Entries for September 2008

It's easy to issue the empty threat that you're going to pull your retirement stash out of the stock market. But most nest eggs aren't mattressbound. An admittedly preplunge Gallup poll released today found that, among the 61 percent of Americans who have money in stocks, 70 percent have not seriously considered withdrawing from the market. Some 20 percent have seriously considered moving to safer investments, but only 8 percent have actually taken money out.

TIAA-CREF, which provides financial services to people in the academic, medical, and cultural fields, says call volume from clients is up 50 percent from this time last year. "Everyone is so afraid. They get nervous and might call and say, 'I want to take all of my money out of stocks,' " says Jeannette Innocent, a TIAA-CREF wealth management adviser in Waltham, Mass. But Innocent, who says she often feels like a psychologist as well as a financial adviser, reassures clients that the portfolios of most individuals aren't tanking as fast as the stock market as a whole, if they have solid diversification and an appropriate risk level. "I'm talking to people who may only be down 5 or 6 percent," she says. "Some clients who are more aggressive may be down 8 or 9." Innocent says only four of her approximately 200 clients have pulled out of the market and put their money in FDIC-insured CDs after talking to her.

Gallup asked on September 26 and 27, "Which of the following do you think is the best long-term investment?" Almost a third of Americans chose safe, low-return financial vehicles that will be lucky to outpace inflation. They responded: savings accounts/CDs (31 percent), real estate (26 percent), stocks/mutual funds (23 percent), and bonds (13 percent).

Have you changed your investment strategy in the past few weeks?

Almost everyone has teachers they fondly remember from high school or elementary school. But do you keep in touch with them? Do you even know if they are still teaching? Enter Facebook. At least two dozen groups have formed to commemorate the retirement of a favorite teacher.

Evan Cobb, 28, a communications director in New Haven, Conn., formed a Facebook group to contact former students of his mother, global studies teacher Sue Cobb, 59, of Fredonia, N.Y. "I wanted to let people know that she was retiring and have them provide stories about her. Within about 24 hours, we had 100 members," says Cobb. The group currently has 320 members. "By the time we got to her retirement party, I'd gotten about 80 or so messages from students—testimonials about the difference that she made in their lives," says Cobb. He collected the stories in a binder and presented it to his mother at her retirement party. Sue Cobb retired this year and has since joined the group.

The government seized banking giant Washington Mutual last night and then sold some pieces of it to JPMorgan Chase for approximately $1.9 billion. Here is how this will affect former Washington Mutual consumers:

What will happen to my bank account?
If you had an account with Washington Mutual Bank yesterday, you now have an account with JPMorgan Chase Bank. All deposit accounts, including savings, checking, money market, and retirement accounts and certificates of deposit, have been transferred to JPMorgan Chase Bank. No depositor has lost any money, even if it was above FDIC insurance limits. Direct deposits and Social Security checks will continue as normal.

Many retirees would like to continue to do interesting work in retirement. Vice presidential nominee Sarah Palin's parents got part-time jobs as wildlife specialists for the U.S. Department of Agriculture. Chuck Heath, 70, a retired science teacher, and Sally Heath, 67, a retired secretary, travel throughout Alaska trapping or killing animals, often in remote locations. They sometimes travel for assignments to other parts of the country as well.

The Associated Press reports:

They've eradicated rat infestations, shooed geese from runways, and killed foxes that were keeping threatened Canada geese from nesting. In January 2002, they went to New York City for a two-week assignment that fit their specialty. Their job was to make sure birds and rats did not disturb the debris from the collapsed World Trade Center towers that was being searched by forensic teams for human remains in Staten Island's Fresh Kills landfill. They used snap-traps to catch mice and rats and pyrotechnics to scare off the gulls. If the birds persisted, the couple shot them as a last resort, Chuck Heath told the Associated Press on Thursday.

Heath said he was happy to leave New York and get back to Alaska. He complained to the New York Times about the heavy traffic. "I'm a country boy," he said.

Retirement experts tell us we should try to work until age 70. Some seniors choose to work even longer. Experience Works, a nonprofit organization that helps older workers find jobs, recently honored an outstanding older worker in each state. I asked the three oldest for the secret to working past age 90.

Jack Borden, 100, only hinted at the answer. "I have a little wooden plaque on my desk that someone gave me. It says, 'Diplomacy is the ability to let someone else have your way,' " says Borden, who works about 40 hours a week as an attorney in Weatherford, Texas. The former FBI special agent has practiced law for 73 years, doing mostly real estate and probate work. "I must like it or I wouldn't still be doing it," says Borden. "There's a lot of people I can help without charging them a lot of money." Borden began working on the family farm at age 5. "By the time I was 10 years old, I was tying four mules to a grinder cutting grains," he says. The high school dropout went back to school for a law degree, graduating in 1936. "The experience is really the educator, and the more experiences you have, the better you are at any job," says Borden. "You are just now getting to the age when you are really worth your money."

Every company's 401(k) plan is slightly different. Some businesses offer more lucrative company matches and more diverse investment choices than others. A national survey released today examines what the typical 401(k) looks like. Here are a few of the highlights.

Company Contributions. Employer deposits into 401(k) plans averaged 3.2 percent of pay, according to a survey of 1,011 plans with 7.4 million participants and more than $730 billion in plan assets by the Profit Sharing/401k Council of America. The study represents 401(k)'s in 2007. The most common 401(k) recipe is a fixed match, which is present in 24.8 percent of plans. Among those with fixed matches, the most popular formulas are 50 cents per dollar up to the first 6 percent of pay (26 percent of plans), one dollar for every dollar up to the first 4 percent of pay (10 percent), and dollar for dollar up to the first 3 percent of pay (8 percent).

Ivy League colleges don't only top U.S.News & World Report ' s annual college rankings. Now, one of the eight elite institutions was also named a great place for older workers to intermingle with younger scholars. Cornell University topped this year's list of the best employers for workers over age 50, produced annually by AARP.

Cornell was recognized in part because of its innovative health-related programs for employees, including health screenings in office buildings on campus, computerized and in-person health counseling, weight-loss workshops, nutrition classes, stress-management programs, and other classes for older adults with titles like Staying Strong, Gentle Yoga, and Core Conditioning. The university also provides access to five fitness centers on campus, an ice skating rink, and several swimming pools. Picking a healthy place to live and work can greatly improve the quality of life in your golden years.