JULY, 2010

In Your Fifties With Inadequate Retirement Savings? Here's Your Plan
by Steve Vernon, FSA
If you're in the "better half" of your life and your retirement savings consist of nothing more than a baseball card collection and a few savings bonds, don't fret.  I've got a plan for you, from my recent post on CBS MoneyWatch.

Please continue reading for this month's selections of the most helpful blogs and articles on retirement that I've found recently.

Common Retirement Planning Mistakes to Avoid
Do a good job addressing the common retirement planning mistakes mentioned in this video clip, and you're on your way to a more secure and enjoyable retirement. These retirement planning mistakes come from a recent interview with Jill Schlesinger, editor-at-large for CBS MoneyWatch.


The Worst Deal in America: "Free Lunch" Seminars for Seniors
You say you're too smart to get trapped by a free lunch "senior seminar?" Guess again. Older people with good incomes and business or professional backgrounds are the tactic's red meat.

You're invited by a prominent financial firm (or what sounds like one) for an "educational" session on, say, estate planning or improving your retirement income. With free wine and roast beef on offer, you figure, "What can go wrong?" Then there's a humming in your ears. When you wake up, you find that you've invested in something you regret.

Read here for more on this topic from this excellent article by fellow CBS MoneyWatch blogger Jane Bryant Quinn.


The Couch Potato's Guide to Getting Rich

Maybe it's because the country was raised on the Protestant work ethic. Or maybe it's that our mother's words still ring in our heads: "If you don't work hard, you'll never amount to much." Whatever the reason, Americans think they need to work hard to make money and that's not always true.

Sure, you've got to show up and diligently toil at the office. But when you save and invest, you're better off being a couch potato. The lazy approach to portfolio management wins over "hard work" pretty much every time.

How much does it pay to be lazy? A conservative estimate is that it would pay an average investor somewhere north of $250,000. That's right. You gain a quarter of a million dollars by doing less -- ideally almost nothing.

To learn more about this intriguing concept, read this great post by fellow CBS MoneyWatch blogger Kathy Kristof.


 
Half of Those Nearing Retirement May Run Out of Money

Dramatically high percentages of Americans -- even in the upper-income categories -- are likely to run short of money after 10 or 20 years of retirement, reports a new study from the Employee Benefit Research Institute. Fellow CBS MoneyWatch blogger Linda Stern summarizes key takeaways from this study in her recent post.
 
And this doesn't just happen to "other people." When I meet people at parties who learn that I write about retirement, I hear all kinds of sad stories in this vein, including ones from people who took lump sums from their pension plans, lived it up in their 60s, and are now broke in their 70s.  There's definitely a need for people to understand how to better manage their financial resources to generate a reliable lifetime income.



In a Mean Market, One Investment to Love
CBS MoneyWatch Editor-in-Chief Eric Schurenberg makes the case in a recent post for investing in high-quality blue chip stocks that pay good dividends with growth potential.  I agree that these investments have a place in portfolios of people near or in retirement, as I write in my book Recession-Proof Your Retirement Years. 
 
Not one to buy individual investments? Not to worry. There are several good mutual funds that concentrate in these types of investments, and you can learn about them at www.morningstar.com.


Should You Buy Long-Term Care Insurance?
I'm sorry to say, there's no simple answer to the question of whether you should buy long-term care insurance. Clearly, different circumstances call for different solutions. Addressing the threat of potentially ruinous long-term care expenses could be one of the most difficult challenges facing you in your retirement years.
 
While long-term care insurance may not be the answer for everybody, I strongly advocate that everybody needs to have a strategy to address the threat of long-term care expenses.  This recent post in my blog column at CBS MoneyWatch kicks off a weekly series on this topic. 

Read below for more ideas on long-term care.

The Public Option for Long-Term Care Insurance
In the din of debate over health care reform legislation, one of the bill's most important features went almost unnoticed -- a public option for long-term care insurance.
 
The bill signed into law earlier this year establishes a national insurance program for purchasing "community living assistance services and support" (CLASS for short). The new plan, which will be rolled out over the next several years, was a top priority of the late Sen. Ted Kennedy.
 
CLASS should help raise the profile of long-term care insurance  -- an important financial tool that doesn't make it into most retirement plans. Long-term care needs can throw a monkey wrench into even the best-designed retirement plan.
 
Read here for more about this topic from Mark Miller's website www.retirementrevised.com.

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Thanks for your interest, and stay tuned for future newsletters that explore how to best live the rest of your life.
 
Best regards,
 





Steve Vernon
Rest-of-Life Communications

P.S. If you think this newsletter will help a friend, please pass it along.
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Just Released

The Second Edition of

Recession-Proof Your Retirement Years

Simple Retirement Planning Strategies That Work Through Thick or Thin

I've updated this popular book to include investment results through the end of 2009 and the latest changes to Social Security.  I've also added about 20 pages of content to cover topics that readers have requested.  It's still short--under 100 pages--so it's easy to follow and easy to finish.  And it still provides a step-by-step program to build reliable sources of retirement income that cover your living expenses and strategies to address the threat of high medical and long-term care expenses.  The book is available for bulk purchase by employers and other organizations, or for individual purchase.  Please see my website for details on all of my books and DVDs.

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 Our Newsletter!
We fulfill a need for trusted, practical strategies that you can use to plan your rest-of-life (aka retirement).  We rely on the latest research and analyses, and we'll keep it simple!  And that's all we provide; we don't sell insurance, investments or health products, so we can "tell it like it is."

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Steve Vernon has spent 35 years as a consulting actuary, helping large employers design and manage their retirement programs.  Now he's president of Rest-of-Life Communications, where he specializes in providing unbiased, trusted information about retirement.  He also consults to Mercer's US Retirement, Risk and Finance business, and writes a regular column for CBS MoneyWatch titled Money for Life.

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For information on keynote addresses, workshops or presentations on retirement issues, visit Steve's website at www.restoflife.com, or email him at [email protected]

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