The oldest Baby Boomers began turning 66 this year the full-retirement age for collecting Social Security benefits but many are claiming their benefits early because of the troubled economy, poor job market and fears about potential changes to the retirement system.

Unfortunately for some retirees, the decision to claim their benefits early could cost them tens of thousands of dollars down the road.

Three out of four eligible Miami Valley area residents start taking Social Security retirement benefits early, even though for some people the decision will permanently reduce their lifetime payments and could cost retirees or their spouses some important income later in life, according to a Dayton Daily News analysis.

Social Security is the primary source of income for many older Ohioans and delaying benefits until the full retirement age or beyond increases the size of the monthly payments.

Ohioans who are in good health, intend to keep working, expect to live a long time and have spouses may want to delay claiming benefits because oftentimes it turns out to be a better financial decision in the long run, experts said.

For some people its worth taking early, like if you are unhealthy, you become unemployed or your investment returns are low or you really, really need income, said John Bowblis, assistant professor of economics and research fellow with Scripps Gerontology at Miami University. But for the typical person, waiting until 66 is probably going to be a better solution.

Social Security retirement benefits are provided to people who have worked for at least a decade, and the payment amounts are based on workers 35 highest earning years.

People can begin collecting Social Security benefits when they turn 62, but the full retirement age is 65 for people born in 1937 or earlier, and 67 for people born after 1960. Taking benefits before reaching the full retirement age reduces the size of the payments. People who retire at 62 will on average receive a monthly payment about 25 to 30 percent less than if they waited until their full retirement age.

Delayed benefits yield larger payout

Every case is different, but people who start receiving benefits earlier get smaller amounts because they are expected to receive more payments, and people who delay collections receive larger payments because they will receive fewer of them.

Continued here:
Ohioans are taking retirement benefits early

CHICAGO -- A decade ago, Christopher Thornton, a high-level recruitment specialist, thought he would retire in 2012. He envisioned traveling, volunteering, maybe working part-time just for fun.

But those retirement dreams have been dashed. Since the economic downturn, his pricey Chicago town house has lost nearly a fifth of its value. He said his investments, though slowly recovering, at one point had been gouged by 45 percent.

Still, Thornton, 59, counts himself among the lucky ones. He's seen too many friends lose their jobs and their health care, and exhaust their savings.

"Every morning I wake up and I fear I might be next, and it's unsettling," he said. "At the beginning of your career, you think there's a start date and an end date. And now for a lot of people in my generation, there's no end date in sight."

Americans of every generation are readjusting their expectations in the wake of a devastating recession. And none more so than the nation's baby boomers, who are reaching the traditional retirement age and finding it means only more uncertainty and more work.

Many are scared, but others are angry. They played by the rules, had successful careers, cared for their families and sacrificed for retirement. Then the recession ate away at their investments and home value, and in some cases swallowed up their jobs. Now comes an election in which Medicare, Social Security and other entitlement programs are on the

As baby boomers scramble to recoup their losses, perhaps what has eroded most is their confidence and faith in the American dream. And many aren't sure Washington has the ability or will to restore either -- despite the many campaign promises aimed at this huge group of voters.

Steven Sass, associate director of the Center for Retirement Research at Boston College, said the job picture for older workers has undergone a major transition, and politicians, employers and employees have not yet adjusted.

"What has happened is really shocking," said Sass. "In 1983, once you got to age 50, about 68 percent of all full-time workers stayed in the same job until retirement. You didn't leave unless you were fired."

But in recent years, only half of workers have retired from the same company that employed them when they were 50,

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Retirement dreams deferred

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

06-09-2012 13:58 Like us on Facebook: Follow us on Twitter: Mel Gibson has one of the most expensive divorces in Hollywood history. Mel Gibson was already reportedly ordered to fork over half of his 800 million dollar fortune to his ex wife Robyn Moore. But since these two had no prenup, she will also receive a large portion of his retirement benefits.

See the article here:
Mel Gibson's Ex-Wife Gets $400 Million And His Retirement Fund - Video

Does your retirement plan consider tax issues? It should -- or it could cost you valuable post-work money.

Taxes don't end when you stop working. Federal and state tax issues come into play in several retirement income areas.

