Talking Retirement

Okay, Maybe We’re Not Saving Enough After All

The basic arguement that the average American was saving too much was based around the fact that most financial services companies suggest that a person needs to be able to have 85% of their annual income available during retirement to maintain their standard of living but a group of economist suggested that we need only about 65%. But a new survery throws some cold water on the situation.

Americans on average were saving only enough to provide them with 58 percent of their preretirement income, counting personal savings, Social Security benefits and pension income.

Fidelity, one of the finanical services companies whose retirement calculators defaults to the 85% figure says the problem is actually even worse. One Fidelity rep says in regard to replacing 85% of a persons income, “Our sense is that is not nearly enough.” Read the story for more.

Retirement Options for Small Businesses: The 2007 Version

The 2006 Pension Reform Act changed some of the rules that govern the retirement saving options for all companies, including small businesses. Business Week, in New Rules for Retirement Plans, takes a look at what a small business owner should do for him/herself and the employees. Read the article.

MySpace for Boomers? Check out Eons.com.

Marketing Trends Indicate More Power for You in the Workplace

Gail Sheehy warns that companies will need to shift their management models to retain their boomer employees, or risk a dangerous loss of institutional knowledge and sudden reduction in their work force.  She also encourages boomers to use this situation to create the work experience they desire.

“There is a hidden brain drain in the American work force,” she says.  “Corporate America is beginning to wake up to a seismic demographic change.  If it lets boomers retire early or drop off the radar, corporations won’t have the people power to remain competitive in a global marketplace.  The rate of growth in the U.S. work force will fall drastically over the next 20 years.  This change offers a golden opportunity for skilled boomers to reverse age bias and transform the corporate model to suit their needs to continue working for meaning & money.” (emphasis added)

There are 4 more trends in the story, but I’ll let you discover those for yourself. Read the entire article here.

Not Retiring to Save Your Retirement

Fool.com has an article called 9 Retirement Killers. It’s got a great laundry list of things that can throw your retirement plans for a loop. The last retirement killer caught my attention because it’s really about not actually retiring at all. Retiring permanently when you really just needed a break.

If you’re in your 60s, you should plan on living at least another two decades. Can you stand full-time leisure for 20 years? Sure, it may sound good now, but many retirees find they get pretty bored after a while. But by then, they have severed many of their professional ties. Before you decide to retire fully and permanently, discuss a phased or gradual retirement with your employer or business partners. Or the possibility of working on a project basis, allowing you to take several months off each year. Or maybe just a one-year sabbatical. Explore your options before you no longer have them.

What to know the other 8 retirement killers? Read the article.

Another Look at Small Business Employee Savings Options

There are potential bright points in working for a small business, especially if you’re the owner and sole employee. In that case, you can open an Individual 401(k) plan and put away money as both and employee and an employer, putting away as much as $44,000 a year, more if you’re over 49. Of course many people won’t fall into that situation, and the article outlines options for those people as well.

There is also a good sidebar to the story that gives a few bullet points of the different plans that apply for the small business employee. Good stuff. Read the article.

Singing the Small Company Blues, When It Comes to Retirement Savings Options

I seem to be stuck in a weird middle ground between self employed and big company. The company I work for doesn’t offer any sort of retirement fund of any sort, but I also don’t seem to qualify for any of the self-employed options, since I am not self employed.

He or she asks the community, what shoud he/she do? Read the responses at MetaFilter.

GenX Retirement Tips: Skip that Expensive Cocktail

How many nights did you “go out” last month? It’s easy to spend between $50 and $100 per night at trendy restaurants, bars or clubs. By cutting out just two party nights per month, you can make progress toward funding an IRA. For those slow nights, read a book, rent movies or entertain friends at home.

Read the rest of the press release here.

The Pitfalls of Automated 401(k) Plans

Have you been automatically enrolled in your company’s 401(k) plan? It’s a good start, but the New York Times has some advice in a recent article, Don’t Let an Automated 401(k) Lull You to Sleep.

Financial planners at T. Rowe Price argue that workers should really be saving at least 15 percent of their paychecks every year. And the Schwab Center for Investment Research says that workers in their 30s who have yet to start saving need to sock away even more—perhaps as much as 25 percent—to prepare adequately for retirement.

There’s much more information in the full story. Read the article.

Server Outage Over the Weekend

If you tried to visit Talking Retirement over the weekend, you probably didn’t find us. The computers that serve the site to the internet suffered a power outage. I’ve got a new entry waiting to be posted later today. Thanks.