Lagos State Pension pays N1.5bn to 234 retirees-Ngozi Onyeakusi

The Lagos State Pension Commission,(LASPEC), said it will be paying another set of 234 retirees under the Contributory Pension Scheme, a sum of N1,547billion being their past service benefits prior to the commencement of the CPS in 2007.

This was in line with the commissions resolve  to ensure that workers  have a better and fulfilled life after retirement.

The Director-General, LASPEC,  Mr Rotimi Adekunle Hussain, said  that the retirees would be receiving their retirement benefits during the 15th Retirement Bond Certificates presentation.

He added that the ceremony is coming up just in a space of one month after the 14th presentation that was held in November of this year.

According to him, the administration of Governor Babatunde Raji Fashola, SAN has since the adoption of the Contributory Pension Scheme in 2007 taken it as a point of duty and utmost importance to always organize the ceremony to present the retirees with their retirement benefits, adding that the retirees are presently enjoying their retirement benefits under the scheme without any rancor or stress.

It would be recalled that as at the 14th Bond Certificates presentation held in November of this year, a total of 5,530 retirees had been paid a total sum of N28,931,971,078.06k (Twenty-Eight Billion, Nine Hundred and Thirty-One Million, Nine Hundred and Seventy-One Thousand, Seventy-Eight Naira, Six kobo) only.

Culled from peoples daily 

6 steps to retirement happiness-Tom Sightings

Thinkstock

Retirement is a leap of faith. You take your foot off the firm ground of a company payroll and place it onto the shifting sands of self-sufficiency. But rest assured, many people have gone before you, so the journey follows a well-traveled road. Here are six steps to set you off in the right direction.

Step 1: Make a plan. Many of us view retirement as a time to take it easy, play golf and do some gardening. There's absolutely nothing wrong with that. If you've worked 30 or 40 years, you deserve it. But most people need something more meaningful than just the absence of work. So their days fill up with volunteer work, or they take classes, land a part-time job or help raise grandchildren. People start to wonder: If I'm retired, why am I so busy? Here's a tip: make a list of priorities so you don't squander your time, but use it to fulfill the kind of retirement you want.

Step 2: Take care of the money issue. Anyone who has planned ahead either has a pension, an individual retirement account or some other retirement savings. Most retirees own their own homes, and can take cash out with a reverse mortgage or sell and downsize. We may have friends who provide valuable resources, such as sharing a vacation cottage or driving us to the doctor. No matter what the balance in your retirement account, you can exercise substantial control over your budget and life.

Step 3: Make sure your medical bills won't kill you. Medicare and Medicaid, along with supplemental insurance plans, sometimes make it easier and cheaper for retirees to access health care. Beyond this, retirees have left behind the stress at work, and have the time and motivation to take care of themselves. And there's no shame in making accommodations for age-related constraints on your activities. Do you have mobility issues that require you to live in a one-story house? Is your health affected by climate? Don't be any more reluctant to make adjustments for this stage of life than you did for any other.

Step 4: Decide where you're going to live. A survey by the real estate company Pulte showed more than 40 percent of workers ages 55 and over plan to stay in the same city where they currently live in retirement. About a third of the respondents intend to move out of state, but many will relocate not to the sunbelt, but to be near children and grandchildren. Yes, plenty of people still retire to Florida and Arizona. But if you're considering a long-distance move, make sure you're comfortable with the new climate, culture and customs.

Step 5: Take it one day at a time. Some people have big ambitions for retirement. They want to start a new career, or move to the south of France or a beach community in Costa Rica. But for many people, retirement is too big a transition to make all at once. That's OK. There is no reason you must change your life immediately. You don't have to move or even retire all at once. Many new retirees spend a few interim years with one foot in their old world and one foot in the new, until they're comfortable enough to set out on their own.

Step 6: Remember, it's a work in progress. There's no such thing as a "performance appraisal" in retirement. So don't get discouraged if everything doesn't develop exactly the way you envisioned. Maybe the part-time job ends up being just as stressful as your old job. Maybe the boat you bought turns out to be more trouble than it's worth. Don't worry. Retirement can last for 20 or 30 years. There's plenty of time to change your mind. Keep trying different activities and experiences until you know you're headed in the right direction.

So will you be happy in retirement? A study from Princeton University found that people are happiest in their mid-20s, then again in their mid-to-late 60s. But the truth is, your happiness curve in retirement will likely track along the same lines as the rest of your life, for happiness depends as much on a positive outlook as it does on external factors. As you get older you will inevitably lose friends and experience physical limitations. How happy you are with these changes depends on you as much as it does on the changes themselves.

Culled from US News

NRC pensioners beg FG to fund payment of 33% increment arrears- Francis Igata

ENUGU— Nigeria Railway Corporation, NRC, pensioners, have appealed to the Federal Government to provide funds to enable the management of NRC offset the arrears of the 33 per cent increment due to them between 2009 and 2013.
The Eastern district secretary, Nigeria Union of Railway Pensioners, NURP, Mr. Obi Uyanne, said “our members are dying every day. The paltry amount paid to us as pensions does not reflect the present economic realities on ground.
“Federal Government should quickly make funds available to Pension Transitional Arrangement Directorate, PTAD, to offset the arrears of 33 per cent owed to us since 2009. Most of our members have been short paid during retirement.”

Culled from iNigeria

America is on the Verge of a Retirement Crisis-Sam Becker

Source: Thinkstock

Worries about retirement are not reserved to the elderly. No, Americans of all ages, from seniors to teenagers, worry about retirement.
One study from Ameriprise Financial, for example, shows that 58% of Americans don’t feel like they are on track for retirement. The report indicated that people were most worried about meeting health care expenses, which are expected to rise dramatically in coming years, outliving their money, and not losing their investments to another financial or economic crisis.

