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	<title>Business &#38; MoneyCategory: Retirement &#124; Business &#38; Money &#124; TIME.com</title>
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		<title>Business &#38; MoneyCategory: Retirement &#124; Business &#38; Money &#124; TIME.com</title>
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		<title>Viewpoint: &#8216;Chained&#8217; CPI for Social Security Calculations Robs Retirees</title>
		<link>http://business.time.com/2013/05/14/how-chained-cpi-for-social-security-calculations-robs-retirees/</link>
		<comments>http://business.time.com/2013/05/14/how-chained-cpi-for-social-security-calculations-robs-retirees/#comments</comments>
		<pubDate>Tue, 14 May 2013 17:00:33 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=79869</guid>
		<description><![CDATA[Financially speaking, we keep asking more of retirees. First, we ask folks who have saved for a lifetime to live on less while banks and indebted consumers use low interest rates to heal. Then we ask them to endure another whack at Social Security benefits while the government tries to rein in spending. This isn’t especially new. We’re half a decade into historically low rates, which have made it all but impossible for many retirees to secure a livable income stream through traditional vehicles like bonds, bank CDs, and fixed annuities. But that’s kind of the point: A lot of seniors have sold assets to make ends meet. After five years, they are running out of things to sell. Instead of relief, they get a bloody nose. Last month, the White House budget proposed tweaks to the cost-of-living formula used to determine annual Social Security benefits increases. Rest assured: This tweak would not make benefits more generous. (MORE: The New Retirement: Forget Being Rich, All We Want Is Peace of Mind) The President wants to use a “chained” consumer-price index, which accounts for how most people actually live. When beef prices go up, for example, many people buy cheaper chicken instead &#8212; so they don’t actually feel the full cost of the rising beef. Currently the CPI is running at 1.5%; chained CPI at 1.4%. The problem is that while such a small difference may sound meaningless in the short term, when benefits increases are held back like this year after year, it has a reverse compounding effect. After 10 years, the average Social Security benefit would be about 3% less; after 30 years it would be 8.4% less. Instead of receiving, say, $20,000 a year, you’d be getting $18,320. If that still doesn’t sound so bad, consider that even the current more generous CPI formula may systematically understate the inflation rate for seniors. The reason is that cheaper substitutes for many of their expenditures simply are not available, especially in the areas of healthcare and housing, which are big parts of a<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=79869&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<item>
		<title>The New Retirement: Forget Being Rich, All We Want Is Peace of Mind</title>
		<link>http://business.time.com/2013/05/13/the-new-retirement-forget-being-rich-all-we-want-is-peace-of-mind/</link>
		<comments>http://business.time.com/2013/05/13/the-new-retirement-forget-being-rich-all-we-want-is-peace-of-mind/#comments</comments>
		<pubDate>Mon, 13 May 2013 17:19:15 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Budgeting]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving & Spending]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=79469</guid>
		<description><![CDATA[We may never tire of discussing lessons from the Great Recession, which hit two groups especially hard: teens who saw parents lose a home or job, and boomers who saw their savings depleted at precisely the wrong moment in life. The kids’ scars are mostly emotional. Financially, they had little to lose; indeed they stand to benefit from the more frugal approach to living that the recession has inspired in many. It’s a different story for boomers who are newly retired or rapidly nearing that stage of life. They saw their assets shrink just as they needed them to grow and they may have had to sell at depressed prices, ensuring they&#8217;d miss the rebound. Compounding their financial loss, interest rates are so low that boomers (and elders) are now finding it difficult to secure a decent monthly income stream. This experience goes a long ways toward explaining boomers’ new priorities. By a margin of 7 to 1, adults past the age of 45 say their focus today is on peace of mind — not wealth accumulation, according to a new retirement study from Merrill Lynch and Age Wave. (MORE: Sizing Up the Big Question: How Much Money Do You Need to Retire?) Long gone is the prerecession attitude of taking risks and building the biggest portfolio possible. Today’s new retirees and preretirees crave the peace of mind that comes from having enough money safely tucked away to provide a sufficient and dependable income stream. In the survey, guaranteed income and protecting assets were four times more important than achieving high-risk returns. This is why sales of fixed annuities are exploding and guaranteed lifetime income products are the new subject du jour. Today’s retirees don’t need a stockpile to count so much as predictable income so that they can spend time with family and on experiences and pursue new, if modest, passions. “Having more money can buttress peace of mind,” David Tyrie, head of personal wealth and retirement for Bank of America Merrill Lynch, says in an e-mail. “But there are<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=79469&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Financial Planning</primary_category><primary_category_link>http://business.time.com/category/planning/financial-planning/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<title>Please Don&#8217;t Use a &#8216;Best Places to Retire&#8217; List to Decide Where to Retire</title>
		<link>http://business.time.com/2013/05/13/please-dont-use-a-best-places-to-retire-list-to-decide-where-to-retire/</link>
		<comments>http://business.time.com/2013/05/13/please-dont-use-a-best-places-to-retire-list-to-decide-where-to-retire/#comments</comments>
		<pubDate>Mon, 13 May 2013 12:00:53 +0000</pubDate>
		<dc:creator>Martha C. White</dc:creator>
				<category><![CDATA[Decision Making]]></category>
		<category><![CDATA[Florida Real Estate]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Health Care]]></category>
		<category><![CDATA[Healthcare]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Real Estate & Homes]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Taxes]]></category>
		<category><![CDATA[AARP]]></category>
		<category><![CDATA[income taxes]]></category>
		<category><![CDATA[National Council on the Aging]]></category>
		<category><![CDATA[North Dakota]]></category>
		<category><![CDATA[Oregon]]></category>
		<category><![CDATA[property taxes]]></category>
		<category><![CDATA[retirement community]]></category>
		<category><![CDATA[sales taxes]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=79540</guid>
