Planning to Retire
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Sticking with Stocks, Even in Retirement
Continue reading… 0 CommentsRetired Americans have less money in the stock market than current workers, but they didn’t abandon equities completely when they left the workforce. Two-thirds of retired investors (67 percent) continue to hold at least some equities in their portfolio, only slightly less than the 75 percent of all retirement savers who hold stocks, according to a recent Vanguard survey of 3,012 Americans between ages 21 to 79 with $5,000 or more in savings and investments. However, the oldest workers and retirees allocate less of their savings to more risky investments. For example, the average 70-something has 49 percent of their savings in equities, compared to 57 percent for those in their 30s.
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Government Insured Pension Limits Won’t Increase in 2010
Continue reading… 0 CommentsThe maximum pension payment insured by the federal government will be $54,000 in 2010, unchanged from 2009, the agency that insures private sector pensions recently announced. Insurance amounts will not increase next year because they are indexed to Social Security benefits, which will also remain the same in 2010, according to the Pension Benefit Guaranty Corporation.
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401(k) Savings Limits Stay the Same in 2010
Continue reading… 0 CommentsThe maximum contribution limit for 401(k)s and other retirement accounts will stay the same next year, the IRS recently announced. The contribution ceiling will remain $16,500 in 2010. Workers age 50 and older will be able to make catch-up contributions of an additional $5,500 next year, also unchanged from 2009.
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For a Good Night’s Sleep, Retire
Continue reading… 0 CommentsMany Americans lose sleep worrying about how they will pay for retirement expenses. But retirement may actually be a remedy for sleep disorders, according to a study published in the November issue of the journal SLEEP. Researchers found that the removal of work-related stress actually helped retirees sleep more soundly.
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Half of Laid-Off Workers Raid 401(k)s
Continue reading… 0 CommentsAlmost half of laid-off workers succumbed to the temptation of spending their retirement stash last year. Some 46 percent of retirement savers who left their job in 2008 cashed out their 401(k), according to a new Hewitt Associates study of 170,000 401(k) participants who terminated employment last year. The rest kept their savings in their prior employer’s 401(k) plan (29 percent) or rolled the money over into an IRA or a new employer’s 401(k) plan (25 percent).
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Private Sector Jobs With the Best Retirement Benefits
Continue reading… 2 CommentsPrivate sector companies have steadily provided less retirement benefits to workers over the past decade. The value of retirement plans for employees, including traditional pensions, 401(k)s, retiree medical insurance, and post-retirement life insurance, dropped from 7.8 percent of pay in 2002 to 6.9 percent of pay in 2008, according to a Watson Wyatt analysis of 183 medium and large private sector employers over the 7-year period. About half of the decline is due to the elimination of retiree health plans at most companies. The shift from traditional pensions to 401(k)s also eroded the total value of retirement benefits.
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Study: Delaying Retirement Improves Your Health
Continue reading… 1 CommentSeniors who work part-time during their retirement years may stay healthy longer, suggests a new study released this week. Retirees who remained employed, but reduced their hours, experienced fewer major diseases and were self-sufficient longer than those who abruptly retired.
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No Social Security Increase in 2010
Continue reading… 14 CommentsRetirees will not receive a Social Security cost-of-living increase in 2010, the Social Security Administration announced today. This will be the first year without a boost in Social Security payments since automatic increases for inflation went into effect in 1975.
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Smaller Social Security Checks for 1947-Born Boomers
Continue reading… 4 CommentsSocial Security checks increased by 5.8 percent this year, the largest Social Security increase in over 25 years. But beneficiaries are not expected to receive another cost-of-living adjustment until 2012, under current law. Social Security increases are tied to the Consumer Price Index for Urban Workers, which decreased in 2009 due to plummeting prices.
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Higher Medicare Part D Deductibles Next Year
Continue reading… 2 CommentsSeniors get an opportunity to shop around for new prescription drug coverage once a year and can potentially switch into a lower cost plan. Each state will have 39 or more prescription drug plans to choose from in 2010, each with different prices and coverage options. In Florida, for example, monthly premiums will range from $19.80 to $100.40 next year. But premium prices aren’t the only cost factor you should evaluate. More Part D drug plans will have deductibles and coverage gaps in 2010 than ever before.
