Retirees who opt to keep mortgage payments-By Anya Martin

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Maybe their parents paid off the house before retiring, but many baby boomers today say it makes more sense to carry a mortgage.

The game-changers: low interest rates and high stock-market returns. Older Americans may come out ahead by keeping 401(k)s and other holdings invested rather than cashing out to make a house payment, says Tom Wind, executive vice president of home lending at Jacksonville, Fla.-based EverBank.
Improved health care and life expectancy also play a role, says Ken Dychtwald, president and CEO of Age Wave, a consultancy focusing on aging trends. “Today when people reach 60 or 65, they come to realize they may have decades of life in front of them,” he says. “When their mom and dad reached retirement, they felt they were in the last inning and needed to pick the safe path.”
Reflecting that more active, long-range perspective, 64% of today’s retirees say they are likely to move at least once, according to a study released in February by Merrill Lynch and Age Wave. Of these, 37% have already moved and 27% anticipate doing so.
They also aren’t necessarily downsizing, either. In fact, 30% of moving retirees relocated to larger homes, the Merrill Lynch/Age Wave study found. Top reasons for a larger home included enough room for family members to visit (33%) and a “boomerang” child living with them (16%). The results are based on the responses of 3,638 participants age 21 and older in a survey conducted in August.
Many older home buyers have the means to pay all cash, but either on the advice of their financial adviser or their own decision, they choose to take out a loan, says Peter Grabel, managing director of Stamford, Conn.-based Luxury Mortgage.
Typically when someone 70 years old calls him for financing, it’s an investment choice, Mr. Grabel says.
The biggest challenge for prospective retiree borrowers is that underwriting rules favor income over assets, Mr. Wind says. In other words, they need to show they can make monthly payments without cashing out investments.
Some retirees head off the income issue with sufficient pension payments and by scheduling distributions of their retirement assets, Mr. Wind says. In some cases, a lender may qualify a borrower based on assets amortized over the lifetime of the loan, he adds
But a rising number have job income as well from second careers that may begin over 50, Mr. Dychtwald says.
“We often think of entrepreneurs being that young tech whiz, but more often it’s a 60-year-old taking that idea and investing in it.”
While the math might seem to favor borrowing, retirees should still keep in mind that the risks of carrying debt multiply for older borrowers, says Michael Abbott, CFO of the Abbott Bennett Group, a Concord, N.H.-based financial adviser. While the stock market has been on a bull run for the past five years, that run won’t last forever, he adds.
“If you have the income coming in to make your mortgage payment, then you could potentially weather the storm,” Mr. Abbott says. “But if you are using your asset to pay down the mortgage and that asset has a downturn, you may need to sell your house to pay down the mortgage.”
If a stock market drop is coupled with a health or other high-cost emergency, the financial hit can be even harder, he adds.
Here are a few more things retirees may want to know when weighing a mortgage:
• Put more down. Like all home buyers, retirees want the best interest rates. Since they have cash and assets, many are often willing to make a larger down payment to get a low rate, Mr. Grabel says.
The 30-year, fixed-rate jumbo had an average interest rate of 3.89%, and the five-year, adjustable-rate jumbo averaged 2.88% for the week ending May 1, according to HSH.com, a mortgage website.
• No age restrictions. If a borrower can show the income to qualify for a mortgage, lenders aren’t permitted by federal law to consider either age or health status in the qualification process, Mr. Grabel says. He just had an 89-year-old client approved for a 30-year, fixed rate mortgage, for example. Unfortunately, that borrower died before the closing, he adds.
• Not just math. Retirees should weigh not just returns but their risk comfort level, says Christopher M. Bennett, CEO of the Abbot Bennett Group. “There’s still something about that good old-fashioned American dream,” he adds. “Making sure the money is there and paying off the house is very rewarding to many people.”

