STATES RESPOND TO RETIREMENT CRISIS

#retirement #pensions #401(k)s #SocialSecurity
“It’s clear there’s a retirement crisis,” Illinois State Treasurer Michael W. Frerichs told small business owners. “This is a problem not only for families but for all of us,” the quote continues.
Frerichs was quoted in an Associated Press article on the subject by Maria Ines Zamudio. It was published Feb. 22, 2017, in The Atlanta Journal-Constitution.
Zamudio’s article focused on how seven states – California, Connecticut, New Jersey, Maryland, Oregon and Washington, as well as Illinois, are in various stages of implementing state-sponsored retirement savings plans.
The plans, the article says, are tax-deductible IRAs with automatic payroll deductions, for which employees don’t pay federal taxes on the money until it is withdrawn.
Americans without work-sponsored savings plans are less likely to save for retirement, the article says. Zamudio quotes research from the Employee Benefit Research Institute that shows 62 percent of employees with an employer-sponsored savings plans had more than $25,000 in savings. Some 22 percent of those had more than $100,000 in savings.
Meanwhile, according to the quoted research from 2014, 94 percent of workers without access to those plans had less than $25,000.
We can certainly debate whether it should be the government’s role to set up savings plans for workers. What isn’t really debatable is that $25,000, or even $100,000, won’t get a person very far into retirement.
A good retirement savings would provide enough so that the person or couple could live comfortably off the interest and dividends those savings would kick off. If one does not have to touch his principal in retirement, he’ll never outlive his money.
Of course, those fortunate enough to get a pension from their employers, combined with Social Security, have a little more to work with, in terms of income.
But will those vehicles be enough to have the retirement you want?
Retirement should be about more than just living Social Security check to Social Security check. It should be about having the resources, combined with the time, to do things one didn’t have the time to do while working. Examples include travel, hobbies etc.
But so many at or near retirement age are not in that position. Some had signed on to work for an employer because of pension benefits, only to find that when the time came to access those benefits, they weren’t there.
Others, perhaps, were forced out of their jobs prematurely through downsizing, technology or other efficiencies. As a result, they lost of lot of work time that could have allowed them to save more. Or, they were forced to take a lower-paying job elsewhere, making saving for retirement impossible, or nearly so.
If you are among those facing tough decisions about retirement – perhaps you tell yourself you’ll have to work until you die – there are a number of good options for earning income that could augment or even enhance your potential retirement income. To check out one of the best, message me.
Meanwhile, if you have a job, make saving for retirement a priority. Closely examine where your money goes, and see whether you can trim spending to put money into retirement savings. Presume that there will be very little to bail you out if you are “retired,” but can’t afford to be.
Also, too, think about your time. How are you spending what free time you currently have? How will you spend your time when you retire? Will you be bored? Will you have the resources to perhaps do what you’d like to be doing?
Certainly, retirement is about more than money. But having enough money will take one worry off your plate so you can decide how best to use your time.
If you don’t want to work until you die, do something today to help eliminate that possibility.
Peter

HAPPY NEW YEAR! LET OPTIMISM RING AND REIGN

#HappyNewYear #2017 #BeOptimistic
Happy New Year!
Americans are hoping for a better 2017 than 2016, according to an article by Emily Swanson and Verena Dobnik, written for the Associated Press..
“Americans weren’t thrilled with (2016). Only 18 percent said things for the country got better, 33 percent said things got worse and 47 percent said it was unchanged from 2015,”reads the article, published in the Dec. 27, 2016, edition of The Atlanta Journal-Constitution.
But 55 percent believe things will be better for them in the new year. That’s a 12 percent improvement from last year’s poll, according to the article.
“You’ve got to be optimistic and I’m going to try,” the article quotes Elizabeth Flynn, 62, an elementary schoolteacher from Peabody, Mass.
“Next year will be better than this year, because people will have more jobs and they’ll have more money to spend,” the article quotes Bourema Tamboura, who lives in Harlem (New York City) and drives for a car service.
Optimism is contagious. Unfortunately, so is pessimism.
So let’s ask the question: Would you RATHER be optimistic than pessimistic?
Optimists are more likely to innovate. They are more likely to take action to solve their, and perhaps others’, problems.
Optimists press on, believing that things will get better eventually.
Pessimists tend to dwell on the wrongs, or perceived wrongs, that have been done to them.
They tend to cast blame on others, and other things, for their predicament.
They tend to sit still, or decline, because they believe things will get so worse that there is no use in trying to get better.
So, one can sit home, wallow, and blame. Or, he can go out, find solutions and make his life better, indeed, if it needs to get better. For some optimists, life is always good but it never hurts to believe it will get even better.
Most of life is governed by our thoughts. Certainly, uncontrollable circumstances can hit any, or all, of us. But circumstances should never govern us. Instead, they should prompt us to act, to take more control of our lives.
If you are looking for something to come into your lives that could not just improve it, but change it for the better, there are many such vehicles out there. To check out one of the best, message me.
Remember, good luck generally comes to those who look for it. You may live your life forever playing, and never winning, the lottery. But if you are open to looking, someone may come into your life with something that you may, or may not, have known you were looking for.
So, have a great 2017. Give it your best. Worry less about what will happen, and look more for what you can do to help others.
Stay optimistic. Your life will be so much better.
Peter

