Regulators on Friday shut banks in Georgia, Michigan, Minnesota, Missouri, and California, bringing the number of bank failures this year to 120 amid the struggling economy and a cascade of defaults on loans.

As the economy has soured, with unemployment rising, home prices tumbling and loan defaults soaring, bank failures have cascaded and sapped billions out of the federal deposit insurance fund. It has fallen into the red.

Depositors' money -- insured up to $250,000 per account -- is not at risk, with the FDIC backed by the government. The FDIC still has billions in loss reserves apart from the insurance fund. It can also tap a Treasury Department credit line of up to $500 billion.

It's no secret the stress of work can keep you up at nights. Now research shows that retirement can spur less fitful sleep, at least for people who are financially stable.

The prevalence of sleep disturbances among 14,714 study participants in France — all of whom had pensions that continued to pay 80 percent of their salaries — fell from 24.2 percent in the last year before retirement to 17.8 percent in the first year after retiring.

Researchers in Finland suggest sleep disturbances may improve after retirement -- for those with secure pensions.

The study, published in the journal Sleep, found a sharp decrease in sleep disturbances in financially secure retirees. However, among the small number retiring early due to illness or disability the risk of sleep disturbances increased 46 percent.

Business consultant Hewitt Associates looked at the behavior of 170,000 401(k) participants who left jobs last year. The review shows that 46 percent of those changing or losing their jobs took the cash out of their accounts. A quarter of the workers either rolled over their money to individual retirement accounts or other retirement plans and about a third kept the money in their previous employers' 401(k) plans.

The fact that people are cashing out at such high rates does not bode well for future retirees, said Pamela Hess, Hewitt's director of retirement research.

The study also showed that younger workers were more likely to take the money and run. Six out of ten workers in their 20s took a cash distribution from their 401(k) last year, compared with just one-third of employees in their 50s.

 Read the update....You need to Rollover your 401k into an IRA.

Is anybody out there hiring? Seriously. I'm not looking for a job but I'd like to know if any major corporations are actually looking to boost their headcount anytime soon.

Courtesy of CNNMoney.com

The Society of Professional Asset-Managers and Record Keepers says nearly 73 million Americans, or just under 50% of our working population, now have a 401(k). And collectively we pour more than $200 billion into these accounts each year. But retire rich? Don't bet on it. The average 401(k) has a balance of $45,519. That's not retirement. That's two years of college. Even worse, 46% of all 401(k) accounts have less than $10,000. Today, just 21% of all U.S. workers are covered by traditional pensions, and the number shrinks every year.

In practice, 401(k)s haven't been nearly so rewarding. When Boston College's Munnell looked at the returns 401(k)s have actually produced compared with the projections, the difference was sobering. The average 55-to-64-year-old should have a 401(k) balance of $320,000. In fact, at the end of 2007, the average 401(k) of a near retiree held just $78,000 — and that was before the market meltdown.

Read Time Magazine's 401k Article

Here's a common Social Security Question on our site:

If you're eligible for Social Security, you can start claiming benefits at age 62. However, claiming benefits before your full retirement age — 66 for Baby Boomers who will turn 62 this year — will permanently reduce your monthly payment by 25% or more. 

But if you go back to work when the economy recovers, your benefits could be further reduced by what's known as the retirement earnings test.

Under the earnings test formula, Social Security will withhold $1 in benefits for every $2 you earn above an annual threshold. For 2009, early retirees can earn up to $14,160 without giving up any benefits. That limit is expected to remain the same in 2010 because the threshold is tied to inflation, which has been negative this year.

Once you cross the threshold, the earnings test can significantly reduce your benefits, or wipe them out. For example, if you're 63, receive $1,200 a month in benefits and earn $30,000 this year, you'll give up $7,920 in benefits, according to the Social Security Administration.

If you earn more than $42,960, you won't receive any benefits. (You can run your own calculations at www.ssa.gov/cgi-bin/retireTest.cgi.)