Most retirees still prefer to own their home debt-free. Of Americans age 65 and over, 72% of homeowners have fully paid off their mortgage, according to the U.S. Bureau of Labor Statistics. However, a decade ago, 79% were home debt-free.

Culled from The Wall Street Journal

Lawsuits pile up over Pacquiao injury-By Rebecca Bryan

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Los Angeles (AFP) - More disgruntled fight fans are going to court with their complaints, suing Filipino ring icon Manny Pacquiao and others for failing to disclose a shoulder injury prior to his "Fight of the Century" against Floyd Mayweather.

A class-action suit filed in US District Court in Illinois not only names Pacquiao and promoters Top Rank but also telecasters HBO and Showtime, who combined to produce the pay-per-view fight program that was sold in the United States for about $100.
The suit also names Mayweather, Mayweather Promotions and cable television providers AT&T, COMCAST and DirecTV, and accuses the defendants of deceptive practices in marketing and advertising the bout.
"Defendants, individually and collectively, deceptively and fraudulently promoted, produced and sold the fight as one between two healthy fighters... expressly misrepresenting the health of Manny Pacquiao to the Nevada State Athletic Commission, all in an effort to maximize and collect pay-per-view revenue," the lawsuit claims.
At least five such class-action suits have been filed across the United States, seeking millions of dollars in compensation on behalf of those who bought tickets, forked out pay-per-view fees or bet on Saturday's fight in Las Vegas, which Mayweather won easily on points.
Pacquiao revealed afterwards that he had been held back by the shoulder complaint.
It did not take long for the lawsuits to come flooding in.
- 'Dud of the century' -
Two men in Nevada sued on Tuesday, saying the promotion violated the state's Deceptive Trade Practices Act.
In a similar suit filed in California, plaintiff Howard B. Sirota cites former heavyweight world Champion Mike Tyson as calling the long-anticipated bout the "Dud of the Century."
Some of the lawsuits point to the pre-fight medical questionnaire signed by Pacquiao for Nevada boxing authorities in which he checked "no" to the question, "Have you had any injury to your shoulders, elbows or hands that needed evaluation or examination?"

Pacquiao adviser Michael Koncz, named as a defendant in some of the lawsuits, has said he inadvertently ticked the wrong box.
Daniel Petrocelli, an attorney for Pacquiao and Top Rank, told The Los Angeles Times that he was confident the Nevada lawsuit would be dismissed.
"It claims Pacquiao was injured (immediately) before the bout and that's not true -- he was injured (nearly a month) before the bout, was examined by doctors and cleared to fight," Petrocelli said. "And he was examined by the commission right before he fought."
ESPN reported Monday that Pacquiao's camp expect the fighter to undergo surgery for a "significant" rotator cuff tear.
They say they disclosed the injury suffered in training camp when they cleared the use of anti-inflammatory drugs with the US Anti-Doping Agency and that Pacquiao had improved enough to be cleared by doctors to fight.
Mayweather earned an emphatic, unanimous 12-round decision over Pacquiao in the feverishly anticipated bout that will go down as the richest in boxing history -- and by critics as one of the most overhyped.

Mayweather walked out of the MGM Grand Garden Arena with a check for $100 million -- just the first installment of a payday that could reach $200 million when all the pay-per-view sales, ticket sales, closed circuit TV viewings and other revenue is totted up and shared out.

Pacquiao is expected to receive more than $100 million.

Culled from AP

Asia slides, euro at two-month peak as global bond rout rattles markets-Reuters

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An employee of the Tokyo Stock Exchange (TSE) looks at a stock quotation board as he works at the bourse at TSE in Tokyo March 13, 2015. REUTERS/Yuya Shino

By Shinichi Saoshiro

TOKYO (Reuters) - Asian stocks fell on Thursday, led by losses on Wall Street, while a rise in euro zone debt yields amid a global bond rout kept the euro near a two-month peak versus the dollar, while the pound lost ground ahead of Britain's election later in the day.

