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Target Date Fund Quarterly Return Details
Tweet Share on Facebook July 10, 2009 CommentIbbotson Associates, a unit of Morningstar, analyzed investment results of 312 target-date funds that have been in operation for at least a year. Here are their returns for the quarter ended June 30, broken down by the target year of the funds. Income funds are conservatively managed funds used by older target-date funds once investors have been retired for some time and have moved into the most conservative phase of their fund's glide path.
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Target-Date Funds Finally Showing Solid Gains
Tweet Share on Facebook July 10, 2009 CommentTarget-date mutual funds, which are designed to produce optimal returns based on a planned retirement date, are moving closer to their moment of truth. Will they be scapegoats for nearly universal disgust over last year's Wall Street collapse? Or will they prove to be the right idea for retirement investing?
[See 4 Myths About Target-Date Funds.]
The funds have become increasingly popular since a 2006 law encouraged employers to offer "automatic pilot" default choices in their retirement plans. That's what target-date funds are designed to do: automatically shift investment holdings away from stocks into more conservative investments as their owners age. But critics complain that the funds' heavy losses last year (funds designed for 2010 retirees lost, on average, 25 percent of their value) revealed they were too heavily invested in stocks. Another critique: The funds failed to adequately disclose their underlying risks. However, with few exceptions, fund managers have strongly defended the design and performance of target-date funds.
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Nation's 10 Least Expensive Medicare Markets
Tweet Share on Facebook July 9, 2009 Comment (2)The nation's most expensive Medicare markets were highlighted in an earlier article. Today, you'll be introduced to the cheapest markets. Now, cheap doesn't necessarily mean the care is poor. Just the opposite. According to the Dartmouth Institute for Health Policy and Clinical Practice, which generated this information, low-cost medical markets may actually be good for your health. To better understand why this might be the case, it's helpful to think of the cost of medical care as having three components:
1. Price. What are the prices charged by hospitals, doctors and providers of drugs and other medical equipment and services? -
The Nation's 10 Costliest Medicare Markets
Tweet Share on Facebook July 7, 2009 Comment (10)As the friction over healthcare reform has intensified, the Dartmouth Institute for Health Policy and Clinical Practice has become the gold standard of information about the costs of health care. Its studies—which look at variations in the cost, frequency, and outcomes of medical procedures—have taken center stage in a debate that could lead to substantial changes in the healthcare sector.
[Use our new, online search tool to find your best place to retire.]
The Dartmouth Atlas of Health Care 2008 contains some amazing and counterintuitive findings about healthcare. First, the amount of healthcare provided in the United States is not related as strongly to patient need as it is to the available supply of healthcare. Using identical patient profiles and medical needs, Dartmouth found that markets with more hospital beds, doctors, and high-end diagnostic equipment provided what amounted to excess healthcare. The primary reason, it said, is that government and private health insurance plans are based on compensating healthcare providers for the procedures they perform, not for the rate at which they cure patients or make them healthier.
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Boomer Entrepreneurs Make New Best Lives
Tweet Share on Facebook July 6, 2009 Comment (1)The Boomerater™ Report, our weekly collaboration with online baby boomer resource Boomerater, this week gives you some tips to consider before starting up your own small business. A Boomerater member was looking for advice about turning her part-time business into a full-time venture and members weighed in with their advice about things to consider before taking the plunge.
[See It's Time for Some Life Planning.] -
Will More Reverse Mortgages Mean More Fraud?
Tweet Share on Facebook July 1, 2009 Comment (6)The rising popularity of federally insured reverse mortgages attracted 1,500 new lenders into the program last year, more than doubling the total of participating lenders. And while reports of consumer abuse and fraud are infrequent, legislators and regulators are calling for strengthened oversight to protect seniors from aggressive or outright unscrupulous lenders.
The federal Home Equity Conversion Mortgage (HECM) program allows homeowners aged 62 and up to borrow money against the equity in their homes. The funds are available as lump sums, regular payments or lines of credit. Borrowers can remain in their homes as long as they're able without making further mortgage payments. They do, however, need to pay property taxes and insurance and keep up the home. The interest payments on the money they borrow are paid to lenders out of the remaining equity in the home. If borrowers stay in the home long enough to use up all their equity, they generally face no further financial obligation to the lender. -
Growing Older, Getting Mellower, Feeling Good
Tweet Share on Facebook June 30, 2009 Comment (1)Taking a step back from the dismal economy and housing bust, things apparently look pretty good to older Americans. A Pew Research Center poll and report on Growing Old in America finds people 65 and older feeling pretty good about themselves and their lives—better, in fact, than the views of old age held by younger Americans.
Of course, it may be hard to see an attractive bigger picture when your home is worth far less than it was two years ago, you can't find even part-time work and the dollars don't stretch as far as you want, regardless of what government statistics say about low rates of inflation. -
Downsizing: Where to Move, What to Take
Tweet Share on Facebook June 29, 2009 Comment (9)The Boomerater™ Report, our weekly collaboration with online baby boomer resource Boomerater, this week follows up on our recent post about downsizing. A Boomerater member was seeking information about various housing types and other downsizing tips and members weighed in with their first-hand experiences.
[See Paralyzed by Your Possessions? Read On.] -
Smart Ways to Access Your Housing Wealth
Tweet Share on Facebook June 25, 2009 Comment (3)Using the equity in your home as a long-term tool to enhance your retirement is a common goal. Doing so wisely is the focus of an uncommonly sound report by MetLife's Mature Market Institute. Tapping Home Equity in Retirement is well worth the hour or so it would take to read and ponder its suggestions. Even with big drops in home values, the declines in retirement accounts and traditional pensions have made home equity an even more important asset for many people as they approach retirement. Here's a highlight reel:
Strengthen Security. Retirement income used to be described as a three-legged stool based on savings, private pensions and Social Security. But the report notes that pensions and the savings rate have both declined, leading to more active use of housing wealth as a source of retirement security. Tools include expanded use of reverse mortgages and home equity lines of credit, with loan proceeds often used to enhance longer-term financial security. "Home equity can play an important role to strengthen the capacity of older homeowners to cope with financial uncertainties in later life," the report says. It emphasizes that these decisions should be carefully studied and that tapping home equity at earlier ages may make many homeowners particularly vulnerable to financial pressures later in their lives. -
Paralyzed by Your Possessions? Read On
Tweet Share on Facebook June 23, 2009 Comment (20)Downsizing a household is a challenge often made much harder by the emotional tug of belongings and mementos. Some people are heartbroken at auctioning a cherished item on eBay or selling it on Amazon; others are in denial, and either refuse to move or cart their very own Mt. Memorabilia to a new home. There, the prospect of its eventual disposition looms ever larger, while the abilities of many aging homeowners are moving in the opposite direction.
Experts say downsizing requires the same type of careful planning and execution as a retirement plan. Because most downsizing efforts are tied to the sale of a home, it is wise to begin the downsizing process as much as a year before you sell your home. "In order to sell a house today, you have to stage it," says University of Kansas gerontologist David Ekerdt. "You have to downsize and take the clutter out of the house before you even put it on the market."