		<description><![CDATA[It can be confusing making sense of the many “best places to retire” lists out there. In fact, it&#8217;s probably best to eye these lists with extreme skepticism &#8212; unless you really do want to spend your golden years in (gulp) frigid North Dakota. What with all the &#8220;best places to retire&#8221; lists in circulation, you&#8217;d think there would be some consensus about the top spots to kick back in retirement. Yet these lists are literally all over the map, and often contradictory. Bankrate.com&#8217;s new roundup ranking the &#8220;surprisingly best&#8221; states for retirement touts the Dakotas, West Virginia, and Mississippi — and ranks Oregon dead last in its corresponding &#8220;worst places&#8221; list. A Forbes list, on the other hand, included Medford, Ore., in its roundup of the best places to retire in 2013, and CNN/Money listed Portland, Ore., in a roundup published last fall. These discrepancies are the rule rather than the exception, partially because the rankings emphasize different criteria. Some lists emphasize college towns, whose populations tend to skew young, while others put a premium on communities with a lot of senior residents. Many publications advise looking at local tax rates, but they clash when it comes to deciding whether income, property or sales tax is most important. Here’s the good news: you can probably ignore them all. As Malcolm Gladwell pointed out two years ago in the New Yorker, rankings fail when they bite off more than they can chew. A “best of” list can aim to evaluate a broad set of criteria or a large number of contenders, but not both. “It’s an act of real audacity when a ranking system tries to be comprehensive and heterogeneous,” Gladwell wrote. Gladwell was critiquing the way college rankings are conducted, but the principle is the same when it comes to cars, restaurants and where to spend your retirement years. (MORE: Um, You&#8217;ve Actually Been Able to Order Authentic Viagra Online for Years) The way &#8220;best places to retire&#8221; lists are graded often misses the point: they don’t tell you much about<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=79540&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2011/09/retirement1.jpg?w=240</featured_image>
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			<media:title type="html">retirement</media:title>
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			<media:title type="html">marthacwhite</media:title>
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		<title>BlackRock&#8217;s Fink: Put it All in Stocks</title>
		<link>http://business.time.com/2013/05/10/blackrocks-fink-put-it-all-in-stocks/</link>
		<comments>http://business.time.com/2013/05/10/blackrocks-fink-put-it-all-in-stocks/#comments</comments>
		<pubDate>Fri, 10 May 2013 18:16:42 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Saving]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[The Economy]]></category>
		<category><![CDATA[401(k) Savings]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=79692</guid>
		<description><![CDATA[Laurence Fink is in the business of taking measured risks. That’s what investing is all about and, well, he happens to be the CEO the world’s largest investment firm: BlackRock, which has $4 trillion under management. So it may be that he was perfectly comfortable standing before a packed classroom at New York University’s Stern School of Business on May 7 and opening his remarks with a risky line: “I want to talk about the subject of old age,” Fink began. Old age? Most of these kids haven’t left home yet. They still believe they’re immortal. But in a sign of how times have changed, the students didn’t nod off or even roll their eyes. The long term, at least as it relates to money, seems to have entered Millennials’ collective conscious. They wanted more. (MORE: Mandatory Savings Accounts Are Coming Your Way) Fink gave it to them, starting with some well-worn but nonetheless effective statistics on longevity. A third of babies born in 2011 will live to age 100. If you make it to 65, odds are you’ll live to 85. One in 10 who are now 65 will make to 95. His point: Many of us are going to live a long time, and that is “a very expensive blessing” that will rewrite the rulebook on saving and investing. You need to start now, he implored to a bunch of kids yet to earn their first full-time salary. Not convinced that kids—or anyone else, for that matter—really get it, Fink called for a new mandatory savings program as part of an overhaul of the nation’s retirement thinking. “The current system is broken,” he said. “We need a comprehensive approach that includes some form of mandatory savings in addition to Social Security.” (MORE: A New Idea to Fix the Retirement-Savings Crisis) But he offered more than a policy initiative to his young audience, which through the questions that were asked demonstrated a genuine thirst for financial advice. In some ways, Fink broke the financial planning mold. His main points: Invest everything<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=79692&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Financial Planning</primary_category><primary_category_link>http://business.time.com/category/planning/financial-planning/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<item>
		<title>Mandatory Savings Accounts Are Coming Your Way</title>
		<link>http://business.time.com/2013/05/09/mandatory-savings-accounts-are-coming-your-way/</link>
		<comments>http://business.time.com/2013/05/09/mandatory-savings-accounts-are-coming-your-way/#comments</comments>
		<pubDate>Thu, 09 May 2013 16:34:56 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[401(k) Savings]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=79567</guid>
		<description><![CDATA[The retirement savings crisis in America has brought us to this point: It’s a near certainty that mandatory savings accounts are in the future of anyone with a full- or part-time job. The world’s largest investment firm BlackRock, with $4 trillion under management and a lot of weight to throw around, is the latest to sound the call. “We need a comprehensive solution to retirement savings that includes some form of mandatory retirement savings,” CEO Laurence Fink said this week. He added that his firm has been agitating “quite noisily” for retirement overhaul and that going forward “we’ll be louder as a firm.” Fink’s call for mandatory savings accounts is in sync with other prominent thinkers in the retirement savings field. Alicia Munnell, director of the Center for Retirement Research at Boston College, is on record favoring these accounts. She says they should be designed to provide 20% of pre-retirement income. Munnell’s colleague at the Center, Julie Agnew, in a study credits mandatory savings accounts in Australia for that country’s “high individual saving rates and broad coverage at reasonably low cost to the government.” U.S. Senator Tom Harkin, an Iowa Democrat and chairman of the Senate Health, Education, Labor and Pensions Committee, is looking at legislation this year that would make saving for retirement more widely available through a so-called USA Retirement fund, though it would not necessarily be mandatory. Billionaire Peter Peterson floated the idea of mandatory accounts several years ago. (MORE: A New Idea to Fix the Retirement-Savings Crisis) The Australian system increasingly is being held up as a model for the U.S. In Australia, employers must contribute 9% of pay (rising to 12% in 2020) to every full- or-part-time worker between the ages of 18 and 70. This makes the accounts a little like a traditional pension in that the employer is funding them. But the accounts are owned and managed by individuals, as with a 401(k). The Australian “superannuation” accounts were put in place just 20 years ago and have all but solved that country’s retirement savings<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=79567&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<item>