It turns out that those fears are completely justified, as many Americans on the cusp of retirement are evidently unprepared for what lies ahead. A Bankrate.com survey revealed that a whopping 26% of Americans between the age of 50 and 64 have nothing saved for retirement at all, and 14% of those over 65 haven’t saved anything either.
There will always be a certain percentage of the population that isn’t prepared for retirement, that’s a given. And, with the cyclical nature of the economy, different waves of retirees will be facing retirement with different headwinds or tailwinds. But the problem with this current wave is not just that the economy is still recovering, by some accounts, from the financial crisis, it’s that the generation now reaching the age of retirement is the biggest in American history.
The Social Security System, on a structural level, and which a large number of senior citizens rely on, won’t be able to handle the influx. In 2012, Social Security benefits were dispersed to 5.7 million people, and 64% of them relied on the system to account for at least half of their overall annual income during 2011, according to the Social Security Administration’s 2013 report.
From the same report, the Social Security Administration issues a rather dire warning regarding the long-term sustainability of the program. “Social Security is not sustainable over the long term at current benefit and tax rates. In 2010, the program paid more in benefits and expenses than it collected in taxes and other non-interest income, and the 2013 Trustees Report projects this pattern to continue for the next 75 years. The Trustees estimate that the trust fund reserves will be exhausted by 2033,” the report says.
That is the crux of the issue. The system, as it stands today, simply cannot handle the Boomer generation. It is too large, and the system is too weak. Moreover, individuals have either neglected or have been unable to compensate for Social Security’s shortcomings on their own, and now a shocking number of America’s elderly are completely unprepared for what lies ahead.

Source: U.S. Census Bureau

The Boomers

An article from My Budget 360 digs into the subject to a fairly deep level, and the points they bring up actually do inspire some worry. Not just for retirees, but for the younger generations that are going to need to support them. The piece argues that America is on the brink of a massive spike in the elderly population. As the baby boomers currently make up the largest segment of the population, as they collectively age, the average age of America also slides farther up. The chart above, compiled using data from the U.S. Census Bureau, illustrates this perfectly. 
Roughly 10,000 people per day, or 300,000 people per month, are hitting retirement age. That adds up to approximately a few million people per year. Not all of them quit working once they do reach that magical age, but some do. And the ones that are planning on relying on Social Security as their only source of income are in for a turbulent ride.

Social Security

Since Social Security is paid for by people currently in the workforce, the fact that the largest segment of the population plans on taking their cut from the system sends up some red flags. It’s a simple matter of numbers. There won’t be enough to go around if the social security system is left in its current state. Add on to that the fact that people are living longer, and it puts even more strain on the system.
According to the National Academy of Social Insurance, 6.2% of everyone’s reported income goes to funding the Social Security system, up to a cap of $113,700 per year. Employers match that amount, boosting the total up to 12.4% for every paycheck. That’s a considerable amount, especially for low-wage workers who could use every penny they earn.
But it’s all direly needed to fund the program. A Congressional Budget Office analysis for 2013 shows that total outlays for the Social Security system tallied up to $808 billion, roughly around a quarter of total federal spending. In 2012, the social security system paid out benefits to just about 62 million people, according to the Social Security Administration. For a system that is already strained, it simply can’t handle what’s coming around the corner.

Jobs

Another issue? The jobs that people are working in the current post-recession economy — the jobs that support the Social Security system — are increasingly low-wage and low-skill, meaning that less money overall will be contributed. And of course inflation and stagnating wages also have a role to play.
The Bureau of Labor Statistics shows that current unemployment levels have dipped below 6% nationally, but that doesn’t necessarily tell the entire story. Though employment numbers are up, part-time work has had a hand in inflating those figures. Of all the jobs that were lost during the recession, it appears that we have fully recovered. But the jobs that we lost are not the positions that are being recovered.
Part-time jobs have grown significantly over the past few years, in an effort to keep labor costs low by many employers. This means people are making less money, and as a result, paying less taxes. That will lead to more problems down the road, as the Social Security System will ultimately have to adjust for that change. A system that’s already having issues staying solvent is only going to experience more turbulence as a result of the weak economy. It’s really starting to look like the perfect storm.

Source: Harvard

Housing

It doesn’t end there, either. Another question that needs to be addressed is that of who will take care of the elderly when they can no longer care for themselves? The cost of in-home care, or even retirement communities is another segment of the economy that is seeing huge price spikes, mostly due to a simple imbalance in supply and demand. And it’ll get worse.
Anarticle from the Harvard Gazette does a good job of putting the issue in context, stating the uncomfortable fact that America simply is not prepared to handle the housing needs of its aging population. The map above, which was included in a recent article, shows the concentration of America’s elderly, ages 50 and over, depending on the shade of red (the darker, the more concentrated). The left side shows the concentration as it were in 1990, and the right side in 2010. Obviously, the country is getting redder, and older.
That population — of those ages 50 or older — is expected to grow over 133 million by 2030. To put that in perspective, in a mere 15 years, between 40 and 50% of the entire U.S. population will be over the age of 50.
The problems don’t end with the housing shortage. Other logistical problems will arise as well, including transportation issues. As more and more people are unable to get to and from the places they need to go, isolation will become another problem. And with it, increased levels of depression and other health issues.
“Recognizing the implications of this profound demographic shift and taking immediate steps to address these issues is vital to our national standard of living,” said Chris Herbert, acting managing director of the Harvard Joint Center for Housing Studies. “While it is ultimately up to individuals and their families to plan for future housing needs, it is also incumbent upon policymakers at all levels of government to see that affordable, appropriate housing, as well as supports for long-term aging in the community, are available for older adults across the income spectrum.”
So once again, it looks like we need to depend on some action from policymakers who have become known for inaction. But if our politicians decide to sit on their hands once again, there could be some very serious issues down the line.
In the meantime, younger generations need to be better educated in personal finance and preparation to help avoid the same issues in the future.

Culled from wallstreetcheatsheet

The real risk of pension plans: They give retirees false security-Allison Schrager

Retirement security is ending the year at an all-time low. The $1.1 trillion last-minute spending bill will allow trustees to cut benefits in multiemployer defined benefit pension plans. And while it affects a relatively small population, 10 million people at most, it opens the door for other employers to make similar cuts. Maybe that’s a long way off; maybe not. But the provision is a rude awakening: We may romanticize guaranteed retirement benefits and lament our 401(k) world, but pensions aren’t safe these days either.
Until recently, a pension benefit seemed as good as money in the bank. Companies or governments set aside money for employees’ retirements; the sponsors were on the hook for funding the promised benefits appropriately. In recent years, it has become clear that most pension plans are falling short, but accrued benefits normally aren’t cut unless the plan, or employer, is on the verge of bankruptcy—high-profile examples include airline and steel companies. Public pension benefits appear even safer, because they are guaranteed by state constitutions.
By comparison, 401(k) and other defined contribution plans seem much less reliable. They require employees to decide, individually, to set aside money for retirement and to invest it appropriately over the course of 30 or so years. Research suggests that people are remarkably bad at both: About 20 percent of eligible employees don’t participate in their 401(k) plan. Those who do save too little, and many choose investments that underperform the market, charge high investment fees, or both.
It turns out that pension plan sponsors, and the politicians who oversee them, are just as fallible as workaday employees. We all prefer to spend more today and deal with the future when it comes. Pension plans have done this for years by promising generous benefits without a clear plan to pay for them. When pressed, they may simply raise their performance expectations or choose more risky investments in search of higher returns. Neither is a legitimate solution. In theory, regulators should keep pension plan sponsors in check. In practice, the rules regulators must enforce tend to indulge, or even encourage, risky behavior.
Because pension plans seem so dependable, workers do in fact depend on them and save less outside their plans. According to the 2013 Survey of Consumer Finances, people between ages 55 and 65 with pensions have, on average, $60,000 in financial assets. Households with other kinds of retirement savings accounts have $160,000. It’s true that defined benefit pensions are worth more than the difference, but not if the benefit is cut.

