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Why Should You Clean Up Your Retirement Muddle?

Are you feeling that the time is near for you to retire and think about your retirement life? Are you feeling unprepared and disorganized for this reason? One thing that most investors and retirees deal with in retirement is the mind-boggling muddle when attempting to figure out ways to make sure they will still live comfortably after retirement.

Let’s take a quick look at the past. Before, tracking and monitoring a retirement plan was a lot easier when an individual served and worked for one firm throughout his or her entire employment. It was easy before because retirement plan generally implies a pension plan, which means that a worker need not to do much other than be present at work, and once they retired, they began getting their pension benefits every month.

It does seem rather easy and stress-free then. In the past, any worker need not to worry about where their money goes; the entire risk connected to the investment chop down on the shoulders of the former employer. Sad to say, the situation is somewhat different now, pension plans are no longer the standard financial investment vehicle for retirement. Pension plans are no longer widely used as they once was. In addition to that, a lot of workers these days do not merely serve one company any longer. A lot of individuals normally switch jobs more often than not before reaching their retirement age. What exactly this results to is that it leaves a track of retirement savings behind the worker.

These days, 401k annuity plans are getting to be the leading financial investment vehicle upon retirement. If you are a worker and/or a retiree, what does this mean to you? It implies that the burden now lies to you instead of the employer’s. You do, on the other hand, have complete control over this type of retirement vehicle.

It is possible to relieve the overpowering feeling of lack of preparation and get eliminate some of that muddle by consulting annuity experts at www.annuityace.com. These experts take some of that burden off of you and put in onto their shoulders. Good annuity experts can also present you with a free strategic planning and income analysis, and they will find the suitable financial investment vehicle for you. Start organizing some of this muddle and secure a free lifetime retirement income model now.

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How To Survive The Eurozone Crisis In 2012

As we receive regular bulletins on the developing Eurozone crisis, in all of its enormity, many of us could be forgiven for thinking about our own savings accounts rates, and whether our money is safe when the European financial system again seems to be under such strain.  Given the request by the Spanish government on Monday 25th June 2012 for a bailout of up to 100 billion Euros for the Spanish banking system, holders of Santander savings accounts in particular might feel concerned.  Fortunately, most customers in the UK are already protected in the event that a banking collapse in Spain affects Santander UK.  Firstly, Santander UK is a fully UK regulated bank.  Every UK regulated current or savings account is covered by the government backed Financial Services Compensation Scheme (FSCS).  The FSCS protects up to £85,000 per person (or £170,000 for joint accounts), per financial institution. 

Secondly, Santander UK – as a subsidiary of the Spanish parent company, Banco Santander – is set up to be completely independent.  While the main problem that Spanish banks face is exposure to the bust Spanish property market, the majority of Santander UK’s exposure – some 95% – is within the UK, with only 0.37% of its exposure to Spain.  To be completely safe, those with savings that exceed the FSCS protection limit might want to think about moving the excess to a different UK regulated financial institution until the crisis is resolved, thus guaranteeing FSCS protection.                      

The Spanish banking crisis is just one episode in a chain of events that stretches back to at least 2007, and arguably before, as the seeds of the crisis that year were sown much earlier.  At the heart of the current Eurozone crisis is what the Financial Times has called a ‘Lethal Embrace’.  This entanglement – between what billionaire investment guru George Soros has called the ‘conjoined twins’ of the banking crisis and the sovereign debt crisis – has seen banks that are ‘too big to fail’ bailed out by their national sovereigns, and national sovereigns bailed out by their national banking systems. 

Before European monetary union, this way of doing things made sense, with banks supporting national governments in times of stress (like war), and national governments returning the favour, when required, through the use of central bank reserve money to prop up national banks in times of trouble.  However as Perry G. Mehrling – Senior Adviser at the Institute for New Economic Thinking – has put it, when it comes to Europe: ‘The problem is that banking is no longer national, and neither is sovereignty… the consequence has been to transform isolated sovereign debt crises into systemic bank crises, and to transform isolated national bank crises into systemic sovereign debt crises’. 

Looking at the economic nuts and bolts of the Eurozone crisis gets complicated pretty quickly, but underlying the whole problem has been the management – or more accurately mismanagement – of debt.  The creation of the Eurozone enabled member countries with previously marginal credit ratings to take advantage of monetary union with much more solid countries, like Germany, and thus access very cheap credit.  The unprecedented borrowing that followed fuelled many booms that were destined to bust.  The Eurozone member least affected?  Germany, a country which has a strong economic base, but also – crucially – an ingrained culture of saving, rather than borrowing.    

 

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Digital Revolution In The Finance Industry

Today, the digital revolution is about so much more than fast data processing, and can be seen as a hyper-expansion of connectivity, allowing anyone with internet access an instant means of viewing and sharing information, and crucially, transferring money so that commerce can take place.  The finance industry has always used cutting-edge digital technology for communication, since the first modems in the 1970’s offered a new way to transmit data and therefore make remote transactions across the world.  The same industry arguably spearheaded the digital revolution in the nineteen eighties, when phone banking introduced the notion of a more personal, decentralised mode of communication between bank and retail customer.  As personal computing and network technology developed and became more affordable, the internet-powered digital revolution took off in earnest.  Again, the finance industry was one of the first sectors to exploit this technology with the introduction of internet banking.  More recently, the internet has been used to allow private individuals to trade shares and play the ever expanding market of derivatives.  During this time, a less specialist service – which is undoubtedly relevant to many more people – has quietly revolutionised a crucial facet of our modern lives; and this is the ability to access the credit report online service provided by Credit Expert. 

Quite simply, the credit report online allows ordinary people an empowering chance to see what lenders see when assessing applications for credit products.  While the digital revolution has undoubtedly brought many benefits for consumers, it can also be argued that computer-powered decision making often increases – or creates – a faceless bureaucratic barrier between service provider and customer.  The most straightforward example of this number-crunching approach to assessing customers is the average automated online application, which involves no human contact at all.  This of course makes the transaction a more cost effective process for the seller, which in turn allows them to offer more competitive prices to the customer.  However, it is when things don’t run entirely smoothly that the downside of the digital revolution is often displayed, and this is where the importance of customer access to the credit report online comes into play.

Credit reports are simply a compilation of the information that lenders share about customers’ credit accounts.  Those that provide this information also access it, and feed this data into the credit scoring processes used to assess applications for credit products.  Given the fact that many of these products – like mortgages – are of crucial importance to the applicant, the value of making sure that the credit scoring process is based on accurate information cannot be overstated.

The old computing adage: GIGO (Garbage In, Garbage Out) neatly sums up the main challenge with automated credit scoring processes.  Whether you fill in an online form, or speak to a customer service rep on the phone, your application for a credit product is increasingly likely to be assessed by a credit scoring algorithm.  Given the complexity of the process – which often takes in hundreds of different factors – you are unlikely to ever uncover the exact reason for a refusal of your application; quite simply, the employee you speak to won’t have access to this information, however much they want to help.

Erroneous data on your credit report can cause problems with both credit scoring, and the fraud prevention systems employed by lenders.  The simple fact is that the best placed person to identify any errors – and therefore have them corrected – is the subject of the credit report – you!  In the digital age, the 16th century maxim of Francis Bacon has never been more apt:  knowledge is power!