Rate Hike Is Milestone for Retirees-Mark Miller

Caspar Benson—Getty Images

Good news for seniors who rely on bonds, certificates of deposit and money market funds to generate income.

The interest rate hike announced today by the Federal Reserve is a major milestone for retirees, who have been caught between a rock and hard place ever since the Great Recession, with zero interest rates and higher-than-average inflation.
The Fed’s quarter-point hike in the benchmark federal funds rate is the first in nearly a decade, and it could mark the start of something good for retirees, who rely on bonds, certificates of deposit and money market funds to generate income.
Rates on these instruments have been near zero – and often negative after inflation – throughout the post-recession era.
Low interest rates have gone hand-in-hand with low inflation. However, inflation is higher for seniors, due mainly to the disproportionate impact of ballooning healthcare costs.
From 1985 to 2014, an experimental inflation measure of senior inflation (known as the CPI-E) ran 5.1% higher than what is reflected in the broad Consumer Price Index. according to research by J.P. Morgan Asset Management.
Today’s move will not ease the pain. The higher short-term rate already has been priced into the bond market and is not expected to boost interest rates on products like money market funds or certificates of deposit.
And the Fed signaled that it will be cautious about boosting rates further. If rates were, in fact, to rise in the neighborhood of 100 basis points over the next year, and if longer-term bond rates moved in lock step, seniors would get some relief.
“They’ve been earning zero on their cash, so seeing short-term rates move off of zero certainly is good news,” said Scott Thoma, investment strategist at Edward D. Jones & Co.
“No one is saying ‘all clear’ on a secular long-term rise – and rates can stay lower longer than most people think,” adds Tom Anderson, a wealth manager at Morgan Stanley and the author of “The Value of Debt in Retirement.”
Inflation Issues
A key issue for retirees is whether inflation is heating up. The Labor Department said this week that the Consumer Price Index advanced 2% over the past 12 months, and it was up 0.2 in November, the third consecutive month inflation rose by that margin.
If the trend continues, seniors can look forward to a cost-of-living adjustment (COLA) in Social Security benefits for 2017 after getting no raise for this coming year. The latest Social Security trustee report forecasts a 3.1% COLA next year.
Even if seniors are able to sock money away in CDs or money market funds with slightly better yield, inflation will take its toll. “If you are earning 1% and inflation is 1.5%, that’s no different than earning 1.5% if inflation is 2%,” notes Greg McBride, chief financial analyst for Bankrate.com.
On the other hand, significantly higher interest rates over the next year also could make long-term care insurance and some types of annuities more attractive, since insurance companies look to bond market returns as a key element of pricing.
Long-term care policy premiums have spiked dramatically in recent years, due in part to the near-zero interest rate environment. A 1 percentage point rise in long-term interest rates generally translates into a decline in policy premiums of about 10%, according to Al Schmitz, a principal and consulting actuary at Milliman, a consulting firm that works with insurers.
Significantly higher rates also could boost payout rates for income annuities, which are priced based primarily on a buyer’s life expectancy. But interest rates also play an important role.
Experts have long argued that immediate annuities (or single premium income annuities) and deferred income annuities should play a bigger role in the arsenal of financial products for retirees, since they provide guaranteed income for life. But a near-zero interest-rate environment has depressed payout rates.
Yet recently updated industrywide mortality projections reflecting greater longevity estimates could counteract any improvement in annuity pricing due to higher interest rates.
“The whole thing could wind up being a wash,” said Stan Haithcock, an independent agent who specializes in annuities and writes about them under the moniker “Stan the Annuity Man.”

Culled from Money/Reuters

10 retirement resolutions for 2016 - By Emily Brandon

Thinkstock

We all know we should be saving more for retirement. It's common knowledge that increasing our retirement savings by a percent or two will help us to be better prepared for retirement. But in addition to saving regularly, here are some ways to improve your retirement finances in 2016.

Plan for a long retirement. While you need to protect your savings as you approach retirement, you will also continue to need growth over several decades. "At retirement, you're likely to live 30 years or more, or your spouse will," says Jane Bryant Quinn, author of "How to Make Your Money Last: The Indispensable Retirement Guide." "Money you don't expect to touch for 10 years or more should be invested for growth -- preferably in broad-based stock mutual funds or exchange-traded funds."

