Salient to Investors: John R. Talbott writes: Total costs of 2% per year in a fund earning a 3 percent real return is tantamount to giving Wall Street two-thirds of the profits. ETF’s that cost a half a percent to 1 percent per year can end up costing as much as one-third
READ MORE... →Salient to Investors: Some financial advisers are telling wealthy clients that the remainder of 2012 is a last-chance sale on federal tax rates before taxes rise in January. Ron Florance at Wells Fargo said pressure to reduce budget deficits will mean higher taxes sooner or later so take advantage of historically low rates and move taxable
READ MORE... →Salient to Investors: Anyone holding an IRA or 401(k) should leave a note explaining the importance of retitling if you want your heirs to get as much tax deferral as they can from the money you leave them. The best strategy for heirs is to leave as much money as possible
READ MORE... →Salient to Investors: The traditional move to fixed-income-heavy asset allocation in retirement planning poses risks and limitations, especially given expanding life expectancy. First, today’s unconventional monetary policy raises the inflation risk. Second, long-duration government bonds and high-grade debt carry the risk of capital loss. A 10-year Treasury and similar debt could decline more
READ MORE... →Salient to Investors: Since 1926, intermediate US government bonds earned about 2.5% above inflation, stocks about 7% above inflation. Currently TIPS yield negative 0.5%. Assuming stocks continue to outperform bonds by 4.5%, then future real returns on stocks will only be 4%, and on a 60-40 balanced portfolio will only be 2.5%. Therefore, central
READ MORE... →Salient to Investors: Aon Hewitt report consumer-directed health coverage were offered by 58% of employers in 2011 versus 41% in 2010. 19% of large employers surveyed by the National Business Group on Health said consumer-directed plans would be the only option they offered for 2013. For healthy people, consumer-directed plans can
READ MORE... →Salient to Investors: 10,000 people will turn 65 every day for the next 18 years. Delaying the start of Social Security adds 8 percent to it each year. Hang on to the full-time job for as long as you can. It is harder to return to work if necessary or
READ MORE... →Salient to Investors: Bjorn Hanson at NYU said $1.85 billion in fees and surcharges was collected in 2011 for hotels alone versus $1.2 billion in 2000, expects $1.95 billion in 2012. loan deposit Airlines collected over $3.3 billion in baggage fees and over $2.3 billion in reservation cancellation and change fees in 2011. Carlson Wagonlit Travel
READ MORE... →Salient to Investors: Systematic withdrawals during down markets early in retirement can devastate nest eggs. One solution is “bucketing” retirement savings into different types of assets to account for the timing of withdrawals. Read the full article at http://www.investmentnews.com/article/20120909/REG/309099973
READ MORE... →Salient to Investors: Professor James Poterba at M.I.T. said that while 46% of retirees have just $10,000 in savings when they die, they may have a relatively generous pension plan, and most of them will have Social Security. Retirees whose spouse had died saw their income drop almost 75% between 1993 and the
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