Tag Archives: retirement plans

Planning for Retirement: a Checklist Approach

My Comments: Some of us are organized and some of us are not and the rest of us are ‘sorta/kinda’ organized. I’m in the ‘sorta/kinda’ organized group.

I am, however, heavily invested these days in teaching others a process to follow when thinking about their future retirement. I’ve created an internet school called Successful Retirement Secrets™ where I’ve written and published two courses on the topic. (click on the image to the right to explore them…)

Meanwhile, for those of you who need help being an organized person, this checklist from Laurie Burkhardt with help from Kelly Henning is a great way to get started.

Laurie Burkhardt, CFP  \ June 26, 2017

As financial planners, we are often asked, “Will I be OK in retirement?” Before looking at a client’s assets and expenses in order to answer that question, we ask corresponding questions such as, “What do you want your retirement to look like?” Each individual’s perspective on retirement is unique. Some people want to remain in their current house and community. Others wish to downsize and stay in the area close to family and friends. There is yet another group that wants to leave the expensive Northeast states and move south or west. Thus, it’s crucial to expand on a client’s retirement goals earlier rather than later.

The checklist below illustrates different items to think about as retirement approaches, from ten years before until right after retirement begins. The earlier one starts planning for retirement, the more prepared one should be not only financially, but also emotionally.

A Strategic Pre-Retirement Checklist

Five to ten years before targeted retirement:

  • Brainstorm retirement goals and dreams of what retirement will look like.
  • Think about where you want to live and whether you want to downsize.
  • Revisit goals and time frame annually.
  • Obtain annual credit report.
  • Pay down mortgages and other debt to strive to become debt-free by retirement age.
  • Revisit progress toward achievement of retirement goal, and adjust retirement contributions and/or spending as appropriate.
  • Review estate planning needs and update documents, titling and beneficiaries as needed. Consider long-term care insurance.

One to five years before targeted retirement:

  • Attend pre-retirement workshop and/or consider personal life coach to help prepare for transition.
  • Get comprehensive medical, dental and vision exams while still covered by employer insurance plans.
  • Consider Social Security claiming strategies.
  • Request estimate of pension or retiree medical benefits.
  • Get educated about Medicare options.
  • Revisit estimated budget for income and expenses anticipated in retirement.

Six to 12 months before targeted retirement:

  • Income tax planning
    • Speak with accountant about expected new income bracket and how to plan for it.
    • Discuss possible Roth conversions or other tax planning strategies.
    • Are you eligible for any outside retirement plan contributions?
  • 401(k) Plan
    • Plan to max out contributions for current year.
    • Confirm that all funds in 401(k) accounts are vested.
    • Confirm whether funds are pre-tax only, or pre-tax and after-tax.
    • Coordinate with wealth manager to keep 401(k) funds in plan or roll to an outside IRA.
    • If rolling to an outside IRA, open new account and obtain account number and custodian address/wire instructions for future deposit.
    • If retiring between 55 and 59 ½, consider waiting to rollover due to options to take penalty-free withdrawals from 401(k) in year of retirement, or take 72t distributions for at least 5 years.
  • Pension Benefits
    • Obtain all pension benefits available through current employer.
    • Determine whether or not a lump sum pension option is available and whether it is preferable for you.
  • Other Qualified and Non-Qualified Retirement Benefits
    • Obtain information on all additional plans offered by the company and information on vesting, tax, and transfer of these accounts.
  • Social Security Benefits
    • Login to http://www.ssa.gov, create account and obtain a current benefits statements.
      • Be sure to complete this step for spouse.
      • If divorced, contact Social Security directly at (800) 772-1213 and obtain information on taking benefits as ex-spouse.
    • Coordinate Social Security Analyzer tool with benefits statements to determine claiming strategy.

