Hang on, it's the only nest egg you've got

You've got three choices about what to do with your retirement plan money when you leave a job. And even though the recession supposedly is over, more of us may be making those choices, according to forecaster Nouriel Roubini, who has been distressingly accurate before.

Basically you can cash in part or all of the plan; leave it with your employer until you retire, even if you no longer work there, or roll it into an IRA of your own where you can tend your investments personally.

Financial advisers generally agree the first choice is the worst choice for most of us, because of the huge tax bite and potential penalties that may be triggered when you cash out too soon. They are more divided about the other two choices.

Hewitt Associate's Pam Hess is among a minority of financial advisers who find good things about leaving the money where it is. It's simple and your plan's investment managers probably know more than you (you hope) about investing as profitably as possible.

More advisers favor rolling the money into an IRA, as CNN's Walter Updegrave reports. It's easier to track and you've got more investment choices. Having more choices is important, because traditional 401(k)s often aren't cutting it anymore, say executives such as Putnam Investments chief executive Robert Reynolds.

Insurers such as Prudential have been imagining some of the changes savers need and are coming up with suggestions that would have been startling just a few years ago. Recently insurance giant Metlife and Fidelity, the nation's largest mutual fund company announced a plan to include annuities in mutual fund retirement plans.

Annuities sound complicated to many people. And we've all heard, or in my case, written horror stories about high costs and other jams investors have gotten into. But in many cases, annuities are getting second looks because lifetime incomes sound reassuring right now.

Freefalling into an unplanned retirement

Finding new jobs these days is tougher than it used to be, AP's Jeannine Aversa reports. But so is one of the alternatives - being forced into an unplanned early retirement. Among the nation's younger than 65-year-olds, anywhere from two to six times more workers are taking that route out of the job market than planned to, the Employee Benefit Research Institute found last spring.

Leaving the workforce sooner than you planned is never easy. You worry more about money, EBRI researchers report. Duh. But a small slew of surveys released in the last few weeks suggests more of us have good reason to worry. MetLife reports that more of us really are trying to live within our means these days. But a good three fourths of us aren't succeeding, says Wells Fargo.

But not saving enough money is only one of three reasons why retiring prematurely fails. Investing your savings unwisely or underestimating what retirement living really costs will sandbag you too. There aren't many roadmaps, I discovered last spring. Basically, you look at your resources and try to use them creatively. Or, you try to find a job, as Newsweek's Linda Stern found more 60-somethings are doing. Some 72 percent of the nation's retirees are planning that now, EBRI calculates, up from 66 percent a year ago.

Head 'em up, Social Security, and move'em out.

Look for some new free financial planning help from the Social Security Administration in the future. The agency, along with Boston College and the University of Wisconsin, are forming a $5 million Financial Literacy Research Consortium to help us plan more effectively for our retirements.

I wish they'd spent the money on cattle prods. Inertia remains a problem that investors around the world struggle with, reports a recent Harris Poll. Meantime, groups like America Saves, 360 Degrees of Financial Literacy and the National Endowment for Financial Education already provide tons of top rate information for free.

Much of their advice boils down to two principles anyway. Think through what you want before you act, but act. And be conservative. Presume retirement will last longer and take more money than you imagine now.

Five million dollars isn't a lot of money by Washington standards. But it's pretty impressive compared to the Social Security benefits many of us will get.

Falling inflation has some hidden traps too

Lord knows I don't miss $4 gas.

But the latest round of flat and falling consumer prices reported by the government may hold some perils for the unwary too.

Near-zero inflation means Social Security beneficiaries won't get cost-of-living increases for the next couple years, for the first time since COLA adjustments became automatic in 1975. Some Medicare prescription insurance premiums will rise, however, so some retirees will take a pay cut. The big question, outlined as clearly as I've ever seen by Felice Baker at Northwestern U.'s Medill Washington Project, is whether lower prices for other stuff will outweigh the higher premiums.

Your ability to put extra money in your 401(k) may be crimped too. Just as workers are feeling secure enough for the first time in nearly a year to increase contributions instead of cutting them, federal inflation adjusting formulas point to a $500 cut in maximum contributions, to $16,000. That won't make much difference to many workers, who only put maybe $4,000 or $5,000 a year into their plans. IRS is expected to announce Oct. 15 whether it will cut the limit or simply freeze it at the current $16,500.

