Archive for the ‘Retirement’ Category
What Atlantans Think About Retirement
Posted: February 23, 2012 at 2:08 pm
ATLANTA--(BUSINESS WIRE)--
Ah, the easy life of retirement – not so much for two in five Atlantans who think they’ll need to work. But more than half like Atlanta so much that they’ll stay here, many because of family and friends or the good medical facilities. And while Atlantans think they’ll need $750,000 to retire, the median amount saved is just $100,000. These are highlights of a new survey done for Wells Fargo. The details:
Two out of five (41%) Atlanta area pre-retirees expect they will need to work during retirement in order to afford their lifestyle or make ends meet. Another 40% say they’ll work in retirement because they want to. Fifty-seven percent of pre-retirees in Atlanta plan to stay in the area when they retire; their top three reasons for staying are family and friends nearby, good weather, and low cost of living. Retirees cite similar reasons for settling in the area. Seventy-one percent of retirees cite being close to family and friends as a major factor for retiring in Atlanta. Good medical facilities and not having to relocate are also important. Among 10 major cities including Atlanta, those in Washington are least likely to retire there (38%) and those in Chicago are most likely (65%). Atlanta is close to Miami (55%) and Philadelphia (59%). About a third of Atlanta respondents (retirees and pre-retirees) rate health care facilities in their area as among the best in the country. In Houston, 70% think their health care facilities are among the best. In Miami just 12% do. Atlantans (32%) are closest to Washingtonians (31%). The median amount Atlanta pre-retirees have saved for retirement is only 13% of what they believe they actually need. Atlanta pre-retirees believe they need $750,000 for retirement; the median amount saved is $100,000. Almost 50% of Atlanta area pre-retirees say their biggest fear about retirement savings is that they will do all the right things today and it still won’t be enough. Seven out of ten (72%) Atlanta area retirees are confident they will have enough money to live the lifestyle they want throughout retirement. Despite this confidence, 28% of Atlanta retirees agree that they need to significantly cut back spending today in order to have enough money throughout their retirement. Among Atlanta respondents with children, 41% agree that they will not be able to leave an inheritance to their children due to the money needed to support their retirement. Atlanta pre-retirees under 65 are evenly split 50/50 on whether it is more likely that the Falcons will win the Super Bowl by the time they are 65 or they will be able to retire at 65!
About the Survey
On behalf of Wells Fargo Retirement, Richard Day Research conducted an online survey between December 2nd and December 18, 2011 among Atlanta area residents ages 25-75 with $25K+ in investable assets (total n=366). Comparisons were made to a similar national online sample of n=1,190.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC - News) is a nationwide, diversified, community-based financial services company with $1.3 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com and wachovia.com), and other distribution channels across North America and internationally. With more than 270,000 team members, Wells Fargo serves one in three households in America. Wells Fargo & Company was ranked No. 23 on Fortune’s 2011 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.
About Richard Day Research (a Market Probe company)
Richard Day Research is a full-service market research firm, located in Evanston, Ill., specializing in behavioral and opinion research among hard-to-reach populations and professional communities. For more information, visit rdresearch.com.
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What Atlantans Think About Retirement
Peyton Manning To Retire According to Rob Lowe tweets — News Story – Video
Posted: at 12:48 am
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Peyton Manning To Retire According to Rob Lowe tweets -- News Story - Video
BMO Retirement Tips of the Day: Consider Others During Your Retirement & Be Sure to Protect Your Most Important Asset …
Posted: at 12:48 am
TORONTO, ONTARIO--(Marketwire -02/22/12)- As the February 29th deadline approaches to make a contribution to a Registered Retirement Savings Plan (RRSP) and as part of its ongoing commitment to improving financial literacy, BMO Financial Group will be providing daily retirement tips during the month of February from BMO Retirement Institute Head Tina Di Vito's new book 52 Ways To Wreck Your Retirement...And How To Rescue It.
Tip Number 43:
Consider Others During your Retirement
More and more Canadians find themselves responsible for caring for their parents, a spouse, a friend or other family members. As you envision your retirement, make sure you consider how the added responsibility of caregiving might alter that vision.
-- Have a care strategy in place.
-- Ask family members for help.
-- Establish set vacation days from caregiving and stick to them.
-- Investigate workplace support for elder care services.
Tip Number 44:
Be Sure to Protect your Most Important Asset - You!
The best-laid plans can go astray if you do not take the proper steps to protect your earning capability during your working years, and your income and assets during retirement. Be sure to examine your life, disability, long-term care and critical illness insurance needs, for both now and into your retirement.
Before retirement:
-- Review your disability insurance policy, to make sure you have the
appropriate type and amount of coverage.