		<title>How to Stay Engaged After Retirement</title>
		<link>http://business.time.com/2013/05/06/how-to-stay-engaged-after-retirement/</link>
		<comments>http://business.time.com/2013/05/06/how-to-stay-engaged-after-retirement/#comments</comments>
		<pubDate>Mon, 06 May 2013 12:00:13 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Decision Making]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=78329</guid>
		<description><![CDATA[Not many people are able to retire before age 60 anymore, and that’s just as well. Health breakthroughs the last few decades have given us a longevity bonus that previous generations could never envision. Working until later in life is a natural development. Still, we will retire one day and likely with many good years remaining in our future. How to spend those years is the subject of my two most recent books, co-authored with Ken Dychtwald. I’m reminded of the lessons in The Power Years and A New Purpose whenever I hear of people reinventing themselves at mid-life. (MORE: CFPB Finally Fixes the &#8216;Anti-Housewife&#8217; Rule) So it was with a recent news story about chess champion Garry Kasparov, who unlike other champions in his field has not been content to fade away. Kasparov just turned 50. He’s been out of competitive chess for eight years but is as busy as ever. He’s a passionate activist for change in Russia. He campaigns against President Vladimir Putin and recently was named the Morris B. Abram Human Rights award winner. He’s also a global activist seeking to have chess classes installed as part of school curricula. The chess effort, especially, caught my eye. Kasparov and a growing list of educators believe that learning to play chess helps children develop the ability to think logically, plan, and use mathematics in a practical way. These critical skills are closely linked to making better money decisions as adults, a key area of instruction that generally is missing from our classrooms. Could we teach chess as a backdoor way to promote financial education? The European Union has endorsed Kasparov’s ideas and is encouraging schools to introduce a chess class using his teaching software. Kasparov may end up having an impact far beyond the chess world. There’s nothing unusual about high achieving individuals staying committed to a cause and giving back in some fashion after retiring. Former presidents Jimmy Carter and Bill Clinton may have accomplished more good in their life after leaving office than they did<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=78329&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<title>Kodak to Pay Retired Workers in Film (and Other Adventures in Creative Pension Funding)</title>
		<link>http://business.time.com/2013/04/30/kodak-to-pay-retired-workers-in-film-and-other-adventures-in-creative-pension-funding/</link>
		<comments>http://business.time.com/2013/04/30/kodak-to-pay-retired-workers-in-film-and-other-adventures-in-creative-pension-funding/#comments</comments>
		<pubDate>Tue, 30 Apr 2013 09:45:33 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=78894</guid>
		<description><![CDATA[Eastman Kodak has reached a deal to hand over its film business to retirees in lieu of paying monthly benefits, making it the latest strapped corporation to resort to noncash pension contributions. Kodak, restructuring under bankruptcy protection, will turn over its personalized-imaging and document-imaging businesses to the U.K. Kodak Pension Plan, according to a report in the Wall Street Journal. This will wipe out a $2.8 billion pension obligation. If all goes well, the pension will sell the businesses and use the proceeds to fund retirement benefits. But no one knows what the businesses will fetch. In the news game, we like to say three makes a trend. So the Kodak deal raises troubling questions about our collective retirement security. The British food company Dairy Crest recently transferred 44 million lb. of cheese to its pension fund to help plug a $128 million deficit. The spirits producer Diageo (Johnny Walker, Smirnoff) gave more than $760 million in “maturing whiskey” to its retirement fund to help quench a more than $1 billion pension thirst. (MORE: Plugging the Pension Gap … With Cheese?) What other assets might retirees be asked to accept? Can they be properly valued? How do you turn bricks and mortar, or whatever, into a reliable and long-lasting income stream? Such creative solutions are born of necessity. Two-thirds of the companies in the S&#38;P 500 have traditional pension plans and only 18 of them are fully funded. Unfunded liabilities total $355 billion. This massive shortfall, by the way, is echoed in public pension plans as well. We have a big mess on our hands. As a matter of fact, this trend stretches way beyond three examples. U.S. Steel transferred 170,000 acres of Alabama timberland to its workers’ pension fund several years ago. The state of Alabama’s pension system owns 11 golf courses and a string of hotels and spas. The New York Times reports that the Pension Benefit Guaranty Corporation, which takes over failed pension plans, has a wide variety of alternative assets, including “water rights in the Mojave Desert, diamonds,<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=78894&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://business.time.com/2013/04/30/kodak-to-pay-retired-workers-in-film-and-other-adventures-in-creative-pension-funding/feed/</wfw:commentRss>
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	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/05/retirement.jpg?w=240</featured_image>
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			<media:title type="html">Retirement</media:title>
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			<media:title type="html">dankadlec</media:title>
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		<title>Safe Bet? Central Banks Suddenly Start Buying Stocks</title>
		<link>http://business.time.com/2013/04/26/why-are-central-banks-suddenly-buying-stocks/</link>
		<comments>http://business.time.com/2013/04/26/why-are-central-banks-suddenly-buying-stocks/#comments</comments>
		<pubDate>Fri, 26 Apr 2013 15:06:31 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Decision Making]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=78589</guid>
		<description><![CDATA[Fed up with low bond yields, the most conservative investors on the planet have begun to load up on stocks. Retirees? No, I’m talking about the world&#8217;s central bankers. Nearly 1 in 4 central bankers say their institution owns stocks or plans to own stocks in the near future, according to a Bloomberg report. The Bank of Japan plans to more than double its stock position, according the report, which cites a Central Banking Publications and Royal Bank of Scotland survey. The Bank of Israel bought stocks for the first time last year. And both the Swiss National Bank and Czech National Bank have boosted stock ownership to at least 10% of reserves. This move into stocks is highly unusual. Central bankers are famously risk-averse. Previous surveys in this series didn’t even ask about stocks. Central banks tend to hold reserves in government bonds, which are easy to buy and sell. (They use reserves to manage their national currencies.) But with yields having fallen below the rate of inflation, holding bonds devalues their reserves. So they have begun diversifying into other assets, chasing higher returns. This is not unlike the dilemma facing many retirees and other individual investors: holding ultra-safe interest-bearing investments is wise past a certain age; yet when yields are lower than the inflation rate, this strategy erodes buying power and undermines long-term financial security. For this reason, many retirees have been seeking higher yields with dividend-paying stocks and even moving into high-yield, high-risk corporate bonds. (MORE: A Nation of Renters: Should We Be Worried That Fewer Americans Own Homes?) Central banks, of course, have a much bigger margin for error than your typical retiree. Their time horizon is eternity and they can print more money if they must, though the consequences of doing so are best avoided. Still, central banks moving into stocks offers some comfort to retirees pushed in the same direction. Everyone must adjust to this new normal. The U.S. Federal Reserve does not appear to have joined in the stock-buying trend. The Fed is not permitted to<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=78589&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<title>Retirement Gamble: Frontline&#8217;s Powerful Case for Taking Control of Your Financial Future</title>
