Retirement has changed radically over the last several decades in America. Years ago, when you expected to work most of your life for a single, large employer, you could count on a pension. Retirement planning meant figuring out how to use your free time when you stopped working, not calculating rates of return and deciphering tax rules. You didn’t have to worry — enough money would be there from your pension and Social Security. Currently, with the exception of federal and state employees, most workers are not enrolled in pension plans, and the numbers continue to drop. Because fewer and…
Given the likelihood of needing long-term care and the tremendous cost that this care entails, it is important that individuals plan for it—and the sooner the better. Certainly, there are barriers. For example, people tend not to think about becoming older and needing care, or they don’t anticipate that they will ever need care themselves; they resist the idea of becoming dependent. They may believe (erroneously) that Medicare or their current health insurance will cover the cost of this type of sustained, ongoing care. They may find it difficult to raise this issue with their loved ones. Or they may…
5 Things to Do Today! Although you may make all the right financial moves, the economy might not be so cooperative. There could be more bear markets and recessions before and during retirement. Taxes may increase to pay for the growing national debt, which is growing ever larger with the recent billion-dollar stimulus and bailout programs and the rising entitlements of Medicare and Social Security. Energy prices could spike; inflation could eat away at more of your purchasing power. Part of setting realistic expectations about the future is understanding that you will probably experience, and need to overcome,…
I attended Frederick’s 8 th Annual Economic Symposium, held at The Weinberg Center for the Arts. The speaker was Ginger O. Brennan CEBS with ING. Ginger Brennan discussed Behavioral Finance: the study of social, cognitive and emotional factors in understanding the economic decisions of individuals. She provided insight on how markets can be impacted by consumers, borrowers, and investors rational and irrational behavior. A ING study found that less than half of the respondents (48%) indicated that they feel “in control” of their retirement plan investments. The study, entitled “Shedding Light on Retirement,” found that while consumers want control and…
Here are five reasons, states ING, why starting early to save for retirement makes sense: You may live quite a long time in retirement. Most people spend at least 15 to 20 years in retirement, so your life expectancy plays a key role in planning for how much money you’ll need and making sure your savings last. Your retirement lifestyle may be just as costly as your current lifestyle. Some people find that their expenses decrease in retirement—their house is paid off and children have moved away. Others find that their dreams for retirement come with big price tags. Depending…
Even with the many concerns over retirement accounts in America, it’s undeniable – IRAs and 401(k)s represent a lot of personal wealth for everyday Americans. That means retirement accounts are assets uniquely worthy of particular attention, to include when it comes to their role in your estate planning. Indeed, amongst households with at least $100,000 to invest, 60% of the household’s assets are in an IRA or 401(k). So, how ought retirement accounts factor into your estate planning. Who will inherit them? The answer is not a simple as you may think. Truth be told, the problem with retirement accounts…
This phase begins at age 70 and lasts as long as you are able-bodied and high-functioning. Despite your good health, it is helpful to begin looking at what steps you would like your family to take should your condition decline significantly. In most cases your ability to make all your own decisions, care for yourself, engage with the world on your terms, and manage your affairs does not vanish in a split second. The loss of abilities is the natural consequence of the aging process and often happens gradually. At the same time, it is our nature as human beings…
This phase lasts from the day you retire until you are 70 years old. For those who do not plan to retire until well into their 70s, the first two tasks of this phase may occur later. A key purpose of this phase is to create a clear communication channel with your family so information can be shared, questions asked and answered, and decisions made in a calm, supportive way. If inter-generational communication around money has not been part of your family culture, it may be useful to enlist the help of a third party to get the process going….
This phase occurs during the final years of the accumulation phase and should begin when you reach 50 years old or are 15 years away from retiring, whichever happens first. Now is the time to get your plan in place, making sure your finances are lined up correctly for retirement day so nothing will be left to chance. If you work for a company with a benefits specialist, arrange an appointment to become informed about the various ways you can convert your employer retirement savings into a stream of income or an IRA. Give yourself time to learn the ropes…
The first stage of the retirment planning is the period when you first enter the workforce and begin setting aside funds for later in your life and ends when you actually retire. A consideration in choosing an employer should be the amount they will contribute to your retirement savings and if they have a pension plan. Sign up for the 401(k), 403(b), or 457(b) plan if offered and contribute the maximum allowed as soon as you start working. In 2007, less than 32 percent of workers under age 35 participated in plans when they were offered at work, according to…
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