Tag Archives: Retirement Plans

Three Simple Steps: How to Start Saving for Retirement

By Chuck Saletta

road signpost pointing to work and retire with person walking down the road

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Saving for your retirement is a big deal. Barring the income you might get from pensions (not what they once were) and Social Security (not likely to stay what it once was) all you’ll have is the money you save to last you the rest of your life. And it’s no secret that if your accounts run dry, it’s incredibly difficult for a retiree to rejoin the workforce a decade or more after leaving it.

Given all that, it’s understandable if you’re a bit worried about coming up with enough money that you’ll be able to retire comfortably on your terms. While building and maintaining that nest egg is a long-term commitment, it’s important to remember that you have the rest of your career to get there. With a solid plan and the flexibility to handle life’s curve balls, you can greatly improve your chances of retiring with a portfolio that can last as long as you do.

3 Steps to Get From Here to Retired

The toughest part of investing for retirement is that you face so many unknowns. How long will you live? What will the market do? Will your Social Security benefits get cut? How tame (or wild) will inflation be? Will your mental and physical health hold out, or will you need the help of a caregiver?

Those are all wise questions to ask, but unfortunately, they can’t be answered with any certainty until it’s too late to do anything about it. The best any of us can really do is develop a reasonable plan based on decent assumptions, and then adjust as life happens. With that in mind, here is a three-step foundation for a solid plan:

1. Set a target. What sort of lifestyle do you want in your retirement? Are you the kind of person who’d be happy rocking away on the stoop, watching the world go by? Or do you picture a retirement filled with world travel, box seats at the symphony, and generous philanthropic gifts to your favorite charities?

Whatever your plans, start by estimating your anticipated monthly expenses. Subtract from that your anticipated net Social Security check and any monthly pension payments you may get, then multiply the remainder by 300. That’s about how large your total portfolio will need to be to cover your costs. At that size, your portfolio should generate enough growth and income that you can take advantage of the 4 percent rule, a solid (if rough) estimate that will help reduce the odds that you’ll outlive your money.

2. Take what help you can get, and ramp up when you can. While that 300-times-monthly-expenses estimate may seem daunting, there are a number programs available to help you build your nest egg faster. Qualified retirement accounts like IRAs, 401(k)s, 403(b)s, and the government’s Thrift Savings …read more

Source: FULL ARTICLE at DailyFinance

7 Smart Money Moves to Make Before the Stock Market Rally Ends

By Dan Caplinger

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The stock market has been on a tear over the past four years, more than doubling since the financial crisis. Many investors have recovered much of the money they lost during the market crash in 2008.

That said, recent bumpiness in stocks suggests that the end of the long bull market may come sooner rather than later.

While trying to time the market is an impossible task, here are some smart moves you can make with your money right now to protect yourself from the next market downturn while still putting yourself in a position to reach all your financial goals.

1. Get in the Habit of Investing Regularly.

Many people make the mistake of thinking that they don’t have enough money to invest regularly. Instead, they buy stocks only occasionally when they have big windfalls like a tax refund.

But with the automatic investment options that many employer retirement plans and brokerage companies offer, you can put even modest amounts of savings to work for you on a regular basis. That will make you more likely to keep investing even if the market drops, allowing you to take better advantage of bargain opportunities that inevitably arise during downturns.

2. Diversify.

If you’re like most people, you’ve heard plenty of tales of how a single stock made millionaires out of all of its investors. But for every anecdote like that, there are 100 untold horror stories of investors who lost everything gambling on one company.

The secret to successful investing isn’t finding a single perfect stock, but rather putting together a diverse portfolio of promising investments and building it up over time. Owning many different stocks keeps you from losing your shirt on a single piece of bad news, and boosts your chances for earning solid returns.

3. Rebalance.

When the stock market rises sharply, your overall portfolio mix gets out of balance, overemphasizing stocks and giving you too little in other investments like bonds and cash. Back in 2008, many people were surprised at how big their losses were, simply because they hadn’t realized how much their stock positions had grown during the bull market from 2003 to 2007.

