Coping with the Economic Meltdown

The Consumer Reports National Research Center surveyed more than 19,000 of its online subscribers between the ages of fifty-five and seventy-five and found about half have already made strides to cut down expenses in the current economic meltdown, including eating out less and cutting back on entertainment. About one-third have cut their credit card use and spent less on groceries and household goods.

The Joys of Planning Ahead

Consumer Reports also found that consumers who planned ahead were more satisfied with their retirement prospects, even in the current economic climate. The more planning methods used, the more satisfied the respondents were.

MarketWatch Recommends Obama’s Platter

MarketWtach investment news service is recommending that President-elect Barack Obama take on six issues immediately after assuming the Oath of Office:

1. Make saving simple and available to all Americans by implementing universal payroll deductions.

2. Fix Social Security.

3. Fix the financial education and advice system by employing teen idols to teach personal finance concepts and embedding financial education in the elementary school curriculum.

4. Fix health care, including Medicare and Medicaid.

5. Fix defined-benefit and defined-contribution plans starting with a review of how these plans operate.

6. Protect sources of retirement income, especially opportunities for older Americans to work in retirement.

Attorneys Slowdown Retirement

Approximately 250,000 baby boomer attorneys have begun entering retirement age. At the same time, many law firms that had expected attorneys to leave because of retirement—and would now welcome it as work has slowed—can no longer rely on older attorneys to hit the road. As a result, many law firms are saddled with too many attorneys and too little work.

In 2005, about 50% of law firms had mandatory retirement plans. The trend since then has been for law firms to do away with such policies, spurred in part by a lawsuit brought by the U.S. Equal Employment Opportunity Commission. In addition, the American Bar Association last year passed a resolution that called for law firms to end mandatory retirement, describing the practice as outdated and contrary to public policy.

Living Benefit Rider

People seeking ways to protect their investments after watching the value of their retirement accounts plummet have a new option called a "living benefit rider." It offers a minimum payout on certain accounts -- even within a 401(k) -- no matter how steeply the financial markets drop. Though this option represents an income guarantee, sometimes the accounts may not be good for people younger than fifty because they carry higher annual fees, which add up over the years, and because the accounts generally invest more conservatively without the potential for the returns younger workers should seek.

The 401(k) Lump Sum

A growing number of workers are faced with making decisions about what to do with assets they have earned in their employment-based plans when they change jobs. After leaving a job with an employer that sponsors a retirement plan, workers have three choices for their retirement accounts: leaving the money in the plan, rolling it over to another tax-qualified savings plan, or cashing it out.

The Post Office Offers Early Retirement

The U.S. Postal Service plans to offer early retirement in an effort to make up for declining mail volumes. The early retirement option is a nationwide effort to adjust to the effects of e-mail and small-package carriers like UPS and FedEx.

Hammering It Out in Missouri

Missouri lawmakers are hammering out alternatives to retirement regulations for the state's public school employees. The Social Security Administration has complained to school districts that too many of their employees have been exempt from paying Social Security taxes. Those workers are covered by the Missouri Public School Retirement System, considered more generous than Social Security.

Federal officials contend that only teachers, principals, and a handful of other positions can be exempt from paying into Social Security. In contrast, the State of Missouri has exempted guidance counselors, instructional aides, and certain office administration and transportation workers so they can enjoy the better benefits of the State retirement system.

Diverting Retirement Funds in Indiana

A federal grand jury has indicted a nine-year employee in a Ft. Wayne, Indiana, mental health center on thirteen felony counts after she allegedly withdrew nearly $48,000 from former employees' retirement accounts and had the checks sent to her home and then deposited them in her personal bank account.

The employee worked at the Center as the executive secretary and office manager, where her duties included processing paperwork for past employees' retirement plans and submitting distribution requests.

Retirement Hits the Brakes in Canada