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Baby Boomers eye Retirement Income
City of Industry, CA -- 10/2009 - Baby
boomers are about to roil the financial
services industry -- again. They've done
this before, of course. Two decades ago they
first began to sock away parts of their
paychecks in stocks, bonds and mutual funds.
That marked the start of their wealth
accumulation phase.
Now boomers are nearing and entering
retirement. As they do, their focus will
increasingly shift to pulling income from
those assets they've worked hard to build
up.
"What more and more baby boomers want to
understand is how much they can decumulate
-- withdraw -- each year without running out
of money," said Frank Porcelli, who heads
BlackRock's (NYSE:BLK) U.S. retail business.
Porcelli is in charge of BlackRock's
relationship with intermediaries and
advisers. The firm ran $1.37 trillion in
client money as of June 30.
After December's expected completion of its
takeover of Barclays Global Investors -- a
big player in ETFs and index funds --
BlackRock will be a $3 trillion titan. [Read
the full article]
TOPEKA, Kan. (AP) -- A university economist
and a key legislator who wants Kansas to
have 401(k)-style pensions for its new
teachers and government workers said Tuesday
that such a plan can be started quickly.
The economist, Art Hall, told the House
Appropriations Committee that starting such
a plan would lessen long-term funding
problems for the Kansas Public Employees
Retirement System. Committee Chairman Kevin
Yoder backs the idea.
Hall is executive director of the Center for
Applied Economics at the University of
Kansas, which raised eyebrows across state
government with a recent report describing
KPERS as "bankrupt." Several committee
Democrats took him to task for the
description, saying it unnecessarily
frightened some seniors.
Hall acknowledged -- as KPERS officials have
said -- that current retirees' pensions
aren't in danger in the near-term. But at
the end of last year, KPERS projected the
gap between its income and expenses over the
next 25 years at $8.3 billion. [Read
the full article]
Last fall and spring, investors were likely
gripped by fear as they watched the stock
market implode.
In Bankrate's new poll, American workers
were asked how they changed their retirement
investment strategy as a result of the
financial crisis.
The majority (53 percent) said they kept
investments about the same. Whether this was
a deliberate decision or not, we can't say
for sure. But oftentimes we are paralyzed,
whether by shock, indecision or just plain
inertia.
Some people took action. Fourteen percent of
Americans suddenly discovered their aversion
to risk, with 9 percent putting more money
into fixed-income investments and 5 percent
selling off most of their stocks or stock
funds.[Read
the full article]
Buying inflation protection will be as easy
as checking a box on your tax return in the
2010 tax season. The federal government is
amending IRS Form 8888 to include U.S.
savings bonds, specifically the Series I
bond. IRS Form 8888 allows taxpayers to
direct that their refunds be split to
various accounts such as savings, checking,
IRAs and education savings.
The move is part of President Barack Obama's
recently announced initiatives for
retirement savings. The idea is to give
people who might not save ordinarily an easy
way to build a nest egg by having their tax
refund directed toward buying savings bonds.
It's an idea initially proposed by Harvard
Business School professor Peter Tufano
several years ago after studies showed that
low-to-moderate-income, or LMI, families
were willing to direct a portion of their
tax refund to buying savings bonds. [Read
the full article]
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