After the Storm, the Little Nest Eggs That Couldn't

A decade ago, Jonnie Worth had her eyes on retiring at age 62. Year after year, she funneled money into her 401(k), first when she worked as an event planner and later when she worked in the private banking department at JPMorgan Chase. But the financial crisis of 2008 swamped Ms. Worth. “Like everyone else, I watched my retirement savings plummet,” she said. “I lost a big percentage of my investments.”

Now 65, Ms. Worth is still working full time; her hopes of retiring at 62 sank along with the 2008 stock market. She does client liaison work for a financial planning firm in Fort Worth, and she still conscientiously puts aside money each month for retirement.

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“Nobody else is going to do it for you,” she said. As for how much longer she plans to work, she said, “I would say at least five years, maybe longer.”

This wasn’t how it was supposed to be.

In many ways, things are looking up for America’s economy. After several years of roller-coaster-ish volatility, the Dow Jones Industrial Average [.DJI  Loading...      ()   ] has climbed to its highest level since the 2008 financial crisis. Economic growth, though not robust, has been gathering steam, and the unemployment rate has been inching downward, although fitfully.

While economic experts voice guarded optimism about the overall picture, many experts are highly pessimistic about the part of the tableau involving retirement — specifically how well (or not well) Americans are preparing for it.

The Center for Retirement Research at Boston College — the nation’s leading research group on this issue — estimates that 51 percent of households are at risk of not having enough to maintain their living standards after retirement.

A New York Times/CBS News poll in October found 63 percent of Americans said they did not think they would have enough money to live comfortably when they reached retirement age. And a recent Gallup poll found that 66 percent of Americans said their top financial concern was not having enough money for retirement.

“There’s a crisis situation because near-retirees lost 25 percent of their assets in the financial crisis,” said Teresa Ghilarducci, a retirement expert at the New School. “It looks like most middle-class Americans will become poor or near-poor retirees.”

Whether one is 30, 40, 50 or 60, there are two routes to being adequately prepared: saving enough in the years before retirement (which means many people should be saving considerably more than they are) or pushing back the year of retirement.

“We encourage people to work an extra year or two before retiring because every year you work is in essence a twofer,” said David Certner, the legislative policy director for AARP. “It means one more year in building up your pension or 401(k) and one less year withdrawing money to live on in retirement.”

Hurt by the downturn and worried that they have saved too little for retirement, many older Americans are working longer — 18 percent of Americans 65 and over are in the labor force, up from 13 percent a decade ago, translating into an increase of three million workers in that age group.

As for saving money, if someone begins saving $10,000 a year for retirement at age 35, that can easily turn into an impressive nest egg of more than $500,000 by age 65, thanks to compounded investment returns. But if one does not begin saving until age 50 and then sets aside $5,000 a year, that could mean a nest egg of less than $100,000, far less than many experts say is needed. According to the Federal Reserve’s most recent figures, the median family 55 to 64 had $98,000 in retirement accounts.

Worried about all the inadequate savings, George Papadopoulos, a financial planner in Novi, Mich., has a maxim. “I tell everybody I talk to — the earlier, the more, the better,” he said. “The earlier you can save and the more you can save and invest, the better the options you will have in life and in retirement.”

There is plenty of reason for all the retirement anxiety. Like Jonnie Worth, many Americans lost tens of thousands, even hundreds of thousands of dollars, when the markets and their 401(k)’s swooned in 2008 — all told, 401(k) plans lost $2.8 trillion in value. Thirty-six percent of American workers age 55 to 64 say they have less than $25,000 in retirement savings, according to a survey by the Employee Benefit Research Institute. (The number is 52 percent for workers age 45 to 54.)

Rock-bottom interest rates have squeezed older Americans who rely on interest from their bond or retirement accounts, and many companies, viewing them as too costly, have eliminated or frozen the traditional pensions that guarantee retirees a solid monthly stipend. Today only 17 percent of workers have such defined-benefit pensions, while 39 percent have 401(k)’s; some in those two groups have both, but an unfortunate 53 percent of all workers have neither.

Housing prices have not recovered from their tumble, making it harder to take sizable sums out of one’s home to help finance retirement — either by selling one’s house or through a reverse mortgage. On top of all this, Washington is awash with talk about scaling back Social Security benefits, even though about a third of America’s retirees receive at least 90 percent of their income from Social Security. “Half the population looks in pretty good shape, and the other half, I don’t know how they’re going to make it financially if they retire at 66 or 67,” said Jack VanDerhei, research director for the Employee Benefit Research Institute.

Alicia H. Munnell, director of the Boston College research center on retirement, said there was a simple reason so many Americans were unprepared.

“We as a nation have institutionalized too low a savings rate,” she said. “Retirement is really expensive. We need to budget a higher percent of our income to it than we are.”

Many Americans, she noted, retire at 65 naïvely thinking they can live comfortably just on Social Security and the $100,000 or so they have in a 401(k). If these people follow the advice of financial planners, she said, they will draw 4 percent each year from their 401(k)’s, translating to $4,000 a year. When that is added to the average amount retirees receive in Social Security — $14,700 a year — it translates to $18,700 a year or just over $1,550 a month (or around $33,000 for a couple when both receive benefits).

“That’s not a lot,” Ms. Munnell said. She warned that many Americans could slide into poverty in retirement because their nest eggs were so small.

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Kid Rock rocks out for Romney after secret meeting

ROYAL OAK, Mich. - It had all the fixings of a Mitt Romney rally, and then Kid Rock hit the stage.

On the eve of the Michigan primary, musician Kid Rock sang a live version of "Born Free," the official campaign song of the Romney campaign and a song that, until tonight, has only been heard in its recorded version, blaring through speakers at events from New Hampshire to Iowa to South Carolina, and everywhere in between.

"The other day I got in my car and I drove out to a home of a fellow that lives in this area, and I asked him whether he might come here tonight," said Romney, standing on a stage at the Royal Oak Music Theatre, surrounded by subwoofers and a drum set, the replica of the debt clock he so often uses to tout his economic dexterity was nowhere to be seen.

"I think you know him pretty well. He's a native son of Detroit, loves Michigan, loves Detroit. He's recently made quite a commitment - he said he's going to raise a million dollars for (the) Detroit symphony. He put a piece of paper in front of me. He'd written down some questions for me. He said first of all, he said, 'Mitt, if you're elected president, will you help me help the state of Michigan?' And I said I would," said Romney, teasing Kid Rock's performance that had only been described as a "surprise musical guest" in campaign advisories.

The odd couple - Romney a squeaky clean family man who obeys the pillars of his Mormon faith,  and Kid Rock, a Hollywood bad boy who has a sex tape and a criminal record - apparently met last week behind closed doors, when Romney went to the singer's suburban Michigan home on February 23.

The meeting lasted for about an hour, according to a campaign aide, who described it as a "warm and friendly conversation" during which the two discussed their "similar interests," including Romney's commitment to Michigan, Detroit and the troops.  Kid Rock recently pledged to play a charity concert to raise $1 million to go toward saving the Detroit Symphony Orchestra and Romney has pledged his support of the state of Michigan again and again on the stump.

According to the aide, a representative from the Romney campaign had reached out to the musician, whose birth name is Bob Ritchie, when the Michigan campaign schedule began to finalize, requesting a live appearance after getting permission to play the audio of the song months earlier.

But Kid Rock insisted on meeting Romney in person, the aide said, a get-together that was attended by the candidate and at least one senior advisor. The day after the meeting, February 24, Kid Rock e-mailed Romney on his personal e-mail address and agreed to perform at tonight's rally.

Romney himself characterized the conversation with Kid Rock in his introduction to the singer this evening, recalling how the singer didn't agree to perform until he made some promises too.

"He said, 'If you're elected president, will you help me help the city of Detroit?' I said I would. And then I turned to him, and I said, 'By the way, given the fact that I'm willing to do those things, will you come here and perform a concert tonight for my friends, and he said he would," said Romney. "So I'm happy to introduce a son of Detroit, a friend, a guy who makes great music, who introduces me by DVD everywhere I go - Kid Rock!"

As Kid Rock belted out the lyrics to "Born Free," Romney and his wife Ann stood and listened, tapping their feet, clapping and whistling in support.

Jumping back on stage after the song, Romney shook hands with Kid Rock and the musician kissed Ann on the cheek, the trio exchanging pleasantries as the crowd of hundreds cheered and the rest of the band began to put their electric guitars back in cases, readying to jump on the road for their next gig - -scheduled in a few days in Texas.

Turning to address the crowd for one more time before polls open tomorrow morning, Romney's microphone wasn't turned on, forcing him - after some coaxing from Ann - to take Kid Rock's microphone.

"Not to be confused with the real artist," Romney quipped. "Thanks, you guys. It's great for you to be here. I appreciate it so much. Thanks to Kid Rock. Thank you to Kid Rock and to his band. These guys did a great job. Real kind of them."

