Posted on March 19, 2012 by Steve
Not very – consider some of these stats from a recent NYT article on the impact of the 2008 financial crisis:
- 36% of American workers age 55 to 64 say they have less than $25,000 in retirement savings
- 52% of American workers age 45 to 54 say they have less than $25,000 in retirement savings
- 33% of retirees get more than 90% of their income from Social Security (the avg SS payment is ~ $1,000 per month)
- 17 % of workers have defined-benefit pensions
- 39 % have 401(k)’s
- 53 % of all workers have neither…
To compound the problem some professional investors are predicting lower long term returns for stocks of about 5% vs. 8-9% historically, based on the historical relationship with bonds which are now providing lower returns.
Anyway – some things to consider as you plan your own future. Good luck!
Posted on January 27, 2012 by Erin
Got a million dollars for retirement? Think it’s enough? Think again. A million dollars sounds like a whole lot of money to most folks, and it is! But in today’s market, one million for your retirement fund simply may not cut it when you need your money to stretch for your entire retirement. Why? Let’s think about it.
The average lifespan of most people today is longer than any point in the past. Living to age 90 isn’t that unusual anymore, especially with modern medicine. If you retire at age 62 and live until age 90, that’s 28 years that you will need to fund. Where you live and the lifestyle you want to maintain can significantly increase the amount of money you will need for retirement. You also have to take into account the cost of medical care. Do you have long term care insurance to protect you in case of an unforeseen medical expense? One hospital stay has been known to throw many people into financial turmoil.
Social Security is unstable and is not enough to live on for many households. It’s never too late to start preparing for your retirement by looking into Annuities and Long Term Care Insurance as options to help protect yourself.
What’s your retirement savings goal? How far along are you and are you confident you will reach it? Let us know your thoughts!
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Posted on January 25, 2012 by Erin
Recently, a study put out by Ameriprise Financial took a look at the different ways men and women plan for retirement. Not surprisingly, both sexes reported not feeling 100% prepared. What was a little more surprising was just exactly how different men and women look at retirement planning.
According to the study, 54% of men report investing money into accounts such as IRAs and 401Ks while only 46% of women report the same. It was shown that men tend to pick a number with which they deem to be their goal for retirement savings. They work toward this goal and do it mostly through their investments. Women on the other hand were shown to think not so much about the specific number they want to hit, but the lifestyle they want to have during retirement. But the study still shows that both sexes are underestimating the amount of money they will need in retirement. With longer life spans, more expensive medical costs and the uncertainty of Social Security, everyone needs to begin to become more realistic with their retirement planning.
Are you prepared? See how long your money will last you in retirement. Use our retirement calculator.
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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 December 30, 2011 by Erin
It’s that time of year again – Time to make those New Year’s Resolutions! This year while you’re thinking about all the ways to improve yourself or your life in 2012, don’t forget to add improving your retirement plan to that list!
What do you plan on achieving this coming year to help strengthen your retirement? Are you going to invest more money into your IRAs of 401(k)s? Are you going to purchase a lifetime annuity to guarantee income later in life? Or are you going to look into Long Term Care Insurance to make sure you are covered in case of unexpected medical costs? There are many small adjustments that you can do to increase the health of your retirement plan. You can use our retirement calculator to see what a small adjustment can do for you and how far your money will stretch. We’ll be here in the New Year to continue to help with all of your retirement planning needs – Have a Happy New Year and see you in 2012!
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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 30, 2011 by Erin
Earlier this week, Fidelity released a study that looked at the investment strategies of higher education employees. Fidelity took 600 participants across three generations, Boomers, X’s and Y’s, and examined the differences in retirement strategies.
Conventional wisdom tells us that since the people in this survey have a background in higher education, they should know more about investing than an average Joe. But what Fidelity found was quite interesting: More than half of those surveyed admitted that they were on a beginner’s level when it came to understanding their investments. And 63% were worried they would never be able to retire. Another interesting find in the study is that the young investors who have time to take on extra risk with their investments, are on the same conservative plans that boomers who are nearing the end of their working years are on. So it seems that these folks are on par with everyone else when it comes to retirement planning – Not nearly close enough to being secure.
How is your retirement planning going? Check your progress with our retirement calculator.
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Posted on November 14, 2011 by Erin
Can you specifically define terms such as mutual funds, stocks, asset allocation and large and small caps? It’s not too terribly shocking if you can’t. Back in October, the Labor Department ruled that all companies that offer 401(k) plans must offer unbiased retirement planning advice that helps the workers enrolled in the program to receive help in understanding what these things mean. But it turns out, according to the Wall Street Journal, only one fourth of all workers who have access to this financial advice actually use it.
Not all of us can be financial experts– and that’s why it’s smart to take advantage of these kinds of services. Some 401(k) plans are set up in a pretty smart way– they are set to a high level of risk in your younger years and as you age, the risk percent begins to decline. But not all plans are set up this way and some are very confusing – which is why everyone should take advantage of this advice. Chances are, people are going to need help figuring out how much they’ll need to save to reach their ideal retirement picture, how much they’re truly spending now, at what age they will need to start collecting social security, and on and on and on! Why ignore FREE retirement planning that is just waiting for you! Be smart and take the advice. Read here for more ideas on how to take advantage of the information.
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Posted on September 16, 2011 by Erin
We’ve talked a lot about taking advantage of a 401k plan recently, but how do you know if the plan you have is a good plan? On a simple level, all 401k’s are good in principle because money is automatically taken out of your paycheck towards your future. It’s not overly simple to access the money and a lot of the times, you can pretend that money never really existed in the first place. But there are things that can make a 401 better than the next. For example, don’t get caught up into plan where information is hard to come by. Transparency is what you need and it needs to be easy to find. Many plans come with an internet site with a username and password that allows you to login at anytime and see your account’s activity. Diversification is another must have when looking at 401k’s. The old saying, “Don’t put all your eggs in one basket,” may have been referring to your investments! Also, make sure you are aware of all the fees associated with your 401k plan. Another saying, “there’s no such thing as a free lunch” can ring true here also. Plan fees, investment fees and service fees are generally the most common, but your employer will hopefully have done some good research and will have found you the best deal. You can read more about the best 401k features here.
How are your retirement savings accounts coming along? Check and see at what age you’ll run out of money by using our Retirement Calculator.
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Posted on September 15, 2011 by Erin
A few years ago, having large gaps in your employment history may have been frowned upon. These days, it’s not unusual for many people to have large gaps of time in between jobs. Though most people are concerned about the appearance of gaps, the most serious implication long term unemployment can have is the daunting task of having to play catch up to your retirement savings.
Young savers in their 20s and 30s who have a gap in their retirement savings take a hit on their final retirement account because they miss out on the compounded returns. Luckily for them, there is time to make up for lost money. Adding a higher percentage to monthly 401K contributions or contributing any on hand money into a separate retirement plan like a Traditional or Roth IRA can help.
As people get older, the gaps in time become less damaging to their final retirement savings, but the contributions that are made need to be larger in amount and in a smaller amount of time. The key to all of this is to plan ahead for the unexpected. Create a rainy day fund that is specifically for emergencies. Avoid pulling money out of any account that is meant for retirement. You never know what tomorrow will bring, so plan today to help yourself out in the future.
Read more about what you can do to catch in retirement savings.
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