GAO Report on 401(k) Rollover Focuses on...

I’ve seen lots of headlines in the last couple of weeks about a new GAO report, “Labor and IRS Could Improve the Rollover Process for Participants”.  Media outlets and industry groups have latched on to different findings in the report, and resulting headlines vary from the humdrum (“GAO Advises Easing Rollovers Between 401(k) Plans”) to the conspiratorial (“Firms Mislead Workers on 401(k) Rollovers: GAO”). Bottom line, what seems to concern the GAO is that so much 401(k) money is flowing into IRAs. From reading the report and its summary, I sense a bias...

The American Taxpayer Relief Act of 2012

The new year began with some political drama, as last-minute negotiations attempted to avert sending the nation over the “fiscal cliff.” Technically, we actually did go over the cliff, however briefly, as a host of tax provisions and automatic spending cuts took effect at the stroke of midnight on December 31, 2012. However, January 1, 2013, saw legislation–retroactively effective–pass the U.S. Senate, and then later the House of Representatives. The American Taxpayer Relief Act of 2012 (ATRA) permanently extends a number of major tax provisions and...

Should you take a variable annuity buyba...

Recently, several variable annuity companies have sent letters to their customers offering a “buyback” of their variable annuity contracts with guaranteed benefits. These might include offers to waive surrender charges, pay additional cash if the annuity is surrendered, or both. Insurers are doing this because they’re holding significant reserves and capital based on the possible cost of the guarantees. Of course, the actual future cost (to the company) or benefit (to the customer) of the guarantee isn’t known. That’s why it’s difficult to know whether you...

Fee-only, Fee-based, what’s the di...

The financial advice industry can’t seem to avoid being confusing. Take the terms “Fee-Only” and “Fee-Based”. The only compensation “Fee-Only” advisors receive is from their clients. Fees are to be transparent. There aren’t supposed to be any forms of compensation from other third parties, especially compensation that’s directly related to product sales (i.e., commissions). “Fee-Based”, on the other hand, means that compensation to the advisor can be from clients or third parties, typically a combination of...

The “Best-Cast Strategist

Are you close to retirement? Or does retirement seem so far away, you can’t even envision it? Whatever your time frame, you probably do want to retire some day. A 2011 study from the Metlife Mature Market Institute contains a lot of interesting information about how retirees and pre-retirees create a financially successful retirement. We always hear about the challenges of achieving a secure retirement, but this survey asked respondents who felt that they were successful in their work towards a “best-case” retirement strategy how they did it. The survey...

The “Best-Cast Retirement Strategi...

Are you close to retirement? Or does retirement seem so far away, you can’t even envision it? Whatever your time frame, you probably do want to retire some day. A 2011 study from the Metlife Mature Market Institute contains a lot of interesting information about how retirees and pre-retirees create a financially successful retirement. We always hear about the challenges of achieving a secure retirement, but this survey asked respondents who felt that they were successful in their work towards a “best-case” retirement strategy how they did it. The survey...

The 7.58% Cash Flow Solution!

In today’s low interest rate environment, anything above a 2% return sounds pretty good, and if you can find something that “returns” a “guaranteed” 7.58%, that’s great, right? I saw the title of this blog post in an ad for an immediate annuity. For those of you familiar with immediate annuities, you’ll know what care the ad’s author has taken to make sure the 7.58% “solution” sounds attractive (like a rate of return?) while not being shown, deceptively, as a “return”.  The solution? Call it a...

Social Security Statements are Back

Well, it took a while, but Social Security statements are now online, as promised. In addition, starting last February, the Social Security administration started mailing statements out again to workers age 60 and over. I tried signing up for my statement by creating a “My Social Security” account at www.ssa.gov.  For security purposes, you’ll need to take a security quiz that may tax your memory – it sure did take me on a trip down financial memory lane.   You may have seen this kind of security when you sign up for account access where security is needed....