As the new legislation makes clear, pension plans can kick the can down the road for only so long. Defined contribution plans have their problems, but a tremendous effort has been made to educate workers about the importance of participating. (Even if the education campaign has been the product of asset managers who make money when more people participate, it’s still valuable.) Almost half of 401(k) plans now automatically enroll employees, which has increased participation and encouraged investment in low-cost index funds. And now it looks like a generous 401(k) plan with sensible, low-cost investment options may turn out to be less risky than a poorly managed pension plan, not least of all because workers know exactly what the risks are.

Culled from Bloomberg Businessweek

Kwara: Saraki Gives His Entire N45m Pension Up For Scholarship

In a twitter message, the former governor noted that he is giving up his pensions

1. 
   

   
   
   Senator Bukola Saraki  an ex governor of Kwara state has tweeted that he will forfeiting  his N45m accrued pension fund to Kwara students in a scholarship scheme.
   
   The money will be going to his foundation, the Abubakar Bukola Saraki Students Foundation (ABSSF).

   That is a good development for an improvement in Education,  governors, senators and other government functionaries should emulate the senator.
   
   Culled from Twitter 
   

Merry xmas and a prosperous new year

 

Merry xmas and a prosperous new year, may you see the new year with joy , peace, good health and prosperity.

PENSIONSBENEFIT.COM

National pension contribution hits N2.5trn in second quarter

 

 

The National Pension Commission, PenCom, said the pension contribution by public and private sectors into Retirement Savings Account, RSA, at the end of second quarter of 2014 was N2.5 trillion.
This is contained in PenCom’s quarterly report.
The report said there was an increase of N93.08 billion, representing 3.82 per cent over the total contributions remitted as at the end of first quarter of the year.
It said the contribution by the private sector during the quarter was N42.21billion while the public sector contribution was N50.87 billion, bringing the total contribution to N93.08 billion.
According to the report, the cumulative contribution of the public sector was 45.87 per cent higher than that of the private sector during the period.
“While the private sector contributions were higher than that of the public sector during the quarter, the cumulative contribution of the public sector was, however, 45.87 per cent higher than that of the private sector,” it said.
The report said the private sector contributions increased from N977.32 billion at the end of the first quarter to N1.02 trillion in the second quarter.
It added that the average monthly contributions for the private and public sectors were N16.96 billion and N14.07 billion respectively during the quarter.
According to the report, the ranking of Pension Funds Administrators (PFAs) by total contributions shows that the top three PFAs accounted for 47 per cent of total contributions.
It added that top five PFAs accounted for 62.7 per cent of total contributions received over the same period.
“While the bottom three PFAs accounted for 0.26 per cent, the bottom five PFAs accounted for 1.20 per cent of total contributions.
(NAN)

Develop a hobby before you retire-David Ning

I have recently gotten into table tennis. Hitting the ball back and forth reminds me of all the benefits of starting a retirement hobby before I actually retire. Many people think they should wait until they have an excess of free time before they get into a new hobby, but I think that's a mistake. There are many benefits to already having an established hobby when you retire. Here's why you shouldn't wait until retirement to figure out how you will spend your time.
Interest in a new hobby might not be sustainable. You may find you don't actually want to spend as much of your retirement time with the activity as you first thought. I've done many activities in my life, including baseball, soccer, biking, bridge, golf and many more. Only a few of these will remain my hobbies in retirement. Part of this is due to my interests, while other hobbies have been dropped due to my physical ability.
I like going to the golf course and hearing the sound of the ball going in the cup, but it took me a few years of consistently playing to realize that I enjoy the game more when I don't play that often. When I play too much, I tend to lose focus and play lousy. I just don't try as hard, because the score doesn't matter to me as much when I frequently play the same holes. The initial passion of a new hobby often keeps things exciting enough for many people to want to play more. But it takes longer to know whether the activity can be a lasting hobby or just an occasional pursuit.
It's easier to switch hobbies when you have a job. Switching hobbies is often expensive. Almost every new activity takes some start-up capital, much of which can be unexpected. When I first got into road biking, I knew about the costs of the bike and helmet. But that's just the beginning of the costs of being a road bike owner. The costs of a nice road bike alone can be thousands of dollars. Then, there are shorts with padding, chain lube, clipless shoes, pedals, pumps, tools to make bike adjustments and a stand. There was so much I needed to buy just to get the bike going, and then I needed water bottles to stay hydrated while I ride. And if you end up riding a lot, some of those bike parts, like the chain, wear out and need replacement.
I still love biking, and one of the main reasons is due to its incredible health benefits. But if I started after I retired, I don't know if there would be sufficient slack in the budget to try a new hobby like this. I might have missed out on a beautiful way to stay in shape and meet new people due to unexpected high costs.

Budget for ongoing costs. I'm still in the honeymoon stage with table tennis, but so far I like it. I know that unless I find a couple of friends and play at one of our homes, then it will cost about $50 a month to play at a club, plus money to replace the rubbers on the paddle that wear out every year or two. If I still love playing after getting into it more, then at least I know to factor these costs into my retirement budget. Retirement is unpredictable enough. There's no need to add more variables such as unexpected costs of new hobbies if I can help it.

Culled from US News

UK pension – Paul Barton and Averil Logan

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Our regular roundup of the latest pensions news. This month we look at changes to transfer rights, disclosure requirements for members accessing their benefits flexibly, VAT treatment of pension fund management services and proposed changes to automatic enrolment.

