Archive for the ‘Retirement’ Category
Raw: Shuttle Inches Toward Retirement Home in LA – Video
Posted: October 14, 2012 at 7:13 am
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Raw: Shuttle Inches Toward Retirement Home in LA - Video
Kalmadi not to contest IOA election, hints at retirement – NewsX – Video
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Kalmadi not to contest IOA election, hints at retirement - NewsX - Video
Jill on Money: Retirement saving and investing
Posted: at 7:13 am
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Elizabeth from NC, a new listener to "Jill on Money" kicked off the show with a multi-part question about her retirement accounts. We started with the best way to use her current plan and then moved onto old account consolidation and allocation.
Kevin from MI also had retirement account questions, because he is trying to juggle his 401K and his Roth contributions. (Check out Roth limits on the IRS web site.) Don't worry if you overfund your Roth, because the IRS allows you to remove the excess contribution by October 15 of the year following the year of contribution. If you do not remove the excess contribution (and the gains associated with it) by that date, you will be subject to a 6 percent excise tax on the excess contribution.
Paul from Buffalo was recently laid off and he wants to know whether at the ripe old age of 56, he has enough money to retire for good. I think he knew the answer to his question, but listen to the steps necessary to determine what he needs to do.
With four years to go before retirement, should Fay from KY pay down her mortgage? Here's your big hint: the only funds available are in retirement accounts!
Both Bill from AZ and Arthur from TX are in great shape for retirement. Bill has two old retirement plans that he wants to pass on to his kinds, while Arthur should have over $3 million in retirement assets when he retires in 5 years. Given his time horizon, it's a perfect time to meet with an advisor, preferably one who is a member of NAPFA.org. Finally, John from Seattle and his wife have $400 to put towards retirement and want to know where and how to invest it.
Here are web sites and resources mentioned in this week's show:
Retirement plans can come with several options
Posted: at 7:13 am
When most Americans hear the term retirement plan, they immediately think 401(k). However, what many people do not know is that there are other retirement plan options that cater to small businesses. Since about half of Americans are employed by small businesses, some of these options make a great deal of sense for the business owner who wants to help his employees prepare for retirement while avoiding the expense and complexity of the conventional 401(k) plan.
For once, something is SIMPLE: The SIMPLE IRA was designed with the small business in mind. In fact, it is reserved for companies with 100 or fewer employees who earn at least $5,000 annually. With the SIMPLE, employees are allowed to contribute up to $11,500 of their salary, and all contributions made to this account are tax-deductible. Individuals who are older than age 50 have the opportunity to defer an additional $2,500 per year for a total of $14,000. Also, businesses can make matching contributions on their employees behalf, which is tax deductible to the company.
Another attractive feature of this plan is the flexibility of investment options. Since this is an IRA, employees can invest their contributions into several options including stocks, bonds, mutual funds, and exchange traded funds.
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SEP IRA: Even though the SIMPLE IRA provides an easy retirement plan option for many business owners, its contribution limits are not as generous as other plans. The SEP IRA is an alternative to the SIMPLE that allows business owners to contribute the lesser of $50,000 or 20 percent of their net income annually to the plan. While procrastination is not recommended, this plan offers companies the privilege of waiting until the tax filing deadline, plus extensions to make tax-deductible contributions to the plan.
Another point of interest is the suitability of this plan. The SEP IRA is a good option for family owned and operated companies, but it is not always the best option for all small businesses. While contributions are not required, 100 percent of the contributions are made by the employer. Therefore, this may not be the first choice option for business owners reluctant to make contributions to employees that extend beyond their immediate families.
Safe Harbor 401(k): Sometimes business owners want to contribute more than the SIMPLE IRA limits, but do not want to be obligated to make contributions on their employees behalf. In these situations, the Safe Harbor 401(k) often presents a viable option. This plan allows employees to defer up to $17,000 of their salary per year and a catch up contribution of an additional $5,500 for those over age 50. In this type of plan, companies have the option to make matching contributions or a required contribution even if the employee does not contribute. The employers choice will depend upon many variables primarily cost and employee satisfaction.
Today, more than ever, business owners have several options to help themselves and their employees prepare for retirement. By consulting with your accountant and financial advisor, you can determine which plan is appropriate for your needs and begin making contributions for one of the most anticipated milestones in your life. To find more information, visit http://www.retirementplans.irs.gov.
Life is a journey, plan for it.
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Retirement plans can come with several options
Shuttle Endeavour begins slow trek to retirement – Video
Posted: October 13, 2012 at 2:13 pm
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Shuttle Endeavour begins slow trek to retirement - Video
The Forum: Kobe’s Retirement Plan – Video
Posted: October 12, 2012 at 11:19 pm
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The Forum: Kobe's Retirement Plan - Video
Six Ways to Bear-Proof Your Retirement
Posted: at 11:19 pm
Following the news that bull markets make people more likely to retire -- and that doing so can put their future finances in danger -- it's important for savers to review how market returns can affect their retirement planning.
