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11 Disruptive Questions Millennials’ Singles’ Day Poses For Your Retirement And For Business

It’s the biggest shopping day on the planet. Alibaba alone chalked up $38 billion in sales for 2019. No, it’s not a religious, patriotic holiday, or even the one time biggest online shopping day of the year, Black Friday – it’s Singles’ Day in China and much of the world. But what’s good for Alibaba, may not be good for your retirement and many industries.

Started as Bachelors Day by students at China’s Nanjing University in 1993 as a kind of ‘anti-Valentines’ day to celebrate being single, the day evolved into Singles’ Day. November 11 or 11/11 was chosen because it provided the powerful symbolism of four 1’s.

And, while the celebration of being single may have begun in China, the lifestyle and business of ‘singledom’ is spreading fast. Retailers in Southeast Asia, Europe, and North America are all riding the singles wave. According to Forbes writer Sergei Klebnikov, Adobe projects that nearly 25% of retailers plan to offer a Singles Day special. Amazon, Apple, Bed Bath & Beyond, Estee Lauder, Foot Locker, Happy Socks and countless other retailers are all too happy to jump on the singles lifestyle bandwagon.

Today In: Money

But, there is more to Singles’ Day then a retail push. Singlehood points to a larger disruptive demographic trend that is shaping lifestyles, your retirement, and the even the markets we invest in today.

According to Pew Research, 61% of young Americans under the age of 35 are without a partner. Up sharply from 33% in 2004. Likewise, the number of people living alone in Canada has doubled over the last three decades. In Europe more than half of the households in Paris, Munich, and Oslo are households of one. Entire nations, such as Sweden and Denmark have more than half of their populations living alone.

So what might this new demographic landscape mean for lifestyles, retirement, and countless industries?

To continue the theme of Singles’ Day on 11/11, here are 11 questions about life tomorrow in a world of one.

1.    Who will buy the homes of retirees today that are typically two, three or more bedrooms? Will homes with one bedroom become the new normal and homes with two bedrooms be considered a spatial luxury – and those with three-plus simply a waste? How might real estate developers rethink communities that are predominantly households of one?

2.    How many wine glasses will you buy? Watch out household goods industry, rather, than buying a set of eight, or even four glasses, as well as all the other things that stock household cabinets and closets – we may buy only one or two of what we need. For those retirees thinking they are going to downsize by handing off that china set with service for 12 to their kids – good luck. As I observe in a previous article, no one wants your stuff.

3.    Who will you buy luxury gifts for? Singles’ Day certainly shows that people are willing to buy things, but will they buy luxury? Will luxury brands begin crafting a new vision of the virtue of treating yourself in contrast to decades of sales based upon treating that special someone as well as marking engagements and anniversaries? Perhaps a whole new socially acceptable celebration of buying your own watch for your retirement will become a new normal.

4.    Is a party of one the new normal for leisure? Will restaurants work harder to make a retired single more comfortable and not feel alone? Hotels, cruise ships, and theme parks have traditionally marketed to couples and families. What will leisure look like in a world of one?

5.    Will being a pet parent mean more than ever? If a partner is not moving in, will pets become your significant other in youth and later life, thereby getting an even bigger boost of wallet share?

6.    How will you share the burden? Managing a household has many moving parts. Typically tasks are split between a couple by conscious decision and often by default. Will retired singles over time learn to do it all, or will there be a growth industry for services once shared with that special someone?

7.    Will there be even fewer children? The birthrate continues to tumble. The industrialized world, as well as many industrializing nations, are seeing a record drop in the number of children being born each year. Will the celebration of one, mean none?

8.    Does singlehood provide greater career freedom? If there is only one person in a household, does that reduce the fear of losing a job or easily moving from one position that does not quite fit? Employers may find a new mobility in single employees who do not need to worry, nor manage, the financial risks of supporting multi-person household. However, will that newfound freedom in youth, present a longer-term financial risk in retirement for singles?

9.    How will you finance retirement alone? Having a partner may increase household consumption and costs – but it may also provide more income and retirement savings. The longevity risk of ones life span outliving ones wealth span may be greater for lifelong singles.

10. Who will care for you? Most of us, at some point, will require care in older age. A partner, or adult child, typically provides family care to an elderly loved one. In a world where neither may exist, does that present a new challenge for individuals planning retirement – and perhaps a new demand for private and public services?

11. Does alone necessarily mean lonely? While it is possible to be alone, but not lonely, will a society with a growing number of households of one portend an even greater rise in the global epidemic of loneliness and social isolation for young and old alike?

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I lead the Massachusetts Institute of Technology AgeLab (agelab.mit.edu). Researcher, teacher, speaker and advisor – my work explores how global demographics, technology and changing generational attitudes are transforming business and society. I teach in MIT’s Department of Urban Studies & Planning and the Sloan School’s Advanced Management Program. My new book is The Longevity Economy: Unlocking the World’s Fastest Growing, Most Misunderstood Market (Public Affairs, 2017) . Follow me on Twitter @josephcoughlin.

Source: 11 Disruptive Questions Millennials’ Singles’ Day Poses For Your Retirement And For Business

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Alibaba CEO Daniel Zhang discusses Singles’ Day and the company’s strategy.

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3 Awful Reasons to Take Social Security Benefits at 65

The age you land on for claiming Social Security could affect the monthly benefits you receive for life. Those benefits themselves are calculated by taking your average monthly earnings during your 35 highest-paid years in the workforce, adjusting them for inflation, and applying a special formula to that number. You’re then entitled to collect your monthly benefit in full once you reach full retirement age.

But you actually get an eight-year window to sign up for benefits that starts at age 62 and ends at age 70. In fact, you technically don’t have to sign up at 70, but delaying past that point won’t put more money in your pocket, so there’s no sense in waiting longer.

Currently, 62 is the most popular age for seniors to start collecting benefits. But if you’re contemplating that decision, you may be inclined to go with age 65. And while that could be a wise choice in some cases, here are three terrible reasons to land on 65 as your filing age.

1. You don’t know your full retirement age

You might assume that 65 is your full retirement age for Social Security purposes because that’s when you’re first eligible for healthcare coverage under Medicare. But for people born between 1943 and 1954, full retirement age is 66. For those born between 1955 and 1959, it’s 66 and a certain number of months. And for those born in 1960 or later, it’s 67.

If you sign up for Social Security at 65, you’ll automatically slash your monthly benefits between 6.67% and 13.34%, depending on your full retirement age, so rather than grapple with a lifelong reduction in Social Security income, commit your full retirement age to memory. Incidentally, in a recent Nationwide survey, only 24% of older adults knew what their full retirement age was, so if you’re nearing retirement, be sure to get that number straight.

