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    • Retirement Savings Crisis Getting Worse, Not Better

      As long-time readers know, one of my continuing themes over the years has been saving, and in particular saving for retirement. Record numbers of Americans are retiring every year and, unfortunately, most have not saved nearly enough for the retirement lifestyle they envisioned.

      Even worse, more and more Americans are retiring with debt – mortgages, car payments, credit cards, etc. It used to be that you planned not to retire until you were out of debt and with a comfortable nest egg. Not so anymore.

      Today we will look at some recent retirement findings from the Transamerica Center for Retirement Studies  which are very concerning. We will also look at a recent survey by the Teachers Insurance and Annuity Association – College Retirement Equity Fund, which researches retirement trends. The results are alarming.

      And finally, we’ll look at the question of how much you need to save to have a comfortable retirement. Unfortunately, this is a complicated subject that depends on several variables such as how much you have saved already, at what age you plan to retire, the lifestyle you wish to have, etc., etc. It’s a very important topic, so let’s get started.

    • Why More & More Americans Are Working In Retirement

      In my Blog last Thursday, I wrote about the astounding number of seniors 65 years and older who have not paid off their home mortgages. As a follow-up to that topic, a new report finds that more Americans than ever are working well into retirement. That’s where we will start today with a review of the latest numbers on those working beyond age 65.

      Following that, I will reprint the most interesting article I have read in some time. It is an article which discusses President Obama’s most likely legacy – one he will definitely be unhappy about. Interestingly, this article was written by Jeff Greenfield, the award-winning TV journalist, best-selling author and a Democrat. You will not believe what he has to say about Obama’s legacy. Let’s get started.

    • Do More Americans Feel Confident About Retirement?

      More Americans say they are feeling more confident about their retirement. That’s according to the results of the latest “Retirement Confidence Survey” conducted each year by the non-profit Employee Benefit Research Institute (EBRI). The Washington-based EBRI is the leading source for data on savings, retirement, health and related issues.

      In their 2015 survey, some 37% of all respondents said they feel “very confident” about their retirement, and another 33% said they feel “somewhat confident.” The problem is that many Americans ‘say’ they are confident about having enough money to retire, even though they have nowhere near enough money stashed away. Many people overstate the amount of retirement savings they actually have and under-estimate how much money they will actually need in retirement.

      As we drill deeper into the latest retirement survey, we find that overall only 22% of current workers are now very confident about having enough money for a comfortable retirement. The 2015 survey also revealed that workers with a company-sponsored retirement plan are more than twice as likely as those without a retirement plan to be very confident – 28% with a plan, as compared to only 12% without a plan.

      I'll summarize the main findings in the latest EBRI retirement survey as we go along today. Following that discussion, I am compelled to criticize what I consider to be some of the worst investment advice I have seen in my 38 years in this business. The advice came in the form of a controversial video that was posted on a popular website last week.

      It was quickly criticized by a number of respected financial writers, mainly because the author, James Altucher, argued that investors and savers, especially younger ones, should avoid and/or abandon their employers’ 401(k) plans. He makes several erroneous statements about 401(k)s and their sponsors that many of us in the financial industry vehemently disagree with. So along with others who quickly discredited the video, I will criticize Mr. Altucher today. I hope no one takes his advice seriously!

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    • Retirement Saving Crisis is Worse Than We Thought

      Each year Wells Fargo & Company conducts a survey of middle-class Americans of various ages to see how they are faring with saving for retirement. The results of the 2014 survey were just made public late last month. I will summarize them for you below. Let me warn you in advance – they are not pretty!

      But first, let’s take a look at last Friday’s better than expected October unemployment report. The headline unemployment rate fell to 5.8%, the lowest level in almost six years. So far in 2014, new jobs are being added at the fastest pace since 1999. Best of all, the employment rate for young people ages 25-34 rose to the highest level since late 2008.

      To all of our brave men and women who have served in our Armed Forces, we thank you and wish you a Happy Veterans Day!

