December 2011 Volume 31, Number 12

Little Red Bucket

You know it's the holiday season when you hear the familiar distinctive tone of a bell ringing as you rush from the parking lot to the store entrance. At first you ignore the bell because you are focused shopper, list in hand, with determination to be in and out of there in just 15 minutes. But guilt overtakes you and you pause for a moment, pull out your wallet, and fumble for a few bills to put into the red bucket. And then you hear the phrase that you don't really feel you deserve, “God bless you….and have a Merry Christmas.”

It has occurred to me that Christmas might be a little more meaningful if we tweaked this scenario. What if shoppers spent more time around the red bucket than they did inside the store? What if we gave more dollars away (to feed the hungry) and spent fewer dollars on soon-to-be-forgotten gifts? What if we took the time to get to know the stranger who is spending a cold evening as a Salvation Army volunteer?

The red bucket has an interesting history. In 1891, Salvation Army Captain Joseph McFee was distraught because so many poor individuals in San Francisco were going hungry. During the holiday season, he resolved to provide a free Christmas dinner for the destitute and poverty-stricken. He only had one major hurdle to overcome -- funding the project.

He lay awake nights, worrying, thinking, and praying about how he could find the funds to fulfill his commitment of feeding 1,000 of the city's poorest individuals on Christmas Day. As he pondered the issue, his thoughts drifted back to his sailor days in Liverpool, England. He remembered how at Stage Landing, where the boats came in, there was a large, iron kettle called “Simpson's Pot” into which passers-by tossed a coin or two to help the poor.

The next day Captain McFee placed a similar pot at the Oakland Ferry Landing at the foot of Market Street. Beside the pot, he placed a sign that read, “Keep the Pot Boiling.” He soon had the money to see that the needy people were properly fed at Christmas.

Within six years, the kettle idea spread to Boston, and over 150,000 hungry Americans were fed that year. In 1901, kettle contributions in New York City provided funds for the first mammoth sit-down dinner in Madison Square Garden, a custom that continued for many years. Today in the U.S., The Salvation Army assists more than four-and-a-half million people during the Thanksgiving and Christmas time periods.

Captain McFee's kettle idea is now used in Asia, South America, and many European countries. Everywhere, public contributions to Salvation Army kettles enable the organization to continue its year-round efforts towards helping those who would otherwise be forgotten.

As you wrap up your holiday shopping, take time to give a gift to someone whose face you will not see, but who will be grateful nonetheless. Slow down when you hear the bell ringer. Make a generous donation. Thank the volunteer. You'll warm his or her heart—and you'll also lighten your own.

Merry Christmas,

Source: SalvationArmy.com

 

 

The “Nest-Egg” Myth

A recent Wall Street Journal article notes that nearly half of older Americans have no income from stocks and savings accounts. And, even those wealthy enough to have some sort of nest egg have far too little in it.

More than 8.5 Million - The projected number of Americans who will be over age 85 in twenty years. (The oldest baby boomers turned 65 this year.)

Less than 25 percent - The average new retiree has only one-fourth of the savings needed in order to maintain their standard of living during retirement.

More than 75 percent - The number of Americans over age 65 whose annual income (including Social Security) is less than $34,000.

85 percent - The amount generally assumed of pre-retirement income which will be needed to maintain the same standard of living in retirement.

9 percent - The average amount being contributed to 401(k) plans. This is a combination of 6% from the employee and a 3% company match. Most financial advisors warn that this is probably not enough to generate the size nest-egg needed for retirement.

Source: The Wall Street Journal

 

 

Retirement Preparation in United States reaching CRISIS LEVELS

Americans are becoming increasingly concerned about retirement. A recent survey of small business owners revealed that Americans are so financially unprepared for retirement that it's becoming a crisis. More than 75% of middle-class Americans said they don't think they will be able to retire until age 80.

There are multiple reasons for the pessimism:

Job Insecurity – Not only are Americans worried about getting or keeping their job, but many feel they may not make the income they had once expected—especially during their later years.

Fewer employer-sponsored retirement plans – Even though small business owners stress over their employees lack of retirement planning, many of them say they can't afford to offer a 401(k) or other employee selffunded retirement plan. Currently, only 20% of small businesses offer such a plan.

Investment Portfolio – Market downturns during the past decade have resulted in disappointing portfolio performance.

Real Estate – Much of the “wealth” that Americans felt was due to rising home prices. The real estate collapse has changed all that.

Procrastination – Two-thirds of Americans say their number one financial worry is not having enough money for retirement. That number is up 53% from just 10 years ago. Many soon-to-be-retirees say they didn't start saving soon enough. Others regret that they didn't save a greater percentage of their income.

Some members of Congress are trying to get a bill passed that would encourage small business owners to pool their resources and offer retirement plans that are less expensive than single employer plans. That would be a step in the right direction, but Americans still need to have the discipline to spend less and save more.

Source: CNBC.com