2. You’re worried you won’t get Medicare coverage

It could be the case that you want to start getting Medicare benefits at 65 and aren’t ready for Social Security — but you sign up for Social Security at that age anyway because you’re convinced your Medicare coverage hinges on it. In reality, though, you can be on Medicare for years before claiming Social Security, and it won’t impact the level of care you receive.

The only drawback to signing up for Medicare before Social Security is that you won’t have the option to pay your Part B premiums directly from your Social Security benefits. Not only does that mean you’ll need to take that step yourself, but it also means you don’t get protection under Medicare’s hold harmless provision. This provision effectively caps the extent to which your Medicare premiums can rise from year to year when you’re on Social Security, because an increase in Part B can’t cause your monthly benefit to go down.

In other words, if your annual cost-of-living adjustment raises your monthly Social Security benefit by $12, but Medicare premium costs rise by $13, you’re only liable for the extra $12. Still, the reduction in benefits you’ll face by claiming Social Security early will generally well outpace any increase Part B throws at enrollees, so if you’re ready to sign up for Medicare at 65 but don’t need your Social Security benefits just yet, don’t feel compelled to claim them.

3. You’re scared Social Security is running out of money

There are rumors abounding that Social Security is on the verge of bankruptcy, but actually, that’s far from true. Social Security gets its funding from payroll taxes, so despite the program’s financial woes, it’s not in danger of going away. Right now, the worst-case scenario is a potential cut in benefits in 2035 to the tune of 20%, but that assumes lawmakers won’t step in and prevent that from happening, which many are invested in doing.

Therefore, don’t file for Social Security at 65 because you’re worried that by waiting, you’ll risk not getting paid any benefits at all. That scenario just isn’t on the table, and if you file at 65 rather than wait until full retirement age or later, you’ll risk losing out on a substantial amount of monthly income for life.

Claiming Social Security at 65 isn’t always a bad idea, and with regard to reducing benefits, it doesn’t cause nearly the same extreme hit as filing at 62. But if you’re going to sign up for Social Security at 65, make sure you’re doing so for the right reasons, and not because you’re ill-informed or are buying into myths.

The $16,728 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

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Source: 3 Awful Reasons to Take Social Security Benefits at 65

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https://socialsecurityintelligence.com | Not everyone needs to delay filing for SS. There are some cases where filing at the earliest eligible age makes the most sense. A lot of the content that you find online will make the case that filing early for social security benefits is always a bad idea. They’ll say things like, “you should always wait until you’re full retirement age for file for maximum amount of benefits,” and while it’s true you can make a good case for filing later for social security benefits, for maximization of income in most cases, that doesn’t apply to every situation. In fact, there are five specific circumstances where I think filing early makes the most sense.

Six Things to Do When Your Aging Parents Have No Retirement Savings

It sounds like the makings of a sitcom, but your parents may end up rooming with you if they haven’t started saving for retirement.An analysis for the Harvard Health Letter using U.S. Census Bureau data concluded that some 3.4 million people aged 65 or older were living in a grown child’s home in 2016.

Before you start counting the ways your life will change once your parents move in, prepare to do some information gathering. Your parents may not have much in savings, but the faster you can get their finances in order, the better off you’ll all be.

1. Get your siblings on board 

Start by having an informal chat with your siblings to share perspectives. Has anyone already had this conversation with mom and dad? If so, how’d it go? Also find out who’s willing to join forces with you to ensure your folks have a good plan for the future.

2. Invite your folks to an open conversation about finances 

Your parents may be defensive about their financial situation, so it’s important to set the tone carefully. Do your best to treat this as a shared circumstance. You’re not fixing or blaming. You’re simply looking out for them by planning for their future.

By starting the conversation with an offer to help, you can keep from playing the blame game. You might say, “Mom and Dad, I’d like to help you guys plan for your later years. Can we set aside some time to talk about financial stuff?”

3. Ask for the numbers 

It may feel better to talk about finances in generalities, but to be successful, you need to resist that urge. You can be most helpful when you know how much your parents spend, their income, what they own, and what they owe. It’s also useful to chat openly about how stable they think their income is. For instance, Mom may plan on working another 20 years, but things are more complicated if she’s worried about getting pushed out next year.

When you understand their income outlook, you can broach the topic of Social Security benefits, and help them strategize on when to take those benefits. If they aren’t sure where they stand with Social Security, help them set up an online account withmy Social Security. And while you’re at it, see if they’ll share passwords to their other financial accounts in case you need to check in on those.

If your folks have a ton of debt or are borrowing to cover their expenses, help them find ways to spend less. Review their credit card statements and checking accounts for subscription services they don’t use, encourage them to shop around for cheaper rates on home or auto insurance, and introduce them to streaming TV so they can cancel cable.

A consistently high grocery bill is a harder challenge to tackle. You might introduce them to a grocery delivery service to minimize impulse purchases. A produce delivery service can also eke out some savings, as these focus on less expensive, seasonal produce that’s locally sourced.

Once your parents’ spending is in line with their income, every bit of savings should go towards paying down the debt.

5. Consider downsizing on homes and cars 

If your parents are open to it, downsizing now may result in more freedom later. Selling an extra car raises some quick cash to pay down debt, and also reduces insurance and maintenance expenses. Downsizing the home may be a tougher conversation to have, but it’s worth exploration. A smaller place that’s fully paid off provides a lot more security for your parents than a bigger place with a mortgage. Ongoing maintenance and expenses will be less, too.

6. Brainstorm new streams of income 

Even after you help your parents streamline their debt and expenses, they probably won’t have access to the traditional, work-free retirement lifestyle if they haven’t been saving diligently for years. That’s not to say they’ll be fully dependent on Social Security either. They could start up aside hustle to generate income and protect their lifestyle.

Veterans Day free food: 100-plus restaurants have deals for vets, active military Monday Here are 3 great reasons to take Social Security benefits at 62 Engage, ask questions and observe when investing in stock market ‘Ford v Ferrari:’ Cars from the upcoming movie take center stage Medicare Part B premium 2020: Rates and deductibles rising 7% for outpatient care

The joint effort pays off 

A little teamwork between you and your folks could have them on sustainable financial ground in just a few years. In other words, the best way to head off the parent-roommate situation is to start those tough conversations now.

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The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

Offer from the Motley Fool:The $16,728 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

Source: Six things to do when your aging parents have no retirement savings

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More Canadians are living well into their eighties. Chances are that many of us will be involved in caring for at least one aging parent and will be concerned if their retirement savings will be enough. Planning ahead will help ensure your parents’ financial independence and for you – piece of mind. BlueShore Financial advisor David Lee explains the nuances of financial planning for aging parents, including RRSPs, Canada Pension Plan, Old Age Security, Long Term Care Insurance and more. Learn more about helping your parents with their financial plan: https://www.blueshorefinancial.com/We…

These Are Retirement Numbers All Couples Should Plan On, But Don’t

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Shortly after wrapping up my lecture on the future of retirement, a petite older woman approached me. Confidently, she quickly positioned herself between me and other attendees that had follow-up questions. She came close and began speaking to me at a volume that may have been more appropriate several feet away, saying: “I don’t know who he is! He is always there—every day!”

