With the women’s vote anticipated to be a huge factor in this year’s presidential election, this controversy has spawned a plethora of surveys and discussion regarding moms, work, and money.

[CLICK HERE to view the video, "Rosen comments spark flood of backlash," at CNNMoney.com, April 12, 2012.]

The Economic Decision to Stay Home

While the number of moms who stay home has dropped in the last few decades, what’s interesting is that the face of this demographic is different than it was in 1979. Today’s average stay-home-mom does not, in fact, look like Ann Romney during her prime mommy years. According to the U.S. Census, today’s stay-at-home mom is more likely to lack a high school degree, have a lower household income than working moms, and 27% are Hispanic.

However, some moms are choosing to stay home because it’s the more economically feasible choice for the household. When you factor in the cost of childcare, commuting and related expenses, more and more women are realizing that, economically, the family comes out better if they stay home.

And then there are others who have lost their jobs due to the economy and haven’t been able to find work since. According to the Bureau of Labor Statistics, about 177,000 women left the labor force in March as a result of layoffs, dismissals or voluntary exit, compared to 14,000 men who found work. Interestingly, during the early phase of the recession, women seemed to hang onto their jobs longer than men, prompting many to call the lay-off component of the economy a “mancession.” Since then, however, more women have been laid off and the opportunities in “female-dominated jobs” (namely teaching and retail) have been slower to return.

[CLICK HERE to read the article, "The Real Face of Stay-At-Home Mothers: Those Who Have No Other Financial Option," at Forbes.com, April 19, 2012.]

[CLICK HERE to read the jobs report, "Employment Situation Summary," at Bureau of Labor Services, April 6, 2012.]

[CLICK HERE to read the article, "Where have all the women's jobs gone?" at CnnMoney.com, April 20, 2012.]

The Plight of the Working Mom

Sallie Krawcheck, former CEO of Bank of America, recently offered this advice to working moms:

“I have a set of rules that I always enjoy sharing with women about working in business. The first is to choose your husband carefully. If you’re caught in a meeting and walk through the door late, what you want is a spouse who says, ‘Can I get you a glass of wine?’ versus ‘Where were you?’ with an eye roll.”

Pew Research recently recapped some of its research on working moms, including this interesting statistic: When asked in general how they feel about their time, 40% of working moms said they always feel rushed compared to only 26% of stay-at-home moms. In contrast, only 25% of working dads said they always feel rushed.

[CLICK HERE to read the recent interview, "Sallie Krawcheck on Taking the Fall - Again," at Marie Claire, April 17, 2012].

[CLICK HERE to read, "Women, Work and Motherhood," at Pew Research, April 13, 2012.]

Between (1) eye-rolling husbands, (2) rushing to fulfill both household and work responsibilities, and (3) not having the choice to work due to poor job prospects or simply because the family can’t afford it, it’s a tough road for women to establish a financial foothold in both today’s economy and culture.

http://on.mktw.net/J7on7u

What exactly does that mean?

It works like this.  Suppose you are retired from Ford and you are receiving a monthly pension.  Ford comes to you and says that if you want, they will replace your pension with a lump sum of money.  You can either choose to keep receiving your pension or you can take the lump sum.

Why is Ford doing this?

It’s very simple.  People are living longer, and longevity represents a significant risk to pension funds.  Ford is attempting to transfer some of that risk away from them towards the retiree.  It’s a real problem for companies that have pension plans, and Ford is the first company I’m aware of to begin taking action to address these types of risks.

You can bet that other companies are watching how this process unfolds very closely.  Like Ford, they would LOVE to get out of the pension plan business, and if this approach by Ford works to any degree, you can bet they’ll follow suit.

The key point for you is that if you are retired, and you receive a pension buyout option, you will want to think very carefully before you take that option.  It may make all the sense in the world, or it may be the worst mistake you can make.  This is definitely one of those areas that you want to sit down with your financial advisor before taking action.  Your retirement security could be at stake.

That’s the word from Dr. Alexandre Kalache, an expert on the aging demographic and President of the International Longevity Centre in Brazil. According to Dr. Kalache, “Statistics show all too clearly why we cannot afford to stick our heads in the sand and continue to view older people as a sickly burden rather than a valuable resource.”

