Why an early start to retirement savings is critical

If you want to retire comfortably, the amount you need to put aside each month gets more and more daunting the longer you wait

I get a lot of emails from people in their forties and fifties who are suddenly panicking about their retirement savings. Often, they don?t have any or they have very little, yet they still want to retire at age 65.

Skip to next paragraph Trent Hamm

The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. Our busy lives are crazy enough without having to compare five hundred mutual funds ? we just want simple ways to manage our finances and save a little money.

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At the same time, I also get emails from people in their twenties who are already saving diligently for retirement. What they want to know is how much they actually need to save so that they, too, can retire at age 65.

The people in the first group obviously spent a big chunk of their adult life not having to save for retirement. This gave them more flexibility with their money in their twenties and thirties than people who were already saving for retirement.

On the other hand, people who start saving early don?t have to save as much overall as people who start later on.

So, which approach is better? Let?s look at the two cases.

Let?s say you?re 20 years old right now. You want to have $2 million set aside for retirement at age 65 and, magically, there?s an index fund out there that will return 7% a year (I?m using this index fund as a convenience, basing the 7% on what Warren Buffett suggests is a good number to use for average stock market returns going forward).

If you start investing at age 20, you?ll need to put aside about $510 a month to reach this goal.

If you start at age 25, you?ll need to set aside about $725 a month to reach this goal, but you don?t have to save anything from ages 20 to 25.

If you start at age 30, you?ll need to set aside about $1,050 a month to reach this goal, but you don?t have to save anything from ages 20 to 30.

If you start at age 35, you?ll need to set aside about $1,530 a month to reach this goal, but you don?t have to save anything from ages 20 to 35.

If you start at age 40, you?ll need to set aside about $2,270 a month to reach this goal, but you don?t have to save anything from ages 20 to 40.

If you start at age 45, you?ll need to set aside about $3,480 a month to reach this goal, but you don?t have to save anything from ages 20 to 45.

If you start at age 50, you?ll need to set aside about $5,600 a month to reach this goal, but you don?t have to save anything from ages 20 to 50.

As you read through those previous sentences, you probably thought that the amounts early on were quite manageable, but when you got to age 50, you?re likely thinking that it?s bordering on impossible.

That?s the lesson here. You can forego the early retirement savings, but catching up later on can be incredibly punishing and the longer you wait, the more punishing it gets.

Thus, my advice is to start saving for retirement right now, no matter what age you are. Even if you can?t save very much, start by saving something. If you?re not saving, you need to be doing something else that?s financially urgent with your money.

For example, if you just save $100 per month starting at age 20 in the above retirement account, increase it to $200 a month at age 30, $300 a month at age 40, $400 a month at age 50, and $500 a month at age 60, you?ll have $720,000 saved for retirement. Double each of those numbers and you?re getting close to where you need to be.

Start saving now, even if it?s just a little bit. Don?t burden your future self with crippling amounts of retirement savings or employment until the very end of your life.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on www.thesimpledollar.com.

Source: http://rss.csmonitor.com/~r/feeds/csm/~3/mX_WuQ2ZrfA/Why-an-early-start-to-retirement-savings-is-critical

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Singer Andy Williams reveals he has cancer: CNN (Reuters)

LOS ANGELES (Reuters) ? Veteran singer Andy Williams, a 1960s television variety show star best known for his rendition of the ballad "Moon River," was reported on Sunday to have been diagnosed with bladder cancer.

CNN said the 83-year-old entertainer broke the news to a live concert audience at his Moon River Theater in Branson, Missouri, during a Saturday performance of his "2011 Andy Williams Christmas Show."

"I do have cancer of the bladder," CNN quoted Williams as telling his fans. "But that is no longer a death sentence. People with cancer are getting through this thing."

The theater's website made no specific mention of Williams' diagnosis but says that "due to health reasons Andy may not make a live appearance in his Christmas Show."

Calls to Moon River Theater management were not immediately returned.