Avoid emotional attachments to investments. Strive to be logical when making investment decisions. Don't make changes to your portfolio because you are scared of a potential negative outcome or when a friend recommends a hot tip. "Resolve to rebalance your investments without emotion. If a fund in your account has gone down in value, think of it as buying on sale instead of losing money," says Liz Davidson, CEO of Financial Finesse and author of "What Your Financial Advisor Isn't Telling You: The 10 Essential Truths You Need to Know About Your Money." "You want to buy mutual fund shares when they're down in value. That's the concept behind buying low."

Prepare for the unexpected. When you retire may not be within your control. Many people retire ahead of schedule due to unforeseen events. "Boomers are often blindsided by a merger and resulting layoffs, by a health condition of a parent, partner or even themselves, by an adult child's or their own divorce," says Phyllis Moen, a sociology professor at the University of Minnesota and author of "Encore Adulthood: Boomers on the Edge of Risk, Renewal, and Purpose." "Plan for change. In other words, have several alternative scenarios and expect the unexpected."

Find a fiduciary. If you plan to seek financial advice, make sure the professional you work with is a fiduciary. This means that the financial advisor is required to provide advice that is in your best interest, not the investments that produce the highest commissions for the advisor. "Find out if his or her income depends on the products you buy," says Teresa Ghilarducci, an economics professor at The New School for Social Research and author of "How to Retire with Enough Money: And How to Know What Enough Is." "Choose a fee-only investment adviser, meaning that the decisions that you make don't affect his or her income."

Pay off debt. Aim to eliminate as much debt as possible before you retire. Paying off your mortgage will significantly reduce your monthly housing costs and make it easier to get by with less retirement income. "It helps eliminate the risk of a rental increase," Ghilarducci says.

Open a MyRA. If you don't have a 401(k) account at work, consider doing some of your retirement saving in America's newest retirement account: the MyRA. The money you deposit in this Roth account is guaranteed by the government never to lose value and earns a variable interest rate that was 2.31 percent in 2014. However, once you hit the maximum balance of $15,000, your money will be transferred to a private sector Roth IRA.

Create a my Social Security account. There's no need to wait to get your paper Social Security statement in the mail. You can check your recorded earnings and taxes paid at any time by setting up a my Social Security account at ssa.gov/myaccount. This tool will also give you a personalized estimate of your benefit payments at various claiming ages or if you become disabled in the coming year.

Avoid gaps in health insurance. Even a short gap in health insurance coverage can result in a huge medical bill if you become injured. If you don't qualify for group health insurance through your job, look into the benefits you qualify for through your state's health insurance exchange. You can also sign up for Medicare beginning three months before your 65th birthday.

Coordinate with your spouse. Make sure that your retirement savings will last throughout both of your lifetimes. "Often, widows are left with insufficient income," Quinn says. "When projecting your future income and expenses, work out the numbers for all three of the following scenarios: You both live to 95, your spouse dies first and you live to 95, you die first and your spouse survives to 95 or even 100."

Consider pushing back your retirement date. Delaying retirement for even one year can dramatically improve your retirement finances. "Stay at work longer if you can," Quinn says. "If you do, three wonderful things happen: You'll have more current income, you'll keep adding to your retirement savings plan and you can put off taking Social Security benefits."

Culled from US News

Here's How Much the U.S. Middle Class Has Changed in 45 Years-By Victoria Stilwell

They're now outnumbered by the richest and poorest

In the age of rising income inequality, the task of preserving America’s middle class has been taken on by politicians across the ideological spectrum. A new report from Pew Research Center shows just how much the economic fortunes of this group have changed since the 1970s.

In every decade since then, the percentage of adults living in middle-income households has fallen, according to Pew, which is based in Washington. The share now stands at 50 percent, compared with 61 percent in 1971.

