Beware of Medicare Scams

It seems every month another state is rocked with a Medicare scam. With these predatory forces out there, it’s a great time to contact clients and educate them that these bad apples are out there and what they can do to avoid getting caught by their false promises.

For example, in North Dakota seniors have been receiving phone calls from people claiming they’re from Medicare. The scammers tell the beneficiaries that they owe a penalty for not having Part D prescription drug coverage and that they need to pay the fine immediately. An article in the Jamestown Sun, stated that the scam is preying on “the penalty that is imposed on people who are eligible for Part D coverage but don’t elect it and have no other creditable drug coverage.” Creditable coverage might include Veteran’s Administration or most employer group health plans.

Insurance Commissioner Adam Hamm added to the announcement saying, "Medicare beneficiaries should never give financial or personal information to anyone who calls and says they are with Medicare.” Hamm went on to remind seniors, “It is against Medicare’s rules to call beneficiaries and ask for that information.”

As part of the statement released by the Hamm’s office, Medicare beneficiaries should remember:

• Medicare cannot call and ask for financial or personal information over the phone.
• Medicare numbers should be kept in a safe, secure place.
• Medicare will not notify beneficiaries of payments by phone. The beneficiary must be notified of the past due premiums via mail.

Chart of the Day - Adjusted for Inflation, The Dow is Down Over -30% This Decade

Chart Courtesy of www.ChartofTheDay.com

For some long-term perspective, today's chart illustrates the Dow adjusted for inflation since 1925. There are several points of interest...

For one, when adjusted for inflation, the bear market that concluded in the early 1980s was almost as severe as the one that concluded in the early 1930s.

Also, the inflation-adjusted Dow is a little more than double where it was at its 1929 peak and trades +54% above its 1966 peak – not that spectacular of a performance considering the time frames involved.

It is also interesting to note that the Dow is up +57% from its March 9, 2009 low which is actually slightly more than what the inflation-adjusted Dow gained from its 1966 peak to today.

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday February 26th the S&P 500 closed @ 1104, and that was...
  
+5.5% ABOVE its 12-Month moving average which stood @ 1043.
+6.3% ABOVE its 40-Week moving average which stood @ 1028.
 Right ON its 10-Week moving average which stood @ 1104.


Therefore, the INTERMEDIATE-Term trend IS NEUTRAL and the LONG-Term trend is BULLISH.

Market Forecast - Ken Taubes @ Pioneer Investment Management

Executive Summary

We believe the U.S. economy will grow by 3% to 4% in 2010.

While consumption may remain muted in light of continued deleveraging among consumers, exports, inventories and fixed investment could experience strong gains. Robust emerging market growth and the weakened dollar, together with high levels of corporate profits, productivity and cash (relative to this stage of the economic recovery) should help bolster GDP growth.

Inflation may threaten if appropriate monetary and fiscal measures are not implemented during the next several years, but should remain dormant in the near term, given the ongoing deleveraging.

Finally, we believe the U.S. dollar may remain stable over the next year. Its declining value relative to currencies of countries with strong growth, current account surpluses and solid fiscal budgets may be offset by its potential to appreciate against the euro and the yen, whose countries face lower growth than the U.S. and have comparable, if not higher, levels of government debt/GDP.

Following record returns in 2009, credit markets should cede market leadership in 2010 to equities, which we believe offer more attractive relative value and should benefit from the global recovery and high corporate operating profits. Over the next several years, however, we continue to find credit markets attractive when compared to developed market government debt, the quality of which will decline as deficits mount. In addition, as the economy recovers, we foresee a cyclical rise in yields, which will favor fixed income credit.

We also believe investors, where appropriate, should talk to their advisors about the advisability of making a discrete allocation to inflation-sensitive products to protect themselves against potential long term inflation.

