wrote. Also remember your kids can borrow for college but you cant borrow for retirement. They also tore into his estimations explaining that interest rates are just coming from all-time lows and that there is no guarantee he will see a 6% annual return for the next 40 years. How does your planning work out if the market returns 3% per year in real terms?
Other commenters added that there are so many unknowns in the next four decades. I think its good to maximize retirement savings when you can as there may be periods of your life where youre unable to do so for one reason or another, SpidermansMom said. People shared personal stories: that user said her husband fell ill and lost his job, and they suddenly went from two salaries to one. He was too sick to watch their son, who stayed in day care, and she couldnt save as much for retirement, but felt comforted by the fact they had been maxing out their retirement plans for years before.
Another user said his perception of his retirement changed after his dad died at 69 and he realized hed personally rather have 15 solid years of retirement compared with his father, who only had three. Another shared that his father made $150,000 a year but today is unemployed with no money. Fortunes change, user palsh7 wrote. Dont assume anything. If youre still feeling good at 55, by all means, cut back, but right now you want to invest.
The notion of saving for retirement isnt lost on VintageBurtMacklin, or the people who responded to his post, but thats not the case for everyone. Americans are drastically under-saving for the later years of their lives, and need to take into consideration other expenses they may face when they become a senior citizen. Not all baby boomers are well equipped for their retirement, even though its coming soon: the generation born between 1946 and 1964 expect theyll have $658,000 in their employer-sponsored retirement plans by the time they retire (though the average in those plans is $263,000), according to a Legg Mason survey. Older baby boomers, between 65 and 74, have about $300,000.
Millennials like VintageBurtMicklin, on the other hand, have time on their sides, but many are paying off student debt, balancing other financial responsibilities and questioning if its really worth saving just a few bucks every month for their retirement. (The answer: It is.)
Ultimately, VinatgeBurtMicklin was convinced to keep maxing out his retirement savings for now and re-asses when retirement got closer or another life circumstance arose.
I need to remember that as life changes, I can adjust my contribution levels, he said. Contributing the most now makes the most sense, both considering my financial/family position and the value of compound interest.
Retirement is just a new opportunity – LA Daily News
Posted: at 2:48 am
Last week, L.S., who loved her work and achieved national recognition is struggling with the loss of identity in her retirement. Teaching engineers and managers from one-hour lectures to full five days at a time, she noted her sense of self-worth was in direct response to the adulation from her attendees. Without teaching and the consistent feedback she doubted her value. She asks, How does one deal with such a profound loss of identity?
A loss of identity in a society where we are defined by our work can be a challenge especially if the position yielded a bit of power, influence and made a difference. It becomes even more difficult if we felt passionate about the work, achieved recognition and identified strongly with the role.
Identity has a lot to do with validation. In our work world, validation is external and frequently comes in the form of a title, a responsible position, salary and from perks such as a car, expense accounts and being invited to luxurious retreats. Validation also comes from just making a difference and knowing you had a role in creating change.
During retirement, one of the biggest changes is the source of our validation from which we derive value. The shift from a full-time highly-charged career to whatever is next suggests that we may need to diminish the need for external validation and place equal or greater value on internal validation, the feelings that come from within.
We may ask ourselves questions such as Who am I? What is my role? What do I stand for?
Jerry Sedlar and Rick Miners, authors of Dont Retire Rewire! (2007, Alpha Books) outline a four-step process that can help affirm or re-establish an identity in the new life stage.
1 See retirement as a new opportunity.
2 Identify your personal motivators or drivers, i.e., what makes you tick. Examples that serve as motivators are authority, belonging, creativity, prestige, recognition and accomplishment. Consider using the drivers as a guide in selecting what you will do with your time.
3 Recognize the activities you want to pursue now.
4 Develop an action plan for engaging new activities that start to fulfill your vision.
Timing is important. One approach is to have a plan before you retire. The other is to take some time and think about whats next. It may be an opportunity to explore, take some risks and see this time as one of adventure, experimentation and most of all freedom. Much depends on knowing yourself and what goes into making a day a wonderful day a reason to get up in the morning and to smile at the end of the day.
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Lets take the perspective of creating an external identity by giving back. Here is just one example of a new organization with a timely mission.