Two to three months before retirement:

  • Review Paid Time Off
    • If you have any accumulated sick days, vacation time or other PTO days, determine if/how you will be paid for these days.
  • Advise Supervisor and HR Representative in writing of desired retirement date.
    • A specific date may be agreed upon(e.g., first week in January depending on payroll and other items).
    • Consider date which you will be eligible for year-end bonus or other benefits, including 401(k) matches, profit sharing, or stock options.
  • Request Retirement package of paperwork from HR.
    • Depending on the size of the company, HR will generally provide its own packet of paperwork and forms that need to be completed.
  • Determine date for exit interview with HR/supervisor.
  • Make final decision on all insurance, including medical, dental, vision and life insurance (timing will depend on company policies).

One month before retirement:

  • Obtain the paperwork to roll your 401(k) (or other retirement accounts) out of the plan into an outside account, if that’s the choice you’ve made.
    • Complete paperwork and contact HR to see if plan administrator signature is required.
    • Paperwork will be sent in following retirement date.

One week before retirement:

  • Confirm that HR retirement package has been completed and all relevant documents are signed.
  • Clean-up desk/emails, etc.
  • Remove any personal/private information from work email and computer.

Post Retirement

  • Submit 401(k) rollover paperwork following retirement date.

The Bottom Line

There are many decisions to consider as one prepares for retirement, from healthcare considerations to account logistics. Understanding the timeframe of essential tasks well in advance of your retirement date can be key to reducing stress in the months before you stop working. Employers will have deadlines on paperwork submission, some of which will be your last day of work or thirty days after.

Knowing these deadlines and seeking information in advance is essential. Use all available resources, such as your company’s human resources department and your various professional advisors, to help make the transition as smooth as possible.

Source article: https://www.investopedia.com/advisor-network/articles/090916/planning-retirement-checklist-approach/#ixzz5VuZQfiW8


Successful Retirement Secrets™

My Comments: I have just now joined the ranks of internet publishers!

Almost four years in the making, it’s an internet course to help you process retirement information leading to a SUCCESSFUL RETIREMENT.

Among other things, it’s about investment skills and getting the most from Social Security.


An enrolled student will develop a system that works in the background, helping someone retire with more money and not less money.

To the first 100 people who enroll before November 1, 2018, I’m offering 50% off the published price.

Click on the link below or the image above, and watch a FREE PREVIEW. Then decide if it would help to have a system to build your road map to a SUCCESSFUL RETIREMENT…


History says the bull market is ending

My Comments: Paranoia is an elusive thing. Just because you’re paranoid, it doesn’t mean there’s no one out there intent on putting you down. It’s much the same with the stock market. Just because we’ve not had a market correction now for almost nine years, it doesn’t mean there is one just around the corner. Or does it?

I’m writing this in an attempt to justify my position that for the past three years, I’ve been warning clients and whomever will listen that a market correction of significance is ‘just around the corner’. Is it paranoia or is it real?

Personally, I hope it happens soon. That way we can get over it and move on for the next several years. I just want to be able to start the next upturn from a higher point than the depths of the next collapse. How about you?

If you want a way to participate in the inevitable upside and avoid the inevitable downside, reply to this post or send me an email. I have an answer for you.

(This comes from http://stansburychurchouse.com)

If history is any guide, the good times are about to end for the U.S. stock market.

It’s been one of the longest-running bull markets ever…

Over nearly nine years, or 105 months, the S&P 500 has returned 368 percent (including dividends).

That’s the second-longest bull market the U.S. has ever seen… just behind the nearly 9.5 year-long, or 113 months, bull market that started in 1990.

You can see the S&P 500’s past bull markets in the table below… it shows the date they began, their overall return and how long each lasted. On average since 1926, bull markets have lasted for 54 months, and resulted in returns of 160 percent.

After the 2008/2009 global financial crisis, interest rates around the world plummeted. In the U.S., the Federal Reserve cut interest rates from over 5 percent to zero in the course of just over a year.

Coupled with that, we saw an unprecedented surge of money printing as the Fed expanded its balance sheet (by creating money and buying assets) from a little over US$800 billion to over US$4.4 trillion today, along with a wholesale bailout of the banking system.

We also later have seen a “Trump rally” where investors expected President Donald Trump’s tax reform and infrastructure investment election promises to boost the economy.