Ken Taubes
(c) Pioneer Investment Management
http://www.pioneerinvestments.com/

Ken Taubes is the Head of Portfolio Management U.S. and is a Portfolio Manager of Pioneer Investments’ U.S. Core and U.S. Core Plus strategies. He has over 25 years of investment experience, including more than 10 with Pioneer Investments, and is well known within the investment industry.

Frightening Medicare Stats...

The Medicare Hospital Insurance Trust Fund, which pays for Medicare Part A, is now projected to be exhausted in 8 years, sometime during 2017.

It has been estimated that the typical older couple may need to save $300,000 to pay for health care costs not covered by Medicare alone.

The average Part B plus Part D premium is estimated to equal about 12% of the average Social Security benefit in 2010, and 16% of the average benefit in 2025.

Taken together, this means that if no action is taken, Medicare premiums and cost-sharing could eat up more than 33% of Social Security benefits in the next 15 years.

A typical older couple in traditional Medicare will pay almost $90 next year on average to subsidize private insurance companies who are not providing their health benefits.

Source: HealthReform.gov

How Defined Benefit Pensions Support Retirement Security

Research from the National Institute on Retirement Security (NIRS) suggests seniors with defined-benefit pension income fare better than seniors without such income.

The Institute found seniors with a pension are less likely to be considered “poor or near poor,” and are less likely to suffer material hardships or rely on public assistance than those with income from other sources. The study was based on data from the 1996, 2001 and 2004 panels of the U.S. Census Bureau’s Survey of Income and Program Participation.

Pensions help 4.7 million Americans avoid poverty. According to NIRS, nearly twice as many households headed by someone 60 or older received Social Security benefits, than income from defined benefit plans. Still, over 1 million more households stayed above the poverty line with help from their defined-benefit plan income than from Social Security. The Institute notes that “Social Security is highly effective at helping seniors avoid poverty, but defined benefit pensions enable people to maintain a middle-class standard of living in retirement.”

Pensions substantially reduce material hardships. Over 500,000 Americans would have would have struggled to buy food if not for their defined-benefit plans. About 380,000 would have been unable to pay for rent, mortgage or bills, and 320,000 would have struggled to pay for health care.

Pensions keep 1.4 million Americans off public assistance. According to NIRS, without income from their defined-benefit plans, 1.4 million American households would have to rely on public assistance. The Institute estimates that defined-benefit plans reduced claims to public programs, excluding Medicaid, by $7.3 billion in 2006.

Senior Unemployment Rates Rise

• 7.4% — Percentage of Americans over 65 who were unemployed in January 2010; 8.3% of those out of work were men, compared with 6.4% of women.

• 5% — Percentage of people over 55 with at least 4 years of college who were out of work in December 2009.

• 6.5% — Percentage of non-Hispanic white Americans over 55 who were unemployed in December 2009; 9.9% of non-Hispanic black Americans and 7.6% of Hispanic were out of work.

Source: Urban Institute

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday February 19th the S&P 500 closed @ 1109, and that was...
  
+5.8% ABOVE its 12-Month moving average which stood @ 1048.
+7.3% ABOVE its 40-Week moving average which stood @ 1034.
+0.5% ABOVE its 10-Week moving average which stood @ 1104.


Therefore, the INTERMEDIATE-Term trend IS NEUTRAL and the LONG-Term trend is BULLISH.

Chart of The Day - S&P 500 Earnings (Inflation-Adjusted)

Chart Courtesy of ChartofTheDay.com

With 4th-quarter earnings largely in the books (over 79% of S&P 500 companies have reported for Q4 2009), today's chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported, S&P 500 earnings.

Today's chart illustrates how earnings declined over -92% from its Q3 2007 peak to Q1 2009 low -- the largest decline on record (the data goes back to 1936).

Since its Q1 2009 low, S&P 500 earnings have surged (up over 600%) and currently come in at a level that has only been exceeded during the latter years of the dot-com and credit bubbles.

