Showing posts with label Retirement. Show all posts
Showing posts with label Retirement. Show all posts

Saturday, March 15

7 new retirement trends

7 new retirement trends
Business Week | By Tom Sightings, U.S. News & World Report

Your retirement is likely to be quite different from what your parents experienced.

We all know that retirement today is not the same as it was for our parents. Pensions are nothing but a dim memory for many of us, and we all worry about Social Security and the cost of health care. Yet our life expectancies have increased, and we can look forward to enjoying healthier, more active lifestyles either at home, in a sunbelt paradise or perhaps in some kind of senior living facility.

Here are seven current trends in the world of retirement, outlined from a recent study by the University of Michigan Retirement Research Center:

1. The traditional career arc is changing

The experience of a decades long full-time job followed by full retirement is becoming the exception rather than the rule. Instead, many workers are leaving full-time work in their 50s, and taking lower-paying "bridge" jobs they may hold for several years before finally entering full retirement. People in bridge jobs have different attitudes and expectations compared to full-time workers, which significantly affects loyalty, commitment and incentives in the workplace.

2. More people are choosing semi-retirement

Due to the lack of a secure pension or forced early retirement, a significant group of retirees are now holding down part-time jobs. According to the University of Michigan study, the proportion of partially retired workers has risen from virtually zero to 15 percent for 60 to 62 year olds, and is over 20 percent for 65 to 67 year olds, up from 5 to 10 percent in 1960.

3. Workers have less control over the timing of their retirement

Despite efforts from the government to ban age discrimination, multitudes of workers in their 50s and early 60s have been laid off or forced into early retirement. In addition, almost as many late-stage workers are being passed over for new jobs. At least some of this phenomenon results from businesses responding to difficult economic conditions since 2000.

Or, as the study says, "Workers around normal retirement age (63-67 years old) are especially sensitive to changes in the national unemployment rate."

4. But they also have more flexibility

In 1970, Social Security introduced a gradual increase in the delayed retirement credit, meaning that employees working beyond normal retirement age continue to build up credits for Social Security. Workers now have the flexibility to take retirement benefits anywhere between 62 and 70, and theoretically receive the same expected lifetime benefits. Also, the decline in defined-benefit pension plans may have reduced instances when workers face age-specific work disincentives.

In other words, fewer companies require workers to retire at age 65 whether they want to or not. That's the silver lining of defined contribution plans: Now you can decide when to retire, rather than the pension plan pushing you to retire at a certain age.

5. The more money you make, the more likely you will keep working

It seems counterintuitive. You'd think the lower your salary, the longer you'd have to work. But it doesn't pan out that way, presumably because higher-paid workers have better jobs they not only want to keep, but are also able to keep. The full-time employment rate for 60-year-olds on the lower end of the pay scale is less than average, and for 65-year-olds it is less than half the average. Highly paid workers have had a different experience.

The average full-time employment rate for top earners ages 65 to 67 went down in the 1990s, but has been rising ever since – suggesting longer careers but less-expected retirement security for this group.

6. People spend longer periods of time in part-time careers

Those who leave the full-time workforce early need to make more income. They tend to fall into the lower end of the pay scale to begin with, and in the end have devoted fewer years to earning a salary. Therefore, instead of taking full retirement at 65 or 66, many keep working their part-time jobs until age 70 or beyond to make up for lost wages earlier in their career.

7. Inflation, housing prices and the stock market have little impact on retirement

The study found that a high inflation rate results in a slightly higher retirement rate, because wages lag inflation and therefore lower the rewards of working. Housing prices and stock market performance have a slight bearing on the timing of retirement, primarily for wealthier individuals. But most people time their retirement based on their own tolerance and ability to work, not on general economic conditions or prospects for the stock market.

Saturday, March 8

Dividend shares are a good bet for retirement?

Dividend shares are a good bet for retirement?
Business Week | By Tom sightings, US News & world report

Many stocks have to walk up, but some areas of the market offer more stable stocks with inflation-beating returns to finance your golden years.

One of the most difficult problems is retirees face in today's financial markets how to make a decent return on our savings. In the old days, we could put money in the Bank, drawing 5 percent interest and life from the proceeds. No more.

Actually a little in the past year, interest rates have risen. But a 5-year Treasury Bills only 1.6 percent interest charged. A 5-year Bank CD offers less than 2 percent. A medium-term corporate bond or bond fund might be 3 percent, but let helpless against inflation bonds.

Other investments offer better repayment, but it's always a compromise. Master limited partnerships (MLPs), such as can high yields to drop, but you are subject to a complex tax situation. Life annuity can pay more, but usually does not provide protection against inflation.

What is shares with high dividend? This is not a new idea, and many of the stocks have already offered much of investors to limit maybe future income. But several areas of the market offer relatively stable stocks with inflation-beating dividend.

We all go to the supermarket, shampoo, toothpaste and cleaning supplies to buy. Procter & gamble (PG) expresses a 3.2 per cent dividend. Clorox (CLX), the producer of bleach, pays also 3.2 percent. Warren Buffett favorite stock, Coca Cola (KO), a little less bubbly pour 3 percent. And you always go to McDonalds (MCD)? The company offers a 3.5 percent dividend.

Are these stocks a good bet? Yes. But keep in mind that you bet still.

Americans are aware of the risks of oil production by environmental disruption in the Middle East. But we need fuel for our cars and our homes for heating, and some offer the large energy companies for decent dividends.

Chevron (CVX), the second largest United States oil company, yields 3.6 percent. Conoco (COP) Income 4.3 percent. Energy companies increase their attractiveness by providing a well-accepted hedge against inflation. A good bet? Probably as good as you will find.

Johnson & Johnson (JNJ), Merck (MRK) and Pfizer (PFE) are large, companies that sell recipes, non-prescription drugs, and in some cases medical devices. All numbers better than 3 percent dividend. And despite the uncertainties of expiring patents and the affordable care Act, one could argue that as long as we need medical care, these companies remains healthy. A good bet? Likely.

Verizon (VZ) and AT & T (T) call solid dividend-4.6 percent and 5.7 percent respectively. Both companies generate enough money. But they are price pressures from consumers, even while they are forced to heavy investments to upgrade their networks. Are dividends safe? Most likely. Are the shares a good bet? Your guess is as good as me.

Electric turn enterprises traditional retiree income. Duke Energy (DUK), Southern Company (SO) and American electric power (AEP) deliver all dividends more than 4 percent. But the most utility stocks have suffered in the past year, the heat-related interest revealed its weakness: when interest rates rise, these shares go up. A good bet? Only if you think interest rates are not higher.

Individual stocks present their own risks, so that for many of us an ETF or fund with high dividend stocks promises a more secure way. Vanguard offers such ETFs that cover each of these five areas, as well as a more general high dividend yield (VHDYX) mutual funds with a 2.8 percent dividend. Most other major fund companies have their own versions of high dividend of equity fund.

Make no mistake, dividend stocks put on the risks of the market, which can be sizeable. Should still be high better payouts than bank offer CDs or State bond and probably at least a part of the portfolios of most pensioners paid shares.

At the time of publication sightings in the possession of a small number of shares of the VZ and T.

Tuesday, February 18

3 new ideas about retirement investing

3 new ideas about retirement investing
Business Week | By Kelly Greene, the Wall Street Journal

Some experts say it is time to rethink the nest egg. Here are three new strategies to your portfolio golden years-to extend, who prefer to have more shares.

Should experts begin, camp to rethink how much keeping people retired.

In general the new think, people more invested in equities, as of some traditional rules of thumb, such as such as subtract someone's age up to 100 to determine a portfolio allocation has suggested is should be. Man, that so much is new and controversial theory to claim that each other you should increase exposure, bearing moves into retirement.

What hangs in the balance: whether 78 million baby boomers can generate substantial enough yields, without to much risk, to create income, that last streams, as long as they do it.

Here are three different approaches that push financial experts that determine that people stronger investment in stock-should be even after you have collected the gold watch.

One of the biggest risks in dealing with investment, is to finance retirement, what risk has called "Sequence of returns". If you retire go and your investment big hit in the early years, you've been doing the money runs, withdrawals, years earlier than suffer if decent are earlier and later through a downturn.

To combat the problem, two researchers recently crunched the numbers and came to the conclusion that in many cases, investors recover their share ownership between 20 and 50 percent at the beginning of the pension and then ramp that, save it to a percentage of a year between 40 and 80 percent in the entire retirement number by phone should be. So leads, for example, a portfolio that starts at 30 per cent in shares and ends at 60% better on average than one that begins and ends with 60 percent shares.

Read more: 4 cheap newspaper stocks that could rebound

"You want to have has the lowest allocation, if your portfolio is greatest, and this will directly before and after retirement," Wade says Peacock, pensions Professor at who did the American College in Bryn Mawr, Pennsylvania, research with Michael Kitces, Director of research which "is Pinnacle Advisory Group in Columbia, MD., if you are particularly susceptible to wealth to lose. Once you switch to retire, one has so much ability to change your plans and make again."

The researchers describe their asset-allocation recommendation, as a "u-shaped glide path," where the stocks begin as a large part of the portfolio, reject, and be raised in the course of time. In the ideal case that researchers say they see integrated asset allocation by target date based their recommendation Fund, retirement dates and times in an attempt, providing investors with their investment objectives on autopilot, allowing their assignments, uses you, Peacock says.

But so far target date funds, best keep a fixed share of wealth in stocks through retirement, and you still a declining share in stocks. "you may have bad results available with a declining glide path into retirement," warns Peacock.