Before I could ask her whom she was describing, I noticed an older man standing slightly to the side, but a little behind her. She continued, picking up her pace, and volume.

“He just doesn’t understand. I have a daily routine!”

The man now seemed to be stepping back — almost shrinking away. She turned to him and rhetorically asked: “Isn’t that true?!”

Not waiting for his response she turned to me, seemingly looking to me to agree, or referee, saying, “My husband! Now that he is retired, he is always looking to me to feed him, entertain him, and keep him busy!”

Today In: Money

Not waiting for my reply, she took the old man by the arm and walked toward the exit.

This was not the first time I heard from an older woman, a now common refrain, voiced by many women with retired partners—“I married him for life, but not for lunch.”

People 50 years old and older have the highest divorce rate of all age groups. In fact, according to Pew Research, the Baby Boomer divorce rate, the so-called gray divorce, has doubled since the 1990s.

Social observers have offered many reasons—among them, most often voiced by women, is: “He bores me.” That reason may not be altogether incorrect, just a little incomplete.

What if the cause of many divorces is poor planning? Not retirement planning in the financial sense, but longevity planning. The failure to plan how, as a couple, they will spend nearly a full third of their adult lives together. A far more concentrated time together than all the previous decades they shared.

There is a new retirement math that has nothing to do with money, and everything to do with living well—together. This new math includes numbers you and your partner didn’t imagine, let alone plan on.

Relationships are typically measured in years. We even assign symbolic gifts to achieving years of togetherness: 25 years is a silver anniversary, 50 years is golden, etc. But, in all those early decades—how much time do you really spend together? Between raising children, careers and countless other activities and responsibilities that only grow in number, and intensity, from young adulthood through midlife, a couple may find they spend years living together, but very few hours actually being together.

The New Math Of Retirement Togetherness

How much time do we actually spend with our partners?

There are 168 hours in a week. Assume that about 8 hours each day are spent sleeping, totaling 56 hours a week, leaving 112 waking hours.

The Bureau of Labor Statistics reports that the average work day is about nine hours, five days a week. For most, that means 45 hours of work away from their partner, leaving 67 hours.

Just getting to work and going home takes time, too. The nation’s average commute time is nearly 30 minutes one way to work, unless you share Boston’s commute with me, then you are sitting nearly idle for an average 49 minutes. Assuming at least an hour per day to travel to and from work, that is an additional five hours from home, leaving 62 waking hours together—assuming that Saturdays and Sundays are days off.

On any given Monday through Friday, however, a couple may spend only a mere six hours truly together. And that is six hours of togetherness counting showers, bio-breaks, meals, children and all the other big and little tasks that make up a day.

Now, let’s consider retirement. A clean break from the workplace. A dividend of 45 waking hours per week are given to you—with interest. Because the end of the daily grind, also ends the daily work commute, another five-plus hours of freedom is gained to spend with your mate.

Suddenly instead of being limited to a just six waking hours per day with your partner, you have scored an additional ten waking hours at home!

Overnight, you went from 6 to 16 hours together! Every day!

Cause for celebration? Perhaps. For many, it is a surprise. Instead of a time to be celebrated, if not fully planned for, it may be a time that brings unanticipated complexity and even conflict between partners.

Many couples cash in their retirement dividend of more time together by making trips dreamed of decades before. Others plan on spending time with friends, family and, grandchildren. However, leisure travel for most is only a week or two a year. Family visits are typically over holidays and long weekends. In sharp contrast, life after full-time work is a daily event that continues for decades.

Retirement planning today focuses primarily on financial security. It is now necessary to develop a longevity plan, that includes money, but also a comprehensive and collaborative discussion that couples must have about what they will do, and how they plan to live together in the many years that is likely to be a full one third of their adult lives.

For now, many may not have a plan, but they are muddling through. Women appear to be taking action to ensure that their later years are filled with activity and income— not just activity planning for their retired mate. The Boston College Center for Retirement Research reports a sharp rise in the average retirement age of women.

Some men are taking a defensive approach. Pete, my Uber driver, keeps busy by staying on the road four to five days a week. With a full head of white hair, dressed in khakis, polo shirt, and sweater, Pete looks more like someone on his way to a member meeting of a high-end golf club, than someone who has found navigating traffic for seven to eight hours a day a side hobby.

I ask him why does he work so many days in retirement? As he puts it, “Retirement has been a great change after years at a desk. I am outside, and I get to meet and talk with interesting people.”

Looking at me in the rearview mirror, he adds, with a big smile: “There’s another reason too. Driving gets me out of the house before the wife kills me.”

More reading: Why 8,000 Is The Most Important Number For Your Retirement Plan

Great Places To Follow Your Passions In Retirement

Follow me on Twitter.

I lead the Massachusetts Institute of Technology AgeLab (agelab.mit.edu). Researcher, teacher, speaker and advisor – my work explores how global demographics, technology and changing generational attitudes are transforming business and society. I teach in MIT’s Department of Urban Studies & Planning and the Sloan School’s Advanced Management Program. My new book is The Longevity Economy: Unlocking the World’s Fastest Growing, Most Misunderstood Market (Public Affairs, 2017) . Follow me on Twitter @josephcoughlin.

Source: These Are Retirement Numbers All Couples Should Plan On, But Don’t

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Saving for retirement means navigating a potential minefield of high fees and bad advice. Billy Eichner and Kristin Chenoweth share some tips. Connect with Last Week Tonight online… Subscribe to the Last Week Tonight YouTube channel for more almost news as it almost happens: www.youtube.com/user/LastWeekTonight Find Last Week Tonight on Facebook like your mom would: http://Facebook.com/LastWeekTonight Follow us on Twitter for news about jokes and jokes about news: http://Twitter.com/LastWeekTonight Visit our official site for all that other stuff at once: http://www.hbo.com/lastweektonight

How GE Shafted Its Retirees

Remember “defined benefit” pensions?

That is the kind of plan in which the employer guarantees the worker a set monthly benefit for life. They are increasingly scarce except for small closely held corporations.

The same rules apply for small closely held businesses as for large corporations.

These plans can be great tools for independent professionals and small business owners. But if you have thousands of employees, DB plans are expensive and risky.

The company is legally obligated to pay the benefits at whatever the cost turns out to be, which is hard to predict.

The advantage is you can use some hopeful accounting to set aside less cash now and deal with the benefit problems later. The problem is “later” comes faster than you would like, and procrastination can be a bitch.