This matters because  the "state of the American middle class is at the heart of the economic platforms of many presidential candidates ahead of the 2016 election," Pew researchers Rakesh Kochhar and Richard Fry wrote in their report. Meanwhile "a flurry of new research points to the potential of a larger middle class to provide the economic boost sought by many advanced economies."
Pew defines a middle-class household as one having income that is two-thirds to double that of the overall median household income. A family of three, for instance, would need to have a minimum income of $41,869 to qualify as middle-income.

Here’s more data on how America’s middle class has morphed over the last few decades:

They're no longer the majority

Being a member of the middle-class has long been treated as an American badge of honor. However middle-income households have lost their majority status in the U.S, with the size of their counterparts on opposite ends of the income spectrum overtaking them in number.

View gallery

.

Some 120.8 million adult Americans lived in middle-class households this year, according to Pew. That’s slightly less than the combined number of upper-income adults (51 million) and those at the lower tier (70.3 million).

Their income gains are smaller

While households across the spectrum have seen higher earnings over the past several decades, upper-income households have seen their pay rise the most.

View gallery

Thinkstock

The median income of those families was $174,625 in 2014, up 47 percent since 1970, Pew data show. That compares with a 34 percent gain for the middle class and a 28 percent increase for the poorest households.

View gallery

.

Households of all income levels got hit hard during the recession, resulting in earnings declines between 2000 and 2014.

Blacks are least likely to be middle-income

Blacks are less likely to be part of the middle class than any other racial or ethnic group, the Pew report finds. Some 45 percent of black adults were in the middle-income tier, down 1 percentage point from 1971.
One positive note is that blacks are the only major racial group to see a decline over that time frame in their share of adults who are low-income, which is down to 43 percent from 48 percent. Still, that percentage is the highest of the ethnic groups, alongside Hispanics.

View gallery

.

White Americans are the only racial group where a majority is in the middle class, though their share fell to 52 percent this year from 63 percent in 1971.

Their piece of the pie is shrinking

The middle class holds 43 percent of U.S. aggregate income, the smallest share in Pew’s data back to 1970.

View gallery

.

Almost half of aggregate earnings in the U.S. is now commanded by the wealthiest families, who are "are on the verge of holding more in total income than all other households combined," Kochhar and Fry wrote. "This shift is partly because upper-income households constitute a rising share of the population and partly because their incomes are increasing more rapidly than those of other tiers."

Culled from Bloomberg.com

You may need less retirement income than you think-By Robert Powell

New research calls the venerable 80% income-replacement rule into question

Thinkstock

New research indicates that retirees—especially in higher income brackets—might need to replace less of their pre-retirement income than they think.

Financial planners have long suggested that individuals replace 80% of their income in retirement from various sources to maintain the same standard of living they had while working.

But in a recent article in Research magazine, Michael Finke, a professor at Texas Tech University in Lubbock, notes that the rule doesn’t necessarily reflect how a person’s income grows while he or she is working — nor how expenses change and even decline in retirement. What’s more, the guideline focuses on gross income rather than take-home pay.

Consider: In retirement, you likely no longer contribute to social security medicare and your retirement account. That means your replacement rate is down to no more than 77% of your final year’s salary — or 60% or less if you use average lifetime income, Finke says.
If you subtract other expenses — commuting and a lower federal income-tax bill (assuming you’re in a lower tax bracket in retirement than you were in your working years) — the replacement rate falls lower still.
“The 80% rule is wrong because it’s too simplistic,” Finke says. “Most of us don’t want to replace our gross income. We want to replace our paycheck.”
The guideline, he adds, is especially distorted for high-income Americans.
“The highest 20% of earners aren’t even spending half of their gross income,” he says. “So if you think they need 80% of their gross income, then they’d have to spend more in retirement than they’d ever spent during their working years — and this doesn’t sound like a good life plan.”

So, what’s a better way to figure out how much income you need?

First, if you’re at, or very near, retirement, you can use your actual target consumption, says David Blanchett, head of retirement research at Morningstar Investment Management, a wholly owned subsidiary of the Chicago-based fund-research company Morningstar Inc. For those still several years or more from leaving the office, the key is pinpointing what specific expenses will change at retirement and adjusting one’s replacement rate accordingly. “A household that is saving 20% of their pay, for example, in a 401(k) needs to replace a lower percentage of their final pay than one saving only 5% because they are used to living off less,” Blanchett says.

