Jane Bryant Quinn The Best of - The longtime AARP Bulletin columnist shares her timeless advice for making the most out

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The Best of
Jane Bryant
  Quinn
   The longtime AARP Bulletin
  columnist shares her timeless
 advice for making the most out
         of your money
                                  1
The Best of
                                       Jane Bryant Quinn
                                   1. The Right Way              6. To Buy or
                                   to Go With Retire-            Not to Buy
                                   ment Money                    Leasing a car
                                   Even if you’ve left the       makes less sense
                                   workplace for keeps,          after retirement
                                   you might want to leave
                                   your savings behind           7. Mortgages
                                                                 and Retirement
                                   2. Debt After Death           Pay it down, sit
                                   Know what you owe—            tight or sell?
                                   and what you don’t
                                                                 8. Managing
                                   3. Juggling Estate            Your Manager
                                   Decisions                     What you need to
                                   With a stepfamily,            demand from your
                                   try not to split heirs        financial adviser

                                   4. Make a Plan                9. Risky Pension Bets
                                   While You Can                 You might be making
                                   Don’t put off critical life   one if you take a lump
                                   decisions until a crisis      sum early

                                   5. Dream Investment           10. My Parting Advice
                                   or Potential Night-           It’s time to say
                                   mare?                         goodbye. But first,
ILLUSTRATION BY MICHAEL HOEWELER

                                   Fixed-index annuities         one last set of tips
                                   are popular—but have          for how to secure
                                   problems                      your future

                                                                                          2
The Best of Jane Bryant Quinn

Introduction By George Mannes

I
      n my all-too-brief stint as Jane Bry-
      ant Quinn’s editor before she retired,
      I was impressed by many things about
      her. To name a few: Her desire to im-
      prove the finances of all Americans.
Her passion for consumer protection. Her
vast understanding of money issues, gained
over many years. Her desire for accuracy.
And the clarity of her writing.
  Jane, I could see, wanted to use her
knowledge and her skills to secure peo-
ple’s futures. Was she successful? I have no
doubt she was.
  But don’t take my word for it. In-
stead, take it from her fans. After Jane
announced her retirement in her final
Bulletin column, more than 600 read-
ers emailed to congratulate Jane and to
thank her for her effect on their lives. “I
attribute the majority of my successful
financial situation to you,” wrote one re-
                                               3
The Best of Jane Bryant Quinn

                                   tiree, praising Jane’s “clear writing style
                                   and usable advice” and adding, “I felt like
                                   you were my personal adviser.” “You
                                   saved us!” began another email. “After
                                   losing 45 percent of our retirement        Jane Bryant Quinn,
                                   savings in the 2003 downturn, my           who wrote the
                                                                              Financially Speak-
                                   husband and I decided that I would         ing column for
                                                                              the AARP Bulletin
                                   be the one to learn how to manage          from 2010 through
                                                                              2019, has been
                                   our money, and take control of our fi- reporting about
                                   nancial lives. Your books and articles personal      finance
                                                                              for more than five
                                   were my primary teachers.... Now,          decades. Among
                                                                              her many other
                                   we’re comfortably retired and secure achievements,
                                                                              wrote a long-run-
                                                                                                she

                                   in the knowledge that we’ll live the       ning column for
                                                                              Newsweek, a
                                   remainder of lives according to our        widely syndicated
                                   own direction.”                            newspaper col-
                                                                              umn, and several
                                     It would be impossible to capture        books, including
                                                                              How to Make Your
                                   all of Jane’s wisdom in any book. But Money        Last: The
                                                                              Indispensable Re-
                                   in this publication, we’ve selected        tirement Guide,
                                                                              most recently up-
                                   some of her best, most relevant col-       dated in 2020. She
                                   umns from recent years. Because we received          a lifetime
                                                                              achievement honor
ILLUSTRATION BY MICHAEL HOEWELER

                                   think that reading, or rereading, any- from      the Gerald
                                                                              Loeb Awards, the
                                   thing that she writes will put your fi- most prestigious
                                                                              prize in U.S. busi-
                                   nances on firmer ground. Enjoy!            ness journalism.
                                                                                                4
The Best of Jane Bryant Quinn

    The Right Way to Go With
       Retirement Money
      Even if you’ve left the workplace
    for keeps, you might want to leave
           your savings behind
         From the June 2019 AARP Bulletin

