The Society of Actuaries released a series of very readable reports dealing with specific issues, from how to handle a forced retirement to whether to withdraw savings incrementally.
“Around the time of retirement, there are so many decisions,” said Joseph Tomlinson, chairman of the working group that produced the new reports. The goal of the two-year project was to provide “friendly and unbiased” information, said Tomlinson, a Maine actuary and financial planner.
He said members of the professional organization also felt the public needed information that wasn’t from “someone trying to sell something – and we’re not.”
This blog’s mission is to explain financial behavior – why we do what we do. It is not to provide personal financial advice about what to do. The mere mention of a “Target Date Fund” was a conversation stopper for me.
No longer. The Center for Retirement Research, which sponsors Squared Away, explains them simply and clearly in a new booklet. The name is inscrutable but the concept isn’t. In fact, your employer’s target date fund, if it is well designed, should make investing easier, not more difficult.
In May, Squared Away’s very first post was about an eye-opening “game” in which players take on the role of someone who is poor. The player is assigned a job and a paycheck. Every financial decision ricochets through the monthly budget, often in unexpected ways. Lives, children, and work choices are affected – poverty even creates unique ethical decisions.
The game, Spent, is so powerful, because its creators interviewed clients of Urban Ministries of Durham in North Carolina, which operates a food pantry, clothing closet, and homeless shelter. A local advertising firm, McKinney, designed the game in conjunction with Urban Ministries.
Mid- and late-career professionals staring into their futures, eyes glazed, often don’t have a clue how much their health care will cost them during retirement.
Few pre-retirees know how many holes exist in Medicare coverage. One MetLife survey this year found that 42 percent of pre-retirees age 56 to 65 believe, incorrectly, that their health coverage, Medicare or disability insurance will pay for their long-term care. Such knowledge gaps make it virtually impossible for most people to take a stab at tallying their total costs, out of pocket, for Medicare, Medigap, and private premiums and copayments over years of retirement.
Retiree healthcare is “the elephant on the table,” said Dan McGrath, vice president of HealthView Services outside Boston. The omission amounts to hundreds of thousands of dollars per retiree.
Calculators that estimate retiree health expenses are scarce, according to a 2008 AARP brief. But HealthView’s calculator, recently upgraded, estimates total out-of-pocket health expenses, which are tailored to an individual’s specific medical traits – diabetes, cholesterol, blood pressure etc. – and health habits – smoking, exercise etc.
Since going live in May, Squared Away has posted articles about everything from saving for retirement to educating children and young adults.
Fall officially starts tomorrow, so it’s a good time to review where we’ve been. These are among the articles that got the most responses from readers or that we thought were especially worth repeating. The link to the article is at the end of each description.
Mobilizing to Plan for Retirement
Baby boomers are paralyzed when it comes to retirement planning.
Cultural and economic forces are behind why baby boomers can’t retire.
Reaching Young People
Financial success begins with self-control and marshmallows.
Teaching young adults about compound interest may persuade them to save.
Helping Low-income People
Online game highlights the poor’s impossible spending choices.
Popular strategy of automatically enrolling corporate employees in 401(k)s didn’t work for low-income people. …
With more college graduates piling up debts, an increasingly popular program on campus is trying to help them stay out of trouble.
More than 600 colleges are now enrolled in the National Endowment for Financial Education’s (NEFE) online program, so they can offer free assistance to four-year and community college students. CashCourse is a sort of private-label personal finance program: each academic institution puts its logo and school colors on NEFE’s online package of cash- and debt-management tools, tips, and workshops.
The University of California, the University of Texas, Purdue University, and State University of New York are among the schools posting NEFE’s materials to their websites or customizing financial programs to meet their students’ unique needs.
“We want every school to figure out what works for them,” said Ted Beck, NEFE’s chief executive.
Leticia Gradington, program director for Kansas University’s program, said it’s not unusual for students to have $20,000 to $30,000 in college loans and credit card debts.
“You’ve got students every day who are worrying about how they’re going to pay their debt back,” she said. If students can learn just how expensive the debt is before they borrow, “They pay more attention to it.” …Learn More