US Finance World

Good news if you are about to retire! Pension incomes are at a two-and-a-half year high.

If you’re about to retire, I have some good news for you. Pension incomes for many new retirees are on the up. However, you’ll still be worse off than many folk who retired in the 90s.

I should add that the recent good news only applies to people who have defined contribution pensions. This is where you and/or your employer make contributions to a pension pot during your working life. That pot is then used to buy you a pension when you retire.

Let’s imagine you’re a 65 year-old man and you retired this month. You’ve paid £100 a month into a pension fund for the last 20 years. All of your contributions have been invested in a pension fund that invests in a mix of shares and bonds.*

Based on average figures from Moneyfacts, your pension pot would now be worth £41,964. If you had

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It used to be that retirement was an attainable vision for just about everyone in the U-S-of-A.

Definition of Retirement: sit around the home, read the paper, play some golf, drive around town in a Cadillac, catch the early bird special at the local diner, watch some TV, go to bed, and do it all over the next day. Mix in an occasional RV or European vacation to take some photos and all was right in the world.

Retirees had a simple financial formula for achieving that dream:

1. Hit age 65.
2. Stop Working.
3. Collect your pension check, replacing the majority of your annual income before retirement.
4. Collect your Social Security benefits to fill in the rest.
5. Rely on your retiree health benefits from your employer.
6. Collect your medicare benefits to fill in the rest.

Those days are all but over. Why?

1. Pensions are dead our generation wont get them, and if you are lucky enough to get one, good luck keeping most of it.
2. Most individual investors fail miserably at investing.

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After years of turning down all but the best borrowers, banks and other lenders are now extending credit to a surprising group of customers: former homeowners who defaulted on their mortgages.

In another sign that borrowing is easing up, some banks are extending credit beyond the best borrowers to include those with significant blemishes on their credit reports, says James Chessen, chief economist at the American Bankers Association. At the moment, borrowers who have defaulted on their mortgages — but are current on all other loans — are among the attractive candidates for new loans. Between February 2009 and August 2010, 64,500 borrowers who had defaulted on a mortgage received a consumer loan, according to a study released last week by credit bureau TransUnion. The majority secured credit cards, but almost 40% got car loans or a personal loan or line of credit, according to TransUnion’s study.

And while more recent data isn’t available, experts say the number of loans granted to mortgage defaulters has likely continued to grow.

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Several years ago, I hired a summer student enrolled in university for some general office administration. Before the start of the next summer, she called and asked if I was hiring for that summer. For a variety of reasons, we did not need help that summer. However, I asked her if she could forward her resume to me in case someone I knew was looking for help. In such an event, I could quickly pass her resume along with a kind word.

She said no.

This to me was a head-scratching move. Summer jobs are hard enough to come by even if you know the employer. But to turn down a chance to have a resume passed along with a reference is tantamount to ensuring your summer spent unemployed or in summer school. Not surprisingly, I have not heard from this summer student since.

We often use the phrase it is not what you know but who you know to emphasize (both positively and negatively) that your network is sometimes more important than your credentials.  Yet, when confronted with an opportunity to expand ones network, some of us turn down these opportunities.

The notion of human capital, often called the most over-looked aspect of personal finance, is traditionally seen as an output of education and experience.

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We talk a lot about what you, as a well-informed personal finance enthusiast, can do RIGHT in order to reach your financial goals.

But

We dont often talk about what you can do WRONG, despite it being equally, if not more important.

So, I decided to compile a list of 10 of the most common (and harmful) young professional financial blunders.

I have seen a lot of friends and peers commit these financial sins and have even committed a few myself. Hopefully, I can save you the frustration and regret that comes days, months, or even years later.

1. Holding off on Saving for Retirement

It is common for many young professionals to hold off on saving for retirement in order to finance their present day lifestyle. With a tinge of arrogance, many of us believe that we can hold off because we have so many years ahead to focus on retirement. In reality:

1. The longer we delay in investing for retirement, the more we miss out on the power of compound interest.

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A new market-leading mortgage makes fixing for the long term even more attractive!

I have long argued the case for five-year fixed rate mortgage deals, despite the temptations of the extraordinary low interest rates on offer from many variable deals. And for me, the case for a five-year fixed rate deal just became even more compelling.

Last week saw a new market-leading five-year fixed rate mortgage launched by Chelsea Building Society. The deal allows borrowers with a deposit of 25% to fix their rate at an extraordinary 3.99%, albeit with a punishing product fee of £1,995.

So why are five-year fixed rate mortgages an attractive option for some borrowers?

When I bought my house two years ago, I knew from the outset what sort of mortgage I wanted. A five-year fixed rate.

1. We have healthy options but they’ll cost you more.

After years of serving 1,000-calorie meals, most fast-food chains have started to offer healthier options salads, fruit cups and other un-fried options. But if you reach for the lower-cal options, be prepared for some sticker shock. On average, the salad with chicken at a fast-food restaurant tends to be the most expensive option on the menu ($4.85 on average) and costs $1.90 more than a large burger, according to a study published in December 2010 by the Yale Rudd Center for Food Policy & Obesity. And the healthy chicken sandwich costs $3.73 on average, about 26% more than a large “red-meat sandwich.”

This pricing, in addition to the heavy marketing of unhealthy food options, undercuts what the fast food industry says is its commitment to healthy options, says Jennifer Harris, a spokesperson for the center. People typically look to get as much food for the price, which makes the healthy options look less appealing, she adds.

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One lender is restricting mortgage fees, so long as you apply within the next seven days.

When arranging a mortgage, a big factor to consider is the fee you have to fork out for the mortgage itself. These can set you back thousands of pounds. However, one lender has announced that for just one week the fees it charges will be significantly reduced.

From Thursday 19 May, Yorkshire Building Society will be cutting product fees on its mortgages for a week.

The lender currently boasts one of the more extreme mortgage pricing strategies in the market. If you want its lowest rates – and they are some of the lowest rates around – you’ll really have to pay for them, with product fees of up to a whopping £1,995. That’s an awful lot of cash to hand over upfront for a decent mortgage, or even worse, to add to your mortgage debt, thereby paying interest on that fee.

However, it also offers a number of mortgages with a higher initial rate, but with product fees of between £95 and £495.

But for the next week, you won’t pay a fee higher than £995 when taking out a mortgage with Yorkshire Building Society. That’s a savi

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