The Conservative and the opposition Labour Party have been neck and neck in opinion polls that indicate Britain could be in store for a hung parliament and another coalition government.

The euro climbed as far as 74.49 pence (EURGBP=R), reaching a high last seen in mid-February. It was last at 74.41 pence.
Sterling was flat against the dollar at $1.5244 (GBP=D4). It has lost momentum after touching a two-month peak of $1.5498 last week.

Spreadbetters expected negative sentiment in equities to be retained in Europe, forecasting a slightly lower open for Britain's FTSE (.FTSE), Germany's DAX (.GDAXI) and France's CAC (.FCHI).

As European deflation fears have ebbed, a seeming reversal of trades linked to the European Central Bank's big quantitative easing has resulted in a sell-off in core European bonds and equities this week, rattling investors across asset classes.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1 percent as shares retreated in China, Hong Kong, Australia, South Korean and Malaysia.
The Shanghai Composite Index (.SSEC) was down 1.4 percent on fears of fresh moves by regulators to reduce leverage in stock trading, extending its losses so far this week to 6.1 percent. [.SS]

The index is still up an impressive 29 percent so far this year on expectations that China's policy easing would shore up equities. The steep gains, however, have triggered expectations of a sharp correction.

"Another few such declines and some of the millions of retail investors who have recently piled into the market might start to wonder if it really is a guaranteed way to make 30-40 percent returns every year or not," analysts at Rabobank wrote in a note.

Tokyo's Nikkei (.N225) lost 1.1 percent in its first trading day of the week. Japanese financial markets were closed from Monday to Wednesday for public holidays.

U.S. stocks ended weaker on Wednesday after U.S. Federal Reserve Chair Janet Yellen warned of high share valuations, adding to anxiety about future interest rates. [.N]
Weak U.S. indicators also added to uncertainty regarding when the first rate hike by the Fed could take place. Data on Wednesday showed tepid private job gains and a second straight quarterly decline in productivity. (ECONUS)
Shrinking expectations for an early rate hike - a tightening in June appears less and less likely - weighed on the dollar and helped its counterparts like the yen and euro.
The euro was steady at $1.1343 (EUR=), not far from a two-month high of $1.1371 struck overnight. The dollar stood little changed at 119.49 yen, pulling further away from this week's high of 120.51 touched on Tuesday (JPY=).
The euro continued to get support from a surge in euro zone bond yields, notably on German Bunds, in light of an easing in deflation fears thanks to improving European data.

German 10-year bond yields hit a four-month high of 0.595 percent overnight. Just last month it had hit a record low of 0.05 percent, when hopes were high that the ECB's trillion euro bond buying quantitative easing program would drive the yield into negative territory. [GVD/EUR]

French, Dutch, Belgian and Austrian equivalent bond yields also scaled 2015 peaks on Wednesday.

In addition to sending chills through financial markets worldwide, the retreat in euro zone bonds has also weighed on U.S. Treasuries and Japanese government bonds, pushing their 10-year yields to two-month highs.

"The focus is on whether ECB officials will express concerns over the euro's rebound and weaker European stocks, and whether that would halt the rise in Bund yields," said Masafumi Yamamoto, senior strategist for Monex, Inc. in Tokyo.

"The euro's bounce could stop if Bund yields steady, but without hints of further ECB easing it could be hard to keep the currency from rising again."

In commodities, U.S. crude slipped on profit taking following an overnight climb to 2015 peaks reached after a first drawdown in U.S. crude inventories since January. [O/R]

U.S. crude (CLc1) was down 0.7 percent at $60.53 a barrel after reaching a five-month high of $62.58 on Wednesday.

(Editing by Eric Meijer & Kim Coghill)

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Getting rich in America depends on a lot more than a college degree-By Victoria Stilwell

Factors like family background, inheritances and health are playing an increasing role

With graduation season around the corner, more than a few U.S. families are probably wondering just how much that college degree will be worth.

