The 4 questions you must get right for a secure retirement-By Walter Updegrave

Given the flood of often confusing and conflicting information from financial services firms, market pundits and the media, it’s easy to lose sight of what really matters when it comes to retirement planning. No doubt that’s one reason only 32% of American workers surveyed by Personal Capital reported they are very or somewhat prepared for retirement. But there’s an easy way to improve your odds of a secure post-career life : Focus on the fundamentals, which can be boiled down to these four key questions:

1. Are you saving enough? How much is enough? Well, if you get started early in your career and experience no disruptions to your savings regimen, you may very well be able to build a nest egg well into six or even seven figures by stashing away 10% of pay each year, especially if your employer is throwing some matching funds into your 401(k). But not everyone gets that early start and sticks to it. So I think a more appropriate target—and one cited in a Boston College Center for Retirement study —is 15% a year.
Of course, if for whatever reason you’re getting a late start on your retirement planning, you may have to resort to more draconian measures, such as ratcheting up your savings rate above 15%, putting in a few extra years on the job before retiring and scouting out innovative ways to cut expenses and save more . There are a number of free online calculators that can help you estimate on how much you should be saving to have a reasonable shot at a comfortable retirement. Don’t despair if the figure the calculator recommends is too high. You can always start with an amount you can handle and then increase it by a percentage point or so a year until you reach your target rate.
2. Do you have the right investing strategy? By the right strategy, I mean tuning out the incessant Wall Street chatter and the pitches for dubious investments and concentrating instead on building a well-balanced portfolio that jibes with your risk tolerance while also giving you a reasonable shot at the returns you need to achieve a comfortable retirement. Fortunately, that’s fairly easy to do. Start by gauging your true appetite for investment risk by completing this free 11-question risk tolerance-asset allocation questionnaire from Vanguard. Then, using the mix of stocks vs. bond funds the tool recommends as a guide, create a portfolio of broadly diversified low-cost index funds.
The portfolio doesn’t have to be complicated. Indeed, simpler is better : a straightforward blend of a total U.S. stock funds, total U.S. bond fund and total international stock fund will do. The idea is to keep costs down—ideally, below 0.5% a year in annual fund expenses—and avoid toying with your stocks-bonds mix except to rebalance every year or so (and perhaps to shift your mix more toward bonds as you near and then enter retirement).
3. Are you fine-tuning your plan as you go along? Retirement planning isn’t a task you can complete and then put on autopilot for 20 or 30 years. Too many things can change. The financial markets can take a dive, a job layoff might upset your savings regimen, a health or other emergency could force you to dip prematurely into your retirement stash. So to make sure that you’re still on track to retirement despite life’s inevitable curve balls , you need to periodically re-assess where you stand and determine whether you need to make some tweaks to your plan.
The best way to do that is to fire up a good retirement calculator that uses Monte Carlo simulations. For example, by plugging in such information as your current salary, retirement account balances, how your investments are divvied up between stocks and bonds and your projected retirement date, the calculator will estimate your chances that you’ll be able to retire in comfort if you continue on your current path. If your chance of success is uncomfortably low— say, below 80% —you can see how moves like saving more, investing differently or postponing retirement might improve your retirement outlook. Doing this sort of evaluation every year or so will allow you to make small adjustments as needed to stay on track, reducing the possibility of having to resort to more dramatic (and often more disruptive) moves down the road.
4. Have you developed a retirement income strategy? If you’ve successfully dealt with the three questions above, you’re likely well on the path to a secure and comfortable retirement. But there’s one more thing you need to do to actually achieve it: Develop a plan for turning your retirement nest egg into reliable income that, along with Social Security and other resources, will provide you the spending dough you need to sustain you throughout a long retirement.
Typically, creating such a plan involves such steps as doing a retirement budget to estimate how much income you’ll actually need to maintain an acceptable standard of living in retirement; deciding when to take Social Security to maximize lifetime benefits; figure out how much of your retirement income you would like to come from guaranteed sources like Social Security, pensions and annuities vs. draws from savings ; and, setting a reasonable withdrawal rate that will provide sufficient income without too high a risk of running through your nest egg too soon.
Clearly, you’ll also want to devote some time to non-financial, or lifestyle, issues , such as thinking seriously about how you’ll live and what you’ll do after retiring, whether you’ll stay in your current home or downsize or, for that matter, even relocate to an area with lower living costs to stretch your retirement budget. But if you want a realistic shot at a secure and comfortable retirement, you need to answer the four questions above.

Culled from Money.com

Customization, the secret of Managing Account a Case of Pension Fund Administrators- Odunze Reginald C

Image credited to paramount.com

Customers are like women and children, they value themselves, and they want to be promoted, appreciated and hold in high esteem. Any human being will feel at home in the hands of those that promote and appreciate him.

In my early years of hunting for job in Lagos, of all my numerous kinsmen, I can never forget one that took time to appreciate me, telling me how intelligent I am, how I will easily get job within the shortest possible time. I discovered one thing that whenever I am with him, my ego swells, and I feel that I have already secured the job. It was that zeal and strong magnetic impulse that drove me to get my first job in Xerox.

But there is one thing that I value this man, he takes time to talk to me positively, telling me not to mind those negative people that say there are no jobs in Lagos. Though I have other kinsmen who took time to tell me that there are no jobs, telling me about negative part of Lagos, though they gave me money, when I am going but I value this man who does not give me anything but takes time to lift my ego, it was that ego lifting that drove me in those days. It rekindles my faith and brings the job nearer to me. He takes time to talk about me, even though I had nothing.