On one hand, it's understandable why more retire during strong market conditions: People have a retirement savings target in mind, and bull markets can help more people reach those targets. The problem is, given the normal cycles of market returns, retiring at a peak could leave you vulnerable to the next bear market.
Ideally, you shouldn't let recent returns influence your retirement planning too much. Keep these six things in mind when a run of good returns has you thinking you should retire a little early.
1. Don't skimp on contributions if you get ahead of target
When market returns are strong, people tend to feel they can skip contributing to their retirement plans, because those returns seem to be adding to the portfolio fast enough. Market returns need to be viewed as cyclical, so good returns one year may have to make up for disappointing returns the next. Meanwhile, savings rates should be based on your long-term needs, not the current value of your portfolio.
2. Remember that an early retirement requires more funding
If you hit your retirement savings target a little early, you might need a higher target to account for the fact that if you retire early, you'll have to live off those savings for a longer time.
3. Be sure to account for low interest rates
One of the biggest changes in retirement assumptions in recent years is the fact that interest rates, from bank rates to bond yields, are nowhere near their historical norms. That means it takes a bigger portfolio to produce an adequate amount of retirement income.
4. Don't retire as soon as your portfolio reaches your target
The Perfect Brew for a Fulfilling Retirement
Posted: at 11:19 pm
For coffee lovers, there is nothing better than the smell of freshly ground beans in preparation for a satisfying cup of java. A fragrant aroma fills the room as the brew trickles through the filter, requiring real self control to not tip the pot just a bit to steal a cup before the process is complete. But that patience pays off when you nestle in your hands that steamy, rich mug of dark wonderfulness and savor the first sip. Preparation along with the proper ingredients, patience, and a commitment to the end result can make baristas of us all. That same strategy of preparing and planning using the right equipment and ingredients can apply to living a fulfilling retirement:
Good coffee takes effort. Living a meaningful retirement also requires considerable foresight. Few of us are born with an innate ability to make the perfect cup of coffee right off the bat. We need to find just the right beans for our personal taste, decide if we prefer drip or espresso, determine the ideal grind, and learn the right amount of milk to add. It takes practice, a bit of trial and error, and we need to stick with it to get it just right. If we dont plan ahead, we may end up with a passable brew, but not the best cup possible.
Just as we sample different coffee beans to find out what we like best, we should experiment with and pursue different passions in retirement. Possibilities that intrigued us at a time in our life when we could not chase them are now ready to be explored. If one retirement goal does not work out as we would have liked, we can try another. And just as our tastes in coffee can change over time, we should also be prepared to shift gears in retired life to pursue new passions that excite and inspire us.
We look forward each day to a fresh cup of perfect coffee. There is nothing better than the first cup of coffee in the morning. Our anticipation helps get us out of bed, and once we are sipping our beverage, we feel ready to undertake the day. Living a fulfilling retirement is similarly empowering when we have things to do that we are passionate about. We cannot wait to get out of bed and start the day knowing that we love what we will be doing. With this inspiration waiting, we can look forward to each day and all that it has to offer.
The right coffee beans and equipment are key. Fresh, good-quality beans, crystal clear water, and the right grind for the cup you desire help you realize the best results. Retirees also need the right ingredients to live a fulfilling and meaningful life. Good mental and physical health are essential. A positive outlook and optimism about the future will also considerably improve your retirement years. Stir in your passions to inspire your retirement years. All of the right ingredients can combine to give you the perfect retirement environment that is both relaxing and meaningful.
If the cup gets a bit cold, you need to heat things up. Getting the most out of retired life requires us to sometimes step outside of our comfort zone to stir things up a bit. We may be happy with the status quo for the moment, but boredom can also creep into your retirement years. Adding some variety can help boost the excitement level. Who wants to drink a cold cup of coffee or live a boring predictable retirement? To heat up your retired life, be creative and take a chance at something you have never done before.
Dave Bernard is the author of Are You Just Existing and Calling it a Life?, which offers guidelines to discover your personal passion and live a life of purpose. Not yet retired, Dave has begun his due diligence to plan for a fulfilling retirement. With a focus on the non-financial aspects of retiring, he shares his discoveries and insights on his blog RetirementOnly the Beginning.
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The Perfect Brew for a Fulfilling Retirement
Retirement: The Scary Numbers Behind The Soothing Lies
Posted: at 11:19 pm
The state of Americans retirement accounts is dismal is how ConvergEx's Nick Colas begins his critically important-to-read note on the reality that millions face. According to an early 2012 study by the Employee Benefit Research Institute, Colas notes only 58% of us are currently saving money for retirement and 60% of those that are have less than $25,000. Thirty percent have less than $1,000. Needless to say, its a far cry from the 8x-10x final earnings suggested by most retirement planners. So why are we so far behind? Americans arent exactly known for impressive savings habits, but that alone does not explain our poor preparation for retirement. Rather, a general lack of financial literacy, including basic understandings of savings growth and retirement income needs, superseding financial obligations, and basic behavioral finance biases keep us from putting cash away. But if we keep up at this pace, you can expect the ongoing political debate about Social Security to take on new and more strident tones.
