NYTimes, May 9th, 2008
MATT Micuda was 12 in 1973 when he surfed for the first time. It was on a board that had come from a friend of the family — a Barry Kanaiaupuni model from Rick Surfboards that was made in 1968.
“I loved it immediately,” he said. “Even when I started surfing on shortboards and eventually went pro, I always had a bunch of longboards around. We always met up when the surf got small on the old boards. That was the time when we’d hang with our friends, get the gossip, talk about girls and enjoy the ocean.”
Mr. Micuda, a sign fabricator from Santa Cruz, Calif., still surfs on the old boards and claims that it’s his way of staying in touch with his love of the sport.
Staying in touch with the feelings that surfing evokes is important, because the surfing world has changed. Competitive surfing has become bigger and more exclusive, and boards and gear have become more expensive and higher tech. Prices of modern competitive boards today range from $800 to $1,200.
Luckily for Mr. Micuda, a surfing subculture that has been around for years is beginning to grow. So-called soul surfers, more concerned with the individuality of the sport, and less with the commercial aspects, are picking up the old boards in an effort to retain the original spirit of surfing.
And they gather for events like the Big Stick Logjam, one of the longest running longboard surf contests in the world, which was held April 26 and 27. This year the contest attracted more than 100 competitors, who came from all up and down the West Coast.
“Yes, it’s a competition,” said Gioni Pasquinelli, a former president of the Big Stick Surfing Association, which puts on the event. “But it’s really just a gathering of people who love old boards.”
He said the contest started about 20 years ago when some surfers began to feel that the sport had become overly dominated by new board technology. “This is an opportunity for people to share old boards, try out boards you’ve never surfed on and truly appreciate how the boards are made,” Mr. Pasquinelli said. “The cool thing about the whole event is that it really feels like another era. And that’s important for everyone to experience.”
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NYtimes, May 4th, 2008
The future of Americans’ pensions has not become a serious campaign issue so far this election season. It’s hard to get retirement issues to the front of the line when the nation faces soaring health care costs, global warming, $100-a-barrel oil, a likely recession and collapsing housing prices. There is also the little matter of the worst credit crisis since the 1930s.
That is too bad, because, as Roger Lowenstein nicely illustrates in “While America Aged,” the country “is sitting on a retirement time bomb.” He is not talking about Social Security, which, he writes, is among the more manageable of future concerns. He is addressing the large-scale failure of America’s once-enviable private pension system.
Lowenstein is one of the nation’s most talented business writers, with a particular ability to make obscure financial issues clear as the morning light. He tells three disturbing tales.
The first is about General Motors and the United Auto Workers. In the 1950s, the U.A.W., under the redoubtable Walter Reuther, won generous pension and health care benefits from G.M., eventually even securing medical coverage for retirees.
Back then, of course, no one thought the world’s premier manufacturing company would ever lose its pre-eminence. But beginning in the 1970s, market share declined inexorably while retiree rolls expanded dramatically. By the late 1990s, G.M. had 400,000 retirees compared with 180,000 workers.
With stock prices generating high returns on investments in the bullish 1990s, G.M. decided to underfund its obligations. It also perhaps too cleverly spun off its parts operations, and a lot of its pension burden, into a company called Delphi. It didn’t work. Delphi foundered, and the U.A.W. has taken over management of its own health fund, hoping to keep most of the promises made to workers. We shall see.
Lowenstein’s second example is New York City’s public transit system. Over time, the Transport Workers Union won subway workers benefits so generous they could retire by age 55. New York, however, failed to fund its pension benefits adequately, while being buffeted by economic crosswinds itself. The subway workers, despite a 2005 strike, were forced into concessions, but the city still faces huge liabilities.
The final example is the most egregious. San Diego’s municipal workers were also granted generous pension benefits. The city management then deliberately skimped on the annual contributions, hiding the underfunding from the public while the union knowingly looked the other way. The result was near bankruptcy for the once thriving metropolis.
