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Cypen & Cypen
NEWSLETTER
for
DECEMBER 29, 2011

Stephen H. Cypen, Esq., Editor

1.      DELAYING RETIREMENT:  IS 80 THE NEW 65?: CNNMONEYsays one quarter of middle-class Americans are now so pessimistic about their savings they are planning to delay retirement until they are at least 80 years old -- two years longer than the average person is even expected to live!  It may be depressing, but for many it is a necessity.  On average, Americans have only saved a mere 7% of the retirement nest egg they were hoping to build.  While respondents (ages 20 to 80) had median savings of only $25,000, their median retirement savings goal was $350,000.  And 30% of people in their 60s -- right around the traditional retirement age of 65 -- who were surveyed had saved less than $25,000 for retirement.  As a result, many people are not in a hurry to quit their day jobs.  Three-fourths of middle-class Americans expect to work throughout retirement.  This group includes 25% of Americans who say they will need to work until at least 80 before being able to retire comfortably. 
 
2.      YOUNGER HIGHER EDUCATION PARTICIPANTS AS CONSERVATIVE WITH SAVINGS AS ELDERS:  Fidelity Investments’ Higher Education Generational Survey covered approximately 600 higher education employees and examined retirement saving and investing behavior across three generations:  Generation Y (ages 21-32), Generation X (ages 33-46) and Baby Boomers (ages 47-65).  Nearly half of the higher education workers surveyed described themselves as “conservative” investors when it comes to retirement, regardless of age.  In fact, younger employees were found to be using the same asset allocation strategies as their older counterparts, with Gen Y using a similar asset mix (50% stock, 35% bond/annuity and 15% cash) as Gen X and Baby Boomers.  More than half (55%) of all higher education employees surveyed also said they considered themselves to be “beginners” at investing:  71% for Gen Y, 50% for Gen X and 51% of Baby Boomers.  Sixty- three percent are concerned they will not be able to live comfortably in retirement.  Most participants do not have a formal plan for their retirement regardless of age.  When asked about plans for retirement, 46 percent said they will delay retirement or never retire at all.  Survey results were reported by BusinessWire. 
 
3.      STABBED AT ANGER MANAGEMENT CLASS, WOMAN SUES SPONSOR:  Luna Oraivej learned about the consequences of angry outbursts during an unintended lesson at her anger management training, a lawsuit contends.  ABAJournal.com reports that Oraivej was stabbed in the arms by a classmate who became enraged by a Dr. Phil video, according to Oraivej’s suit against the not-for-profit company that ran the class.  Oraivej says a teen-attendee stabbed her with a paring knife after she encouraged the girl to give Dr. Phil a chance.  The teen was arrested, but Oraivej finished the class because of fears she would go to jail if she did not complete the work.  The instructor did not disabuse her, saying there was just a little more coursework to complete.  The spokesman for the class sponsor said the incident was isolated, that the instructor had previously worked as a parole officer and was trained to handle angry people.  Oraivej herself was in class because she had broken a DVD player during a domestic dispute.  Ah, yes, the most unkindest cut of all. 
 
4.      OLDER ADULTS AND THE 2007-2009 RECESSION:  United States Government Accountability Office has issued a Report to Chairman of the U.S. Senate Subcommittee on Primary Health and Aging, Committee on Health, Education, Labor and Pensions.  Here is a summary of GAO’s findings: 
 

  • Since 2007, unemployment rates rose and remained higher than before the recession for workers aged 55 and older.  
  • While these rates were not as high as for workers in younger age groups, median duration of unemployment is higher for older workers, indicating that older workers have a harder time finding other employment after losing a job. 
  • Proportion of older workers employed part-time who would prefer full-time work rose sharply.  
  • Unemployment rates increased for all groups during the recession and remained lowest for whites.  
  • Since 2007, many older adults have seen decreases in their income and net worth. 
  • Median household income fell by 6 percent for adults 55-64, but increased by 5 percent for adults 65 and older. 
  • Household net worth fell for older adults during the recession, while poverty rates increased for those aged 55-64. 
  • Medical costs continued to rise faster than other costs.  
  • Purchasing power of Social Security benefits was maintained with cost-of-living adjustments and, for those receiving benefits in 2009, increased with a one-time $250 Recovery Act payment in 2009.  
  • During the recession, mortality rates for older adults continued a long-term decline. 

