The government on Thursday said it would adopt strict new limits on using chimpanzees in medical research, after a prestigious scientific group recommended that experiments with humans' closest relative be done only as a last resort.
joi, 15 decembrie 2011
Ron Wyden and Paul Ryan's Bipartisan Plan for Health Care and Medicare Reform
This morning, Democratic Sen. Ron Wyden (Ore.) and Republican Rep. Paul Ryan (Wis.) have shaken up Capitol Hill with an intriguing, bipartisan plan for reforming Medicare, and also the private-sector employer-sponsored insurance system. Politically, the plan is a huge boost to Mitt Romney, whose own remarks on Medicare reform hew closely to Wyden-Ryan; and also to House Republicans, who now have an easy retort to Democrats who were planning to attack Medicare reformers in the 2012 campaign. Substantively, the plan has many encouraging qualities, but there are also some important blanks that Wyden and Ryan will need to fill in.
Premium support with competitive bidding
The heart of the Wyden-Ryan plan is to use competitive bidding to allow private insurers to compete with traditional, 1965-vintage fee-for-service Medicare. If you want to learn more about competitive bidding, see this piece I wrote about Mitt Romney’s proposal for Medicare reform. If that doesn’t quench your thirst, you can read the definitive book on competitive bidding: Bring Market Prices to Medicare, by Robert Coulam, Roger Feldman, and Bryan Dowd.
The basic idea behind competitive bidding is that, say, on a county-by-county basis, you let private plans and traditional Medicare offer plans with the same actuarial value compete, to see who can offer the same package of benefits the most efficiently. Each plan in a given county will name a price for which they are willing to offer these services, and seniors are free to pick whichever plan they want. However, the government will only subsidize an amount equal to the bid proposed by the second-cheapest plan. If you want a more expensive plan, you have to pay the difference yourself.
As I mentioned in the Romney post linked to above, competitive bidding has some left-of-center fans; indeed, a form of competitive bidding was part of the Senate version of Obamacare. It also has fans on the Right, most notably Yuval Levin, dean of the conservative entitlement-reform wonk set. A key concern I mentioned in the Romney post is that competitive bidding, if not structured correctly, puts private insurers at a disadvantage to the government plan. It would be important to ensure that there is a level playing field between the public and private options under such a system.
The plan would only go into effect for people aged 55 or younger today. These future seniors would buy insurance on a “Medicare Exchange,” which would require plans to guarantee coverage regardless of pre-existing conditions, and require plans to charge similar premiums to those who are healthier or sicker.
An unenforceable cap on Medicare spending growth
In the event that competitive bidding failed to bring down spending growth, Wyden-Ryan would cap the growth of Medicare spending to nominal GDP plus one percent (a calculation that includes inflation). How it would enforce this cap is largely unclear. Every Congress is sovereign; one Congress can’t bind future Congresses to due its bidding. Hence, if competitive bidding fails to bring costs down (though it should), the Wyden-Ryan approach of requiring Congress to find ways to cut spending is, effectively, toothless.
Implicitly, the Wyden-Ryan approach would repeal IPAB, Medicare’s rationing board, without putting any credible mechanism in place for future Congresses to keep costs down.
Means-testing for the wealthy, and protections for low-income retirees
Wyden-Ryan would expand means-testing throughout the Medicare system. Currently, higher-income individuals pay more for Medicare under the program’s traditional benefit for outpatient physician services (Part B), and also for the newer prescription-drug benefit (Part D). Under Wyden-Ryan, means-testing would also apply to the premium support payments offered through the Medicare Exchange.
Lower-income individuals who are eligible for both Medicaid and Medicare (the so-called “dual eligibles”) would be protected from the GDP+1 spending growth cap.
Medicare Advantage reform
Wyden-Ryan seeks to reform Medicare Advantage in order to drive further spending growth reductions. They note that Medicare Advantage is currently prevented by law from passing on cost savings. “If a private Medicare Advantage plan has lower costs than traditional Medicare, then by law, the plan may not offer a rebate to the senior. Instead, the plan must compete by offering additional benefits, which in some circumstances increases the use of services—and therefore costs.”
They’re right. And this is why Medicare Advantage has not been able to lower federal Medicare spending. Medicare Advantage plans cost about 14 percent more per person than traditional Medicare plans do, but they typically offer richer benefits than traditional plans. This drives incentives in the wrong direction, and it would appear that Wyden and Ryan aim to change that.
Cost-sharing reform
As I wrote in my big National Affairs piece on Medicare reform, the fundamental problem with Medicare is that seniors are not really required to share in the cost of their care, leading them to spend far more than they need to. Wyden-Ryan urges cost-sharing reforms, though it doesn’t make any specific suggestions. Last March, Sens. Tom Coburn (R., Okla.) and Joe Lieberman (I., Conn.) proposed cost-sharing reforms that Wyden and Ryan would do well to consider.
Employer-sponsored insurance reform
One of the most intriguing aspects of the Wyden-Ryan plan is its drive to gradually migrate our inefficient, employer-sponsored private insurance system to a true individual market where people buy health insurance on their own.
Here, Wyden and Ryan are borrowing from Wyden’s proposed Free Choice Act, in which employees could choose to opt out of their employer-sponsored plan, and take the money to buy a plan of their own choosing on the private market. The opt-out only applies to workers at firms with 100 or fewer employees. If these workers buy a plan on the open market that costs less than what their employers would have paid for, they can pocket the difference as taxable income.
In the absence of Obamacare, this is a very attractive idea. Instead of simply ending the $300 billion-a-year employer tax exclusion, creating a massive disruption of the private insurance market, the opt-out idea allows for a voluntary, gradual transition to an individual health-insurance market. When people buy insurance for themselves, they are more likely to shop for value, instead of overspending on overly comprehensive benefit packages. That, in turn, brings down costs for the overall system.
Likely what would happen is that healthier individuals would opt out of the system and choose cheaper, consumer-driven health plans that pair high-deductible insurance with health savings accounts. Sicker individuals would stay in the conventional employer-sponsored system. This could, in theory, drive a form of adverse selection, driving up costs for the shrinking pool of sicker beneficiaries. However, the savings from the opt-outs might be worth it.
If Obamacare stays on the books, the opt-out idea could actually cause problems if it wasn’t structured the right way. A poorly conceived opt-out, combined with Obamacare’s exchanges, could increase the incentives for employers to dump workers onto the subsidized Obamacare exchanges.
Some liberals and conservatives dislike the compromise
As I mentioned in the opening paragraph, Wyden-Ryan means that premium support has now been embraced by a prominent Democrat. This helps inoculate Republicans from the fact-free, demagogic criticism that they are trying to throw granny off of a cliff.
This fact already has Democrats grumbling. “Why in the world [Wyden] agreed to help Ryan get out of the rock he was under is beyond me,” a former senior Democratic staffer told Kaiser Health News. “This is a bad move on a couple different levels, and has the potential to take away a key argument for Democrats that are trying to retake the House.”
Rep. Pete Stark (D., Calif.) sent out a statement insisting that that the demagoguery would continue. “Despite Wyden's claims otherwise, the Wyden-Ryan plan ends Medicare as we know it, plain and simple."
Some conservatives are unhappy with Paul Ryan, too. Ben Domenech says that Ryan “gave up a lot more to do this [compromise]…My concern is that Ryan’s timing and the nature of this plan will be viewed as a walkback, one that weakens the hand of Republicans going into the presidential [election], and creates conflict for his fellow House and Senate members who stuck their necks out to support his budget and now will be confronted by more questions.”
Ben is right to raise the concern, but I think it’s unlikely to play out that way. Left-wing Democrats are far more likely to take the Pete Stark approach of arguing that there isn’t much difference between Ryan’s old Path to Prosperity plan and the new Wyden-Ryan one. From the Left's standpoint, anything that moves away from single-payer Medicare is anathema.
Bottom line: A promising plan, but more specifics are needed
While I continue to favor the old Ryan plan (indeed, I’d rather see a true Swiss-style voucher system), I do agree that competitive bidding has certain advantages. Most importantly, it has support on the other side of the aisle. In addition, competitive bidding could drive costs lower in areas where hospital monopolies currently hold sway. This makes it the most plausible, bipartisan approach to Medicare reform that’s out there.
On the other hand, it will be important for Wyden and Ryan to help us understand how they will enforce the global spending growth cap. In addition, they will need to explain how their employer insurance opt-out won’t explode the Obamacare exchanges (more than they already will be).
One other deficiency in the plan is that it takes too long to work. In order to honor the promise that there will be no Medicare changes for those older than 55, the plan kicks in in 2023. However, Medicare is slated to go bankrupt in 2020 (if you believe the Congressional Budget Office) or 2016 (if you believe the Medicare actuary).
Overall, I’m very encouraged by this plan. It appears that between Ron Wyden, Paul Ryan, and Mitt Romney, a group of prominent political figures is coalescing around a bipartisan approach to Medicare reform. No doubt that the hard-core will find fault with it. And there are technical problems with the proposal that need to be worked out. But we can say that Wyden and Ryan have moved us forward, on the long road to bringing our runaway fiscal problems under control.
Study group: 3-year freeze on Miss. retirees' COLA
JACKSON, Miss. (AP) — A commission is recommending a three-year freeze on the 3 percent cost-of-living adjustments paid to Mississippi government retirees.
It's also asking lawmakers to consider a long-term change in the pension rules for new hires of state and local government, by adding a defined-contribution component to the Mississippi Public Employee Retirement System.
The recommendations are part of a report released Wednesday by a commission that Republican Gov. Haley Barbour appointed in August. The group is made up of business people, elected officials and financial experts, and Barbour asked them to find ways to strengthen the finances of PERS.