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The Motley Fool, May 7th, 2008
We each have a vision of what we want from our retirement years. Mine involves a lot of travel, maybe on my own by sailboat or small plane, but always starting out from a friendly community of caring neighbors who swap stories over coffee, share fun projects, and help each other out when needed.
Whether or not the travel in my vision fits into yours -- it doesn't fit into my wife's, which will no doubt make for some lively debates in 20 or 30 years -- the idea of settling into a rich, close-knit community in your post-working years appeals to many folks contemplating retirement.
Such a community can be hard to find under the best of circumstances. As you age -- and as you or your old friends move to warmer climes or to downsized houses in different neighborhoods, grown children disperse, and interests long shared with friends start to diverge -- community can be a downright scarce resource.
Many developers and community leaders have tried various approaches to help older adults recapture the close-knit neighborhood feel that is increasingly hard to find in American life. Over-55 "adults only" developments suit the needs of some, and some of those developments have seen great success. But others say those neighborhoods feel sterile, with stilted "community activities" that few attend and a general sense of isolation -- exactly what they moved into the neighborhood to avoid.
In recent years, a few other developers and groups have taken a different path. Using an idea conceived in Denmark in the early 1970s, these groups have been building brand-new close-knit neighborhoods from scratch. The idea is called cohousing, and it's quickly gathering steam in the United States.
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FoxBusiness, May 7th, 2008
Lower compensation and less time in workforce harms women's retirement security
Women are at a much higher risk than men of facing economic uncertainty in retirement and, on average, they'll enter retirement with considerably less savings than men. Women face these unique challenges because they spend fewer years in the workforce, earn less income and have longer life spans than men, according to a report released today entitled, The Female Factor 2008: Why Women are at Greater Financial Risk in Retirement.
Multiple factors combine to cloud women's retirement security, including less time in the workforce and lower lifetime earnings then men. The report finds that women earn 77 cents for every dollar earned by men, which translates into a median retirement income of just 58 percent of men's. Additionally, due to family caregiving responsibilities, women are in the workforce an average of 12 years less than men. This translates into fewer years saving or participating in an employer-provided retirement plan. The median salary for a woman working full-time in 2006 was $32,515 compared to $42,261 for men. The disparity is even more dramatic for minority women, with African-American women's median income at $27,535 and Hispanic women's median income at $22,285.
Women also live, on average, five years longer than men and are far more likely than men to be widowed and living some part of their retirement years alone. Older women living alone -- whether widowed, divorced or never married -- face much higher rates of poverty than men do. Approximately one in five unmarried elderly women is poor.
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NYTimes, May 4th, 2008
Virtually unnoticed during the primary season, the baby boom generation turned 62 this year and began to draw Social Security benefits. This heralded a milestone in America’s aging, and depending on which of the candidates you ask, it spells a budgetary straitjacket or possibly a looming social crisis. Over the next generation, the population of seniors will practically double, to 72 million. With more people retiring and a smaller share of people working, the strains on Social Security and especially Medicare will become evident. Over the very long term, the two programs combined are projected to consume virtually the entire federal budget. A portion of Medicare (the part that pays hospital bills) faces insolvency much sooner than that — in 2019. “The entitlement problem is here and now,” says Eugene Steuerle, a senior fellow of the Urban Institute. “It is so big and overwhelming, none of the candidates feel they can tackle it.”
The age of guaranteed benefits is hardly over, but anxiety over the fraying of the safety net — private as well as public — is palpable. It is true that not one of the three White House contenders has offered a comprehensive solution. And except for Barack Obama’s proposal that the wealthy pay more in payroll taxes, none have been so bold as to suggest that the government meet its entitlement obligations by raising its take on them. But each has suggested some intriguing fixes that, while differing in the details, all seek to alleviate the entitlement problem by stimulating individual savings. At the very least, if campaign politics preclude speaking harsh truths, the age of tinkering with the framework — a sort of policy wonk’s Woodstock — is under way.