-- Review your life insurance policy. Is the coverage enough, and can you
continue the policy in retirement?
-- Consider long-term care and critical illness insurance to help cover the
costs that may arise.
In retirement:
-- Incorporate the potential costs of long-term care or a critical illness
into your retirement plan, and determine what impact these costs would
have on your retirement. Consider long-term care and critical illness
insurance to help cover costs that may arise.
-- Consider life insurance to pay estate costs and income taxes, or to
create an inheritance.
For more information on retirement: http://www.bmo.com/retirement.
Get the latest BMO press releases via Twitter by following @BMOmedia.
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BMO Retirement Tips of the Day: Consider Others During Your Retirement & Be Sure to Protect Your Most Important Asset ...
The Standard Adds New Fiduciary Protection for Retirement Plan Sponsors
Posted: at 12:48 am
PORTLAND, Ore.--(BUSINESS WIRE)--
Standard Retirement Services, Inc., has enhanced its core retirement plan services with significant, new fiduciary protection services. The company can now act as an ERISA 3(16) fiduciary in performing certain plan administrative duties on behalf of plan sponsors who delegate these tasks. These duties can include required compliance testing, plan eligibility notifications, approval of participant loans and distributions, and delivery of required participant notifications and disclosures.
“Plan sponsors must take on considerable administrative responsibilities in order to comply with ERISA regulations,” said Dan Hall, vice president of Retirement Plan Sales. “By leveraging our internal expertise and resources, we are able to take on a significant amount of plan sponsors’ administrative burden while better supplementing the offerings of plan advisors.”
To further complement the needs of advisors and their clients, StanCorp Investment Advisers, Inc., can now take on ERISA 3(38) fiduciary responsibility for the removal and replacement of investments at the plan level. This expanded layer of protection adds to The Standard’s existing fiduciary capabilities, which include acting as an ERISA 3(21) fiduciary for the selection and ongoing monitoring of the investments offered in a plan sponsor’s retirement plan and acting as an ERISA 3(38) fiduciary for participants who are enrolled in Mainspring ManagedSM, the company’s goal-based savings and investment planning and advice service.
“We recognize that many advisors provide some level of investment fiduciary services as part of their offerings to plan sponsors, while others do not provide such services,” Hall said. “Our fiduciary services are intended to complement the unique value proposition and service delivery model that each advisor brings to the table. Advisors can choose to use all, some or none of our fiduciary services as they determine what is most appropriate for a particular client’s plan. This approach gives advisors maximum flexibility to deliver the right level of fiduciary protection to their clients.”
In addition, the three-level fiduciary protection services under ERISA 3(16), 3(21), and 3(38) will be available to plan sponsors of any size.
“We designed our fiduciary offering to be cost effective for all employers, especially for those with smaller plans who have not traditionally had access to this level of fiduciary protection,” Hall said. “When you also consider that The Standard does not outsource any of this fiduciary responsibility to a third party, we believe that our fiduciary services offer a very compelling value to advisors and sponsors.”
Disclosure
StanCorp Equities, Inc., member FINRA, distributes group annuity contracts issued by Standard Insurance Company and may provide other brokerage services. Third party administrative services are provided by Standard Retirement Services, Inc. Investment advisory services are provided by StanCorp Investment Advisers, Inc., a registered investment advisor.
About The Standard
The Standard is a leading provider of financial products and services, including group and individual disability insurance, group life, AD&D, dental and vision insurance, retirement plans products and services, individual annuities and investment advice. For more information about The Standard, visit http://www.standard.com.
The Standard is the marketing name for StanCorp Financial Group, Inc., and its subsidiaries: Standard Insurance Company, Inc., The Standard Life Insurance Company of New York, Inc., Standard Retirement Services, Inc., StanCorp Mortgage Investors, Inc., StanCorp Investment Advisers, Inc., StanCorp Real Estate, LLC, and StanCorp Equities, Inc.
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The Standard Adds New Fiduciary Protection for Retirement Plan Sponsors
Retirement planning inspiration from the Oscars
Posted: at 12:48 am
(MoneyWatch)
As an actuary, I'm a numbers guy. That's why most of my posts offer analyses, strategies and insights from my 35-plus years of actuarial experience to help you make the best of your retirement.
But many people need more than facts and figures to get them to take action to improve their lives -- they need inspiration. And motion pictures often tell the stories that move us to make changes in our lives.
With Oscar night approaching, it's a good time to watch a few movie clips that will inspire us to take charge of the rest of our lives. All of these clips except one come from movieclips.com, a fun website that organizes a treasure trove of clips from the classics and beyond. One clip comes courtesy of YouTube.
