Retirement on The Huffington Post

Ashley B. Carson: Hands Off Our Social Security

2009-12-17T11:56:22Z

I was recently invited to speak on Capitol Hill about Social Security's importance to people -- specifically, the real men, women and children who rely on Social Security for survival. The event was sponsored by NASI, The National Academy of Social Insurance, and was titled: "Demystifying the Deficit, Social Security Finances and Commissions." What follows is a condensed version of my remarks:

I'd like to start with a few stories about some of those real people. My first story is about Eleanor, an 86 year old retired domestic worker, who receives a check from Social Security every month for $600. This is her sole source of income. Eleanor remembers learning about Social Security at an early age; when she began working, the system was still in its infancy. She also tried to save money for her retirement whenever she could. But Eleanor worked the majority of her life in a variety of part-time domestic jobs in hotels, restaurants, and private homes -- jobs that offer low wages and no pensions, and are predominately held by women. The nature of her jobs and her wages meant that Eleanor was unable to save much of her take home pay. Today, she is living hand to mouth. A lot of the women in her generation had husbands to contribute to the household income and retirement savings, but she didn't. She always worked hard just to keep her head above water.

A recent poll conducted by NASI showed that the recession has changed the way Americans think about their financial future. Nearly nine out of 10 Americans say that with the economy as bad as it is right now and Americans having lost so much value in their homes, 401(k)s and other stock holdings, Social Security benefits are more important than ever to ensure that retirees have a dependable income when they retire. Undeniably, benefits are modest, but they are better than we had prior to 1935, which was nothing.

Older women depend on Social Security because they have to. Without it, more than half of older women would fall into poverty. The reality is that throughout women's lives, they must reconcile their work and life patterns with a retirement system that doesn't respond to their needs. Women's experiences of growing old in America are very different from men's. The financial problems women face are extensions of the problems they face earlier in life. Race, ethnicity, family and work arrangements, and economic resources are the primary influences on the quality of older women's retirement. For women, poverty in old age is often rooted in the realities that shaped their earlier lives. The main factors are the wage gap, as I like to say "you can't save what you don't earn," (earn of course being italicized because women have traditionally done much of the unpaid work that we continue to undervalue). Other contributing factors are their caregiving responsibilities, and the fact that women more often times take part-time or more flexible jobs that don't offer benefits -- either health or retirement plans.

Now, most people have heard of the wage gap -- but many people do not understand just how much this can affect a woman over her lifetime. For example -- African American women earn only 65 percent of what white men earn. Over a 35-year career, that's an average $420,000 less to save or invest for retirement. For Latinas, it's even worse. The wage gap continues to ensure that women will consistently have a lower retirement income than the average man.

As of January 2009, the average retired worker benefit was $1,155 per month or $13,860 annually; however, this annual average drops by about $2,000 for older single women. If seniors had to rely only on their non-Social Security income, 50 percent of seniors would be poor. With Social Security, less than one senior in 10 is poor. So, not only is Social Security an anti-poverty program, but the benefits are critical to middle and upper middle income elders.

My second story is about Anita. Anita, a 25-year-old management analyst, has already reaped the benefits of Social Security. Although people sometimes assume Social Security is only financially beneficial for individuals 65 and over, Anita started receiving survivors benefits when her mother died of heart failure when Anita was only 15. Anita's grandmother became her legal guardian at that point. Now, Anita's grandmother didn't expect to be raising another child in her senior years and as a result she relied heavily on the monthly Social Security check to supplement her own retirement savings and her own benefits in order to raise Anita. Because of these benefits, Anita was able to attend college -- without them, there was no way her grandmother would have the financial ability to send her to college.

So, in addition to retiree benefits, Social Security, in fact, provides critical life insurance and disability protection for working families. The Social Security actuaries estimate that 39 percent of young men and 30 percent of young women will die or become disabled before reaching retirement age. Much higher percentages than most of us realize. So, in real terms, what does this mean? Well, it means that for a young family, with a 30-year-old worker earning from $27,000 to $30,000 annually with a spouse and two young children, the Social Security disability and life insurance protection are each valued at over $450,000. About 6.5 million children under the age of 18 receive part of their family income from Social Security, which in effect lifts 1.3 million children out of poverty.

Now, that we've heard how important these benefits are I would like to make a few key points. First, if Social Security were a private company, its shareholders would be very pleased, as it ran a surplus of $180 billion last year and accumulated a reserve of $2.4 trillion. This is the only government program to run a surplus! Second, Social Security is insurance, flowing from the core American value that you work hard and pay into the system, you eventually receive a benefit if and when the insured event occurs -- lost wages in the event of death, disability, or old age. Third, with absolutely no action benefits can be continued to be paid in-full until 2037 and at that point with no action, benefits will only be slightly reduced.

I have to admit, that I come from one of the younger generations who grew up believing, thanks to a few major campaigns to privatize Social Security, that Social Security wouldn't be there for me. In fact, I don't think I've met a single person under 40 who didn't grow up believing that Social Security wouldn't exist when they reached age 65. Even more shocking is that I didn't know the real story about Social Security until I moved to Washington, to work on economic security policy for older women. To me, this means that we economists, advocates and educators have a lot of work to do, and with the impending threat of a commission, very quickly.

So, in addition to educating young people about the truth, how can we make Social Security an even more solid program than it already is? According to the recent poll done by NASI, large majorities of Americans say that they don't mind paying Social Security taxes, because it helps millions of other people -- and they know they will probably need it someday. Because of this, many of them are willing to contribute more to the program in order to ensure its future. Seventy-seven percent of people polled agree that it is critical to preserve the program for future generations even if it means increasing working Americans' contributions. Two out of three Americans agree that we should increase Social Security benefits because millions of Americans have lost savings and pensions in the current economic crisis.

NASI has recently released this issue brief which provides dozens of options to restore Social Security make it even more adequate. Social Security's projected shortfall can be restored to balance by increasing its revenue, decreasing its outgo, or some combination of the two. Not all increases in revenue involve Americans paying more. For example, many experts have proposed increasing the return on the investment reserve. This could be done by allowing SS to invest a small part of its reserve in broadly based indexed stock funds. This would eliminate about one-fifth of the shortfall. Another alternative is to raise the cap so higher levels of wages are insured for SS purposes. Congress could lift the Social Security cap so that Social Security insures all wages and all workers pay the same contribution rate, regardless of income. This eliminates almost the entire shortfall and 83 percent of people polled supported this reform.