 
By way of background, consider that
 

  • The average proportion of income received from SSA by recipient households with a member age 65 or older was 65 percent in 2008.  
  • Most households with Social Security benefits receive most of their income from SSA.   
  • In aggregate, Social Security benefits provide 36 percent of income for all households with someone 65 or older. 
  • Pensions and assets are also key sources of retirement income, together providing 31 percent of aggregate income for households with a member aged 65 and older.  
  • However, many older adults lack any pension; 44 percent of full-time workers in their 50s have neither a defined benefit nor defined contribution pension from their current employer.
  • Although many current retirees have DB pensions, including 12 million retirees with private sector DB pensions, DB prevalence has declined; the number of active DB plan participants in the private sector fell from about 26 million to about 19 million from 1990 to 2008.  
  • DC plans are more common among today’s workers.  Among workers retiring 2000-2006 with a DC plan, only about 6 percent chose an annuity to ensure income throughout retirement. 
  • For households approaching or entering retirement (age 55 to 64), the median level of financial assets in 2007 (before the recession) was about $72,000.  Using a 4 percent withdrawal rate in retirement, that would replace about 5 percent of these families’ $55,000 median annual household income. 

 
There is serious trouble brewing.  GAO-12-76 (October 2011). 
 

5.      L.A. WILL NOT USE GOOGLE CLOUD FOR POLICE EMAIL: Los Angeleshas canceled a move that would have put the Los Angeles Police Department and other criminal justice personnel on Google’s cloud-based email system.  According to govtech.com, while the city’s other employees will stay on Google’s Gmail, city officials believe that security requirements needed by law enforcement were not met by Google’s cloud technology.  The city’s $7.2 Million contract -- signed in 2009 to move all 30,000 city employee email accounts from Novell GroupWise to Gmail -- will be modified so that LAPD and others who need heightened security will remain on an in-house email.  Meanwhile. Google will pay $350,000 per year for those employees to use the existing Novell system.  It looks like somebody had his head in the clouds. 
 
6.      YOU SCRATCH MY BACK, AND I’LL TATTOO YOURS:   Welcome back to Judge Carton Rules, where a fake judge issues rulings to spare the parties the time and expense of cases in which the outcomes are obvious.  Here are the facts in today’s case: 
 

  • Plaintiff and defendant reside in a trailer park, and were once girlfriend and boyfriend. 
  • Boyfriend, who is a tattoo artist, learned that girlfriend cheated on him with a longtime friend of his. 
  • Sometime after boyfriend learned that girlfriend cheated on him, girlfriend asked boyfriend to tattoo a scene from Narniaon her back. 
  • Prior to creating the tattoo, boyfriend and girlfriend drank wine and did tequila shots and boyfriend had girlfriend sign a consent form stating that the design of the tattoo was at the artist’s discretion.   
  • Boyfriend then created a tattoo on girlfriend’s back that in no way showed Narnia, but rather is a large pile of feces with flies buzzing around it. 
  • Plaintiff girlfriend is suing boyfriend for $100,000 for tattooing the pile of feces on her back.  Boyfriend argues that girlfriend signed the consent form leaving the tattoo to his discretion. 
 
Judge Carton finds for the plaintiff in the amount of $100,000, plus costs of tattoo removal.  While girlfriend did sign the consent form (and did allegedly cheat on boyfriend), a tattoo of a pile of excrement was not within the range of discretion reasonably provided to the tattoo artist boyfriend.  In the alternative, the judge found that the girlfriend was intoxicated and unable to provide consent under the circumstances.  We guess girlfriend should not have turned her back on boyfriend. 
 

7.      GOLF WISDOMS:  Don't play with anyone who would question a 7. 
 
8.      PARAPROSDOKIAN:  (A paraprosdokian is a figure of speech in which the latter part of a sentence or phrase is surprising or unexpected in a way that causes the reader or listener to reframe or reinterpret the first part.  It is frequently used for humorous or dramatic effect.):   "A fool and his money are soon elected." — Will Rogers 
 
9.      QUOTE OF THE WEEK:  “Decide that you want it more than you are afraid of it.”  Bill Cosby 
 
10.    ON THIS DAY IN HISTORY:  In 1972, Eastern Tristar Jumbo Jet crashes near Everglades, killing 101.  
 
11.    OUR NEW LOOK:  We recently switched to a new list-serve, which accounts for a different look.  Tell us if you have any problems, as work is still in progress.  Thanks for subscribing to our Newsletter. 
 
12.    KEEP THOSE CARDS AND LETTERS COMING: Several readers regularly supply us with suggestions or tips for newsletter items.  Please feel free to send us or point us to matters you think would be of interest to our readers.  Subject to editorial discretion, we may print them.  Rest assured that we will not publish any names as referring sources. 
 
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WISHING YOU AND YOURS A VERY HAPPY AND HEALTHY NEW YEAR

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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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