That Brings Us to the Lesson for Today

In October 7, General Electric (GE) announced several changes to its defined benefit pension plans. Among them:

Today In: Money
  • Some 20,000 current employees who still have a legacy-defined benefit plan will see their benefits frozen as of January 2021. After then, they will accrue no further benefits and make no more contributions. The company will instead offer them matching payments in its 401(k) plan.
  • About 100,000 former GE employees who earned benefits but haven’t yet started receiving them will be offered a one-time, lump sum payment instead. This presents employees with a very interesting proposition. Almost exactly like a Nash equilibrium. More below…

The first part of the announcement is growing standard. But the second part is more interesting, and that’s where I want to focus.

Suppose you are one of the ex-GE workers who earned benefits. As of now, GE has promised to give you some monthly payment when you retire. Say it’s $1,000 a month.

What is the present value of that promised income stream? It depends on your life expectancy, inflation, interest rates and other factors. You can calculate it, though. Say it is $200,000.

Is GE offering to write you a generous check for $200,000? No. We know this because GE’s press release says:

Company funds will not be used to make the lump sum distributions. All distributions will be made from existing pension plan assets in the GE Pension Trust. The company does not expect the plan’s funded status to decrease as a result of this offer. At year-end 2018, the plan’s funded ratio was 80 percent (GAAP).

So GE is not offering to give away its own money, or to take it from other workers. It is simply offering ex-employees their own benefits earlier than planned. But under what assumptions? And how much? The press release didn’t say.

If that’s you, should you take the offer? It’s not an easy call because you are making a bet on the viability of General Electric.

The choice GE pensioners face is one many of us will have to make in the coming years. GE isn’t the only company in this position.

Unrealistic Assumptions

When GE says its plan is 80% funded under GAAP, it necessarily makes an assumption about the plan’s future investment returns.

I dug around their 2018 annual report and found the “expected rate of return” was 8.50% as recently as 2009, when they dropped it to 8.00%, then 7.50% in 2014, to now 6.75%.

So over a decade they went from staggeringly unrealistic down to seriously unrealistic. They still assume that every dollar in their pension fund will grow to almost $4 in 20 years.

That means GE’s offered amounts will probably be too low, because they’ll base their offers on that expected return.

GE hires lots of engineers and other number-oriented people who will see this. Still, I doubt GE will offer more because doing so would compromise their entire corporate viability, as we’ll see in a minute.

Financial Engineering

GE has $92 billion in pension liabilities offset by roughly $70 billion in assets, plus the roughly $5 billion they’re going to “pre-fund.”

But that is based on 6.75% annual return. Which roughly assumes that in 20 years one dollar will almost quadruple.

What if you assume a 3.5% return? Then you are roughly looking at $2, which would mean the pension plan is underfunded by over $100 billion—and that’s being generous.

GE’s current market cap is less than $75 billion, meaning that technically the pension plan owns General Electric.

This is why GE and other corporations, not to mention state and local pension plans, can’t adopt realistic return assumptions. They would have to start considering bankruptcy.

If GE were to assume 3.5% to 4% future returns, which might still be aggressive in a zero-interest-rate world, they would have to immediately book pension debt that might be larger than their market cap.

GE chair and CEO Larry Culp only took over in October 2018.

We have mutual friends who have nothing but extraordinarily good things to say about him. He is clearly trying to both do the right thing for employees and clean up the balance sheet.

He was dealt a very ugly hand before he even got in the game.

GE needs an additional $5 billion per year minimum just to stave off the pension demon. That won’t make shareholders happy, but Culp is now in the business of survival, not happiness.

That is why GE wants to buy out its defined benefit plan beneficiaries. Right now, the company is on the wrong side of math.

It doesn’t have anything like Hussman’s 31X the benefits it is obligated to pay. Nor do many other plans, both public and private. Nor does Social Security.

Tough Choices

To be clear, I think GE will survive. Its businesses generate good revenue and it owns valuable assets. The company can muddle through by gradually bringing down the expected returns and buying out as many DB beneficiaries as possible. But it won’t be fun.

Pension promises are really debt by another name. The numbers are staggering even when you understate them. We never see honest accounting on this because it would make too many heads melt.

If I am a GE employee who is offered a buyout? I might seriously consider taking it because I could then define my own risk and, with my smaller amount, take advantage of investments unavailable to a $75 billion plan.

I predict an unprecedented crisis that will lead to the biggest wipeout of wealth in history. And most investors are completely unaware of the pressure building right now. Learn more here.

Follow me on Twitter. Check out my website.

I am a financial writer, publisher, and New York Times bestselling-author. Each week, nearly a million readers around the world receive my Thoughts From the Frontline free investment newsletter. My most recent book is Code Red: How to Protect Your Savings from the Coming Crisis. I appear regularly on CNBC and Bloomberg TV. I’m also Chairman of Mauldin Economics, a research group that provides monthly analysis and recommendations to thousands of readers around the world. I was previously CEO of the American Bureau of Economic Research. Today I am President of the investment advisory firm Millennium Wave Advisors, LLC. I am also president and registered principal of Millennium Wave Securities, LLC a FINRA and SIPC registered broker dealer. When I’m not traveling to speak at conferences and events, I live in Dallas, TX. I’m also the proud father of seven children.

Source: How GE Shafted Its Retirees

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FREE Help for Seniors! Miriam Dix is an independent Medicare Insurance Agent and helps seniors do more with less by helping them stretch their healthcare dollars and determine the best value for their specific situation. Miriam does not work for any one insurance company and, instead she offers the best value plans available. Miriam can be reached at 1-904-513-0535 and via email at miriam@seniormarketmanagement.com. Send me your questions! I’ll help ya! 🙂 News clip available at: http://www.wdrb.com/story/29661213/ge…

The Formula You Are Using To Determine How Much To Save For Retirement Is Broken

If you are trying to figure out how much money you need to save for retirement, there’s an easy rule of thumb that you can use: simply multiply your expected annual expenses in retirement by twenty-five.

For example, if you expect to spend $100,000 annually once you’re retired, you’ll want to have a $2.5 million portfolio saved up. If you’d like to play around with the numbers to estimate your own retirement needs, you can use this simple retirement calculator.

This retirement savings rule of thumb is based on the 1998 landmark study conducted by Carl Hubbard, Philip Cooley and Daniel Walz, in their seminal study known as the Trinity Study. They built on the 1994 work of William Bengen, who originally coined the ‘4% Rule’.

Today In: Money

The Trinity Study evaluated safe retirement withdrawal rates, and found that 4% was sufficient for the majority of retirees. A safe withdrawal rate simply refers to the amount of money that can be taken out of an account and allow you to reasonably expect the portfolio to not fail, or run out of money. In this case, the 4% withdrawal rate refers to the amount of money that will be withdrawn from the balance of the retirement portfolio in the first year of retirement. In subsequent years, the balance withdrawn will simply be an inflation adjusted number based on the total dollar amount withdrawn the year prior.

