Last week, I had the good fortune to attend a Retirement Issues program hosted by the National Press Foundation in Washington D.C. Along with a contingent of fellow journalists, I listened to the thoughts of influential policymakers, financial planners, retirement industry execs and the senior adviser to the Secretary of the Treasury about the state of America's retirement.

A recurring message imparted by the speakers over the course of four days: America is in a retirement crisis. It was enough to set us reporters and editors on edge about our own prospects for a successful retirement.(But I couldn't help notice that most of the male speakers were well into their 60s, and one was either a septuagenarian or an octogenarian. Evidently, retirement experts themselves are in no hurry to retire.)

The first speaker, Diane Oakley, executive director of the National Institute on Retirement Security, began by citing a frightening statistic: 6 out of 10 households within 10 years of retirement have saved the equivalent of one times their salary or less. She is a proponent of traditional pension plans and spoke about the progress that states have made over the past two years to shore up their underfunded pensions. In 2010 and 2011, 41 states have made changes: 26 restructured employee contributions, 24 raised the retirement age and service requirements (in other words, cut benefits), and 18 reduced cost of living adjustments, she said.

So I had to find out her reaction to the Pew report released earlier this week, which my colleague Jennie Phipps blogged about. The report found a $1.38 trillion gap in fiscal year 2010 between states' assets and their obligations for retirement benefits in the public sector. The report cited "serious concerns" about pensions in 32 states, while 7 states were found to "need improvement," and only 11 were "solid performers."

Oakley said the Pew report fails to take into account the recent changes made by the states. "When the Pew report makes a pension-funding diagnosis using just your pulse and blood pressure from two years ago, it would be wise to get a more up-to-date opinion," she says.

For instance, both the Utah and Idaho state pension plans were downgraded from star performers to the "needs improvement" category, she notes. Utah has "made drastic changes" in its plan's benefit structure, yet was still downgraded in the report. Idaho's downgrade is particularly irksome to Oakley because its long-term funding practices have been exemplary. "Idaho is one state that has not made plan changes because they have been doing the right things year in and year out for the decade we looked at their plan."

Oakley's stance on pensions has not wavered since last week, when she said states will continue to take steps toward long-term sustainability of their plans and that these plans will continue to recover.

"Fine tuning may still be needed, but we are making progress that is not reflected -- and Pew acknowledges this -- in the results of the Pew study," she says.

Meanwhile, many of us who don't have pensions are in worse shape. "Last week, the Federal Reserve Bank released its wealth and income data from the Survey of Consumer Finances, and this highlighted to me the broad underfunding of retirement security in America that is not covered in the Pew report," says Oakley. "The median 401(k) account balance was down to only $44,000 and was less than one times the median income level. That account value is nowhere near what is needed to pay bills throughout retirement and remain self-sufficient."

What wouldbe better for your retirement planning -- a regular pension paycheck or a retirement account you can manage for yourself?

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America’s retirement crisis

(MoneyWatch) Working longer is now the "go to" strategy for affording retirement, as cited by many Americans in recent surveys. But it begs an important question: How much longer do you need to work?

One answer comes from a recent thought-provoking bulletin by Boston College's Center for Retirement Research (CRR). The bulletin describes the National Retirement Risk Index (NRRI), a measure of Americans' ability to retire at different ages. The index considers retirement savings, pension benefits, and home equity, as reported in the Federal Reserve Survey of Consumer Finances, and the amount of Social Security benefits someone might expect to receive at each possible future retirement age.

The NRRI then calculates when a person can retire and still maintain the same standard of living they enjoyed before retirement. That calculation factors in that their income and payroll taxes decrease, they're no longer saving for retirement, and that they've often paid off their mortgage.

Delaying retirement? Here's how to make it work A retirement plan for the working 99 percent Retirement planning: Just tell me what to do

For households headed by someone age 62, the NRRI indicates that less than one-third of people -- only 30 percent -- have sufficient financial resources to retire and maintain their standard of living. Of these households, 60 percent are covered by a traditional defined benefit pension plan.

For households headed by someone age 65, 49 percent of today's working households will have sufficient assets to retire and maintain their standard of living in retirement. The percentage of people who can afford to retire increases to 86 percent if they wait until age 70 to retire, leading the CRR to conclude that the vast majority of households will be ready to retire by age 70.

