(MoneyWatch) Although most people are willing and able to save more for retirement, they're often unsure just how to go about it, according to recent survey by State Street Global Advisors that highlights this so-called action gap.

A large majority of the respondents -- 83 percent -- said they could cut their household budget by at least five percent to increase their retirement savings, while 64 percent said they could cut back as much as 10 percent. Fifty-two percent of the surveyed employees said they'd even be willing to increase their 401(k) contributions to as much as 10 percent of their pay if their employer automatically increased their 401(k) savings rate by one percent each year.

So what's stopping people from saving more? Frankly, it's a head-scratcher. For example, although 78 percent of the respondents said they know it's important to determine how much they must save to ensure a secure retirement, only 33 percent claim to have the knowledge to calculate that amount.

The Retirement Savings Menu: a visual take on how much you should save How to pick a target date fund Top tips for using retirement calculators

I realize that it takes some time and effort to estimate how much you need to save for retirement, and I've written previously about how to figure that out. But let me give you some additional advice: If you have the room to reduce your household budget by five to 10 percent so you can save for retirement, go ahead and save more.

Unsure how of much you need to save to have a secure retirement? Don't use that as an excuse to put off saving more -- chances are high that you're not saving enough and that you're short by a large margin, so any additional savings is much better than doing nothing.

Today, go online to your 401(k) plan administrator or pick up the phone and increase your retirement contributions by five to 10 percent of your pay. Then take the time in the weeks and months ahead to calculate how much you should save for retirement and adjust your contributions accordingly.

Don't know how to invest? Don't let that hold you back. Pick the target date fund in your plan if one is available, or select a mutual fund that's balanced evenly between stocks and bonds. You can always take the time later to learn more about investing. Today, though, go ahead and save more.

If you don't have a 401(k) plan, explore purchasing an IRA, or simply open an investment account with an established mutual fund company. Vanguard, Fidelity, and T. Rowe Price are all good places to start for any type of retirement savings; they have low-cost mutual funds and non-commissioned telephone representatives who will guide you through the process. So go ahead and save more.

If you're like many people who are motivated by emotions rather than logic, check out my Retirement Savings Menu post. It motivates you to save more by showing you what your life could be like in retirement.

See more here:
How to beat the retirement savings "action gap"

BOSTON, July 23, 2012 /PRNewswire/ --John Hancock Funds has launched a new program designed to help retirement plan advisers demonstrate their value and build stronger client relationships. Available on the John Hancock Funds' adviser web site, http://www.jhfunds.com, the program, "Focus on Value: What Matters Most to Your Clients and How to Build on It," includes a Guidebook, Wholesaler PowerPoint, and Plan Sponsor Toolkit.

In addition, John Hancock participated as a co-sponsor for a survey and study of plan sponsors released in the spring and called: "Can a Professional Retirement Plan Adviser Really Make That Much of a Difference?" The survey findings provide first-person insight into ways that plan sponsors believe retirement plan advisers may bring the greatest value to their plans and participants.

"New Department of Labor regulations this year require retirement plan service providers to reveal investment expenses and fees to plan sponsors. The right adviser can help monitor and review fees to ensure compliance," noted Gene Huxhold, Senior Managing Director, Investment Only Retirement Plans. "Our materials illuminate insights and provide steps to boost the specific values that plan sponsors recognize and appreciate most about service the retirement plan advisers provide. John Hancock is committed to the Investment Only space and to helping retirement plan advisers express their value to plans and participants."

The new Guidebook from John Hancock Funds includes five key findings from the research study whereby plan sponsors offered observations about what retirement plan advisers bring to their plans:

The guidebook also offers corresponding practice management tips for advisers.

Also available are the Wholesaler PowerPoint, a client-facing presentation that mirrors the Guidebook and is formatted for iPad delivery, and the Plan Sponsor Toolkit, which offers a comprehensive approach to evaluating a new or existing financial adviser for a company's retirement plan.

About John Hancock Funds

The Boston-based mutual fund business unit of John Hancock Financial, John Hancock Funds manages more than $74.5 billion in open-end funds, closed-end funds, private accounts, college savings and retirement plans, and related party assets for individual and institutional investors as at March 31, 2012.

About John Hancock Financial and Manulife Financial Corporation

John Hancock Financial is a unit of Manulife Financial Corporation, a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. In 2012, John Hancock celebrates 150 years of serving clients across the United States, while Manulife celebrates its 125th anniversary. Operating as Manulife Financial in Canada and in most of Asia, and primarily as John Hancock in the United States, Manulife Financial Corporation offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were C$512 billion (US$512 billion) as at March 31, 2012. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife Financial can be found on the Internet at manulife.com.

