Archive for September, 2007 Page 2 of 3

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CIOs Should Prepare Now For Boomers Retirement, Says Report

Posted on September 20, 2007 by Jason

Information Week, September 19th, 2007


CIOs need to get skills assessment programs going in their
organizations now in order to deal with impending shortages of tech
talent in the years to come.

Sounds logical, but it’s not as easy as it seems, says Phil Murphy,
a Forrester Research principal analyst and co-author of the new report
“Skills Assessment, a 21st Century Imperative for CIOs.”

That’s because CIOs spend a lot of their time and energy putting out
fires and dealing with nearer term issues, such as current IT projects
and budgets, so thinking ahead to future skills needs isn’t necessarily
on their radar screens.

But with declining numbers of younger people entering the tech field
and more baby boomer techies nearing retirement, it’s important to get
an assessment of the skills an IT staff has today and will need to
develop for the future, he says.

Because the IT industry is young — only about 40 years old –
it hasn’t yet experienced a full generation of employees retiring, he
says. “Assessments haven’t mattered much because they haven’t had to
deal with [massive retirements] much yet,” Murphy says.

For older IT workers getting ready to retire, it’s not so much
the hands-on tech skills, like Cobol and other legacy programming –
that will go sorely missing, it’s the depth of skills combined with
company, industry, and business experience that will create holes in IT
organizations, he says.

Read more of this article.

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U.S. House Passes FHA Reform Measures

Posted on September 20, 2007 by Jason

DS News, September 19th, 2007

The U.S. House of Representatives
has passed a comprehensive FHA reform package, which aims to bring new
life back into the affordable housing sector and to assist troubled
borrowers by providing the market with federally-insured refinancing
options.

The House overwhelming passed H.R. 1852, or the
“Expanding American Homeownership Act of 2007,” on Tuesday. Under the
terms of the Act, borrowers have the opportunity to buy homes at lower
down payments, refinance under safer loan options, obtain housing
counseling, and take part in the FHA’s enhanced reverse mortgage
program for seniors.

“A revitalized FHA program will help
future homeowners realize the dream of homeownership, and will prevent
many first-time and inexperienced home buyers from being pushed into
loans that are unaffordable or difficult to understand,” said Barney
Frank, Chairman of the the Financial Services Committee. “The bill we
passed today will help people across America because we have enacted
provisions to allow the FHA to insure loans in high cost areas.”

The FHA reform bill includes the following measures:

Lower Down Payments: Including zero or lower down payment loans.

Housing Counseling: Doubles the current funding level for housing counseling.

Subprime
Products: Directs FHA to provide mortgage loans to higher risk (but
qualified) borrowers, without authorizing unnecessary fee hikes on the
borrowers.

Read more of this article.

About Reverse Mortgages:  Learn all about reverse mortgages at NewRetirement.com

Home sales plunge in August

Posted on September 17, 2007 by Jason

Los Angeles Times, September 13th, 2007

Home prices fell in most Southern California neighborhoods and the
number of sales tumbled to a 15-year low for August — driven down by
tougher lending standards, mounting foreclosures and skittish buyers.

Sales for the month plunged 36% from a year earlier. What’s more, 71%
of the Southland’s ZIP Codes showed price declines, according to
figures released Wednesday by DataQuick Information Systems. The survey
excluded areas with 14 or fewer sales.
“Prices are falling everywhere,” said Christopher Thornberg, a former
UCLA business professor who is now a principal at Los Angeles-based
Beacon Economics.

In recent years, the housing market had been propped up by the
widespread use of home loans with low introductory teaser rates –
allowing prices to outpace income growth, he said. But with those
easy-credit loans all but gone, values are coming back into balance.

“People just don’t have the income to support these prices except
with crazy mortgages — and now the mortgage money is going away, and
people are walking away from their homes,” Thornberg said.

Nearly 9% of the homes sold last month were foreclosure properties, DataQuick reported, up from 2.2% a year earlier.

Most communities are seeing price declines, and the downtrend is
strongest in outlying suburban areas such as in Riverside County, where
affordable homes attracted droves of first-time buyers — many of whom
could not qualify for traditional fixed-rated mortgages.

Today, many of these same buyers who counted on rising home values
can’t refinance their loans and can’t make the escalating payments on
their adjustable-rate mortgages, forcing them into foreclosure and
putting yet more properties on the market.

Read more of this article.

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Double Warning That a Recession May Be on the Way

Posted on September 17, 2007 by Jason

The New York Times, September 15, 2007

The employment statistics and the bond market are combining to send out
a warning that has been heard only rarely in the past two decades: A
recession is coming in the United States.

The two charts show the double warning. Both charts warned of an
economic downturn before the 1990 and 2001 recessions, and they are
doing so again.

While each has arguably registered false warnings, they have never done so together.

