Worker's Retirement Confidence Falls To Record Low

Yesterday I was doing some informational research when I came across this article from Benefit Selling. It blew me away so I decided to share it with you:

Worker's Retirement Confidence Falls To Record Low by Amanda McGregory

Twenty-seven percent of employees say they are “not at all confident” about having enough money to live comfortably in retirement, according to the 2011 Retirement Confidence Survey, released by the Employee Benefit Research Institute and co-sponsored by the Principal Financial Group.

This figure is the highest in the survey’s 21 years.

Additionally, 13 percent of workers say they are “very confident,” which ties 2009 for the lowest rate measured by the survey.

“The survey finds that many systemic conditions are forcing Americans to redefine retirement, such as high unemployment rates, government fiscal crises, rising health care costs, lower investment returns, a surging older population putting pressure on Social Security and Medicare and longer life expectancies,” says Jack VanDerhei, EBRI research director and co-author of the report.

“Americans are beginning to recognize the level of savings needed for a comfortable retirement. Now it’s critically important to take steps to improve the chances they’ll have enough,” says Greg Burrows, senior vice president, retirement and investor services at The Principal. “Research shows even simple actions, like calculating how much is needed for retirement, increases savings. Creating a plan and working with a financial advisor can also help get savers on realistic paths to a secure retirement.”

Approximately one-third of workers and retirees report dipping into their savings in 2010 to pay for basic expenses; however, those with retirement savings accounts are much less likely to withdraw from their savings.

Forty-two percent of respondents say they guessed to determine their needed retirement savings while 70 percent say they are a little or greatly behind schedule in planning and saving for retirement.

More than half of workers report having less than $25,000 in total savings and investments, excluding their homes.

Twenty percent of respondents say they now intend to retire at an older age than originally planned, but 45 percent say they retired earlier than expected, primarily because of a health problem or disability.

 What steps are you taking? Our analysis can put you on the right track and establish a working plan. Calling our office at 732-364-5462 would be a good first step.

Is greeting customers at Wal-Mart or Costco really an option you want to consider for your retirement?

-Tom

The Life Cycle of Your Money

You spend many years trying to save for retirement. During your 20's and 30's you are just starting out. Perhaps you married, paid down some school loans, while saving for that illusive down payment on your first home. If kids come along, a lot of your earnings went to raising them. A lot! During these years, your money is in the accumulation phase.

Just when you can finally start to buckle down, after college tuitions, weddings, and helping the kids get started, you realize you don't have a lot of time left to save more for your "planned" retirement date. Now you are getting near the distribution phase.

This is the time you need to consider being more conservative with your investment choices. Please realize, conservative does not necessarily mean guaranteed. It can be totally devastating to the longevity of your money if you take a hit from the market during the first few years of distributions. When you are drawing down during these periods it can become very difficult and sometimes impossible to recoup losses.

A strategy that may help is to build a foundation based on a guaranteed supplemental income stream (after Social Security and your pension, if you're on of the lucky ones that still gets one!). Once you have an income plan in place, then you can diversify according to your own risk tolerance. A word to the wise: being too conservative can be almost as dangerous as being too risky. You could very well outlive your money, earning today's meager returns once you factor in inflation and future tax increases.

I suggest having an analysis done on your current and future income needs. Be sure to cover the "what if"s like needing extra money for health care, or losing your spouse/partner. Then go and live your life!

For an independent audit and income analysis, give us a call. We want you to live the best life possible.

-Kathy

Family Focus Financial Group (732)364-5462 kathy@ffrgonline.com

There is a general sense of uneasiness, skepticism, and mistrust permeating the air..

Many still vividly remember the stock market collapse of 2008 and early 2009. The news stories of Bernie Madoff and other financial swindlers are still relatively fresh in our minds. Quantitative easing, i.e. the massive printing of money by the Federal Reserve has people worried about the future direction of the US economy and the possibility of massive inflation. While the "official" unemployment number is falling even those who are less engaged with current economic news know that as far as official Government reporting is concerned, the proverbial books are being cooked.