Another option would be to dedicate the estate tax solely to Social Security. This option, favored by 70 percent of individuals polled, reduces the deficit by about one quarter. These ideas are in stark contrast to other options such as raising the retirement age (only supported by 31 percent of those polled) and reducing benefits (only supported by 11 percent of people polled.) This may come as a surprise, given that those are usually the only two options you hear about. Not only is cutting benefits extremely unpopular, but it is poor policy. Indeed, given the continued and even increasing importance of Social Security, 88 percent of those polled say it is more important than ever. I think we should be increasing benefits, and the NASI issue brief provides many options for how this can be done at a modest cost.

In closing, I want to remind you that there is a very strong sense among the American public that Congress needs to act in order to secure this program for future generations, but at the same time, emphasize that the program remains strong. As a country, we need to think very long and hard before we continue lump Social Security in with Medicare and Medicaid, when the problems are completely different. To do so continues the cycle of people not understanding how Social Security operates, how it is financed and its underlying pact with the American people to provide greater financial stability in your most vulnerable years or when tragedy strikes. As we try to determine the best route for the long-term solvency of Social Security, I urge all of you to think about the real people, the widows, children, and older men and women who rely on this income to pay for their most basic needs. Any reduction in benefits, to ultimately lengthen the solvency of an already solvent program will hurt them and that goes against core American values. www.socialsecuritymatters.org

Top Execs' Retirement Plans Had Guaranteed Returns, Despite Losses On Employee Plans: WSJ

2009-12-15T14:38:17Z

One-quarter of top executives at major U.S. companies had gains in their supplemental executive retirement-savings plans in 2008, even as employees had sizable losses in the companies' retirement accounts, according to a Wall Street Journal analysis. The gains in executive retirement accounts often stemmed from guaranteed fixed returns on executive-savings plans.

Patrick Takahashi: How To Roast A Turkey

2009-11-23T18:46:23Z

[In July, the day after my wife passed away, The Huffington Post published my article on "Gratitude, Not Grief." With all the trauma now fading memories, I have entered a new and rather exciting phase of my life.]

For some of you looking for a reasonably safe adventure, you might want to consider roasting a turkey for the holiday season. I would like to share with you my first attempt.

I noticed that Safeway was charging only $3.99 for any turkey 16 pounds or less... not per pound, but per whole fowl. (Later I learned that various supermarkets also had similar sales, and, for all I know, this happens every year at this time. I would imagine that a state like Minnesota, which is noted to produce the most number of turkeys--the kind you eat--must give them away for free. Oh, another nice piece of trivia is that the US annually raises just about as many of these birds as our total population.)

For that price, I would have been satisfied with a pigeon-sized bird, but the smallest one I could find was 11 pounds. Then, I couldn't check out because the fine print said I had to have a bill of at least $20. But that was no problem, since I bought a few more necessary items. Unfortunately, at home, I couldn't fit it into the refrigerator, so I placed it into one of those insulated bags for defrosting.

The next day I learned from my golf group that it would be smart to first soak the bird in a saline bath to kill the salmonella and such, and add some taste. I did not have enough salt, so again I went to the market and bought a whole standard model cylindrical container of salt for all of $1.07. Amazing, considering the one pound 10 ounce weight and shipping cost. I then thought about cranberry sauce and sweet potato, but, no, it was not really that day yet, and I would see too much of it on November 26, so I went home with only the salt.

However, circumstances prevented my actually placing the bird in the oven at that moment, so I added ice as necessary. Already it was much more work than I wanted, especially as I don't particularly like turkey.

Rather than going to the Internet, I noticed a large brown Treasury of Great Recipes in the kitchen, and found "Roast Turkey Wayside Inn." I hate cloves, parsley, thyme, neck, heart, liver and giblet, so I purposely left them out. Oh yeah, you need to remove those organs inside of the turkey. There was also a plastic contraption which served no particular function to me, and maybe could melt in the oven, so with great difficulty, I removed it. Maybe a reader will comment on this matter.

I'm also not a great fan of bread stuffing, so I created my own: cooked rice, can of corn, water chestnuts, and chopped macadamia nuts/mushrooms/onion. I found some bacon, and with some irony noted that it was made of turkey. So that's what Pearl was feeding me. Anyway, I crisped the bacon and worked it in with a raw egg, plus some salt and pepper. The whole concoction perfectly fit into the turkey and I tied the legs to keep everything in place, barely. Into a large pan with aluminum foil lining, I added two cups of water and a quarter pound of butter.

The main parameters of importance I sought from the book were what temperature (325 degrees F) and for how long. To my chagrin, stated was: ten to twenty minutes per pound. Thus, using a calculator I determined that the oven should be on for anywhere from less than two hours to nearly four hours. I arbitrarily selected three hours. The main thing was to gain the right shade of brown, which was a slam dunk, as the other options are white and black.

The directions called for basting every half an hour. Basting? What's that, and how? Well, that's somehow getting the liquid part in the pan spread over the bird to keep it moist and, ultimately, tastier. I think I needed that bulb and tube thing, but a large spoon sufficed. Be careful, as this can be a dangerous process when the oven is hot.

Well, three hours later, perfecto. After a cooling period, I didn't bother with careful carving because no one was watching and I also never learned. Instead, I cut delectable portions and placed them on a plate. The recipe also called for gravy, but why bother with having to wash another pan and add flour. It would be sacrificed anyway if diet was a factor. I placed a bit of pan liquids over some mashed potato I found in the freezer from a previous experiment, had the outstanding stuffing a la Takahashi and fixed a lettuce and tomato salad with blue cheese dressing. Complemented by a glass of cabernet sauvignon, no, make that two, I had one of my best meals, ever.

You know, maybe now, I might begin to appreciate turkey, which is a good thing because the leftovers filled eight quart size Ziploc bags, and should last me the lifetime of the freezer. For only $70 - $150 I could have bought a whole prepared turkey with all the trimmings from assorted suppliers, but this was for the sheer experience, plus it was incredibly economical. Heck, I even had more than 50 cents of salt left for future use.

My next adventure could well be a goose for Christmas...or, maybe Peking Duck.

