Daily Gains Letter

Retirement Plan

Even at the best of times, creating a retirement plan is not an easy task. Throw in economic uncertainty and low savings rates and the well intentioned idea of saving for retirement can become an arduous task.

There’s more to a retirement plan than tucking money away for your golden years.  It’s about replacing your main source of income once you retire, with another source of income.

A long term approach to a successful retirement plan produces income, wealth creation, and capital growth.  As it stands, retirement savings comes from three different sources: social security, pension, and investments.

The average American will receive an annual Social Security benefit of less than $15,000 a year.  At present, only 50 percent of the U.S. work force is covered by an employer-sponsored pension plan; unchanged over the last three decades.

If retirees want to live on more than Social Security and pensions, they will need to find creative ways to enhance their retirement plan.  That’s why a sound, diversified,  investment strategy that encompasses stocks, bonds, mutual funds, real estate etc., are essential for ensuring you are more than prepared for retirement.


Four Tips for Retiring Wealthy



DL_Sasha_8When it comes to creating an investment strategy, there are many things to consider. Getting back to the basics, there are four points that everyone must accomplish to get the biggest bang for their buck. 1. Reduce Credit Card Debt While many might not consider reducing credit card debt as an investment strategy, it clearly is., the reason being that you are paying a very high interest rate on that debt. It is not easy to generate massive returns in the stock market, so if one’s credit card interest payment were 20%, one would need to generate a bigger return than that in the stock market to justify not paying off that debt. Reducing or eliminating unnecessary credit card debt is an easy initial step to ge ... Read More



Three Steps to Overcoming Losses in a Declining Market



Overcoming Losses in a Declining Market“What should you do when the house isn’t in order?” A good friend of mine asked this question back in 2011. At that time, key stock indices were plunging lower due to issues regarding the U.S. debt ceiling. There was uncertainty, and many wondered what would happen next. I remember this question now because the key stock indices nowadays are falling due to troubles in the emerging markets and there seems to be panic—similar to what we were experiencing when I first heard this question. When key stock indices are declining, instead of panicking and selling ... Read More



How Low Interest Rates Are Holding 144 Million U.S. Workers Hostage



144 Million U.S. Workers HostageAre the long-term retirement plans of working Americans being held hostage by the Federal Reserve? If the point of quantitative easing was to stave off a recession and spur jobs growth, I think it’s fair to say the Federal Reserve’s $85.0-billion-per-month money-printing scheme has been a failure. At the very least, I’m not so sure the money was well spent, and that the end does not justify the means. I enter as evidence almost $4.0 tril ... Read More



What You Can Learn from Missed Investment Opportunities



Missed Investment OpportunitiesOne of the basic rules that investors should follow when it comes to portfolio management is to not have a bias. What biases eventually do is either hinder investors from making better decisions or cause investors to not even recognize an opportunity that can take their portfolio to new heights. For example, take the Affordable Care Act, more commonly referred to as “Obamacare.” A friend of mine, who is saving for his retirement, has a bias when it comes to this topic. He says it’s not worth it for Americans, and it’s just another expense to add to the budg ... Read More



Three Easy Ways to Save for Retirement if You’re Self-Employed



DL_John_310113Many dream about being self-employed; being their own boss, and making their own hours. But, being self-employed also means being responsible for your own retirement savings. Unfortunately, many self-employed Americans seem to have forgotten this or have maybe simply chosen to ignore it until a later date. That could be a costly mistake. At present, only 50% of the U.S. workforce is covered by an employer-sponsored pension plan, unchanged over the last three decades. Furthermore, 71% of small businesses with fewer than 25 workers do not sponsor a retirement plan. (Source: Lichtenstein, J., “Financial Viability and Retirement Assets: A Look at Small Business Owners and Private Sector Workers,” U.S. Small Bu ... Read More



Retirement Post Recession: Why It’s No Longer the Golden Years



Retirement Post RecessionWill your retirement mantra be, “save, save, save,” or “work, work, work?” That depends on how close to retirement you are—at least, according to a recent study published by The Pew Charitable Trusts. (Source: “Are Americans Prepared for their Golden Years?,” The Pew Charitable Trusts web site, May 16, 2013, last accessed June 13, 2013.) When the Great Recession hit in 2007, the oldest baby boomers were just a few short years away from retirement. And, after a lifetime of economic expansion and planning for retirement, they faced the rea ... Read More



U.S. Retirement Confidence Way Down as Investors Flock to Products, Services That Reduce Risk



U.S. Retirement Confidence Way Down as Investors FlockRetirement confidence seems to follow the trends of the global economy. At least, that’s according to one recent survey that looked at 12,000 workers and retirees in 12 European, North American, and Asian countries, including France, Germany, Hungary, Japan, the Netherlands, Poland, Spain, Sweden, China, the United Kingdom, the United States, and Canada—making this one of the largest studies of its kind. The study found that 65% of the participants believe futur ... Read More



Are You Programmed to Be a Successful Investor?