Kitces says: "When I say 'You will invest more in equities later in retirement,' everyone freaks out." But he and Peacock say retirees actual behavior in the past, if more people relied on traditional pensions, corresponds to their findings.

Peacock says people who invested in shares, finance their fixed costs with a combination of pension and social security and other pension payments sometimes much of the rest of its assets. So at the age and the remaining value of this fixed sources of income had gone back effectively, substantially more of their investments in stocks.

Read more: A less stressful way to invest in Asia

For years, many financial experts advised investors retired to weight their portfolios to bonds. Some now argue that the main underlying assumptions behind this recommendation is no longer applicable.

For one thing, says "We are ending a 30-year bull market in bonds," Lisa Shalett, head of the investment and portfolio solutions for Morgan Stanley Wealth Management. On the other hand, the investment horizon for most has extended pensioners from 10, along with the general rise in life expectancy for the US population to 30 years. And finally, the shift from pension plans to 401k retirement has more retirees depending on the investment gains for income.

"Put those three things together, and what he says is, we need a new approach," said Shalett. Bonds can no more than the driving motors in portfolios on counted that are three decades could have.

Friday, January 31

7 retirement planning rules of thumb

7 retirement planning rules of thumb
| By Robert Berger, U.S. News & World Report

These guidelines can help you prepare for a comfortable retirement.

Rules of thumb often develop because they’re at least somewhat accurate and are helpful when running off-the-cuff measurements. When it comes to retirement planning, rules of thumb abound, and they’re often quite helpful in setting savings, investment and withdrawal goals. The following seven rules of thumb for retirement planning will help put you on the right track for a comfortable retirement.

This isn’t strictly a retirement planning goal, but having an emergency fund is the basis for many good financial plans. If you have money on hand to weather small and large emergencies, you’ll be less likely to stop saving in an emergency, borrow from a retirement plan or rack up high-interest debt because of unexpected expenses. And even if you do have an emergency fund, you don’t have to stick it into an account that earns next to no interest. There are plenty of great places to put an emergency fund, like a high-interest savings account or CD ladder.

Many financial gurus advocate for paying yourself first by automatically saving 10 percent of your income for retirement. The personal savings rate for Americans is currently 3.2 percent of disposable income, according to 2013 statistics from the U.S. Department of Commerce. Saving 10 percent of your income in a 401k or IRA account every year will get you well on your way to retirement as long as you start early.

However, this rule of thumb breaks down a bit if you don’t start saving until well into your career, in your thirties, forties or even fifties. Starting early allows you to tap the power of compounding interest. The sooner you save, the less you’ll have to put in to meet your retirement savings goals.

As you age, most experts agree that you should shift more of your portfolio into less volatile investments, like bonds, which will be less likely to lose lots of money if the market crashes. If you’re very young, you can handle more uncertainty and potentially get better returns by investing in stocks.

This rule of thumb is quite conservative. While you might want to have 60 percent of your portfolio in bonds at age 60, having a full 30 percent in bonds at age 30 might be too much for you. It really all depends on your risk tolerance, which has to do with more than just your calendar age. Things like your current job, personality and family situation all play into your risk tolerance, too.

When you’re setting goals for retirement savings, many online calculators will ask what you expect to make on your portfolio. Plenty of experts say that you can expect to earn an average of 7 to 8 percent per year from a diversified domestic stock portfolio.

Of course, this is the stock market we’re talking about, so nothing is guaranteed. Depending on where your investments lie, how diversified they are and what the economy is like, you could make more or less than this in any given year. Plan accordingly.

Many financial advisers will say that you should aim to replace 70 to 80 percent of your pre-retirement income with Social Security, retirement savings or any other retirement income you may have available to you. Again, this works out for many people, but not for everyone.

For some reason, you may have higher-than-average retirement needs. Maybe you or a spouse has serious medical issues, or you have a disabled dependent who will never be able to live on his or her own. In this case, you’ll want to try to replace even more of your pre-retirement income during your retirement years. However, at least one study suggests that many retirees will need just 35 percent of their pre-retirement income.

Investment firm Fidelity offers one interesting retirement planning model that can help you set goals by age. The plan winds up with you saving eight times your income by the time you retire. So if you retire at 65, you’ll need to have saved eight times the amount you’re making per year as of that year. This plan is helpful because it gives you goals to meet throughout your working years, including saving one times your income by 35, three times by 45 and five times by 55.

Many retirement plans are based on the idea that retirees will withdraw 4 percent of their savings per year during retirement. The theory is that you’ll earn 7 to 8 percent, spend 4 percent and invest the remainder to keep pace with inflation. But in today’s low-yield environment, 4 percent may be too much. One New York Times article recently noted that a retiree with a $1 million nest egg invested in municipal bonds (once a favorite of retirees) would have a 72 percent possibility of running out of money before death if they withdrew on those bonds at the rate of 4 percent a year.

As with all rules of thumb, these for retirement and savings are based on averages. And, of course, no single person is truly average. It’s better to develop a personalized plan when it comes to retirement than it is to operate solely off of rules of thumb. Instead, meet with a financial planner or do more extensive research to set retirement savings and spending goals based on your unique personality, life and financial situation.

Monday, January 27

New retirement challenges for boomers

New retirement challenges for boomers
| By Richard Satran, U.S. News & World Report

During the financial crisis, many people vowed they would never retire, and now they are. What changed?

Planning for retirement? If you are not, you should be. What's becoming increasingly clear in the post-financial-crisis economy is that many people are unable to plan just when or how they'll leave the workforce.

In the midst of the financial crisis, baby boomers responded to money pressures by vowing not to retire, and some forecasts saw the post-55 work segment poised for huge growth. Pew Research reported in 2009 that 60 percent of people nearing retirement planned to work through retirement age. Other studies put that figure as high as 80 percent as the financial crisis raged.

But reality bit. Even people who wanted to work longer found they could not swing it. Among the first wave of baby boomers to hit retirement age, more than half (54 percent) quit working before they planned, according to MetLife's Mature Market Institute survey this year. "Boomers aren't necessarily 'working 'till they drop,' as was predicted," MetLife says.

The reason they are retiring? A majority of those polled say it was job loss or health-related issues. Still, many older workers say retirement is not a term they like, and many hope to work longer. Employment experts and financial planners see dangers in failing to come to grips with the reality of a workplace that can be difficult for older workers. Failing to deal with this transition carefully can lead to missteps and big costs in the long term.

Many still see a solution in part-time jobs, freelancing or finding unconventional work or new careers. In other words, they are hoping to "sort of" keep working in an economy that is "sort of" keeping people employed. But planning to make significant money later in life could be putting off the inevitable need to map out a sustainable exit strategy.

"People losing jobs and being forced into retirement have some homework to do – and they need to do it very quickly," says Maria Bruno, a senior investment strategist and financial planner for Vanguard. "Suddenly, you've gone to having no paycheck and you wonder, 'Now what do I do?'"

When you retire suddenly, it means doing practically the reverse of normal financial planning, she says. In careful life-stage-based plans, people consider far in advance how to fund their big life goals. In the case of a sudden, unforeseen retirement, it's more a matter of first figuring out how to survive without a salary.

"There were all these grand expectations that boomers would redefine retirement with huge numbers staying in the workforce, but there has not been that big of a change," says Sara Rix, senior strategic policy advisor for AARP Public Policy Institute. "People often say they feel a shock when that first paycheck does not arrive, no matter how much you have prepared for it. And a lot of people have done nothing at all."

The mundane first step is to add up expenses and create that elusive budget you never got around to finishing. It's the initial move in addressing what will likely be a longer-term challenge: There may be a period of weeks or months before Social Security or other pension funds can be tapped. How do you raise money to handle immediate costs?

Non-taxed bank accounts or emergency funds. If you are suddenly without a paycheck, it's probably best to use your emergency fund to cover expenses rather than raid higher-value, tax-deferred funds. "This is the time to use that emergency fund," Bruno says. "This is exactly what it's there for."

Sale of a home or other assets. Downsizing is a default choice for many retirees trying to manage costs. But it comes at a price. Real estate commissions, home improvements to your sale property, banking fees and moving expenses add up in a hurry, and a smaller home has to be significantly less costly to make sense, planners say. It can be a workable solution, but it takes time and planning, and creates short-term costs. So it's not much help in a pinch.

"There were all these grand expectations that boomers would redefine retirement with huge numbers staying in the workforce, but there has not been that big of a change," says Sara Rix, senior strategic policy advisor for AARP Public Policy Institute. "People often say they feel a shock when that first paycheck does not arrive, no matter how much you have prepared for it. And a lot of people have done nothing at all."

The mundane first step is to add up expenses and create that elusive budget you never got around to finishing. It's the initial move in addressing what will likely be a longer-term challenge: There may be a period of weeks or months before Social Security or other pension funds can be tapped. How do you raise money to handle immediate costs?

Non-taxed bank accounts or emergency funds. If you are suddenly without a paycheck, it's probably best to use your emergency fund to cover expenses rather than raid higher-value, tax-deferred funds. "This is the time to use that emergency fund," Bruno says. "This is exactly what it's there for."

Sale of a home or other assets. Downsizing is a default choice for many retirees trying to manage costs. But it comes at a price. Real estate commissions, home improvements to your sale property, banking fees and moving expenses add up in a hurry, and a smaller home has to be significantly less costly to make sense, planners say. It can be a workable solution, but it takes time and planning, and creates short-term costs. So it's not much help in a pinch.

Monday, December 30

3 ways to restart your retirement savings

3 ways to restart your retirement savings
| By Dorianne Perrucci, LearnVest

The biggest mistake you can make is to give up after a financial setback, so don't delay on rebuilding your nest egg.

