Its been a rough couple of months for all investors, as the Dow Jones Industrial Average DJIA, -2.31% and S&P 500 SPX, -2.77% and Nasdaq Composite COMP, -3.14% indexes plunged more than 30% from their all-time highs before bouncing back nicely through last week. (They sold off again Monday, but were higher midday Tuesday.)

And no one was hurt more than the 73 million baby boomers, the generation born between 1946 and 1964, nearly half of whom already are retired, while millions more are right on the cusp. By some measures, Gen Xers, those born between 1964 and 1980, are in even worse shape. For both this marks the third wealth-destroying major bear market in the past 20 years, and some of us think we havent hit bottom yet.

One reason for this is that target-date retirement funds, which have become the retirement savings and investing vehicle of choice for many boomers and Gen Xers, have been hit hard in the recent bear market. Typically, these funds decrease their allocation to stocks as the funds get closer to the retirement target date. But some of the most popular funds that have a retirement target date of 2020 hold 50% or more of their assets in stocks.

Target-date funds now account for $1.8 trillion in assets, according to Sway Research, predominantly in workplace defined-contribution, or 401(k) plans. Vanguard Group is the leader with 37% of the market, while Fidelity and T. Rowe Price follow with around 12%-13% each. That means almost two of every three dollars in target-date funds are managed by the Big Three.

From Feb. 20 through March 20, which coincided with almost all of the recent market selloff, target-date 2020 funds from Fidelity FFFDX, -0.60%, Vanguard VTWNX, -0.78% and T. Rowe Price TRRBX, -0.94% lost 19%-22% of their value, according to Morningstar Inc. (After the recent rally, theyre 11%-14% off their highs.)

Vanguard had the lowest equity allocation50% domestic and international stockswhile T. Rowe Prices 2020 target fund had 58% in equities. These firms 2025 target funds had 59%-64% of their holdings in equities, according to the firms websites.

The rationale, of course, is that with increasing life expectancy, investors need to hold more stock to generate the growth theyll need over long retirements to keep from running out of money. But 50% in stocks has proven too risky for people who are retiring now, and investors should hold less stock or keep two to three years of retirement living expenses in cash as insurance. (The right kind of annuity can help, too.)

Americans in general have roughly 50% of their individual retirement accounts (IRAs) in equities, although the equity percentage of the balanced funds they own raises that past 55%. Stock holdings, however, drop when people turn 60, according to a study by the Employee Benefit Research Institute (EBRI), and hover between the high 40s and mid-50s for the rest of their lives.

Of course, just because everybodys doing it doesnt make it right. Ronald J. Surz, president of Target Date Solutions and of its parent company, PPCA, Inc., based in San Clemente, Calif., has long railed against the dominant industry practice of having 50% or more in stocks at the retirement target date. He believes that even five years before they retire, investors enter the risky zone, where they have to pay more attention to preserving than accumulating capital. Thats because sequence of returns riskdrawing down diminished retirement funds in the midst of a bear marketcan force retirees to tighten their belts way more than they expected.

So, weve got a lot of people in the risk zone, more than we ever had before, most of whom I think dont really realize that theyre taking more risks than they can afford, Surz told me in a telephone interview.

Instead, Surz recommends a different glide path to retirement and beyond, based on research by Wade D. Pfau and Michael Kitces, which found that reducing equity exposure to 20%-40% at retirement, then building it back up as retirement proceeds would maximize their level of sustainable retirement income, and/orreduce the potential magnitude of any shortfalls in adverse scenarios.

Surzs proprietary SMART Target Date Fund index, based on those concepts, lost only 2% in the selloff, although it did lag in the latter years of the recent long bull market. John Hancock also has some more conservative target-date funds which lost at least 5 percentage points less than Vanguard, Fidelity and T. Rowe Prices 2020 funds in the recent selloff. But as Surz points out, investors dont choose their target funds; theyre stuck with the 401(k) provider their employers pick for themand thats mostly the Big Three.

Target-date funds have a lot going for them, and theyre certainly better than the flawed judgment of individual investorsexcept when they get to retirement itself. Thats why I think the Big Three need to do a big rethink. Theres got to be a better way.

Howard R. Gold is a MarketWatch columnist. He owns target-date funds from Vanguard and Fidelity. Follow him on Twitter @howardrgold.

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Target-date funds are failing those on the cusp of retirement - MarketWatch

Phil Drake, Great Falls Tribune Published 10:49 a.m. MT April 21, 2020

HELENA Eric Feaver, longtime employee labor leader, has announced his retirement and Amanda Curtis, a former state lawmaker and Democratic candidate for U.S. Senate,will replace him as president, union officials said Tuesday.

Feaver announced his decision over the weekend at the third annual conference of the Montana Federation of Public Employees (MFPE) which was held online Friday and Saturday due to the COVID-19 pandemic. The MFPE is Montanas largest union with 23,000 members.

Eric Feaver(Photo: Courtesy Montana MEA-MFT)

Curtis, who had served as second vice president, was elected as MFPEs next president. First Vice President Bill Dwyer was re-elected, current MFPE Treasurer Rich Aarstad was elected second vice president, and Michelle Wheat was elected MFPE treasurer. They will take office June 15.

Feaver was a fixture at the state Capitol, often attending legislative meetings and sessions and letting lawmakers know what the union thought of proposals and decisions. He often found himself at odds with elected officials.

We are unique, we are diverse.In the Montana context, we are huge and we have a huge responsibility to see that the labor movement in this state goes forward, Feaver said, according to a news release. If we fail or if we are killed by the political processes by the things that have occurred in states like Iowa and Wisconsin and Michigan, the labor movement will die in Montana. It rests on our shoulders to bear the burden of the labor movement and to defend it.