MIDDLE CLASS DECLINING IN MANY METRO AREAS

#MiddleClass #MedianIncome #population
“The widening wealth gap is moving more households into either higher- or lower-income groups in major metro areas, with fewer remaining in the middle.”
So writes Christopher Rugaber of the Associated Press. His article was published in the May 12, 2016, edition of The Atlanta Journal-Constitution.
Rugaber based his article on a Pew Research Center analysis and report. Pew defines the middle class as households with incomes between two-thirds and twice the median income, adjusted for household size and local cost of living, according to Rugaber’s article.
Middle-class adults now make up less than half the population in such cities as New York, Los Angeles, Boston and Houston.
“(The shrinking of the middle class) has increased the polarization of incomes,” Rugaber quotes Rakesh Kochhar, associate research director at Pew and lead author of the report.
Nationally, the proportion of middle class adults shrank to 51 percent in 2014 from 55 percent in 2000, Rugaber quotes the report. Upper-income adults now constitute 20 percent of the population, up from 17 percent. The lower-income share has risen to 29 percent from 28 percent, the article says.
So what happened? People who lost jobs in the Great Recession, if they have found new ones, are now working for less money. The article tells of a Detroit man, age 52, who was earning $28 an hour as a factory worker, but now works for $17 an hour in another company’s shipping department.
That’s pretty close to half of his salary gone.
The good jobs that had been available, whether unionized or not, are disappearing. Make no mistake. Regardless of how you feel about labor unions, they helped build the middle class. As their power wanes, so does the middle class. Many of those who rail against unions today either once belonged to a union, or had a close family member who did. Many today have unions to thank for whatever life they have built or inherited.
Not only have people lost good jobs only to take lesser paying ones, many have lost good benefits. What their good jobs used to pay for, i.e. health insurance, their new jobs probably do not.
So many are making less, and paying more out of pocket for life’s necessities. Fortunately for them, the price of oil has dropped significantly, so they are saving lots at the pump.
It’s easy to look at the downside of a shrinking middle class. But let’s check out the reverse: some people are actually making more than middle-class wages.
That could be the result of one of several things. Some may be getting highly educated, particularly in science, technology, engineering and math (STEM). Skills in those areas can bring someone a big-paying job.
Still, companies often have to look outside the United States to find people with those skills. Apparently, America is not producing those highly educated people in large numbers.
Some could be boosting their net worth by investing well in the markets. One could start relatively poor, save a little each week out of his meager paycheck, put it away and watch it grow. Then, that person must stay disciplined enough to manage it, but not touch it, until his or her elder years.
Finally, there are ways other than a traditional job that one can earn extra income. For one of the best, visit www.bign.com/pbilodeau. You’ll see people who started in a variety of financial positions – low, middle or high income – and worked part time on something that made them a fortune. There are no guarantees, of course, but a few people saw something special and worked with it.
The lesson here is that to improve one’s financial position, he may have to look for something that may not be readily apparent. Stick with a job, even a lower-paying one, if you must, but always be on the lookout for something better. There are good things out there for those who look for them.
Peter