But the gains can’t go on forever

Take a look at the following chart. It shows when and why each of the bull markets above eventually ended.

For example, in 1990, the U.S. market entered its longest-running bull market on the back of the Internet boom. The S&P 500 soared over 400 percent in nine years. But in March 2000, the market peaked – and went on to fall 49 percent over the next 2.5 years.

In 2002, the market soared back. It went up over 100 percent in five years. Then the global financial crisis hit in 2007, and the S&P 500 fell 57 percent over the next 17 months.

The bull market/bear market cycle keeps repeating… thanks to mean reversion. Markets (along with most other things in life) tend over time to reverse extreme movements and gravitate back to average.

It’s like a rubber band… stretch it and when you let go it returns to its original shape. So after a period of rising prices, securities tend to deliver average or poor returns. Likewise, market prices that decline too far, too fast, tend to rebound. That is mean reversion, and it works over short and long periods.

And mean reversion isn’t the only reason we think the U.S. bull market is winding down…

Overpriced equities

By many measures, U.S. stock market valuations are high.

One of the best ways of measuring market value is to use the cyclically-adjustedprice-to-earnings (CAPE) ratio. It’s a longer-term, inflation-adjusted measure that smooths out short-term earnings and cycle volatilities to give a more comprehensive, and accurate, measure of market value.

As the chart below shows, the CAPE for the S&P 500 is now at 33.6 times earnings. That’s higher than any time in history, except for the late ‘90s dotcom bubble. It’s even higher than the stock market bubble of the late 1920s.

High valuations don’t mean that share prices will fall. High valuation levels can always go higher, at least for a bit. Or they could stand still for a while. But mean reversion suggests that at some point, valuations will fall, one way or the other.

And as we showed you recently, the U.S. economy could also be about to see a slowdown in growth – which could also dampen market sentiment and hurt share prices.

It’s not just the U.S.

Now, this is all in the U.S. But we’re seeing a similar situation in global markets.

As we told you in November, the MSCI All Country World Index (which reflects the performance of global stock markets) has seen an unprecedented streak of gains over the past year. And it’s up 8.4 percent since we last wrote about it. As we said earlier, nothing goes up forever.

Plus, if the world’s biggest market (at around half of the global market cap) is in trouble, the rest of the world could be too.

So what should you do?

Look to diversify your portfolio. Regular readers will know that we’re big fans of diversification.

We’ve written before about the importance of not just investing in different sectors and asset classes… but in different markets and countries too. That’s because spreading a portfolio around the world reduces risk. After all, gains in one market can offset losses in another.

And while the gains in some markets are nearing an end, they’re just getting started in markets like India, Bangladesh and Vietnam. These are three of the fastest-growing markets in the world.
So do yourself a favour and diversify your portfolio.

Read the original article on Stansberry Churchouse Research. This is a guest post by Stansberry Churchouse Research, an independent investment research company based in Singapore and Hong Kong that delivers investment insight on Asia and around the world. Click here to sign up to receive the Asia Wealth Investment Daily in your inbox every day, for free. Copyright 2018. Follow Stansberry Churchouse Research on Twitter.

A Majority of Working Americans Are Completely Wrong About Social Security

My Comments: The first monthly Social Security income benefit ever paid was to Ida May Fuller on January 30, 1940. Today, some 77 years later, it is a critical income source for millions of Americans.

This article by Sean Williams confirms the role Social Security plays in the lives of millions of Americans, and I’m one of them. If not already, you too will become a recipient of benefits from this 82 year old program.

I’m creating an internet course called Successful Retirement Secrets. It will have three major topic areas, one of them about Social Security.

The course will be a comprehensive and sophisticated outline for someone to follow as they slowly move through life toward retirement. I expect to have it ready to go before year end.

Sean Williams | Dec 10, 2016

In terms of retirement income, no program is more vital to seniors’ financial well-being than Social Security. For more than 75 years, Social Security income has been providing a financial floor for countless seniors, with the Center on Budget and Policy Priorities estimating that elderly poverty rates in America are just 8.5% because of Social Security income, as opposed to 40.5% without it.