"You guys, thank you so very much. We love you. Thank you. Have a great night. See you tomorrow, and a big victory."

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Gujarat riots: BBC journalist recounts horror 10 years after

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28 February 2012 Last updated at 01:27 GMT BBC Hindi correspondent Rehan Fazal arrived in Gujarat on 28 February 2002, to cover religious riots that had broken out after a train carrying Hindu pilgrims the day before was set on fire, killing dozens. More than 1,000 people, mostly Muslims, died in the outbreak of violence, one of the worst since Independence.

Ten years later, he recounts the horrors of reporting the riots as a Muslim journalist.

My memory of those days has not dimmed.

I arrived in Ahmedabad, Gujarat's main city, at around 08:00 on 28 February. Disturbances had not yet broken out, but I could see people milling around, protesting at busy intersections.

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Should I move further on an unpredictable journey in this volatile environment, or return to what I believed was the safety of Ahmedabad?”

End Quote As my driver and I travelled around the city, I could see a 200-strong crowd, carrying burning torches. They were shouting slogans and stopping vehicles. The moment our car stopped, it was surrounded by about 50 people.

I tried to talk to them but my driver signalled that I should keep quiet. He tried to reason with them in Gujarati - that we were from the BBC, on our way to Godhra, the station where the 59 Hindus were charred to death, to report on the deaths.

After plenty of persuasion, we were allowed to proceed. The situation was no different at Dakor where we were stopped by the police. They flatly refused to let us go further. My driver reversed the car and took a detour to Godhra.

Soon, we hit Balasinor, where we were stopped by another angry crowd. The moment the vehicle stopped, some of them charged towards me.

"Show us your identity card!" As the order was barked, from the corner of my eye I could see a man being dragged out of another car and stabbed repeatedly. He was lying in a pool of blood on the road, trying to cover his stomach with his hands.

Again, the cry came: "Where is your identity card?"

I hesitatingly took out my card - printed in English - and held it up to his face, covering my Muslim name with my thumb. Would I be subjected to the same treatment which I had just witnessed? Would I become another statistic in the scores of communal incidents that India had witnessed?

Stay or go?

One of the men in the crowd glared at me and gave my identity card a second look. Suddenly, an argument broke out among my tormenters. One of them got into my car and ordered me to record an interview. He gave me a long lecture on why Muslims were such a despicable lot.

Finally, the man got out of the car and removed the burning tyres blocking our path. To my absolute and total relief, we were allowed to move forward. It was a close shave for me. Drenched in sweat, I thanked my stars that I was still alive.

The outbreak of violence was one of the worst since India's independence

I was in two minds. Should I move further on an unpredictable journey in this volatile environment, or return to what I believed was the safety of Ahmedabad? My journalistic instincts prompted me to move on.

We eventually reached the spot where the train was attacked. Only some police personnel were around. Stones were strewn all over the place. A policeman asked me to leave immediately.

I met senior police official Raju Bhargava, who gave me the police account of how the trouble had started at 07:43 when the Sabarmati Express rolled in four hours late to Godhra station. He told me that the culprits had been arrested and the situation was under control.

My driver and I decided to return to Ahmedabad. I had planned to spend the night in Godhra but my driver prevailed upon me to return to Ahmedabad as things were bound to get worse.

About 10km into our journey, I saw a mob setting fire to some houses. I asked my driver to accelerate, but to my dismay, we discovered we had a flat tyre. It was replaced, but we then had another flat; we were standing in the middle of nowhere with no spare tyre.

My driver decided to knock at the door of a nearby house. He persuaded the people who opened the door to lend him their scooter so that he could get the flat tyre repaired.

As I sat alone in the car, waiting for the driver to return, I saw a mob heading towards our car. I quickly put my identity card, credit card and all my business cards under the carpet of the car.

By sheer chance my wife's credit card was in my wallet. I clasped it in my hand.

A man wearing a yellow headband asked me if I was a Muslim. I waved my hand in the negative. He asked for my identity card. I flashed my wife's credit card, which bore her name, Ritu. He misread it as Ritik and shouted to the mob, "His name is Ritik! Let him go!"

We soon resumed our journey towards Ahmedabad, not knowing then that the city had been hit by spiralling violence.

Not only did I survive Ahmedabad, but I managed to return to my family in Delhi without a scratch.