S&P 500 Historical Sector Weightings: 1990 - 2010

Above are the historical sector weightings for the S&P 500. Technology currently has the biggest weighting in the S&P 500 at 19.2%. This is the highest weighting the Tech sector has had since the Internet bubble burst in 2000.

After falling all the way down to just 8.9% at the March 2009 lows, the Financial sector's weighting in the S&P 500 now ranks 2nd at 14.4%.

Health Care, Consumer Staples, Energy, and Industrials are the other 4 sectors with a weighting of more than 10%. The Consumer Discretionary sector is close to 10% at 9.8%. From 1998 to 2007, the Consumer Discretionary sector was bigger than the Consumer Staples sector.

When the bear market hit in 2007, Consumer Staples overtook Consumer Discretionary, but the spread has tightened to about two percentage points recently. If the bull market continues, we'll likely see Discretionary overtake Staples once again.

While the Materials sector gets a lot of attention in the media, especially because it has the gold stocks, it's important to remember that it only makes up 3.5% of the S&P 500. The Utilities sector is even bigger than Materials.

Chart and analysis courtesy of Bespoke Investment Group

U.S. Sovereign Debt Credit Default Swaps Spike

The markets are panic-stricken that credit default swap risk is soaring for the southern European countries in 2010, but default risk is also spiking for U.S. Sovereign Debt.

U.S. Credit Default Swaps (CDS), as shown in the above Bloomberg screenshot, spiked significantly above its June 2009 high in February 2010.

Default risk is still well below the highs reached during the crisis, but we don't want to get anywhere near those levels again.

The trend, however, is now going in the wrong direction.

Commercial Real Estate Is The Next Crisis

The Congressional Oversight Panel said in a report that mounting commercial real estate losses could endanger the banking system and thwart economic recovery.

A total of $1.4 trillion in commercial real estate loans will require refinancing in the next 4 years, and more than 50% of those loans are underwater, written for properties whose value has dropped like a rock.

The expected losses when loans go bad could hit between $200 billion to $300 billion and threaten 3,000 small and mid-size banks with a disproportionate share of commercial real estate assets on their books, according to the panel.

The report is intended to "wave a red flag" to the White House and Congress that the commercial real estate loan market is going to get a lot worse before it gets better.

"We're at a point where even as TARP is ramping down another major challenge in our economy is ramping up," said Elizabeth Warren, the oversight panel's chairwoman.

"We need to start now, before the system is on the brink of collapse to figure out a plan," she added.

The Panel's research found that 2,988 banks are heavily invested -- with more than 3 times their assets tied up -- in commercial real estate loans. Of that number, 2,500 banks each have less than $1 billion in assets.

The Panel offers a number of possible solutions for policymakers to head off a commercial real estate crisis, including stress tests for banks, injecting capital into these small banks, buying their toxic assets, or guaranteeing loans.

Health Care and Seniors – Inside The Numbers

• Eleven million seniors are still subject to rising premiums. Those affected are new enrollees in Part B, high earners, and seniors who are delaying receipt of Social Security benefits. Premiums for Part B increased by a staggering +72% between 2000 and 2005.
   
• Social Security represents half or more of total income for 67% of beneficiaries, and for 33% of beneficiaries, Social Security represents 90% or more of total income.
  
• Social Security provides 45% of income for seniors in the second-highest income quintile, and 18% in the top 20%.

• The average annual Social Security benefit for retirees in January 2009 was $13,900. By comparison, the federal poverty guideline level for a single person is $10,830 a year, and the recommended income to meet basic expenses as a retired homeowner (as calculated by the Elder Economic Security Index) is $16,300.

Source: The Economic Policy Institute

Vantage Point UPDATE: Intermediate-Term and Long-Term Trend Analysis

On Friday February 12th the S&P 500 closed @ 1076, and that was...
  
+3.1% ABOVE its 12-Month moving average which stood @ 1043.
+4.6% ABOVE its 40-Week moving average which stood @ 1028.
-2.6% BELOW its 10-Week moving average which stood @ 1104.


