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Prudential Warns Of Widespread Over-Reliance On State Pension

According to new research from Prudential, nearly a fifth (18%) of people planning to retire in 2010 will be retiring on the State Pension and savings.

Prudential Warns Of Widespread Over-Reliance On State Pension

But 31% of the people surveyed in Prudential’s nationwide Class of 2010 study either do not know how much the basic State Pension pays or over-estimate the individual weekly amount by £25 or more.

Prudential warns the basic State Pension alone may not provide sufficient retirement income for many and urges people who are still working to save as much as possible for their old age in company and personal pensions as well as savings and investments.

“Given that so many people expect to retire on the basic State Pension, particularly when only half know how much it pays, there is still a clear need for people to understand the consequences of not making adequate provision for their retirement,” said Martyn Bogira, Director of Defined Contribution Solutions at Prudential.

“If the basic State Pension is your only source of income you could be in an extremely precarious position financially. Just one significant financial emergency, like your central heating system unexpectedly breaking down, could cause serious financial hardship for people expecting to retire on the State Pension alone.

“On its own the basic State Pension, paying just under £5,000 a year, should only really be used to supplement other sources, such as income from a pension or an annuity.

“We would urge people to pay as much as they possibly can into their retirement savings, because the State alone is unlikely to be able to support you in your retirement. The sooner you start saving, either into a company pension, personal pension or other savings, the greater the amount of money you can build up to help provide for you when you do come to retire.”

Average expenditure in households headed by someone aged 65 to 74 was £321 a week, according to the most recent Office for National Statistics figures from 2007, and £218 a week for households headed by someone aged 75 or over, but today the basic State Pension for married couples lags behind this figure by paying £152.30 a week.

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Prudential Launches Five New Risk Rated Portfolios

Prudential is launching five new actively-managed, risk-rated, multi-asset funds designed to help advisers to focus on client management through an extension of its partnership with independent investment specialist Old Broad Street Research (OBSR).

The partnership gives advisers access to the asset allocation expertise of Prudential’s Portfolio Management Group (PMG)*, which currently manages over £100 billion of capital, and the fund selection and recommendation experience of OBSR in one place.

Prudential is launching the funds in response to demand f r o m advisers for investment solutions which can help them respond to the changes driven by the Retail Distribution Review and the ongoing focus of the Financial Service Authority’s Treating Customers Fairly (TCF) initiative. In addition, customers will benefit f r o m the choice of a wide range of funds across tax wrappers that are designed to meet the needs of identified groups and are targeted accordingly.

Crucially, the funds will be actively risk managed in line with their portfolio investment objectives and may help reduce the risk of potential TCF issues through running static portfolios.

The five portfolios – Defensive; Cautious; Cautious Growth; Balanced; and Adventurous – will be available on a range of Prudential personal pension products, income drawdown, onshore and offshore bonds. The risk ratings of each portfolio can be mapped against all the major independent risk-rating tools.

Andy Brown, Director of Investment Funds at Prudential said: “Asset allocation and fund selection are vital in ensuring that client needs and long-term investment expectations are met. However, both are potentially demanding and time-consuming.

“Advisers need cost-effective support with their investment management to address the changing regulatory environment. We are determined to address that issue and are delighted to be expanding our partnership with OBSR.”

Phil Lindsay, sales & marketing director for OBSR said: “The objective of the ‘Prudential Dynamic Portfolio’ risk rated funds is to consistently conform to specific risk profiles by utilising the strengths of Prudential’s Portfolio Management Groups’ asset allocation capabilities and OBSR’s fund research and portfolio construction skills thereby assisting intermediaries in developing solutions in line with client attitudes to risk.”

Prudential’s Portfolio Management Group will be responsible for asset allocation, determining the macro asset mix of the portfolios with the long-term aim of ensuring the portfolios conform to their stated risk objectives. They will have the flexibility to implement strategic and tactical changes within given ranges which over time will result in changes in the broad asset mix. These changes will be made to ensure the funds remain within the risk parameters set.

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Prudential Warns Of State Of Ignorance Over Retirement Age Rise

New research from Prudential shows that nearly half (47 per cent) of 45 to 49 year-olds and two-fifths (39 per cent) of 50 to 54 year-olds are unaware of the rise in the minimum retirement age from 50 to 55 which comes into effect on 6 April this year. The increase in the minimum retirement age could be a particular blow to people aged 50 to 55 who are planning to retire this year, Prudential warns.

Prudential is urging people who will be affected by the increase in minimum retirement age to speak to financial advisers and pension providers ahead of the 6 April deadline and stresses there is still time to act.

The new minimum retirement age – first announced by the Government in 2004 – will prevent many people aged between 50 and 55 from claiming private or company pension benefits and especially taking the tax-free cash element of their pension fund until they
are 55.

For those who had planned to retire at 50, the higher minimum age will mean five years without access to pension benefits or tax-free cash.

Prudential’s research has found that 6 per cent of the UK’s 3.9 million adults aged 50 to 54 – equivalent to more than 230,000 people – said they planned to retire in 2010.

Karin Brown, Director of Annuities at Prudential, said: “People who want to take their pension benefits and any tax-free cash allowance still have nearly three months to decide what they want to do.