Recession Intensifies GenX Discontent At Work: Generation X Vs. Baby Boomers, GenY

2009-11-16T00:14:40Z

CHICAGO — They're antsy and edgy, tired of waiting for promotion opportunities at work as their elders put off retirement. A good number of them are just waiting for the economy to pick up so they can hop to the next job, find something more fulfilling and get what they think they deserve. Oh, and they want work-life balance, too.

Sounds like Gen Y, the so-called "entitlement generation," right?

Jim Selman: Aging: Giving Up 'Giving Up'

2009-11-11T10:29:59Z

My partner and I were recently enjoying one of those lazy weekend mornings just chatting about life in general when we got onto the subject of getting older and how we feel about it all. I made the point that my passion and The Eldering Institute® is about transforming our culture's view of aging and teaching people that we can change how we relate to the future--and, as a consequence, we can have more choices, more possibility and more 'aliveness' than what most people can expect as they grow older. Moreover, I reasoned, once people are empowered as they age, they are free to contribute more, build partnerships with the young and make the difference they always wanted to make--to even take on the world's intractable problems.

She rightly pointed out that I was talking in a context of 'more' in terms of possibilities and opportunities to contribute, 'better' in terms of quality of life, and 'different' in terms of offering alternatives to conventional retirement options. In effect, I was speaking about my vision for improving life as we age but doing so with in the same system of values and expectations of "more, better and different" that we've been living with all our lives. She suggested that perhaps successful and satisfying aging has more to do with consciously 'giving up'. For example, giving up the personal, cultural, economic and sometimes political expectations around which most of us have organized our lives and our patterns for living. By this, she didn't mean becoming resigned or succumbing when we don't get what we want. We discussed consciously giving up our:

1) Prejudices
2) Beliefs that may no longer serve us
3) Longstanding habits to conform to cultural norms or societal expectations
4) Need for positive feedback to validate our behavior or our personal value in the world
5) Egocentric certainties, and (by extension)
6) Fears and resentments.

What if wisdom has more to do with 'giving up' our beliefs and attachments than 'getting' more insights or having 'more, better and different' of whatever we think is important?

What she shared was one of those 'bolts' of insight that rocked me to my foundation. For the past 30 years, I have been working with the idea that transforming aging was about 'more, better and different' varieties of the 'good stuff' and a way of 'getting out of the box' and letting go of or transcending the 'bad stuff'. It is important to understand that there is nothing wrong with living in a 'more, better and different' perspective. In fact, we have no choice about that, since it is the prevailing paradigm of our times. The question is are we choosing it and if so, can we then have a possibility of not choosing it--of giving it up.

Giving up something--whether it's a pattern, a belief or a habit--that we've lived with for a long time isn't so easy. In fact, from one perspective, most of our behavioral apparatus is so intertwined with "who we are" (or at least who we think we are) that it would be just as accurate to say that we are used by or addicted to our beliefs, patterns and habits. So to consciously choose to give up one of these 'items' that we believe make us who we are is something akin to a small 'ego death', a passing from one relationship with life and the future into another one--a transformation.

The irony is that I have known for a long time that transformation is not 'just another' point of view or paradigm. Transformation is a way of thinking about our thinking, a way of observing our observing, a point of view about our points of view. Transformation is the distinction that allows us to escape a reactive, deterministic and self-referential (Cartesian) world view of causes and effects in which we lose the capacity to differentiate between our 'self" and our 'thinking'. In effect, transformation allows us to recover our capacity to choose--it is freedom. I now see that transformation is also the basis for a definition of wisdom where wisdom is giving the best of who we are and our experience to others--along with the space for them to accept or reject what is offered and without any attachment to how it is received.

I now also appreciate that Eldering is about changing our relationship with the future ... at any age. It is not about 'more, better or different' varieties of what we already have. By the same token, it doesn't preclude that either (if that is what we are freely and consciously choosing). Eldering is coming from age being transparent already. Eldering is choosing each moment to be exactly what it is.   So whatever we choose inside the context of Eldering, whether it's 'more, better or different' or something else entirely really doesn't matter. We can give up 'giving up'. What matters is being conscious of and responsible for our choices.

© 2009 Jim Selman. All rights reserved.

Rest Easy: Retirement (and Money) Can Improve Sleep

2009-11-02T12:30:03Z

It's no secret the stress of work can keep you up at nights. Now research shows that retirement can spur less fitful sleep, at least for people who are financially stable.

George Bush Motivational Speech Draws Over 10,000

2009-10-27T01:50:29Z

FORT WORTH, Texas — Former President George W. Bush has used a paid motivational speech in Fort Worth, Texas, to urge listeners to stand by their beliefs.

Bush spoke to about 11,000 people at a "Get Motivated" business seminar Monday.

Unemployment Among Americans 65 or Older Surges, Highest Since Great Depression

2009-10-23T17:07:35Z

It is well known that during the nation's gale-force recession, many older Americans who dreamed of retirement continued to work, often because their 401(k)'s had plunged in value.

In fact, there are more Americans 65 and older in the job market today than at any time in history, 6.6 million, compared with 4.1 million in 2001.

Naomi G. Goldberg: 'Save for Retirement Week' Rings Hollow for Gay and Lesbian Couples

2009-10-23T15:42:34Z

The United States Congress has designated this week as National Save for Retirement Week to encourage Americans to save for retirement. Research continues to shows that the majority of Americans aren't doing enough to prepare for retirement. A 2009 report from the Employee Benefits Research Institute found that 53% of American workers have less than $25,000 in total savings and investments.

For most Americans, the congressional cheerleading is backed up by a range of substantive policies that provide incentives for savings. But for members of same-sex couples, the Congressional proclamation will ring hollow. Federal policies penalize gay and lesbians for retirement savings and greatly hamper their ability to provide for their families after they die.

In two new studies released this month by UCLA School of Law's Williams Institute, researchers have found that when compared to different-sex married couples, gay and lesbian couples have less retirement income and have less ability to provide for their families after they die. For example, female same-sex couples have 20% less income during retirement than different-sex married couples, and they rely more heavily on social security benefits. Male same-sex couples are more likely to continue working during retirement and rely on wage income as a large share of their income during retirement.

One of the main incentives for retirement savings is to provide for family members after death. Federal policies make this more difficult for same-sex couples. For example take two hypothetical couples: Joe and Marla and Jared and Mark. Both couples have been together for twenty years and have raised children. Both couples are among the half of Americans whose jobs sponsor a defined contribution retirement plan, like a 401k. Unexpectedly, Marla and Mark die. In the case of Joe and Marla, the balance of Marla's 401k can be transferred to Joe without any tax bill. Joe can then wait until age 70½ to begin taking money from this retirement account.

