SlideShare a Scribd company logo
1 of 4
Download to read offline
CARY ROWELL'S


                  A C O M P I L AT I O N O F I N F O R M AT I O N A N D I D E A S F O R E F F E C T I V E M O N E Y M A N A G E M E N T



                                                                                       Financial Front
             Money line
                                                           NEWS BRIEFS AND HIGHLIGHTS FROM THE FINANCIAL WORLD
       Do You                                              Lump-sum pension payouts may               Don’t remodel to increase a
    Have Enough?                                           not be available to all holders of
                                                           defined-benefit plans. A new law
                                                                                                      home’s value if you plan to move
                                                                                                      soon. You would be lucky to recover
                                                           requires employers to tell their work-     even a portion of your investment if
                                                           ers if a defined-benefit plan is fully     you sell before the depressed housing
                                                           funded—that is, if it has all the money    market recovers, and that may take
          By W. Cary Rowell
                                                           needed to pay all its obligations. Fully   another two years. Also, affordability is
            LUTCF, MBA                                     funded plans may offer retirees either     moving up in importance to home buy-
                                                           a series of payments or a lump-sum         ers, given tight economic conditions.
  I hope you find you have enough when you con-            payout, but plans that do not have         “Sprucing up” your home still is worth-
  sider what’s really important in your life.              enough money to pay in full at least       while, however. Examples: Painting
    I recently read a letter to a financial columnist      80% of employees are allowed to pay        walls, trimming bushes and straighten-
  that read, “Many of my 50-something friends are          only 50% of a retiree’s pension in a       ing up your garage.
  wasting some invaluable time that they’ve been           lump sum. And plans that do not have
  given on Earth. They are caught up in an ‘earning        enough money to pay at least 60% of        If your mortgage lender fails, keep
  and spending cycle’ (must keep working hard so           employees do not have to make any          sending your monthly payments to the
  they can keep buying things they don’t really            lump-sum payments at all. Ask your         same address until you are told to do
  need) while worrying they’ll need to save a lot of       defined-benefit plan’s manager for         otherwise. If your lender transfers
  money to retire.                                         details on the financial health of your    your mortgage to another servicer, you
    “I can’t believe the number of smart, talented         company’s plan.                            will be notified within 15 days and the
  friends I have who are not particularly happy                                                       new servicer must contact you within
  doing what they are doing,” the reader said. But         Looking for a lost savings bond?           15 days after the transfer. The Real
                                                           Go to TreasuryDirect.gov and down-         Estate Settlement Procedures Act
  they believe “they must continue so they can stop
                                                           load Form 1048, Claim for Lost, Stolen     (RESPA) sets rules for mortgage trans-
  working at (fill-in-the-blank age) to play golf or sit
                                                           or Destroyed US Savings Bonds. Fill in     fers. For more information, visit
  by the pool.”
                                                           the following information: the bond        www.hud.gov, and search for “RESPA.”
    I must agree. What a waste, doing something
                                                           owner’s name, address and Social           Your mortgage terms will not
  you don’t like so eventually you can stop and
                                                           Security number; approximate issue         change—the contract is legally binding
  do...nothing?                                                                                       even if transferred to another party.
                                                           date; and serial number if available.
    Why not pursue your passions even if the pay is
                                                           Once the form is certified at a bank,
  less? (That reader did, returning to school for a        mail to the Department of Treasury
  degree in a different field.) If you love what you       (the address can be found on the
  do, you may never feel the need to totally retire,
  or at least won’t mind working a few more years.
                                                           form). With the serial number, the                   Wit & Wisdom
                                                           process will take three to four weeks;
  Retirement, as this reader said, would be a time         without it, you may be waiting months
  to work for joy and learn new things.                    to get a duplicate bond.                      “A bone to the dog
                                                                                                           is not charity.
                                                           If you take photos of your home
    W. Cary Rowell LUTCF, MBA                              for posting on-line, be sure the pic-         Charity is the bone
         Financial Services Professional
              628 Chestnut Centre
                                                           tures do not show off valuables. Also:       shared with the dog,
                                                           Before holding an open house, lock up
            Myrtle Beach, SC 29572
                                                           valuables or store them off the premis-
                                                                                                        when you are just as
                 (843) 449-7805
          wcrowell@ft.newyorklife.com
                                                           es. There have been recent reports of        hungry as the dog.”
         www.caryrowell.nylagents.com                      well-dressed thieves coming to open
                                                                                                                 — Jack London
                                                           houses and stealing jewelry, handbags,
                                                           clothing, even champagne.
Volume 22, Number 3
Investment Strategies


