5 Risks to a Successful Retirement – Solid financial planning must address Longevity, Healthcare expenses, Inflation, Asset Allocation, and Withdrawal Rate as part of your plan for a successful retirement.  Click here for full details and feel free to send an email back to me to request a worksheet for Valley National to prepare a Retirement Income Evaluation for you.

Several of our clients have reportedly received official looking emails from the IRS seeking confirmation of social security numbers and bank account information.  These are bogus – be cautious, as always, of releasing vital information in response to any unsolicited email.

Question:   I am getting close to the age when I could start taking my Social Security retirement benefit.  Where can I find more information?

Answer:   The gov’t has set up a great web site at:  http://www.ssa.gov/retire
This site contains a Social Security Retirement Planner and walks individuals through the retirement application process, and offers information on issues to consider when contemplating retirement, what documents are needed when applying for benefits, and how and where to apply for benefits.   ALSO, this week’s Your Financial Choices will concentrate on the topic of Social Security – see below for more information on how to listen to this timely radio show. 

“Well done is better than well said.”

–Benjamin Franklin

1. Rates– interest rates have declined to 1% not only in America but also in Japan, Britain, and most of the euro zone (source:  The Economist).



2. The Trend– interest rates have been generally declining since 1981 – a period of 29 years.  Does that mean interest rates can generally increase for 29 years? Yes – interest rates generally increased from 1952 to 1981 (source:  Valley National Research). 



3. Leader – In December, 2009 China surpassed Germany as the world’s leading exporter (source: U.S. Dept. of Commerce).



4. Number One New Year’s Resolution– 76% of consumers say that decreasing debt is their No. 1 New Year’s resolution (source:  The National Foundation of Credit Counseling).



5.  Busy Signal – The IRS has set a goal of connecting 71% of calls from taxpayers to an IRS employee.  In other words, the IRS is planning to be unable to answer 3 out of every 10 calls it receives (Source: The IRS).

The show is hosted by Valley National’s Laurie Siebert CPA, CFP®. 

This week Host Laurie Siebert, CPA, CFP® will discuss “Medicare and Social Security issues.  She will be joined by frequent and popular guest, Mark Bacak, District Manager, Bethlehem Social Security Administration and Jon Langmead, Health Insurance Specialist for the Centers for Medicare & Medicaid Services.    

Laurie will take your calls on this subject and other financial planning topics at 610-758-8810. WDIY is broadcast on FM 88.1 for reception in most of the Lehigh Valley; and, it is broadcast on FM 93.9 in the Easton/Phillipsburg area; and, it is broadcast on FM 93.7 in the Fogelsville/Macungie area – or listen to it online from anywhere on the internet.  For more information, including how to listen to the show online, check the show’s website www.yourfinancialchoices.com and visit www.wdiy.org. 

Apps – the most amazing things in technology in a long time.  Programmers keep making these nifty programs for my iPhone by the scores – every day.  Apps are available for just about everything.  It’s entertaining to simply sift through what’s new.  Many are free.  Or inexpensive – $.99.  Apps are easy to download and set up.  My most recent App:  “Quickvoice” which enables me to dictate into my iPhone, convert my speech to text, and email it to anyone in my Contacts.

Many Americans need and expect more help from their advisors in regards to their own retirement planning.  Our solution to answer this need is Valley National’s Retirement Income Evaluation which takes a snapshot of your financial condition today and forecasts it over your life expectancy using a scenario that you describe.  The Retirement Income Evaluation excels at providing valuable insights to “what if” such and such happens.  This capability empowers us to address the 5 risks of retirement by asking the question and then providing the answer:

 Longevity – what if your life span stretches far beyond the current life expectancy tables?  How will you avoid outliving your assets?

 Healthcare Expenses – what if your employer drops your health care coverage because of its own financial stress? What if your spouse health declines which results in the need for personal care or a nursing home?

 Inflation – how do you prevent the decline of the purchasing power of your assets if your cost of living doubles or triples over your life span?