W
          hat should you do with the mon-
          ey in your 401(k) when you leave
          your job? Maybe nothing at all.
  Your instinct may be to take your mon-
ey with you by rolling it into an individual
retirement account (IRA). And a financial
adviser may encourage you to do just that.
(Not coincidentally, that adviser might
earn a commission or be paid a percentage
of the money in your IRA each year.)
  But just as there may be valid reasons to
empty your 401(k), there may be equally
valid reasons to leave your savings alone. It
depends on the qualities of the 401(k) and
your personal feelings. To help you decide,
here are some questions to consider:
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The Best of Jane Bryant Quinn

Will it cost you more to stay or leave?
  Small plans — those with less than $10
million or so in assets — charge an average
of about 1.1 percent annually for adminis-
trative fees and investment management,
according to a 2018 study by Bright-
Scope, which analyzes and rates 401(k)s.
If you’re in such a plan, you can cut your
expenses and improve your investment
returns by rolling your money into a low-
or zero-fee IRA at a no-load mutual fund
company and buying inexpensive funds.
Large plans ($250 million and up), how-
ever, can be competitive with the IRAs.
They typically offer low-cost index funds,
or target-date funds that allocate your as-
sets between stocks and bonds and auto-
matically shift that mix appropriately as
you age. If you choose these investments,
your plan might cost you less than 0.5 per-
cent of assets per year. By contrast, invest-
ments suggested by a broker or financial
adviser will often cost more than that.
                                                6
The Best of Jane Bryant Quinn

       Do you want more choice?
  The average 401(k) offers about two
dozen mutual funds from which you can
create a well-balanced portfolio. It also
might offer a stable value fund, similar to
a money market account, that pays high-
er interest rates than you can get on oth-
er cash alternatives. With IRAs, you have
access to tens of thousands of funds, but I
doubt that’s an improvement. And there’s
no stable value option.

  How easy is it to tap your money?
  Your old employer’s 401(k) plan should
give you the option of withdrawals at any
time, or at least monthly withdrawals. If it
doesn’t, an IRA may be better.

       Are you in your 50s, and
       will you need the money?
  In most situations, if you roll your
401(k) into an IRA and then make a with-
drawal before you turn 59½, you’ll owe
                                               7
The Best of Jane Bryant Quinn

a 10 percent tax in addition to the tax-
es usually levied upon withdrawal. But
should you leave work the year you turn
55 or later, you can take money out of that
employer’s 401(k) without paying that ex-
tra tax.

       Are you in legal trouble?
  Most creditors can’t get at your 401(k).
But, depending on the state where you
live, they might be able to reach your IRA.

         Do you like your plan?
  If you have low-cost funds that have
served you well, and your plan adminis-
trator is easy to deal with, why change?
Stick with what you know. You can always
change your mind later.

                                              8
The Best of Jane Bryant Quinn

          Debt After Death
          Know what you owe —
           and what you don’t
       From September 2018 AARP Bulletin

A
       lmost everyone dies owing at least
       some debt. Sometimes it’s only
       last month’s ordinary bills plus fi-
nal medical expenses. But there can be
shocking surprises for survivors — debts
unknown to the children and even to the
spouse of the deceased. Heirs might dis-
cover large credit card balances, undis-
closed home equity loans or gambling
debts.
  Creditors are entitled to payment, from
the money and property (the “estate”) that
your loved one left behind. But what if he
or she didn’t leave enough to get everyone
repaid? Can the creditors come after you?
  Sometimes yes, sometimes no. With
loans secured by property, such as mort-
gages, an heir has to keep up the monthly
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The Best of Jane Bryant Quinn

payments or else sell the property to cover
the debt. Unsecured loans, such as credit
card debt and student loans, are another
matter. Your liability depends very much
on the nature of the bill, the type of prop-
erty and your state’s laws. But here’s what
I can say, generally.