Therefore, the INTERMEDIATE-Term trend IS NEUTRAL and the LONG-Term trend is BULLISH.

Status of Our Vantage Point Models - TWO Model Changes!

This week we have TWO Vantage Point Model changes.

On Friday, February 12th, our Growth vs Value Switching Model began to favor Value funds over Growth funds for the first time since January 8, 2010.

Also on Friday, February 12th, our High-Yield Bond Model turned NEGATIVE for the first time since July 24, 2009.

As of the close on Friday, February 12th, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is NEGATIVE as of February 12, 2010.

In our relative strength work, we NOW favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
• Value funds over Growth funds                 (since 02/12/10)
• U.S. funds over Foreign funds                   (since 11/20/09)
• SmallCap Value over LargeCap Growth     (since 12/18/09)
  
  
  

3,000 Banks Face Commercial Real Estate Risk

A new report from the Congressional Oversight Panel which tracks the progress of the TARP program projects that commercial real estate losses threaten nearly 3,000 mid-sized and small banks and may severely compromise their ability to make loans.

At the core of the report is the observation that “Between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the end of their terms. Nearly 50% are at present "underwater” – that is, the borrower owes more than the underlying property is currently worth.”

This means many of the banks which hold these loans have commercial real estate borrowers who will not be able to make interest and principal payments and cannot refinance their mortgages.

The Panel also points out that there have been NO “stress tests” of these smaller banks so the scope of their real financial problems is unknown.

The new analysis underscores the problems that the Obama Administration and Congress face as they attempt to increase the capital available to consumers and small businesses.

Banks are still unlikely to make all but the safest of loans because of current and anticipated problems with their balance sheets. The issue is exacerabated by the worry that modest-sized businesses are at greater risk of failure and therefore loan defaults in a slow economy.

The only practical solution to the problem for both banks and their current and potential customers is for the federal government to take money it does not have to bolster the balance sheets of the nearly 3,000 banks at risk for large commercial real estate write-offs.

Alternatively, these firms could be loaned money by the government to make money available to small business which need credit. That process might stimulate lending but would not solve the problem of the write-offs these financial institutions face.

The Treasury Department has said that the $700 billion TARP program is no longer necessary to rebuild the bank and credit systems.

It turns out that if the Congressional Oversight Panel forecasts are accurate, the Treasury’s observation is not even close to the truth.

Douglas A. McIntyre @ 24/7 Wall Street

Top High-Yield Bond Strategist Still Favors The Asset Class

Junk Bonds Show Ebbing Distress on Record Sales

Feb. 9 (Bloomberg) -- Investors in the lowest rated corporate bonds are looking past concern that worsening government finances will derail the economy, paying prices that imply the fastest drop in defaults in more than a decade. 

“Recent trends in asset prices will not change the trend in the default rate,” said Peter Acciavatti, head of U.S. high yield and leveraged loan credit strategy at JP Morgan. “Our view is default rates will continue to fall due to the improvement in capital markets over the last year, even as markets have become a little choppy of late. We still like the asset class.”

Acciavatti, the top-ranked high-yield strategist in Institutional Investor magazine’s annual poll for the past 7 years, cut his forecast for junk-bond defaults to 2% by year-end from 4%.

Full Story...

20% of Homes Underwater

Real estate website Zillow.com says 1 of every 5 U.S. home owners owed more on their mortgage than their home was worth in the 4th quarter. 

The percentage of American single-family homes with mortgages in negative equity rose to 21.4% in the 4th quarter from 21% in the 3rd quarter, according to the Zillow Real Estate Market Reports. 

U.S. home values declined again in the 4th quarter, as the Zillow Home Value Index fell -5% year-over-year and down -0.5% quarter-over-quarter, to $186,200. It was the 12th consecutive quarter of year-over-year declines, the reports showed.

