Many Americans are not prepared for retirement: Fed survey-

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Many U.S. households are not prepared or even planning for retirement, according to a new survey released by the Federal Reserve Thursday.
“When it comes to planning and saving for retirement, the survey results tell a somewhat cautionary tale,” the survey concluded.
Despite the shift from pension plans to 401k plans, which has placed responsibility on the individual to plan for his or her their retirement, only about a quarter of those surveyed appear to be actively doing so.
Here are some stark facts:

• Just under a third of non-retired U.S. households reported having no retirement savings or pension, including just under 20% of households aged 55 to 64.
• A quarter of the respondents said they had done no retirement planning at all.
• Of those who have given some thought to retirement planning and plan to retire at some point, 25% didn’t know how they will pay their expenses in retirement.

Even the concept of retirement seems to be losing its luster. Among those ages 55 to 64 who had not yet retired, more respondents said they expect to keep working “as long as possible” than households who said they plan to follow the traditional retirement model of working full time until a set date and then stopping working altogether.
– Greg Robb Marketwatch (Wallstreetjournal)

5 Retirement Tips for Young Investors-Ben Kramer-Miller

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1. Start now

Young investors see retirement as something that is a lifetime away, but they need to start preparing now. If you don’t believe me, just think back to your high school math class, when you learned about exponential functions that start out growing slowly and then skyrocket.
Money that you put away today will grow and compound for decades, and even just a few hundred dollars here or there can make a big different when it comes time to retire. If you give yourself 40 years to prepare and you anticipate growing your money at 8 percent per year, then you will end up with four times as much money as someone who puts away the same amount of money but who allows just 20 years. That’s a lot of money.
Starting early also gives you a cushion in case you make mistakes. Young investors have less experience, but if you spend money when you’re young and start investing for retirement when you’re 40, then your skill level will be akin to somebody who is just starting out. So start early and learn from your mistakes in order to become wealthy in your golden years.

2. Avoid mutual funds

Mutual funds are slowly going extinct, but investors still have trillions in these once-popular investment vehicles. Mutual funds take your money and give it to an expert to invest. This so-called expert typically doesn’t beat the market, but he or she will take your money trying to do so and make excuses when he or she doesn’t.
Mutual funds also have several hidden fees, such as trading and research, and it means that the fund’s performance has to amply outperform the market in order to be worthwhile. Some mutual funds are winners, but most aren’t.

3. Buy ETFs instead

ETFs are cheaper, and they take the bias out of a strategic approach to the market. They are also much cheaper than mutual funds because they typically don’t have a manager working full time: Management in most cases is akin to buying and selling securities. Pick funds that try to achieve some sort of blanket investment goal, such as a dividend aristocrat fund (i.e., a fund that only owns stocks in companies that have increased their dividends for 25 years running).
Take advantage of the fact that ETFs give you easy access to international stock markets that were previously unavailable to American investors. Foreign stocks have lagged American stocks. They often generate sales in regions that have faster growth than we have in the U.S. They are also are cheaper than U.S. stocks in most cases and pay larger dividends.

4. Slow and steady wins the race

Buying cheap, low-risk companies with slow yet sustainable growth may sound boring, but they can generate astronomical returns over your career. Just stick to companies that have large profit margins and wide economic moats, meaning that they have very little competition, if any. These companies can generate returns of 8 percent to 12 percent every year for decades, and this can make you rich if you hang on to your positions and don’t become suckered in by overvalued hot stocks that end in disaster nine times out of 10.

5. Own gold

Gold is not often considered a retirement asset because it doesn’t generate a profit or pay a dividend. But gold holds its value over long periods of time, and it protects you during periods of economic chaos. America has, on average, had a recession every four to six years, and so if you work for 40 years, chances are we will have seven to 10 recessions during that time frame. Some will be bad like, in 2008, and gold will protect you.
Right now, gold is undervalued and investors want nothing to do with it. They want to own stocks, which seem to climb on a daily basis. But these trends are not going to last forever. Gold is extremely attractive right now, and if you buy gold now, then in a few years, you will be able to exchange some of it in order to buy some of the stocks that you want to own now but which are historically expensive.

