Talking Retirement

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.

6 Strategies for the Retirement Savings Game

U.S. News & World Report has Take Time to Review Your Retirement Game Plan this week. The article outlines 6 strategies an American should follow when it comes to the retirement saving game.

1. Contribute to an IRA.
2. Max out your 401(k).
3. Set a retirement savings goal.
4. Examine your investment portfolio.
5. Review your Social Security statement.
6. Plan for the financial transition.

Pay the Mortgage vs. Pay Your 401k.

Why You Might Already Be Saving Enough for Retirement.

According to [the contrarian economists from universities, research institutions and the government ], the financial industry, with its ostensibly objective online calculators, overstates how much money someone will need in retirement. Some, in fact, contend that financial firms have a pointed interest in persuading people to save much more than they need because the companies earn fees on managing that money.

The more realistic amount could be as little as half the typical recommendation made by Fidelity, Vanguard or any number of other financial institutions.

You might find this article very interesting. I did. Click here to read the whole thing.

The Get Rich Slow Tips

Want to get rich? According to Retirement Savings: Five Tips to Catch Up the one way not to do it is to plan on catching up quickly through some miraculous stock pick.

One hint you will not find here: striking it rich thanks to your unparalleled stock-picking genius. It may not sound sexy, but careful planning and a broadly diversified investment portfolio can help you make up for lost time.

For five other tips, read the article.

Ten Percent Is Not Enough

But since 10 percent likely isn’t adequate unless you get a very early start or believe you can count on other generous company perks - like a traditional check-a-month pension or employer-paid retiree health care, both of which are becoming increasingly rare - then I think it’s a good idea to at least try to raise your target to 15 percent.

As for employer matching funds, I would not consider them part of the 10 percent or 15 percent or whatever percentage you save on your own.

Read the article. This is a well worth your time.

71% Wish They Would Have Saved in First Job

The article Boomers short on saving echos a familiar story. People nearing retirement are finding they didn’t save enough. It does include some new real information though in the form of a new survey.

A recent national survey by Thrivent Financial for Lutherans in Appleton found that 59 percent of people between 45 and 64 years old have done no formal retirement planning and 71 percent wish they had started saving as soon as they landed their first full-time job.

If you know a young person just starting his or her first full-time job, it might be worth passing that little piece of the article on to them. Read the full article here.

Women Should Save 12%

Sometimes it’s nice to get advice that’s unambiguous. If you’re in that mood, try reading Women should save 12% for long lives, retirement, an article from the Detroit Free Press. While the headline only gives part of the story covered in the article, it helps people set a base level to start retirement planning.

While the rule of thumb is that you should save 10% of your gross income each year, Black says that women should save 12%. This is to account for their longer life expectancy and the loss of wages many women face when they raise their children.

What else is covered? Some basic rules for life insurance, and long-term disability coverage. For more information, read the entire article here.

Lost Social Security Card?

The San Antonio Express-News has a question and answer article called Social Security and You: Stolen card easy to replace, but the danger can linger. As the lengthly title suggests, getting a new card isn’t the big issue a person has to deal with when their Social Security card, but keeping track of what a potential thief might be doing with your information. The article suggests reading a page on socialsecurity.gov (here’s the link) for more information on identity theft.
Read the article.

Retirement Planning Basics

If you find yourself with too little to do this weekend, here’s a link to the Retirement Planning section on About.com. The section is edited by Jenny and Patrick McKinny, and they have solid basic information on a very wide range of retirement planning topics, including 401(k) plans, IRAs, Keoughs, estate planning, etc. Check it out.