Rebalancing involves selling off some of your winning stock investments to raise cash or invest in bonds or other types of investment assets. By targeting specific percentages for stocks, bonds, and other investments, it’ll be easier for you to keep a well-balanced portfolio.

4. Shore Up Your Emergency Cash Supply.

During bull markets, it’s tempting to put all your cash to work in the market. Moreover, savings accounts are paying next to nothing in interest right now, making having a cash stash seem like a waste.

Yet as an insurance policy, it’s still

From: http://www.dailyfinance.com/2013/04/19/investing-tips-bear-market-stock-downturn/

5 Ways to Pay the IRS Less Next April

By Dan Caplinger

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Cassandra Hubbart, DailyFinance

April 15 has come and gone, and most people have put another year of tax-return preparation behind them. But a recent Gallup poll shows that an increasing number of people believe they pay too much in taxes, with the fewest Americans since 2001 believing that the amount they pay is fair.

If you’re still in shock from the amount of taxes you just had to pay, you should start working now to reduce your tax bill for April 2014 and beyond. Here are five ways you can get on track to write a smaller check to the IRS next year.

1. Put more money toward your retirement. The best way to shrink your taxable income is to save for retirement using IRAs, 401(k) plan accounts, and other tax-favored retirement savings accounts. This advice tops our list because the amounts you can save are big enough to have a real impact on your taxes. Those younger than age 50 can save $17,500 in a 401(k) plan this year and another $5,500 in an IRA. If you’re 50 or older, those limits are even higher, topping out at $23,000 for 401(k)s and $6,500 for IRAs. Using them in combination can cut thousands off your tax bill.

2. Hold onto winning investments longer. When the stock market is rising, many people sell off their winners quickly to make sure their paper gains don’t turn into losses. But that short-term mentality leaves you paying much higher rates on short-term profits, with some taxpayers losing more than half their gains to federal and state taxes. If you hold onto winning investments for more than a year, you’ll qualify for much lower long-term capital gains rates, which can cut your tax bill on those gains in half — or even eliminate it entirely for some lower-income taxpayers.

3. Take a look at tax-free municipal bonds. With interest rates as low as they are, paying taxes on the paltry amounts of income you can earn from bank CDs and most bonds just adds insult to injury. But especially if you’re in a fairly high tax bracket, you’ll want to take a closer look at tax-free municipal bonds for income. Right now, the muni bond market is in a somewhat unusual position in which yields are actually higher than what you’ll get from Treasury bonds or FDIC-insured bank accounts, even before you take their tax advantage into account. So don’t ignore municipal bonds as a potential source of valuable income as well as tax savings.

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4. Boost your withholding. If you didn’t have enough taken out of your paycheck last year, you not only had to write a big check at the end of the year but also might have owed penalties

From: http://www.dailyfinance.com/2013/04/19/pay-less-taxes-next-year-irs-deductions-credits/

Why You Should Care About Your Employees' Retirement Plans

By Steve Parrish, Contributor The popular press is wrong about the decreased importance of company retirement plans in an employee’s financial planning. The fact that defined benefit plans have become increasingly rare does not mean that company retirement plans are less important to employees. Two things this past weekend drove this home for me. First, I was reviewing a friend’s plan for his imminent retirement and realized that almost 90% of his retirement capital was coming from his accounts at work. He had a large 401(k) balance and a sizeable nonqualified deferred compensation account. Second, I read a CNN newsfeed titled, “Where Americans stash their wealth.” The gist of the article is that whereas in the past families had a sizeable part of their wealth in home equity and bank savings accounts, these days they are dependent on their 401(k)s and other company retirement plans.

From: http://www.forbes.com/sites/steveparrish/2013/04/17/why-you-should-care-about-your-employees-retirement-plans/

My Old Boss Kicked Me Out of My 401(k)! What Now?

By Dan Caplinger

401K (Cassandra Hubbart, AOL)

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Cassandra Hubbart, AOL

Using a 401(k) or other employer-sponsored retirement plan is one of the best ways you can set aside money for your old age. But as many workers who’ve moved on from past jobs have recently discovered, employers don’t want to keep footing the bill for their former employees’ retirement savings. So they’re kicking those accounts to the curb.

