How to Avoid Retirement Burnout-Dave Bernard

Don’t let boredom and depression creep into your retirement years.

Retirement can become boring and lonely if you don't make an effort to keep things interesting.

It sounds hard to believe, but after the initial honeymoon period you may start to feel dissatisfied with your life in retirement. Twenty years is a long time to spend catching up on sleep and watching TV. And many people are unprepared to take on the responsibility of filling their days with more meaningful activities. While a suddenly blank calendar and no place you have to be often sounds great to overscheduled working people, it can also get boring or lonely if the absence of activities continues for an extended period of time. Without a reasonable amount of variety, challenge and newness, retirement could turn out to be far less enjoyable than you hoped for.
After working so hard to get there, it is important to stay active and engaged in retirement. Here are a few ideas to help you avoid retirement burnout:
Keep challenging yourself. No one wants to find themselves mired in a boring routine with nothing to look forward to. Although it may feel safe to remain within the familiar walls of home, it may also lead to boredom and laziness. You can avoid such a debacle if you try to keep challenging yourself. Experimenting and doing things for the first time helps keep life interesting and fresh. New experiences often require new skills, and developing those skills is an important way to stay sharp and on top of your game. Just because you may be less physically nimble does not mean you have to spend your retirement doing nothing. Do what you can safely manage, but keep doing something.
Stay engaged and building new relationships. Once you retire you will find yourself with more free time than ever before. You may choose to spend some of that time with friends and family. Relationships can be strengthened and new memories will be created with the people you engage with in retirement. In addition to renewing existing relationships this can be a chance to branch out and meet new people. Since your interests will likely change once you depart the working world, getting to know new people who share your new interests can keep things interesting. Whether you prefer one on one face time or a group gathering, a little variety in the people you interact with can help you avoid burnout.
Broaden your horizons. After six or more decades of living, some retirees may feel they have done it all. With little they have not yet experienced, they settle into a life of repeating what they know and are most comfortable with. But experiences you may have viewed as boring in the past could deserve a revisit. In my earlier life, I had no interest in opera. Then my wife took me to an Andrea Bocelli concert that changed my mind. Today it’s not uncommon to hear the soft lilt of an exquisite Italian tenor playing in our home. It never sounded interesting back when I was working full time, but now I have discovered an unexpected new passion. Whether it is music, sports, the theater or even dining out someplace new, retirement can be an excellent time to broaden your interests.
Do some good. The idea of doing something for others has always been interesting to me, but I never made time to do it during my frantic working days. I see retirement as the perfect opportunity to give something back to the community. During my second act, I will have the free time to contribute, and there is always a need.
Stay young at heart. Have you ever met someone who spends their life acting the way they feel rather than the age they are? Although wrinkled on the outside, some retirees maintain an exuberant carefree attitude far younger than their years. Often their zest for living exists in spite of physical limitations, but they choose to stay positive and enjoy life. A positive attitude can help you to better cope with the challenges that come with aging.

Culled from US News

5 Obstacles to Early Retirement- Joe Udoh

People who engage in these behaviors will never be able to retire early.

