Longevity Quandary

With each installment, I find the best thinking on retirement, and this week is a treasure trove of commentary on the longevity quandary. Michael Phelps presumably just wrapping his competitive swimming career is a great model for longevity. Both Michael Phelps and Usain Bolt competed in four Olympic Games … and neither won a medal the first time. There may be an analog here because that is not what you remember about either of them. The lesson for the rest of us is to work harder, longer on your savings because you will be retired longer.

Leverage the longevity quandary by watching expenses in your retirement accounts.
Sad to say I would not think to ask a Department of Labor employee for advice on retirement. This former one, however, makes a series of worthwhile points about common mistakes. I encourage you to read it. 10 Retirement Mistakes Baby Boomers are Making
We always harp on costs. When you consider the longevity impact on costs, it is even worse. So you must strive to lower your total investment cost structure. It can be as easy as having a simple, effective strategy and sticking with it. A financial planner says most people don’t need to pay someone to manage their investments

Leverage the longevity quandary by ensuring you save enough for retirement.
Here is a really good, comprehensive piece on just what challenges longevity brings, and ways to address them. The Longevity Paradox
We have mentioned HSAs before, but this drives home the point about. Fact is you will spend a lot of your own money on healthcare in retirement. An HSA is a way to save pre-tax money now, not get taxed on growth, and not get taxed when you withdraw for medical expenses … there is simply no better answer. Why Advisors Need to Know about HSAs
Just in case you forgot, or simply don’t believe me, here’s the latest on medical expenses in retirement. Health Care Expenses for Retired Couples Hit Record $260,000 : Fidelity
On a related note, long-term care insurance is an important thing to consider … just weigh the cost/benefit wisely. These tricks can help tilt the balance in favor of buying. 4 Tax-Friendly Ways to Pay for Long-Term-Care Insurance
Here is an advisor’s eye view of these medical costs in retirement. More importantly, the implications of the DOL fiduciary rule on advice you will get on them. It lays out some hard dollar costs and is promising in anticipating incorporation into plans under the new rule. Add this to your DOL checklist: health, LTC costs in retirement

Leverage the longevity quandary by focusing on building an income stream for retirement.
Switching mindset from accumulating wealth to generating income is a key retirement transition. Longevity, though, may have some bearing on when you make that move. Longevity and Your Retirement
Changing your mindset should begin with understanding your needs. This piece helps you put your retirement income needs into perspective. How to Solve the Retirement Income Equation
Here is some interesting insight on IRAs, and 401(k)/403(b) for that matter. They may not be the best in retirement vehicle for you when you consider longevity risk. IRAs are for retirement planning, not for retirement
Here is a fascinating, refreshing look at the retirement income puzzle. Is retirement spending a level pattern? Should you use a simple rule like the 4% rule? This says no. What is the “Retirement Spending Smile”

Olympic Savings

With the Olympics well underway, it is a good time to think about winning the gold in Olympic Savings. I feel old when I say the Olympics do not seem as compelling as they once were. Sure, the Michael Phelps story continues to amaze, Simone Biles, Simone Manuel, Lilly King and Kristin Armstrong have all added tremendously to the spectacle. I don’t know, the coverage seems weak, annoying even, they barely show beyond the US team, you’re lucky to find ‘minor’ sports, and the delay is really annoying. Rant over for now, but I am sure there are many more good stories at the games that we just will not see. So, as they say, let’s control what we can, as always that means your retirement security. How can you win the gold in Olympic Savings?


Win the Olympic Savings gold by ensuring you save enough for retirement.

We talk about longevity with some regularity here, but Millennials need to pay particular attention. Merrill Lynch’s Dwyer Says It’s Important for Millennial Investors to be Disciplined

Rules of thumb are great starting points (of course we consistently pick apart the 4% rule here). There is a lot of value in granularity, too. So, keep an eye on the things people miss when planning. 6 Big Expenses Retirees Didn’t Save For – But Should Have

As you can see from the comments on this one, it stirred some controversy. Still, it is a valid point and worth your consideration. Estimate Your Retirement Income Needs Based on Your Spending, not Your Income


Win the Olympic Savings gold by investing wisely for retirement.

