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Getting
Ready for Retirement I: The New Rules of Retirement |
| The most recent
Retirement Confidence Survey, published last month by the
Employee Benefit Research Institute, is filled with alarming
statistics — like the percentage of Americans (45%) who feel
less confident that they will receive benefits from a
traditional pension, or the percentage (40%) not currently
saving for retirement at all. But perhaps the most alarming
statistic of all is this: survey participants spent an average
of 19 hours (just under two-and-a-half working days) planning
for retirement. That’s more than the 11 hours they spent
planning vacations but about equal to the time they spent
planning for the holidays. Why is this alarming? Because
Thanksgiving, Christmas and summer vacations last a couple of
weeks at most; your retirement could last 20 or 30 years. And if
you’re not prepared, you’re unlikely to have much fun in the
sun during what used to be known as the ‘golden years.’ Read
the first of a four-part series from best-selling author James
Geary about how retirement is changing and how you can prepare
yourself for it.
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Noise
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| "Would you
turn that racket down? I can’t even hear myself think!"
If I had a dime for every time my father yelled that up to me as
I sat in my room, blasting the music as loud as I could, I’d
be a very wealthy man. Instead, I’m a hard-working financial
planner who’s a bit hard of hearing. My dad used to say that
there was so much noise he couldn’t even think straight. I was
reminded of this recently while meeting with a prospective
client. As he explained to me that he had avoided making any
decisions because there seemed to be so much conflicting advice
out there, it suddenly hit me. There is so much noise, he
can‘t even think straight. Read
more about the
"white noise" the media creates about investing –
and tips to cope with it – in this editorial by Howard
Pressman, CFP®.
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Beyond
the Dog Food Fallacy: How to Prepare a Personal Cash Flow
Statement
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| No, the ‘dog
food fallacy’ has nothing to do with what you feed your pooch.
It does, however, have everything to do with your own financial
diet — how what you earn and spend affects your ability to
reach your goals. Authors Mary Claire Allvine and Christine
Larson coined the term ‘dog food fallacy’ in The 7 Most
Important Decisions You’ll Ever Make: What Happy Couples Do to
Achieve Their Dreams. (Some editions of the book are called The
Family CFO.) The authors argue that couples should run the
financial aspects of their relationship like a business; jobs
like investment manager and chief financial officer (CFO) should
be assigned, and economic decisions should be evaluated for
affordability and cost-effectiveness, just as in the corporate
world. They also suggest that couples convene annual board
meetings (in suitably romantic locations, of course) and prepare
the same crucial financial documents that businesses do to
measure the success of an enterprise. One such key document is
the cash flow statement, and it is a document that is pretty
easy to prepare. Read
more about how a cash
flow statement can be used to identify risks and opportunities
that can affect your ability to achieve your dreams.
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Financial
Alerts
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In February, the Federal Deposit Insurance Corporation
(FDIC) issued an alert about fraudulent "phishing"
e-mails that claim to be from FDIC and that seek to obtain
personal or financial information. Since that alert, FDIC
has learned of a new type of e-mail being distributed.
This new e-mail claims to be from FDIC and asks bank
customers to download and install on their computers a
"ProBank" software program that purports to
combat fraud. If you receive one of these fraudulent
e-mails, don’t take any action to download or install
ProBank, as FDIC believes it is a malicious software
program designed to obtain personal information from
consumers and businesses. FDIC does not send unsolicited
e-mails, nor does it ask for detailed personal
information. Read more about this and other alerts
regarding fraudulent e-mails at: www.fdic.gov/consumers/consumer/alerts/index.html
Almost all of us have received "cold calls"
from salespeople trying to sell products or services we
haven’t requested information about. Although cold
calling is a legitimate way for many businesses (including
investment firms) to reach potential customers, the
Securities and Exchange Commission warns consumers that
cold calling is also used by scam artists trying to sell
fraudulent products and investments. Learn about things
you can do to limit the cold calls you receive, red flags
to look out for when you do receive a cold call, your
rights as a consumer and much more at: www.sec.gov/investor/pubs/coldcall.htm
Recent economic growth in China and strong performances
by the Shanghai and Shenzhen Composite Indices have
generated a lot of talk about low-priced "China"
stocks. But some of the companies being promoted have no
actual connection to China's stock markets. Learn how to
avoid becoming a victim of these "China" stock
scams, what you should know about the risks of investing
internationally, and how to evaluate the risks associated
with any investment at: |
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Read
more about these
and other financial alerts. |
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Free
Answers to Your Financial Questions: CFP
Board's Free Financial Planning Clinic
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| Each month,
"It’s Your Turn" provides information about free
publications or online resources that can help you take control
of your finances and learn more about financial planning, such
as the free online "The Fundamentals of Personal Financial
Planning" course at the University of California, Irvine
featured in last month’s newsletter. There’s a lot you can
learn from reading about financial planning, but there’s also
much more to be gained from individualized answers to your
financial questions. The good news is there are plenty of
financial planners across the country who are qualified to
answer your questions. What’s even better is the many
financial planners involved in volunteer programs that offer
answers to your financial questions at no cost. Read
more about programs
that offer free personalized financial information and register
to attend CFP
Board’s Free Financial Planning Clinic
on August 4, 2007 from 10:00 a.m. to 2:00 p.m. at the Sheraton
Boston Hotel.
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About
This Newsletter
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You are receiving this e-mail because you subscribed to CFP
Board's eNewsletter. Periodically, CFP Board will e-mail you
"It's Your Turn," which includes information about
financial planning, financial planning tools and resources,
consumer alerts and much more. Suggestions and feedback are
welcome at mail@CFPBoard.org.
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