Jared can still rollover the balance of Mark's 401k into an IRA. But, because Jared isn't recognized as Mark's legal spouse, Jared will lose nearly half of any amount over $3.5 million due to the estate tax. Plus, Jared will be forced to take money out of this account immediately, even if he doesn't need that money now -and the money will be taxed more now as opposed to when he's older and less likely to have income from other sources. Jared doesn't have the option of waiting until he is 70½ like Joe does.

Plus, if Mark's estate, such as the value of his house, retirement plans, stocks, cars, or artwork, is worth more than $3.5 million, Jared will have to pay the estate tax on that value. In 2009, it is estimated that 73 same-sex couples will be in just this situation. And they will, on average, have a tax bill of $3.3 million. Meanwhile, all of Marla's assets can be transferred to Joe without any taxes.

Much of this inequality in retirement assets and estate taxes is due to the fact that same-sex couples aren't recognized as married couples by the federal government. This is the case even if they are legally married in Massachusetts, Connecticut, or Iowa. The repeal of DOMA would mean that for legally married same-sex couples, this unfair taxation on retirement assets would end. Even prior to the repeal of DOMA however, Congress could address these estate tax and retirement plan inequalities similar to the way it allowed same-sex spouses to rollover, albeit with strings attached, the balance of their dead spouse's 401ks in 2006.

As part of National Save for Retirement Week, Congress should turn its attention to the ways in which committed, same-sex couples are treated unfairly and are disadvantaged when it comes to the ability to prepare for retirement and protect their families. For these families, federal proclamations should be backed by federal policy.

Working After Retiring Can Be Good For Health

2009-10-23T14:04:47Z

People who keep doing some work in their field after they retire may enjoy better physical and mental health than those who stop work completely or switch to another area of work, according to a U.S. study.

Don McNay: Just Say "No" to Adult Children Wanting Money

2009-10-20T19:12:24Z

My old man is another child that's grown old

-John Prine

It seems like every family has one -- the Child Who Never Grew Up.

They mooch off their parents well into their "adulthood." They frequently need to "borrow" money, with no intention of paying it back. They always have car problems, relationship problems, "bad luck" or other sob stories.

All their problems have the same proposed solution: Money from mom and dad.

Often they are living with mommy and daddy, long past the time when their contemporaries are starting careers and families.

Concepts like budgeting, responsibility and ambition don't make it into their vocabularies.

According to multiple media accounts, former Michigan basketball star Rumeal Robinson took mooching to a new art.

He tricked his mother into letting him mortgage her home. A headline in the Miami News Times sums it up: "Hoops hero Rumeal Robinson blew a fortune on strippers, got indicted and left his mom homeless."

Sounds like a great guy.

Mooching children usually don't hurt parents as dramatically as Rumeal Robinson did, but the results are still bad. Adult children with a "failure to launch" are dragging down parents who can't afford to subsidize them.

The headline from a recent Newsweek online article read "Retired and Broke."

According to the AARP, people over 55 is the age group most likely to declare bankruptcy. The article cites the usual bankruptcy causes, like medical expenses and credit card debts, but hammers on the idea of parents not giving money to their children.

The article ends by noting that "parents may want to help the next generation extricate itself from debt. Leading by example might be a more valuable gift."

Wise advice.

It's not an easy decision to implement. There are situations, like medical emergencies or short term downturns, where families don't have another alternative. I'm also not talking about children with severe illnesses or who are unable to work. I wouldn't throw my sick child out on the street and neither would you. I'm talking about the child who has a car, an iPhone and running-around money but doesn't chip in for rent or groceries.

You are not doing your children any favors by not allowing them to grow up.

Roger Ailes did an interview for CSPAN a few years ago. He said when he turned 18, his father asked him where he planned to live.

Ailes was puzzled, but his dad said, "I can get you a job at the factory, (where his dad worked) but you can't live here." Ailes decided to go to college at Ohio University and got into broadcasting. He went on to create Fox News, CNBC and play major roles in some presidential campaigns.

Love him or hate him, Ailes is one of the most influential people in American media. His father forced him to grow up and make his mark.

I had a similar moment on my 18th birthday. My father took me outside and said, "You are going to get what I got on my 18th birthday -- the whole wide world to make your living in." (Dad had to quit school and go to work at age 15.)

Dad pointed to his car. He said, "You see that Cadillac? That is MY Cadillac, not OUR Cadillac. Make some money and buy your own." 20 years later, I did.

It wasn't "tough love." It was making me realize that I was an adult and had adult responsibilities.

I'm OK with parents helping children through college (in four years, not forty), but after that they are on their own.

People in my father's generation were drafted and sent off to war. There are 18 year-olds today who are fighting in Afghanistan and Iraq.

I saw a Frontline story about Afghanistan where the soldiers are sleeping on the ground without mattresses. I suspect those soldiers don't have much sympathy for a 30 year-old who is still living with mommy and daddy.

I work with people who receive "big money" from lotteries, inheritances and injury settlements. All of them have the same problem that retirees have. Once they lose all their money, they have very little ability to make it back. Like retirees, their financial downfall often comes from family and friends who want to "borrow" money from them.

Which gets us back to the adult in your house who still acts like a child. I can go on for hours about how making life too soft for him or her is bad. I can go on about how eating away your savings will leave you in a situation where death is your only way out of the mess. I can go on for hours about how giving adult children money is not actually love. It is enabling bad behavior, like giving heroin to an addict.

Instead, I give you three words to remember: Rumeal Robinson's mother.

Don't end up like her.

Helen Ford adopted Robinson at age 10 after his biological mother abandoned him. She and her husband raised him, helped Rumeal become part of a national championship basketball team at the University of Michigan and a player in the National Basketball Association, making millions of dollars.

Rumeal blew through his money, spending it on strippers, nightlife and high living. He never gave anything to the people who raised him. After his career ended, he got his mother to agree to let him take a mortgage on her house. Later, it was foreclosed on.

She used the house as a center for foster children. Now she lives in a two room apartment.

Rumeal's mother had good intentions. She wanted to help her son.

Parents are often the last to see that their child is a piece of human garbage. They are the easiest of prey.