Generation to Generation Los Angeles (Gen2Gen LA) has launched an inter-generational initiative to actively engage older, culturally diverse 50-plus adults to work with children (08 years old) in underserved communities across Los Angeles County. About 25 percent (220,000) of L.A. County children under 6 years old are living in poverty. Gen2Gen LA is working in partnership with local community agencies to recruit older adults as volunteers or paid staff to help prepare these children for success in elementary school focusing on their education and social readiness. Five communities are part of the first stage of this project: Pacoima, East Los Angeles Boyle Heights/Lincoln Heights, South Los Angeles, South Bay-San Pedro and Southeast Los Angeles. See http://generationtogeneration.org/communities/la/ and go to opportunities. This type of work can bring meaning, validation and a sense of personal identity while making a difference in these childrens lives.
L.S., thank you for your question. Perhaps engaging in this generation initiative would tap your teaching skills, providing a different kind of experience working with those at the other end of the age spectrum. Consider giving equal time to defining yourself from within, answering the question Who am I? Some say that the later years provide the opportunity to be rather than to do. I think both can happen at the same time. Best wishes in finding the right combination that works for you.
Send emails to Helen Dennis at helendenn@aol.com, or go to http://www.facebook.com/SuccessfulAgingCommunity
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Retirement is just a new opportunity - LA Daily News
What do you need to do to retire with $1 million? – Washington Post
Posted: at 2:48 am
Did I have you at $1 million?
Look, I actually think you shouldnt worry yourself sick about having millions saved for retirement even $1 million. How much you need to save to have a comfortable retirement depends on so much.
My grandmother Big Mama didnt have $1 million saved. She had exactly $20,000 saved. And you know how much she had when she died some 20 years after retiring?
She had $20,000.
Big mama lived off her Social Security benefit and a small pension. The key was she didnt want for much so she kept her expenses low. She paid off her home before she retired. And she hated debt so she didnt carry any into retirement.
But you may want more.
So what would it take to save $1 million or more for retirement? Heres some reading that may help you achieve that goal. How do I retire with $1 million?
Start with $10,000 and retire a millionaire
Do you need $1 million to retire? Maybe.
Now, heres the thing. Dont read these articles and get depressed. Dont get discouraged. Whatever you end up saving will help. Its better than not saving anything.Retirement rants and ravesIm interested in your experiences or concerns about retirement.
Did you retire early and if so, how did you do it?
Is retirement everything you hoped for?
Are you scared youll run out of money?
Your sharing might help others. So send your comments to colorofmoney@washpost.com. Please include your name, city and state. In the subject line put Retirement Rants and Raves.
Not a rant or a rave but John Wickizer of Arizona offered some great insight about retirement.
Hes 74 and his wife is 75. Both are retired. Its not money he wanted to talk about.
The reason I am writing is to alert those in retirement mode not to get overly caught up the lives of their adult children and grandchildren, Wickizer wrote. Will they at some point in their lives have to face financial challenges? Yes, you bet. Most of us who love our children and grandchildren want to make their lives as easy and comfortable as possible.
But take a pause. Maybe you shouldnt be giving so much,Wickizer says.
We have found the more we give to make their lives easier the more they want and/or need,he wrote. I know a lot of folks out there will say, Just cut them off. If it were only that easy! But there has to be a point of reasonableness, I have to make sure our needs are first met, then anything above our set retirement monies can be considered to aid others! I guess more than anythingits dealing with uncertain times both politically and economically, the state of our old world in balancing on a thin wire, no one knows what will bring our castles tumbling down! Just be wise in your giving! Good luck out there!
Love this advice!
Heres more reading on this topic. 6 Ways to Help an Adult Child Without Going Broke
An open letter to parents who financially support adult children
Id love to hear from retirees who are concerned that they are giving too much to helping adult children or grandchildren. Send your comments to colorofmoney@washpost.com
And if youve been in this situation and cut off the financial spigot help others. How did you do it?
Retirement blogI believe that wealth happens intentionally and this means for me reading as much as I can about all things financial, especially retirement.
In this section of the newsletter, Ill feature postings from various retirement blogs. Recommend a favorite blog post and Ill featured it in the newsletter (and give you credit for spotting it!). Send the link to colorofmoney@washpost.com
This weeks blog post by Squared Away had me at the title: Beach Reads for and about Old Folks
Who wants to spend their beach vacation reading about growing older? These recommendations just might surprise you, Kim Blanton writes.
Retirement assignmentThis week,I want you to do something. Go to ftc.gov and sign up to receive scam alerts from the Federal Trade Commission.
