COLUMN: Don't get tricked! Follow the money trail
www.waltonsun.com
October 30, 2010
Given the particularly divisive nature of 2010 politics it is important to remember money is neither red nor blue but in this country ? green. Heeding Deep Throat?s admonition to follow the money makes sense when choosing sides.
In the Florida gubernatorial race, we have Alex Sink. As chief financial officer, Ms. Sink instituted several changes beneficial to Florida seniors, investors and state employees. Over the last four years, Ms. Sink aided Sunshine state seniors and investors by increasing suitability standards for fixed annuity purchases.
She also instituted more plain-English disclosure language for any proposed fixed annuity exchange. Fixed annuities often have steep (up to 15 percent) surrender charges concealed from purchasers. Compounding the problem is investors, often seniors, replace an existing annuity whose surrender period has lapsed with a new annuity with a brand-spanking new surrender period.
Follow the money.
457 plans are the government counterpart to 401(k) plans in the private sector. For years, variable annuities were standard issue 457 plan options.
On the downside, variable annuities stick participants with much higher annual costs compared with mutual fund and, like their fixed cousins, have steep surrender charges. Alex Sink augmented 457 plan investment choices by adding T.Rowe Price as an option and allowing self-directed investors to invest through Charles Schwab?s platform. Generally we have dissuaded clients from participating in Florida 457 plans but no longer.
Follow the money.
If you want to really, really tick off your wife?s Tea Party aunt ask her to name the last president to lower taxes by $118 billion. Odds are the answer will be a Bush or Reagan. Make sure she?s sitting down when you point out it was President Obama. Lost in the election rhetoric about the evil stimulus package most Americans simply overlooked their tax cut. Give the Obama administration credit; they designed the cut to go unnoticed. Their tack was that by reducing the amount withheld from each paycheck folks would spend rather than save which, in turn, would stimulate the economy. Some economists applaud the Obama crew?s idea but politically it sucked; less than 10 percent of Americans realize their taxes are lower (NYTimes/CBS poll).
Follow the money
For 73 million Americans their primary way to save for retirement is via a defined contributions plan. As head of the House committee on Labor and Education, Representative George Miller exposed in Congressional hearings the hidden costs of defined contribution plans-401(K) and 403(B). Recently the Department of Labor announced that retirement plan providers must spell out all individual and general expenses deducted from an employee?s retirement account. These regulations will not take effect until January 2012 so it is incumbent that the new Congress does nothing to hinder these common-sense regulations.
Follow the money.
Fees drive performance. If you want to give your money away, be my guest.
Any investment professional or Congressional demagogue that blows that off doesn?t have your best interests in mind.
According to family legend Deep Throat was a menagerie of sources with Mark Fell being at the epicenter. Former Georgia Senator Herman Talmadge and my dad were guests on a South Georgia quail hunt and Talmadge alluded as much. His rationale was the Deep Throat character would increase book sales and box office revenue.
Follow the money.
Buz Livingston is a certified financial planner. He operates Livingston Financial Planning Inc. focusing on hourly financial planning and investment management. Contact him directly at 850-267-1068 or at buz@Livingstonfinancial.net
www.waltonsun.com
October 30, 2010
Given the particularly divisive nature of 2010 politics it is important to remember money is neither red nor blue but in this country ? green. Heeding Deep Throat?s admonition to follow the money makes sense when choosing sides.
In the Florida gubernatorial race, we have Alex Sink. As chief financial officer, Ms. Sink instituted several changes beneficial to Florida seniors, investors and state employees. Over the last four years, Ms. Sink aided Sunshine state seniors and investors by increasing suitability standards for fixed annuity purchases.
She also instituted more plain-English disclosure language for any proposed fixed annuity exchange. Fixed annuities often have steep (up to 15 percent) surrender charges concealed from purchasers. Compounding the problem is investors, often seniors, replace an existing annuity whose surrender period has lapsed with a new annuity with a brand-spanking new surrender period.
Follow the money.
457 plans are the government counterpart to 401(k) plans in the private sector. For years, variable annuities were standard issue 457 plan options.
On the downside, variable annuities stick participants with much higher annual costs compared with mutual fund and, like their fixed cousins, have steep surrender charges. Alex Sink augmented 457 plan investment choices by adding T.Rowe Price as an option and allowing self-directed investors to invest through Charles Schwab?s platform. Generally we have dissuaded clients from participating in Florida 457 plans but no longer.
Follow the money.
If you want to really, really tick off your wife?s Tea Party aunt ask her to name the last president to lower taxes by $118 billion. Odds are the answer will be a Bush or Reagan. Make sure she?s sitting down when you point out it was President Obama. Lost in the election rhetoric about the evil stimulus package most Americans simply overlooked their tax cut. Give the Obama administration credit; they designed the cut to go unnoticed. Their tack was that by reducing the amount withheld from each paycheck folks would spend rather than save which, in turn, would stimulate the economy. Some economists applaud the Obama crew?s idea but politically it sucked; less than 10 percent of Americans realize their taxes are lower (NYTimes/CBS poll).
Follow the money
For 73 million Americans their primary way to save for retirement is via a defined contributions plan. As head of the House committee on Labor and Education, Representative George Miller exposed in Congressional hearings the hidden costs of defined contribution plans-401(K) and 403(B). Recently the Department of Labor announced that retirement plan providers must spell out all individual and general expenses deducted from an employee?s retirement account. These regulations will not take effect until January 2012 so it is incumbent that the new Congress does nothing to hinder these common-sense regulations.
Follow the money.
Fees drive performance. If you want to give your money away, be my guest.
Any investment professional or Congressional demagogue that blows that off doesn?t have your best interests in mind.
According to family legend Deep Throat was a menagerie of sources with Mark Fell being at the epicenter. Former Georgia Senator Herman Talmadge and my dad were guests on a South Georgia quail hunt and Talmadge alluded as much. His rationale was the Deep Throat character would increase book sales and box office revenue.
Follow the money.
Buz Livingston is a certified financial planner. He operates Livingston Financial Planning Inc. focusing on hourly financial planning and investment management. Contact him directly at 850-267-1068 or at buz@Livingstonfinancial.net
Last edited by a moderator:
