Newsletters
Fifty-seven percent of American workers have saved less than $25,000 for retirement, and 28% have saved less than $1,000. 1
Will you outlive your retirement income? How much liability insurance should you have? Should you add stocks to your portfolio? Are your financial expectations for the coming year realistic?
Our financial newsletters are designed to provide helpful information on a wide variety of financial topics. Simply click on one of the newsletter topics below to read the article in its entirety.
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May
HOT TOPIC: Sequester Under Way: What to Expect from Federal Budget Cuts
The Budget Control Act of 2011 mandated $1.2 trillion in automatic spending cuts, known as the sequester, if Congress failed to negotiate a more targeted deficit-reduction package. The blunt federal budget cuts — spread over nine years, 2013 to 2021, and divided evenly between defense and nondefense programs — were meant to be indiscriminate and painful as motivation for lawmakers to take action.
Fraud Never Sleeps
Fraud accounted for more than half of the 1.8 million consumer complaints received by the Federal Trade Commission in 2011. This article cautions consumers about three relatively new scams and how to help avoid them.
Moving On and Rolling Over
One issue that many transitioning workers must decide is what to do with the savings they have accumulated in their employer-sponsored retirement plans. The article explains the potential benefits and pitfalls of four typical options: leaving the savings alone, transferring them to a new employer plan, rolling funds to an IRA and withdrawing the money.
Signs That You May Not Be Ready to Retire
The road to retirement can be difficult to navigate. This article offers some warning signs that readers might not be ready to go full speed ahead with the transition from worker to retiree. A graphic shows the percentage of pre-retirement earnings that Social Security might replace for low, medium, and high earners.
Sector Investing
Individual sectors of the U.S. economy often behave differently under various economic conditions, so investing among the major sectors is one way to help diversify stock market holdings. This article focuses on how the composition, risks, and portfolio roles of the sector funds typically differ from broader-based stock funds.
Businesses Face Health-Care Decisions
Both large and small business owners may want to pay attention to the Affordable Care Act's tax implications due to potential penalties or available financial incentives depending on the level of coverage provided to workers. This article discusses some of the new regulations and tax implications that may affect businesses.
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April
HOT TOPIC: Bouncing Back: The Recovering Market
The collapse of the U.S. housing market helped drive the economy into the worst recession since the Great Depression. Unlike previous recessions, however, the housing sector lagged as the broader economy began to grow, holding back what might have been a stronger recovery.
How Much Do You Need To Save?
One common rule of thumb in developing a retirement savings strategy is that your accumulated savings and other sources of income will need to replace about 80% of your pre-retirement income.
The Empty Nest: An Opportunity to Build Retirement Savings?
The 2006 film Failure to Launch told a humorous story of an adult son who couldn’t seem to leave his parents’ home. Although the plot was fictional, this scenario has become more common in real life — about three in 10 Americans aged 25 to 34 either live with their parents or have done so in recent years.
Understanding Beneficiary Designations
A will is a good starting point to help ensure that your assets are passed on to your heirs according to your wishes. However, it’s also important to specify beneficiaries for financial accounts and insurance policies on the appropriate forms, which may supersede instructions in a will.
A Legacy with a Special Purpose
According to the 2010 census, people with special needs make up nearly 20% of the U.S. population. Furthermore, nearly 20 million American families are raising children with disabilities.
Setting the Stage for Retirement Income
In a 2012 survey, 73% of annuity owners said annuity investments are a critical part of their retirement funding strategies, and 63% said market volatility makes them more likely to consider buying an annuity.
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March
HOT TOPIC: Fiscal Cliff Deal Settles Tax Issues
The American Taxpayer Relief Act of 2012, approved by Congress on January 1, 2013, left current income tax rates in place for most households. However, it raised taxes on high earners for the first time in about 20 years. If a deal had not been struck, federal income taxes were scheduled to return to higher pre-2001 tax-law levels for all taxpayers in 2013
A Closer Look at Closed-End Funds
Most investors have a basic understanding of mutual funds, but they may not have considered that the vast majority of mutual funds are open-end funds, where shares are continuously offered by the investment company. This article presents an overview of less common closed-end funds, including the potential benefits and risks.
Are You Ready for E-Social Security?
As of March 1, 2013, paper Social Security checks will be a thing of the past, and all retirement and disability payments (with minor exceptions) will be made electronically. This article explains the benefits of the electronic payment system and how beneficiaries can help protect their accounts from fraud.
Making Distribution Decisions in Retirement
Committing to a savings strategy while working is essential to enjoying a comfortable retirement, but it’s also important to follow a sound portfolio withdrawal strategy. This article presents the often-recommended 4% inflation-adjusted approach and a three-stage strategy that allocates different types of assets for different periods of retirement.
Considering the Costs of Long-Term Care
About seven out of ten people over age 65 are expected to need some form of long-term care during their lifetimes. This article presents the facts about long-term-care costs, including the coverage limitations of government programs, and encourages readers to factor these costs into their retirement savings strategies.
Tablets May Help Simplify Small-Business Tasks
A recent survey found that roughly two-thirds of small businesses utilize touch-screen tablets for work, as innovative (and relatively inexpensive) apps change the way some companies conduct business on a daily basis.
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February
The Affordable Care Act Goes into Action
The Affordable Care Act enters a pivotal phase of implementation in 2013. This article outlines changes that may affect taxpayers and consumers, including new tax provisions to help pay for benefits under the act, issues that may impact employer-based coverage, and the rapidly developing landscape of state-based insurance exchanges.
Updating Heirs on Your Accounts
The beginning of the year may be a good time to review beneficiary designations to make sure they reflect current wishes. This article explains why beneficiary forms for retirement accounts and insurance policies supercede instructions in a will, and it outlines some important considerations when reviewing beneficiary designations.
Libor Levels
The London Interbank Offered Rate, commonly known as Libor, has been in the news this year because of allegations that a number of banks tried to manipulate it during the 2007–2009 financial crisis. If you are not familiar with Libor, you may wonder what it is and how it might affect your own financial situation.
Here Comes Another Earnings Season
Publicly traded companies are required to report their financial results to regulators and shareholders quarterly, disclosing their successes and failures. This article focuses on the information that is presented to investors during earnings season and how understanding the reporting process may help readers keep short-term market swings in perspective.
Making Your Own Retirement Opportunities
About two-thirds of small-business owners fear that they are financially unprepared for retirement, yet one-third do not have a personal or business-sponsored retirement plan in place. This article focuses on the potential tax benefits and contribution limits of solo 401(k) plans and SEP IRAs.
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January
HOT TOPIC: Disastrous Sandy: The Financial Effects of a Historic Storm
Hurricane Sandy inflicted an estimated $50 billion in losses from property damage, lost business activity, and additional living costs. This article focuses on the insured and uninsured financial losses that may slow the U.S. economy in the short term, and discusses how recovery spending may contribute to GDP growth in 2013.
The Risk of a “Flight to Safety”
During the financial crisis, investors moved money into money market mutual funds as a “flight to safety.” Then when the stock market started to recover, cash flowed out of these funds almost as quickly as it flowed in. This article examines money market funds while also cautioning investors about their limitations.
Cost of Early Retirement Plan Withdrawal
More workers have been borrowing from their retirement accounts or taking hardship withdrawals in the past few years. Even so, 55% of those who took a cash distribution when changing jobs said they regretted having done it. This article explains why early retirement plan withdrawals could be more costly than they might seem.
Having a Backup Plan
People are working longer and often carrying major financial responsibilities, such as mortgages, into their later years. For those who work, a period of disability could not only have immediate financial consequences but might also impact the options available for retirement. This article focuses on the benefits of an individual disability income insurance policy.
Understanding High-Deductible Medical Plans
For some families, a high-deductible plan managed in combination with a health savings account (HSA) may be a more affordable and flexible health insurance option. This article focuses on HSA rules, tax implications, and maximum coverage levels, as well as potential benefits and drawbacks.
Adding Exports to Growth Strategies
An emerging middle class of consumers in China, Russia, India, and elsewhere may provide lucrative markets for products offered by smaller U.S. companies. This article explores the reasons why more small firms are incorporating exports into their business plans and introduces some resources that may be available.
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December
HOT TOPIC: QE3: Is the Third Time the Charm?
In September, the Federal Reserve announced the third round of quantitative easing, dubbed QE3, in an effort to stimulate the still struggling U.S. economy. This article examines the potential benefits and risks of QE3, how it differs from QE1, QE2, and Operation Twist, and how it may impact investors and consumers.
Big, Medium, and Small: Spreading the Risk
During the five-year period from 2007 to 2011, the total return of large-cap stocks was a disappointing -1.24%. The performance of small- and mid-sized companies during the same period was much better: 17.72% and 10.10%, respectively. This article compares large-cap, mid-cap, and small-cap stocks and explains how they can be used to diversify a portfolio.
An Introduction to Trusts
Many people think trusts are only for the rich, but that’s not necessarily the case. Most estates go through the probate process, and tax changes scheduled to take effect in 2013 could subject even modest estates to federal estate taxes. This article presents some trust basics and describes how a trust could help reduce or avoid the costs of probate and estate taxes.
Potential Changes to the Gift Tax
The highly favorable treatment of federal estate and gift taxes is scheduled to expire at the end of 2012. This article explains current gift limits and exclusions and the lifetime exemption, and why it may be a good time to examine gift options because of the uncertainty of the gift tax next year.