Retirement savings

The key focus of all retirement plans is ensuring you have enough money to live the retirement lifestyle you want. While you were working, you took advantage of workplace savings accounts such as 401(k) plans and individual retirement accounts.

If your IRA is a Roth account, you don't have to worry about tax issues with the Internal Revenue Service. You paid taxes on the money before you put it into your Roth IRA, and its earnings have grown tax-free. That means you don't owe the IRS anything on your withdrawals once you retire.

But if you're depending on traditional IRA or 401(k) funds, you will owe taxes. You never paid income taxes on the workplace plan or deductible IRA contributions. Plus, the earnings of these accounts are tax-deferred, meaning you owe tax at your ordinary income tax rate on money you take out in retirement.

And if you've delayed distributions so as to postpone those taxes for as long as possible, remember that the required minimum distribution, or RMD, rules compel you to withdraw certain amounts when you turn 70 . The IRS has life-expectancy charts, the most common one being the Uniform Lifetime Table, that help you calculate how much to withdraw. Traditional IRA, 401(k) withdrawal rules

Withdrawals are required from all tax-deferred retirement accounts once you turn 70 . The account distributions are taxed at ordinary income tax rates. If you made nondeductible contributions to a traditional IRA, information on IRS Form 8606 you filed reporting those contributions will help you avoid paying taxes on that money again when you withdraw it. The IRS has three required minimum distribution tables to help you figure the amount to withdraw. Basically, the longer you are expected to live, the less the IRS requires you to withdraw, and pay taxes on, each year.

Taxable Social Security

Your private retirement accounts are designed to supplement your Social Security benefits.

See the article here:
Tax Issues You Could Face in Retirement

Retirement home owners who face large exit fees when they sell or sublet the property will find their costs cut considerably after the Office of Fair Trading (OFT) forced one of the larger providers to curb its fees.

Fairhold, which has 53,000 retirement home leases and owns many of the freeholds for former McCarthy & Stone properties, has agreed to change its structure for charging tenants. In the past it has levied transfer fees of 1pc. It will now not charge a transfer fee for new leases that it obtains through acquisition or development, and will impose fees only for a service that it undertakes.

The OFT has been investigating these fees, also known as exit fees, which are payable when a tenant sells or lets out their retirement home and in some other situations. Typically calculated as a percentage of the value of the property, these fees can amount to thousands of pounds. Fairhold has said leaseholders will not pay any transfer fee when the lease is passed on through inheritance or surrendered, or if a relative or carer moves in with the elderly tenant.

A flat fee of 85 will now be charged for subletting, which replaces the current fee of 1pc of the property's value. The OFT said the change should make it more affordable for tenants not living in their property to sublet it.

Fairhold also indicated that it will not enforce any transfer fees on properties that it may acquire from developers in the future. The company said it "welcomes" the conclusion of the uncertainty which has arisen as a result of the discussions with the OFT.

The OFT is still investigating the fees charged by other retirement home companies and said it hoped to provide an update in the autumn.

The rest is here:
Retirement home group backs down on exit fees

Some Americans may be better prepared for retirement than they realize.

About 56% of baby boomers and Generation X (people now between about ages 38 and 65) are saving enough to cover their basic retirement costs, including uninsured medical expenses, according to a recent projection by the Employee Benefit Research Institute, a Washington-based nonprofit think tank.

The bad news is that 44% aren't saving enough, and some of those people are on the lowest rungs of the income ladder, so they may have little opportunity to ramp up their savings as they age.

Still, while some people face a troubling retirement outlook, others in that 44% group can take steps to get their savings on track.

"Some Americans face a retirement crisis, but it isn't the majority," said Stephen Utkus, the director of Vanguard Group's Center for Retirement Research.

"For the longest time, studies have always pointed out that about 50% of Americans seem clearly ready for retirement," he says. But it's a mistake to assume the other half is in deep trouble.

Instead, Utkus says, people fall along a spectrum of retirement readiness, with 20% to 30% of Americans "partially ready" for retirement.

"A significant number of people can take some steps between now and retirement to move the dial and get to 'prepared,'" he says.

More:
How to avoid retirement crisis

(MoneyWatch) Earlier this year, I wrote about a study from Boston College's Center for Retirement Research (CRR) that suggested the vast majority of households will be financially ready to retire by age 70, and that almost half of households could retire at age 65.