		<link>http://business.time.com/2013/04/23/retirement-gamble-how-fees-and-poor-results-destroyed-your-401k/</link>
		<comments>http://business.time.com/2013/04/23/retirement-gamble-how-fees-and-poor-results-destroyed-your-401k/#comments</comments>
		<pubDate>Tue, 23 Apr 2013 14:32:19 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[401(k) Savings]]></category>
		<category><![CDATA[Decision Making]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Jobs]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=77979</guid>
		<description><![CDATA[The retirement crisis in America is fairly well defined: Six in 10 people expect to delay retirement; just 14% are confident they’ll have enough to live comfortably and 17% say they will never be able to quit work altogether. If that doesn’t bring you down, make sure you tune in to the PBS Frontline special Retirement Gamble tonight. Serious depression is sure to follow. Hopefully, though, so will remedial action on the part of anyone who identifies with the handful of struggling working class Americans in this documentary. Retirement doesn’t break new ground. Anyone who’s been paying attention understands that corporate America has shifted the burden of retirement to individuals over the past 30 years. Traditional pensions have been supplanted by 401(k) plans, which have proved to be massively ineffective as a primary source of retirement security. Billions of dollars in savings have leaked out of these plans over the years and trillions were wiped away in the market collapses of 2000 and 2008. The program takes us through all this gory history and makes the case that our retirement programs are not a system but a “free for all.” It concludes that saving for retirement is a “bewildering and frightening challenge.” (MORE: How a Few Text Messages a Month Can Secure Your Retirement) For emphasis, Retirement even dredges up the $18 billion in bonuses paid to Wall Street the year of the mortgage crisis, when people were losing their jobs or their homes or both. The point is one that I’ve made over and over in this space: You are on your own out there; it’s time to start paying attention. You can’t help but identify with one subject in particular, a well-spoken man of retirement age who gleefully recalled the day in 1999 when his 401(k) portfolio crossed $1 million. “I just thought this was how it works,” he says. The market took back all his gains within a couple years. The special takes aim at the confusing and multi-layered fees that accompany many 401(k) plans and which are difficult<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=77979&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<title>How a Few Text Messages a Month Can Secure Your Retirement</title>
		<link>http://business.time.com/2013/04/22/how-a-few-text-messages-a-month-can-secure-your-retirement/</link>
		<comments>http://business.time.com/2013/04/22/how-a-few-text-messages-a-month-can-secure-your-retirement/#comments</comments>
		<pubDate>Mon, 22 Apr 2013 18:55:54 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Psychology of Money]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving & Spending]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=76507</guid>
		<description><![CDATA[Reminders work. That’s why retailers sell $1 billion a year in post-it notes and virtually all alarm clocks come with a snooze button. Maybe it’s time to put the power of prompt to work in your savings strategy too. A growing body of research suggests that money reminders tweeted, texted, emailed or otherwise delivered through social media fall on receptive eyes. Researchers in the Philippines, Bolivia, and Peru found that banks reminding clients to save via text message and other means increased the likelihood of reaching a savings goal by 3.1% and the total amount saved by 6.3%. (MORE: The Hidden Cost of Text Refunds) A study led by Barbara O’Neill at the Rutgers Co-operative Extension found that Twitter and Facebook messages to adults raised awareness about money issues even if they didn’t always lead to behavioral change. In the study, banks tweeted clients up to nine times a day with messages like: Think yourself rich. Savings starts in ur brain, not ur bank account. Plug ur spending leaks &#38; save: snacks, soda, lottery etc. $5/ day = $1,825/ yr + interest. Small amts add up. Susan Beacham, a financial educator, regularly sends texts with money reminders to her teens. It’s a great idea. Young people send and receive an average of 3,339 texts a month. Remarkably, they actually read them. But texting money reminders can be for adults too, and now you can sign up for a helpful dose of savings prompts through the America Saves campaign from the Consumer Federation of America. The program is ongoing. But if you sign up by the end of April you will become eligible for a $500 reward. The texting service is simple. You register with a specific goal and will receive three texts a month through the end of the year reminding you to take steps toward reaching your goal. Standard texting charges apply. (MORE: Is the Global Economy Slowly Falling Apart) The most popular goals include: setting up an emergency fund, saving for education, repaying debt, saving for a home,<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=76507&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://business.time.com/2013/04/22/how-a-few-text-messages-a-month-can-secure-your-retirement/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Financial Planning</primary_category><primary_category_link>http://business.time.com/category/planning/financial-planning/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/141475352.jpg?w=240</featured_image>
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			<media:title type="html">dankadlec</media:title>
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		<title>Mandatory Savings: How Australia Fixed a Retirement Crisis</title>
		<link>http://business.time.com/2013/04/22/mandatory-saving-how-australia-fixed-a-retirement-crisis/</link>
		<comments>http://business.time.com/2013/04/22/mandatory-saving-how-australia-fixed-a-retirement-crisis/#comments</comments>
		<pubDate>Mon, 22 Apr 2013 10:00:20 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[401(k) Savings]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=78153</guid>