“Prudential strongly urges people approaching retirement to contact a financial adviser or talk to their pension provider about the options available.

“The Government first announced the changes to the minimum retirement age nearly six years ago so there has been plenty of time for the news to sink in. It is worrying that so many are still unaware but there is time to act before rules change.”

The information contained in Prudential UK’s press releases is intended solely for journalists and should not be used by consumers to make financial decisions. Full consumer product information can be found at www.pru.co.uk.

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Financial Experts Predicting Rapid Dollar Devaluation in a Coming Burst of the ‘Dollar Bubble’

Many news commentators are echoing the same resounding assurance: the recession is over. But not everyone sees it this way. Who’s right? Just look at the facts.

While Wall Street, thanks to the help of the Federal Reserve, rallied for a big end-of-the-year win, at least for top executives, they’re getting big bonuses while Main Street investors suffer. Rising unemployment figures, increased foreclosures and a loss of wealth continue to plague the average Joe.

Times Magazine named Chairman of the Federal Reserve Ben Bernanke, “Person of the Year” for 2009. The National Inflation Association, a grassroots group that warns people of the dangers of hyperinflation, named him “Villain of the Year.”

The Fed’s policies have made the value of the US dollar artificially high and before long the dollar bubble is bound to burst, leading to hyperinflation with prices of consumer goods rising sharply. According to Phoebe Chongchua of the Denver-based Nabers Group, the U.S. is already beginning to experience this kind of runaway inflation.

Nabers Group has issued a warning to U.S. consumers on its blog about the impending devaluation of the U.S. Dollar’s value in a period of hyperinflation.

“Hyperinflation can really be thought of as a silent tax, especially if artificially created by U.S. monetary policy. If the dollars you have today can purchase a fruit punch, a sandwich and a bag of chips but that same money in the future can only purchase the fruit punch, then your money has been devalued—you have lost purchasing power. Ultimately it’s the average middle class consumer who ends up getting the short end of the stick,” says Chongchua.

For most people, the major concern is how to preserve their dwindling wealth. CEO Jeff Nabers, encourages clients to diversify their portfolios using an exceptionally flexible investment vehicle known as the Solo 401k.

“The Solo 401k is designed specifically for a business owner who has no full-time employees. One of the most powerful benefits of the Solo 401k is the plan’s participant loan feature, which offers a tax-favorable alternative to withdrawing money from a retirement plan as a distribution,” says Nabers.

Preserving your wealth doesn’t have to be an uphill battle even as we head into rising inflation and the devaluing of the dollar if people act now to protect their wealth.

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Top Self Directed IRA Firm And Leading Precious Metals Broker Pair Up To Provide Investors With Alternatives

The New Mexico based self directed IRA firm Sunwest Trust (www.SunwestTrust.com) announced today that they have reached an arrangement with Republic Monetary Exchange (www.RepublicMonetary.com), a leading precious metals broker based in Phoenix, Arizona. Under their arrangement, Sunwest Trust will provide exclusive self directed IRA custodian services for Republic’s client investment accounts, described by Jim Clark, CEO of Republic Monetary Exchange as a “win-win situation for our clients”.

For Sunwest, this partnership represents an extension of the firm’s IRA custodial and escrow services to the precious metals market, a move likely to be adopted by an increasing number of firms in the financial services sector.

“Consumers are becoming interested in investment vehicles which are less vulnerable to the ups and downs of the stock market. We’re seeing a lot of new IRA accounts at Sunwest from clients who want to purchase gold and other precious metals inside their IRA portfolios. Until 2007 it was primarily real estate, but now we’re starting to see an increase in the number of gold or precious metal backed accounts,” said Terry White, CEO of Sunwest Trust.

With a growing concern among the public about the possibility of inflationary pressures driving down the value of their IRA accounts and other investments, the number of consumers choosing to invest in gold, silver and other precious metals has been steadily increasing over the past few years, with brokers like Republic Monetary Exchange gaining market share in the financial services sector rapidly.

The relative stability of gold and other precious metals makes them an especially popular investment in a sluggish economy, especially when compared to traditional stock and securities investments. Given the uncertain economic outlook for at least the next few quarters, Sunwest Trust Inc. and Republic’s new relationship looks to be one, which is certain to attract investors looking for stable retirement investment vehicles such as the self directed IRA or a gold-backed IRA account.

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Savvy Self-Employed Seek Little-Known Tax Benefits Provided By The Solo 401k

The Solo 401k is designed for the self-employed and offers powerful features not found in traditional 401k or IRA retirement plans. The Solo 401k offers unique tax benefits to those who open an account before the New Year.

The clock is ticking for taxpayers to secure their end-of-the year tax breaks and many Americans who qualify for a tax shelter are not utilizing it.

“That’s because many people are completely unaware of a special retirement vehicle that offers the self-employed a way to make significant contributions,” said financial expert, Jeff Nabers, CEO of Nabers Group.

The Solo 401k account offers powerful features that are not available to those who invest in traditional IRA or 401k accounts.