The Trinity Study has become so well-known, that it has been adopted by hopeful retirees from all walks of life, including those hoping to retire early. The FIRE movement (Financial Independence, Retire Early) is a lifestyle movement with the goal of allowing individuals to retire as early and quickly as possible.

However, one detail that the movement is getting wrong and completely missing, is the fact that the Trinity Study’s 4% rule of thumb was based on a 30 year retirement period. This time horizon was determined to be on the conservative end of retirements by the authors of the study. If you work until you’re 65, having a 30 year retirement seems pretty reasonable. I don’t think many would argue that living until the age of 95 is a short life by any means.

The problem arises due to the FIRE movement seeking a much longer retirement period. If you retire at 45 years old, you may need a portfolio that will survive another 45 to 50 years in order to avoid running out of money. In this case, making a judgement error could end up meaning re-entering the workforce at an advanced age. For this reason, relying on a 4% withdrawal rate is an extremely risky decision if you plan to retire early.

This begs the question of what a more appropriate withdrawal rate is if you plan to retire early. The answer is that it depends. In general, the study found that as the balance between stocks and bonds shifts towards equities, a portfolio is more likely to withstand the test of time. So inherently, your risk tolerance will need to be factored into the equation. If you are comfortable with 75%+ of your portfolio being in stocks (and stomaching the increased risk), you might be safe with a 3% withdrawal rate. If you prefer less volatile investments, a lower rate is more conservative.

This is bad news for a lot of you hoping to retire early.

For one, it would mean having to save an additional $833,000 if you hope to spend $100,000 annually like in the example above. Unless you are an exceptionally high earner, it’ll likely mean having to work for several additional years or having to continue to earn additional income even after retirement.

With the buzz surrounding the gig economy and the seemingly endless ‘side-hustle’ opportunities available, this seems like a surmountable hurdle. The deficit in retirement savings required also highlights the impact of having to save for retirement as efficiently as possible.

This means fully taking advantage of your 401(k), IRA, and other tax-advantaged accounts. It also means evaluating whether it makes sense to refinance your student loans or not. Avoiding credit card interest fees and other forms of high interest debt are a must. In addition, maximizing your earning potential will also help safeguard your nest egg from market turbulence and economic uncertainty.

Just as important, you’ll also want to avoid making costly investment mistakes. One that comes to mind is erroneously viewing your vehicle as a sound investment. Another pitfall is picking individual stocks in lieu of index funds or ETFs. To set yourself up for success, minimizing fees and diversifying your investments is the name of the game.

Does all of this mean that the 4% rule is futile and should be completely ignored? Absolutely not. The authors of the Trinity Study ran simulations to find what the safe withdrawal rate would be for varying time horizons. But at the end of the day, they were just that: simulations. Even if you only had an expected 15 year retirement and used a conservative withdrawal rate, there is always the chance that your portfolio could fail. The same is true in the opposite direction: there’s always the chance that a 4% withdrawal could be sufficient for a 50 year retirement.

The question you have to answer is whether you are comfortable taking that risk. I know I’m not.

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Camilo Maldonado is Co-Founder of The Finance Twins, a personal finance site showing you how to budgetinvestbanksave & refinance your student loans. He also runs Contacts Compare.

Source: The Formula You Are Using To Determine How Much To Save For Retirement Is Broken

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What Makes People Truly Happy in Retirement?

What makes people happy in retirement? That’s the question Michael Finke has been researching for many years now. He’s the chief academic officer of the American College of Financial Services, and was one of 16 experts who spoke on at TheStreet’s Retirement, Taxes, and Income Strategies symposium held recently in New York.

And he now has the answer.

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But first a little background. Finke has been researching the question of what makes people happy in retirement because he wants to know to what extent does what people do with their money make them happy in retirement. “Is it better if they have a lump sum? Is it better if they have a pension, or some kind of annuitized income?”

And what he found was this: There seems to be three pillars of happiness in retirement. The first pillar is money, which he says is good news for those of who are actually saving for retirement. “You are happier if you have more money,” Finke said. “So money is a pillar.”

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And it shouldn’t be any surprise, he said, that health is also a pillar of happiness. “You can have all the money in the world, but if you’re not healthy, you’re not actually gonna enjoy your retirement,” Finke said.

But most of his newest research is on social well-being. For instance, the extent to which you have good relationships with your spouse is is one of the strongest predictors of happiness in retirement. “So make sure you invest in that as much as you’re investing in your 401(k),” Finke said.

The other predictors of happiness in retirement are, according to Finke, friendships and the depth of friendships and the number of friendships that you have with other people. “And even when we look at spending, what we see is that social spending is what really makes people happy,” he said.

Spending money on all sorts of other stuff that we think might make us happy in retirement doesn’t really make us that happy. “It is social spending that makes us happy,” Finke said.

So that’s the foundation of his research in life satisfaction in retirement. “You have to have all three of those if you’re going to be satisfied, and all of them are an investment,” said Finke.

What is an investment in retirement? According to Finke, an investment is anything that requires a sacrifice during your working years in order to build value. “When you save for retirement, it means that you’re living a little bit less well,” he said. “You’re setting money aside that you could have spent today, and you’re (going to) spend that money in retirement.”

Health is an investment, too, said Finke who recalled his early days as a food consumption researcher. “The whole reason I got into finance was because I took a doctoral class in investments because I wanted to understand investments theory, but my theory was that the same thing that motivated people to save money for retirement is the thing that motivated them to engage in healthy behaviors like eating better or exercising, and so that’s an investment in your future as well,” he said.

Relationships are an investment as well and it takes ongoing investment and time and resources to be able to maintain those friendships “so that you can actually draw from them in retirement,” said Finke.

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And if you haven’t made those investments — and men are especially bad at making investments in friendships — you’re not going to be as happy in retirement, he said.

Women, by contrast, invest more. “Women have more deep relationships than men do by the time they get to retirement,” he said. And that, said Finke, actually creates a big issue because very often women have friends outside of the relationship, and they want to spend time maintaining that investment with their friends.

A man’s social circle, by contrast, is at work. “And by the time they retire, they’re relying more on their spouse,” Finke said. “In an opposite-sex couple, they’re relying on their spouse for that, to spend time with them, to go on vacation with them and have lunch with them, and sometimes that creates a bit of friction in retirement.”

Finke also noted that married retirees, in general, are happier, but the happiest group is women who are newly divorced between the ages of 60 and 65. “That’s the happiest group,” he said.

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Source: What Makes People Truly Happy in Retirement? – TheStreet

Got questions about money, retirement and/or investments? Email Robert.Powell@TheStreet.com.

