Posted on January 9, 2012 by Erin
It’s something that many people don’t really think can happen but has become more common over the last few years – being laid off shortly before you retire. We like to think the chances of this happening are small due to the belief that it’s too outrageous, especially If you are one of those people that has put in many good years at a company. Who wants to think their employer would be so quick as to lay off someone just before retirement?
Unfortunately, it happens. The problems associated with losing your job before retirement age are numerous – are you too “old” to get a new job? Do you have too much experience and require too high of a salary? Will younger and cheaper candidates undercut you in the job race? Yet are you too young to receive Medicare or Social Security? Recently, the New York Times laid out some crafty ways that can help you survive, that you can read here.
Do you know anyone that this has happened to? What would be your plan if this happened to you?
If you were laid off today, how far would your money stretch? Find out by using our Retirement Calculator.
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Posted on January 6, 2012 by Erin
Yesterday we talked about the trend of parents moving in with their adult children. This trend will likely continue for some time and in many cases, the parent being home may create some extra work for the adult children. Many times if the parent needs medical care, the adult child is forced to take time away from work or cut back drastically on hours in order to care for their parent. This is why it’s important to point out that in some cases, the caretaker may be able to receive compensation.
Recently, AARP highlighted some different ways that children can receive financial compensation for the care of their parents. Much of it has to do with programs that are offered through the use of a Medicaid waiver. Of course, Medicaid is not the most cash rich program currently, so the hoops that need to be jumped through may be quite large. Another suggestion is to check the parent’s long-term care insurance policy, if they have it. Some policies allow for a cash benefit for the use of in-home assistance. And of course don’t forget – especially with tax time right around the corner – any deductible expenses the caregiver may have incurred to accommodate their parents needs. Wheelchair ramps, safety bars or even the gas used to drive the parent’s to their doctors appointments may be deductible.
Do you have long term care insurance to protect you? See how to select the best policy for you.
Will you be able to afford to stay in your home? Use our retirement calculator to see how your retirement plan shapes up and you can improve it.
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Posted on January 4, 2012 by Erin
Often times we hear of parents having the burden of taking back their adult children who just can’t seem to make it financially in this economy. But lately, a new trend has begun to take shape – adult children having to help out their parents.
According to a study done by the Pew Research Center, out of the adults who have parents ages 65 and older, 39% have reported that they helped their parents financially in the past year. One in 25 of unemployed Americans ages 55 and older have been forced to move in with their friends or family due to money problems. Many factors contribute to this new phenomenon, but Social Security not being enough to live off of, retirement savings being depleted due to forced retirement or unemployment and medical costs skyrocketing for those who need treatment, are issues that are not helping. It’s not to say that families staying close and living under one roof is bad, but the trend is showing that when parents move in with their adult children, they fear they are being a burden.
Would you want to move in with your adult children or would it be a last resort? And do you think the trend of parents moving into their adult children’s home is a trend that may continue even if the economy gets better?
See how long your nest egg will last. Use our Retirement Calculator and determine ways to stretch it a little further.
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Posted on January 3, 2012 by Erin
With the economy the way it’s been and the cost of living being so high for so many people, the thought of retirement is something that is simply a dream for many. But that thought just isn’t acceptable for some people and they’ve taken the matter into their own hands. They’re up and moving out of the country to get their retirement dream!
In a study done by Internationalliving.com, it was found that Ecuador is one of the most popular places for retirees to retire. Expenses here can be as little as one fifth of what they are in the U.S. In many cases, people can retire up to 10 years earlier than they would have been able to in the U.S. and they can also afford luxuries like maid services and weekly massages (how does $25 for an hour long massage sound?!). There are many places to explore around the world that could make your retirement a reality and could create something you may have never even dreamed of!
Can you afford to retire? Do you know when you will run out of money? Get answers by using for retirement calculator.
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Posted on December 14, 2011 by Erin
Some good news in retirement planning! Last week, consulting firm, Towers Watson, found that out of the companies that had halted their 401(k) matching programs, three-fourths of them have now once again begun the practice.
The end of matching programs started back in 2009 when it was more evident that the economy was not getting better and corporations’ bottom lines began to suffer . Though the savings programs were still available to employees, the days of receiving big matches were no more. Now, Towers Watson has found that out of the 231 companies that had admitted to stopping their matching, 205 have brought it back and 8 out of 10 of the companies reinstated the match at the same levels that they had previously offered.
This is great news for those who still contribute to their 401(k)!
How is your retirement saving coming along? Will you have enough to last you throughout your entire retirement? See when and if you’ll run out of money by using our retirement calculator.