With all the bad news about retirement -- inadequate savings, stock market meltdowns, layoffs, retirement benefits cutbacks, and the threat of reduced Social Security benefits -- it's understandable if you're mad as hell about retirement. If it helps to get it out of your system, go ahead and shout out your frustrations, like Peter Finch's character did in the movie "Network," when he yelled, "I'm mad as hell, and I'm not going to take this anymore!"
But just being mad won't change the reality of the retirement challenges that boomers face today. So redirect that energy and take action steps that will make your life better. Believe that failure is not an option, and develop a plan that will work, as shown by this scene from "Apollo 13."
Some movie clips offer examples of what not to do, such as this scene in "Shrek Forever After," when Shrek meets up with the retired cat Puss in Boots, who had lost purpose in life, and had degenerated into a fat cat. Instead, you'll thrive in your retirement years if you enter them with a spirit of renewal and transformation, as shown in this scene from "Man of La Mancha."
Speaking of contrasts, one thing you may want to avoid is adopting Billy Crystal's cynical attitude about aging, as shown in this clip from "City Slickers." Instead, look no farther than the tale of reinvention in one of this year's nominees for best picture, "The Artist."
While planning for your retirement years, don't forget to make plans to ensure that your spouse or partner will be secure after you've gone to the great cutting room floor in the sky. In this famous scene from "Gone With the Wind," Clark Gable's character, Rhett Butler, gives us an example of how not to think about the future. Instead, it's better to be sure you'll never be sorry about the plans you've made for your spouse's future, as illustrated in this equally famous scene from "Love Story."
The people who do best in their retirement years are the ones who commit to making a difference in their lives and the lives of others. Need some inspiration for that? Watch this scene from "Star Trek: Generations," and you'll see what I mean.
Motivated to learn more about retirement planning? These posts are a good start:
Retirement planning: How to do it right
Women: Don't go broke in retirement
So what are you waiting for? It's time to start planning for the rest of your life. May the Force be with you!
Race And Retirement: Who’s Saving The Most, Least?
Posted: at 12:48 am
What does race have to do with retirement? Apparently plenty. A new study, Retirement Revealed, from ING U.S. examines how cultural environment can affect one's financial situation and behavior.
While no one in America seems to be feeling terribly confident about retirement, not even those who are a lot closer to the lofty 1% than the rest of us, there remain significant differences among ethnic groups. The Retirement Revealed study shines the spotlight on the differences between Asians, African Americans and Hispanics (as compared to an overall set of 4,000+ U.S. respondents), when it comes to retirement saving, planning and preparedness.
ING's research showed that Hispanics feel the least prepared, with 54% indicating that they feel "not very" or "not at all" prepared. This compares with 50% of African-Americans, 48% of whites and 44% of Asians polled who said they don't feel prepared. The feelings make sense when you look at the amount save in employer-sponsored retirement plans, where Hispanics reported having the lowest average balance ($54,000) in their retirement plans. This amount was notably lower than the average balance across all groups, ($69,000). The top savers were Asians, who had the highest average balance of $81,000.
Savings shortfall
What's getting in the way of saving?
Nearly three-quarters (73%) of those surveyed admitted having barriers to saving. Among the groups, African-Americans said debt was their biggest obstacle. More than 60% of African-Americans said that whittling away their debt was their most important short-term financial goal. Needing to know more about their savings options is a greater barrier to savings for Hispanics than for any other group.
Fail to plan, plan to fail
The Hispanics said they were less focused on their future retirement goals — well over half (57%) have never done the math to come up with a figure for how much money they'll need to mirror their current lifestyle later down the road. Seventy percent didn't have a formal investment plan to reach their goals. In fact, only 29% of all who shared their thoughts said they had a formal investment plan. African-Americans are most likely to have one (32%) and whites are least (28%).
No safety net
Nearly half of all participants have too little savings to amount to much (one month or less). The number increases to 47% for Hispanics, 50% for African-Americans, while only 25% of Asians have one month or less saved for hard times.
Cart before the horse syndrome
While Asians win the trophy for being most prepared for retirement, they seem to have their priorities somewhat misplaced. Lifestyle matters much for Asians, who put a higher priority on purchasing a nice house or car, than planning for retirement, according to the survey.
What's the takeaway?
Truth is, the survey shows that everybody on the planet could likely benefit from professional planning advice. "Having a road map to retirement will increase one's probability of achieving one's goal," says Fred Makonnen, vice president of Multicultural Sales at ING. Universally, there is a need for a stash of at least six months worth of expenses. Then too, across the board there is also room for improvement in getting life insurance coverage. However, there is one group that stands out: nearly one-in-four African-Americans have life insurance coverage equal to four to five times their salary, higher than the total population (18%).
