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The Seven Deadly (Debt) Sins
Tweet Share on Facebook August 30, 2010 Comment (1)When your computer is locked up and you're staring at the blue screen of death, hitting the reset button is often the only remedy. It's scary, isn't it? I'm always worried my computer will never come back to life and that, somehow, this marvelous machine has died for good. Increasingly, our economy is behaving like the blue screen of death. It's locked up. Things don't work -- no new jobs, no new loans, no investment gains, and no sustained movement to solve our enormous budget and economic problems.
We, too, have been hitting our personal reset buttons during the past two years. So have banks and other financial companies, but their job has been made a lot easier because they're using free money from the Federal Reserve. We don't get free money. And because consumer spending drives our system, our economy certainly hasn't rebooted yet. And as detailed information about consumer behavior comes to light, it's clear that individuals are nowhere near the end of their personal rebooting process. Looking at some recent history paints a sobering portrait of how long a national "credit cure" could take.
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Cheaper Reverse Mortgages May Be Coming
Tweet Share on Facebook August 27, 2010 Comment (2)The Federal Housing Administration (FHA) is developing a new reverse mortgage product that sharply cuts up-front payments by home owners but also significantly reduces the percentage of a home's equity that can be paid to owners under the program. Reverse mortgages insured by the government are available on homes where the youngest owner is at least 62 years old. The program is called a Home Equity Conversion Mortgage (HECM).
Many consumer advocates have been opposed to reverse mortgages, in part because they carry stiff fees to consumers. They also have been controversial because of high-pressure marketing tactics that led some borrowers to use loan proceeds for inappropriate investments. Most experts advice older consumers to use a reverse mortgage only when they need funds for living expenses and other necessities.
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High-Tech Rx for Consumer Health Records
Tweet Share on Facebook August 27, 2010 Comment (3)It's rare that government gets accused of moving too fast. But in only five months, federal incentive payments will be available for healthcare providers that implement electronic health records (EHRs). There is a $20-billion-plus pot of money that can fund these projects, so the gold rush is on. But according to the American Medical Association, there are no EHR systems that currently meet the government's new standards. Of course, those standards were published all of a month ago. And while the incentive payments are the carrot, beginning in 2015, healthcare providers can be penalized for not providing acceptable EHRs.
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Disability Insurance Program Needs a Fix Now
Tweet Share on Facebook August 25, 2010 Comment (4)The financial health of Social Security has moved front and center. President Obama's deficit reduction commission reportedly is actively considering recommending changes to the program when its report is issued after mid-term elections in November. Just floating a trial balloon to this effect in the news media was justification for AARP to sound the klaxon horn (again) last week about its opposition to benefit cuts.
Because the commission's task is to reduce deficits, AARP and other Social Security defenders have questioned why the program should be viewed as a contributor to soaring federal deficits in the first place. The real deficit villain related to Social Security is that overall federal deficits historically did not include the U.S. government debt that Social Security bought each year with its huge surpluses. Social Security is legally required to buy only U.S. government securities with its surpluses, so it's been doing as ordered. Successive Presidents and Congresses, however, were only too happy to look the other way and understate the true size of the federal deficit.
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7 Spending Cuts You Might Not Even Notice
Tweet Share on Facebook August 23, 2010 CommentIt's painfully clear Americans are still hurting financially. Jobless claims are far too high if we're actually in any kind of meaningful recovery. Penalty withdrawals from 401(k) plans have been increasing, not shrinking. Mortgage rates are hitting 40-year lows with regularity and we still can't find a pulse in the housing industry.
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How Age Friendly is Your Community?
Tweet Share on Facebook August 20, 2010 Comment (2)If you haven't seen much yet about "age friendly" communities, you will. Starting next year, 10,000 Baby Boomers a day will turn 65. The cumulative impact of an aging society has moved -- slowly, to be sure -- into the mainstream. What's clear at this point is that there is no single model for making a city, suburb, or even neighborhood age friendly. Even the priorities in pursuing such an objective differ greatly.
What doesn't differ so much are the things older residents say would make their community more age friendly: housing that better accommodates older occupants and visitors; public and volunteered transportation that provides affordable, physically accessible, safe. and flexible service; downtown areas and, especially in the suburbs, gathering places that are pedestrian friendly and don't require a car to reach; retailers who "get it" about legible store signage, senior sensitivity in product selections, and accessible store layouts, and, a range of "aging in place" healthcare and social-service supports that help older people lead independent lives and remain in their homes as long as possible.
[Visit the U.S. News Retirement site for more planning ideas and advice.]
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How to Find the Best High-Dividend Stocks
Tweet Share on Facebook August 18, 2010 Comment (3)The search for decent yet safe investment yields is more important than ever. This is no time to risk investment capital. Consumer prices are nearly flat and fears of deflation have been depressing stock values. It's widely expected that Social Security will forego a cost of living adjustment for the second straight year. And the Federal Reserve has repeatedly stressed its concern about the weak recovery and seems unlikely to raise interest rates anytime soon. So, if you want to find portfolio returns two or three percentage points above prevailing interest rates, you should consider looking for solid stock dividends.
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Age Wave Points to Lower Economic Growth
Tweet Share on Facebook August 16, 2010 CommentYou'd had to have spent years in a cave not to know that the leading edge of 78 million Baby Boomers will begin turning 65 next year. There will be a lot more older people, and the worlds of senior healthcare, housing, lifestyle, and community supports will be under growing social and financial pressure to change a great deal. What is not so well understood is that these same demographic shifts could have a big drag on the values of homes, investments, and other financial assets.
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Youth Movement at Retirement Communities
Tweet Share on Facebook August 13, 2010 Comment (1)There were no formalized retirement communities 50 years ago. But on New Year's Day of 1960, Del Webb invited the public to take a look at his new Sun City complex outside of Phoenix. According to company history, Webb wasn't sure how many people would show up. But when he tried to drive to the event, he found the roads so clogged he was forced to hire a helicopter to make it into Sun City. The official tally would later show that more than 100,000 people had turned out to see his vision of a retirement community.
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Social Security Still Keeping Its Promises
Tweet Share on Facebook August 11, 2010 Comment (8)Social Security celebrates its 75th birthday this weekend, and it's hard not to draw parallels between 2010 and 1935. Now, as then, we are struggling with a serious erosion of the national and world economies. This is a stubborn downturn that has kept us on a roller coaster in terms of where things are headed. That was true 75 years ago as well.
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