Culled from the wallstcheatsheet

CBN Governor, Emefiele, under fire- Sylvester Ebhodaghe

• For publishing the controversial 2012 Financial Report online
• Presidency embarrassed
THE smooth take off of in office of the new Central Bank governor, Mr. Godwin Emefiele, ran into stormy waters recently due to the unauthorized uploading of the apex bank's 2012 financial report on the apex bank's website. National Daily learnt that
the presidency was irked by that development which led to Mr. President summoning the Attorney General of the Federation Mr. Mohammed Bello Adoke over the issue. A source at the Presidency told National Daily that the Attorney General verbally queried Mr Emefiele on why the apex bank uploaded on its website, a report he is well aware of the issues and controversies surrounding it. This led to the pulling down of the 2012 Financial Report as soon as words got to the Bank that the President was embarrassed by their action. The source further hinted that the President got in touch with the Attorney General of the Federation Mohammed Bello Adoke to look into the consequences that may arise from the publication of the said report. The attorney general was said to have informed the CBN governor on the legal implications of such, especially as the Federal Government, and other agencies of the government are still in court with the erstwhile governor of the Bank, Sanusi Lamido Sanusi on issues bordering mostly on the 2010 report of the Bank.
National Daily also learnt that the Financial Reporting Council of Nigeria expressed their reservations on the issue to the Central Bank Management. The FRC was said to have demanded that the Bank investigate what led to that brazen development especially as all members of the bank's senior management team are in the know of the controversies trailing that Report and that it is responsible for a pending court case.
However, a source at the Central Bank told National Daily that contrary to insinuations that the governor was ordered to yank the Report off the Bank's website, that it was the governor who ordered that the 2012 report be pulled down from the website. According to this source who craved anonymity because this issue is outside her jurisdiction, it was the Bank's Director of Research Dr. Charles Mordi who without approval from the Board or the governor instructed one of his staff to upload the Report in the website. Sensing that such directive might put him in trouble, the said staff requested that the Director put the request in writing as an approval from him, which he did, and the Report was approved. She further said that a day after the entire Bank was in turmoil as people were seen running around discussing in hush tones. It was later that the news broke that some people who knew how controversial that report was and the problem it could cause the management of the Bank brought it to the knowledge of the governor and deputy governor Dr. Sarah Alade. This development the source said did not go down well with the governor who ordered the Dr. Mordi to yank off the report from the website with immediate effect. A flustered Mordi was said to have denied giving the approval for uploading of the report, shifting the blame on the technical officer who obeyed an instruction.
It could be recalled that the bank's inability to publish its 2012 financial report was responsible for the crisis that led to the suspension of the former CBN governor. Prior to the suspension of the governor, questions were raised over the 2012 financial report of the Bank because of series of infractions detected in the apex bank's audited account for the year. The situation then led to talks within the financial sector that the Bank cannot balance its book. That was heightened by the fact that the apex bank's auditors Ernst and Young went through without appending their signature on the report, a pointer to the fact that they were not convinced about the bank's account. This was based on the fact that an audit report is worthless if it does not carry the signature of the auditor.
This led to the suspension of Mallam Sanusi Lamido Sanusi. It is on record that the President based on the preliminary findings of the FRC that reviewed the bank's operation and its 2012 account, which the CBN board and Ernst Young, its auditor did  not signed wrote to the National Assembly,and the board of the CBN to intimate them on why the government decided to suspend the governor.