Kalache refers to “productive aging” as a means not only to emerge from our current economic setback, but as the only way we can truly prepare for the epidemic of aging populations on a worldwide scale. We already know that the generation nearing retirement age tends to have high educational levels and a lot more experience than their younger counterparts, thus maturity has an important role to play in the future of our economic growth.

[CLICK HERE to read the article, "What if we fail to provide for our ageing population?" at World Economic Forum, April 5, 2012.]

[CLICK HERE to read the article, "How the Baby Boomers Are Reinventing Old Age" at Huffington Post, April 4, 2012.]

In its global brief for World Health Day (April 7), the World Health Organization stated that good health must lie at the core of any successful response to aging. “If we can ensure that people are living healthier as well as longer lives, the opportunities will be greater and the costs to society less,” the report observed.

[CLICK HERE to read the World Health Organization report, "Good Health Adds Life to Years: Global brief for World Health Day 2012," at http://www.who.int.]

Senior Income
The U.S. Social Security program was established 130 years ago, back when few people lived to age 65. Today, few people even expect to retire by age 65. In Brazil, where pension income has been available for only the last 15 or so years, seniors use their money to provide for their families. They buy food and resources (such as a sewing machine) to help their children make a living. Because of this, they are a critical resource to the family, which has a vested interest in keeping them healthy, happy and involved.

While not suggesting that seniors work 9-to-5 until age 95, Dr. Kalache suggests we modify the way we approach work and long-term careers. Workers who live long lives should not burn out, but rather remain productive, innovative, and valued.

Here in America, as well as all over the world, the youth culture is glorified and celebrated. Even in the workplace where experience should reign, youth has its advantages. A recent report by the Global Agenda Council on Ageing Society observed that, “in a society with fewer younger people relative to mature workers, an organization’s ability to succeed may hinge on whether it can attract and retain mature workers.” The publication offers the following recommendations to this end:

• Establish employment conditions and compensation terms that make it desirable to keep working
• Create age-friendly working environments
• Include flexible working practices, such as career breaks, part-time work and flexi-place working
• Encourage health and well-being promotion, such as supervised fitness programs
• Offer continuous learning opportunities to update skills

[CLICK HERE to read the report, "Global Population Aging: Peril or Promise?" at the World Economic Forum website, http://www.weforum.org, 2012.]

Whether you work well past traditional retirement age because you need the income or because you simply can’t imagine being idle and unchallenged for potentially another 30 years after you retire, it appears that productive aging is an inevitable part of our future. Articles are published every day about how there are currently jobs available, but employers can’t find qualified candidates to fill them. It just seems like perhaps some of the more valued qualities in older workers have been overlooked.

If you’re considering earned income as a valid component of your financial future after retirement age, give us a call to discuss how that strategy can compliment the rest of your portfolio.

1 Dr Alexandre Kalache, “What if we fail to provide for our aging population?” April 5, 2012.

So with this post we’re focusing on positive stories in the news lately. Some of these issues are highly controversial, but even in the wake of great debate, we should recognize the potential for what’s good and what’s possible.

Random Acts of Corporate Compassion

Corporations tend to give away money – at least partly for the tax deduction, but it’s appreciated nonetheless. And, most of the time, they’ll admit when they’ve made a mistake and compensate customers or shareholders in kind. So I enjoyed reading this news story about a compassionate clerk who works for bankrupt American Airlines. She realized a frequent flyer businessman would miss his flight – albeit by and large through his own fault. Regardless, she did some quick thinking to expedite his route to the boarding gate under the radar so as not to upset other customers. You can read about it here:

[CLICK HERE to read, “Is Kindness a Strategy?” at Harvard Business Review, March 22, 2012.]

Sure, her methods may be suspect, but her heart was in the right place. That might be something you could say about a lot of what’s going on in America today. Both the government and large corporations appear to be trying to balance the scales between helping people and still making a profit.