The latestscam alertwill help a lot of grandparents out there: Grandpa spots scammers
This story involves Lou, who knew someone was trying to scam him. But Lou, who is 87, was quick to spot the con, writes Seena Gressin, an attorney with the FTCs division of consumer and business education.
He knew it was a scam, almost as soon as he heard the young man call him grandpa. The caller said hed been arrested for drunk driving, needed money for bail, and wanted Lou to call a lawyer who would explain everything. (All while not telling, mom.)
Read this alert and the common tricks scammers use and then pass it along to someone elderly you know. (This is your assignment too. You may be quick to spot a scam, but others may not be so fortunate).
Every week from now on Im adding this new retirement assignment feature. Theres so much to know and keep watch on once you retired. Whether youre three or 30 years away from retirement you need to plan for the time you cant or dont want to work anymore. This means taking action.
So one week I might ask you to run the numbers on how much you need to save for retirement. Or I may have retirees find a scam seminar to attend.
To become or stay financial savvy, you have to work at it. I also want to hear how your home assignment went. What did you learn? Did the assignment make you change any of your plans? Did it save you money?
Send your comments to colorofmoney@washpost.com. Put Pre-retirement assignment in the subject line. Ill also be open to suggestions on what to assign folks.
Newsletter comments policyPlease note it is my personal policy to identify readers who respond to questions I ask in my newsletters. I find it encourages thoughtful and civil conversation. I want my newsletters to be a safe place to express your opinion. On sensitive matters or upon request, Im happy to include just your first name and/or last initial. But I prefer not to post anonymous comments (I do make exceptions when Im asking questions that might reveal sensitive information or cause conflict.)
Have a question about your finances? Michelle Singletary has a weekly live chat every Thursday at noon where she discusses financial dilemmas with readers. You can also write to Michelle directly by sending an email to michelle.singletary@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writers name, unless otherwise requested. To read more Color of Money columns, go here.
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What do you need to do to retire with $1 million? - Washington Post
The Freelancer’s Guide to Saving for Retirement – Barron’s
Posted: at 2:48 am
Freelancers often have high job satisfaction nearly 8 in 10 say they prefer it over a traditional office job. But so-called gig workers receive much less support than desk jockeys when it comes to planning for retirement.
Anyone who is self-employed is in the yoyo economy, says Ed Slott, a certified public accountant who specializes in retirement planning. Youre on your own (yoyo) in terms of figuring out and setting up your benefits. Nothing is done for you.
Alas, most gig workers are not nailing the job of being their own retirement plan sponsor. Less than 4 in 10 self-employed workers surveyed by financial service firm Aegon report that they are habitual retirement savers.
Granted, its not financially or psychologically easy to siphon off hard-earned income today and tuck it away for four or five decades. But its crucial for young workers to get started early so they can benefit from compound interest.
Heres how to get your own retirement plan up and running:
Create an automatic savings plan. The most important step is to get in the habit of saving, says Catherine Collinson, president of the Transamerica Center for Retirement Studies. The only way to ensure this will happen is to commit to having automatic deposits made into a retirement account from your checking or savings account. And when you have an especially good month, save even more.
Start with a Roth Individual Retirement Account (IRA). You can contribute up to $5,500 this year into an IRA. (Some perspective: thats $106 a week.) If you can manage to pull that off in 2017 and leave the money growing for 40 years at a 7 percent annualized rate, you will have more than $80,000 waiting for you when you eventually retire. Manage to save that much each year for 40 years and you will have more than $1 million.
There are two types of basic IRAs: A Traditional IRA and a Roth IRA. The Roth IRA is your best option as it entitles you to tax-free withdrawals in retirement. Individuals with income below $118,000 and married couples filing a joint return with less than $186,000 can make the full $5,500 contribution this year. Many financial service firms such as Fidelity, Schwab, TD Ameritrade and Vanguard offer a lineup of low cost mutual funds or exchange-traded funds. (See this article for a quick and easy guide to building a diversified portfolio).
Check Out a Solo Roth 401(k) if you can save more than $5,500 a year. Once you are ready to set aside more for retirement you can opt for a SEP-IRA or a Solo 401(k).