    • Retirement: How To Avoid Outliving Your Savings

      With over 10,000 Baby Boomers retiring every day, a pattern that will continue for the next 20 years, retirement savings continues to be one of the most important issues of our day. With 76 million Americans born between 1946 and 1964 – the “Baby Boom Generation” – saving enough for retirement is critically important.

      Unfortunately, study after study continues to find that most older adults have not saved nearly enough for their retirement, especially considering that we are living longer due to medical advances and taking better care of ourselves.

      Today, we’ll start by looking at some recent data on retirement saving and how this remains a huge problem for most Americans We’ll also look into why it is that many people overspend in retirement and get into trouble. Following that discussion, we will look at some ways to make sure that you don’t outlive your savings.

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    • Looming Retirement Crisis – Boomers In Big Trouble!

      Let’s face it, we all know this country is facing a retirement crisis. The first of the Baby Boomers turned 65 and started retiring in 2011. The number of Boomers retiring each year will rise rapidly over the next decade or more. Before the end of this decade, Boomers will be turning age 65 at the rate of 8,000 per day.

      This massive retirement of Baby Boomers will stretch our health care and health delivery systems to the max and beyond. Our public safety net – entitlements – has long been poorly managed, ill-thought-out and threadbare. Imagine what will happen as tens of millions of Boomers retire.

      Yet the worst part of all is that so few people or families have saved anywhere near enough for retirement. According to a survey conducted earlier this year, 60% of workers have saved less than $25,000 for their retirement. And 36% have saved less than $1,000. This is appalling!

      Another new study found that 43% of Baby Boomers are at risk of running out of money in retirement. And this number is almost certainly understated because, as I will discuss below, many Boomers are untruthful about their assets when responding to retirement surveys. The point is, most Boomers are far, far behind in saving for their retirement.

      Given the magnitude of the coming retirement crisis, it will be a continuing theme I will be writing about periodically in the months and years ahead. I hope to present you with some ideas for saving more for retirement and, of course, making more on your investments.

      In that regard, I will be unveiling a new investment strategy that has me more excited than I’ve been in years! The risk/reward profile of this strategy is very impressive. We call it “ALPHA ADVANTAGE.” Trust me, you’re going to like what you see. I’ll talk a little more about it at the end of today’s E-Letter, but the details, including the performance, etc., will be unveiled in a special E-Mail to all clients and readers tomorrow. You don’t want to miss it!

    • Baby Boomers Not Prepared for Retirement

      One of the more common questions we get at my firm is "How can I get active management strategies in my 401(k) plan?" It's a good question since many participant-directed plans such as 401(k)s, 403(b)s and 457 plans are sold by brokerage and mutual fund companies who have no interest in providing strategies that can go to cash to protect retirement assets during market downturns.

      Fortunately, we now have two ways that 401(k) participants can access active management strategies, depending upon the structure of their plans. This week, I'm going to highlight each of these alternatives, one of which virtually anyone can use to put the power of active management in their corner.

      First, however, I'm going to talk about why fresh strategies are needed in many 401(k) plans. Recent surveys have shown that Baby Boomers are woefully unprepared for retirement. While this is nothing new, it may shock you to know that about 25% of Boomers say that they don't think they can retire...EVER! This week's E-Letter is a must-read for anyone with significant 401(k) balances.

    • Retirement Income With Limited Risk


      1.   The Retirement Income Dilemma

      2.   Convertible Bonds as an Income Option

      3.   Revisiting the Advantages of Convertible Bonds

      4.   The Wellesley Advantage – A New Webinar

      5.   Another Chance to Hear Greg Miller, CPA

    • Is a Roth Conversion Right for You?

      Since their introduction in 1997, Roth IRAs have become increasingly popular. Unlike traditional IRAs, contributions to a Roth IRA are not tax-deductible, but earnings grow on a tax-free basis if held for the required amount of time. The ability to have completely tax-free income at retirement is a big plus, especially for young people.

      The Roth IRA rules also allow for someone with a traditional IRA to convert it to a Roth IRA. Prior to 2010, only those with incomes under $100,000 could do a Roth conversion, but now anyone can convert their traditional IRA to a Roth. However, just because it is now permissible doesn't mean that it's a wise financial decision for everyone.