                   ASSET ALLOCATION: Think Goals,
                       Risk Tolerance, Timeline
                                                     By Humberto Cruz




Q:     I thought you were an invest-
       ment guru. Instead, you
apparently park a lot of money in the
                                          dozen times over the years and taken
                                          his advice to heart, drawing the dis-
                                          tinction among the ability, willingness
                                                                                     willingness to take risk have
                                                                                     decreased. Thirty years ago, while
                                                                                     building up my career (and portfolio),
bank. Do you recommend safety first       and need to take risks.                    I had 80 percent in stocks.
and don’t get involved in stocks and                                                   What’s the most appropriate asset
bonds?                                       “Never take more risk                   allocation for you? That’s a personal
                                               than you have the                     decision for you to make, perhaps

A:       Glad you asked, because a
         discussion about investment
risk is needed these days.
                                             ability, willingness or
                                                 need to take.”
                                                                                     with professional help. Good advice
                                                                                     would have kept a 70-year-old I met
                                                                                     recently from having most of his
  First, I am no investment “guru.”                                                  retirement money in the single — and
My success has come by keeping              For example, you may be able to take     sinking — stock of his former employ-
things simple and following basic         a fair amount of investment risk if you    er, Wachovia bank.
rules.                                    won’t need the money for a long time         While that’s an extreme case,
  I have diversified broadly and have     and also have a steady, good-paying        research by the Employee Benefit
kept my asset allocation (broadly         job.                                       Research Institute (EBRI) and
speaking, the mix between stocks and        But you may still not feel comfortable   Investment Company Institute shows
bonds in my portfolio) in line with my    with too much risk, preferring to give     many older Americans are heavily
risk tolerance.                           up potential gains to sleep better at      exposed to the stock market.
  “Never take more risk than you          night.                                       Based on the most recent figures,
have the ability, willingness or need       On the other hand, you may need to       almost a third of 401(k) plan partici-
to take,” said Larry Swedroe, an          take at least some risk to generate the    pants in their 60s had 80 percent or
investment adviser in Clayton, MO         returns to meet your goals. An all-cash    more of their 401(k) money in stocks,
and author or co-author of seven          portfolio may feel “safe” but likely is    including company stock and mutual
common-sense investment books.            inadequate for long-term needs.            funds.
  “We live in a world of uncertainty,”      Swedroe’s advice is to consider all        In the 56-65 age group, 27 percent
Swedroe said. “Stocks are high-risk       three factors separately (ability, will-   had more than 90 percent in stocks.
investments, no matter how long the       ingness and need to take risk) and         Another 15 percent had between 80
investment horizon.” Never treat the      choose the least overall amount of risk    and 90 percent, and 11 percent had
unlikely (such as a major, prolonged      consistent with them.                      between 70 and 80 percent.
bear market) as impossible, or the          Since retiring from full-time work in      While such high allocations to stocks
likely (stocks eventually always go up)   2000, I’ve kept no more than 30 per-       can be OK for younger workers, “it is
as certain, he cautions.                  cent of my portfolio in stocks — just 20   less certain that those approaching
  I’ve interviewed Swedroe half a         percent since 2008 — as my need and        retirement would receive similar rec-
                                                                                     ommendations,” Jack VanDerhei,
                                                                                     EBRI research director, told the House
                                                                                     Education and Labor committee
                                                                                     recently. Unpublished research by
                                                                                     EBRI found the average allocation to
                                                                                     stocks in so-called “target-date” mutu-
                                                                                     al funds specifically designed for
                                                                                     investors in the 56-65 age group was
                                                                                     a more moderate 51 percent.


                                                                                                                                   $ FND

                                                                                     Reprinted with permission. © Copyright Tribune Media
                                                                                     Services. All Rights Reserved.
Debt Management


                  Paying Off Your Mortgage Can Boost
                       Cash Flow In Retirement
                                                         By Mark Miller


