All Posts Tagged With: "retirement fund"
The Pitch – Are you pulling from your retirement fund?
Jennifer McClelland | RSS | Fri, Nov 20 2009 | 0 Comments
Are you pulling from your retirement fund early?
Question
Are you pulling money out of your retirement fund, have you considered it and what advice do you have for someone facing this situation?
Answer:
I actually don’t have a retirement fund in a traditional sense. My husband and I have a nest egg that we put money into. However, if I am understanding the ways 401(k)’s work, then it isn’t a great idea for people to pull money out of it early unless they absolutely have to. The fees for drawing from a retirement plan early can be quite high, however the fees vary depending on your fund.
If I were faced with a situation where I either had to pull from my retirement fund or my family would go without food, then I would likely pull from the fund…it just all depends on your individual circumstances and how you feel about it.
Have an idea or want us to use your pitch in the next issue? Then, make a submission on The Pitch Page. Related posts:
People who make less are less likely to save for retirement
The Pitch – What are your opinions about health reform?
How college can negatively impact your retirement
Tags: circumstances, Money, retirement plan
People who make less are less likely to save for retirement
Jennifer McClelland | RSS | Sat, Oct 24 2009 | 0 Comments
I read somewhere in the past few months that said that sometimes when people go to college, because of debt and other issues, the college graduate would not have as much money saved at retirement as the person who graduated with just a high school degree, even though the person with the high school degree earns less.
Of course, this is counting on that the person who did not go to college not only has a college fund, but invests that in a mutual fund that tracks the market and also puts money into their retirement fund on a monthly basis.
While this is a scenario that could happen, it often doesn’t. A report by the Office for National Statistics in Great Britain reported that people who earn less do not contribute to their pension funds as often as those who earn more. It said that 21% of men and 32% of women who earn less than 300 pounds a week were contributing to their pensions.
This is in stark contrast to the 76% of men and 82% of women who earn over 600 pounds per week give to their pensions and have an employer sponsored pension program.
This could also have something to do with the fact that contributions to employer sponsored pension programs are down. According to reports, in Great Britain, in 1979, 65% of employees were contributing to their employer’s pension program. However, the number dropped to 57% in 1995 and then to 54% in 2004. In the private sector, 40% were contributing to their fund while 25% were contributing in 2005.
A problem has come up regarding the pension programs because people simply aren’t contributing to their pensions, and they don’t continue to participate in a program. Contributions to 33% of pensions stop after four years. If this trend follows that means that within 10 years, as few as 40% of pensions will still be getting contributions.
A serious issue in the United Kingdom, as well as all across most of the world, is the aging population. In the UK there are four working people to every retired person. In the future, the ratio will turn. In the United States, many are worried about what happens as our population grows older. Obviously this issue is just as large in other countries as well.
This is why everyone should start saving for retirement. You can never be too young to contribute to a pension fund or a 401 k or any other kind of retirement fund.
Related posts:Today’s Ebook – What Women Need to Know About Retirement
The Pitch – Are you pulling from your retirement fund?
How college can negatively impact your retirement
Tags: pension program, aging population, retired person
Being lazy is costing you money!
Jennifer McClelland | RSS | Thu, Jun 25 2009 | 0 Comments
Laziness is a curse and the end result of nothing but procrastination. One of the seven deadly sins known as sloth, laziness was even punishable by death in Christian mythology. Those who were guilty were fed to the snake pits in hell.
Worse yet, laziness is digging into your greed and is actually costing you money. Forbes magazine had a special showing ways that being lazy is costing you money.
1) Not doing enough research to choose the best rate on your savings account. When you stay content with your bank without doing comparison shopping, you are setting yourself up to not realize the full returns you could be having if you just did a little comparison shopping. Traditional banks offer less than 1% while some banks can offer up to 2.25% APY. On $100,000, over five years, that’s an additional $8,000! Looking for a new bank won’t take too much time either. Just make sure the bank you put your money in is FDIC insured.