There's little doubt education is associated with higher income, better financial decision-making and more wealth. However, issues that are harder for an individual to control -- what type of family you come from, whether you get an inheritance, or how healthy you are -- also play a growing role in determining your net worth, according to a new report by researchers William Emmons and Bryan Noeth at the Federal Reserve Bank of St. Louis.
Education "is important, but it's not the whole story," Emmons, a senior economic adviser at the St. Louis Fed, said in an interview.  "You can't simply send everyone to college and expect to solve all the social problems that we have, including problems in the job market."
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Family background, such as your parents' social class, occupation, education and income, also has a hand in wealth-building, Emmons and Noeth found. Wellness can play a role because people who are fit can work longer and incur fewer health-care expenses in retirement. There is also what sociologists call ``assortative mating,'' or the tendency of highly educated people to marry each other.
The bottom line is that these other influences help translate income into wealth. The result is a growing gap between the net worth of more- and less-educated families even as the disparity in income stays fairly constant. The following chart depicts the wealth-to-income ratios of households led by someone 40 years old or older with various amounts of education. The rate shows how easily a family can turn earnings into net worth.
"Increasing the educational attainment alone of an individual or group is unlikely to result in all of the positive effects that are hallmarks of families with advanced education," the researchers wrote in the paper. "Some important contributors to the economic and financial success of many highly educated people cannot be granted along with a degree."

While the U.S. has taken strides to make going to college more accessible, the financial outcomes of those who don't get additional schooling have deteriorated. That means if four years at a university isn't a good fit for you, your economic picture has gotten bleaker.

The median net worth of families headed by high school graduates was $95,072 in 2013, down 36 percent from $149,182 in 1989 after adjusting for inflation, according to data from the Survey of Consumer Finances. By comparison, wealth levels for families with graduate or professional degrees rose 45 percent to $689,100 over the same period.

"More of the people who have the potential to go to college are going to college today," Emmons said. "But the flip-side is that for those who don't go to college, their opportunities look much less promising in this narrow financial sense."
This made me think of my 70-year-old uncle, who lives in western North Carolina. He didn't finish high school, but was still able to work for a railroad his entire life and generate a solid, stable income stream for his family. He bought land, built a home, helped his son through college and is now enjoying retirement. Scenarios like that are becoming increasingly rare, Emmons said, because "the job opportunities are not there."
The odds of becoming millionaires for a family headed by someone 40 or older without a high school diploma were 1 in 110 in 2013, according to Emmons and Noeth's calculations. That compares to 1 in 2.6 for a family headed by someone with a graduate or professional degree.
Moreover, much of the educational attainment in the U.S. is concentrated among white and Asian households, adding a racial filter to the issue. At the graduate-and professional-degree level, only Asians have shown a strong upward trend in educational attainment, while blacks and Hispanics, who will be responsible for much of the U.S. population growth in the coming years, still trail other races at every schooling level.
Gender differences are also at work, with women of every race and ethnicity passing their male counterparts at each education milestone, Emmons and Noeth find. This is problematic considering that women have lower labor force participation rates and have yet to reach pay parity with their male colleagues.
"The continuing barriers facing women in fully contributing to their families’ and the economy’s progress, together with the rising share of the black and Hispanic population with very low education levels, make it likely that educational advances will contribute less to economic and financial growth in the future than they have in recent decades," Emmons and Noeth wrote.


Culled from Bloomberg

Plan your retirement- Odunze Reginald C

Photo credited to 10xfinancial.ca

Experience has shown that nearly most businesses owned both the rich and the poor all fizzled out following the death of the bread winner or the owner of the business.

According to research also most family members are also enmeshed in family squabbles over who takes over the estates of the deceased especially if he dies interstate. So what happens if the deceased do not bequeath anything to a family member?  Will they decide not to bury the deceased , what about if the deceased willed all his or assets to charity. What will the family members do?  And even when the family member that dies has no will, there is that squabble between the relations  and the wife and children of the deceased, as there is unwritten maxim in Africa that the relations of the deceased has been before the coming of the wife and children of the deceased.