Transfer rights amended by Pension Schemes Bill

The Pension Schemes Bill has finished its stages through the House of Commons and is due to have its second reading in the House of Lords on 16 December 2014. The Bill brings in changes to legislation that are necessary to facilitate the defined contribution (DC) flexibility introduced under the Pensions Taxation Bill (see November’s Headlines).
The Bill’s key change is to extend a member’s right to transfer money purchase and cash balance benefits up until the point that they are used to purchase a pension (or are designated for drawdown) - thereby allowing such members to transfer at retirement to a more flexible DC arrangement. This easement will not be apply to members with defined benefits (DB), who – broadly as now – only have a right under the legislation to transfer their DB rights up to a year before their normal pension age, although schemes can choose to allow their members to transfer up until retirement.
Safeguards will be put in place to protect schemes against the cost of repeated requests to transfer:

• The member must have ceased accruing the benefits that they wish to transfer.
• The member will also need to take independent financial advice if they wish to transfer DB rights in order to access flexibility. Usually, the member will need to pay for this advice, but, in a welcome easement, where the employer meets the cost, the member will not be taxed on this provided certain conditions are met.

The Bill also introduces new definitions of scheme type with a view to implementing shared risk schemes and collective DC schemes.

Disclosure burden softened by Taxation of Pensions Bill changes

The Government has agreed to modify the proposed duties on members to disclose the fact that they have flexibly accessed defined contribution (DC) benefits under the new regime operating from April 2015.
When a member first accesses DC funds flexibly, for example by taking part or all of their fund in a scheme as a taxable lump sum, they must notify other schemes of which they are a member, within a set period. This is to ensure that those other schemes are aware that any subsequent contributions paid by or in respect of the member to DC arrangements will be subject to the reduced £10,000 annual allowance. There is an initial £300 fine on the member for failure to do so, with powers to levy fines daily for ongoing failure.
The original proposal would have required members to recall and inform all schemes with which they have pension savings within 31 days (see last month’s Briefing). The Government has now acknowledged this was unnecessarily onerous and has made two amendments. The first increases the timescale to 91 days and the second restricts the schemes that need to be informed to those in which the member is accruing DC or cash balance rights (i.e. an active member). The changes are due to be considered at Report Stage of the Taxation of Pensions Bill, but given that they are not politically contentious and are Government amendments, they are unlikely to be defeated.

Simplifying the auto-enrolment process

The Department of Work and Pensions (DWP) is consulting on changes that it says will make it easier for employers to continue using their defined benefit (DB) schemes to meet the quality test for automatic enrolment when contracting out ceases in April 2016.  
Employers using a non-contracted out DB scheme for auto-enrolment must satisfy the test scheme standard (TSS) in relation to that jobholder or a new ‘cost of accruals’ test. The optional new test will require a minimum contribution rate that will broadly represent the cost of providing TSS benefits – the principal version requiring that the cost of accrual is at least 10% of qualifying earnings but with limited variations for DB schemes that use a different definition of pensionable earnings.
The DWP is also proposing to reduce the amount of information that must be provided by the employer to its employees.  In particular, it has concluded that the requirement to send information to employees who are already active members of the scheme is of “little benefit to them or the employer”. Employers will not be obliged to change their existing processes.
The draft regulations will also enable employers to choose whether or not to automatically enrol certain categories of employees, namely:

• Those in a notice period
• Those who have chosen to leave their qualifying scheme within the previous 12 months
• Those who the employer has reason to believe have any form of lifetime allowance protection
• Former employees who are re-employed within 12 months of being paid a winding-up lump sum. 

The same options apply in relation to re-enrolment.
The consultation runs to 9 January 2015, with final regulations planned to take effect in April 2015.

VAT Treatment of pension fund management services

Her Majesty’s Revenue & Customs (HMRC) has published guidance on the VAT treatment of pension fund management costs following two rulings by the Court of Justice of the European Union; the Danish ATP case and the Dutch PPG case. The guidance raises the prospect of VAT refunds and VAT exemption but, in some cases, additional VAT costs. In both cases, the implications will depend on the scheme‘s VAT profile and its arrangements with the employer therefore any changes will need to be considered by their tax advisers.
Brief no.43 relates to the PPG case and sets out HMRC’s position on the extent to which employers can recover VAT on services relating to schemes they sponsor. HMRC will no longer differentiate between ‘general management’ costs and ‘investment management’ costs, having previously allowed employers to recover VAT only in relation to the former. They also confirm that former 70/30 split will disappear after a transitional period. Employers may now be able to recover all of the VAT on all types of service but only where the “services in question are supplied to the employer”. HMRC state that this is likely to be the case where employers are a party to the contract for the service, the service is provided to them and they pay for it.  However, there is a risk that none of the VAT relating to services will be reclaimable if HMRC’s conditions are not met. Consequently, employers and trustees will need to consult their tax advisers to review their current arrangements, decide whether retrospective VAT claims may be made and determine the most appropriate way to arrange for payment of services in future. HMRC has stated that it will provide further details in an updated version of VAT Notice 700/17.
Brief no.44 is concerned with whether defined contribution (DC) schemes qualify as Special Investment Funds for VAT purposes. It follows the ATP case in which it was held that DC schemes could be considered a ‘special investment fund’ and so management and administration services for these schemes could be exempt from VAT. HMRC has accepted that DC pension funds will be exempt if they are solely funded by the members, the members bear the investment risk, the fund contains several customers’ contributions and the risk is spread across a range of securities. The Brief leaves some questions unanswered and trustees of DC schemes and schemes with a DC element should consult their tax advisers to consider their position in the light of the HMRC’s statement.