It is best to have an investment strategy that encompasses all your savings – 401(k), IRA, pension, investment accounts, etc. That means you will have the chance to do some things yourself. So learn about hot strategies and try some you like. Testing Smart Beta with Two Relatively Long Real-Time Records

Of course, everyone has heard about the outperformance by low cost indexed products vs. higher cost actively managed funds. Is that really the long-term answer? Let’s face it, when markets go down, indices go down … actively managed funds may not. Is Active Management Dead? Not Even Close

Do not become an active investor by any means, but do stay abreast of opportunities. Market timing almost never works, even for the best and day trading is another race to the bottom, largely. Still, opportunistically finding gems … ideally finding them, yourself … can make this more fun and boost your nest egg. Inside EQAL: A Strategy That Has Doubled Return of S&P 500


Win the Olympic Savings gold by focusing on building an income stream during retirement.

Dividend stocks are one good way to drive income without harvesting principal in retirement. That is why we keep giving you leads on good ones. AT&T: Dividend Investors’ Dream

I clicked through on the author of that article to see what else he had written. You should do the same when you stumble upon something that makes sense. Turns out he likes NextEra Energy, too. Funny thing is an old GE colleague has been in charge there during this period as “one of America’s fastest-growing and best-performing utility stocks.” NextEra Energy – One of America’s Best Utilities Keeps Getting Better

Returning to this notion of having a plan, we often share data debunking the age-old 4% withdrawal rate rule. To be completely fair, I give you new data from T. Rowe Price that supports it. I only ask does a decades old adage make sense, knowing what you do about dramatically increasing longevity? How to reduce the risk of outliving your money


Win the Olympic Savings gold by staying aware of your environment.

Not much you can do about this aside from understand and avoid related pitfalls. You may be fascinated to realize it, though. S&P 500: This is Critical Information for Each and Every One of Us

Secure Retirement

The election continues to provide plenty of action, strange, but action, but you still need a secure retirement. The best way to get a secure retirement is by maintaining focus on the important things: saving enough, achieving the lowest possible cost, leveraging tax incentives, and building a reliable income stream in retirement.

Enjoy a secure retirement by ensuring you are saving enough for retirement.
Should you have an IRA? Look at this amazing chart anyway because it gets to the impact of time on your savings. The Most Important IRA Chart You’ll Ever See
If you really want to be diligent in preparing for your retirement, doing some or all of these things will likely pay off in the long run. Is your 401(k) helping or hurting your retirement savings?
As you can see from the comments on this one, it stirred some controversy. Still, it is a valid point and worth your consideration. Estimate Your Retirement Income Needs Based on Your Spending, not Your Income

Maintain a secure retirement by focusing on building an income stream during retirement.
This one helps you fine-tune your Social Security strategy and gives you some savings tips, too: fits in both categories! How the Average Retiree Can Gain $5,000 Per Year in Retirement
One thing is certain in retirement, you want as much control as possible. That especially applies to RMDs. Here are some good ideas for managing them. 6 Tax-Smart Ways to Lower Your RMDs in Retirement
More good, short information on the brave new world of retirement income. Most notably, more commentary on the 4% rule. Navigating the New World of Retirement Income

Be sure of a secure retirement by keeping an eye on the economy, too.
With continuing anemic growth in the US, just how good is the economy? Have we ever recovered from the 2008 downturn, except for financial markets? “Policymakers Have Been Calling a ‘Depression’ a ‘Recovery’ for Nearly a Decade”
Not to overdose on Zero Hedge, as they tend to have a negative bent, but here citing Goldman’s analysis of the markets it may be worth a look. Goldman: The Last Two times P/E Multiples Expanded This Much, The Result Was A Historic Crash
We have touched on this before, but a focused reminder of the very real implications of Washington’s never ending drunken binge: the national debt will mean you must save more for retirement. Doesn’t seem fair, does it? How Government Debt Affects Your Retirement

Beating the Heat

With a continuing heat wave nationwide, beating the heat is top of mind for everyone. Do all the normal things, but one sure way to stay cool is by resting assured of your retirement. So, take your weekly half hour to buzz through these good tips from across the web.

Beating the heat, focus on fees in your retirement accounts, don’t get soaked.
In a continuing theme here, its employees now have sued NY Life over excess fees inside their 401(k) plans. Whether or not true, the lesson here is to be sensitive to in house fund options (at least for now) because of these risks. New York Life sued by employees claiming excess 401(k) fees Money managers with in-house 401(k) plan options at risk of employee lawsuits: lawyers
While this is not spot on with fees, it is worth considering. 3 Retirement-Savings Mistakes the Average American Makes
Here’s the flip side of that issue, and a good perspective on it, too. Employers and the boards overseeing retirement plans need to keep a sharp eye on fees. This also provides a good reminder for you of FeeX as a resource for understanding your own cost structure. As 401(k) suits mount, check your own plan

