#retirement #WorkUntilYouDie #labor #jobs #employment
There’s talk in the public sphere about abolishing retirement.
That means, of course, working until you die, unless you have a disability.
The conversation is coupled with talk of cuts in Social Security and Medicare, even if such cuts come from only “waste” in those funds.
First, if you have a great job, and your employer will let you work until you die, congratulations.
But, that’s hardly the case in most places. Despite the need for labor and many unfilled positions, employers definitely look at older workers, many of whom are making the most money in their categories, for places to cut. Ultimately, they may replace those workers with younger, cheaper ones.
The generous employers will offer these older workers separation incentives, commonly called buyouts, to leave by a specified date.
The less generous employers will just lay off older workers, despite laws that may put them in a protected class.
These protected class laws put the burden on the employees to sue to keep their jobs. They have to show, in most cases, that their employers fired them simply because of their ages. That’s hard to prove, since employers can come up with other – legitimate or illegitimate – reasons to let a person go. Many employees are also so-called “at-will” workers, meaning they can be fired for any reason. Also, most employees won’t bother suing, and the employers know that.
But, even if your employer WANTS you to work until you die, do YOU want to work until you die – particularly at a job you hate?
Retirement is designed not just to protect older people from workplace abuse, but also for the workers to live their golden years with some degree of well-earned pleasure. It’s designed for people to enjoy, and have control of, some part of their lives before they die. Also, it is designed to make jobs available for younger workers.
When Social Security was created as part of the New Deal after World War II, most people didn’t live but a few years after their retirement at, say, age 65.
Now, with advances in medical care, people are living decades after retirement, placing a burden not just on Social Security, but also on public and private pension funds. Some actuarial studies show these funds might not be sustainable for the near term, never mind perpetuity.
Making people work well into their so-called retirement years conjures up many awful scenarios. Would you want your parent or grandparent in a factory line, working his or her tail off in their 70s or 80s?
Would they even survive it?
In addition to medical advances, people are living longer likely because they are not working.
No one should discriminate against a worker because of his or her age.
But, no one should make someone work past a certain age, if he or she chooses not to.
And, yes, we need to take care of older people who are not working.
It’s not an easy problem to solve. But imaginative people in all sectors of society can, and, hopefully, will find ways to make retirement more achievable, enjoyable and sustainable.
Peter
Tag Archives: Social Security
SOCIAL SECURITY: WHEN TO TAKE IT
#SocialSecurity #retirement #savings #earnings
It’s a question discussed numerous times in this space: when to take Social Security.
Maurie Backman of The Motley Fool took it on in a Christmas Day article, 2018, in The Atlanta Journal-Constitution.
Take it early, at age 62, and you get a lesser amount than you would at your full retirement age. But, if you have already retired and need to cobble together an income, taking Social Security early is an option.
Of course, the longer you wait to take it, the bigger your check will be. Wait until age 70, and your check could be pretty good-sized.
Backman cites three reasons he believes taking Social Security at age 62 might be a good idea for you: first, you are unable to work (or are having trouble finding a job, even though you are able to work); you’re in bad health; and, you’ve earned the right not to wait.
All those reasons make sense for some people. But everyone’s situation is different. Here’s one rule of thumb for everyone: don’t take it early just because you fear the government will run out of money and the checks will stop. Most experts believe Social Security will be around for quite some time, even if the government does nothing about the funding. Benefits may have to be adjusted in the future, they say, but it’s unlikely to go away entirely.
When making the Social Security decision, consider the following: what other income do you have, or will you have, in retirement. Income includes pensions, dividends and interest from your savings and investments and, perhaps, a no-stress, part-time job. Income, for some, may also include a full-time job. Yes, there are those who love their jobs enough that they don’t want to retire. If you are fortunate enough to be in that situation, and your employer will keep you on forever, that’s excellent.
Most folks, though, have jobs that will get old after a while, if they haven’t already. Others may have employers that are eager to get them retired, or at least out of their employ.
It’s a good idea, if you are among the latter categories, to have a Plan B in place that will give you income that will enable you to go with whatever happens, “retire” when you want and potentially give you financial freedom. Many such vehicles involve only a few part-time hours a week, with the potential to dwarf your working income. To check out one of the best such vehicles, message me.
Also, as you ponder when to take your Social Security, know that no matter how many years you paid into it, and no matter how good your income was, that government check alone probably won’t give you enough money to give you the retirement you want. You WILL need some other financial resources.
