Wow! We are already into the month of March. We are almost through the first quarter of 2015. The financial markets behaved fairly well in the month of February, so you should be relatively pleased with your monthly investment statements as they roll in over the next few days. But, as you know, this newsletter is about more than investments. It is designed to capture some of the highlights of the articles I read each week that can help you with the resources you need to make better financial decisions when faced with the issues we discuss.
This week, there were several good articles about different aspects of retirement. We start out with a new innovation in saving for retirement, coming from, of all places, the State of Illinois. The next article discusses one of the most important decisions you will make when getting close to retirement…when to start taking your Social Security benefit. The third article offers some ideas on how to make sure you don’t run out of money in your retirement years. And the fourth article offers tips on one of the most difficult, but necessary, things we all have to face. There is lots of good information here…I hope that some of it can help you.
It’s no secret that our country is facing a retirement crisis in the future. We simply have not done a good enough job in saving for our future. Over the last generation, the retirement picture has changed dramatically. Many of our parents and grandparents worked in companies that would provide them with a lifetime of pension income after a given number of years of service. Now, with the exception of some public sector employees and the military, there are very few of us who can count on pensions in our retirement years. So, the responsibility of providing for our retirement has fallen on us as individuals. And, for the most part, we haven’t handled that responsibility well. So, it’s time for some out of the box thinking. This article discusses an innovation in retirement saving that is taking place in Illinois. In January, certain small businesses that don’t offer retirement plans are required to funnel 3% of their employees’ paychecks into an “Automatic IRA,” a state-run Roth IRA. While 3% isn’t anywhere the 10-15% that most financial planners (including yours truly) say that we should be saving for our future, and I’m sure that I wouldn’t want the state directing my retirement account, it’s certainly much better than nothing. It’s a step, albeit a small one, in the right direction.