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Jan 8 17 4:09 PM
Jan 8 17 4:15 PM
The pension is nearly extinct. Overly optimistic returns left many
pension plans practically insolvent and not ready to adapt to a low
yield environment. The benefit of pensions however is that it forced
people to save over time for retirement. What we have learned via the
401k is that when left to their own devices, people simply are not good
at planning for the future especially when it comes to retirement.
So now, a full generation into this experiment we are left with many
older Americans fully relying on Social Security as their main source of
income. That was never the intended use of that program. When we look
at US pension plans
we realize that they are aggressively betting on equities to make up
for the larger returns needed to payout retirees. It might seem that
the stock market only goes up over the last few years but as we all
know, tides do shift.
Jan 8 17 4:18 PM
Failing to plan is planning to fail. If this is true, most Americans
are planning to live in retirement with very little money and are going
to rely heavily on Social Security to get by. That is the case today
where most retirees get the bulk of their income from Social Security.
Back when the 401k plan was introduced, the thought was many people
would squirrel away money each month and after 30 or 40 years of
working, there would be a large nest egg thanks to a raging stock
market. Stock market growth has tempered and most people just didn’t
participate. So now as many Americans enter retirement age most are
realizing they are going to work until they die. The 401k plan was introduced in 1978 and the end result for most Americans is that it has failed.
Jan 8 17 6:34 PM
For some 173,000 Social Security recipients in 2015, some of whom are
retired workers while others are receiving Social Security disability
payments, that income lifeline is being chipped away. What's to blame,
you wonder? Look no further than student loan debt.
According to a recently released 83-page report
from the Government Accountability Office (GAO), the federal government
reduced monthly Social Security checks to 173,000 beneficiaries in 2015
who had defaulted on their student loan debt and were still paying it
down. That's up 380% from the 36,000 beneficiaries who saw their Social
Security checks reduced due to student loan defaults in 2002.
According to the GAO report, about 43%
of older borrowers (defined as persons 50 and up) have had their student
loan debt for at least 20 years, a majority owed less than $10,000, and
many were paying the maximum allowable offset of 15% of their monthly
Social Security payment. The GAO report suggests this works out to a
little more than $140 a month, on average.
Still, this offset is
hardly making a dent on the principal because of the $15 fee imposed by
the Social Security Administration each month, as well as the interest
from the student loan. The report states that more than a third of older
Americans were still in debt after two years of having their benefits
garnished. Furthermore, garnishing Social Security checks wound up
pushing 67,300 beneficiaries below the poverty level in 2015 compared to
just 8,300 such instances in 2004.
Jan 10 17 3:07 AM
zerohedge.com / by Tyler Durden / Jan 9, 2017 5:22 PM
Many Americans looking forward to Trump’s promise of tax cuts from
his administration are going to get a rude awakening when they get their
first paychecks of 2017. While Trump has vowed to cut marginal income
tax rates for individuals and corporations, the social security tax
levied on the nation’s top earners is set to soar in 2017 for top
For the 2015 and 2016 tax years, only the first $118,500 of earnings
was subject to the 6.2% social security payroll tax. That said, that
“taxable minimum” is set to soar to $127,200 for the 2017 tax year, a 7.3% increase that will cost America’s top earners an additional $539 this year.
points out, the steep increase in 2017 is the result of the federal
government making up for lost time as the “taxable minimum” is not
allowed to increase in tax years during which benefit recipients don’t
get a cost-of-living increase.
Jan 10 17 12:27 PM
Jan 11 17 11:47 AM
wallstreetexaminer.com / by Stark Merrifield • January 10, 2017
This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
In addition to knowing the best investments to make when heading into retirement, it’s also important to know the obstacles retirees face, so you can take steps now to avoid them.
We put together five of the biggest retirement obstacles that can rob unsuspecting retirees of their hard-earned money.
Don’t let your retirement savings get eaten by government
intervention or tax consequences. Check out our list to be “in the know”
about retiring in 2017.
Obstacles Retirees Face in 2017 No. 5: Not Saving Enough Money
An April 2015 survey done by the Employee Benefits Research Institute
found more than one in 10 workers think they’ll need to save at least
$1.5 million to retire comfortably.