The commission can only make recommendations. Any changes would have to be approved by new legislators who take office in early January.
Ten years ago, Mississippi PERS had enough money to cover 88 percent of its long-term responsibilities, Barbour said. Now, it has enough money to cover 62.5 percent, and money managers would like to see system have at least 80 percent, he said.
Barbour, who leaves office Jan. 10, said many states are shoring up the finances of their public employees' pension plans, and Mississippi needs to do it, too.
"Who deserves this the most?" Barbour said Wednesday. "The taxpayers deserve it. But the employees and the retirees deserve it the most, because they're the people who are basing their future assumptions that this money is going to be there at a time when the system is going in the wrong direction."
The possibility of change worries some state workers and retirees.
"When your financial future is possibly in jeopardy, you are concerned," said Brenda Donnell, who retired in 1996 after 30 years of teaching reading to elementary and middle school students in Jackson.
Donnell was among about two dozen government retirees who packed a room at the Sillers state office building, where Barbour and the commission chairman, Gulfport Mayor George Schloegel, announced the recommendations.
Under the current structure, all of PERS is a defined benefit plan, with managers making investments for all participants and retirees receiving a guaranteed payout based on how many years they work and how much they earn on the job.
If a defined contribution plan is added for new employees, the workers would either manage part of their own investments for retirement or hire someone to manage the investments for them.
The cost-of-living adjustment is typically referred to as a "13th check" because many retirees take it as a lump payment at the end of each calendar year. However, they have the option to receive the COLA each month. Barbour said the actual cost of living has increased by less than 3 percent for each of the past few years, so PERS beneficiaries were overpaid during that time. He said a three-year halt to the COLA payments to current retirees would save the system money.
The study group proposes that for upcoming retirees, the COLA be withheld for the first three years after they leave government service.
The group makes several other recommendations, including requiring PERS to set lower assumptions for the annual earnings rate on its own investments and diversifying the PERS board to add members who don't have a financial interest in the system.
During public hearings this fall, public employees expressed concern about the possibility of reduced benefits for their retirement. Many said a reduction would make it difficult for them to retire comfortably. Union leaders said many public employees already work for lower wages than private-sector workers, and a defined-benefits retirement package is incentive for many to stick with government work.
The study group met during the legislative election season, and the uproar over possible changes in benefits prompted Democratic and Republican candidates to pledge to protect the system, including preserving the 13th check, if possible.
Mississippi PERS manages pension funds for 80,000 state and local government retirees and 167,000 active employees. The members include teachers, firefighters, state hospital workers, prison guards and other nonfederal government workers. State troopers have a separate fund, while legislators have a supplemental fund on top of the regular plan.
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Online:
The PERS study report is posted to the Mississippi governor's website: http://www.governorbarbour.com
Safeguard Your Child's Social Security Number
Jaleesa Suell, a senior at George Washington University in Washington, D.C., recently tried to establish credit by applying for a modest student credit card. To her surprise, she was turned down. She later learned that someone had used her Social Security number to get a credit card in South Dakota, which the thief later defaulted on. Suell, a former foster child who overcame many obstacles on her path to college, now faces the daunting task of clearing off the blots on her credit record. "I've worked so hard to get here, but then this pops up. It's really frustrating," she says.
[See How 2011 Affected Your Money.]
Increasingly, children have become targets of identity thieves. In a study published recently by Carnegie Mellon University, identity checks on 42,232 U.S. minors revealed that 10.2 percent had had their Social Security number used by someone else, 51 times the 0.2 percent rate for adults.
Since children don't tend to file for credit until they are older, the problem can go undetected for years. According to Bo Holland, founder and CEO of AllClear ID, an Austin, Texas, company specializing in identity theft protection, credit bureaus don't have access to federal Social Security records and so can't determine if a thief is making a first-time--and fraudulent--use of a stolen number in a credit application. The bureaus' databases make the assumption that the correct name is associated with the correct number.
Credit bureaus also do not yet employ tools that can determine whether multiple people with different names are misusing the same number. AllClear ID recently studied the credit reports of 381 children. Despite their being known fraud victims, Holland says, "99 percent of the cases were not detected" when checks were run through the three national bureaus, Equifax, Experian, and TransUnion.
[See 12 Money Mistakes Almost Everyone Makes.]
Recently, the Federal Trade Commission held a forum where various nonprofit organizations and firms, including AllClear ID, briefed government officials on the issue. One proposed solution was the creation of a "1710 Database," which would likely be administered by the Social Security Administration with state motor vehicle agencies and the three credit bureaus being the customers. The database would include the birthdays, names, and Social Security numbers of all children up to 17 years and 10 months old. Every credit or job application could be run against the list, catching potential fraud before it happens.
While broader solutions are being developed, credit bureaus have begun taking other steps. For example, TransUnion teamed up with AllClear ID to create a free tool for parents to check the status of their children's identities. And Experian is working with the Identity Theft Resource Center. If your family is victimized, these sites as well as the firm Identity Theft 911 can connect you with the help needed to recover your stolen identity.
@USNewsMoney
Republican Ryan backs new bipartisan Medicare plan
WASHINGTON (Reuters) - Republican lawmaker Paul Ryan, who caused an uproar this year by proposing to privatize Medicare, unveiled a new bipartisan approach on Thursday to cut costs in the government's $525 billion health plan for the elderly.
Ryan, chairman of the House of Representatives Budget Committee, joined Democratic Senator Ron Wyden of Oregon in a plan that would retain Medicare's popular fee-for-service program and allow private insurers to compete for more of its 48 million beneficiaries.
The plan would provide financial support allowing seniors to select insurance through a new, regulated exchange intended to foster competition and reduce costs.
Wyden and Ryan said they were raising the idea at the start of the 2012 election campaign as a way for Republicans and Democrats to find common ground to reform a popular program that has long been seen as politically untouchable.
"This is about trying to get out in front of this issue before it's just another high-decibel shouting match," Wyden said in an interview with Reuters.
"We're outlining a bipartisan approach that would give us a chance to have what might be characterized as an adult conversation about Medicare," he said.
Ryan faced fierce criticism from senior citizen groups early in 2011 with a plan to convert the entire Medicare program into a "premium support" system to help senior citizens buy private insurance.
Republican presidential candidate Newt Gingrich initially castigated the so-called Ryan plan as right-wing social engineering. Analysts said the public reaction undercut support for Republicans among senior citizens, a critical base of voters who had helped the party take control of the House from Democrats in 2010.
The new Wyden-Ryan plan would retain the premium support idea so that Medicare funds would help beneficiaries purchase private coverage vetted by federal health officials and sold through the exchange.
Insurers like UnitedHealth Group and Humana Inc already provide care for millions of beneficiaries through Medicare Advantage plans sponsored by the government.
The lawmakers said their plan would also impose a battery of consumer protection measures to ensure comprehensive and effective coverage.
"Our plan wouldn't merely ensure that American retirees have more health-care options than they have today. By allowing private plans to compete directly with traditional Medicare, our plan would also spur a wave of innovation to lower healthcare costs," Wyden and Ryan wrote in a Wall Street Journal opinion piece published on Thursday.
Beginning in 2022, the plan would allow Medicare spending to rise no higher than the growth in U.S. gross domestic product, plus 1 percent, they said. It would require Congress to cover any additional increases with measures including lower payments to healthcare providers and premium increases for higher-income beneficiaries.
Wyden said there were no plans to introduce legislation in the foreseeable future.
(Reporting by David Morgan; Editing by Michele Gershberg and Peter Cooney)
Wonder No More: 'The Wonder Years' is Now (Finally) Streaming to a Device Near You
It was a television show that achieved multigenerational success. Baby Boomers, Gen X-ers, or Millennials - no matter. Whether old enough to remember the look and feel the show was trying to capture, or young enough to feel as if one grew up with the main characters, the six-year run of "The Wonder Years" certainly left its mark.
The Characters
"The Wonder Years" followed the life and times of the Arnold family and, specifically, the agony and ecstasy of youth through the character of Kevin Arnold (Fred Savage) and his inner monologue, voiced by veteran actor Daniel Stern. Jack (Dan Lauria) and Norma (Alley Mills) held down the family fort as the strange dichotomy of suburban stagnation and the tumult of the Vietnam Era played out in the background. Kevin's obnoxious older brother Wayne (Jason Hervey) and hippie sister Karen (Olivia d'Abo) rounded out the family portion of the cast in fairly stereotypical portrayals. At times it seemed as if Wayne's only memorable lines from the show consisted of his ubiquitous "butthead!" Karen flitted in and out of the storylines, only appearing in roughly half of the episodes. Rounding out the main cast were Kevin's best friend Paul Pfeiffer (Josh Saviano) and sometimes-best friend, sometimes-main squeeze Winnie Cooper (Danica McKellar).
Perhaps even more significant were the number of 'names' of television and film that passed through "The Wonder Years" set during its run - there was David Schwimmer of "Friends" fame whose character, Michael, married Karen in Season Five. Ben Savage (Fred's younger brother and future "Boy Meets World" star) took a turn as Cupid early in the series. Ben Stein was a routine guest as the hilariously monotone (and occasionally apocalyptic) Mr. Cantwell. A couple of future "Saved by the Bell" stars stopped by for a visit (Mark-Paul Gosselaar and Dustin Diamond), and anyone watching the show today would notice Seth Green playing a punk by a cafeteria vending machine, Alicia Silverstone as an all-too-brief love interest, and even an appearance by Punky Brewster herself.
The Episodes
There are plenty of "best of" websites out there when it comes to "The Wonder Years" - and for good reason. One of the reasons the show built such a loyal following that persists more than 20 years later is that it managed to capture (no matter how schlocky) some of the milestone moments of the audience's young lives, through Kevin's voice.
