Archive | December, 2012

2103 Retirement Resolution: Plan Your Next Chapter

When thinking about retirement, it’s easy to see it as the end of something: your working career. But it’s also the beginning. Chances are that you have a lot of good years left in you and retirement is also an opportunity to pursue a different path, so make this last 2013 retirement resolution: plan your next chapter.

Start now. Make this 2013 retirement resolution: plan your next chapter.

2013 retirement resolution: plan your next chapter

Whether you’ve saved a lot of money or just a little, your golden years are a perfect opportunity to take your life in a completely new direction and try things you’ve always wanted to, but never had the time. If you give it some thought, you can probably make money from your new adventures, too. And that’s never a bad thing.

Once your retirement finances are in place, you’ll also need a plan for how to spend your time in retirement. “Slowly start thinking about what you want your next chapter to be about,” says Marci Alboher, vice president of Encore.org.

Make a plan — or several. Be practical, but don’t limit yourself, either.

…do some experiments to test out your ideas. Volunteer for an organization in your neighborhood. Make some coffee dates with people who have used their retirement in meaningful ways.

Of course, you’ll probably never become a professional football player starting so late in life, if that was your dream, but there are lots of options that will allow you to be actively involved with the things you love, so add this last 2013 retirement resolution: plan your next chapter.

Click here to read more 2013 retirement resolutions.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Plan Challenges0 Comments

Scams Threaten Your Retirement Security

The elderly seem to be a prime target for scammers, who often pose as grandchildren in need of financial assistance. This approach has been around a long time, but it’s worth mentioning again because these scams threaten your retirement security.

Scams like the “grandchild in trouble” threaten your retirement security.

Scams threaten your retirement security

Grandchildren — and children — often need financial assistance and loving grandparents with the means to do so often help. This willingness to help out family members is the basis of a scam that can rob you of hundreds — or thousands — of dollars.

Carol Mahre said when one of her grandchildren is in trouble, there’s nothing she won’t do to help. That’s why when she got a call from a young man claiming to be her grandchild, she was determined to help.

“I get a call in the morning by this young man who said, ‘Hi grandma’ just like my grandson would do,” Mahre said. “And then he said. ‘I’m in Mexico and I’ve got a problem.’”

And that’s how it starts. Before you send your hard-earned retirement dollars to some foreign land, or even across the country, there are some simple things you can do to ensure you really are helping a loved one and not getting ripped off.
  1. If the person says they know you, verify their identity by calling them back on the number you already have.
  2. Never give out bank or credit card numbers.
  3. Be very suspicious of requests for money wires.

You can also call other family members to learn about the “grandchild’s” activities, before you send any money. Parents and siblings are sure to know where they are and what they’re up to. Scams threaten your retirement security, but you can avoid them with these simple steps and a good dose of skepticism.

Click here to read more about avoiding scams that threaten your retirement security.

Posted in Saving for Retirement, The Economy0 Comments

2013 Retirement Resolution: Get Your Social Security Statement

Most of us will be relying — perhaps heavily — on Social Security when we retire. To get an idea of what that will mean for you, adopt this 2013 retirement resolution: get your Social Security statement.

Make this 2013 retirement resolution: get your Social Security statement.

2013 retirement resolution: get your Social Security statement

Most workers will no longer receive a paper Social Security statement in the mail. But now people age 18 and older can access their Social Security statements online. Take a few minutes to check that your earnings history has been property recorded and familiarize yourself with your expected Social Security payout. “Delaying Social Security makes sense for most people if you can afford to do it, because the payout escalates enormously for every year you wait between ages 62 and 70. That’s a return that is really hard to beat by putting your own money to work.”

In addition to increasing your Social Security payments, working longer has the added advantage of more earnings and — of course — more savings for retirement, so make this 2013 retirement resolution: get your Social Security statement.

Click here to learn more about 2013 retirement resolutions you should make.

Click here to visit the Social Security Administration set up your online account.

Posted in Planning for Your Retirement, Social Security0 Comments

2013 Retirement Resolution: Understand 401(k) Fees

401(k) plans are notorious for charging outrageous fees to manage your account and it’s amazing how much those fees can drain your retirement fund. So, make this 2013 retirement resolution: understand 401(k) fees.

Your 401(k) could be bleeding money. Make this 2013 retirement resolution: understand 401(k) fees.

2013 retirement resolution: understand 401(k) fees

The fees your retirement fund management team charges you to take care of your money range from fractions of a percent to several percent, depending on the company and the funds where you have your money. While it may not sound like much, over the years it can add up to tens of thousands — or even hundreds of thousands — of dollars.

That money should be yours, and what you’re spending it on isn’t a bargain, considering the quality of the investment advice most of us get.

Finally, you have a way to see what you’re being charged, and although it will still take some work to figure it all out, it’s well worth it.

Make use of new 401(k) fee information.

Retirement savers will get new information about the fees and other charges being deducted from their 401(k) this year in the form of quarterly and annual statements. Take a look at the costs of your investment options and how your returns compare to the benchmark. If your funds aren’t delivering enough value to be worth the cost, consider switching to investments with lower fees. “Ideally you should be paying no more than half a percent on investments in your 401(k),” says Mark Jarvis. “You need to make sure that all fees on investments, whether in a 401(k) or IRA or other account, are as low as possible.”