The conference drew nearly 500 member leaders, a record number of attendees, organizers said. Members also voted on constitutional amendmentsand approved the years budget.

Amanda Curtis(Photo: STATE OF MONTANA)

Feaver became president of the Montana Education Association (MEA) in 1984 and guided its throughits merger with the Montana Federation of Teachers (MFT) in 2000, according to a news release.He was elected president of the newly formed MEA-MFT.

Then, in 2018, Feaver oversaw the merger of MEA-MFT with the MPEAto form the Montana Federation of Public Employees (MFPE).

Feaver discussed the merger with the Tribune in 2018.

I think numbers matter. I would like to be a union of this size than not, he said.Having a large number of employees paying dues for a union is a powerful statement, and we intend to show that.

One of the best things about my job is that there is always a reason to come to work, he said in that interview. It keeps the adrenaline pumping. Every now and then, when we lose, it makes us all the more anxious to win the next time.

Curtis is a Butte educator, former state legislator and nominee for U.S. Senate.

This union has a 138-year history and were going to continue for another 138 years and centuries after that regardless of whos in governance, she told MFPE delegates. Were going to keep protecting pensions, bargaining better pay, benefits, and working conditions, and getting our members elected to office.

Members include K-12 public school teachers and support staff; state, countyand municipal employees; higher education faculty and support staff; Head Start employeesand health care personnel.

Reporter Phil Drake is our eye on the state capitol. For tips, suggestions or comment, he can be reached at 406-231-9021 or pdrake@greatfallstribune.com.

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Feaver to retire from state's largest union, Curtis to take reins - Great Falls Tribune

Carveth Care Centre personal support workers Cherry Reyes and Cheryl Reston wear personal protective equipment before supporting residents at the Gananoque facility. (Supplied Photo) Submitted / Submitted Photo

KINGSTON With high rates of COVID-19 and subsequent deaths at retirement homes in Almonte, Bobcaygeon and other areas in the province, Kingston-area retirement and long-term care homes have pretty well managed to keep the coronavirus at bay.

According to Public Health Ontario, as of Sunday afternoon there were 114 outbreaks in Ontarios long-term care homes and 249 deaths among residents or patients at those homes. After not having any cases in the Kingston area for the past couple of weeks, Providence Manor in Kingston reported one new case on Monday.

Brett Gibson, the co-owner of Gibson Family Healthcare with his sister Lisa Burgess, said in an interview that at their two homes Carveth Care Centre in Gananoque and Helen Henderson Care Centre in Amherstview its mostly good preparation, but also a little bit of luck, that is keeping COVID-19 out.

Gibson, also the mens hockey coach for the Queens Gaels, sees similarities between coaching hockey and managing the coronavirus.

I think with coaching, this role is quite similar. My sister and I have put plans in place and you plan for the worst and hope for the best, and I think the plans that weve done have allowed our front-line staff to perform on demand, because weve communicated to them right from the beginning, he said.

From an early start date, theyve been very diligent, and with an early start date, theyve been sticking with the plan. Its very similar to coaching: You put plans in place and you hope your players stick to those plans, and the preparation is whats going to lead to the performance.

Carveth has 104 residents in its long-term care home and 38 in its retirement home, while Helen Henderson has 104 in its long-term care section and 65 in its retirement home.

Some of the mitigation controls at both facilities include one entrance in and out of the building, with no outside visitors. Everyone wears surgical masks inside the buildings, social distancing is being practised, and people visiting loved ones inside can no longer go up close to the window of their room. Theres now a painted line on the grass two metres away from the building.

Staff member Angela Ballantyne, a personal support worker at the Carveth Care Centre in Gananoque, checks on a resident in an undated photo. (Supplied Photo) Submitted / Submitted Photo

Our dining rooms are now spread out at both nursing homes, so theyre six feet apart when our residents are eating, and our recreation programs have gone down to a bare minimum, Gibson said.

Gibson knows the facilities he and his sister manage have been lucky with their mitigation techniques while some other homes have not.

There is luck involved. This virus is a deadly virus and I dont think anyone intentionally wanted to infect any of these homes, he said. There also is a lot of preparation, and I think that has a lot to do with the successes. You obviously have to have luck, but you can put a lot of measures in place to make sure youve earned that luck.

I think these (other) homes were prepared and they got unlucky some of them.

Gibson said he and his sister keep good lines of communication with residents and family members. Those measures include regular email updates.

They have a line where its directly coming from the top, Gibson said.

Dr. Ashok Chadha, the general manager and director of care at the Windsor Retirement Residence in Amherstview, said COVID-19 did not enter the facility due to the early lockdown and other safety protocols he put in place well before the government orders to do so came in mid-March.

We were the first in doing basically everything, Dr. Chadha said. We were way ahead of the authorities and government.

Chadha said he started educating residents of the 81-unit facility about COVID-19 in January.

They were well prepared. Were the first ones to talk about lockdown and the first ones to bring in screening guidelines and stayed ahead of things before they went widespread in the province, he said.

Chadha said staff members also had to stop working at other long-term care homes early in the outbreak to prevent the spread of the virus. He also banned outside agencies and contractors from coming into the Windsor.

Mitigation protocols include wearing masks throughout the facility and social distancing. Residents are allowed to walk outside in the private, fenced grounds as long as family members dont come on the property.

Chadha was also concerned about the residents anxiety and mental health during the new quarantine measures.