The 2,000-seat dinner theater is named after Williams' signature song, written by Johnny Mercer and Henry Mancini for the movie "Breakfast at Tiffany's."

It became Williams' own theme after he sang it at the Academy Awards ceremony in 1962, the same year he began hosting his own regular weekly TV variety show on NBC.

Known for a smooth vocal style, he also recorded hits with "Days of Wine and Roses," "The Shadow of Your Smile," "Can't Get Used to Losing You," "Solitaire," "Music to Watch Girls By," "Can't Take My Eyes Off of You" and the theme from the 1970 movie hit "Love Story."

A close friend of the Kennedy family, Williams sang "The Battle Hymn of the Republic" at the funeral of Robert F. Kennedy after the New York senator was assassinated during the 1968 presidential campaign.

He also sang at the funeral of Kennedy's son, Michael, who was killed in a 1998 skiing accident.

In 1999, a polyp was discovered on his vocal chords. Resisting surgery, Williams chose instead to rest his voice with no singing and little talking for 10 months until the polyp went away on its own. At that time, he was forced to cancel tours of the United States and Britain and more than 100 shows at the Moon river Theater.

He has been appearing there on a regular basis since 1992, typically performing two shows a day, six days a week for nine months a year.

(Reporting by Sheri Linden; Editing by Steve Gorman and Peter Bohan)

Source: http://us.rd.yahoo.com/dailynews/rss/cancer/*http%3A//news.yahoo.com/s/nm/20111106/en_nm/us_andywilliams

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Hrithik finds an admirer in Yash Chopra

Ever since the promos of Karan Johar?s remake of the 1990 hit ?Agneepath? went on air, it is basking in the spotlight of fame and popularity. Not just the audiences but even the critics are showering praises on the film. Hrithik Roshan is essaying the role of Vijay Deenanath Chauhan (originally played by legendry actor [...]

Source: http://feedproxy.google.com/~r/newslatest/~3/fSVzvGzHyY4/4120.html

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Studies Suggest Link Between Smog, Joint Disease (HealthDay)

SATURDAY, Nov. 5 (HealthDay News) -- Exposure to certain types of air pollution is associated with an increased risk for the painful joint disease known as rheumatoid arthritis, new research suggests.

This link is strongest for sulfur dioxide, one of the six most common air pollutants in the United States, according to the findings from two studies scheduled to be presented Wednesday at the American College of Rheumatology annual meeting, in Chicago.

In the studies, investigators looked at 2,092 rheumatoid arthritis patients and more than 93,000 people without the disease in the United States and Sweden, and used their home addresses to estimate their long-term exposure to several common air pollutants, both gaseous (for example, carbon monoxide, sulfur dioxide and nitrogen dioxide) and particulate (soot or dust).

There was no evidence of increased risk of rheumatoid arthritis associated with particulate air pollution. But increasing exposure to sulfur dioxide and oxides of nitrogen in the 10 and 20 years prior to onset of rheumatoid arthritis was associated with increased risk of the disease among the Swedish participants, the investigators found.

Low-, medium- and high-exposure to sulfur dioxide, nitrogen dioxide or nitrogen oxide were associated with an up to 7 percent, 11 percent and 7 percent increased risk for rheumatoid arthritis, respectively, according to the Swedish study.

These increased risks of rheumatoid arthritis were higher in people with less than a university education than in those with at least a university education. Education levels are a measure of socioeconomic status.

People "with a lower socioeconomic status are more likely to live in houses where more air pollution leaks in from the outside or other factors such as general health status that may make them more susceptible to the effects of air pollution," Dr. Jaime Hart, an instructor in medicine at Brigham and Women's Hospital in Boston, said in an American College of Rheumatology news release.

Hart was lead investigator of the U.S. study and was scheduled to present the U.S. and Swedish findings at the meeting.

The U.S. study found that only exposure to sulfur dioxide was associated with modest increases in rheumatoid arthritis risk. Those with a high exposure to sulfur dioxide had a 5 percent greater risk of rheumatoid arthritis than those with low exposure.

