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Cracked Nest Egg: Why you'll work through retirement

Cassandra57 — Sat, 24 Jan 2009 20:04:08 -0800

Why you'll work through retirement
Recession is just one factor changing how retirees will live out golden years

By Chris Farrell
Business Week
updated 1:47 p.m. PT, Fri., Jan. 23, 2009

There is a major social and cultural message in the current economic collapse for the future retirees of America: Forget retirement.

That's right. The recession is making clear what we've suspected for a long time. The concept of not working and embracing leisure for the last third of one's life isn't practical for most people.

Put it this way: Survey after survey has shown that a majority of aging baby boomers plan on working in retirement. Well, that plan is coming true.

Financial safety net
Economic downturns often accelerate change. For instance, in the latter part of the 19th century, the country moved from a rural, farm economy to an urban, industrial one. The wealthy associated old age with leisure, but for everyone else it usually meant involuntary unemployment and a humiliating dependence upon family, charity or community organizations for shelter and food. Policy reformers agitated for some kind of a financial safety net for the nation's impoverished and isolated elderly.

Not much happened until the Great Depression. It was an economic disaster for families, especially the elderly "as they watched their hard-won assets vanish, and with them their hopes for an independent and secure old age," write historians Carole Haber and Brian Gratton in "Old Age and the Search for Security." (Sound familiar?) Traditional middle-class objections to a national safety net crumbled with the Depression. Social Security became law in 1935.

"The real or incipient collapse of individual households helps to explain the widespread popularity of Social Security," say Haber and Gratton.

Our image of retirement is still shaped by the early decades after World War II. The elderly poverty rate plunged thanks to Social Security. Older Americans gained universal health care coverage with Medicare in 1965. And Corporate America offered workers defined-benefit pension plans based on a salary and years-of-service formula.

It was in these years that retirees developed a distinct lifestyle captured by the mass migration to Sunbelt communities, traveling in RVs and bus tours, spending long mornings on the golf course and other recreational pursuits. The development of modern retirement is a great social achievement of the 20th century.

But in the 21st century, the underlying economics of retirement are changing.

Living longer, working longer
On the positive side, we're living longer. Average life expectancy is now about 78 years, up from 61 years when Social Security became law. We're healthier, too. Disabilities among the elderly are declining, thanks to a combination of healthier lifestyles and medical advances.

A seismic shift in the economy and workplace is making it easier for an aging population to labor longer. An information- and services-dominated economy will ease the transition to longer working lives. Simply put, toiling away on a computer in medical diagnostics or government bureaucracy is far less demanding than manning an auto assembly line or mining for gold. The rise of an economy based on intangibles and longer life expectancy is behind more than a decade's worth of scholarly research, aging conferences and popular press articles trying to redefine retirement.

Retirement savings wiped out by crisis
The day of retirement reckoning is here for less happy reasons, too. For the second time in eight years, savers have watched in horror as their 401(k)s, 403(b)s and other retirement savings were hit with sharp declines. This time around, the household wealth destruction is even greater because of the nationwide fall in home prices. For instance, from the last quarter of 2006 through the third quarter of 2008, the real value of homes and household holdings of stocks plummeted by $5.6 trillion, according to a recent report by Hoisington Investment Management Co. in Austin, Texas. It predicts that the wealth loss may exceed $10 trillion when the fourth-quarter figures are calculated.

Indeed, the current pension system is making everyday retirement insecurity worse. Employers have embraced defined-contribution savings plans like 401(k)s. But 401(k)s don't deliver a steady stream of income during one's golden years. There's also plenty of evidence that workers with access to defined-contribution savings plans aren't taking full advantage of them, either.

But wait, there's more: The health insurance system is widely acknowledged to be broken and is a strain on family finances. Even with Medicare coverage after age 65, the elderly are finding it necessary to pay for a greater percentage of their overall medical bill.

The comedian George Burns used to get a laugh saying, "Don't stay in bed, unless you can make money in bed." It's no longer a joke. Many aging workers simply can't save enough to create a solid foundation of savings that will maintain their standard of living in retirement.

Postponing retirement
The solution: work longer. After all, earning a paycheck in your latter years can make a huge difference in retirement living standards. Pocketing even a slim income often allows retirement portfolios to compound over a longer period of time.

Take this calculation by economist Robert Shackleton of the Congressional Budget Office, which posits a married couple is in their early 60s earning $100,000 pretax a year. They'll need nearly $66,000 a year after taxes to replace 80 percetn of their preretirement income. (The 80 percent is a standard rule of thumb when it comes to making this kind of retirement calculation.) If both retire at age 62, they'll receive more than $25,000 in total Social Security benefits and require a portfolio of at least $891,000 to generate the income they need to live the good life through their normal life expectancy. (The calculation comes from a paper written several years ago, so the Social Security numbers will have changed a bit over the years. Yet the basic calculation remains true.)