I'm seeing a lot of elderly people lose their houses, savings and often their lives (financial pressure is a key trigger for suicide) because children "borrowed" money and never paid it back.

It's time to cut them off.

The kids will pout and cry. They will try to make you feel guilty. Immature people do that. Show them that you are a real, loving parent and not a patsy. Just say "No." Your own survival is at stake.

If you want some reassurance, I would ask you to call Rumeal Robinson's mother, but I assume her phone has been cut off.

Read more at: http://editorial.huffingtonpost.com/tmp/individual-entry-archive13.html

Don McNay, CLU, ChFC, MSFS, CSSC is one of the world's leading authorities in helping people deal with "Big Money" issues.

McNay is an award-winning syndicated financial columnist and Huffington Post Contributor.

You can read more about Don at www.donmcnay.com

McNay founded McNay Settlement Group, a structured settlement and financial consulting firm, in 1983, and Kentucky Guardianship Administrators LLC in 2000. You can read more about both at www.mcnay.com

McNay has Master's Degrees from Vanderbilt and the American College and is in the Hall of Distinguished Alumni of Eastern Kentucky University.

McNay has written two books. Most recent is Son of a Son of a Gambler: Winners, Losers and What to Do When You Win The Lottery.

McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field.

Read more at: http://editorial.huffingtonpost.com/tmp/individual-entry-archive24.html

Hillary Rubin: What Do You Hold On to for Security?

2009-10-20T14:40:13Z

A
few weeks back I was in a weekend workshop with some incredible people. Over
lunch one of the men that was sitting at the table began to talk about Bernie Maddoff and how
he has a "big one" coming to him. All of us sat there and
watched how upset he was around this situation and he didn't even loose any
money with him. We all agreed that it was a horrible situation and felt for
those that were taken advantage of. Then my friend Mel who works as a coach
said, "Well what do you think is at the core of your anger?" He
looked at her like she had horns in her head and said, "Are you nuts
that guy totally took advantage of people and wrecked their lives." (I don't
think anyone has ever asked him what is under the surface before).

She shared with the group that is about security and what we believe to be safe
that is being challenged here. At that point I was inspired and a new world
opened up for me. We all are holding onto something to feel secure consciously
and unconsciously -- money, health, marriage, education, businesses, beauty,
youth, etc... Questions began to swirl in my mind knowing she was totally
onto something deep here. What was I holding to in my life to be safe? What was
the one thing that if it was not there what would happen? What do I count on
every day I wake up and go to sleep at night?

We all went around the table talking about this and I was still in this place of
seeing how our world is shifting paradigms. I asked Mel what was her security
and she said, "I count on my health, I have been healthy all of my life
and if I didn't have it that would be scary." Another friend said,
"My husband and someone else said, "My marriage." We are living
in a magical time that's also pretty painful for many people as jobs are lost
while new businesses are created. What we thought would be around
"forever" is fading away faster than ever as each day passes. We are
seeing financial paradigms collapse, newspapers and magazines collapse, and a
health system crumble into pieces. And we are all faced with a choice to see it
as a problem or opportunity. I tend to choose opportunity even if it’s
uncomfortable. (And that will inform there is growth happening if you choose
it).

After a week of contemplating and talking about this I realized that we really
couldn’t count on anything outside ourselves that will last forever. I began to
see how I have tricked myself to believe in the structures I have created and
all for my own comfort or safety. In my yoga practice and meditation practice
my focus was intensified on my breath. There was a time I was not able to do
yoga and it scared me and then it changed. I learned I could count on me and my
breath for as long as it lasted and use this as my practice to enjoy life even
more for the short time I am here. I see for myself that everything is changing
and as I have learned in my own spiritual practice is that the form changes but
the actions stay the same. We are all made of energy and as paradigms are built
they will also fade away and new ones will arise. (Take time to honor yourself
and journal your connection to yourself)

What I have come to understand and it is just the tip of the iceberg here is that we
are all left with the essence that each of us are that existed before we were
born that never dies. This fire inside of us is what keeps us moving, breathing
and alive. We can count on that for as long as it lasts and turn to it with
gratitude. This takes being responsible in new ways that we may never
have been met with and from his a new paradigm is being born. I invite you to
step into a new space and uncover what you believe is secure and then see how
you have created those relationships, situations and even bank accounts to
insure a life that will look very different from the one you see in your mind.

I have found that with every moment there
is a great opportunity to love more, laugh more
and deepen in your own heart which in turn assists you to give and be even more beneficial on this
amazing planet for as long as you are here to dance.(this is the ultimate that we have no control of that may be behind what you are holding onto to feel safe)

For
more about Hillary please go to Hillary
Rubin.com & I am not a mess.com.

Eric Schurenberg: Retire the 401(k) - Replace it with This

2009-10-15T08:38:50Z

Now that Time Magazine and the New York Times have joined CBS MoneyWatch at beating up on the 401(k), it's only fair to ask what the country ought to have instead. The traditional pension that worked out fine in the Mad Men era turned out to be too static for a modern mobile workforce. So jilting the 401(k) to return to the old-fashioned pension, like going back to your spouse after a fling, is not an option. You need something that combines features of both.

There are actually a number of proposals that try to do that. One of the more intriguing is the New Benefit Platform for Life Security, proposed by a trade group of retirement plan administrators called the Erisa Industry Committee. It has all the portability of a 401(k). But like a pension, it absorbs financial market risk so you don't have to.

The NBP is built around a network of private benefit administrators, which are financial institutions that compete to manage your retirement savings. Your employer is no longer responsible for running a retirement plan on your behalf; in fact, your employer doesn't have anything to do with the NBP, unless it chooses to contribute to your account as a perk. Instead, you set up the account with the administrator you choose, and you can keep the same administrator when you change employers, get laid off, retire or whatever.

You have the option of setting up the NBP like a pension -- so that everything you save converts at retirement to income you can't outlive. It's up to the benefit administrator to make sure you get that income, come boom or come bust. That way, you're not at risk of having your life savings gutted just before you retire, a fate that befell millions of baby boomers who had been counting on their 401(k)s.

So the NBP is sort of like an IRA, in that it's a retirement plan that you set up for yourself. Except that, unlike an IRA, you're not limited to $5,000 a year of savings. You can put enough money into it to fund a decent standard of living. And it's sort of like a traditional insurance company annuity, too, in that you put in cash and get back a promise of guaranteed monthly checks for life in the future.