We were also very proactive in taking steps to talk to them more and give them breathing exercises, he said. Our residents are just not limited to stretching their arms on the balcony. They can go out and walk.

If this thing continues for a month or another two months, its going to take its toll on their mental health.

Despite the lockdown, residents have been able to keep up their recreational activities as long as social distancing is respected.

Our ultimate goal is their safety and well-being, Chadha said.

imacalpine@postmedia.com

twitter.com/IanMacAlpine

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Local retirement homes determined to keep COVID-19 out of facilities - The Kingston Whig-Standard

If you just retired last year, you were feeling pretty good about things: Stocks kept hitting all-time highs and your portfolio looked as if it could sustain a comfortable lifestyle for years. Or, based on the same set of assumptions, you decided this was the year to finally hang it up and were looking forward to spending time on the people and things you really love.

Oops.

For the third time in the past 20 years, the market has thrown investors, particularly retirees, a wicked curveball. The novel coronavirus and the draconian shutdowns that have come in its wake have sent the economy reeling and stocks plungingas much as a 34% decline in the S&P 500 from its February 19 all-time closing high.

Weve rallied from the lows but depending on how long the shutdowns lastand how much permanent damage is done to the economy---we still may not have seen the ultimate bear-market bottom.

Regardless, this is a retirees worst nightmare. Its the dreaded sequence of returns riskby retiring just when the market has tanked, retirees could lock in lower income for years. Thats particularly true if you had way too much invested in stock (80% or more of your holdings) in an effort to catch up. Now you may spend the rest of your life trying to catch up with where you were before.

As I wrote here previously, Americans near or at traditional retirement age hold on average roughly 50% in stock. Those people sustained 17% to 20% declines in their overall holdings, not counting any offsetting gains in bondholdings during this time. Thats bad but not disastrous, though the 56% loss the S&P 500 SPX, +7.03% incurred during the financial crisis walloped even conservative portfolios.

So, what do you do now? Retirement Weekly reached out to financial planners and weve culled what we regard as the best advice from 15 of them from across the country and present them here in two parts. Every single one of them, of course, advised people to get a financial plan. I agree, but since this is their livelihood and doesnt give specific advice to readers who dont have a plan, Ill mention that here and then move on.

Ill conclude with some of my own advice. Im not a certified financial planner but Ive invested and written about retirement for years and even got a retirement plan done for me. (Ill deal with financial planning in a future column.) But right now Ill yield the floor to the planners.

Everybody tells you this, and its almost always true, although I believe there are special circumstances under which it might make sense to sell some stock into bear market rallies. But heres what the planners say:

Stop! Do not make financial decisions based on emotions, says Thomas J. Duffy of Tinton Falls, N.J.

Dont make an emotional decisionbased on market conditions during a temporary crisis (or, conversely, during a period of temporary euphoria), writes Benjamin Simiskey of Katy, Texas.

Dont sell out of the market, says Zach Abrams of Cleveland, Ohio. Losses are only losses if you sell and realize them. Recouping losses once you sell is incredibly difficult.

Let me jump in and give an example here. Lets say you had a $500,000 retirement portfolio with $300,000 in equities, whose value fell by a third. That would leave you with $200,000 in equity value and a $400,000 portfolio value overall.

Lets also say you had 3,000 shares in a stock ETF selling at $100 at its peak. Those shares now sell for $66 each. If you keep them they would have to rise 50% for your equity holdings to reach their previous value (not counting stock dividends and reinvestment).

But if you sell, say, 1,000 shares and have 2,000 shares left at $66 each, youll raise $66,000 in cash and your remaining stockholdings will be worth $132,000. In this case, your stock ETF would have to rise 76% for that part of your holdings (including the cash you got from the sale) to reach its previous $300,000. And for much of that time youd have a lot less equity to provide growth to meet future living expenses. That could force you to tighten your belt much more than you expected.

But its not all gloomy. While the market downdraft has wounded investment portfolios, it doesnt need to be fatal to your retirement plans, writes Michael Hennessy of Fort Lauderdale, Fla. But you only get one chance to retire right.

No pressure, folks: After giving you the donts in this part, next time well tell you what you can and should do now.

Go here to see the original:
Is this the retirement apocalypse? - MarketWatch

Expert advice for retirees during this financially tumultuous time. Buzz60

The new coronavirus outbreak and economic measures to contain it could have a significantly negative impact on retirement preparations for millions of Americans.

Account balances have been depleted by the stock market collapse. Many people now need to tap into their accounts to make ends meet. Others, facing layoffs or reduced hours, won't have the income to make investment contributions.

Still others, in their early 60s, will start taking Social Security benefits as soon as they can, locking in lower monthly payments for the rest of their lives.

But the fallout isn't entirely bad.

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The government has introduced several temporary changes that could help people shore up their finances and manage their retirement accounts more effectively.

Here's what is changing:

One change involves the required minimum distributions that investors normally must begin after reaching age 72 with Individual Retirement Accounts and some 401(k)-style plans.

Set on selling stocks amid the coronavirus crisis?Consult this checklist first

Under provisions of the new federal CARES Act, RMDs may be suspended for 2020 to help investors rebound from stock-market losses.

This is notable because those withdrawals would have been based on account balances as of Dec. 31, 2019, when the stock market was much higher.

The new one-year RMD waiver is a "huge help" for many seniors who had been facing taxes on higher account values, said Ed Slott, a certified public accountant and founder of IRAHelp.com.

"Now, clients can sit out a year and avoid the tax bill on their 2020 RMDs, if they wish," he said.

