RETIREMENT?…THERE’S AN APP FOR THAT!

After my recent Post, NEW EMPLOYEES ENTERING THE WORKFORCE, I ran across the linked article, from the Chicago Tribune, by Carolyn Bigda, “It’s always app-ropos to think of retirement”, http://www.chicagotribune.com/business/yourmoney/sc-cons-0913-started-20120914,0,4224197.story. Although the attached App, is defined in the Column in regards to Young Workers, I believe that it can be used by others, as well. Obviously, many Financial Firms have their own versions of such Apps.

Incremental Investing Over Time is, perhaps, the only way for the Small Investor to put their money to work. When you invest, little-by-little, the Investor would be Smoothing Out the Curves–some is invested when the market is UP, and some when it is DOWN. In essence, you get the good with the bad. Keep in mind that Investors generally would prefer that their investments are made when the Market is Down, and Up when they withdraw their Retirement Benefits, in Later Years.

In prior Posts, I have noted that the Financial Services Industry is especially focused on the Baby Boomers (those born between 1946 and 1964). This is the Demographic Group that was born after the GIs returned from World War II. The Brokerage and Insurance Companies are not only targeting the Boomers; but, they are also looking to generate revenue from Generational Transfers, from their Parents, and also Funds that they will pass-on to Future Generations.

Going back to my earlier comment about Incremental Investing, the Financial Services Industry is trying to stretch that thought to DCA (Dollar Cost Averaging) which, in other words, can be Incremental Investing–little-by-little, over time. But, they stretch it further.

DCA is used to suggest that it is a Magic Bullet–to insure investment Success. IT DOES NOT! DCA is often used to place a Lump Sum, into either a brokerage account or annuity policy, from which it would be transferred into the Financial Markets over time. Two major problems come to mind: if you are really optimistic about the Markets NOW, why hold most of your money in Reserve? Also, Annuity Fees (let’s say 2.0-2.5%) can start immediately even if your money is merely sitting in Cash. The Firms certainly appreciate the extra liquidity addition to their Financial Picture.

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