You can save in a SEP-IRA (thats short for Simplified Employee Pension Individual Retirement Account) if you are self-employed. A SEP-IRA is akin to a Traditional IRA, in that contributions qualify as a tax deduction in the year you make the contribution. While a regular IRA allows you to save up to $5,500 this year, the contribution limit for a SEP-IRA is $54,000 or 25 percent of your income, whichever is less.
There is no Roth version of a SEP-IRA that allows you to invest after-tax dollars today with the payoff of tax-free income when you retire. (All money withdrawn from a Traditional IRA or a SEP-IRA will be taxed as ordinary income.)
Thats where a Solo 401(k), also known as an Individual 401(k), comes into play. Some brokerages, including E-Trade, TDAmeritrade and Vanguard offer a Solo Roth 401(k) option. The tax treatment is identical to a Roth IRA: you invest after-tax dollars today for the right to make tax-free withdrawals in retirement. There is no income limit to be eligible for a Solo 401(k)-Traditional or Roth version-and you can set aside even more than the $18,000 limit on regular employer-provided 401(k)s.
If you have both a SEP-IRA and a Solo Roth 401(k) you can toggle between them, says Slott. In a year when you have a lot of income, maybe use the SEP-IRA so you can get the tax deduction on your contribution. In a year you earn less and the tax deduction isnt worth as much to you, fund your Solo Roth 401(k).
The rest is here:
The Freelancer's Guide to Saving for Retirement - Barron's
Washington state maritime labor headed for a retirement cliff – The Seattle Times
Posted: at 2:48 am
Water-transportation workers face an impending mass retirement of almost a third of the workforce. A lot of the jobs pay well, so why arent young workers flocking to them?
When Capt. Ken Penwells son was looking for a job, Penwell offered to get him work as a deckhand. Penwell captains hopper dredges for Seattles Manson Construction, sucking up dirt and clay from river beds.
But Kyle Penwell didnt want to go into his fathers career.
Dad, I dont want to be gone that long from friends and family like you were, the father recalled his son saying.
Ken Penwell has been in the maritime industry 37 years, and in his first job he was gone for five months at a time. He texts and calls his family as often as possible, but the job has taken a toll. Penwell has been separated from his wife for 10 years.
Penwell is 60 and hoping to retire soon. Hes not the only one: The marine workforce in Washington which includes sailors, engineers, captains and other workers on everything from tugboats to shipping vessels is headed for a mass retirement. Close to a third of the states almost 6,000 water-transportation workers alone are older than 55, according to 2016 data from the Census Bureau.
Were just about at a cliff, said Joshua Berger, director of economic development for the maritime sector of the U.S. Department of Commerce. He says this issue is the maritime sectors biggest concern right now.
For years, young people havent been entering the maritime trades in numbers sufficient to fill holes left by old workers, Berger and other experts say. Seamen, captains, pilots, engineers, shipbuilders, dock workers, and even galley cooks, among others, are getting older and older with few qualified people to take their place.
Some sectors are in crisis mode: This problem could keep Washington State Ferries (WSF) from sailing, according to ferries spokesman Ian Sterling. Approximately 40 percent of the ferry systems vessel employees are eligible for retirement in the next 5 to 10 years, and around 88 percent of the ferries captains.
Frankly, we are already too late to address our problem, Sterling said.
Maritime workers help support a $17 billion industry in Washington. The average maritime laborer in Washington made almost $67,000 a year in May 2016, according to the Bureau of Labor Statistics; a captain, mate or pilot made almost $84,000.
So why arent young people going down to the docks to get jobs like their parents did? In answers to this newspapers callout to readers, mariners gave a range of reasons: schools steering students toward college and away from blue-collar labor, the training and tests hopeful mariners have to complete, the tough nature of the work, and notions that the industry is old and dirty.
Maritime labor isnt easy. Robert Robison followed his father into tug boating, but he understands why many of todays young people dont want to do it. Hes 57 and has worked on tugboats for 29 years, and hes retiring as soon as possible.
Id retire today if I could, Robison said.
Robisons work in the ocean division of tug boating takes him across the Pacific. He recently returned from a 90-day trip from Seattle to Hawaii to Korea to Japan to Russia and back.
This work isolates him from life on the mainland: In the past, hes been called to sea for months and months with little notice.
Someone says, Im having a party a wedding in September, can you come? Robison said. I dont know if I can make it.
When Robison started in tug boating, the only way he could call his wife was at pay phones wherever the ship stopped. Hed wait in line with change, call home, and sometimes his wife would be at the store.