Not surprisingly, John McCain’s platform is well to the right of the Democrats’. He favors bringing entitlement spending down rather than bringing revenues up. And he has made it clear that he is open to cutting Social Security benefits. His boldest stroke is on health care, where he would offer a universal tax credit but in return make employer plans taxable to the recipient. In other words, if your company has a health plan, you would have to pay taxes on the value it provides. This would pierce the illusion that health care is “free” and, it is said, discourage spending. This is Adam Smith 101: if health-care recipients pay more of the cost, they will order fewer M.R.I.’s and replace fewer knees.
McCain also argues that market reforms could slow the growth in the government’s Medicare costs. Obama and Hillary Clinton support such steps (like more competitive bidding for drugs), but their emphasis has been on making the retirement and health-care system inclusive, as distinct from paring its cost.
Each has proposed a rather innovative savings plan. These are important on two levels. As an aging society, the U.S. should be saving more; instead, in recent years, we have had negative savings (people are spending more than they earn). Also, the network of private pensions that developed after World War II has been eroding as corporations terminate plans and as new companies decline to provide them. Even worse, the typical household’s savings fall woefully short of what they will need for retirement.
Clinton has proposed a national 401(k) under which the government would match up to the first $500 to $1,000 that a worker sets aside. The intent is to kick-start poor and middle-class people, who do not have the income to take advantage of tax deductions and whose savings rate is especially low. “The tax system is upside down when it comes to savings,” says Gene Sperling, Clinton’s economic adviser. “We give the most incentive to those who need it least.” (Only 5 to 7 percent of savings deductions go to people on the bottom half of the income ladder, Sperling says.)
The Clinton proposal mixes egalitarian values with free-market orthodoxy. It assumes that if you give people an incentive to save, they will. Indeed, economic theory holds that most folks will do the math, figure out how much they need to save for the future and act on it now. But experience has shown otherwise. Actual people (as distinct from the textbook variety) are not necessarily so responsible. Many Americans do not take advantage of 401(k)s. They also do lots of other silly things with their finances, like taking mortgages they can’t afford.
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NYTimes, May 3rd, 2008
When David Bunnell, a magazine publisher who lives in Berkeley, Calif., went to a FedEx store to send a package a few years ago, he suddenly drew a blank as he was filling out the forms.
“I couldn’t remember my address,” said Mr. Bunnell, 60, with a measure of horror in his voice. “I knew where I lived, and I knew how to get there, but I didn’t know what the address was.”
Mr. Bunnell is among tens of millions of baby boomers who are encountering the signs, by turns amusing and disconcerting, that accompany the decline of the brain’s acuity: a good friend’s name suddenly vanishing from memory; a frantic search for eyeglasses only to find them atop the head; milk taken from the refrigerator then put away in a cupboard.
“It’s probably one of the most frightening aspects of the changes we undergo as we age,” said Nancy Ceridwyn, director of educational initiatives at the American Society on Aging. “Our memories are who we are. And if we lose our memories we lose that groundedness of who we are.”
At the same time, boomers are seizing on a mounting body of evidence that suggests that brains contain more plasticity than previously thought, and many people are taking matters into their own hands, doing brain fitness exercises with the same intensity with which they attack a treadmill.
Decaying brains, or the fear thereof, have inspired a mini-industry of brain health products — not just supplements like coenzyme Q10, ginseng and bacopa, but computer-based fitter-brain products as well.
Nintendo’s $19.99 Brain Age 2, a popular video game of simple math and memory exercises, is one. Posit Science’s $395 computer-based “cognitive behavioral training” exercises are another. MindFit, a $149 software-based program, combines cognitive assessment of more than a dozen different skills with a personalized training regimen based on that assessment. And for about $10 a month, worried boomers can subscribe to Web sites like Lumosity.com and Happy-Neuron.com, which offer a variety of cognitive training exercises.
Alvaro Fernandez, whose brain fitness and consulting company, SharpBrains, has a Web site focused on brain fitness research. He estimates that in 2007 the market in the United States for so-called neurosoftware was $225 million.