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Posted on December 8, 2011 by Erin
This year, workers have continued to contribute to their 401(k) plans, yet the money in those accounts continues to drop. According to Fidelity, the balances have dropped almost 12 percent from June through the end of September. How can it be that more people are investing more money while their work places are matching, yet these people seem to be further away from their retirement savings goals now than they ever were before?
A few different reasons. Remember the credit downgrade from Standard and Poor’s 500 index and the European debt crisis earlier this year? These helped the markets become shakier than they were previously and the stock market reacted by declining. Luckily, because 401(k)’s usually include a mix of bonds along with those volatile stocks, the damage was less than it could have been. Bonds saw good investment gains in the third quarter of this year which helped to offset the deep declines from stocks. Fidelity also reported seeing a small increase in hardship withdrawals from 401(k) which also contributed to the decline in balances.
Is your money still in a 401(k)? Do you intend to keep it where it is or do you have other plans?
Relying heavily on 401(k)’s for your retirement income? See how safe you are from volatile markets by using our retirement calculator.
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Posted on December 1, 2011 by Erin
Yesterday we told you about a study that showed young investors are no better prepared for retirement than the boomers before them, and that in some cases, are actually less educated about their investments. Well on Monday, the Pew Research Center released a study that shows the wealth gap between the younger and older generations is indeed getting much wider.
Right now, the gap is the biggest it has ever been in recorded history. Older Americans are actually increasing their net worth while younger Americans are seeing noticeable declines. Why is this happening? Well for starters, kids graduating from college are facing an extremely difficult economy. Many times people in this age group have no choice but to delay their careers because they simply cannot find work. Others choose to continue with their education by going back to school . Although higher education typically means higher paychecks down the road, the loan amounts that students today are acquiring are much larger than the generations before. The fear is that if this trend continues, this younger generation will never be able to play catch up and the future for both them and the country’s economy may be dim.
How far along are you with your retirement planning? Are you further ahead than most? Try out our Retirement Calculator to see where you stand.
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Posted on November 21, 2011 by Erin
Can you believe that Thanksgiving is already here? Before you know it, it will be the end of the year and it will be time to start thinking about filing your 2011 taxes. You still have time to take advantage of some decisions that will affect your returns for this year.
You still have time to contribute to your Roth IRA for the year (you have until April 17, 2012). If you are under 50, you can contribute $5,000 a year but if you are older, the limit is $6,000. The great thing about Roth IRA’s is that you can contribute money that has already been taxed but when you pull out the money, it is tax exempt as long as you are 59 and a half years old and have had your Roth for at least 5 years. Along the same lines, try to avoid any early withdraws from any retirement plan because the tax penalty associated with it is usually pretty steep. For more ideas on how to help your taxes this year, check out this article!
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Posted on October 11, 2011 by Erin
Here’s some hopeful news! Recently, the FDIC announced that it was supporting a proposed rule that would ban the practice of banks trading to make a profit for themselves instead of their clients. Currently, banks can bet on a risky investment with their own money. This was the problem in 2008 when the bets the banks chose failed and the tax payers were forced to bail them out. The rule also helps to limit a bank’s investment in hedge funds – banks would no longer be able to own more than 3 percent.
Any regulations guarding against another financial crisis seems like a needed step – but of course, the proposed rule has its loop holes. The banking industry is already complaining that the new regulations would be too confusing and complicated. Others have pointed out stiff rules could stop them from buying and selling the investments that their clients are demanding. Barlett Naylor, a financial policy advocate for the group Public Citizen was quoted as saying, “The regulators are proposing that they will detect the difference between various trades by fishing through complex data provided by the banks after the fact. This is an invitation for evasion.”
What do you think? Is this going to help protect us from another financial crisis? Or do you think it’s just a temporary fix that people can easily take advantage of?
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Posted on October 4, 2011 by Erin
Three weeks ago, a movement started on Wall Street. A loosely organized group of people from all different walks of life came to New York to stand up to what they describe as the corporate greed of financial institutions that is causing the high unemployment in the U.S. By using social networking sites such as Facebook and Twitter, the movement is spreading to other parts of the country – rallies have been planned for Memphis, Tennessee, McAllen, Texas and Hilo, Hawaii just to name a few.
The crowd consists of anti-capitalists, anarchists, students, parents, business professionals who have been laid off and have no current job options and military members who are facing a bleak future. The protests may have been loosely planned, but the message is getting out in mass. People are tired of the current economic situation and are ready to fight. Between unemployment, tax payer bailouts, astronomical student loan debts and retirement funds being eaten away, it seems that no one is immune from the problem. Do you think the demonstrations will have an impact? What do you think it will take to get the attention of the government and corporations?
How has the current economic environment impacted your retirement fund? Use our retirement calculator to see what you can do to improve your plan.
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