My Personal Finance Blog » Retirement

Baby Boomer Retirement

admin — Fri, 24 Jun 2011 18:11:25 +0000

There was a colossal rise in the birth rate after the Second World War. These babies were dubbed the Baby Boomers and they are the babies born between around 1946 and 1960. This means that the first Baby Boomers became pensioners in 2011 at the age of 65.

It should be noticed that when the first Baby Boomers came of age, they produced the changes in civil and human rights and discrimination associated with 1968. They also fashioned the Hippy Movement, Flower Power and the Sexual Revolution. So what will ensue when they become pensioners?

The Baby Boomer generation is the wealthiest generation ever, but they have never felt the drop in earnings, status, health and mobility associated with older age, so it is likely that there will be some sort of pensioners’ pressure group.

About 22% of the American population are Boomers, which means that there will be tens of millions of individuals retiring over the next ten years. This has several important consequences. The first one is for health care; the mass retirement could or almost certainly will put the health care system under massive strain.

The second one is employment. Because the Boomers’ generation is the largest sector of society, when they retire, there will be a shortage of labour. After all, if the Boomer generation is the biggest portion of society, then by definition the following generation must be smaller.

These figures are roughly the same for all Western countries and it almost certainly accounts for why there is a rush in Western countries to permit immigration. Firstly, immigrants will take up the slack in the workplace and second, their taxes will assist pay for all the old Boomers.

So, with any luck, neither the state finances nor the Boomers’ health will suffer, but what other effects might this mass retirement have? Well, there could easily be a huge increase in demand for retirement homes both in one’s native country and abroad. Baby boomers are prolific travellers and many may want to retire to warmer countries or warmer parts of their country.

The southern states, provinces or counties of Western countries in the northern hemisphere and warmer countries in general, like Thailand, Spain and Italy could see a boom in retirement housing. The construction industry might receive a much needed shot in the arm.

Most Western governments and many private construction firms already have plans and even dynamic projects to satisfy this need for retirement housing when it starts to kick in. If the Boomers make a mass exodus out of the cities into the countryside or to the seaside, it could free up millions of inner city residences and at the same time make plenty of construction work outside the cities. But not just that, millions of additional jobs will be created in support and service staff positions.

The aging of the Baby boomers could be just the boost that most failing Western economies require to get back on their feet after the banking crisis of 2008-2010. Let’s hope so.

Retirement Advice From Baby Boomers in 2011

admin — Mon, 20 Jun 2011 19:15:38 +0000

If you were to ask the first batch of retiring baby boomers what advice they would offer for planning your retirement, most of them would probably start by warning you not underestimate how critical that planning will become as you approach your retirement years. For many baby boomers facing retirement in 2011, the results of the economic recession of 2007-2008 will drastically change the way they live out their retirement years. Here’s some advice that could help you avoid the disappointment of discovering all too late that your funds are not sufficient to cover the needs of your golden years.

Undervalue Your Retirement Funds And Overestimate Your Lifespan. Inflation, recession, taxes, medical expenses, long-term care, etc. may end up eating up more of your retirement funds than you had planned for, and improved technology may help you live longer. So try to build in a cushion for the unforeseen. Recent history has reminded us that things don’t always work out the way we had hoped. Getting a job at 80 doesn’t have a lot of appeal.

Phase In Your Retirement If Possible. Practice living on a fixed income on a part-time basis if you can so that the change in lifestyle is not so traumatic. Many newly retired folks find themselves at loose ends when they no longer have the structure of the daily routine that they have been following for 40 years. Look for ways to supplement your retirement income if you realize that there simply won’t be enough to go around.

Find a way to earn more income. Creating a secondary source of income that is equal to or greater than your main source of income honors an old adage. This will ensure that if your main source of income is taken away, you will already have a backup in place that will support your lifestyle.

Many retirees will be staying at their job, or looking for a new one, after they turn 65. Those who don’t want to continue in the same arena will venture into the entrepreneurial world – they’ll start a business of their own. There are tremendous opportunities for anyone who wants to start a business in today’s global marketplace. Now is the time to take the action to put your secondary source of income into place.