How many watch the financial talking heads on TV? Do you watch Cramer? Kudlow? Cavuto? The squawk box gang. How many of you have ever heard two seemingly bright people on these shows talk about the same financial topic and give advice that is the polar opposite advice that another seemingly intelligent person gives? The reason for this is that each of these pundits has a different opinion as to what might occur due to a specific set of economic circumstances. Then based on that opinion these experts have a suggested course of action in order to profit from or be safe from these possible outcomes.

A better course of action, I suggest, would be to identify personal financial goals and pinpoint possible obstacles to achieving these goals and from those two lists develop a plan to achieve those goals. There is a lot of confusion and uncertainty among the masses, people are scared financially speaking, unsure what their personal goals are and how to identify the possible obstacles that might get in the way since there are so many. Can we help? I think so.

What are you really looking for - could the answer be Security?


-Tom Boles

Choose the Right Pension Payout - It's Forever!

The day you've been looking forward to is almost here- retirement. 
You've put your time in and now you've had enough!

Before you leave your employer, some very important decisions need to be made; how do you structure your income payout from your pension. What is the best option for you?

It will be different for everyone. Here are some questions to ask yourself:

1. How stable is your company or municipality. It is no secret that many public pensions could be in jeopardy due to overspending, mismanagement of funds, loss of revenue (foreclosures hurt-if you're not paying your mortgage, you're likely not paying your property taxes).
2. Are you willing to permanently part with a portion of your pension to provide a spousal benefit? Boomers are expected to live 25-35 years into retirement. That's a lot of lost wages if you take the reduced payout option.
3. On the flip-side 25-35 years is a long time to go with no pension if you choose a life only option and die too soon, leaving your spouse under-protected.
4. Should you consider a pension maximization program which basically allows you to take a higher payout with no spousal benefit, then supplement with a life insurance policy on the pensioner if he or she dies first. This can give you many years of maximum income to spend, especially if you are both relatively healthy. However, the numbers may not make sense if you are rated or a smoker.
5. Are you healthy? Consider each partner's health and the lifestyle you envision for your retirement?
6. Are you planning to work part-time or perhaps start a business?
7. What other income sources do you have? Could your investments sustain you if you experience a market loss, especially early on?

It is wise to meet with your trusted advisor who should be able to do an analysis and run all the numbers and scenarios. Only then can you make an educated decision on what feels best for you and your spouse.

If you need help, we're here to listen.

Kathy

Family Focus Financial Group (732) 364-5462

The Media Can Hurt You

We're all so thirsty for information, especially when it comes to what to do with our finances. There are plenty of opinions out there. What scares me the most is the media. It seems when you read it in print, some written by whom the public views as credible, or hear it on television, you want to believe. Many do believe. It was on TV, so it must be true; or "so and so," who is a celebrity, says you should do this...

Don't get me wrong. I am happy that you are being made aware. It causes you to think. However, more often than not, the reporter or the writer only gives part of the facts, takes things out of context, or simply does not have the financial training and experience to be discussing the subject matter. Important information gets left out. The facts are sometimes incorrect, and often you, the public, are misguided.

This can do more harm than good. So before you take things as gospel, realize who is delivering the message. If it's a reporter or writer, even one from a widely read publication, chances are the information may not be totally accurate. Without years of education and experience on the subject matter, what credentials do they have to be giving out such crucial advice?

Think about this. Who would you feel had more credibility? A doctor who had years of medical education, training and experience in his or her field of expertise, or something you heard on the news?

It's ok to question. In fact, it's wise. One of two outcomes will occur: you will realize the "story" has flaws and trust your instincts, or believe anything you hear and read because it's popular opinion. Bad news sells! For some reason the public is addicted to it, maybe because that's all we're fed on a daily basis. Perhaps you've been brainwashed by the hype; or have you just given up on your ability to filter through the madness.

All I can say is trust your own instincts and develop a relationship with a knowledgeable and credible advisor who has taken the time to listen and get to know you.

After all, don't you deserve better than "cookie cutter" advice?

-Kathy

WOW ! Wall Street is starting to get it……ALMOST!