What’s Happening?
Until 2005, employers routinely cashed out small 401(k) plan accounts when workers quit. Previous law allowed them to sell 401(k) assets and send checks to workers who had less than $5,000 in their accounts, forcing the recipients to figure out on their own how to roll over those amounts into IRAs to avoid the extensive taxes and penalties that would otherwise apply.

Current law, however, only allows that option for workers with less than $1,000 in their accounts. For those with between $1,000 and $5,000, employers have to go to the trouble of setting up an IRA for their former employees.

That’s enough of a hassle that many employers didn’t bother doing it. But as administrative costs of managing 401(k)s have risen, forcibly pushing former workers into IRAs has gotten more popular.

Why Is That Bad?
In general, rolling over an old 401(k) to an IRA can be the smartest move you can make. That’s because it gives you access to a wider range of investment options that are often less expensive. It also helps you avoid the tax hit of just depositing old 401(k) money into your regular bank account.

But for those with tiny account balances, those low-cost options are a lot harder to find. Without the clout that a large 401(k) plan brings, you won’t get the same lucrative deals that many major employers can get, including low-cost institutional mutual funds and other favorable investments.

Two Ways to Deal With Being Dumped
If your former employer boots you out of your 401(k), realize that you have options.

If the IRA that your former employer sets up for you isn’t what you want, you have the right to transfer that money to the provider of your choice. That way, you can pick a lower-cost IRA that meets your needs.

Alternatively, if you have a 401(k) account with your current employer, you can roll the IRA money into that account. That strategy works best if you like your current plan’s investment options better than what you have access to elsewhere.


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Source: FULL ARTICLE at DailyFinance

PVH Corp. Reports 2012 Fourth Quarter and Full Year Results

By Business Wirevia The Motley Fool

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PVH Corp. Reports 2012 Fourth Quarter and Full Year Results

  • Fourth Quarter Results Driven by Increased Earnings across All Businesses
  • Full Year Non-GAAP EPS Was $6.58, Which Includes a $0.15 Favorable Impact Related to Change in Method of Accounting for Retirement Plans, and $6.43 Absent the Change
  • Full Year GAAP EPS Was $5.87, Which Includes a $0.09 Unfavorable Impact Related to Change in Method of Accounting for Retirement Plans
  • Company Provides Preliminary 2013 Non-GAAP EPS Guidance of $7.00

NEW YORK–(BUSINESS WIRE)– PVH Corp. [NYSE: PVH] reported 2012 fourth quarter and full year results.

Non-GAAP Amounts:

The discussions of historical results in this release that refer to non-GAAP amounts exclude the items which are described in this release under the heading “Non-GAAP Exclusions.” Reconciliations of GAAP to non-GAAP amounts are presented later in this release and identify and quantify all excluded items.

Overview of Fourth Quarter Results:

  • Earnings per share was $1.60 on a non-GAAP basis, which includes a favorable impact related to the change in the Company’s method of accounting for retirement plans and represents a 34% increase over the prior year period’s non-GAAP earnings per share of $1.19 (as adjusted for the change). Absent the change in accounting method, non-GAAP earnings per share would have been $1.54 for the fourth quarter, which exceeds the top end of the Company’s previous guidance by $0.05, and compares to $1.18 for the fourth quarter of 2011.
  • GAAP earnings per share was $1.09, which includes a negative impact related to …read more
    Source: FULL ARTICLE at DailyFinance

Despite Stock Market Gains, Workers Worry About Retirement

By The Associated Press

workers worry about retirement savings

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The stock market has climbed back to a record high, but workers remain pessimistic about having enough money for retirement. The Employee Benefit Research Institute’s annual retirement confidence survey shows nearly half of workers have little or no confidence that they’ll have a financially comfortable retirement.

