This document provides information on various financial topics including retirement planning, home remodeling, lost savings bonds, and asset allocation. It discusses how pursuing passions even with less pay can lead to greater happiness in retirement. It also notes that asset allocation should consider goals, risk tolerance, and timeline rather than taking more risk than able to handle. Safety first is recommended by keeping investments broadly diversified and following basic investment rules.

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