Average Social Security Benefit

The current average Social Security benefit is $1,153 per month.

Retirement Confidence at an All-Time Low

Only 16% of Americans are "very confident" about having enough dough for a comfortable retirement, according to the Employee Benefit Research Institute Retirement Confidence Survey. Researchers say this 16% is statistically equivalent to the 20-year low of 13% measured in 2009. A mere three years ago, in 2007, 27% of survey respondents said they were very confident about their retirement.

Retirement Tips from MarketWatch

What can be done to get America back on track here? Here are three ideas offered by MarketWatch:

1. Determine how much you'll need. You will then be twice as confident about having enough money for a comfortable retirement than those who have not.

Among ways to calculate what you will need:

The easiest way is to say that you'll need about 20 times your final year's salary set aside in savings. So, if you earn $50,000 you'll need $1 million set aside in savings. If you want to get a bit more sophisticated, you could subtract the net present value of your defined-benefit plan, Social Security benefits, and other assets that you might convert into income to fund your retirement, including any home equity, life insurance, an inheritance and the like. You might also take into account how much money you expect to earn during retirement. Add all those together and you might need something like 15 times your final year's salary set aside.

2. Save more

3. Work longer

Working longer is how most Americans plan to make up for insufficient savings.

But working in retirement is not a sure bet nor should most Americans count on it as their lifeline. In fact, many people retire sooner than expected due to a variety of reasons, including poor health, disability, changes at their company (downsizing or closure), and having to care for a spouse or another family member.

4. Don't forget your house

Most retirees have more home equity than money set aside in their IRA/401(k) plans, Sass said. And, he said, for most retirees housing is their largest expense even if the mortgage is paid off. Still, few think about converting the equity in their homes into income. Doing so will soon become a necessity, according to a report issued yesterday by the Boston College for Center for Retirement Research.

In summary: if you want confidence in retirement, get a plan, save more, work longer and don't forget the equity in your house.

University of Tennessee Retirement Incentive

The University of Tennessee Institute of Agriculture is offering its second round of voluntary University of Tennessee retirement incentives to staff in an effort to cut costs and reduce the need for layoffs. This year’s program will save a projected $1.8 million in fiscal year 2010-11, with the potential savings in subsequent years of almost $2.5 million.

Beginning July 1, eligible employees would receive a lump sum payment of four months’ base salary, as well as the option of a one-year, part-time appointment after retirement.

California Retirement Fairs

 The California Public Employees' Retirement System (CalPERS) is hosting a series of Retirement Planning Fairs this spring to help its members plan for a more financially secure retirement. The California retirement fairs begin in Los Angeles on March 30 and continue through April 14 in Fresno, with fairs also in Sacramento and Redding.

How to Salvage Your Retirement

The Wall Street Journal advises that if you are still working, you can still save your retirement. Here is how:

• Delay your retirement. That works for four separate reasons. First, it gives you extra years of earnings from which to save. Second, it gives your savings extra time to grow. Even if you are only earning a couple of percentage points over inflation, that's valuable. Third, it reduces the amount of time your savings will need to last you in retirement. (The biggest danger to many retirees, financially speaking, is longevity—living to 100 on savings that were only meant to last till you were 80.) And fourth, if you also delay taking Social Security payments, it means you will collect more each year.
• Scale back your retirement costs. Move to where living costs are low. Even around the big, high-cost cities, once you move outside the commuter belt, real estate prices plummet. And if you are prepared to move further afield—particularly to the middle of the country—you can save even more.
• Don’t worry too much about your heirs. Instead, convert your retirement assets into an immediate annuity that generates a monthly income until you die, a strategy that leaves nothing for your survivors.  Ignoring your heirs might also lead you to a reverse mortgage, which turns the equity in your home into a type of annuity.
• Save as much as possible. If you are 50, each dollar you save now could easily grow to about $3 (in today's purchasing power) by the time you are 80. And every $1 you cut from your monthly bills could easily give you an extra $700.

A Michigan Retirement Reformation

Gov. Jennifer M. Granholm, D-Mich., has issued the following news release:

“Governor Jennifer M. Granholm today applauded the introduction of legislation that will save hundreds of millions of dollars by reforming the state employee and public school employee retirement systems and, in the process, encourage approximately 47,000 eligible public employees to retire this year. The changes are part of 29 government reforms outlined by the governor in January to transform Michigan government.

