The only way to pass a TIAA-CREF account beyond the current generation requires that you elect not to annuitize. You must instead elect the Minimum Distribution Option, because that avoids the conversion of the account into a premium. The first benefit, assuming that this comports with your values and resources, is that you will have responsibility for your own financial destiny. To underline the point, you have rejected the safety net of a lifetime annuity and have chosen instead to take distributions at your own pace, subject to the governmentally prescribed minimum. (more…)

There are two primary factors that affect how long your money will last and how much money do you need to retire. One is inflation, and the other is taxes. Both of these factors are a certainty you can’t ignore.

Inflation means your retirement dollars will buy less, so you’ll need more retirement dollars just to stay even. For example, let’s say you’ve got a fixed retirement income of $25,000 a year. Inflation will eat into the buying power of that money in short order. Fixed income leaves you in a fix when it comes to inflation. You’ll need to grow your retirement income just to keep pace with the ravages of inflation. Certainly, you need better retirement income strategies to cope with inflation and taxes. Table below shows annual inflation for the past 25 years. (more…)

In developing a retirement plan there are several factors to consider in addition to the amount you need or want to save.

1. Income Taxes.

The above discussion did not take into consideration income taxes. You might have to save more if you have to pay income taxes on all or part of your retirement benefit or your contributions. Distributions from qualified employer plans are always subject to retirement income tax. (more…)

There is an old adage that says “numbers don’t lie.” So when it comes to figuring out how much money do you need to retire, you need to understand basic math, a few retirement concepts, and some financial retirement concepts. This is where you may wish you had paid more attention to your high school math teacher. (more…)

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The preferred way of many people to enjoy a secure retirement is work with companies that comes with a best retirement benefits and jobs with pensions. Most private companies spend an average of 92 cents /hour for their employee retirement benefits. Employer 401 (k) and corporate pension plans contribute as much as 4 dollars / hour in the utilities industry, as little as 9 cents /hour for catering workers. (more…)

Although practices may differ with respect to the involvement of the corporate sponsor in objective setting and asset allocation retirement, selection of investment managers is rarely delegated. In terms of dollars of assets, most funds are managed by investment managers outside of the corporation, inasmuch as few companies have the internal expert staff needed to perform this function. Moreover, corporate management may prefer to delegate the fiduciary responsibility for investment, and some companies believe that having outside managers reduces some of the problems with respect to pensions in labor negotiations. (more…)

You can retire at 62 and can consider it as early retirement, but it come with a penalty. You can also retire in the years between the earliest retirement dates and full retirement and get a bit more money with each passing year. Suppose you create a financial plan based upon the three-legged financial stool of personal savings, part-time income (by having retirement part time jobs), and getting Social Security Income (Social Security benefits). As your planned-for retirement date approaches, (more…)

With respect to investments, the first task of the corporate sponsor is to set return objectives and broad definitions of characteristics for the investment portfolio that receives the corporate contribution. Setting investment objectives by the corporation for the investment manager or managers was not always considered an important function of the corporate sponsor; objective setting frequently was left to the discretion of the investment manager. However, as funds have grown in size, setting investment objectives has assumed increased importance; written objectives are prepared and then reviewed at regular intervals. Unfortunately, objectives often are stated in very vague terms, such as obtaining the maximum return consistent with prudence. Nevertheless, this problem is getting increased attention, and more specific directions may be expected in the future. (more…)

In a free market system, income is a critical determinant in the quality of life one enjoys in retirement, including quality of care for those elders in need of caregiving. Those serving gay, lesbian, bisexual, and transgender elders need to take into account the impact of the unequal treatment same-sex couples experience under policies regulating retirement income. For example: (more…)

Tax law changes also provide workers age 50 and older the opportunity to make additional “catch-up” contributions, above the maximum amounts listed above, to Roth and Traditional IRAs and to employer salary deferral plans. IRA catch-up contributions are $500 for 2003–2005 and $1,000 for 2006 and after. Catch-up contributions for employer plans are $2,000 in 2003, $3,000 in 2004, $4,000 in 2005, and $5,000 in 2006, with amounts adjusted for inflation in 2007 and after. Older workers who take full advantage of the increased contribution limits and catch-up contributions will save significantly more than those who invest in taxable accounts or limit their contributions to pre-2002 tax law limits. (more…)