The old rule of thumb was that you need to say 10% of your income for retirement. However, a number of recent studies conclude that 15% is the appropriate amount. This percent includes an employer's contribution but half of Americans workers get no help from their employer and the self-employed are on their own. Of course you can't wait until you are 40 to start investing 15% of income for retirement. So young workers need to increase their contributions to retirement by 1% (or more) a year to reach the ideal 15%; older workers have few options other than to work longer (which isn't always possible) while reducing current and future consumption expenditures. Bottom line: start saving early and plan to work longer. This info is based on a recent study by the Center for Retirement Resarch at Boston College; check it out at: http://crr.bc.edu/wp-content/uploads/2014/07/IB_14-111.pdf
July 31, 2014
Retirement Toolkit
One-stop shopping for retirement info and advice! Developed
by the Social Security Administration, the Department of Labor, and the Centers
for Medicare and Medicaid services, the “toolkit includes a list of
publications and interactive tools to help in your planning, plus information
on how to contact us with your specific questions. It is important to start
early and be well informed so you can make timely decisions and, if necessary,
make changes while you still have time before retirement.” It includes a
timeline, starting at age 50, to assist with your planning. http://www.dol.gov/ebsa/pdf/retirementtoolkit.pdf For a description of the Toolkit plus “the
basic timeline in the toolkit, with the addition of how to supercharge your
retirement health care nest egg and where to go for the best Social Security
claiming strategy advice,” read Ashlea Ebling’s Forbes article: http://www.forbes.com/sites/ashleaebeling/2014/07/29/free-retirement-advice-from-uncle-sam/
July 29, 2014
How Giving Up Cable TV Could Save Your Retirement
“Ditching cable frees up cash to save for retirement
and reduces your retirement expenses.” David
Ning explains: “We all know that higher spending
lowers the amount we can save
for retirement. An inflated lifestyle also requires a bigger retirement
stash if you want to continue to fund those higher expenses in retirement. Even
relatively small luxuries necessitate saving more for retirement if you want to
continue to enjoy them over 30 years of retirement. Consider the impact your cable
TV bill has on your monthly expenses. Many people pay $100 a month or more
for the privilege of channel surfing. A $100 per month bill costs you $1,200
per year or $36,000 over a 30-year career.” Read the details at: http://money.usnews.com/money/blogs/on-retirement/2014/07/23/how-giving-up-cable-tv-could-save-your-retirement
Are you saving 15% for retirement?
According to the National Retirement Risk Index, published by the Center for Retirement Research at Boston College, half of American households are behind in their financial preparation for retirement. On average one should invest 15% of earnings for retirement throughout one's working life. The easiest way to accomplish retirement security is by starting young. But for workers at mid-life or beyond, their best bet is working longer, until age 70 when they are eligible for the maximum Social Security benefit. Read a summary of the study by Gil Weinreich (which contains a link to the full report) at: http://www.thinkadvisor.com/2014/07/23/half-of-households-risk-inadequate-retirement-inco
July 28, 2014
Catch up on retirement developments
"For those who want to use these lazy summer days to catch up on their reading about retirement, Squared Away has compiled some of the blog’s most popular articles this year." These articles are quick and easy to read and reflect the latest research on retirement that has implications for individual planning. See: http://squaredawayblog.bc.edu/squared-away/summer-reading-retirement/
July 19, 2014
7 Habits of Highly Successful Retirement Savers
Almost anyone can become wealthy using these
investment strategies.
By Robert Berger. Details at: http://money.usnews.com/money/blogs/on-retirement/2014/07/17/7-habits-of-highly-successful-retirement-savers
11.
Start saving
early.
22. Avoid car loans
33. Pay off debt slowly
44. Save a sizeable down payment for a home
55. Never stop learning.
66. Focus on investing costs.
77. Ignore market fluctuations.
Still supporting adult kids?
According to Dennis Miller, “Nothing can screw up
retirement plans like supporting adult children after you've shelled out tens
of thousands of dollars in college tuition, shuttled them back and forth for
Thanksgiving and Christmas breaks, and maybe purchased a new computer for all
that research and writing they did (or maybe didn't do) over four-plus years.
And yet, some 85% of parents plan to provide some sort of postgraduation
financial assistance.”
“As Eileen Gallo and Jon Gallo note
in their paper “How 18 Became 26: The Changing Concept of Adulthood,” for a
certain socioeconomic set, growing up and moving out—permanently—means
downgrading your lifestyle.” The authors quote sociologists Allan Schnaiberg
and Sheldon Goldenberg: “The supportive environment of a middle-class
professional family makes movement toward independent adulthood relatively less
attractive than maintenance of the [extended adolescence] status quo. Many of
the social gains of adult roles can be achieved with higher benefits and
generally lower costs by sharing parental resources rather than by moving out
on one's own!”
“So, what can parents do to make ‘home’
a lot less welcoming, and make complete financial independence look like the
brass ring it should be?”
Be honest with
yourself.
Ask yourself: Is my financial assistance helping or hindering my child's emotional
and financial growth?
Mom and Dad must be
on the same page. One parent slipping the son or daughter money while
the other fumes does little for a marriage or the emotional and financial
well-being of the child.
Be a parent and a
coach.
Offer emotional support and financial mentoring.
“Retiring
rich is hard enough without paying for your child's extended adolescence. The
job market may be tough for new graduates, but forcing your child to navigate
it anyway might just be the best way to help.” Read the full article at: http://www.marketwatch.com/story/supporting-adult-children-try-tough-love-instead-2014-07-08
7 Habits of Highly Successful Retirement Savers
Almost anyone can become wealthy using these
investment strategies.
By Robert Berger. Details at: http://money.usnews.com/money/blogs/on-retirement/2014/07/17/7-habits-of-highly-successful-retirement-savers
1.
Start saving
early.
2. Avoid car loans
3. Pay off debt slowly
4. Save a sizeable down payment for a home
5. Never stop learning.
6. Focus on investing costs.
7. Ignore market fluctuations.
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