Here’s a look at some of the findings from the 23rd annual survey released Tuesday:

Respondents who are very confident about having enough money for a comfortable retirement: 13 percent

  • Somewhat confident: 38 percent
  • Not too confident: 21 percent
  • Not at all confident: 28 percent

Percentage of workers identifying the following issues as the most pressing concerns that most Americans face, followed by the percentage of retirees identifying that issue:

  • Job uncertainty: 30 percent, 27 percent
  • Making ends meet: 12 percent for both groups
  • The budget deficit and government spending: 8 percent, 14 percent
  • Paying for health insurance and medical expenses: 9 percent, 10 percent
  • The economy: 8 percent, 6 percent
  • Taxes: 8 percent, 5 percent
  • Making mortgage payments: 8 percent, 4 percent
  • Saving for retirement: 2 percent, 4 percent

Percentage of workers reporting that they could definitely come up with $2,000 if an unexpected need arose within the next month, followed by the percentage of retirees:

  • 50 percent, 52 percent

Percentage who could probably come up with $2,000:

  • 20 percent, 17 percent

Percentage who could probably or definitely not come up with $2,000:

  • 28 percent for each group

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Source: FULL ARTICLE at DailyFinance

The Last-Minute Tax Move That Could Be Worth $100,000

By Chuck Saletta

Filing taxes online

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The 2012 tax filing deadline is less than a month away and if you haven’t filed yet, don’t worry — you’re not alone. H&R Block (HRB) estimates that on average, Americans are about two weeks behind last year’s filing pace, with about 60 million yet to file as of the beginning of March.

A big part of the delay is driven by the last-minute tax law changes and new reporting requirements that were so complex that even the IRS was forced to delay its typical starting date for accepting returns.

If you’ve got all the paperwork and are just dreading the effort or the bill you might have to pay, here’s something that might motivate you to get moving: There’s a last-minute tax move you can make for 2012 that could potentially be worth over $100,000.

The move that can be worth so much? It’s simple: Fund your IRA for 2012.

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And exactly how do we come up with the tasty $100,000 carrot to get you to act? Like this: The money you contribute to an IRA (traditional or Roth) grows tax deferred. And if the IRA you fund is a Roth IRA, that growth may even end up being completely tax free.

People under age 50 can contribute up to $5,000 for 2012. If that $5,000 contribution compounds at 8 percent annually for the next 40 years, your savvy tax move you make in the next month winds up being worth $108,623.

That’s not a bad haul for a one-time investment, but you’ve got to get moving.

While the IRS will automatically let you extend the deadline to file your 2012 taxes , the window slams shut on 2012 IRA contributions after April 15. In short, filing extensions do not apply to IRA contributions.

What If You Don’t?

Of course, there’s nothing forcing you to contribute to your IRA. If you can’t come up with the cash or otherwise choose to not contribute, that’s fine. But understand what you miss out on:

  • Tax-deferred compounding: You can still invest money outside of your IRA, but you’ll likely owe taxes on dividends and capital gains on the returns that money makes, even years before you need to spend it.
  • Creditor protection: Many states shield some or all of your IRA assets from creditors, protecting that money from being seized to satisfy most common debts. Money in an ordinary brokerage account does not enjoy that kind of protection.
  • College financial aid: Money held in an IRA is not counted as an asset for calculating a family’s expected financial contribution when calculating federal financial aid for college. Investments in ordinary brokerage accounts reduce the amount of aid a student can receive, whether those investments are held by the student or that student’s parents.
  • Penalty enforced retirement focus: With few exceptions, tapping your …read more
    Source: FULL ARTICLE at DailyFinance

New Study Finds Women Likely to End Up Poor Than Men

By Michele Lerner

Women make less money than men and have poorer job choices

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When it comes to saving and spending, the news is not good for women.

SaveUp.com, an online financial rewards program for saving and paying down debt, recently analyzed a representative sample of more than 20,000 of their users’ savings and debt balances. The results reveal a sobering reality: Women are more likely than men to be poor during their lifetimes.

If you’re surprised, you wouldn’t be alone — the women who took the survey are right there with you. When asked which gender they think is better at saving, more than 73 percent of women said females were.

The SaveUp U.S. Consumer Savings and Debt Report, released on Tuesday, finds that the average man has account balances that add up to nearly twice the size of the amount of money women have saved:

Men Women
Avg. 401k $50,632 $39,320
Avg. IRA $8,456 $4,916
Avg. Taxable Investment $72,390 $55,668
Avg. Certificate of Deposit $30,374 $7,459
Avg. Money Market Investment $11,157 $13,225

Source: SaveUp.com

Not only are men saving more in general, but they are saving more aggressively for retirement-related goals.