Take, for instance, Bank of America’s pilot plan to help curb the sting of foreclosure by renting houses back to their previous owners. On one hand, it may be aggravating to be a homeowner in this situation. But on the other hand – logistically – avoiding the expense of having to move, providing stability for a family to stay in its home, and the advantage of paying less each month than the previous monthly mortgage … that’s got to be worth something.

[CLICK HERE to read, “BofA Tests an Option to Foreclosure,” at The Wall Street Journal, March 22, 2012.]

Now let’s consider the greatly debated Patient Protection and Affordable Care Act (PPACA)–. The article below points out some interesting improvements underway regardless of whether or not the Act is repealed.

“This is probably the most transformative period I’ve lived through,” says Dr. David Longworth, chairman of the Medicine Institute at Ohio’s Cleveland Clinic. He was referring to the number of insurers, hospitals, and doctors forming alliances and adopting new procedures to provide higher quality care and reign in exploding health care costs. According to the chief clinical officer at insurer UnitedHealthcare, “This changes the business model, changes the reward and payment system for better care and better health at lower cost.”

Granted, for every pro-PPACA article there’s a scathing repudiation, but for now we’re seeking examples of what good can come from what’s generally considered bad – in this case, exploding health care costs. Indeed, if insurers are working with medical providers to bring costs down in the spirit of the current law, well that’s a good thing, right?

[CLICK HERE to read the article, “Obamacare Has Already Transformed U.S. Health Care” at BusinessWeek.com, March 22, 2012.]

And finally, even the IRS is doing its part to become a kinder, gentler government entity. It recently announced penalty relief for qualifying taxpayers through its Fresh Start plan. This latest announcement on the heels of our depressed economy does give one pause to ask, will wonders never cease?

[CLICK HERE to read the article, “IRS cuts penalties; but don’t forget the forms,” at MarketWatch.com, March 13, 2012.]

But because driving is such a pervasive part of American culture, we can’t ignore the impact higher gas prices have on our personal budget. This is one reason why consumer sentiment sunk lower in mid-March. Against expectations of a small increase, the Thomson Reuters/University of Michigan preliminary index of consumer sentiment fell to 74.3 from 75.3 last month. That’s the lowest level thus far this year.

According to Bernard Baumohl, chief global economist at the Economic Outlook Group, gas prices play havoc on consumer sentiment more so than other inflationary signs. “Less than 5% of take-home pay actually goes to paying for gasoline,” Baumohl pointed out in a recent interview with Knowledge@Wharton, “But gasoline prices have a much greater psychological impact on consumers because they see on a daily basis how much the price of gasoline goes up. It’s advertised on so many signs.” The uptick in prices thus has a “palpable impact” on consumers.

[CLICK HERE to read the article, “Consumer Sentiment in U.S. Drops on Gasoline Prices: Economy” at Bloomberg.com, March 16, 2012.]

[CLICK HERE to read the article, “Beyond the Gas Price Blame Game, a Thorny Case of Supply vs. Demand,” at Knowledge@Wharton, March 14, 2012.]
Was Last Year Really That Bad?
The American Institute of Economic Research (AIER) recently published findings about inflation that may strike closer to home. The entity claims that annual inflation numbers appear more contained due to the  impact that technology and globalization have on big-ticket items.

For example, the average inflation rate for 2011 was 3.02%.[1][1] However, check out the 2011 price increase of some of the every day items we spend money on, courtesy of AIER’s Everyday Price Index (EPI):

· Ice cream, 9.0%

· Peanut butter, 27%

· Beef, 18%

· Coffee, 19%

· Video rentals, 15%

Somehow, while we notice we’re paying those higher prices in the grocery store, they don’t aggravate us quite as much as a twenty-cent increase in gas prices.

[CLICK HERE to read, “The EPI Reflects Basic Economic Change” at AIER.org, March 1, 2012.]

On one hand, we don’t want to pay higher prices at the supermarket and gas pump, because that digs into our already strained household budget. But on a larger scale, we want to promote economic growth – which is why the Federal Reserve Board is keeping base interest rates so low – to help fuel new jobs in the country. Higher prices can at times be highly annoying and inconvenient, but in moderation it’s a good thing.

[CLICK HERE to read, “Gasoline lifts U.S. inflation, dents confidence” at Reuters, March 16, 2012.]

