TimothyMobley

The great Social Security lie

Less than a week ago, US News posted an article in the Smarter Investor section titled 7 Threats To Your Retirement . While the article thoroughly discusses some of the threats to retirement, such as switching jobs, early retirement and lump sum distributions, which are indeed valid threats to the average American’s ability to retire comfortably, the author seems to focus more on the issues facing employees with defined benefit plans. The reality is that a large percentage of Americans these days are not going to enjoy the security of pensions when they retire as less and less employers offer defined benefit plans (i.e. traditional pensions) and more and more employers offer defined contributions plans(i.e. 401Ks) with a tiny match, if any… Therefore to me , the real issue to discuss is What are the 7 threats to your retirement when all you have is a 401K? A little bit of history can help us understand the current reality… In 1974 when The Employment Retirement Inc...

7 threats to your retirement

Robert Reich (Why The Economy Can't Get Out of First Gear)

“When am I going to be able to retire?” is a question that is on the mind of many Americans, often keeping many of us up at night and giving many investors serious amounts of heartburn every time they look at the balance of   their 401K plans. The current economic environment coupled with the uncertain future solvency of Social Security in the US, is causing more and more of us to question when are we going to be able to retire, if at all. The vision of leisurely afternoons on the golf course is beginning to look like a chimera… The reality is not terribly encouraging. Just in the past decade we lived through the Great Recession, the global financial crisis, unemployment figures reaching double digits and we witnessed our houses lose value due to the burst of the real estate bubble. So what are we looking at – little, if any, equity in our homes; unpredictable value in our 401Ks and possibly some savings. The stock market is still below the levels reached in 2001 and we...

I am often asked the question:” How about market linked CDs? I would like to stay away from the equities market but somehow still benefit from any potential upside in securities while getting FDIC protection. Are equity linked CDs the right choice for me?” The most appropriate answer really is: “It depends...” Below, I will explain the advantages and disadvantages of market linked CDs and in which circumstances I usually recommend investing in market-linked CDs. Market-linked CDs (also referred to as market-indexed or equity-linked CDs) are certificates of deposit based on one or more asset classes such as securities or market indices. By purchasing a market-linked CD the investor participates in the growth of the underlying security or index while preserving the characteristics of a traditional CD, including protection against market decline. When a market linked CD is held to maturity its principal is protected and the investor receives interest based on the performance of the und...