Early retirement is a dream for many employees toiling away at dissatisfactory jobs. But that doesn’t mean these workers are planning their escape. The 2014 Retirement Confidence Survey by the Employee Benefit Research Institute found that half of all workers have less than $10,000 saved for retirement. That’s not enough to retire at a normal age and makes early retirement an impossible dream. Here’s why retirement in your 50s or earlier is out of reach for most people:
Spend too much money. The American consumer lifestyle dictates that we buy a lot of depreciating junk. Almost every consumer item loses its value over time. A $1,500 60-inch smart HDTV will be worth nothing in just a few years. A new car loses value moments after it’s driven off the lot and about 20 percent after the first year. That’s a lot of loss for the new car smell. We think of these things as assets, but they are just sitting around depreciating.
Most of us think it is fine to spend money because we work hard for it and there will always be another paycheck. This is a huge barrier to early retirement. If you want to retire early, you need to plan for the day that the paycheck stops coming in. Buying less stuff and getting rid of unnecessary services is a good start.
Didn’t start saving early. I am forever grateful to my dad who convinced me to start saving for retirement as soon as I started working. After a few years, I maxed out my 401(k) and I’ve been adding to my retirement fund ever since. Time is your best friend if you start investing early. Compound interest will make a huge difference over 40 years. If you invested $5,000 per year from age 25 to 35 and then stopped, you’ll have over $600,000 by the time you turn 65, assuming 7 percent annual gains. Putting off retirement investing until you’re in your 30s will drastically decrease your chances of achieving an early retirement.
Didn’t save enough. Saving early is great, but you also need to save more. Financial planners recommend saving 10 percent of your salary, but that’s not nearly enough for early retirement. The earlier you retire, the less time you have to save and the more time you will need your nest egg to last. If you want to retire early, you need to save much more than 10 percent. This is where spending less money helps. Reducing your expenses will enable you to save more and compounding will work in your favor.
Didn’t invest consistently. Individual investors are notoriously bad at timing the stock market. Many investors sold off their stock investments during the 2007 and 2008 financial crisis and missed much of the recovery. If you’re a genius investor who can consistently beat the stock market index, then by all means do it. However, if you’re a regular investor, it’s better to figure out a target asset allocation that you’re comfortable with and invest with low cost index funds. Keep investing through the downturns and you won’t miss out on the recovery. The bear years are great buying opportunities for young investors.
Have a large family. Kids are another huge obstacle to early retirement. The USDA calculated it will cost almost $250,000 to raise a child from birth to age 18. This doesn’t even include college, which will probably cost more than that in 18 years. It costs a lot to raise a family, so if you have three or four kids, then early retirement might be out of reach.
Early retirement is a possibility for some savers, but it won’t be easy to get there. Keeping lifestyle inflation down is very difficult in our culture, but once you figure out to buy Apple stocks instead of the latest iPhone, you’ll be well on your way to early retirement. It’s best to buy income generating assets and minimize depreciating consumer goods as much as possible. Living below your means and investing consistently for many years can bring you closer to your desired early retirement.

Culled from US News

'Free money' bank offers may cost more than you think- Mandi Woodruff

Source: Flickr

If you’re thinking about switching banks, this summer may be a lucrative time to make the leap.

A new analysis by GoBankingRates.com found that more than a dozen of the top 50 U.S. banks are offering free cash giveaways in an effort to attract new customers.

Fifth Third Bank is dangling a $200 carrot in front of new customers who open a new checking account and have at least $100 direct deposited.  Not to be outdone, Chase is offering new customers a $150 bonus when they open a basic checking account and $250 for opting for their Premier Plus Checking account with a $100 direct deposit.

“In the past, banks have used interest rate deals or promotions as incentives, but because rates are so low right now, that can only go so far,” says John Gower, senior banking analyst for Nerdwallet.com. “Instead, they’re turning to cash bonuses.”

So what’s the catch?

This isn’t exactly a charity project for big banks. They wouldn’t be handing out wads of cash if it weren’t in their best interest over the long term.

By offering cash bonuses and other goodies, retail banks are hoping to tap into a very specific group of people — existing bank customers who are on the fence about whether they should switch banks.

Banks have made it so expensive and time-consuming to leave their service these days that consumers continue putting up with them even if they want to leave. More than a quarter of consumers say they are sticking it out just because switching banks is too much of a hassle, according to Accenture.  A little cash incentive, banks hope, will be enough to nudge these fence-walkers to make a move.

“It’s not going to pay off for them if a customer only opens an account, dumps the funds and walks away,” says Christina Lavingia, of GoBankingRates.com. “They want a customer who’s going to maybe get a credit card or a mortgage and eventually, they’ll make a lot of money that way.”

To make sure new customers stick around, a lot of banks require customers to show their commitment before they qualify for a bonus.

For example, some offers require customers to enroll in direct deposit or actively use their online checking features. Right now, Santander promises to give new customers $20 each month for a year. All they have to do is enroll in direct deposit, deposit at least $1,500 into their checking account within a month and pay two bills through the bank’s online banking feature. Citibank’s $10-a-month promotion requires online bill payment, a mobile check deposit or digital money transfer.

Long-term costs of short-term benefit

Just because a bank offers free cash with its checking accounts doesn’t mean the checking accounts themselves are free, too. Far from it.

In answer to rising overhead costs and the beating they took during the 2008 financial crisis, banks have been jacking up consumer fees left and right. Free checking accounts are officially an endangered species, making up less than 30% of checking account offerings in 2013, according to an analysis by MoneyRates.com’s Richard Barrington. Banks now charge an average $12.50 per month for checking accounts and more than $30 for each overdraft fee.

Banks can’t afford to get rid of their fees. Neither can they afford to lose more customers. So they hope cash bonuses will be enough to woo new accounts without having to actually change their fee schedules.

“Banks are struggling to raise revenue and you see them launch price-based strategies such as cash rewards,” says Rajesh Kandaswamy, a banking analyst with Gartner. “Since it is more difficult to win new bank customers compared to retaining them after, upfront cash rewards prove attractive to banks instead of reducing ongoing fees."