Dr William King noted that “A gossip is one who talks to you about other people,  A bore talks to you about himself. And a brilliant conversationalist is one who talks about yourself” Lebouef ( 2000:35)

Continuing Lebouef noted “that in today’s world professionalism has little to do with what you do for a living, it’s how well you do what you do that separates the pros from the also-rans. The mark of true professional is that by his conduct, he gives the customer excellent value for his dollar as the customer perceives it. And there is no better way to build perceived value than by tailoring your efforts to benefit each individual customer”. Lebouef  (op cited)

And when we do that we are customizing, we are in the era of customization, not that customer is king, but it is equally good to tailor our service deliver to customer’s specifications and requirement. No two customers will exactly have the same desire, expectations etc.

In customization, it is imperative we know the names, title and aspirations of our customers. The customer’s aspirations have a lot to do in carrying on with the essential requirement in maintaining a cordial and harmonious relationship with a customer. I have step into a customer’s premises and immediately I discover that the customer is a politician, I took time to see the brandings, symbols in his office and I have to follow, in a way that even though I am not a politician, but being mindful of what you will say in such dispensation may make or mar you.

As National Pension Commission strategizes on lifting the transfer window, which according the AGM, Public Sector, Abba Mamman has been militated by the rising cases of double and multiple pins. He went on to say that what wlii ensure the success of PFAs in surviving and keeping their customers in the event of the lifting of the transfer window is the quality and efficiency of customer service. But to me what will ensure that is the ability to customized, sterling bank calls it the one customer. But I call it customization, the need for customization cannot be over emphasized, each customer has its specific needs and tailoring the services of PFAs to the needs of the specific customers will long way, in ensuring the satisfaction of these customers.

Odunze Reginald is the Lead Consultant, Chareg Consulting, a management and marketing  consultant  a social media and social marketing consultant , you can visit our twitter anchor @regydunze, find us on Facebook @ Reginald odunze and reginaldodunze.com, at google+ @ Reginald Odunze and at Linkedin@reginald odunze.

Why your retirement savings plan may be over diversified— Catherine Fredman

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It’s the time of year when your 401(k) plan administrators are showering you with annual disclosure statements. It’s tempting to toss them, but before you do, check your portfolio to make sure you haven’t fallen into the over-diversification trap.
Most financial advisors will tell you that diversification—spreading your money across several asset classes and investment styles—is the best way to protect your portfolio from risk and volatility. But what if an investor overdoes the advice not to put all her eggs in one basket and has too many eggs in too many baskets? Over-diversification—buying more and more mutual funds, index funds, or exchange-traded funds (ETFs)—can actually amplify risk, stunt returns, and increase transaction costs and taxes.

Too much of a good thing
Over-diversification is a situation that sneaks up on you—especially as you collect funds in your retirement accounts without considering the overall impact on your portfolio.
Craig Adamson, president of Adamson Financial Planning in Marion, Iowa, describes a typical case. As a result of changing jobs a few times, a client had four different 401(k)s, a Roth IRA and a regular IRA.  The client stated that he didn’t want to invest in foreign stocks, yet after analyzing the funds in the portfolio, Adamson discovered that 30 percent of the fund holdings were in international equities—a huge overweighting. “He thought he was diversified because he had money in four different 401(k)s and two IRAs, instead of looking at his underlying investments,” Adamson notes.
A bloated portfolio can negate the benefits of diversification in a variety of ways:

• Owning too many funds increases risk by concentrating your holdings in a few areas. A typical joke after the technology bubble burst was that investors thought they were diversified because they held Janus Twenty, Janus Mercury, and Janus Growth; in reality, each of those funds held almost the same technology stocks.
• Funds with completely different strategies can, in fact, hold large concentrations of the same stocks. For example, five of the top ten holdings of an index fund tracking the growth stocks in the S&P 500 (ticker: IVW) are also in the top ten picks of a well-regarded technology mutual fund (VGT).
• Returns suffer for the simple reason that if you have too many investments, the positive contribution of one won’t be big enough to make a difference. For example, if a fund only makes up 1 or 2 percent of your holdings, even a significant gain in that investment won’t sway the overall portfolio.  
• In addition, if you have too much of the same kind of asset class, such as large-cap stocks, you risk “index-hugging,” the term for when your holdings mirror one of the standard indices, such as the S&P 500. In that case, your return will revert to the mean, or average. But because the portfolio might not be balanced to match the index, it could actually lead to lower returns.
• Overall performance can also be eroded by unforeseen trading costs, tax inefficiencies, or, operating expenses. Paying for trades or sales charges in actively managed funds can add up; similarly, high turnover in a taxable portfolio can create an expensive tax bill at the end of the year.
• Last, an over-diversified portfolio can become too unwieldy to monitor, leading to what financial advisors call “analysis paralysis.” “There are too many elements to keep track of,” says Adamson. “Investors just get overwhelmed.” 

Avoiding portfolio bloat
There’s no flashing light that says, “I’m an over-diversified portfolio.” It’s up to the individual investor to take a deep dive.

• Look up each fund’s description of its investment strategy: Is it focused on U.S. large-cap growth stocks or foreign developed markets? If the description of one fund’s strategy sounds eerily familiar to that of another fund, alarm bells should starting ringing.
• Check each fund’s top ten holdings for duplication. If you see Apple or Google in too many top ten holdings, you might want to question whether you bought the same thing five or ten times.

Finding the right balance

• For novice investors, start with one low-cost fund that covers the total U.S. equity market or a target date fund that includes U.S. and international stocks and bonds.
•  It makes sense to diversify into specific asset classes when your portfolio reaches $10,000.
• Five to seven funds are sufficient. Divide them among: large-cap growth and large-cap value stocks (or both, through a large-cap blend); small-cap growth and small-cap value; international equities (including developed and emerging markets); and U.S. bonds.

Culled  from Consumer Reports: