Retirement In Sight for May, 2014


R E T I R E M E N T I N S I G H T
Presented by Jonathan R. Broadbent, CRPS, AIF
 

MONTHLY NEWS AND INFORMATION FOR CURRENT AND FUTURE RETIREES

 

MAY 2014

 

Love truth, and pardon error.
  

- Voltaire

 

TRAVEL TIP
Think about personalizing or stylizing your luggage. There are so many plain blue, red and black bags out there that it becomes all too easy for an eager (or tired) fellow tourist to grab yours instead of theirs. A smart-looking tag with just your first name in large letters or brightly colored tape on the handle of your carry-on can reduce the chance of such mix-ups.

 

BRAIN TEASER
Two Wizards, One Lizard.
A knight seeking Camelot came to a forked road and met two wizards. He knew that one wizard always lied and the other always told the truth. One road led to Camelot, and one let to a ferocious dragon. How did the knight discover what road to take?*

 

DID YOU KNOW?
Time to clear the air 

In the People’s Republic of China, an average of 50,000 cigarettes are smoked per second during a given day.4

 

 


WHY RISING INTEREST RATES COULD BE GOOD FOR RETIREES

Since late 2008, the Federal Reserve has artificially suppressed interest rates through bond buying. This has fueled the housing recovery and the bull market but hurt the purchasing power of risk-averse seniors. Yearly inflation has vacillated between 1.0-1.6% over the last several months; despite rising more than 80 basis points in a year, the yield on the 5-year Treasury was under 1.7% in mid-May. Social Security hasn’t exactly offered retirees big raises either.1,2

 

Longer-term interest rates are poised to rise as the Fed winds down its stimulus. While the outlook for longer-term bonds (and especially bond funds) is uninviting, rising rates do imply better yields on CDs and money market funds. If rates head north at last, seniors will feel less pressure to draw down their savings and may be able to assume less risk in their portfolios. So while higher interest rates could constrain stock gains, better returns from fixed-income investments might offset a run-of-the-mill market. In the best-case scenario, the economy strengthens impressively to overpower the effect of rising rates, fostering double-digit gains for stocks again.

 

As interest rates return to normal, returns on stocks and bonds could normalize as well – and broadly speaking, the norm has been pretty good for generations of retirees.

 

 

WORKAMPING: COMBINING TRAVEL WITH INCOME
That old mobile retirement dream – buy an RV, sell the home, see the country – has a practical new twist these days. Retirees are now workamping, taking seasonal jobs to stay active and to fund their nomadic new lifestyle.

 

The possibilities are vast. You could find seasonal work helping big-box and online retailers at stores and distribution centers. You could work on a guest ranch, or at an amusement park or two. How about following the NASCAR circuit or the PGA Tour? And instead of working for others, how about for yourself? You could sell snacks, souvenirs, or your skills at your destinations to generate income. Workamper News (workamper.com) and Workamping Jobs (workampingjobs.com) offer you a good overview of the possibilities and current job opportunities.

  

 

ON THE BRIGHT SIDE
Fannie Mae and Freddie Mac will hand the Treasury a collective $10.2 billion in dividends in June. By next month, the two GSEs will have sent the Treasury a total of $213 billion.3

 

 


Jonathan Broadbent may be reached at
440/345-8003 or jonathan@planpartners.net
www.planpartners.net
 

     

<<representativedisclosure>>

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

* TRIVIA ANSWER: Stumped? Contact me for the answer! 440-345-8003

CITATIONS.
1 - investing.com/economic-calendar/ [5/12/14]

2 - bloomberg.com/markets/rates-bonds/government-bonds/us/ [5/12/14]

3 - online.wsj.com/article/BT-CO-20140508-710169.html [5/8/14]

4 - factslides.com/ [5/12/14]

 

 

 

 

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