Social Security? Not Exactly

The carnage of the past two years in the stock market is giving investors a clear warning; learn a new way of doing things or get ready for more of the same. The money clock never stops ticking and the longer you wait to make the necessary changes to stop the bleeding in your accounts the less you’ll have when you retire. Every day you put this off increases the chance of being broke in retirement.

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One of the effects of the current crisis will be severe cuts in entitlement programs for “the wealthy.” MoneyNews.com reports that anyone making more than $60,000 a year will be refused entitlement payments under new proposals from members of Congress.

Investors are “bloodied and confused,” says Warren Buffett, “much as though they were small birds that had strayed into a badminton game…”

For Americans struggling to cope with falling home values and rising job insecurity, a shrinking pension plan is the “last straw”. But cashing in your retirement plan now is the worst thing you can do. Mike Caggeso looks at the three best ways to rescue your 401(k).

Chances are, your portfolio suffered heavy losses last year. But incoming President Obama’s ‘mega fix’ for the US economy could end up costing you even more, says James Dale Davidson.  It’s time to consider your options…

People sometimes ask me: “What should I do with my retirement account?” I often tell them to consider ways of retiring that are not dependent on financial abstractions and various corporate/government promises, such as Social Security or corporate pensions. This usually gets some puzzlement because they’ve been trained for decades to think only in terms of financial products.

Let’s look at a specific example. This is for my own parents, who turned 65 last year. (That puts them just before the Baby Boomers.) They live in a nice suburb outside of New York City, on the coast of Connecticut. Like many older people, they would like to stay in the house they have owned for about 20 years now, in the…

Corporate pension plans have been pummeled by the broad slump in equity and commodity markets. After ending 2007 will a surplus of $60 billion, S&P500 companies now have a combined deficit of around $300 billion.

This from the Guardian (UK):

Investors should start seeing the effect on year-end balance sheets, and reforms under the Pension Protection Act of 2006 are likely to complicate matters by forcing companies to spend cash to shore up their plans.

“If your pension plan was invested mainly in equities and equities are off 20 percent, all of a sudden you have a 20 percent shortfall,” William Hernandez, chief financial officer of paint maker PPG Industries Inc , told Reuters in an interview earlier this month.

“It is going to…

Public pension funds are some of the biggest casualties of this market slump. The New York state pension fund has lost 20% of its value since April. This is more bad news for baby boomers, says Bill Bonner. This generation is already “woefully ill-prepared for retirement” and could end up causing the “fiscal meltdown of this nation”.