2013 New Year’s Resolution – Start Your Retirement Income Planning Now

Written by Julie Cole, Conservation Analyst

In 2007, the U.S. Senate Special Committee on Aging asked the Government Accountability Office (GAO) to report on how American workers are fairing with their plans for retirement. The GAO interviewed a wide variety of financial planning professionals, Department of Labor officials, Social Security administrators and actuaries, academic researchers, and state insurance commissioners, asking for their input. The results were published in a 2011 report titled Retirement Income: Ensuring Income Throughout Retirement Requires Difficult Choices. The report identified four critical mistakes that retirementpeople continue to make when planning for retirement:

  1. People are not starting early enough to save for retirement.
  2. People are choosing to start receiving social security benefits before they reach full benefit age.
  3. People are not planning for a 30-year retirement.
  4. Most people are not seeking or getting advice from qualified professionals about how to convert their retirement savings into retirement income.

Individuals continue to delay saving for retirement. This is evident by two things: 1) At year-end 2009, the average 401(k) balance for workers aged 60 to 70, with at least 30 years of job tenure at their current employer is about $200,000. 2) Approximately 30% of individuals over the age of 65 are dependent on full-time or part-time employment to maintain their standard of living.

Current social security statistics indicate that 43% of eligible retirees start their SSI benefit within one month of their 62nd birthday. A total of 73% take their benefit before age 65. Only 14% start their benefits when they reach full retirement age. Three percent start their benefits after they reach full retirement age, but before age 70 and 10% delay receiving SSI until age 70. By delaying the start of benefits to age 70, these recipients will receive approximately 75% greater monthly benefits than their peers who start receiving their benefits at age 62. This indicates that people reaching age 62 are not aware of the actuarial statistic that they will live another 23.5 years.

In a 2008 survey of 10,000 baby boomers, 88% of them indicated that they did not receive or do not expect to receive any inheritance from their parents. This is because their parents have used up or are likely to use up all of their savings and assets.  Many boomers indicated that their parents did not anticipate either the high costs of long-term care or that they would live well into their 90’s.

Most people don’t have a plan for retirement income. Financial Planners consistently recommend two strategies to guarantee a higher retirement income: Delay the start of social security benefits to age 70 (when health permits) and increase “annuitized” income. Yet, only 10% of retirees delay the start of SSI benefits to age 70 and less than 5% of retirees use income annuities to provide a guaranteed income.

Following the release of the 2011 report, the U. S. Senate Special Committee on Aging asked the Financial Planning Association for help. They posed several important questions:

  • How can financial advisors do a better job serving “middle  class America” in pre-retirement planning?
  • What are planners doing to reach people and provide help with a strategy for retirement income?
  •  How does long-term care financing fit into a retirement income plan?
  •  How can advisors engage people to think about what they need to do after they leave the job market (either from layoffs or voluntary early retirement) to get re-employed?

The GAO report stresses that, “Solving the retirement income planning problem is critical to the underlying financial stability of our country. Poor personal financial management will eventually affect everyone — not only the retiree — as the effects of poor decisions potentially place a heavier burden on public need-based assistance.”

Talk with your wfla advisor today about your retirement plan. Western Fraternal Life Association IRAs are an excellent retirement savings vehicle and wfla income annuities provide a guaranteed monthly retirement income that you cannot outlive. Put “See a wfla advisor and make a retirement plan” at the top of your list of New Year’s resolutions.

Decorating a Table on a Budget for the Holidays

For me, the holidays mean spending time with family at my parent’s house, making memories, taking pictures, eating special meals and giving gifts.  I like getting a good bargain on the gifts and typically search print ads, online sales, and in store for the best deals possible.  Who doesn’t want to stretch their dollar around the holidays?

Decorating my dining room table for a holiday get-together was not on my list this year, or in my budget, however, when the opportunity presented itself to host a holiday party for 4, I couldn’t say no!  Hosting a party also meant decorating my home accordingly, so I had some work ahead of me.

I started with some research.  The Black Friday ads were mostly toys and gadgets.  I was looking for decorative items so the ads after Thanksgiving were not the most helpful.  Searching in-store ended up being the most lucrative.  By waiting until after December 1st to purchase table décor, I ended up saving 60% at one store and got other necessary items at the Dollar Tree for $1.00 per item.  The key to decorating on a budget is to be thrifty and to keep looking!  If you see something you like but it isn’t in your budge, shop around.  You can also look for coupons online or figure out how to replicate that idea on your own budget.  Sometimes it takes a little imagination to stay on budget!

For my project I started with two things: a color scheme and a budget of $20.00.  By establishing my color scheme (red and gold) before I went shopping, it helped eliminate the decorative items that did not fit my theme and kept me on task.  I chose this theme because I already have lots of red and gold in my house, so remember, use what you already have instead of starting brand new.  This will help you save money and stay on budget!

I only had $20.00 to spend and here’s what I bought:

4 cloth napkins – $2.00 (2 pack/$1.00 per pack)
1 table runner – $1.00
4 charger plates – $4.00
1 container décor for centerpiece – $7.99
TOTAL = $14.99 (not including tax)

Other items needed for my table (already have):

4 plates
4 sets of silverware
4 wine glasses
Decorative bowl
Extra ornaments

After purchasing all the needed items and gathering the items I already had, it was time to decorate for the party.  Putting out the table runner, setting the table, and decorating the table really got me in the holiday spirit!

And what would decorating a table on a budget be without pictures!  I’ve showcased my work below:

clip_image002(close up of table setting)

pic 5(close up of centerpiece)

pic 6(close up of whole table)

For me the holidays are about enjoying the people around you and this holiday table will help me do just that!  I look forward to having my guests over this weekend and enjoying my holiday table on a budget.  Even though I didn’t spend a lot of money, my table is simple and elegant and exactly what I wanted!


Happy Holidays from my table to yours!