The market may not be the greatest risk to your retirement portfolio

Most investors think the greatest risk to their retirement portfolio is the stock market. As such, many of us have a myopic focus on returns, performance and investment risk. But are we ignoring a far greater risk—our health care burden? Let’s say you have amassed $1 million in savings toward your retirement. If faced with another stock market decline similar to 2008-2009 (year-over-year decline of 38% on the S&P 500 Index) or the cost of meeting your lifetime Medicare premiums, which has more risk? The 2017 Retirement Health Care Costs Data Report, put together by Health View Services, a data resource for financial advisors, reveals that the total retirement health care costs for a 65-year-old-couple retiring this year is $404,253. And that is in today’s dollars, which does not account for the medical inflation rate of 6%. These lifetime premiums include Medicare Parts B, D, supplanted insurance, dental, vision, hearing, plus deductibles, copays and any other out-of-pocket costs. It is a conservative number because the 6% medical inflation rate does not include a variety of additional medical costs that the typical person would pay. Just to be sure, I asked my partner Zack Marcotte, who just loves to crunch numbers, to figure out my health costs. My lifetime bill tallies up to be $420, 696.   Now, let’s look at market risk. You would have incurred a $380,000 stock market loss in the financial crisis, if you were fully invested in equities and took no action. Remember, too, that the 2008-2009 periods was the worst stock market loss since the 1929 crash. Many believe that the risk of another financial...

The death of the gas guzzler may take longer than you think

There is a gathering consensus among certain countries and companies that gas and diesel engine cars could be relegated to the dustbin by 2040. How much of that is hype largely depends on who you talk to. This week the U.K. joined France in banning the sale of internal-combustion engines by 2040. Their ban follows on the heels of similar initiatives in several cities throughout Europe.  The main impetus for these moves has been Europe’s efforts to curb auto pollution dating back to the mid-Nineties’ emission controls. Although the UK and France represent only about one-third of autos sold in the EU, most European countries are sympathetic to regulations and deadlines that will reduce pollution, especially in an era where electric and fuel-cell vehicles are becoming a feasible alternative. However, U.K. and French auto production is a drop in the bucket compared to both U.S. and Chinese production. The two account for nearly half of all light vehicles sold in the world. The fact that in China, the central government has been working to discourage consumers to purchase gas guzzlers, while promoting the manufacture and purchase of electric vehicles, lends increasing pressure to end fossil fuel vehicle production sooner than later. Actually, it is only here in the U.S. where the government (thanks to the Trump Administration) is rolling back emission standards. Part of the reason governments are now feeling confident that they can dictate an end to fossil fuel vehicles is the increasing number of studies that forecast electric vehicles (EV) will be both affordable and readily available no later than 2020. Some analysts on Wall Street expect...

How overworked nurses hurt you and your hospital

  Nurse throughout the country are complaining about their hours. Some critics say that they should be happy to have so much work and overtime. After all, plenty of people are working for minimum wage–if they can find a job at all. The problem is that nursing requires a heck of a lot more than your usual service job. Given that almost 90% of the care you receive in a hospital comes solely from nurses, the ratio of nurses-to-patients is a critical factor for you, the patient, and the hospital you enter. The higher the ratio of nurse to patients, the higher the risk that something unpleasant may happen to you during your hospital stay. Here are some of the risks. The more overtime a nurse works, the higher the chance of infection you have. The CDC says over two million hospital infections occur annually. On average, ICU nurses work overtime 5.6 % of the time in most major hospitals. So you do the math. When overworked nurses are stressed beyond their ability to cope, the chances of errors in medications increase and with it the mortality rate of patients. Then there is “The failure to rescue” syndrome. That’s when the patient goes into critical mode. On TV, the heart rate monitor beeps out a warning, the intercom screams out that the patient is coding, a dozen nurses rush in, armed with every conceivable medical device and bring you back from the dead. But in real life there may not be anyone available to rescue us. It happens more times than you know. Hospital accidents do happen and errors...

Front-line nurses have had enough

The ratio of nurses to patients in this country is a battleground. It is such a life or death problem that it has spilled over into the state legislatures around the United States. The concept of “safe-staffing,” rather than “more pay” has now become the rallying cry for nurses and non-nurses alike nationwide. It should be. Owing to the combination of a huge nursing shortage and massive cost-cutting by our nation’s health facilities, nurses feel they have been overworked to the point that they can no longer safely do the jobs they have been assigned. “Safely” is the key word here. Make no mistake—I love nurses. Over the past few years, I owe my life to them and the care they have given me while in the hospital. In addition, I get to see and visit with nurses all the time because many of the local nursing staff are my clients. I manage their 403(b) s for them. I get to see their daily stress, the dark-circles under their eyes, and the trembling in their hands when they sign papers or use the keyboard. At the moment, these 800-plus heroes of mine are deciding whether or not to strike Berkshire Medical Center. I hope that doesn’t happen, but if it does, I will be here for them. My universe of nurses is dedicated, highly-experienced, and totally overworked and they are not alone. Nationwide, nurses are experiencing the same thing. They are through waiting for legislatures or hospital auditors to change what they see as an out-of-control trend, towards reducing nursing staffs further in an effort to contain costs at...

Small business remains the lynchpin of America’s success

The facts are that small businesses still create the lion’s share of jobs and at least half the economic growth in this country. It would be wonderful if our lawmakers would finally realize that. Look around you: with few exceptions, we are surrounded by entrepreneurs who have created over 60% of the jobs in our communities since the financial Crisis of 2009. What we don’t see is the enormous burden that these heroes are living under on a daily basis. A start-up is largely a game of survival. Those who stay in business the longest are most likely to succeed. About two thirds of businesses only survive two years. Of them, another 50% will go under within five years. And only 33% will make it through ten years. The Labor Department, which supplied these statistics, found the same results across all industries. The biggest challenges small business owners face is economic uncertainty, regulatory burdens, taxes and health care costs. All but one of those obstacles depends on decisions that are largely made in Washington. In recent small business surveys a quarter of small business owners said that taxes are the most critical concern they face right now. As such, the outcome of the present debate in Washington over tax reform (or just plain tax cuts) will shape the actions of business owners in the future. Most of us think in terms of tax cuts for the rich (or poor) but that is a simplistic way of looking at this issue. Tax cuts have far more impact on small businesses than on any single individual. Most small business owners are...

The world’s bread basket no more

The recent controversy over dairy trade policies between the Trump Administration and Canada is only the tip of the iceberg. While Trump is selectively picking on one particular product, the truth is that the United States is losing its competitive advantage in many areas of agriculture. Government subsidies to the agriculture industry worldwide have always been a thorn in the American side. That’s not to say that our farmers have gone without. We too subsidize our farmers. Taxpayers are expected to pay at least $87 billion to help farmers over the next dozen years. And for decades, we have been spending billions each year to protect them from lost income and crop failures. The difference between then and now is that, despite other countries’ farm subsidies, we were still number one worldwide in a great variety of food stuffs. So we didn’t care as much. Today this nation’s market share for commodity such as wheat, soy beans and corn are shrinking rapidly. Exports of wheat, for example, have declined by over 50% since the 1970s, while countries like Russia have expanded wheat production by over 60% in just the last ten years. As a result, Russia now dominates global wheat production. And Russia is not alone. Countries in South America, specifically Brazil and Argentina, traditional agriculture countries, have also increased production, thanks to investment, technology, year-round growing seasons, and new planting methods. Four years ago, Brazil overtook the U.S in soybean exports (now the world’s largest exporter) and will be the second-largest corn exporter after the U.S. this year. How did Brazil accomplish it? Brazil embarked on its agricultural...