Chances are, your 401(k) account is being over-charged and there are more economical options in your plan. If you must put money into a 401(k) plan, make this 2013 retirement resolution: understand 401(k) fees.

 Click here to learn more about 401(k) fees and other 2013 retirement resolutions.

Posted in Medicare, Planning for Your Retirement, Retirement Investment Options, Retirement Plan Challenges, Saving for Retirement0 Comments

Retirement Downsizing May Not Be Right For You

You’ve raised your family, they’re out of the house and doing well on their own. You look around at all the empty space and wonder if you really need it. Maybe a smaller home is the right choice, but it’s also possible that retirement downsizing may not be right for you.

Retirement downsizing to a smaller home may not be right for you.

Retirement downsizing may not be right for you

There are many benefits to downsizing, but there are some drawbacks as well:

With the real-estate market still fragile, many baby boomers are getting a lot less than they expected for the old homestead. All too often, they have little cash left over after buying a new place, and their monthly expenses don’t fall as much as they thought—or may even rise instead.

Then there’s the emotional impact:

Many baby boomers are finding they lack the stomach or stamina to dismantle their lives. They can’t bear to sort through or part with all those boxes in the basement, or argue with the adult children who want to keep the house where they grew up.

And, if you’ve gotten used to lots of space, you could be in for a shock.

One of the biggest problems people encounter after downsizing is also one of the most obvious: It can be crowded.

Many retirees look at a smaller, less expensive living space as a solution to their retirement financial problems. It can help, but you’ll have to make some sacrifices, so retirement downsizing may not be right for you.

Click here to read more about retirement downsizing.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Plan Challenges0 Comments

2013 Retirement Resolution: Capture Employer Matching Funds

One of the few reasons to put money into a 401(k) plan is if you’re getting a matching contribution from your employer — it’s free money. If you are, take advantage of it with the 2013 retirement resolution: capture employer matching funds.

Make a 2013 retirement resolution to capture employer matching funds.

2013 retirement resolution: capture employer matching funds

Max out your employer benefits.

Saving for retirement is easier when your employer chips in. Make sure that you sign up for your workplace retirement plan and save enough to capture the 401(k) match or other contributions offered by your company. An employee who earns $50,000 a year and gets a 3 percent employer match could get as much as $1,500 annually from the company for their retirement.

While there are problems with 401(k) plans — like excessive management fees and the risk of systemic failure — you should take advantage of your employer’s matching contribution to your 401(k).

Equally important, understand the sizable risks association with 401(k) plans and learn how to mitigate those risks and protect your retirement savings. No on cares as much about your retirement as much as you do, so commit to the 2013 retirement resolution: capture employer matching funds.

Click here to read more about 2013 retirement resolutions.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Investment Options, Saving for Retirement0 Comments

2013 Retirement Resolution: Save More

As we approach the new year, many of us will be contemplating the tradition of making new year’s resolutions. With that in mind, here’s the first of several resolution ideas to improve your golden years — 2013 retirement resolution: save more.

Make a new year’s resolution to save more for your retirement.

2013 retirement resolution: save more

Save 1 percent more.

Set your direct deposit to your 401(k) or IRA to be slightly higher next year. “I would increase the percentage 1 percent, and if, after three months, I am paying my bills and having a little fun, I would raise that another 1 percent,” suggests Gail MarksJarvis, author of Saving for Retirement (Without Living Like a Pauper or Winning the Lottery). “If I am getting a raise in the new year, my resolution would be to provide half of my raise to a 401(k) or an IRA before I ever take that pay home.”

Given the problems with 401(k) plans — like excessive management fees and the risk of systemic failure — you should also think outside the box, like increasing your mortgage payment by one percent or finding other investment options that really do diversify and protect your investments.

You deserve a great new year and a safe and secure retirement, so plan ahead and commit to this 2013 retirement resolution: save more.

Click here to read more about 2013 retirement resolutions.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Plan Challenges, Saving for Retirement0 Comments

Do The Emotional Math When Planning for Retirement

Talk to any knowledgeable financial advisor and they’ll be able to run all sorts of calculations and predict your retirement date and the amount you’ll have saved, right down to the penny.

At least it looks that way. In fact, they can’t take into account many variables — especially the emotional factors that are so important to a happy retirement. To come up with the best retirement plan, you’ll have to look at the numbers as well as do the emotional math when planning for retirement.

Do the emotional math when planning for retirement.

Do the emotional math when planning for retirement

There are many emotional factors that can come into play as you plan your retirement:

  1. Evaluate your health, not just your medical coverage.
  2. Consider whether you actually want to be retired. After a full career, many people find that quitting work leaves them without a clear direction of what they really want to do.
  3. Understand that it’s impossible to be certain about how everything will work out.
  4. Be able to deal with spending less money than you might prefer.
  5. Be flexible with your final retirement date.
  6. Remember the other people involved with your retirement decision.