“One special feature of the Solo 401k is that it can be run by the accountholder. You don’t have to open it up at a Wall Street-focused firm. That means that you’re not stuck to ordering your investments off of a menu that offers only stocks, bonds, and mutual funds,” explains Nabers.

The volatile stock market and significant losses that many investors suffered have caused them to look for alternative options. Nabers says that’s where the Solo 401k can really be helpful. “Using the Solo 401k, people can invest in real estate, gold, foreign annuities, foreign currency, small businesses, and much more,” said Nabers. Even better, the Solo 401k allows accountholders to make large retirement contributions totaling more than $50,000.

About the Jeff Nabers, CEO
Jeff Nabers is the Chief Executive Officer of the Nabers Group and is a renowned consultant, speaker, and educator. Nabers is an expert in the fields of Self Directed wealth management and personal finance. Nabers teaches seminars on understanding money, free market capitalism, inflation, Austrian economic theory, real estate investing, direct possession of gold and silver, income-producing assets, small business startup funding, and Self Directed IRA and Solo 401k investing. Additionally, Nabers is the chairman of the IRA Association of America and authored the book 5 Steps To Freedom.

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Hargreaves Lansdown Named Best Online SIPP Provider of the Year

Hargreaves Lansdown has been named the Best Online SIPP Provider of the year at the Technology Administration and Service (TAS) Awards, 2009.

The awards programme, which is organised by the Pensions and Investment Group of the Financial Times, aims to recognise achievement by providers of products and services to UK advisers.

It is the second award that that Hargreaves Lansdown’s SIPP has received this year, following their award for Best SIPP provider from What Investment, an accolade which the company has received three years in a row.

Following the awards, which were held at the Park Lane Hilton, Alex Davies, Director of Pensions at Hargreaves Lansdown, said “We never get complacent about these things but hope these awards demonstrate our commitment to providing clients with the best information and the best tools to manage their own investments.”

If you are interested in considering a SIPP, visit the Hargreaves Lansdown website, were more information, along with a downloadable, free guide to Self Invested Personal Pensions is available.

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Workers Beyond Retirement Age To Double In 10 Years

Prudential has revealed that UK businesses are bracing themselves for a surge in staff looking to delay retirement with around 1.8 million people expected to be working beyond traditional retirement ages in just 10 years.

The findings from new research commissioned by Prudential among finance directors at UK businesses found 24% of companies expect staff to work beyond retirement age in the next 10 years, with the proportion of people in the workforce who are past traditional retirement ages expected to more than double to 1.8 million people.

Larger companies expect to see an even greater proportion of their workforce working beyond retirement, with 39% of finance directors at larger firms expecting to have to accommodate requests from staff to work longer.

UK companies anticipate this will mean around 6.3% of their workforce (equivalent to 1.8 million people across the UK working population) will be made up of people working beyond statutory retirement ages in 10 years, more than double the current proportion of 2.6% of company workers (equivalent to around 752,700 people***) who currently work past retirement.

The study also found that in the past 12 months alone, 7% of finance directors have reported an increase in the number of employees asking to work past traditional retirement ages.

Martyn Bogira, Prudential’s Director of Defined Contribution Solutions, said: “As health and longevity continue to improve and people look to fund a longer life in retirement, it is inevitable that compromises have to be made.

“The statutory retirement age for men and women is due to rise to 68 by 2046, so working longer will be a fact of life for those entering the workforce today but these findings suggest that increasing numbers of pensioners will be forced to work later far sooner than this. Employers have told us that their staff costs could rise as their employees work for longer.

“Workers face the stark choice of either having to save more for their pension from an earlier age or having to work longer if they are to avoid taking a significant drop in their standard of living in retirement. Early pension saving is critical and we strongly encourage people not to delay starting a pension.”

The research also identified a clear North/South divide. Companies in the north of the country expect an average of 16.2% of their staff to work past the statutory retirement age compared with an average of 2.4% in Greater London and the South East.

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New Tax Law for Roth IRA May Be a Bad Deal for Taxpayers

In 2010 millions of Americans will be able to do something they have never done before—convert their IRA into a Roth IRA account. Current 2009 limitations do not allow anyone who makes more than $100,000 per year to convert their traditional retirement funds into a Roth IRA.

However, beginning in 2010, the Roth IRA conversion restrictions are being lifted. But is this really a good thing for taxpayers?

“Roth IRAs are a bad idea for taxpayers because they are paying taxes now in order to avoid paying taxes on distributions that are taken later,” said Jeff Nabers, CEO of Nabers Group. The problem is partly the economic crisis that we are in. “It makes sense if we were in a commodity-based monetary system, but we’re not. We have a fiat currency system that creates an inflationary environment in which Roth conversion is a good deal for the government and a bad deal for the taxpayer.”

Additionally, the Roth IRA conversion can be costly for the taxpayers. If they opt to convert their traditional IRAs to Roth IRAs, the IRS will view this as a taxable event. Accountholders will be taxed based on the entire conversion amount for their current tax bracket. The income taxes due on the 2010 conversion can be spread over two years. However, future conversions must be included in income reports to the IRS and will be taxed during the tax year in which the conversion is completed.

Nabers cautions his clients to carefully look at all their options when considering the Roth IRA conversion. He suggests, “Instead they should continue using their non-Roth Retirement accounts for the maximum tax benefit.”

