Month: July 2016

Retirement Roundup

Posted on by planeteria

A digest of timely information and insight about finance, investing, and retirement

Retirement security at top of wish lists for next president | Pensions & Investments

No matter who wins the White House in November, a number of experts say that the next administration will have to do more to advance retirement security. Also on their wish lists? Shore up Social Security, boost the economy and better equip the Securities and Exchange Commission.

Is this what you had in mind for retirement? Here’s what actual retirees found out | Bloomberg

A new survey by HSBC Group suggests that pre-retirees’ expectations for their future differs from the way retirees fund their spending today. Today’s pre-retirees expect to save for seven more years than current retirees did, and they are more likely than current U.S. retirees to expect future retirement income from selling property, either by downsizing or selling a primary or secondary home.

Thinking of buying your dream home for retirement? Do your homework first | Washington Post

Buying that retirement dream home is a big deal. Like everything else when it comes to retirement, it takes a lot of planning. And you’d better do research first.

Check these 7 retirement blind spots | Morningstar

Don’t limit your retirement readiness check to an assessment of your account balances and your Social Security payments. Make sure that you’re considering the whole gamut of financial-planning considerations in retirement – especially new expenses and costs that you might not have had to contend with when you were working.

No bump likely in Social Security next year | CNBC

The Board of Trustees of the Social Security Trust Funds estimates that the 2017 cost-of-living-adjustment likely will be very small to flat: from 0.7 percent down to zero. The adjustments are based on increases in the consumer price index.

This common delusion can wreck your lifestyle in retirement | MarketWatch

Many boomers think they’ll retire debt-free, but that’s not likely to be their reality. More than eight in 10 middle-income Baby Boomers – with an annual household income between $25,000 and $100,000 and less than $1 million in investable assets – now has at least some debt, according to a survey from insurance firm Bankers Life Center for a Secure Retirement. Yet many average boomers engage in the common delusion that they will retire debt-free. More than half of non-retired, middle-income boomers say they plan to retire without debt, the same survey shows.

PERA on the Issues posts are written and compiled by the staff of Colorado PERA under the direction of Executive Director Greg Smith and the PERA Board of Trustees. We encourage you to comment with your thoughts and feedback.

Research You Can Use

Posted on by planeteria

While their names might not be trendy, nor their acronyms clever, research organizations and advocacy groups provide important facts and offer perspective on the sustainability of public retirement systems in today’s topsy-turvy world. They conduct useful research related to retirement and are often quoted as sources in news stories about public pensions.

PERA staff often turn to them for credible, accurate information to help stay current on the most recent research in the pension industry. Links to timely research or to pages with important information are included in the brief descriptions below.

NIRS – National Institute on Retirement Security

July 2016: Preserving Retirement Income Security for Public Sector Employees

NASRA – National Association of State Retirement Administrators

NASRA Issue Brief, July 2016: State and Local Government Contributions to Statewide Pension Plans: FY 14

CRR – Center for Retirement Research at Boston College

July 2016: Pension Participation, Wealth, and Income, 1992-2010

SLGE – Center for State and Local Government Excellence

April 2016: 10 Things You Should Know About Public Pension Disclosure Changes

NCPERS – National Conference on Public Employee Retirement Systems

NCPERS Research Series, March 2016: Are State and Local Pension Funds Taking More Risk Now Than Before?

CPRS – Coalition to Preserve Retirement Security

February 2015: Retirement Insecurity: The Unintended Consequences of Mandatory Social Security Coverage

PERA on the Issues posts are written and compiled by the staff of Colorado PERA under the direction of Executive Director Greg Smith and the PERA Board of Trustees. We encourage you to comment with your thoughts and feedback.

Expanding to Serve You Better

Posted on by planeteria

The new Colorado PERA Lone Tree Office officially opened to serve PERA members and retirees in the south metro Denver area as business leaders, PERA Trustees and staff, and members of the Lone Tree community joined to celebrate the occasion on July 21. The South Metro Denver Chamber sponsored a ribbon cutting ceremony at the newest PERA office, located at 10457 Park Meadows Drive, Suite #102 in Lone Tree.

PERA’s expansion into the south metro Denver region offers a convenient location for nearly 22,000 members and retirees in Douglas County to meet with PERA counselors or conduct PERA business. PERA distributes over $157 million in annual benefit payment to retirees who call Douglas County home. PERA employers in the south metro region include Douglas County Schools and Charter Schools, Douglas County Libraries, the City of Castle Pines, and the City of Lone Tree.

PERA is headquartered in Denver’s Capitol Hill neighborhood and also has a north metro Denver office located at 1120 W. 122nd Avenue in Westminster. The expansion to the south metro Denver location in Lone Tree allows PERA to better serve members along the southern Interstate 25 corridor.

Map and directions to the Lone Tree Office.

PERA on the Issues posts are written and compiled by the staff of Colorado PERA under the direction of Executive Director Greg Smith and the PERA Board of Trustees.
We encourage you to comment with your thoughts and feedback.

PERA Board of Trustees Remains Vigilant About Funded Status

Posted on by planeteria

In June, the Board of Trustees of Colorado PERA released the Comprehensive Annual Financial Report (CAFR). The CAFR disclosed the total PERA fund investment return from 2015, which was 1.5 percent.

“It was a very challenging year in terms of the investment markets,” noted PERA Executive Director Gregory W. Smith in the release of the CAFR. “We were able to achieve a positive return in an environment when a number of other public funds did not, which affirms PERA’s investment strategy and allows us to offer our retirees and the entire state a reliable source of economic stability,” Smith added.

Taking into account the 2015 investment return, the PERA trust fund is now 60 percent funded, meaning PERA’s current and future liabilities exceed its assets. For recent historical perspective, in 2010, PERA was threatened with insolvency and the General Assembly passed legislation to reduce benefits for members and retirees.

During the 2009 legislative session and as the significant decline in the financial markets associated with the Great Recession were recognized, the General Assembly directed the PERA Board to develop recommendations that would return the PERA trusts to long-term sustainability. Thus, the resulting 2010 legislation began as a recommendation from the Board after an extensive review and analysis process that included discussions with stakeholders throughout the state. The Board unanimously supported the reform measures of Senate Bill 10-001 – even those Board members who were directly impacted by the personal sacrifice shared by all PERA members.

The most important responsibility of PERA Trustees is to act as fiduciaries. Trustees are bound by a fiduciary obligation to act in the best interests of PERA members, retirees, and other beneficiaries, including survivors and those on disability. The changes that began in 2010 brought PERA back to solvency. Based on last year’s financial performance, it will take 44 years to reach 100 percent funding. While that is certainly a long time, PERA projections, along with independent projections performed for the Office of the State Auditor, show PERA will continue to be able to pay benefits now and into the future. Despite the continued solvency of PERA, the increased duration to reaching full funding is concerning.

The Board has just concluded two rigorous Request for Proposals (RFP) processes to select both an investment consultant and actuarial firm, making final selections in January and June, respectively. This positions the Board for in-depth analyses of the investment and actuarial assumptions that are used in assessing PERA’s financial health in the future.

The Board will share that information with members and a range of other stakeholders, including legislators who have the responsibility for setting PERA benefits and funding (the Board does not have that power). The PERA Board continues to remain open to all viable ideas that serve the members and their beneficiaries.

Learn more about the PERA Board of Trustees.

Five Steps to Be An Active Health Care Consumer

Posted on by planeteria

Seeking health care as a patient can be daunting. Questions can range from seemingly basic – how to choose a doctor, or when to ask about specific symptoms, to more complex – where to have a test or scan, or how to understand the results. This is true even if you are in great health, but if you are facing a serious illness or chronic condition, navigating your health care experience can feel truly daunting.

The best place to start is with your primary care physician. A good relationship with your doctor is about your health, but other factors like mutual trust, communication, and understanding are also at play. “The better you two get along, the more satisfying your relationship, and that’s good for your health,” writes Nissa Simon, a contributor to AARP media on health issues.

Regardless of your particular health care needs, preparing in advance before a doctor’s visit, hospital stay or even trip to the pharmacy can make your experience less frightening and more likely to feel successful. Below are five steps to be an active, rather than passive, consumer of health care.