Some money is protected. At death, un-
secured creditors cannot collect from life
insurance payments, pay-on-death bank or
brokerage accounts, jointly held property
that passes directly to the surviving own-
er, or retirement plans such as 401(k)s and
IRAs that have named beneficiaries, says
IRA expert Ed Slott, creator of IRAHelp.
com. They’re safe — but only if they were
handled right. By “right,” I mean that the
deceased filled out a beneficiary form for
each account, naming the people who were
to inherit. If this step was skipped, the
funds will be paid into the estate, where
they can be used to satisfy the creditors.
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The Best of Jane Bryant Quinn

Your signature matters. If you signed
a joint application for a credit card, you
owe the balance, even if you didn’t know
how high it had grown. If you were merely
an “authorized user,” however, most states
don’t require you to pay. (Note that autho-
rized users shouldn’t use the card after
the owner dies if the estate is broke. Such
spending could be considered fraud.)
Spouses are generally not liable for any
separate debts their mate incurred before
the wedding or, in most cases, after.
  Rules in community property states,
such as Texas and California, are differ-
ent. Your community property can gen-
erally be tapped to pay a spouse’s debts.
But creditors can’t take your separate
property, says Cathy Moran, an attorney
in Mountain View, California In any state,
you’ll still owe any private debt you co-
signed with the deceased, such as a stu-
dent loan. Some private student lenders
will forgive the loan, but most won’t.
                                              11
The Best of Jane Bryant Quinn

You have to pay the doctor. Final med-
ical bills are usually considered a spouse’s
responsibility. If your mate entered a hos-
pital, the admission papers you signed
probably included a payment agreement.
When there’s no money, however, and
the survivor has very little income, health
providers might write off the account.

Get tough. Don’t be talked into making
a few payments on bills you do not owe.
Creditors might claim that you willingly
assumed the debt. Tell them, “No, no, nev-
er.” You know your rights.

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The Best of Jane Bryant Quinn

    Juggling Estate Decisions
 With a stepfamily, try not to split heirs
       From July/August 2018 AARP Bulletin

W
           hen you say “I do,” you’re en-
           tering a financial partnership as
           well as an emotional one. If you
say “I do” a second time and have children,
your partnership acquires new stakehold-
ers — not necessarily willing ones. Adult
children have expectations about how
much they’ll inherit and how soon. A new
spouse scrambles that calculus. “Steppar-
ents and stepchildren are natural compet-
itors,” says estate-planning attorney Mark
Accettura, author of Blood & Money: Why
Families Fight Over Inheritance and What
to Do About It. “It’s the number one source
of conflict in my practice.”
  All should be well if you and your
spouse are each financially independent
and leave your own assets to your natural
heirs. But if one spouse depends on the
                                               13
The Best of Jane Bryant Quinn

other for support, assets will have to be
tied up for that spouse’s lifetime. In cas-
es of May-December marriages, children
of the older spouse might have to wait an
extra 15 years or more before any money
comes their way. No smiles there.
  Nevertheless, your first responsibility is
to your spouse. When you write a prenup-
tial or postnuptial agreement or update
your wills, you’ll each want to be sure that
the other will have enough to live on if left
alone. A surviving spouse does have the
right to claim certain amounts of the late
spouse’s assets, in the absence of a will or
proper prenup. The award can be large or
a trifle, depending on state law — be sure
you know which.
  At the death of the first spouse, distrib-
ute at least a little cash to all the adult
children, equally. It’s not so much the
amount as the signal that you cared.
  In families with good (or good enough)
relationships, children and stepchildren
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The Best of Jane Bryant Quinn

should be treated the same in wills. If
there’s a reason not to, the results should
still seem fair. For example, take a man
with a young second family. He might
set aside enough for their education and
divide the rest of the children’s money
equally.
  A persistent source of conflict is the di-
vision of personal property, says John
Scroggin, an attorney with Scroggin & Co.
in Atlanta. First-family heirlooms might
be claimed by second-family children —
in the worst case leading to lawsuits. You
and your spouse can help by signing and
dating a list of where important items
should go and attaching it to your will.
  If you leave everything to your spouse,
you can’t be sure that your natural chil-
dren will ever inherit any money. That’s
because, after your death, the ties between
stepparent and stepchildren might fray.
Your spouse’s children will murmur, “You
haven’t seen Freddie for 10 years — why
                                               15
The Best of Jane Bryant Quinn

leave him 30 percent of the estate?”
  To preserve inheritances, it helps to
leave money for children in trust, with
income to the spouse for life. Still, the
spouse can effect changes. “In real life, the
survivor wins,” says Martin Kurtz, a finan-
cial planner at the Planning Center in Mo-
line, Illinois
  Memo to self: Discuss options with a
lawyer. Memo to children and stepchil-
dren: Keep in touch.