President Trump signs the CARES Act, providing $2.2 trillion in economic relief during the coronavirus pandemic. USA TODAY

Under the CARES Act, investors in workplace retirement plans and IRAs can withdraw up to a combined $100,000 in 2020, from all such accounts, without incurring the usual 10% early withdrawal penalty. The penalty normally applies for people under age 59 1/2 or 55 in some cases with 401(k)-style plans.

However, not everyone will get this break.

"The affected participant or IRA owner (including a spouse or dependent) would need to either be diagnosed with SARS-COV-2 or COVID-19 or experiencing adverse financial consequences as a result of an event," noted Fidelity in a commentary. These consequences include a layoff, furlough, reduced work hours, a lack of available child-care assistance or a business closing in the case of self-employed individuals.

Ordinary income taxes still apply on permanent distributions, but the impact may be spread evenly over three years. As an option, investors can repay some or all of the withdrawn money back into a retirement plan within three years to avoid the tax bill and rebuild their account balances.

"That's why this provision was put into the bill to help people get back on track for retirement," said Meghan Murphy, a Fidelity vice president for global thought leadership. "It's like a mortgage: What you get approved for might be much more than you need."

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In most 401(k) plans, employees can take out loans rather than making permanent withdrawals. Loans can be a tempting way to access cash quickly. Among the benefits: There's no lengthy application process, the interest you pay goes back into your account rather than to a bank and the transaction isn't included on your credit report.

Under the new CARES legislation, the amount employees may borrow from their 401(k) plans increases to $100,000 this year from $50,000 before (assuming there's at least that much in the account).

Many plans only allow employees to borrow up to a certain percentage of their balance, such as 50%, though that threshold is waived this year, Murphy said. Also, the legislation allows loan repayments to be delayed for one year.

Taking out a 401(k) loan isn't necessarily a great option. If the stock market rebounds while your money is out on loan, you could miss some juicy gains. And if you can't or don't repay a loan, the balance would be taxed and that 10% penalty might apply down the road.

Prior to the new coronavirus outbreak, relatively few 401(k) participants had taken out loans, including during the 2007-2009 recession, Murphy said. But the unprecedented pressures that now apply, including heightened health-care needs, could change that.

The coronavirus (COVID-19) is impacting the global economy and raising fears of a recession. What causes a recession and what are the signs? USA TODAY

Other retirement provisions

This year, the deadline for filing federal income-tax returns and paying taxes has been delayed from the normal April 15 date to July 15. Many states, including Arizona, have adopted the same schedule.

As one consequence, July 15, 2020, also becomes the deadline for making 2019 contributions retroactively to IRAs though not for workplace 401(k) plans. This isn't a huge benefit, as relatively few Americans max out their IRA contributions, but it's a modest advantage for those who do.

Also, the optional ability to make tax-free transfers from an IRA to help a favored charity has been retained. This provision remains open to seniors 70 1/2 or older. It has proved popular among some people who don't need to live off their withdrawals.

The new rule changes provide relief, or at least more flexibility, for workers and retirees with retirement accounts. Yet many employers, especially small businesses, might need assistance too, and they are eager to get it.

The American Retirement Association, which includes affiliates such as the Plan Sponsor Council of America,has asked the Treasury Department to amend regulations to give employers more flexibility during the new coronavirus outbreak, including the option of suspending matching-fund contributions they make to employee accounts.

Many businesses closed their offices or transitioned quickly to telecommuting, which hindered their ability to amend plans properly and provide notices to workers, meaning that matching-fund obligations continue, the American Retirement Association said in a letter to the Treasury.

Without a relaxing of these and other rules governing 401(k) programs, "The financial crisis facing employers might force them to terminate their plans rather than keeping them intact but partially frozen, until the business recovers," the letter warned.

The American Retirement Association and its member employers and financial-service companies don't want to see 401(k) plans scuttled, which they fear could be a disaster for the long-term goals of millions of people. Rather, they seek "breathing room" for hard-pressed 401(k) sponsors, allowing time for them to recover.

If that happens, many employees wouldn't receive matching funds, at least for a while.

Reach Wiles at russ.wiles@arizonarepublic.com or 602-444-8616.

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New changes in law will help those near retirement and others weather coronavirus's financial storm - USA TODAY

For most of us, the reality of growing older means that medial issues will likely become a more common concern. As a result, health care can become a prominent expense in retirement. Medicare typically serves as the foundation of your health insurance later in life as it starts at age 65. If you retire prior to age 65, youll find insurance coverage to be expensive, with significant potential out-of-pocket costs.

A major category of expenses in retirement

For most, health care expenses become greater as they grow older. According to statistics compiled by the Kaiser Family Foundation, annual health spending for the average woman is $11,694 for those ages 65 and up. This compares to average annual expenditures of $8,343 for those age 55-64, and $5,775 for women ages 45-54. Spending patterns are similar when comparing costs for those different age groups among men.

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At the same time, changes in health care costs in general tend to outpace the standard rate of inflation. According to the U.S. Bureau of Labor Statistics, over the 15-year period ending in 2019, the cost of living for all goods and services rose by 2.0% annually. During that same period, medical services costs rose by an average of 3.5% annually. Rapidly rising health care costs can quickly eat away at your retirement savings as you grow older.

A challenge even with Medicare

The reality is that while Medicare helps make health insurance much more affordable for older Americans, it is far from free. You will pay premiums for Medicare Part B (doctors visits and other care services). In 2020, the base premium for Medicare Part B is $144.60 per month per person, but it could be higher depending on your income level. The premiums typically rise each year. If you choose, Medicare Part D (prescription drug coverage), there is an additional premium, but that should be offset by lower drug costs. You may also choose to purchase a Medicare Supplemental Insurance plan that could add hundreds of dollars to your monthly budget but limit other out-of-pocket expenses.