		<description><![CDATA[We can learn a lot about staying on top of our long-term financial security by studying the land down under. Australia was among the earliest to get serious about financial education, establishing a financial-literacy foundation in 2005 — before the financial crisis. It also has a retirement system that is regarded as among the best in the world. The U.S. is struggling on both fronts. We were early to formally embrace financial education, having established a Financial Literacy and Education Commission in 2003. But Australia has steamed ahead, requiring a personal-finance class for graduation throughout its school system. In the U.S., just 14 states require that such a course even be offered as an elective. Increasingly, financial education is becoming a global initiative. The hope is that by raising the financial IQ of individuals around the world, the economy won’t fall victim to another financial crisis — at least not one caused by basic misunderstanding of things like mortgages and credit-card terms. It’s a long-term approach. The real Aussie edge, though, may be a retirement system that “has achieved high individual saving rates and broad coverage at reasonably low cost to the government,” according to new research from Julie Agnew for the Center for Retirement Research at Boston College. Australians do this through a three-pillar system that starts with private savings. The system also includes a safety net that resembles Social Security, though benefits are means-tested and disappear past a certain income threshold. In the U.S., means testing faces stiff opposition, though some argue that effectively it is already in place. The key difference is Australia’s employer-based savings accounts, which resemble a 401(k). Employers are required to fund every worker’s account with 9% of pay, rising to 12% of pay in 2020. Over 90% of working Australians have savings in such an account. In the U.S., fewer than half of workers have money in a 401(k) or similar plan. In her research, Agnew found that Australian plans are more likely to have automatic enrollment and contribution-escalation provisions, which are proven<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=78153&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://business.time.com/2013/04/22/mandatory-saving-how-australia-fixed-a-retirement-crisis/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<title>Plugging the Pension Gap &#8230; With Cheese?</title>
		<link>http://business.time.com/2013/04/19/plugging-the-pension-gap-with-cheese/</link>
		<comments>http://business.time.com/2013/04/19/plugging-the-pension-gap-with-cheese/#comments</comments>
		<pubDate>Fri, 19 Apr 2013 07:00:34 +0000</pubDate>
		<dc:creator>Christopher Matthews</dc:creator>
				<category><![CDATA[Companies & Industries]]></category>
		<category><![CDATA[Food and Beverage Industry]]></category>
		<category><![CDATA[Retirement]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=78061</guid>
		<description><![CDATA[In American slang, the word &#8220;cheddar&#8221; has long been a stand-in for money. Now, it would appear some folks in the U.K. are taking this association far more literally. According to the Financial Times, the British food company Dairy Crest has a roughly $128 million deficit in its pension fund as of the end of September, and to help plug that gap, the firm has transferred roughly 44 million lb. of cheese to the pension. Writes the Financial Times: Dairy Crest, maker of Cathedral City, holds stocks of about £150 million worth of maturing cheese at any one time. Cheese, like whisky, can be matured for different amounts of time: in Cathedral City’s case, most is sold after one year but can go up to 3½ years. Apparently this isn&#8217;t the first case of a large food manufacturer handing over large inventories of goods to a pension fund to help plug a gap. In 2010 the firm Diageo — which manufactures popular spirits like Johnnie Walker and Smirnoff vodka — gave more than $760 million in &#8220;maturing whiskey&#8221; to its retirement fund in an effort to fill a more than $1 billion pension shortfall. (MORE: How Bad Is America’s Pension-Funding Problem?) It&#8217;s no secret that pension funds around the globe, in both the public and private sectors, are dangerously underfunded. Corporations and governments have always found ways to skimp on contributions, often by using rosy projections regarding pension funds&#8217; investment returns. An already shaky system took a huge hit during the financial crisis and the weak economic growth that has followed. On top of all this, many retirees are living longer, putting even more strain on retirement accounts. And while it might seem silly that a pension fund would end up owning so much cheese, in some ways it makes perfect sense. After all, for a company like Dairy Crest, its most liquid assets are going to be foodstuffs. As Charles Cowling, managing director at JLT Pension Capital Strategies, told the Guardian:  If a company has valuable assets that are not pledged to<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=78061&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link>
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			<media:title type="html">christopherrmatthews</media:title>
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		<title>A New Idea to Fix the Retirement-Savings Crisis</title>
		<link>http://business.time.com/2013/04/17/a-new-idea-to-fix-the-retirement-savings-crisis/</link>
		<comments>http://business.time.com/2013/04/17/a-new-idea-to-fix-the-retirement-savings-crisis/#comments</comments>
		<pubDate>Wed, 17 Apr 2013 16:20:35 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[401(k) Savings]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=77851</guid>
		<description><![CDATA[The retirement-savings crisis in America is so acute that at least one prominent thinker on the subject is calling for a mandatory savings program above and beyond existing 401(k) and other pension plans. “The nation requires a new, mandatory tier of retirement accounts, initiated by the federal government but managed by the private sector, that will replace about 20% of preretirement earnings,” Alicia Munnell, director of the Center for Retirement Research at Boston College, told Bloomberg News. Munnell is a former Treasury official and former member of the President’s Council of Economic Advisers. Her voice carries a lot of weight on pension matters, and her comments seem to open the door to a back-to-the-future kind of pension system. Along with a new, additional type of savings program, Munnell wants to delay Social Security payments “a few years longer” and encourage people to stay at work to age 68 or 69 or later. She’d like to see 401(k) plans reworked so that autoenrollment and autoescalation of default contribution rates are required in every plan. (MORE: Retirement Savings: Piecing Together a Perfect Portfolio) She also wants to further limit opportunities for plan participants to cash out early — stemming what’s known as leakage, which has emerged as a serious flaw in 401(k) plans as a primary source of retirement savings. These steps, she says, would return the 401(k) “to its original purpose of providing supplementary income” as opposed to being a primary vehicle. The eye-catcher in her proposed overhaul, though, is the new tier of mandated savings accounts. Numerous studies have shown that Americans are not saving enough for retirement. Even working longer isn’t a cure-all, Munnell suggests. What’s needed is a new kind of account where a large enough kitty would build to replace 20% of preretirement income. This extra tier of savings along with Social Security benefits and other sources should be enough to get most people to 70% of preretirement income; that’s a level that many financial planners say is a minimum for a comfortable retirement. How this new savings<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=77851&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<title>Big Brother: How the Obama Budget Helps Ordinary Savers (at Some Risk)</title>