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What Is The Average Retirement Savings in 2019?

It costs over $1 million to retire at age 65. Are you expecting to be a millionaire in your mid-60s?

If you’re like the average American, the answer is absolutely not.

The Emptiness of the Average American Retirement Account

The first thing to know is that the average American has nothing saved for retirement, or so little it won’t help. By far the most common retirement account has nothing in it.

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Sources differ, but the story remains the same. According to a 2018 study by Northwestern Mutual, 21% of Americans have no retirement savings and an additional 10% have less than $5,000 in savings. A third of Baby Boomers currently in, or approaching, retirement age have between nothing and $25,000 set aside.

The Economic Policy Institute (EPI) paints an even bleaker picture. Their data from 2013 reports that “nearly half of families have no retirement account savings at all.” For most age groups, the group found, “median account balances in 2013 were less than half their pre-recession peak and lower than at the start of the new millennium.”

The EPI further found these numbers even worse for millennials. Nearly six in 10 have no retirement savings whatsoever.

But financial experts advise that the average 65 year old have between $1 million and $1.5 million set aside for retirement.

What Is the Average Retirement Account?

For workers who have some savings, the amounts differ (appropriately) by generation. The older you are, the more you will have set aside. However there are two ways to present this data, and we’ll use both.

Workers With Savings

Following are the mean and median retirement accounts for people who have one. That is to say, this data only shows what a representative account looks like without factoring in figures for accounts that don’t exist. This data comes per the Federal Reserve’s Survey of Consumer Finances. (Numbers rounded to the nearest hundred.)

• Under age 35:

Average retirement account: $32,500

Median retirement account: $12,300

• Age 35 – 44:

Average retirement account: $100,000

Median retirement account: $37,000

• Age 45 – 55:

Average retirement account: $215,800

Median retirement account: $82,600

• Age 55 – 64:

Average retirement account: $374,000

Median retirement account: $120,000

• Age 65 – 74:

Average retirement account: $358,000

Median retirement account: $126,000

For households older than 65 years, retirement accounts begin to decline as these individuals leave the workforce and begin spending their savings.

Including Workers Without Savings

When accounting for people who have no retirement savings the picture looks considerably worse. Following are the median retirement accounts when including the figures for people with no retirement savings. The following do not include mean retirement accounts, as this would be statistically less informative than median data.

• Age 32 – 37: $480

• Age 38 – 43: $4,200

• Age 44 – 49: $6,200

• Age 50 – 55: $8,000

• Age 56 – 61: $17,000

How Much Should You Have Saved For Retirement?

So that’s how much people have saved for retirement, or more often don’t. Now for the more useful question: How much should you have saved for retirement?

The truth is that there’s no hard and fast rule. It varies widely by your age, standard of living and (perhaps most importantly) location. Someone who rents an apartment in San Francisco needs a whole heck of a lot more set aside than a homeowner in the Upper Peninsula of Michigan.

The rule of thumb is to estimate by income. Decide the income you want to live on once you retire, then picture your life as a series of benchmarks set by age. At each age you want a multiple of this retirement income saved up. Your goal is to have 10 to 11 times your desired income in savings by retirement.

• By age 30: between half and the desired income in savings

• By age 35: between the desired amount and double the desired income in savings

• By age 40: between double and triple the desired income in savings

• By age 45: between triple and quadruple the desired income in savings

• By age 50: between five times and six times desired income in savings

• By age 55: between six times and seven times desired income in savings

• By age 60: between seven times and nine times desired income in savings

• By age 65: between eight times and 11 times desired income in savings

So, if you earn $50,000 per year, by age 40 you will want to have between $100,000 and $150,000 in retirement savings set aside. The formula grows later in life for two reasons. First, as your savings accumulate they will grow faster. Second, as you approach retirement it is often wise to accelerate your savings plan.

What You Should Do Next for Your Retirement Savings

Retirement is approaching a crisis. In the coming decades millions of Americans will get too old to continue working without the means to stop. Millennials, crippled by debt from graduation, will turn this crisis into a catastrophe in about 40 years. And Social Security, designed to prevent exactly this problem, covers less than half of an average retiree’s costs of living.

It’s beyond the scope of this article to discuss exactly how this happened, but if you’re one of the many people who have fallen behind on retirement savings, don’t panic. There’s plenty you can do. But… it might not necessarily be easy.

The key is to think about retirement savings like a debt. This is money you owe to yourself and it charges reverse interest. Every day you go without adding money to your retirement account is a day you lose investment income. That’s money that you’ll need someday and won’t have.

Next, take stock of where you are. How much will you want to live on in retirement and how much do you have saved today? Use our chart above. That will tell you how far behind you are compared to where you need to be. Are you a 40 year old with $25,000 in savings who will want to live on $50,000 per year in retirement? Then you’ve got $75,000 you need to make up for.

Now, begin catching up. Chip away at that debt every week and every month. Pay into your 401k and IRA the same way you would whittle down a credit card. By thinking about it this way, as a specific goal, you can take away some of the fear of saving for retirement and turn it into an achievable (if large) amount. It’s not just some big, black hole you can never fill. It’s a number, and numbers can go down.

It won’t necessarily be fun. You might have to cut back on luxuries or take on some extra work, but even if you start late in life you can catch up on your retirement.

Now’s the right time to start.

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Source: What Is The Average Retirement Savings in 2019?

Dimensional Vice President Marlena Lee, PhD, explains how her research on replacement rates can help you prepare for a better retirement outcome. See more here: https://us.dimensional.com/perspectiv…

A Recession Won’t Wreck Your Retirement…But This Will

Here is what matters if you’ve made it and want to keep it.Do the financial markets have your attention? I assume so. After all, Wednesday’s 800-point drop in the Dow was the worst day in the U.S. stock market this year. And while many investors missed it, the December 2018 plunge in stock prices capped off a 20% decline which started in October. That could have put a big divot in the plans of folks recently retired or in the late stages of their careers.

Stumbling at the finish line?

Demographics tell us that there is massive group of people who are between 55 and 70 years old. They are the majority of the “Baby Boomer” generation. Many of them have built very nice nest eggs, thanks to a robust U.S. economy over the last 40 years. That period of technological innovation and globalization of the economy also produced four decades of generally falling interest rates. That’s provided a historic opportunity to build wealth, if you saved well and invested patiently.

But now here we are, with a stock market near all-time highs and interest rates crashing toward zero. The tailwind that lifted Baby Boomers in their “accumulation” years may flip to a headwind, just in time for them to start using the money.

