A Pathetic Payday
Doing less, with less, is one way to describe retirement on a fixed income today. This sad truth is illustrated by Young Research’s proprietary Payday Indicator, the average of the Dow Jones Industrial Average yield plus the three-month Treasury bill yield. In the history of the series, it has never... Read the full story
Rollover that 401k
My first job after Babson College was with Fidelity Investments. I worked at Fidelity Institutional Retirement Services Company (FIRSCO). It managed the 401(k)s of large companies. On big up or down days in the stock market, phone volume would pick up exponentially. Everyone had to help answer calls—including... Read the full story
Twisted Risk to Savers, Pensions, and Annuities
The Federal Reserve has left savers, pensions, and annuities twisting in the wind. Buying long-term Treasuries has resulted in the 10-year bond yielding less than 2%.If we take into account inflation, especially of items needed for survival like food and energy, investors are essentially paying to lend... Read the full story
Gold, Speculators, and You
The temptation to be a speculator in this market is high thanks to some neck snapping stock market volatility, surging gold prices and pathetically low Treasury yields. In such an environment, I suggest you craft a diversified portfolio of stocks, bonds, and gold. If you don’t have an advisor, focus... Read the full story
The Trouble with Annuities
You may have learned about the trouble with annuities. In its simplest form, an annuity is an arrangement in which you give an insurance company a lump sum of money and in exchange you receive payments over time. For a fee, that is. At the end of the day, what you’re really doing is giving up control... Read the full story
Inflation Threatens Long Bond Yield
The Labor Department released July numbers for consumer, producer, and import price inflation this week. The results were troubling. Consumer prices increased 3.6% compared to last year, producer prices increased by 7.6%, and import prices increased by a whopping 14%. Even the Federal Reserve’s preferred... Read the full story
The Biggest Annuity Mistake
I don’t like annuities. I know there are ways they can make sense in some portfolios, but for the majority of investors they’re a bad move for several reasons. First, they’re pushed on unsophisticated investors by well-trained salesmen. Second, the fees, especially surrender fees, can be devastating... Read the full story
Where It’s Expensive to Die
According to Forbes.com: As of June 10, 2011, the District of Columbia and 22 states imposed estate and/or inheritance taxes. Illinois is the latest of the states to adopt a tax; it acted in January. In May Connecticut lowered the amount it exempts from its tax from $3.5 million to $2 million per estate,... Read the full story
Baby Boomers Place Their Bets
You may be surprised at how ill prepared baby boomers are for retirement. In his Wall Street Journal article “Retiring Boomers Find 401(k) Plans Fall Short,” E.S. Browning writes: The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter... Read the full story
Are You Financially Prepared for Retirement?
I just finished wading through the Employee Benefit Research Institute (EBRI) 2011 Retirement Confidence Survey (RCS). My findings are problematic. The EBRI is a private, non-profit, nonpartisan public-policy market research firm. The 2011 RCS is the EBRI’s 21st annual retirement survey. The survey... Read the full story