MORE JOBS, LESS SECURITY

#jobs #security #parttimejobs
The United States is gaining jobs, but more of them are part time, pay less than the ones lost and employees haven’t had raises in years.
Sure, McDonald’s, Wal-Mart and other companies have announced employee raises with great fanfare recently, but many of those who work there can’t make a decent living on what they earn.
Associated Press reporters Josh Boak and Christopher S. Rugaber tackled this issue in an article published June 14, 2015 in the Tennessean newspaper in Nashville. In that same Tennessean edition, Paul Davidson of USA Today said many who are working part time are doing so reluctantly.
If you grew up in the 1950s or 1960s, you are at or near retirement. Hopefully, you retired, or will retire, on your own terms. Many have not. If you are currently in your 20s, looking for steady work, perhaps you are cobbling together an income, however inadequate, with one or more part-time jobs. If you are doing that, what are the prospects of you getting the full-time job you need? Are you still living at home with Mom and Dad, and don’t really want to, but can’t afford not to?
The Associated Press article quotes Lena Allison, 54, of Los Angeles. She lost her job as a kindergarten teacher and has worked temporary jobs since. “More people may be working jobs, but they’re like these serial part-time jobs,” the article quotes her.
The AP reporters also point out that hiring has surged in the health care, retail, construction and hospitality and leisure industries. Rick Rieder, a Black Rock investment officer quoted in the AP article, says the country is beginning to see the start of broad-based wage growth. That opinion would surprise many Americans, the reporters say.
But here’s what could trigger wage growth: lower productivity. In the first three months of 2015, productivity dropped 3.1 percent after a 2.3 percent drop in the fourth quarter of 2014, the AP reporters say. Productivity had expanded 2.1 percent annually, on average, since 2000, they add. Companies have been slow to invest in equipment and other assets that might make their workers produce more. Therefore, hiring more workers in the short run could combat that, the AP reporters say.
Still, most workers are collecting no benefits or vacation time with their jobs.
Let’s face it. For most people who have lost jobs in the last few years, the ones they’ve gotten to replace them, if they’ve been so lucky, pay less than the jobs they lost. For those fortunate enough to survive the downsizings, most are working harder and probably haven’t had a raise in quite some time. Fortunately for those employers, these employees probably have no better place to go.
What’s an employee to do in these situations? First, if you have a job you like that pays well, don’t let it go. But, don’t presume it will always be there. Most people are one reorganization, or one bad manager, away from an untenable employment situation. Look for a Plan B that can help you make an extra income while you work, so, if the worst case happens, you can leave your job with a smile.
If you are in need of something to relieve an immediate income problem, the same solution could apply. There are lots of great ways to make extra income outside the traditional employment arena. For one of the best, visit www.bign.com/pbilodeau.
Don’t let the numbers fool you. Things may appear to be getting better as far as economic numbers go, but little has trickled down to the average person. With very few ways to get meaningful help from this situation, decide today to help yourself. Save more. Spend less. Look for a Plan B. Don’t waste energy complaining about what is. Use that energy to look for, and find, what can be.
Peter

30-SOMETHINGS SWEAT RETIREMENT: PART 1

If you are 30-something, are you worried about your financial security in retirement?
A survey by the Pew Research Center, as reported by Hope Yen of The Associated Press, says Americans in their late 30s are more worried about retirement than those of the Baby Boom Generation.
The 30-somethings should be concerned. However, they have time to do the right things.
If you are in this group, think about the following: your job, your pension (if you have been promised one), your lifestyle, your spending habits, your free time.
First, your job. No matter how “good” your job is, it may not last forever. Your forebears saw complete industries go from thriving to dead – or at least on life support — in a generation. If you have or had grandparents who worked in a factory, is that factory still around? Remember, your grandparents thought that job was as good as gold, and it probably was FOR THEM. But they may have lived to see those jobs disappear – something they never expected when they were your age.
No matter what industry you are in now, EXPECT it to change. New technology is making the way we do things differ by the day. What you are doing now may not even resemble what you may be doing as you approach retirement. Can you live with that? Will you see the changes BEFORE they hit you, so you can act accordingly? It’s difficult to anticipate change you don’t know is coming, but regardless of how your job, or industry, changes, your expectation of change will serve you well.
A PENSION FOR CHANGE
Second, your pension. If you are lucky enough to have a pension as part of your employment package, count your blessings. However, at this stage of your life, your pension is little more than a promise, unless you are contributing your own money toward it. We are seeing pension promises broken every day, and those older than you are having retirement planning disintegrate before their eyes.
Do you have a parent who is at or near retirement age but has to keep working because everything they’d worked for has all but disappeared? From your vantage point, you can learn from this. Start now to save for your retirement. How YOU prepare your own resources for retirement will make a difference in how and when you will be able to retire. Remember, the retirement planning that you do, with your own money, can’t be taken from you. It can go up and down with the markets, but your own money and efforts are yours forever. It’s a promise you can keep for yourselves.
Promises from employers can be broken. If your parents have or had an employer that is keeping its pension promise, they are very lucky. Even unionized or government pensions are coming under scrutiny. If you are employed in a unionized or government environment, and you are in your 30s, don’t expect the promises made to you today to hold up at, say, age 60. If you plan that things will go away, and they don’t, that’s a bonus for you.
LIFESTYLE CAN CREATE WEALTH
Third, your lifestyle. In this age of ever-changing gadgets, people wait in long lines for fancier phones, etc. People want what’s hot. They want it even though they know that the minute they get it, something else will make it obsolete. When your grandparents and parents were young, they may have bought a TV or a radio, or a stereo system. They expected to use it for decades without replacing it. Today, people replace their gadgets annually, if not more frequently, so they can have the latest, trendy thing. If you have a gadget that works for you, think long and hard before replacing it. Your friends may laugh at you for having “old” technology, but you’ll have the last laugh when you put the money that you would have spent on the newest gadget into your retirement fund.
We’ll talk more about spending habits and free time next week. Meanwhile, as you ponder your retirement and fret about what it will look like, visit www.bign.com/pbilodeau. This may be one way you can put your mind at ease when it comes to retirement. Who knows? It might even put you on the road to retiring EARLY!
Time is on your side. Things you do – or don’t do – today may determine the type of retirement you will have. Think hard, and choose wisely.
Peter