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The Best of Jane Bryant Quinn

   Make a Plan While You Can
     Don’t put off critical life decisions
               until a crisis
        From November 2017 AARP Bulletin

M
         ost of us think about retirement as
         the last big plan we’ll ever have to
         make. But there’s one more thing
that’s perhaps even more important. You
need a plan to protect yourself against the
risk of making poor decisions in your old-
er age. Like it or not, we aren’t as sharp at
80 as we were at 60, even when we think
we’re fine.
  For example, Terrance Odean, a Uni-
versity of California, Berkeley, finance
professor, tells me that his father, weak-
ened from a fall, decided to cancel his
long-term care insurance at 85. He never
asked his son’s advice. Two years later, he
wound up in a nursing home, uninsured.
“Dad was no longer thinking clearly but
didn’t know it,” Odean says.
                                                17
The Best of Jane Bryant Quinn

  Margaret King, director of the Center
for Cultural Studies & Analysis in Phil-
adelphia, wrote to me about an ill and
widowed neighbor in her 70s. She has
no close relatives and zero plans for fu-
ture health care or financial management.
“Her friends can’t devote their lives to her
needs,” King says.
  Loss of powers might come on us gradu-
ally or suddenly in a crisis. The better pre-
pared we are, the safer we’ll be.
  Item one is to simplify your finances, says
attorney Martin Shenkman of Fort Lee,
New Jersey, to make it easy for someone
to take over. Consolidate any scattered CD
accounts and IRAs, set up automatic pay-
ments to a credit card for regular bills (card
companies provide fraud protection) and
create good financial files, including user
names and passwords.
  Then choose an agent who’ll help you
with your finances if you become uncertain
or unable. Give him or her your durable
                                                 18
The Best of Jane Bryant Quinn

financial power of attorney after having a
heart-to-heart about what you expect. Or
consider a revocable trust. Chat with your
agent about even small money decisions,
in order to get in the habit. Any financial
advisers should have someone to contact
if you start doing odd things (for example,
making big gifts to a hired caretaker).
   Another power of attorney should go to
the person you’d want to make medical
decisions for you in case you can’t make
them yourself.

  When your medical and financial stand-
ins are not the same person, the financial
document should order the financial agent
to pay for any kind of care that is chosen
by the health care agent, Shenkman says.
Draw up a living will that covers your
wishes for continuing, or final, care.

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The Best of Jane Bryant Quinn

        Dream Investment
     or Potential Nightmare?
    Fixed-index annuities are popular —
            but have problems
        From October 2017 AARP Bulletin

I
   ’m getting mail about an apparent
   dream investment. It promises gains if
   stocks go up, zero loss if they fall and
guaranteed lifetime income, too. What’s
not to like? Plenty, as it turns out.
  The investment is called a fixed-index
annuity, or FIA, and it’s issued by an in-
surance company. Sales are booming —
$73.5 billion in 2019. FIA contracts vary,
but this is how they work:
  You buy the annuity with a lump sum,
which goes into the insurer’s general fund.
You are credited with a tax-deferred re-
turn that’s linked to the market — for ex-
ample, to Standard & Poor’s index of 500
stocks. If the S&P rises over 12 months,
you receive some of the gain. For exam-
                                              20
The Best of Jane Bryant Quinn

ple, your credits might be capped at an
increase of 5 percent, even if the market
soars. If stocks go down, you take no loss
— instead, your FIA receives zero cred-
it for the year. Each year’s gains or zeros
yield your total investment return. But I
see problems:

Low returns. Salespeople might claim
that FIAs could earn 6 or 7 percent a year.
But with fees, they’ll struggle to match the
low returns from bonds, says Michael Kit-
ces of the wealth management firm Pin-
nacle Advisory Group in Columbia, Mary-
land.

High fees. You can’t find out what
you’re paying for investment manage-
ment. Costs are buried in the black-box
system used to adjust the credits to your
account. Sales commissions run 5 to 7 per-
cent and may be hidden, too. Under the
new fiduciary rule, which requires advis-
                                               21
The Best of Jane Bryant Quinn

ers to put your interests ahead of theirs,
commissions have to be disclosed if you’re
buying the annuity for a retirement ac-
count, but not for other accounts. Sales-
people sometimes claim, falsely, that their
services are free.