But if our couple waits until age 66 to retire, their Social Security benefits go up and the time they need to bank money shrinks, so $552,000 in savings will suffice. Retire at age 70? All they require is a portfolio worth some $263,000. And so on.

More than making ends meet, work is physically and mentally energizing. It keeps the mind active and dementia at bay. For many people, the workplace is a social environment, with birthday celebrations and coffee klatches. To be sure, you may want to say goodbye to your current office mates for the last time. But that doesn't mean you won't want to work.

Of course, not all senior citizens will be physically and financially healthy in retirement. Especially vulnerable are less educated workers. So are single-parent households. Both groups are far less likely to have a pension plan and own their home. And then there's the lingering problem of ageism: Some employers are still hostile to aging workers with sagging middles and graying hair.

Nevertheless, the recession has made it clear that retirement and work will be woven into a new cloth for many Americans. The challenge for all of us - employees and employers - will be making the best of the situation.

URL: http://www.msnbc.msn.com/id/28814777/

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Phil Collins retires from music industry

justingirl1989 — Sat, 26 Apr 2008 14:36:48 -0700

Phil Collins who recently completed a reunion tour with his former band, Genesis, is now ready to call it a career. After 30 years in the music industry, singer Phil Collins is retiring at age 57.

Friday he announced he will no longer be releasing any more albums or going on tours.

The now retired Collins plans to take a break from music, but will continue to write songs in his free time.

Collins has said he’ll be spending time working on his favorite hobby, collecting memorabilia from the Battle of the Alamo!

Phil says, “It’s not that unusual for a man of my age who grew up reading [about] Davy Crockett.”

We wish Phil all the best in his retirement!

http://www.hotmommagossip.com/phil-collins-retires-from-music-industry/

Chris Martin Prepares for Retirement

justingirl1989 — Wed, 19 Nov 2008 10:09:26 -0800

We certainly hope this isn’t any time soon! Chris Martin has been heavily hinting at his retirement lately. He believes musicians should step away from the music scene when they’re in their mind 30s. He says he and his band Coldplay will retire from the limelight in a couple years to ensure they’re ending at the top of their game.

But lucky for us fans, Chris says until that time, they’ll continue to pump out as many albums as possible. He says, "I’m 31 now and I don’t think that bands should keep going past 33. I don’t believe in time off. We’ve still got most of our hair, we can still fit into our musical trousers and we’ve got to make the most of that."

What do you think of Chris’ plan?http://music.hollyscoop.com/chris-martin/chris-martin-prepares-for-retirement_1303.aspx

Early Retirement... Pros & Cons?

Myst — Mon, 11 May 2009 09:08:27 -0700

I realized last week, that at ripe old age of 26, I'm officially burned out from the marketing world. Nearly 5 years constant traveling, chasing prospects accounts, and overseeing projects, is completely tiring. I don't feel like I have one creative bone left in my body. I realized it was bad, when the concierge desk at American Airline, addressed me by name when making a trip out to Dallas. Maybe I'm going through a phase but I'm thinking of just completely walking away within the next 3 or 4 years if I can make it even then. I've been lucky enough to have a great job that pays well, I've been investing money since I turned18, and I don't live an extravagant lifestyle, so I'll be ok.

But the question is, if I retired early what are the pros and cons?

If you retired early what would you do?

Pierce Brosnan is going to retire in Hawaii

justingirl1989 — Wed, 16 Jul 2008 04:44:13 -0700

Pierce Brosnan has already made plans for his retirement - he wants to settle on the island of Hawaii.

The 55-year-old actor has been living in the tropical paradise for the last three years with his wife Keely and their two young children.

And despite his immediate plans to return to shore to send his two sons to school, the former James Bond star admits the oasis is tempting him to take an early acting hiatus.

He says, “To get away, we bought a nice place (in Hawaii). We’ve been living there for the last three years, it’s heavenly… That’s a real kind of luxury to be able to do that. I don’t know, I might retire there. You never know what’s around the corner.”

http://icydk.com/2008/07/15/pierce-brosnan-is-going-to-retire-in-hawaii/

Anna Wintour to Retire?

justingirl1989 — Tue, 18 Nov 2008 07:16:25 -0800

Are Anna Wintour's fashion days coming to an end? The word on the street is that the rumored inspiration behind The Devil Wears Prada could be moving on from her multi faceted fashion throne.