So according to the NRRI, you won't have to work forever -- just five more years after age 65. And this is consistent with my own analysis in a previous post, A retirement plan for the working 99 percent.

Before you decide you can afford to retire at age 70, though, you'll want to understand the assumptions that the CRR makes to develop its retirement index to see if the above conclusion might apply to you.

First, in assessing if people can afford to retire at age 70, the CRR assumes that you'll start your Social Security benefits at 70, the age that generates the highest amount of benefits. In reality, three-quarters of Americans start Social Security at age 62, the earliest possible age with the lowest amount of benefits. The NRRI also takes into account the prevalence of traditional defined benefit income. If you have a significant pension from such a plan, that's great, but if you don't, it's a strike against you.

Third, the NRRI assumes you'll buy an immediate, inflation-adjusted lifetime annuity with your retirement savings -- a strategy I agree with. Most Americans, however, don't buy such an annuity; instead, they use various methods of drawing down their retirement savings that produce different amounts of retirement income, with people who draw higher amounts running the risk of outliving their assets.

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How much longer do you need to delay retirement?

Retirement benefits for state and local employees have come under enormous funding pressure because of the recession, slow recovery in tax receipts, and cutbacks in federal stimulus and support spending. The 2010 shortfall in public pension and healthcare benefits was nearly $1.4 trillion, according to a report from the Pew Charitable Trusts. That's the difference between what the states have on hand and the benefit obligations they have promised to pay retirees.

[See Top-Rated Funds by Category Ranked by U.S. News Mutual Fund Score.]

The retirement prospects of public employees are, of course, directly affected by the adequacy of retirement benefit funding. But the health or weakness of state retirement benefits also affects a state's broader tax and spending environment. States with well-funded retirement systems are less likely to boost taxes on their residents than states with public retirement programs in poor financial shape. If you're nearing retirement, a state's fiscal health may play a big role if you're considering moving to a place.

Pew says 2010 is the most recent year when it could review data on all 50 states. It notes that nearly every state took steps in 2011 and 2012 to narrow its pension shortfall and that many acted on healthcare benefits as well. "States have responded with an unprecedented number of reforms that, with strong investment gains, may improve the funding situation they face going forward," Pew says, "but continued fiscal discipline and additional reforms will be needed to put states back on a firm footing."

Pensions. States set aside funds to cover future pension obligations. Pew says states' total funding shortfall for pensions was $757 billion in 2010. Closing that gap would mean states had achieved 100 percent coverage of their pension obligations. Pew and other experts say adequate pension funding should achieve at least an 80 percent ratio of pension plan assets to retiree payment obligations.

[See Avoiding Common Investing Mistakes.]

Here are the 10 states with the highest percentage of funded pension obligations in 2010:

Wisconsin: 100 percent

North Carolina: 96 percent

South Dakota: 96 percent

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State Retirement Benefit Gap Getting Wider

State workers will have to pay more for their retirement benefits and work more years before claiming them, according to changes to the states retirement plan that the General Assembly approved Thursday.

Working longer means state workers would withdraw less money from the states $25 billion retirement fund a taxpayer-supported fund that accountants estimate will run out of money sometime over the next 30 years if no changes are made. Having state workers pay more an extra $567 a year from the average public employees paycheck means taxpayers will pay less.

The changes plug the retirement systems projected $15 billion shortfall by making it nearly impossible for state workers to get a retirement check and a paycheck at the same time a practice critics refer to as double dipping.

This is a retirement system. And retirement system means that you retire. Its not an annuity that all of a sudden I get to a point where I can collect it, said state Sen. Greg Ryberg, R-Aiken, one of the authors of the bill. We want these people to retire. ... Its not a second income.

Lawmakers killed the controversial TERI program, which allows state workers to retire and return to work for up to five years while they earn both a salary and a retirement check.

Lawmakers also made it much harder for public-sector employers to hire retired workers back to their old jobs. Under the new law, retired employees who return to work would have to forfeit their retirement checks once they earn $10,000 in salary in one year.

And if those public-sector employees state and local government workers plus teachers want to buy so-called service time to retire early, the price is about to go up significantly.