It’s easy to buy into the conventional vision of retirement — whatever that may be — but it’s more important to decide what you what and how you want to achieve it for a happy and fulfilling retirement. In addition to running the numbers, be sure to also do the emotional math when planning for retirement.

Click here to read more about doing the emotional math when planning for retirement.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Plan Challenges, Saving for Retirement0 Comments

Stop Low Interest Rates From Ruining Your Retirement

The current record-low interest rates are — we’re told — supposed to boost the economy by making it easier for businesses to borrow, but these same rates are causing havoc among retirees — and soon-to-be retirees — by slashing their interest income. Here are a few things you can do to stop low interest rates from ruining your retirement.

You have many options to stop low interest rates from ruining your retirement.

Stop low interest rates from ruining your retirement

A May survey from Gallup and Wells Fargo (WFC) confirmed what many people already know all too well: Low interest rates are destroying people’s confidence about ever being able to retire. Fully one-third of those surveyed said that they expect low rates will compel them to work longer and delay their retirement, while 45% of current workers say they think low rates will make it a lot more likely that they’ll outlive their money after they retire.

In particular, the survey points to deteriorating confidence among retirees. Last year, retirees were much more optimistic about their futures. Yet with core inflation outpacing rates on bank certificates of deposit by more than a factor of three in many cases, those living on fixed incomes are feeling the pinch — and will continue to do so as higher prices reduce the purchasing power of their nest eggs.

To counteract this disturbing trend, many retirees are doing something they probably shouldn’t, although they may have little choice.

Almost 20% of retirees have moved their money into riskier investments they probably wouldn’t have bought if rates weren’t so low. For instance, some retirees have turned to dividend-paying stocks, many of which pay out more income than bank CDs and other income-generating investments.

Only you can decide if taking on that added risk is right for you, but keep in mind that there are other options:

The best answer for most retirees involves using a combination of investments to generate income. Dividend-paying stocks may play a role in your portfolio, but putting all your money into stocks involves far more risk than the vast majority of retirees can afford to take.

A well-balanced portfolio can help:

Municipal bonds earn interest that isn’t subject to federal income tax, but they also have higher yields than Treasury bonds of the same maturity — even though you have to pay federal tax on Treasury income.

Managed payout funds make fixed payments to their shareholders over time, and even if the income the fund portfolio generates isn’t enough to cover a payment, the fund can go in and essentially return a portion of your investment back to you to cover your cash flow needs.

Now may also be the time to look into a second career. Work you enjoy — even if it’s just part-time — can help cover the income gap and give you something interesting to do during your golden years.

Low interest rates won’t last forever — although it may seem like it — so now is the time to think outside the box and modify your retirement strategy to stop low interest rates from ruining your retirement.

Click here to read more about what you can do to stop low interest rates from ruining your retirement.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Plan Challenges, The Economy0 Comments

Retirees Should Understand the Dangers of Investment Fraud

The elderly have long been a prime target for “fraudsters.” Crooks are more brazen and knowledgeable than ever and most of us don’t have time to keep up with all the new ways someone else can illegally get our money. That’s why it’s so important that retirees should understand the dangers of investment fraud.

Retirees should understand the dangers of investment fraud.

Retirees should understand the dangers of investment fraud

It was just about four years ago that the epic cons of Marc. S Dreier, R. Allen Stanford and the mastermind Bernie Madoff crashed down around them, along with the world’s financial markets. What have we learned? Now “may be a good time to ask whether you have done all you can to lower your risk of being caught up in a similar fraud.”

Protecting yourself against fraud, or simply bad advice, is easier said than done. The most common advice is to make sure your money is held by an independent custodian or firm whose job is to keep your money safe. That wasn’t the case with either the Madoff or Stanford fraud. But that is only one small step.

Here are some other things to keep in mind to avoid having your retirement fund gutted by some unscrupulous con artist:

The first step would seem to be picking an honest adviser. The good news is that only about 7 percent of advisers have disciplinary records, said Nicholas W. Stuller, president and chief executive of AdviceIQ, a company that evaluates advisers.

Ross Gerber, president and chief executive of Gerber Kawasaki, a wealth manager, said clients with sizable wealth should not trust it to any single adviser, no matter how good the adviser seems to be.

Mr. Gerber added that he would steer clear of advisers who didn’t want to share with other advisers what they had done for clients. “If Starbucks goes from $50 to $80, it’s easy to show them why it did well,” he said. “When you’re investing in these scams, they’re funds. You don’t see what’s in them. People don’t necessarily ask a lot of questions or they don’t care.”

In some cases, investors do not even know the questions to ask. Marc Odo, director of applied research at Zephyr Associates, a financial software firm, said he had been asked by a client whether a return could be so high or consistent for so long that it might signal a fraud.

I can’t stress it enough: Learn about investing — after all, your retirement depends on it — ask questions and remember — if it sounds too good to be true, it probably is. The better retirees — and the rest of us — understand the dangers of investment fraud, the safer our investments will be.

Click here to read more about what retirees should understand about investment fraud.

Posted in Planning for Your Retirement, Saving for Retirement0 Comments

Recent Comments