So before you buy into a cash bonus reward offer from a new bank, do your homework first. Make sure you’ll be able to cover the minimum balance requirements and monthly service fees.

“You’re getting a short-term reward up front but if you’re signing up for an account that’s not right for you, you could easily be charged the amount of the bonus over the course of a year,” Gower says.

Lavingia adds: “You want to be careful about loopholes but if you’re at a bank where you’re not earning as many [perks] right now, it could be a good opportunity to make the switch.”

Here’s a list of cash bonus offers going on now. Read each deal carefully for terms and conditions:

Bank of America: In select states, earn $100 when you open a personal checking account.

BBVA Compass Bank: Win $100 by sending money through their p2p transfer system.

BMO Harris Bank: Earn up to $200 by opening an Everyday Checking account, Select Checking or Portfolio Checking account.  

Capital One: Earn a $50 bonus with a 360 Checking Account.

Chase Bank: Earn a $150 bonus by opening a Total Checking account or $250 when you open a Chase Premier Plus Checking account.

Citibank: Pocket $10 each month (up to $100) through Dec. 31, 2014 by opening a checking account by July 31.  

Fifth Third Bank: $150 to $250 cash bonus when you open an Essential or eAccess checking account with direct deposit.

First Republic Bank: Download their free online banking protection software and get a $25 bonus.

KeyBank: Get a $150 bonus for opening an eligible KeyBank checking account online.

PNC Bank: Earn $100 to $300 for opening one of three PNC Virtual Wallets.

Santander Bank: Get $20 a month for a year when you open their extra30 checking account.

TD Bank: Sign your kid (kindegarten-5th grade) up for a Young Saver account and qualify for a $10 summer reading bonus.

U.S. Bank: Earn $100 in rewards by opening a S.T.A.R.T. savings account. 

Culled from Yahoo Finance

Osborne stops pension providers giving advice -Simon Read

Chancellor says levy will finance free service for retirees

Pension firms will not be allowed to advise people on their retirement options from next April, but they will effectively be forced to pay for independent advice for retirees.

The Chancellor, George Osborne, yesterday filled in much of the detail around the new pension freedoms he announced in his March Budget, which was largely welcomed by consumer groups but left much of the pensions industry still warning of potential problems.
Crucially, Mr Osborne said the guaranteed guidance on pension choices offered as part of the new rules must be provided by independent organisations rather than pension schemes or providers.
The advice will be free to the consumer but will be paid for by a levy on regulated financial services firms. 
The Chancellor pointed out that Treasury research showed that “consumers would not trust guidance given by a person or organisation with a vested interest in selling a financial product or service”.
He said: “We’re making sure that people have the right support to make their own choice about how best to finance their retirement. Everyone with defined contribution pension savings reaching pension age will get free and impartial guidance.”
The changes follow years of concerns that annuities may have been mis-sold as pension providers were allowed to effectively put people into their own products, irrespective of whether they were the best or most cost-effective option.
Mr Osborne’s statement draws a line under that practice and he said that some 18 million people would be able to benefit from the changes, which come into force in April next year.
In the future pensions guidance will be offered through a range of channels, including web-based, phone-based as well as face-to-face, from organisations such as the Pensions Advisory Service and Money Advice Service.
Pensions expert Ros Altmann said: “The guidance opens the door for new and better products, as well as improving financial literacy nationwide. It could be the start of a whole new industry, which will ensure people have a better idea of how to plan their finances and how to assess their retirement options.”
Richard Lloyd at Which? said: “It’s essential that people facing retirement get personalised, impartial support to navigate some of the most radical changes to the pensions market in decades, so it is absolutely right to separate this from sales processes. This decision will help avoid potential conflicts of interest when guidance is given.”
But Neil Lovatt of Scottish Friendly said of the free guidance plans: “This feels a bit like window dressing on the part of the Government. It’s a solution that cannot possibly cope with the level of demand that should be placed upon it – which leads me to believe that it won’t be implemented properly.”
Meanwhile Nigel Barlow at the special insurer Partnership warned that the levy could hit financial advisers. “The suggestion that financial advisers may need to fund up to 30 per cent of the guidance costs came as somewhat of a shock to the industry as a whole and further clarification is needed around this.”
The Treasury also confirmed yesterday that it will allow new pensioners in private sector defined-benefit schemes to transfer into defined-contribution pension schemes, but with two new safeguards: a requirement to take advice and new guidance for trustees of the existing schemes.

Culled from The Independent

The need for Voluntary Contribution.