Should you carry a mortgage into             Mortgage interest tax break: Many
retirement?                                 homeowners like the idea of keeping a
  Before the economic crash last year,      mortgage for the tax deduction on inter-
financial planners advised many pre-        est costs. But that benefit applies to tax-
retirement and retired investors to
invest any free cash in stocks, rather          Many planners now
than pay down a mortgage. But the
new economy has ushered in much               advise clients to focus
                                                                                            Funding a pay-down: If you have
more conservative attitudes about            on debt reduction as one                     sufficient savings to pay off your mort-
retirement planning — especially               of the best retirement                     gage without raiding emergency savings
indebtedness.
  Many planners now advise clients to         security “investments”                      funds, use lower-return taxable savings
                                                                                          before tapping tax-advantaged IRA or
focus on debt reduction as one of the              you can make.                          401(k) accounts.
best retirement security “investments”                                                      If you don’t have adequate cash to jet-
you can make. In retirement, you’ll         payers who itemize beyond the standard        tison the mortgage, refinancing to a
likely be on a fixed income and face        deduction. And the greatest interest          lower rate may help you accelerate pay-
pressure to keep pace with rising costs,    expense comes in the earlier years of a       ments. Or, consider getting a part-time
and debt-related interest expense just      mortgage; with an older mortgage, the         job and devoting your earnings entirely
adds to the challenge.                      payment is mainly principal, reducing         to accelerated mortgage payments.
  The no-brainers to focus on include       the value of any tax deduction.
credit card debt and auto loans. But if                                                    Another option to consider: Sell
you’re a homeowner, a mortgage likely         The underwater dilemma: Many                your current home and move to an area
is your most significant monthly debt-      pre-retirement baby boomers took on           — or home —with a lower cost of living
related expense. Let’s look at the issues   higher mortgage debt in the years run-        that can be financed mortgage-free.
to consider in deciding whether a           ning up to the real estate crash; a study     “That can be one of the best ways to
mortgage pay off is right for you near      this year by the Center for Economic          extricate yourself from mortgage debt,”
— or in — retirement:                       and Policy Research found that 30 per-        says Christine Fahlund, a senior finan-
                                            cent of Americans age 45 to 54 are            cial planner at T. Rowe Price.
  Where’s the best return? If you           “underwater” on their mortgages — that                                                        $ FND
have a dollar to invest, consider           is, their debt is higher than their homes’
                                                                                          Reprinted with permission. © Copyright Tribune Media
whether your best return will come          current value, and they would need to bring   Services. All Rights Reserved.
from investing it, or reducing the bal-     cash to a closing in the case of a sale.
ance on an interest-bearing mortgage.         For some, that raises a question about
If your mortgage rate’s after-tax rate is   paying off mortgage debt that won’t pro-                   On The Money
five percent, you’d need to do better       vide a return when the property ulti-
than that in the stock market to be in      mately is sold. Indeed, University of
positive territory. Historically, stocks    Arizona law professor Brent T. White
have returned eight to 10 percent a         even suggested in a recent research
year over 30-year periods — but it’s        paper that the rational economic move
returned about zero over the past 10        for some underwater homeowners
years, and the market’s short-term          would be to default on their loans and
direction is anyone’s guess.                give their homes back to the bank.
  Most importantly, stocks shouldn’t be       Since that raises more moral and legal
a big part of a retirement portfolio, so    issues than most people can stomach,
the appropriate comparison is a more        the best advice is to simply look at your
conservative fixed-income investment,       home as housing, not an investment.
such as certificates of deposit, Treasury   In that context, owning your property         “I finally put something aside for my retirement.
Bills or Treasury bonds.                    debt free is more efficient than carrying                I put aside my plans to retire!”
                                            a loan.
CARY ROWELL'S



 628 Chestnut Centre
 Myrtle Beach, SC 29572
 W. Cary Rowell is a Registered Representative offering securities through NYLIFE Securities, LLC., Member FINRA/SIPC
 (843) 720-1900 - 200 Meeting Street, Suite 202; Charleston, SC 29401




This publication is provided to our readers as an informational source only. The ideas, opinions and concepts expressed here should not be construed
as specific tax, legal, financial and/or investment advice. You should consult with your professional advisors regarding your particular situation.



