How much will your investments be worth in ten years? Every year Charles Schwab offers long-term return estimates on stock, bond and cash investments to get a better perspective on what the markets may deliver. Michael Lind explains how to interpret the results and calculate your own estimates. If you or your children have regrets about the way you financed college, you’re not alone. A new survey from the AICPA shows that 68% would do it differently if they could do it over again. The Journal of Accountancy summarizes the survey’s findings. Those more concerned with planning for retirement will be interested in Ken Steiner’s analysis of how retirees can increase their spending budgets. He compares two common strategies.
Estimating Long-Term Market Returns– Each year, Charles Schwab Investment Advisory, Inc. (CSIA) calculates long-term return estimates for stock, bond and cash investments. Here, they explain how they conduct their research. The returns shown here assume a long term inflation rate of 1.8%. The best practice is to use forward-looking estimates of returns for planning purposes as opposed to solely historical data. Read more…
Most Americans Regret The Way They Paid For College– Sixty-eight percent of U.S. adults with college loans said they regret the way they financed their own or their children’s education. The National CPA Financial Literacy Commission recommends that before deciding to take out a loan, students determine their monthly payments, their estimated salary after graduation, and the date they will need to start paying it back. The commission also suggests that students investigate grant and scholarship opportunities and speak with their financial aid office before taking out a loan. Read more…
Delaying Commencement Of Social Security vs. Buying A Qualified Longevity Annuity Contract (QLAC)—Which Is The Better Strategy?- Ken Steiner, retired actuary, compares the strategy of delaying commencement of Social Security to buying a QLAC in an IRA account. Bottom line: Both the Social Security deferral strategy and the QLAC strategy can be used to increase retiree spending budgets. The strategy that is more effective in this regard will depend on what actually happens in the future. Not knowing what the future holds, it is too difficult to proclaim a ‘no-brainer’ winner. Steiner believes that both strategies are worthy of consideration by retirees and/or their financial advisors, and that those interested in pursuing the QLAC strategy should keep a watchful eye on QLAC pricing in the months ahead. Read more…
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John R. Day, Bill Ennis, Stephanie Davidson and Matt Heller