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Keeping Older Workers on the Job
Tweet Share on Facebook July 17, 2008 Comment (12)Companies that fear a shortage of qualified workers are trying to entice older workers to stay on the job longer. The Los Angeles-based defense and technology corporation Northrop Grumman is exploring innovative ways to keep baby boomers at their desks and get them to teach younger workers their vital skills. I recently spoke with Ian Ziskin, chief human resources and administrative officer for Northrop Grumman, about how he balances new hires with older worker retention. Excerpts:
How much of your workforce is planning to retire in the next decade?
If you look at the demographics of the workforce for Northrop Grumman, which are pretty consistent with the demographics of the aerospace and defense industry in general, we have about 122,000 employees, approximately 50 percent of whom are going to be able to retire over the next five to 10 years. -
A Generation Gap in Retirement Planning
Tweet Share on Facebook July 16, 2008 Comment (3)Almost everyone aims to attain financial security in retirement. But each succeeding generation expects to be more self-reliant than the preceding one, according to a new online survey by Charles Schwab, Age Wave, and Harris Interactive. Americans are depending more on personal savings and investments and less on the government or their employer.
Current retirees depend on the traditional three-legged stool: Social Security, pensions, and personal savings and investments. Each leg supports their retirement to a substantial degree. But generations X and Y expect to rely largely on their own investments, the survey shows.
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The State of Retirement Planning
Tweet Share on Facebook July 15, 2008 Comment (4)People who live in U.S. News's hometown of Washington have the best shot at retirement security, according to a new study. Yes, the cost of living is among the highest in the country. But workers in the District of Columbia are much more likely to have federal government pension plans and retiree health insurance that make retirement planning much easier.
The study by Ernst & Young and Americans for Secure Retirement is the latest in a series of studies predicting that Americans will be woefully unprepared for retirement. While almost 60 percent of new middle-class retirees can expect to outlive their financial assets if they attempt to maintain their preretirement standard of living, Ernst & Young calculated, the probability of outliving one's assets ranges from 39 percent in the District of Columbia to 72 percent in Montana.
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4 Warning Signs: Giving Up the Car Keys
Tweet Share on Facebook July 14, 2008 CommentDriving is a rite of passage in the United States. Remember when you passed your driving test and took your parents' car out onto the open road? Unfortunately, there comes a time in life when you need to think about hanging up those car keys.
In most parts of the country, the privilege of driving is conferred at age 16. But judging how and when to take away or limit access to the keys is harder. In areas of the country without reliable public transportation, losing your ability to drive can feel like a life sentence of isolation and dependency.
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3 Retirement Mistakes Women Make, and How to Fix Them
Tweet Share on Facebook July 11, 2008 CommentBaby boomer women are more likely to have a more financially secure retirement than their predecessors. A new study found that men and women at large companies are both on track to produce the same share of their working income—85 percent of pay—in retirement.
At first that sounds like good news. But women are fraught with the double whammy of lower salaries and a longer life expectancy. So, a woman will need to save 2 percent of pay more per year than the average man over 30 years to achieve the same standard of living, according to Hewitt Associates' calculations.
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Working in Retirement: Motivating Boomers to Stay on the Job
Tweet Share on Facebook July 10, 2008 Comment (3)Working past the traditional retirement age can give you essential extra income, provide something productive to do, and offer opportunities to interact with peers. Unsurprisingly, 85 percent of baby boomers plan to work in retirement, primarily for financial reasons, according to a McKinsey & Co. survey.
Work at older ages has some pretty good perks for society, too. If early boomers between the ages of 54 and 63 delayed retirement from age 65 to age 70, the McKinsey analysis found, the share of households prepared for retirement (and not draining public resources) would nearly double from 31 to 60 percent. Plus, working longer would boost economic growth, enabling the economy to generate an extra $12.9 trillion in GDP between now and 2025, McKinsey calculated.
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Surprise Expenses in Retirement
Tweet Share on Facebook July 9, 2008 Comment (1)Mike Pride, a Concord Monitor columnist in New Hampshire, was looking forward to retirement until he actually got there. He expected normal monthly bills, property taxes, and a visit to his wife's parent's home in Belgium. But he didn't foresee record high oil prices and a 401(k) that rapidly hemorrhaged in value. He also didn't budget for home repairs, like a broken dishwasher and garbage disposal, a refrigerator and freezer that gave up cooling, cold showers when his hot water tank started leaking, and squirrel damage to his home, which all hit him seemingly at once.
"It is not so pleasant to start retirement with so many ill omens, with the national economy quaking, with our 401(k) bleeding. In the shadow of these things, it is a struggle to embrace—or even feel—our new freedom," he says in a Concord Monitor column.
Tell us, what unexpected expenses crept up on you in retirement?
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How Rising Fuel Costs Affect the Elderly
Tweet Share on Facebook July 8, 2008 CommentMany seniors rely on local aging services like rides to the doctor, home-delivered meals, and home healthcare to keep them living independently. But rising gas costs are forcing cutbacks. Over half (56 percent) of Area Agencies on Aging have already reduced services in 2008 to keep up with climbing fuel costs, according to a survey by the National Association of Area Agencies on Aging, and 90 percent expect to do so in 2009. Gas prices are also making it more difficult for over 70 percent of agencies to recruit and retain volunteers.
"Increased costs, all tied to the rising price of oil, are making it harder and harder to keep families together and maintain these patients at home where they prefer to be," says Tim Rogers, executive director of the Association for Home Care and Hospice of North Carolina and the South Carolina Home Care Association.
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A Spending Target
Tweet Share on Facebook July 7, 2008 CommentAfter you've amassed a nest egg, you need to develop a plan for sustaining it. But workers aren't sure how much they can spend in a given year and still make their savings last a lifetime. A recent MetLife Mature Market Institute and GfK North America survey found that 43 percent of workers between the ages of 56 and 65 who plan to retire in the next five years say they can withdraw 10 percent or more of their savings each year while still preserving their principal. But most retirement experts suggest a withdrawal rate of 4 percent or less annually. Here's how long MetLife calculated your savings will last for a given withdrawal rate.
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A Taxing Decision
Tweet Share on Facebook July 3, 2008 CommentWant to save money on taxes in retirement? Give Alaska a try. It's the only state in the country without a state income or sales tax. But before you grab your parka, here's a look at other states with low tax rates.
Income tax. Seven states have no income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. And two states, New Hampshire and Tennessee, tax dividend and interest income only. Other states tax as much as 9.5 percent of your income, although certain types of retirement income are shielded from income tax in some states. To find out which types of retirement income are exempt in your state, contact the state department of revenue.