Steps to take before you retire

Good planning can help you prepare for the challenges posed by medical costs in retirement. Potential steps to address this issue include:

Be sure to consult with your financial advisor to learn more about the potential financial challenges you face with healthcare in retirement and to explore steps you should take today.

Carlos F. Arias,CRPC ,CLTCPrivate Wealth Advisor

Arias &Partners Wealth Advisors A private wealth advisory practice of Ameriprise Financial Services, Inc.

An Ameriprise Private Wealth Advisory Practice

Carlos F. Arias, APMA, CRPC , CLTC, is a Private Wealth Advisor and Business Financial Advisor with Arias andPartners Wealth Advisors, a private wealth advisory practice of Ameriprise Financial Services, Inc. in Berkeley Heights, NJ. He specializes in fee-based financial planning and asset management strategies and has been in practice for 20years.

To contact him, (908) 272-0188 https://www.ameripriseadvisors.com/carlos.f.arias

100 Connell Dr Ste 2300 RM 233 Berkeley Heights, NJ 07922-2737

Investment advisory products and services are made available through

Ameriprise Financial Services, Inc., aregistered investment adviser. Ameriprise Financial Services, Inc. Member FINRA and SIPC.

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Low- and middle-income workers who havent been able to save much for retirement might not be as ill prepared as the financial punditry would have you believe, a finding that could help ease seniors anxiety surrounding the adequacy of their post-work income.

According to a recent paper via the National Bureau of Economic Researchtitled Can Low Retirement Savings Be Rationalized?the current meager returns from safe investments like bonds and certificates of deposit dont justify delaying consumption as they had when interest rates were higher. Whats more, the papers authors contend, the conventional wisdom on adequate retirement savings fails to account for declining consumption, meaning that those who cant save a lot in the first place may be able to get by with less in retirement.

The papers conclusion: Many people in the bottom half of lifetime earnings should spend their retirement wealth well before death and live on Social Security alone after that. It even says the lowest earners might find it best to not engage in retirement saving at all.

The market is simply not rewarding people who postpone consumption to save in safe investments, said John B. Shoven, an economist at Stanford University and one of the papers co-authors. The real inflation-adjusted returns are negative, so people areand maybe even shouldconsume at a higher level early in retirement, with a consequence that theyre going to have a lower standard of living in the second half of retirement.

In decades past, what prevented people from spending resources immediately was that they could expect to earn a steady 2% or 3% through safe investments, he said. By saving instead of giving in to their impatience, investors could increase their assets and enjoy more purchasing power in future years.

Since the recession of 2007-09, however, interest rates have remained near historic lows. The yield on a 10-year Treasury note recently fell below 1% for the first time ever amid coronavirus concerns, and the Federal Reserve cut short-term interest rates to near-zero. When that rate is adjusted for inflation of around 2%, investors are getting a negative yield, decreasing their future purchasing power, Shoven said.

With interest rates likely to stay low for the foreseeable future, safe investments have little appeal for retirees with modest savings, Shoven said.

Another problem with a typical savings strategy, Shoven said, is that it envisions a steady level of consumption throughout a lengthy retirement. But low interest rates justify a tilted approach to consumption, where seniors in the low to middle income brackets would use up most of their savings within three to 10 years of retirement.

Some people will die early in retirement, and others will develop physical or cognitive impairments, limiting their ability to travel, leave the home and enjoy their money, Shoven said. Therefore, as seniors age, their discretionary spending likely will decrease, while basic monthly expenses like mortgage payments and utilities stay flat.

If your target is no longer a flat level of consumption during retirement but this kind of tilted consumption, it turns out that you need to save less for retirement, he said.

The market is simply not rewarding people who postpone consumption to save in safe investments.

To be sure, Shoven said the findings on early spending dont apply to retirees with a high risk tolerance or ample savings, since the potential long-term gains from investments like stocks could reward investors for saving, unlike safer investments. Also, because Social Security might not be enough to maintain their standard of living, high-income seniors need to be careful about exhausting their savings too early.

Still, Shoven said retirees all along the income spectrum should use their savings to delay collecting Social Security benefits as long as possible because monthly checks increase about 8% for every year theyre not claimed up to age 70. Workers with salaries below the national median will be able to replace a large portion of their income in retirement if they delay accepting Social Security, he added.

If youre in the lower half of the income distribution, its not unthinkable for you to live on Social Security alone, said Shoven, a longtime proponent of the benefits of working longer. Social Security is providing you a substantial floor or base in retirement, and what you have above that you may want to spend out early in your retirementenjoy it at that time.

Questions? Comments? Write to us at retirement@barrons.com

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Concerned About How Little You Have Saved for Retirement? A New Study Offers Hope. - Barron's

Are they safer at home, with me?

Maybe, experts say but you need to ask yourself some important questions before deciding that.

First, some perspective. In Minnesota, the coronavirus has found its way inside at least 47 Minnesota nursing homes or assisted living facilities, state health officials said Friday, April 3. There are several hundred such facilities in the state, and all are on heightened alert for any signs of illness. So far in Minnesota, none has experienced a devastating outbreak such as a one in a nursing home in Kirkland, Wash., linked to 37 deaths or a veterans home in Holyoke, Mass., where at least eight residents have died.

The majority of those 47 facilities have exactly one confirmed case, health officials have said, crediting vigilance by facility staff, as well as a state response regimen put in place months ago.

