The Retirement Income Challenge
A signifciant part of estate and retirement planning is ensuring there is adequate income during retirement to live comfortably - as defined by each of us for ourselves. Given the economic perfect storm that we have encountered as a country over the past year or so that goal is much more difficult now for many of us to reach. Over the past year home prices have fallen, the stock market is off more than 50% from its highs, unemployment is up more than 2% over its position at this time last year, the financial system is experiencing difficulties of a lifetime, interest rates are down, and generally the consuming public has stopped buying or even shopping.
What all of this means for many folks is the need to keep working past what previously was considered "normal" retirement. The question many will face is not whether to work longer, but whether to work for someone else or work for yourself in your own business. While I don't have the answers to those questions, there are a couple of new books recently published that people who are examining those questions might want to review. The first is "Working Longer: The Solution to the Retirement Income Challenge," by Alicia H. Munnell and Steven A. Sass (Brookings Institution Press). The other one is "Retire — And Start Your Own Business" (Nolo Press), by Dennis and Martha Sargent.
According to Munnell and Sass, the typical head of household who is approaching retirement has a nest egg of only $60,000, which probably is less than will be needed to maintain lifestyles, health care needs and longevity predictions. They suggest that rather than retiring at 62, most people should continue working until they are around 66, or later. There are many charts and graphs contained in the book to help understand the demographics involved. The pair advocate that individuals, employers, and government, must work together to accomplish the fundamental changes that will be required to provide work and financial support for those who will need or want to continue working. One suggestion they make is for Congress to modify the Social Security law to allow employees who have 35 to 40 years of Social Security covered earnings to opt out of paying Social Security taxes while still on the job. That would lower employer payroll taxes, which would create an incentive for both the workers and the employers.
"Retire — And Start Your Own Business" takes a different approach. It provides an extensive how-to workbook that helps the prospective entrepreneur determine what kind of business is best suited for the new business owner. it begins with a detailed self-appraisal that provides a personal motivation and financial profile for the individual. Then, the reader is guided through a plethora of business possibilities that either guides one to the "perfect" business opportunity for themselves, or sufficiently convinces them that going into business for oneself is not such a good idea (in which case go back to "Working Longer!"). The book is sprinkled with examples of real individuals' successes and failures. It contains many "reality checks" to keep you from being led astray by unbridled ambition, such as a reminder that there are only 168 hours in a week to get things done. The book comes with a CD-ROM that contains questionnaires, worksheets and forms that can be filled in and printed out for review and follow up.
For those who will find it necessary or desirous to engage in some kind of economic activity for a period of time extending beyond the traditional 62 or 65, these books are a good read. Personally, I plan to keep working for a long time.
What all of this means for many folks is the need to keep working past what previously was considered "normal" retirement. The question many will face is not whether to work longer, but whether to work for someone else or work for yourself in your own business. While I don't have the answers to those questions, there are a couple of new books recently published that people who are examining those questions might want to review. The first is "Working Longer: The Solution to the Retirement Income Challenge," by Alicia H. Munnell and Steven A. Sass (Brookings Institution Press). The other one is "Retire — And Start Your Own Business" (Nolo Press), by Dennis and Martha Sargent.
According to Munnell and Sass, the typical head of household who is approaching retirement has a nest egg of only $60,000, which probably is less than will be needed to maintain lifestyles, health care needs and longevity predictions. They suggest that rather than retiring at 62, most people should continue working until they are around 66, or later. There are many charts and graphs contained in the book to help understand the demographics involved. The pair advocate that individuals, employers, and government, must work together to accomplish the fundamental changes that will be required to provide work and financial support for those who will need or want to continue working. One suggestion they make is for Congress to modify the Social Security law to allow employees who have 35 to 40 years of Social Security covered earnings to opt out of paying Social Security taxes while still on the job. That would lower employer payroll taxes, which would create an incentive for both the workers and the employers.
"Retire — And Start Your Own Business" takes a different approach. It provides an extensive how-to workbook that helps the prospective entrepreneur determine what kind of business is best suited for the new business owner. it begins with a detailed self-appraisal that provides a personal motivation and financial profile for the individual. Then, the reader is guided through a plethora of business possibilities that either guides one to the "perfect" business opportunity for themselves, or sufficiently convinces them that going into business for oneself is not such a good idea (in which case go back to "Working Longer!"). The book is sprinkled with examples of real individuals' successes and failures. It contains many "reality checks" to keep you from being led astray by unbridled ambition, such as a reminder that there are only 168 hours in a week to get things done. The book comes with a CD-ROM that contains questionnaires, worksheets and forms that can be filled in and printed out for review and follow up.
For those who will find it necessary or desirous to engage in some kind of economic activity for a period of time extending beyond the traditional 62 or 65, these books are a good read. Personally, I plan to keep working for a long time.
Posted by Randy Coleman at 11/23/2008 4:41 PM 
Categories: Retirement Accounts,Estate Planning
Tags: exempt assets retirement planning estate tax estate planning beneficiary designation
Categories: Retirement Accounts,Estate Planning
Tags: exempt assets retirement planning estate tax estate planning beneficiary designation
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