Posted on January 23, 2007 by Jason
San Diego Union-Tribune, January 18th, 2006
A lot of people envision retirement as an abrupt change from work to
play, but a new study by The Vanguard Group has found that it’s more
likely to take the form of a gradual transition from a full-time job to
full-time leisure.
A study released Thursday by the Valley Forge, Pa., mutual funds
company found that about six in 10 Americans say that their retirement
plans include part-time or full-time work.
The survey of some 2,500 adults age 40 to 69 also found that “a common
strategy for making the transition from work to retirement is
downshifting.” That is, older workers shift to less stressful or
simpler jobs before stopping work entirely.
Nearly 25 percent of respondents age 55 and older have
“downshifted” at least once, the study found, and 40 percent expect to
do so in the future.
Steve Utkus, director of the Vanguard Center for Retirement
Research, which commissioned the study, said it has important
implications for employers and workers alike.
Read more of this article.
Posted on January 23, 2007 by Jason
Napa Valley Register, January 22nd, 2006
When you determine your retirement
income needs, you make your projections based on the type of lifestyle
you plan to have and the desired timing of your retirement.
However,
you may find that reality is not in sync with your projections and it
looks like your retirement income will be insufficient for the rate you
plan to spend it.
This is called a projected income shortfall.
If you find yourself in such a situation, finding the best solution
will depend on several factors, including the following:
• The severity of your projected shortfall
• The length of time remaining before retirement
• How long you need your retirement income to last
Several methods of coping with projected income shortfalls are described in the following sections.
One way of dealing with a projected income shortfall is to stay in the workforce longer than you had planned.
Read more of this article.
Posted on January 23, 2007 by Jason
US News and World Report, January 22nd, 2006
The problems with Social Security are not going away. That was the message Federal Reserve Chairman Ben Bernanke delivered
in his testimony this week to the Senate Budget Committee. He points to
a possible quadrupling of the federal budget deficit by 2030–which
sounds like a long time from now but is only 23 years away.
Long-range projections prepared by the CBO vividly portray the
potential effects on the budget of an aging population and rapidly
rising healthcare costs. The CBO has developed projections for a
variety of alternative scenarios, based on different assumptions about
the evolution of spending and taxes. The scenarios produce a wide range
of possible budget outcomes, reflecting the substantial uncertainty
that attends long-range budget projections. However, the outcomes that
appear most likely, in the absence of policy changes, involve rising
budget deficits and increases in the amount of federal debt outstanding
to unprecedented levels. For example, one plausible scenario is based
on the assumptions that (1) federal retirement and health spending will
follow the CBO’s intermediate projection; (2) defense spending will
drift down over time as a percentage of GDP; (3) other noninterest
spending will grow roughly in line with GDP; and (4) federal revenues
will remain close to their historical share of GDP–that is, about where
they are today. Under these assumptions, the CBO calculates that, by
2030, the federal budget deficit will approach 9 percent of GDP–more
than four times greater as a share of GDP than the deficit in fiscal
year 2006.
Here is his sobering conclusion:
To summarize, because of demographic changes and rising medical
costs, federal expenditures for entitlement programs are projected to
rise sharply over the next few decades. Dealing with the resulting
fiscal strains will pose difficult choices for the Congress, the
administration, and the American people. However, if early and
meaningful action is not taken, the U.S. economy could be seriously
weakened, with future generations bearing much of the cost. The
decisions the Congress will face will not be easy or simple, but the
benefits of placing the budget on a path that is both sustainable and
meets the nation’s long-run needs would be substantial.
Read more of this article.
Posted on January 23, 2007 by Jason
MSNBC, January 22nd, 2006
Hank Paulson’s attempt to persuade Democratic
members of Congress to agree to launch a bipartisan initiative to
reform Social Security is fast approaching crunch time.
People
close to the highly sensitive discussions say the Treasury secretary
will know in three to four weeks whether enough prominent Democrats are
willing to join such an effort to give it a plausible chance of success.
At this stage the exploratory talks are focused on process rather than the substance of any reform plan.
Treasury
officials are encouraged by feedback in a second round of telephone
calls between Mr Paulson and prominent Democrats, which followed an
earlier set of calls in the immediate aftermath of the November
mid-term elections.
“He
has had some productive conversations with members on both sides of the
aisle,” a Treasury official said. “It remains to be seen whether we can
reach critical mass.” The official refused to name names, for fear this
would jeopardise the discussions.
Read more of this article.
