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Tuesday, July 17, 2012
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Top 10 Retirement Cities

Kiplinger.com recently released its top-10 list of great retirement cities in the United States, with a majority of southern locales figuring into the mix. Birmingham, Ala., took the top spot. In addition to Alabama's Magic City -- as it's known to locals -- the other cities that made the list are: Tucson, Ariz; Winston-Salem, N.C.; Manchester, N.H.; New Orleans; Spokane, Wash.; Charleston, S.C.; Knoxville, Tenn.; Palm Bay, Fla.; and St. Louis.

To narrow the list to 10 of the best cities for retirement, the Washington-based financial-reporting firm focused "first and foremost" on affordability. The cost-of-living index for retirees in each city had to score near or below 100, the U.S. average, according to the company, and top cities also had "to offer tax perks to retirees, such as exemptions on retirement income, and have lower state taxes per capita than $2,424, the national average."

Another factor in creating the list included access to quality medical care and whether the city has a high percentage of residents over 65.

"We also calculated a Lipitor score that reflects how much a 30-day supply of the cholesterol-lowering drug costs above or below the average prescription price of $174.71," the company says. "Lipitor is the country's most-prescribed name-brand medication, and its price is tracked by the Council for Community and Economic Research -- the same organization that provides our cost-of-living estimates."

LGBT and Retirement

LGBT (lesbian, gay, bisexual and transgender) investors face several unique challenges when it comes to saving for their retirement, including those stemming from a lack of federal marriage and inheritance rights.

Yet, in a recent nationwide retirement survey of 505 LGBT non-retirees by San Francisco-based Wells Fargo Advisors, they report a higher level of confidence in their retirement savings (61 percent) compared to the general population (53 percent). Despite this confidence, 36 percent of LGBT non-retirees expect they will need to work during retirement in order to afford their lifestyle, which is only slightly lower than the 41 percent of the general population.

To better help this segment of retirement savers, the Accredited Domestic Partnership Advisor program was created -- through a partnership with the College for Financial Planning -- to educate advisors about the unique needs and financial considerations of domestic partners.

According to the survey, approximately one in 10 LGBT respondents have heard of ADPA. "Each investor has different priorities, needs and life goals, and domestic partners and same-sex couples often have added concerns and questions about their unique financial situation," says Well Fargo's Kyle Young.

Not Looking Forward to Retirement?

The average working baby boomer has saved just 49 percent toward his or her total retirement-savings goal, according to a new survey released by Omaha,Neb.-based TD Ameritrade Holding Corp.

Working members of the "mature generation" -- or those born between 1909 and 1945 -- have saved, on average, 71 percent, Generation X have reached 26 percent and Generation Y have achieved 15 percent of their respective retirement savings goals, according to the survey of 2,209 U.S. residents.

Perhaps more troubling, one out of every two Americans surveyed said they are not looking forward to retirement -- a sentiment being fueled by the fear of not having enough money saved in time, according to nearly 30 percent of respondents.

A lack of steady employment, debt, education and healthcare expenses were most often cited by 73 percent of respondents, who say obstacles have prevented them from saving for a comfortable retirement. To make matters worse, 69 percent of respondents have no specific savings goal. Among those who have a specific savings goal, the average amount is $750,000, regardless of age, and only 54 percent say they are confident they will reach their goal, citing a bad economy, not enough income, expenses and not enough time as the reasons they may not be successful.

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"There's no doubt the economic climate in recent years has presented significant challenges for those planning ahead and saving for retirement," says Lule Demmissie, managing director for investment products and retirement at TD Ameritrade Inc. "The key is to focus not on what you can't do, but rather what you can."

China to Raise Retirement Age?

According to the website ChinaDaily.com.cn, a Chinese-government agency has revealed that it will propose a more flexible pension system to central authorities -- which may include a rise in the retirement age -- in order to keep a balance between employment and an expected shortfall in retirement payments.

The site reports the Chinese government's Ministry of Human Resources and Social Security released a written statement on its website stating it is conducting research into the retirement and pension system, and will submit the proposal at an appropriate time "after listening to comments from all circles."

The story notes that, in China, most men retire at 60 and women at 50, but the country is now facing a ballooning deficit in its retirement-pension funds due to a population that is living longer.

According to the story, almost all employees in China, in both private and state-owned organizations, have an individual pension account, into which both the employee and the employer have to make a monthly contribution, but the employee is prohibited from withdrawing any funds until he or she retires.

"From an academic view point, to gradually raise the retirement ages is an inevitable choice due to increasing life expectancy," Zheng Chenggong, a professor with Renmin University of China, told Xinhua, the People's Republic of China's official news agency, as reported by ChinaDaily.

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