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Job and Stock Market Woes Could Linger for Retirees
Tweet Share on Facebook June 15, 2010 CommentThe state of the job market and stock market in the year you retire could affect how much income you receive a decade or more into your retirement. A stock market decline in the years leading up to retirement typically causes a reduction in investment income that can still be felt 10 years later, according to new Wellesley College research. High unemployment around the time of retirement means some older workers may be pushed out of the workforce earlier than planned, which also generally reduces retirement income.
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7 Ways Money Leaks Out of Your 401(k)
Tweet Share on Facebook June 14, 2010 Comment (6)Most people who dip into their 401(k) or IRA before retirement aren’t buying the latest gadget or financing a lifestyle they can’t afford. Savers who take early retirement account withdrawals primarily have a compelling need for the money, such as job loss or a health problem, according to a new Urban Institute study. Some retirement investors also tap their nest egg to purchase a home. Those who raid their 401(k) shortly after a voluntary job change account for only 10 percent of total dollars withdrawn. Here’s a look at the seven most common reasons money leaks out of retirement accounts.
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The Future of 401(k) Fee Disclosure
Tweet Share on Facebook June 11, 2010 Comment (2)The House of Representatives approved legislation requiring all 401(k) fees to be disclosed in May. But Senate lawmakers dropped the 401(k) fee disclosure provisions of the American Jobs and Closing Tax Loopholes Act this week.
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5 Tips for Taking a Mini-Retirement
Tweet Share on Facebook June 10, 2010 CommentSome people call them mini-retirements, sabbaticals, or simply an extended break from the 9 to 5 lifestyle. Instead of working until age 65 and then retiring, some individuals are interested in stepping away from a structured job for more than the standard two week vacation. Here are some tips for fitting a mini-retirement into your career plans.
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How Long Will Your Retiree Health Plan Last?
Tweet Share on Facebook June 8, 2010 Comment (1)The federal government is giving companies $5 billion to maintain health care coverage for early retirees. The Early Retiree Reinsurance Program, created by the health reform bill, will subsidize employers that provide health insurance to retirees age 55 and older who are not yet eligible for Medicare until health insurance exchanges become operational in 2014. However, a new study found that the government payout may not last four years.
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Ian Ayres: Why Young People Should Borrow to Invest
Tweet Share on Facebook June 7, 2010 Comment (7)The typical 60-something investor has much more money in the stock market than he did his late 20s, mostly because young people don’t have as much money to invest. Ian Ayres, an economist and Yale Law School professor, proposes that retirement savers should invest more in the stock market when young and less when old, even if young people need to borrow money to invest. In his new book, Lifecycle Investing: A New, Safe, and Audacious Way to Improve the Performance of Your Retirement Portfolio with coauthor Barry Balebuff, Ayres makes the case that 20-somethings should make leveraged investments – going so far as to buy stocks with 50 percent down payments – in order to lower lifetime stock market risk. U.S. News asked Ayres to explain his controversial time diversification strategy. Excerpts:
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Why Companies Use Automatic 401(k) Enrollment
Tweet Share on Facebook June 4, 2010 Comment (2)Automatically signing up all employees up for a 401(k) account generally gets more people to save for retirement. Almost half (42 percent) of 401(k) plans currently automatically enroll workers, according to a new AARP and Woelfel Research survey of 806 large private sector employers offering 401(k) plans. Some companies (28 percent) also automatically escalate employee contributions. The most common default savings rate is 3 percent of pay.
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The 4 Major Sources of Retirement Income
Tweet Share on Facebook June 3, 2010 Comment (2)Social Security is the largest source of income for Americans age 65 and older, according to a new Employee Benefit Research Institute analysis of Census Bureau data. Earnings from work are also increasingly becoming a necessity for seniors. While about half of seniors have some sort of retirement investments, income from assets makes up only a small fraction of the typical retiree’s budget. Here’s a look at the four major sources of income most retirees rely on.
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The Least Trusted Financial Institutions
Tweet Share on Facebook June 2, 2010 CommentFinancial institutions have been accused of not being there for their customers in the wake of the financial crisis. Less than 5 percent of Americans say they find statements made by a spokesperson for a financial company completely believable. Credit card, mortgage, and health insurance companies are among the least trusted financial institutions. But consumers also say they are mistrustful of the government agencies tasked with regulating financial companies. Here’s a look at the least trusted financial institutions.
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5 Ways 401(k) Fee Disclosure Impacts Savers
Tweet Share on Facebook June 1, 2010 CommentThe House of Representatives approved legislation that aims to make 401(k) fees more transparent on Friday. The bill would require 401(k) service providers to list all fees subtracted from employee retirement accounts. Here’s how the Defined Contribution Fee Disclosure Act of 2010, if it becomes law, would impact your 401(k).