Its brutal if you have small kids, Robison said. Its extremely hard on marriages.
But Robison has been married 28 years. Today, ships have internet, but on his tugs, its as slow as dial-up used to be, he says.
When Robison is at sea, he works four hours and then rests for eight. The work is often physical. A few weeks ago, he tore the rotator cuff in his left shoulder while lifting a 100-pound tow shackle.
During rest shift, hes often so bored hell sleep to make the time pass faster. Theres not much to do on a small tug like the Michele Foss, which is the size of a big double-trailer with two locomotive engines down bottom.
Its like being in jail on that boat, Robison said.
Not every maritime job is as hard as Robisons. Many tug boaters deploy for only two weeks at a time. Shipwrights and longshoremen dont have to go to sea, and ferry workers can come home after every shift.
But for some, the sea is a welcome change from life on land. Geoff Dickgieser is a student at Seattle Maritime Academy who is interning on a steam ship in the Bering Sea.
All the problems and complications of life at home are far away, Dickgieser said via email, his only steady connection with the outside world when hes at sea. Theres really nothing you can do about them from out here, so they tend to just fall away.
The days of walking down to the docks and getting a job are long gone. Today, many entry-level jobs require hours of training and certifications from the Coast Guard. Crews on ships are smaller, and each job requires more skills than it used to, according to Vince OHalleran, Seattle branch agent for the Sailors Union of the Pacific, which represents around 1500 mariners in Washington.
In 1970, a 14,000- to 16,000-ton ship would have a crew of 56, OHalleran said. Today, 21 can staff a vessel twice that size. Todays ships especially large vessels are run by computers and require electricians and crew with knowledge of computer science, because you cant call IT from a ship.
In the old days, jobs were easy to get, plentiful, and cities were full of mariners. It was easy for people like Robison to walk off the street and walk onto a tugboat, Robison said.
Today, students dont hear about maritime jobs in high school, according to many advocates and mariners.
How do we get past the perception that the trades are for if you couldnt get into college? said Sam Laher, a shipwright who teaches in the Wood Technology Center at Seattle Central College (SCC). Laher is the son of a lobbyist and a lawyer who wanted their son to go to college. But college wasnt for him: He dropped out and joined the Coast Guard in 1995.
Laher had always wanted to work with wooden boats, so after he left the Coast Guard, he enrolled in SCCs marine-carpentry program in 2002.
Theres no one to work on these boats, Laher said. Marine carpentry is seen as a dying trade.
Its not just wooden boats that need workers. Vigor Industrial, the dominant shipbuilder in the Northwest, has been struggling for years to find enough job applicants for welding, pipe-fitting and other shipyard jobs. Sue Haley, Vigors executive vice president of human resources and administration, has been working on this problem for over six years.
This is definitely my life here, Haley said. We have craftsmen here who are in their 70s.
The company has partnered with public colleges to open training centers in Alaska, Portland and Seattle. In 2013, it worked with South Seattle College to open a training center on Harbor Island where Vigor provided the equipment and workplace, and the college provided the instructors and courses.
Vigor hires the majority of the graduates from this program. The result: Vigors average age is 46 today, where it was 54 six years ago.
Intern Sebastian Jewell takes the quartermasters place at the wheel of the ferry Cathlamet on his last run of the day. Jewell will start his senior year at California State University Maritime Academy in the fall, but this summer hes been at work starting at 5 a.m. daily on the Washington State Ferries. The pay is $50 a day.
Jewell is part of a team of 21 interns from Seattle Maritime Academy and California Maritime whove worked in the engine rooms, decks and wheelhouses of Washingtons ferries all summer.
Jewell says the old deck crew have passed on a lot of wisdom to him, from how to navigate between sail boats to advice about deferred compensation.
Theyre the wealth of knowledge, Jewell said.
This summer for the first time, WSF has even started inviting nonmaritime students to come onboard in the hopes that theyll be inspired to go into maritime labor like Jewell.
Jewell grew up in Bellevue, but hes the only one in his family whos ever gone into maritime labor. Hes fallen in love with the ferry system, where he can be home every night and on the water every day.
Every boat has its own feel, Jewell said. Theres lots of wisdom even in the boats themselves.
For these old boats to keep sailing, Washington is going to need to find more young mariners like Jewell.
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Washington state maritime labor headed for a retirement cliff - The Seattle Times