You don't want your retirement savings to be a case of "shoulda, woulda, coulda."

But for many of us, the biggest problem is that we take a little "savings vacation," stop socking money away, then never get back on track.

Let's say, for whatever reason -- from an unexpected medical bill to paying for college tuition -- you took out a loan from your 401k or cashed out your retirement savings when you changed jobs. And you have yet to replace the money you took out.

If that describes you, you're hardly alone. One in every five participants who withdrew money from a 401k plan in 2011 hadn't paid themselves back by the end of the year, according to the Employee Benefit Research Institute (EBRI). New research from financial technology firm HelloWallet shows that more than one in every four participants are using their retirement money to pay for nonretirement needs.

Of course, sometimes, life interrupts your best savings plans. We get it. But take heart -- saving for retirement is a lot like riding a bike: If you fall off, you can always get back on. Here are three key steps to get you saving again:

First things first: You need an emergency fund, so you won't be tempted to stop saving for retirement or use money earmarked for it when a crisis hits. "You still need to make sure you have some sort of emergency savings so you don't crawl back into the same hole," says Judy McNary, a financial planner in Broomfield, Colo.

An emergency fund, which should be at least six months of net income set aside in a separate account, is also the smartest place to pull money from in a financial crisis, says Joel Bengds at HSC Wealth Advisors in Forest, VA. "Folks always feel they can make up the difference in the years to come," he says, but most never replace money in a retirement account.

Besides, while there are only certain times you should withdraw from an emergency fund, it's far more detrimental to make an early withdrawal from a retirement account. In most situations, you'll incur a 10 percent penalty fee and pay taxes on your withdrawal, eating into the money you took out. That means you'll have to save even more to replenish what you "borrowed."

In addition to keeping your hands off your retirement savings, an emergency fund delivers another benefit: You'll likely think twice about spending that money, for the simple reason that it took you time to build it up. "People are much more intentional and scrutinizing when pulling money out of an emergency fund," says Bengds.

Most people who don't save think they have no "room" to do so, but never look to see where they might free up the extra money. "It all starts with a simple budget," says Bengds.

It's easy to make excuses -- at any age or income level -- for why you just can't put more toward retirement: Older workers grow accustomed to luxuries, he says, "while younger clients want to have all the luxuries now—the house, the furniture, the car -- that their parents worked hard to enjoy."

Finding the means to plump up your retirement account usually involves a three-fold effort: First, controlling your "urge to splurge," tracking your expenses so you know where your money is going and "paying yourself first" by putting set amounts away in both an emergency fund and a retirement account.

Wednesday, December 25

Timeless moves for a successful retirement

Timeless moves for a successful retirement
| By David Ning, U.S. News & World Report

Times change, markets go up and down, and new innovations come along all the time. Still, some financial moves always make sense.

A comfortable retirement may seem harder to reach than ever before. But those with the right attitude will still make out OK. Here are a few ways to prepare for retirement that never go out of style.

Throughout your life you will be faced with many financial decisions: Do you pay off the mortgage early or do you invest that extra sum of money? Do you pay off high interest debt or do you pay off the smallest balance first? Many people opt to follow what the math says, but the right approach is always the one that will give you the best results.

For example, will you actually invest the extra money if you don't use it to pay off your mortgage or will you spend it? And we all know we'll pay more in interest if we don't pay off the debt with the highest interest rate first, but some people are more motivated when they pay the smallest balance off first because it gets them excited to think of new ways to save. Sometimes emotions win over math because personal finance is all about persistence and discipline. If you decide to follow the math, then make sure your behavior tightly follows the model you envisioned in your calculation.

This debate will probably rage on forever, but a dollar is a dollar whether you saved it or earned it. Rather than trying to figure this out or spending time defending your position, why not spend time maximizing whichever comes more naturally to you? Some people find it easier to find ways to make more money while others love saving money. When you are done perfecting one strategy, give the other side a try too. It's actually better to work on both than to concentrate on just one of the two ways of building wealth.

If a comfortable retirement is your goal, then make tax deferral a priority. There are all kinds of reasons you haven't put the maximum amount possible into tax-advantaged accounts every year. But every one of those excuses is leaving money on the table. Tax deferral will ultimately allow you to pay a lower tax rate on all or part of your withdrawals, especially if you drop into a lower tax bracket in retirement. Plus, you won't have to pay taxes on gains, dividends and interest year in and year out. That's money you could spend on necessities, traveling, food, toys for your grandkids and whatever else you fancy in retirement.

The compounding effect is powerful, but that's just the beginning of why starting to save early is great. It's so much easier to learn frugal habits when you aren't used to an expensive lifestyle, because you already know you can live happily on Ramen every day. When you begin to save at an early age you won’t have to play catch-up later in life. And you'll never let accidents wipe you out because you will always have a savings cushion.

Investing can be simple and effective, but there are also many sub-optimal ways to go about it. Many people waste too much money and countless working hours making investing mistakes. Even if you have a money manager who handles your nest egg for you, it's imperative that you learn how markets and investing work so you can guide your adviser to make the most prudent decisions for you at all times.

A comfortable retirement is still possible for people who save consistently throughout their careers. Use these time-tested strategies to build wealth for the future.

Monday, December 23

Don't stop investing after retirement

Don't stop investing after retirement
| By Timothy McCarthy, U.S. News & World Report

If you've made it this far, chances are you'll live longer than average, and an overly conservative portfolio won't cut it. Here are three ways to keep your money growing through retirement, but diversified against risk.

Too many investors think they should switch to overly conservative investing after they retire. Some mistakenly move too large of a portion of their money into fixed-income investments and cash.

It is surprising that so often, people think they will live to the average age of the population, or until around 77 to 80 years. What they don't realize is a key concept called "given or conditional probability." Given that you are already over 60, the reality is that you have a new average life expectancy.

After all, you survived all those wild years of your youth. Hence, if you and your spouse already in your 60s, thinner than me, don't smoke and have no major illness, guess what? At least one of you is more than likely to fly by 90 years old. That means your money has to last for 30 more years!

You need your money to keep growing after you retire. And remember, you don't want to run out of money six months before you pass. You have to make sure your money lasts longer than you.

What's the remedy? It used to be that if you just left your money in the bank and bought some bonds, you could be assured of growing your money at 4 or 5 percent a year. However, those days are long gone, especially when inflation is factored in.

Naturally, you may say to yourself, "I don't want to risk losing my money. After all, I can't make it over again." What can you do to grow your money at an average of 4 to 5 percent a year while keeping your risks low? The secret lies in getting the right asset classes in your portfolio and then leaving it alone.

There is no such thing as a no-risk investment. But a broadly diversified portfolio left alone to grow for decades can allow your money to grow, yet as a whole, be just as safe as money left in the bank. But how do you make sure you get the mixture right?

Here are three components to diversifying your portfolio for long-term safety.

Make sure to have small portions of many different asset classes and management styles in your overall portfolio to smooth out the volatility over time. Although much attention is given to trying to pick the best-performing mutual funds, it turns out that better long-term growth at reduced risk comes more from good diversification rather than fund selection.

This mixture of assets should include all levels of equities, large-cap, small-cap, various industries, different styles, both active and passive funds, plus a variety of corporate and government bonds, mixing short and long-term duration. Make sure to include other asset classes like real estate investment trusts and even a dose of a variety of commodities, from timber to gold to oil and gas.

As you age, you will very slowly reduce portions of the higher-volatility asset classes; for instance, larger blue chip stocks with higher dividend yields will replace the small-cap, more volatile growth stocks. Still, the secret is not making too big of a bet on any one asset class or style.

Despite the massive economic improvements of many countries around the world, the news still scares many away from investing overseas. Yet one of the most important ways to decrease your portfolio volatility while increasing your return is to make sure to have a significant minority of your assets invested in highly rated overseas securities.

The reality is that growth in the U.S., Europe and Japan is slowing as our populations age. But the good news is that there is a select group of about 20 countries, including Chile, Poland and Thailand, that have already emerged and will continue to grow at a rate much higher than the "old countries," and yet, as a basket, will be diversified enough to keep your volatility relatively low.

In your retirement years, it is best to stay out of the more "frontier countries" as they remain too volatile. However, the safer portion of the "growth countries," as a whole, could actually turn out to be safer than just investing in the U.S. It's fine to have the majority of your money in the U.S. in the 21st century, but it is no longer wise to have your entire core portion invested in only one country.

Of all the diversification techniques you can employ, time, by far, is the most powerful. Indeed, we have seen again how much patience matters. In the crash of 2008, if you only took out enough money that you would need to live on, for instance, one-thirtieth of all your money, then you would have only suffered a loss on that small portion. And after only five years, the various markets have recovered. Thus, only taking each year what you need to live on is critical.

Of course, you may slowly reduce first from the more growth-oriented volatile asset classes as you age, but remember, at least a significant portion of your money needs to keep growing even into your 80s.

What should your non-cash portfolio look like when you're 72?

Naturally, every person is different. Needing to spend money sooner for your own unique reasons alone can alter these percentages dramatically. Thus, a range of suggested portfolio weightings is much more helpful. The portfolio below is stated in wide ranges because as you age, you will want to move to the lower percentages of investment in these classes and more into cash and short-term funds. Just remember to do it slowly -- only a little movement each year.

Sample recommendation for a 72-year-old person:

U.S. equities: 15 to 30 percentInternational equities (including growth countries): 5 to 10 percentFixed income, U.S. government and corporate bonds: 40 to 55 percentFixed income, international bonds: 5 to 15 percentReal estate investment trust funds (REITs): 3 to 8 percentA mixture of commodities: 2 to 4 percent
Understandably, people will have their personal prejudices against certain investments. However, it is critical not to totally ignore any category. Having zero money invested overseas, for instance, actually adds risk to your portfolio.