Men in the survey have 28.8 percent more than women in their 401(k)s and 72 percent more in their IRAs. The only type of account in which women average a higher balance than men is in a money market account — a conservative, low-growth investment.

What’s Behind the Savings Gap?

The simple answer to the question is “income disparity.” According to the American Council on Education, depending on their race and where they live, women make between $0.57 and $0.77 for every dollar men make. This not only makes it harder for women to save than men, but their retirement contributions through their employer will be substantially lower.

Another thing that may be holding women back is student loan debt. Women with student loans in the SaveUp study carried somewhat more debt from higher education than men who had student loans ($41,405 versus $39,104 for men).

Even in planning for the future, women shortchange their goals. When SaveUp asked women to put a dollar figure on the amount they were trying to save for retirement, the median was $200,000 compared to the men’s median goal of $400,000.

Closing the Gap

One area of money management where women are doing better is in managing what SaveUp calls “non-asset building debt,” which includes credit card debt, car loans and lines of credit.

According to the study, the average debt-bearing woman owes $34,645 versus $42,842 owed by the average debt-bearing man. …read more
Source: FULL ARTICLE at DailyFinance

Washington Lawmakers' Pensions: The Envy of a Nation


congress pension plan retirement

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(Chip Somodevilla/Getty Images)

While extending the payroll tax cut through the end of last year, members of Congress last fall took what many feel was a long overdue whack at the cost of their retirement plan. They bumped up the rate at which federal employees contribute to their pension plan, saving an estimated $15 billion over the next 11 years.

They also made sure that none of the increase applied to themselves. Anyone in service before the law went into effect would pay into the pension plan at the old rate.

For all the talk you hear from Capitol Hill about running government more like a business, Congress has a retirement plan that would make any Fortune 500 executive blush. Members can retire younger, having contributed fewer of their own dollars, than almost any worker in the country — even more than the generous terms other federal workers get.

At a time when traditional pensions are disappearing and many workers are struggling to save for retirement, the Federal Employees’ Retirement System, an old-school defined benefit pension program, pays 215 former congressmen and women an average of $39,576, for an average of 16 years of service, according to a recent Congressional Research Service report.

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That’s about what the average private-sector worker makes in retirement from all sources after a lifetime of work, according to the Employees Benefits Research Institute. The average income that worker gets from a pension is about $8,800 — if they have one. In 2010, fewer than 15 percent of private sector employees were enrolled in a defined-benefit pension.

“It’s not keeping pace with what’s happening in the private sector,” said Veronique de Rugy, a senior researcher with George Mason University’s Mercatus Center. “It’s not sustainable.”

It’s inaccurate, in fact, to refer a single retirement plan, since any senator or representative elected after 1986 has access to three: Social Security, a 401(k) program that matches 5 percent of their contributions up to $17,500, and FERS, which as the name implies covers anyone paid from the federal till.

FERS alone is a plan any U.S. worker would envy. As Jim Kessler, co-founder of the think tank Third Way and a former congressional aide, said, “It’s not wrong to have three plans, but the matching is one-to-one for two of them and the other [FERS] is one-to-14.”

As a result, all federal employees get a return on their FERS contributions at a rate that’s almost double what other workers do. (See chart.) But thanks to a faster accrual rate granted to elected employees — how fast the value of their benefits pile up — members of Congress even get a higher percentage payout on FERS for the same time served than other federal workers do.

federal versus private defined pension plans retirement

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Source: FULL ARTICLE at DailyFinance

3 Simple Ways to Increase Your Retirement Income

By Dan Caplinger

Retirement Income

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A soon-to-be-released report from the Deloitte Center for Financial Services reveals the nation’s dire state of retirement readiness — and, on top of that, how deflated so many people feel about the prospects of their future getting better:

  • Although saving for retirement is a top priority, 58 percent of those surveyed said they don’t actually have a retirement plan.
  • One in five say they will rely entirely on Social Security to provide their retirement income.
  • Nearly 40 percent believe that no matter what they do with their money, they won’t be able to generate the income they want when they retire.