[CLICK HERE to check out an upcoming series of lectures by Fed Chairman Bernanke about the Federal Reserve and the Financial Crisis. You can find out more and access links to the live video at FederalReserve.gov. The live lectures are scheduled for 12:45 p.m. ET on March 20, 22, 27, and 29^th, with transcripts and video recordings available later.]

The Federal Reserve has observed that the recent spike in oil prices will likely push up inflation – but only temporarily. As such, it predicts that inflation is likely to run at or below its 2% target over the “medium-term.”

More than half of America – 59% – is on a social network.² In fact, social media is so mainstream that many people have grown tired of it. They check their Facebook wall once or twice a month. They occasionally track blogs and tweets without posting  comments. Yet regardless of how active users may be, just by opening an account on a company’s website they become a commodity for that company. And commodities are bought, sold, traded and – as is perfectly demonstrated through the new Facebook IPO – used to set a value for a company’s worth.

Scheduled to hit the sales block in May, Facebook’s proposed public offering values the company at $75 billion to $100 billion. For a start-up founded in 2004 by a college-dropout, that’s a pretty astounding achievement. According to its filing, the social media site boasts 845 million monthly active users who contribute 250 million photo uploads and 2.7 billion comments a day.³

According to a recent article from Wharton, the Facebook IPO will make many of its employees enormously wealthy – and that’s one reason why the IPO may be a tough act to follow. Wharton legal
studies and business ethics professor, Kevin Werbach, observed that “It’s  difficult to retain employees who have already made millions of dollars on their stock options.” You can read more analysis of the Facebook IPO at the links below.

[CLICK HERE to read the article, “The $100 Billion Facebook Question,” at Knowledge@Wharton Today, February 2, 2012.]

[CLICK HERE to read, “The Ultimate Guide to Facebook’s IPO,” at Bloomberg Businessweek, February 9, 2012.]
[CLICK HERE to view the video, “3 things you don’t know about Facebook,” at CNNMoney.com, March 2012.]
Zynga is the social gaming developer that hosts “Farmville,” “Cityville,” and “Words with Friends” on Facebook, currently generating 12% of Facebook’s revenues. About 240 million users play a
Zynga game at least once a month, a statistic that helped launch its own IPO valued at around $7 billion back in December 2011.⁴

[CLICK HERE to view the video, “Zynga launching game network,” at CNNMoney.com, March 2012.]

[CLICK HERE to read, “Zynga Dumps the Training Wheels,” at Bloomberg Businessweek, March 1, 2012.]
Just recently Yelp, an online consumer-reviews site, offered an IPO valued at $900 million. The company’s shares began trading at $15 on Friday, March 2, 2012. The eight-year old global website provides a platform for consumers to share their personal opinions of  just about anything, from restaurants and hotels to doctors, churches, high schools and even strip clubs. Yelp attracts 66 million users a month and, by the end of 2011, had posted 25 million personal reviews.⁵

[CLICK HERE to read, “Yelp soars 66% on first day of trading after IPO,” at USA Today, March 2, 2012.]

[CLICK HERE to view the video, “Yelp IPO soars! Are you kidding me?,” at CNNMoney.com, March 2, 2012.]
New trends and opportunities hit the market every day. Please contact us if you’d like to discuss suitable alternatives for your financial future.

¹ comScore, January 2012.
² Pew Research, June 16, 2011.
³ SEC.gov, February 1, 2012.
⁴ CNNMoney.com, “Zynga shares close below IPO price,” December 16, 2011.
⁵ USA Today, “Yelp soars 66% on first day of trading after IPO,” March 2, 2012.

Apparently, global dependence on oil has spurred innovation in new oil production techniques in the United States. In fact, these unconventional technologies have helped the U.S. become the lowest-cost provider of oil and natural gas in the world, for the first time in 40 years.

[CLICK HERE to read the article, “What's driving oil prices up?” at Fidelity Viewpoints, March 2, 2012.]

[CLICK HERE to view the video, “Dow CEO: U.S. can be an energy exporter,” at CNNMoney.com, March 2012.]