Data from the Social Security Administration backs up this reliance on benefits. According to the SSA, 61% of all beneficiaries are counting on their Social Security benefits to supply at least half of their monthly income. This figure was particularly high (71%) for unmarried elderly individuals. Even pre-retirees, which believe they’ll be less reliant on Social Security than the current generation of beneficiaries, would likely struggle to make ends meet without Social Security income.

While on one end Social Security has been a financial blessing for many retired workers, their spouses, and their families, it’s also a major cause for concern. Projections from the Social Security Board of Trustees suggest that the program could begin paying out more in benefits than it’s bringing in via payroll taxes, interest, and through the taxation of benefits by 2020, ultimately culminating in the program exhausting its more than $2.8 trillion in spare cash by the year 2034.

A majority of working Americans have this all wrong

If you’re among the many retirees reliant on Social Security, the idea of the program “exhausting its spare cash” probably sounds terrifying. The TransAmerica Center for Retirement Studies, which regularly surveys Americans to get a feel for their retirement preparedness and knowledge, found earlier this year that 77% of workers are concerned that Social Security will not be there for them when they retire. Yet the truly terrifying fact here isn’t that Social Security’s spare cash is expected to be depleted in less than two decades; it’s that a majority of working Americans are just plain wrong about Social Security.

One of the near-surefire guarantees of Social Security is that it will be there when baby boomers, Generation X, millennials, and Generation Z retire. In other words, Social Security won’t be going bankrupt anytime soon, if ever.

The reason Social Security will be able to provide benefits to America’s retired workforce, the disabled, and survivors of deceased workers lies with the payroll tax. Even if the more than $2.8 trillion current in spare cash is depleted as the Trustees report has predicted, payroll tax revenue — a 12.4% tax that’s often split down the middle between you and your employer, or which is paid in full by the self-employed — will continue to be levied and collected on America’s workforce. As long as Americans keep working, the program will continue to generate revenue.

Social Security can, in theory, continue forever as a budget-neutral program that pays out benefits based on what is collected via payroll tax revenue and the taxation of benefits. Interest income earned from its spare cash is the only component of the program set to essentially disappear once that excess cash has been exhausted.

Two steps for working Americans to take now

The true worry for working Americans should be that their future Social Security benefit may be reduced from its current trajectory. The Board of Trustees estimates that when the spare cash is depleted, across-the-board benefit cuts of 21% may be needed to sustain the program through 2090. This would put three in five retirees who count on Social Security for a majority of their monthly income in a very precarious position.

This estimate serves as a wake-up call for working Americans to both (1) have a working budget and retirement budget ready, and (2) have alternative channels of income for retirement.

1. Have a working and retirement budget

Budgeting is critical for a variety of reasons but none more important than that it helps you understand your cash flow. If you don’t have a firm grasp of where your money is being spent once it’s deposited into your account by your employer, then your chances of maximizing your saving habits or minimizing your discretionary spending is low.

Creating a budget can be done entirely online these days with the use of free software, and the biggest challenge is no more involved than adding and subtracting and sticking to your plan. Some of the most helpful hints for budgeting with the goal of saving as much as you reasonably can for retirement include:

• Getting everyone in your household involved, since it’ll encourage you and those around you to stick to the household budget.
• Meeting up with like-minded individuals once or twice monthly to share your ideas and progress.
• Using separate accounts for different spending categories, such as food and entertainment.
• Most importantly, analyzing your data monthly to assess your progress.

Having a retirement budget is just as critical as the budget working Americans use to save money. Retirement probably means giving up a consistent working wage for good, and for many Americans that can mean a sudden drop in monthly income. If you’re nearing retirement and haven’t thought about a retirement budget, you could be in for a shocking surprise when your income drops 10%, 20%, or even more once you retire, especially if you’re still working with your old budget from when you were working.