The S.C. State Employees Association supported the bill but said the TERI and return-to-work programs are not the bogeyman that lawmakers made them out to be.

TERI is an incentive to get quality employees to come and work for the state, said Carlton Washington, the associations executive director.

TERI will be phased out over five years. The return-to-work changes and the service time requirements, which allow workers to buy credit for additional years of service, will not go into effect until Jan. 2, 2013. That gives current state workers who are close to retirement six months to make up their mind.

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Retirement system changes OK’d

(MoneyWatch) Following a challenge from a reader, my last post addressed how a typical retiree can make ends meet. This new post looks at the situation for a working couple who are both age 60 and who have about $200,000 in retirement savings, along with some home equity.

As with the current retiree, the financial solutions are limited for this couple. Their most important decisions will be when to start taking Social Security benefits, how long to work, how to deploy their retirement savings, and how to manage their living expenses to make ends meet. Let's look at the most important decisions one at a time.

Social Security

For the sake of this example, let's assume the primary breadwinner has been the husband, who currently earns about $75,000 per year. To make the most of his Social Security income, he should delay starting Social Security until age 70, when his benefits would be about $2,700 per month. Let's also assume the wife has only worked sporadically throughout her career -- not enough to earn her own Social Security benefits -- so her Social Security income will consist of her spouse's benefit based on his earnings history. In this case, I suggest that she start her spouse's benefit at age 66, which would amount to roughly $1,000 per month.

Retirement plan for the 99 percent Delaying retirement? Here's how to make it work 10 ways for retirees to cut their cost of living

In this scenario, they would have a combined Social Security income of about $3,700 per month starting at age 70, or $44,400 per year. In addition, they would receive about $12,000 per year from age 66 to 70 from the spouse's benefit.

How long to work

In this couple's case, the best choice would be for them to not touch their retirement savings until age 70 in order let them grow as much as possible until they fully retire. To cover their living expenses until that time, the husband and wife will need to continue working.

They don't need to make as much money in their sixties as they did when they were younger, since I'm assuming that they're no longer saving for retirement. All they need is to earn enough money to cover their living expenses until Social Security kicks in for the husband at age 70, at which point they can start drawing from their retirement savings. AARP and T. Rowe Price have called this strategy "practice retirement."

They can ease up a little at age 66, when the wife's Social Security benefit adds an income of $12,000 per year. An important job criterion would be for one of them to be eligible for medical insurance from their employer, at least until age 65 when they're eligible for Medicare.

Continued here:
A retirement plan for the working 99 percent

By Mark Miller

CHICAGO (Reuters) - June is Gay Pride Month in the United States. And you can tell the times they are a changing when U.S. Secretary of Defense Leon Panetta salutes the event by taping a video personally thanking gay members of the military for their service.

But when it comes to retirement security, LGBT Americans still have a long way to go. The federal Defense of Marriage Act (DOMA) is a core obstacle to equality for a range of important benefits and legal protections, because it defines the word "spouse" as applying only to different-sex married couples for any purpose involving interpretation of federal law.

The ground is shifting quickly, though. Legal challenges related to DOMA and same-sex marriage are making their way toward the Supreme Court. And the workplace is changing quickly as companies reshape their benefit programs to ensure equality.

But LGBT individuals and couples also can take action on their own to improve their retirement security. Here's a checklist of five key areas LGBT Americans should be sure to address.

401(k) BENEFICIARIES

Until 2010, it wasn't possible for a workplace retirement saver to name a non-spouse beneficiary. That changed starting in 2010 due to provisions of the Pension Protection Act of 2006. Non-spouse beneficiaries, including employees' partners, are permitted to roll their inherited retirement benefits directly to an individual retirement account or an annuity.

Gay workers who started with their employers before 2010 should re-visit their beneficiary designations. But they also should check to make sure their employers are complying with the new law. Only 86 percent of corporations that have rollover provisions have made the adjustments needed to extend benefits to same-sex partners, according to the 2012 Corporate Equality Index, an annual survey of corporations by the Human Rights Campaign Foundation (HRC), a non-profit research, education and advocacy group.

"For many companies, this is an administrative fix that just hasn't been on the radar screens of human resources departments," says Deena Fidas, deputy director of corporate programs for HRC.