If you haven’t yet retired, and don’t know what your resources will be when you do retire, it’s time to start planning for it. The earlier you start planning, and the more disciplined you are, the better off you’ll be when you get older.
So, start saving, and get a good, trusted financial adviser to guide you in retirement planning. Remember, too, that retirement planning isn’t all about money, though money is a big factor. Know what you’ll want to do when you retire, and plan to make that happen.
The Social Security office nearest you can give you your options, based on your income. The wise person will have a plan so that, no matter when he or she retires, he or she will never run out of money.
Peter
WHEN SHOULD YOU TAKE SOCIAL SECURITY?
#SocialSecurity #pensions #WhenToTakeSocialSecurity
Some people may want to take their Social Security immediately upon eligibility, just because they need the money.
For others, waiting may be a better option, even if you have to dip into your retirement savings while you wait.
The Atlanta Journal-Constitution tackled this decision in an article published Oct. 8, 2018.
In the article, Perry Volpone was determined to take his Social Security as soon as he retired. His financial adviser, Dana Anspach, argued against it. She urged the former retail executive, then 65, to put off applying for Social Security for five more years, because his monthly benefit would increase, the article says.
“(Taking the benefit immediately) would make me more comfortable,” Volpone argued. “The whole thing is just so much more complex than you think,” the article quotes him.
Here are the facts, as stated in the article: For each year past your full retirement age that you put off applying for Social Security, your monthly benefit will increase by 8 percent. That does not include any cost-of-living adjustments the government makes – as it did recently.
Here’s what you have to decide: How much, on average, are you earning with your retirement savings, plus any pension you might be receiving? If your savings – should we say, investments? – are earning you, on average, less than 8 percent a year, can you supplement your income through the dividends and interests on your investments, plus any pensions or other income, to allow you to keep your Social Security “in the bank” for five years or so?
Though that may require some thought, and good advice, as Volpone was getting in the article, there are some no-brainer decisions: if you have little or no retirement savings, and no pension, take your Social Security as soon as you can.
By the same token, if you have a good retirement nest egg, that’s kicking off good earnings that you can tap for living expenses, and/or you have a good pension, postponing Social Security until age 70 is also an easy decision.
If you are married, and both spouses qualify for Social Security benefits, the best decision might be to take the lower-earning spouse’s Social Security at that person’s full retirement age – say, 66 or 67 – and postpone taking the higher-earning spouse’s Social Security until that spouse turns 70. When one spouse dies, the other spouse gets only one check, and the higher-earning spouse’s check is going to be better.
A decision people make rashly is to take Social Security immediately upon qualification, because they believe it’s going to run out of money before they die. Most experts believe Social Security will be around in some form no matter what, if anything, government does to “fix” it.
There is something else to consider. What if there were a way a person, retired or not, could make extra money by committing a few, part-time hours a week working at something that would not feel like a “second job?”
There are many such vehicles out there for those willing to check them out. To find out about one of the best, message me.
In short, most of us dutifully paid into Social Security while working. When it was created, no one predicted the longer life span that medical and other science has given us, so there have been some financial headaches with the system.
Still, most predict it will never go away entirely, though we may see some combination of benefit reductions and increases in the retirement age in the future.
But, Social Security alone will not give you the retirement lifestyle you probably want. It can be part, but should not all, of your retirement income. It’s up to you to decide what kind of retirement you want, and use your working years to save, invest and prepare for it.
The younger you start doing that, the better prepared you will be when you get older.
Peter
DECISIONS FOR A SECURE RETIREMENT
#retirement #SocialSecurity #PensionFunds #pensions
Recent reports and studies have Medicare funding drying up by 2026, with Social Security only secure for a few years after that.
Geoff Mulvihill reports that many pension funds for public workers already owe far more in benefits than they have in the bank. His article for the Associated Press was published May 26,2018, in The Atlanta Journal-Constitution.
Just two days later, the Atlanta paper published an article by Susan Tomor for the Detroit Free Press discussing how to become a 401(k) millionaire. In summary: start saving at a young age, consistently, from every paycheck you receive. Also, if you get raises, put those in the bank, too, and don’t touch the money, except to reinvest or improve your investment portfolio.
We’ve all heard the stories about people at or near retirement age who have very small nest eggs stashed away.
Obviously, they did not make that a priority as they’d gone through various life stages – marriage, children etc. Some of them might argue that there is no way they could have saved money and dealt with whatever life threw at them.
For the young person, making retirement saving a priority is essential if, of course, you don’t want to be broke in your elder years, when you might have the time to do things that you never had time to do as a youth.