                                                                     Retirement Planning

Seniors Can Boost Their Social Security Benefits By ‘Re-retiring’
                                                                                 By Kathy Kristof


Retirees may be able to take advantage                         in a lump sum plus some money left                       Kathleen Wiegand, a Social Security
of a loophole in the Social Security law                       over, you shouldn’t do it, Horowitz said.                spokeswoman in San Francisco.
which allows you to “restart” your                               That said, the typical retiree’s biggest                 The agency would then respond with
retirement benefits years after you’ve                         risk is outliving their savings. “The                    a letter saying how much they’d have
retired. If you’re healthy, have some                          biggest risk old people have is living to                to repay. Once they repaid those bene-
savings, and are under age 70, it may                          100,” said Kotlikoff. “You can’t count on                fits, they could “re-retire” and start get-
pay off.                                                       dying on time.”                                          ting payments at the higher rate.
  Someone who originally retired at age                          Let’s take a look at Peter and Kate, a                   Kotlikoff estimates that his hypotheti-
62 and “re-retires” at 70, for example,                        hypothetical 70-year-old retired couple                  cal couple would each need to write the
could boost monthly benefit payments by                        who originally started taking Social                     government a check for $94,556.
76 percent, said Brett Horowitz, a certi-                      Security benefits at age 62. Kotlikoff esti-               That payment gets them an extra
fied financial planner with Evensky &                          mates that each spouse would be receiv-                  $620 per month, or about $7,440 per
Katz in Coral Gables, Fla.                                     ing $13,250 per year or some $1,104 per                  year. If they live at least another 13
  The catch? You have to repay what                            month today.                                             years, until they’re 83, they’re ahead of
Social Security has given you so far.                            However, if they had retired at age 70,                the game. That would pay back their
  Sound crazy? It would be if you’re in                        they each would be receiving $1,724 per                  $94,556 outlay and then some.
poor health, said Larry Kotlikoff, an eco-                     month, or $20,692 annually.
                                                                                                                                                                      $ FND
nomics professor at Boston University.                           To restart their retirement, they would
Moreover, if you don’t have more than                          have to fill out form 521, a “request for                Reprinted with permission. © Copyright Tribune Media
                                                                                                                        Services. All Rights Reserved.
enough in savings to repay the benefits                        withdrawal” of retirement benefits, said

More Related Content

Similar to May 2010

Do You Have Contingency Plans?
Do You Have Contingency Plans?Do You Have Contingency Plans?
Do You Have Contingency Plans?Owner's Edge, LLC
 
Compass Newsletter April 2010
Compass Newsletter April 2010 Compass Newsletter April 2010
Compass Newsletter April 2010 guest30ab03c
 
Develop your financial_iq
Develop your financial_iqDevelop your financial_iq
Develop your financial_iqFlora Runyenje
 
Cse part iv mine
Cse part iv mineCse part iv mine
Cse part iv mineneeason
 
Home Buying 101
Home Buying 101Home Buying 101
Home Buying 101Art Hotes
 
Smart Money May June 12 Sm44 Singles
Smart Money May June 12 Sm44 SinglesSmart Money May June 12 Sm44 Singles
Smart Money May June 12 Sm44 SinglesOliver Taylor
 
Age Does Make A Difference
Age Does Make A DifferenceAge Does Make A Difference
Age Does Make A DifferenceDestinyDefined
 
5 tips for coming up with down payment
5 tips for coming up with down payment5 tips for coming up with down payment
5 tips for coming up with down paymentRandyBett
 
MILWAUKEE NETWORKING CLUB - Gary Zimmermann with ENVOY MORTGAGE
MILWAUKEE NETWORKING CLUB - Gary Zimmermann with ENVOY MORTGAGEMILWAUKEE NETWORKING CLUB - Gary Zimmermann with ENVOY MORTGAGE
MILWAUKEE NETWORKING CLUB - Gary Zimmermann with ENVOY MORTGAGEmilwaukeenetworkingclub
 
9 Things To Avoid When Buying A House
9 Things To Avoid When Buying A House9 Things To Avoid When Buying A House
9 Things To Avoid When Buying A HouseLogan Sargent
 
Intelligent investing
Intelligent investing Intelligent investing
Intelligent investing DipDas40
 
5 estate planning moves for those without heirs
5 estate planning moves for those without heirs5 estate planning moves for those without heirs
5 estate planning moves for those without heirsDan Dekoter
 
Mad about money
Mad about moneyMad about money
Mad about moneySoma Ghosh
 
4 signals it might be time to buy
4 signals it might be time to buy4 signals it might be time to buy
4 signals it might be time to buyRandyBett
 
You're Fired; Now What?
You're Fired; Now What?You're Fired; Now What?
You're Fired; Now What?Abhishek Shah
 
The Retirement Income Gender Gap -- Dealing with the Shortfall
The Retirement Income Gender Gap -- Dealing with the ShortfallThe Retirement Income Gender Gap -- Dealing with the Shortfall
The Retirement Income Gender Gap -- Dealing with the ShortfallDolf Dunn
 
Viewpoint Newsletter for November and December 2010
Viewpoint Newsletter for November and December 2010Viewpoint Newsletter for November and December 2010
Viewpoint Newsletter for November and December 2010Steve Stanganelli
 

Similar to May 2010 (20)

Do You Have Contingency Plans?
Do You Have Contingency Plans?Do You Have Contingency Plans?
Do You Have Contingency Plans?
 