And think about low inflation now when you next fill out your federal and state income tax returns. Senior economist Gerald Prante of the Tax Foundation says the current year-over-year monthly average 0.19 percent uptick in the Consumer Price Index effectively freezes personal exemptions, standard deductions, how much you can itemize, tax bracket boundaries, and virtually everything else on which you base your calculations.

This follows the largest increase in nearly two decades last year. You decide if the turnaround means stability or hitting the windshield.

Keep your hands on the wheel if your retirement plan goes on autopilot

President Obama made a big change in how workers save for retirement over the Labor Day weekend.

Here are some of the details. Briefly, more employers will be offering automatic enrollments in 401(k) and other retirement plans, taxpayers get new opportunities to use tax refunds for retirement savings or to buy Savings Bonds, and some workers with unused vacation or paid sick leave can throw that money into the retirement pot too.

Automatic enrollments have been around - and generally applauded - for several years, but making them nearer to universal makes it more important for savers to watch for potential problems too. One of the advantages that employers may like, for example, is that the new rules make it potentially easier to offer smaller matching contributions and to cut back on traditional pension funding that they also might be on the hook for.

Meantime, back at the payroll window, the changes also may hurt some lower income workers that are supposed to be helped, writes USNews.com's Emily Brandon. It's tough to save for retirement if you need payday loans to buy groceries. You can unenroll from the plans if needed, but that just makes it tougher to save.

Also, while more of us might be saving money by being automatically enrolled, there is no guarantee any of us will be saving enough. We probably won't, Vanguard, the mutual fund company, found in a 2007 study. Many of us will need to increase our contributions to more than the automatic enrollment offers.

The 401(k) Help Center offers links to lots of specialized Web sites that may be helpful when the new rules kick in.

Converting your 401(k) into a pension

Old fashioned pensions look a lot more attractive after some of the damage our retirements took during the last couple years. And now some companies are looking to add some old-fashioned pension benefits to retirement plans, reports Kiplinger.com

You already can do this yourself if you've got time and can wade through some potentially eye-glazing insurance calculations. You can even do a lot of it more simply just by stopping the damage we inflict ourselves saving too little too late.

But Kiplinger outlines something informally known as a DBk plan, which is a 401(k) with a dollop of pension benefits. Employer matching would be more generous too in exchange for some streamlining that also would mean sweeter deals for upper echelon execs, writes Kiplinger's Joan Pryde.

It's too soon to tell how popular the new plans might become. But look for employers to restore some sort of improved retirement plans as soon as they can, suggests WorldAtWork.org. They value the plans as much as workers do, a new study found.

My next home buying decision gets complicated

We hired a friend to paint some trim along the roof of our house last week. I'm not as good on ladders as I was a couple decades ago and Ms. Ktnomics is not thrilled with our medical coverage since the layoff.

We expect to face such decisions more frequently as time passes. Turns out that one logical solution -moving into a maintenance free retirement or continuing care community - may be more challenging than we imagined.

Canada's Atlantic Seniors Housing Research Alliance already reports that few communities are equipped to handle hordes of first wave baby boomers that are demographically projected to start knocking soon on the front doors. That's scary because other observers believe Canada may be better prepared than we are in the Lower 48.

There is a solution. Move in early to beat the rush. Some people already are starting, Coldwell Banker, the real estate concern, found earlier this year. Not many numbers have come in yet, but retirement communities appear to be becoming some of the perkiest real estate markets around. Just as in traditional suburbs, the most economically priced properities are going fast, say data base crunchers at Clear Capital, a Truckee, Calif., information seller.

Developers already are planning some big changes in the way future retirement communities will be built. Don't count on much shuffleboard.

How to pick a good retirement community when you are still relatively young and active gets interesting too. Web sites such as HomeInsight.com and the Gilbert Guide outline hosts of things to look for, including crime rates, personal safety, the proximity of colleges or other senior-discount friendly educational and social outlets, and good medical care.

Oh, and one other thing. Look for part time job opportunities in the area too, the mavens say.
Someone apparently has to pay for all this stuff.

Are 401(k) matches coming back?

The short answer is maybe. Some new survey results reported by Financial-Planning.com show that nearly two in three employers who stopped matching workers' 401(k) contributions are planning to restore them soon.

We can use the money. Market losses and last year's reduced contributions dropped the national average 401(k) balance to a five-year-low $26,578, according to the Employee Benefits Research Institute. Losing the contributions permanently would be potentially devastating for many savers' retirements, as Shelley K. Schwartz of Bankrate.com reported recently.