Now, to be sure, guaranteed income sounds great in the wake of the Great Crash of 2008. But that's also the weakness of this plan: The guarantee is only as good as the benefits administrator's ability to make good on it. We're talking here about a guarantee that you have to believe in over the course of your whole career and lifespan in retirement -- a period that could easily stretch 70 years all told. Who would you trust over that length of time? Fidelity? Citigroup? AIG?

With the 401(k), we have a system that sets up some generations to retire broke and others to retire rich, based entirely on whether the last years of their career fall during a boom or a bust. I don't think that's a good plan. I think we need to move to a system that spreads the risk of booms and busts over a whole population -- and that's what the NBP does. But no system is perfect, and none can make risk go away. The only question is who bears the risk: You alone (the 401(k) way)? Your company alone (the old-fashioned pension)? Or some larger population of workers and financial institutions? The first two didn't work. So why not try the third?

Continue reading on CBS MoneyWatch.com

Bankrupt Retirees: Older Americans Are Most Likely To Declare Bankruptcy

2009-10-14T14:07:42Z

Older Americans are heading into and through retirement with a boatload of debt. They're carrying everything from mortgages and home-equity loans to big credit-card balances, and many are finding the burdens harder and harder to bear. In the last eight years, the over-55 crowd has become the age group most likely to declare bankruptcy, according to the AARP.

Recession Creating A Lost Generation; Young People Can't Find Jobs

2009-10-11T15:48:06Z

Bright, eager -- and unwanted. While unemployment is ravaging just about every part of the global workforce, the most enduring harm is being done to young people who can't grab onto the first rung of the career ladder.

Affected are a range of young people, from high school dropouts to college grads to newly minted lawyers and MBAs across the developed world from Britain to Japan. One indication: In the U.S., the unemployment rate for 16- to 24-year-olds has climbed to more than 18 percent, from 13 percent a year ago.

Social Security Demand Shows Huge Increase Due To Recession

2009-10-05T09:28:34Z

Applications for Social Security benefits rose almost 50 percent more than expected this year because of the recession, according to the federal retirement program.

Jeff Kreisler: This Week In Cheating: Ken Lewis' Pension

2009-10-01T18:18:40Z

Bank of America's Ken Lewis Gets A $53 Million Retirement Payment

The Cheater Says:
Guess his pension is just made up of all his employees and investors pensions.

After all, what's a pension? A system wherein the employee gives the boss money for "safekeeping." Good luck with that. Might as well give your little kids to the Catholic Church for "safekeeping." You're not getting either back.

Score another one for The Cheaters.

--

Jeff Kreisler's first book, "Get Rich Cheating," is a Boston Globe Bestseller and can be purchased in fine bookstores or online.
"Just by reading this book you'll earn an asterisk next to your name. You'll be laughing all the way to the bank, assuming other cheaters haven't forced it into bankruptcy yet." - Rachel Maddow (MSNBC)
"Catcher in the Rye for evildoers" - Penthouse Magazine
"A very funny book with a very timely message." - Terry Jones (Monty Python)
"This is THE book to read in the unemployment line." - Lizz Winstead (Co-creator of The Daily Show)
"Laugh out loud - roaring!" - CNBC
"A brilliant and brilliantly sustained satirical broadside. On just about every page, you'll find a pithy, pointed barb worthy of the late great George Carlin." - Tony Hendra (National Lampoon, Father Joe)

Roger W. Ferguson, Jr.: Retirement Security, Guaranteed

2009-10-01T14:02:28Z

The economic shocks of the last year have shown it is time to address serious shortcomings in our nation's approach to retirement savings. The dramatic decline in financial markets has reduced the value of 401(k) accounts that Americans are counting on to complement Social Security and has led many retirees to realize it is possible to outlive their savings. What's less obvious is that we have the building blocks right now to make sure that doesn't happen, and that workers who participate in retirement plans have enough money to cover basic living expenses for the rest of their lives.

President Obama recently outlined a series of initiatives - from expanding automatic enrollment in 401(k) and other retirement savings plans to making it easier for workers to direct their income tax refunds into their retirement accounts - that will help many people save for a more secure retirement.

At the same time, there is growing awareness of the need for retirement savings plans to translate into some sort of guaranteed income in retirement. 401(k) plans were conceived as supplementary savings, not as a holistic retirement system.

While we're past the days when most Americans worked a lifetime for one company and could expect to be rewarded with a monthly pension, a few changes in the way retirement plans operate will go a long way to strengthening retirement security for the workers who participate in them.

Guarantee a portion of savings as income. The President's financial reform plan unveiled in June urges looking at new ways to generate more income for retired workers. One idea that merits further discussion is converting a portion of savings to a series of monthly payments that continues for the life of the retiree and a surviving spouse or partner, and provides some degree of inflation protection (subject to the claims paying ability of the company providing the payment). In the current downturn, retirees who received income from a fixed annuity were able to rely on it to cover expenses like food and housing even while their market investments lost money. Whatever the mechanism, the goal should be to ensure that Americans receive enough monthly income from a combination of their retirement account and Social Security to cover their living expenses.

Offer no more than 15-20 well diversified investment choices. Defined contribution plans should offer participants an investment menu of no more than 15 to 20 options, including low-cost guaranteed fixed annuities. That number is sufficient to cover a range of asset classes without overwhelming participants. Research shows that more than 20 options can lead to less diversification, which is essential for managing investment risk over the long term.

Ensure that contributions are sufficient to generate real income. Contributions by workers and their employers must be sizeable enough to generate sufficient retirement income, assuming reasonable investment returns over time. Employers contribute on average about three percent of employee wages to today's 401(k) plans, most often by matching contributions from workers. The most common match is $.50 per $1.00 up to the first six percent of pay. Among eligible workers who participate, total contributions average 6 to 7 percent of pay. Yet to build sufficient savings, contributions in the range of 12 percent are needed. The public sector, including many state universities, provides a model with defined contribution plans that frequently feature non-discretionary contribution rates for both the individual and the employer.

Keep an eye on financial companies' fees. Companies that provide investment and other services to retirement plans must operate cost-efficiently, with a focus on minimizing fees and expenses so that retiree income can be maximized. For example, participants in TIAA-CREF, the company I lead, benefit from our structure, which assures that money we make goes to help meet the financial needs of participants on the best terms practicable.