Culled from Towers Watson

4 retirement resolutions worth keeping-Dave Bernard

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An elderly couple walk towards Limburg Cathedral (L) past the bishop's residence with the bishop's private chapel (R) in Limburg October 14, 2013. German Catholic bishop Franz-Peter Tebartz-van Elst, under fire for huge cost overruns on a luxury residence and alleged lying under oath, has flown to Rome to meet Vatican officials and possibly Pope Francis to decide if he can stay in office, a spokesman confirmed on Sunday. Tebartz-van Elst has caused a crisis in the German church for building a luxury residence and office complex at a time when the new pope is stressing humility and service to the poor. An initial audit of his spending, ordered after a Vatican monitor visited Limburg last month, revealed the project cost at least 31 million euros, six times more than planned. REUTERS/Kai Pfaffenbach (GERMANY - Tags: POLITICS RELIGION CITYSPACE)

As another year comes to an end it is once again time to take stock of the past 365 days. By now, resolutions we may have signed up for at the beginning of the year have either been realized, modified or forgotten, and it's time to make a new round of resolutions for next year. Here are a few ideas for worthwhile resolutions to get you started.
Review and consolidate services. Take a close look at your monthly expenses and consider how much value you are getting from them. At our house we noticed a steady increase in what we pay for cable TV service. Upon review, my wife and I agreed we did not need 300 channels to choose from, all of the premium channels or the land line that was part of the bundle. We trimmed down the bundle and are saving a few dollars. I have also paid between $30 and $50 per month for a gym membership since I graduated from college. I decided I could do what I need with a stationary bike and a few weights in the garage. I cancelled the membership and we are saving a few dollars more there. We also dropped our wine club membership after we found ourselves paying a hefty price for some wines that we did not really like. Now we just buy what we like. If you look closely you may uncover little adjustments to reduce what you pay for services without negatively impacting your lifestyle. Maybe you don't need three disks at a time from Netflix and can get by with two or one. Saving money is always a good way to start the year.
Make yourself smarter. People stay sharp on the job because they are challenged and forced to quickly react to situations. But once removed from the mix, where do we find the stimulation to keep us on top of our game? Those of us reaching retirement age know that if you do not use your brain you can begin to lose your edge. But you can counteract that by continuing to learn new things. You could decide to enroll in a local community college course that interests you. The grades don't matter when you are taking a class for fun. If you prefer the comfort of your home you can look at online courses. You can even work your mind via apps you download to your phone and use them to sneak in a little learning while waiting in line. For some people an old fashioned book club is the perfect venue to meet and share thoughts about popular literary works. My wife helps stay sharp conquering increasingly intricate jigsaw puzzles. There are lots of ways you can crank your brain up a notch.
Explore something entirely new. Recently I have watched a handful of movies about cooking and the life of a chef. I have always enjoyed eating good food and am now contemplating the cooking side as well. This year I plan to don a chef hat and try my hand at some creative cooking. And after viewing a wonderful course on French impressionist painters, I am starting to have an interest in giving painting a try, something I never would have imagined myself doing even one year ago. Some of us have passions that we were unable to pursue due to the requirements of a job and raising our family. Now in retirement we have the opportunity to revisit and explore overlooked interests.

Try to make an impact on someone's life. Many of us remember someone who had a positive impact on our lives. Perhaps there was a special teacher who inspired our extra effort, a coach who taught us the importance of working together or a particular author who changed the way we look at the world. Each of us has the ability to influence the lives of those around us. It does not necessarily require superhuman effort. Sometimes a little thing said or done at the right time is all it takes to make a difference. You might prefer to volunteer your time for a worthwhile charity or nonprofit organization. Or you could commit to making an extra effort at home to help family members. Then you will get to look back at the end of 2015 at the wonderful difference you made in someone's life.

Culled from Yahoo Finance

Pension cuts helped keep the government open, but they hurt many retired women-By Joann Weiner

Provisions to cut certain pension benefits are part of the newly-signed spending bill. (Joshua Roberts/Bloomberg)

 

On Nov. 14, the Pension Benefit Guaranty Corp. reported that 200 of the 1,400 multi-employer plans covering 1 million participants are at risk of failing within the next decade. The PBGC is worried about this because it becomes responsible for the pension obligations of these failed plans.
And it has its own financial problems, having just projected a  $42.2 billion deficit for fiscal 2014, a threefold increase from the $8.3 billion deficit predicted just one year earlier.
On Dec. 13, Congress agreed to allow trustees in these multi-employer pension plans to cut benefits so that the plans and the fund that insures them can remain solvent.
On Dec. 15, President Obama signed the $1.1 trillion spending bill that contains this amendment.
Rep. John Kline (R-Minn.), chairman of the Education and Workforce Committee, and retiring Rep. George Miller (D-Calif.), led the bipartisan effort on these reforms, saying that they would help prevent the collapse of failing plans and better protect workers’ retirement security. Randy G. DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans, said that these reforms give pension funds the tools they need to remain solvent. The joint business-union group had proposed many of these ideas in its “Solutions not Bailouts” plan.
Not everyone agreed. Sen. Ron Wyden (D-Ore.), chairman of the Finance Committee, criticized the “last-minute scheme worked out largely in private” for producing a “lopsided solution” that will result in rolling back “a major tenet enshrined in pension law – never take away money a pensioner has already earned.”
Karen Friedman, executive vice president of the Pension Rights Center, said: “We are furious that without debate Congress has placed the burden of rescuing underfunded plans on the people who can least afford it – retirees and surviving spouses who rely on their pensions for food, medication, and other necessities.“ The International Brotherhood of Teamsters criticized the way the changes happened, saying that the legislation represents “substantial changes to policies that have protected the pensions of workers for decades. It should not be changed through procedural manipulation.”
Previous pension reforms have left these vested benefits alone. Pensions for people who had worked long enough to become vested were considered untouchable. This protection had lasted primarily because the Employee Retirement Income Security Act of 1974 established that although plan trustees could cut benefits that workers hadn’t earned, they couldn’t touch the benefits that workers had already earned. ERISA also created the Pension Benefit Guaranty Corp.

Culled from Washington post

Why You Should Plan for a Longer Retirement Than You Think-Eric McWhinnie

Source: Thinkstock

Life is short, at least according to people who aren’t financial advisers. The financial industry typical recommends you save and invest for a retirement lasting several decades. This may seem too conservative at times, but the odds say you will probably have a longer retirement than you think.
How much money do you need for retirement? The answer depends on several factors, including living expenses, tax liabilities, and life goals. One of the most crucial and overlooked aspects of retirement planning is longevity. Every year you spend in retirement is a year filled with expenses — sometimes quite costly and unpredictable. If you fail to consider the monetary impact of a long retirement, you run the risk of running out of money and spending your so-called golden years in poverty.
Your chances of a long life should be front and center in the retirement-planning process. As you near the typical retirement age, the probability of you living for another decade or two is remarkably high, according to an analysis by JPMorgan Chase. Men age 65 today have a 78% chance of living another 10 years, while women have an 85% chance. Interestingly, the odds of a long life increase dramatically for couples. In fact, couples age 65 today have an astounding 97% chance that at least one of them lives another decade and an 89% chance that one celebrates their 80-year birthday. It almost comes down to a coin flip that at least one person in the relationship lives to 90.
Despite household spending peaking at age 45, retirement expenses are not exactly chump change. JPMorgan analyzed 1.5 million client households and found that spending averaged about $43,000 per year in the early years of retirement. However, due to health care spending, this amount increases about 15% from age 65 to 90 (excluding long-term care). If you plan to travel the world in retirement or provide college funding for grandchildren, your costs could be even higher.
You should plan on living to at least 90 years old or perhaps even longer, depending on your family history. Fidelity recommends assuming a lifetime of 92 years for men and 94 years for women. While more people are working beyond the age of 65, that doesn’t mean you should assume you will be able to do so. JPMorgan found that almost 70% of actual retirees left the workforce before age 65, primarily due to health problems or disabilities.