Not so fast, says the Employee Benefit Research Institute (EBRI). EBRI recently released a report that suggests that the lowest-paid quartile of workers will need to work until age 84 before the majority would have a 50/50 chance of success in retirement, and that the second-lowest paid quartile would need to work until age 81 to have the same odds. Those in higher-paid groups have a better chance of success: The top-paid quartile would need to work until age 65, and the second-best paid quartile would need to work until age 72 for a majority of people in these groups to have a 50/50 chance of success.

So what are the differences between these two studies? And do either of the results apply to you?

First, it's important to consider that the primary audience for these studies is policymakers and analysts at government entities, nonprofit organizations, and businesses; individuals planning their retirement aren't who these studies are aimed at. Policymakers and analysts need this type of analysis to determine if changes are desirable or needed in government and employer-sponsored retirement programs, and if they need to encourage additional levels of savings.

Second, it's important to realize that any study needs to make a number of assumptions regarding a variety of important factors, such as rates of return on retirement savings, levels of future contributions to retirement savings, the age when people begin drawing their Social Security benefits, how long citizens will live and so on. When reviewing the results of these studies, you need to first determine if these assumptions apply to your circumstances.

For example, the CRR study assumed that citizens would make optimal decisions regarding when to start drawing Social Security benefits and how to deploy retirement savings to generate retirement income, and that people would use their home equity to enhance their security in retirement. Actual experience suggests, however, that most people don't make the wisest choices regarding Social Security commencement and deploying their retirement savings, and that many people don't tap into their home equity to fund their retirement.

One key difference between the two studies is that the EBRI study takes the potential for high expenditures for medical and long-term care expenses into account, whereas the CRR study didn't. But long-term care is the wild card of retirement: If you incur long-term care expenses, your financial resources might get drained quickly, whereas you might fare quite well in retirement if you are lucky enough to escape these expenses.

One critical assumption that both studies make is that individuals and households will maintain the same standard of living in retirement that they did before retirement. "Maintaining the same standard of living" usually means having the same amount of after-tax income during retirement that you had while you were working.

But that just won't be the case for the vast majority of Americans, who will need to adopt some combination of working in their retirement years and drastically reducing their living expenses in order to have enough money to live on during their retirement. The number one strategy named by retirees for surviving in retirement is management of their living expenses, and both of these studies confirm that this strategy will be needed for future retirees.

How much longer do you need to delay retirement? A retirement plan for the working 99 percent Retiring baby boomers: Dropping out to make every dollar count? The biggest retirement planning mistake of all

Read more here:
Do you need to delay retirement to age 70...or 84?

CHICAGO, Sept 6, 2012 /PRNewswire/ --According to a recent report conducted by The American College, forty percent of small business owners have no retirement savings or pension plan in place. Furthermore, the study found that three-fourths of those owners have no written plan as to how they intend to fund their retirement.1

Small business owners know the value of a solid business plan. Unfortunately, too many of those entrepreneurs neglect to place the same effort in planning for their retirement. Business owners focus so much on growing and maintaining their business, that often their own retirement is put on the back burner.

"It's important to have personal retirement savings outside of your business because the value of that business can fluctuate significantly over the years," says Margie Lawless, Senior Vice President of Small Business Banking, BMO Harris Bank. "Additionally, having a retirement nest egg is important should the unexpected arise, such as a major health issue or needing to sell the business sooner than expected."

Tina DiVito, Head of the BMO Retirement Institute, offers these tips for small business owners on how to effectively save for retirement:

As with any investment, you should consult with a tax advisor to determine what works best for your personal goals and financial situation.

"Although it's tempting to concentrate solely on investing in their business, small business owners owe it to themselves and their family to have personal retirement savings to help ensure a comfortable retirement," says DiVito.

To learn more about how to financially prepare for retirement, please visit: http://www.bmoharris.com/retirementinstitute

About BMO Harris Bank

Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through over 650 branches and approximately 1,350 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris BankSM is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion.

United States Department of Treasury Regulation Circular 230 requires that we notify you that this information is not intended to be tax or legal advice. This information cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. This information is being used to support the promotion or marketing of the planning strategies discussed herein. BMO Harris Bank, a part of BMO Financial Group and its affiliates do not provide legal advice to clients. You should review your particular circumstances with your independent legal and tax advisors.