There was the perfect pilot episode, in which Kevin and Winnie shared their first kiss in Harper's Woods. Vignettes from the lives of the other characters were common, from Jack's stressful life at Norcom to Wayne's heartbreaking attempt to join the Army. The creators also provided two intensely gut wrenching Karen episodes - one in which she receives Jack's military jacket from Korea for her birthday and another in which she marries Ross, er, Michael (David Schwimmer) after he pitches a tent on the lawn and stands plaintively in the rain for hours. In the end, however, the series was all about Kevin Arnold and, by extension, every kid who ever grew up as a member of the great, unwashed masses of suburbia. Kevin experienced summers of love, compassionate (or dictatorial) public educators, piano lessons, driving lessons, and life lessons as America listened in each week.
After Years of Waiting - Finally Available
Dozens of the nation's favorite shows have become available on DVD and, later, Blu-Ray - but not "The Wonder Years." Rumors were floated about potential releases on at least a few occasions, but they were quickly squelched by the official word that it was the music licensing that was holding everything up. There was much wailing and gnashing of teeth. Fans started grassroots campaigns. Two 'best of' VHS tapes and DVDs existed but were like giving a person dying of thirst in the desert a small plastic cup of water upon which to subsist. Even the re-runs on obscure basic cable channels grew sparse. Several poorly executed bootlegs were out there, and doubtless there were those who grasped in desperation.
Finally, in the fall of 2011, the shows became available on Netflix and Amazon streaming video - more than 100 episodes, right at one's fingertips.
The moment may have passed without much fanfare (instant streaming still doesn't capture as much attention as a mainstream DVD release), but one thing is for certain: Harper's Woods has been reborn, Mr. Harris' hardware store is open for business, and the magic of "The Wonder Years" is back for good.
Sources:
"The Wonder Years," Internet Movie Database.
"The Wonder Years," The Museum of Broadcast Communications.
"The Wonder Years: The Complete Series," Netflix.
Keith Gow, "The Wonder Years: An Episode Guide," epguides.com.
White House blasts new Medicare plan by GOP's Ryan
WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits dropped to a 3-1/2-year low last week, suggesting a weak U.S. economy is gradually improving even though factory data proved more mixed. Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 366,000, the …
miercuri, 14 decembrie 2011
Canada seeks a way to limit health-spending increases
OTTAWA (Reuters) - Canada's top finance officials will try at a meeting next week to come to grips with the thorny problem of how to limit the rising costs of the country's universal public health-care system in the face of an aging population.
Health care in Canada is a responsibility of the provinces, and since 2004 the federal government has been increasing by 6 percent a year the amount of money it provides them to help pay for the system. It has committed to keep on doing so through 2016, and since 2006 it has increased its annual payments to C$27 billion ($26 billion) from C$19 billion.
But Prime Minister Stephen Harper sounded a warning on November 25 that both levels of government recognize that "the cost of our health-care system cannot continue to rise more quickly than our revenues."
Federal and provincial finance ministers meet in Victoria, British Columbia, next Monday to tackle the problem.
"We will continue to increase funding for health care in a way that is balanced and sustainable," a federal official said, without specifying what formula will determine what is sustainable.
Federal officials dismissed a newspaper report that the escalator would be tied to real yearly growth in gross domestic product, which is projected to range from 2.1 percent to 2.5 percent in the period 2011-15.
However, they did not rule out the idea of linking growth in federal health spending growth to that of nominal GDP. Nominal growth includes inflation and would be a more natural benchmark for health costs since they too are subject to price inflation.
The economy is projected to post nominal growth through 2015 averaging 4.6 percent a year, still substantial but well under the current 6 percent rate of growth of federal health transfers.
The problem that Canada faces, however, is similar to that facing most advanced economies: the bulge in health spending that is expected as baby boomers retire and age.
This means that even if care is delivered efficiently, the health sector might have to account for a larger share of the overall economy, growing faster than nominal GDP.
($1=$1.04 Canadian)
How To Go Against The Grain For Retirement Income
With Federal Reserve Chairman Ben Bernanke reaffirming his plans to maintain an ultra-low interest rate environment through mid 2013, retirees need to once again reconsider how they’re going to generate income from something other than traditional strategies centered on fixed income products. Retirees today need a multi-faceted approach to generating income that includes alternative investment strategies such as contrarian investing.
Contrarian investing is essentially a disciplined approach to fighting the crowd, a willingness to go against the grain and swim upstream … the essence of which Mark Twain captured when he wrote, “Whenever you find yourself on the side of the majority, it’s time to pause and reflect.” In a nut shell, if everyone is running for the exits on a particular stock or sector, contrarian investors begin to salivate over the opportunity.
It’s not hard to find stocks or a sector in the current market that are dramatically underperforming. Case in point: the financial services sector that incorporates insurance companies, banks, brokerage firms, and mutual funds. Combined, they easily take the title of Worst Performing and, thus, the most opportunistic contrarian sector heading into 2012. In fact, according to recent data, this sector is down over 20% year-to-date and are regularly bullied about by both market analysts and the mass media, making them income and capital appreciation plums for contrarian investors with the proper focus and time-horizons.
Caution, though. Contrarian investing for retirement income is a specialized approach that should only be considered as a satellite/strategic diversifier, not a core portfolio tactic. In case you haven’t read my other articles on retirement income, I suggest familiarizing yourself with them first before leaping into a contrarian approach as your first venture (see sidebar).
One contrarian strategy for adding income generators to your portfolio is to buy individual stocks that pay a dividend. We know too well that, before the 2008-09 financial meltdown, financial services stocks – especially banks - were the cornerstone on many income portfolios. These companies were flush with cash; they provided relatively high yields, good dividend growth rates and carried very little perceived risk. Obviously all that has changed, which yet again highlights them as good contrarian prospects.
Three financial services companies are members of an exclusive list called “Dividend Achievers” and together, out-yield the most recent inflation rate of 3.5%. They are: Cincinnati Financial (CINF) 5.8%; Eaton Vance (EV) 3.08%; and Hudson City Bancorp (HCBK) 5.49%. Adding an insurance company and a large asset manager to a time-tested bank can provide diversification with ample opportunities for long-term growth prospects in each area.
On the flip side of selecting individual names, using broad based financial services ETFs does reduce some of the sector volatility, however, at a much lower yield. If you’re willing to trade yield for reduced volatility and focus more on longer term growth prospects consider Financial Sector Select SPDR (XLF) 1.57% or Vanguard Financial ETF (VFH) 1.95%.
A second, high yield consideration for adding financial services to your income pool can be accomplished through preferred stock ETFs. Preferred stocks are a hybrid security with attributes of both equity and fixed income products. Generally speaking, they can be less volatile than individual companies and, since many preferred securities have a fixed interest payment associated with them, are considered fairly consistent income payers. Two popular preferred stock ETFs include iShares S&P US Preferred Stock Shares (PFF) 7.20% and Powershares Preferred (PGX) 6.5%. Both are comprised of at least 80% financial services holdings but do provide some nice cushioning relative to yield during downturns.
Finally, for those who want to go extreme contrarian, check out some International Financial Services investments. Obviously, Euro zone headlines have dramatically shaken the markets of late but, if you truly want to live out the contrarian core philosophy, there isn’t a more feared place to invest right now. Check out iShares MSCI Europe financial Index (EUFN) 4.57% or iShares S&P Global Financials (IXG) 3.16%. The global fund will also include some domestic financial companies so, if you plan to combine any of these strategies together, be sure to consider any duplication that it may create in your portfolio.
In earlier articles I discussed other retirement income strategies, including using precious metals, laddered dividends and a barbell technique in place of traditional fixed income strategies. Now retirees can add contrarian methods to both generate income and potentially build capital appreciation for the long-term.
“We simply attempt to be fearful when others are greedy, and to be greedy only when others are fearful." Warren Buffett
Follow Robert on Twitter @robertlauraCheck out Robert Laura’s recent articles including:Try Laddered Dividends for Retirement IncomeRetirement 2.0: The best FREE retirement planning tools and calculators
How to Build the Best Retirement Spending Plan
Retirement experts have long advocated a conservative approach to spending down retirement assets. That's to ensure people don't outlive their funds. The most common rate recommended is 4 percent a year, although rates from 3 percent to as much as 5 percent and even 6 percent are sometimes considered appropriate, depending on individual circumstances. In the real world, however, there are wild variations when it comes to how people spend their money.
[See top-ranked ETFs by category ranked by U.S. News Best ETFs.]
Research on the spend-down patterns of retirees leaves much to be desired. Fidelity Investments says its 18 million customers spend down their assets at a rate slightly above 4 percent. But that's an aggregate average that masks large variations in behavior. And even at Fidelity, which beats the drum of retirement planning loudly and regularly, only 20 to 25 percent of those 18 million customers have ever completed a retirement plan, let alone followed its recommendations.
At the National Bureau of Economic Research, economists James Poterba, Steven Venti, and David A. Wise have performed many retirement studies over the years. Before 401(k)s, IRAs, and other self-directed retirement accounts began replacing traditional pensions, most people depended on the regular streams of income produced by pensions and Social Security. Individual decisions did not play a big role in retirement income.
Now, of course, it's all about individual decisions. The three economists say that both their own research and their review of other studies show that people use their retirement assets as a piggy bank: They tend to break in only during emergencies and other shocks, such as divorce, the death of a spouse, or a serious health problem. Home equity, traditionally a retirement funding source, is used for such emergencies but is otherwise not tapped (in other words, it's regarded as a personal rainy-day fund).
[See How to Size Up Your Retirement Nest Egg.]