For many people, their home is one of their most important assets. But remember, you have high concentration and liquidity risk in your house investment, so it is best to make sure you have a solid investment portfolio in financial assets as well.

The above portfolio structure will help ensure that no matter how long you live, you won't be a financial burden on your family.

Sunday, December 8

6 key retirement planning steps

6 key retirement planning steps
| By Philip Moeller, U.S. News & World Report

The earlier you take proactive steps, the greater your odds will be of having a successful retirement.

Coming to terms with the realities of your later years can be one of the toughest challenges of aging. America is obsessed with youth, and even acknowledging the inevitability of aging may be considered a form of cultural disloyalty.

So let's accept and applaud that 80 can be the new 60, that millions of baby boomers will reinvent themselves during their 60s and 70s and that stereotypes about being old in America will be tossed out in favor of more positive images of vibrant old age.

Even so, we will still get old. After all, isn't that the goal of today's enhanced emphasis on taking better care of ourselves? To age successfully, however, we will also need to contemplate important aspects of our later years, up to and including plans for our death.

Here are six planning needs that nearly everyone will face as they age and retire. Some are practical and financial; others are subjective but no less important. In every case, the sooner you begin to build these plans, the better off you'll be in the future. How many of these life "boxes" have you checked off?

Generating the largest possible retirement income often seems to be the only financial goal of retirement planning. But it's really just a visible element of a more complex set of calculations, many of which are emotional, not financial.

The goal of all this work is to produce self-sufficiency in retirement. We don't want to worry about making ends meet every month, and we certainly don't want to be a burden on our families. Reaching self-sufficiency is a process that should begin well before you turn 65. It can often require some difficult and perhaps uncomfortable admissions about how much money you will have to live on in retirement.

While we're balancing future expenses and income, we're also adjusting our dreams to reflect the reality of our likely future circumstances. It is hard work, but ignoring it doesn't make it easier or lead to better outcomes.

Unless you're really wealthy, there are adverse life events that can devastate your finances. Take suitable precautions. I recently bought an additional life insurance policy that will be in force until I'm 80 years old. Its sole purpose is to help my wife (and me) sleep better at night knowing she will have an extra cushion if something happens to me.

For the same reason -- sleeping well at night -- we also have long-term care insurance. If you go this route, be aware that some insurers are raising rates. Make sure you have enough coverage for in-home care, which is increasingly where care will take place. And you should explore getting what's called a state "partnership" policy. Under this policy, if you require extensive care – most likely for Alzheimer's – you would seek Medicaid coverage after exhausting your long-term care insurance policy benefits and, most likely, a good portion of your wealth. If this happened, you would not have to deplete your assets totally to qualify for Medicaid. Instead, you'd be able to shield an amount equal to the total of your private insurance benefit payments.

Most people want to age in peace in their homes. If this applies to you, take a careful and hard look around your house, and imagine how well it would suit you if you were in a wheelchair. That's the reality you need to consider.

Also ask yourself: Is your home in a supportive neighborhood? Once you can no longer drive, how would you get out to shops and doctors' offices? If, instead, you opt for a seniors-only retirement community, what's your geographic preference and why? What kind of community can you afford?

If you died tomorrow, how hard would it be for your loved ones to get access to your key legal documents (will, trusts and the like) and financial accounts? Do you even have the basic legal documents drawn up?

You should have multiple copies of key documents plus account information and online access passwords. Increasingly, these are going to be computer files. Keep one set on your home computer, and back it up either on an external hard drive or on a cloud computing backup service. Provide access information to the appropriate family members. Then -- and this is much easier said than done -- regularly update these files so they are always current.

There is no common yardstick to use in measuring the impact we've had on the world during our lives. Most likely, however, you have your own yardstick. What does it tell you? How do you measure up to your own standards? Are there things you still believe you should be doing to satisfy your expectations? Believe me, this is not something you want to wait until your final days to do. Maybe a frank look in the mirror will cause you to make some major changes in your life. Maybe it will reaffirm you've been on the right path all along.

Social scientists who have studied people in their final days report how helpful it is when a person has made the key decisions about the end of their life well in advance. Often, people are not able to make sound decisions as they near death because they have physical and mental impairments that make such work impossible. Their families may have to make these calls for them, which adds a lot of stress to what is already a difficult situation.

So, would you like to die at home, in a hospital or perhaps in a hospice facility (you can have hospice at home or in a hospital)? Have you executed the proper documents providing your spouse or a family member with the authority to make medical decisions should you become incapacitated? Does this person know your preferences for end-of-life care? Do you want to be buried or cremated, or perhaps donate your body to science? Is there a final resting place you have in mind? Who's going to provide an obituary to your hometown newspaper, and what do you want it to say?

Setting aside time to make these decisions will hardly rank among your happiest memories. But you will provide your family an invaluable gift -- allowing them to focus on the loving aspects of your life, not the hassles of wondering how you'd like things handled when you die.

Tuesday, December 3

10 reasons to rent in retirement

10 reasons to rent in retirement
| By Emily Brandon, U.S. News & World Report

Retirees often need the help with maintenance and repairs that renting provides.

In retirement, you don't necessarily need a house with several bedrooms and a big yard. In fact, stairs to climb and a yard that needs mowing can become a significant liability as you age. Renters get to outsource emergency repairs and some home maintenance chores, which can make life easier as a retiree. Downsizing to a smaller apartment can also improve your retirement finances. Here are 10 reasons to become a renter in retirement.

Tap your home equity. When you sell your home and become a renter, you can add that home equity to your nest egg, which could significantly improve your retirement finances. "Selling the home and renting gives you capital that is able to produce and earn income," says Neal Van Zutphen, a certified financial planner and president of Intrinsic Wealth Counsel in Mesa, Ariz. "It costs less to rent than it does to own. There's no maintenance costs, there's no property taxes and sometimes utilities are included."

Downsize to a smaller place. Once your children move out of the house, you don't need as much space or stuff. "Downsizing to a living space more appropriate for current needs can be additionally helpful if moving from a multi-story to single-story home, i.e., eliminating stairs," says Andrew Carle, founding director of George Mason University's Senior Housing Administration.

Lower your cost of living. Retirees no longer need to live in expensive areas near the office or in good school districts. Sometimes moving even a short distance can result in a drastically lower cost of living.

Outsource home maintenance. In many rental agreements, it is the landlord's responsibility to maintain the property, including the lawn, exterior of the building and many of the appliances. You are "shifting the burden of home maintenance and repair to the landlord," Carle says. "This includes interior, but also exterior things like lawn maintenance and snow removal."

One phone call for repairs. When something breaks, you don't have to spend your day finding a person to conduct the repair or getting price estimates. You simply call the landlord or administration office and put in a maintenance request. "A lot goes wrong with older homes and that's why a lot of people want to relocate," says Debra Drelich, a geriatric care manager and founder of New York Elder Care Consultants. "You don't have to deal with it when things break – you just call the super."

Live near the amenities you use. Some retirees choose to relocate to a walkable location near stores, parks and recreational opportunities. "You can walk to things like shops or the theater," Drelich says. It can be useful to base yourself near public transportation in case you reach a point when you no longer want to drive.

Relocate near family. Retirement can be an opportunity to move closer to your children and grandchildren. "If you rent close to your family or children or grandchildren, you have less travel expenses to see family," Van Zutphen says. You can also help each other with childcare and eldercare as needed.

More flexibility. Renting gives you the flexibility to experience a new location or lifestyle without a long-term commitment. "Renting gives you an opportunity to try out a place and see what a place is really like to live in," Van Zutphen says. "Rather than buying right away, you can rent for a full year and see if you can imagine yourself living in Florida or Arizona."

Find age-appropriate features. Retirees can select apartments with amenities that will allow them to live independently for as long as possible. Features to look for include apartments with a minimum amount of stairs, convenient laundry facilities and handles in the shower. "I live in this 95-year-old house with many flights of steps, and this is not the house I am going to be able to grow older in with all the steps," Drelich says.

Extra help is sometimes available. Some senior housing arrangements allow you to live independently for as long as you are able to, and then offer increasing levels of services as you need them. "For those who are getting older, there's independent living, and then when you need it, there is assisted living and nursing homes and long-term care," Van Zutphen says. Many senior communities also offer the added bonus of social activities for residents and a chance to make friends.

Thursday, October 10

How to draft a retirement blueprint

How to draft a retirement blueprint
| By Susan B. Garland, Kiplinger's

Accounting for every possible expense can help you create a withdrawal strategy that ensures your savings will last a lifetime.

As you contemplate retirement, you've probably heard that you should plan to live on 80% of your current spending after you leave work. Forget that rule of thumb.

The only way to get a realistic picture of how much you're likely to spend in the future is to create a retirement budget now. You can even plan for the unexpected -- say, the adult child who may need a large cash infusion at some point. Mulling every possible expense could help you create a withdrawal strategy that will protect your nest egg from the vagaries of life. And the budget exercise is "a great opportunity to start thinking about how you want to spend your time in retirement," says Judith Ward, senior financial planner and vice-president of T. Rowe Price Investment Services.

The first step is to take your current take-home pay and make adjustments, perhaps subtracting commuting costs while adding money for travel. This "top-down" approach will give you an idea of how much you may need soon after you retire.

To dig even deeper, use the "bottom-up" method, by developing an estimate for each spending category. You can use a detailed budget worksheet that covers most expenses. This from-scratch approach provides a better starting point for projecting how expenses could change over time. Even if you're already retired, creating a budget, and updating it regularly, can help you stay on track for years to come.

