Talking Retirement

20% Haven’t Started to Save for Retirement

According to a new Wall Street Journal poll, while 90% of people say they plan to retire, only 80% are saving to do it. The survey also indicates that people are starting to save at a younger age.

While the mean age for beginning retirement planning is 33.3 years old, young people say they are planning for retirement earlier. The median age at which 18- to 34-year-olds begin planning is 23.6; for 35- to 44-year-olds it jumps to 29.1; for ages 45-54 it is 35.6; and for those ages 55 and older, the median is 42.8.

Read more about it here.

What Makes a Good Retirement? Unsurprisingly, People Disagree.

An Ipsos Reid survey of 1,201 adults found 26% think they’ll need to amass between $1-million and $5-million to “retire rich.” An equal percentage (26%) felt they could do so with less than $1-million.

However, 5% believe they’ll need between $5-million and $10-million and 1% think they’ll need more than $10-million.

Huh? That left me scratching my head, but I like how the author the article sums up all the different thoughts. “In my experience with the industry and the investing public, when someone says ‘it’s not about the money,’ I make a mental note to myself: ‘It’s about the money.’” I agree. Read the article here.

Diet Planning Gets More Time Than Retirement Planning

For example the study showed more than half of Ontario Baby Boomers, compared to 47% nationally, spent more time planning their diet than their retirement. Just under 50%, compared to 46% nationally, spent more time planning home renovations and across the country almost half of Baby Boomers surveyed said they spent more time planning an exercise routine. 

Read the article for the full story.

Retirees Expect Less from Social Security

A recent story, Poll: Boomers May Delay Social Security, has several different interesting finding in it. The first is that people who are now nearing retirement will be more likely to delay collecting Social Security benefits. Another interesting finding was “many boomers also do not expect to rely as heavily on the program for income compared with current retirees.” I wonder if this lowered expectation is due to the numerous stories about the state of the Social Security program. Read the full story here.

Universal 401(k) Accounts

Today The New York Times has a story called Universal 401(k) Accounts Would Bring the Poor Into the Ownership Society. What is a Universal 401(k)? I hadn’t heard of it before. The article quickly defines it.

The core idea is simple. The federal government creates tax-free retirement accounts for lower-income Americans, supplementing private accounts where they already exist, and matching personal contributions to those accounts. The amount of the match would depend on the income of the family and how much they save.

It’s an interesting idea, but later in the NY Times article, the author says that “...the uncomfortable truth is that many of the most effective antipoverty measures leave more than a few people behind.” What are your thoughts?

Read the article.

Happy Holidays

I’m off celebrating Christmas and hope you’re able to be with your family and friends too. Be well. Talk with you next week.

Worried About Your Savings? One Authors Says “Don’t Worry.”

Stop the hand-wringing, says Pond. The “number” is largely a creation of members of the financial services industry, who have a vested interest in scaring you into sending them more money.

The article does mention that Pond “offers precious few specifics to back that up.” The USA Today review does give a brief rundown of Pond’s formula for saving the money you need for retirement though. Read the article.

Out sick today

Sorry for no post today. I’m out sick. Back tomorrow.

25% of Boomers Will Work 2+ Extra Years

Read the article here.

How safe are your 401(k) savings? The answer might surprise you.

Are you ready for a scary story? If so, read So you think your 401(k) money is safe from the LA Times. It’s about theft from 401(k) plans and how little money can be recovered for those whose money has been stolen.

By law, all assets in 401(k) plans must be covered by private insurance policies known as fidelity bonds. But the bonds are required to cover just 10% of the retirement plan’s assets or $1 million, whichever is less.

At companies with fewer than 100 employees… the plans are not subject to annual independent audits that could deter embezzlement.

The story does say that theft from the 401(k) plans of “large companies” is rare. It’s in smaller companies, when an employer directly manages his or her employee’s retirement funds that the risk is most prevalent.

We’ve talked before here about the Pension Benefit Guaranty Corp. that guarantees pensions, but that doesn’t cover a 401(k) plan at all. If it’s gone, the PBGC can’t do a thing for you.

Want to know more? Read the story for more shocking details.