In a continuation of their previous article about test-driving your retirement plans, SmartMoney recently offered a reminder about the prospect of a transitional retirement – which may be the best way for some to leave the workforce. Retirement doesn’t have to be a climactic stopping point, where yesterday you were working full speed ahead and today you’re at full stop. From a financial planning standpoint, it’s difficult to transition from a full working income to a retirement income – especially if your retirement accounts took a recessionary hit. From an emotional standpoint, the abrupt lifestyle adjustment may be difficult to…
Roth IRAs have become the darling of the financial media recently. Of course much of the chatter has been about using a Roth as part of your retirement planning strategy, and the superb conditions for Roth conversions. But what about the Roth IRA and your estate planning, what happens if you leave your Roth IRA to your estate? Marketplace Money guru for American Public Media, Chris Farrell, recently fielded the question. “When it comes to estate planning, the Roth ranks among the best of the retirement savings plans,” says Farrell. Why? Unlike a traditional IRA, a Roth does not have…
If you participate in a 401(k), you may be surprised to learn that your employer could actually over-ride your investment choices if they think you’re not making appropriate decisions yourself. It’s called a “re-enrollment,” and employers say they are doing it for your own good. You might want to pay attention, though, because your employer’s choices may not be right for you – especially if you are older, female or have other unique circumstances. Re-enrollment is different than “auto-enrollment.” Auto-enrollment is a fairly common practice, in which employers automatically enroll workers in a 401(k) plan and defer a certain percentage…
According to a recent study conducted by MetLife – the Qualified Retirement Plan Barometer – your 401(k) plan is probably falling short, because most plans simply don’t do all that a 401(k) plan ought to do. According to The Wall Street Journal’s MarketWatch, many plan sponsors aren’t offering important plan features that could greatly enhance your retirement savings plan. What features are lacking? Primarily “help tools” and services. Studies show that plan participants who use the “help” tools and services provided by their employers tend to outperform participants who did not use these tools. In other words, if your employer…
If you have had to push-back your retirement plans and continue working, you are in good company. As many as 60 percent of eligible workers say they are postponing retirement. According to a recent article in SmartMoney, that may actually be a good thing. Take this additional time to finalize your retirement planning, and maybe even put your plans through a “test-drive.” “The idea might sound strange. There doesn’t seem to be much need to “practice” retiring. (After all, what’s so hard about not working?) In truth, though, retirement will probably be a sizable shock to your wallet and lifestyle…
New Year’s resolutions never stick terribly well, as we are just a few weeks into the year and we have forgotten about them already, but if your resolutions were for proper retirement planning (and they should be) then you simply can’t allow them to lapse. Consider it a New Year’s follow-up, then, and perhaps take a cue from Robert Powell of MarketWatch and his recent list of eight retirement-planning resolutions for 2011. There is a good deal of specific information to be gleaned from that article and the entire eight resolutions, but it can also be boiled down to three…
Financial and insurance products have long been key retirement planning components – helping savers mitigate retirement risks and provide retirement income. According to a recent issue of MarketWatch, however, those types of products are getting harder to find as some of the major companies back out of the market.Genworth last week said it will stop selling variable annuities and MetLife decided late last year to stop selling long-term care insurance policies.Why? These are all business decisions based on current economics. But in the case of long-term care insurance, it seems some of the bigger providers got their pricing wrong. Many…
If you are a parent of an adult child, especially a recent college grad, you may be challenged to help your kids get on their feet financially – especially in today’s tough job market. While most parents are quick to put their kids’ needs first, it’s only prudent to do so in ways that won’t jeopardize your own retirement funding. For a little guidance, U.S. News and World Reports offers a list of ways in which you can help support your adult children without also ruining your retirement funds. 1. Budget for any support you plan to provide. Develop a…
Christmas music has already begun in some stores, which also means that it’s time to begin end-of-year planning. For many, this means looking at your 401(k), and so I thought I’d share some news and tips from a recent article. Brightscope Inc., a retirement plan rating company, recently compiled a list of the 10 most commonly held mutual funds in 401(k)s. Generally, it hasn’t been a bad year for 401(k)s and investors. Nevertheless, many of the top ten underperformed the Standard and Poor’s 500 stock index. This may simply be a sign that size is not always conducive to…
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