Social Security and traditional pensions also need to be shored up over the long term. But we can and should focus right now on improving the defined contribution plans that are the only retirement plan many Americans will ever have. With forethought, we can have a system flexible enough to benefit individuals as they navigate the modern economy, and that guarantees income so retirees can live out their years in dignity.

Larry Gellman: Back to the Future -- The Tension Over Tense

2009-09-30T17:46:14Z

Have you ever noticed that most things people say they are worried might happen in the future are things that have already happened? Once the dreaded event has taken place, they start speaking in the future tense about it as though it hadn't happened yet -- but they're worried that it might.

That was this year's Rosh Hashanah insight that got me through the day as we Chosen folks ushered in 5770 the other day.

As a financial adviser I have seen it repeatedly over the years. Investors and the business news media always seem to consider the market to be risky after it has already been crushed. It is only near market tops that people tend to be comfortable owning stocks and are losing sleep because they don't own enough hot issues.

We saw panic at the bottom after the stock market crash in 1987 and again last March when people were so worried about how risky the market had become that they wanted to sell every stock they owned -- including companies that were trading at valuations that were less than the cash they had in the bank. That, of course, was after their accounts had been crushed and the people sold their stocks without regard to price just so they could sleep at night.

We saw the mirror image of that behavior during the late 1990's during the tech bubble. "Conservative" investors fired their money managers for not owning enough high-flying stocks that had already gone up by 1,000 percent or more. Then they turned around and sued their new managers in the early 2000's because they owned too many of the internet companies that the investors themselves ordered them to buy.

It's easy to poke fun but in fact human nature tends to lead us astray under a variety of circumstances. With investments, mob psychology takes over. People get greedy at the top and afraid at the bottom. At the end of the day, they almost always default in favor of sleeping at night.

What is harder to understand is why people speak in the future tense about their worries months after the worst has already happened and the risk would seem to be gone.

The same phenomenon seems to apply to the criticism and concerns expressed about President Obama. The very issues that many detractors say they are most worried about seem to be events that already happened long before Obama even took office.

For example, critics say they are worried that Obamanomics will create huge federal deficits and destroy the economy. But during the eight years of George W. Bush's presidency, what had been a budget surplus turned into $5 trillion in deficits and that doesn't include the cost of the Iraq war and other expenses that were made off budget.

To save the economy, Obama will certainly run $1 trillion-plus deficits in coming years, but Bush already did that in 2008. John McCain has admitted that had he been elected the deficit numbers would have looked pretty much the same.

As far as destroying the economy is concerned, that was pretty much a done deal at this time a year ago -- months before Obama was even elected.

There is also a lot of hand-wringing and fear that Obama wants to redistribute wealth and take all the money from the rich and give it to the poor. But wasn't it Bush who pushed through a $170 billion stimulus bill more than a year ago where checks of up to $1,200 were sent to the poorest Americans in a failed effort to avert a recession? Where were the cries of "socialism" and the teabagging parties back then? And wasn't it Bush who redistributed billions of in the opposite direction with his tax cuts for the wealthy?

The same is true regarding many concerns about health care reform -- not the phony ones which are just based on lies. Outrage is routinely expressed about having a government-financed health care system in which the care itself would be rationed.

But isn't that what we already have with Medicare, Medicaid, and the V.A.? And isn't health care already being rationed by our current system?

I am covered by a "gold-plated" health plan but my premiums and co-pays go up every year and the procedures that are covered by my insurance keep going down. In recent years, I have been told more and more often that "your insurance doesn't cover that procedure" and have seen an increasing number of doctors refuse to accept patients covered by certain insurers because their reimbursement levels have dropped so dramatically.

Perhaps the most ironic line of this whole debate comes from the millions of Republicans who have cautioned Obama and the Democrats to "keep the government away from my Medicare."

There are many reasons to be concerned about the future of health care in our country and how we're going to pay for it. But those who are most concerned about the government controlling coverage or about care being rationed in the future are waiting for a train that left the station years ago.

My guess is that 95 percent of the things most people worry about either have already happened or will never happen. Having said that, there is no doubt that fear about the future can be a useful tool. But only if it is used to keep us out of trouble or to spur us on to imagine and work to create better outcomes and a better world.

Today, however, fears and worries seem to mainly just whip up anger, hate, and demonization of our leaders and institutions.

Hopefully during the coming year we will funnel more of our energy to finding constructive solutions to the many problems that confront us and waste less worrying about things that have already happened or never will.

Steering the Ship of State and our personal lives is tough enough under the best of circumstances. It becomes impossible if we spend all our time looking in the rear view mirror.

Ken Lewis Retiring: Bank Of America CEO To Step Down By End Of 2009

2009-09-30T17:30:25Z

NEW YORK — Ken Lewis, the embattled CEO of Bank of America Corp., is leaving the company, succumbing to nearly a year of strife that followed his company's acquisition of Merrill Lynch & Co.

The bank, the nation's largest by assets, said Wednesday that Lewis, 62, decided on his own to leave and would retire as CEO and also leave the company's board by the end of the year. The company did not announce a successor, saying one would be selected by the time Lewis steps down Dec. 31.

Byron Williams: My Recent Trip to the Mailbox

2009-09-24T16:14:32Z

I recently celebrated my golden anniversary of life. Historically, I've not been one for public celebrations. I have always preferred to use these annual commemorations for quiet moments of self-reflection.

I feel great; I don't look a day over 49. I've even found a measure of contentment by being in excellent physical shape -- with the added proviso, "for my age."

Knowing that I was soon approaching 50, friends and family would occasionally ask: "How does it feel to be turning 50?"

How do you answer that? Since I had never been 50, all I could say: "It's no big deal." Many of my close friends have already reached the five-decade plateau this year, so it became one more thing to bond around. And, hey, it beats the alternative.

It wasn't a big deal. I haven't given it much thought, at least not until I went to my mailbox approximately 15 days before my birthday. Those of you who have already passed 50 no doubt know where this yarn is headed.

It is that once-in-a-lifetime moment when you make the perfunctory visit to the mailbox for the usual assortment of bills and junk mail only to be startled by that four-letter acronym on the left side of the envelope staring at you with the correct mailing name and address that reads: AARP!

Couldn't there have been a warning? Maybe several postcards months in advance preparing me for this date with inevitability that read:

"In a few months we'll be calling."