Furthermore, not having a retirement budget in place could lead to you depleting your nest egg faster than expected or pulling out more than you need from your retirement accounts each year and paying more in taxes as a result.

2. Have alternative channels of income

Working Americans also need to ensure that they have alternative channels of income beyond just Social Security when they retire. If you have other forms of income, then a 21% cut to Social Security benefits may not be crippling to your financial well-being.

Arguably the most popular retirement income channel is the employer-sponsored 401(k). According to StatisticBrain.com, 52.5 million Americans have a 401(k), with the value of assets held by 401(k)s totaling about $4.5 trillion. A 401(k) is a tax-deferred retirement plan, meaning the money is taken out pre-tax and can lower your current-year tax liability. However, you’ll owe federal tax once you begin making withdrawals during retirement. A 401(k) can be particularly attractive if your employer offers to match a percentage of your contribution, which is essentially free money.

For those of you who work for an employer that doesn’t offer a 401(k), either a traditional IRA or Roth IRA is always available. The popularity of the Roth IRA has grown particularly quickly in recent years since eligible distributions are completely tax-free. Unlike a traditional IRA or 401(k), which provide that aforementioned up-front tax benefit and deferred taxation until retirement, a Roth IRA is funded with after-tax dollars — and since you’ve already paid your taxes on those dollars, any subsequent gains on that money is free and clear of taxation as long as you make a qualified withdrawal.

Long story short, there are ample ways for working Americans to save money and diversify their income stream during retirement. Social Security will be there for you when you retire, but that doesn’t mean you should rely on it to be your primary or sole source of income.

“I am a Democrat in rural, red-state America. My party abandoned us.”

Peasant-Wedding-Bruegel-the-ElderMy Comments: As we come to terms, from either perspective, with the idea of Donald Trump for the next four years, it helps to better understand how he won the election, if not the popular vote. This understanding is critical for those of us who are by nature more liberal than those who will be in charge going forward.

Jane Lindsay | November 15, 2016

I come from rural Texas. I am one of the handful of people here who votes blue – and I put up with all kinds of ridicule and rejection because of that. Many of the people who voted for Trump are my friends and family. Yes, some of them are racist but not all of them are. The reason they support Trump is simple: their needs have been thrown aside for years.

Donald Trump is a horrible person. I am glad people are protesting him. But many people here do not see an alternative. The Democratic party does not care about our issues, our culture or our people. There are hundreds of towns in this country just like ours. Well, Donald Trump came and said he cared. That’s why he won: it is not rocket science. We need to look at the truth so we can bring about change.

People here are losing everything that generations of families have worked to build. They depend on their churches for help. They believe people should work hard. Most of us work six to seven days a week, every week. It is no good to judge us instead of understanding us.

We have two private prisons in this town that sustain us in this crunch. Do I agree with private prisons? No. At the same time, if our prisons close it will wipe us out. Not one blue politician has offered a plan to deal with what happens to us then.

It’s the same with climate change. My hometown flourished for years because of oil. Now that the price of oil is down, this town lives on one-third of the budget they had. Nobody in Washington DC cares about that either. No wonder so many people in coal country voted for Trump: they were worried about their jobs and income, and they felt that he was the only one listening.

The people who are writing us all off as racists and deplorables have not seen the community and kindness that exists here. When our elementary school burned down the year before last the whole community everyone dug deep to find the money to buy and build a new school.

In my community, I see a mother whose kid has been in the hospital for a month come home and start her coat drive the next day. I see another mother who spends the month of October collecting junk and selling it for money to send care packages to the military overseas.

I see another woman build one of the state’s best animal rescue centers. She makes sure that everyone can afford to get their pet neutered. I see her spend every Saturday driving 40 miles for dogs to find a home. I see the local community board provide me with space to make a community garden that is free so everyone in town will have access to organic food.

Rural culture is as important as any other culture and is often thought of as backwards, dumb and redneck. At university, people assumed I was stupid because of my accent. A colleague said right in front of me that my southern accent and enthusiasm should be overlooked because, actually, I was smart. Now that Trump has won, I see countless people say that my community – and communities like mine – voted him because we are ignorant and bad-hearted. How is that going to help things?