Finke adds: “Most of the wealthiest retirees don’t spend down their money at all. This means that if they didn’t want to give it to their kids they could have had a lot more fun when they were younger.”

The story “How much retirement income will you need? Maybe less than you think” first appeared on WSJ.com

Culled from MarketWatch

The Rationale for the Pension Reform Act- Odunze Reginald C

The origin of pension’s dates back to ancient time, the Holy Bible in the book of Numbers 8 vs. 25, stated “but at the age of fifty, they must retire from the regular service and work no longer” and according to King James version, it states” And from the age of fifty years they shall ceased waiting upon the service thereof and shall serve no more”

Why then do people view retirement as a wreck, the reason is that they have not save enough to cater for retirement during old age. There is a strong connection between planning, enough pension pot(Retirement Savings Account balances) and happy retirement.

And according to Robert Kiyosaki, in his book Rich dad, poor dad, he noted that “people work for two reasons, to save for retirement and to make lots of money” Continuing Kiyosaki noted that “an individual’s reality is the boundary between faith and self confidence, and a person’s financial reality will not clear until he or she go beyond the fears and doubts of his or her own self imposed limits. Those self imposed limits are what limit the retiree from enjoying a happy an successful retirement

Pension is an important issue, as a time will come when you will longer be able to  work, at that time , you fall back on your pension .

What is pension?  According to Wikipedia “A pension is a fixed sum to be paid regularly to a person, typically following retirement from service. There are many different types of pensions, including defined benefit plans, defined contribution plans, as well as several others. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.”

Continuing Wikipedia noted that” The terms retirement plan and superannuation tend to refer to a pension granted upon retirement of the individual. Retirement plans may be set up by employers, the government or other institutions such as employer associations or trade unions. Called retirement plans in the United States, they are commonly known as pension schemes in the United Kingdom and Ireland and superannuation plans  in Australia and New Zealand.

A pension created by an employer for the benefit of an employee is commonly referred to as an occupational or employer pension. Labor unions, the government, or other organizations may also fund pensions. Occupational pensions are a form of deferred compensation, usually advantageous to employee and employer for tax reasons. Other vehicles (certain lottery payouts.

The common use of the term pension is to describe the payments a person receives upon retirement, usually under pre-determined legal or contractual terms. A recipient of a retirement pension is known as a pensioner or retiree

The following are the rationale for the Reform

Most public sectors schemes are unfunded

Unsustainable pension liabilities

Weak and inefficient administration of the scheme in both private and public

Aging make defined benefit scheme unsustainable

Many workers in the private sector were not covered by any form retirement benefits arrangement

Existence of diversified arrangement which were largely unregulated in the private sector.

There was also mismanagement fund, corruption and large scale misappropriation of public fund

There were no organized data base of  the pension contributions

The idea of enacting the pension reform act 2004 came up when the committee set by the federal government in conjunction with bureau of public enterprises’ on the sale of NITEL and NEPA. Discover that the foreign buyers could not price it effectively because of huge pension liabilities. Because one question they continuously ask is are you operating define benefit scheme or define contribution scheme.

The committee to the presidency and the result was formation of a committee to look into ways of reforming the pension scheme. The result was the pension reform act 2004 this has been amended as Pension Reform Act 20I4.

Odunze Reginald is the Lead Consultant, Chareg Consulting, a management and marketing  consultant  a social media and social marketing consultant , you can visit our twitter anchor @regydunze, find us on Facebook @ Reginald odunze and reginaldodunze.com, at google+ @ Reginald Odunze and at Linkedin@reginald odunze.

How technology will transform retirement - By Joseph F. Coughlin

.

For the next generation of retirees, the question that will trump all others will be a simple one: How do you add life to longer lives?