In addition to being the head person at Vogue, Anna also controls Fashion Rocks and Teen Vogue, but maybe not for long.

A source told Page Six: "Her contract is up soon. She's thinking of retiring. She feels she's done it all and had enough. She has been putting out feelers to intimate friends recommending a possible replacement to S.I. Newhouse."

A rep for the infamous editor replied with a brief statement saying, "This is completely unfounded." With everything that she's seen and heard in her long career, we think that Anna could walk away and easily score a very lucrative book deal. But would she dare spill all those secrets?
http://www.hollyscoop.com/anna-wintour/anna-wintour-to-retire_18462.aspx

M.I.A. Coming Out Of Retirement

justingirl1989 — Mon, 01 Sep 2008 05:56:53 -0700

After all the success M.I.A. has had recently with her song Paper Planes, she's decided to come out of retirement. The song was featured in Pineapple Express, and it pretty much got everyone listening to her music. So now, only two months after announcing that she was playing her last show ever, she's changed her mind and is deciding to make more music.

She tells Entertainment Weekly, "With the success of 'Paper Planes', there's pull for me to make another record. Even my mum believes in me more. It's a nice encouragement. But I was planning my life as a fishing woman on the outskirts of Cambodia. That's a joke."

M.I.A. also says if she did go through with quitting, she might have tried to get into movies. She says, "I think I would have gone and made a film. As an artist you want to play around with mediums and see if you can get the point across in a different way. I wanted to stay an outsider and prolong the process of getting accepted."

We're just glad she's back! She has such a unique sound and we cant wait to hear more of her.http://music.hollyscoop.com/mia/mia-coming-out-of-retirement_1068.aspx

Hugh Hefner finally retiring from legendary Playboy parties

justingirl1989 — Thu, 14 Aug 2008 11:15:32 -0700

Hugh Hefner may finally be growing up. Whoever thought a man could jump from stunted 25-year-old bachelor to senior citizen without any of the stages that generally come in between? According to Pop Tarts, Hef is finally planning on retiring the bunny ears. The parties, the extra girlfriends – maybe even the grotto. It’s all on its way out. Say it ain’t so.

It looks like Holly Madison is finally getting what she wants - Hugh Hefner all to herself and the winding down of his wild parties populated by girls wearing next to nothing.

Fellow girlfriends Kendra Wilkinson and Bridget Marquardt were nowhere to be seen at last Thursday’s EA Madden NFL ‘09 Game Launch party at West Hollywood’s STK. And the Playboy founder clearly only had eyes for Madison as they canoodled in the back VIP booth, with Holly very much in her element and laughing a lot more than usual (for once she didn’t have to share her man).

… Pop Tarts has been told by numerous inside sources that this is the last time bunnies and big-wigs will hop around the Shakespeare-themed party. After decades and decades of wild nights, we hear Hef is calling it a day and that Playboy Enterprises has decided that this party and the upcoming annual Halloween party will be the last that the magazine mogul personally throws as a means to cut costs.

A rep from the men’s mag kept mum on the murmurs, saying: “Who knows what will happen in a year from now?”

[From Fox News’ Pop Tarts]

The article says that the mansion is still going to be available for private party rentals. Sounds like an excellent place to host a wedding shower to me. It sounds like the decision is mostly a business one, but I’m sure Holly Madison still has visions of little babies crawling around in bunny costumes. Of course they’ll be the kind with footies and a trap door in the back for a quick diaper change. No word on if Hef is really ready to act his age… or even half his age. But it seems like a step, nonetheless.

http://www.celeb*tchy.com/13589/hugh_hefner_finally_retiring_from_legend...

John Mayer is retiring?

justingirl1989 — Thu, 26 Jun 2008 07:27:40 -0700

John Mayer has hinted at an early retirement from the music industry after completing his summer tour.

The star, 30, is currently in the middle of his European jaunt, but has indicated to USA Today newspaper that he may never release another album again.

He says, “I’m not sure when I’ll come back with another record. I feel like I’ve done everything I can do with this set of tools.”

Mayer’s last release, The Village Session EP, hit stores in December 2006.

Source

http://icydk.com/2008/06/26/john-mayer-is-retiring/

Fergie Retires Her Mom

justingirl1989 — Thu, 27 Mar 2008 06:56:57 -0700

Talk about a generous Mothers Day gift! Fergie is planning on retiring her mother Terri so she never has to work again.

Fergie says, "I'm actually retiring my mom this year, so next year she doesn't have to go to work.

"I wanted to give back because she took me to all those auditions for all of those years. It's the least I could do."

So how is this going to work? Does she deposit a big chunk of money in her account? ...and where do I apply to be her friend?

sweet

source: hollyscoop.com