Profit limits. Every year, the insurer
can raise or lower the amount of future
gain credited to your account. You face
high risk that returns will be adjusted
down.

Poor liquidity. You can usually with-
draw 10 percent in cash, each year, with-
out breaking your guarantee. But you’ll
owe surrender charges if you need your
money back before five or 10 years are up.
You might also forfeit some gains.

Lifetime benefits. For about 1.5 percent
a year, you can add a “guaranteed lifetime
withdrawal benefit” to your FIA. Prom-
                                              22
The Best of Jane Bryant Quinn

ised yearly payments run about 5 percent.
But, Kitces asks, why do it? Your basic FIA
already provides a lifetime income. What’s
more, 5 percent is not a return on your in-
vestment. The insurer is merely paying
you your own money back, in 5 percent in-
crements — and charging you 1.5 percent
for the “service.” If you live long enough,
you’ll exhaust your money and the insurer
will pay, but that doesn’t happen often.
  For a guaranteed income, try a plain-va-
nilla immediate or deferred annuity.
It’s cheaper, and you’re not apt to be led
astray.

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The Best of Jane Bryant Quinn

        To Buy or Not to Buy
       Leasing a car makes less sense
             after retirement
          From 2017 July AARP Bulletin

N
      eed a new car? The question is
      whether — given your budget and
      lifestyle — you should buy or lease.
Here are the two classic rules:

1. To pay the least over the long run, buy
the car outright.
2. But lease if you want to drive a better
car than you can afford to own.

  Down payments are lower when you
lease, compared with taking an auto loan,
and monthly payments are lower, too.
  No rule is forever. You might have a dif-
ferent opinion in your 50s than in your
70s. Before that discussion, however, you
need to weigh some other pros and cons
of leasing a car versus buying it.
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The Best of Jane Bryant Quinn

  When you purchase a car, you pay off an
auto loan in an average of about five years.
After that, you drive “free” for as long as
you like. You become responsible for all
repairs, once the car comes off warranty.
To save money, consider a factory “certi-
fied pre-owned” car that has been inspect-
ed and refurbished and carries a manufac-
turer’s extended warranty.
  When you lease, by contrast, you nev-
er own the car. You pay for its use over a
limited period of time — say, three years.
The warranty should cover basic repairs.
Maintenance costs may be covered in the
contract. At the end of the term, you can
buy the car at a price predetermined by
the contract. Or you can return it to the
dealer and lease another car, brand new.
For those who go from lease to lease, car
payments never stop.

Which approach best fits your needs?
 People still working often find it attrac-
                                               25
The Best of Jane Bryant Quinn

tive to lease. Driving a fancier car might
be good for business (or good for the
soul). And constant car payments don’t
feel burdensome when there’s a steady
paycheck coming in.
  Before signing the lease, be aware of the
many incidental fees (such as for acquisi-
tion, documentation and title). For exam-
ple, you’ll pay penalties for driving more
than 12,000 or 15,000 miles a year unless
you buy additional mileage in advance. If
you want to give up the car before the end
of the lease, you’ll owe early termination
fees that might run to several thousand
dollars.
  A crash that totals the car is considered
early termination; to protect yourself, al-
ways buy gap insurance to cover that un-
expected cost. At the end of the lease,
there might also be a fee for unusual wear
and tear.
  Are you currently leasing a car? At re-
tirement, you might rethink. There’s good
                                              26
The Best of Jane Bryant Quinn

reason to own rather than lease once out
of the workforce. For one thing, you prob-
ably won’t be driving as much, so the car
will last longer. As an owner, you’ll be able
to use it, reliably, for perhaps 10 or 15 years,
while making no monthly payments at all.
  For another thing, owners are better off
on that day when you have to give up driv-
ing for safety’s sake and start dialing car
services for rides.
  If you’re leasing and turn the car in
early, you’ll owe the big termination fee.
Owners can sell their cars and pocket the
cash. Nice.