PENSION SURVIVOR BENEFITS

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Retirement planning checklist for LGBT Americans

MILWAUKEE, June 21, 2012 /PRNewswire/ -- Northwestern Mutual announced today a first-of-its-kind retirement planning approach. Consistent with the company's core belief that risk protection and asset accumulation should be managed hand-in-hand, the new Northwestern Mutual Retirement Strategy is designed to provide individuals with tailored and balanced retirement solutions. The approach breaks new ground because, unlike most financial plans, it does not assume a fixed life expectancy. Instead, the company studied longevity at various ages so that income plans succeed with a high level of confidence no matter how long one lives.

(Logo: http://photos.prnewswire.com/prnh/20120126/CG42140LOGO)

Utilizing the Northwestern Mutual Retirement Strategy, the company's financial professionals help their clients meet three distinct retirement goals: create a stream of reliable income throughout retirement, protect retirement savings so they last a lifetime, and leave behind a legacy.

"An individual's offensive strategy the accumulation of assets is only as strong as their weakest financial defense," says John Grogan, Northwestern Mutual senior vice president for planning and sales. "We've taken our deep expertise in the areas of risk management, investment solutions, and comprehensive financial security planning to develop customized solutions that address our clients' personal needs. It's an approach our field force can use with clients to help them manage risk and grow their retirement assets to generate income for as long as they live."

The defensive strategies address six risks that challenge financial security in retirement:

"What we've realized time and again is that building a prudent plan with the guidance of a trusted financial advisor is key to building a financially secure retirement," continues Grogan. "The Northwestern Mutual Retirement Strategy was developed with the knowledge that the most crucial aspect of retirement planning is having certainty, as well as flexibility, as you move through your retirement years."

About Northwestern Mutual

The Northwestern Mutual Life Insurance Company Milwaukee, WI (Northwestern Mutual) among the "World's Most Admired" life insurance companies in 2012 according to FORTUNE magazine has helped clients achieve financial security for more than 155 years. As a mutual company with $1.2 trillion of life insurance protection in force, Northwestern Mutual has no shareholders. The company focuses solely and directly on its clients and seeks to deliver consistent and dependable value to them over time. Northwestern Mutual and its subsidiaries offer a holistic approach to financial security solutions including: life insurance, long-term care insurance, disability insurance, annuities, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC, broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company, limited purpose federal savings bank; and Northwestern Long Term Care Insurance Company; and Russell Investments.

[1] Annuity 2000 Table with mortality enhancements determined using projection scale G2

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Northwestern Mutual Tackles Retirement Head On

SPRINGFIELD, Mass., June 21, 2012 /PRNewswire/ --MassMutual's Retirement Services Division is sponsoring a contest for retirement plan advisors with the grand prize being an opportunity for the winning advisor to participate in a professionally recorded interview at the 2012 PlanAdviser National Conference in Orlando, Fla. The interview of the grand prize winner will also be included on PlanAdviser.com as well as in PlanAdviser magazine and the winner will have full usage rights for the video and print materials to use as business development tools.

You're #1 Story Contest

"This is MassMutual's way of recognizing the critical role that retirement plan advisors serve in helping plan sponsors and participants achieve their vision of retirement success. MassMutual recently earned several awards including the #1 overall satisfaction rating from retirement plan advisors(1), as well as the Retirement Leader of the Year(2) award. These accomplishments are due, in large part, to the tremendous service of retirement plan advisors. They are on the ground, helping sponsors and participants every day," says Hugh O'Toole, senior vice president of sales and client management, MassMutual Retirement Services. "Every successful advisor has stories about how they have helped sponsors and participants and we want to hear them and recognize their efforts," adds O'Toole.

Entries may either be in video (two minutes or less) or written form (1,000 words or less). The contest is open to all intermediaries regardless of whether they have ever done business with MassMutual and contest entrants are not required to solicit any MassMutual products or services, nor to have sold, or sell, any MassMutual products or services of any kind. Winning submissions must be stories relative to the retirement plan industry. Examples of possible story themes include, but are not limited to, the following:

All entrants receive a copy of "Made to Stick," the best-selling book about using storytelling in business and sales. The top 10 entries will win a one-year subscription to Audible.com and one grand prize winner will be awarded a professional interview to be recorded at the 2012 PlanAdviser National Conference in Orlando, Fla. this September.