It really doesn’t matter what you earn. It matters only that you take what you earn and use it wisely.
Spontaneous – some might call it frivolous – spending ought not be a big part of your life. Knowing where every cent you have is going is essential. Of course, a life of complete amusement deprivation is not good either. But choose your fun wisely, as cheaply as you can.
Check you daily expenses. Are you buying your lunch at work every day? If so, bag your own. Are you making daily coffee shop runs? Buy a Thermos, brew your own and take it with you.
Are you ending your workweek with “happy hour?” Why not have you, and your friends, pick someone’s house, each buy a favorite beverage or snacks, and gather there instead of at your favorite watering hole.
Of course, not everyone has to cheap out. But for those who insist they cannot afford to save money, it has to become a conscious decision.
Even bigger life decisions, such as how many children to have, and when, should be considered as part of creating a financial future.
Young folks, too, have to decide when, or whether to buy a home. It may be considered part of The American Dream, but there is no shame in renting, if that works better for you. On the other hand, a house can be an investment you could use later as part of your overall net worth.
If you are older, and think you are out of luck now, or even if you are younger and are looking to secure your future, there are many ways out there to earn a decent, potentially lucrative, income by spending a few part-time hours a week. The bonus: if you are diligent and consistent, it’s money no one can take away from you. To check out one of the best such vehicles, message me.
The lesson to learn with these various reports on retirement is that a secure financial future is in no one’s hands but yours. Take charge. Use what you have, to the best of your ability. Perhaps even be open to looking for things that may help boost your future.
As the adage goes, if it is to be, it’s up to me.
Peter
MOST PEOPLE AREN’T SAVING ENOUGH FOR RETIREMENT
#retirement #pensions #savings
Most everyone knows or suspects that people aren’t saving enough for a decent retirement.
But a World Economic Forum report spells it out: People are living longer. Investment returns have been disappointing. Therefore, within three decades there will be a $400 trillion shortfall worldwide in retirement savings.
The report was cited in an article by Katherine Chiglinsky for Bloomberg News. It was published June 4, 2017, in The Atlanta Journal-Constitution.
The shortfall includes a $224 trillion gap among the six large pension-savings systems: the U.S., U.K., Japan, the Netherlands, Canada and Australia, the article quotes the report.
Employers have been moving away from pensions and offering defined-contribution plans, which include 401(k)s, and individual retirement accounts. Those categories make up about 50 percent of global retirement assets, Chiglinksy writes.
The report warned that the savings shortfall in the U.S. is growing at a rate of $3 trillion a year, and may climb at an annual rate of 7 percent in China and 10 percent in India – countries with aging populations, growing middle classes and a higher percentage of workers in informal sectors, Chiglinsky writes.
So, how are you set for your retirement?
Have you got a pension lined up? If so, it’s entirely possible that it won’t be there when you are ready to take it, or it could be reduced.
Social Security by itself won’t let you live a decent life. And, if Washington doesn’t act, benefits could be reduced eventually. Many experts say we needn’t fear that Social Security will go away entirely. But benefit reductions are a possibility in a few decades.
Think of your retirement planning this way: if it is to be, it’s up to ME.
If you are young, and just starting your career, make retirement savings a priority. If you aren’t raking in big bucks, start with a small percentage of what you are making. Put that money away. Don’t touch it!
Once your savings have grown to an investible amount, say, a few thousand dollars, get it out of your bank savings account and put it into something that will pay you higher rates. Get good advice from a financial planner that you trust. You may want to start with fairly safe – everything outside of insured bank deposits carry some risk – investments, and diversify more as your money grows.
If you are older, you need to put more of what you earn into retirement savings. Young folks have lots of time to balance gains and losses. Middle-aged folks have much less time. Talk to a financial planner about you goals, and let him or her guide you as to how much to save, and in what vehicles to invest.
Of course, cutting spending is a must. Increasing income may give you a leg up on your retirement savings. To learn about one of best vehicles for doing both, message me.
In short, you can take matters into your own hands. It’s all about setting priorities, making good choices and sticking to your plan.
Whatever you sacrifice now, be it $100 a month in lattes, taking too many expensive trips etc., will pay you back in spades when your job goes away. And you don’t have to live in complete deprivation to do it.
Just look for value in what you buy, and make good choices in how you save.
Peter
RETIREMENT SAVINGS SHORTFALL PREDICTED
#retirement #savings #RetirementSavingsShortfall
Most everyone knows or suspects that people aren’t saving enough for a decent retirement.