Retirement Gift Idea

admin — Sun, 19 Jun 2011 16:24:15 +0000

Retirement gifts demonstrate appreciation and respect towards an employee or employer for the years of dedicated hard work they have put in. The nice thing about these days is that a lot of retirement gifts can be purchased online from a wide selection of websites that offer different kinds of items.

When most people brainstorm for a retirement gift idea the first thing that usually comes to mind is a watch. Timepieces are classic retirement gifts that companies give employees as a token of gratitude for the long years of service. This retirement gift somehow conveys the message that retirees have all the time they have to do the things that they have been postponing for so long to focus on work.

Not only affordable but also personalized is another retirement gift idea–signature frames. A retirement gift such as a signature frame is a true keepsake in the sense that it displays a photo of the retiree surrounded by signatures as well as messages from fellow workers and friends from the company. Fixed with an engraved plaque, the signature frame is something a retiree will be proud exhibiting in a room to remind the memories accumulated during the most productive years of his or her life. This retirement gift is highly suitable to give at a retirement party.

Travel voucher is another great retirement gift idea. A relaxing trip for two to places the retiree has been wanting to go, but did not have the chance to, is something he or she will genuinely cherish. A perfect vacation getaway is a fitting culmination activity from the daily routine at the office. Travel vouchers are easy to acquire from your nearest travel agent.

Gourmet basket is another popular retirement gift idea.The most popular item available on the internet is the Luxury Chocolat retirement gift line. These are personalized wooden boxes made of mahogany. The retiree’s name can be engraved on the brass plates that are fitted on the box, and inside the box are handmade French chocolates.

Other personalized retirement gift ideas are mementos carved or embossed with the name of the retiree, which may also include the dates of being hired into the company and of retirement. These personalized souvenirs are reasonably priced and are available to order from many websites that specialize in customized gift items. Apart from these, china gift sets, commemoration mugs, photo albums with handcrafted covers, no matter how simple a though they are can make the retiree feel appreciated as well.

There are many more of ideas to choose from on the Internet. If one really takes time, brilliant retirement gift ideas can emerge from the simplest of objects. Creativity does not only cost less, but also contributes a more personal touch on the gifts that you give to a person who is transitioning a new chapter in his or her life–retirement.

Roadblocks to Baby Boomer Retirement

admin — Fri, 17 Jun 2011 18:29:47 +0000

Baby boomer retirement is upon us. The 76 million Americans born between 1946 and 1964 are reaching normal retirement age in 2011. I was born in 1945 and have been retired for 16 years…it does not look rosy for the baby boomers wanting to retire. Why? Four major reasons:

1) Social Security and Medicare…both are in financial trouble…right when baby boomers are retiring…something has to give…taking 500 billion out of Medicare will not help…many doctors are opting out of Medicare due to reduced payments to doctors

2) Poor investment outlook…the stock market used to yield a reliable 7 to 10% a year…not anymore…put your money in savings…current interest rates on savings are less than 1%…no wonder 52% of all boomers have less than $25,000 in savings

3) The real estate mess…once upon a time folks could depend on home values going up and the equity used to buy an RV or cabin in the woods…In Nevada currently 80% of home owners owe more than their house is worth…many walk away from their mortgage.

4) Counting on an inheritance? Your folks are in the same boat you are…poor returns on savings and the stock market affect them the same as you

The cumulative effect on baby boomers wanting to retire is depressing. If not postponing retirement, or giving up altogether, 72% percent say they will be forced to work in retirement. That many retirees working will strain the available jobs in the popular retirement states.

The roadblocks to boomer retirement are real but there is hope. Many retirees will be expanding their retirement horizons, they include:

A) Downsizing…smaller homes cost less

B) Retiring overseas…the cost of living is less expensive than the US

C) Alternative retirement lifestyles…RVing, living on a sailboat, all fun ways to retire

D) Retire online…the virtual retirement lifestyle will appeal to many.

Being retired for 16 years we have experienced all the above let us show you how to enjoy retirement.

