The overall economic news this week was not good, either for workers or for retirees. I’m afraid that it will be some time before we start hearing better news. Many economists predict that unemployment will remain at today’s levels or get worse through 2010. In other words, if our economy is now in a “recovery” mode, it is a jobless recovery. That suggests that there is no real recovery.
A dilemma for the Fed is that it must act quickly to increase interest rates as soon as it is convinced that the economy is in recovery. Otherwise, it may lose complete control over inflation. Your retirement planning should take this into account. I may be buying some ten-year TIPS at auction on Monday as part of my preparation.
Here are a few things I read this week that you may find interesting or helpful:
If you are looking to improve your job prospects or are considering a relocation to lower your cost of living, here is a list of 50 metropolitan areas rated by the number of unemployed persons per job posting.
If you want to know how the spousal Social Security retirement benefit will be affected by claiming that benefit before full retirement age, here is a calculator that will give you the hard facts. You may recall from my earlier post on spousal Social Security benefits that the maximum spousal benefit is 50% of the other spouse’s benefit. But that 50% spousal benefit level is reached only if is is claimed at full retirement age and not earlier.
If you are a bond investor, one famous bond guru is now suggesting that dividend paying stocks have a better future than bonds. My problem with that idea is that two years ago some of the best dividend paying stocks were in financials. From that point forward, most banks cut or eliminated their dividends altogether. That caused me to lose my enthusiasm for relying on dividends for retirement income.
Do you have long term care insurance? We do and are hopeful that we can afford to keep it. Met Life has a short quiz you can take to test your knowledge about long term care needs.
If you are or will be separating from your present employment, what do you plan on doing with your 401(k) account? I recommend rolling it into an IRA which normally gives you greater investing flexibility. Kyle at Amateur Asset Allocator wrote a nice summary of IRA rollover rules.
Finally, the Money Ning blog published an excellent article focused on the important difference between wealth and retirement income. I agree. Your retirement planning should be focused on building sustainable sources of income retirement, not on how much you have invested.
Enjoy the rest of your weekend.