"The prevalence of markets in or near a double-dip situation shows that we are not yet at the bottom, in terms of home values," Stan Humphries, Zillow chief economist, said in an interview.

One in 5, or 29 of the 143 markets tracked by Zillow, had at least 5 consecutive month-over-month increases in home values during 2009 before values began to flatten or fall again in the 2nd part of the year. These markets included the Boston, Atlanta and San Diego metropolitan areas.

Zillow said it defines a "double dip" as 2 periods of sustained declines in home values separated by a brief period of stabilization or recovery.

Foreclosure resales remained high, making up 20.3% of all U.S. home sales in December.

Foreclosure resales also made up the majority of sales in several metropolitan areas, including Merced, California, at 68.3%; Las Vegas, at 64%, and Modesto, California, at 62%.

Additionally, 28.5% of home sales nationwide sold for less than what the seller originally paid.  Home values increased year-over-year in 27 of 143 markets and remained flat in 15.

Social Security & Defined Contribution Plan Statistics...

2.5 million – Number of people over 60 who receive income from a defined-contribution account; an additional 3.5 million receive income from a spouse’s account.

37.6 million – Number of people who receive benefits from Social Security; an additional 2.1 million have a spouse who receives benefits.

$24,435 – Mean annual amount from a senior’s defined-contribution account, compared with $11,965, the mean annual amount from Social Security.

$11,970 - The median annual amount from a senior’s defined-contribution account, compared with $12,038 from Social Security.

Source: National Institute on Retirement Security

GDP Grows at Fastest Pace in 6 Years

While the ultimate pace of the economic rebound continues to be debated, GDP in the 4th quarter of 2009 rose +5.7% (expectations were for growth of +4.6%), which was the fastest pace in 6 years. Granted, this growth follows an even bigger decline of -6.4% in the first quarter of 2009, but at least it's a start.

Judging by the performance of equities in the fourth quarter, and the earnings reports we've seen so far, we already knew the fourth quarter was strong, the big question is whether or not this growth will continue in Q1.

Based on what we've seen so far in terms of guidance, companies seem to have a positive outlook.

Chart and analysis courtesy of Bespoke Investment Group

Long-Term Care Insurance: What You Should Know - Part 5 of 5

5. Customize Policy Premiums

“Everyone’s needs are different,” says Wendell Morgan, an agent with Bankers Life & Casualty in Austin, Texas. “You can’t just go to every client and always show the largest policy available with every available rider.”

It sounds like common sense, but Morgan comes across numerous cases where he is the 2nd or 3rd agent to discuss a Long-Term Care Insurance (LTCI) policy with a prospective client.

When he asks if they’ve considered  LTCI they respond that they have but the coverage was too expensive. When Morgan probes for details on the previous proposal, it often turns out that the other agent came in with fully loaded coverage while a basic plan was more appropriate.

In response, Morgan shows plans in which he adjusts the features and benefits to reduce premiums. By modifying the policy’s benefits, he cuts premiums to a level that the prospect can afford.

“My thoughts on long term care insurance are that something is better than nothing,” says Morgan.

Long-Term Care Insurance: What You Should Know - Part 4 of 5

4. The Insurer’s Claims Process

“When we’re talking to our clients about long term care, the main thing is making it a realistic conversation, not overselling the capabilities of long term care insurance,” says Gwenn Branstad, CLTC, an advisor with The Stonebridge Group, an affiliate of Thrivent Financial for Lutherans in Edina, Minn.

Caution is needed, she says, because even when the contract is in force, insureds and those assisting them with a claim must work through the insurer’s procedures. 

“As the my client's trusted advisor, I still have to jump through some hoops to get a claim open and paid and to establish communication between the insurance company and the provider of care,” she says. “So much of the advisory process helps the clients think about this not from their perspective but from the perspective of their family or their children or the person taking care of them.”