Family Limited Partnerships
Business owners who want family members to inherit their businesses in the future may want to consider using a family limited partnership to transfer estate assets during their lifetimes — and long before they plan to relinquish control. This article focuses on how FLPs work and their potential role in business succession and estate planning.
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November
HOT TOPIC: Fiscal Cliff: How Election-Year Inaction Could Affect the US Economy
Nearly $600 billion in federal tax increases and spending cuts are scheduled to take effect on January 1, 2013, unless lawmakers address the deficit, taxes, and government spending. Political and fiscal policy uncertainty may cause bouts of market volatility in the latter part of the year.
End of Year Tax Tips
With the end of the year fast approaching, it may be a good time to consider some steps that could help reduce your 2012 income tax liability.
The Dow Then and Now
The Dow Jones Industrial Average is so ingrained in American financial thinking that many investors may not have stopped to consider what it represents and how accurately it may reflect broader market trends. This article presents a brief history of the Dow and how it has evolved with the American economy.
The Attraction of Bonds
Bonds are generally considered to offer lower returns than stocks, but the last decade demonstrated that isn't always true, as corporate bonds outpaced stocks by an annual average of 4% during the period. This article presents the fundamentals of bonds and bond mutual funds, and the role they can play in an investment portfolio.
Looking Beyond Your Credit Score
Baby boomers and people aged 66 and over have higher credit scores than younger age groups, but they may still face credit challenges. This article examines how debt held by these age groups compares with national averages.
Business Builder or Time Waster?
In a recent survey, 94% of marketers reported they are using social media to publicize their businesses, and small business owners, too, were willing to tout its benefits. This article discusses social media trends for business owners and includes some tips for creating and using social media accounts effectively.
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October
HOT TOPIC: Potential Impact of the 2012 Drought
By the end of July, hot and dry conditions had driven a rapid expansion of drought across 63% of the nation, devastating crops and livestock. While the severity and full effect of the drought might not become clear for some time, it may be helpful to examine its potential implications for consumers and the U.S. and global economies.
More Affordable than You Might Think
Even though the cost of life insurance has fallen over the last decade, 80% of consumers cite financial reasons for not having enough coverage. Americans overestimated the cost by almost three times the actual price. This article encourages readers to explore the benefits of having adequate protection for their families.
Graduating with Debt
In 2010, about 56% of students who received a bachelor’s degree from a public college or university had an average debt of $22,000; private-school graduates averaged $28,100 in debt. This article emphasizes the importance of saving to help reduce potential debt and how college could be considered an investment in the future.
Take Advantage of Medicare Open Enrollment
Each year between October 15 and December 7, eligible beneficiaries can make changes to their Medicare health or prescription drug coverage for the following year. The article examines some of the benefits of Plans A, B, C, and D and encourages readers to consider their options.
Small Firms Still Face Credit Challenges
Business owners often rely on borrowed money for the cash flow needed to run their operations, pay employees, or finance expansion. But since the recession, many small firms have found it more difficult to obtain financing when needed. This article takes a look at how small businesses are coping with today’s challenging credit environment.
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September
HOT TOPIC: Rediscovering Fossil Fuels: Could Energy Boom Transform the Economy?
The nation is producing more natural gas than ever before. This article discusses how fossil fuel discoveries and shifts in electricity production, auto engineering, and manufacturing could affect supplies and prices in the future as well as the potential implications for consumers, businesses, and the U.S. economy.
How Much Life Insurance Do You Need?
A recent study indicates that 40% of consumers believe they do not have enough life insurance to meet their families’ long-term needs. But how much is enough? This article presents guidelines to determine how much life insurance may be appropriate
Becoming a More Rational Investor
Studies have indicated that investors’ willingness to assume risk tends to rise and fall with the stock market. This article looks at how and why investors react to gains and losses given recent research in behavioral finance and neuroscience.
Consider These TIPS
Nobel prize-winning economist Milton Friedman once said that “Inflation is taxation without legislation.” You’re probably aware of how taxes reduce your earnings, but have you thought about the effect of inflation?
Surprise! It’s Retirement Time
In a 2012 survey, 50% of current retirees said they retired earlier than planned, up from 45% in 2011. This article presents some of the key issues that pre-retirees should consider to ease the transition into retirement.
Taming Taxes
Small-business owners and independent contractors may be more likely than other taxpayers to benefit from the home-office tax deduction, which has an average value of more than $2,600. But some taxpayers are hesitant to claim this potential tax benefit, fearing that it could trigger an IRS audit. This article may help taxpayers evaluate their eligibility for the home-office deduction.
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August
HOT TOPIC: The Affordable Care Act: Where Do We Go from Here?