 It could be recalled that the governor was queried over 22 infractions discovered in the apex bank's book. The response, it was learnt, was not satisfactory while the Presidency also wanted to put things in proper order ahead of the resumption of a successor to Sanusi Lamido who is expected to leave office on June 2. Sources disclosed that the bank's management violated Sections 6, 49, and 50 of the CBN Act and this is reflected in the accounts and explain why the accounts have not been signed by relevant authorities. Section 6 (3d) provides that the board of the bank shall make recommendation to the President for the appointment of auditors in accordance with Section 49 of this act, the provision of the necessary facilities and the rates of remuneration. Presidency sources said the CBN management did not seek the approval of the President on the appointment of Ernst and Young, its auditor and the N400 million allegedly approved as its remuneration.
The management also ran foul of Section 49 (4) of the CBN Act which stipulates that “the bank shall as soon as may be practicable after the last day of each month make up and publish a return of its assets and liabilities as at the close of business on that day, or if that day is a holiday, as at the close of business on the last preceding business day.”Section 50 (5) provides that “a copy of the return referred to shall be forwarded to the president and shall be published in the gazette.”
Sources also revealed that the current management has never, since the assumption of office of Sanusi, published its account or submitted its monthly report to the President or publish them in the gazette.The Presidency is also said to have condemned the failure of the apex bank to transit to the International Financial Reporting Standards (IFRS), the new accounting regime which banks under its supervision have since adopted. Sources said the Presidency became suspicious when the CBN could not submit its 2012 account to the Financial Reporting Council (FRC), the body with the mandate to ascertain the compliance of companies with IFRS. Rather, the bank requested seven years' grace for it to be able to transit to IFRS. The President reportedly gave the CBN account to the FRC for review and part of the issues allegedly detected is the refusal of its auditors, Ernst and Young, to sign the account but rather, saying that it complied with the CBN Act.
There is also, according to Presidency sources, alleged discrepancies in the 2012 account of the Nigerian Security Printing and Minting Company, a subsidiary of the apex bank.
“In the account of Mint, N29 billion was recorded as the turnover as against N60 billion in the book of the apex bank. Other issues include the donations to some higher institutions but which findings allegedly show was inflated. Bayero University Kano was said to have collected only N1 billion as against N4 billion allegedly reported by the apex bank. There are other illegal donations to churches, mosques and sundry sources, which the CBN Act never provides for.”
There were concerns then that the complicated accounts of the apex bank will pose challenges to Sanusi's successor especially being that the accounts are not balanced and were not signed. Moreso, the state of health of the apex bank's annual statement became suspicious when the governor refused to submit it to the Financial Reporting Council (FRC) the body with the mandate to ascertain the compliance of companies with accounting standards, and the International Financial Reporting Standards, IFRS. Rather than submitting it to the body, the governor requested for seven years' grace for the CBN to comply with FRC stipulations. The former governor later went to court concerning what he called harassments by the FRC.
All these were responsible for the manner in which both the presidency, the office of the Attorney General of the Federation, and the FRCN handled the uploading of that controversial report. A legal expert who spoke with National Daily said that with the case in court, the management of the CBN erred in uploading the report because it has the potential of rubbishing the integrity of the government internationally. Moreover, Sanusi could use it against the government in court.