We’ve been touting this for years. Boomers are going to need income.  It is the number one concern of all boomers, and if it isn’t, it should be. A reasonably healthy 65 year old couple has more than a 50% chance that at least one partner will live beyond age 90. A single male has about a 35% chance, and a single woman, a 45% chance. That’s at least 25 years or more after retirement that income will be needed. And, oh, by the way, we haven’t even mentioned the significant impact inflation, tax increases, or health care will have on that monthly nut you will need to crack to cover your basic needs, like food, clothing, shelter and yes, medications. If you’re going to live that long, there is a good possibility that you’ll not be in 100% perfect tip-top shape.

I was so shocked to read a recent article in the Wall Street Journal, March 8, 2011 titled “Making the Case to Buy an Annuity.” Wall Street has been bashing annuities for years - remember, most stock brokers do not have the necessary licenses , training, or credentials to offer them to you. If there is nothing in it for them, why would they recommend them. Also, since an annuity is meant to be left alone to do its job, create present or future guaranteed income, and tax advantages, it not a financial instrument that is meant to be sold, cashed in or traded. Do you get what I’m saying?

Well I am so happy to see Wall Street finally recognizing the importance and the value of having annuities as a “foundation” of a good retirement plan. But once again, they did not tell the whole story. They spoke of only two kinds of annuities; an immediate annuity, which works like a pension- trade a sum of money for a period of guaranteed payments, and of course they would tout a variable annuity, which invests in, what else, mutual funds! They never mentioned one of the most popular annuities today: a fixed indexed annuity with guaranteed income riders. One might say that this type is the best of both worlds. Your principle is guaranteed (unlike
a variable), and only your interest is variable as it can be allocated to either a guaranteed fixed rate, usually better than a CD, or it can be linked to various indexes like the Dow or commonly the S & P. So, you can have the potential for growth, with none of the downside risk. In addition, you don’t have all the hidden fees associated with variable annuities.

In closing, each individual should work with an advisor who is competent and knowledgeable and not limited to one company’s products. Remember, it’s about what is best for you, not them, and each of you has your own unique situation, risk tolerance, and income needs.

WE LISTEN. We’re here to help if you need us.

-Lady Fi

Kathy

Senate to Vote on rival GOP, Democratic Budgets

In a demonstration of official Washington's often curious logic, the Senate is expected to vote down both a slashing GOP budget bill and a less painful Democratic plan to demonstrate progress instead of gridlock.

The idea is to show both sides that they need to move toward each other to break a bitter stalemate over how much to cut spending as Congress wraps up last year's unfinished budget work. The combatants are facing a March 18 deadline that already has Republicans in the House drafting another stopgap spending measure to make sure the government doesn't shut down if a broader agreement isn't reached by them.

Let me put this into average American household terms:

Say that a married couple, both working, has a home with a mortgage of $1000. That payment includes the taxes on the property and the property insurance. The couple also pays an electric bill, a natural gas bill and a cable bill each month.

Now one of the two loses their job. Down to just one income, the couple has some decisions to make about what to cut out of their household budget and what to keep in the budget. They have to cut about $1000 per month in expenses in order to make their household budge balance.

Instead of making the hard choices, they decide for starters to eliminate the cable and see how it goes. You don't need a degree in economics to figure out that it won't take long and the couple will be broke, unable to meet their household budget.

That's exactly what is happening at the Federal level currently. Given the magnitude of the US deficit and debt, it seems that there would be meaningful discussions about getting spending under control, but instead the two parties are arguing about the cable bill.

-Tom

Women - Don't Settle!

Do you know statistics show that women currently control over 50% of the investment wealth in this country? (Federal Reserve Board data) And, that by 2020 that number is expected to be closer to 75%!

A 2008 LIMRA report  found that 72% of affluent women are NOT happy with their current advisor.

So, I ask you. Are you satisfied with your current financial advisor. Is he or she listening to your concerns, letting you know that your feelings are valid, that your fears are justified?

It is no secret that men and women think differently when it comes to money. Different things are important to us. Men are more focused on how something works. Women are more concerned about what it does.
Men tend to make financial decisions quickly while women need to get to know their advisor as a person to feel comfortable.

