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Large Companies More Likely to Cut Retirement Benefits
Tweet Share on Facebook April 15, 2009 Comment (116)Employees of large companies have long had access to cushier retirement and other benefits than workers at smaller companies. But part of that gap may be closing, as least as far as retirement benefits are concerned.
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Free Retirement for Dummies Book
Tweet Share on Facebook April 15, 2009 Comment (10)Humana, a health-benefits company, and Wiley Publishing are giving away free hard copies and a downloadable version of Retirement for Dummies. This short 68-page guide has sections covering signing up for Medicare, managing your money, and caring for loved ones. The bright yellow paperback book also provides the addresses of useful websites to get more information about each topic. You can sign up here.
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Why Retirement is Getting Tougher
Tweet Share on Facebook April 14, 2009 Comment (1)A perfect storm of financial forces have all conspired to make retirement especially rocky for the oldest baby boomers. Optimism about retirement prospects among all age groups has dropped sharply in the past year. Some 54 percent of Americans say they are less confident about having enough money for retirement than they were last year, according to an Employee Benefit Research Institute telephone survey of 1,257 Americans age 25 and older conducted in January 2009.
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Americans Lose Confidence in Ability to Retire
Tweet Share on Facebook April 14, 2009 Comment (4)Optimism about a retirement filled with golf and gardening is being replaced by a vision of retirement that includes work for pay and a considerable amount of cutting back. Only 13 percent of Americans say they are very confident they will have enough money to live comfortably in retirement, according to a new survey. That’s a record low since the Employee Benefit Research Institute began asking the question in 1993 and continues a downward trend from 27 percent in 2007 and 18 percent in 2008. Retiree confidence in having a financially secure future has also dropped to a new low, with only 20 percent now saying they are very confident, down from 41 percent in 2007 and 29 percent in 2008.
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How Much Do 401(k) Match Cuts Hurt Your Retirement Prospects?
Tweet Share on Facebook April 13, 2009 CommentThe suspension of a 401(k) match for just one year could shrink your nest egg by thousands of dollars in retirement. A 30-year-old worker earning $50,000 annually who contributes 6 percent of his salary to a 401(k) and previously got a 50 percent match will have $16,000 less in retirement if the match is suspended for just one year, according to a new analysis by Hewitt Associates, a human resources consulting firm. That number jumps to $48,000 if the employee stops contributing to his 401(k) as well. If that worker becomes discouraged and stops saving altogether for 5 years he will have $150,000 less for retirement, Hewitt calculated. The calculations assume the employee will recieve a 3 percent annual raise and 7 percent returns on investments.
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Your 401(k) May Be Making Someone Else a Millionaire
Tweet Share on Facebook April 10, 2009 Comment (5)Starting to save for retirement in your 20s and continuing throughout your life can make even modest earners millionaires. But you may also be making someone else a millionaire in the process.
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Forced Into Retirement Without Warning
Tweet Share on Facebook April 9, 2009 Comment (3)Many people plan to work until age 62 when Americans become eligible for Social Security. Age 65 is also a popular retirement choice because Medicare eligibility kicks in. But retirement can also happen without warning. An unexpected layoff or health problem can force you into retirement earlier than planned. Some employers will also try to entice you to retire early with a buyout offer. Employees sometimes accept the early retirement incentive because they’re afraid they might be laid off under less favorable terms later.
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Don’t Count on Future Social Security Increases
Tweet Share on Facebook April 8, 2009 Comment (66)Social Security payouts increased 5.8 percent this year. It was the largest cost-of-living increase in more than 25 years and increased the typical retiree’s check by approximately $63.
But don’t count on a boost in payments next year. A Congressional Budget Office report predicts that there will be no cost-of-living increases for Social Security beneficiaries in 2010 through 2012. Although it’s more difficult to make accurate calculations farther into the future, CBO also projects that, after 2012, future cost-of-living adjustments will be less than 2 percent until 2019.
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A Resurgence in Retirement Savings
Tweet Share on Facebook April 7, 2009 Comment (2)There is no question that almost all American’s retirement account balances are down this year. But that doesn’t mean we’ve stopped saving. In fact, 28 percent of Americans have actually managed to save more in the past 12 months, according to a new survey. Plus, a whopping 71 percent of respondents say they have cut back on spending.
The majority (86 percent) are padding their emergency fund, according to the AARP and International Communications Research survey of 1035 Americans age 25 and older conducted in late February and early March. But 73 percent said they are also slashing expenses and painstakingly bumping up their saving in order to have more money available in retirement.
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Retirement Risks are Increasing
Tweet Share on Facebook April 3, 2009 Comment (10)Retirement is risky business. Giving up your income stream and hoping you have enough saved to cover whatever expenses may crop up is a scary prospect, especially without a pension. It’s a good idea to try to calculate how much you need to save. But the truth is, you don’t know how long you might live and can only hypothesize about what health expenses you may incur.
About 64 percent of Americans are at risk for not being financially prepared to maintain their standard of living in retirement, according to a new Center for Retirement Research at Boston College study underwritten by Nationwide. The estimate was recently updated to include the possibility of long-term care costs, which caused a spike in the number of unprepared households.