James Miller, president of Woodward Financial Advisors, in Chapel Hill, N.C., asks clients who are within two years of retirement to fill out an expense worksheet. The 100 line items include payments for gasoline, life insurance premiums, food, charitable giving, dining out, cable TV, pet care and club dues. "It's crucial that the expenses are accurate," Miller says. "If your expenses are off by 5% a year, it may not be a killer, but if they're off by 10% or more, that could make a big difference compounded over 30 years."

Review all of your expenses for an entire year, not just for a few months, says Steven Medland, a certified financial planner with TABR Capital Management, in Orange, Cal. "Many expenses are paid out once a year, such as homeowners insurance," he says.

Some expenses, such as a mortgage, will end, but you may need a new roof at some point. You may cut back to one car, but you'll likely need to replace it.

You can review your credit card bills and checking account. The most accurate way to track expenses is to use software such as Quicken or an online budgeting tool such as Mint.com.

Also, split your expenses between the essentials and the discretionary. Peg McMahon, 66, uses two Mint.com accounts, one to track her personal costs and the other for household expenses she shares with her partner. "It turned out we had underestimated what we were spending on groceries and cat food," says McMahon, who lives in Kansas City, Mo., and works as an information technology technician for Sprint.

McMahon expects to retire in several years. By noting every expense, she says, she'll have a better idea of what she will need in retirement and what she can cut out. After seeing how much she was spending on books, she stepped up her visits to the library. McMahon hopes to cover all essentials, such as food and an Internet connection, with Social Security and pensions. "One of my desires is to live now on what I will have in retirement and sock the rest away," she says.

The difficulty is figuring out what your costs will be down the road. Many retirement researchers and financial planners agree that annual spending for most retirees tends to decline over 30 years, after adjusting for inflation. "As people age, they don't travel as much and they are not as concerned with spending on fashion," says Ty Bernicke, a certified financial planner in Eau Claire, Wis. Bernicke conducted a major study in 2005 on the spending decline.

Financial planners often refer to three stages of retirement spending as "go-go, slow-go, no-go." First, there are the heady years of travel and new hobbies, when spending can surpass the preretirement lifestyle budget. In a person's seventies, retirement settles into a routine, with lifestyle spending declining while health care costs begin to creep up. After 85, some healthy octogenarians do embark on expeditionary travel, but most seniors spend little on leisure, clothes and other discretionary expenses, many financial planners say.

In the last stage, health care costs consume a greater share of a retirement budget – 18 percent for those over 85, compared with 9 percent for those 50 to 64, according to an analysis by the Employee Benefit Research Institute. That analysis, however, did not include most spending on long-term care -- the real wild card in projecting future costs. "Spending on travel and entertainment does decline with age, but you have to assume that both declines will be offset with increases in other categories," says Wade Pfau, a professor of retirement income at the American College, an institution for financial professionals, in Bryn Mawr, Pa.

In designing a realistic budget, retirees need to factor in inflation. Assuming a 3 percent annual increase in costs, groceries that now cost $5,000 will run about $10,500 in 25 years.

Retirees who want to go a step further can factor in different inflation rates for different types of spending -- and then make adjustments based on spending habits by age. Research by Somnath Basu, a finance professor at California Lutheran University in Thousand Oaks, Cal., looked at a 30-year retirement divided into "age bands" -- 65 to 74, 75 to 84, and 85 to 95. He divided spending into four general categories: taxes, basic living, health care and leisure. He then assigned an inflation rate for each category -- 7% each for health care and leisure, and 3% for taxes and basic living.

Basu also adjusted each spending category for each age band. For example, he assumed that taxes, adjusted for inflation, would drop by half, with the end of payroll taxes and a decline in taxes on salaries, and then would remain steady. Basic living costs (which include transportation, housing and food) were assumed to drop by 30% after retirement, fall another 20% at 75 and then by another 10% at 85.

Leisure activities increased by 50% in the first years after retirement, and then dropped precipitously. Meanwhile, health care posted a rise of 15% at retirement, another 20% at 75 and 25% more at 85. His conclusion: You can't assume that overall spending will decline over the years.

But Michael Kitces, director of financial planning at Pinnacle Advisory Group, in Columbia, Md., says such increases in health care "can't go on indefinitely." And, he says, "you will drive yourself nuts" if you try to apply a different inflation factor for each line item. (If you'd like the challenge, the U.S. Bureau of Labor Statistics shows percentage changes in consumer prices (.pdf file) for people age 62 and older from 1998 to 2009.)

Kitces also says that the Medicare program will continue to protect retirees from much uncertainty over costs. A married couple today typically pays more than $8,700 a year for premiums for Medicare Part B, a Part D prescription-drug plan and a Medigap supplemental insurance policy. Medicare, Kitces says, has "eliminated almost every unexpected expense." Medicare doesn't pay for everything, so plan for out-of-pocket costs for vision and dental care.

Tuesday, September 24

5 tests of your retirement readiness

5 tests of your retirement readiness
| By Dave Bernard, U.S. News & World Report

There are lots of ways to plan for retirement, but they all (hopefully) lead to the same place -- happy, financially secure golden years. Here's how to know if you'll be ready.

Are you ready to retire? Some people spend years preparing for their second act, while others roll into retirement and take it one day at a time. Often retirees have some idea of what to expect, but are also prepared to live at a more realistic and enjoyable pace than is typically possible in the working world.

Take a moment to contemplate what may be in store for your retirement and to find out just how prepared you really are. Freedom to do what you want to do is a wonderful thing, but a little preparation and insight into what is ahead can help you to avoid possible pitfalls. Here’s how to tell if you are ready to retire:

Do you have enough saved even in the event of the unexpected? One of the big fears many retirees have is outliving their savings. Take all of the income that will be generated by your savings, investments and retirement plans and compare it to your fixed expenses, assuming you will live into your 90s. Also, remember to budget money for enjoying your retired life and a provision for the unexpected. If you don’t have enough, take steps to correct your funding gap.

Deciding on the best age to begin collecting Social Security benefits is an important part of the retirement planning process. If you start collecting at the earliest possible age of 62, you will receive only 75% of what you would upon reaching full retirement age. But for each year between your full retirement age and age 70 that you delay receiving payments you can increase your benefit by 8%.

Is your relationship ready for retirement? While members of the working world, you and your partner have lived dual lives made up of work and life outside of work. Whatever the proportion of time you dedicated to each other, you have not yet experienced being together 24/7. Once you retire you will be together almost all the time. It can be helpful to communicate ahead of time about this significant change in your lifestyles. Having individual interests and supporting each other in these pursuits can allow for some “me time” to reflect and grow, which will only add to the quality of the relationship when you are together. Don’t expect things to just automatically work out if you have not even considered the real changes retirement life will introduce into your relationship.

Do you have a clear picture of the retirement you want to live? Try to imagine your perfect retirement scenario. Do you prefer a relaxing pace to life, or do you plan to chase after all the experiences you can? Consider whether you are happy with where you are living or might like a new location. Decide if you want to experiment with adventurous trips around the world or are fine with less exotic travel that leans more toward comfort than challenge. And make sure to compare your retirement vision with that of your partner. If you want to be ready to retire, ask the important questions to help better illuminate your path.

Do you have enough to keep you busy? The typical retirement will be a combination of doing things that you enjoy, finding pursuits that are meaningful and doing a bit of nothing as you relax and enjoy the freedom to do as you please. Establishing a balance is important. Retirement does not mean always doing something productive. But it is helpful to think about what will hold your interest and keep you engaged as you live your second act. Do you have enough hobbies and interests to help you avoid boredom? Can you entertain yourself, or do you need company from others?

Do you have the right retirement attitude? Once you have successfully arrived at retirement, the fun begins. But you will also experience the difficulties and frustrations that come with growing older. It is not easy to prepare for something that you have never before experienced. Try to face the challenges of aging with a positive outlook, and find innovative ways to cope with some of the inconveniences of growing older.

Thursday, September 12

7 steps to retirement independence

7 steps to retirement independence
| By Tom Sightings, U.S. News & World News

If you’re planning your retirement, you’re likely counting on being able to take care of yourself. Here are 7 ways to make sure you can.

Most of us aspire to remain independent after we retire. We don't want to be a burden on our children, asking them to give us money or let us live in their spare bedroom. We don't want to be a burden on society either, forced to wait for a good Samaritan to fulfill our needs.

Yes, that may happen someday. But at least as we start out, we want to be able to take care of ourselves. Here are seven steps to help you achieve an independent retirement:

The situation in which it makes sense to incur debt is when you expect to have more income in the future than you do now, allowing you to pay off debt from money you don't need for everyday expenses. But in retirement you're on a fixed income. You don't get a big raise or a bonus when you're on Social Security. So you shouldn't go into retirement expecting that somehow, some way, you'll be able to pay things off later. That means no car loan and no credit card balance. And many experts recommend no mortgage either. What greater independence can there be than not having to pay the bank every month?

You want to maintain your standard of living in retirement, and there's no way to do that without projecting what your overall expenses will be. Many people throw up their hands and say, "How are we supposed to know?" Don't get hung up in the details. You can make a reasonable estimate of your housing expense, and your insurance, car, travel and food costs. Look at each category, and get a ballpark figure on what you've been spending in the past two or three years. Many credit card companies offer a year-end statement which will help you do this. Then think through how your expenses might change. Perhaps you will need less money for clothing and kids, and more for travel and entertainment.