See the article here:
John Hancock Funds Launches Program To Help Retirement Plan Advisers Demonstrate Their Value

While the concept of retirement means you get to quit your job and do what you love all day, many retirees would love to earn a little income to ease their cash flow. One of the best ways to both feel retired and bring in some money is to find a way to generate cash from your hobbies. It may take a little extra effort to move something from a hobby to a small business, but with a measure of entrepreneurial spirit you can turn fun into profit. How much you can make depends a lot on the level of time you are willing to put into participating in your hobby and marketing your services or products. Here are some examples of potentially profitable hobbies.

SalesSelling Items on eBay If you have a vast collection of antique toys, record albums or clothing that you no longer want, you can sell them on eBay to the highest bidder to turn a profit. Some entrepreneurial types turn eBay skills into a business by buying low and selling high. If you have special expertise in a particular area or simply want to gamble a bit on something like sports tickets, you can spend hours making bids and then reselling items on other websites.

Selling Books and CDs on Amazon Another option for people with the storage space for books and CDs is to sell your own collection through Amazon.com. You can haunt flea markets and thrift stores for bargain priced books and CDs and then resell them, but you'll have to take into account shipping costs and the hassle factor of storing and sending the items.

Selling Handmade Items on Etsy If you love to quilt, sew or make jewelry, Etsy.com can be your marketplace. The website makes it simple to market your crafts. You can even sell vintage clothing. So, if you have a trunk full of clothes in the attic this could be a goldmine and help you clean out your closet.

Sell at Flea Markets and Yard Sales Plenty of people love to spend their time looking for treasures and unique items at flea markets and yard sales. If this is your hobby, you can turn it into a business by snapping up bargain items and reselling them. You can also sell your handmade items, including jewelry, quilts and clothes at flea markets.

SEE: Amazing Yard Sale Finds TeachTeach or Tutor One of the fastest ways to earn money on your own schedule is to become a tutor or a teacher. Whether you excel at math or English, you can offer tutoring services through your own website or with advertising at local schools. If you speak a foreign language or want to help others learn English, you can also earn money by tutoring. Other skills that can bring in plenty of students include teaching voice lessons, art or a musical instrument. Be sure to think about whether you want students to come to you or if you want to meet at a library or in their homes.

Try eduFire.com An unusual option for tutoring is eduFire.com, a website that puts students and tutors together for one-on-one sessions or group classes via computer. You'll need basic computer skills and some credentials for marketing yourself to teach any subject you want.

SEE: 6 Careers You Can Do From Home OthersWrite If you've always wanted to write, look into the possibility of freelance writing for your local newspaper or for websites that specialize in something that interests you. Fiction writing is less lucrative, but if you are prolific and dedicated to submitting your work, you can make a little money with your poetry and prose.

Party Planning If you are the one everyone turns to when they're looking for a suggestion for a party theme or an interesting way to entertain guests, set up a party planning website and start charging for your advice.

Organizing If you love to organize your home, you may want to offer your services to others. Just be sure you can physically handle hauling papers around or clearing out someone's closet. You can start your own business or offer to assist someone who already has a thriving business as an organizer.

Continue reading here:
Retirement Hobbies That Make Money

You've spent your entire adult life working toward -- and saving for -- retirement, but it can be hard to accurately predict how much money your will need in your golden years.

If you're unsure about how much money you'll need in retirement, follow these pieces of advice from financial experts:

A Solid Goal: 80% to 90% of your pre-retirement monthly income

Retirees should expect to need about 80 to 90 of their pre-retirement income per month, according to ING retirement coach and planner Larry Rosenthal. That means, if your income is $40,000 per year, you'd want to have $32,000 on hand per year in retirement. "People will spend money on hobbies or some type of entertainment," Rosenthal says. "They'll also tend to spend more money on their grandchildren after they retire. And travel is expensive and becomes a big part of retirement spending." Experts says a good strategy is to withdraw about 3 or 4% of your retirement savings each year. "If you had about $1,000,000 in an interest account, you could live on the income of $40,000," according to Charlie Epstein, author of Paychecks for Life.