		<link>http://business.time.com/2013/04/12/big-brother-how-the-obama-budget-helps-ordinary-savers-at-some-risk/</link>
		<comments>http://business.time.com/2013/04/12/big-brother-how-the-obama-budget-helps-ordinary-savers-at-some-risk/#comments</comments>
		<pubDate>Fri, 12 Apr 2013 14:00:55 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[401(k) Savings]]></category>
		<category><![CDATA[Estate Planning]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=77583</guid>
		<description><![CDATA[The newly released White House budget addresses the savings needs of ordinary Americans in a big-brother kind of way. But it does little to address our nation’s overall financial illiteracy. In 244 pages, the Obama budget makes not a single mention of “financial education” or “financial literacy.” The budget does offer measures to beef up math education and help students finish college, both of which are linked to smarter personal money management. Still, when it comes to things like mortgages and retirement saving, this president favors the hand of big brother over initiatives that would help people help themselves. To be fair, the president has embraced financial education at a certain level. We have a formal national strategy for financial literacy and a couple high-level commissions coordinating private and public sector financial education efforts. These groups have done a great job developing helpful consumer websites like moneyasyougrow.org and mymoney.gov. But this work is nowhere near as high profile as that of the watchdog Consumer Financial Protection Bureau, which has an education component but mainly regulates consumer financial institutions. (MORE: Obama&#8217;s Budget Would Cap Tax-Advantaged Savings) The Obama budget would help ordinary Americans save by making tax-favored retirement accounts more widely available and automatic. Roughly half of American workers have no workplace retirement plan; only one in 10 who are eligible to contribute to an Individual Retirement Account do so. To fill this gap, the budget would automatically enroll workers without employer-based plans in IRAs through payroll deductions. These workers would be free to opt out. But most in such plans do not. Some would be eligible for a saver’s tax credit, further boosting what they are able to put away. Small employers would be eligible for tax credits to defray any administrative costs. The budget helps clarify the extent to which the White House sees tax-favored accounts as a tool for middle and lower income groups. As reported here, the budget would cap the amount anyone can save in tax-advantaged accounts at around $3 million. “Under current rules, some wealthy<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=77583&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://business.time.com/2013/04/12/big-brother-how-the-obama-budget-helps-ordinary-savers-at-some-risk/feed/</wfw:commentRss>
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	<primary_category>Financial Planning</primary_category><primary_category_link>http://business.time.com/category/planning/financial-planning/</primary_category_link>
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			<media:title type="html">dankadlec</media:title>
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		<title>10 Biggest 401(k) Mistakes—and How to Avoid Them</title>
		<link>http://business.time.com/2013/04/10/10-biggest-401k-mistakes-and-how-to-avoid-them/</link>
		<comments>http://business.time.com/2013/04/10/10-biggest-401k-mistakes-and-how-to-avoid-them/#comments</comments>
		<pubDate>Wed, 10 Apr 2013 18:14:43 +0000</pubDate>
		<dc:creator>Martha C. White</dc:creator>
				<category><![CDATA[401(k) Savings]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Investing]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Portfolio Strategy]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving]]></category>
		<category><![CDATA[Wall Street & Markets]]></category>
		<category><![CDATA[401k]]></category>
		<category><![CDATA[401k Contribution]]></category>
		<category><![CDATA[401k Fees]]></category>
		<category><![CDATA[401k Match]]></category>
		<category><![CDATA[401k Savings]]></category>
		<category><![CDATA[retirement investing]]></category>
		<category><![CDATA[Retirement Plan]]></category>
		<category><![CDATA[Retirement Savings]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=76088</guid>
		<description><![CDATA[As traditional defined-benefit pensions become increasingly rare, more Americans instead are offered employer-sponsored 401(k)s, defined-contribution plans that require participants to be more proactive and educate themselves. Here are the biggest pitfalls experts say can do the most damage to your nest egg. Not having one. Let’s get this one out of the way. The experts unanimously agree that the biggest mistake you can make is to not have a 401(k), especially if your employer matches your contributions. Collectively, we’re ridiculously underfunded for retirement Going with the default contribution level. Some people assume that their plan’s &#8220;default&#8221; contribution level is sufficient to fund retirement: It’s not. The most common default contribution level is 3% of an employee&#8217;s income, but Stephen Utkus, principal and director in the Vanguard Center for Retirement Research says people with a household income of between $50,000 and $100,000 should be saving 12% to 15%, between their contributions and whatever their company matches. People who make more than that should aim to save 15% to 20%, and workers earning below $50,000 should ideally be socking away 9% to 12%. Abandoning a 401(k) after you switch jobs. With all of the upheaval that comes with switching jobs, it can be easy to forget about rolling over your 401(k). But letting one languish can have serious consequences, says Dana Levit, owner of Paragon Financial Advisors, a fee-only financial planning firm. The funds themselves where your money is parked could change to the point where they no longer fit your investment goals, and if the plan changes hands, your money could get dumped into cash by default, where it won&#8217;t even keep up with inflation. So don&#8217;t put off a rollover once you&#8217;re eligible to join your new company&#8217;s plan. (MORE: We Talk a Big Game But Don&#8217;t Follow Through When it Comes to Saving for Retirement) Withdrawing funds too soon. Cashing out your retirement fund is a horrible idea all around. The money will be taxed at your regular income tax bracket, plus you&#8217;ll get hit with a 10% penalty fee. On top of this,<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=76088&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>401(k) Savings</primary_category><primary_category_link>http://business.time.com/category/personal-finance-2/401k-savings-personal-finance/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/91830055-1.jpg?w=240</featured_image>
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			<media:title type="html">marthacwhite</media:title>
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		<title>Obama&#8217;s Budget Would Cap Tax-Advantaged Savings</title>
		<link>http://business.time.com/2013/04/10/obamas-budget-would-cap-tax-advantaged-savings/</link>