Other experts are keeping a closer eye on military turmoil, nonetheless. While there’s recently been an oil embargo on exports from Iran by Western nations, the general opinion is that this is unlikely to have a significant impact on price since other nations, such as China, are lined up to buy Iranian oil. However, since Iran sits on the most globally strategic supply route for oil supply (the Straits of Hormuz in the Persian Gulf), the threat of military conflict remains a huge issue.

[CLICK HERE to read, “Oil and Gasoline Prices Rise Again: How High and How Long?” at Advisor Perspectives, March 8, 2012.]
[CLICK HERE to read the report, “Oil Market Dynamics and the Fear Factor” at CME Group, March 2, 2012.]

Gas Taxes
As if rising oil prices isn’t enough, a new study reveals that some states could stand to update their gas tax to produce more revenue for state construction projects. The 50-state analysis report, conducted by the Institute on Taxation and Economic Policy, calls for some states to modernize their state gas taxes and peg those taxes to grow with the cost of transportation construction. States that were cited as remiss in updating gas taxes include Virginia, Maryland, New Jersey, Massachusetts, Iowa, Oklahoma, South Carolina and Arizona.

[CLICK HERE to read, “Study Sees State Gas Tax Rate Go Down 20%,” at TVtax.com, February 26, 2012.]

For now, it appears we could be in for another few months of more expensive gasoline, but the expectation is that prices will plateau later in the year. Please contact us if you’d like to discuss ways to make the most of your money in 2012.

¹ Institute on Taxation and Economic Policy, “Building a Better Gas Tax,” 2012.

• Start (or add to) an emergency fund. Many people don’t have a dedicated rainy day fund, only the presumption that they might have enough cash in case of a financial tight spot.
• Invest in yourself. You could put the money toward education, career training, personal improvement, or some sort of personal experience with the potential to enhance your life.
• Use it for a down payment on a  car or truck or real property. Real property represents the better financial choice, but updating your vehicle may have merit – cars do wear out, and while a truck also ages, it can help you  make money.
• Put it into an IRA or workplace retirement account. If you haven’t maxed out your IRA this year or have a chance to get an employer match, why not?
• Help your child open up a Roth IRA. Has your under-18 son or daughter worked and earned money this year? He or she can open a Roth IRA. Your child’s contribution limit is $5,000 or the amount of his or her earned income for 2012 (whichever is lower). You can actually make this Roth IRA contribution with your own money if your child has spent his or her earnings.²
• Buy some warehouse memberships. If you have a large family or own a small service business, why not sign up to save regularly?
• Pay down debt. Always a smart choice.
• Establish a financial strategy. Some financial advisors work on a fee-only basis. They can perform a review of your current financial situation and give you pointers for the future for roughly $1,000 with no further obligation.¹
• Pay for that trip in advance. Instead of racking up a bigger credit card bill, consider pre-paying some costs or taking an all-inclusive trip (some are not as pricey as you might think).
• Get your home ready for the market. A four-figure refund may give you the cash to spruce up the yard and/or exterior of your residence. Or, it could help you pay a professional who can assist you with staging it.
• Improve your home with Create your own food bank. What if a hurricane or an earthquake hits? Where would your food and water come from? Worth thinking about.
• Write a proper will. Your refund could pay the attorney fee, and the will you create might end up more ironclad.
• See a doctor, optometrist, dentist or physical therapist. If you haven’t been able to see these professionals due to your insurance situation or your personal cash flow, the refund might provide a way.
• Give yourself a de facto raise. Adjust your withholding to boost your take-home pay.
• Pick up some more insurance coverage for cheap. The typical flood insurance policy in a low-to-medium risk area costs less than $1,000 (and sometimes less than $500). A $1 million personal liability umbrella policy can usually be bought for $400 or less.²
• Pay it forward. Your refund could turn into a charitable contribution (deductible on your 2012 federal tax return if you itemize deductions).

