Planning to Retire
-
The Case Against 401(k) Automatic Enrollment
Continue reading… 8 CommentsAutomatic enrolling workers in 401(k) plans is generally viewed as a way to get more employees to save for retirement. Instead of requiring workers to sign up and make investment choices, employees automatically have a portion of their paycheck set aside for retirement. These involuntary investors must take action only if they don’t want to participate or disagree with the default investment amount or allocation. A 2006 law made it easier for companies to automatically enroll employees in 401(k) plans. Since then, more employers have been automatically enrolling primarily new employees in 401(k) plans. However, contrarian Punam Anand Keller, a management professor at Dartmouth College’s Tuck School of Business, cautions that automatically enrolling all workers in 401(k)s or similar retirement accounts makes workers less responsible for their retirement decisions and doesn’t help people figure out how much they will need for retirement. U.S. News asked Keller to explain why workers who are automatically enrolled still need to pay attention to their investments. Excerpts:
-
Nominate Your Ideal Place to Retire
Continue reading… 0 CommentsDreaming about retiring to the golf course or a mountain town provides a welcome respite from worrying about account balances and 401(k) statements. U.S. News is looking for readers to recommend the best retirement spots in the United States. Please e-mail us at retire@usnews.com and tell us what makes a retirement gem you’ve discovered special. Please include your name, age, telephone number, the city and state you are recommending, and a short description of what makes that locale the ideal place to spend your golden years. Selected entries will be published in an upcoming issue of the magazine.
-
When Will 401(k) Matches Return?
Continue reading… 2 CommentsAfter the last recession earlier this decade, many employers suspended their 401(k) match and then reinstated it later when the company’s bottom line improved. In fact, in the years following the last recession, employers contributed more to employee 401(k)s than before the recession began, according to Dallas Salisbury, president and CEO of the Employee Benefit Research Institute. But will this recession be different?
-
Census Bureau: World's 65 and Older Population Will Triple by 2050
Continue reading… 3 CommentsThe world's population is graying rapidly. The age 65 and older population is projected to triple from 516 million in 2009 to 1.53 billion in 2050, according to Census Bureau projections released yesterday. The proportion of younger people under age 15 is only expected to increase by 6 percent during the same time period, from 1.83 billion to 1.93 billion.
-
5 Ways Employers Plan to Change Their 401(k) Plan
Continue reading… 4 CommentsEmployers are tweaking 401(k) plans to save money. Most finance and human resources executives say that their company’s 401(k) plan needs slight modifications (56 percent) or a number of improvements (32 percent), according to a new survey. Only 9 percent of the HR employees surveyed think their 401(k) plan needs no changes, the online survey of 219 executives at companies with revenue over $100 million by CFO Research Services and Charles Schwab Corporation found. The survey went on to ask the executives what changes the company has made to the 401(k) plan since September 2008 or plans to make in the near future. The responses:
-
Should You Move in Retirement?
Continue reading… 16 CommentsIt’s fun to dream about retiring to the golf course or deep in wine country. If you are feeling practical, it is apt to contemplate downsizing to a smaller house in a more affordable part of the country to give your nest egg a quick boost. But most Americans don’t move in retirement. Of the 36.8 million people age 65 and older, only about 1.4 million retirees moved last year, according to new Census Bureau data released today.
-
Survey: Employees Can’t Quantify 401(k) Fees Paid
Continue reading… 5 CommentsMost employers say they know how much their workers are paying in 401(k) fees. A telephone survey of 596 business executives who make decisions about employee benefits at for-profit companies released today by the Transamerica Center for Retirement Studies and Harris Interactive found that 92 percent say they have a clear understanding of the 401(k) fees charged. Most of the executives (73 percent) say that other employees also have knowledge about the 401(k) fees charged. But that doesn’t appear to be true. Transamerica also commissioned an online survey of 3,466 for-profit workers, and only 29 percent of the employees participating in a 401(k) said they are aware of the fees they are paying. Some 48 percent of the employees said they were unaware of the fees levied on their nest eggs and 23 percent were not sure what they were charged in fees.
-
3 Ways to Get Your 401(k) Back on Track
Continue reading… 3 CommentsWe’re all searching for a quick way to fatten up our nest eggs. But all the potential remedies require discipline and patience. And the closer to retirement you are, the more difficult it will be to recoup stock market losses. Two new reports released today chronicle how long it will take to recover investment losses and how workers approaching retirement age plan to cope. Here are the 3 difficult, but not impossible ways to get your 401(k) back on track.
-
401(k) Fee and Advice Legislation Moves Forward
Continue reading… 1 CommentA House subcommittee voted today to move forward to with two 401(k) bills. The 401(k) Fair Disclosure for Retirement Security Act would require fee disclosure for all 401(k) investment options. The Conflicted Investment Advice Prohibition Act would impose safeguards on investment advice with the goal of ensuring that retirement plans don’t have conflicts of interest. Both measures were passed by the subcommittee on health, employment, pensions, and labor by a 13 to 8 vote today. The legislation will now be considered by the full House Education and Labor Committee.