2) Open your retirement fund as soon as you can. If you’re like me, or even close to it, you’re not thinking about retirement, but you and I should both be thinking about it because we all get old, it’s something that happens to everyone. Say you’re 25 and start saving $5,000 annually at 6% interest a year, well by the time you’re 65, which would have come out to $821,000…not too shabby. You can also try to see if your company offers a 401 (k), then you can save for retirement and not have to worry about anything.
3) You have to send in rebates to get the rebates! Oh, how many times have I bought something what was “so many dollars off” after mail in rebate and just not ever sent it in? I think that this is what companies are planning on when they offer this kind of rebate. Recently, I bought a new phone that offers a $100 mail in rebate after the phone has been activated for 30 days. I’m thinking it has something to do with the carrier hoping that people will forget, possibly. Seriously though, filling out a mail in rebate takes minutes and (in the case of the phone) can save you hundreds. You may even be able to get household items for free this way.
4) You have to pay attention to 0% APR deadlines. Oh we’ve all heard the promos for the credit cards about 0% financing for “a set number” of months. Well, if you remember to pay off the balance within that amount of time, then you’re fine, but if you carry a balance past the deadline, then you could be setting yourself up to pay more money in interest than if you had stuck to your “set interest” credit card. In the example given by Forbes, if you purchase a $3,200 TV with 0% interest for 18 months, you have to remember to pay it off in that time frame because one day past the 18 month mark and you will owe interest on the entire $3,200 (at 22% interest that’s $700!) even if you have paid $3,199.
5) Look into renegotiating for a better deal because you may be surprised to find what you can get. Just to bring up the cell phone story again, I called the carrier the next day and was able to “upgrade” my plan to a plan with more minutes for $10 less a month, plus get a corporate discount on top of it. I was able to get that just by asking nicely. You can negotiate on things like cell phone plans, leases (especially in the real estate market we’re in right now landlords may be even more willing to work with you), hotel rooms, electronics, and furniture. Who knows, you may just end up saving yourself even more than what the “mail-in rebate” can get you!
Related posts:How you can save money on all your telephone bills
Tags: procrastination, end result, traditional banks
When will the bailout actually help the economy?
Jennifer McClelland | RSS | Sat, Dec 13 2008 | 0 CommentsBanks are still failing, investors are losing thousands (if not more), families are still losing their homes. So how was the bailout supposed to help?
We, as United States taxpayers, have funded companies with $700 billion. It is OUR loan to THEM. However, the economy is still sub-par and there are no investments that we can put our money in for safety with the guarantee of even a tiny profit.
Short run T-bills have 0% interest rate. From what I’ve learned in my managerial finance class, when the T-bills is at 0% that means the risk free rate of interest on an investment is 0% and anything above that (such as on a corporate bond) included a default and market risk premium. (To me) that means any coupon rate on a bond (corporate, municipal, etc) is all risk…
The point I’m trying to make is that the bailout was supposed to help the economy…so when will that happen. There are thousands, if not millions, who are losing their retirement funds in the market. When will they be bailed out?
Related posts:The Fed may lose its ability to bailout huge companies
What will the credit card companies do?
Tags: retirement funds, bailout, market
Time for another debate
Jennifer McClelland | RSS | Wed, Oct 15 2008 | 0 CommentsTonight the final presidential debate was held in New York. This time the debate focused more on attacking each other than telling policies. John McCain even brought up "we need to know the extent of the relationship between Senator Obama and William Ayers."
Watching this debate, I would like to know where to find a plumber that makes $250,000 a year. My father surely didn’t.
I personally didn’t think they spent enough time on focusing on how to fix the economy. There are more Nancy home makers and Steve the cubical magician than Joe plumbers…Nancy and Steve are losing their retirement funds and their children’s college funds. What about them Senators?
At least this debate is over, now all I have to do is get past November 4th and hopefully the election will be over…
Related posts:Should you stay close to home for college?
Tags: retirement funds, college, obama