Ditto for 401(k) and IRA assets. According to the economists, less than one quarter of all account holders withdraw assets from these accounts before they are forced to take a minimum distribution at age 70½. And in later years, people take out less money than the accounts have earned. Even at advanced ages--up to the early 90s--people preserved their retirement assets. "Personal retirement plan assets, like home equity, seem to be husbanded in retirement--at least by many households."
The accumulation of retirement assets is interrupted by two major events: a change in family status and a change in health. People who experience a divorce or the death of a spouse also experience a big financial shock that can reduce their retirement funds for the rest of their lives. Two may not live quite as cheaply as one, but couples fare much better in retirement than singles.
Major health events are another significant factor that drives people to break into their nest eggs. The association between health and retirement assets "is striking," the economists found. People in the bottom 20 percent of the population in terms of health had median assets that were only half of those of people in the top 20 percent when the research period began in 1994. When it ended 12 years later, the least-healthy group had only one third the retirement assets of the healthiest group.
Joan Bloom, a Fidelity executive, said the economists' findings were not surprising. If anything, they reinforce the need to plan. "Nobody likes to plan, particularly around money," she says. "It can be intimidating. It can be overwhelming. But the value in going through the pain of planning is that you really do understand what you can do." She emphasizes that planning is not a one-day-per-year exercise, but something that must be more fluid. "You need to be constantly looking at what you're doing. It needs to be adjusted on an ongoing basis." And that 4 percent drawdown rate? Forget it, she says. "A static drawdown rate is not the right way to think about it. Your investing strategy has to be more dynamic."
[See Retirement Plans That Weather Economic Storms.]
Central to that investing strategy, Fidelity advises, should be identifying what it calls a "target income mix." Much like a target asset mix helps to diversity assets and better manage investment risk, a target income mix can help diversify income streams to manage your income risk in the drawdown phase of investing. Different types of income-producing investments have different types of properties, Fidelity says, and mixing these components can help to build an "all weather" portfolio that provides income in various market scenarios. Fidelity's approach is to develop a target income mix with stocks, bonds, and short-term investments that are augmented with annuities. However, since each investor's situation is unique, there's no one mix that's right for everyone.
Bloom says people should calculate their fixed expenses--mortgage, property taxes, utilities, insurance, and the like--and fund them with assets that produce guaranteed income streams. This can include Social Security, interest income from bonds, and annuities. Discretionary spending should be approached with a more diverse portfolio. Stocks historically have produced higher returns than other asset classes, but they are riskier holdings. Using stocks to fund part of your discretionary spending makes sense. You'll probably experience solid gains, but if you don't, you can cut your discretionary spending. It's also important not to underspend, she notes. What's the virtue of hoarding assets, she asks, if it means you don't make trips to visit your family?
Twitter: @PhilMoeller
Hard-up German pensioners forced back to work
Germany, as Europe's top economy, may be seen as the land of plenty but its senior citizens are increasingly being forced to take a part-time job in their twilight years just to make ends meet.
With more inhabitants over the age of 65 than any of its European partners, Germany's senior citizens are having to resort to jobs such as animal- or babysitting or as a caretaker to top up their pensions.
Notices such as "Still spritely pensioner, in good physical and intellectual shape, seeks work paying at least 400 euros ($536) a month. Good knowledge of computers," are common on specialist sites posting job adverts.
Such sites tend to have a column dedicated to pensioners listing so-called "mini-jobs" targeting those within the country's 20-million-strong retired population in need of boosting their incomes.
"Two or three times a week I deliver newspapers," 69-year-old Norbert Mack, who lives in Sindlingen, a western suburb in the city of Frankfurt, told AFP.
"Mostly they are free papers with advertising which arrive around midday, so you then need two or three hours to deliver a pile of 200 to 300 papers," he said.
"I do my round in the area with a shopping trolley. After that, I'm tired and I need to nap for one or two hours at home," said Mack, who used to be employed in industrial machine construction.
The job earns him about 180 euros every month which supplements his 1,500-euro pension which he and his ill wife live on.
"Our only little pleasures are an old car, a small allotment where we spend the holidays and of course, my dog," said Mack, whose hobby is training German shepherd dogs.
Initially created in 2003 by the Social Democratic government of then chancellor Gerhard Schroeder to fight unemployment, these low-paid "mini-jobs", which are taxed at lower rates, proved a hit among the over-65 year-olds.
And about 11 percent of people who hold down "mini-jobs" are in this age category, according to the central office which oversees this type of work.
"Pensioners regularly ask us for work," Walter Ofer, who works for an association helping pensioners said, adding that as well as senior citizens who work to top up their pensions, many women also worked as cleaners off the books.
At 72, Gerda Hafermalz, who used to work in customer service, promotes Swiss cheeses in supermarkets around the eastern region of Erfurt.
"Of course, it was imperative for me to find this work. Either I sat crying over my fate or I took my destiny in my hands," said the divorcee who describes herself as "tough".
"My pension gives me 880 euros a month and there's 375 of it that goes on my rent. Without the money my job gives me I could survive but not live," she said.
Germany has seen the number of pensioners taking jobs to top up their income increase by more than 58 percent between 2000 and 2010, according to the German labour ministry in response to a question by a member of the far-left Linke Party.
In 2000, their number was about 417,000, rising to 661,000 in 2010.
According to Eurostat, Germany has the most inhabitants over the age of 65 in Europe, with 20.6 percent of its population.
The retirement age is due to gradually go up from 65 to 67 years following a reform approved in 2007.
Canada seeks a way to limit health-spending increases
OTTAWA (Reuters) - Canada's top finance officials will try at a meeting next week to come to grips with the thorny problem of how to limit the rising costs of the country's universal public health-care system in the face of an aging population.
Health care in Canada is a responsibility of the provinces, and since 2004 the federal government has been increasing by 6 percent a year the amount of money it provides them to help pay for the system. It has committed to keep on doing so through 2016, and since 2006 it has increased its annual payments to C$27 billion ($26 billion) from C$19 billion.
But Prime Minister Stephen Harper sounded a warning on November 25 that both levels of government recognize that "the cost of our health-care system cannot continue to rise more quickly than our revenues".
Federal and provincial finance ministers meet in Victoria, British Columbia, next Monday to tackle the problem.
"We will continue to increase funding for health care in a way that is balanced and sustainable," a federal official said, without specifying what formula will determine what is sustainable.
Federal officials dismissed a newspaper report that the escalator would be tied to real yearly growth in gross domestic product, which is projected to range from 2.1 percent to 2.5 percent in the period 2011-15.
However, they did not rule out the idea of linking growth in
federal health spending growth to that of nominal GDP. Nominal growth includes inflation and would be a more natural benchmark for health costs since they too are subject to price inflation.
The economy is projected to post nominal growth through 2015 averaging 4.6 percent a year, still substantial but well under the current 6 percent rate of growth of federal health transfers.
The problem that Canada faces, however, is similar to that facing most advanced economies: the bulge in health spending that is expected as baby boomers retire and age.
This means that even if care is delivered efficiently, the health sector might have to account for a larger share of the overall economy, growing faster than nominal GDP.
($1=$1.04 Canadian)
(Reporting by Randall Palmer; Editing by Peter Galloway)
5 Ideas to Beef Up Your Retirement Plan
If you already have a retirement plan in place, you are well ahead of the typical person with an investment account. But you need to monitor and update your retirement plan as you progress through your career to make sure you are still on track. Here are five ideas to strengthen your retirement plan.
[See 11 Retirement Benefit Changes Coming in 2012.]
1. Use your own portfolio performance to project future growth. Include as much data as you have. Past performance is no indication of future performance, but it's much better than simply using the past year's performance to predict what will happen for the next 20 years. Using your own portfolio performance as guidance is more accurate than using historical averages, because personalized results account for our actions, such as what we tend to do when markets are depressed and the economic situation seems dire.
2. Factor in your spouse's risk tolerance. Most people don't take the time to talk to their spouse about money. As a consequence, the risk a family takes on with their investments is usually based on the tolerance of the person who makes the decisions. Take some time to discuss retirement investments with the whole family and find a plan that works for everybody. Achieving financial freedom is a goal that everyone must work toward and will ultimately be enjoyed by everyone involved.
[See Tips for Baby Boomers Reaching Retirement Age in 2012.]
3. Account for your ability to make decisions as you grow older. Many people shun financial professionals because they don't want to pay a financial adviser around 1 percent of their assets every year in order to get standardized advice. However, an adviser is more objective about what needs to be done, and they can help you see the logical side of your financial situation as you get older and making decisions becomes more difficult. It's a good idea to pick a person you trust to manage your investments while you still have the time and energy to stay on top of your finances in case you need help in the future.
4. Know how your plan will change if there are sudden emergencies. Make some contingency plans, because a few financial emergencies are likely to occur before you finally leave the workforce. You shouldn't assume that your current level of saving and investment returns will continue indefinitely. So be a bit conservative and save more than you think you will need. There really is no such thing as saving too much, especially when it's so easy to inflate your lifestyle.
[See The 10 Best Places to Retire in 2012.]
5. Don't underestimate how much can change in 10 years. It's hard to imagine what your life will be like a decade from now, but don't short change yourself. Many people look at their current situation and try to extrapolate to the day they retire, even though life is seldom going to be the same for so many years. If you are willing to work hard, you can save a lot of money and climb up the corporate ladder, but you might also want to start or grow your family and work fewer hours so that you can spend more time with them. This means different levels of assets, income, and spending, which you should take into account in your retirement plan.
Developing a retirement plan is a great start, but you will need to update the plan as you move through your career. Take steps to improve the accuracy of the plan each time you make a major life change and as you get closer to retirement.
David Ning runs MoneyNing, a personal finance site aimed at helping others change their habits for a better financial future. He suggests that everyone to sign up for an online savings account to get more out of our hard earned money.
