8 tips for people who will retire in 2015-Emily Brandon

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Retirement is a major life transition that requires changes to your income and lifestyle. Here are the final preparations you should be making if you plan to retire in 2015.

Decide when to sign up for Social Security. When you sign up for Social Security drastically affects how much you will receive each month. Most baby boomers are eligible to receive full benefits at age 66. If you sign up before age 66, your monthly payments are reduced, and if you delay claiming up until age 70, your payments increase. "You want to consider the penalty for taking it early and the benefit of delaying it beyond full retirement age," says Christopher Rhim, a certified financial planner for Green View Advisors in Norwich, Vermont. Members of married couples may also be able to claim spousal and survivor's payments and strategize ways to maximize their benefit as a couple. You can get a personalized estimate of your benefit by creating an online account at socialsecurity.gov/myaccount.
Take care to sign up for Medicare on time. It's important to sign up for Medicare as soon as you are eligible to do so. "You should start submitting the paperwork for Medicare up to three months before age 65," Rhim says. "It's not something you want to wait and delay on because there are some financial penalties if you sign up later." Also, take a look at Medicare's premiums, deductibles, copays and coinsurance so you can get an idea of how much you will need to pay out of pocket. If you retire before age 65, you will need to find another source of health insurance until you qualify for Medicare, perhaps through your state's health insurance exchange or your former employer.
Assess your workplace retirement benefits. Make an appointment with your human resources department to determine which workplace retirement benefits will carry over into retirement. Some fortunate employees get traditional pension payments and retiree health insurance after leaving their jobs. You should also check when you vest in your 401(k) plan and get to keep your employer's contributions.
Consider rolling over your 401(k). When you leave your job, you have the option to roll your 401(k) balance over to an individual retirement account. To decide if this is a good move, you need to compare the fees and investment options in the 401(k) plan with those in an IRA. "If they do roll it all over into an IRA, they get certain benefits from it," says Laura Mattia, a certified financial planner for Baron Financial Group in Fair Lawn, New Jersey. "A lot of times when you consolidate, you can take advantage of price breaks and lower fees." However, if you leave your job at age 55 or older (or age 50 for public safety employees) and plan to dip into your 401(k) balance immediately, you may want to leave the money you will need in the 401(k) plan. You can take penalty-free 401(k) withdrawals from the 401(k) associated with the job you left at age 55 or later, but if you move the money to an IRA, you will have to wait until age 59½ to avoid the 10 percent early withdrawal penalty.
Make a long-term investment plan. Investors obviously want to keep their nest egg safe, but you also need to make sure that it lasts the rest of your life and keeps up with rising costs. "You really don't want to get too conservative because your portfolio has to overcome inflation and management fees and trading costs," Rhim says. "If you are looking at 20 to 25 years of retirement, that is a long-term planning horizon and you need a competitive return. That really is a call for stocks. You simply can't get that type of return with bonds and cash." You also need to develop a plan for how you will spend down your assets in a way that minimizes taxes and penalties. "You should list all your financial assets, where they are and identify what the strategy is behind them," Mattia says. "You want to make sure you are reacting according to your strategy and not making decisions emotionally."
Remember required minimum distributions. Beginning after age 70½, you will typically be required to withdraw money from your traditional retirement accounts every year and pay income tax on each distribution. The penalty for failing to withdraw the correct amount is 50 percent of the amount that should have been withdrawn.
Develop a plan for emergencies. Covering your basic monthly costs in retirement isn't enough. You'll continue to need an emergency fund in retirement to cover unexpected bills. "I always tell people to keep between six months to a year's worth of expenses in a liquid interest-bearing account that you can get to whenever you want," Mattia says. "Having some cash out at all times also gives you flexibility, so if investments are not going in the right direction, you can leave them alone for a while to get back on the right track."

Decide how you will send your time. What you decide to do in retirement will have a big impact on your costs and quality of life. "Certainly you will spend less on gas and don't have to spend as much on work clothes, but some people are also going to spend more money now because they have the time and don't just want to sit around the house," says Craig Schmith, a certified financial planner in Durham, North Carolina. "If you've got pent-up demand to travel, especially internationally, and you haven't had time to do that, you need to think about budgeting that in."

Culled from US News

2015 to be toughest year since recession: Minton Beddoes-Joanna Campione

2015 will be the toughest year for global business since the recession of 2008-09. That’s according to Zanny Minton Beddoes, Business Affairs Editor at The Economist.

Minton Beddoes says to expect turbulence in share prices, interest rates and currencies in 2015. “It’s not a grim prediction,” she says. “It is a prediction for more volatility.”

Can big business stomach it?

The U.S. economy is relatively strong approaching the New Year.  A surge in consumer spending boosted the economy's growth rate to 3.9% last quarter and its strongest six-month performance in more than a decade. Stocks continue to set new record highs. And after a blockbuster November jobs report released on Friday, 2014 will see the strongest job growth since 1999. 

But at the same time, the rest of the leading global economies are struggling. Japan’s economy is now officially in a recession and Europe is teetering on the brink of one. China’s economy is still growing but at a much slower pace after being one of the main drivers of the global economy over the past decade. Russia is getting hit by lower oil prices and economic sanctions levied by the U.S. and European Union as the conflict in Ukraine continues.

“The other parts of the rich world [are] not doing very well, with monetary policy going in the opposite direction.” Minton Beddoes says the emerging world looks “sluggish at best.”

Global economic growth has been sluggish since 2012. Slow growth isn’t always good for businesses but in this environment it has been. U.S. corporations are buying back shares of their own companies at the fastest pace since the financial crisis. Stock buybacks hit a record $500 billion by mid-year. At the same time, sky high profits have boosted merger and acquisition activity. Deals are likely to top $3 trillion in 2014.

 At the same time all this macro volatility is taking place, Minton Beddoes points to a huge amount of disruption going on at the micro level coming from the digital revolution which she says is accelerating. “Disruptive innovation is a total cliché but it’s really happening and it’s happening in more and more industries."

Companies like Uber, Airbnb, Kickstarter and Rent the Runway have shaken up big business. They are part of a class of tech start ups that can upend an entire industry.  Minton Beddoes says a relatively stable global economy has been able to absorb this digital revolution so far but that may change in 2015.

“If you’re a CEO, you have to be rethinking how you are going to deal with the new digital environment," she says. "You’ve been able to do that against a fairly placid macro economic backdrop, now you have to deal with volatility both above and below."

Culled from Yahoo

The need for Additional Voluntary Contribution and its Positive impact on the Life of the Retiree-Odunze Reginald C

 

source of the picture is ftadvisers

The need for Additional Voluntary Contribution and its Positive impact on the Life of the Retiree

The idea of additional voluntary contribution stems from the inability of the pension pot to take care of the pension’s expectations, expenditures, medical expenses and other issues arising from the pension contributions.

Most retirees often discover that their pension Pot is not enough to carry them through  and 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 Sip 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 in number of years to the organization. But a situation where the organization what do the retiree do,  of course nothing , but if there is additional voluntary contribution , it can take of any shortfall in the expectation   of the retirees pension pot.

Retirees should make it as a duty to check their pension from their Pension Fund Administrators or they make online pension calculator which has in built mechanism capable of calculating the contributor’s likely expected values and returns

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 through you through. 

REGINALD ODUNZE.COM