If you think you can count on Social Security for anything resembling a comfortable retirement, think again.

Don't just take my word for it. Here's what the Social Security Administration itself claims:

• As of June 2008, the average monthly benefit paid to a retired worker was $1,084.47.
• In 2041, Social Security will only be able to pay 78% of scheduled benefits.

Put those two points together, and it means that in 2041, the average retiree can expect to receive the inflation-adjusted equivalent of $845.89 per month. That may be enough to squeak by on the most meager of lifestyles, but it's also well below what a full-time minimum-wage job pays.

Can Live On $845.89 A Month? Courtesy of The Motley Fool

I know it hasn't been a great stock market this year and many of us are dreading our IRA and 401k quarterly statements..I'm still determined to retire!  I'll keep adding to those plans and maybe do a little home work on "bear markets."   Here's a Barron's update on the bear:

IT'S OFFICIAL: THE BEAR HAS ARRIVED. The Dow Jones Industrial Average last week qualified for the widely accepted definition of a bear market of a 20% drop from the highs. The good news is that once the decline reaches that arbitrary 20% mark, based on history, the market has suffered most of its losses. The bad news is that the decline typically drags on for some time, and time may be the worst enemy

Happy 4th of July!  I hope you had a great three day weekend filled with a barbeque, camping or a relaxing dip in the pool.  I noticed a number of people like me were busy with a home remodeling project.  Any three day weekend calls for a little rest and some home repair!  I have a feeling many retiree's are spending some time in the hardware store too.  Here's one helpful home improvement page from This Old House

For example, a 65-year-old man who invests $100,000 in a traditional life-only annuity would receive $676 a month for the rest of his life, according to New York Life. (A woman's payout would be smaller because of her longer life expectancy.) If the man lives a long time, it's a great deal. But if he dies early, the insurance company keeps the money.

Or he could choose a life annuity with a cash refund so his heirs would receive the balance of his initial investment if he died prematurely. His monthly payout would decrease to $626. If he opted for a life annuity with a 20-year guarantee (meaning his heirs would continue to receive annuity payments for 20 years from the date of purchase if he died before then), his monthly payout would drop to $591.

These products have struck a chord with consumers, says Mike Gallo, New York Life's vice-president for retirement income. He says about 60% of customers are choosing either a cash refund or guaranteed 20-year payout option, compared with 10% who select a life-only annuity.

The Social Security Administration bases its inflation adjustment for Social Security checks on the average inflation rate in this year's third quarter compared with the previous year's third quarter.

That means the inflation rates nationwide for July, August and September are what matter. Last year, inflation was running very low in August, at a 1.8 percent rate, and not much higher in July, at 2.3 percent and at 2.8 percent in September.

This year, inflation is not that low. The most recent reading we have was a 4.5 percent annual rate in May.

It's different from the CPI-U, the Consumer Price Index for all urban consumers, which is the rate quoted most often. That was 4.2 percent in May. The Social Security adjustment is pegged by law to the CPI-W, which measures costs for households that have hourly wage earners or clerical workers.

The CPI-W is often used in labor negotiations. It is based on a survey of 32 percent of the total U.S. population, according to the U.S. Bureau of Labor Statistics. The CPI-U is a larger survey based on 87 percent of the U.S. population.

Social Security Inflation at Sun-Sentinel.com 

Age 62  $1,245 Monthly

Age 66  $1,778 Monthly

Age 70  $2,400 Monthly

According to most of the information I've read, 50% of retiree's age 62 apply for Social Security.  I can understand.  However, if you have longevity in your family and anticipate living 20+ years in retirement-consider the increased benefits.

Source: ABCNews.com

 

Looks like Bud prices are going up and their pensions are going down. 

The program, which Anheuser-Busch calls "Blue Ocean", includes cutting 10 to 15 percent of its 8,600 salaried workforce through early retirement and attrition, speeding up price hikes to cope with rising commodity costs, and setting earnings forecasts that exceed Wall Street's expectations.

It details plans to calculate lump sum pension benefits for salaried employees through a method using interest rates tied to corporate bonds as of 2009. It previously calculated the rate using the 30-year US Treasury bond rates for the months of August and September.

This is expected to reduce individual lump sum payouts by about 5 percent to 6 percent in 2009 and about 15 percent by 2012, the memo said.

Courtesy of Forbes.com 

Daily TSP Rates | June 27, 2008

	Close	Change	YTD
L 2040	$16.69	-0.01	-8.50%
L 2030	$16.14	-0.02	-7.29%
L 2020	$15.67	-0.01	-5.89%
L 2010	$15.05	-0.01	-2.65%
L Income	$13.37	0.00	-0.74%

Here's a recap of money market yields from several mutual fund companies: 

Vanguard Prime                    (VMMXX) 2.22%

Fidelity Cash Reserves         (FDRXX) 2.39% 

T. Rowe Prime Reserves       (PRRXX) 2.14% 

Schwab Investor MM              (SW2XX) 2.13%

 

 

 

 

 

 

 

 

 

With all the major index's down over 10% YTD, Bloomberg called it the "brink of the bear."

Looks like Boeing has joined the many companies who are de-emphasizing traditional pensionscompany news release says that nonunion workers hired after Jan. 1, 2009, will join a new defined-contribution savings plan. Boeing will seed the plan with 3, 4 or 5 percent of an employee’s pay, depending on the person’s age, and will also match the employee’s contributions. The match is dollar for dollar on the first 4 percent, then 50 cents on the dollar for the next 4 percent of pay. in favor of 401k plans. 

Courtesy of  STLToday.com