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Print Only On Balance – Editorial CalendarA Newsletter for Retirees and Pre-retireesMarch 2012
Shifting Ownership
Between 1994 and 2010, mutual fund ownership increased for older age groups but fell for younger age groups. Ownership fell from 24% to 15% for investors who are younger than 35, while ownership rose from 13% to 20% for those aged 55 to 64.
Putting Your Eggs in Multiple Baskets
Many investors understand the basic concepts of asset allocation and diversification, but may not understand how they have the potential to improve portfolio performance over time. This article examines how mutual funds offer the potential for a broad level of exposure to a variety of asset classes, market capitalizations, and industry sectors.
There’s Still Time to Catch Up
Worker confidence in affording a comfortable retirement fell to a record low in 2011, but investors aged 50 and older may be able to make up for lost time by maximizing contributions to retirement plans and taking advantage of catch-up contribution limits. The accompanying chart shows the potential difference in accumulation by taking advantage of catch-up contributions from age 50 to age 65 or 70.
Doing Your Heirs a Favor
Although a will and a trust specify disposition of assets, many other details of an individual’s final wishes might be explained in a letter of instructions. This article offers some topics to consider addressing in the letter to help loved ones make decisions and take care of final arrangements.
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February 2012
Understanding Medicare
Less than half of Americans aged 60 and older say they understand the Medicare program, and even fewer can correctly indentify the program’s specific coverage areas. Chart shows breakdown of understanding by age group.
Balancing Stability and Growth
An investor who is two or three decades from retirement could decide to be more aggressive in pursuing investment growth than someone approaching retirement. Even though investors address this by transitioning to a more conservative asset allocation, they still need to seek growth while balancing the desire for principal preservation. This article offers some factors to consider and examines three hypothetical asset allocations and their historical performance over the past 10 years.
A Matter of Trust
A properly executed trust not only may help avoid probate but could help reduce or avoid estate taxes and help ensure that assets are distributed as the grantor wishes. The focus of this article is on basic trust concepts and the most common types of trusts.
Foreign Exchange
Foreign currencies have been in the news headlines with the European debt crisis and pressure on China to loosen its monetary control. Readers can test their knowledge of world currency in this multiple-choice quiz.
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January 2012
Be Alert for Elder Fraud
Most victims of elder fraud are between the ages of 80 and 89, live alone, and require health or home maintenance care. Accompanying pie chart shows elder financial abuse cases, by category.
Going Global: Proceed with Caution
While the U.S. economy lost ground during the Great Recession and has grown slowly over the last two years, many emerging and developing economies are thriving, with continued growth projected for the next few years. Investing internationally offers an opportunity to diversify and take advantage of the global economy, but investors should understand the inherent risks of investing outside the United States.
Looking Ahead in 2012
Although the economic outlook for 2012 suggests that the U.S. economy may continue to experience slow growth in the short term and a modest improvement in the housing sector, it is difficult to predict how this could affect an investor’s portfolio. Regardless of short-term results, a sound investment strategy should be based on an investor’s personal situation, time frame, and risk tolerance.
Keeping Pace with Social Security
In 2012, Social Security beneficiaries will receive a 3.6% cost-of-living increase for the first time in three years. But a recent study suggests that benefits are lagging behind real expenses. This article explains how Social Security benefits are indexed and what older workers and retirees might expect from the program in the future.
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December 2011
Most Retirees Feel Debt Is Under Control
More retirees expressed concerned about debt in 2011 than in 2005, yet 57% seem to be comfortable with their current debt levels. In contrast, more than 60% of workers said debt was a problem in 2011.
Insurance for Two Could Benefit Your Heirs
Survivorship life insurance offers a way to help a couple’s heirs pay estate taxes, probate costs, and other final expenses — and could be especially important after 2012 when the federal estate tax is scheduled to be significantly higher. Even if the estate tax doesn’t apply to an estate, the insurance proceeds could benefit heirs or a favorite charity.
For Better, For Worse: Communicating About Retirement
A recent study indicates that couples are not communicating clearly about retirement goals and strategies, even as they approach retirement age. This article offers suggestions to open a dialogue and encourages couples to discuss their retirement needs and desires with each other and with their financial advisor.
Don’t Forget Your RMDs
One of the steepest penalties in the tax code can be levied on investors who fail to take required minimum distributions from traditional IRAs and employer-sponsored retirement plans after age 70½. This article examines RMD rules, penalties, and deadlines.
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November 2011
Where Their Money Comes From
Only 14% of today’s millionaires say their parents were wealthy; 95% attribute their wealth to hard work and 83% credit “smart” investing.
Choosing an IRA to Fit Your Life
Both traditional and Roth IRAs offer some appealing tax benefits, but which is most appropriate for investors? This article examines the tax implications, income restrictions, and distribution rules of both types of IRAs and how they can be an important part of a retirement savings strategy.
Another Year, Another AMT Patch
The 2010 Tax Relief Act adjusted AMT exemption levels for 2010 and 2011 to help prevent an estimated 21 million middle-income taxpayers from being subject to the alternative minimum tax. Will Congress enact another patch for 2012?
Keeping Your Beneficiaries Current
Retirement plan assets and life insurance benefits typically convey directly to the people named on the beneficiary forms, bypassing probate. The holiday season could be a convenient time to review beneficiaries for these accounts. The questions in this article may help readers review their beneficiary designations.
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October 2011
Less Likely Than You Think
Almost three out of four workers anticipate working for pay in their retirement years, yet less than one out of four current retirees report actually doing so. The accompanying chart contrasts worker expectations with current retiree experiences.
Mutual Funds That May Strike a Balance
As investors age, their willingness to take risk tends to decrease, yet some older investors may want or need to maintain a somewhat more aggressive position. Balanced funds offer an opportunity for retirees and investors nearing retirement to maintain some balance, combining the growth potential of stocks with the potential stability of bonds.
Giving Strategies That Can Give Back
Americans gave more than $290 billion to charity in 2010, despite the slow economy. About 73% of charitable donations came directly from individuals. This article explains how a charitable remainder trust and a charitable lead trust could be used to provide more control over gifts while potentially benefiting the giver and his or her heirs.
Checking Up on Medicare
It's projected that Medicare will cover 88 million people by 2040, compared with 47 million in 2010. Unfortunately, since 2008, Medicare has been paying out more in benefits than it receives in revenues. Given the challenges facing Medicare, readers might consider factoring in higher health-care expenses in retirement.
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