But the question remains: Where is mom or dad safer?

Its a personalized decision based on your ability to potentially care for your loved one outside the facility, says Dr. Emily Downing, vice president of medical operations, home care and senior care for Allina Health.

First, Downing says, does the resident have physical limitations? Can they get around your house? Wash and bath themselves? What about managing their medications if they require that?

Usually the reason they ended up living in a communal care setting is because they need assistance that family members cant provide, she says.

But even if youre able to care for the person, or he or she can live independently, youre not done asking questions.

Currently, nearly every nursing home or long-term care center in the nation is banning visitors, and many are screening staff daily. Theyre attempting to isolate the entire facility. Can you say the same for your home?

If you or anyone in your family is regularly interacting with people outside your house by virtue of your job, for example doctors warn against taking your elderly loved one in.

Is taking them out of their facility, which is currently in lockdown, really going to reduce their risk of exposure? Downing asks.

It might. If only one member of your household leaves for groceries once a week and is careful, that certainly creates fewer chances for the virus to get inside as opposed to the numerous workers who arrive each day at care centers and then go home.

If its possible for an older grandparent or parent to move in with a family and that family is social distancing meticulously thats a good alternative, says Dr. John Swartzberg, clinical professor emeritus of infectious diseases and vaccinology at University of California Berkeley School of Public Health, in an interview for the Bay Area News Group. But its often not possible.

If youve gotten this far, youre still not done yet.

Try as you might to avoid it, someone in your house might still get sick, Downing notes.

Can you isolate the loved one? she asks. If the loved one requires a lot of care, then you wont be able to isolate them. At home you wouldnt have the protective equipment that they have at the facility.

If not, would your loved one be able to return to the nursing home? Some facilities recommend placing residents under two-week quarantine after returning for an absence to ensure theyre not bringing the virus in.

Given all the dynamics, state health officials are neutral on the issue.

We are certainly not in a position of dictating that answer, Health Commissioner Jan Malcolm said when asked whether she could offer guidance to families thinking about bringing their loved ones home to ride out the pandemic. I would have to refer that to private family decisions and the care provider.

Read more:
Should I pull my parents out of the retirement home? Here are questions you need to ask first - West Central Tribune

There Is No Denying That We Are Going Through An Awful Time

I have written several rough articles recently but I do feel it's important to put my opinions on the line in the hopes of helping people navigate the very rough waters we are in. That being said, I am a believer that our economic and investing way of life will not only survive but will thrive.

Nobody knows when the tide will turn, and I'm pretty sure that everyone wants to get back to some semblance of normal. With this in mind I would like to list my opinions of what I might consider placing on my shopping list. And I hope you, the Seeking Alpha community, can offer your selections. Today is not the time to jump in yet, in my opinion, but I think I'm seeing a slowdown in massive panic selling of late. To me, that is at least one positive to take note of!

Data by YCharts

As you can tell, the precipitous drops in the Dow (DJI) of 1000-3000 points has leveled off and we've had a few relief rallies. That is not to suggest that we have reached a bottom. To the contrary, we probably will be headed lower as the unemployment numbers keep surging and the number of business closings continue to climb.

However I do see a temporary drop off in the sharp declines, or "sell everything" numbers to at the very least a more manageable slow decline, even though there is high daily volatility. If you tune in to to any financial TV stations, you know the last 45 minutes of a given session have been the most volatile, probably from the day traders closing their positions for the day. I would guess that many day traders have lost chunks of money, while only a few have done well. That is not a knock or anything; it's just what I can see in these tiny "tea leaves".

If I envision a tiny sliver of a silver lining, it just might mean that our medical efforts are beginning to work and social distancing is making Wall Street a tad more comfortable. Perhaps not comfortable enough to start jumping in, but maybe a bit more energized not to dump shares and to begin selecting stocks for a shopping list as more positive signs show themselves.

Let me be very clear here. I am not advocating that folks nearing or in retirement start gobbling up shares, because there are still so many unanswerable questions. If you are fortunate to have a long time horizon (which I do not, by the way) then you might want to slowly consider the stocks you truly feel can make it through this collapse and can continue paying dividends, and hopefully even increase them. There will be some winners amidst a tidal wave of losers, so deep research and digging into fundamentals is imperative.

I would say that if you have a minimum of seven to 10 years prior to needing your income stream, there are a few companies that I have been looking at that you might want to consider putting on your own shopping list.

Seventy percent of our economy is consumer driven. Of that, many professionals say that about 30% of your overall budget might be earmarked for discretionary spending, so I will use that percentage as a small guide as I try to explain myself.

If 40% to 50% of your spending is non-discretionary, what would be a short list of those expenses?

First let me defer to this article to take a peek at what discretionary spending actually is:

A discretionary expense is a cost that a business or household can get by without, if necessary. These expenses are often defined as things that are "wants" rather than "needs."

KEY TAKEAWAYS

A discretionary expense is a cost that is not essential for the operation of a home or a business.

In a corporate environment, discretionary expenses are usually costs linked with improving a companys standing with its customers and employees.

Tracking discretionary expenses enables businesses and households to identify where they can save money in times of financial difficulties.

Discretionary expenses vary, depending on the business or person.

I believe this is a clear description of discretionary spending and here are a few non-discretionary expenses, as noted here:

Living Expenses

Day-to-day living expenses, including:

Debt

Any loans or credit youve taken out that youll need to continue to pay down the principal balance with periodic interest payments, including:

Taxes

Taxes fluctuate as you age as they shift from salaried income to capital-gains rates. Its important to have money set aside for annual taxes.

