The recession will make 2009 “the year of condensed soup, driven by the backdrop of severe economic pressure on the consumer,” Mitchell Pinheiro, a Philadelphia-based analyst at Janney Montgomery Scott LLC, wrote in a note yesterday.

Coutesy of Bloomberg.com

So far this year, the average worker’s 401(k) account balance has dropped between 21% and 27%, depending on the worker’s age and time with his or her employer, according to the Employee Benefit Research Institute.

“The current 401(k) system has not turned out to be as secure as we want it to be,” said Rep. George Miller (D-Martinez), chairman of the House Education and Labor Committee. “It has not provided the returns that we want it to. And it’s not provided the level of savings that we want it to. It’s kind of failing on a number offronts.

“Should there be a serious reassessment? Absolutely,” he said."

Miller’s committee already has held two hearings on the effects of the financial crisis on retirement savings plans. At one, a professor from New York’s New School for Social Research called for creating government-backed retirement savings accounts that would offer a guaranteed, inflation-adjusted 3% return. The government would contribute to the accounts, using money gained by eliminating about $80 billion in annual tax breaks for 401(k)savings.

Another common MRD question.  Here's the answer:

Distributions from your IRA accounts are always made, whether you are working or retired.  

You may be able to delay the MRD from your 401k plan if you are still employed and not a 5% owner.  Take a look at IRS Publication 590 or consult your tax advisor on any minimum required distribution question.

Almost 300 companies are asking Congress, as part of any economic stimulus legislation, to suspend a requirement that they pay more into their pension funds, saying it may force them to cut jobs.

Pfizer Inc., Boeing Co., Chrysler LLC, Verizon Communications Inc., Kraft Foods Inc. and Cigna Corp. are among the companies that signed a letter to lawmakers saying the economic slowdown has slashed the value of their pension assets, forcing them to make potentially "huge'' contributions to the pension plans to meet requirements imposed by Congress in 2006.

Courtesy of Bloomberg.com

The postal service is offering early retirement packages to workers over the age of 50 who have more than 20 years on the job. Early retirement has been offered to 156,000 employees nationwide

Q  I have several IRA accounts at different custodians.  Do  I need to take distributions from each of the IRA accounts?

A  No. Add the combined amounts from each of the IRA's and then use the tables from IRS Publication 590 or use the table on our website and you can pick one of your IRA accounts to take your MRD.

Talk about a full plate. President Obama will be struggling with two wars, a recession, high unemployment, energy issues and baby boomers looking at retiring.  Here's the USNews.com look at retirement:

The leading edge of the baby boomers will hit age 65 during Barack Obama's administration. Legislation enacted over the next four years will be key to boomers' economic security in retirement, especially as investors frantically try to recover from massive stock market losses before they retire. Here's a look at the president-elect's major retirement proposals:

Income tax for seniors. Obama plans to eliminate all income tax for seniors making less than $50,000 annually. Obama's advisers estimate this will save 7 million seniors an average of $1,400 apiece annually.

Hardship withdrawals. Early withdrawals from IRAs and 401(k)'s are currently subject to a 10 percent early withdrawal penalty for those younger than 59½. Obama proposes penalty-free hardship withdrawals of 15 percent of the IRA or 401(k) account balance, up to $10,000, in 2008 (including retroactively) and 2009. These withdrawals would still be subject to normal income taxes.

Required withdrawals. Annual withdrawals from traditional IRAs and 401(k)'s are currently required for retirees 70½ or older. These required minimum distributions are taxed as income. Obama proposes a temporarily suspension of the required withdrawals for seniors over 70½. This will allow nest eggs more time to recover from recent market losses. He also plans to temporarily exempt any withdrawals made up to the required minimum amount from taxation.

Social Security. Obama does not support raising the retirement age or privatizins Social Security. But he is considering plans to raise payroll taxes for those making more than $250,000 by 2 percent to 4 percent (combined employer and employee) to improve the system's financial position.

Automatic pensions. The Obama administration plans to automatically enroll all employees in a workplace pension plan. Employers who do not currently offer a retirement plan will be required to enroll employees in a direct-deposit IRA account. Employees may choose to opt out. Low- and middle-income Americans will also receive matching contributions. Families than earn less than $75,000 may get a 50 percent match of the first $1,000 of savings.

The tally of failed banks in 2008 rose to 19 as the government announced that a Texas and a California bank had been shuttered Friday night.

Franklin Bank, a Houston, Texas-based bank and Security Pacific Bank, a Los Angeles, Calif.-based bank were shut down by state regulators Friday, marking the 18th and 19th bank failures this year.

Your 401k or 403b might offer a "stable value" fund or, a "guaranteed investment contract," also known as a "GIC."  They are offered by insurance companies and really invest like a money market or bond fund.  IRA accounts don't have access to these investments, although using a CD or bond fund will be very similiar.

Here's a recap from USAToday:

But amid the gloom, you may detect a ray of sunshine: your plan's stable value fund. These funds, which are offered by most large 401(k) plans, were up an average of 5.2% through September, according to the Stable Value Investment Association.

Like bond funds, stable value funds typically invest in corporate and government bonds. In addition, though, they buy contracts from banks and insurance companies, known as wrappers, that guarantee the principal and accumulated interest even if the underlying investments decline in value.

Stable value funds invest in high-quality bonds with an average maturity of 2.8 years, says Gina Mitchell, president of the Stable Value Investment Association. This enables them to deliver better returns than money market funds, which typically invest in fixed-income securities that mature in 30 to 90 days, she says.

Falling leaves and falling stock markets. Here's a quick recap:

The Dow Jones industrial average wound up one of its most volatile months ever. The Dow plunged 14.1%, or 1526 points, through Oct. 31.

As of Friday's market close, the S&P 500 had plunged 16.9%, or 198 points, for the month.

Here's a common question on the website each day:

Q Can I take the MRD at any time or do I have to wait until my 70 1/2 birthday? 

A The MRD can be taken at any time during the year in which the individual attains age 70 1/2.  Many people wait until November or December to take their distributions but your IRA custodian will do the calculation and send out a check or move money to your bank at any time.

The Minimum Required Distribution (MRD) is also known as the Required Minimum Distribution (RMD)

Welcome to the world of financial jargon.