Know your expenses: Expected and unexpected

While some expenses can be predicted he expenses you anticipate, there will also likely be unexpected expenses. "The most significant and unexpected expense in retirement is due to out of pocket health- care expenses," says John Ulin, a certified financial planner in Boca Raton, Fla. More than 50% of people 65 or older will at some point in their life need either home health care or will enter a nursing home, he says. "This type of 'care' is not covered by Medicare or Medicaid and can financially devastate your nest egg," he says. "Home health care can cost upwards of $35,000 a year and a facility care can cost upwards of $60,000 a year. Plan accordingly."

Common Mistakes

Experts agree that the most common mistake people make is not having and following a financial plan. "How does someone know where they are and where they need to go if they don't have a financial plan in place that analyses retirement cash flow," says Barry Taylor, a financial adviser and money manager based in San Francisco.

In addition, many people planning on retiring don't begin saving early enough. "As a rule of thumb, you need to save 10% of your pay each year," says Epstein.

Another common -- and frequently devastating -- mistake is underestimating the cost of health care in retirement. "The latest projection on cost of health care is that on average, health expenses will equal or exceed $325,000 for a couple from age 65 until death," Taylor explains. "A great deal of this cost will be paid by Medicare and 'Gap' insurance policies that cover most of medical, hospitalization, and drugs. But many soon-to-be-retirees do not understand the conditions of the retirement health insurance they purchase at retirement and the size of the 'gaps' that may not be included."

Link:
How Much Money Will I Need in Retirement?

With all of the monumental challenges facing retirees, I sometimes wonder if retirement as we know it will survive. Many potential retirees are ill-prepared from a financial and non-financial perspective, and the clock is ticking. Maybe people will just work until they die, rather than attempt to exit the rat race and enter their second act. But theres also the possibility that these doom and gloom predictions are exaggerated and retirement will not be all that bad. Here are eights reasons your retirement will probably be just fine:

1. Average life expectancies have been trending upward for decades. In 1900, the average life expectancy was 46.3 years for men and 48.3 years for women. Today the average life expectancy in the U.S. is 79.6 years, while Japan leads all countries with an 83.2 year average.

2. For many people, retirement represents a time of opportunity. The majority (86 percent) of baby boomers between ages 45 and 65 who have a minimum household income of $75,000 view retirement as a whole new chapter in life and a chance to reinvent the person they are and will be, according to a 2011 survey commissioned by the resort real estate advisory firm Civano Living. And 90 percent of those surveyed believe retirement will give them time to pursue their interests and hobbies more fully. Retirees should be excited about this chance to journey down a different path and pursue what they are truly passionate about, rather than just existing.

3. The nature of work has changed from the physically demanding jobs of old. Todays knowledge workers use their minds more than their backs. When retirement age is reached, these seniors still have a lot of mileage left and can consider the possibility of a second career more along the lines of what they would like to do.

4. With 10,000 people reaching age 65 each day for the next 20 years, the impact of aging baby boomers is being felt far and wide. Senior citizens are a large portion of the population and have powerful organizations like AARP behind them. They are a highly influential group whose interests and impact cannot be ignored. Expect senior citizen voices to be heard and attention to be paid to their specific needs.

5. With longer life expectancies, many seniors see themselves living well beyond the official averages, continuing to remain productive, and developing deeper family relationships. According to a 2011 SunAmerica Financial Group and Harris Interactive survey, two-thirds of adults age 55 and older say their personal goal is to live to 100.

6. With aging comes challenges to health and well being. However, 82 percent of seniors are satisfied with their own physical health, according to the Civano Living survey. And 84 percent of those ages 45 to 65 say they are interested in health and fitness programs designed for them.

7. The years of experience and knowledge gained in the working world will make seniors increasingly more important in the job arena. Older workers are, in fact, not more expensive to employ because their typically higher wages are based on experience rather than age, according to Peter Cappelli, coauthor of Managing the Older Worker: How to Prepare for the New Organizational Order. Changes will need to be made to adapt to the needs of older workers such as increased flex time, age-friendly work environments, and less forced retirement when the worker has many good years still to offer.

8. It turns out that the adult brain is not a slower version of the youthful brain. Instead, the middle-aged brain maintains many of the abilities of youth and even acquires some new ones. The Seattle Longitudinal Study showed middle-aged adults performed better on four out of six cognitive tests than those same individuals did as young adults.

Retirement will be a big change from the way of life we were accustomed to while we were in the workforce and raising a family. We need to prepare financially and socially if we are to realize the fulfilling retirement we want. But it is encouraging to see that retirement can be an exciting, positive time in our life, even for those with modest incomes.