Focus on what matters

At this stage of their investment life, Baby Boomers are tempted from all directions. They are told to bank on index funds, 60/40 portfolios, structured products and private partnerships. And, while there are merits to each, I am telling you what I see as someone who has been hanging around investment markets since this Baby Boomer was a Wall Street rookie in the beloved World Trade Center in NYC: much of it is bunk. It’s a distraction. It’s a sales pitch.

Take these over-hyped attempts by wealth management firms to boost their bottom line and scale their businesses, and bring your attention to your own priorities. Today, as much as any time in the past 10 years, your focus should be on true risk-management.

That does not necessarily mean running to cash. That is an outright timing move, and it borders on speculation. But it does mean that the intended use of your accumulated assets (when you need it, how much you need, and how you will navigate the markets of the future) should be

inward-looking. It should not be based on trying to guess what the stock market is going to do.

Rate cut? Check. Inversion? Check. Giant stock market drop? We’ll see.

uncaptioned
Source: ycharts.com

The big news on Wednesday was the “inversion” of a closely-watched part of the U.S. Treasury yield curve. Translated to English, that means for the first time since 2007, U.S. Bonds maturing in 10 years yielded less than those due in 2 years. This is far from the first inversion we have seen between different areas of the Treasury market. However, it is the one that is most widely-followed as a recession warning signal.

The chart above shows 3 things that were essentially in sync around the time the last 2 stock bear markets began. The 10-2 spread inverted, but then quickly reverted to normal. The Fed cut interest rates for the first time in a while. And, the S&P 500 peaked in value, and fell over 40% from that peak.

Let that sink in, given what we have witnessed in just the past 2 weeks. Then, fast-forward to today, where we find ourselves in a very similar situation regarding inversion and the Fed. See this chart below:

uncaptioned
Source:ycharts.com

What stands out the most to me in that chart is how the spread between the 10-year and 2-year yields is almost perfectly opposite that of the S&P 500’s price movement. That is, when the 10-2 spread is dropping, the S&P 500 is usually moving higher. But when that spread starts to rise, at it is likely to soon, the S&P 500 falls…hard. As a career chartist, I just can’t ignore that.

I have been writing about the threat of an eventual “10-2 inversion” in Forbes.com since April, 2017. It finally happened this week, 19 months into what increasingly looks like a period of muted returns for investors. That is, if they follow rules identical to those they followed for the past 10 years.

Recessions are bad, but this is worse

We saw on display this week what I have been talking about since early last year: that it will not take the declaration of a recession to tip the global stock market into a panic-driven selloff that rips through retirement efforts. All that is needed is for stock prices to follow through to the downside is to actually see the market react to the preponderance of evidence that has been building for a while now.

In other words, it is the market’s fear of the future (recession) and not the actual event that is most important. By the time a recession is officially declared, you won’t need to react. The damage will already be done.

Specifically, a slowing global economy, excessive “easy money” policies by the Fed and its global counterparts, and a frenzied U.S. political environment. This has shaken investor confidence, and now the only thing that ultimately matters in your retirement portfolio: the prices/values of the securities you own, is under pressure.

What to do about it

First, don’t fall prey to the hoards of market commentators whose livelihood depends on progressively higher stock prices. Corrections are not always healthy, diversification is often a ruse, and long-term investing is for 25 year-olds!

For those who have “fought the good fight” to get to the precipice of a retirement they have darn well earned, the last thing they want is to have this inanimate object (the financial markets) knock them back toward a more compromised retirement plan.

The best news about today’s investment climate is that the tools we have to navigate through them are as plentiful as ever. Even in a period of discouragingly low interest rates for folks who figured on 4-6% CDs paying their bills in retirement, bear markets in stocks and bonds can be dealt with, and even exploited for your benefit.

Bull or bear? You should not care!

Maybe this is not “the big one” that bearish pundit have been warning about. Perhaps it is just another bump in the road of a historically long bull market for both stocks and bonds. But again, market timing and headline events like 10-2 spreads, recessions and the like are not your priority.

What your priority is, if you want to improve your chances of success toward and through retirement, is something different. Namely, to get away from the jargon and hype of financial media, simplify your approach, and take a straightforward path toward preserving capital in a time of uncommon threats to your wealth. I look forward to sharing insight on that in the coming days.

Comments provided are informational only, not individual investment advice or recommendations. Sungarden provides Advisory Services through Dynamic Wealth Advisors

To read more, click HERE

Follow me on Twitter or LinkedIn. Check out my website.

I am an investment strategist and portfolio manager for high net worth families with over 30 years of industry experience. A thought-leader, book author and founder of a boutique investment advisory firm in South Florida. My work for Forbes.com aims to break investment myths and bring common sense analysis to my audience. Connect with me on Linked In, follow me on Twitter @robisbitts. Visit our website at www.SungardenInvestment.com

Source: A Recession Won’t Wreck Your Retirement…But This Will

Creative Planning President and Founder Peter Mallouk discusses why he thinks the economy is in good shape, who should look to alternative investing and how to invest for retirement. He also discusses why he is not a fan of crypto.

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Fintech Firm Solves Number One Retirement Fear—Outliving Your Money

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Ken Henderson, a traveling Pickleball pro, has taped out two 22-by-40-foot courts on an East Harlem gym floor. Today, instead of the usual Florida retirees, he’s teaching a crew of youngish engineers, Web designers and financial planners who have taken the subway up from the Chelsea offices of their fintech startup to play the paddle sport many Baby Boomers favor because it requires less running than tennis and is easier on aging joints. One of the older players today is 41-year-old Rhian Horgan, the founder and CEO of Kindur. She has arranged the outing as a tongue-in-cheek way for her staff to get in touch with their inner Boomers—and their clientele.

In 2016, after 17 years with JPMorgan, Horgan ditched her business suits for jeans and reinvented herself as a fintech entrepreneur. She pitched Kindur as a one-stop digital financial advisor for those nearing or in retirement. It would manage clients’ investment portfolios using a basket of low-cost index ETFs (from Vanguard, BlackRock and Schwab); offer them advice on when to take Social Security; determine which of their retirement accounts to draw down first; and, in many cases, sell them a fixed annuity­—all with the goal of making sure they didn’t run out of money or pay more taxes than necessary during retirement. For simplicity, Kindur would even consolidate a client’s income sources into a monthly “retirement paycheck.”

But venture capitalists who have thrown hundreds of millions at a slew of robo-advisors and personal finance apps targeting Millennials were not wowed by Horgan or her pitchbook. “There was nothing in their portfolio targeting people ages 55 to 70,” she says. “It was a demographic they didn’t understand.”

Adding to her problems, Horgan believes, was her own identity. “I wasn’t viewed as investable. I was old for the industry, almost 40, didn’t have a cofounder, and I worked [previously] for a bank.” In addition, the notion of selling annuities online without high-pressure commissioned salesmen has been met with wide skepticism—from VCs and especially within the insurance industry itself.