  1. Be Prepared. Any health encounter will be easier and more productive if you are already familiar with your medical and health history. It may be helpful to have your past health records available. Writing down a few lists ahead of time is also a good idea:
    • All prescription medications you take.
    • All over-the-counter medications or nutritional supplements you take.
    • Health episodes or problems you’ve had and when they occurred (at least as best as you remember).
  2. Ask Questions. Before any appointment with a health care provider, write down a list of questions you want to ask and concerns you want to discuss. When you’re at the appointment, take notes. Always ask for clarification if there’s anything you don’t understand – and write that down, too. Questions to consider might include:
    • What are the risks and benefits of any medications that have been prescribed?
    • What are the instructions you need to follow if taking a prescribed medication?
    • If tests are recommended, what are the costs? Are there any less expensive options available?
    • For any medication or treatment, what outcomes should you expect? What side effects should you watch for, and can you avoid them?
    • If a procedure is recommended, how many of times has your provider performed it before? (Providers expect this question; don’t be embarrassed to ask.)
  3. Consider alternatives. Together with your care provider, be open to considering alternative treatment options. Is there new technology available to help in your care? If an invasive treatment or surgery is recommended, are there other options you should consider first? While seeking out additional information about symptoms or a proposed treatment can provide valuable context and offer potential alternatives to evaluate, be sure to look to reputable, objective sources of evidence-based information.
  4. Find Support. It can be helpful to have a family member or close friend accompany you to an office visit or test. Often, a companion can focus on taking notes and confirming what steps, if any, are needed for follow up, while you are paying attention to a diagnosis and asking questions. If you are diagnosed with a chronic disease or serious illness, there are many advocacy groups that offer support and can lead you to advice and guidance while also providing compassion and opportunities to connect with others experiencing similar symptoms and challenges.
  5. Seek a Second Opinion, If Needed. If you begin to feel uncomfortable or unsure about a doctor or other clinician, don’t be afraid to get a second opinion or even change providers. It is important to trust the care you are receiving and to feel comfortable with the people who are providing your care.

The Cleveland Clinic’s blog Health Essentials, on seeking a second medical opinion notes, “[I]n some cases, the opinion provided by a second physician may agree with the diagnosis and treatment identified by your physician. This can provide you with significant reassurance, peace of mind and confidence that you are making the best choice for your health.”

Having a general approach in mind for dealing with complex medical care will make any health care encounter more comfortable, and might even improve your health outcomes. The above steps are a starting point, but taking an active role to work closely with your health care team can lead to a treatment approach that is the right one for you.

Retirement Roundup: Women get shortchanged when saving for retirement

Posted on by planeteria

A digest of timely information and insight about finance, investing, and retirement.

Women get shortchanged when saving for retirement | USA Today

Planning, saving and investing for and living in retirement isn’t easy for many Americans. But it’s especially difficult for women, according to a new report published by the National Institute for Retirement Security (NIRS).

But according to Jennifer Brown, manager of research at NIRS and co-author of the report, “Shortchanged in Retirement, The Continuing Challenges to Women’s Financial Future,” a few key findings might help women improve their odds of enjoying retirement.

10 financial decisions you will regret in retirement | Kiplinger

Long before you punch out and leave behind the daily commute, there are a number of questions likely to come up as you think about how to fund your golden years. To help make the right choices for preparing for retirement, consider this list of retirement decisions you could regret forever.

Different types of retirement accounts | NerdWallet

Uncle Sam’s shorthand for the vast array of retirement options offered to working Americans can feel like alphabet soup: IRA, 401(k), SEP IRA, 457 plan, 403(b) plan, SIMPLE IRA, Solo 401(k) and the list keeps going. Offering tax breaks on retirement plans is the government’s way of enticing us to set aside money and employers to help out. A guide to some of the options for tax-advantaged retirement savings can help take some of the mystery out of so many alternatives.

3 ways to make sure your retirement isn’t boring | Time-Money

Fewer than half of retirees say they are having a very enjoyable retirement, according to a recent research brief on retirement satisfaction from the Employee Benefit Research Institute. Fortunately, there are ways you can improve your odds, especially if you’re willing to be creative, resourceful and a bit adventurous.

How investors can stay calm when the markets are going mad | Time-Money

The seismic decision by the United Kingdom to exit the European Union continues to shake up global markets, which may be tempting investors to make their own exit from the stock market. Resist the urge. If you have a well-diversified portfolio, you’re probably better off staying put. In any case, you should avoid overreacting to the fears of the moment. Four rules based on behavioral finance research may help you take a more measured view of today’s global turmoil. [Read more about the field of behavioral finance.]

What would your 90-year-old self tell you to change today? | MarketWatch

Odds are rising that you will live to be 100 years old. That reality means re-examining your financial planning for retirement, and even how you think of retirement. Perhaps the clearest way to think about this longer life is to imagine a conversation today with your 90-year-old self. What would your future self tell you to do now, whether you are in your 20s, 40s or 60s?

5 ways to overcome obstacles between you and retirement | USA Today

Americans aren’t saving enough for retirement, and there are plenty of reasons why. Many, such as low wages, high cost of living and limited access to retirement plans, are difficult to work around. But there are also small ways that we sabotage our ability to reach our retirement goals, often without realizing it. But overcoming common obstacles can significantly improve your retirement prospects.