Beating the heat, be sure you are saving more for retirement.
So, how much is enough? This article reviews the various rules of thumb and helps you judge for yourself. How Much You Really Need to Save for Retirement? You be the Judge.
Here’s an interesting twist on retirement income, back to the old ‘how much do I need to save’ question. There are a few tips and tricks worth reading in here. Is $1 Million Enough to Retire On?
It does not seem to be a big topic in the Presidential race, but it should. Here you will see how “experts” are saying Social Security will run dry by 2034 without intervention by Congress. Lest we forget it is 2016 now, and nothing will be done before 2017, that’s for sure. Social Security projected to run out
Some really good news, younger people are saving more systematically. 401(k) Bonanza: Why More Americans are Feeding Their Retirement Accounts

Beating the heat, lastly focus on building an income stream in retirement.
If you read one thing today, read this. It highlights and links to a paper by the CFA Institute that suggests you create a virtual annuity with your retirement nest egg. It is a fascinating concept well worth consideration and discussion. Theory to Practice: Siegel and Waring on Retirement Spending Rules
Good news from plan sponsors: they are embracing lifetime income solutions.  These are likely to be a cornerstone for any good retirement plan. Sponsors Warming Up to Lifetime Income Solutions
If nothing else, this article provides interesting background on the structure of REITs. This one, the largest, happens to have a pricing glitch that may yield you 7.5%. The Better 7.5% Yield

Weathering the Election

Now everyone understands this will be a very different election cycle. Smart money will prepare for weathering the election with careful management of your retirement accounts. It is never too early or too late to focus your energy on what will provide you happy times for 30 or more years in retirement. So start now or keep on top of it, either way, be prepared for whatever comes your way. 

Improving your retirement, first focus on fees.
It is worth noting that others are taking notice of fees, especially in 401(k) plans, and this may be coming to your business, too. So, take a close look at your fee structure and raise the issue if it is egregious. Transamerica settles excessive-fee lawsuit with its employees for $3.8 million Cetera, plan sponsor sued for excessive fees in $25 million 401(k)
While this is not spot on with fees, it is worth considering. 3 Retirement-Savings Mistakes the Average American Makes
Don’t be fooled by the title, this article is a worthwhile read for everyone concerned with how to weather the election. A Millennial’s Guide to Money and Long Term Investing

Improving your retirement, next focus on saving more.
We have mentioned HSAs before, but this article lays out a great case for using these as a great retirement saving vehicle after you max out others. It happens to be a great way for weathering the election, keeping your savings tax-deferred. 7 benefits of HSAs
Here is a nice, short article on reasons why we do not save enough. It is worth the five minutes, trust me. How Americans blow $1.7 trillion in retirement savings
This may come as no surprise, I hope it does not, but only 27% of Americans are adequately saving for their retirement. 9 Reasons Why You’re Never Going to Retire
For the younger reader, or your kids, this is sage advice on entering the workforce. What Every New College Grad Should Know About Retirement Savings

Improving your retirement, lastly focus on building an income stream.
While this is a bit aged, the facts remain true, and these type ideas can help drive an income stream for your retirement. How to Place Your Money for Three Years and Get 7.74% Cash Returns It is still running at a discount, albeit smaller now, another good approach for weathering the election. RFTA Stock Quote
Here is another quick guide to finding the best dividend stocks. This one makes the point about keeping your fees in check, too! Retirement Strategy: Five Dividend Aristocrats to Buy Here
Here is Fidelity’s take on the QLAC (Qualified Longevity Annuity Contract) as a means to get you guaranteed income later in retirement. I remain a big advocate in the right situation. It is certainly worth your time. A way to secure retirement income later in life


We express solidarity with our friends in France, and with all who would disavow acts of brutality. We feel for the people of France, and all impacted by last night’s awful event in Nice.

There is high uncertainty in the world, from these too often terrorist acts to still fragile economies and a host of backlash political events. This lends ever more credence to our focus on helping you take control of your own retirement planning and related retirement success. For now, we will keep our posts consistent in format, zeroing in on fees, increased saving rates and generating income.

