The road to a comfortable retirement is full of risks, and they don't end when you stop working. As an investor, you are probably aware of market risk. You might also have considered longevity risk – the risk that you could outlive your retirement assets.
Here are four additional risks that may be worth considering, whether you are in the accumulation phase of your retirement journey or are already spending down your savings.
Inflation. The inflation rate has been relatively low over the last five years, averaging about 2.25 percent per year. But even that level can eat into the purchasing power of your savings. And long-term inflation trends have been higher, averaging 2.85 percent annually over the last 30 years. Although you may want to tilt your portfolio toward more conservative investments after you retire, you still might allocate some assets to stocks and other investments that have the potential to outpace inflation. Of course, all investments are subject to market fluctuation, risk, and loss of principal. When sold, they may be worth more or less than their original cost.
Madam C.J. Walker, Johnson Products, Pro-line and SoftSheen are all companies that have benefited greatly by providing products for black hair. These entities lead the way for other firms to profit from the industry as well. Corporations such as L'Oreal and Pantene seized the opportunity to expand their business into the market by leveraging their financial strength and distribution network. Many of the smaller black-owned companies were acquired by the major corporations and positioned as divisions.
In last week's column detailing HINO (Hair Industry Night Out), state Rep. Antonio Parkinson pointed observed that there is a natural movement going on outside of hair care; more and more people want to be closer to nature and anything that has to do with lifestyle or healthcare. As women increasingly move toward embracing their natural hair and leave behind damaging processing and/or chemicals, styles are ranging from natural curls to locks and pressing/flat iron to afros.
Feeling liberated, many women now wonder why they waited so long to embrace their natural hair. Along with this movement come myriad business opportunities.
In 2013, the U.S. Supreme Court settled a case between a widow and her deceased husband's former wife regarding who would receive the man's federal employee insurance benefits. The judges ruled in favor of the first wife, even though the couple had been divorced for more than 10 years when he died, because she was still the designated beneficiary on his policy.
Some people may not be aware that the assets in most bank accounts, retirement plans, and insurance policies convey directly to the people named on the beneficiary forms, even if they are different from the people named in their wills or trusts. Others simply forget to make the appropriate changes in writing.
If your beneficiary forms are out of date – and your intentions somehow become a matter of dispute – a state and/or federal laws or the administrator's plan documents could ultimately determine who receives your assets.
From being the founder of the Block Party for Peace to the Community Baby Shower, Antonio Parkinson, State Rep. for District 98, is about "making a difference." Now he is poised to make a huge impact in the health and beauty industry with HINO, his latest venture.
Carlee McCullough: Please tell us about yourself.
Antonio Parkinson: I grew up in a single parent household. My mother was...well, still is a stylist. As a child we watched her go through cosmetology school and then helped her to build a business in the cosmetology industry. From that seed was birthed my entrepreneurial spirit and currently I am the owner of a marketing company, Black Market Strategies.
These days, it seems as though Americans are spending more for college while getting less value in return – a trend research validates, says entrepreneur Matt Stewart.
"The average cost for an in-state public college is $22,261, and a moderate budget for a private college averaged $43,289 for the 2012–2013 academic year; for elite schools, we're talking about three times the cost of your local state school," says Stewart, a spokesperson for College Works Painting, (www.collegeworks.com), which provides practical and life-changing business experience for college students who have shown potential for success. Interns operate their own house-painting business with hands-on guidance from mentors.
Making matters worse, adults in their 30s have 21 percent less net worth than 30-somethings 30 years ago, according to a new Urban Institute report.
WASHINGTON – The economic status of African Americans and the "crisis-level" income gap between the rich and the poor was the agenda of this year's State of the Black Press luncheon at the National Press Club in D.C.
The event (March 21st) sponsored by the National Newspaper Publishers Association Foundation featured discourse among journalists and financial experts. They weighed in on different factors affecting black economics, including the crippling recession that some said wiped out gains made by middle-class blacks during the recent recession.
"The recession supposedly ended in 2009 but there are still adverse effects," said economist Valerie Wilson, who works with the D.C.-based Economic Policy Institute. "At the rate of recovery that is taking place we will not reach pre-recession employment levels possibly until 2018."
Traditional individual retirement accounts (IRAs) can be a good way to save for retirement. If you do not participate in an employer-sponsored retirement plan or would like to supplement that plan, a traditional IRA could work for you.
A traditional IRA is simply a tax-deferred savings account that has several investing options and is set up through an investment institution. For instance, an IRA can include stocks, bonds, mutual funds, cash equivalents, real estate, and other investment vehicles.
One of the benefits of a traditional IRA is the potential for tax-deductible contributions. In 2014, you may be eligible to make a tax-deductible contribution of up to $5,500 ($6,500 if you are 50 or older). Contribution limits are indexed annually for inflation.