The
first chart shows the difference between the yield on two-year
Treasuries and the Federal Reserve’s target rate for federal funds —
the rate on loans between banks. In normal times, the Treasury rate is
usually higher.

In bond market jargon, the opposite condition
is an inverted yield curve. And when it is very inverted, the recession
warning is sent.

At the widest spread this week, on Monday, the
yield on two-year Treasuries was down to 3.854 percent, while the fed
funds target rate was 5.25 percent. That difference, of 1.396
percentage points, is the largest since early January 2001.

It
was also in January 2001 that the Fed surprised the market with a
50-basis-point — or half a percentage point — reduction in the target
rate for fed funds. That move briefly cheered the stock market, but did
not prevent the recession that began in March.

Read more of this article.

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Corporate Pensions Working Again After Dire Straits In ’02

Posted on September 13, 2007 by Jason

CNN Money, September 13th, 2007

Say this much for financial crises: They never stop coming, and they never last forever.

For
proof, check out the U.S. pension system. A few years ago it seemed
headed for a crisis. Plans sponsored by S&P 500 firms were woefully
underfunded. Many plans were either frozen or in default.

Things
got so bad that some experts said the pension system was in worse shape
than Social Security. There was talk that only a massive bailout would
fix the problem.

You don’t hear that kind of talk anymore — mainly because the crisis turned out to be not much of a crisis after all.

A
report released last month by Goldman Sachs (NYSE:GS) shows that
defined benefit pension plans of S&P 500 companies were, in
aggregate, fully funded at the end of last year. It was the first time
in several years that S&P 500 firms had enough money in the plans
to cover their obligations.

Gains Across The Board

S&P
500 plans were funded at a 101% level last year, up from 93% in 2005
and well above the 84% level reported in 2002. The plans had an excess
of $8 billion in 2006. That compares to an $83 billion deficit in 2005
and a $165 billion shortfall in 2002.

Even companies considered poster children for shaky pension plans have bounced back. General Motors (NYSE:GM) GM was 119% funded at the end of last year, according to Goldman Sachs. Boeing (NYSE:BA) BA was 101% funded.

Read more of this article.

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Mortgage reset shock: Not so bad

Posted on September 12, 2007 by Jason

CNN Money, September 12th, 2007

The number of adjustable rate mortgages (ARMs) up for reset is set
to peak this fall, with an estimated $50 billion worth poised to adjust
to higher rates in October.

The housing and credit markets are
bracing for another blow, but recent trends may mean the reset shock
will be less painful than expected, especially if the Federal Reserve
drops its Fed Funds rate.

Ironically, the recent spike in defaults on ARMS is one reason why
borrowers with resetting ARMs should be better off. Fixed-income
investors are buying much safer investments, which has pushed up
short-term bond prices and brought down interest rates.

“Many
2/28 hybrid ARM interest rates are based on one-year treasury yields,”
said said Allen Hardester, a mortgage consultant in Maryland. “The new
rate will be more affordable.”

From a recent high of 5.02 percent
in mid-July, one-year Treasury yields have fallen to 4.09 percent as of
Sept. 10. The reset rates of ARMs are calculated using an average of
several treasury prices, but the final result should be around that
4.09 percent.

Add a margin of 2.75 percent (a common margin
according to Keith Gumbinger of publisher of mortgage information, HSH
Associates), and it totals an interest rate of 6.84 percent, compared
with 7.77 before.

Read more of this article.

About Reverse Mortgages:  Learn all about reverse mortgages at NewRetirement.com

Mortgage Refinancing:  Consider refinancing your existing mortgage to lower your monthly payment with help from NewRetirement.com

Mediterranean Diet May Boost Alzheimer’s Survival

Posted on September 11, 2007 by Jason

Yahoo News, September 11th, 2007

Consuming what’s known as a
Mediterranean diet — one loaded with fruits, vegetables, grains and olive
oil — may help Alzheimer’s patients live longer, a new study
suggests.

The observation comes after researchers tracked the dietary habits of
people diagnosed with early-stage Alzheimer’s. It follows on earlier work
by the same team that suggests these diets may lower the risk of
developing Alzheimer’s in the first place.

“This time, we found that Alzheimer’s patients who were following the
Mediterranean diet had longer survival as compared to those who were
following the diet less,” said study lead author Dr. Nikolaos Scarmeas, an
assistant professor in the department of neurology at Columbia University
Medical Center in New York City.

The study is published in the Sept. 11 issue of Neurology.

According to the American Heart Association, diets native to the 16
countries bordering the Mediterranean Sea varies somewhat region to
region. However, most regimens include a high intake of fruits,
vegetables, breads, cereals, potatoes, beans, nuts, seeds, and olive oil.
More than half of all fat-sourced calories in the Mediterranean diet come
from monounsaturated fats, such as olive oil. Dairy, fish, poultry, and
other sources of saturated fats are eaten at low to moderate levels, the
AHA say.