But Hart noted that the U.S. participants were part of the Nurses' Health Study, which meant they may have had a higher overall socioeconomic status than the Swedish participants.

Study data and conclusions presented at medical meetings should be viewed as preliminary until published in a peer-reviewed journal.

About 1.3 million Americans have rheumatoid arthritis, which typically affects women twice as often as men. Previous research has suggested a connection between environmental factors and rheumatoid arthritis.

More information

The American Academy of Family Physicians has more about rheumatoid arthritis.

Source: http://us.rd.yahoo.com/dailynews/rss/science/*http%3A//news.yahoo.com/s/hsn/20111106/hl_hsn/studiessuggestlinkbetweensmogjointdisease

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Starbucks profit up despite economic jitters (Reuters)

(Reuters) ? Starbucks Corp's (SBUX.O) quarterly profit rose after the summer's economic jitters failed to dilute the coffee buying habits of the world's largest coffee chain's customers.

The stock, which closed at $41.40, rose 2.8 percent to $42.56 in after-hours trade.

Fourth-quarter net income hit $358.5 million, or 47 cents per share, including gains of 10 cents per share, the company said Thursday. In the year-earlier quarter, Starbucks made a profit of $278.9 million, or 37 cents per share.

Total revenue rose almost 7 percent to $3.03 billion for the quarter ended Oct 2.

Global sales at cafes open at least 13 months jumped 9 percent, better than the 6.5 percent gain analysts, on average, had expected according to Thomson Reuters data.

U.S. same-restaurant sales were up 10 percent.

(Reporting by Lisa Baertlein; Editing by Richard Chang)

Source: http://us.rd.yahoo.com/dailynews/rss/earnings/*http%3A//news.yahoo.com/s/nm/20111103/bs_nm/us_starbucks

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10 Ways to Destroy Your Portfolio ? Investing Caffeine

November 5, 2011

With the rise and frequency of heightened volatility in recent years, investing has never been as difficult as it is today. However, the importance of investing has never been more crucial either, thanks to the rising, corrosive effects of inflation, and the uncertainty surrounding the sustainability of Social Security, pensions, and other retirement accounts.

If you are not losing enough money from our structurally flawed and loosely regulated financial industry that is inundated with conflicts of interest, here are 10 additional ways to destroy your investment portfolio:

#1. Watch and React to Sensationalist News Stories: Typically, strategists and pundits do a wonderful job of parroting the consensus du jour. With the advent of the internet, and 24/7 news cycles, it is difficult to not get caught up in the daily vicissitudes. However, the accuracy of the so-called media experts is no better than weather forecasters? accuracy in predicting the weather three Saturdays from now at 10:23 a.m. Investors would be better served by listening to and learning from successful, seasoned veterans (see Investing Caffeine Profiles).

#2. Invest for the Short-Term and Attempt Market Timing: Investing is a marathon, and not a sprint, yet countless investors have the arrogance to believe they can time the market. A few get lucky and time the proper entry point, but the same investors often fail to time the appropriate exit point. The process works similarly in reverse, which hammers home the idea that you can be 200% wrong when you are constantly switching your portfolio positions.

#3. Blindly Invest Without Knowing Fees: Like a dripping faucet, fees, transaction costs, taxes, and other charges may not be noticeable in the short-run, but combined, these portfolio expenses can be devastating in the long-run. Whether you or your broker/advisor knowingly or unknowingly is churning your account, the practice should be immediately halted. Passive investment products and strategies like ETFs (Exchange Traded Funds), index funds, and low turnover (long time horizon / tax-efficient) investing strategies are the way to go for investors.

#4. Use Technical Analysis as a Primary Strategy: Warren Buffett openly recognizes the problem with technical analysis as evidenced by his statement, ?I realized technical analysis didn?t work when I turned the charts upside down and didn?t get a different answer.? Legendary fund manager Peter Lynch adds, ?Charts are great for predicting the past.? Most indicators are about as helpful as astrology, but in rare instances some facets can serve as a useful device (like a Lob Wedge in golf).

