Archive for the ‘retirement’ Category

Using Your House for Income in Retirement

July 17, 2015 Comments off

Using Your House for Income in Retirement
Source: Center for Retirement Research at Boston College

Using Your House reviews the two most common ways to use your house to boost your income in retirement – downsizing and a reverse mortgage – with clear examples, a discussion of the pros and cons of each approach, and links to tools on the web where you can get estimates of what downsizing or a reverse mortgage can do for you.

Still a Better Bang for the Buck: Update on the Economic Efficiencies of Pensions

July 16, 2015 Comments off

Still a Better Bang for the Buck: Update on the Economic Efficiencies of Pensions
Source: National Institute on Retirement Security

New research finds that pension plans are a far more cost-efficient means of providing retirement income as compared to individual defined contribution accounts.

The study calculates that the economic efficiencies embedded in defined benefit (DB) pensions enable these retirement plans to deliver the same retirement income at a 48% lower cost than 401(k)-type defined contribution (DC) accounts.

CRS — Military Retirement: Background and Recent Developments (April 30, 2015)

July 8, 2015 Comments off

Military Retirement: Background and Recent Developments (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The military retirement system is a government-funded noncontributory, defined benefit system that has historically been viewed as a significant incentive in retaining a career military force. The system currently includes monthly compensation for qualified active and reserve retirees, disability benefits for those deemed medically unfit to serve, and a survivor annuity program for the eligible survivors of deceased retirees. The amount of compensation is dependent on time served, basic pay at retirement, and is adjusted annually through a Cost-of-Living-Adjustment (COLA). Military retirees are also entitled to nonmonetary benefits including exchange and commissary privileges, medical care through TRICARE, and access to Morale, Welfare and Recreation (MWR) facilities and programs.

Poll: Americans sleeping better as economy recovers

June 30, 2015 Comments off

Poll: Americans sleeping better as economy recovers

Losing sleep over financial stress is on the decline in the U.S., according to a new poll.

A national poll commissioned by found that 62 percent of adult Americans are losing sleep over at least one financial problem — 7 percentage points lower than in June 2009, the last time this poll was conducted.

Today’s most common money worry is saving enough for retirement; two in five Americans say this keeps them up at night at least occasionally. The second biggest concern is educational expenses, which trouble young adults the most.

2015 Couples Retirement Study Fact Sheet

June 26, 2015 Comments off

2015 Couples Retirement Study Fact Sheet (PDF)
Source: Fidelity

What the Study Found: Key Findings

While the majority of couples (72%) say they communicate exceptionally or very well, more than four in 10 (43%) failed to correctly identify how much their partner makes—and of that, 10% got it wrong by $25,000 or more. There were other important disconnects between couples including:

  • 36% of couples disagreed on the amount of the household’s investible assets.
  • When asked how much they will need to save to maintain their current lifestyle in retirement, nearly half (48%) have “no idea”—and 47% are in disagreement about the amount needed.
  • When asked to estimate their Social Security payout in retirement, 60% of couples either don’t know or aren’t sure. Even more disturbing: almost half (49%) of Boomers fall into this category.

T. Rowe Price: Millennial 401(K) Savers Have Better Financial Habits Than Baby Boomers

June 25, 2015 Comments off

T. Rowe Price: Millennial 401(K) Savers Have Better Financial Habits Than Baby Boomers
Source: T. Rowe Price

T. Rowe Price’s Retirement Saving & Spending Study revealed that a national sample of 1,505 millennials with 401(k)s have relatively good financial habits, particularly when compared with a national sample of 514 baby boomers with 401(k)s. While millennials are not saving at least 15% of their annual salary for retirement, as T. Rowe Price recommends, they recognize that saving for retirement is important and are interested in saving more.

More millennials than baby boomers track expenses carefully (75% vs. 64%) and stick to a budget (67% vs. 55%). And while baby boomers on average are saving a slightly higher percentage of their salary for retirement than millennials are saving, more millennials have increased their retirement savings within the past 12 months (40% vs. 21%). This suggests that they are acting in accordance with their financial priorities, as millennials ranked contributing to a 401(k) but below the match and paying down debt equally as their top priority.

How America Saves 2015

June 25, 2015 Comments off

How America Saves 2015
Source: Vanguard
Defined contribution (DC) retirement plans are the centerpiece of the private-sector retirement system in the United States. More than 90 million Americans are covered by DC plan accounts, with assets now in excess of $6.5 trillion.

Participants’ adoption of professionally managed allocations continues to grow. In 2014, 45% of all Vanguard participants had their entire account balance invested in either a single target-date fund, a single target-risk or traditional balanced fund, or a managed account advisory service. These professionally managed investment options have the potential to reshape retirement savings outcomes for these participants. They signal a shift in responsibility for investment decision-making away from the participant and back to employer-selected investment and advice programs. We predict that sometime during 2015, half of all Vanguard participants will be using a professionally managed allocation.


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