Makonnen, has this advice for African-Americans, "Tackle debt. Write your goals on paper and create a plan to get there. Start with reducing your debt. It may require cutting your cable or other expenses. African-Americans also incur higher levels of late fees. You can avoid unnecessary penalties by setting up an automatic payment account." Once the debt is paid off, the next task should be building an emergency and stepping up retirement savings at work.
For Hispanics, his words of wisdom are simple, "Get focused. Create a comprehensive plan that takes into account shorter-term goals like weddings and college and longer-term goals like retirement."
Although Asians are strong savers, they are the least likely to have a last will and testament (26%), compared with 31% for Hispanics and 37% for whites. Makonnen urges Asians to put creating a will high on the to-do list.
While the research reveals cultural differences, I'm left wondering why? The intersection of culture, tradition and money is fascinating. How much of one's financial personality and attitudes can be attributed to upbringing, environment, culture and tradition? No one can say for sure yet. I'm waiting for that study.
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Race And Retirement: Who’s Saving The Most, Least?
Retirement Gotchas Experts Rarely Talk About
Posted: at 12:48 am
Retirement planning is full of rules of thumb. The 4 percent rule can help you to decide how much to withdraw from your retirement savings each year, and aiming to replace a certain percentage of your pre-retirement income can give you a rough idea of how much to save. However, this well-intentioned advice sometimes gets slowly twisted into something else that does more harm than good. Here are some ways following expert advice can actually harm your financial future.
[See 10 Important Ages for Retirement Planning.]
You are unlikely to implement the 4 percent rule. The 4 percent rule is based on withdrawing 4 percent of your assets annually and adjusting the amount based on inflation every year. So even if the market does really well or drops precipitously, you stick with a 4 percent withdrawal based on the original nest egg and ride out the bumps. But can you imagine anyone actually doing this throughout retirement? Say you are 20 years into retirement. By then, even the most stubborn and disciplined person has probably come up with a new percentage to draw based on market performance and personal circumstances. In reality, people end up twisting the 4 percent rule, perhaps to withdraw more money when they incur an unexpected expense or skip a withdrawal while the market is down. This may or may not work for them, but it's not the 4 percent rule.
Everyone doesn't need the same percentage of pre-retirement income. Some studies have calculated that most people will need a specific percentage of their pre-retirement income to live comfortably in retirement, such as 75 or 80 percent of working income. This is another rule that could help you get a sense of how much is needed for your retirement years, but it may not work in practice. There are just too many expense variables to say that everyone will be able to get by on a given percentage of their pre-retirement income. For example, many people have a mortgage payment that consumes around 25 percent of their income. Obviously, people who pay off their house before they retire will have a vastly different expense situation than those who are still making payments. Therefore, the only way to come up with any realistic retirement budget is to know your own situation and track your expenses. There's no other way to determine how much you need to save for retirement.
[See The 10 Best Places to Retire in 2012.]
There's inflation between now and retirement too. While most people consider how inflation will impact their nest egg during their retirement years, not enough people account for inflation eroding their purchasing power from now until the day they decide to start their retirement. Of course, this problem is worst for younger folks who have decades until they retire. But workers nearing retirement should acknowledge that they will probably need a bigger nest egg to account for inflation. Once you figure out your expenses, you need to remember to add inflation into the calculation too. For example, if your expenses are currently $40,000 a year, the same level of consumption could cost as much as $54,000 in 10 years.
Social Security is a big help. It's true that the Social Security system has a long-term deficit. But there is almost no chance that the program will be eliminated in its entirety. This means that, for the vast majority of Americans, there will be some sort of check coming to you on a monthly basis for the rest of your life, and it will be adjusted each year to keep up with inflation. The program won't replace all your working income, but the monthly payments will give your retirement standard of living a significant boost.
[See 7 Misconceptions About Retired Life.]
Instead of writing the whole scheme off completely, you should make sure that you are doing what you can to increase your retirement benefit. This means at least 35 years of paying into the system, and taking some time to figure out the pros and cons of claiming your benefits at various ages. Married individuals should explore ways to maximize their lifetime benefit as a couple.
David Ning runs MoneyNing, a personal finance site aimed at helping others change their habits for a better financial future. He suggests that everyone to sign up for an online savings account to get more out of our hard earned money.