You can find out your expected Social Security benefits from the Social Security Administration. Add to that your pension and any other income you expect, including rent from an income property, alimony payments, or insurance benefits. And then figure a 4% annual draw down of your savings. Now, see if your future income roughly matches your projected expenses. If not, either you need to readjust your expectations, or maybe you're not ready to retire yet.

Obviously, your health is only partially under your control. But the fact is, enjoying good health in retirement gives you greater independence to do the things you want to do. So first make a realistic assessment of your health. Do you have mobility issues that require you to live in a one-story house? Is your health affected by climate? Do you need to be near a particular medical facility? Then make the necessary accommodations. Beyond that, take the time and effort to eat right, get some exercise, drive carefully, and do all the things that will support your health and allow you to fulfill your retirement dreams.

Having a happy, supportive marriage offers people a sense of satisfaction and self-worth. But, married or not, friends are important for all the obvious reasons. Playing sports with friends, playing cards with friends, or having dinner with friends all boost your feelings of happiness and contentment. You never know when you'll need a friendly shoulder to cry on. Or, you may need a friend to take care of your pet while you're on vacation, or drive you to the doctor when you're sick.

Some people choose to continue to work in retirement, either as a consultant for their old company or part-time in a completely new job. Other people relish their volunteer work or focus on their family. Only you can define what is "worthwhile," but doing something that you enjoy and find rewarding is important in achieving a sense of independent worth, at any age.

All the retirement advice you get comes under the heading of guidelines, not strict, never-to-be-broken rules. Don't worry if you're a little short on assets, if you're not in an intimate relationship, or if you haven't found your niche in volunteer work. To a large degree your attitude determines the perception of independence. As one expert advised, "Independence in retirement is not found primarily in having plenty of money or plenty of friends, but in being able to find contentment with what you have."

Saturday, September 7

Enjoy your retirement 5 ways really messed up

Enjoy your retirement 5 ways really messed up
| By Brett Arends, the Wall Street Journal

Financial advisor call a long list of major errors that make new retirees once they hang up their tools or make their BlackBerrys.

Tomorrow, 10,000 Americans will withdraw as every day. And many of them will screw it up.

Financial advisor call a long list of major errors that make new retirees once they hang up their tools or make their BlackBerrys.

Most are preventable, often quite simple.

Many people rush to collect benefits as soon as she shall be entitled, at the age of 62. But it's a hassle. By it she be early less each month-much less collect. Those who can to age 70 delayed increase their controls of less than 70%.

Those who usually early to take social security make a simplified calculation: "I can earn less each month, but I gather it longer so that it somehow works in the long term," think so.

But he has poor, think. Robert Radhouane Chandran, a financial adviser in Chicago, notes that those who delay more collected unless they also have age 80 to 82 lives. Many are under the present new pensioners.

Moreover, those are to be able to meet the social security something very wertvolles-- abandon longevity insurance.

Many people risk today live in the 90s or even later. The years real financial danger for those who do will be later, if much savings were used up and treatment costs are skyrocketing.

A larger social security check could be a real help if you far beyond your life expectancy life.

Say that this money is too early the most common failure of social security, but it is not the only Adviser. Sometimes married couples more benefits by structuring, when and how each spouse claims can achieve, they say. Their ability to investigate before you submit must take the planning, social security.

New retirees are suddenly they have get time for these projects it on not around when working notes Bryan Wisda, consultant in carefree, Ariz., and that, he adds, can a real problem.

He sees people suddenly blowing $50,000 on conversion or other projects. The problem: the retirement portfolio may have to last for decades. Remove the first dollar are the most expensive because you forgo all future returns on the dollar.

The same argument applies to those who suddenly splurge on a boat, a new car or a bigger house, what they've always wanted. Marc Roland, a financial planner in San Diego, observed a trend among the new retirees trade to "dream home" when they retire.

Often you can not afford, he says. Insert "way too much in an asset that does not help pay for retirement."

John Sestina, a financial consultant in Columbus, Ohio, advises customers to bigger ticket purchases, how their cars to replace if they still work and be better positioned, can use the additional handle costs.

It is not only the more expensive measures, you will burn. "Michele Clark, a financial planner in Chesterfield, MO, says that some of their new clients are the recent retirees"who called me and said,' help, we bleed money. " "

They thought they could afford to retire, she says, but "they are amazed how fast they perish your checking account balance to see."

They no longer have a steady paycheck - and now they have a lot of free time on their hands, where they can spend money.

Friday, August 9

Only half of workers have a retirement plan

Only half of workers have a retirement plan
| By Andrea Coombes, MarketWatch

Businesses face steep hurdles in providing retirement plans to their workers, and without such plans, it’s even more challenging to save enough to retire.

Retirement crisis? More like a catastrophe for the 50% of U.S. workers who don't participate in a savings plan at work, many of whom work at small companies nationwide. Those businesses face steep hurdles in providing retirement plans to their workers, according to a new report -- and without such plans, it's even more challenging to save enough to retire.

Just 5% of businesses with one to four employees offer a workplace retirement savings plan, according to the report by the Government Accountability Office, or GAO, the investigative arm of Congress.

The numbers aren't much better for slightly bigger businesses: 18% of firms with five to 11 employees, 26% of businesses with 12 to 25 workers, and 31% of businesses with 26 to 100 workers sponsor a workplace retirement plan, according to the report, which cites Labor Department and Internal Revenue Service data.

"There are a lot of people who really are looking forward to a retirement with not much more than Social Security," said Charles Jeszeck, author of the report and director of the education, workforce and income security team at the GAO.

It isn't as though workplace savings plans are a retirement-crisis panacea. In fact, some workers who have access to a plan at work don't even take advantage of it -- often because they simply can't afford to save. Nine percent of workers at businesses with 100 or fewer employees that offered a workplace plan chose not to participate, according to a 2009 report by the U.S. Small Business Administration.

Yet a 401k is a valuable tool for most savers. While those without a workplace plan can opt to set up an IRA, it's a more cumbersome process. You must choose a provider, set up your plan and then make regular contributions to it -- hurdles that can waylay would-be savers.

A workplace plan such as a 401k, meanwhile, is easily accessible, and paycheck deductions simplify matters. Plus, for those who can afford it, 401k's and similar plans allow workers to set aside as much as $17,500 per year on a pretax basis -- and even more, for those over age 50 -- versus the $5,500 annual contribution limit for IRAs in 2013.

While large firms are far likelier to offer the benefits of a workplace plan, it's not like you can blame small-business owners who fail to offer a 401k to their workers. They're busy trying to run a business, and creating a retirement-savings plan is complex and time-consuming.

Some of the difficulties business owners cited include the cost of starting a plan, the complexity of choosing investment options for their workers, and the fear of failing to meet their fiduciary responsibilities and facing litigation as a result, according to the GAO report. Read the report as a PDF here.

Small-business owners also cite a lack of worker interest as a reason for failing to start a plan, or for closing their plan. And they say that health-care benefits trump retirement benefits, the report said. When a small business reaches the point where it's making enough money to offer benefits to workers, the first step is usually a health-care plan, the report said. (At this point, it's unclear how and to what degree the Affordable Care Act might change that, Jeszeck said in a telephone interview.)

For this new publication, the GAO compiled data from a number of its recent previous reports and presented it as testimony to the Senate Committee on Health, Education, Labor & Pensions, in a hearing on "Closing the Retirement Plan Coverage Gap for Small Businesses." Watch the July 16 hearing here.

A number of proposals in recent years -- including making it easier for workers to contribute to an IRA and making the retirement savers' tax credit refundable -- have the goal of getting more workers to save for their retirement, but those proposals haven't gained much ground.

"Congress for the last couple of years has focused on the budget. Now there's a big focus on immigration, the debt ceiling -- those more global issues pretty much have gotten the limelight," Jeszeck said.

At the Senate committee hearing, "multiple-employer plans," or MEPS, were discussed as one way to expand coverage among small-business owners. With MEPs, a third-party company pools the retirement-plan assets of a number of employers, thus taking the administrative load and other time-consuming plan tasks off the shoulders of business owners, and potentially reducing overall costs. MEPs have existed for decades, though there's not a lot of data on them, Jeszeck said.

Tuesday, June 18

Fears ease 7 ways to retirement

Fears ease 7 ways to retirement
| By David Ning, US News & world report

Many Americans are concerned that they will outlive their savings. Here are seven steps to make sure that you have enough money for retirement.

Transition from accumulating in the withdrawal term is hard for many pensioners, who enjoyed their assets have to watch grow for decades. Some people make excessive money. You can unnecessary thrift practice and miss the chance to enjoy what most should be free time of their life. Here is how the fear to overcome that you will outlive your retirement:

Get a single premium immediate pension (SEPIA). It is recommended that all insurance products are skeptical. But the guaranteed monthly income is received an immediate pension the best way, to just to reduce the fear of money. By accepting, you probably exceed a diversified investment portfolio, and not be able to leave this part of the assets for your heirs, you gain the peace of mind that a monthly check is delivered, as long as the insurer in business remains.

Track your expenses and income to a long-term trend to get. Collecting a story, about your issues to and compare it with the income that your portfolio generates. This will help to, how much money need you your spending to pay for a good picture you. Is your net value really oppose because you fear, or are only as too pessimistic?

Identify where you can cut if necessary. If your expenditure pattern know you can come with a plan, also to reduce costs, if market performance falls short of your expectations. Keep in mind that simple steps like cutting can your cable TV Bill wonders for your budget. No money in retirement is actually rare that pensioners who plan and track, because most people will start well, before exhausted their stock to zero adjust their spending.

Lead various retirement calculator to see your chances of success. Many retirement calculators, on historical returns and inflation numbers give you a good idea of where you stand. Some calculator to calculate your chances of money less than even.

