Daily Gains Letter

retirement plan


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

By for Daily Gains Letter | Mar 27, 2013

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 occasions. The company’s last share split was on June 12, 2001, and the stock is definitely due for another split.

On the stock market, Johnson & Johnson recently spiked 10 points higher. And that’s just since the beginning of January. The company’s long-term stock chart is featured below:

dl_0327_image001Chart courtesy of www.StockCharts.com

Track record-wise, the stock is up well over 10-fold within the last 20 years, and that’s just capital gains; that doesn’t include dividends paid.

Everyone knows Johnson & Johnson’s consumer products; the company’s baby shampoo is for sale virtually everywhere. But Johnson & Johnson is much more than that. It’s dozens of popular healthcare brands, skin creams, and medicines. The company’s pharmaceutical research in oncology, contraceptives, immunology, and vaccines is extensive. Finally, Johnson & Johnson manufactures implants, diabetes care products, and joint replacement products. It’s a company with hugely favorable exposure to demographic changes and an aging population.

Of course, this is why Johnson & Johnson is rarely … Read More


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

By for Daily Gains Letter | Mar 22, 2013

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 Solutions for the Financial Services Industry,” Deloitte Center for Financial Services web site, March 7, 2013.)

According to a report by the Deloitte Center for Financial Services, pre-retirees either don’t want to think or they don’t believe that they’ll need professional advice with retirement planning. For many, the report contends, “This might be a short-sighted decision, given the complexity of retirement finances and the potential value an advisor could offer.”

Maybe; maybe not.

While it’s astounding to learn that 58% of investors don’t have a retirement plan, it’s not hard to see why so many distrust banks and other financial service providers. It’s tough to have faith in a system that was, by and large, responsible for the Great Recession.

It’s also tough to think that a sector that helped bring the nation to its knees can have the foresight to provide objective retirement planning advice and deliver on their promise to serve an individual’s retirement planning needs.

In this tough economic climate, … Read More


Four Simple Steps to Finding the Perfect Retirement Investment Planner

By for Daily Gains Letter | Mar 21, 2013

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 investment advisors.” (Source: “NASAA Top Investor Threats,” North American Securities Administrators Association web site, August 21, 2012, last accessed March 20, 2013.)

That’s right—investment advisors—though obviously not all retirement investment advisors (RIAs), just the unqualified ones. But spotting the “bad” ones is easier said than done, especially when you consider how many well-off, financially solid millionaires saw their retirement assets vanish at the hands of Bernie Madoff. If Madoff and others of his ilk have taught us one thing, it’s that serious problems can exist undetected in a qualified investment advisory firm.

Aren’t retirees supposed to be able to trust RIAs? Technically, yes. Investment advisors are licensed to give specific investment advice, as opposed to brokers, who simply handle securities transactions. And that’s where part of the problem lies.

Thanks to Bernie Madoff, RIAs are under increased scrutiny from both state regulators and the Securities and Exchange Commission. Between 2010 and 2011, state actions against investment advisor firms doubled and focused on general compliance practices and advice to … Read More


Top Tax-Deferred Savings Tips for Retirees

By for Daily Gains Letter | Mar 18, 2013

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 retirement plans, like individual retirement accounts (IRAs), 401(k)s, or 403(b)s. In 2013, you can contribute a maximum of $17,500, or $23,000 if you’re over age 50.

Depending on your tax bracket, every dollar deposited into a 401(k) could save you anywhere between $0.10 and $0.40 in income taxes for the year in which the contributions are made. For example, if you contribute $5,000 to a 401(k) the year before you retire, it would be taxed at 35%. Withdrawn in retirement, the funds are taxed at 15%, meaning the 20% difference in tax rates translates into a savings of $1,000.

Should You Delay Claiming Social Security?

For those already retired, you can consider delaying your Social Security checks. One benefit of waiting to collect Social Security until you’re older is that your checks will be larger. Even though you can start collecting Social Security any time between 62 and 70 years old, for every year you wait, your check will … Read More