Are You Programmed to Be a Successful Investor? When it comes to investing, our retirement planning rests in our ability to make sound economic judgments based on mathematically quantifiable numbers. We weigh the financial risks and rewards, and then make our decision. Fortunately, or perhaps unfortunately, we are a little more complex when it comes to making decisions. For one thing, our emotions, developed after a lifetime of experiences, play a large part in how we act. This fight-or-flight tendency helps us make good (some might argue “safe”) decisions; it prevents us from swimming with sh ... Read More



Where to Find Certainty in the Stock Market with Cyprus on the Edge



270313_DL_clarkThere are a lot of great stocks out there with proven track records for making money. These are retirement stocks—brand-name stocks that pay dividends to create wealth. With dividend reinvestment, you can effectively compound this wealth in an easy, costless manner. One blue chip company that I’d like to highlight is Johnson & Johnson (NYSE/JNJ), which has an outstanding track record of increasing its dividends to shareholders and achieving capital gains on the stock market. I couldn’t get data for before 1972, but Johnson & Johnson has increased its annual dividends every year since then. Since 1972, the company’s stock has split three-for-one on two occasions, and two-for-one on four occasi ... Read More



Two Wealth Management Retirement Strategies to Reconsider



260313_DL_whitefoot From home repairs, to fixing cars, to crafts, publishing, and decorating—in a do-it-yourself culture, nothing is out of bounds. Thanks to low interest rates and underperforming assets with terrible returns, many who are on the cusp of retirement are looking after their own retirement plans in an effort to boost their retirement income. Meanwhile, those already in retirement are looking for ways to sustain their savings. Self-directed retirement investing is a great way to manage a retirement nest-egg. And there is a wide array of resources and tools available to help retirees going it alone to make informed decisions, including: online calculators (which help determine how much you need to save fo ... Read More



Build a Solid Retirement Portfolio in Less Than 60 Minutes



250313_DL_clarkGood investing doesn’t have to be complicated. If you want to save for retirement using the stock market, most individual investors would likely choose a selection of mutual funds or exchange-traded funds (ETFs). Going forward, a lot of people are viewing the stock market as very vulnerable; unless there is another war or the euro currency really does come apart, the next big pullback is likely to be an attractive buying opportunity for those able to put away some savings for retirement. A portfolio investment strategy is always crucial, and over the years, I’ve learned to be very conservative with equities. There’s always room for a few highfliers, but I don’t bet the farm on anything. Putting to ... Read More



What Retirees Wary of U.S. Banks Need to Know



Piggy Bank and canadian dollarsThose on the cusp of retirement are an untrusting lot. Apparently, you’re not getting the message that you need to save more for retirement. At least, that’s according to the financial services industry. In 2011, U.S. financial services firms spent over $1.0 billion advertising investment and retirement services. Despite the advertising blitz imploring us to entrust them with our retirement funds, roughly 58% of investors are turning a blind eye and don’t have a retirement plan. A full 39% don’t think investment returns will be high enough to provide decent retirement income regardless of how much they sock away. (Source: “Meeting the Retirement Challenge: New Approaches and Soluti ... Read More



Four Simple Steps to Finding the Perfect Retirement Investment Planner



210313_DL_whitefootFor those nearing retirement or already enjoying it, retirement planning and wealth management has become a dangerous place for unsuspecting seniors. After saving diligently for decades, baby boomers are relying on their retirement savings to take them through their golden years. At the same time, there are unscrupulous individuals out there selling financial products and touting retirement “wealth-creating” practices that can drain your accounts before you know it. What’s one of the biggest investment traps retirees should be wary of? According to the North American Securities Administrators Association (NASAA), one of the biggest threats to investors is “inappropriate advice or practices from ... Read More



Top Tax-Deferred Savings Tips for Retirees



180313_DL_whitefootRetirement isn’t the finish line when it comes to retirement savings; it’s just another stage, and it’s one that retirees need to adjust to. After decades of contributing to tax-deferred retirement savings plans that reduce taxes, you’re now withdrawing from those accounts and paying taxes at the regular rate. For those on the cusp of retirement, there’s more to making smart financial decisions than just making money. At this stage, there are a number of unique tax-planning opportunities that can help you save money over the long run. What’s next for your 401(k)? Workers about to retire should do everything they can do increase or max out their contributions to tax-deferred re ... Read More