This calls for self awakening and a deliberate programme and strategies in ensuring your own successful retirement devoid of family input.

There are steps to achieving that and according to Wall Street cheat sheet “TCRS offers the following three strategic steps for achieving retirement readiness and success:

1. Save for retirement. Start saving as early as possible — and as much as possible to maximize potential compounding of investments. Save consistently over time. Avoid taking loans and early withdrawals from retirement accounts as they can severely inhibit the growth of long-term retirement savings.
2. Calculate retirement savings needs, develop a retirement strategy, and write it down. In creating a plan, consider lifestyle, living expenses, healthcare needs, government benefits, and other factors, as well as a backup plan in case retirement comes early due to an unforeseen circumstance.
3. Get educated about retirement investing. Whether relying on the expertise of professional advisers or taking a more do-it-yourself approach, gain the knowledge to ask questions and make informed decisions. Seek assistance from a professional financial adviser, if needed.” (Wall street cheat sheet)

What we are trying to say is that every human being should endeavor to put in place measures towards achieving a successful retirement during old age and not look upon family estates as a means to survival.

Putting a hope on family estates and parent retirement pot portrays a lack of confidence among family members and in most extreme cases built up of  hatred, murder, kidnap and other vices that the love for money can aggravate. And according to Kiyosaki “the world of money is filled with con men and charlatans”

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Quality Service Delivery the key to customer Retention-Odunze Reginald C

Image credited to gosimpletax.com

Speaking before American Bankers Association in San Francisco, Robert Schuller asked them the following questions”1) what are we in this business for anyway? 2) If we keeping going at it the way we are, will we get what we are going after? 3) If we succeed in reaching our goals, will be satisfied- and proud of how we did it? Then he ended it by saying, “Remember that at the bottom line of your business of banking, there are no numbers, only people.” Schuller 1988

Napoleon Hill devoted over twenty five years of his life to trying to discover why so few men succeed and so many fail. Le Boeuf (1987:133). He went on to say that he interviewed and studied the lives of numerous great achievers from all walks of life such as Andrew Carnegie, Thomas Edison and Woodrow Wilson and presented the essence of his findings in his classic bestselling “Think and grow Rich”

One of Hill’s best recommendation is to cultivate the idea and habit of rendering more and better service than that for which you are paid” and before you realized it the world is willingly paying you for more than you do” today we call that building perceived value, seventy years ago Napoleon Hill called it “the law of increasing returns” Le Boeuf (op cited)

Pension Fund Administrators are all offering the same service, a homogenous service and the service is basically the following: Retirement Savings Account, Investment of the contributor’s and retiree’s fund, Customers support services and relationship management, Retirement seminars, pension forums and enlightenment programmes.

Therefore the extra mile the PFAs goes in satisfying the customers will go a long way in enhancing customer’s loyalty. Customer loyalty is essential for the pension fund administrator because it gives the edge they need in the event of the regulatory body National Pension Commission, PenCom, lifting the transfer window

What then is the determining factor?  Quality service delivery. In a recent forum in Lagos, Pencom through its AGM public sector Abba Mamman noted that  most of the PFAs are clamoring for lifting of the transfer window. He went on to say that as they wishing and planning for all the PFAs to migrate to their PFA, so are the other also planning for the same thing. He then went on to say that the most crucial thing is to embark on aggressive customer satisfaction and quality customer delivery.

Are your adult children a financial drain?-By Ilana Polyak

It's reasonable to want to help adult children financially, but doing so can foster dependence and endanger your retirement, say financial advisors.

It's natural for parents to want to help and support their children. But should that help continue well into adulthood? By helping too much, parents run the risk of imperiling their own financial future and creating dependence.