Improving your retirement, first focus on fees.
This is an old, old article, but very detailed and interesting. Hidden 401(k) Fees Are Stealing Your Nest Egg
This article nicely lays out for you some fees to beware of when investing. Understanding Investment Fees: From Brokerage Commissions to Sales Loads
While not spot on to our topic, the notion of doing smart things early, including watching fees, certainly is valuable advice. 5 ways to overcome obstacles between you and retirement

Improving your retirement, next focus on saving more.
Most people need to save more than they already do. Now you need to save more than you even thought because of market volatility and other factors. Market volatility raises the bar for retirement income savers
One other driver for the need to save more – the cost of being retired … most notably the cost of medical expenses in retirement. Do not forget a vital, big cost that is coming. 5 ways retirees can control long-term health-care costs
While it is little consolation, realize that you are not alone, and likely not in the worst position with respect to your accumulated savings. Guess How Many Americans Over 55 Don’t Have Any Retirement Savings

Improving your retirement, lastly focus on building an income stream.
We are not the only ones who understand that dividend stocks help build income with principal in retirement. Plus, with interest rates stubbornly low, negative in some places, dividend stocks offer an attractive alternative. That market interest drives down dividend yields. You need to be sharper to find the best options. Retirement Strategy: 3 Dividend Themes Still Ripe for the Picking
If you are interested in going deep on this, i.e. finding and buying dividend gems, this is a great article for you. How to Use Finviz to Find Bargain Dividend Stocks for Free
While it may be the flip side of income, avoiding taxes is another way for you to net more money in your pocket after tax. So, it is always a good idea to optimize your Social Security strategy, too. Here are some good tips. 5 Ways to Avoid Taxes on Your Social Security Benefits

Gun Violence

I purposely shy away from commentary on politics and politically charged issues, but watching a live feed from Dallas last night unwittingly showing at least two officers down from gun violence is simply enough. I have not seen commentary yet on the motivation for the attack, but it certainly begs the question ‘can we not do more to ensure the mental stability of gun buyers?’ I cannot conceive of someone, whatever side of the various issues in play here, who can endorse this action. The notion that Congress is beholden to the NRA, preventing truly common sense measures is untenable. We should challenge this false narrative. If nothing else, elect legislators not compromised on this issue. Presumably, we all feel sorrow and compassion for the families of the fallen. Let us leverage this horrific incident to get some movement on the underlying issue, gun violence.

I parse this gun violence issue, which includes other mass shootings, from the very valid driver of the peaceful protests across the country last night and the recent police involved shootings because the corrective action is different. I, too, am shocked by the rapid succession of police shootings, but presume that to be a training and selection issue.

The backdrop for this mayhem is the strangest Presidential election of my memory. Surely, there will be plenty of campaign trail bluster about this, and mayhem seems the best descriptor for this mess. I say you should largely focus on what you can control, your retirement. Perhaps we start with ‘are you controlling your retirement?’ Regardless of your answer, here are some ideas that can help.

Improving your retirement, first focus on fees.
I think the first priority, always, for your retirement investing is to control the fees. It has been demonstrated that the smallest improvement in these small, often hidden costs, makes a material difference in outcome. Focus on the fees you pay on all your retirement assets first and foremost.
We hit on this last week and will remind you now, Fidelity is going straight at Vanguard (ironically enough at the vanguard of low fee investing). Fidelity takes on Vanguard by cutting prices on index funds, ETFs
You may be getting some help from the Department of Labor’s new fiduciary rule, too … but you should not rely on this yet. DOL fiduciary rule will nudge 401(k) advisors to zero-revenue-share fund lineups

Improving your retirement, next focus on saving more.
I will leave this one with this one, simple Warren Buffett quote: “Don’t save what is left after spending; spend what is left after saving.”

Improving your retirement, lastly focus on building an income stream.
The closer you get to retirement, the more you need to think about converting a balance (the total of your retirement savings) into an income stream. One great way to anchor this is with investments that generate income. Find great dividend stocks, for example: High Dividend Stock Yields 15%, Has Top Shelf Customer, Insiders Keep Buying
Tread carefully in this space, though, and lean on professionals when you can. Dividend focused ETFs or funds may be your safest route. A Warning for Dividend Growth Investors

Independence Day

Independence Day, July 4, is broadly celebrated here in the US, and what better time to consider where you stand with respect to your retirement prospects. Take some quiet time this long weekend to pull together your entire retirement portfolio. Think about it as a balance sheet and income statement for yourself. What are your assets? What are your liabilities? What does/can your monthly income and expenses look like given that? Once you have done this, you can project how it might look in different scenarios, increased savings, market downturns, etc. I encourage everyone to do it. As we launch into the Independence Day long weekend, we share some of our best finds on the internet below.