After months of fruitlessly knocking on U.S. doors, Horgan found a believer at a fintech retreat in the French Alps. Anthemis, a London-based VC firm that was in on the first 2010 funding round of Betterment—the largest of the independent robo-advisors—agreed to lead a $1.25 million seed funding in September 2017, with billionaire Steve Cohen’s Point72 Ventures chipping in. Why mess with Boomers? “That’s where the money is,” answers Anthemis cofounder Sean Park, who sits on Kindur’s board.

Horgan hired an engineer, a designer, a general counsel (from Citi) and a few fellow financial wonks. They set up shop in a WeWork office. Across the hall, a sixtysomething woman was using WeWork’s online Meetup service to organize mah-jongg games, which gave them encouragement whenever naysayers suggested Boomers just weren’t that into the internet.

Still, their challenge was daunting: designing a “decumulation” or spend-down plan is more complicated (and requires more individualization and sets of calculations) than determining a proper asset allocation in the accumulation or saving phase. Yet to retain a broad appeal, the look and feel of the site couldn’t be too wonky, they believed.

The result: Kindur’s site, which launched in April, takes a low-key approach to both the details and the sales pitch. After setting up a free account, you answer a handful of specific questions (age, recent salary, planned retirement date) and guesstimate your assets and current spending. You get a preliminary free plan providing spending, Social Security and other advice based on these guesstimates or by linking to your actual accounts.

Prospective customers can play with their assumptions (retire later? spend less?) and ask questions of Kindur’s “coaches” via phone or online chat. Turns out, Boomers love chatting online and half use Kindur’s smartphone app, instead of its website, Horgan reports.

So far, more than 1,000 potential clients have gotten free plans. It’s a slow sales process, so we don’t yet know how many of them will buy Kindur’s services. But those who do will transfer their IRAs and investment accounts to its platform (custodied by Apex Clearing) and be charged an annual management fee of 0.5% of investment assets.

One of the most closely watched parts of Horgan’s approach is her use of fixed annuities to ensure clients don’t outlive their money. In contrast to the complicated (and commission-heavy) variable annuities insurance salesmen pitch, these are relatively plain vanilla products: You hand over a lump of money—say, $100,000—and get a fixed monthly income beginning either now or at some date in the future. Some financial planners and policymakers argue fixed annuities are a good idea, particularly for those middle-class folks who have savings but no regular pensions (outside of Social Security) they can count on.

Not surprisingly, annuity sellers are aggressively pursuing the Boomers’ business. In fact, the Alliance for Lifetime Income, an industry group, is the sole sponsor of the Rolling Stones’ current concert tour—the one that was delayed by Mick Jagger’s heart surgery.

But the insurance industry is still resistant to selling annuities online. Complicating matters, Horgan wanted a custom-designed product that fit her vision of a good annuity. She interviewed more than 40 insurers to find one willing to work with her and finally teamed up with American Equity, a West Des Moines, Iowa-based $51 billion in assets company started just 24 years ago.

“We’re partnering with Kindur because it’s a distribution channel of the future,’’ says Ron Grensteiner, the president of American Equity Investment Life Insurance Co. “There’s a segment of the population now, and there will be even more so in the future, who want to do retirement planning digitally—and anonymously, to a certain degree.”

Horgan resolved to start Kindur after watching her own parents struggle to make sense of their retirement options. Her physician father and piano-teacher mother immigrated from Ireland when she was 9. Her dad worked at six different U.S. hospitals, accumulating six workplace retirement plans, as well as sundry other financial assets. Her mom, who died in late 2017, had two retirement accounts. “The list of accounts went on and on. They never had a financial advisor, and most of the info was in my dad’s head,’’ says Horgan, who has decorated Kindur’s offices with framed photos of parents—her own and those of her staff.

Before taking the Kindur site live, she raised another $10 million, including $1 million from Inspired Capital, a new fund run by billionaire Penny Pritzker and Alexa von Tobel, who founded Learnvest, a financial site for Millennial women. (It was acquired by Northwestern Mutual and later ended as a brand.) “She’s extremely ahead of the competition in recognizing what an opportunity this is,” says Von Tobel.

Not quite all the competition. United Income, a similar comprehensive online service aiming at the 50-to-70-year-old getting-organized-for-retirement crowd launched in September 2017 and already has $780 million in assets under management, with an average account size of $833,000. Unlike Horgan, founder Matt Fellowes didn’t have to fight the VCs’ anti-Boomer bias—he used his own and his family’s money, plus funds from Morningstar, which backed his first fintech startup, Hello Wallet, an automated budgeting and financial education tool aimed at Millennials.

United Income is a bit pricier. It charges 0.5% of assets a year for robo-only management and 0.8% for a “concierge service” with access to a personal financial advisor. And it doesn’t recommend annuities. Why not? Fellowes says fewer than 10% of his customers face an “essentials gap”—meaning their basic living expenses aren’t covered by Social Security and pensions—and he views bond ladders and other low-risk investment strategies as a more cost-effective method than annuities to fill such a gap.

How big a role annuities will ultimately play in Boomer retirements is still unclear.

What is clear, however, is that digital money management is not just for Millennials anymore.

In fact, the bigger challenge for Kindur, United Income and the inevitable similar startups to come may be that Boomers will simply opt to get their robo-advice from the established financial companies that helped them build their nest eggs in the first place.

Charles Schwab & Co.’s robo-human hybrid advice service, Schwab Intelligent Portfolios Premium, launched in 2017. It includes spend-down advice and costs just $300 up front, plus $30 a month. So far, two thirds of users are 50 or older.

And then there’s the blue whale of robo-human hybrids: Vanguard’s Personal Advisor Services, which launched in 2015 and charges 0.30% of assets (and less for those with $5 million or more under management).

 The Vanguard service not only allocates clients’ investments, but also offers advice on claiming Social Security and how much (and from which accounts) clients should spend in retirement. So far, 85% of Personal Advisor’s users are 50 or older, and it has grown to $130 billion in assets under management—way more than all the robo startups combined, no matter what age clients they serve.

I’m an associate editor on the Money team at Forbes based in Fairfield County, Connecticut, leading Forbes’ retirement coverage. I manage contributors who cover retirement and wealth management. Since I joined Forbes in 1997, my favorite stories have been on how people fuel their passions (historic preservation, open space, art, for example) by exploiting the tax code. I also get into the nitty-gritty of retirement account rules, estate planning and strategic charitable giving. My favorite Forbes business trip: to Plano, Ill. to report on the restoration of Ludwig Mies van der Rohe’s Farnsworth House, then owned by a British baron. Live well. Follow me on Twitter: http://www.twitter.com/ashleaebeling Send me an email: aebeling@forbes.com

Source: Fintech Firm Solves Number One Retirement Fear

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