The Supreme Court decision on the Affordable Care Act may be one of the most significant legal decisions in the long history of the court. This article will examine the court’s decision and its potential effects on health care and the economy as well as on the fundamental issues of state rights and taxation.
The Benefits of Giving
A recent international survey suggests that spending money for the benefit of others may promote a feeling of happiness in the giver. Three-fourths of Americans donate to charities, and while doing so could help ease your tax burden, it’s important to understand the rules and keep appropriate records.
Understanding Your Social Security Options
About half of all retirees file for Social Security benefits when they first become eligible at age 62, but those who do may be missing out on the potential for higher benefits. This article presents strategies for increasing monthly and lifetime Social Security benefits based on various situations.
Inherited IRAs Come with Critical Choices
Inherited IRAs offer an opportunity to continue tax-deferred growth of IRA or workplace saving plan assets, but the rules and available choices differ depending on the heir’s relationship to the original owner. This article explains how inherited IRAs work and discusses some common strategies for spouses, children, and others.
Following the Leading Index
The Conference Board’s Index of Leading Indicators is designed to help economists and investors assess the U.S. economic outlook for the next three to six months. Earlier this year, the research group that publishes the index replaced several outdated components with others that may be more accurate indicators in light of recent structural shifts in the U.S. economy.
The ABCs of Business Structure
When a small business grows quickly, the owner may consider changing its form of ownership to a C or S corporation so it can take on additional investors. And some states now recognize benefit corporations, which tend to appeal to “social entrepreneurs.” This article compares the different options for incorporating your new or growing business.
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July
HOT TOPIC: Coming to America: Foreign Travelers Boost U.S. Economy
International visitors spent a record $153 billion visiting the United States in 2011, an increase of 14% over 2010. As the overall U.S. trade deficit continued to grow, foreign tourism produced a trade surplus of $42.8 billion. This article examines the growing U.S. travel and tourism industry and what it may mean to the domestic economy.
What’s Your Retirement Vision?
It’s disappointing to dream about a comfortable retirement and then find yourself with limited financial resources, unable to enjoy travel or hobbies due to high daily living expenses and needs. Workers of all ages should factor the kind of retirement lifestyle they want into their saving and investment strategy.
Investing When Rates Are Low
Interest rates have been exceptionally low for three years – and are expected to remain so through the end of 2014. For investors approaching retirement, capital preservation is typically very important, but portfolios should also outpace inflation in order to last. This article presents considerations for investing in the current low-interest-rate environment.
Costs of Caregiving
More than 65 million Americans – about one in three adults – provide unpaid care for someone who is ill, disabled, or aged. Caregivers may incur substantial financial burdens but could also face risks to their own physical and mental health. It may be prudent to consider the cost of long-term care into your retirement plans.
Following the Federal Reserve
This primer on the central bank discusses the Fed’s recent policy moves, including the unprecedented actions it has taken to help prop up the banking system and spur the economy in the wake of the financial crisis, and how Chairman Bernanke has promoted greater transparency.
What Is Your Business Worth?
The market for selling small businesses improved slightly in 2011, but buyers still had the upper hand. This article addresses some reasons why a precise professional valuation could be useful for effective business, tax, and retirement planning.
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June
HOT TOPIC: Watching for Weakness in the Global Economy
Economic growth has weakened more than expected recently in some of the world’s largest economies but there are differences in the economic challenges facing these nations. Global economic conditions and expanded world trade have made the fates of many large economies more interdependent, which could affect the United States.
To Convert or Not to Convert? That’s the Roth Question
Many investors may not understand the potential long-term advantages of converting tax-deferred retirement plan assets to a Roth IRA. This article focuses on factors to consider, such as current and future tax implications, avoidance of mandatory distributions, and weighing the current value of assets versus their converted tax-free growth potential.
Help Protect Your Assets
From 1951 through 2009, the cost of torts rose at more than double the annual rate of general inflation. Standard homeowners and auto insurance policies offer limited liability coverage, whereas an umbrella liability insurance policy not only provides additional coverage but often cover situations not included in standard policies.
Socially Responsible Investing Joins the Mainstream
Assets in socially responsible investments (SRIs) have climbed in recent years as more investors seek to invest according to their personal beliefs. This article looks at the different types of socially responsible, green, and sustainable investments available and reminds readers to consider traditional portfolio fundamentals when selecting SRIs.
Hanging the “Help Wanted” Sign
Business owners need to consider not only wages when hiring new staff, but also the potential costs involving benefits, recruiting, training, and compliance. Accompanying chart shows median recruiting costs per hire, by industry.
Rebalancing World Trade
Healthy U.S. exports have been an important contributor to economic growth during the recovery. Investors may be interested in following some important developments in the international trade arena.
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