Is 80 The New Retirement Age? Many Americans Think So
Did you think age 65 was a long time to wait for retirement? Well, how do you feel about age 80 because that's when more Americans say they expect to stop working.
Concerns about having enough for retirement are widespread across the the income spectrum, according to a study released today by Wells Fargo. Almost 20% of affluent Americans says they will need to keep working until at least the age of 80. Slightly more (25%) of middle-class Americans said the same.
Says Karen Wimbish, director of Retail Retirement at Wells Fargo, “We find the rich versus poor narrative in the U.S. is more complex than we might expect, with fears and concerns about retirement felt along the income spectrum. Even among those considered ‘well off’, many seem to fear a sharp drop in their post-retirement standard of living due to insufficient retirement savings.”
Wells interviewed 801 Americans ages 25 to 75 who owned at least $100,000 in investable assets, excluding real estate and other property. Of those, 37% say they need to significantly cut back their spending to save for retirement and 40% say their biggest fear about retirement is they “will do all the right things today and it still won't be enough for tomorrow." Further, 9% fear they will have unde saved and won’t recover.
Even more startling is the response from older working Americans between the age of 60 and 75: 21% of them don't know when they'll stop working.
So the good news is Americans are thinking more about saving for retirement. The bad news though is that many of them are pretty pessimistic about what retirement will look like.
Interesting women are more pessimistic than men when it comes to retirement age. According to the study, twice (18%) as many affluent women as men agree they will need to work until age 80 to have enough savings to live comfortably in retirement.
“Despite the fact that women hold half the high paying managerial positions in the U.S. workforce and they make a majority of household buying decisions, women continue to lag behind men in their confidence in preparing for retirement and this is particularly true for single women,” Wimbish says.
3M offers early retirement to 4,900 employees
(Reuters) - 3M Co is offering early retirement incentives to 4,900 employees and expects about 15 percent to participate in the program, a spokeswoman for the diversified U.S. manufacturer said on Wednesday.
"We are responding to the current economic situation by aggressively controlling costs and conserving cash," said spokeswoman Jacqueline Berry.
3M began to curb spending in the third quarter through a hiring freeze and reduced travel, she added.
The company has about 80,000 employees worldwide, according to its website.
(Reporting by John Stoll)
marți, 13 decembrie 2011
Mario and Zelda Creator Shigeru Miyamoto Retiring as Head of Nintendo
UPDATE: Well this is curious. Nintendo is refuting pretty much everything Miyamoto said, saying that he is NOT stepping down from his current position.
"This is absolutely not true. There seems to have been a misunderstanding. [Miyamoto] has said all along that he wants to train the younger generation. He has no intention of stepping down. Please do not be concerned."
That was a from a Nintendo spokeswoman to Reuters after a 2% stock dip following the announcement. Now there's an official denial statement from Nintendo.
"Video game designer Shigeru Miyamoto's role at Nintendo is not changing. He will continue to be a driving force in Nintendo's development efforts. In discussing his priorities at Nintendo in a media interview, Mr. Miyamoto explained how he is encouraging the younger developers at the company to take more initiative and responsibility for developing software. He attempted to convey his priorities moving forward, inclusive of overseeing all video game development and ensuring the quality of all products. Mr. Miyamoto also discussed his desire to pursue fresh ideas and experiences of the kind that sparked his initial interest in video games."
Unless there were some major translation errors in the Wired piece, that doesn't sound like what he was saying. Yes, he wanted the younger crop to step up, but he definitely said he wanted to step down and work on smaller projects. Not sure what to make of this.
ORIGINAL STORY:
It's been an interesting year for Nintendo. Early weak 3DS sales and issues with the Yen caused them to post the first loss in their history as a video game company. But the 3DS has turned around, and the release of a new Zelda game has bolstered the company once more. How then, will they take this monumental news?
Shigeru Miyamoto, creator of Super Mario Bros. and The Legend of Zelda announced through an interview with Wired that he will be stepping down from the company as head of game development to "focus on smaller projects." Yes, he's still working within the company, but won't be overseeing major titles like Skyward Sword anymore.
“Inside our office, I’ve been recently declaring, ‘I’m going to retire, I’m going to retire,’” Miyamoto said through his interpreter. “I’m not saying that I’m going to retire from game development altogether. What I mean by retiring is, retiring from my current position.”
“What I really want to do is be in the forefront of game development once again myself,” Miyamoto said. “Probably working on a smaller project with even younger developers. Or I might be interested in making something that I can make myself, by myself. Something really small.”
He says he's starting work on a project soon, and hopes to show it within the year. There's no telling exactly what "small" means, but if it's Miyamoto working on it, even if it's reduced in scale from their usual blockbuster titles, that doesn't mean it can't be a big hit for Nintendo.
Why is Miyamoto retiring now? He wants the younger generation to be able to step up and run Nintendo, and not always have to look to him for all the answers.
“The reason why I’m stressing that is that unless I say that I’m retiring, I cannot nurture the young developers,” he said. “After all, if I’m there in my position as it is, then there’s always kind of a relationship. And the young guys are always kind of in a situation where they have to listen to my ideas. But I need some people who are growing up much more than today.”
It's hard to overstate the massive impact Shigeru Miyamoto has had on gaming the past few decades. I scoffed when Steve Jobs was given the "most influential" honor in gaming a few weeks ago, but if we're being serious, Miyamoto might very well deserve that crown for himself.
It's going to be as interesting to see Nintendo without Miyamoto at the helm as it will be Apple without Jobs. Both are so tied into their brand, you have to wonder how each will function without their leadership. But Miyamoto will still be roaming the halls, working on mystery projects with that same sly smile on his face, and that should comfort Nintendo that the spirit of their company is still alive and well.
First Person: The Alternatives to Withdrawing From Retirement Savings
*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
Several years ago, my family suffered a financial hardship that left us wondering whether we would be able to keep a roof over our heads. For six months, it seemed like everything that could go wrong did. I was in a car accident that resulted in hefty medical and repair bills, then my wife lost a large account in her freelance writing business, then our apartment flooded and we were forced to pay to replace most of our furnishings.
It was tough. And for a while, we thought our only option would be to drain our retirement accounts in order to stay afloat.
That was when I went to my financial adviser for some help. I knew that withdrawing money from a retirement account is like the kiss of death for future finances. Heavy penalties and taxes, combined with the loss of savings for retirement years, might leave us destitute down the road. I just couldn't see any other option.
What my financial adviser told me came as a surprise.
Personal Loans
This was the option on which my wife and I decided. A personal loan carries interest, of course, which means spending more on what you buy with it than you would have if you'd had the cash to burn. However, it beats paying the penalties and taxes on a retirement account withdrawal.
The caveat here is that all personal loans are not created equal. We visited twelve different banks and credit unions before applying for a personal loan, and we didn't go with the institution at which we maintain our checking and savings accounts. The terms just weren't as favorable.
We borrowed $10,000, and paid it off six months later. Although we could have taken up to five years to pay it back, we got it over with as soon as our financial situation improved. That way, we avoided significant interest. Of course, that means looking for a loan without prepayment penalties.
Credit Cards
My financial adviser suggested this first, but I immediately discounted it. After accumulating tens of thousands of dollars in credit card debt during college, I did not want a repeat of the experience.
However, I can see how credit cards would be preferable to a withdrawal from retirement savings, especially if the borrower can make more than the minimum payment each month. It just wasn't a route I wanted to consider.
Family
In my experience, loans between family members never turn out the way one expects, but it certainly beats a retirement account withdrawal. This wasn't an option for us, but if our kids ever find themselves in financial jeopardy, I hope they will come to us rather than dipping into their retirement savings.
When Retirement Savings are Necessary
My financial adviser told me that, in some cases, none of the alternatives is viable, and consumers must use their retirement accounts to subsidize their living expenses. He explained that it can be done as long as the consumer is willing to pay the penalties and pay back the money in a timely fashion.
U.S. cracking down on Medicare painkiller abuse
WASHINGTON (Reuters) - Health authorities are directing Medicare prescription drug plans to withhold payments for popular painkillers when they suspect patient abuse, part of a wider effort to combat fraud.
The Department of Health and Human Services noted evidence of "doctor shopping," when patients approach several doctors to get multiple prescriptions of addictive painkillers like OxyContin and Percocet. It also encouraged doctors to issue prescriptions for such drugs that provide a supply of 30 days or less.
The Government Accountability Office found that in 2008 some 170,000 people in Medicare, the federal health insurance for the elderly, received prescriptions from five or more doctors for drugs that are frequently abused.
They incurred about $148 million in prescription drug costs, much of which was paid for by the government.
Painkillers including OxyContin, made by Purdue Pharma, and Percocet, from Endo Pharmaceuticals Holdings Inc, represent the fifth most-filled class of prescription drugs in Medicare, according to the Centers for Medicare and Medicaid Services.
Abuse of painkillers is also responsible for more deaths than illegal drugs like cocaine and heroin combined.
Nearly 15,000 Americans died from a record number of overdoses of prescription painkillers in 2008, the Centers for Disease Control and Prevention said last month.
The CDC estimated that as of last year, 12 million Americans were using prescription opioid or narcotic pain relievers.
HHS said the government has recovered almost $3 billion resulting from healthcare fraud this year.
(Reporting by Alina Selyukh, editing by Carol Bishopric)
House GOP unveils fix to looming Medicare cuts
NEW YORK (Reuters) - Stocks fell for a second straight day on Tuesday after the Federal Reserve gave no hints of new stimulus measures to offset the effects of the worsening European debt crisis. Though the Fed did leave the door open to further easing next year, as it has done after recent meetings, it gave no indication …
Retiring Magic CEO says keeping Howard is priority
ORLANDO, Fla. (AP) — The Magic's retiring chairman and chief executive officer Bob Vander Weide said Wednesday that his decision to step down had nothing to do with a late-night phone call he made recently to Dwight Howard and that efforts to keep the Magic All-Star continue.
