Wednesday, June 23, 2010
Participate in Orion's Transition Corner,
Where Does Retirement Money Come From?,
Congratulations to This Month's Winner,
Helping Your Child Save for College,
Connect with Orion
Protecting Your Social Networks
Everyone from junior high students to senior citizens have jumped on the social networking bandwagon. Social network sites from Facebook to Twitter have become commonplace. In fact, it is safe to say that if you aren’t on one of the social networking sites, you are in the minority. That being said, people have included a significant amount of personal information about themselves on their personal pages, and this opens the gate for a multitude of crimes that range from identity theft to sexual predators tracking our children.
The social networking companies are very aware of the dangers and are now introducing ways to make their users more secure. Facebook recently announced new privacy settings. According to an article titled, “How to Secure Your Facebook Account” on www.smartmoney.com by Kelli Grant, the information on your page still remains at risk even with the new safeguards. The same article quotes Parry Aftab, Executive Director for Wired Safety. Ms. Aftab has an easy test she uses to determine which information is safe. "Would you put it on a sign in front of your house? That's got to be your measure." If you wouldn’t put it in front of your house, don’t put it on any social networking site.
Among the changes at Facebook are privacy controls condensed into a single page in the format of a chart, opt-outs for instant personalization will be easier to navigate, and the ability to opt-out of third-party applications.
Here are some of the things users can do to protect their privacy:
• Review your settings. Be sure to opt-out of any third-party sharing. On Facebook, you can use the “preview my profile” tool to manage your privacy settings.
• Visit the site www.reclaimprivacy.org, which identifies un-secure settings.
• Specify who you want to view your information, and be sure that you limit it to only people you know. If you allow your friends to view your pictures, make sure you don’t enable them to share your pictures with their friends, as well.
• Use common sense, and always err on the side of caution. Don’t trust anyone you don’t know or recognize.
These new privacy settings are designed to protect the users, however, some information will still be vulnerable. People utilizing social network sites need to be wary and realize that the more information they include about themselves, the more accessible they will be and the greater chance they will become a target.
Participate in Orion's Transition Corner
Where Does Retirement Money Come From?
For most people, during their working career, the majority of income comes from their job. But when the change is made to retirement, the majority of a person’s money comes from variable sources. Some of these include 401ks and pension plans, social security, and part-time jobs. Recently U.S. News and World Report examined the ten biggest resources for retirement income. Here is what they found:
1. Social Security – According to U.S. News and World Report a recent Gallup survey indicated that 54% of Americans say social security checks are a major part of their income.
2. Retirement Accounts – The same Gallup poll found that half of retirees plan to use their 401k to fund retirement.
3. Pensions – Only 23% of workers expect to receive any income from pensions because fewer companies are offering them, and, if they do, the payouts are generally smaller than that of years past.
4. Savings Accounts & CDs – The Gallup pole indicates that 13% of current retirees use monies in savings accounts and CDs to fund retirement. However, 22% of current workers hope to have enough from these methods to supplement their retirement income.
5. Stocks and Stock Mutual Funds – Most people agree that stocks are not the way to make significant income for retirement purposes, especially after the lessons of the recent recession. Only 14% of current retirees use stocks as payment for living expenses. Most retirement planners recommend that 2-4 years of living expenses should be kept outside the stock market. This provides a way for retirees to be protected if the stock market tanks.
6. Home Equity – 20% of Americans, according to the Gallup poll, will use their home equity for retirement income. It also indicates that 20% of current retirees are using their home equity as part of their retirement income.
7. Part-Time Work – Some retirees who haven’t saved enough must work part-time jobs to supplement their retirement income. Approximately 18% of current workers believe they will work part-time in their retirement years.
8. Inheritance – Approximately 9% of workers expect a significant amount of money from an inheritance, but only 3% expect to utilize an inheritance towards retirement income.
9. Annuities or Insurance – Around 8 % of current workers and retirees say annuity payments or insurance plans will be part of their retirement income.
10. Rent & Royalties – If you are an inventor, writer or property manager, this one is for you. Approximately 6% of working Americans plan to use income from rent and/or royalties throughout retirement as part of their living expenses.
Congratulations to This Month's Winner
Helping Your Child Save for College
There are a multitude of stories emerging in the media about graduates not being able to pay back their student loans. With the high cost of education and lower salaries due to the recent recession, it seems that today’s graduates are drowning in debt. According to an article in The New York Times titled, “Placing the Blame as Students Are Buried in Debt” by Ron Lieber, the College Board’s “Trends in Student Aid” study found that 10% of people who graduated in 2007 and 2008 had borrowed $40,000 or more.
Perhaps the most important thing you can do to protect your children against future debt is to involve them from the beginning by explaining the importance of education and helping them to start saving. The U.S. Department of Education recommends introducing children to college planning in the middle school years (6th-8th grades). They also have a “Think College Early” program that can be found at www.ed.gov/thinkcollege, where children and their parents can obtain information about planning for college. The website answers some important questions such as:
• “How can I afford to go to college?”
• “Can I get financial aid without high grades?”
• “I have to pay financial aid back, right?”
• “Who provides financial aid and where do I apply?”
• “How do most families pay for college?”
The American Council on Education also has a program called “College Is Possible.” It is a youth development program that helps to motivate middle and high school students from disadvantaged areas to obtain a college education. The website for the “College Is Possible” program can be found at www.collegeispossible.org.
In addition to teaching your children about financial aid resources, having a conversation about helping save for college is an excellent way to introduce your children to financial planning and investing. Some of the easiest options for parents to explain to their children are 529 plans, money market funds, savings bonds, and simple savings accounts with interest. If financial planning isn’t your strong suit, find a friend or relative who can work with you to help your child start planning now.
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