Culled from wallstreetcheetsheet

Police Pension Scheme: 3,000 retired cops screened in Makurdi -By Peter Duru

As part of efforts to eradicate fraud in the administration of the Police Pension Scheme, over 3,000 retired policemen have been screened in Makurdi, the Benue State capital, to ascertain their eligibility to benefit from the newly introduced Defined Benefit Scheme, by the Federal Government, for paramilitary services in the country.
The verification and screening exercises which also involved the capture of the biometric data of the retired officers were carried out by officials of the Pension Transitional Arrangement Directorate, PTAD.
Director General of PTAD, Mrs. Nellie Mayshak who spoke to newsmen yesterday at the venue of the exercise, said that retired from Nasarawa, Plateau and Benue States were involved in the exercise ahead of the commencement of the new scheme.


Culled from INigeria

Auto-enrolment: What's the new pension plan? -Jasmine Birtles

TV money expert Jasmine Birtles talks about the revolutionary changes

Fancy free money from the government and your bosses?
That’s what is on offer next month as we are all encouraged to make sure we have a decent company pension.
Those TV adverts with Nick Hewer from The Apprentice and Theo Paphitis from Dragons Den are putting out the same message.
So if you work for a big company, from October 1 you may find you have less in your pay packet but a little more to put away for your future.
That’s because the largest UK firms will have to put all of their employees into a company pension if they are not already in one.
So whether you are a builder or a supermarket cashier, if your firm employs more than 120,000 people they will have to put you into their scheme.
It’s called “auto-enrolment” and over the next five years the scheme will be extended to cover everyone. Pensions minister Steve Webb says: “If we can get 7.5million people into an employer contributory scheme that will be incredible.”
The next phase comes at the the end of 2013 when firms with 50,000-119,999 employees are included. And everybody else has to be offered a pension by April 2015.
 
SO WHAT IS AUTO-ENROLMENT?
IF you are 22 or over, and you earn more than £8,105 a year, you will be automatically enrolled in your company’s pension scheme.
About 3% of your salary will go into the pension every year (rising to at least 4% by 2018).
Your employer will have to add cash to your fund too (1% of your gross salary to start with, then up to 3% by 2018) and the government will add the tax you would have paid.
You can opt-out if you want but I wouldn’t if I were you.
Unless you are close to retirement and would be better off living on benefits, pretty much everyone is better off with a company pension.
WHY SHOULD I JOIN MY FIRM’S PENSION SCHEME?
TWO reasons that I see: 1) You will develop a retirement fund without putting in any effort yourself.2) You basically get free money from your employer and the government.
Of course, company pensions are not foolproof. If the pensions company your employer works with invests badly, you could still lose money. But most people are much better off when they retire if they have been putting money into a pension.
I’M AN EMPLOYEE... HOW MUCH DO I HAVE TO PAY?
TO start off with you must pay 3% of your gross salary (the money you get before the tax and National Insurance is taken out). By October 2018 that will go up to reach 5% of your salary.
HOW DO I OPT OUT?
JUST tell your employer that you don’t want to be in the company scheme and they won’t put you in it.
They will probably be relieved because it will mean they don’t have to pay into it either.
Your employer will also have a duty to automatically enrol you into the scheme every three years, so if you really don’t want to join, make sure you keep an eye on this.
If you opt out, do it for the right reasons. If you’re already putting money into a pension or other investments and you don’t think much of the company pension, fair enough.
But if it’s just because you want to spend the money now, then stop yourself. You need to put money away for your future because the state is less and less able to look after you.
I’M AN EMPLOYER... HOW MUCH DO I HAVE TO PAY?
INITIALLY, 1% of your employee’s gross salary, rising to 3% by 2018.
If you have a small business you won’t have to do anything until April 2015. But after that, even if you just employ a nanny or a gardener or a carer, you will have to provide some sort of pension for them.
It must be one approved by the government for auto-enrolment. You can find out more about this online at thepensionsregulator.gov.uk
WHY HAVE THEY STARTED AUTO-ENROLMENT?
BASICALLY, it’s because we’re all living a lot longer than we used to, and the State can’t fund all of our retirements any more.
Meanwhile, the number of people saving in workplace pension schemes has dropped to its lowest level since records began almost 60 years ago, with just 2.9million workers currently enrolled, according to the Office For National Statistics.
You are likely to live for at least 20 years after you retire and you’ll need money to keep yourself going... and to have a fun time!
Australia, New Zealand and some European countries switched to auto-enrolment about 10 years ago and it means that millions of their workers are already building up nice retirement pots for themselves. That’s what our government wants us to do, too.
Most of us don’t put anything like enough away to look after ourselves when we retire but if we let our employers do it we’re more likely to keep saving regularly.
Auto-enrolment should be particularly helpful for women because they tend to save less than men for their retirements, even though they ­generally live longer.
Mothers are particularly bad at investing for themselves because they will usually spend money on their families before they look after themselves.

Culled from the Mirror

Nigeria: Lagos to Offset Pension Arrears- Ekene Okoro

Lagos — Lagos State Governor, Babatunde Fashola, at the weekend reiterated his administration's commitment to offset outstanding pension liabilities of 142 per cent.
The governor gave the assurance at the 2014 Pen Down Ceremony in honour of 13 retired permanent secretaries, held at the Adeyemi Bero Auditorium, Alausa, Ikeja, Lagos, last week.
According to the governor, despite the fact that the Federal Government imposed the outstanding pension arrears on the state, it would be catered for in the state's 2015 budget, to demonstrate its commitment to the wellbeing of retirees in the state.
Fashola, who was represented by his deputy, Mrs. Adejoke Orelope-Adefulire also promised that government would reduce the bottlenecks often encountered by retirees in accessing their pension benefit before the expiration of his tenure.
He said that the Lagos State Government was adjudged the best operator of the Contributory Pension Scheme in July 2014 during the 10th anniversary of the commencement of the scheme.
"I wish to state that from these and other notable programmes, our government is quite receptive to retirees in view of its appreciation of their selfless services, especially during their most active period in life", the governor said.
Commending the 13 retirees for serving the state meritoriously, Fashola lauded them for contributing their quota to the socio-economic and political development of the state.
You served and helped the government implement its programmes and policies aimed at creating a new and better Lagos. I must say that the state will not forget these worthwhile efforts but will continue to relish your mentorship, experience and wise counsel for a long time," he said.