Civil Service Retirement System

admin — Tue, 14 Jun 2011 09:37:19 +0000

The Civil Service Retirement System (CSRS) began in 1920 and has given disability, survivor and retirement benefits for the majority of civilian employees in the Federal government until 1987 when the new Federal Employees Retirement System (FERS) was created. Nevertheless, over two million people carry on receiving Civil Service Retirement System retirement and survivor benefits every month.

Retirement benefits are presently financed by both Government and employee contributions to the retirement fund, and the benefits are provided based on the duration of service and the average pay over the highest three years of pay.

What are the eligibility requirements for Civil Service Retirement System benefits? An employee is qualified to retire voluntarily if the following provisions are met: at least five years of creditable civilian service; is separated from a position subject to Civil Service Retirement System coverage; is covered by Civil Service Retirement System for at least one year within the two-year period immediately preceding the separation; and meets age/service combinations of age 55 with 30 years of service, or age 60 with 20 years of service, or age 62 with five years of service.

For employees who separate from service and have met the criteria except for the age/service combination may be permitted to a deferred annuity at age sixty-two. To be qualified, the employee must not take a refund of retirement deductions upon separation.

In determining the service which may be used for an employee’s eligibility for retirement under the Civil Service Retirement System, is not restricted to service in positions subject to CSRS retirement deductions, it may also comprise service where the pay of the employee is not subject to retirement deductions, such as under a temporary appointment. Honorable active military service may also be qualified, subject to conditions: it was executed before the separation date upon which is the basis for entitlement to annuity; it is not comprised in computation of military retired pay except for certain service-connected disability requirements; if the military service was executed after December 31, 1956, some employees will have to create a deposit for the service to receive firstly or for other employees, to retain credit after the age of sixty-two.

Although the service used in determining an employee’s eligibility for retirement is typically the same as creditable service for computation purposes, there are some exceptions: periods of CSRS service refunded, will not be creditable unless a redeposit is made; if the refunded service was executed before October 1, 1990, it will be qualified even if no redeposit is made but the annuity will be actuarially decreased; non-education service is made on or October 1, 1982, is not qualified if a deposit has not been made. October 1, 1982 prior service is creditable by the annuity will be decreased by ten percent of amount owed; active military service executed after December 31, 1956 is not creditable for employees first employed in a covered position after September 30, 1982 except if a military deposit for the service is made; and unused sick leave is commendable in computing benefits. Sick leave is changed into days or months of service using the Sick Leave Chart in the OPM operating manual, but it can never be used for eligibility.

I Have Noticed the Government’s Announcement That the Default Retirement Age is to Be Phased Out

admin — Fri, 10 Jun 2011 02:43:32 +0000

On 30th July 2010, the Government announced that the default retirement age, which is 65, is to be phased out from 6th April 2011 and abolished completely from 1st October 2011, when the statutory retirement procedures will be removed.

The current situation is if an employer wishes to retire an employee who has attained the default retirement age of 65, an employer must give a minimum of 6 months notice, or a maximum of 12 months notice of retirement to those employees. The notice must give the employees the right to request to work beyond their retirement age, in which case there should be a meeting to discuss this request, together with the right of appeal in respect of the decision. If, following the appeal the ultimate decision is that an employee is to retire upon his or her attaining the age of 65 years, there is no need for the employer to give reasons for the decision. The reason for dismissal is retirement.

From 6th April 2011 it will no longer be possible for employers to retire employees with this procedure. Indeed there will be transitional arrangements for retirements that have been notified prior to 6th April 2011 and where the date of retirement occurs before 1st October 2011.

From 1st October 2011, subject to the transitional arrangements, if an employer wishes to dismiss or retire an older employee, this would involve following a fair procedure and relying on one of the established reasons for a potentially fair dismissal which are set out in the Employment Rights Act 1996, which are, conduct, capability, illegality, redundancy or some other substantial reason.

The Government has published a consultation document, explaining the proposals to phase out the default retirement age. Responses to the consultation are required by 21st October 2010.