Heart disease rates in Mediterranean nations are lower than in the
United States, the AHA adds, although it’s not clear that diet alone is
responsible for the difference.

Read more of this article.

Medicare and Your Retirement:   Learn what Medicare will cover during your retirement, and whether you
will need Supplemental Health Insurance to cover other potential
medical costs.

Older Americans dump drugs when payments stop: study

Posted on September 11, 2007 by Jason

Reuters, September 11th, 2007

Some elderly Americans simply stop
taking their prescribed drugs when insurance plans cease paying
for them, U.S. researchers reported on Tuesday.

And when the benefits reset at the beginning of a new year,
many fail to resume taking their drugs, the team at the
nonprofit Rand Corporation found.

The findings suggest the same may happen when patients
enrolled in Medicare’s new “part D” prescription plan hit gaps
in coverage popularly known as the doughnut hole, they said.

“Prescription use falls significantly as patients reach
their benefit caps,” said Geoffrey Joyce, a health economist
who led the study at the research organization.

“Most of the drugs we studied help prevent long-term
complications of chronic disease so there are likely to be
adverse health consequences for seniors who hit their caps.”

Joyce and colleagues studied 60,000 retirees enrolled in a
private health plan offered by a large national employer in
2003 to 2005. They had a choice of two drug plans that offered
annual drug benefit caps of $1,000 or $2,500 and a third that
had no spending limit. Participants had a co-pay in each of the
plans.

Between 6 percent to 13 percent of the patients enrolled in
drug plans with caps reached their spending limits in each of
the years studied, with about half going uncovered for more
than 90 days.

Read more of this article.

Medicare and Your Retirement:   Learn what Medicare will cover during your retirement, and whether you
will need Supplemental Health Insurance to cover other potential
medical costs.

Reduce Your Retirement Risk

Posted on September 11, 2007 by Jason

The Motley Fool, September 11th, 2007

Sometimes, you have to embrace risk in order to reach your goals.
When you can eliminate risk and still get where you want to go,
however, you have the best of both worlds.

When it comes to saving for retirement, investors face many different types of risk.
Will you have enough money to support yourself when you’re no longer
working? Will your investments perform well enough? Will you have
unexpected expenses that eat up your entire nest egg? Combined with all
the challenges investors face in their daily lives, it’s not surprising
that many people don’t bother to prepare for retirement at all.

You can’t eliminate all of these risks. But when markets perform
well — as they have over the past several years — you may have an
opportunity to reduce one important risk all investors have to deal
with.

Have a flexible plan
When you first start saving for retirement, it’s good to have a general goal. For instance, if you’re looking to make your first million
before you retire, it’ll take you most of your career — 35.5 years –
if you can set aside $250 each month and earn 10% on your investments.

But you need to realize that having a goal and a plan to get there
is just a starting point. The assumptions you make will inevitably be
wrong. Some months you’ll save $500, and others you won’t save at all.
And the odds of getting exactly a 10% return over decades are just
about zero. There are plenty of stocks that have had higher returns,
even over long periods of time:

Read more of this article.

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Consider ‘integrated housing’ says planner

Posted on September 10, 2007 by Jason

Investment News, September 10th, 2007

Financial advisers should consider talking to their elderly clients
about the advantages of selling their homes and moving in with
relatives as a way to reduce overhead expenses.

This was among the points presented by veteran financial planner Karen Schaeffer on Sunday

Ms. Schaeffer, president of Schaeffer Financial Planning LLC in
Rockville, Md., said clients often miss out on the financial
opportunities of what she described as “integrated housing.”

“Of
course, it’s easier to live with your mother-in-law if your house is
built for it; that way everybody doesn’t have to watch Antique Road
Show,” she said during a morning session entitled: Planning for Senior
Clients: Housing, Health and Medicare Issues.

The conference,
which started on Saturday and runs through Tuesday, has attracted more
than 3,000 attendees from 26 different countries.

The attendance is up by 250 over last year’s gathering in Nashville.

Ms. Schaeffer, who also advised extreme caution when directing elderly
clients through a reverse mortgage, said the key is communication and
often involves talking with clients about issues that they might not
have ever considered.

“Instead of a reverse mortgage maybe mom
needs to sell her house and move,” she said. “You have to have those
conversations with your clients.”

While she acknowledged that
integrated housing might not work in all situations, Ms. Schaeffer said
advisers should try to avoid making a reverse mortgage the immediate
standby alternative.

“We all know that reverse mortgages will
get better as baby boomers enter retirement,” she said. “But why take
the money out of your home in the most expensive way possible?”

About Reverse Mortgages:  Learn all about reverse mortgages at NewRetirement.com

Downsizing and Relocation:  Consider whether or not your current home is the best place for you to retire at NewRetirement.com.

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