Mr. Fernandez pointed out that compared with, say, the physical fitness industry, which brings in $16 billion a year in health club memberships alone, the brain fitness software industry is still in its infancy. Yet it is growing at a 50 percent annual rate, he said, and he expects it to reach $2 billion by 2015.
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NYTimes, May 5th, 2008
Edie Gieg, 85, strides ahead of people half her age and plays a fast-paced game of tennis. But when it comes to health care, she is a champion of “slow medicine,” an approach that encourages less aggressive — and less costly — care at the end of life.
Grounded in research at the Dartmouth Medical School, slow medicine encourages physicians to put on the brakes when considering care that may have high risks and limited rewards for the elderly, and it educates patients and families how to push back against emergency room trips and hospitalizations designed for those with treatable illnesses, not the inevitable erosion of advanced age.
Slow medicine, which shares with hospice care the goal of comfort rather than cure, is increasingly available in nursing homes, but for those living at home or in assisted living, a medical scare usually prompts a call to 911, with little opportunity to choose otherwise.
At the end of her husband’s life, Ms. Gieg was spared these extreme options because she lives in Kendal at Hanover, a retirement community affiliated with Dartmouth Medical School that has become a laboratory for the slow medicine movement. At Kendal, it is possible — even routine — for residents to say “No” to hospitalization, tests, surgery, medication or nutrition.
Charley Gieg, 86 at the time, was suffering from a heart problem, an intestinal disorder and the early stages of Alzheimer’s disease when doctors suspected he also had throat cancer.
A specialist outlined what he was facing: biopsies, anesthesia, surgery, radiation or chemotherapy. Ms. Gieg doubted he had the resilience to bounce back. She worried, instead, that such treatments would accelerate his downward trajectory, ushering in a prolonged period of decline and dependence. This is what the Giegs said they feared even more than dying, what some call “death by intensive care.”
Such fears are rarely shared among old people, health care professionals or family members, because etiquette discourages it. But at Kendal — which offers a continuum of care, from independent living apartments to a nursing home — death and dying is central to the conversation from Day 1.
So it was natural for Ms. Gieg to stay in touch with Joanne Sandberg-Cook, a nurse practitioner there, during her husband’s out-of-town consultation.
“I think that it is imperative that none of this be rushed!” Ms. Sandberg-Cook wrote in an e-mail message to Ms. Gieg. The doctor the Giegs had chosen, the nurse explained, “tends to be a ‘do-it-now’ kind of guy.” But the Giegs’ circumstances “demand the time to think about all the what-ifs.”
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The Slate.com, April 15, 2008
Subprime was just the beginning. Wait until California's prime borrowers start handing their keys to the bank.California is to mortgage lending what Chicago is to pork bellies.
For years, that meant it was a place with soaring house values; today,
the foreclosure rate across the state is twice the national average and
going up fast. Riverside County, outside Los Angeles, may be the
foreclosure capital of the country, with a rate close to six times the
national average. And housing prices are in freefall.
California
should be the poster child for a mortgage-loan bailout. In few other
places have so many taken on such onerous debts with so little equity.
Unfortunately, the crisis in California is going to get much worse, and
there is no bailout that will solve it. Why? Because if the first stage
of the foreclosure crisis was about people who could not afford their
mortgages, the next stage will be about people who have every reason
not even to try to pay their mortgages.
Over the next several
months, we're going to be subjected to a chorus of hand-wringing about
the moral turpitude of people who walk away from their mortgages and
pronouncements like last month's warning
from Treasury Secretary Henry Paulson that people should honor their
mortgage obligations. The problem with finger-wagging on what you
"should" or "ought" to do is that, when it comes to money, you're
usually given the lecture only when it's in your interest to do the
opposite. Certainly, that's the case for all the California homeowners
who in the next year or two are going to find themselves with the
choice of whether, faced with a huge new wave of interest resets and a historic decline in the value of their homes, they will simply walk away.
First,
those home prices: For a weird few months of the mortgage crisis,
statisticians came up with peculiar numbers about home values, rolling
out comforting stats showing single-digit declines. Well, that's over.
