Thursday, August 12, 2010

“Personal Finance: Workplace Wrath - Washington Post” plus 1 more

“Personal Finance: Workplace Wrath - Washington Post” plus 1 more

Personal Finance: Workplace Wrath - Washington Post

Posted: 12 Aug 2010 11:20 AM PDT

Since I have a very thoughtful readership for this newsletter, let's talk about this. Here's the Color of Money Question of the Week: Do you think what Slater did should be applauded? Send your comments to colorofmoney@washpost.com. In the subject line, put "Workplace Wrath."

While you're sending comments about Slater, tell me about any workplace wrath you've experienced or witnessed, and how it turned out.

Debt Tagging

No one wants to be accused of something they didn't do, especially when it comes to not paying a bill.

But that's what's happening to a lot of people as debt collectors become more aggressive in trying to hunt down debtors, reports the Post's Sonja Ryst in Debt collection mistake can be consumers' nightmare.

Debt collectors are going after people with the same names as those who owe money. They are relentlessly calling the wrong phone numbers, hoping to pry information out of whoever answers. Some finagle enough identifying information to make people seem liable for debts they never owed, Ryst reports.

In its 2010 annual report on the Fair Debt Collection Practices Act, the Federal Trade Commission said it received 119,364 complaints about third party and in-house debt collectors, up from 104,766 the previous year.

The FTC has tips on what to do if you find you're accused of owing debt that's not yours.

Picky People

Even as the unemployment rate looms at 9.5 percent, many unemployed Americans are reluctant to take lower paying work in unfamiliar job fields.

"Employers these days seem taken aback when highly qualified, experienced people fail to rush to apply for the openings they post," writes Slate.com business columnist Daniel Gross in Is any Job Better than No Job?.

Gross was responding to a Wall Street Journal article that reported some employers were having a hard time filling certain positions. But he believes - and I agree - that the Journal piece overlooked one important factor. "Maybe some of these employers just aren't offering terms that are good enough," Gross writes.

Five Filters featured article: "Peace Envoy" Blair Gets an Easy Ride in the Independent. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.

Personal Finance: Avoid running out of money in retirement - Philadelphia Daily News

Posted: 08 Aug 2010 11:20 PM PDT

Posted on Sun, Aug. 8, 2010

It's a shocking statistic: About 47 percent of early baby boomers and 44.5 percent of Generation Xers - ages 36 to 45 - are on course to run short of money for basic living expenses such as food and electricity in retirement, according to the Employee Benefit Research Institute.

Will you be among them? Taking a glimpse into your future now will help you make sure you don't end up wondering how to pay the cable bill in your 70s.

If you start putting about 10 percent of your salary into a 401(k) or IRA in your 20s, and keep doing it until you retire, you will probably be fine. If you haven't started, start now.

Ten percent might sound like a painful amount to save, but it's not as rough as people think. If you are lucky enough to work for a company that rewards you for saving with matching money, you can combine free money from your employer with your savings. So if your employer gives you a 3 percent match, 7 percent from you will do. In addition, you get a tax break as a reward.

What's the impact? If you are 25 and earn $30,000 now, you will invest about $40 a week in your 401(k) this year, and if your investments behave the way history suggests, you will wind up with about $1.2 million when you retire. Of that, about $370,000 will be from the employer match. For this calculation, I assumed that you would invest in a mutual fund with your retirement date of 2055 in its name, your salary goes up 2 percent a year, and you earn an average of 7 percent a year in the mutual fund. Experiment with your pay and savings at http://go.philly.com/pay1.

That $1.2 million might seem excessive. But don't decide it's not necessary. In 45 years, inflation will likely make $113,000 feel like today's $30,000. Don't let that spook you. We adapt to inflation as we go, and our salaries tend to go up to reflect the cost of living. About 45 years ago, an income of $4,500 would have been equivalent to $30,000 now. See http://go.philly.com/pay2.

Because most people don't save 10 percent starting with their first jobs, they must make up for lost time. Simple rules of thumb and an Internet calculator can give you a snapshot.

How much will you need? If you are about to retire and have saved 12 times your last annual salary, you should be OK, says Charles Farrell, a Denver financial planner and author of Your Money Ratios. This will let you be fairly sure that you won't run out of money, provided you abide by a financial-planning rule of thumb: During your first year of retirement, remove no more than 5 percent of your savings and then each year afterward, withdraw only a little more to cover inflation.

So if you retire this year with $1 million saved, you can remove $50,000 for a year of living expenses. The next year, you will be able to increase the original amount by 3 percent for inflation. You will live on $51,500. Of course, you will have Social Security, too - maybe adding $20,000 more. Find out how much Social Security you should get each month at http://go.philly.com/pay3

Financial planners generally tell people they will probably feel comfortable in retirement if they have enough savings to replace 70 percent to 80 percent of their last preretirement salary. That's because they will no longer have expenses like commuting to work or saving for retirement. But a person who has expensive hobbies, wants to travel, or takes on an expensive mortgage could find that too limiting.

At any age, use the "ballpark estimate" calculator at http://go.philly.com/pay4 for a glimpse into your future. Based on your current savings and income, the calculator will tell you if you are likely to build up enough money in your nest egg to replace 70 percent to 80 percent of the money you were used to living on during the year before you retired. And if your savings, Social Security, and any guaranteed pension money in a defined-benefit plan will fall short of delivering what you will need, the calculator will tell you how much more to save each year to get to where you want to be.

Gail MarksJarvis is a personal finance columnist for the Chicago Tribune. E-mail her at gmarksjarvistribune.com.

Five Filters featured article: "Peace Envoy" Blair Gets an Easy Ride in the Independent. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.
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