As people live longer, and spend more time in retirement, the challenge will be to get more out of those years. How do you find a rewarding second career? How do you stay close with friends and family? How do you maintain independence and mobility? How do you embrace new experiences?
The equally simple answer: technology.
The next-generation retiree will have an unprecedented array of technologies and tech-enabled services to invent a new future for working part time, remaining social, having fun, living at home, staying healthy and arranging care.
Many of the solutions will be driven by the “Internet of Things”—where household objects can use Internet connections to think, talk and communicate with one another, enabling an entirely new on-demand service industry for older adults. Kitchen appliances will monitor a person’s diet and relay that information to a doctor. Older people will order up services they need to handle chores that have become too difficult, everything from housecleaning to car rides. Even clothing will connect people to a larger network of services that will monitor, manage and motivate them well into older age.
This new world of retirement will come with plenty of challenges—among them, costs and possible loss of privacy. But if the challenges can be met, these innovations could transform retirement into a new and vibrant period of life that is about living better as much as it is about living longer.
Here’s a closer look at some of the innovations.
STAYING ON THE JOB
Retirement was once a clear line between work and not working. Today, a career may be completed, but work is not over. Recent AARP research suggests that nearly four out of 10 baby boomers are planning to work in retirement. Some over-50s report that they plan to work until they drop. These days, that’s easier hoped for than done. Not only do older people battle the preconceptions of bosses and co-workers about older workers, but they also face a rapidly changing work environment that demands new skills. And they’re often forced to think of work in a new way, as a series of contract projects rather than a regular job.
Now technology is offering new options and flexibility. Telecommuting isn’t a new idea, but it’s crucial for retirees who want the freedom to accept whatever opportunities suit them without disrupting their lifestyle. With smartphones and tablets, the newly retired can be productive from home, beachfront or grandchild’s playground.
The Internet also frees retirees from having to seek out colleges to brush up on job skills. Massive open online courses, or MOOCs, let retirees learn what they need to stay competitive or enter a new field.
The available training isn’t just for work skills. There’s also help available online for retirees who want to practice their interview technique. Artificial-intelligence-based coaches will help retirees test themselves with a variety of virtual interviewers. An avatar will shoot tough questions their way, readying them for an interview with a potential boss who is younger than their own children.
All of that applies to retirees who will want to seek out a traditional professional job behind a desk. But the Internet is also opening up options for retirees who don’t want to be confined to an office, who want a sort-of retirement. Consider peer-to-peer companies, which let people connect with other people to order services. It often doesn’t take special training or experience to hire oneself out to these services, and they provide the ultimate in flexibility. Active retirees who don’t mind spending the day on the road, for instance, might sign up to become drivers with Uber.
The peer-to-peer economy can also help retirees earn an income from one of the biggest investments they’ve made over their lifetime: their house. Services like Airbnb let retirees rent out space in the family home—which probably has lots of room now that their children have gone. Airbnb recently reported on its blog that 10% of its hosts are over 60 years old.
STAYING CONNECTED TO FRIENDS AND FAMILY
Most people worry about their physical health in older age, but well being is strongly related to the ability to maintain a social life. Friends, family and regular social interaction keep people vital—yet many retirees end up feeling isolated as friends and family scatter. And, of course, many retirees must face the loneliness that comes after the loss of a spouse.
Applications such as Skype already make it possible to enjoy a virtual dinner with a distant grandchild, and communication is due to get even easier and more elegant. For one thing, communication will break free from the confines of a computer or television screen: Imagine an entire wall of the home projecting images of distant friends, letting people share coffee together.
Social media, meanwhile, will get more specialized as sites begin catering to older adults who want to get online and stay connected. One online community, from Connected Living Inc., connects older adults in senior housing with each other and their families; it has signed up more than 60,000 users in 36 states over the past seven years.
Sites are also springing up that help older adults find romance. Over-50 dating site OurTime.com, affiliated with Match, has seen more than two million people join in the past year. And tech-savvy retirees are transforming social sites once thought to be only for the young, such as Facebook, into their hangouts to share and connect with friends and family alike.