Nabers, the author of Five Steps To Freedom: How to Cut Your Dependence on Institutions and Escape Financial Slavery, points out that the most important thing that taxpayers can do in these economic times is to find alternative investment solutions. “We’re likely heading into an era of significant inflation. I recommend that people seek alternatives to volatile Wall Street Securities and dollar-denominated assets in general.”

“The action that I recommend is to get more educated on the matter and look at both sides of the story before making a decision,” said Nabers. He says deciding to convert to a Roth IRA could cost you hundreds of thousands of dollars. “Before paying taxes using half of your savings, wealth, or retirement account, consult experts about all of your options. What you don’t know could hurt you—so seek knowledge and information so that you can make an informed decision that you won’t regret.”

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Jeff Nabers, CEO Of Nabers Group, Cautions Against The Use Of 401(k), IRA Rollovers As A Financing Strategy For A Business Start-up

One unforeseen consequence of the current recession has been the increasing number of Americans who have stumbled into entrepreneurship after losing their jobs to round after round of layoffs. Many of these people have taken one look at a job market where the unemployment rate is nearly 20% in some regions and decided to start their own businesses. It’s a bold move and certainly there is something very admirable about the idea, but also a risky one, with about half failing in the first few years; making financing a small business start-up something, which should be done with great care.

There are a lot of people who think of using 401(k) or IRA rollovers as a source of financing the start-up costs of a new business or to cover the purchase of an existing one. While you may see a lot of praise for these plans (called ROBS for Roll Over Business Start-up by the IRS), especially online where their proponents try to sell would-be entrepreneurs on the merits of this form of financing, many financial industry experts strongly recommend thinking again about using your IRA or 401(k) to fund your small business.

One of these financial experts is Jeff Nabers, CEO of the Denver financial planning company Nabers Group. Nabers has written about how ROBS work and their risks on his blog, where he warns against using these financing vehicles.

“It’s entirely understandable that people are tempted by ROBS; the recession hasn’t made small business financing easy to come by and there are more Americans than ever trying to start their own businesses. However, there are a lot of risks associated with using IRA and 401(k) rollovers. Beyond the old diversification maxim of ‘don’t put all your eggs in one basket’ the legality of the ROBS strategy has been on shaky ground. There’s a basic rule that prohibits “self dealing” for any retirement account participant, but ROBS promoters have attempted to skirt this by creating a loophole that claims a special exemption. Unfortunately, a government ruling from 2006 closed that loophole. ROBS structures could face a stiff penalty, which amounts to approximately 115% of your retirement funds,” says Nabers.

“It’s a subject that is somewhat controversial in the financial services industry, but as I have been informed by government officials and my legal counsel, the 2006 ruling means ROBS no longer occupies a legal gray area even. I can’t recommend these to my clients in good conscience. I don’t see a bright future for this strategy of funding, to put it mildly,” added Nabers.

Jeff Nabers isn’t alone in sounding the alarm about ROBS and other rollover schemes – there has been a lot of concern expressed by financial experts in the last year. Previously, ROBS was considered high risk, but as Nabers’ put it, “My recent DOL meeting was the nail in the coffin of the ROBS loophole.”

Nabers unabashedly encourages entrepreneurship in spite of the government’s unfavorable stance on ROBS. His message to would-be ROBS users is: “Start and fund your venture anyway [without ROBS]. You can still raise money from others, including from their IRA and 401(k) accounts. Frankly, that is actually a surer path to success because raising money from others will cause you to be more thorough in your business planning.”

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Prudential Reports Strife Begins At 40 For Pensions Late Starters

Prudential has revealed that workers who don’t pay a penny into a pension until they reach the age of 40 may need to set aside upwards of 33 per cent of their salary until age 65 if they want to retire on the holy grail pension of two-thirds annual salary.

But for someone starting their pension at 30 the amount drops to 20.5 per cent of salary and at age 18 it falls to 12.9 per cent – just over a third of the amount a 40-year-old would be required to pay into a pension for the first time.

Based on the current average salary of £26,020 a 40-year-old worker starting their pension plan today and aiming to retire at 65 would need to put aside the equivalent of £728.06 a month, or £23.94 a day, from combined employee and employer contributions.

A 30-year-old worker’s pension savings would need to total £443.59 a month or£14.58 a day, while an 18-year-old starting work today would need to save an amount equivalent to £9.19 into a pension every day of their life until the age of 65 in order to achieve the optimum pension of two-thirds the current average annual salary of £26,020.

Martyn Bogira, Prudential’s Director of Defined Contribution Solutions, said: “The findings show very clearly that anyone earning an income should try to begin putting money into a pension fund as soon as possible as the cost of delay is considerable; for someone aged 40 who’s contributing to a pension for the first time, the optimum pension contributions are three times higher than for someone aged 18.

“Understandably, making payments into a pension at age 18 may be a struggle and seem insignificant but even the smallest of contributions has the potential to make a massive difference. Arguably, the simplest and most beneficial way to do this is to pay into an employer’s defined contribution scheme and take advantage of any contributions an employer will also make to help make up the optimum amount needed to retire on two-thirds salary.”

