Entries for October 2008

Social Security prevents poverty for millions of older Americans. But the rules about when to sign up and how much you get can be complex. Take this quiz to decide if you know the basics or need to spend more time reading up on your retirement options at the Social Security Administration page online.

Many Americans have stopped saving for retirement. Completely. A new survey found that 63 percent of Americans say they have given up tucking money into their nest egg. An additional 35 percent say they have reduced their retirement plan contributions.

But curtailed savings aren't due to a fully funded retirement account. Only 21 percent of survey respondents say they currently have $50,000 or more in investable assets, according to an Opinion Research Corp. and TD Ameritrade Holding Corp. telephone survey of 1,005 adults conducted in mid-September.

Many baby boomers plan to sign up for their Social Security checks as soon as possible. A new survey found that 45 percent of those currently 61 years old will begin getting Social Security at age 62, the first year recipients can apply. Boomers cited financial necessity, health and longevity concerns, and a desire to collect as much as possible from the system as their reasons for early claiming.

But collecting your due at age 62 could be a mistake. Social Security benefits will increase by approximately 7 percent each year this group of boomers delays claiming from age 62 to 66 and by 8 percent per year until age 70. That is almost certainly a better return than investors are getting from their investments right now, and it can insure healthy retirees against the possibility of outliving their savings.

Cosmologist Stephen Hawking plans to retire next year. The 66-year-old author of the popular science bestseller A Brief History of Time became famous for his theories about gravity, black holes, the big bang, and the nature of time.

Hawking, the Lucasian Professor of Mathematics at Cambridge University (a position once held by Isaac Newton), plans to step down at the end of the academic year, in accordance with a University policy of retirement at the end of the academic year in which officeholders turn 67, the Associated Press reports.

The U.S. Pension Benefit Guaranty Corp. (PBGC), a government agency that insures private-sector pension plans and pays out benefits if the a plan fails, lost at least $3 billion in investments during its fiscal year, which ended in August, U.S. Rep. George Miller announced at a hearing today in San Francisco. Miller, a California Democrat, heads the congressional committee that oversees PBGC.

According to a document containing preliminary, unaudited figures, the losses were caused by the agency's stock holdings. Miller says PBGC invested a significant portion of its funds in mortgage-backed securities.

Roberta Tim Quan, 74, a retired elementary school educator in San Pablo, Calif., recently sustained a loss of $38,000 in her 403(b) retirement account. "My situation is in shambles, with expenses exceeding income," she said at a congressional hearing about retirement security this morning. "I am retired and unable to re-earn the lost funds."

Quan, like many retirees who have experienced catastrophic losses in their retirement accounts, is looking for the government to provide some answers. But how the government should address the retirement needs of retirees who suffered market losses is hotly debated.