Time to Make New Year's Financial Resolutions
It's time for my annual surefire predictions for the New Year. As usual, I won't waste your time predicting what the stock market will do, since nobody knows. Instead, I'll concentrate on predictions you can do something about:
Saving "Solutions" Sought
With millions of Baby Boomers lacking the means to retire, we'll see a growing national debate on how to encourage if not force Americans to save, along with calls to simplify the tortuous maze of workplace and individual retirement plans.
But you don't need to wait. If you're not sure whether it's better to save in a 401(k) plan or an IRA, for example, just pick one, or better yet, both.
Don't use the excuse that markets are treacherous not to save. You can pick stable investments rather than stocks.
And don't agonize so much that you become paralyzed. If you can't decide between paying down debt or adding to your savings, do a little bit of both. But do something.
Fuming Over Fees
Despite threats of additional government regulation -- or maybe because regulations have slowed profits -- banks will continue to increase fees, drawing ire from consumer groups.
Whether these fees are justified goes beyond the scope of this column. I just want consumers to be smart as well as irate.
Consider: An annual survey by Bankrate.com, a consumer education site, found that average automated teller machine fees jumped 5 percent to an all-time high of
"Consumers can find themselves wasting several hundred dollars a year by not taking simple steps to avoid those fees," said
Just as investors piled into tech stocks in late 1999 and early 2000, and went into hock to flip condos in 2005-2006, they will flock to whatever investment is "hot" in 2011, increasing the risk of getting burned. Through the years, this self-destructing investor behavior has never changed.
I don't know whether we'll have any "bubble" burst in 2011, and if so, where. I do know that with interest rates near historic lows, long-term bond mutual funds pose particular danger now.
That's because interest rates can rise much more than they have room to fall, and bond prices go down when rates rise, with longer-term bonds falling the most. Most Americans are not aware of this inverse relationship between bond prices and yields, according to numerous surveys.
A better strategy: Put together, and periodically rebalance, a diversified portfolio of stocks and bonds suitable to your goals and risk tolerance.
It's Time to Say Goodbye
After writing this weekly column for 20 years, I will leave you with a final thought next week and "fully" retire by the end of the year.
This is a natural progression from my decision to retire from full-time work in 2000 at age 55 and write this column from home. Doing so cut my pay but gave me more time for family, hobbies and travel. Having turned 65, I want to devote still more time to newly discovered passions, including playing and writing music and learning about art and other fields. That's why I saved, and why you should, too, to be able to fulfill your passions and dreams.
Available at Amazon.com:
- Money and Life: Some Points Worth Remembering
- Do Some Research Before You Donate to Charity
- Time to Make New Year's Financial Resolutions
- Make Time to Keep Your Financial House in Order
- Keep These Tips in Mind for Retirement Planning
- Give A Gift of New Ideas on Retirement
- My Predictions For 2011
- How to Find the Best Credit Card for You
- 7 Tips for Giving Money to Family Members
- 11 Retirement Resolutions for 2011
- Retirement Benefits: What to Expect in 2011
- Roth IRA vs. 529: Best Way to Save for College & Retirement
- Decoding the FICO 8 and FICO 8 Mortgage Score
- Experts Offer Advice on Investing in 2011
- Active Fed and Conservative Congress to Pave Uncertain Way
- Best Intermediate Municipal Bond Funds for the Long Term
- Fundamental ETFs Go Beyond Index Investing
- Investors Ease Back Into Stocks
- Why You Should Buy Stocks That Pay Dividends
- What Investors Can Learn from the Insider-Trading Scandal
- 10 Easy Tips to Save Money This Christmas
- How to Save Money, Eat Well, and Be Merry
- 4 Steps to Maximize Your College Savings
- The Million-Dollar Retirement Plan
- Consider Converting to a Roth
- Bi-partisan Proposal Would End Medicare As We Know It
- Size Up Your Estate and Do Some Tax Planning
- 10 Money Mistakes Parents Make
- How Deficit Reduction Proposals Would Affect Social Security
- Update Your Medicare Game Plan
- Ease the Pain of Higher Health-Care Costs
- Credit Cards and Medical Expenses Pushing Older Americans Into Bankruptcy
- You Still Have Time to Reverse IRA Conversion
- Be on the Alert for Scholarship Scams
- Save on College Visits
- How to Find Your Optimal Debt Level
- 7 Costs to Eliminate Before You Retire
- 6 Best Money Tips for Young People
- 5 Retirement Tax Deadlines to Plan For
- Why Social Security Payments Will Be Flat in 2011
- Is a Retirement Income Fund Right for You?