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One In Five Stock Market Investors Never Check Share Performance

Prudential has revealed that over one in five (22 per cent) of UK stock market investors never check the performance of their shares. Furthermore, it has been revealed that 65% of investors don’t seek any professional advice prior to investing.

The findings, f r o m new research conducted for Prudential, found that 36 per cent of UK adults aged 18+, equivalent to 17.23 million people, have invested in the stock market over the past 10 years. However, more than half (53 per cent) of these investors admit they only check share performance every six months or less frequently, with one in five (20 per cent) saying they only review their stock performance once a year and 22 per cent admitting they never do.

When it comes to gaining advice on where the best place is to invest their savings, UK adults appear to be equally apathetic with around two thirds of investors (65 per cent) saying they rely on internet searches or media reports when selecting which shares or investment fund to buy with just 16 per cent seeing an independent financial adviser, four per cent consulting a stockbroker and 10 per cent gained advice f r o m bank or building society staff.

However, while many stock market investors fail to adequately monitor share performance or gain financial advice on how to invest, they are at least exposing themselves to an asset class which has historically shown some of the strongest growth. This sits in stark contrast to the rest of the population with around 30 million UK adults (64 per cent) having made no stock market-based investments in the past ten years.

Trevor Cheal, Retirement Savings Business Director, Prudential said: “While not everyone is fortunate enough to have spare funds to save or invest, many people do and it is staggering how few are seeking financial advice or looking to capitalise on the growth potential that the stock market has historically offered.

“Those who invest in the stock market have taken the first important step towards benefiting f r o m the long-term growth of the economy, but they stand a greater chance of maximising its value if they re-evaluate their investment arrangements regularly. However, in volatile markets, investors may not want all their eggs in one basket and multi-asset funds which provide diversification can give them some degree of comfort while still having exposure to the stock market. Those who feel they lack the knowledge to manage a diversified portfolio should consider getting professional financial advice f r o m a stockbroker or an IFA.”

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According To The Prudential’s Equity Release Index, Homeowners In England And Wales Own £654 Billion Property Equity

According to the Prudential’s Equity Release Index, Homeowners in England and Wales aged 65 and over have retained £611billion of equity in their property – with a further £43bn held in Scotland – as the housing market begins to show signs of stabilising following two years of decline.

Prudential’s Equity Release index tracks the amount of equity held in property by people over 65 years old in England and Wales. Figures are based on Prudential’s analysis of data from the ONS Family Spending Report (2006), the Land Registry House Price Index (August 2008) and GfK NOP (2007). Specifically, weighted number of households data is taken from the ONS Family Spending Report 2006. Home ownership data is taken from the NOP data. Average house price per region is taken from the Land Registry Index.

The Index also shows modest gains for homeowners aged over 65 in Wales, the West Midlands, London and the North West.

In Wales, the over-65s saw values rise by £3448, followed by London’s over-65s who gained £3296, while in the West Midlands retired homeowners gained £2789 and the North West saw increases of £818.

Homeowners in Scotland aged 65 and over have retained £43billion of property equity and saw modest gains in the second quarter of 2009, with an average increase in property values of £5235 since March, although the total value of property equity for the over-65s is still more than £3 billion lower than it was a year ago.

The Prudential Equity Release Index shows that, in the second quarter of 2009, Scottish over-65s saw the value of the equity in their homes increase by 3.7%. Over the same period, the equity in homes owned by over-65s in England and Wales remained almost level, decreasing by just 0.03%.

The picture across England and Wales as a whole is one of stabilisation, with property equity for the over-65s falling by less than £43 since February – the lowest fall recorded by the Prudential Equity release Index.

The recent fall of just £43 contrasts sharply with the period between October 2008 and February 2009 when property equity in England and Wales for homeowners aged 65 and above dropped by an average of £21,377.

Property equity can provide a valuable source of retirement funds, especially against a backdrop of low interest rates and equity price falls in the past two years which have hit pensioners’ non pension savings.

About Prudential
“Prudential” is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including life assurance, equity release, annuities (including an income drawdown option), pension plan options and investment products like the unit trust and tools, such as the tax calculator. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number 15454.

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UK Workers In State Of Pension Inertia

New research f r o m Prudential shows that nearly a third (30%) of Britain’s 8.8 million active occupational pension scheme members pay no attention to how their retirement savings are invested and 29% – more than 2.5 million scheme members – have never reviewed how their chosen pension fund is performing.

The pension provider’s study also shows that 48% of workers aged 25+ have their money invested in the ‘default’ fund of their company pension scheme.

Pension savers are failing to take an active role in managing their assets to produce the best possible retirement income. Around 29% admit they have never reviewed the progress of their selected pension funds.

Prudential warns that workers who do not regularly review the progress of their pension fund to deliver asset growth, or simply select the default fund offered by their employer without studying any other options available to them or seeking advice, could then risk limiting the value of their pension pot at retirement.

Andy Brown, director of investment funds at Prudential, said: “It’s worrying that so many people who pay into a company pension scheme appear to be in this state of inertia and aren’t taking an active role in the management of their pension savings.