Last
month, the California Realtors' association (folks who in October
managed to "project" that prices would fall 4 percent in 2008) reported
that, actually, California house prices in February fell 26 percent from a year ago. In the places where the foreclosure boom has hit hardest, it's worse.
A quick, almost random survey of some foreclosure prices in Southern and Central California:
- In San Bernardino, a house bought for $310,000 in 2005 is now being offered by the bank for $199,900.
- A 2,000-square-foot ranch house in Rancho Santa Margarita is down from $775,000 to $565,000.
- A starter home in Sacramento, sold for $215,000 in 2004, is now down to $129,900.
These are not sale prices. They are asking prices. Don't doubt that they are negotiable.
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NYTimes, April 20th, 2008
CONVENTIONAL wisdom recommends that investors start with a high
allocation of stock in their portfolios when they are young and reduce
it as they approach retirement.
That makes intuitive
sense: In your 20s, you may be inclined to take bigger risks; in your
60s, you may feel a greater need to protect the wealth you have been
able to amass.
But a recent study of real-world portfolio
returns, which fluctuate significantly from month to month and year to
year, has found that there is no particular advantage in this approach.
You would do just as well, with no greater odds of doing poorly, by
simply picking an allocation of stocks and bonds that you can live with
for a long while and sticking with it.
That is the implication
of “Hitting or Missing the Retirement Target: Comparing Contribution
and Asset Allocation Schemes of Simulated Portfolios,” by Harold J.
Schleef, an economics professor at Lewis & Clark College, and
Robert M. Eisinger, an associate professor of political science at that
institution. It was published last year in the Financial Services
Review, an academic journal.
The professors performed elaborate
computer simulations for hypothetical individuals investing for
retirement. Each earner is 35 years old and trying to amass $1 million
(in 2006 dollars) by age 65, in 30 years’ time. They differ in how they
divide their portfolios between stocks and bonds.
They also
differ in how the stock and bond markets perform during their decades
of investing. For each year and individual, the professors picked
randomly from the 80 years from 1926 to 2006. That means, for example,
that the period over which an investor is trying to amass wealth could
turn out to be like the 30 years beginning in 1929, a period when the
market barely beat inflation — or like the 30 years beginning in 1974,
a span when stocks provided stellar returns.
By running their
simulations thousands of times, and by assuming the future will be like
the past, the professors calculated the odds that any given strategy
would succeed. Consider, for example, an investor whose portfolio at
age 35 has 78 percent allocated to stocks and 22 percent to bonds, and
that the equity portion declines gradually so that, at age 65, it is
just 40 percent.
Such a scheme is typical of what many
financial planners recommend, and is similar to what has been adopted
by the so-called life-cycle funds, or target date maturity funds, that
mutual fund families in recent years have created. Assume further that
this investor contributes $11,000 each year to this portfolio. This
would be enough to enable it to reach $1 million by the time he is 65 —
provided the stock and bond markets each year perform exactly in line
with their long-term averages.
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NY Times, April 21st, 2008
EVEN for people who have built up a decent nest egg, deciding how to
use it is one of the demands of early retirement. The good life may be
within reach, but the financial logistics still require careful
attention.
“We were thinking, We’ve got the time now, but how do we finance
it?” said Cathy Odlaug, recalling how she felt two years ago when her
husband, Bruce, went part time at his Minneapolis law firm, giving up
his partnership and 60 percent of his income.
In an era when fewer Americans are getting pensions, Mrs. Odlaug’s
concern isn’t unusual. Most retirees have to create their own income
streams, usually through a combination of Social Security and
distributions from retirement savings, including I.R.A.’s and 401(k)
accounts.
“Unless you’ve actually lived through it personally, you don’t fully
appreciate some of the nuances of the deaccumulation phase,” said
Sheryl Garrett, founder of the Garrett Planning Network, which creates
financial plans for middle-income people. “There’s a lot of angst
around, How am I going to get my paycheck in retirement?”