But a World Economic Forum report spells it out: People are living longer. Investment returns have been disappointing. Therefore, within three decades there will be a $400 trillion shortfall worldwide in retirement savings.
The report was cited in an article by Katherine Chiglinsky for Bloomberg News. It was published June 4, 2017, in The Atlanta Journal-Constitution.
The shortfall includes a $224 trillion gap among the six large pension-savings systems: the U.S., U.K., Japan, the Netherlands, Canada and Australia, the article quotes the report.
Employers have been moving away from pensions and offering defined-contribution plans, which include 401(k)s, and individual retirement accounts. Those categories make up about 50 percent of global retirement assets, Chiglinksy writes.
The report warned that the savings shortfall in the U.S. is growing at a rate of $3 trillion a year, and may climb at an annual rate of 7 percent in China and 10 percent in India – countries with aging populations, growing middle classes and a higher percentage of workers in informal sectors, Chiglinsky writes.
So, how are you set for your retirement?
Have you got a pension lined up? If so, it’s entirely possible that it won’t be there when you are ready to take it, or it could be reduced.
Social Security by itself won’t let you live a decent life. And, if Washington doesn’t act, benefits could be reduced eventually. Many experts say we needn’t fear that Social Security will go away entirely. But benefit reductions are a possibility in a few decades.
Think of your retirement planning this way: if it is to be, it’s up to ME.
If you are young, and just starting your career, make retirement savings a priority. If you aren’t raking in big bucks, start with a small percentage of what you are making. Put that money away. Don’t touch it!
Once your savings have grown to an investible amount, say, a few thousand dollars, get it out of your bank savings account and put it into something that will pay you higher rates. Get good advice from a financial planner that you trust. You may want to start with fairly safe – everything outside of insured bank deposits carry some risk – investments, and diversify more as your money grows.
If you are older, you need to put more of what you earn into retirement savings. Young folks have lots of time to balance gains and losses. Middle-aged folks have much less time. Talk to a financial planner about you goals, and let him or her guide you as to how much to save, and in what vehicles to invest.
Of course, cutting spending is a must. Increasing income may give you a leg up on your retirement savings. To learn about one of best vehicles for doing both, message me.
In short, you can take matters into your own hands. It’s all about setting priorities, making good choices and sticking to your plan.
Whatever you sacrifice now, be it $100 a month in lattes, taking too many expensive trips etc., will pay you back in spades when your job goes away. And you don’t have to live in complete deprivation to do it.
Just look for value in what you buy, and make good choices in how you save.
Peter
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
RETIREMENT PROSPECTS DON’T HAVE TO BE GLOOMY
#retirement #SocialSecurity #employment
It’s been said many times, in many ways: many of us don’t see how we can retire.
Perhaps we haven’t been able to save enough. Perhaps we won’t be getting the pension we were promised. Perhaps we believe Social Security will be tapped out before we can tap in. Or, perhaps we’ve been put to the curb by our employers at middle age, can’t find a comparable job and have to “retire” before we want to.
Robert Powell, editor of Retirement Weekly, discussed some of these issues in a USA Today column, published June 1, 2015.
Powell talks about postponing retirement until age 70. That’s fine, if you like your job and are able to do it. Bob Schieffer, the longtime newsman with CBS, had recently retired at age 78. But, most employers won’t exercise that much patience. Once an employee hits middle age, he or she usually begins to get messages about “early retirement.” For many employers, a middle-age worker, particularly one who has been with the company a good number of years, is taking a lot out of the company in salary and benefits. If that position is vital to the company, then it can be more economically filled with a younger, less senior person, who may bring some new energy to the company.
Now, if you are able to extend your employment, there are great benefits to waiting until age 70 to collect Social Security. Powell says your benefits could go up by 76 percent by waiting. Basically, delaying Social Security should be a no-brainer for anyone who doesn’t need the money in retirement. It’s a whole different matter if you NEED the Social Security money to survive.
Powell also talks about the longevity risk. Will you outlive your money? One way to avoid the longevity risk, assuming you’ve been able to save some money, is to only tap the dividends, interest and other earnings your money generates, without dipping into your principal. Certainly, people are living longer and the longevity risk is real. If you are already middle age, your parents and grandparents would envy the longer average lifespan you now have. If you are young, presume your average lifespan will increase further. Start saving whatever you can TODAY, and don’t touch it until you retire.
Again, this is easier said than done when you don’t earn enough at your job, your employer doesn’t offer retirement benefits of any sort etc. Take this hint: live within or below your means. If you aren’t making much, look at what you spend your money on. Buy what you can afford, when you can afford it.