However, general manager Otis Smith said the Magic won't placate to every request Howard might have should he decide to test the free agency waters next summer.
Howard can opt out of his current contract a year early and become a free agent in July 2012.
"At the end of the day our objective is to win a title and protect this franchise," Smith said. "We're going to do whatever we have to do in order to do that. Our objective is to keep (Howard) in a uniform, however, if that's not the case then we'll move another direction. But our objective right now is to keep him in uniform."
Vander Weide, who has worked with the Magic since coming on in 1992 as vice president of basketball operations, had been its CEO and chairman since 2010 after previously serving as team president.
He said at a Wednesday press conference he has been moving toward giving up the chairman and CEO reins for more than a year and that the recent NBA labor negotiations are what delayed Wednesday's announcement.
Vander Weide, 53, will stay on in a consulting role, but will hand off the chairman duties to his brother-in-law Dan DeVos. Team president Alex Martins is taking over as CEO and will be running day-to-day matters.
DeVos will also take Vander Weide's position as the Magic's lead representative on the NBA Board of Governors.
Vander Weide sought to clear up reports that he may have been intoxicated when he spoke to Howard in a phone conversation earlier this week.
He said he had 2-3 glasses of wine over a three-hour period after a social event and that he wanted to return text and phone messages Howard had left for him. He denied being drunk when he spoke to Howard.
"We need to be clear on this, that phone conversation has not changed my relationship with Dwight," Vander Weide said. "We like each other; we even love each other as people. He's always reached out to me. That phone call has not changed his feeling about this organization. And third, and maybe not as important, that phone conversation has nothing to do with us being here today."
Vander Weide went on to say that from his assessment in recent conversations between he and Howard that he thinks that "mentally Dwight is in a good place" as he contemplates his future.
Asked if the process to court Dwight to stay has been a tough one for team officials, Vander Weide seemed to at least allude to the 1996 departure of Shaquille O'Neal to the L.A. Lakers when he said previous ones have been.
"It would be real clear historically, having done this with several of your own free agents, it's a taxing process," he said. "But we've learned from each one and we are doing everything we can to make sure Dwight knows this is home for him."
With trade scenarios already swirling, Smith made it clear that while the desire to re-sign Howard is, of course, the Magic's top free agency priority.
"Our objective is to win an NBA title and who does that it is NBA basketball teams," Smith said. "And that's what we're going to continue to do. We're going to put the best team on the floor to give the Orlando Magic a chance to win an NBA title. That doesn't necessarily mean we're going to listen to everything Dwight has to say and placate to that."
Smith said they also would not do it to the detriment of the Magic's organization goal of winning an NBA title.
The ultimate choice, though, is Howard's.
"We want him here as long as we can have him here and our organization brand is to win a title," he said. "We built a culture here for a reason. That's the reason it's that way. We're doing all of our jobs. I'm doing my job. And at the end of the day, the decision will come down to him. It's not going to come down to the people sitting at this podium. It's going to come down to Dwight Howard. And then at that point we have to make another decision."
Brain Changes May Be Tied to Parkinson's Dementia
MONDAY, Dec. 12 (HealthDay News) -- Researchers say they've spotted brain abnormalities that may be linked to dementia in people with Parkinson's disease.
Many Parkinson's patients develop dementia and many of those who aren't diagnosed with dementia have mild cognitive impairment (a state that can precede dementia), according to background information in study.
The study used MRI scans of the brains of 84 Parkinson's patients -- 61 with normal mental abilities, 12 with mild cognitive impairment, and 11 with dementia as well as 23 healthy people.
The scans showed that the Parkinson's patients with dementia appeared to have more brain atrophy in the hippocampal, temporal and parietal lobes of the brain. People with Parkinson's and dementia also tended to have decreased prefrontal cortex volume compared to Parkinson's patients without dementia.
Parkinson's patients with mild cognitive impairment had a pattern of brain atrophy that was similar to those with dementia.
The study, which only found associations and cannot prove cause and effect, is published in the December issue of the journal Archives of Neurology.
As awareness of Parkinson's link to dementia grows, insights that can help further research and aid in the care of these patients will become increasingly important, Dr. Daniel Weintraub, of the University of Pennsylvania, Philadelphia, and colleagues said in the study.
More information
We Move has more about Parkinson's disease.
A Year-End Retirement Checklist
As 2011 comes to a close, we need to take this opportunity to wrap up some retirement planning loose ends. Here are some retirement planning tasks to complete before the holidays.
401(k). The 401(k) contribution limit for 2011 is $16,500, and if you are 50 or older you can add an additional $5,500. Now is the time to check your 401(k) account to see how much you have contributed since the beginning of the year. If you haven't maxed out your 401(k), this month is your last chance to add funds that count toward tax year 2011. It's also a great time to increase your contribution rate so that you don't have to worry about it in 2012.
[See 11 Retirement Benefit Changes Coming in 2012.]
Roth IRA. Roth IRA contributions are limited to $5,000, or $6,000 if you are 50 or older. The easiest way to contribute to a Roth IRA account is to deduct a set amount automatically from each paycheck. Some people also contribute manually throughout the year. Although you can make 2011 contributions until April 2012, December is still a good time to double check your contributions and see if you can add any more money. Once you contribute after-tax dollars to a Roth IRA you won't have to pay tax on any withdrawals in retirement, including decades worth of gains.
Capital loss write-off. December is a great time to take a quick look at your taxable accounts as well. The stock market made some great strides in the beginning of 2011. If you sold some stocks, you most likely have some profit on the books. Consider selling off some loser stocks to offset those capital gains. If you don't have any gains, it is still a good idea to sell enough bad performing stocks to take advantage of the $3,000 tax write-off.
[See The 10 Best Places to Retire in 2012.]
Rebalance. Once you finish dealing with contributions and sell off some stocks, then you should check your asset allocation. Stock markets all over the world fluctuated greatly in 2011 and your asset allocation probably no longer resembles your target allocation. You can use the cash from selling your losers to rebalance your asset allocation in 2011. Also remember to change your 401(k) investment elections to help rebalance your entire portfolio.
529 saving plan. If you have children, consider using any money left after taking care of your retirement contributions to fund a 529 college saving plan. If you pay state income tax, then it could be worthwhile to contribute to the 529 to get a state tax write off. Check your state's 529 plan to see what the allowable state tax deduction is and whether it will reduce your tax bill.
[See The 10 Sunniest Places to Retire.]
Enjoy the holiday. Once you have wrapped up all these loose ends, it will be time to relax and enjoy the holidays with no guilt. If you couldn't max out your retirement account contributions this year, you can always try to improve next year.
Joe Udo is planning an exit strategy from his corporate job by reducing expenses and increasing passive income. He blogs about his journey to early retirement at Retire by 40.
Polish seniors flock to Spain for sun, subsidies
Polish seniors are flocking to Spain, drawn by the cosy Andalusian sun and government subsidies for seniors aged 55 and older, designed to boost the tourist trade in the low season.
"Without the help of the government in Madrid -- which amounts to 130 euros ($175) per person -- and that of my children, I couldn't afford a vacation like this," said Tarsylia Juszkiewicz, 67, fresh off a charter flight from Spain's Malaga, back home to Warsaw.
She spent eight days with three friends in a four-star hotel in Benalmadena, on Spain's Mediterranean Costa del Sol, an unheard of pleasure for the Polish pensioner.
"I've never had such a luxurious vacation before," said Juszkiewicz, who said her meagre monthly state pension alone would never permit such an extravagance.
Average state retirement pensions tally at some 400 euros per month (535 dollars) in Poland, an ex-communist country which joined the European Union in 2004 but is not yet a part of the eurozone.
"The airplane, hotel, meals, insurance, two guided visits for just 1,800 zloty (403 euros, 540 dollars)," Juszkiewicz marvelled, saying the Spanish government paid the 130 euros extra directly to Spanish tourism organisations.
"We can warm our old bones a bit in the sun," joked Irmina Piatek, who as the oldest of these four ladies will soon turn 80.
"In Spain, it's still warm with the temperature at 24 degrees C (75.2 F). Now we have to get used to Polish weather once again and the temperatures are around zero. Paradise is finished!" she exclaims.
All four holiday-makers admitted that "without the subsidy programme, we would certainly have had to stay at home."
Launched in 2009, the program, called Europe Senior Tourism (EST), was created for residents 55 years of age and older from selected EU states, notably poorer ex-communist newcomers to the 27-member bloc including Poland, Slovakia, Hungary, Bulgaria and Romania.
Better off seniors from Britain and Germany are already familiar with Spain and can better afford to holiday there, so EU newcomers are enjoying the benefits of the sponsored tours, an organiser explained.
"The Spanish government is targeting new markets, especially from countries where seniors rarely choose to visit Spain," said Edyta Romanowska, an EST project employee.
She described it as a win-win situation on both sides.
"Spain is also really benefiting. Each euro spent on a senior visitor earns Spain 1.30 euros or more indirectly," she added. "The goal is to give the hotel sector some business in the off-season and to create jobs."
To attract the maximum number of tourists, seniors can be accompanied by a younger person, who also is also eligible for the 130-euro subsidy.
Anna Walicka, 63, was able to invite her daughter Barbara, who is 40.
"My daughter also received the help of the Spanish government," the elegant pensioner told AFP at Warsaw's Frederic Chopin international airport.
Poles are taking full advantage of the bargain, making up about 20 percent of the 100,000 seniors who have traveled to Spain during the first two seasons of the EST project in 2009-10 and 2010-11.