Yet despite people’s grim outlook for their retirement prospects, few trust financial professionals to help them, instead preferring to handle their money on their own.

Don’t give up just yet: You can take charge of your finances in ways that can make a big difference in retirement. Here are the three key areas where you can squeeze out more money to cover your retirement living expenses.

1. Make The Most of Social Security. Social Security seems simple on its face, but choosing the best strategy for taking advantage of the entitlement is complicated, especially if you have other family members depending on your benefits. In general, the longer you wait, the bigger your monthly checks will be. Moreover, waiting can boost not only your income but also the benefits your spouse can receive, both in spousal benefits during your lifetime and after your death in survivors’ benefits.

To do: Visit the My Social Security website where you’ll get good information about what your benefits will look like, along with information to help you choose the best time to start taking your benefits. (Here are other strategies to follow to get maximum value from Social Security.)

2. Get Better Investing Returns. In the current environment of rock-bottom interest rates, you can’t expect no-risk bank products like CDs to give you the income you need in retirement. These days, you have to understand how different investments provide income, including bonds, stocks, and specialty investments like real-estate investment trusts and master limited partnerships.

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To do: Understanding portfolio income doesn’t mean you have to invest in all of these different things. Often, a simple combination of stock and bond index mutual funds or exchange-traded funds is all you need to produce both the income you need and the growth to meet rising costs.

3. Take Advantage of Other Financial Resources. Beyond Social Security and your investments, many retirees have few or no financial resources to tap into after they quit their jobs. Having to go back to work during retirement is not only unpalatable to most retirees but also difficult to do in this economy, in which millions of underemployed and unemployed individuals are fighting for job opening.

To do: You may not even have thought about …read more
Source: FULL ARTICLE at DailyFinance

Not Saving Enough? Your Native Language May Be to Blame

By Muneeza Iqbal

English Translator

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If you’re reading this without the help of Google Translate, chances are your saving habits stink, and you’re not as healthy as you could be either.

According to recent research by Yale University behavioral economist Keith Chen, the language you speak plays an important role in how you approach saving money. This might seem absurd, but his research has shown a strong correlation between language and future decision-making.

“Languages force you to pay attention to time,” Chen explains. Languages such as English, French, Italian and Tamil are what he calls “strong future-time reference languages” — languages that have a different tense for the future. “Weak future-time reference languages,” such as Mandarin and German, don’t make as much of a distinction between the present and the future; in German, for example, “Morgen regent es” translates as “it rains tomorrow.”

The greater the linguistic distinction between present and future, Chen says, the less likely you are to plan ahead. That may be why speakers of future-less languages are likely to have 39 percent more wealth than their future-speaking counterparts by the time they retire. They are also 31 percent more likely to have saved more.

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The study also found that future-language speakers tend to be unhealthier: They get less exercise, practice unsafe sex, and smoke more than their future-less language counterparts. According to Chen, they choose “current pleasure in exchange for future pain.” He realizes that the whole premise sounds far-fetched, but his research has yielded statistical evidence showing that future-less language speakers are 24 percent less likely to smoke, 29 percent more likely to exercise, and 13 percent less likely to be obese.

Critics of Chen’s work suggest that the differences observed are not related to language but rather to culture. But he responds that he controlled for that factor by testing in multilingual countries. In those nations, he notes, you can find families living next to each other with the exact same education and socioeconomic factors, but different languages, and different levels of saving. Sure enough, the families conversing in the future-less language were on average saving more.

Chen says that what his study essentially shows is “how we represent these problems to ourselves.” So instead of purchasing a copy of Rosetta Stone, you might want to consider changing your perception of time.

Photo Credit: Alamy

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Her Financial Goal: Get a Handle on Retirement Planning

By Jean Chatzky

Sarah Chazan, AOL Music

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Everyone has things they want to improve about their financial lives — even those of us who are paid to write and think about money on a daily basis. To that end, the editors at DailyFinance and a few other AOL sites shared their 2013 goals with personal finance expert Jean Chatzky. Today she offers some tips to help Sarah Chazan, editor-in-chief of AOL Music, take control of her retirement plan.