I completely understand why people voted for Trump. I do not agree with it but I understand it. If people want things to change they need to understand us too: we are hurting. We need help to turn our communities around – otherwise, people like Trump will continue to get votes here.

Will Trumpism Outlive Trump?

Pieter-Bruegel-The-Younger-Flemish-ProverbsMy Comments: Before you criticize me for posting what appears to be a political comment, consider what I think is the takeaway phrase from the following dialog: “Trump doesn’t matter, Trump’s voters do”.

There’s a reason there are so many pissed off people on both sides of the Atlantic. And unless and until our elected leadership takes steps to understand the anger and develop policies and solutions to mitigate that anger, we’re all going to get sucked further into a black hole.

By Isaac Chotiner June 28 2016

David Frum, the Canadian-born conservative, has been writing about politics here and abroad for many years. His books and essays, going back to Dead Right in the mid-1990s, offer a critique of the modern conservative movement that is often withering. A former staffer in the George W. Bush administration (where he helped coin the phrase axis of evil), Frum, after leaving government, had a falling out with his bosses at the American Enterprise Institute. He is now a senior editor at the Atlantic.

Despite his reputation as a moderate, Frum is actually very conservative on subjects such as foreign policy and immigration. It was the latter that I wanted to discuss with him this week, in the wake of the Brexit vote. (He is chairman of the board of the British center-right think tank Policy Exchange; the views he expresses in this interview, however, are his own.) Over the course of our conversation, which has been edited and condensed for clarity, we discussed how conservatives should view immigration, the real grievances behind the Brexit vote, and the post-Trump Republican Party.

Isaac Chotiner: You wrote that you thought Angela Merkel was the person most responsible for Brexit. Why?

David Frum: Immigration has been a large and accumulating problem in the United Kingdom. It involves competition for jobs to a lesser degree; competition for social services; pressure on hospitals; pressure on housing, especially the incredibly expensive South of England. Of course, also in the U.K., migration has a very large security element in a way that is not true here. A lot of the migration to Britain from the Middle East was Britain’s own decision, because half the migrants to Britain that come are non-EU people, admitted through the British system. The people who Merkel admitted, once they get papers, will be able to move anywhere in the EU.

Presumably they would come for jobs though, yes?

Right, the point is that more than half of all the net new jobs created in Europe are created in the U.K. What that means is they’re created in the Southeastern corner of England. That is the mightiest job magnet on the whole European continent. It’s sucking in labor from the whole continent. So those 1.1 million people that landed and submitted in 2015, and a lot more in 2016, once they get the right to reside in Europe, some will end up in Germany, some will probably go to Sweden, a lot will end up in England.

You mentioned the southeastern corner of England, which is where London is, but that is the area that voted “Remain,” no?

Right. This is sometimes represented as a completely irrational action. Is it so irrational? All these jobs are being created in the Southeast of England. So there you are, living in some formerly industrial town in the North, and you’re thinking, maybe I should move. Maybe I should leave this town and move to London and look for work. When you make that decision, you look at the prices and you say, “There’s no way I can afford housing in the Southeast of England. When I make inquiries about looking for work, they’re much happier with the labor they’re getting from the Poles, who by the way are willing, in order to get settled, to live eight to a house.”

I want to talk about conservatism and immigration skepticism, because I think it is fair to say you are an immigration skeptic.

Yeah. I was also somebody who hoped that Britain would remain in the EU, and I have a lot of respect for the EU project. There’s a lot about it that’s annoying and bureaucratic, but in the end, it’s a really important and beneficial and to some degree inspiring thing. In the same way that global free trade is that. We’ve been operating for a long time on the idea that, if you’re in favor of the free movement of goods, then you should be in favor of the free movement of capital and the free movement of people. They’re all the same thing. It may be that when we try to have all three of those things, we end up with none of them.

But it does seem like this issue has gotten to a point where the whole debate has been influenced by inflammatory racial rhetoric. How do you have the conversation when that is the case?

Look, it’s not a binary issue. The choice is not no immigration or open borders. It’s a question of how much, and what kind. It’s true that the immigration debate attracts racists. It also attracts romantic ideologues of all kinds. When you tell a country, when you tell people in the country, that the only people who deal with the problem you care about are the fascists, they are going to say: “Who are these fascists of who you speak, and what is their phone number?”

That’s really, I think, the lesson of Brexit and Trump: When your country has a problem, responsible people have to address it in a responsible way. If they refuse, the problem doesn’t go away. Oh well, your conscience doesn’t allow you to address this issue. No, they’re going to hire a Donald Trump or exit the EU and break up the European Union.

I think one liberal response to that would be, well, people on the right who are worried about this issue should do more to get racists out of their ranks.

Look at what’s happened in the U.K. I don’t think Brexit is a racist reaction. Brexit is not a racist thing. The immigration issue did not express itself like George Wallace; it expressed itself in this kind of labor-protectionist way that was as attractive to people, more attractive in many ways to the people on the left than the people on the right.

You also had Nigel Farage and so on.

If we’re trying to protect the good things in globalization, that is not only challenged by people on the far right. Podemos just had a bad election in Spain, but there are a lot of these reactionary movements that present themselves as being on the left and present themselves as being anti-racist, but they’re profiting from the strains created by too rapid change. Their agenda is going to be destructive of the open society that conservatives and liberals alike want to conserve. Each for their own reasons.

How do you think Trump has changed the immigration debate here?

This is one of my concerns about him, one among many. I fear what he’s done is he’s made this debate so polarizing and so toxic. How do you rescue something from the likely wreckage of the Trump campaign? He didn’t offer anything useful, but he was speaking to something real. To a great extent he was exploiting it, but it was still real.

So you think he has made the task of discussing it harder?

Yes, right, and he’s also locked Democrats and liberals into an immigration solution much more extreme than they had a decade ago. So now Obama’s immigration executive actions are a baseline position.

You started writing about Trump early and were an early critic, but has anything surprised you about the last few months of his campaign?

Who hasn’t been caught by surprise again and again? I did not believe he was going to win the nomination. I thought that something would happen that would cut off this obviously self-destructive adventure. So the fact that he won the nomination surprised me. The fact that he’s still on his way to being the Republican nominee, I never stop finding that surprising. The fact that the Republican Party didn’t … Trump is a kind of opportunistic infection and the fact that the patient didn’t have strong antibodies—that to me is a real surprise.

Did you think he’d be able to pivot in a way that he hasn’t?

No, no. You can’t stop being the person you are.

It seems to me that one possible advantage that he’s blown is the idea that he could benefit from some sort of outside event. It seems like the degree of his solipsism has prevented that from happening. We’ve had an awful attack by an ISIS-inspired attacker and economic uncertainty. He’s reacted to both in such a bizarrely solipsistic way.

He had some elements of a wider populist appeal on health care and on social insurance generally, which appealed to some more middle-class people. That seems to have been dropped. We don’t hear him anymore defending Social Security and Medicare. He may do it again. As he’s proceeded, his campaign has become ever more about himself and whether people are nice to him or not.

Do you think the Republican Party is going to try to stay away from Trumpism, assuming he loses? Or do you think we are likely to see a figure rise by saying, “We need to move the party more in a populist-nationalist direction?” We just need somebody who is 20 percent less rough around the edges.”

I’m not going to predict that because that’s going to be the debate that we’re going to have. Republicans are at risk, though, of having a debate between two positions that can’t work. Some people are saying that the real lesson of Trump is that we need to double down on pure ideology.

Which is the lesson they normally draw after a loss.

Right, whatever the Wall Street Journal editorial page says, plus 15 percent. Those who have gotten close to Trump, they’re going to present him as what—a victim of his own tax lawyers and media bias?—but not ask the question: Hey, how did anybody ever imagine this as anything other than a catastrophe in the making? What I hope we can discuss is: Trump doesn’t matter, Trump’s voters do. How do we talk to them? They just told us something unusually important about a big section of American life. They’re in a lot of trouble. They wanted bread, they demanded bread, and they got a stone. Someone needs to offer them something that can do them some good.

What John Oliver Got Right (and Wrong) About the DOL Fiduciary Rule

My Comments: The financial services industry is starting to come to terms with what is known as the DOL Fiduciary Rule. Some of us embrace this new standard and others think the world is about to end.

In short, it institutionalizes the idea that if you are providing financial advice to the consuming public, you are bound to act in your client’s best interests. While many believe this has been the case all along, it’s been largely a myth. If push comes to shove, the companies for whom the large majority of brokers and advisers work for do not want to be held accountable for the recommendations and offerings made by their sales people. They have argued vehemently against this new standard and with the help of millions of dollars spent on lobbyists, the new rules are a watered down version of what was originally proposed.

But in my opinion, it’s a good first step. If those in my profession are ever going to achieve the professional status of Certified Public Accountants (CPAs) and attorneys, we’re going to have to, in every respect, conform to a fiduciary standard.

June 17, 2016

The Department of Labor’s fiduciary rule has been a battle for our industry for about six years now, and consumers rarely know about or understand the potential changes. But last week, the rule took on a new audience: the viewers of “Last Week Tonight with John Oliver.”

I spend almost every day reading something about this rule, whether it be about lawsuits, what advisors should do about it or how the industry should embrace it. The rule itself is extremely complicated and so are the things advisors managing retirement accounts must do. As Oliver explains, “for the average person saving for retirement … [it] doesn’t need to be this confusing.”

Oliver does a decent job of explaining why the rule came about, but he also sways in favor of the DOL, which doesn’t seem to be the opinion of our industry.
I see how many of our industry’s people are worried and furious about the harm it could cause, but I also see why the DOL and consumers think the rule is important to protect Americans and their money. Just take a look at this Reddit thread where consumers are concerned about the “hidden fees” their accounts may be facing. Here’s a look at hits and misses of the video:

What he got right:

In the beginning of the video, Oliver begins to discuss how the term “financial advisor” is not a credential but rather just a job title. Although he may have angered advisors for mocking their job titles, it’s true that consumers may not know these are not reflective of the advisor’s credentials.

Oliver goes on to explain how the fiduciary rule is good for consumers because they should have someone acting in their best interests. This makes sense because in order to create a successful retirement plan, many different products and investments will most likely be needed to make sure a client will have enough income for as long as they live. It only makes sense for advisors to be fiduciaries, right?

Where Oliver was wrong:

Although he was right to state that the titles “financial advisor, financial analyst, etc.” virtually mean nothing, he failed to mention that consumers bear part of that burden. When hiring someone to manage your money, one would think the consumer would do some research on the people chosen to manage that money. Really, it comes down to the lack of financial education our country faces.

Oliver also suggests people should be investing in low-cost index funds, which the show seems to imply is a good investment for any and every person. From my experience though, every portfolio and client situation is different, which is why financial advisors are important in the first place; suggesting one type of investment as a be-all, end-all for investors could create a sticky situation in the long run.

In case you missed it (or if you didn’t make it to the last two minutes of the video), here are the five retirement saving tips the show gives to its viewers:
1. Start saving now.
2. Invest in low-cost index funds.
3. Ask if your advisor if they’re a fiduciary.
4. As you get older gradually shift your assets from stocks to bonds.
5. Try to keep your fees under 1%.

One more thing to point out is that Oliver seems to think that annuities are almost always a bad investment decision. Annuities have been the subject of the “bad” in our industry according to Elizabeth Warren and Suze Orman (both of which he cites as fighting against the investment products).

To me, what this video tells consumers is that they should be aware of exactly how their money is being invested. Advisors should be clear to their clients about how they’re being compensated, and in turn, clients should communicate any concerns they have with their advisors.

My hope is that this video helps educate consumers at least on the importance of saving for retirement and that it sparks conversation.