Greek seniors took first spot with 15,254 visitors in 2009-10, but Poles outpaced them in the second edition of the program in 2010-11, with 12,964 visitors.
"Romanians and Bulgarians also responded enthusiastically this year," Romanowska said, stating "the Eastern European market has huge potential and a bright future."
Tourist Walicka had only one regret.
"It's a pity that the Spanish government only contributes to one week of vacation, we would very much like to have stayed longer," she said.
6 Unusual Retirement Lifestyles
NEW YORK (Reuters) - Stocks fell for a second straight day on Tuesday after the Federal Reserve gave no hints of new stimulus measures to offset the effects of the worsening European debt crisis. Though the Fed did leave the door open to further easing next year, as it has done after recent meetings, it gave no indication …
A Year-End Checklist for Retirement Planning
The holiday season is a time for celebration. It's when most people enjoy the company of their loved ones and spend time having fun. And this is as it should be. After all, we work hard all year and life is the most fulfilling when we find the right work-life balance. But the end of the year isn't just a time to relax. Take a tiny bit of time out of your day to complete these five year-end tasks for aspiring retirees.
[See The 10 Best Places to Retire in 2012.]
Plan how much you will contribute to your retirement accounts. The best time to elect the percentage of your paycheck to direct deposit into a retirement account is now, before the new year starts. Try to boost the amount you will save next year if you can. You can contribute up to $17,000 to your 401(k) in 2012, $500 more than in 2011, and another $5,500 if you are age 50 or older. Next year, take advantage of being able to defer taxes on more of your retirement savings.
Develop a plan to reduce your 2012 taxes. There is still time to reduce your 2011 tax burden. But significantly reducing your tax bill requires a conscious effort year round. Efficient tax planners are already looking for ways to reduce their 2012 tax bill. Planning early will also help shield you from making sudden decisions that are often costly.
[See top-ranked ETFs by category ranked by U.S. News Best ETFs.]
Funnel extra cash into your retirement and savings accounts. One way to increase your savings is to funnel loose change into your savings accounts. Bills that you forgot in your drawers, extra cash you find in your wallet, and monetary gifts you might receive from others during the holidays should be stashed in your savings vault. If you haven't maxed out your retirement accounts, deposit windfalls of cash into those accounts first. The contribution limits reset each year, so you are missing out on the tax savings if you don't take advantage of it now.
Figure out how to make your gifts meaningful. Gift exchanges are a chore for many families. Many people end up spending money excessively around the holidays on people they seldom see the rest of the year. This huge money drain benefits no one. Talk to your social circles and decide how you can make your gifts meaningful for everyone. Otherwise, skip the tradition and pocket your savings for your future self.
[See 11 Retirement Benefit Changes Coming in 2012.]
Be thankful for a good year. No matter how you feel your year has gone, there are lots of things to be thankful for. Your health, your family, and your standard of living in a developed nation are just some of the privileges that we often take for granted. There is always room for improvement, but be thankful and enjoy the holidays. Reducing stress has the added benefit of possibly reducing your medical bills in the future.
David Ning runs MoneyNing, a personal finance site aimed at helping others change their habits for a better financial future. He suggests that everyone to sign up for an online savings account to get more out of our hard earned money.
Top Beach, City, and Country Retirement Spots
When considering the idea of retiring to another country, two factors are most important: how much money you have to live on in retirement and the kind of lifestyle you would enjoy best.
Perhaps you dream of the lapping Caribbean Sea just beyond your doorstep or the sound of the crashing Pacific surf outside your bedroom window. Maybe your ideal retirement lifestyle would be a country town, where wildflowers cover the hillsides and the temperatures are pleasant year-round. Or, perhaps, you wouldn't be happy in a place where you couldn't dine out three nights a week and enjoy regular visits to the theater, museums, galleries, and cafes.
[See The 10 Best Places to Retire in 2012.]
Once you know the kind of retirement lifestyle you want, you need to select a place that suits your budget. Consider these recommendations for beach, city, and country retreats suitable for every budget.
Top Beach Choices
Bigger budget ($2,500/month): Puerto Vallarta, Mexico
Puerto Vallarta, Mexico, offers a full-amenity Pacific coast retirement option, like the best of southern coastal California, at half the cost or less. This isn't developing world living, but near-luxury living in a charming town. In addition, this region boasts the beautiful Bay of Banderas (where Richard Burton and Elizabeth Taylor showed the world how to fall in love), marinas, golf courses, shopping, and fine dining. Puerto Vallarta is also easily accessible from North America and home to an established expat community.
Medium budget ($1,700/month): Costa de Oro, Uruguay
Uruguay is a jewel of South America. Costa de Oro is emerging as a top retirement haven with many world-famous beaches along its Gold Coast. Farther along this coast are far less known choices, which are often overlooked and ignored. In these prime beach locations, life continues as it has for decades. This is a region left back in time.
Here you'll find some of the best seaside values available in any first world setting, including 30 miles of uninterrupted golden sands, gentle sweeping coves, and uncrowded beaches. There are options for full-time retirement living on the water, and small, friendly communities with shady, tree-lined streets and stately homes.
These are towns where you can enjoy going out to eat, find excellent shopping, and meet up with a handful of fellow North Americans from time to time. Most places have drinkable water, high-speed Internet, and generally first world infrastructure. Uruguay in general offers a peaceful, laid-back culture, and an appealing distance from the world's troubles. Uruguay is also a place where expats can obtain residency easily and even a second passport.
Smaller budget ($1,300/month): San Juan del Sur, Nicaragua
Relatively undeveloped and rough around the edges, San Juan del Sur, Nicaragua, isn't for everyone. This quintessential beachcomber town on the beautiful bay of the same name can be a great Pacific coast choice if your retirement budget is small. Nicaragua is one of the world's most affordable retirement havens. Its Pacific coast, in particular those sandy stretches around San Juan del Sur, is known for serving up some of the world's best surfing waves. The emerging San Juan del Sur expat community is warm and welcoming.
[See The 10 Sunniest Places to Retire.]
Top City Choices
Bigger budget ($3,000/month): Paris, France
If you like city life, you'll love Paris. This is the world's most beautiful, most romantic, most alluring, and most walkable city. It offers every manner of diversion and distraction you could imagine along with some of the world's best museums, art galleries, restaurants, theater, architecture, parks, gardens, and shopping. The really good news is that it's not necessarily as expensive a place to live as you might imagine. Some of the best things in this city are free or nearly so, such as long walks along the Seine, long afternoons in the Luxembourg or Tuileries gardens, and long respites savoring a coffee at one of the city's many outdoor cafes. Even the more practical requirements of life can be affordable, including monthly phone, cable, and Internet packages for as little as $50 and a Metro ticket to take you anywhere in the city costs less than $2.
Medium budget ($2,000/month): Medellin, Colombia
If you can't afford Paris but want that kind of cosmopolitan lifestyle, consider Medellin, Colombia. No, of course, this isn't Paris, but Medellin has an appeal that I find irresistible. It also has great restaurants, great museums, pretty parks, well-tended gardens, outdoor cafes, and festivals, including an impressive Festival of Lights to celebrate the season this time of year. In addition, this city of springtime and flowers has great weather year-round, something even Paris doesn't offer.
Smaller budget ($1,300/month): Cuenca, Ecuador
Colonial Cuenca, Ecuador, could be said to offer the best quality of city life for the money. At just over 400,000 people, Cuenca seems like the perfect size. It's small enough so that you always see someone you know when walking around town. People know and remember you, so you feel at home and part of the community.
At the same time, Cuenca is not so small that it doesn't have all the services you need. It's a provincial capital, meaning you have the state and municipal offices at your convenience, as well as fine-dining restaurants, theater, orchestra, and plenty of festivals and celebrations. The colonial architecture, Andean markets, and heritage of the city make you feel that you're really experiencing another country and a rich culture. Public transportation is great, both within the city and between cities. The city buses are plentiful and inexpensive. Taxis cost about $1.50, and a four-hour ride to Guayaquil, for example, is about $8.
[See 6 Affordable Places to Retire Abroad in 2012.]
Top Country Choices
Bigger budget ($3,000/month): County Kerry, Ireland
County Kerry is the best of romantic, postcard Ireland, with its patchwork fields, stony walls, mystical forts, and craggy caves. This region of Ireland is all about the great outdoors, with opportunities for hiking, mountain climbing, kayaking, sailing, or just strolling the national parks. Plus, on these southern shores of the Iveragh Peninsula, you'll find white sand and, beyond, the wide Atlantic horizon.
This is a part of the country that has managed to avoid major development. You won't find freeways or any Golden Arches as you wind your way around these craggy peninsulas. Iveragh is one of the most stunning parts of Ireland. If you're drawn to a more traditional way of life, surrounded by nature at its best, the area is hard to beat. And, with the collapse of this country's property market, this is the best time in a generation to be thinking about settling down here.
Medium budget ($1,600/month): Abruzzo, Italy
It's hard to think of a lovelier corner of Italy than Abruzzo. Its beaches are golden, and the sea rolls out from them like a giant bolt of turquoise silk. Eagles swoop down from craggy eyries, wild peonies and gentians color the alpine meadows, and the region stitches together seascapes with lush mountain valleys. You can have the best of all worlds here: a beach and a hillside. In spring, it's possible to combine a morning on the Apennine ski slopes with an afternoon at the beach. How many places in the world is that possible?
There is no over-crowding or heavy industry. Hiding away down Abruzzo's curvy roads are castles, vineyards, and villages made of stone and memory. Life in this part of the world hasn't changed that much over the years, and coming here is like wandering into a gentler, kinder yesterday with little or no crime and neighbors who watch out for each other.
