A recent U.S. Supreme Court ruling provides much needed guidance on the issue of whether bankruptcy protection is afforded to inherited IRAs. While the bankruptcy protection afforded to ERISA qualified plans (as well as contributory and rollover IRAs) is clear the protection given to inherited IRAs hadn't been as well-defined. In Clark, et ux v. Rameker the U.S. Supreme Court [...]
A couple of recent studies highlight the (willful?) financial ignorance of the American public: The audit confirmation service Confirmation.com polled college-educated investors about the Bernie Madoff fraud. The findings are interesting: 27% of respondents never heard of Bernie Madoff or are aware he perpetrated a stock market fraud 50% of respondents between the ages of 18 and [...]
Behavioral finance suggests the power of emotions sways and often overrules our rational, logical minds. These emotions are often (but not always) inherited from and influenced by our parents through "money scripts" - ingrained, often unconscious beliefs we hold about money. Scripts may include beliefs about wealth, poverty, budgeting, spending, saving, charitable giving, investing, protecting/insuring, [...]
Today Pope Francis called for governments around the world to redistribute wealth to the poor in a new spirit of generosity to help curb the "economy of exclusion." He called on the United Nations to promote a "worldwide ethical mobilization" of solidarity with the poor - to promote a more equal form of economic progress [...]
Years ago the folks at Morningstar (the giant investment complex best known for their mutual fund research) began popularizing the investor gap - the difference between time-weighted returns (the returns of an investment) and dollar-weighted returns (the returns of an investor owning the investment). MorningstarAdvisor (a robust offering tailored to professional advisors) recently updated the research by noting some interesting [...]
Apparently the IRS is too busy administering Obamacare and auditing non-profits with Tea Party ties to notice their literature is inaccurate.
The problem with Federal entitlement programs is they're outdated. SS benefits at age 65 were fine when life expectancy was 67. Unemployment benefits were fine when job loss was frictional. In today's America retirees are living longer. The unemployed are out of work for longer due to structural changes. Social safety nets necessarily become a fiscal burden. One [...]
This survey from the Employee Benefit Research Institute offers some sobering statistics on the financial unpreparedness of the majority of Americans when it comes to their retirement. Sadly rather than a Darwinian solution our "leadership" in Washington will continue to attack and punish responsibility and success by taxing those of us who eschew the 120" TV in favor [...]
One of the most attractive features of the Roth - the ability to avoid Required Minimum Distributions ("RMDs") - is under attack by the Obama White House. Under the clever euphemism of "harmonizing Roth RMD rules with other retirement accounts" President Obama's fiscal 2015 budget calls for a provision that would require Roth IRAs to [...]
We've all heard the adage "it's a marathon - not a sprint." Sadly in our instant gratification society too many of us miss the importance of the sentiment. Investors often fall victim to impatience - usually through fear of missing out or falling behind. Emotional barriers to smart behavior are real and shouldn't be minimized [...]