“You routinely check your savings, utilities, insurance cover, mobile phone contract and broadband arrangements to make sure you’re getting the best f r o m them, and checking the performance of your pension should be no different.”

Prudential urges workers who have not reviewed their pension investments, especially during the stock market turbulence of the past two years, to review them now as a priority to ensure they are correctly positioned to take advantage of any market upturn.

Many pension scheme members are doing virtually nothing to ensure their pension funds are invested in the best place to maximise growth and maintain the right balance to protect fund values in the last few years before retirement.

When it comes to paying more money into company pension schemes, Prudential’s research found that 37% of people with a defined contribution pension have either made Additional Voluntary Contributions to their pension fund or increased the amount they pay in.

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Equity Mix Remains Top Choice For Pension Investments

Prudential has reported that more than one in three people retiring within the next 10 years say they would prefer their pension to be invested partly in the stock market and the remainder in other types of investments, according to new research*.

Equity Mix

The nationwide study shows that consumer confidence in the stock market continues despite recent market and economic upheavals.

Prudential asked 1002 men aged 55 to 64 and women aged 50 to 59 who have a pension how they would want their pension fund invested if they could choose:

– 35% said partly in the stock market and the remainder in other investments (40% men, 29% women)
– 29% said only in cash or very low-risk investments (29% men, 30% women)
– 22% said they did not know (18% men, 28% women)

Since the FTSE 100 index of leading shares hit a five-year low of 3530 in the week of 2nd March this year, it has climbed back up. Currently the FTSE is at 4615 w/c 27 July 2009, compared to 4413 w/c 26 July 2008 so is 202 points higher than this time five years ago.**

Andy Brown, Prudential’s director of investment funds, said: “Despite immense volatility in the stock market over the past year or so, there is still evidence of consumer confidence in equities to deliver a promising return for pension investments over the long-term.

“What is certain as well is that many people have been spooked by the recent economic maelstrom and, unsurprisingly, would prefer their pension to be in cash or lower risk investments as they near retirement.

“We’ve seen a marked increase in the numbers of people looking for a home for their money which they can trust, knowing that it has a solid capital base and a long-standing history which will stand it in good stead for the future.

“I think investors can feel confident in stock market opportunities if they are given a decent choice in how they access real assets such as the equity market. Investors can really capitalise on the markets if they can access funds across a number of asset classes and sectors from a range of different investment managers allowing diversification across assets and manager styles.”

* Survey conducted by Research Plus among 1,002 UK males aged 55-64 and UK females aged 50-59 between 23 and 30 April 2009 using an online methodology
** Source: Yahoo finance FTSE 100 charts – correct as at date of issue: 27th July 2009

About Prudential:
“Prudential” is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including life assurance, savings and investment products, such as a bond investment and pensions, including advice on company pensions.

Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number 15454. Authorised and regulated by the Financial Services Authority.

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Sunwest Trust Is Now Offering Their Latest Product – The Individual 401k, Aka I401k

Sunwest Trust, Inc. announces the launch of the Individual 401k or i401k. “The i401k gives self-employed business owners the same tax benefits that large corporations have enjoyed for years,” says Terry White, CEO of Sunwest Trust, Inc. as well as White adds, “a number of additional benefits not offered by the traditional self directed IRA.”

Individual 401k

With an i401k, business owners may be eligible to contribute far greater amounts to their 401ks than they could with any other type of retirement plan. In addition, the i401k is much simpler to administer than a typical 401k plan.

Another advantage to the i401k is the Roth contributions that you are eligible to make. You can designate some or all of your deferrals as Roth contributions. Roth contributions are after-tax dollars, so those contributions will grow tax-free.

Unlike self directed IRA, you may take loans from your i401k.

Also, the i401k has lower administrative costs than most retirement options for a small business owner. Unlike a self directed IRA, with the i401k you do not need to have a self directed IRA custodian for your i401k. You may act as trustee for your own plan.

White does note, “that the i401k is not for every small business owner and that there are restrictions and guidelines someone must follow in order to be eligible.” White recommends, those who seek to invest using the i401k, “consult a tax professional to make sure that they are making their contributions correctly and to help them fill out the form 5500-EZ when their i401k accumulates over $250,000.00.”

To be eligible to have an i401k, you must be a self-employed business owner with no full-time employees other than your spouse. Whites also states, “investors need to make sure to check with their tax professional to find out the limitations and amounts that can be borrowed from the i401k plan.”

White adds, “The timing of the i401k could not be better for business owners as well as the company. Despite the tough economy, Sunwest Trust continues to grow. By adding new products and providing the same great customer service their clients have come to expect, Sunwest Trust is well on their way to another record setting year. The company has already seen 16 percent growth from this time last year and there are no signs of slowing down anytime in the near future.”

One explanation for the sudden growth over the last two years has been the volatility of the stock market. When the stock market hits uncertain times, many investors would rather not gamble their future on Wall Street and investors look for more stable investment opportunities. Self-directed IRAs and 401ks allow savvy investors the opportunity to find the investment that best fits their investment needs, risk tolerance and retirement goals, whatever it may be.