Jan 16 17 11:58 AM
sovereignman.com / Simon Black / January 16, 2017
Not too long ago my step-dad had to spend a few days in intensive care. Pretty scary stuff.
He had just about every nasty symptom imaginable, from constant
vomiting to dizziness to ultra-high fever, but the doctors couldn’t
figure out why.
Fortunately his condition improved enough that he was released from the hospital, and now he’s on the mend.
Now, my step-dad is a Medicare patient. But he just found out that he’s been unceremoniously dropped by his Primary Care doctor.
Apparently his physician dropped all of her Medicare patients in one giant culling.
It turns out that physicians across the country have been firing
Medicare patients; and according to a late 2015 study from the Kaiser
Family Foundation, 21% of physicians are not taking new Medicare
Much of this trend is based on stiff penalties and financial
disincentives from the Affordable Care Act (Obamacare), and 2015’s
Medicare Access and CHIP Reauthorization (MACRA) Act.
MACRA in particular is completely mystifying.
The law created a whopping 2,400 pages of regulations that Medicare physicians are expected to know and follow.
Many of the rules are debilitating.
For instance, MACRA changed how physicians can be reimbursed for
their Medicare patients by establishing a bizarre set of standards to
determine if a physician is providing “value”.
Jan 17 17 3:09 AM
wallstreetexaminer.com / by Anthony B. Sanders via Confounded Interest / January 16, 2017
The Federal Reserve’s zero interest rate policies (ZIRP) have an
unwelcomed effect: both the Federal Government and Private Pensions
gorged themselves on low-cost debt.
The Federal Reserve lowered their Fed Funds target rate starting in
2007, then started their asset purchases in late 2008, culminating in a
dramatic decline in interest rates.
Then, since the end of Q4 2008, both the Federal government AND
private pension funds gorged on debt: Federal devt rose by 77% though
the end of 2015 and private pension debt rose by 66%.
Jan 19 17 5:22 PM
Doug Bandow, a former special assistant to President Ronald Reagan,
and a senior fellow at the Cato Institute, warns that seniors must plan
for “Social Security’s coming crash.”
And in an alarming article, U.S. News & World Report argues that payouts will inevitably end, and says you must learn how to “prepare for the end of Social Security” now.
How could this happen?
As you know, Social Security operates as a classic Ponzi scheme — new contributions are used to pay off earlier contributors.
The problem is twofold: Our government tapped into Social Security
savings, and there are not enough new contributors to pay those who
already funded the system.
And the problem is worse than any government agency wants to admit.
Jan 19 17 5:34 PM
Increasingly, Americans in search of retirement in a place where they
can stretch their (likely meager) retirement savings are looking beyond
That’s according to an Associated Press report, which found that between 2010 and 2015, the number of Americans who retired abroad increased 17 percent—with even more retirees following their lead over the next 10 years as boomers leave the workplace.
Olivia S. Mitchell, director of the Pension Research Council at the
University of Pennsylvania's Wharton School, was cited in the report
saying that the cost of living is the reason most retirees cite for
moving out of the country.
Jan 23 17 1:56 PM
financialsense.com / JEFFREY D SAUT / 01/23/2017
have often written that when everyone is asking the same question, it
is usually the wrong question. However, I have also found the converse
to be quite true – if no one is asking a question, it is probably one
that you want to at least ask yourself just in case. For this reason, my
attention was drawn to a blog post by Peter Lazaroff of Plancorp last
week that asked several big name financial commentators like Barry
Ritholtz, Ben Carlson, and Josh Brown the following question: What issue
in the world of finance isn’t getting enough attention? Naturally, with
so much focus on the US political landscape recently, I expected to see
responses about such under-the-radar topics as European banks, emerging
markets, or the need to raise the debt ceiling once again in March.
Yet, to my surprise, most of the answers were about more fundamental
personal finance themes such as low savings rates, the amount paid in
fees, and the switch to passive investing, all of which likely have a
bigger impact on an investor’s long-term returns than just some
transitory news headlines.