Compass Newsletter April 2010
Compass Newsletter April 2010 Compass Newsletter April 2010
Compass Newsletter April 2010
 
Develop your financial_iq
Develop your financial_iqDevelop your financial_iq
Develop your financial_iq
 
Cse part iv mine
Cse part iv mineCse part iv mine
Cse part iv mine
 
Home Buying 101
Home Buying 101Home Buying 101
Home Buying 101
 
Smart Money May June 12 Sm44 Singles
Smart Money May June 12 Sm44 SinglesSmart Money May June 12 Sm44 Singles
Smart Money May June 12 Sm44 Singles
 
Age Does Make A Difference
Age Does Make A DifferenceAge Does Make A Difference
Age Does Make A Difference
 
5 tips for coming up with down payment
5 tips for coming up with down payment5 tips for coming up with down payment
5 tips for coming up with down payment
 
Realty411 - The Real Estate Investor's Magazine!
Realty411 - The Real Estate Investor's Magazine!Realty411 - The Real Estate Investor's Magazine!
Realty411 - The Real Estate Investor's Magazine!
 
Recession-Proof Your Financial Life
Recession-Proof Your Financial LifeRecession-Proof Your Financial Life
Recession-Proof Your Financial Life
 
MILWAUKEE NETWORKING CLUB - Gary Zimmermann with ENVOY MORTGAGE
MILWAUKEE NETWORKING CLUB - Gary Zimmermann with ENVOY MORTGAGEMILWAUKEE NETWORKING CLUB - Gary Zimmermann with ENVOY MORTGAGE
MILWAUKEE NETWORKING CLUB - Gary Zimmermann with ENVOY MORTGAGE
 
9 Things To Avoid When Buying A House
9 Things To Avoid When Buying A House9 Things To Avoid When Buying A House
9 Things To Avoid When Buying A House
 
Intelligent investing
Intelligent investing Intelligent investing
Intelligent investing
 
5 estate planning moves for those without heirs
5 estate planning moves for those without heirs5 estate planning moves for those without heirs
5 estate planning moves for those without heirs
 
Mad about money
Mad about moneyMad about money
Mad about money
 
Mad about money
Mad about moneyMad about money
Mad about money
 
4 signals it might be time to buy
4 signals it might be time to buy4 signals it might be time to buy
4 signals it might be time to buy
 
You're Fired; Now What?
You're Fired; Now What?You're Fired; Now What?
You're Fired; Now What?
 
The Retirement Income Gender Gap -- Dealing with the Shortfall
The Retirement Income Gender Gap -- Dealing with the ShortfallThe Retirement Income Gender Gap -- Dealing with the Shortfall
The Retirement Income Gender Gap -- Dealing with the Shortfall
 
Viewpoint Newsletter for November and December 2010
Viewpoint Newsletter for November and December 2010Viewpoint Newsletter for November and December 2010
Viewpoint Newsletter for November and December 2010
 

Recently uploaded

PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfHajeJanKamps
 
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfTalent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfCharles Cotter, PhD
 
Tata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakTata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakEditores1
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)tazeenaila12
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfAnhNguyen97152
 
Project Brief & Information Architecture Report
Project Brief & Information Architecture ReportProject Brief & Information Architecture Report
Project Brief & Information Architecture Reportamberjiles31
 
Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Lviv Startup Club
 
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...IMARC Group
 
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 Building Your Personal Brand on LinkedIn - Expert Planet-  2024 Building Your Personal Brand on LinkedIn - Expert Planet-  2024
Building Your Personal Brand on LinkedIn - Expert Planet- 2024Stephan Koning
 
A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.mcshagufta46
 
PDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdfPDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdfHajeJanKamps
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Onlinelng ths
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessAPCO
 
Entrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsEntrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsP&CO
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxJemalSeid25
 
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...AustraliaChapterIIBA
 
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfChicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfSourav Sikder
 
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView
 

Recently uploaded (20)

PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
 
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfTalent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
 
Tata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakTata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerak
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
 
Investment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV IndustriesInvestment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV Industries
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
 
Project Brief & Information Architecture Report
Project Brief & Information Architecture ReportProject Brief & Information Architecture Report
Project Brief & Information Architecture Report
 
Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)
 
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...
Boat Trailers Market PPT: Growth, Outlook, Demand, Keyplayer Analysis and Opp...
 