White adds, “not all investments are ideal and whenever you make an investment there is always inherent risk involved. Each investor should acquire competent legal counsel and commit to completing the proper due diligence prior to shifting their retirement dollars into an alternative investment.” He adds, “just as it is not your local bank’s responsibility to validate the veracity of an investment, neither is it the IRA custodian’s job to validate the authenticity of the investments you make with your IRA/401k dollars. The last thing you want to do is gamble away your hard earned retirement savings blindly without verifying the genuineness of the investments your are making.”

About Sunwest Trust, Inc.

Sunwest Trust is an independently owned private company that offers self directed IRA custodian, escrow and now Individual 401k services. The company offers a huge range of financial services providing post retirement benefits, private mortgages, real estate contacts and other related fields for its clients. FDIC insured banks back the self directed IRA funds of their clients. For more information on the activities of the company, please visit http://www.SunwestTrust.com.

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Divorce Survival Kit Released as Ultimate Divorce Resource

The Divorce Survival Kit has just been released as the ultimate comprehensive resource for people experiencing divorce. The Divorce Survival Kit was developed by Carol Ann Wilson, one of the nation’s foremost experts on divorce and finances. The Divorce Survival Kit consists of a four (4) CD audio set and complete workbook filled with examples, forms and checklists. The product took over a year to complete, and it represents a great wealth of Carol Ann’s vast knowledge and experience. The Kit contains everything you need to know if you are going through a divorce and are concerned with how to survive financially.

The topics covered in the Divorce Survival Kit include:

  • Marital vs. Separate Property: Learn the truth about marital and separate property and how to keep what is yours. Don’t surrender it if you don’t have to!
  • Alimony/Maintenance: Find out if you are likely to receive alimony and how much. If you have to pay alimony, understand how to best protect yourself and minimize your losses.
  • Health Insurance: Did you know you could become uninsurable after your divorce? Protect yourself and your children.
  • Child Support: Learn what you need to know about the Child Contingency Rule that could save you from owing the IRS thousands of dollars.
  • Asset Division: Don’t ruin your financial future by failing to consider hidden assets and tax consequences. Discover the best ways to divide all your assets.
  • Dividing Retirement Accounts: This is often the biggest asset in the marriage. Avoid some common mistakes and make the most of this valuable asset.
  • Settlement Alternatives: Courtroom battles can be costly and expensive, but there are alternatives. Mediation, arbitration and collaborative divorce are explained.

Carol Ann Wilson, a Certified Financial Divorce Practitioner, is the founder of the profession of divorce financial planning. She has been working with divorcing clients and their attorneys for over 20 years.

Carol Ann’s dedication to helping couples financially survive their divorce has driven her to continuously develop more ways to help them. In addition to the Divorce Survival Kit, Wilson has authored many books and articles on divorce, has served as an expert witness in court for over 120 divorce cases, has developed software for professionals used in determining financial results in divorce settlements, and has trained thousands of divorce financial planners around the country how to work with divorcing clients to achieve fair and equitable divorce settlements.

Currently, Wilson is the president of the Financial Divorce Association, located in Longmont, Colorado, and an owner of the Academy of Financial Divorce Practitioners in Chicago. Her expertise, as the founder of the profession, is highly sought-after, and Wilson continues to consult with divorcing clients today.

“The Divorce Survival Kit is going to help a lot of people,” Carol Ann says. “I am excited to be able to offer all of my knowledge and experience in one complete package, that is affordable to anyone. I like to say that you get my 24 years of experience for less than the cost of 30 minutes with an attorney.”

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Prudential Reveals That Advisers Pin RDR Hopes Online

Prudential has released research demonstrating the need for providers to constantly adapt their services to help advisers in both the online and offline environment, with more than half of the advisers surveyed (58%) ranking better quality or more online information and service options as the most important element of the product provider/distributor relationship surrounding preparations for Retail Distribution Review (RDR).

While improving online servicing is seen as a must do by advisers, they also believe that solid account management relationships must go hand-in-hand with technology. This sentiment was highlighted by 40% of advisers citing more or better dialogue with an account manager as the next most important service element surrounding their preparations for RDR. With a combination of expert face-to-face and telephone account management teams readily available to guide advisers through obtaining and completing sales, this is a service Prudential is already supports.

Ian McKenna, Director of the Finance and Technology Research Centre (FTRC) said: “RDR will make it essential for advisers to focus on the cost of doing business in ways they have never needed to previously. It is not giving the advice that takes excessive time but the preparation. Collating information manually is hugely time consuming, electronic services can deliver in seconds what might otherwise take hours. Historically the cost of those hours has been subsidised by commission, when it is the client potentially paying for the time racking up hours in this way will no longer be acceptable. Automated delivery of information to advisers will be a hygiene factor in a Post RDR environment.”

57% of advisers claimed that their volume of client enquiries regarding retirement planning remains unchanged. This is encouraging news in the current economic climate, proving that it is vital for providers to arm advisers with all the necessary tools to deal with their continuous day-to-day business.

Jon Cross, Head of eBusiness at Prudential said: “Our research shows that advisers are becoming increasingly dependent on online services to help guide them through the changes that RDR will bring. Prudential works very closely with advisers to develop its online services, we constantly review our content and navigational functionality, and will of course continue to evolve our systems to help advisers as they change their business models ready for RDR. We are committed to providing a high level of service to advisers to ensure that they spend as little time on administration as possible. Taking their business online frees up time that would have traditionally been spent processing paperwork.”