The state employee retirement reforms are expected to save the state an estimated $265 million in the 2011 fiscal year that begins October 1 and $1.97 billion over the next 10 years.

"’The reforms in this legislation will save state government and Michigan school districts hundreds of millions of dollars," Granholm said. "I urge quick passage of these bills so we can realize the savings that are needed in the fiscal year that begins October 1.’

“Granholm said final legislative action is needed on the bills by April 1 to accommodate the application window outlined in the bills.

“Separate bills were introduced today in the Michigan Senate and the Michigan House of Representatives. The state employee retirement reform bills are Senate Bill 1226, introduced by State Senator Mark Jansen, R-Grand Rapids, and House Bill 5954, introduced by State Rep. Chuck Moss, R-Birmingham. The public school employee retirement reform bills are Senate Bill 1227, introduced by State Senator Jud Gilbert, R-Algonac, and House Bill 5953, introduced by State Rep. Bill Rogers, R-Brighton.

“About 7,900 state employees are eligible to retire. It's anticipated that approximately two new state employees will be hired for every three retiring state employees, creating new job opportunities for Michigan college graduates.

“Approximately 39,000 teachers and other school employees also are eligible to retire. It's estimated that those who actually do retire, together with other reforms in the bill, will create a total first-year savings of $701 million for Michigan school districts, and open up thousands of new jobs for young teachers.

“The state employee retirement reform bills make the following changes to the State Employees Retirement System for state employees who are members of the defined benefit plan:

• A 3 percent employee contribution will be reinstated.
• The earned service credit is capped at 30 years. Employees continuing in state service beyond 30 years will be transferred to a defined contribution plan for any additional years of service, excluding what is purchased by the employee.
• State-subsidized retiree vision and dental coverage is eliminated for state employees retiring with an effective date after October 1, 2010. Retirees will be able to purchase vision and dental coverage at their own cost through the state plan.
• For employees age 60 and above, a phased retirement option is established. At the employer's discretion, an employee could a draw a pension and continue to work, but the number of hours worked would have to be reduced by at least 50 percent.
• A retirement incentive is provided through an increase in the multiplier from 1.5 to 1.6 percent for eligible employees who retire with an effective date between July 1 and October 1, 2010.
• The application window for eligible state employees wishing to retire before October 1, 2010 is April 15 to May 15, 2010.
• The public school employee retirement reform bills make the following changes to the Michigan Public School Employees Retirement System (MPSERS) for public school employees who are members of MPSERS:
• A 3 percent employee contribution will be reinstated effective July 1, 2010.
• Subsidized retiree vision and dental coverage is eliminated for school employees retiring with an effective date on or after October 1, 2010. Retirees will be able to purchase vision and dental coverage at their own cost through the plan.
• The earned service credit is capped at 30 years. Employees continuing in public school employment beyond 30 years will be transferred to a defined contribution plan for any additional years of service, excluding what is purchased by the employee.
• For employees age 60 and above, a phased retirement option is established. At the employer's discretion, an employee could a draw a pension and continue to work, but the number of hours worked would have to be reduced by at least 50 percent.
• A retirement incentive is provided through an increase in the multiplier from 1.5 to 1.6 percent for employees who retire with an effective date between July 1 and September 1, 2010.
• A new, more cost-effective retirement plan for new employees hired on or after July 1, 2010 will be created. New employees will participate in both a less expensive defined benefit plan and a defined contribution plan with an employer match.
• The application window for eligible school employees wishing to retire before September 1, 2010 is April 15 to May 15, 2010.”

Households at Risk

More than 60 percent of households are ‘at risk’ of being financially unprepared for retirement, according to new research from the Center for Retirement Research (CRR) at Boston College.

Demise of Defined Benefit Plans

In 1985, 80 percent of full-time employees participated in a pension plan that guaranteed lifetime benefits. By 2008, only 20 percent of full-time employees were covered by such a plan, according to the Bureau of Labor Statistics.  In that year, 2008, 67 percent of full-time employees participated in retirement plans that require the employees themselves to manage their assets to assure lifetime income.

Affluent Preferences

A Cogent Research’s new In-Retirement Income(TM) 2010 report explores familiarity and interest in retirement income products among today’s affluent retirees and pre-retirees, revealing a vacuum for both a winning product and a clearly identified leading provider.