		<comments>http://business.time.com/2013/04/10/obamas-budget-would-cap-tax-advantaged-savings/#comments</comments>
		<pubDate>Wed, 10 Apr 2013 13:00:11 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[401(k) Savings]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Estate Planning]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Tax Policy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=77347</guid>
		<description><![CDATA[Some of us have worried for decades that when America’s tax-advantaged savings pot got large enough, our perpetually revenue-challenged federal government would raid the nest egg. All that untaxed growth would simply prove irresistible. That day may be at hand. President Obama’s budget, just sent to Congress, proposes to cap tax-advantaged savings across all accounts at $3 million in order to raise $9 billion over 10 years. The proposal is being spun as a way to prevent wealthy private-equity executives from amassing huge IRAs—like Mitt Romney’s, once estimated to be worth as much as $100 million. But it would also curb the savings ability of self-employed professionals like doctors and lawyers. As these business owners reach the cap, and there’s nothing left in it for them, they might shut down or reduce plans that benefit their employees. (MORE: Young Workers with a 401(k) Finally Get Diversified) The cap proposal is a clear play to unlock some of the $10 trillion sitting in IRA and 401(k) accounts, which have become the primary retirement savings vehicles in America. Congress pried this door open a few months ago by toying with a law forcing heirs to liquidate an IRA within five years—almost certainly triggering otherwise avoidable income-tax payments. We may see that yet. Now the president is wedging the door open further with a proposal that targets the wealthy. This is how it starts. What’s next? Taxing the growth in Roth IRAs? Social Security benefits were once sacred and unencumbered. That began to change about 30 years ago; today roughly 85% of Social Security recipients pay some kind of income tax. The attack has not let up. The president’s new budget seeks to cut future Social Security benefit increases by tweaking the inflation formula. Now lawmakers are moving on to the next bucket of cash. It’s not clear how the IRA cap would be enforced. Would savings beyond $3 million be disallowed? Or taxed right away? If you already have more than $3 million in IRA and 401(k) accounts, might you be forced<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=77347&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/11/biz-obama-taxes-1116.jpg?w=240</featured_image>
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			<media:title type="html">image: President Barack Obama speaks during a press conference in the East Room of the White House in Washington, Nov. 14, 2012.</media:title>
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			<media:title type="html">dankadlec</media:title>
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		<title>Retirement Saving: Piecing Together a Perfect Portfolio</title>
		<link>http://business.time.com/2013/04/04/retirement-saving-piecing-together-a-perfect-portfolio/</link>
		<comments>http://business.time.com/2013/04/04/retirement-saving-piecing-together-a-perfect-portfolio/#comments</comments>
		<pubDate>Thu, 04 Apr 2013 16:00:37 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Retirement]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=75433</guid>
		<description><![CDATA[Saving for retirement has a new look. No longer a concern that can wait until mid-life, putting away money for the long term starts with your first job and continues for at least four decades. Thankfully, the nest-egg building process has become simpler with innovations like target-date and exchange-traded mutual funds. Starting early and saving unwaveringly is the only way that most people will manage to lock up financial security by age 65—and afford the life they envision for the rest of their years. That’s because traditional pensions are all but gone and Social Security looks more like a meal plan than a retirement plan. The onus of retirement income has been shifted from employers and government to individuals, and the only dependable way to lighten this burden is to address it at every life turn. Americans are just beginning to understand this shift in responsibility—too late for many. Some 69% of workers say they won’t have a large enough nest egg to retire at age 65 and more than half plan to compensate by working longer than they’d like, according to the 2012 Transamerica Retirement Readiness survey. Young people have been especially slow to grasp the new look of retirement saving; they mistakenly view retirement security as an issue to tackle down the road. Wells Fargo found that just 13% of Millennials (largely the children of boomers) elect to participate in a 401(k) plan. Workers under age 35 have the lowest savings rate of any group, according to the Center for Retirement Research at Boston College. The reason for this, the center found, is “deeply rooted in psychology: when an event such as retirement is far in the future, people tend to distance themselves from it.” (MORE: How to Draw Down Your Nest Egg: 3 Alternatives to the 4% Rule) But many who put off saving do so in part because they are not sure how to go about it and don’t trust financial advisers to give them the best information. Saving smart throughout life isn’t as difficult as<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=75433&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2011/09/retirement1.jpg?w=240</featured_image>
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			<media:title type="html">retirement</media:title>
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			<media:title type="html">dankadlec</media:title>
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		<title>Scared to Prepared: How the Great Recession Changed Our Spending Habits</title>
		<link>http://business.time.com/2013/04/03/scared-to-prepared-how-the-great-recession-changed-our-spending-habits/</link>
		<comments>http://business.time.com/2013/04/03/scared-to-prepared-how-the-great-recession-changed-our-spending-habits/#comments</comments>
		<pubDate>Wed, 03 Apr 2013 04:01:25 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving & Spending]]></category>
		<category><![CDATA[The Economy]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=76463</guid>
