The most common retirement planning mistake is a sin of omission: often, people just don’t make a plan, perhaps because thinking about doing it is overwhelming. A recent Bankrate, Inc. poll showed that only 28 percent of respondents expect to be able to retire comfortably. In last year’s version of the poll, 44% of those polled indicated that they were saving 5% or less of their gross income for retirement. This year’s stock market collapse and depressed economy will be especially punishing to those close to retirement who were under-prepared.
Jason Zweig is a highly respected personal finance writer and editor of The Intelligent Investor column in the Wall Street Journal. He raises the issue of a “fiduciary standard” versus a “suitability standard” in his most recent column.
One of the key differences between a NAPFA Fee-Only advisor and a broker is that NAPFA advisors serve their clients in a fiduciary capacity. A fiduciary standard means that your advisor is putting your interests first. Jason describes why this is important:
“A key factor still is missing from Finra’s suitability requirements: cost. Let’s say you tell your broker that you …Read More
Each year the trustees of the Social Security/Medicare trusts are required to report on the status of the trust funds. Last month, having included the effects of the recession in their projections, they released a new report. The news is not good.
Last year’s analysis projected that Social Security would begin paying out more in benefits than it would collect in taxes in 2017. This year’s report from the Trustees of the Social Security and Medicare trust funds concludes that given the levels of unemployment now included in their model, we’ll reach that point a year earlier, in 2016. David …Read More
Recently the mutual fund industry has introduced a new type of financial product targeted at Baby Boomers: income replacement funds. Fidelity has initiated several of these funds and Vanguard’s versions of the same idea, known as “managed payout” funds, were rolled out earlier this month. Other companies will doubtless follow their lead; Schwab and John Hancock are reportedly working on similar products. Like any investment product, these funds will be useful for some people. Consumers should be certain that they understand these funds in order to avoid any unpleasant surprises.
Mutual funds have become familiar investment tools for most …Read More
I got asked the other day what I had against annuities. Let me first explain that my issue has more to do with variable annuities over fixed annuities. Fixed annuities can serve a legitimate purpose in a retired individual’s portfolio. (There are options that may be better though). What I do want to address in this entry is:
1) the proper location of one’s investments
2) the tax consequences of investing in a variable annuity.
Too many tax professionals do not have a good sense of the investment side of an individual’s financial life and too many investment professionals do …Read More