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 Building Your Personal Brand on LinkedIn - Expert Planet-  2024 Building Your Personal Brand on LinkedIn - Expert Planet-  2024
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 
A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.A flour, rice and Suji company in Jhang.
A flour, rice and Suji company in Jhang.
 
PDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdfPDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdf
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Online
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
 
Entrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsEntrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizations
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptx
 
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
 
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfChicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
 
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
 

May 2010

  • 1. CARY ROWELL'S A C O M P I L AT I O N O F I N F O R M AT I O N A N D I D E A S F O R E F F E C T I V E M O N E Y M A N A G E M E N T Financial Front Money line NEWS BRIEFS AND HIGHLIGHTS FROM THE FINANCIAL WORLD Do You Lump-sum pension payouts may Don’t remodel to increase a Have Enough? not be available to all holders of defined-benefit plans. A new law home’s value if you plan to move soon. You would be lucky to recover requires employers to tell their work- even a portion of your investment if ers if a defined-benefit plan is fully you sell before the depressed housing funded—that is, if it has all the money market recovers, and that may take By W. Cary Rowell needed to pay all its obligations. Fully another two years. Also, affordability is LUTCF, MBA funded plans may offer retirees either moving up in importance to home buy- a series of payments or a lump-sum ers, given tight economic conditions. I hope you find you have enough when you con- payout, but plans that do not have “Sprucing up” your home still is worth- sider what’s really important in your life. enough money to pay in full at least while, however. Examples: Painting I recently read a letter to a financial columnist 80% of employees are allowed to pay walls, trimming bushes and straighten- that read, “Many of my 50-something friends are only 50% of a retiree’s pension in a ing up your garage. wasting some invaluable time that they’ve been lump sum. And plans that do not have given on Earth. They are caught up in an ‘earning enough money to pay at least 60% of If your mortgage lender fails, keep and spending cycle’ (must keep working hard so employees do not have to make any sending your monthly payments to the they can keep buying things they don’t really lump-sum payments at all. Ask your same address until you are told to do need) while worrying they’ll need to save a lot of defined-benefit plan’s manager for otherwise. If your lender transfers money to retire. details on the financial health of your your mortgage to another servicer, you “I can’t believe the number of smart, talented company’s plan. will be notified within 15 days and the friends I have who are not particularly happy new servicer must contact you within doing what they are doing,” the reader said. But Looking for a lost savings bond? 15 days after the transfer. The Real Go to TreasuryDirect.gov and down- Estate Settlement Procedures Act they believe “they must continue so they can stop load Form 1048, Claim for Lost, Stolen (RESPA) sets rules for mortgage trans- working at (fill-in-the-blank age) to play golf or sit or Destroyed US Savings Bonds. Fill in fers. For more information, visit by the pool.” the following information: the bond www.hud.gov, and search for “RESPA.” I must agree. What a waste, doing something owner’s name, address and Social Your mortgage terms will not you don’t like so eventually you can stop and Security number; approximate issue change—the contract is legally binding do...nothing? even if transferred to another party. date; and serial number if available. Why not pursue your passions even if the pay is Once the form is certified at a bank, less? (That reader did, returning to school for a mail to the Department of Treasury degree in a different field.) If you love what you (the address can be found on the do, you may never feel the need to totally retire, or at least won’t mind working a few more years. form). With the serial number, the Wit & Wisdom process will take three to four weeks; Retirement, as this reader said, would be a time without it, you may be waiting months to work for joy and learn new things. to get a duplicate bond. “A bone to the dog is not charity. If you take photos of your home W. Cary Rowell LUTCF, MBA for posting on-line, be sure the pic- Charity is the bone Financial Services Professional 628 Chestnut Centre tures do not show off valuables. Also: shared with the dog, Before holding an open house, lock up Myrtle Beach, SC 29572 valuables or store them off the premis- when you are just as (843) 449-7805 wcrowell@ft.newyorklife.com es. There have been recent reports of hungry as the dog.” www.caryrowell.nylagents.com well-dressed thieves coming to open — Jack London houses and stealing jewelry, handbags, clothing, even champagne. Volume 22, Number 3