Independence Day: Strengthening your retirement prospects.
This article is a little long winded, but it does make several interesting points and hones down to a proposal. How does your investment mix compare? The Simple Retirement Portfolio that Spanked the S&P 500
This portfolio is way simpler than the last, simple one. Not only that, it keeps the focus on dividends. 4 Stock Retirement Portfolio with 6.0% Yields and 100% Upside
We are always on the lookout for well performing dividend opportunities, this may be one. Outperforming Unique High Dividend Stock Yields 10%, with Estimates Rising
With so much of our focus on fees, this is a welcome war in the investment space. Fidelity Takes on Vanguard in the Fund Fee Wars, and Investors Win

Independence Day: What’s happening with the global economy?
The global central banks have used a steady diet of easy money to pave the way out of the 2008 downturn. Are we really in a better place now? How was our return on investment? What do they have left if things turn truly sour? “The Global Economy Can No Longer Rely on Debt” – BIS Warns Central Bank Actions “Have Started to Backfire”
Then there is Brexit … big deal or not? anomaly or not? Have a look here. Is Brexit the First of Many Dominoes? A Few Charts
Just in case you thought you were ill prepared, this dismal review of US savings should make you understand just how bad we are at this … the fact that you are looking and trying definitely sets you apart. These statistics about American’s savings habits are staggering

Independence Day
This seems like the perfect time to consider this great infographic. See the Exact Moment the World’s Biggest Cities Were Born


Two days on from the historic vote, start considering the Brexit impacts on global geopolitics. This week has been an embarrassment of riches, with the Brexit, House Republicans tax proposal, and much more.

Geopolitics: The most important story of the week, Britain’s Brexit vote.
Here is a great collection of subject matter experts giving their prognostication on the geopolitics landscape in five years. The surprising quasi-common theme is a still smaller EU and a smaller UK, too. How Brexit Will Change the World
This is a freestanding take on the Brexit impacts, painting David Cameron as the bad guy in all this. Sure seems like Scotland and Northern Ireland are ‘in play’ now and likely to switch teams. David Cameron could go down in history as the man who lost Europe, Scotland and Northern Ireland
Inasmuch as we like to focus on your retirement and relevant investing ideas, Brexit may present a golden, short term opportunity. The Brexit Vote is a Buying Opportunity – Here’s Why

There was more consequential news this week.
House Republicans released their long awaited tax reform plan on Friday, purposely in the shadow of Brexit? Regardless, they threw in some surprises, and it is worth considering because, forget what presidential candidates say, their plan is most likely the foundation for anything that might actually happen. The Surprising Evolution of House Republicans on Taxes

Geopolitics aside, life goes on, consider this:
Say what you will about self-driving cars, it appears they are only accelerating (pun intended). This article puts it into perspective. The last driver license holder

Heat Wave Respite

It is hot outside, stay in the cool air and take a heat wave respite with some cool reading about the economy and your retirement.

Heat wave Respite: A few quick ideas to improve your retirement.
First a quick checklist for you. I may not agree with all these, nor may you, but it is directionally correct. 51 things not to do if you want to be better off financially
Most of you, like me, are over 50 now. So, suck it up and take this advice. 3 Steps to Building Wealth in Your 50s
It is always a good time to start saving money. Perhaps these tips will work for you. 2 Ridiculously Simple Tax Strategies That Can Each Save You $100,000+ Over Your Lifetime
Here is an interesting mix of two favourites, have an investment strategy you can stick with and consider dividend stocks as a means of building retirement income. A Simple Method for Buying Low and Maintaining Diversification

Heat wave Respite: A quick scan of the global economy
The most fascinating and consequential event on the schedule is the June 23 “Brexit” vote in Britain. It seems too close to call; I simply cannot imagine an exit. We shall see. One thing that seems to be consistent, at least here, is that Brexit is masking a real, looming issue with European banks. Forget Brexit, It’s the Banks Stupid! makes the most interesting point “Whatever the outcome of the Brexit referendum next week, it would appear that nothing can stop a systemic crisis developing in Europe.” Brexit is Getting the Blame
This is a fascinating, negative, and likely first-time event in the US economy. US Negative Interest Rate Bets Surge to Record High
It is always worthwhile putting things into perspective. Here, you can look at the global economy over the past 5,000 years. That is right, 5,000 years (or so they say). How about the lowest interest rates ever? US stocks at 60-year highs vs. Europe? Plenty of other fascinating or scary facts embedded here. Visualizing “the 5,000 Year Long Run” in 18 Stunning Charts

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