But this is wishful thinking by someone coming to terms with the shock and awe that the American Association of Retired Persons has come calling without notice.

AARP's arrival robs any sober-thinking individual of the impulses of denial. We can lie to our friends, but if AARP says you're 50, you're 50.

I would imagine their accuracy rate percentage on age is off the charts. The "50 is the new 40" propaganda is no match for the reality of AARP.

Didn't they know people are living longer? Isn't there some sort of adjusted-for-inflation criteria associated with age? That alone would have pushed the envelope back by at least five years.

There is a Big Brother creepiness associated with the whole thing. It doesn't matter if it is the FBI, IRS, or one offering discounts on travel, dining, or shopping.

If it is based on using personal information that you would have unlikely provided had traditional methods been used, it is an invasion of privacy.

Did AARP lobbyists have language inserted into the Patriot Act? What else could explain their possession of such sensitive information? They have probably violated the Fourth Amendment to send me their unwanted solicitation.

But my discomfort is not about turning 50 nor is it the "AA" part, but rather the "RP" portion -- retired persons.

Since I am not a well-paid athlete, entertainer, Wall Street executive, and I did not win the lottery, receiving something in the mail overtly advertising retirement is about as relevant as wearing a wet suit in a lion cage.

How can I possibly entertain retirement?

With their sophisticated methods to know that 50 was on the horizon, AARP should have also known I would be offended receiving something so blatant about retirement.

If AARP wants to be taken seriously by those of us who can't fathom retirement, I recommend it creates another organization -- something that serves as a buffer that officially welcomes you to indisputable middle age (a fact that while in our 40s, many of us continue to deny), while adequately preparing you for the upcoming golden years mentally.

How about the American Association for those in Pre-Retirement (AAPR)? It's a fair warning. It puts those of us not ready to contemplate retirement in the proper frame of mind.

Had I received something from AAPR, no problem. That would have been consistent with natural order. Why didn't the braintrust at AARP factor this as a viable option?

But no buffer was forthcoming, no warning, no mental preparation, just a bucket of cold water splashed on my face while in the deep sleep of denial. Forget the 50 is the new 40 rationalization. The AARP solicitation forced me to contemplate that 80 may very well be the new 65 in terms of retirement age?

I guess AARP did me a favor, but why doesn't it feel like one?

Byron Williams is an Oakland pastor and syndicated columnist and blog-talk radio host. He is the author of Strip Mall Patriotism: Moral Reflections of the Iraq War. E-mail him at byron@byronspeaks.com or visit his Web site: byronspeaks.com

Recession Investing Tips: How The Downturn Is Changing Investing

2009-09-22T10:52:07Z

BOSTON — Stocks always rise over the long haul. Bonds are for retirees and investors with little taste for risk. Companies rarely cut their dividends.

Those are three of the long-followed rules of investing – and rules that, as investors learned during a year of the stock market's worst turmoil since the Depression, can't always be counted on.

The 10 Biggest Retirement Mistakes

2009-09-21T09:57:41Z

These are tough times for retirees and for those planning for retirement. Nest eggs have been demolished by the economic meltdown. Job cuts have forced many people into early retirement with insufficient funds to sustain them in their golden years. While there's not much that can be done about the past, anyone can avoid making mistakes that will make a bad situation worse.

Manisha Thakor : 5 Items Will Consume 50% of Your Income - Are You Prepared?

2009-09-15T16:01:22Z

In these recessionary times, financial tips are flowing fast and furious about how to save money and stick to a budget. Facing a sea of information many people are asking, "Where do I start?" For most of us, five areas of spending will consume over 50% of the money we earn during our lifetime, so that's the best place to begin. The five areas are: Home, Car, Kids, Education, and Retirement. Here's what you need to know about each:

HOME: Don't bite off more HOME than you can chew. How much house can you comfortably afford? For most people the answer is a house with a purchase price of no more than 3x their annual household income. Rationale: the cost of a home includes much more than the monthly mortgage payment. It's also property tax, insurance, upkeep, etc. Typically these costs run 2%-3% of the price of your home each year. Assuming a 20% down payment, a 30-year fixed rate mortgage, and interests rates in the 5%-6% rate, the 3x your income rule of thumb will translate into total housing costs of roughly 30% of your gross income.

CAR: Don't let your CAR drive you to the poor house. The same logic applies to your car. Most people can comfortably afford a car that is 1/3rd of their annual income. If you make60,000 you can comfortably afford a car that costs20,000. If that seems low - now you know why so many Americans are in financial trouble. They are driving it. A car has many other costs than simply the monthly payment. There's insurance, gas, parking, maintenance, etc. If you follow this rule of thumb, your total transportation costs should be 10% or less of your gross income.

KIDS: Don't let your KIDS kick you in the wallet. Kids are expensive. From a purely clinical standpoint the Dept. of Agriculture estimates it will cost220,000 to raise a child born in 2008 from diapers to age 18. And that figure is before you add in the cost of college! Deciding to be a parent is a major financial obligation. Don't make it worse by over-indulging your love bundles.

EDUCATION:Don't forget to ask "How high is too high for higher EDUCATION?" It used to be good debt was defined as mortgage and student loan debt... and bad debt was everything else. Not any more. We've now learned that too much of a good thing can indeed be bad. Rough rule of thumb, don't take on more in total education debt than you think you are going to earn on average annually during your first 10 years after graduating (from college or grad school). In plain English, if you think you'll make50,000 a year, don't take out more than50,000 in loans. The logic behind this is that if it takes you more than 10 years of paying 10% of your income a year in student loan repayments, it's going to be tough to meet your other financial obligations.

RETIREMENT: Don't underestimate the need to feed your RETIREMENT nest egg. How much will you need to retire? A simple rule of thumb is to multiply your current income by 25. So if you make50,000 a year and want to maintain that standard of living in retirement, you'll need a nest egg of at least1,250,000. Understanding early on in your working life what "your number" is... will help you see just how important it is to plan for this major savings goal.

Obama Announces Initiatives To Increase Savings (VIDEO)

2009-09-05T09:07:57Z

WASHINGTON — The recession has eaten into people's nest eggs so the government is promoting ways to make it easier to save for retirement.

One initiative that President Barack Obama outlined in his weekly radio and Internet address Saturday will allow people to have their federal tax refunds sent as savings bonds. Others are meant to require workers to take action to stay out of an employer-run savings program rather than having to take action to join it.