 

WSJ

Technology may also help ease face-to-face contact with friends and family. Older adults may find themselves forgetting crucial details about someone, even a close acquaintance, which can lead to frustration and embarrassment. Augmented-reality glasses in development now—think Google Glass—will project reminders in front of users’ eyes when they run into someone: the last conversation they shared, for instance, or the names of their children. The glasses will provide other helpful information, depending on context. If the retiree invites the friend home for dinner, the glasses can provide step-by-step instructions to prepare a meal from a new recipe.
STAYING MOBILE
Being able to get around independently is a crucial ingredient to a quality life in older age—visiting a friend or going out at for an ice-cream cone on a hot summer night. Research shows that reduced mobility to go where you want when you want leads to declines in both mental and physical well being.
Once again, technology is serving up solutions. Autonomous technologies, such as automatic parking, collision warnings and blind-spot detection, will make it possible for retirees to keep driving safely and longer than they otherwise would. Looking even further ahead, we can expect autonomous vehicles to take over driving entirely; all a retiree will have to do is text their self-driving car to pull up and take them anywhere.
Still, some retirees won’t want the burden of owning and maintaining a vehicle, or won’t have particularly strong feelings about giving up the driver’s seat. For them, there are services like Lyft and Uber that promise a ride with the touch of the smartphone.
And here, too, high-tech goggles may play some role in diminishing the frustration that comes with limited mobility. When real-world travel becomes too difficult for retirees to manage, these goggles will provide the option of virtual travel. Headsets such as the Oculus Rift integrate high-quality graphics and software to deliver immersive and interactive experiences. Using videogame technology, retirees can tour a Paris museum or feel the bumps of a jeep ride on African safari, all from their favorite chair.
A HOUSE THAT KEEPS ITSELF
Taking care of a home can be a fraught issue for retirees. Many find themselves losing the energy or inclination to tackle cleaning and upkeep. Soon the Internet of Things will help with those jobs, not only making maintenance easier but also transforming the home into a helper, companion and even caregiver.
Already, there are systems that make it easier to control the basic functions of the home. A smart thermostat and monitoring system enable people to run nearly everything in their home by smartphone while away on vacation. And distant relatives can use those same systems to make sure their loved ones have their home properly heated or cooled.

 

WSJ

Appliances may also help retirees by keeping track of things and taking over simple tasks. An Internet-enabled refrigerator, for instance, will maintain a daily inventory of its contents, alert owners when something is low and even arrange for home delivery of favorite foods—saving retirees the burden of keeping an eye on supplies and making regular runs to the store.
New types of appliances will also begin to appear in retirees’ homes to aid their everyday chores. Early examples include the Roomba vacuum, which can spare owners’ aching backs, and Amazon’s Echo, a compact device that lets people check their schedule, order home deliveries and more, all by voice.
Some appliances will even provide a kind of companionship for retirees who suffer from mental issues or isolation. Paro is a therapeutic robotic seal designed to help calm people with conditions like dementia. The robot has nearly 100 sensors allowing it to respond to touch with movements of its head, flippers and tail; blinking of its eyes; and sounds.
Of course, not all the Internet-enabled household help will come from machines. Internet service companies such as Washio and Hello Alfred are emerging to make aging at home easier, allowing people to summon human helpers to get small jobs done, like taking out laundry to be cleaned or tidying the house.
MACHINES TO MONITOR HEALTH
One of the frustrating ironies of retirement is that people often find themselves forced to deal with multiple chronic conditions even as their ability to manage those conditions diminishes. Even worse, many people are living with conditions they don’t know about: As people get older, they are more likely to cope with seemingly imperceptible decline, only seeking out medical help when a crisis emerges.
Now the Internet of Things is promising to help retirees—and the family members who are often their primary source of care—stay on top of their health. Machines might keep track of details a retiree might find hard to remember during an appointment, or might not think to be concerned about. An intelligent coffee maker might communicate wirelessly with a smart toothbrush, and together they would learn what time their owners typically wake. Sleep late or wake early, and the gadgets will alert a physician that the retiree has broken with routine. A tricked-out bathroom, meanwhile, will feature a mirror that scans owners’ faces to detect warning signs of cardiovascular disease and risks of heart attack or stroke.
Devices would also monitor physical data that can be a burden for retirees to record and report. A smart toilet, for one, might report to a distant call center its owner’s weight, blood-glucose level and other vitals.
Clothes will also go high-tech. Smart materials and sensors woven into underwear will detect retirees’ activity level and vitals such as heart rate. Eventually, these clothes will have features that will reduce the chance of injury by cushioning the impact should the retiree fall. But before that happens, sensors in the carpet will detect that a retiree’s walk has become a shuffle and alert family or physician.
Robots will put in an appearance here, too, to spare retirees and families the burden of daily worry and traveling to constant doctors’ appointments. Operated by a remote nurse, a robot will roll through the home to check in on retirees, review vitals and even have a chat before returning to sleep mode in a corner.
***
Clearly, the transformative potential of all these technologies is powerful. But let’s pause for a reality check. These innovations bring new questions of their own.
For one, there’s cost. The services the Internet of Things will provide will become so convenient, and so vital to our care and well being, that they will be a significant and necessary cost. Yet most people already aren’t saving enough for retirement. How much more will they need to put aside? And will the added costs increase the already-growing divide between the haves and the have-nots in America?
It also means some institutions will need to rethink how they deal with older Americans. If people can live longer at home, will we need as much senior housing as we do now? And how will health care adapt to the data coming from smart toilets, toothbrushes and toasters? Most doctors and nurses have little time to fully discuss a health condition during a visit, let alone monitor endless streams of data.
On the individual level, what does it mean when people’s homes and even clothes are collecting big data about their most personal behaviors? The privacy issues of big data aren’t confined to older people, of course, but they are among the most vulnerable members of society, so the concerns are especially pressing.
Finally, it’s vital to remember that technology alone won’t solve our problems. However powerful our gadgets and appliances become, they will never be able to entirely replace the human touch, or completely remove the normal pains and frustrations of getting older.
And they won’t be able to deliver their fullest benefits unless we have a compelling vision of what we want retirement to be. Even now, expectations and the very context of how we live are changing so quickly that it’s tough for many retirees to know what they’re supposed to do during this next stage of life. Unlike previous generations that only had to plan for a few years of life after work, baby boomers and those that follow must anticipate decades.
The ultimate retirement plan for individuals and society is to imagine an older age that is more than simply living longer: a new, exciting period of life that is about living better.