Some differences in planning are personal. For instance, a couple
planning to retire at 55 may need a paycheck-bridge strategy before
they become eligible for Social Security at age 62, said Michael
Kitces, director of financial planning for the Pinnacle Advisory Group
in Columbia, Md. If the couple are in line for an inheritance or are
planning to sell a second home, they can spend more earlier in
retirement than might otherwise seem prudent, he added.
Other variations are economic. An extended period of stock-market
gains may let some retirees increase their withdrawals. A couple of
down years can have the opposite effect.
These factors must all be weighed in a paycheck replacement plan.
“The mathematics of this are beyond what most people could really be
sophisticated at,” said Roger Ibbotson, a professor at the Yale School
of Management and an expert on investments who has helped mutual fund
companies advise retirees. “It’s not that they’re stupid. It’s just
that it’s complicated.”
To give retirees some new tools, two of the biggest fund companies,
Fidelity and Vanguard, have introduced mutual funds intended to make it
easy for retirees to make systematic monthly withdrawals.
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NYTimes, April 21st, 2008
WITH his longtime New York
City estate and business law practice winding down, Robert Rubinger was
ready to retire five years ago, at age 76. But his wife, Nancy, who was
then 66, was not.
Ms. Rubinger had started working at a nonprofit organization only 13
years earlier, after the couple’s two children were grown. “I was
really having a very good time,” she said. “I find it extremely
gratifying to help people.”
So Mr. Rubinger happily retired, while his wife happily kept working. But problems cropped up.
“There were some mornings when I would have liked to have slept in,
and he’s fast asleep,” Ms. Rubinger recalled. She would ask herself,
Why do I have to go out in the snow and rain?
Then, when she got home from work at 7:30 p.m., she would ask her
husband whether he had made plans for dinner. No, he would reply, “I’m
waiting for you.”
Ms. Rubinger said, laughing, “I would suggest that maybe it would be
a good idea that he would do a little bit more” around the house, but
finally she gave up. “I knew it would be a lost cause.”
Her husband’s version: Housework, he said, “was never part of my
life. She would have to guide me, but we never had any real deep
discussions as to what my role would be.”
Scenes like this are becoming more common as the first mass
generation of career women reaches the traditional retirement ages of
60 to 65. Experts on aging say that the phenomenon began about five
years ago and will continue to expand as more women enter their 60s.
These are the wives who swept into the work force in the late 1970s and
early ’80s, just as the women’s movement was pushing open career doors.
Many had stayed home taking care of the house and family, and often,
like Ms. Rubinger, put off entering the work force until their children
were in school, in college or even grown.
“In the past, other generations for the most part only had to deal
with one retirement,” said Phyllis Moen, a sociology professor at the University of Minnesota.
But nowadays, when the husband is ready to relax after four decades of
work, the wife might have barely begun her working life. “Wives often
feel, I finally got rid of the kids, I’m finally moving up in the job,
and I don’t want to retire,” Dr. Moen said. “There’s just a mismatch
between the two.”
Of course, even a traditional retirement, like any life-cycle
transition, can cause strains in a marriage, so the timing mismatch
just adds one more hitch. There may be arguments over washing the
dishes, vacations and moving. Roles that have been set in stone for
decades are upturned. “When you’re retired at different times, there
are very different agendas,” said Maryanne Vandervelde, author of the
book “Retirement for Two” and a founder of the Institute for Couples in
Retirement in Seattle.
The cases usually involve a retired husband and a wife who is still
working, like the Rubingers, rather than the other way around. The
feminist movement and the fact that many women are entering the working
world late in life make up only part of the picture. Wives in this
generation also tend to be younger than their spouses and thus further
from retirement age. Moreover, experts like Dr. Moen say that men are
more likely to have the kind of work that pushes them to retire,
because of physically demanding labor that they can no longer do or
generous pensions that allow them the luxury of quitting.
Housework is probably the No. 1 cause of friction. When both
spouses were working, the woman might have done most of the cooking and
cleaning. Now, Dr. Moen said, “He’s home all day, and the wives feel he
should do more.”
