Talking Retirement

Warning Against Your Company Stock in Your 401(k)

CNN/Money’s story Don’t be a company man warns against buying too much of your company’s stock in your 401(k) plan. Why? A single world answers that question: Enron. But here it is from the source.

Buying your employer’s stock, after all, amounts to placing two big economic bets on one company. If your firm suffers an Enron-type collapse - or even a less dramatic downturn - you could lose your job and a big portion of your retirement savings.

The article recommends that if you currently have a lot of your company’s stock in your 401(k) that you transfer it out and diversify your holdings. It gives you tips on how to do that. Read the article for the full story.

Some Employers Are Learning How Valuable Older Workers Are

Fortune has an article, In praise of older workers, that reports on how few employers are ready for the retirement wave brought on by aging boomers. “Only 24 percent of companies surveyed said they were ‘on track’ in their preparations to manage the outflow of talent, either by accommodating older employees, or by addressing the void they’ll leave behind,” according to the article.

Some employers do get it though. Borders, the bookseller chain, is one example mentioned. “More than 16 percent of Borders’ workforce is over 50… Perks for older workers include a 401(k) catch-up program, which allows participants to make larger contributions, and the opportunity to buy health care benefits at group rates for part time employees.”

I’m sure more companies will change out of necessity. If you’re already retired and looking for a good company to check out, the piece also mentions the AARP Featured Employers Program, visit that site here.

Read the Forbes article for more information.

Chicago Tribune Begins Retirement Series: The Journey

In this column we will explore the issues facing readers as they plan for, and live in, retirement. We’ll pair top financial experts with readers who have specific retirement-planning questions. We’ll try out financial products and opportunities geared toward Boomers in the second half of life. We’ll discuss Americans’ savings patterns and offer strategies for both feathering the nest egg today and tapping it after retirement.

The initial article introduces us to Mary Jane Good, who, at 71, still isn’t ready for a traditional retirement and continues to work. Happily, she has a job she enjoys. That’s the new retirement, at least for her. We’ll keep an eye on this series as it develops. I wish them luck with it. Read the first article here.

Study Offers Sobering News About Being Forced Into Retirement

A new study is reporting that 40% of workers retire earlier than they actually planned on doing. For some, there are health reasons to blame, others are simply forced out by changes in their workplace, according to a recent article, Workers Retiring Sooner Than Planned. The article goes on to say “that nearly half of the people who now are employed planned to keep working past age 65. But among retirees polled, only 13 percent said they had done so.”

That’s food for thought when planning on how much you need to save. Trying a variety of scenarios is probably a good idea. Read the article.

More Employee Benefits on the Horizon?

The Connecticut Post has an article today called As baby boomers retire, next generation can demand more from job market that reports on one workplace expert, Joseph Carbone, president and chief executive officer of The WorkPlace Inc., that thinks the benefits that have been disappearing from the workplace could re-emerge soon.

The retirement of baby boomers should create a large vacuum the next generation cannot fill. As a result, Carbone said, he expects companies to enter into bidding wars for qualified employees. An influx of immigrants to help fill the shoes of retiring boomers, and the new jobs still to come, will be vital for the national and state economies, he said.

I’m not sure I agree that companies will fill the social benefit roll they once did, but I appreciate the argument. It seems to me that there is so much cheap labor outside the US that companies will continue to turn to outsourcing before they give US workers better benefits. Read the story. Let me know what you think with the Talk Back button below.

Maytag Closing In Iowa. Fears of Disappearing Benefits.

I just read about the Maytag plant closing announced in Newton, Iowa as reported in a story called Where am I going to find another job?. This is another in a long line of industrial jobs leaving the US. Along with people worried about finding replacement work, there are also retired Maytag workers concerned about the loss of the retirement benefits they receive from the company.

Melody Landegrebe, whose husband has worked at Maytag for 28 years, worries that he will lose part of his retirement benefits. “Maybe he’ll lose all of it,” she said.

The article also talks about workers who are close, but not quite ready to stop working but are being offered reduced benefits if they retire now. (See Evaluating a Buyout Offer From Your Employer from earlier here on TR.)

The uncertainty brought on by relying on a company to provide for you during your post-work years reinforces my belief that you’ve to to look out for yourself during retirement. It’s unfortunate to lose your faith in the organizations that promise to take care of you, but it seems the best way to guarantee for a stability.

Companies Need to Accommodate Older Workers

Employers have an approaching dilema according to Workforce Shortage: Retaining Knowledge And Expertise. Older workers in their organizations often have the knowledge and skills that make a company valuable, but they are nearing retirement age and their wants and needs are changing.

Miklos notes that the need to retain older workers is greater than ever. The trick to retention—offering enough incentives to stay.

“If you retire or step back in pay [by taking a part-time position in the company], that can affect the type of benefits that you get [compensation and health insurance],” according to Miklos. “Some companies have handled this by letting people retire and then bring them back. And I think if companies don’t get on board with that, what we’ll get is people retiring and going to a different organization.”

Read the article here.