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The Best of Jane Bryant Quinn

    Mortgages and Retirement
        Pay it down, sit tight or sell?
          From June 2017 AARP Bulletin

M
         ore and more older homeowners
         are carrying mortgages into their
         retirement. The dollar amounts
are much larger than they used to be, and
the average loan term is longer by several
years. Is this a crisis? That depends.
  Normally, the larger your debt, the
greater the risk that your retirement stan-
dard of living is likely to fall. But some
retirees keep large mortgages by choice.
Others find it possible to carry even an un-
wanted mortgage because interest rates
are low. Either way, retirees have options
for reducing the debt.
  Hold a large mortgage. This might
make sense for people with high income
who can deduct mortgage interest, who
are comfortable with risk and who invest
heavily in stocks. Your long-term returns
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The Best of Jane Bryant Quinn

are likely to beat your mortgage costs, af-
ter tax. If your income is modest, however,
you’re probably using the standard deduc-
tion, so the tax break on mortgage interest
doesn’t do anything for you. Your mort-
gage is simply an expense.
  Pay down the debt faster. You might
make double payments, or refinance into
a 15-year mortgage. Prepaying is easiest
when you’re still working and earning a
paycheck. Postretirement, it works best for
people with comfortable incomes who can
afford the extra monthly cost. But prepay
with taxable income; don’t take money out
of a tax-sheltered retirement account. And
don’t tackle the mortgage until you’ve paid
off any lingering credit-card debt.
  Sell and buy something cheaper. You
might buy the new place for cash, if you’ll
have enough money left over to live on. If
not, take a mortgage with lower payments
than you’re making now. The sooner you
act, the more money you’ll save. And by the
                                              29
The Best of Jane Bryant Quinn

way, banks count Social Security income
when evaluating your creditworthiness.
  Sit tight. If you have only a few years
left, just run it off.
  Aim for being free and clear. Even
many wealthy people get rid of their hous-
ing debt. If bad things happen, you know
that the home is yours. And remember,
property taxes and insurance premiums
can continue to rise, long after your mort-
gage has been paid off.

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The Best of Jane Bryant Quinn

     Managing Your Manager
         What you need to demand
       from your financial adviser
          From 2017 April AARP Bulletin

H
        ow do you know if your financial
        adviser has your best interests at
        heart? They all say they do. Then
some of them turn around and sell you
products with high (often hidden) costs
that line their pockets at your expense.

      Here’s your path to getting
         trustworthy advice:

Ask the person managing, or offering to
manage, your investments to state in writ-
ing that he or she will act as a fiduciary
at all times, for retirement and nonretire-
ment accounts. That’s especially import-
ant for less sophisticated investors who
depend heavily on professional advice.
Knowledgeable clients already demand
                                              31
The Best of Jane Bryant Quinn

fiduciaries for all their money.

Ask the adviser to compare the costs
and benefits of leaving your retirement
money in your 401(k) versus investing it
through the firm’s IRA. You want a good-
faith estimate, in writing, of what you’ll
pay in direct fees or sales commissions,
plus any payments the adviser’s firm qui-
etly receives for selling particular mutual
funds or annuities, says Ron Rhoades, di-
rector of Western Kentucky University’s
financial planning program. Don’t settle
for generalities; get specifics. True fidu-
ciaries will give them to you.

Consider choosing an adviser who
charges flat fees — such as a percentage
of managed assets or a fixed amount per
year — rather than those who also take
commissions. Fee-based advisers can be
expensive, too, so you still have to check.
But commissioned advisers are those most
                                              32
The Best of Jane Bryant Quinn

likely to push complex products, such as
annuities whose sky-high costs dwarf any
benefits.

Don’t be blinded by titles like “financial
adviser” or “wealth manager.” If they’re
not fiduciaries, the advisers can earn com-
missions on sales, and they’re legally enti-
tled to put your interests last. Even if they
are fiduciaries, they still might persuade
you (wrongly) that costly investments are
in your best interest. Remain on guard.