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Calling Your Retirement Adviser Via Bar Code
Continue reading… 2 CommentsA new advertisement is encouraging investors to connect with a retirement adviser by scanning a bar code with their phone. The TIAA-CREF ad campaign invites smartphone users to take a picture of a black and white square, which will connect them with an investment consultant.
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Work is the New Retirement
Continue reading… 0 CommentsForget about early retirement. Most Americans now plan to stay employed as long as they are able to work or can hold on to a job. A recent Bankrate, Inc. and Princeton Survey Research Associates International phone survey of 1,003 adults age 18 or older conduced in September found that 75 percent of Americans plan to work as long as they can because they enjoy work (39 percent), need the money (32 percent), or for both reasons.
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How Your 401(k) Investments Stack Up
Continue reading… 0 CommentsThe bulk of 401(k) assets are invested in stocks. At the end of 2008, 56 percent of 401(k) participants’ savings was invested in the stock market including equity funds, the equity portion of balanced funds, and company stock, according to a new report released yesterday by the Employee Benefit Research Institute (EBRI) and the Investment Company Institute. The hefty concentration of equities played a major role in the 30.5 percent decline in the average 401(k) balance between 2007 and 2008.
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GAO: IRA and 403(b) Owners Pay Higher Fees than 401(k) Savers
Continue reading… 0 CommentsRetirement savers using IRA and 403(b) accounts tend to pay higher fees than those stashing their nest egg in a 401(k), according to a new Government Accountability Office (GAO) report. 403(b) and IRA participants are more likely to invest in products such as variable annuities and retail mutual funds, which frequently charge more than other investments. They also have less bargaining power to negotiate for lower costs.
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A Tax Saving Tip for Retirees
Continue reading… 0 CommentsRetirees over age 70½ normally must take required minimum distributions from their retirement accounts and pay income tax on the withdrawal. But for 2009 only, retirees don’t need to take any withdrawals from their retirement accounts. The Worker, Retiree, and Employer Recovery Act of 2008 issued a waiver of 2009 required minimum distributions shortly after retirement account balances plummeted in 2008.
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Americans Working Part-Time After Age 65
Continue reading… 2 CommentsDon’t count on full-time retirement, even after age 65. About 15.5 percent of Americans age 65 and older were still working in 2008, according to recently released data from the Census Bureau’s American Community Survey. Most of those seniors (62 percent) have cut back to part-time work. But over a third (38 percent) continue to work 35 hours a week or more during the traditional retirement years.
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How Many 401(k) Investment Options Do You Want?
Continue reading… 0 Comments401(k) accounts generally allow workers to specify how their retirement stash is invested. Most 401(k) plans (69 percent) have between 10 and 19 investment options, while 11 percent offer 25 or more offerings, according to a recent Watson Wyatt survey of 149 companies with over 1000 employees representing 2 million workers.
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The Recession’s Toll on Retirement
Continue reading… 2 CommentsFalling home prices, financial market losses, and layoffs have come at the worst possible time for workers on the verge of retirement. But the recession is also eroding retirement security in smaller ways that can add up.
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15 Retirement Gems From Our Readers
Continue reading… 1 CommentFor some retirees, a seaside town in Florida is an idyllic retirement spot. But others prefer the excitement of the ski slopes, the beauty of the wine country, or the art and culture that come with living in a big city. This year, U.S. News invited readers to recommend their personal retirement havens. Hundreds of retirees and baby boomers contemplating retirement told us about leisure activities like golf, festivals, and the cost of living in their favorite towns:
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3 Ways Cash Leaks Out of Your 401(k)
Continue reading… 2 CommentsWhile many Americans have valid reasons for raiding their 401(k) during their working years, these early withdrawals can have dire consequences in retirement. Fees and penalties for early distributions can further eat away at your retirement account balance. About 15 percent of 401(k) participants spend some of their nest egg before they’re ready to leave the workforce, according to new Government Accountability Office report. The study identifies three major ways money leaks out of 401(k)s before retirement and how much each one affects your financial security.