Long-Term Care Insurance: What You Should Know - Part 3 of 5

3. The Cost of Local Care

Consult surveys citing average national and statewide costs for Long-Term Care (LTC) facilities. 

For example, the cost of a private nursing home in the U.S. rose +3.3% to $219 per day or $79,935 per year, according to a 2009 MetLife survey.

Unless a potential policyholder has recently had a family member receive long term care, figures like that are sure to be a jaw-dropping, eye-opener.

A more effective approach is to cite current costs at local facilities with which the consumer will be familiar. 

Instead of saying that the average daily cost for a nursing home in our state is $X, for instance, it makes more sense to determine the actual cost at the nursing home a few miles from the consumer’s home.

While it might take some time to compile that information, it’s well worth the effort.

That’s the approach Wendell Morgan, an agent with Bankers Life & Casualty in Austin, Texas, takes because he services clients’ claims after they’ve entered a local care facility. As a result, he has firsthand knowledge of the facilities’ charges and can use that information to educate potential clients.

“I can say, here’s what it costs locally. Do we want a policy that pays all the cost or part of the cost? Tell me what you’re thinking.”

Long-Term Care Insurance: What You Should Know - Part 2 of 5

II. The Insurer’s Staying Power

Consumers buy Long-Term Care Insurance (LTCI) when they are reasonably healthy with the expectation that the insurer will pay the contracted benefits when needed, but that need might not arise for a very long time.

That creates a risk, especially considering the financial markets’ recent volatility and its affect on financial services firms.

Prospective policyholders and their agents / advisors must know the insurer’s financial condition, says Gwenn Branstad, CLTC, an advisor with The Stonebridge Group, an affiliate of Thrivent Financial for Lutherans in Edina, Minn.

It also means being familiar with the insurer’s longevity in the LTC business and its claims payment history, she says.

Long-Term Care Insurance: What You Should Know - Part 1 of 5

1. Product Benefits

While most policyholders don’t want to know every detail of a Long-Term Care Insurance (LTCI) policy’s coverage, they do want accurate information on the benefits they need.

Steve van Gilder, CLTC, a Genworth Financial agent and president of Long Term Care Specialists Inc. in Birmingham, AL., says those need-to-know benefits include:

Provision for Independent caregivers: This benefit allows insureds to hire friends, relatives, etc. as home-caregivers; it works best when the insured anticipates needing help with the activities of daily living versus medical care and wants to receive care at home. “Most people think of this as the ‘anti-nursing home’ benefit,” says van Gilder.

Shared Care: Allows two insureds spouses or partners, for example to be named on the same policy and share a pool of LTC benefits. Whatever benefits remain after the death of the first insured become available to the surviving insured.

Inflation Protection based on the full coverage amount: Some policies base their inflation adjustments on the remaining unused benefit, but it’s more beneficial for the insured if the inflation increase is based on the original pooled amount.

Care Coordination: Expert advice provided by the insurance company to help family members or other caregivers determine which services and care providers to work with.

Lump Sum Withdrawals: Home assistance or home modification provisions give a client greater flexibility in covering large expenses related to the need for care. For example, assume the policy pays a benefit of $4,000 per month and the insured needs to install a chairlift to get up and down the stairs at home. With this provision, the contract provides a pool of funds say, three times the monthly maximum benefit or $12,000 that the insured can use for the construction.

Status of Our Vantage Point Investment Models

NONE of our Vantage Point Models have changed since the last update.

As of the close on Friday, January 29th, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is POSITIVE as of July 24, 2009.

In our relative strength work, we favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
• Growth funds over Value funds                 (since 01/08/10)
• U.S. funds over Foreign funds                   (since 11/20/09)
• SmallCap Value over LargeCap Growth     (since 12/18/09)

Surprise! - The U.S. Now Leads the G-8 in Inflation!

Country P/E Ratios and GDP Growth

Many investors use the PEG Ratio as a valuation tool these days because it puts a company's growth prospects into perspective along with the widely followed price to earnings ratio. The PEG ratio is the P/E Ratio over the Growth Rate, and a PEG of less than one is generally considered good.