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Retirement Gotchas Experts Rarely Talk About
Retirement Market – Video
Posted: February 22, 2012 at 3:08 am
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Retirement Market - Video
Foundation of a Happy Retirement Isn't Money
Posted: at 3:08 am
HUNT VALLEY, Md. (TheStreet) -- One would believe that the "foundation of retirement" is Social Security or a pension. Some may say it is the three-legged stool of Social Security, pension and savings. The reality is that the foundation of retirement is the same for all financial planning regardless of where you are in life: "What you think about money will determine everything you do with and for money." I have been in the financial advice business for 33 years, and for the first 15 of those years I was frustrated. I seemed to always give good advice, but I was getting mixed results. One person was aggressive on tax deductions, the other conservative. One person was an aggressive investor, the other conservative. One bought all the insurance they could get their hands on, the other never bought it. Neither was right or wrong. They were just acting out of what they thought and believed. As financial advisers we need to listen to our clients to understand what is driving them and their belief systems. Only by doing this can we be truly successful in working for them. For someone to get their "foundation" right requires a massive shift away from some universally accepted beliefs. The king of all beliefs is that money is powerful. Unfortunately, there is no basis to that common belief. Tell a trillion dollars to go do something really powerful and you know what? Nothing will happen. We must understand that money is an inanimate object that has no power. Money can buy a house, but it will never make it a home. Money can get you a child, but it will never make you a great parent. Steve Jobs was worth many billions, but he still died. The same will happen to Warren Buffett and Bill Gates and any other very wealthy person. Money cannot keep us from the grave. Real power lies in relationships, and the No. 1 destroyer of relationships is money. Money is a very useful tool and too little of it is not healthy. But statistics show that when a family reaches $75,000 in annual income there is little change in the overall family level of satisfaction. The United States peaked in its citizens' level of contentment back in the 1950s and we have been declining ever since despite our vast growth in national wealth. Why have so many wealthy civilizations collapsed? I think you will find the answer in the deceitfulness of wealth. Money is no more powerful than the ancient idols that have been worshipped throughout history. As you head into retirement it is very important to set your feet upon a solid foundation so that you find fulfillment in retirement and leave behind a legacy. A legacy is the dreams, hopes, inspiration, and aspiration you leave behind to the next generation. >To submit a news tip, email: tips@thestreet.com.
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Foundation of a Happy Retirement Isn't Money
Retirement tips: Here's how to save more now
Posted: at 3:08 am
(MoneyWatch)
When you're planning for retirement, your future self doesn't stand a chance battling your current self. That's the powerful message of an excellent video hosted by the Financial Security Project at Boston College. Let me show you what I mean.
Spend for today or save for tomorrow? Your present self is happy when you spend and unhappy when you save.
Take Social Security as early as possible to get the money now or delay it to let it grow? Your current self gives you a high five for taking it now!
In retirement, draw down your 401(k) retirement savings at a much faster rate than 4 percent to pay for the things you want? No worries, says your current self. Somehow it will all work out.
Can your future self ever win? It's not even here today to defend itself! The short answer is nope -- not unless you take special steps now to help your future self.
Daniel Goldstein, the noted psychologist in the above-mentioned video, suggests that you use "commitment devices," or schemes, that your rational, planning future self puts in place. These schemes force you to take care of your future self. Good examples of retirement planning commitment devices include:
-- Saving more with automatic payroll savings and auto escalation with 401(k) plans.
-- Throwing away credit cards that enable you to spend too much.
-- In retirement, using managed payout funds and immediate annuities that send you a monthly paycheck from your retirement savings, so that paycheck lasts for life.
Goldstein goes on to encourage you to imagine your future self being happy and financially secure and asks if you can find the discipline to take steps today to make that future self happy and secure. In a fascinating paper, Goldstein describes experiments where subjects "interacted" with their future self by seeing pictures of themselves that had been "aged." During these experiments, the future self smiled if their present self saved more for retirement and frowned if they saved less. Subjects report that they were more likely to plan for their future if they could see and interact with their future selves.
If you're not faint-hearted, try one of the online software programs that will age a photo of your face. I tried the iPad app AgingBooth, which added 30-plus years to my face. The first few photos of me that were aged were kind of scary, but were also deeply moving. I tried several photos until I found an older "me" that I liked. The exercise made me want to be sure that the older me is OK and doing well -- not only financially but with my physical health as well.
The retirement savings menu: A visual take on how much you should save
What a marshmallow experiment can teach you about retirement
IRA and 401(k) retirement drawdown: Don't die broke!
Unbeknownst to my wife, I ran the program on a photo of her, too. It made me compassionate for both of us. I know that our shared experience will only deepen as we age and that we'll take care of each other as we get older. I have no real worries because I know we'll be committed to make it all work out.
Photo courtesy of iStockphoto contributor JJRD
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Retirement tips: Here's how to save more now