Insurance and Health Care

Health care costs tend to rise faster than inflation and can be a big expense as you age. Youll need to account for the following:

Quite obviously, reducing discretionary spending could help in everyone's belt tightening efforts. Reducing non-discretionary probably will probably take a few phone calls with banks, lenders, credit card companies, mortgages, and anything else you can think of.

All of this being said, I believe that companies that supply and produce "essentials" could see a short-term growth spurt and are likely to survive this collapse. Here are just three that I happen to feel somewhat comfortable with:

Data by YCharts

Procter & Gamble (PG) is a company that has the widest assortment of products that are actually "needed" by just about every age group - from baby food to adult diapers, I would guess - and this company is already well positioned during this crisis.

Coca-Cola (KO) has a vast assortment of food and drink stuffs that can be stored for long periods of time while we employ our self quarantines. KO has some comfort snacks that while they might not be totally essential, I believe many of us will still continue to purchase their products. On a personal note, I "need" an occasional snack while I am in self-imposed exile!

Johnson & Johnson (JNJ) is perhaps the largest medical-supply producer and supplier in the world, and vital medicines as well as equipment are required by both individuals and hospitals. So despite their recent legal issues, I think this company will more than survive and you might want to consider it for your shopping list.

As you can see from the chart above, the share prices of these stocks have held up fairly well and the following chart will show the dividend yield currently of each:

Data by YCharts

These Dividend Aristocrats and Kings are probably strong candidates for continuing their amazing streaks of both paying and increasing their dividends even through these uncharted waters. Their yields are not huge and are manageable given their cash reserves, revenues, lower debt levels and ongoing business.

I consider them reasonable and reliable even though I know that anything can happen!

As I stated, I am not advocating that folks "back up the truck"; instead, you might prudently consider adding them to your shopping list. The share prices could go down further for better entry points, or they can go up in the near term. If you are familiar with selling put options at a price you would love to own these stocks at, not only might you hit a real bargain, but you will be paid immediately the premium for selling these puts.

If you are not familiar with simple option strategies, then either stay away or do some research on the advantages and disadvantages and learn about them.

Keep in mind that during this crisis capital preservation is most important, especially for those nearing or already in retirement. If you do decide to nibble, consider teeny tiny bites over time until this market can sort itself out.

I am certain that the Seeking Alpha community could suggest other candidates for your shopping list and look forward to everyone sharing their opinions right here!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Continue reading here:
Retirement Strategy: Put Together Your Shopping List For When The Time Comes - Seeking Alpha

These are a few of the retired nurses, doctors and other health care workers helping to shore up a system under siege.

As the fast-rising tide of sick people overwhelms hospitals and infects the doctors and nurses delivering care, officials across the country and around the world have asked retired health care workers to help reinforce systems in crisis. Raising their hands, they feel at once resolute and torn, weighing their expertise and desire to serve against their heightened vulnerabilities.

Thousands have answered the call. Here are a few of them.

New York City

Retired primary care doctor and former assistant commissioner for the Bronx Bureau of Neighborhood Health

I had my retirement party on Feb. 28. I was feeling so lucky. Ive learned so much. Ive been able to work with amazing people and to do some things that have been really good. And it turns out when you retire, people tell you things about yourself, ways that you had an effect, and they said just lovely things.

I thought I would be hiking with my partner and son in Wyoming right now. He talks about how wide open it is, how different from the Bronx, where we live. I was really looking forward to seeing the beauty of it through his eyes.

But so many things have changed. Ive always wanted to make sure that Im part of the solution and not part of the problem. So that means Ive got to rearrange my thoughts about retirement. I signed up online on March 15.

Im in a higher than average risk group, so theres a lot of concern from my family. Just age puts me at a modest risk. And Im a fairly recent cancer survivor. I had surgery and radiation therapy and chemotherapy and those things have an effect on your immune system.

There have been a lot of discussions with the family. If youve had anybody in your family or close circle whos gone through the trifecta of cancer treatments, everybodys done a lot already. Theyve invested a lot in me being alive. I think of this even when I get on my bike: I better not have a crash because people really worked hard to keep me alive.

For my family and friends, I dont want to take an undue risk. And I also have this funny pressure of, Oh my goodness, if I got sick and Im in a higher risk group to have more difficult complications, then I myself would clog up an E.R. spot or a hospital bed or a ventilator. I cant do that, those are precious resources!

But I am more than confident that we know enough to be able to safeguard health care workers and health care volunteers. I have skills to put to good use, especially in these troubled times.

I feel lucky that because I have a medical degree, I have a path to help out. It feels like a gift.

Crystal Lake, Ill.

Retired emergency room nurse

It was really hard to retire. Emergency medicine is a drug and its like withdrawing. We have the same camaraderie as cops and firefighters.

I think the reason I was so antsy to get back for this is because Im still talking to the people that I worked with. Theyre so overwhelmed and you just dont want to see your friends get hammered without helping. And when you hear the reports on the E.R. Facebook group, We have no masks. Were wearing our masks for 12 hour shifts or days or until they start to deteriorate. You feel like you abandoned them and you cant do anything.

Even if I went back to the hospital, they would not put me in the E.R. because of my age. Im allegedly higher risk. I told the director of public health here, If you need any help, let me know. She said, Yeah, we need people on the phone. Thats great. I can do something.

When we come into the call center, they check our temps and ask if we have symptoms. Everybody has a little cubicle and a phone with the latest information in front of them. Of course you wipe everything down. When I first started, the calls were mostly from physicians wanting to know if they could get patients tested. There have been a few people that I really worried about. Youre thinking, Oh God, I hope this one doesnt end up with a respiratory arrest in the middle of the night. Of course you tell them, go to the E.R. if you cant get your breath.

