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Retirement Often Happens Unexpectedly
Tweet Share on Facebook March 31, 2009 Comment (4)We like to think that if we plan and save throughout our working lives, a secure retirement is within reach. But retirement often happens unexpectedly. A lay off, health problem, or the illness of a relative can derail retirement plans in an instant.
Few people make it to age 40 without a sudden event shocking their finances. A new survey of 1,200 adults between ages 40 and 79 found that 57 percent had already experienced a major life crisis such as a job loss (18 percent), divorce (29 percent), death of a spouse or life partner (10 percent), a serious illness or long-term disability for you or a spouse (24 percent), or the illness or disability of a child (7 percent). Only about 43 percent of those surveyed made it to middle age or older unscathed, AARP Financial Inc. and Boston Research Group found.
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The 30 Companies With the Best 401(k) Matches
Tweet Share on Facebook March 30, 2009 Comment (1)Many companies are suspending their 401(k) match in an effort to improve their bottom line. But some employers still offer a generous contribution to retirement accounts. U.S. News asked BrightScope, an independent data analysis firm that launched the nation's first online 401(k) rating system in January, to sift through its data about 401(k) matches. Here's a look at the employers who give their worker's nest eggs the biggest boost.
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Fidelity: Retired Couples Need $240,000 for Medical Expenses
Tweet Share on Facebook March 27, 2009 Comment (7)Baby boomers who have lost their health insurance coverage often speak of trying to find a way to make it to Medicare. But even after you reach age 65 and finally qualify for the government health insurance program, you’re still likely to face significant costs.
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Social Security Recipients Will Get $250 in May
Tweet Share on Facebook March 26, 2009 Comment (88)The federal government will distribute $250 payments to Social Security recipients in May 2009. The money will be sent separately from regular Social Security monthly distributions. No action is required to get the extra cash by check, direct deposit, or loaded onto your Direct Express debit card.
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The GOP’s Plans for Your Retirement Accounts
Tweet Share on Facebook March 25, 2009 Comment (7)President Obama released his 2010 government budget in February. In it, he proposed that all employees who don’t have access to workplace pension plans be automatically enrolled in a direct-deposit IRA. For families that earn less than $65,000, a 50 percent match on the first $1000 would also be provided. Employees who don’t wish to participate may opt out.
The GOP, however, has different plans to try to help retirement savers, which include blocking efforts to introduce government-run retirement accounts. The GOP Savings Recovery Solutions Group, a House Republican group led by John Boehner of Ohio, yesterday released a blueprint for the Savings Recovery Act, which includes ideas such as:
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AARP Suspends 401(k) Match
Tweet Share on Facebook March 25, 2009 Comment (1)AARP, a giant advocacy group representing the interests of older Americans that used to be called the American Association of Retired Persons, suspended its 401(k) match, effective this week. Employer contributions will be eliminated for at least for the remainder of this year. AARP is one of over 145 employers who have eliminated or changed their 401(k) match since October 2008, according to the Pension Rights Center, including Xerox, Morningstar, and Fossil, Inc.
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House Evaluates 401(k) and IRA Financial Advice Rules
Tweet Share on Facebook March 24, 2009 Comment (6)The House held a hearing this morning to review the rules that govern how financial advice is dispensed to 401(k) and IRA participants. The debate was largely in response to a Labor Department rule, finalized in January, that would allow financial advisers affiliated with mutual funds and brokerage firms to give investment advice to IRA and 401(k) account holders, as long as they disclose how the company earns fees and the computer models used. The rule is currently scheduled to take affect May 22.
Critics of the rule say it will allow investment companies to offer advice that benefits financial services firms and not employees. “During a time where American workers have already lost $2 trillion in assets due to last year’s market downturn, exposing their hard-earned retirement savings to greater risk by allowing advisers to offer them conflicted advice is irresponsible and imprudent,” said Rep. Robert Andrews, a New Jersey Democrat who heads the House subcommittee on pensions, in his opening statement.
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How to Increase Your Retirement Income
Tweet Share on Facebook March 20, 2009 CommentSome retirees are trying to come up with a way to recoup last year’s investment losses. Bonds are an attractive choice for retirees because they’re less risky than stocks while still providing higher returns than CDs. Government bonds provide the most security, but also generally the lowest interest rates. And municipal bonds are attractive for their tax-free status when held outside of retirement accounts. But bonds promising high returns do carry some risks, especially junk bonds. On Monday night I spoke with Nightly Business Report about how to balance the risks and rewards of choosing different types of bonds. You can watch the video here.
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Edging Out the Baby Boomers
Tweet Share on Facebook March 19, 2009 Comment (3)The sheer size of the baby boomer generation made them a group to be watched and analyzed. More children were born in 1957, the peak of the postwar baby boom, than in any other year recorded-- until now.
Approximately 4.3 million children were born in 2007, the highest number of births ever registered in the United States in a single year, according to estimates released yesterday by the National Center for Health Statistics. The record number is largely due to an increase in the U.S. population overall, including women in the child bearing years. The average woman today has 2.1 children, far fewer than 50 years ago.
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A Free Loan From Social Security
Tweet Share on Facebook March 18, 2009 Comment (9)A little-known law allows Social Security recipients who are already collecting benefits to change their mind and start over. An individual can claim Social Security at age 62 and then reclaim again for an enhanced payout at age 70, provided he or she pays back every cent already received. No interest is charged on this “loan” from Social Security. So, an individual who doesn’t need to spend their Social Security income on immediate expenses could feasibly invest the money and keep the interest. Upon paying back the principal, these investors will get higher Social Security checks for the rest of their life.
