Planning to Retire
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The Pensioners Versus the Pension-less
Continue reading… 4 CommentsThe haves and have-nots in retirement will largely be defined by who is offered and best utilizes a retirement plan at work. Only about half of private sector workers had any sort of employer-sponsored retirement plan in a given year between 1979 and 2008, according to a new Center for Retirement Research at Boston College analysis. Many workers also move in and out of retirement plan coverage throughout their career as they change jobs, which leads to smaller retirement payouts than if they consistently participated. Plus, about a third of primarily low-income households are not covered by any sort of retirement plan throughout their entire working life. These people will be entirely dependent on Social Security in retirement.
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6 Problems with Retirement Planning Software
Continue reading… 2 CommentsFinancial planning software can be a useful tool to create a retirement savings plan. But many computer programs fail to adequately account for several major retirement risks, according to a new review of 12 financial planning computer programs commonly used by consumers and financial professionals by the Society of Actuaries and the Actuarial Foundation. “The results from any program should not be used as the sole input for decision making for retirees or prospective retirees,” the study concludes. Here’s a look at the major problems with retirement planning software the study identified.
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More Americans Make Financial New Year’s Resolutions
Continue reading… 2 CommentsAmericans are largely making New Year’s resolutions to improve their personal finances in 2010. Slightly more people have resolved to save more money next year (63 percent), than the more traditional aims to exercise more (62 percent), eat better (60 percent), or to lose weight (46 percent), according to a recent telephone survey by TD Ameritrade and Opinion Research Corporation. The only resolution more popular than saving money was to relax and reduce stress (65 percent).
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Generation Y Too Indebted to Save for Retirement
Continue reading… 2 CommentsFor many members of Generation Y, purchasing a first home and paying down debt are being prioritized above accumulating a nest egg. Nearly half (47 percent) of employed adults between ages 22 and 33 with a retirement plan at work say paying for mortgage or credit card debt is a more crucial obligation than saving for retirement, according to a recent Fidelity and Consulting Services survey. But the importance of retirement savings is beginning to resonate with some young employees. About 18 percent of the young workers consider saving for retirement to be their top financial goal, up from 13 percent in 2008.
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Employers Ambivalent About Baby Boomer Retirement
Continue reading… 2 CommentsMost employers think that the baby boomers, the oldest of which are just reaching retirement age, are going to stick around in the workforce a few years longer than their parents did. Two thirds of employers (69 percent) say that workers will retire at even older ages than they do today within three to five years, according to a new MetLife and Asset International survey of 240 companies with at least 1,000 employees. The firms believe that their older workers will retire at an average age of 67 in 2014, about four years later than today’s average retirement age of 63. And employers have decidedly mixed feelings about the delayed exodus.
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More Seniors Carrying Debt into Retirement
Continue reading… 2 CommentsAn increasing number of Americans are entering their retirement years with debt. Some 63 percent of American families with a head age 55 or older had debt in 2007, up nearly 10 percentage points from 1992, according to an Employee Benefit Research Institute analysis. The median debt level increased from $15,923 in 1992 to $43,000 in 2007, in 2007 dollars.
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401(k) Match Comes Out of Retirement
Continue reading… 4 CommentsKodak, FedEx, and Ford announced this week that they will resume their 401(k) matches in 2010. All three firms suspended employer contributions to retirement accounts in December 2008. The companies join American Express, Motorola, AARP, and Black and Decker in recently restarting contributions to 401(k)s.
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Coming Soon to Your 401(k): Annuities
Continue reading… 0 CommentsEmployers are exploring ways to make 401(k)s work a little bit more like traditional pensions. One way to do this is to add an annuity feature to a 401(k) plan that will guarantee payments for life based on the lump sum you accumulate. Almost a quarter (22 percent) of companies already offer an annuity as an option, and another 10 percent of firms are considering adding this option in 2010, according to a recent survey of 149 employers by consulting firm Watson Wyatt.
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Automatic 401(k) Enrollment Could Hurt Retirement Savers
Continue reading… 1 CommentAutomatic enrollment of employees in a 401(k) plan is likely to get more workers to save something for retirement. But it might not boost retirement savings overall, suggests a new Center for Retirement Research at Boston College study. An increase in 401(k) participation means employers that provide a 401(k) match will have to spend more money on employee benefits. Firms that can’t or don’t want to increase compensation may take a scalpel to the 401(k) match.
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Study: Only Half of Americans Planning for Retirement
Continue reading… 2 CommentsFor workers without a traditional pension, retirement is a do-it-yourself affair. But the majority of Americans have not done any retirement planning, according to research released today. Only 42 percent of working Americans have ever tried to figure out how much they need to save for retirement, the survey conducted by the Treasury Department, President’s Advisory Council on Financial Literacy, and the FINRA Investor Education Foundation found. Even among those closest to retirement, just 51 percent of Americans between the ages of 45 and 59 have attempted to calculate how much they must accumulate.