I feel like Im able to do something. Its not perfect. In my ideal world, Id be back in the E.R.

Carlsbad, Calif.

Retired family physician and embassy doctor in the Foreign Service

I retired about a year and a half ago and wanted to continue using my medical skills but in a volunteer capacity. So I joined lots of organizations. With the California Medical Assistance Team, I deployed last fall for the fires in California, providing medical care for the firefighters and taking care of people who were evacuated from their homes but had nowhere to go.

This came up and so I volunteered to help with the Covid patients.

So far Ive had two deployments with Covid.

The first one was to a place called Asilomar, its a state park area in Monterey. We received patients from the Grand Princess. Some had no symptoms; one gentleman was on oxygen. We did that for about two weeks. Then we were deployed to our current location in San Mateo.

Weve taken over a Holiday Inn. The County of San Mateo needed somebody to manage it medically. We came here and kind of started this from scratch. Were here with the Army National Guard and the California National Guard. Im serving as the medical director.

The hospitals need to deal with the acute patients. So we started receiving patients who are Covid positive and stable, they dont need to be in a hospital setting, but they cant go back to a nursing home or group home, or they cant isolate from elderly family members or people who are immune-suppressed.

We have teams going in every two hours to take care of our current residents. Its not just checking patients and temperatures; theyre changing diapers and moving them so they dont get bed sores. So were there doing a lot of basic care. Everybodys got to pitch in and do whats needed for the patient.

People are really scared that health providers can get this and become sick. Its in the back of my mind, to be honest. I know Im in a higher risk. But even the people who arent at higher risk, there are so many health care workers doing this, hundreds of thousands. Im sure all their families are worried about what theyre doing.

New York City

Semiretired nurse

Ive done just about everything you can think of in terms of nursing: surgery, neonatal intensive care unit, I.C.U., burn unit. I retired from Mount Sinai about seven years ago.

My motivation for being a volunteer is 9/11. At the time I was working in the surgical suite but I was off that day. I remember watching the Twin Towers and I said to my wife, I need to go down to the hospital. So I got there and everybody available was standing around waiting for the victims to arrive. And no one came. Ill never forget that feeling of helplessness that we couldnt do anything.

Now with this situation, at least Im able to actually participate and try to help. Im waiting for a facility in the Bronx seeking volunteers.

My wife is very concerned. If she had the choice, she would not let me out of the house. So its a difficult choice for me and its difficult for her to accept.

Im thinking that they may put me in a less risky role because of my age. But because of my skills I.C.U., isolation, ventilators they could say, we need you. Of course I would be somewhat skeptical, anxious. Its not just me, its also my wife, my children, my grandchildren. But its something that I would feel obligated to do because its the right thing to do.

Chicago

Semiretired internal medicine doctor

I had a private practice for 29 years. I closed my practice in 2018 and have been working part-time since.

Im in that risk group by age and Ive got some chronic illnesses that affect the immune system. My husband is over 70 and also has a pre-existing condition that puts him at greater risk. So I feel like I have some responsibility for myself and for him. I am the last part of my immediate nuclear family, so if I got sick, I would truly be relying on others to care for me. I think that if I was younger and I didnt have these other pre-existing conditions, I would probably feel like Im in a better position to help in more ways.

But I got emails from a private company saying that because of the Covid crisis, they need doctors for telehealth. At least with the telehealth, I feel like I am making a contribution, and lessening the burden for the health care professionals. Im glad this opportunity is available now, whereas it wasnt as available 10 or 15 years ago.

Greenwood Village, Colo.

Retired psychiatrist

I was in private practice for about 45 years and retired about six years ago.

Like everyone else, Ive been riveted to the news. Seeing the stress on physicians, especially in the hardest hit areas like New York, and recognizing theres going to be a need for volunteer help from all kinds of health professionals, including physicians, nurses, respiratory therapists, and so on, it just seemed clear to me that if there was any way that I might be able to help, even in some limited way, I would be more than happy to do that. I feel an obligation to the public.

I think thousands, if not hundreds of thousands of people, are undergoing extraordinary stress and anxiety. There might be some people who are in treatment for a psychiatric diagnosis, this might destabilize them possibly. And then theres the broad swath of the population who are just afraid of whats going to happen. So there might be an increase in anxiety disorders, depressive disorders, substance use disorders. I think those are the main things that are likely to happen and would be really sort of expected in a crisis of this kind. So, I could be available to try to help people through that.

Salem, Ore.

Retired physician assistant

I retired from paid work as a P.A. in 2012. I was 65 at the time and I wanted to be able to devote more time to volunteer activities, including animal-assisted therapy, working with hospice clients and working as a lay chaplain.

Because of my medical training, skills and experience, I would like to be useful during the pandemic here in my own community. And so, I contacted the local staff person for the Medical Reserve Corps in Marion County and asked how I could contribute without doing direct patient care. She encouraged me to take an online survey of potential volunteers. They determine who might be most valuable where and when.

I also got an email from a former colleague telling me that our licensing board has put out a call for lapsed licensees to reactivate on an emergency and expedited basis. So I reached out to some of my colleagues at Kaiser who are still working. They said we need you and would strongly encourage you to do it because Kaiser is almost exclusively doing telemedicine right now. So Im waiting to hear back.

I need to feel like Im helping in some way to feel a sense of worth.

Read more here:
Out of Retirement, Into the Coronavirus Fight - The New York Times