Nevada Retirement Planners

More workers are losing confidence in their ability to retire comfortably, a new survey finds.

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 One of today columns I wrote in this weekend's Financial Post and FP Weekend is this one, which looks at two old chestnuts that regularly get debated at financial discussion forums. It argues that if you lack a traditional Defined Benefit pension plan, a modern couple might well have to shoot for a $2 million nest egg in order to retire to a standard of living close to what they enjoyed while working.

This invokes the familiar "Replacement Ratio" argument. Financial planners traditionally argue a 70% replacement ratio is sufficient. Some mutual fund companies, like Fidelity, think the percentage is anywhere from 80% to 105%. At the other extreme is actuary Malcolm Hamilton's view that 50% is sufficient.

The key here is really the absence of a DB pension. I often hear people talk about a good pension like the one Ontario teachers enjoy. My father benefited from this and I know a fair number of boomers in the plan, and even a few couples both in the plan. It's generally acknowledged that such a pension is worth $1 million in terms of the capital you'd otherwise need to accumulate to generate $50,000 a year of income. After all, a modest 5% return on $1 million would generate the same $50,000. So two teachers in such a plan each with such a pension would have the equivalent of $2 million. So it's not unreasonable to propose that if neither spouse has a DB plan, they'd need $2 million if they want to replace the $100,000 of income they were accustomed to living on in their working years. 

When can you retire?

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The “How much do you need?” question is often linked to the “At what age can
I retire” question. Clearly, the more you need, the longer it will take to
accumulate and the later you’ll need to retire. Both questions are discussed at
the new Retirement subforum at a new financial discussion forum mentioned in
the column: www.canadianmoneyforum.com.

After just two weeks, the new forum has already attracted more than 700 users
and achieved a critical mass of knowledgeable posters. Already it is one of the
best financial discussion forums in the country. This should not be too
surprising since the main posters mostly run their own financial blogs. Their
ages appear to be primarily 20s, 30s and 40s. 

In another post there, I point out four reasons why this younger generation of investors has a leg up on baby boomers, who paid too high a price for stocks for too many years; who did not have the new Tax Free Savings Accounts (TFSAs), did not have the wealth of Internet tools and social networking sites that exist today, and did not have low-cost exchange-traded funds (ETFs) to invest in. You can find that discussion thread here. 

There is also a non-financial forum where the participants discuss such popular online topics as Twitter, Facebook, Linked-In and other web-based tools so popular with Internet-literate investors. 

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Source The Wealthy Boomer : Retirement

NEW YORK (AP) — A corruption scandal at the state’s retirement fund is the latest in a long string involving politically connected intermediaries called placement agents sometimes hired by investment firms hoping to land rich investment deals with pension officials, experts said.

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Some public pension funds have suffered losses along with the hedge fund industry’s fortunes.

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NEW YORK (Reuters) – A former New York state political party leader was criminally charged in a probe of kickback fees paid to manage state pension investments, New York’s top legal officer said on Wednesday.

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LONDON (Reuters) – The deficit facing 7,400 of the country’s pension funds worsened in March to 242 billion pounds, more than 10 times its year-ago level, according to the Pension Protection Fund, an insurance scheme for underfunded plans.

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The Labor Department subpoenaed the Tribune Company over its employee stock plan, which was crucial to the purchase of the company by the billionaire Sam Zell.

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The Boston Globe’s guild said it is being asked to sacrifice too much to help The New York Times Company meet its savings goal.

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For the first time since Hewitt Associates began tracking 401(k) accounts in 1997, American workers in February held less than half of their 401(k) money in stocks.

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Even at today’s depressed values, it’s important to protect your retirement accounts from creditors.

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