  • 2. Investment Strategies ASSET ALLOCATION: Think Goals, Risk Tolerance, Timeline By Humberto Cruz Q: I thought you were an invest- ment guru. Instead, you apparently park a lot of money in the dozen times over the years and taken his advice to heart, drawing the dis- tinction among the ability, willingness willingness to take risk have decreased. Thirty years ago, while building up my career (and portfolio), bank. Do you recommend safety first and need to take risks. I had 80 percent in stocks. and don’t get involved in stocks and What’s the most appropriate asset bonds? “Never take more risk allocation for you? That’s a personal than you have the decision for you to make, perhaps A: Glad you asked, because a discussion about investment risk is needed these days. ability, willingness or need to take.” with professional help. Good advice would have kept a 70-year-old I met recently from having most of his First, I am no investment “guru.” retirement money in the single — and My success has come by keeping For example, you may be able to take sinking — stock of his former employ- things simple and following basic a fair amount of investment risk if you er, Wachovia bank. rules. won’t need the money for a long time While that’s an extreme case, I have diversified broadly and have and also have a steady, good-paying research by the Employee Benefit kept my asset allocation (broadly job. Research Institute (EBRI) and speaking, the mix between stocks and But you may still not feel comfortable Investment Company Institute shows bonds in my portfolio) in line with my with too much risk, preferring to give many older Americans are heavily risk tolerance. up potential gains to sleep better at exposed to the stock market. “Never take more risk than you night. Based on the most recent figures, have the ability, willingness or need On the other hand, you may need to almost a third of 401(k) plan partici- to take,” said Larry Swedroe, an take at least some risk to generate the pants in their 60s had 80 percent or investment adviser in Clayton, MO returns to meet your goals. An all-cash more of their 401(k) money in stocks, and author or co-author of seven portfolio may feel “safe” but likely is including company stock and mutual common-sense investment books. inadequate for long-term needs. funds. “We live in a world of uncertainty,” Swedroe’s advice is to consider all In the 56-65 age group, 27 percent Swedroe said. “Stocks are high-risk three factors separately (ability, will- had more than 90 percent in stocks. investments, no matter how long the ingness and need to take risk) and Another 15 percent had between 80 investment horizon.” Never treat the choose the least overall amount of risk and 90 percent, and 11 percent had unlikely (such as a major, prolonged consistent with them. between 70 and 80 percent. bear market) as impossible, or the Since retiring from full-time work in While such high allocations to stocks likely (stocks eventually always go up) 2000, I’ve kept no more than 30 per- can be OK for younger workers, “it is as certain, he cautions. cent of my portfolio in stocks — just 20 less certain that those approaching I’ve interviewed Swedroe half a percent since 2008 — as my need and retirement would receive similar rec- ommendations,” Jack VanDerhei, EBRI research director, told the House Education and Labor committee recently. Unpublished research by EBRI found the average allocation to stocks in so-called “target-date” mutu- al funds specifically designed for investors in the 56-65 age group was a more moderate 51 percent. $ FND Reprinted with permission. © Copyright Tribune Media Services. All Rights Reserved.
  • 3. Debt Management Paying Off Your Mortgage Can Boost Cash Flow In Retirement By Mark Miller Should you carry a mortgage into Mortgage interest tax break: Many retirement? homeowners like the idea of keeping a Before the economic crash last year, mortgage for the tax deduction on inter- financial planners advised many pre- est costs. But that benefit applies to tax- retirement and retired investors to invest any free cash in stocks, rather Many planners now than pay down a mortgage. But the new economy has ushered in much advise clients to focus Funding a pay-down: If you have more conservative attitudes about on debt reduction as one sufficient savings to pay off your mort- retirement planning — especially of the best retirement gage without raiding emergency savings indebtedness. Many planners now advise clients to security “investments” funds, use lower-return taxable savings before tapping tax-advantaged IRA or focus on debt reduction as one of the you can make. 401(k) accounts. best retirement security “investments” If you don’t have adequate cash to jet- you can make. In retirement, you’ll payers who itemize beyond the standard tison the mortgage, refinancing to a likely be on a fixed income and face deduction. And the greatest interest lower rate may help you accelerate pay- pressure to keep pace with rising costs, expense comes in the earlier years of a ments. Or, consider getting a part-time and debt-related interest expense just mortgage; with an older mortgage, the job and devoting your earnings entirely adds to the challenge. payment is mainly principal, reducing to accelerated mortgage payments. The no-brainers to