Watson Wyatt consultant Laura Sejen, whose firm conducted the new survey, suggests that many of the new deals may not be as sweet as the old ones. Employers are still vague about when the cuts will be restored; some reportedly aren't even telling employees of the change just in case the economic recovery doesn't work out. And, as happened with our health plans, employers like the idea of us carrying more of the total load.

So when your employer announces its plans, be ready to push a pencil to recalculate what you need to contribute to hit your retirement goals. CNN's Jeanne Sahadi offers some guidelines to help calculate what you need to make up lost ground.

Oh, crap. Retirement looms

Ever notice how many of the kids in your high school yearbook have goofy haircuts?

I thought of that recently when I ran across a 10-year-old AARP survey of what I and my fellow first-wave baby boomers expected retirement to be like. It's a hoot. Eight in 10 of us planned to work, at least part time, after we hit 65 just to keep active and perhaps to provide breaks between some serious recreational plans.

Reality is different, of course. First, growing numbers are being pushed into retirement sooner than we planned, the Employee Benefits Research Institute recently reported. Second, many of us aren't financially ready for that shock. Our savings rates, until recently, have been abysmal. And a $6 trillion housing market meltdown threatens to leave many first wave boomers with little more than Social Security and Medicare to get by on, the Center for Economic and Policy Research calculates.

So, chances are many of us will try staying in the workforce longer, but not for the reasons we told AARP back in 1999. More of us than we imagined will be trying to pay off credit cards that we haven't yet maxed out, say pollsters at Securian Financial Group.

I already posted a few months ago how this changed the way I'm handling some of my own plans for retirement income. Now, The Motley Fool's Robert Brokamp, posting on the Get Rich Slowly site, finds that this situation may be changing the whole notion of retirement. But we've heard that before too. And the future didn't work out the way Merrill Lynch expected either.

I wonder if our haircuts now will look funny maybe 20 years from now.

Reverse mortgages -- strangling on a life line

Like many of us, I sometimes thought about using a reverse mortgage as a backs-to-the-wall post-recession defense against old age poverty. Then I did the math. Stockpiling cat food is more appealing.

That won't be true for everyone, of course. Reverse mortgages can be nifty way for homeowners who are 62 or older to pull equity out of their homes to meet living expenses. How nifty depends on their ages, the value of their homes and what other choices they have to meet their income needs. Those are different for each of us. AARP has a handy calculator to help you run your own numbers.

But if you are a 63-year-old thinking of pulling, say, $190,000 out of a modest suburban home, the numbers are not pretty. After you lop out closing costs, mortgage insurance and other fees - which can be hefty, as critics warn - what's left is either a lump sum or credit line somewhere between $55,700 and $84,920 or a monthly payment between $417 to $524. The difference depends on whether you go with a fixed rate or variable loan.

The money is tax free, which is good. But where I live the low end of my potential monthly payout barely covers property taxes and upkeep needed to get the loan in the first place. And pulling money out of your house might complicate your eligibility for Medicaid or other programs that might be more valuable.

Those are just some of many questions you need to think through before considering such a loan. Bottom line - using our homes as ATM machines didn't work out before. We don't want to get stuck in a similar jam again.

It's time to get real about retirement

Career choices get even tougher when potential early retirement is on the table too.

Older workers who get downsized often say finding new jobs is harder for them than for younger workers. But tapping your retirement savings too early is risky too, even if you are old enough to avoid some potentially hefty penalties, researchers say. Retiring before you are ready roughly triples your chances of a bleaker future, insurance giant Prudential reports.

Few of us appear to be ready. Charles Schwab finds that nearly four in 10 of us are saving nothing for retirement, which seems to be something that someone reports every year. That's not just a U.S. phenomenon either. Researchers in the United Kingdom not long ago calculate that half the savers in 23 countries aren't salting away enough money for secure old ages either.

Solutions in those countries are basically the same as here, say contributors to the British-born www.six-steps.org website. Take control. Know yourself. Save a little and often. Invest for the future. Get advice when you need it.

Things get trickier if you are pressed for time. The Ohio Patrolmen's Benevolent Association recently listed some suggested priorities for its members, whose jobs often make time horizons shorter than those of us who've worked office or assembly line jobs. You know the drill, though. Cut debt, live within your means, save for emergencies and invest for your future.

The rules change if you have no time. Borrowing may be smart - The Wall Street Journal's Brett Arends recently ran some ideas about when red ink might be your better choice. Liz Pulliam Weston at MSN Money Central offers suggestions about which bills you don't pay if you are squeezed that hard, but also writes that, financially, you can cut into the bone too if you really need to.