      In this week's E-Letter, I'm going to discuss the pros and cons of converting a traditional IRA to a Roth IRA and when such a conversion may be feasible. I'll also let you in on a key factor in the decision to convert and how politics may actually come into play. I think you'll find this discussion very interesting.

    • Falling Global Birthrates Threaten Prosperity

      Long-time clients and readers will recall that one of my macro concerns is the steep decline in birthrates in developed countries around much of the world, as discussed at length in my September 4, 2007 E-Letter. Given that we have a short week due to the President's Day holiday, I have elected to reprint another fascinating article on the subject of falling birthrates. The following article by Professor Steven Malanga points out that the US birthrate is hovering at just above the necessary 'replacement' level, which he and others believe will lead to a long period of healthy economic growth in the years and maybe decades ahead. However, as he points out near the end, rising taxes have a negative effect on birthrates, and with our national debt exploding, we are definitely headed in the direction of higher taxes. I think you will find this very interesting reading.

    • Retirement Focus: Target-Date Funds in the Crosshairs

      Target-date funds have been touted as an excellent alternative for 401(k) plan participants who either can't or won't do the work necessary to build their own retirement portfolios. These funds offer a one-stop shopping approach by offering an automatic asset allocation scheme within the fund that is based on a future retirement date. However, like most one-size-fits all solutions, these funds have some serious drawbacks. In fact, some of these funds did so poorly in 2008 that government regulators are now considering special allocation and disclosure rules. This week, Mike Posey will fill us in on the pros and cons of target-date funds and why they may not always be the best alternative for investors.

    • Retirement Focus: Spotlight on Good News

      This week, Mike Posey resumes his Retirement Focus series of E-Letters by calling attention to the positive things happening in the retirement planning market. Yes, there is a lot of bad news floating around out there, but Mike's analysis shows that there are opportunities awaiting those who recognize and act upon them. As part of the good retirement planning news, Mike will introduce a new actively managed 403(b) program that we are researching. This investment option is offered by Potomac Fund Management, one of our most trusted Investment Advisors. While our due diligence process is not yet completed on this product, we feel confident that we will soon be able to offer this program to those of you who participate in 403(b) programs and have the Fidelity family of mutual funds as an available investment option.

    • Retirement Focus - Year-End Retirement Sugarplums

      The stock market has been doing a bit better lately with both the Dow and S&P 500 Indexes well above their November lows. This, in turn, has resulted in some well-known financial "experts" saying that the market has hit the bottom and it's now time to invest. Other analysts, however, are not so optimistic and point to continued uncertainty as a reason that the market could still go lower. Nowhere is this debate more important than to 401(k) and IRA account holders with large cash balances and are agonizing about whether to jump back into the market, or remain on the sidelines. This week, Mike Posey provides a possible answer to this question, as well as offering a number of other year-end retirement planning ideas that may be helpful to you....
    • Obama's Judges vs. Republican Opposition

      Since I began writing this E-Letter in 2002, I have always maintained that politics and investments are joined at the hip. The political "solutions" coming out of Washington to address the subprime debt crisis and resulting credit crunch should be more than enough to prove this thesis. This week, I'm going to discuss a political issue where the tie to investments may not be as evident, but it's there. The issue is the potential for liberal judicial appointments during the Obama presidency, and how these may change the legal landscape. President-elect Obama is already on record as supporting the "living document" interpretation of the Constitution, and so will likely favor jurists who share this viewpoint. This could mean more "legislating from the bench" and other forms of liberal judicial activism. If so, all I can say is hold onto your pocket books!...
    • The Democrats' Plan To Highjack Your 401(k)

      Well, election day is upon us. While the mainstream media would have us believe that the results are a foregone conclusion in Obama's favor, recent polls have indicated a narrowing of his lead over McCain in some battleground states. Obviously, we'll all just have to wait and see how the votes turn out. In the meantime, I think it's important that we conservatives notice some of the trial balloons that are being floated by the Democratic leadership. One recent proposal that would eliminate the favorable tax treatment of 401(k) plans shows us that, no matter how the election turns out, we have plenty to fear from the liberals who are already in office....