focus on include the value of any tax deduction. credit card debt and auto loans. But if Another option to consider: Sell you’re a homeowner, a mortgage likely The underwater dilemma: Many your current home and move to an area is your most significant monthly debt- pre-retirement baby boomers took on — or home —with a lower cost of living related expense. Let’s look at the issues higher mortgage debt in the years run- that can be financed mortgage-free. to consider in deciding whether a ning up to the real estate crash; a study “That can be one of the best ways to mortgage pay off is right for you near this year by the Center for Economic extricate yourself from mortgage debt,” — or in — retirement: and Policy Research found that 30 per- says Christine Fahlund, a senior finan- cent of Americans age 45 to 54 are cial planner at T. Rowe Price. Where’s the best return? If you “underwater” on their mortgages — that $ FND have a dollar to invest, consider is, their debt is higher than their homes’ Reprinted with permission. © Copyright Tribune Media whether your best return will come current value, and they would need to bring Services. All Rights Reserved. from investing it, or reducing the bal- cash to a closing in the case of a sale. ance on an interest-bearing mortgage. For some, that raises a question about If your mortgage rate’s after-tax rate is paying off mortgage debt that won’t pro- On The Money five percent, you’d need to do better vide a return when the property ulti- than that in the stock market to be in mately is sold. Indeed, University of positive territory. Historically, stocks Arizona law professor Brent T. White have returned eight to 10 percent a even suggested in a recent research year over 30-year periods — but it’s paper that the rational economic move returned about zero over the past 10 for some underwater homeowners years, and the market’s short-term would be to default on their loans and direction is anyone’s guess. give their homes back to the bank. Most importantly, stocks shouldn’t be Since that raises more moral and legal a big part of a retirement portfolio, so issues than most people can stomach, the appropriate comparison is a more the best advice is to simply look at your conservative fixed-income investment, home as housing, not an investment. such as certificates of deposit, Treasury In that context, owning your property “I finally put something aside for my retirement. Bills or Treasury bonds. debt free is more efficient than carrying I put aside my plans to retire!” a loan.
  • 4. CARY ROWELL'S 628 Chestnut Centre Myrtle Beach, SC 29572 W. Cary Rowell is a Registered Representative offering securities through NYLIFE Securities, LLC., Member FINRA/SIPC (843) 720-1900 - 200 Meeting Street, Suite 202; Charleston, SC 29401 This publication is provided to our readers as an informational source only. The ideas, opinions and concepts expressed here should not be construed as specific tax, legal, financial and/or investment advice. You should consult with your professional advisors regarding your particular situation. Retirement Planning Seniors Can Boost Their Social Security Benefits By ‘Re-retiring’ By Kathy Kristof Retirees may be able to take advantage in a lump sum plus some money left Kathleen Wiegand, a Social Security of a loophole in the Social Security law over, you shouldn’t do it, Horowitz said. spokeswoman in San Francisco. which allows you to “restart” your That said, the typical retiree’s biggest The agency would then respond with retirement benefits years after you’ve risk is outliving their savings. “The a letter saying how much they’d have retired. If you’re healthy, have some biggest risk old people have is living to to repay. Once they repaid those bene- savings, and are under age 70, it may 100,” said Kotlikoff. “You can’t count on fits, they could “re-retire” and start get- pay off. dying on time.” ting payments at the higher rate. Someone who originally retired at age Let’s take a look at Peter and Kate, a Kotlikoff estimates that his hypotheti- 62 and “re-retires” at 70, for example, hypothetical 70-year-old retired couple cal couple would each need to write the could boost monthly benefit payments by who originally started taking Social government a check for $94,556. 76 percent, said Brett Horowitz, a certi- Security benefits at age 62. Kotlikoff esti- That payment gets them an extra fied financial planner with Evensky & mates that each spouse would be receiv- $620 per month, or about $7,440 per Katz in Coral Gables, Fla. ing $13,250 per year or some $1,104 per year. If they live at least another 13 The catch? You have to repay what month today. years, until they’re 83, they’re ahead of Social Security has given you so far. However, if they had retired at age 70, the game. That would pay back their Sound crazy? It would be if you’re in they each would be receiving $1,724 per $94,556 outlay and then some. poor health, said Larry Kotlikoff, an eco- month, or $20,692 annually. $ FND nomics professor at Boston University. To restart their retirement, they would Moreover, if you don’t have more than have to fill out form 521, a “request for Reprinted with permission. © Copyright Tribune Media Services. All Rights Reserved. enough in savings to repay the benefits withdrawal” of retirement benefits, said