Retirement savings, in particular, received quite a bit of real
estate on the blog, with Isaac Presley of Cordant Wealth Partners
pointing out that “the median retirement savings for individuals aged
55-64 is just over $100,000, good for roughly $4,000 in annual spending”
(per the Government Accountability Office). That is a frighteningly low
number for people who should be nearing or entering their retirement
years, especially when modern medicine and a renewed focus on health
keeps extending our life expectancy upward. According to the Social
Security Administration’s actuarial table, a current 65-year-oldemale is
expected to live another 20 years (to approximately 85), but one thing
that is often overlooked about aging is that the older you get, the
longer you are expected to live compared to the average life expectancy.
For example, while that 65-year-old woman is currently expected to live
to 85, a woman who has enjoyed enough good health to live to be 80 is
then expected to live another 9.64 years, to the age of almost 90. The
point is, there is a very good chance that retirees will require income
for longer than they anticipate, and the average person is woefully
Jan 23 17 1:57 PM
Steven Mnuchin, U.S. Treasury Secretary Nominee, During His Senate Confirmation Hearing on January 19, 2017
wallstreetonparade.com / By Pam Martens and Russ Martens / January 23, 2017
Most Americans are unaware that the Pension Benefit Guaranty
Corporation, the Federal body that stands behind corporate pension plans
known as defined benefit plans, has only three members and three votes
on its Board of Directors: the U.S. Labor Secretary, the U.S. Commerce
Secretary and the U.S. Treasury Secretary. Under the Donald Trump
administration, all three votes could be problematic for workers’pension
interests if Trump’s current nominees are confirmed by the U.S. Senate.
Andrew Puzder is Trump’s nominee for Secretary of the Labor
Department. Puzder is already on record as opposing a substantial
increase in the Federal minimum wage and an opponent of making more
workers eligible for overtime pay. Much less is known about Puzder’s
eyebrow-raising earlier career. From 1978 to 1991, Puzder was a trial
lawyer in St. Louis at the law offices of Morris A. Shenker, the man Life Magazine called the “foremost lawyer for the mob in the U.S.” According to the book, The Money and the Power,
by Sally Denton and Roger Morris, a colleague of Shenker’s called him
the “front man for the St. Louis Mob.” The book reports that Shenker
took over the Dunes Hotel and Casino in Las Vegas and remained its
Chairman until 1984. Shenker was indicted in 1989 but did not stand
trial due to serious health issues. He died the same year he was
indicted at age 82.
Jan 27 17 3:24 AM
Source: Business Insider
financialsense.com / FS STAFF / 01/26/2017
Retirement planners often assume rates of return on clients’
portfolios between 6 and 7 percent right now. This time on Financial
Sense Lifetime Income Series, we look at why this isn’t likely in our present situation, and what investors can do to protect themselves.
Retirees Face Difficult Challenges
We’re beginning to see the largest generation in US history start to
retire and the next 20 years are likely to be high risk for Baby
“There are $10 trillion in retirement assets and, in the next decade,
60 million boomers age 70 and a half will have to draw from those IRA
and 401(k) accounts,” said Jim Puplava, founder and president of PFS Group.
This is significant because Boomers are entering retirement during a
period of the lowest returns for both stocks and bonds that they’re
likely to see in their lifetimes.
Couple that with the fact that life expectancy is going up, and
Boomers may face the prospect of living longer with lower income.
Jan 31 17 4:04 PM
sovereignman.com / Simon Black / January 31, 2017
The numbers are pretty startling.
Nearly 7 in 10 Americans have less than $1,000 in savings.
1 out of every 3 Americans has nothing set aside for retirement.
And, according to Federal Reserve data, the median working-age couple has saved just $5,000 for retirement.
How is this even possible?
How could it be that the citizens of the wealthiest country to have
ever existed in the history of the world barely have any savings?
Simple. The cost of living has skyrocketed over time. It’s become
terribly difficult for tens of millions of people to keep up. Just look
at the data—
Housing prices, once again, are at all-time highs. And for those who choose to rent instead of buy, rents in many cities have also reached all-time highs.
