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Deflated Pensions

John Lim  |  Sep 29, 2021

INFLATION IS BAD news for bond investors, but it’s really terrible for annuitants and those receiving company pensions. Bond investors can at least reinvest maturing bonds in newer bonds paying higher yields. But most income annuities and pensions pay a fixed monthly benefit for life. In fact, you can no longer even buy inflation-adjusted single-premium immediate annuities. Meanwhile, just 7% of all private-sector pensioners received automatic cost-of-living increases, according to a 2000 survey by the Bureau of Labor Statistics.

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Simpler and Cheaper

Mike Zaccardi  |  Sep 28, 2021

VANGUARD GROUP today announced significant price cuts for its fleet of target-date retirement funds. Currently, investors can own a Vanguard target fund for the seemingly low cost of 0.12% to 0.15% a year, equal to $12 to $15 for every $10,000 invested. The new price tag will be just 0.08%, effective February 2022.
It might not seem like much, but the price cuts announced today will deliver an aggregate savings of $190 million to investors in 2022,

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Oldies but Goodies

Greg Spears  |  Sep 28, 2021

IF YOU’VE EVER wanted to own antique furniture, now is the time to buy. The cost of “brown furniture” has plummeted. That old-money mahogany is deeply out of fashion with today’s tastemakers, who prefer mid-century modern set out in spare, white rooms.

I won’t claim that 18th century goods are better aesthetically. That’s my personal preference, and probably an East Coast sensibility. Rather, I’d say that old furniture is better value. The fact that a table or desk has survived for two centuries is a testament to its durability—and it may cost less now than flat-pack furniture made of particle board.

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Share What You Know

Jim Wasserman  |  Sep 27, 2021

MOST EVERYONE AGREES financial literacy should be taught to some degree in schools. Even the basics, like how to set up a bank or credit card account, or how to make a budget and avoid debt, should be explained to those soon to enter the workforce.
Another group of newcomers to the U.S. financial system who could use guidance are immigrants, particularly refugees. Jiab and I have been volunteering for a number of years to help refugees get acclimated to American life.

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Growing Cheap

Jonathan Clements  |  Sep 27, 2021

SUPPOSE THE S&P 500 ended the year at Friday’s close of 4455.48. Let’s also assume that the analysts at S&P Dow Jones are correct, and the S&P 500 companies have 2021 reported earnings equal to an index-adjusted $185.32. That would put the S&P 500 at 24 times earnings, versus today’s 34.8.
That would be considered high by historical standards, though it isn’t outrageous given today’s low interest rates. But what would it take for stocks to look like a compelling investment?

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Epic Fail

Mike Zaccardi  |  Sep 26, 2021

EVEN INDEX FUND investors need the occasional psychological boost—which brings us to the ongoing S&P Index Versus Active (SPIVA) study’s mid-year review, which was published last week. The data from S&P Dow Jones Indices, a division of S&P Global, serve as a reminder that picking winning stocks and funds is mighty hard.
I used to serve on a 401(k) committee. I’d keep an eye on the active funds included in our investment lineup. Returns looked good.

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Clouds in My Coffee

Richard Quinn  |  Sep 26, 2021

I’M ON MY THIRD cup of coffee this morning and it dawned on me how much I’m spending on the stuff. I have one of those machines that use the little K-Cup pods, which may be the most expensive way to make coffee. I find it curious that someone who likes to think of himself as frugal makes coffee at home that can cost 70 cents or more per cup.

If I bought a pound bag of house brand—not designer—coffee,

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Dream Inflation

Kristine Hayes  |  Sep 25, 2021

AS PART OF OUR retirement strategy, my husband and I plan on using the money we make from the sale of our home in Oregon to help cover part of our retirement expenses. We already own a second home in Arizona, which we’ll move into once I leave my job. We’ve played around with different ideas for how best to use the money, including making a large, onetime payment against our Arizona home’s mortgage.

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Saturday All Week

Andrew Forsythe  |  Sep 25, 2021

AS A HAPPILY RETIRED 69-year-old, I still remember a conversation I had with an acquaintance two decades ago. The gentleman had had many years in the military, followed by time as a city police officer. He had recently retired—forever—from his third career in federal law enforcement. That meant he was sitting pretty with three different pensions. To top it all off, he was probably in his mid-50s.
Even though my own retirement was still many years away,

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Feeling Insecure

Mike Zaccardi  |  Sep 24, 2021

NATIXIS INVESTMENT Managers published its ninth annual Global Retirement Index last week, which focused on overall wellbeing and financial security. The U.S. slipped to an unimpressive 17th out of 25 countries.
Perhaps that isn’t surprising given the state of Social Security. Based on the program’s current financing, benefits would need to be cut after 2033. None of us wants to hear that, but we also aren’t surprised. The Natixis study reports that a whopping 77% of U.S.

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Found Money

Don Southworth  |  Sep 24, 2021

IT’S ESTIMATED THAT up to $3 billion of unclaimed property is recovered every year. But another $49 billion is lost and still waiting to be claimed. How much of it is yours?

Whenever I check if I’m due anything, I always come up empty. But the memories of found money keep me checking and hoping something pops up. Who can ever forget finding that surprise dollar bill in the pocket of your recently washed jeans when you were 11 years old,

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A Few Extra Bucks

Mike Zaccardi  |  Sep 23, 2021

MY FIRST JOB DURING high school was bagging groceries at Publix Super Markets. The starting wage was a cool $7 per hour in 2004. That was big money to me. It meant I could work the weekends and a few nights a week, and then buy music CDs on eBay. My 2005 goal was to earn enough to fund a Roth IRA at Vanguard Group.
Today’s teenagers have it better. Don’t take my word for it: The latest wage growth tracker,

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What They Remember

John Goodell  |  Sep 23, 2021

THERE’S A SAYING in the military: Rank has its privileges. It’s absolutely true. The trappings that accompany the highest military ranks can include aides, personal drivers and even cooks, to name just a few. The best leaders I’ve worked with knew that these trappings were ephemeral and often the result of luck, albeit mixed with hard work and ability.
Not every leader—whether they served in the military, corporate America or elsewhere—understands this. After retirement,

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Moving Back Home

Dennis Friedman  |  Sep 22, 2021

WHEN MY PARENTS were alive, they would ask me what I was going to do with their home when they passed away. I knew they wanted me to live there. My sister and brother-in-law had no interest in the house. They were planning to move to Tennessee to be close to their son.
I never really gave them an answer on what my plans were. They probably never understood why I wouldn’t jump at the chance to live in a bigger house with more amenities in a safer neighborhood.

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Great Expectations

John Lim  |  Sep 22, 2021

AFTER DEPARTING the U.S. stock market for the greener pastures of emerging markets, I recently hit a pocket of turbulence. Although emerging market stocks are virtually unchanged year to date, they fell as much as 12% in August compared to the recent highs reached in February. By contrast, the S&P 500 is up 17% for the year, with barely a pullback along the way.
The travails of Chinese stocks explain much of this underperformance.

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