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Entrepreneurs: Fund Your Retirement, Not Just Your Business

MILWAUKEE, Sept. 6, 2012 /PRNewswire/ --According to a recent report conducted by The American College, forty percent of small business owners have no retirement savings or pension plan in place. Furthermore, the study found that three-fourths of those owners have no written plan as to how they intend to fund their retirement.1

Small business owners know the value of a solid business plan. Unfortunately, too many of those entrepreneurs neglect to place the same effort in planning for their retirement. Business owners focus so much on growing and maintaining their business, that often their own retirement is put on the back burner.

"It's important to have personal retirement savings outside of your business because the value of that business can fluctuate significantly over the years," says Kara Kaiser, Regional President, M&I, a part of BMO Financial Group. "Additionally, having a retirement nest egg is important should the unexpected arise, such as a major health issue or needing to sell the business sooner than expected."

Tina DiVito, Head of the BMO Retirement Institute, offers these tips for small business owners on how to effectively save for retirement:

As with any investment, you should consult with a tax advisor to determine what works best for your personal goals and financial situation.

"Although it's tempting to concentrate solely on investing in their business, small business owners owe it to themselves and their family to have personal retirement savings to help ensure a comfortable retirement," says DiVito.

To learn more about how to financially prepare for retirement, please visit: http://www.bmoharris.com/retirementinstitute

About BMO Harris Bank

Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through over 650 branches and approximately 1,350 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris BankSM is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion.

United States Department of Treasury Regulation Circular 230 requires that we notify you that this information is not intended to be tax or legal advice. This information cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. This information is being used to support the promotion or marketing of the planning strategies discussed herein. BMO Harris Bank, a part of BMO Financial Group and its affiliates do not provide legal advice to clients. You should review your particular circumstances with your independent legal and tax advisors.

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Save For Retirement Or Invest In Your Business?

ST. LOUIS--(BUSINESS WIRE)--

Americans are experiencing a tug-of-war between their retirement savings goals and the stark realities of todays financial burdens. New research from Scottrade, Inc. found that while more than 60 percent of Americans recommend saving between 6 and 19 percent of their income annually for retirement, less than a third actually do. And on average, Americans reported spending 21 percent of their monthly income on mortgage and non-mortgage debt.

The survey, fielded in June, follows up on the trends Scottrade uncovered in its sixth annual American Retirement Study, which was fielded in January. Both surveys polled Americans about their perspectives on retirement and savings.

Americans are trying to balance their savings goals with everyday expenses, said Kristin Grupas, Scottrades assistant director of client education. Scottrades online trading tools and investment education can help self-directed traders and investors find opportunities to make saving and investing for retirement a reality.

While nearly all Americans in both surveys 93 percent in January and 92 percent in June reported taking some action to reduce the financial stress caused by this financial tug-of war, fewer were sticking to the money-saving efforts reported in January. In three key areas, Americans reverted to January 2011 levels:

While some Americans have deviated from their penny-pinching behaviors, 49 percent of the June respondents said they do not have any financial regrets from the first six months of the year. Of those who did report regret, the leading response (37 percent) was not saving enough money.

Despite their saving struggles, the majority of Americans surveyed in June (65 percent) reported managing their investments without the help of a broker or professional financial advisor. Of those, nearly half rated their confidence in their ability to plan for retirement as good or very good.

The combination of Scottrades in-person and online support, along with its easy-to-use trading tools empowers clients to execute the investing strategies they believe will get them closer to their retirement savings goals, Grupas said. While many Americans are struggling with this balance of paying bills versus saving for retirement, Scottrade can help them find the right solution for their own unique needs.

About the 2012 Scottrade American Retirement SurveySix-Month Follow-Up

The survey was commissioned by Scottrade and conducted online by Synovate. Fielded with a nationally representative sample of 1,000 respondents between June 7-11, 2012, the survey examined attitudes, behaviors and trends related to retirement. All participants were at least 18 years of age and were involved in making investment decisions in their households. Margin of error for the overall poll is +/- 3.1 percent at 95 percent confidence. This survey is a follow-up to Scottrades 2012 American Retirement Study, which for six consecutive years Scottrade has commissioned to gauge Americans current viewpoints about retirement and retirement investing.

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Scottrade Research Finds Americans Struggle to Save for Retirement