USAToday provides important information on the Social Security Earnings Test Formula

Regulators have shut Warren Bank in Warren, Mich., and two small banks in Colorado and Minnesota, boosting the number of failed U.S. banks this year to 98 as loan defaults rise in the worst financial climate in decades.

The Federal Deposit Insurance Corp. took over Warren Bank, with about $538 million in assets and $501 million in deposits as of July 31. The Huntington National Bank, based in Columbus, Ohio, agreed to assume the deposits and about $83 million of the assets of the failed bank. The FDIC will retain the remaining assets for later disposition.

• Last year, Congress passed a law that provides for a one year suspension of required minimum distributions, which means you don’t have to take a distribution in 2009 if you don’t want to.
• You’re also required to take an RMD from 401(k), profit sharing and other qualified retirement plans, so check with your accountant to determine whether your accounts are subject to the RMD rules.

Automatic Distributions. Because the penalty tax for missing a distribution is so high (50 percent of the amount you were supposed to distribute), many people have implemented automatic distribution features on their IRAs.   And often those distributions are made in the fourth quarter of the year. Generally, this is a good idea and ensures you don’t miss your RMD.

But if you don’t need the RMD this year, then you’ll most likely have to inform your IRA custodian that you want to suspend the automatic distribution for 2009. Otherwise, you may end up paying taxes you could have avoided.

• But because the RMD has not been suspended for 2010, if you like the automatic RMD feature, you want to be sure that it is suspended for 2009, but still in place for 2010.

CBSMoneywatch.com Year End Tax Saving Tip For Retirees

I come in contact with the failure of America's retirement system at my local supermarket. That's where a corps of elderly gentlemen bag my groceries. After the bags are piled in the cart, they ask me with slackened faces if I need help to the car. It's always a mildly awkward question. I am far more agile, and we both know it.

Without fail this thought enters my mind: What went wrong for them?

Maybe nothing, and they choose to hoist heavy bags into shopping carts as they round the septuagenarian corner. But the more likely scenario is that whatever jobs they had as younger men didn't offer sufficient retirement benefits.

I fear that their fate is befalling much more of America.  

The Great Recession has gutted retirement accounts, which have lost 26 percent of their peak value. As a direct result, nearly four in 10 Americans over age 62 say they have delayed retirement, according to a new Pew Research survey.

With only about 12 percent of workers between 30 and 39 now enrolled in a defined-benefit pension plan, according to the Center for Retirement Research at Boston College, employers are off the hook. They can unilaterally reduce or even eliminate 401(k) contributions.

Which means Americans are on their own. Retirement has become largely a matter of aggressive personal savings and investor savvy. It doesn't matter that most of us are unqualified financial planners; either choose the right risk allocations and timing or hope those bagger jobs are still available.

Source: Robyn Blumner of the St. Petersburg Times

Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise.

The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted in 1975.

By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.

About 50 million retired and disabled Americans receive Social Security benefits. The average monthly benefit for retirees is $1,153 this year. All beneficiaries received a 5.8 percent increase in January, the largest since 1982.

More than 32 million people are in the Medicare prescription drug program. Average monthly premiums are set to go from $28 this year to $30 next year, though they vary by plan. About 6 million people in the program have premiums deducted from their monthly Social Security payments, according to the Social Security Administration.

IRS Retirement Plans Navigator

"The Internal Revenue Service has created a new Web-based tool to help small business owners determine which tax-favored pension plan best suits their needs and how to keep their plans in compliance. The IRS Retirement Plan Navigator is intended to provide employers with an easy-to-use guide that focuses on three areas: choosing a plan, maintaining a plan and correcting a plan."

This Labor Day, NBR examines the employment situation in America from a personal perspective. The numbers are startling: 7 million jobs lost and unemployment nearing 10%. And, the faces behind those numbers are troubled. They are men and women struggling to make ends meet and battling for a new scarce resource -- a job.

An Nightly Business Report Special - Premieres Sept 7, 2009