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In The Morning News
Posted By Dave Goldstein On May 12, 2008 @ 9:54 am In Bulletin Today | No Comments
AP: Study Finds Many Make Costly Retirement Mistakes
“Despite extensive efforts to educate workers about saving for retirement, many employees are not doing a good job of managing their company-sponsored 401(k) accounts, a new study indicates.” A review of “nearly 1 million retirement portfolios found that 69 percent have inappropriate risk or diversification of holdings and 36 percent have worrisome concentrations of company stock. In addition, one-third of savers aren’t putting enough aside to qualify for the full company matching contribution.” Those mistakes are “especially pronounced among young and low-paid workers, according to the study by Financial Engines, a Palo Alto, Calif.-based firm that provides investment advice and managed accounts for defined contribution plans like 401(k)s.”
CNN/Money: Higher Tax Rates In Future Seen As Inevitably Lowering Retirement Savings
Janice Revell reports, “Today’s low rates can’t last. The tax cuts of the past decades were supposed to lift economic growth (which they did) and hike tax receipts faster than federal spending (which they did not). Not even close. The resulting tsunami of federal debt is one reason to expect your taxes to rise over the next quarter-century.” Add in the retirement of the Baby Boomers and “if today’s low tax rates remain in place, a staggering 76% of all federal income tax revenue in 2050 will be soaked up by” Medicare and Social Security. This fact “has major implications for your retirement savings strategy.” In the face of a “very real possibility that you’ll be in a higher marginal tax bracket when you retire,” workers “should be saving in vehicles that allow you to pay taxes today, instead of putting them off until tomorrow,” like Roth IRAs and Roth 401(k)s.
BusinessWeek: America Moving To Adapt To Older Drivers
“The oldest baby boomers start turning 65 in less than three years, but car-crazed American society isn’t ready, and neither are the boomers themselves.” For future use, “GM is working on ‘vehicle-to-vehicle’ communications, which could for instance warn a driver that cars in a line several cars ahead are applying their brakes. GM is also making more widespread use of simpler features like larger, more legible numbers and letters in its instrument panels.” Besides safety, the issue of when and “if older drivers should lose their licenses could be the stickiest issue of all, looming with the new wave of elderly drivers.” And while “[p]eople are conscious of the need to plan financially for retirement, but they often overlook the likelihood that sooner or later, they won’t be able to drive,” which presents “a problem for retirees in suburban or rural settings.”
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