Culled from The Wall Street Journal

New Rules Could Help Millions Save for Retirement - By Janna Herron

Thinkstock

States may soon be able to automatically enroll workers into state-sponsored IRAs if their employers don’t offer retirement plans, thanks to a new move by the Obama Administration that circumvents Congress.

The Labor Department on Monday proposed a safe harbor from federal pension law so states can offer workers only an opt-out option—rather than an opt-in one—for these retirement plans. The proposal would also allow employers to make automatic deductions from employee paychecks to go into the state plans.

The goal is to get as many of the 68 million workers who lack access to employer retirement plans to start saving. Less than 10 percent of these workers have set up an IRA on their own, and research has shown that participation in employer 401(k) plans with automatic enrollment is 10 percentage points higher than those without.

So far, Illinois, Oregon, Washington and California have already passed legislation to create payroll-based retirement savings vehicles, while 19 other states are considering it.

“Overall, it’s a great opportunity for states to promote saving for retirement,” says John Crosby, a certified financial planner and head of the government relations committee for the Financial Planners Association in New Jersey. “Hopefully, what will happen as a byproduct is that employees are going to realize the benefit and put more money aside.”

Crosby has been working with state legislators and business groups on the state’s plan called New Jersey Secure Choice Retirement Saving Program. Under the plan, employees without workplace retirement savings plans will automatically have 3 percent of their salary deducted into the retirement plan. They can opt out if they want.

Crosby says New Jersey, along with most states considering similar plans, will outsource the management of the funds to an investment company such as Vanguard or Fidelity to select assets for the greatest return. Workers will still have to abide by IRA rules that limit contributions to $5,500 a year.

“But if you put away $5,000 every year for 40 years at 7 percent, that’s almost a million dollars,” Crosby notes.

The move by the Labor Department comes less than two weeks after the federal government introduced myRA, a basic retirement savings plan similar to a Roth IRA.

President Obama has recommended automatic IRA enrollment for employees without a workplace retirement savings plan in every budget since taking office, according to a blog post from Labor Secretary Tom Perez and Jeffrey Zients, director of the National Economic Council.

“But Congress has failed to act on this proposal,” they wrote.

Culled from The Fiscal Times