Ten long years have passed since I reported on the murderous riots in Gujarat. Even as I continue to count my blessings, my mind wanders to the pain and suffering of those who were not as lucky as me.

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Bachchan back home after surgery

24 February 2012 Last updated at 05:43 GMT Bachchan has suffered several abdominal complaints in the past Bollywood legend Amitabh Bachchan, who had successful abdominal surgery recently, has been discharged from hospital and is recovering at home.

"Am back home in familiar surroundings, gently taking in all that now engulfs me," the actor wrote on his blog.

The 69-year-old actor, who has a history of abdominal ailments, was operated on in the western city of Mumbai on 11 February.

He has acted in more than 180 films and remains India's most popular actor.

"Home. A joy to be back in familiar surroundings... thank you all for your blessings and prayers... I made it again," Bachchan posted on the micro-blogging site Twitter on Friday morning.

'Discomfort'

On his blog, he wrote: "The surgery discomfort and soreness persists, but will take a while to finally erase itself from the pain glands.

"God's grace and prayers of the extended family have put me back on track again."

The actor complained that journalists had "blocked his car not allowing it to move, insensitive to need of ailing occupant to get securely home".

After the surgery at Seven Hills Hospital nearly two weeks ago, his family said it had gone well and "everything was normal".

But after he complained of acute abdominal pain, his stay at the hospital was extended amid reports of another operation.

Bachchan had surgery for an intestinal condition at the same hospital in 2005. Three years later, he was admitted to a hospital with abdominal pains.

The actor suffered a near fatal injury during the shooting of an action scene on the set of a film in 1982 and was critically ill for several months.

Last year Bachchan returned as the celebrity host of Kaun Banega Crorepati, the Indian version of Who Wants to be a Millionaire - one of the most watched shows on Indian television.

He is also to make his Hollywood debut in a new film adaptation of The Great Gatsby, starring Leonardo DiCaprio, due to be released late this year.

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RBS Records $1.2 Billion Loss After Greece Charges

Royal Bank of Scotland, the state-backed British bank, recorded a pre-tax loss of 766 million pounds ($1.2 billion) for 2011 Thursday, but said it would continue to pay bonuses.

The Royal Bank of Scotland Headquarters

The bank, which is 82 percent owned by UK taxpayers, was hit by charges of 850 million pounds for the payment protection insurance scandal in which it mis-sold insurance. It took another 1.1 billion pounds in charges over its exposure to Greece debt.

The loss is less than the 1.2 billion pounds forecast by Deutsche Bank. Its core Tier 1 ratio was 10.6 percent, indicating that it should not need to raise more money to meet new European banking regulations. Operating profit for 2011 was 1.9 billion pounds, up 11 percent from 2010.

Chief Executive Stephen Hester, who decided to turn down his bonus last month after pressure from politicians and the public, was parachuted in to the bank in 2008 after it was part-nationalized.

Since then, 34,000 jobs have been cut and the bank has been refocused on retail banking.

Investment bankers were still paid 2.45 billion pounds in 2011 – down 9 percent from the previous year.

The total "variable compensation" awarded to investment banking employees in 2011 was 390 million pounds, down 58 percent from 2010. This represented around 23,000 pounds per employee in the investment bank. Total "variable compensation" for the bank's workers was 785 million pounds, down 43 percent from the previous year.

Many of RBS' [RBS-LN  Loading...      ()   ] problems are ascribed to rapid expansion under Sir Fred Goodwin, who left the bank in 2008. The purchase of ABN Amro at the height of the market in 2007 is often cited as the key to RBS’s poor subsequent performance.

Barclays has also slashed its bonus pool to around 1.5 billion pounds for its investment bank, although the size of Chief Executive Bob Diamond’s remuneration package has not been announced.

Antonio Horto-Osario, Hester’s counterpart at Lloyds, has announced he won’t take a bonus this year.

Hester said: “We have three jobs at RBS - to support our customers, to defuse our legacy risks and to rebuild a successful profitable bank. In 2011 we showed results across all three goals, though with much still to do.”

Philip Hampton, chairman of RBS, said: “The job of rebuilding the Group is far from complete. The need to address the legacy of losses in a number of businesses means that the Group is not yet profitable.”

He added: “I understand people's anger and anxiety about inequalities in pay at a time when the economy is weak and many people are finding things tough. RBS alone cannot fix these wider issues if we are to achieve what is asked of us commercially. But we have led the way in changing how we pay our people.”

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J&J CEO to Step Down After Product Recalls

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