Culled from AllAfrica.com

The Beauty of the New Pension Scheme -Odunze Reginald

orelowitz.co.za

In May 2001, Engineer Mike Agboola  retired as the chief Engineer of  Deck Engineering services Ltd. As at that the time Agboola was retiring he was full hope, aspiring into the next phase of his life as a senior citizen, He quickly rushed to the schedule officer, who has been handling pension issues in the company. The schedule officer referred him to the authorities concerned, on reaching Agboola discovered that his name was not in the master list , the schedule officer has misappropriated the money, an order was issued for his immediate arrest but before they could muster the necessary documents to get hold of him, he has escaped and find his way to a foreign country. Engineer Agboola was left without any pension, the family of 5 were in serious dire need of the basic things of life, coupled with Agboola first son who was completing his medical course.

Engineer Agboola died few years later, a dissatisfied man, the son had a negative picture of the state of the Nigeria economy and pensions, but with the help of relatives, he was able to complete his medical profession. and eventually found his way outside the shores of Nigeria,  practicing  his medical profession and any time he remembers his father, he vowed that he will not put his services to the country.

These were the state of pension in Nigeria prior to the 2004 Pension Reform Act. But all that have change, the pensioners in this new scheme are happier , able to access their money as at when due as the objective of the scheme in 2004 as in enshrined  Section 2 subsection a, b and c

(a) ensure that every person who worked in either the Public Service of the

Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due:

(b) assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age: and .

(c) establish a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the Public Service of the Federation, Federal Capital Territory  and the Private Sector.

And   in Pension Reform Act 2014, the objective under section 1 subsection a, b,c and d

(a)establish a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the Public Service of the Federation, Federal Capital Territory , state Government, Local Government  and the Private Sector.

(b)Make provision for smooth operation of the pension scheme.

       (C) ensure that every person who worked in either the Public Service of the

        Federation, Federal Capital Territory or  public service of the State Government , or the public service        of the Local Government and Private Sector receives his retirement benefits as and when due:

       d) assist improvident individuals by ensuring that they save in order to cater for their   livelihood during old age.

From the objectives of the scheme it should be noted that the basic objective is to receive your retirement benefit as at when due, anything short of that, may not augur well to the pensioners.

And when this is achieved, the pensioner desires and aspirations are achieved, no matter how small the benefit may look, it tend to make the retiree live longer and happily.

 

Culled from reginaldodunze.blogspot.com(REGINALD ODUNZE.COM)

Demographic Changes Threaten Pensions-Steven Greenhut

New report: There eventually will be more retirees collecting pension checks than there will be employees paying into the system

In a 2011 profile about California's ongoing fiscal mess, Vanity Fair interviewed San Jose's then-Mayor Chuck Reed, a progressive Democrat who has for years been warning about coming cuts in public services if the state's pension systems don't get benefit levels under control. Reed did the math and the picture wasn't pretty.

"By 2014, Reed had calculated, a city of a million people, the 10th-largest city in the United States, would be serviced by 1,600 public workers," according to the piece. "The problem was going to grow worse until, as he put it, 'you get to one.' A single employee to service the entire city, presumably with a focus on paying pensions."
Pension activists still refer to Reed's "joke," but it wasn't really a joke and it's certainly not funny. Defenders of the current pension system accused Reed and the state's pension reformers of overstating the problem.
But while San Jose and other cities will never literally reach a single employee who sits in the room mailing out pension checks, the trajectory is headed in that troubling direction. One city manager even quipped to a newspaper a few years ago that cities are becoming pension providers that offer a few public services on the side.
Now even the California Public Employees' Retirement System, the nation's largest pension fund and one of the state's most adamant opponents of pension reform, released a report in November that bolster's Reed's case. Its key finding: There eventually will be more retirees collecting pension checks than there will be employees paying into the system. This is a nationwide trend in public-pension systems, and one that's tough to ignore.
"A pension plan in its infancy will have a very high ratio of active to retired members," according to the report. "(T)he ratio for CalPERS has dropped from just above two (active members) to just below 1.5 over a 10-year period. … (T)hese ratios are also expected to continue dropping over the next decades until they reach a floor somewhere between 0.6 and 0.8."
That means more people will be receiving money from the system than putting it into it, thus challenging CalPERS' ability to fund retirement promises. It could lead to a further reliance on risky Wall Street investments to make up for the shortfalls and continued increases in the contribution rates CalPERS assesses to participating agencies. Cities will be pushed to raise local taxes or cut back services.
Local agencies already are reeling from recent rate hikes. "For many plans, the contribution rates have never been as high as they are now," according to the CalPERS report. These agencies already pay 30 percent to more than 50 percent of each employee's salary into the retirement system. This is a big chunk of cash.
Public employees receive defined-benefit pensions guaranteeing them a payout based on a formula. The agencies they work for contribute into a pension fund, which invests the money. The funds, such as CalPERS, predict a rate of return. Higher returns on these investments reduce the size of the debt, whereas poor returns create a bigger "unfunded liability" problem.
"This is just another indicator about the unsustainability of the pension promise," said Dan Pellessier, president of California Pension Reform. This information doesn't change the size of the liabilities, he notes. But it does affect the money flowing into the system to pay off those liabilities. There will be fewer active employees to help CalPERS dig out of its hole.
"CalPERS is finally demonstrating some fiduciary responsibility in better describing the magnitude of its problem," Pellessier added. Nevertheless, the big question is what the agency plans to do about it. CalPERS has been meeting its investment targets, yet these and other demographic changes point to deep trouble any way.
Legislative leaders are unlikely to tackle this issue when they return to the Capitol given their political leanings. For years, it's been easy for them to depict Reed's and other reformers' warnings as hyperbole, but it's going to be much harder for them to ignore CalPERS' latest findings.