#5. Panic-Sell out of Fear & Panic-Buy out of Greed: Emotions can devastate portfolio returns?when investors? trading activity follows the herd in good times and bad. As the old saying goes, ?The herd is lead to the slaughterhouse.? Gary Helms rightly identifies the role that overconfidence plays when ininvesting when he states,?If you have a great thought and write it down, it will look stupid 10 hours later.? The best investment returns are earned by traveling down the less followed path. Or as Rob Arnott describes, ?In investing, what is comfortable is rarely profitable.? Get a broad range of opinions and continually test your investment thesis to make sure peer pressure is not driving key investment decisions.

#6. Ignore Valuation and Yield: Valuation is like good pitching in baseball?very important. Successful investors think about valuation similarly to skilled sports handicappers. Steven Crist summed it up beautifully when he said, ?There are no ?good? or ?bad? horses, just correctly or incorrectly priced ones.? The same principle applies to investments. Dividends and yields should not be overlooked ? these elements are an essential part of an investor?s long-run total return.

#7. Buy and Forget: ?Buy-and-hold? is good for stocks that go up in price, and bad for stocks that go flat or decline in value. Wow, how deeply profound. As I have written in the past, there are always reasons of why you should not invest for the long-term and instead sell your position, such as: 1) new competition; 2) cost pressures; 3) slowing growth; 4) management change; 5) excessive valuation; 6) change in industry regulation; 7) slowing economy; 8 ) loss of market share; 9) product obsolescence; 10) etc, etc, etc. You get the idea.

#8. Over-Concentrate Your Portfolio: If you own a top-heavy portfolio with large weightings, sleeping at night can be challenging, and also force average investors to make bad decisions at the wrong times (i.e., buy high and sell low). While over-concentration can be risky, over-diversification can eat away at performance as well ? owning a 100 different mutual funds is costly and inefficient.

#9. Stuff Money Under Your Mattress: With interest rates at the lowest levels in more than half a century, stuffing money under the mattress in the form of CDs (Certificates of Deposit), money market accounts, and low-yielding Treasuries that are earning next to nothing is counter-productive for many investors. Compounding this problem is inflation, a silent killer that will quietly disintegrate your hard earned investment portfolio. In other words, a penny saved inefficiently will depreciate rapidly.

#10. Forget Your Mistakes: Investing is a very challenging game, and it is not getting any easier. As Albert Einstein said, ?Insanity is doing the same thing, over and over again, but expecting different results.? Mistakes will be made and it behooves?investors to document them and learn from them. Brushing your mistakes under the carpet may make you temporarily feel better emotionally, but does nothing to help your returns.

As the year?approaches a close, do yourself a favor and evaluate whether you are committing any of these damaging habits. Investing is tough enough already, without adding further ways of destroying your portfolio.

Wade W. Slome, CFA, CFP?

Plan. Invest. Prosper.

www.Sidoxia.com

DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients own certain exchange traded funds, but at the time of publishing SCM had no direct position in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC ?Contact? page.

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Entry filed under: Education. Tags: buy and hold, Einstein, ETFs, fees, index funds, market timing, media investing, Peter Lynch, Rob Arnott, transaction costs, valuation, Warren Buffett.

Source: http://investingcaffeine.com/2011/11/05/10-ways-to-destroy-your-portfolio/

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China Is Now a Lot Closer to Creating a Space Station and Reaching the Moon [Video]

Today, China is a lot closer to completing their suborbital space station plans: the unmanned Shenzhou 8 spacecraft has automatically rendezvoused and docked with the space lab Tiangong-1. It's the third space agency ever to achieve achieve this feat. More »

Source: http://feeds.gawker.com/~r/gizmodo/full/~3/-dRa95cfMOA/china-is-now-a-lot-closer-to-creating-a-space-station-and-reaching-the-moon

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