Retirement Age

admin — Wed, 08 Jun 2011 21:36:41 +0000

Once you complete the fixed years in your service, it is the time to retire. This is a crucial period of your life as you are mentally prepared to accept the fact that you have worked enough, and now you have to rest. You want to spend the remaining days of your life playing with your grandchildren and enjoying a relaxed schedule.

It is true that age for retirement entirely depends on an individual, but according to the U.S. Census Bureau, the retirement age is 62 years. Another most important thing is that age of retirement differs from one country to another. Regardless of the countries, it varies between fifty to seventy years of age range. There are also countries where different retirement age is set for male and female.

Sometimes, retirement age also depends on the particular occupations and professions. For example, those who are in military professions, or working as pilot, they require high level of physical and mental proficiency. So, for the professionals of these fields, retirement age is not same as the other industries.

Many a times, it has also been noticed that the individuals also choose an early or late retirement age depending on their needs and preferences. There are benefits and drawbacks of both early and late retirement. If you opt for early retirement, installment rates will not be huge enough, but you will get it for a longer duration. On the contrary, if you choose late retirement age, you will get larger rate of interest for a shorter time period.

In the US, 96% of employees are under the protection of Social Security which is considered as an integral part of the retirement plan. So, you must know all the pros and cons to be eligible for Social Security benefits and other related issues.

When the individuals reach the retirement age, they apply for availing different Retirement Insurance Benefits, and Old-age Insurance Benefits. The U.S. Social Security Administration is responsible for monitoring all these issues as the senior citizens can reap the best during the period of retirement. The date of birth, retirement age, etc. play important role for benefit payments.

After retirement, the retirees don’t get their monthly salaries, and they need to support themselves through pensions or savings. Normally, the government plays major part to support the senior citizens after retirement. There are quite a few financial institutions which offer various retirement plans as well.

In later life, people become more prone to illness. For this reason, the cost of health care after retirement becomes heavier. To protect the retirees, there are universal health insurance facilities for seniors which they can avail after reaching the age of retirement.

The Best Hope to Make Money in Retirement Will Be The Internet

admin — Wed, 08 Jun 2011 15:35:38 +0000

The internet will provide hope for many baby boomers looking for the best way to make money for their retirement. 2011 marks the year that the oldest Baby Boomers reach their 65th birthday. For the last quarter century, this generation has been fueling our economy, pushing stock prices, real estate values, and the prices of all assets in general, higher than ever before.

Unfortunately, not only were we borrowing most of the money we needed to pay for our purchases, but we were leveraging the very assets we were purchasing, at an over-inflated price. In other words, we were buying things with money we didn’t have, paying a higher price than the things were worth, thereby skewing the demand side of the traditional “supply and demand” model. The supply curve responded to a demand curve that was not backed by real money.

Now, at a time when we want to “cash in our chips,” we are discovering that our chips aren’t worth as much as we, perhaps naively, thought that they would be worth. That is to say, nobody will now give us as much for our chips as we originally paid for them. Since we based our retirement lifestyle on the inflated value of our chips, and now can’t find any buyers for those chips at the inflated price, we have to sell our chips for less. As a generation of folks not willing to settle for less, we will need to figure out a way to create more chips.

Fortunately, one of the greatest technological contributions of Baby Boom generation – the internet – will prove to be its salvation. The internet will become the best hope this generation has to make money for its retirement. This technology has created the fastest growing business platform in history, producing tremendous opportunities for entrepreneurs who want to succeed in business for themselves by taking advantage of the proven business models available on the internet.

The prerequisites are minimal, and there are plenty of honest, legitimate, and successful internet entrepreneurs willing to teach anyone who wants to learn how to acquire the skills and techniques necessary to create income online.

2011 Pension Plan, IRA Limits and Long-Term Care Deductions Announced

admin — Sun, 05 Jun 2011 19:17:38 +0000

The Internal Revenue Service (IRS) today announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2011. In general, these limits will either remain unchanged, or the inflation adjustments for 2011 will be small.

The elective deferral contribution limit for employees who participate in section 401(k), 403(b), or 457(b) plans, and the federal government’s Thrift Savings Plan remains unchanged at $16,500. The catch-up contribution limit under those plans for those aged 50 and over remains unchanged at $5,500.