 Asset Allocation – are your investments structured properly to produce income and protect your purchasing power?  Are they too growth oriented?  Are they too conservative to prevent outliving your assets?

 Withdrawal Rate – is the amount that you intend to withdraw from your investments each year to replace your earnings stream too high?  What is the probability that this withdrawal rate will deplete your assets during your life span?

Feel free to e-mail me at triddle@valleynationalgroup.com and request a worksheet for Valley National to prepare your Retirement Income Evaluation.

STOCKS PUSHED TO THEIR HIGHEST LEVEL in nearly 16 months only to pull back 5.1% over three quick, repentant days, and the sudden swerve makes at least one thing clear: We are a jumpy bunch these days.

Much could be made of this about-turn. The three-day toll was the worst since this frequently-dissed, oft-doubted bull market began last March. It also wiped out stocks’ early 2010 gains, worrying those who believe January trading sets the tone for the year. Yet stocks had run up 70% without any setback worse than 7%, and it remains to be seen if last week was another bump along the road to recovery or the start of a bigger correction.

The selling jag, however, showed how concerned investors have become about monetary policy and regulatory meddling. Stocks’ swoon began after Chinese banking regulators took early steps to curb its lending boom, and continued as President Obama proposed limiting the risks big banks can take. Any such proposal won’t take effect soon, but the fear is that risk-averse banks will retreat further from lending — just when the economy needs it most.

Selling accelerated Friday afternoon amid reports that the Senate lacks the votes needed to confirm Ben Bernanke as Federal Reserve chairman — and thereby extend his policy of monetary largesse. Risky assets fell hard and Treasuries rallied. In the options market, the rush for protective puts sent the VIX volatility index up 55% in three days — a measure of how everyone was watching the exit.

Material and metal stocks most sensitive to Asian growth suffered, and crude oil fell 4.9%. The Dow Jones Industrial Average slumped to its third loss in four weeks and ended the week down 437, or 4.1%, to 10173.  The S&P 500 is now in the red for the first time this year. The Nasdaq Composite Index lost 83, or 3.6%, to 2205, while the Russell 2000 slipped 21, or 3.3%, to 617.
Why so jumpy? For a start, it is bonus season on Wall Street, and things are tense this year. Higher stock prices also brought higher expectations, and the strain showed. Google (ticker: GOOG) fell 6% after it reported a 17% jump in revenue, while American Express (AXP) fell 8% after it tripled quarterly income. Starbucks’ (SBUX) U.S. sales increased for the first time since 2008, but that didn’t appease the crowd. Pricey casino stocks with Macau perches sagged under the prospect of tightening credit in China, and any impact that might have on the high-rollers crowding their baccarat tables.

Is China really the next bubble ready to burst? The Shanghai Composite Index has stalled since August but is just 10% off its recent peak, so a further retreat isn’t out of the question. But Chinese stock prices, volatile though they are, aren’t excessive compared to their 10-year average, and markets like India have rebounded more resoundingly. “Modest tightening now by Chinese authorities to cool rapid liquidity and white-hot growth is likely to help preserve the expansion, instead of derailing it,” says one Wall Street economist (Source: Barrons Online).

Last week, U.S. Stocks and Foreign Stocks both declined but Bonds increased.   During the last 12 months, STOCKS have substantially outperformed bonds.

Returns through 1-22-2010	1-week	Y-T-D	1-Year	3-Years	5-Years	10-Years
Bonds- BarCap  Aggregate Index	.3	1.5	7.9	6.5	5.2	6.6
US Stocks-Standard & Poor’s 500	-3.9	-2.0	35.1	-6.4	.7	-1.0
Foreign Stocks- MS EAFE Developed Countries	-3.7	-.9	43.1	-9.1	1.4	-.7

        
Source: Morningstar Workstation. Past performance is no guarantee of future results.  Indices are unmanaged and cannot be invested into directly.  Three, five and ten year returns are annualized.  Assumes dividends are not reinvested.