In this regard, Bespoke created "PEG" ratios for a number of countries using the P/E ratio of each country's main equity market index along with 2010 estimated GDP growth rates. Just as with stocks, the lower the country PEG, the more attractive.

As shown, India has the best PEG out of the countries we analyzed. It has a P/E ratio of 26.19 and estimated 2010 GDP growth of 8%. While its P/E isn't as low as a lot of countries, its growth rate is very high. China ranks 2nd with a PEG of 3.66.

The U.S. ranks in the middle of the pack with a P/E of 24.53 and estimated GDP growth of 2.6%.

At the bottom of the list sits Switzerland, Italy, and the UK, while Australia, Japan, and Spain have negative PEGs due to either a negative P/E Ratio or negative estimated GDP growth.

Chart and analysis courtesy of Bespoke Investment Group

The New Retirement Challenge

"Seniors must redefine their idea of retirement to be successful."

New statistics for 2009 show most Americans believe they will not be able to afford retirement anytime soon. The annual Retirement Confidence Survey, conducted by Matthew Greenwald & Associates, found that only 13% of respondents feel very confident that they will enjoy a comfortable retirement, the smallest percentage since the survey began in 1993.

Respondents expect to work longer due to the economic downturn, with 28% of workers reporting that in 2009 they pushed back their expected retirement date.

Furthermore, 89% of those who are delaying retirement indicated they would do so for financial reasons.

According to Robert J. Krakower, CFP and author of Redefining Retirement for a New Generation, the old model of retirement no longer applies.

Krakower believes that would-be retirees must adopt new views of retirement planning if they hope to retire on time. “Forces such as increased life expectancy, the sheer size of the baby boom generation and the massive replacement of pensions with 401(k) plans, shift the risk away from the corporations, where it used to be, and onto the shoulders of individuals,” he said.

The current generation facing retirement, the baby boomers, face risks that previous generations did not, namely outliving one’s money. Today, retirees can hope to live 30 years or more in retirement. Retirees receiving Social Security constitute a much heavier burden for the work force to bear, placing that income source at risk. This situation is aggravated by the size of the generation entering retirement, which will result in the most new retirees in American history.

The traditional source of retirement income has also shifted, creating new challenges. Krakower notes, “The demise of the old pension plan and the rise of the 401(k) represent a new retirement risk. Now, individuals must cope with the risk that bad investment decisions can have catastrophic consequences for their lifestyle in retirement. Redefining retirement means taking a fresh look at all the assets to which individuals have access, and thinking in new ways about how to put those assets to work to generate lasting retirement income.”

Ten Worst Equity Funds of The Decade...

As we begin a new decade, Bloomberg considerately gathered the worst stock funds from the last 10 years. Notably, many of these funds are still recovering from the tech bust early in the decade.

From Bloomberg: "The 10 worst funds all focused on shares of growth companies, so designated because their sales or earnings are rising faster than their industry’s or the overall market. The group fell -71% on average after the technology bubble deflated. That compared with the -47%  decline by the S&P 500 index from March 24, 2000, to Oct. 9, 2002.”

Here are the 10 worst stock funds based on their performance from Jan. 1, 2000 to Dec. 28, 2009, along with their assets under management, and their percent decline for the period:

Fidelity Growth Strategies; $1.9 billion; -67%

Vanguard U.S. Growth; $4 billion; -50%

Putnam New Opportunities; $2.6 billion; -46%

Columbia Select Large Cap Growth; $1.7 billion; -41%

SEI Large Cap Growth; $2.1 billion; -40%

MFS Growth; $2.1 billion; -39%

Janus Enterprise; $2.4 billion; -38%

Putnam Investors; $1.6 billion; -37%

Seligman Growth; $1.4 billion; -37%

AIM Constellation; $3.1 billion; -37%