"The reality is that you are not doing the adult kids any favors at all by always bailing them out," said certified financial planner ReShelle Barrett, a senior vice president with Bill Few Associates.


The Great Recession rewrote some of the rules of financial independence for many young adults. With jobs scarce, student debt soaring and foreclosures hitting, it wasn't uncommon for grown children to take refuge in their childhood homes.
"If they're typically financially responsible but have fallen on hard times, you are going to want to be there to help them, and that's fine," said Joe Franklin, a CFP and founder of Franklin Wealth Management.


Those were unusual circumstances, and even hardworking children found themselves in financial straits. It's a general "open wallet" policy that financial advisors say is dangerous for parents and children alike.
"People don't want to cause their kids any pain or any stress," said Joel Larsen, a CFP and principal of Navion Financial Advisors. "One day you're not going to be around anymore. Do you want your kids learn to deal with the world when they're 60?"
It's fine to make a lavish gift to adult children now and again, especially for children who are otherwise diligent and make no demands. But always coming to the rescue can jeopardize both your child's drive and your retirement security.
"In the final descent to retirement, there's not a huge buffer for you," said Ken Geraghty, a CFP with Eagle Strategies. A child in his or her 30s or 40s has lots of options for income generation; a retiree does not.
Take one of Joel Larsen's clients, a 70-something widow who always swooped in to rescue her three children. "One needed help starting a business; another needed a down payment on a house or a new car," Larsen said.
The woman had a comfortable retirement that wasn't too extravagant, but her constant gifts soon depleted her investment account and, later, her emergency savings. When she came clean to Larsen, he called her children and asked for the money back. "They all said, 'Sorry, I can't,'" he recounted.
Before long, the client had a medical issue and needed care. With her assets gone, the only care she could get was in a Medicaid nursing home. Had she not made those handouts, she could have afforded a better facility or received care at home, Larsen said.
Now when clients say they want to help their adult children, he offers to run the numbers for them and tell them how it will impact their retirement plans. "That way, they can say, "My financial planner says I can't afford it,'" he said.
There are several categories of gifts that advisors caution against. The first is help with a down payment. Parents who provide a down payment outright may be facilitating home buying before their children have the maturity that comes with saving for it.
Helping with a bigger down payment has other problems. "If children are buying a house and counting on help from Mom and Dad, then it's probably a house they can't afford," Barrett at Bill Few Associates said.

Parents are also too quick to help their children start a business. Plenty of small businesses fail, and parents need to protect themselves.
"You need to have something legally in writing that protects you as an investor in that business," Barrett said. "If the business defaults and can't pay its creditors, those creditors can come after your personal assets."
Some advisors, such as Franklin of Franklin Wealth Management, believe that when parents make substantial cash outlays to help their kids, they should expect to be paid back. He advises his clients to draw up a contract and charge interest. "As a parent, you have to feel proud when they pay your money back, knowing they are on the path to financial independence," he said.
By Internal Revenue Service rules, you must charge a minimum interest rate. In March the Applicable Federal Rate was 0.40 percent for loans up to three years, 1.47 percent for loans of three to nine years and 2.19 percent for loans longer than that. "If they don't pay you back, it's now a gift," Franklin said.
Gifts that are more than $14,000 (or $28,000 per couple) are taxable, though "most people are not even aware about the gift tax," said Geraghty. If tax is not paid, then larger gifts will need to be accounted for and taxed at that time.

Some parents go one step further and deduct gifts from their children's inheritance. "I had a client who said that when she passes, her son is not going to get anything, that it was going to the other children because he had already gotten so much from her in the form of handouts," said Franklin.

Of course, financial dependence is a two-way street and the result of a lifetime of financial lessons never learned. The best defense against dependent children, advisors say, is increasing financial responsibility as children grow. And letting them fail when they're young is a lesson that will stay with them long after their parents are no longer there to bail them out.

Culled from CNBC.com