In general, women want to work with someone who listens carefully, who respects their ideas and has the patience to walk you through the process so we can feel confident in the solutions.

Lady Fi says, it's time  to take TIME! Women often put themselves last. You are so used to doing for others first. It is our nature to nurture.

Well it's time to take care of business girl, this is serious!

It is said that by the age of 57, almost 50% of women will be either divorced, widowed or separated. In addition it is expected that "boomer women will outlive their husbands by 15 years or more!
What does this mean to you? It means it's time to wake up - smell the coffee - you need to be responsible for your finances.
If you are married it means you need to know what is going on. What assets do you have? How are they titled? Are beneficiaries updated? Do you have your own logins and passwords? This is not a matter of a lack of trust. This is just smart. It's good planning to protect yourself for the day when you are without your partner. No time to procrastinate or cry lack of interest or understanding - "Lady Fi" is here to help educate you, not break up your marriage.
If you're single you have NO EXCUSE! There is no knight in shining armor going to shower you with buckets or cash in your 80's. Yes, I know it's overwhelming to have to do it all yourself. But you're NOT ALONE! Lady Fi is here to guide you and help you do the best you can. In the end that's all any of us can do. But plan now, TODAY, you'll meet each challenge as it comes along - just as you always have!

Ask Lady Fi
Enter your concerns and questions here for our forum to discuss. I'm listening. And besides, I guarantee there are at least a dozen other women with the same concerns! Sharing helps us all.

Warm Wishes

"Lady Fi"
Kathy

Debt Has Its' Consequences

$600 Billion, that's 75 billion dollars per month, of our own money to be bought back by the U.S. to stimulate our economy? 
Huh? Yeah, I know it sounds like double talk. It is. Created a buzz for a while, kinda like a few glasses of cheap wine. But don't expect the euphoria to continue. The market is already starting to show signs of increased volatility.

Take heed...the bond bubble is about to burst.

As I wrote in the summer issue of The County Woman, here comes the implosion of the US TREASURY bubble. The last time this occurred in 1976, the five years following were among the most extraordinary in economic history. They're about to be repeated again, but this the the trend will be bigger, it will move faster, and the fallout will be far greater. We weren't 1.65 trillion dollars in debt. We did not have underfunded Social Security and Medicare disasters looming, and we did not have 76 million baby boomers retiring at the rate of 10,000 a day for the next 15-20 years! And above all, we were not recovering from the worst credit crisis in our history!

Now, in order to save the day, we need the rest of the world to keep buying our debt, 'cause we're pretty tapped out, wouldn't you say? Russia and China have already begun buying oil in their own currency, not the US dollar. We are looking at worldwide currency devaluation if the US Dollar gets replaced as the world currency.

The day of financial reckoning is near when other countries and even our own citizens lose confidence and nobody shows up to buy our bonds. When that day comes, we'll crank up the printing presses and print more money. In effect, we will be silently defaulting on our own debt, bonds will crash, the Dow and the dollar will nosedive, and inflation will quickly start to spin out of control.

And what of the overall market? The next downleg is coming. Could be as early as April, but I think no later than July. Believe me, I'd rather be wrong about this than right, but I mingle with and follow some really smart people that have no personal vested interest in their predictions. If your nest egg can't withstand another major hit, it doesn't hurt to sit on the sidelines for while. Me, I'd rather be safe than sorry. Again.

Usually the contrarian opinion ends up being the right one in the end. I don't smell roses. Smells like crap (or should I say poop!).

-Kathy

The Fleecing of America

Anyone get gas today?
If not you're in for a surprise! This is just a plain fleecing. We don't even purchase oil from Libya. If you are as outraged as I am, Call Your Congressman and Senator.
Realize this - we elected them to take care of us - to look out for our interests. They don't pay for gas, they have expense accounts. So, in reality we are paying for their gas.
This is outrageous. Call them to voice your displeasure and threaten to withhold your vote and tell them that you'll remember this at election time - this will get them to do something, even if it is just to listen to our venting.
This price hike is not about supply and demand - it's about fleecing the American public.

- Tom