July 31, 2014

What % of income to save for retirement?

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

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.

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.
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.
Financial Planning for Women does not sell, rent, loan, lease or otherwise provide any personal information collected at our site to any third parties.