This is especially difficult for the Millennial generation, which
finds itself spending over of 40% of disposable income on housing costs.
If you add in student debt (which continues to plague millennials), that takes even more money out of their pockets each month.
Feb 2 17 11:45 AM
zerohedge.com / by Tyler Durden / Feb 1, 2017
The United States is a demographic time bomb, plain and simple. Over the next 30 years, the U.S.
economy will face an unrelenting demographic transition as ~75 million
baby boomers exit the highest wage earning years of their life
and start to draw down what little retirement savings they’ve managed to
tuck away while wreaking havoc on the public “safety net” ponzi
schemes, like Social Security, that will almost certainly be insolvent
in a decade.
Per the U.S. Census Bureau, over the next 30 years, the number of
people in the U.S. over the age of 65 is expected to double while those
85 and up will triple. Needless to say, the overall population growth
of the United States is a fraction of that which means that millennials
are about to get crushed by their parents….so it’s probably a good thing
they already live in mom and dad’s basement.
Feb 17 17 10:10 PM
Seventy-eight percent of 45- to 65-year-olds somewhat or strongly
agree they’ll need to cut back on spending after they retire, according
to an Ipsos/USA Today survey of 1,205 adults in mid-January.
results partly reflect the less-than-robust state of their nest eggs.
Twenty-seven percent of those surveyed have no retirement savings or
investments and another 22% have less than $100,000.
diminished views of their golden years are also rooted in a more
vigilant mindset after the Great Recession pummeled home and stock
prices and forced millions of unemployed Americans to take lower-level
or part-time jobs. Although U.S. payrolls and real estate and market
values have more than recovered and hit record highs, many workers never
reclaimed their former salary levels, endured sluggish wage growth or
simply remain chastened by the downturn.
Feb 22 17 9:28 PM
zerohedge.com / by Dennis Miller via MillerOnTheMoney.com / Feb 22, 2017 6:01 PM
In 1935 the government passed Social Security into law
setting up a government managed retirement plan for the majority of US
workers. To fund the plan, they passed the Federal Insurance
Contribution Act (FICA). The law mandates that employers withhold a
portion of the worker’s salary (contribution) and requires the employer
to match the contribution.
It was sold to the public as a form of annuity, with each worker’s
contributions and benefits based on their income. While Social Security
has features similar to an annuity (paying lifetime benefits), in many
ways it is different.
In 1960 the Supreme Court (Flemming v. Nestor) ruled, “that
no one has an accrued property right to benefits from Social Security.” Contributions are now taxes with an indirect correlation to benefits.
An annuity with a private
insurance company is a legally binding contract. The insurance company
must honor the agreement or risk being sued for breach of contract.
Feb 23 17 1:00 PM
zerohedge.com / by Tyler Durden / Feb 23, 2017
For the past several months we’ve warned that the taxpayers of the
City of Dallas, despite all of the tough talk coming out of their
elected city council members, would ultimately be forced to bail out the
failing Dallas Police and Fire Pension (DPFP) system. And just last
night the DPFP board voted 9-0 to approve a plan that would do just
The plan to save the DPFP was proposed by Dan Flynn, chair of the
pensions committee in the Texas House of Representatives, and calls for
Dallas taxpayers to contribute 34.5% of police and firefighter salaries
each year into the failing pension system, up from 27% in 2015, plus an
incremental $11 million per year. In total, the adopted plan will cost Dallas taxpayers an extra $22 million per year.
That said, the plan also calls for pensioners to grant concessions, including the following:
Increase in retirement age to 58 from 55Increase in employee contributions to 13.5% of payroll from 8.5%Elimination of COLAs in the near termElimination of exorbitant interest payments made on employees DROP accounts
Of course, the $7 billion shortfall in the DPFP triggered downgrades
to Dallas’s credit rating from Moody’s and S&P in recent months
which has wreaked havoc on the city’s bond yields. (chart per Bloomberg).
Feb 25 17 8:05 PM
Are you thinking about your future, your retirement? Are you wishing
that you could retire sooner rather than later? Are you wondering how it
will even be possible to retire?
Well here are five steps to consider before you retire – five things that will help get you there sooner…
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