Culled from the National Daily Newspapers

Hidden Retirement Risks: How to Plan Now for Higher Health Costs Later- Kirsten Klahn

Source: Thinkstock

Many people try their best to plan and prepare for retirement. They regularly save and start to anticipate what their budget will look like. However, many overlook one of the biggest risks a retirement account faces: potential healthcare costs. Overlooking or underestimating these potential expenses can pose a serious threat to your savings – one large medical bill could quickly whittle away at the money you may need for another 10 to 20 years. The best way to avoid this? Start preparing now. Here’s what you need to know about planning for retirement healthcare costs.

Why You Should Plan

Unexpected medical expenses can quickly put a huge dent in your retirement savings. Even if you’re budgeting for health costs, you’re probably still underestimating how much you should be saving. “As we age and live longer, our health deteriorates pretty heavily in the last five to seven years of life, and that’s when we spend a ton of money,” said Bob FitzSimmons, a certified financial planner and president of Bob FitzSimmons Inc., a wealth management firm, to CNBC. “I have quite a few clients who have burned through their capital in assisted-living facilities, spending $200,000 to $300,000.”
In an AARP study, the organization found that two-thirds of survey respondents had never even attempted to determine how much healthcare will cost in retirement. Additionally, when asked to give a ballpark estimate of how much money they might need, more than 40 percent said they expected to need less than $100,000 to cover their retirement health costs.
However, an average 65-year-old couple should actually have about $220,000 set aside for 20 years in retirement, according to the AARP. Many don’t have that much saved and don’t feel as though they’ll be able to afford health costs. Just over half — 52 percent – of adults ages 50 to 64 said they feel confident they can afford the cost of healthcare in retirement. Another mistake is assuming you don’t need to save much because you have Medicare. Unfortunately, Medicare only covers about 51 percent of your healthcare costs, per the AARP.
In some cases, retirees should anticipate spending even more than $220,000. For example, CNBC reports that a 65-year-old couple with median prescription drug expenses will need $295,000 for a 75 percent chance of being able to pay all their remaining lifetime medical bills. In order to increase that to a 90 percent chance, the couple should have $360,000 saved up. While that may seem like an overwhelming amount of money, there are things you can do to start preparing now.

1. Stay healthy

It may seem obvious, but it’s the best way to avoid spending all of your money on medical costs. Prudential writes that healthy habits, such as good nutrition and exercise, should start early and be maintained throughout your life. While there’s never a 100 percent guarantee you won’t get sick, it certainly helps.
You should also determine possible conditions you may develop later in life so you can start budgeting and planning accordingly. U.S. News & World Report writes that the most chronic ailments in retirement are asthma, cancer, heart disease, stroke, and diabetes. Talk to your doctor about your chances of developing any of these, as well as any possible preventative measures.
You should also examine your family history. “If you recognize that something runs in your family, you know what your options are and what you can do to delay the onset,” Elaine Bedel, a certified financial planner, told U.S. News & World Report.
Another great way to ensure you’re at your healthiest is by taking advantage of wellness benefits that may be offered at your workplace. More and more employer-subsidized programs are being offered, which are designed to either help you break bad habits, such as smoking or overeating, or establish good ones, such as onsite exercise classes and nutrition counseling.

2. Educate yourself

Start by talking to people who are in retirement and learn about their experiences with healthcare costs. A key question to ask is whether they feel they were prepared enough to handle their health costs. Fox Business also recommends doing your own research online so you can begin to understand the true costs of healthcare.
Working with your financial planner to build a plan that’s based around “what ifs” is another great way to prepare. You can start to apply some of the information you’ve gathered, such as possible diseases, and begin to work those into your healthcare budget.

3. Determine your healthcare cost estimate

Use the knowledge you’ve gathered about average healthcare costs and then factor in your health and potential lifestyle needs. To arrive at your most accurate figure, Fidelity Investments suggests adjusting the $220,000 based on your family history and health status — this could cause you to plan for a longer or shorter retirement, as well as a larger or smaller total cost.

4. Look into all possible funding options

Fidelity writes that if you have a health savings account that is used in conjunction with a high-deductible health plan, you will be able to make pre-tax contributions, which can be used to pay for qualified medical expenses. The funds can be used to pay for both current and future qualified medical expenses, meaning it can be set aside to cover future retirement expenses.
“Health savings accounts are a smart way to set aside funds specifically for medical needs,” Steven Feinschreiber, senior vice president of financial solutions at Strategic Advisers Inc., said to Fidelity. “HSAs are not subject to the ‘use it or lose it’ rule and are completely portable for individuals who change employers.”
Working part time is another option worth considering. Check if your company offers health insurance benefits to its part-time employees. If so, it could help cover a substantial amount of your healthcare costs while allowing you to enjoy semi-retirement. In fact, this is a reason many retirees decide to work part time.
According to a 2014 EBRI Retirement Confidence Survey, 50 percent of retirees said keeping health insurance or other benefits played a major role in their decision to continue working.

Culled from the Wallstreetcheatsheet