Deadline for entries is August 17, 2012 and official rules and details of the contest may be found at http://www.massmutual.com/number1.

For more information, please call your MassMutual Retirement Services representative or contact MassMutual at (888) 626-4911, http://www.massmutual.com/retire.

Source: (1) Boston Research Group's 2011 Defined Contribution Plan (DCP) Retirement Advisor Satisfaction and Loyalty Study; (2) 19th Annual Mutual Fund Industry Awards sponsored by FundIndustry Intelligence, a premium publication of Euromoney Institutional Investor.

About MassMutual

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) [of which Retirement Services is a division] and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, Member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.

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MassMutual Retirement Services Sponsors "You're #1" Story Contest for Advisors

By Dan Caplinger | More Articles June 20, 2012 |

The following video is part of our "Motley Fool Conversations" series, in which Motley Fool editor Erin Kennedy and Fool contributor and financial planner Dan Caplinger discuss topics from around the investment world.

In today's installment, Erin and Dan discuss how young people can get off to the right start by saving early for retirement. Dan goes through several smart alternatives that workers of all ages can use, including 401(k) retirement plans through your employer, as well as IRAs. He also notes that setting money aside for retirement can also give you tax savings now. Although some of the rules governing retirement accounts can get complex, Dan gives some simple guidance on a number of common scenarios that come up, as well as how to get started. He closes by explaining how even with so many people changing jobs frequently, you can make sure your retirement money follows you and that you put it to best use.

Everyone wants to have a comfortable retirement. To get more advice, check out The Motley Fool's special report, "3 Stocks That Will Help You Retire Rich." Inside, we reveal some stocks that could help you as well as some winning wealth-building strategies. Click here to learn more.

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That's why we've asked our top advisors and equity analysts to weigh in on which investments will win if Romney does... which will win if Obama does... and what you can do to help boost your wealth no matter who wins in November.

It's all part of our brand-new investor empowerment series, "Invest Like a Pro: Savvy Strategies for the Next 4 Years and Beyond" which we're making available to individual investors like you absolutely free for a limited time.

To get access to this exclusive bundle of informative videos, advisor roundtables, special reports, articles, and more, simply enter your email address below, click the "Sign me up!" button, and then check your inbox for further details.

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Retirement Options for Younger Investors

SAN FRANCISCO--(BUSINESS WIRE)--

Schwab Retirement Plan Services has been named the top 401(k) provider in the categories of loyalty and overall satisfaction in a survey by Boston Research Group, affirming its standing as a leading provider of 401(k) plan services.

Loyalty Rankings

Schwab, which serves plans with 1.5 million corporate retirement plan participants, received its number one ranking in loyalty by both employers sponsoring 401(k) plans and their employees. Among employers, Schwab scored 86 percent compared to the industry average of 75 percent. Employers measured loyalty against three key drivers: easy to do business with, resources to offer the best plan and partners effectively.

The loyalty gap between Schwab and its competitors was even wider among plan participants. Two-thirds (66%) of respondents said they would leave their money in the current plan with Schwab or rollover to a Charles Schwab & Co., Inc. IRA if they left the plan today, compared to an industry average of just 51 percent.

High Satisfaction Marks from Plan Participants

In the area of overall satisfaction, Schwab was given the highest mark of any provider by plan participants 46 percent, ten points above the industry norm. Schwabs score rose four percent in 2011 over its industry-leading mark in 2010. The factors that drove overall satisfaction with employees in plans serviced by Schwab include its investment experience and the participants experience when they engage with Schwab.

Schwab is committed to building strong relationships with employers who choose us to service their 401(k) plan, and to delivering an excellent experience to their employees, said Steve Anderson, head of retirement plan services at Schwab. The Boston Research Group study findings are an affirmation that our efforts are being recognized among the people whose opinions we value mostour clients.

Charles Schwab continues to be a leader in the retirement plan industry in the view of both employers and their employees, said Warren Cormier, president of Boston Research Group. We commend Schwab for engendering a very high level of loyalty and satisfaction among both groups.

About Charles Schwab

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Schwab Retirement Plan Services Earns Top Marks for Client Loyalty and Satisfaction in Independent Survey