Test, wait until 70 to get social security. Another way that significantly increase the chances of running, no money is that you retired does not, is delayed, collect your social security checks. By waiting until you turn 70, you get much more per month. Clearly, you could end up losing, because you die early. But avoid that money have just the primary concern a higher check every month after 70 is enabled, is worth is the wait.

Recognizing that money in retirement may not just disaster. Reducing your retirement may not so disastrous, think the reality as you nest egg. The United States is still one of the better countries in taking care of its seniors. With Medicare, Medicaid, social security, and a progressive tax system, the Government will give more and more by a hand if your pension is dwindling. Already many of your fellow retirees live only on social security and have a happy and satisfactory retirement continue to.

Recognize that retirement care are normal. You are not the first person who make no money, and will be not be the last. A moderate amount of fear is really good, because it helps to prevent excessive spending. It can be helpful to take care of money, as long as the fear is prevented does not enjoy a well-deserved retirement.

Retirement should be free from everyday life. Free do what you worry of money.

Thursday, November 29

Workers can not easily take type A in retirement.

Workers can not easily take type A in retirement.

Richard Eisenberg, next Avenue
So you are a type A personality: heavy load, status-driven and impatient. How do you think that will work for you in retirement?

Probably not so great after Donald Asher, a Gerlach, Nevada, career counsellors, the type of A pensioner has studied. "Type A not, prevent that type of A retired," Asher says.

Asher, who speaks on this issue across the country, told me that a type A personality in the retirement life is not very well suited.

"You can play only so much golf."
"A type A guy I on a golf course met told me: ' if I was about to retire, I was looking forward to much golf to play." But now that I'm retired, I found you can only so much Golf, play ' "Asher says.

Before going into retirement, are the type of A leader at work often, barking orders and getting things done, if they want, kind and wise, what you want. (Cardiologists Meyer Friedman, who coined the term "Type A personality", said the behavior is partly expressed through "free-floating hostility", but let us not go there.)

Reminiscent of the famous New Yorker cartoon about the dog over the Internet, were retired, no one knows that, a Manager, or a heart surgeon. Uniform, a type of A pensioner looks just like the pensioners and is seen by the people who will find he or she usually otherwise. You will receive no special treatment (Senior discounts aside). You are not surrounded by toady that bend knees, based on your title, because you do not have a title. And how you can get a shock.

In addition, life is if you are pensioner unstructured. Meet fed have not for you at certain times. It is up to you your day, your weekend, your month - should be drawn in your life. It is annoying for a type a.

Rob Pascale found all this out when he from his job running a market research company in Charlotte, NC on 51 adopted the main author of the retirement maze, I wrote a great book about next Avenue, Pascale told me that only a few months after his resignation bleak becoming. "I had low self esteem than if I work was", he says. "I had a lack of structure and purpose in my life."

Withdrawn for five months
The New York Times recently wrote about the similar experience of Alan Siegel, 74, who had been Chairman of the brand-and-corporate-identity consultants Siegel & Gale in New York City. A type A, if there ever was a seal in May and lasts around five months later decided that he hack it could not. He started just seal vision, a company that is competing with which he had founded and the left.

On the question why not retire to enter, said Siegel,: "I can not. I love the interaction with different types of people. I like shake things up, make a difference."

The adjustment is not difficult, only for type A life can be for their spouse become brutal wind up always ordered, if only because of the proximity.

"A woman told me that her husband began demanding she fold the towels differently", Asher says. "she said to him: ' you never care, for 50 years towels folded like me." This is not to go to work. ""

Retirement advice for type A
So what do a type A when retirement beckons?

Start with the construction of a new social network of other retirees, Asher suggests. "The biggest thing is social interaction often, that is missing the type A the four walls of a House are not enough in life" he says. "You can scratch the itch a social network."

Next, find a new form of prestige, replace provided the status of your work. "Maybe it is the Rolling Stones around the world to follow or ride a $365,000 RV," Asher says.

If you are considering an encore career to help others searching for the type of position that plays to your personality. In General, this means a paid or volunteer job as a supervisor with authority.

Finally, Asher says something, add pressure and stress to your life - and this may sound a little strange-. "This is not compatible with the traditional idea of retirement," he notes. "I had a friend who does Ironman Triathlon at 60. "He is creating his own pressure."

Appear for a type A pressure and stress simply make your life worth living.

Tuesday, October 2

Retirement means recruitment for some employers

Needham, Mass. — Rosa Finnegan has plenty of similarities with other wage-earning Americans. She hitches rides in with a co-worker, likes to joke around with colleagues, and feels very grateful to have her job. At the end of the day, she's ready to sink into a cushy chair at home.

More US news from the Christian Science Monitor
But Mrs. Finnegan is also a trailblazer. She offers striking proof that employment and productive activity need not end when the so-called retirement years arrive.

Let's put it this way: Where many people now nearing retirement can recall Sputnik, civil rights protests, or the pitching wizardry of Sandy Koufax, she mentions memories of gas-lit streets, the spread of telephones, and working at a rubber plant during World War II.

Having passed her 100th birthday this year, Finnegan is still working at a needle factory in this Boston suburb, helping to make and package the stainless-steel products in custom batches.

Yes, she walks a bit more slowly now than many of her co-workers. But Rosa, as they all call her, still has willing hands and a nimble mind. And she has no desire to leave her job.

"I'd rather be here than almost anywhere," she says. "You feel like you're still a worthwhile person, even though you're old — (you're) not sitting in a rocking chair."

What's notable is not just that she wants to keep working, but also that she's found an employer who values her presence. When Rosa notched her 100th birthday earlier this year, Fred Hartman, chief executive of the family-run business called Vita Needle Company, celebrated with a cake during a morning break time — and then let her keep right on working.

In fact, at a time when the manufacturing of many goods has shifted from the United States to overseas, Vita Needle has survived partly because it has welcomed older workers. The median age of its 48 employees is 73. These workers have proved to be both reliable and low cost. Staff turnover has decreased, and the company believes the older workers help turn out a better product, offsetting the lower-wage advantages that some overseas firms enjoy.

Vita Needle is an extreme example, but it's just one of many employers who in varying ways have been learning to value workers on the mature end of the spectrum.

The rise of the older worker is cast sometimes as a problematic feature of the current job climate: a "gray ceiling" in which the lingering of older employees leaves scant opportunity for younger workers to be hired, developed, and promoted. The challenge is genuine, as recent headlines about a "lost" generation of youth imply.

But take a larger and longer view, and the picture may be much more positive. There's the potential for ample demand for younger and older workers alike. Many seniors, for their part, are engaged in a righteous rebellion against artificial limits — against the notion that hitting 65 means one's contributions to society are largely in the rearview mirror.

The trend, while not new, is still in its early stages and promises to have long-term significance. Life spans have been expanding, and attitudes about how to live during the so-called golden years have been evolving toward less emphasis on leisure and more on usefulness.

It's also a story about the financial imperative facing individuals and nations, which is intertwined with the global economy's current aura of debt crisis. Fiscal pressures in nations like Japan, Italy, and the US are linked closely to the demographics of retirement, with a wave of age 60-plus people who will either have to support themselves or be supported by taxpayers.

The rise of the gray workforce shouldn't be exaggerated. The concept of retirement isn't being phased out entirely. But elderly people are increasingly taking on jobs, either in the form of part-time employment, seasonal work, or brief encore careers.

Combine that with the sheer size of the baby boom cohort, and the trend promises to alter the makeup of workplaces across the developed world over the next two decades. Already, in fact, the growing presence of older workers is one of the most notable facts of the current US job market.

Since January 2010, job seekers age 55 and up have accounted for 70 percent of all employment gains in the US. Viewed over the past decade, the pattern is even more stark. That older group has added some 10 million employees to its ranks, even as employment among other age groups has actually declined by more than 4 million.

Those statistics, by the way, shouldn't be interpreted to mean that older workers have found it easy in a tough economy. The reality is that only about 17 percent of seniors are employed, which is far lower than the 39 percent who say in surveys that they "need" to work in retirement, according to a report this spring by Wells Fargo.

What the statistics do show is an inexorable force. The rising share of seniors employed over the past decade, coupled with the number of boomers poised to hit retirement who want to keep working, means the number of older people in the workforce will continue to surge.

'Staggering' numbers
"It's staggering," says Kim Ruyle, a human resources consultant. For the next decade, he says, thousands of boomers every day will be hitting the 62 to 65 age frame that in the past has been accompanied by cake-and-speech farewells at the office.

Where are older people finding work? Just about everywhere, actually.

Across the country from Needham, Mass., amid the balmy breezes of San Diego, Scripps Health offers another case study in welcoming older workers. Scripps has been recognized many times as among the "Best Employers for Workers Over 50" — as ranked by AARP. And it's a major employer — 14,400 people in a network of local hospitals and clinics.

High demand for skilled professionals like nurses makes health care one of the key industries trying to hang onto older workers. Scripps is a leader in this trend. Its retirement rate for employees who hit 65 is half the national average.

One of those "silver collar" workers is Barbara Genzler, a registered nurse who manages the surgery department. She's 67 and has no plans to retire. With 43 years of nursing experience behind her, most of it at Scripps, Ms. Genzler says she loves the work. "That's why I'm still doing it," she says. Even though the job is physically demanding, Genzler says she doesn't tire easily and plans to work at the hospital until she's unable to physically. "I can easily see spending my 70s working here," she says. "There's a lot of longevity in our department."

In recent years, the AARP "Best Employers" list has also included manufacturing companies like John Deere, financial firms, universities, and a range of other employers. In more than a few cases, these firms report that half or more of their workers are over 50.

