Briefly Noted

    5 Fund Strategies to Boost Retirement Income

    With long-term interest rates hitting historic lows, it’s getting harder for many investors—particularly those at or near retirement—to squeeze more income out of their portfolios. One potential solution is to look for income throughout the entire portfolio, even in the equity holdings. Here are five ideas to consider for maximizing the income-producing potential of a mutual fund portfolio:

    1. Equity-Income Funds: These funds focus on dividend-paying companies, which are typically more mature and generate consistent cash flows. Most dividends are paid quarterly in cash, so these funds can represent a relatively reliable income stream.

    2. Specialty Real Estate Funds: Real estate properties typically produce income from mortgage and lease payments, which can provide a reliable income stream.

    3. Convertible-Bond Funds: Convertible bonds are hybrid securities that offer much of the upside potential of the underlying stock and usually have a current yield that exceeds the dividend yield on the stock, albeit not as high as non-convertible bonds.

    4. Government, Muni or Corporate Bond Funds: These may be a particularly timely income-producing choice. As the economy continues to recover, we can expect corporate earnings to grow and state and local revenues to expand, conditions that typically translate into improved credit quality—thereby reducing investor risk and potentially increasing return.

    5. Ultra-Short Bond Funds: Ultra-short bond funds typically pay a higher rate of return than money market funds with little added risk. Because the average maturity of these funds is relatively short, their risk also is generally lower than a longer-term bond fund.
    Source: Jim Peterson, vice president, Schwab Center for Investment Research.

    Financial Planning:The 4 Biggest Year-End Pitfalls

    • Blowing your bonus. Too many Americans spend their hard-earned bonus all at once on a luxury item and don’t consider how to apply a bonus to their financial plan in a smart way, such as adding to savings.

    • Giving gifts without an eye to cutting your taxes. Many people do not fully utilize the annual exclusion for gifting amount ($11,000/$22,000 split gifting). Another financially astute approach to gifting is to use appreciated securities for year-end gifting instead of cash.

    • Cluelessness on AMT. Many individuals are unable to assess whether or not they will be clobbered by the alternative minimum tax (AMT). Understanding your possible AMT exposure allows you to accelerate or postpone deductions or income accordingly to minimize the tax.

    • “Playing Santa Claus” at the expense of your retirement plan. Many Americans make the mistake of focusing on holiday gift buying or travel first and then hope that they can figure out later how to scrape up the needed money for their retirement account.
    Source: The Zero Alpha Group (, a nationwide network for eight independent investment advisory firms.

    Updating Your Will: The Essentials

    If you have a will, you’re already in better shape than many Americans. But life isn’t static, and major events could have a major impact on your will and your estate planning documents. So it’s important to review and update your will regularly. Although there are many possible changes you may want to consider, make sure you also keep up-to-date records about the following essential items:

    • Names and addresses of the guardians for your minor children.
    • Funeral and burial arrangements.
    • Location of safe deposit boxes and details about keys, passwords, or combinations.
    • Location and number of any post office box, and where you keep the key.
    • Account numbers for all checking and savings accounts.
    • Names and addresses of any professionals (including accountants, attorneys, financial advisors, and stockbrokers) who could potentially assist your executor.
    • Location and policy numbers of all life insurance policies.
    • A list of credit card accounts and numbers.
    • Information on outstanding debts.
    • All property and other assets, with the location of deeds and titles.
    • Details about brokerage accounts and other investment vehicles.
    • A list of all retirement accounts with designated beneficiaries and the location of account statements.
    • Debts owed to you, with any proof that the debt exists.
    If you update your will, make sure the executor named in the will has a copy of the latest version, and keep the will in a safe but accessible place. Using a safety deposit box could be problematic, because it could be sealed upon your death.

    Source: Legend Financial Advisors, an investment advisory firm based in Pittsburgh, Pennsylvania.

    Budgets: Easier Said Than Done

    Over 60% of all Americans either don’t have a household budget or have difficulty sticking to their budget, according to new survey by the legal Web site

    While 70% of those surveyed said they have a household budget, nearly half of those who set a budget said they either had trouble sticking to that budget this year or completely gave up trying to follow it.