Go here to see the original:
8 Signs Your Retirement Will Be Just Fine

(MoneyWatch) This post continues my series on various retirement income offerings that are being introduced in 401(k) and other defined contribution retirement plans. Today we'll take a look at Income +, the retirement income service offered by Financial Engines.

Founded by Nobel Prize winner Bill Sharpe, Financial Engines is well-known as the financial advisory service that's available on the platforms of many 401(k) plan administrators. Since 1996, Financial Engines has provided online advice to 401(k) plan participants. These services help participants decide how much they should save to reach reasonable retirement savings targets and how to allocate their accounts among the investment funds offered in their 401(k) plans. In addition, participants can elect to receive professional management services, which monitor their retirement savings and progress toward retirement goals, periodically re-balance the investments in their accounts, and prepare personalized retirement plans.

In January 2011, Financial Engines introduced Income +, an extension of their professional management service. Income + isn't a product, such as an annuity or managed payout fund. It's a service that helps plan participants turn their 401(k) balances into monthly retirement income that can last for life. During your retirement, you stay invested in the funds offered by your employer's 401(k) plan, and Financial Engines helps you manage your account balances to generate a retirement paycheck.

401(k) retirement income options coming your way Retirement income review: Hueler Income Solutions Retirement income review: GLWB in retirement Rolling your 401(k) to an IRA? Think twice

With its Income + service, Financial Engines can help you in the years leading up to retirement by developing an asset-allocation strategy that manages your exposure to stock market fluctuations. The goal is to prevent your retirement plans from being thrown off track due to stock market crashes just before your retirement. The services also provides estimates of your retirement income at various retirement ages to help you decide when you can retire.

When you retire, your savings are then divided into three pots. The first generates a retirement income until an advanced age, typically age 85; it's invested in fixed income funds -- either bond funds or stable value funds -- in your 401(k) plan. This pot equals roughly 65 percent of your 401(k) account when you retire.

The second pot equals about 20 percent of your account when you retire and is invested in equity funds in your 401(k) plan. The intent of this account is to provide boosts in your retirement paycheck until age 85 to help your income keep pace with inflation.

The third pot equals about 15 percent of your account when you retire and is invested to serve as a reserve you could use to purchase a lifetime annuity at age 85. The goal is to protect you if you happen to live longer than expected.

Currently, the initial annual income you'll receive if you retire at age 65 is a little less than four percent of your total account balance, not much different from the "four percent rule" that's advocated by many financial advisors.

Financial Engines charges between 0.20 percent and 0.60 percent of your accounts for their services, depending on the arrangement it has with your 401(k) plan. Its charges are roughly one-third to one-half the charges typically assessed by personal financial advisors, who charge a percent of assets under management.

Read the rest here:
Retirement income review: Financial Engines

Most retirees face the same conundrum: how to spend down assets without completely depleting them. One popular strategy is to apply the 4% rule -- withdraw 4% of your initial retirement balance and adjust the dollar amount annually to keep pace with inflation. Another rule of thumb is to spend only your portfolio's interest and dividends.

[More from Kiplinger: Quiz: Are You Saving Enough for Retirement?]

Some academics aren't fans of either strategy. A retiree who spends only his interest and dividends may load up on, say, bank stocks -- and that's "the tail wagging the dog," says Anthony Webb, research economist at the Center for Retirement Research at Boston College. Leaving the principal untouched may fit with a desire to leave money to heirs, but it could put a crimp in your lifestyle.

As for the popular 4% rule, it doesn't respond to actual investment returns, Webb says. Retirees drawing fixed dollar amounts from a sinking portfolio will soon run into trouble.

The RMD strategy. A third option may work better for many retirees: Base annual spending on the required minimum distribution rules that apply to traditional IRAs after you turn 70 1/2. Retirees of any age can use RMD calculations as a spending guidepost by simply dividing their total year-end portfolio balance by the life-expectancy factor listed for their age in IRS Publication 590.

[More from Kiplinger: 10 Things You Must Know About Social Security]

In a recent study, Webb and coauthor Wei Sun, of China's Renmin University, found that the RMD strategy outperformed the spend-the-interest strategy and the 4% rule, given a typical retiree's asset allocation. Because the RMD approach calculates the annual withdrawal as a percentage of the remaining portfolio, it is calibrated to investment returns. And the withdrawal percentage increases with age.