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The Best of Jane Bryant Quinn

         Risky Pension Bets
       You might be making one if you
          take a lump sum early
        From 2015 December AARP Bulletin

W
            ould you rather have a month-
            ly pension guaranteed for life
            or a lump sum of money now?
Before I address that question, let me say
that you’re lucky if you have the choice.
Private pensions are on the way out, even
among old-line companies. In older age,
there’s nothing more comfortable than a
check in the mail every month. Normally,
you’re not offered the choice of a pension
or lump sum until you retire. Rising num-
bers of companies, however, are extending
this offer to former employees who hav-
en’t taken their vested pensions yet. They
want to shift the burden of retirement in-
vesting over to you.
  In fact, they’d like to get rid of you in the
next 12 months. That’s because the size
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The Best of Jane Bryant Quinn

of your pension or lump sum depends, in
part, on how long the people in your age
group are expected to live. If you take a
lump sum in place of a lifetime month-
ly pension, you’re making at least one of
three risky bets.
  Bet 1: You are betting that you can pro-
vide yourself (and your spouse) with a
guaranteed monthly income for life that’s
at least as high as you’d get from your pen-
sion. To check this, go to a website such
as immediateannuities.com, which shows
you what insurance company annuities
pay. Enter the lump sum you’re being of-
fered, your age and when you want the
payments to start, then choose the type of
annuity you want. Compare that payment
with your vested monthly pension amount.
Odds are, the pension will pay you sub-
stantially more, especially if you’re a wom-
an, says Anthony Webb, senior fellow at
the Schwartz Center for Economic Policy
Analysis at the New School in New York.
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The Best of Jane Bryant Quinn

   Bet 2: That your life span will be shorter
than average. The lump sum is intended
to last your expected lifetime, not your ac-
tual lifetime. If you live longer, you’ll need
extra money in reserve.
   Bet 3: That you can invest the lump sum
in stocks and bonds and earn even more
than the pension will pay. To check this,
look at the “interest rate” in the fine print
of your lump sum offer. (If it’s not there,
ask the company for it.) Your investments
have to grow by at least that percentage
annually, after fees, to equal a pension
that covers an average lifetime and much
more, if you live longer than that.
   Lump sums make sense if you’re termi-
nally ill, if you have so much in other sav-
ings that you’ll never have to worry about
running out of money, or if the amount is
small. To avoid taxes, roll the money into
an individual retirement account.
   But to assure yourself of an income for
life, without taking stock market risk, pen-
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The Best of Jane Bryant Quinn

sions are hard to beat.
  If the lump sum offer confuses you or
leaves you anxious, don’t take it, says Ari
Jacobs, global retirement solutions leader
at the benefits consultant Aon. “You’ll be
in the same spot you were before.”
  For more information, go to pension-
rights.org. In the search box, type in
“Should you take your pension as a lump
sum?”

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The Best of Jane Bryant Quinn

         My Parting Advice
          It’s time to say goodbye.
       But first, one last set of tips
      for how to secure your future
        From 2019 December AARP Bulletin

S
     o much has changed in the world
     since the day I launched as a baby
     financial reporter in 1963. When it
comes to what to do with our money, we
have tons of options that didn’t exist back
then. So which should we choose?
  My advice? Simplify your financial life.
Raise the automatic contributions to your
savings plans. Don’t have a plan? Auto-
mate contributions to an individual re-
tirement account (IRA). Buy low-cost in-
dex funds that follow the broad stock and
bond markets; they will likely outperform
any managed fund you own (and, almost
certainly, any bag of individual stocks you
might select). Rightsize your life to live
within your means. Make a will. Check
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The Best of Jane Bryant Quinn

that the beneficiary forms of your IRAs
and 401(k)s list the correct people. Then
quit thinking about your money and get
on with your life.
  But, but, but … it’s one thing to nod your
head to advice on paper and quite anoth-
er to set a plan in motion. You might think
about making changes but never act, or
simply turn your decision-making over to
someone else — someone who won’t nec-
essarily have your best interests at heart.
  So how do you gain the confidence to
make financial decisions?
  Personally, I learned confidence by fol-
lowing the academic research on what ac-
tually works. That’s where I got the advice
that I offered above. If you ignore all the
other stuff — namely, the stuff that doesn’t
work! — you’ve narrowed your choices to
a small set of decisions, such as which in-
dex fund to choose. At that point, you can
hardly go wrong.
  What throws us off is the vast Wall
                                               39
The Best of Jane Bryant Quinn

Street financial machine offering com-
plex investments designed to separate
you from your money. If you don’t want to
manage your money yourself, find some-
one who charges only fees (no commis-
sions) and works for a firm where no one
charges commissions. Keep it simple. Sim-
ple is the sophisticated way to save, invest
and plan.

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