The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are active participants in an employer-sponsored retirement plan and have modified adjusted gross incomes (AGI) between $56,000 and $66,000. This amount is unchanged from 2010.

For married couples filing jointly, in which the spouse who makes the IRA contribution is an active participant in an employer-sponsored retirement plan, the income phase-out range is $90,000 to $110,000, up from $89,000 to $109,000. For an IRA contributor who is not an active participant in an employer-sponsored retirement plan and is married to someone who is an active participant, the deduction is phased out if the couple’s income is between $169,000 and $179,000, up from $167,000 and $177,000.

The AGI phase-out range for taxpayers making contributions to a Roth IRA is $169,000 to 179,000 for married couples filing jointly, up from $167,000 to $177,000 in 2010. For singles and heads of household, the income phase-out range is $107,000 to $122,000, up from $105,000 to $120,000. For a married individual filing a separate return who is an active participant in an employer-sponsored retirement plan, the phase-out range remains $0 to $10,000.

The AGI limit for the saver’s credit (also known as the retirement savings contributions credit) for low-and moderate-income workers is $56,500 for married couples filing jointly, up from $55,500 in 2010; $42,375 for heads of household, up from $41,625; and $28,250 for married individuals filing separately and for singles, up from $27,750.

For the eight million Americans who own long-term care insurance, eligible long-term care insurance premiums included in the term ‘medical care’ range from $340 to $4,240 per-individual. The applicable limit is based on attained age before the close of the tax year, according to the Accountant’s Guide to Long-Term Care Insurance, published by the American Association for Long-Term Care Insurance, the national trade group.

The limits are as follows: For age 40 or less, $340; for more than 40 but not more than 50, $640. For more than 50 but not more than 60, $1,270. For more than 60 but not more than 70, $3,390 and for more than age 70, $4,240.

The Social Security Retirement Age Proportional to Year of Birth

admin — Tue, 31 May 2011 16:05:12 +0000

The basic criteria for Social Security Retirement Age are the individual’s birth date. Studies have revealed a fact that these days are more health conscious and thus life spans have increased. And as a counter reaction Social Security Retirement Age has been modified accordingly. People can enjoy the benefits of the service in proportion with their age. There is a section of individuals who prefer not to work after a certain age. They can take advantage of the services by planning for their future well in time. Social Security retirement age is one of the major factors kept in mind while formulating the plans for retirement as well as the age appropriate for retirement.

Earlier Social Security Retirement Age was fixed at sixty-five years for long, along with the option of getting premature retirement at the age of sixty-two in case an individual demanded for it. Though some benefits were accordingly reduced for them. People working in congress are given the charge of formulating various necessary aspects regarding the issue. Various informational surveys and study of social conditions have been taken into account by them before finally deciding the Social Security Retirement Age. These councils have to visualize the basic needs of people and accordingly bring out the Social Security retirement age along with the different amount of benefits that the individuals will be getting at various stages.

Social Security Retirement Age Reflects the Needs of the Community

Depending upon there personal situations people have varied preferences as far as Social Security retirement age is concerned. Some prefer to keep working for as long as possible and get the complete benefits while others may opt for getting an early break and settling off with a lesser amount of money in the process. There is another group who wants to continue working even after their specified retirement age. So various people have different visualizations and situations according to which they have their choice of how and when they want to take the final break off from work.

Social Security Retirement Ages [http://www.1retirementplan.com/Retirement_Living/] are well specified according to the time of birth of a person. Complete benefits are offered to people born before 1973. They can opt to retire at the age of sixty-five and can enjoy full benefits. Individuals born between 1943 and 1954 have the option of going on with their work till the age of sixty-six, and reap full benefits. People born after 1960 can retire at sixty-seven taking the advantage of all benefits. Along with all the above criteria’s, all individuals have a fair option to retire at any stage, but their benefits get reduced accordingly. People also prefer to put in some extra money all the way during their tenure and get equally better amount at the later stages.