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NYTimes, April 21st, 2008
EDWARD M. HOUGHTON, a human resources executive at Pitney Bowes,
was sick of traffic jams and unpredictable hours. Bina Kozak, who
matches patients to cardiologists at a Scripps Health clinic in San
Diego, wanted to volunteer for nonprofit agencies. James M. Wing, a
pharmacist for CVS Caremark in Cincinnati, hated Ohio’s harsh winters.
Each planned to retire last year. Back in the 20th century, their
companies would have probably sent them off with gratitude and maybe a
gold watch.
But that was before baby boomers began to reach retirement age.
“Companies could lose everyone who remembers how they handled the last
economic downturn,” said Alison Sander, who studies trends at the
Boston Consulting Group.
Now some companies are taking preventive action. They are offering
shorter hours, flexible locations and lighter duties, hoping to keep
older workers on board longer.
“They’re letting older employees wind down gradually, so they can
transfer their knowledge before it leaves for good,” said Deborah
Russell, director of work-force issues for AARP.
So Pitney Bowes, which is based in Stamford, Conn., is letting Mr.
Houghton, 56, work a four-day week at a plant near his home in Shelton.
Scripps Health has let Ms. Kozak, 62, work three days every two weeks.
And CVS is sending Mr. Wing, 63, to Florida to work in stores there in
the cold months.
“Winter is CVS’s busiest time in Florida, and it’s when I want to
enjoy the beaches and golf,” said Mr. Wing, who plans to work until he
is at least 70 years old. Mr. Houghton and Ms. Kozak said they felt
re-energized by their shorter hours. “I don’t call it partial
retirement; I call it working,” Mr. Houghton said.
Ms. Kozak put it more simply. “I can’t see a downside for anyone,” she said.
Nonetheless, programs to hold onto older workers are far from ubiquitous.
The accounting firm Ernst & Young recently asked 150 large
companies how they were handling the graying work force. The norm was
benign neglect. “They all know that workers are getting older, but only
companies on the cutting edge are focusing on ways to retain them,”
said Arthur L. Conat, an executive director at the firm.
In fact, some experts say that companies sabotage their relationships with older workers.
“Most employers are not even making it easier for people who want to
stay, let alone giving them incentives to stay,” said Marc Freedman,
author of “Encore: Finding Work That Matters in the Second Half of
Life.”
Many companies still marginalize people who admit they are
considering retirement, added Sandra Timmermann, director of the
MetLife Mature Market Institute. “They’re made to feel like lame ducks
if they announce their retirement too far in advance,” she said.
Still, programs for retaining older workers are slowly emerging.
Read more of this articleNewRetirement Retirement Calculator: Assess your retirement plan with the NewRetirement Retirement Calculator.
HeraldNet, April 20th, 2008
The soft national housing market and chaotic mortgage environment have
sent lenders and investors back to the drawing board in an effort to
come up with new ideas and produce an alternative to corral new
business.
The latest niche product designed to tap the billions
of dollars of equity tied up in seniors' primary residences has spread
not only to second homes but also to residential rentals and commercial
properties.
Equity Key (
www.equitykey.com)
has rolled out an equity-share option that differs from a reverse
mortgage in that the program does not charge interest on money taken
out of the home. Instead, the option gives Equity Key an equal share in
the future appreciation of the property (primary residences, rental or
commercial) based on its present market value.
The concept is similar to the Rex Agreement, another new equity-sharing
vehicle that also claims a share of future appreciation. The main
differences are that the Rex Agreement has no age restriction while
Equity Key is aimed at homeowners between the ages of 65 and 85. The
Rex Agreement is for primary residences and is not available for second
homes and investment properties at this time.
According to
Equity Key, it pays the property owner a specific lump sum
(approximately 12 percent to 15 percent of the property's value) or an
annual recurring payment in the approximate amount of 0.9 percent to
2.4 percent of the home's value. In exchange, Equity Key splits any
future appreciation on a 50-50 basis with the property owner. The owner
retains the equity he or she has accumulated.
