This time of year we are flooded with reminders, checklists, and predictions. Many are useful, but some are merely entertaining.
While there are many items related to your financial health that deserve attention at the beginning of the year, this might be a good time to order your annual free credit report.
Here are several “big picture” retirement themes I expect to hear more of in the coming year. I’ll come back later in the month with a post on personal retirement tactics.
I’m pretty sure that I resolved several years ago to stop making New Year’s resolutions. My track record at sticking to resolutions was abysmal.
Actually, I’ve done pretty well at hitting savings goals over the years, because I don’t rely on willpower. I use automatic savings—through my 401(k) at work and through preset automatic transfers from checking into investment accounts. These mechanisms are artificial willpower—a painless way to stiffen my backbone.
The economic slump we’re crawling out of has done big damage all over the place: to employment, home values, businesses, and, of course, investment portfolios.
Put charities on the casualty list, too. Charitable organizations have been hit in multiple ways. Demand for charities’ services has risen because of the tougher economic times. Charities’ investment portfolios and endowments have been hammered. And charitable giving has fallen because so many individuals have suffered declining incomes and assets. Boston College’s Center on Wealth and Philanthropy estimates that charitable giving by individuals in 2009 was $217.3 billion, down more than $25 billion from 2 years earlier.
In our household, we know how lucky we’ve been. We didn’t lose our jobs, and our investments have mostly recovered from the markets’ downturn. Knowing the pressures on charities—my wife worked in the nonprofit sector for much of her career—we’ve been discussing how to make sure our own contributions of dollars and time do the most good.
Coming back from lunch in our cafeteria (in keeping with Vanguard’s nautical theme, we call it the Galley), I ran into a co-worker (crew member) I’ve known since I joined Vanguard 14 years ago.
After exchanging quick updates on work and our children, he mentioned that while his kids were at one end of the “care spectrum,” his aging parents were at the other—and were occupying a lot of both his and his wife’s time and financial resources. Heading back to my office, I wondered why more isn’t said about this in the financial planning media. It’s not an unknown challenge—there are books, websites, news articles, and even a “Sandwich Generation Month.”