-
A Renewed Interest in Emergency Funds
Continue reading… 1 CommentShould job loss or an unexpected medical bill crop up, an emergency fund is a financial lifesaver. Workers and retirees are showing a renewed interest in saving for the unexpected. About 59 percent of workers and 67 percent of retirees have an emergency fund, according to a recent online survey conducted by Harris Interactive and Principal Financial Group. Retirees generally have larger account balances. About 66 percent of retirees say they have over 6 months worth of living expenses earmarked for sudden expenses, compared to 36 percent of current workers. Both percentages are up significantly since 2008, when 54 percent of retirees and 30 percent of workers had enough in the bank to weather 6 months.
-
Older Workers Remain Unemployed Longer
Continue reading… 2 CommentsOlder workers continue to enjoy more job security than their younger counterparts. While the unemployment rate for the total labor force was 9.4 percent in May, only 6.7 percent of workers age 55 and older were out of work. But the ranks of unemployed older workers have been swelling faster than those of younger employees over the past month. The unemployment rate increased 6.1 percent for the senior workers, compared to 5.7 percent for those under age 55, according to an AARP Public Policy Institute analysis.
-
A Retirement Timeline
Continue reading… 8 CommentsThe aging milestones for young people are well known: At age 16 you can drive and 18-year-olds can vote. But the rights and privileges of aging don’t end after your first legitimate drink in a bar on your 21st birthday. There are variety of retirement rights of passage you should take advantage of at different ages. Here’s a retirement timeline.
-
Study: Work-Related Stress Could Impact Your Health in Retirement
Continue reading… 3 CommentsYou might think that after you retire, the stresses of the working world would fade into memories. But the damaging health effects of work-related tension could follow you long into your retirement years, suggests new research. "People's occupations during their working years can clearly be a risk for hypertension after they retire," says Paul Leigh, a professor at the Center for Healthcare Policy and Research at University of California at Davis and coauthor of the study. "The body seems to have built up a stress reaction that takes years to ramp down and may last well beyond age 75."
-
Baby Boomer Couples Disagree About Retirement Plans
Continue reading… 1 CommentWhen baby boomer couples vowed to stay together for richer or for poorer, few were thinking about a 30-year retirement that began during a recession. Husbands and wives don’t always agree about their retirement plans, and deflated investments have only made matters worse. A new survey found that married couples are often out of synch when planning for retirement. Here’s a look at how retirement strategies differ within couples.
-
Caring for Grandchildren in Retirement
Continue reading… 11 CommentsWhile I attended a 4-day National Press Foundation conference for retirement writers last week, my husband’s parents graciously provided child care for my daughter. As it turned out, grandparents providing childcare was one of the many hot retirement topics I discussed with 18 other writers selected to participate in the conference. Some of the other writers with young children, like me, welcomed the help with child care. The confidence that comes from knowing that you left your offspring with someone you trust completely is immeasurable. The actual cost savings doesn’t hurt either. About 61 percent of grandparents babysit on a regular basis and 11 percent are primary caregivers, says Georgia Hope Witkin, a psychologist and contributing editor to Grandparents.com, who spoke at the NPF conference. Among the 11.3 million children younger than 5 whose mothers are employed, 30 percent are cared for on a regular basis by a grandparent during their mother’s working hours, according to the Census Bureau.
-
Will Your Retirement Be Worse Than Your Parent’s Was?
Continue reading… 18 CommentsIt’s nice to think that there were good old days when grandma and grandpa retired to Florida with enough income to pay all their bills and even travel. But that idyllic retirement only existed for a minority of Americans. “The conventional wisdom that in the good old days everybody worked for one employer and got a pension and a gold watch is bunk and does not fit the history of the American nation at any point since the Indians were displaced,” says Dallas Salisbury, president and CEO of the Employee Benefit Research Institute. There never was a time when the majority of Americans had a single life-long employer either. Industrious Americans have been job hopping as long as the country has existed. “The notion that the modern baby boom age is the first time that most people have had multiple jobs is flat out false when one looks at the data,” says Salisbury, who has held 7 jobs since he graduated from college. The median job tenure of Americans peaked in 1983 at 15.3 years, but has been lower both before and since.
-
Save for Retirement, Win a Prize
Continue reading… 2 CommentsLottery tickets sell hope to millions of people who will never become millionaires. For a dollar or two you get the chance to dream about what it would be like to kick back in a nice house, drive around town in a fancy car, or retire on a tropical island. Many people who play the lottery know deep down that none of these things will ever happen to them. But it’s a cheap way to envision a quick exit from the working world.
-
Should Saving for Retirement be Required?
Continue reading… 19 CommentsIt’s no surprise that it is difficult for Americans to save for retirement. Only roughly half the population even has any sort of retirement plan. One of the new proposals to get workers to save is an automatic IRA. Under this plan, as proposed in President Obama’s 2010 government budget, most employers that don’t already offer a retirement plan would be required to enroll their workers in a direct-deposit IRA. Employees could opt out if they choose. The existing saver’s tax credit would also be modified to provide a 50 percent match on the first $1,000 of retirement savings for families that earn less than $65,000 and be fully refundable.