Via Nick Colas (and Sarah Miller) of ConvergEx: Hope I Die Before I Get Old
Note From Nick: I dont remember anything about being 23. Or 24. Or, well, you get the idea. But understanding the financial decision making of this cohort is a useful exercise, especially when it comes to investing for retirement. Happily, Sarah is in the thick of these decisions and is, in fact, 23. It is pretty easy to see the long shadow of an important social problem from her narrative. If you think the debate over Social Security is raging now, just wait a few years. And now, over to Sarah
Ive been at ConvergEx for just over a year now, and Im happy to say Ive survived 12 months at my first job in the real world after college. Id like to think Im a bit smarter than I was when I walked in here last year. When I was given the employee handbook with all the options for healthcare, restaurant discounts, and pre-tax transportation contributions, I admit I had no idea what to choose. So I did what any 22-year-old Millennial child would have done: I called my parents. I figured my mother, who works in healthcare, and my father, the finance professional, would be the best advisors for these kinds of decisions.
After deciding on my options for healthcare and transportation, we finally came to the 401k something I had certainly heard of, but never really confronted. At 22, retirement savings was nowhere near the top of my priority list; and having just moved into New York City, I was not keen to tuck away part of my paycheck that could have been redirected towards some other expense. After all, wouldnt that money serve me so much better as a new pair of boots than it would in some account? Part of me is still inclined to say YES!. But knowing my parents probably knew more about this than I did, I followed their advice and put a whopping 1% of my paycheck towards the 401k.
Little did I know that only one year into my employment, at the age of 23, I would be farther ahead in my retirement savings plan than millions of American workers. According to a March 2012 survey by the Employee Benefit Research Institute for retirement confidence, the majority of Americans are vastly underprepared for retirement, with very few savings or even none at all. A few key takeaways from the report, which can be found here:
But why the lack of preparation? Several complementary reasons might reveal the answer:
1. Lack of financial literacy. Americans on the whole are not versed in the ways of financial planning. A study by Lusardi and Mitchell in 2005 found that less than half of a sample of US adults 50 and older was able to answer simple questions about inflation and compounding interest. Another study, by McKensie and Liersch in 2011, showed that a majority of adults misunderstood savings growth: they expected it grew linearly rather than exponentially, therefore underestimating the potential return a small investment could have over several years. When exponential growth of savings was demonstrated, real employees chose to save more for retirement (see the study here). To top it all off, 34% of those surveyed by the EBRI estimated they needed less than $250,000 to retire.
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Retirement: The Scary Numbers Behind The Soothing Lies
How to Spend and Save Confidently for Retirement
Posted: at 11:19 pm
When it comes to retirement readiness, most of us dont feel adequately prepared.
The number of Americans who report making financial preparations for retirement dropped to 70% in 2012, the lowest level in three years, according to Ameriprise Financial's 2012 City Pulse Index. While 63% of respondents report having set money aside for retirement, only 37% feel on track for retirement.
The study, which examined consumer retirement planning in the 30 largest U.S. metropolitan areas, highlights why would-be retirees are staying in the labor market longer to help shore up their nest eggs.
People are going to need to make more provisions to take care of themselves, not less. The whole issue is having adequate cash inflows during retirement to live the lifestyle that an individual wants, says Mark Lee, a certified public accountant with Business Legacy Consulting in Massachusetts.
The survey found that the country's most prepared and retirement-confident residents reside in Hartford-New Haven, Conn.; San Diego; and Minneapolis-St. Paul. The least prepared cities are Indianapolis, Charlotte and Washington, D.C.
The findings come at a time when rising costs of health care, Social Security, taxes and Medicare are pinnacle issues on the presidential campaign trail. In fact, all these topics were discussed at length in the first presidential debate.
More than half of survey responders indicated that President Barack Obama and Gov. Mitt Romney's positions on these topics were very likely to influence their vote. More than one- quarter said Social Security and health care changes would jeopardize their retirement plans.
With only 20% of the workforce feeling financially secure enough to retire before 65, according to the survey, the labor market and economy will continue to struggle as boomers continue to save more, spend less and remain in the workforce.
To ensure being financially prepared to retire, experts advise constantly evaluating spending and saving habits, establish and invest in an a savings vehicle and keeping up to date on new investing tools and regulations. Here are six of their best tips:
Write a detailed retirement Plan. Calculate how much money youll need to cover your essentials over the course of a 30-year retirement and then add discretionary expenses inflation and health care into your projections, says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial.
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How to Spend and Save Confidently for Retirement