To some degree, older workers are found in virtually every occupation. A graying grocery bagger or orange-aproned Home Depot associate has become a common sight. But think about this: Among Americans over 65 there are 101,000 active farmers and ranchers, a similar number who drive buses or taxis, 25,000 musicians, 17,000 crossing guards, and more than 80,000 chief executives. Warren Buffett, you are not alone.

Many work as professionals, such as lawyers. But many more occupy low-paid positions, laboring as retail clerks or janitors (more than 100,000 in each of those fields, says the Urban Institute, citing US Census data).

The demand for older workers is global. If anything, the pressure on employers to welcome elderly workers appears greater in Japan and much of Europe than it is in the US. The reason is that, while the US has some population growth contributing to its labor force, those other advanced nations are plateauing or facing outright demographic decline because of low immigration and fertility rates. That translates into fewer working-age people to support each prospective retiree.

For now, Europe has a culture and policy climate that encourages retirement and discourages working past 65. But that appears to be changing. "We've seen a lot of countries in Europe, particularly Germany, starting to address these problems by raising the retirement age," says Richard Johnson, an expert on aging and retirement at the Urban Institute in Washington.

The Australian government, seeing what it perceived as a mismatch between older workers' value and employer demand, recently launched a program offering $1,000 bonuses for each worker over 50 that employers hire.

Amid pizza shops and hair salons near the town square of Needham, the entrance to the Vita Needle Company is almost invisible. It's a bit like the entrance to the railway Platform 9-3/4 in the fictional realm of Harry Potter. You'll probably see this door only if you're looking for it.

Yet there it is. Up a staircase, the little factory occupies a wooden-planked space that was once a dance hall. Where "factory" conjures up images of forklifts, assembly lines, or robotic machines, this is different: a modest-sized shop floor where people sit at workbenches, exchanging bits of casual conversation as they use hand-operated tools such as stamping machines, drills, and wire brushes.

Employees include former salesmen, postal workers, or waitresses (as Finnegan was) among them. Up the stairs come 10-foot-long boxes filled with thin steel tubing. Down the stairs go customized needles for industrial and medical uses.

"We make some of the finest needles in the world here," says Mr. Hartman, whose family founded the firm here in 1932.

For Vita Needle, the appeal of older workers is that they combine reliability with low maintenance and low costs. The older employees don't need a lot of supervision. They just come in and get the job done, sometimes setting their own schedule, like a 5 a.m. arrival.

Most of the shop-floor employees are part-time workers, not covered by the company's health-care benefits. That makes the senior demographic a good fit. (The older employees are eligible for Medicare, so they have health insurance even as the firm reduces a fast-rising cost of business.)

Collegiality and an industrious ethic
The needle factory blends collegiality with an industrious ethic on the part of workers. Workers like the social contact as much as anything, conversing as they pull lunch containers out of a fridge in the middle of the one-room workspace.

Finnegan says she might feel out of place if a workplace was dominated by young employees. The company's upward tilt in age is part of the banter.

"I don't want to fall," Finnegan says as she navigates an aisle. "There's too many old people around that would have to pick me up!"

Vita Needle's age profile isn't something that could be replicated everywhere. Some firms feature tasks that are too physically demanding for older workers. But the basic rationale for hiring senior workers — high quality work at relatively low cost — spans many industries.

Often older workers accept lower pay in return for jobs that are less demanding. (The needle plant emphasizes precision and quality control, but most of the jobs aren't highly skilled.)

Employers have also come to appreciate older workers for their dedication and performance. Sure, there are negative perceptions, too. Jackie James, director of research at Boston College's Sloan Center on Aging & Work, says some employers view older workers as less flexible and less interested in learning new skills. But her group's surveys find that people with silver hair and empty nests win over employers in prominent ways.

"Older workers are perceived as being reliable and having a very good work ethic, (and) more engaged in the work than the younger workers are," says Ms. James.

Mature workers often provide firms with a ready answer for particular needs, such as mentoring or taking on short-term projects. "Smart employers are targeting the mature workforce," says Melanie Holmes, a vice president at the staffing firm ManpowerGroup in Milwaukee. They offer the experience that today's productivity-focused companies are eager to have, she explains.

At the same time, Ms. Holmes says age discrimination against mature workers also lingers. In some cases, she notes, companies believe they waste money when they invest in training an older person, even though evidence suggests that young hires won't necessarily stay on the job any longer.

Perceptions remain complex, with some observers seeing exploitation where others see bosses like Vita Needle's Hartman as promoters of a healthier society.

Hartman has reaped benefits from his workers but also has tailored his operations with their interests and employability in mind. In a new book centered on Vita Needle, Caitrin Lynch, a sociologist at Olin College in Needham, describes it this way: Sometimes the workers may quip, and partly grouse, that they are "making money for Fred." At the same time, "it is due to Fred's business acumen, but also to his good will and social conscience, that they have jobs in the first place."

Howard Ring is one who's glad to work at the needle plant. "When you get to be older, it's very hard to get a job," notes Mr. Ring, now 77, who says he works to cover his expenses.

After a career in mechanical engineering ended with a layoff more than a decade ago, he says it was a "stroke of luck" that landed him his current job. He happened to visit Vita Needle's shop one day, saw a milling machine like one that he had at home, and asked if they were looking to hire anyone.

That was about six years ago. "I don't see any imminent retirement in my future at all," he says.

The rise of senior workers is part of a larger story of economic transformation. The advancement of human civilization has been enabled by various revolutions: in agriculture, metallurgy (think Bronze Age), and industrialization, to name a few.

Now, even as technology remains a driver of economic change, ManpowerGroup CEO Jeff Joerres argues that the world is in the "human age." It is one in which victory goes to organizations that best manage talent.

Companies basically want to attract the best workers (whatever their age), help them maximize productivity, and keep them happy. Efforts to tap the skills and dedication of well-seasoned workers are part of the process.

Phased retirement
At Scripps Health in San Diego, this means offering a phased retirement program that allows employees 55 and older to gradually work less but remain on the payroll, and maintain their benefits, for as long as they want to and are able.

"We want them here," says Vic Buzachero, senior vice president of human resources for Scripps. "The more senior worker has a well-rounded knowledge base in terms of how to care for patients."

In one recent survey, the Society for Human Resource Management polled professionals in the field and found some 72 percent saying the loss of talent due to older workers retiring or departing is a current or potential problem.

So far, though, the response by employers has been mixed, with many not making older workers much of a priority, even as others cater to them in creative ways.

Some companies have made cubicles easier for mature workers to navigate, with enhanced lighting or larger keys for typing. AARP credited one of its "Best Employer" winners, First Horizon bank in Tennessee, with offering older workers something as simple as parking spaces close to the building.

One perk that appeals to older and younger alike is a flexible work schedule. This can take various forms, from adjusting start times to offering compressed workweeks, telecommuting, or job sharing.

In Des Moines, Iowa, Diana Heisner is one who appreciates something less than the 9-to-5 grind. She officially retired early in 2010 from her work as an administrative assistant at Principal Financial Group, an insurance and financial services firm.

But soon she was back at work, helping out through a program the firm developed called "Happy Returns." The idea is to encourage company retirees to come back into part-time service at the firm, whose headquarters sprawls across four blocks of downtown Des Moines.

For her part, Ms. Heisner sets aside about six weeks a year to fill in for other administrative assistants on maternity or sick leave. If she works more than that, it could cut into her Social Security income. She calls Happy Returns a win-win for retirees and the firm.

"We know the company. We know the systems. And in my case I still know a lot of the people," she says before settling into a cubicle that offers air-conditioned refuge from a searing Great Plains summer.

Heisner likes to gab with old friends about Iowa State University sports, and to earn extra income that she can use at a mall or the odd yard sale.

Some companies, including L.L. Bean, the big Maine outdoor-goods retailer, find older workers a helpful source of seasonal labor. When the company girds for its holiday season rush of mail orders for everything from backwoods jackets to backpacks for preschoolers, it comes at a time of year when many retirees wouldn't mind stepping in for a stint of work.

Carolyn Beem, a company spokeswoman, says the older workers bring a strong customer-service ethic that often rubs off on the new hires who sit alongside them. Unlike Scripps, which posts openings partly on websites targeting mature workers (such as RetirementJobs.com), L.L. Bean doesn't actively target the older population in its recruiting.

The bottom line is that employers are forming increasingly close bonds with older workers, and those workers make up a growing share of the labor force. Don't expect those changes to slow down anytime soon.

Where financial experts used to talk about seniors being supported by a "three-legged stool" — Social Security, savings, and perhaps an employer pension — work is now an additional leg, says James at Boston College.

And from New England to the Pacific shores, many people are following Rosa Finnegan's path of finding fulfillment in part through staying employed.

One of the oldest employees at Scripps Health, Kenneth Curzon, is about to turn 90 in November. The cheery, slightly stooped Mr. Curzon manages parking operations full time, as he has done since 1990.

"It gives me a lot of satisfaction coming here each day, knowing I'm doing something other than sitting in a corner dreaming about things that happened years ago," says Curzon. "I have a lot of friends here."

Back at Vita Needle, longtime worker Bill Ferson can relate to that thought. As someone who lives on his own just down the road, he credits the job with keeping him alive mentally and moving physically. The results show in his spry wit.

"I'm 39 years old," he tells a visitor. This results in a raised-eyebrow pause, before Mr. Ferson explains that reversing the order of those digits would be the accurate way to put it. Then he's ready to turn back to the swaging machine he operates, putting out a new batch for his needle-factory team.

© 2012 Christian Science Monitor

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