GM's bankruptcy makes your retirement harder too

Financial planners like to use the image of a three-legged stool when they talk about retirement planning.

The metaphor and idea behind it are simple. To live comfortably in retirement, most of us need income from three different sources: Social Security, our employer's pension plan, if there is one, and additional money that we should be saving or investing.

Now, wreckage from Detroit's imploding automakers is knocking some of the legs out from under that stool, according to contributors who've taken an in-depth look for the Financial Times of London. You don't have to be in the auto industry, or even own a Chevy, to feel the tremors.

Former U.S. Labor Secretary Robert Reich draws some strong parallels between what's happening with GM and in the rest of the economy. And you don't have to agree with his politics to wonder, as he does, what taxpayers may be be buying with our $60 billion investment.

But I think an unsigned editorial raises a more interesting idea - the U.S. has no real retirement-security plan because we've relied on our employers' pension plans to carry that load. Even Poland has a surer plan, reports Forbes.

Mending the mess is possible, but will take time and some presumably unpopular tax changes, say commentators such as Thomas Mackell Jr. at Huffingtonpost.com. We each have our own heavy lifting to do as well.

If you have time, and a job, you also have resources to deal with the most challenging problems, says the Certified Financial Planning Board of Standards. If not, there is a fourth leg under the stool too. Good luck with the job hunt.

Using retro chic savings to salvage an unplanned retirement

I already realize that some of the what seemed dumb personal finance moves I made years ago are becoming unexpected sources of some needed income now.

Now some of the rest of the world is catching up too. The Wall Street Journal, where headline writers also liked to use the word 'fusty' way back when I worked there to describe retro chic financial moves, reports a growing interest in whole life insurance policies like Grandpa bought.

Financial self-help author Pamela Yellen even incorporates some retro chic insurance investing in some of the wealth building systems she sells. You want to check out some basics about life insurance and annuities before you decide if that approach feels right for you.

Retro chic saving styles are creeping into other conversations too. Old fashioned thrift would go a long way to ease an interest, insurance and taxes jam we've worked ourselves into, writes a Motley Fool contributor.

Meantime, contributors to a Swiss-Press.com round table on what the recession is doing to casinos offer some heartening words for some of us who haven't heard many of those lately.
The most successful survivors of the current recession, they conclude, will be government workers, business owners who sell infrastructure stuff to the government, and recent retirees who learn to live with a very low overhead.

We're trying.

The old rocking chair's got me personal finance blues

I feel too young for pension payments.

But as a 60-something boomer fighting a brutal job market in an imploding news industry, I recently applied anyway. I'm thinking defensively. A lot of good financial planners I've talked with over the years generally advise rolling your 401(k) savings into an IRA and taking them with you when you leave a job.

I decided to do the same thing with a handful of old fashioned traditional pension benefits I earned back before employers switched to 401(k)s. Briefly, I'm rolling as much as I can as a lump sum into an IRA that I hope not to need for a few more years. That still leaves maybe about $800 a month in payments the plan rules won't let me roll over. I'm taking that too, even though it would be worth a bunch more if I waited another four years or so.

So, why now? Because I don't know what would happen to the money if my former employer got deeper into its financial jam and either filed bankruptcy protection or simply shut down the plan to save money.

Theoretically, many of our pensions our insured by a 35-year-old federal agency known as the Pension Benefit Guaranty Corp. They've fielded some biggies, including the Enron collapse. But the agency is currently running $11 billion in the red and we don't know how many auto workers' pensions might be coming over the hill soon.

PBGC isn't a totally reassuring deal in the best times. The agency currently pledges to protect up to $4,500 a month in traditional pension checks for covered workers. But whether you are protected depends on your plan's rules, your age, how well the plan is funded and what PBGC can recover if it needs to take over.

There's plenty of wiggle room there. And even that theoretical $4,500 a month drops quickly to below $3,000 if you are younger than 65, have a spouse who will still need money if you die.

PBGC won't protect your 401(k) savings if your employer goes broke. Another agency in the Labor Department is supposed to assure that those funds are shielded from creditors. But that can be tricky too, because if your employer goes bust, your claims for your 401(k) money get bumped way down the list of who gets paid with what's left.

So, two things to do. Talk to the people running your retirement money, find out what happens worst case, and plan accordingly. Then, if it looks really bad, remember that those new fangled plastic coffee cans that Folgers, Maxwell House and others have been switching too will hold up a lot better than the old fashioned steel cans when buried in the back yard.