“For years, I’ve blindly been putting money into a 401(k) but have neglected to learn about what…

Her Financial Goal: Get a Handle on Retirement Planning originally appeared on DailyFinance.com on 2013-02-22T09:30:00Z.

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Roth 401(k)s: If Your Employer Offers One, Should You Switch?

By Dan Caplinger

roth 401k employee benefits retirement planning

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Making the most of your employee benefits is essential in this tough economy. With more employers than ever adding a new Roth 401(k) option to their retirement plan offerings, should you make the switch or stick with your existing retirement strategy?

A survey from Aon Hewitt found that employers plan to take advantage of a brand-new law allowing workers to make transfers from their existing regular 401(k) accounts to Roth 401(k)s. Although half of the major employers surveyed don’t offer a…

Roth 401(k)s: If Your Employer Offers One, Should You Switch? originally appeared on DailyFinance.com on 2013-02-15T05:00:00Z.

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Target-Date Funds: Same Dates Can Earn Wildly Different Returns

By Dan Caplinger

Target mutual funds

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In recent years, target-date mutual funds have grown substantially, with savers investing $55 billion into the funds last year in the hopes of getting easy exposure to every asset class you need for a diversified portfolio.

Their popularity is understandable: Different funds focus on different target dates, the idea being that you pick whichever date is closest to when you’ll need your money back. When that date is far away, the fund invests aggressively, with most of its money going to…

Target-Date Funds: Same Dates Can Earn Wildly Different Returns originally appeared on DailyFinance.com on 2013-02-11T13:20:00Z.

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3 Social Security Shockers From the CBO's Latest Report

By Chuck Saletta, The Motley Fool

Social Security Trust Fund

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On Tuesday, The Congressional Budget Office updated its annual projections on the health of Social Security and its Trust Funds. In essence, if you’re still working and you’re depending on that program to cover your retirement — you’ll be in for a shock. Or three.

Shocker No. 1: It’s failing faster than even last year’s dire projection.

The table below shows the CBO‘s projections for combined Social Security Old Age, Survivors, and Disability Insurance Trust Fund balances, with the 2012…

3 Social Security Shockers From the CBO’s Latest Report originally appeared on DailyFinance.com on 2013-02-08T06:00:00Z.

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Your Parents Think You Stink at Managing Your Money

By Dan Caplinger

Parents money issues

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No matter how old you are, you can always count on mom and dad to let you know when you’re doing something wrong. A recent study from Fidelity tapped into that sentiment, asking parents how they think their adult children are doing at handling their finances.

As you might expect, parents didn’t hold back with their criticism:

  • 42 percent of parents said that their adult children have too much credit card debt.
  • 38 percent cited their kids’ failure to save for retirement early enough.

Your Parents Think You Stink at Managing Your Money originally appeared on DailyFinance.com on 2013-02-07T06:00:00Z.

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My Social Security Site Has the Lowdown on Your Future Benefits

By Dan Caplinger

My Social Security

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In the past, the only information most people got about their future Social Security benefits came once a year via snail mail. Now, thanks to updates from the Social Security Administration, finding out what Social Security will pay you in retirement just got a lot easier.

At the SSA‘s my Social Security website, which launched in early January, you can review your Social Security information at any time to make sure you’re on track to get the benefits you’ve earned. And while you’re at it,…

My Social Security Site Has the Lowdown on Your Future Benefits originally appeared on DailyFinance.com on 2013-02-06T10:39:00Z.

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Don't Make These Five 401(k) Excuses

By U.S. News

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401 (k)By Scott Hosopple

Excuses, excuses. Long before “the dog ate my homework,” humans were procrastinating and otherwise messing up –– always with some excuse or another. We all know it’s counter-productive, but we do it anyway.

You can put off cleaning the bathroom or mowing the lawn without severe problems. But putting off your retirement contribution increases could have harsh, tangible consequences. Picture yourself at age 60 when you realize you’ll need to work another 15 year’s before you…

Don’t Make These Five 401(k) Excuses originally appeared on DailyFinance.com on 2013-01-31T12:00:00Z.

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