In the past two years, federal tax refunds have averaged about $3,000. That’s a nice chunk of change – and it could be used to bring some positive change to your financial life and the lives of others.²

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. 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. This is not a solicitation or a recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 www.dailyfinance.com/2012/03/23/tax-refund-surprising-smart-ideas/#photo-1 [3/23/12]
2 www.kiplinger.com/slideshow/10usesforyourrefund/1.html [3/12]

What’s interesting, though, is that you’re more likely to spend more than that 80% during the first phase of retirement, and less than 80% in the latter years. The early years of retirement tend to be the most expensive because new retirees are healthier and more mobile. While daily transportation expenses may decline since you’re no longer commuting to work, you may have increased expenses if you plan on extensive travel. According to the EBRI study, spending on things like vacations and entertainment tend to be higher for younger retirees. ¹

[CLICK HERE to read “Are you saving too much for retirement?” at Reuters.com; November 30, 2011.]

[CLICK HERE to read the report, “Expenditure Patterns of Older Americans, 2001-2009,” from Employee Benefit Research Institute, February 2012.]

As you get older, your spending habits will change. For example, early on, most retirees spend about 9%-11% of their income on health care. But once they get around age 85, that percentage ncreases to about 18%.¹ While your health care expenditures may increase, spending on entertainment, transportation, and even clothes and food will likely decrease. Consider these numbers¹:

· The average household headed by someone age 45 to 54 spends 57,788 a year

· Average expenditures for the 55-to-64 age group are $50,900

· From age 65 to 75: $41,434

· Households headed by those over 75: $31,529

That means that even if you do need 80% or more of your working income in your first years of retirement, it’s not likely you’ll need that forever.

Tips for Saving

General wisdom says you should start planning for your retirement when you get your first job and can participate in a 401(k) plan. However, as you get older, you have to ramp up those plans and efforts. The article below from US News & World Report gives you a step-by-step roadmap to follow to properly plan for retirement needs at appropriate times in your life.

[CLICK HERE to read the article, “10 Important Ages for Retirement Planning,” at US News & World Report, February 21, 2012.]

Saving for retirement isn’t easy. One way financial theorist/psychologist Daniel Goldstein advocates staying motivated is by taking a look at your future self. Not just in terms of what you’ll own and be able to do, but also at what you will physically look like. In a published paper, he tested levels of commitment to retirement savings goals by showing participants interactive pictures of themselves that had been aged by 20 or 30 years. Apparently, actually seeing what you may look like as a senior can be very motivating.

If you own an iPhone, iPod touch, or iPad, you can try out this exercise for yourself with an app from AgingBooth. Check it out at the link below.

[CLICK HERE to read the article, “Retirement tips: Here’s how to save more now,” CBSnews.com, February 21, 2012.]

[CLICK HERE to download, “AgingBooth,” at PiVi and Co. ($0.99), February 2012.]

Give us a call for help finding ways to both get motivated and plan for your different phases of retirement.

¹ Employee Benefit Research Institute, “Expenditure Patterns of Older Americans, 2001-2009,” February 2012.

But here we are, three years later, with the Dow pushing 13,000. That’s a gain of 98% in just three years. (Notice how we have a gain of 98% and it’s not enough to make up a loss of 53%. Once again, we learn how losses hurt more than gains help.)

The question is…how long will the market continue to rise?

History tells us that bear markets (a market loss of 20% or more) occur about every 3 years or so¹. The timing for the market to turn is certainly ripe. But will it? Will the market move from bull to bear or won’t it?

As I look ahead, I can certainly see some things to be worried about:

• Our Government continues to spend money it doesn’t  have, driving up the deficit.
• Europe is still a mess, and you haven’t seen the end of  Greece yet.
• The derivative market (what brought us to our knees in  2008) is actually bigger today than it was in 2008.

None of these issues bode well for a continued bull market run.

On the other hand, I’m not reading yet where everyone has jumped on the market wagon either. Normally, you see everyone and their brother buying into the market before it goes South, and I still see people scared about investing in the stock market.

So which way will it be? My suspicion is that we’ll see a significant market drop before the end of the year. Time will tell if I’m right.

¹Digging out from Bear Markets – What History Tells Us, DiMeo Schneider & Associates, L.L.C.. Sep. 2009. WEB < http://www.dimeoschneider.com/documents/Research-digging-out-from-bear-markets-%E2%80%93-what-history-tells-us-130.pdf>