- How to Avoid Charity Scams
- Rebate Deals Make It Easier to Save for College
- Keep Your Identity Safe With These Six Strategies
- 10 Reasons to Open a Roth IRA
- 5 Ways to 'Psych Yourself Rich'
- 4 Ways to Save Money on Life Insurance
- What to Know About Health Savings Accounts
- How Work Impacts Social Security Benefits
- Raising Retirement Age Will Help Save Social Security
- Cutting Benefits Isn't the Way to Save Social Security
- Baby Boomers Will Redefine Retirement on Own Terms
- Retirement Planning: Taking Stock and Coming Up Short
- Don't Procrastinate on Wills and Estate Planning
- Annuities Can Be Valuable Slice of Retirement Funding Pie
- Videos Put Entertaining Spin on Money Management
- Shorter-Term Mortgages Make Sense for Some
- SIPC Considers Revamping Rules
- Expect Significant Changes During Open Enrollment for 2011 Health Coverage
- Patients Beware: Hospitals Increasing Requiring Cash Up Front
- How the New Consumer Bureau Will Help You
- Looking for Overseas Retirement
- Do You Live in a High-Debt City?
- 10 Historic Places to Retire
- Don't Get Caught in Sticky Web of Credit Card & Bank Fees
- The New Retirement Plan: Watch the Expense Side of the Equation
- Recession Prompts More Americans to Tap Retirement Security to Make Ends Meet
- Preventive Care & Electronic Medical Records Guidelines Set
- 5 Retirement Myths
- How to Tell if You Have a Good 401k Plan
- Insurance for Boomerang Kids
- Boomers Take On 'Necessities' May Not Be Grounded in Reality
- Avoid IRA Tax Pitfalls
- New Rules Slash Credit Card Fees
- More Consumer Protections on Bank Overdrafts May Be Coming
- Most Okay With Higher Social Security Taxes
- How to Retire Gradually
- Plan Ahead For a Comfortable & Potentially Rich Retirement
- To Understand Your 401K Plan Just Focus on the Fees
- Buying Coupons for Deep Discounts Carries Risk
- How New FTC Rules for Debt-Settlement Firms May Protect You
- 529 College Plans Not Completely Trouble-Free
- New Website Helps You Navigate Health Insurance
- Prepare For the Rising Cost of Long-Term Care
- How Much Life Insurance Do You Need?
- The Great College Scholarship Scramble
- The New High-Risk Health Insurance Pool: Common Questions
- Misunderstandings Rampant on Health Care Reform & Medicare
- How to Talk to Your Parents About the Estate Tax
- Should Young People See a Financial Planner?
- 10 Ways to Ruin Your Retirement
- Understanding the Psychology of Retirement Planning
- Five-Year Rule for Roth IRA Withdrawals: A Primer
- Hard Times Triggering Spike in Consumer Fraud
- New Sites Empower Students to Build Their Own Scholarships
- 10 Things You Didn't Know About Social Security
- Costly 'Add-On' Insurance More About Profits Than Benefits
- Teaching Your Child Money Habits for Life
- Retirement Living Decisions Don't Require Hand-Wringing
- Sears Brings Back the Christmas Club
- Will You Run Out of Money Before You Run Out of Years?
- Best and Worst Places to Build a Nest Egg
- 21 Ways to Make Extra Money in Retirement
- Do You Trust Financial Services Companies? Trust Index Says Not So Much
- Don't Be Intimidated by Medicare Labyrinth of Letters
- 2010: Good Year to Die For Your Heirs' Sake
- The Dangers of DIY Estate Planning
- The Economy's Lasting Impact on Your Retirement
- Unconventional Retirement Investing Strategies
- Another Retirement Challenge for Women: Income Gender Gap
- Launching Your Own Business After Age 50
- Key Questions to Ask Before You Hire a Financial Adviser
- The New Good Life: Living Better Than Ever in an Age of Less
- 15 Ways to Tell if You Are Ready to Retire
- How to Maximize Your Social Security Benefits
- How Working Longer Helps Build Retirement Security
- How to Find a Low-Tax Place to Retire
- Investing Your Social Security Check? Consider These Factors
- Alternatives to Traditional Retirement
- Change On the Way for Retiree Health Benefit Programs
- Two New Medigap Plans to Consider
- Sizing Up Your Retirement Nest Egg Needs
- Biggest Sources of Retirement Income
- Assembling a Sturdy Retirement Portfolio
- Withdrawing from Retirement Accounts Early without Penalty
- Social Security Inflation Adjustment Debate
- Biggest Sources of Retirement Income
- Don't Neglect Long-Term Care in Retirement Planning
- How the Health Care Bill Impacts Retirees
- Jobs With the Best Retirement Benefits
Personal Finance - Time to Make New Year's Financial Resolutions
(c) 2010 TRIBUNE MEDIA SERVICES, INC.