Post by Zoinkers on Sept 29, 2006 2:56:09 GMT -5
Motley Fool
Brokerages Failing on Retirement Planning
Friday September 22, 10:13 am ET
By Selena Maranjian
If you're counting on your trusty brokerage to help you plan sufficiently for your golden years, think again.
According to a recent report from Corporate Insight, which monitors financial services companies, brokerages aren't doing a good enough job when it comes to retirement planning. It noted "only two thirds of the firms tracked ... offer some type of retirement planning tool, and just over 10% of those allow clients to import actual accounts and positions for a look at financial stability and growth based on market simulations, as opposed to generically selected rates of return." In other words, if you're looking for meaty information on your personal financial situation, it may not be easy to find at your friendly brokerage.
The kinds of services that might be helpful include being able to model the growth of your portfolio -- especially if you can automatically import the contents of your portfolio into a modeling tool. You can still tackle this on your own, though -- perhaps by estimating how quickly you expect your various holdings to grow over time. Wal-Mart (NYSE: WMT - News), for example, has grown by an average annual rate of 26% over the past 30 years. Should you expect that over the next 30 years? Probably not. Temper your expectations as a company grows. Over the past 20 years, the rate has been 16%, and it's been 14% over the past decade. So if you have $20,000 invested in Wal-Mart and hope to leave it there for 20 more years, perhaps expect to earn between 10% and 14% on it, on average, per year.
If you start with smaller companies, as Tom Gardner does in our Hidden Gems newsletter, you might expect faster growth. Don't let this be your only planning, though.
If you want to find a better brokerage for yourself, visit our Broker Center, where you can also compare four solid brokerages via a handy broker comparison table.
And don't just look to your brokerage for planning tools. The retirement resource I use most often is our Rule Your Retirement newsletter, which you can try for free.
Here's a sampling of some very useful articles from past issues:
In the June 2006 issue, newsletter editor Robert Brokamp addressed international investing, re-recommending an international mutual fund that advanced some 50% since he first mentioned it back in December of 2004.
In another issue, Robert explained why we may want to plan on withdrawing 4% from our nest eggs during each year of retirement, if we want to make the money last.
The October 2005 issue delved into dividends and offered some recommended dividend payers. (Robert also discussed dividends in this article, mentioning firms such as Johnson & Johnson (NYSE: JNJ - News), 3M (NYSE: MMM - News) and Procter & Gamble (NYSE: PG - News).
Wal-Mart and 3M are Motley Fool Inside Value recommendations. Johnson & Johnson is a Motley Fool Income Investor pick.
Longtime Fool contributor Selena Maranjian owns shares of Wal-Mart, 3M, and Johnson & Johnson. The Motley Fool has a trustworthy disclosure policy.
Brokerages Failing on Retirement Planning
Friday September 22, 10:13 am ET
By Selena Maranjian
If you're counting on your trusty brokerage to help you plan sufficiently for your golden years, think again.
According to a recent report from Corporate Insight, which monitors financial services companies, brokerages aren't doing a good enough job when it comes to retirement planning. It noted "only two thirds of the firms tracked ... offer some type of retirement planning tool, and just over 10% of those allow clients to import actual accounts and positions for a look at financial stability and growth based on market simulations, as opposed to generically selected rates of return." In other words, if you're looking for meaty information on your personal financial situation, it may not be easy to find at your friendly brokerage.
The kinds of services that might be helpful include being able to model the growth of your portfolio -- especially if you can automatically import the contents of your portfolio into a modeling tool. You can still tackle this on your own, though -- perhaps by estimating how quickly you expect your various holdings to grow over time. Wal-Mart (NYSE: WMT - News), for example, has grown by an average annual rate of 26% over the past 30 years. Should you expect that over the next 30 years? Probably not. Temper your expectations as a company grows. Over the past 20 years, the rate has been 16%, and it's been 14% over the past decade. So if you have $20,000 invested in Wal-Mart and hope to leave it there for 20 more years, perhaps expect to earn between 10% and 14% on it, on average, per year.
If you start with smaller companies, as Tom Gardner does in our Hidden Gems newsletter, you might expect faster growth. Don't let this be your only planning, though.
If you want to find a better brokerage for yourself, visit our Broker Center, where you can also compare four solid brokerages via a handy broker comparison table.
And don't just look to your brokerage for planning tools. The retirement resource I use most often is our Rule Your Retirement newsletter, which you can try for free.
Here's a sampling of some very useful articles from past issues:
In the June 2006 issue, newsletter editor Robert Brokamp addressed international investing, re-recommending an international mutual fund that advanced some 50% since he first mentioned it back in December of 2004.
In another issue, Robert explained why we may want to plan on withdrawing 4% from our nest eggs during each year of retirement, if we want to make the money last.
The October 2005 issue delved into dividends and offered some recommended dividend payers. (Robert also discussed dividends in this article, mentioning firms such as Johnson & Johnson (NYSE: JNJ - News), 3M (NYSE: MMM - News) and Procter & Gamble (NYSE: PG - News).
Wal-Mart and 3M are Motley Fool Inside Value recommendations. Johnson & Johnson is a Motley Fool Income Investor pick.
Longtime Fool contributor Selena Maranjian owns shares of Wal-Mart, 3M, and Johnson & Johnson. The Motley Fool has a trustworthy disclosure policy.