When the owner
moves out or dies, Equity Key sells the property, and the accumulated
equity (all the equity the owner had prior to the Equity Key
transaction plus 50 percent of what has accumulated subsequently) goes
to the owner's heirs. The homeowner's estate has the first right of
refusal to purchase the property at the current market value, according
to the company.
Read more of this articleAbout Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com
MSNBC, April, 21st, 2008
But with M.D. endorsements, is the field more credible — or risky?
For thousands of years, magicians, alchemists,
even a few fringe medical practitioners have fueled an unbounded
optimism that we can blunt the ravages of time, stay younger for
longer, maybe even defeat death itself. Their pitches have usually
hinged on some drug, food or device — everything from electricity to
yogurt to surgically installing the gonads of animals into our own
bodies — that will slow or reverse the aging process. Every decade or
so, “anti-aging” promoters grasp onto news coming out of research labs
and trumpet those developments as the answer we have all been awaiting.
Lately,
the buzzwords are “nano,” which refers to the science of the ultra
small (a nanometer is one millionth of a millimeter), and stem cells.
One “nano” face cream, for example, promises to stave off wrinkles with
"nano-encapsulated technology" into which the makers have "packed
microscopic bundles of Prodew, a nourishing skin humectant." A dietary
supplement advertised as "The World's FIRST Stem Cell Enhancer,"
promises to "Rebuild, Renew, Rejuvenate" — giving you more stem cells
and keeping your organs healthy — if you take the blue-green algae
capsules. The claims are based on wispy science and hype.
But while the cycle remains the same, something new is happening in the
world of anti-aging. Mainstream doctors who once wanted nothing to do
with the naturopaths, osteopaths and others who first populated modern
anti-aging, and whom they often considered glorified carnival barkers,
are buying in, signing up for “certification” as anti-aging
practitioners and offering patients the promise of youth and
rejuvenation through such treatments as human growth hormone,
testosterone, special diet and exercise regimens, antioxidants and
hundreds of other supplements.
Read more of this articleNewRetirement Retirement Calculator: Assess your retirement plan with the NewRetirement Retirement Calculator.
L.A. Chronicle, April 20th, 2008
Many seniors have taken out a reverse mortgage and are enjoying the
benefits of receiving cash from the equity in their home. However, many
still find, for various reasons, that the money they receive is still
not enough. Refinancing the original loan could be an option, but is it
the best option?
Everybody is familiar and feels comfortable with the idea of
refinancing an ordinary home equity loan - if you take out a loan and
then some time later need extra cash and there's more equity left in
the home, many would definitely take a look at raising cash this way.
But many seniors who find they need more cash rarely think about
refinancing their existing reverse mortgage. Many don't even realize
that this is even an option.
In the past there were definite obstacles in the way. For instance, an
HECM reverse mortgage incurs a 2% insurance fee on the value of
property with a 0.5% annual premium that is deducted from the cash
payments. This up front fee reduces the equity that's left in the home
and ending the loan, whether by moving, selling or dying means less
money for the borrower(s) or heirs. This was further compounded when
seeking reverse mortgage financing as an additional 2% would be charged
on the total value of the property. So, if the home cost 200,000
dollars when the first loan was taken out, 4000 would be payable, thus
reducing the equity to 196,000. Later, if the home value increased to
300,000 and refinancing was sought, an additional 2% would be payable,
i.e. 6,000. This would mean total costs of 10,000, making refinancing
an expensive proposition.
The Department of Urban Development realized this problem and being
keen for seniors to see refinancing as a viable option has changed the
insurance so that it's only the value differential that is liable. So,
in the above example, the home rose by 100,000 with only a 2% insurance
premium of 2,000: total costs would now only be the original 4,000 plus
2,000, a total of 6,000 rather than 10,000.
Also, the obligatory counseling can be waived, in certain circumstance, when refinancing a HECM reverse mortgage.
How do you know if you qualify?
Read more of this article
About Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com