Culled from Reason.com

Is that phone call a scam? -James Andrews

There's been a huge increase in the number of people offering 'free pension reviews' - but which are from criminals and which are real? Here's how you can tell

Is the text legit? Here's how to tell

With millions of people now enrolled by their bosses into private pensions schemes - and millions more with schemes of their own - scammers are taking advantage and cashing in.
New rules mean everyone will get free pensions advice when they hit 55, but criminals are getting in early, promising hard up Britons a way to access that cash now or offering to move your money into "investment opportunities" that will see your savings grow far faster.
These scams frequently turn out to be unregulated, high-risk or bogus investments that can see you lose your entire life savings.
Those being enticed to access pensions as a lump sum or loan before age 55 get hit with huge tax penalties and sky high fees from conmen.

So how can you be sure the person on the other end of the line is legit?

We asked  Steve Hyndman, head of financial crime prevention for Phoenix Group, for his five tops to spotting the criminals:

1. Be careful of urgent deadlines. If you're being asked to hit a deadline, something suspect is probably going on. Being pressured to make a decision quickly may increase the chance of making a poor decision.
2. Is this how the company usually contacts you? Would your pension provider really text you about fraud? Think about whether it's sensible for the company to make contact in that way.
3. Do you need to pay upfront? You should never have to pay to access funds due to you.
4. If it sounds too good to be true…it probably is. Sometimes an offer may be framed in a way that will not arouse suspicion. Think very carefully about the risks.
   
   Culled from Mirror

Retirement Portfolios: Adding Crucial Alternatives -Blackrock

We've all heard about the wisdom of not putting all your eggs in one basket. In traditional investment theory this means holding a range of different kinds of assets in your retirement portfolio.
If you hold fewer securities, there is a greater risk that a decline in one of them could adversely affect your whole portfolio. By diversifying your holdings into assets that may perform independently of each other in different markets, you spread out the risk, or volatility, of the overall portfolio.
Investing in assets with different cycles of performance is aimed at preventing "positive correlation," or the risk that your assets move in tandem and perform similarly. Traditionally, asset classes such as stocks and bonds would be negatively correlated, meaning they generally have moved in opposite directions and provided returns accordingly.
But following the 2008 financial crisis and the subsequent low-interest-rate environment, asset classes that used to provide diversification have been exposed to many of the same factors that push them in similar directions.
But you can still diversify by considering what's called "alternative" investing, which involves a wider range of strategies which were, until recently, mainly available to institutions and very wealthy investors.

Alternative investing is based on the premise that it's possible to buy a basket of investments with different risks that may perform independently of each other. These could include assets such as commodities, or involve strategies that aim to take advantage of differing economic outlooks in various parts of the world.
This kind of diversification seeks to provide alternative sources of capital growth and income with low correlations to public markets. Gaining access to such liquid alternatives is now possible for the average investor through mutual funds and exchange traded funds.
This gives more investors the opportunity to move away from the traditional stock/bond makeup of the typical retirement portfolio.

Culled from investopedia

6 things the rich get an advantage on-David Ning

Getty Images

The Federal Reserve has been accused of helping the rich more than the poor with its economic stimulus policies, but the wealthy have opportunities to make more money than the average person no matter what the Fed does. Here are seven ways you can get a better deal if you have money.

The rich can choose to lower their tax rate by saving more in retirement accounts. Retirement account contribution limits are pretty generous, with many people being eligible to contribute $18,000 per person to a 401(k) and $5,500 to a traditional or Roth IRA in 2015. A couple who maxed out both of these accounts could defer taxes on $47,000, and even more if they are age 50 or older. The only problem is that most people don't have the funds to contribute this much to their retirement accounts every year. Higher income folks don't have this problem, which means they can lower their tax rates at will by choosing to put a little more cash into a retirement account instead of a taxable account.
If you have enough wealth to retire early, you can further minimize taxes by doing a Roth conversion. The wealthy might be able to accumulate enough assets in an IRA to retire early. When you convert traditional IRA assets to a Roth account, you pay taxes on the amount you convert at your current tax rate. If you do the conversion in a year when you aren't working, you can pay a very low tax rate or even no taxes on a portion of the conversion. And then you won't have to pay taxes on that money again, and can even leave it to heirs. For some wealthy investors, a Roth conversion during early retirement is an opportunity to avoid or significantly reduce taxes on thousands of dollars.
Getting a loan becomes cheaper as you get wealthier. Investors with significant financial assets can borrow money at a lower cost than less wealthy households are getting for their loans. Everything is negotiable, and financial institutions are often willing to lend money to clients at a lower rate when they maintain a higher balance at their firm. The more money you have, the better loan terms you can get. The hope is that the company can make money off of your assets in other ways if you keep the money with them.
You can take advantage of sign up bonuses from financial institutions that want your money. With fierce competition, many firms are offering cash to clients who transfer assets to them. Essentially, you are being paid to invest with a specific financial institution. Those with assets in brokerage accounts can move money from one firm to the next, wait until the required holding period ends and then make a move again to grab more money.
Being able to delay Social Security benefits until age 70 is only possible if you have the money to last until then. Electing to receive Social Security starting at age 70 is one of the most financially beneficial moves most people can make to ensure they won't run out of assets in retirement, but you need to have enough assets to survive until 70 to pull this off. For many people, delaying Social Security benefits until age 70 isn't an option, even if they believe they are going to live until 100. You need to have other sources of retirement income or be able to work until 70 in order to make this optimal financial move.
The wealthy may be able to eliminate emergency funds with very low interest rates. Having cash reserves to deal with emergencies is a good idea, but people with assets may not need one at all. That's because most emergencies can be dealt with pretty easily. First, there's cash flow via wages, dividends and interest. Then, the rich can use up to their credit card limit, which is essentially a free loan as long as you can pay it off by the payment date. Just these two sources can deal with just about every event that can come up. Plus, richer folks have equity and investment portfolios, both of which give them access to credit lines such as home equity and portfolio backed loans at very good interest rates. So, there's no need to tie up any of their cash in savings accounts or CDs paying less than 1 percent interest.

The wealthy are at an advantage, but the beauty is that leaning to invest like the wealthy can help you to get ahead. For example, if your taxable investments are earning income, you can use that for your expenses and shift more of your earned income to your retirement accounts. The key is to earn a good living, save and invest consistently. Let time do the rest.

Culled from Yahoo finance