		<description><![CDATA[In the months following the financial crisis, just about everyone got religion. They rediscovered core values and began to place relationships and experiences above material things. But it was anybody’s guess how long this earnest austerity would last. Five years later the economy is growing steadily, housing is recovering, and the stock market is at record highs. Certainly, there are signs of letting go, especially in the art market where The Scream recently sold for $119 million, the most ever for a painting at auction. (MORE: Internet Saved the Video Star: How Music Videos Found New Life After MTV) Yet for the vast majority, the shock of the Great Recession lingers — and that’s a good thing in terms of how most folks are managing their money. In a new survey from Fidelity, nearly half of respondents say even now they are saving more, reducing debt and building an emergency fund. A new survey from Principal Financial finds that the number of workers preparing for retirement is on the rise and that most workers who expect a tax refund plan to save or invest it, or pay down debt. Before the crisis, people commonly cited going on vacation and buying big ticket items as well. Perhaps most telling, the Fidelity survey found that 78% of those who have taken steps to shore up their finances say the measures are part of a new and permanent personal financial strategy. “The sheer number of people who say the changes are permanent was probably most surprising,” says Ken Hevert, vice president of retirement products at Fidelity. People are moving from scared to prepared, Hevert says. When the financial crisis hit, 64% said they were scared and 45% said they were prepared; today, 45% say they are scared and 61% say they are prepared — a near perfect reversal. In general, those who feel prepared are the ones who have cut debt, increased savings and built an emergency fund. There remains ample blame to go around when it comes to who caused the financial crisis:<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=76463&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Financial Planning</primary_category><primary_category_link>http://business.time.com/category/planning/financial-planning/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/04/gs1125063.jpg?w=240</featured_image>
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			<media:title type="html">dankadlec</media:title>
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		<title>Savings Booster: Making it Simpler to Repay Your 401(k) Loan</title>
		<link>http://business.time.com/2013/04/01/savings-booster-making-it-simpler-to-repay-your-401k-loan/</link>
		<comments>http://business.time.com/2013/04/01/savings-booster-making-it-simpler-to-repay-your-401k-loan/#comments</comments>
		<pubDate>Mon, 01 Apr 2013 14:00:53 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[401(k) Savings]]></category>
		<category><![CDATA[Borrowing]]></category>
		<category><![CDATA[Financial Education]]></category>
		<category><![CDATA[Financial Planning]]></category>
		<category><![CDATA[Personal Finance]]></category>
		<category><![CDATA[Planning]]></category>
		<category><![CDATA[Retirement]]></category>
		<category><![CDATA[Saving]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=75538</guid>
		<description><![CDATA[Maybe it was the tortured acronym that sank the SEAL Act two years ago. So lawmakers are back with another try. The letters and measures remain the same. But this version of SEAL stands for words that are at least slightly more comprehensible. And by the way it’s a smart proposal that would help protect retirement security for millions of Americans, which is what makes this name game worth writing about. Gone is the Savings Enhancement by Alleviating Leakage in 401(k) Savings Act sponsored by former Democratic U.S. Senator Herb Kohl of Wisconsin and Republican U.S. Senator Mike Enzi of Wyoming. Say hello to the Shrinking Emergency Account Losses Act, sponsored by Enzi and Democratic U.S. Senator Bill Nelson of Florida. (MORE: How to Draw Down Your Nest Egg: 3 Alternatives to the 4% Rule) This new SEAL Act was recently reintroduced in Congress. Let’s hope lawmakers find it more understandable because its measures would address one of the huge failings of the 401(k) retirement savings system: the billions of dollars that leak out of retirement accounts each year through hardship withdrawals and loans that never get repaid. The persistent problem of savers pulling money from their 401(k) plan has grown even worse since the financial crisis. One in four workers with a 401(k) or other defined contribution plan tap their account for current expenses. This “leakage” reaches $70 billion a year, equal to nearly a quarter of all contributions, one study shows. The SEAL Act would ensure that at least some of this lost savings gets restored. Under the proposed law, anyone leaving their employer while a 401(k) loan is outstanding would have until they file their taxes for that year to repay the loan. Currently, these loans must be repaid in 60 days or they are treated as a distribution subject to income taxes and early withdrawal penalties. The SEAL Act also would allow workers to keep making contributions—and collecting the company match—immediately after taking a 401(k) loan. Currently, contributions must be suspended for six months after a<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=75538&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>401(k) Savings</primary_category><primary_category_link>http://business.time.com/category/personal-finance-2/401k-savings-personal-finance/</primary_category_link>
		<media:content url="http://1.gravatar.com/avatar/d69b05e696e822e7e41ae630be72226a?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">dankadlec</media:title>
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		<title>How to Draw Down Your Nest Egg: 3 Alternatives to the 4% Rule</title>
		<link>http://business.time.com/2013/03/22/how-to-draw-down-your-nest-egg-3-alternatives-to-the-4-rule/</link>
		<comments>http://business.time.com/2013/03/22/how-to-draw-down-your-nest-egg-3-alternatives-to-the-4-rule/#comments</comments>
		<pubDate>Fri, 22 Mar 2013 15:49:18 +0000</pubDate>
		<dc:creator>Dan Kadlec</dc:creator>
				<category><![CDATA[Retirement]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=75043</guid>
		<description><![CDATA[The 4% safe withdrawal rate has come under fire for good reason: It is based on a relatively small sample of historical market data and does not hold up when a retiree suffers big losses the first few years out of the gate. In today’s lasting low-return environment—and with the U.S. economy possibly taking a back seat to other parts of the world for decades to come—more recent studies suggest the safe withdrawal rate is more like 2.5%. Still, the 4% rule is deeply ingrained, and financial planners say it remains a valuable rule of thumb. The rule states that each year you can withdraw 4% of a portfolio’s value, raising the annual withdrawal amount by 3% to account for inflation, and be confidant that your money will last through 30 years of retirement. This rule, based on a mix of 60% stocks and 40% bonds, was popularized in the 1990s when markets were roaring. It was back tested through modern U.S. market history. (MORE: Can the U.S. Dollar Become Almighty Once Again?) The investment firm T. Rowe Price gave the 4% rule another look, beginning with a retirement date of Jan. 1, 2000. It found that the Internet bust and financial crisis would have laid waste to the finances of anyone practicing the 4% rule since that date. If you had retired on that date with a portfolio of 55% stocks and 45% bonds and begun withdrawing 4% a year (plus inflation), your portfolio would have fallen by a third over 10 years. You would have only a 29% chance of your money lasting 30 years. So it turns out 4% has been anything but a safe withdrawal rate for new retirees in these recent tough years. That doesn’t mean it won’t work going forward; it’s just not the sure thing you may have come to believe. The real benefit of this rule is that it has got millions of retirees imposing some level of discipline on their spending. For that reason, 4% is still a worthwhile benchmark. But<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=75043&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Retirement</primary_category><primary_category_link>http://business.time.com/category/retirement-2/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2013/03/160427001.jpg?w=240</featured_image>
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