The benefits of online servicing are clear for advisers, allowing easy access to brochures, illustrations and valuations outside normal office hours. Prudential’s adviser website houses a wealth of useful material including product guides, support literature, real-time valuations and market analysis from industry experts. Advisers can also find a variety of interactive tools covering pension planning, drawing an income and annuitisation. The ‘Support for you’ section provides advisers with updates and news regarding regulatory issues such as TCF and RDR. Also under this section advisers can hear what Prudential experts have to say as they explore various opportunities and considerations advisers face in helping their clients save for and provide an income in their retirement.

Prudential surveyed 123 independent financial advisers during April 2008.

About Prudential:
“Prudential” is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including life assurance, annuity products – including retirement annuity, pensions, savings and investment products. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number 15454. Authorised and regulated by the Financial Services Authority.

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Historic Losses For 401K Plan Participants

Retirement savings have dwindled significantly over the past 18 months. The median rate of return on 401k balances was negative 28.3% in 2008 according to a study by human-resources consulting firm Hewitt Associates. The average 401k balance dropped from $79,600 at year-end 2007 to $57,200 at the close of 2008.

401kinvesthelp

In the 12 months following the stock market’s peak in October 2007, more that $1 trillion worth of stock value held in 401ks and other “defined-contribution” plans was wiped out, according to the Boston College research center.

Alan Weir, who turns 60 this month, showed 60 Minutes his latest 401(k) statement, which he hadn’t had the courage to open up. “I’m afraid,” he told correspondent Steve Kroft. There’s good reason for his trepidation: nearly half of his life savings have vanished in a matter of months. “It went down again,” Weir told Kroft after opening the statement. Overall, he said he was down about $140,000.

Another woman in a similar situation told Kroft her 401(k) was worth less now than it was in 2005. “And another one went down almost $40,000. One was 80 – 88,000. And then, and then it went down to 50(k),” she told Kroft, crying. The saddest part of this story is that it is being repeated all over the country.

In eastern Pennsylvania, 59-year-old Iris Hontz lost her accounting job and half of her 401(k) investments.

“Unlike Wall Street executives, American families don’t have a golden parachute to fall back on,” said U.S. Rep. George Miller (D-CA).

www.401kinvesthelp.com is a site designed to assist the Individual in their noble attempt to save for retirement. How does it guide investors? The number one problem investors have while saving for retirement is the potential of suffering devastating losses of 30% or more in stock mutual funds. The ideology of just “buy and hold,” “invest for the long term” only work a small percentage of the time. In addition to the latter problem, 80%-90% of the mutual funds offered within these retirement vehicles are more risky than the benchmark or index they follow. It’s about time someone stepped in to assist Americans with their retirement accounts rather than leaving them helpless and alone. The indicators used within the site are designed to give individuals a sneak peek into the economy and the financial markets. Is it safe to be invested fully? Should I take some off the table and be only partially invested? These are questions everyone has and generally know the answers to, but need someone to help reinforce that decision. The indicators are updated every 1st business day of each week and an email is sent to each subscriber alerting them of any changes, as well as a brief commentary on the financial markets. Investing smart bodes well for those who understand, “It’s just best to sit on the sidelines and watch the fireworks at times.”

If you would like more information about this topic, or to schedule an interview with Leonard M. Rhoades, please call Andrea Rhoades at 616-581-5696 or email support@401kinvesthelp.com.

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According To The Latest Survey From Prudential, Financial Advisers Are Not Convinced That Their Clients’ Retirement Planning Is On Course

The new Prudential survey found that over two-fifths of advisers (43 per cent) said they are either not that confident or not at all confident, that their clients’ retirement planning is on course, compared to just a third (34 per cent) who said they are either reasonably confident or very confident.

However despite their doubts about how well their clients are prepared for retirement, a third of advisers (33 per cent) actually reported an increase in the number of enquiries from clients about pensions and retirement planning over the past three months. Additionally, half of the advisers surveyed said they had seen an increase in the number of clients using the open market option when shopping around for their annuity in the past three months.

Andy Curran, Director of Intermediated Sales at Prudential, said: “Advisers and providers have taken a fair amount of flak over the years for apparently not informing people that they have the freedom to shop around for the retirement products which best suit their needs.

“It’s good to see that half of advisers say they’ve seen an increase in the number of people using the open market option but it seems to me that it’s taken a financial crisis for people to start their financial planning.

“What is worrying is the feedback from advisers that their clients’ retirement planning is not on course, especially in these unprecedented times when personal financial security should be top of the agenda for everyone.”

Prudential surveyed 123 independent financial advisers during April 2008.

About Prudential:
“Prudential” is a trading name of The Prudential Assurance Company Limited and Prudential Unit Trusts Limited. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including life assurance, pensions, savings and investment products. The Prudential Assurance Company and Prudential Unit Trusts Limited are registered in England and Wales under number 15454 and 1796126. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Authorised and regulated by the Financial Services Authority.

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