Most retirees often discover that their pension Pot is not enough to carry them through, that bring us to the idea of voluntary contribution. Most retirees develop one problem or the other when they discovered that their pension pot is not enough to carry out coupled with the rising cost of living and the sudden realization that the money they saved will not be able to cater for their old age.

Old age is what people pray for  right from their upward age of 15 years and I wonder why people feel terrible uncomfortable on advancing old age. The result has been that bleak rather than happiness.

And according to Richard Evans in an article in the Telegraph Newspaper he noted that “ more than a million people have started a self-invested personal pension or Sipp since their introduction in 1989, although many run their Sipp with help from a financial adviser.
These plans offer a simple and tax-efficient means to save in a wide variety of investments, from shares and bonds to cash and even, for more sophisticated investors, assets such as commercial property.”

The pension Reform Act 2004 and the pension Reform Act 2014 was explicit on that and it states in section 9 subsection 5 , Any employee to which the act applies may in addition to the total contribution being made by him and his employer make voluntary contribution to his retirement savings account.

The need for voluntary contribution came as a result of the insufficiency of pension contribution and the inability of some private sectors to pay accrued pension rights. The need for accrued pension stems out of the desire of the Federal Government to cater for the period preceding 2004, where an employee have put numbers to the organization.

In voluntary contribution, the amount is irrelevant, it is better to start small, so that you don’t feel unsafe especially when your salary is meager, and couldn’t carry you through.

Odunze Reginald C

Programmed withdrawal, the best option for Africans by Odunze Reginald C

Insurance marketers are good in selling Annuity by the slogan, Pension for Life, what is pension for Life, you will continue to draw your money until you drop dead, and once you drop dead after the  guaranteed period of Ten , nothing goes to your beneficiary and if the contributors draws up to 9years, the remaining one year pension goes to the beneficiary though on a monthly basis.

The Americans and Europeans are good at keeping fortune for themselves, and so annuity is good for them as they are only interested only on themselves, even where there is a family i.e. the nuclear family system the annuitants may not extend his savings for his immediate family unlike in African where we have the extended family system. In Africa, there is communal effort and Africans are good at being their brother’s keeper.

Even in America and elsewhere people are avoiding annuity, they argued that the period where they are paid only a particular and same type for all your life time is no longer tenable as investment is a necessary part of the pension scheme . According to Moret “Monitoring investments is very important. “A pension is for life, it’s not a case of 'buy and forget’,” said Mr Moret, who has earned the nickname “Mr Sipp” for helping to shape the industry since its launch.” In annuity , your investment is with other investment as such you don’t have access to your pension investment as it belongs to the actuary company and not to the individual investors. But in Programmed withdrawal, all your investments are reflected on your statements, and so there are the likelihood of extending the period of monthly pension.

And according to Richard Evans in an article” How to get by on a £100,000 pension pot”  which appeared in the Telegraph ,If you buy an annuity, you can fairly comfortably exceed this figure. The best-buy annuity will currently give you an annual income of £5,760, according to the Annuity Bureau. Add this to the basic state pension of £5,730 a year and the total comes to £11,490. The problem is inflation. While the state pension will rise in line, this particular annuity will not – the income remains fixed for life. An index-linked annuity currently pays £3,395 a year, making a total income of £9,125, or £775 below what is needed.  Continuing Richard thought of an alternative and he states “ let's look at what the alternative could do. This other means of taking a regular income from your pension savings is called "income drawdown". Here, rather than handing over your capital to an insurer in return for an income, you keep hold of it, normally within a self-invested personal pension or Sipp, and take an income from the interest or dividends it produces.”

From this brief presentation, it should be noted that if  whites who are advocate of nuclear family can start thinking of alternative to annuity, talk less of Africans who are of the extended family advocates.

According Campbell Fleming he noted that  "we don't know how many people will turn their backs on annuities but the evidence from my home country, Australia, where annuity purchase is voluntary, suggests that only 5pc of pensioners actually buy one. It's a similar story in the US. Annuities were designed at a time of high inflation and high interest rates, conditions that no longer apply. Continuing Fleming stated that he has issues on what could replace it and ask   "So what could replace them?" but he went to say that

"the reforms present an opportunity for the fund management industry to innovate and create investment products that meet the needs of this new generation of retired people. Clearly, it's imperative that we help that ensure investors understand their options, as more freedom for investors means more responsibility for fund managers" 

An investment that leaves nothing to your family when you die is not the best investment, Even in Bible Isaac has to bless Esau and Jacob before his death. He did not just leave them, the Bible stated, He bless them.

Odunze Reginald C