If you are married, postpone having children until you are financially ready to care for them. If you are single, look to share a household with friends to lighten individual expenses.
Powell also talks about home equity. There are some famous people out there touting reverse mortgages, which are a fine solution for the property-rich, cash-poor retiree. Perhaps it’s best to consider this option a last resort. Some of the ads say you retain “complete ownership” of your home as you draw cash from the equity. Your name is on the deed still, you are responsible for all the maintenance of the home, but the lender owns whatever chunk of equity it has turned into cash for you. If that doesn’t matter to you, then check out the reverse mortgage option as a last resort.
One thing Powell doesn’t mention is the idea of re-inventing oneself. If necessity is the mother of invention, then retirement, for some, is the mother of re-invention. There are multiple ways out there to make an income, perhaps even a great income, without having a job, pension or other source of funds. For one of the best, visit www.bign.com/pbilodeau. You have to be willing, perhaps, to re-invent yourself. Or, you have to be looking for a way to cut spending and earn more money. But a retirement solution could be waiting for you, if you are willing to look at it.
The retirement picture doesn’t have to be gloomy, particularly if you are young. But it does take some thought, perhaps some habit changes or courage to re-invent. It’s OK to be afraid, but sometimes we have take action while afraid. That action, gradually or quickly, can ally our fear.
Peter
THE DISAPPEARING AMERICAN DREAM, PART 2: RETIREMENT PREPARATION ISN’T WHAT IT USED TO BE
#AmericanDream, #disappearingAmericanDream, #economicgrowthrates #retirementplanning
Retirement planning is complicated for Americans of all ages.
So says Jeff Reeves, editor of InvestorPlace.com, who wrote a column for USA Today. It was published in the May 10,2015, edition of The Tennessean newspaper of Nashville.
The Employee Benefit Research Institute, in a 2014 survey, found that only 64 percent of Americans have saved any money for retirement to supplement Social Security benefits. It says that roughly six of 10 Americans have less than $25,000 saved for retirement, according to Reeves’ article.
Certainly, if you are young – say, in your 20s and 30s – retirement is a long way off. Or, so you think. Time travels with break-neck speed, and 30 years can go by very quickly. It’s never too early to save, even if it’s only, say, $5 a week. That may be one visit to Starbucks that you would be sacrificing.
Your parents and grandparents probably were diligent savers. Perhaps they were disciplined and never touched their retirement money.
In their day, perhaps, jobs didn’t disappear more quickly than cake at a child’s birthday party.
If you are young, you face a daunting task of keeping a good job for as long as you want it. If you are older, say, in your 40s and 50s, perhaps you had a good job for a long time, and it’s now gone.
All this complicates saving for retirement, so that task requires extra discipline, perhaps more than your parents or grandparents had.
Despite all the gloom-and-doom reports, Social Security is likely to survive. Benefits could be reduced a bit, but it should survive. The question to ask yourself is, what kind of lifestyle will I have on Social Security alone? Even if you add in a pension, should you be fortunate enough to have one, it’s still not going to be that much. If you are a careful, disciplined person, you would have spent your whole life watching every dollar. Your retirement years should be enjoyable, not ones of deprivation.
Well, one does not have to rely on a job, pensions etc., to have a good retirement. One does not have to engage in risky, unsafe investments to get a decent return.
But, to achieve that, one has to be motivated to want to change his situation, rather than accept it and complain about it.
If you are that type of person, visit www.bign.com/pbilodeau. Check out how many people from all different backgrounds, education levels and skills are not only securing their retirement, but helping others do the same.
Many of us do not want to take handouts, but want to get what was promised to us. Promises can, and often are, broken. That’s why motivated people look outside what they are used to and find a new way to prosperity.
Now, if you are indeed young, you can save your way to prosperity. Reeves quotes John Sweeney of Fidelity Investments as saying, “we are seeing many examples of people who have $1 million in a 401(k) because they started early, they diligently contributed and kept to it.”
That’s more difficult to do as jobs come and go, and jobs, if they are replaced, are often replaced with ones paying and providing less.
But the discipline you will acquire if you diligently save and not touch those savings until later years, and put those savings in the hands of a trusted financial adviser that won’t gobble up too much in fees, you can secure potentially great retirement.
The new Voya ads talk about “orange money,” that one must put away for retirement and not spend. Designate your own “orange money,” or whatever color you deem it, so you won’t have to scrape together an old age of deprivation.
Peter