The strategy isn't perfect. It may result in withdrawal rates that are too low, particularly early in retirement, causing retirees to leave behind money that they might have preferred to spend. But if we're entering an extended period of low returns, as many advisers predict, you may want to err on the side of conservative spending rates.

[More from Kiplinger: State-by-State Guide to Taxes on Retirees]

A hybrid approach. Although no simple rule is ideal, retirees may incorporate an RMD-inspired strategy into a broader plan for covering expenses. A 2010 Vanguard Group paper, for example, found benefits from combining an inflation-adjusted immediate annuity with an RMD approach. This strategy produced stable cash flows that grew at a faster rate than those produced by other rules of thumb.

View original post here:
Don't Run Out of Money in Retirement

Video Link: https://www.youtube.com/watch?v=Qyt07xUqKhE

17-07-2012 08:53 Jalen Rose and Stephen A. Smith discuss Kobe Bryant's comments about retiring after two more seasons.

Original post:
Buy Or Sell: Kobe Retirement - Video

Retirement and marriage after 60: Wedding preparations

Getting married again? Experts say brides and grooms older than 60 would be wise to include a visit to an estate planner as part of their wedding preparations to iron out the financial details of the new union.

"People think estate planning is for very wealthy people," says Larry Luxenberg, a financial adviser with Lexington Avenue Capital Management in New City, N.Y. "But neglecting to plan can cause conflict after one partner's death."

A prenuptial agreement, adds Jillian Nel, a Certified Financial Planner at Legacy Asset Management in Houston, Texas, can save survivors a lot of heartache.

Getting your financial future in order is a great way to strengthen a new relationship. Having these discussions early "makes the marriage a lot more positive," Nel says, "and you can concentrate on being happily in love again."

For those collecting Social Security benefits, a number of issues need to be considered, Luxenberg says -- particularly if either or both partners have been married before. "New couples who are already retired might think the die is cast," he says, "but there are still lots of considerations."

For example, most widows older than 60 have the option to continue to collect survivors benefits or to draw benefits based on their own income or that of their new spouse. But if the wedding takes place before her 60th birthday, she loses the survivor-benefit option.

For a bride older than 65, says Nel, Medicare payments can also be affected.

"Medicare is means-tested," she says, meaning that premiums for some benefits increase according to a person's ability to pay. "So if you are marrying someone with a lot of unearned income, talk with an accountant about multiyear tax planning."

Given the complexity of Social Security regulations, Nel says, checking with an expert before saying "I do" is a smart strategy. "There are some quirky issues that could come up."

Visit link:
Retirement and marriage after age 60

Rob Russell

What if everything you were told about saving in your company retirement plan was bogus? What if the benefit of tax-deferred growth in your mutual fund based retirement plan was really a well-funded Wall Street marketing gimmick?

For decades now, you and I have been told to sock away our hard-earned money into 401(k)s, IRAs, 403(b)s, TSPs, etc. to reap the benefits of tax deferral and to just trust the system. Advisors, tax preparers, and CPAs jumped onto this Wall Street bandwagon of letting your money grow tax-deferred until you retire. The crux of their seemingly logical-sounding argument was that youd be in a lower tax bracket in retirement, thus kicking the tax can down the road.

[When to Change Investing Strategies.]

Were they right? Would paying the tax later in retirement be better? Or, was it just a big marketing gimmick for you to buy into the mutual funds peddled by Wall Street?

Would you agree the answer depends on future tax rates? Future tax rates are almost as unpredictable as future market prices. I think, however, an argument can be made that future tax rates will eventually be higher than todays historically low tax rates simply because they have to be (thanks to the national debt, deficits, Social Mecurity and Medicare imbalances, etc.)

Consider todays retiree or soon-to-be retiree. A middle-class married couple making $65,000 per year is currently in the 15 percent bracket. If this couple is currently contributing to their 401(k), in essence they are deferring the payment of taxes at a 15 percent rate. In only five short months (under current law) they will be in a 28 percent bracket, almost double their current rate. If they plan to retire in 2013 and intend to live off of Social Security, a pension, or investment income they will actually be in a higher tax bracket. Given this example, did kicking the tax can down the road actually work for them or will they actually be subjected to higher taxes during their retirement?

[Find top-rated mutual funds.]

This big retirement lie could be harmful to retirees and soon-to-be retirees because they will live on less since they will be paying the government more, but it could actually work well for their younger counterparts contributing to their retirement plan. Heres how:

Excerpt from:
The Big Retirement Lie