And perhaps the best thing about the sparsely populated Abruzzo is its affordable cost of living. In some villages in this part of Italy, habitable village houses are on the market for as little as 28,000 euro. At current exchange rates, that's $36,400. This isn't Tuscany.
[See The Most Tax-Friendly Places to Retire Abroad.]
Smaller budget ($1,300/month): El Retiro, Colombia
El Retiro is an undiscovered colonial mountain town in Colombia, about an hour outside Medellin. The hillsides look down from all sides, giving the town a safe, cozy feel. The appeal is the traditionally laid out Spanish-colonial town, with the plaza and centuries-old white church at its center. This is an escape to a simpler time. Still, you can find everything you'd need for a pleasant, comfortable life here. And what you can't get in El Retiro, you can find an hour's drive down the mountain in Medellin.
Home to about 6,000 people and four beautiful churches, El Retiro has managed to remain a world apart. The setting, the square, and the ambiance are reminiscent of Cafayete, Argentina, but you don't have to travel as far. It's hidden away, but only a half-hour from the international airport.
If you like life slow and easy, El Retiro could be an appealing option. It's also a place to escape the heat. Here, a fireplace would be a welcome addition to your home some evenings. The setting is hard to beat, and the cost of living and of real estate are a bargain. The old colonials around the central square change hands for $40,000 to $60,000. There's an awful lot of charm for not a lot of money.
Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter. Her book, How To Retire Overseas--Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.
Tips for Baby Boomers Reaching Retirement Age in 2012
In 2012, the oldest baby boomers will turn 66, an important age for Social Security eligibility. At 66, boomers can claim the full amount of Social Security they have earned, and the penalty for working and claiming Social Security benefits at the same time disappears. Here are some retirement planning tips for those turning 66 next year.
[See 11 Retirement Benefit Changes Coming in 2012.]
Social Security eligibility. Baby boomers born in 1946 will hit what the Social Security Administration considers the full retirement age, at which time they are eligible to claim the full amount of Social Security they are entitled to. Boomers who claimed their due early are receiving a reduced payout.
Delay and get more. You can further increase your monthly Social Security payments if you delay claiming your benefits up to age 70. "Financially speaking, it makes more sense to wait until later when you can get more money per year, especially if you are healthy and think you will live a long time," says Daniel Goldie, president of Dan Goldie Financial Services in Menlo Park, Calif., and coauthor of The Investment Answer: Learn to Manage Your Money & Protect Your Financial Future. "You will get more money per month and that money will continue at that higher level for the rest of your life."
Claim twice. Married individuals (or those who were married for at least 10 years) are eligible for Social Security payments based on their own work record or payments equal to up to 50 percent of the higher earner's benefit, whichever is higher. Baby boomers who have reached their full retirement age can even claim both of these types of payments at different times. A 66-year-old retiree may sign up to receive spousal payments and continue to delay receiving his or her own retirement benefit. A retired worker who uses this strategy between ages 66 and 70 will get higher monthly payments after age 70 due to delayed claiming plus four years of spousal payments.
Work without penalty. If you work and claim Social Security payments at the same time prior to age 66, part or all of your Social Security benefit will be temporarily withheld. Social Security recipients under age 66 who earn more than $14,640 in 2012 will have 50 cents of each dollar above that limit deducted from their Social Security payments. The year you turn 66, the earnings limit jumps to $38,880 and the amount withheld is reduced to 33 cents for each dollar earned. And the earnings limit disappears once you turn age 66. "Unlike people who take early Social Security, you can work and earn as much as you want without reducing your Social Security," says Tim Maurer, vice president at the Financial Consulate in Hunt Valley, Md., and coauthor of The Ultimate Financial Plan: Balancing Your Money and Life.
[See The 10 Best Places to Retire in 2012.]
Don't forget about Medicare. Boomers born in 1946 should have signed up for Medicare in 2011. Retirees can sign up for Medicare beginning three months before the month they turn 65. It's important to sign up for Medicare as soon as you are eligible because premiums may increase by 10 percent for each 12-month period that you delay enrollment. People who are still working and are covered by a group health insurance plan through their job must sign up within eight months of leaving the job to avoid the penalty. If you elect to receive Medicare Part D prescription drug coverage, it's important to shop around for a new policy annually during the open enrollment period because covered medications and cost-sharing requirements often change each year.
Protect what you have. At this stage of your life, it is important to protect the nest egg you have built for retirement. "Make sure you are continuously tracking and monitoring how you are spending your money and the types of returns you are generating from your portfolio," says Gordon Tudor, a certified financial planner for Wealth Analytics in San Diego, Calif. "It's not about return--it's about reducing your risk and avoiding losing money." While many retirees maintain some exposure to stocks, which provide continued growth and fight inflation, it's important to keep a gradually increasing portion of your nest egg in safer investments that will allow you to meet your everyday spending needs.
[See The 10 Sunniest Places to Retire.]
Plan your new life. Retirement planning isn't just about meeting your financial needs. You also need a plan for how you will spend your days after you leave the workforce. "Develop a part-time dream job that you could now potentially afford to do," says Maurer. "Look at this as a time of commencement."
Twitter: @aiming2retire
Analysis: Old and young bear strain as euro crisis festers
LONDON (Reuters) - When Italy's welfare minister shed tears in announcing an increase in the retirement age, people might have thought she was crying for a lost generation of European youth. For opinion polls show a strong perception that older workers deny young people jobs.
Fortunately for millions of young unemployed across Europe, economists say the perception is wrong, a variation of the fallacy that the amount of work is finite and jobs must be shared out accordingly.
If the "lump of labor" hypothesis was anything but a myth, why does the size of a country bear no relation to how many of its citizens have a job? Why have automation and computer processing not caused mass unemployment?
"Surely history tells us that there is no lump of labor!" said Simon Kirby, a senior research fellow at the National Institute of Economic and Social Research, a think tank in London.
The supposition that delaying retirement is "taking jobs" from youngsters is in the headlines as one EU country after another, under pressure to reduce debts and deficits, cuts pension spending.
In the case of Italy, Welfare Minister Elsa Fornero said on Sunday that pensions would be calculated from next year on the basis of paid-in contributions instead of end-of-career salaries.
The minimum retirement ages goes up to 62 from 60 for women and to 66 from 65 for men. Inflation indexation for those with monthly pensions of more than 936 euros is scrapped.
Fornero wept at the sacrifices she was seeking.
"I won't deny that there would probably be some increase in unemployment as a result of extended working lives, but that would just be a temporary factor as the labor market adjusts," Kirby said.
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EVIDENCE FROM THE PAST
Britain's successful absorption of a jump in the number of immigrants from eastern Europe in recent years showed it was false to imagine that one group of individuals can find work only at the expense of others, Kirby said.
"That was a labor market shock. No one in the UK, particularly business, anticipated the scale of the increase in migration and yet we absorbed that reasonably well," he said.
Mark Keese, head of the employment analysis division at the Organisation for Economic Cooperation and Development, a Paris forum of industrial democracies, also cited empirical evidence to debunk the theory.
Governments had tried in the past to reduce youth unemployment by enticing older workers to retire but had failed, partly because they had to raise labor taxes to pay for the extended pensions. Employers were not amused.
"We have a good historical record showing it doesn't work in one sense, so there's no reason to think, in the other sense, that if you extend working lives it's going to lock out younger people," he said.
Indeed, Keese said there was no evidence that youngsters were faring particularly badly this recession. Yes, youth unemployment was high -- above 40 percent in Spain. But fewer older workers had left the workforce during the downturn.
"So if the lump-of-labor fallacy were correct, the situation for youth would be much, much worse," he said.
Keese said it was simplistic to view all jobs as the same. An older person has years of accumulated experience, often with valuable skills specific to a particular firm, that a youngster cannot match and an employer is loath to lose. A young worker might be more adept with information technology but probably lacks management skills.
"This is part of the lump-of-labor fallacy. You can't just substitute a younger person for an older person. It really depends on the type of job," he said.
PENSIONS BILL
In a demographic context, the policy emphasis on working longer is hard to dispute. In the 50 years since the OECD was founded in 1961, life expectancy has jumped by 10 years, to 76 for men and 82 for women.
Despite quite extensive changes in a clutch of countries to make pension systems financially sustainable, budgets are groaning under the strain.
Before the latest reforms, for example, Italy's spending on pensions came to 29.4 percent of government spending, up from 19.1 percent in 1990 and dwarfing the OECD average of 16.5 percent.
Charles Robertson, chief global economist at Renaissance Capital, said pension spending was a key cause of the euro zone crisis.
"To bring Italian pension spending down to German spending levels would require pension payments to be cut by a third. Given the 12 million Italian pensioners (roughly one-quarter of voters), it is little wonder that former-premier Silvio Berlusconi and his allies were so reluctant to address the pension issue," he said in a report.
Delaying retirement to tackle unaffordable pension outlays might magnify youth unemployment in the eyes of voters, but economists take a more dispassionate view.
Creating jobs for youngsters comes down to giving employers incentives to hire young workers and reforming employment laws that protect "insiders" with permanent jobs at the expense of "outsiders" on precarious short-term contracts. These are often women and youths. Only one in five Italians under 25 has a job.
Above all, governments need to stimulate aggregate demand as well as raise the standards of education, training and skills.
"In many cases the qualifications that people acquire are just not fit for the skilled work that people want them to do," said George Magnus, a senior economic adviser at UBS and author of a book on the economic consequences of ageing.
But raising education levels is for the long haul. Generating jobs by boosting demand and output is the immediate imperative.
"The lump-of-labor argument is as meaningless today as it ever was," Magnus said. "If we had more growth in the economy, I don't think we'd be having a heated debate about oldies taking away jobs from young people."
(Reporting by Alan Wheatley. Editing by Jeremy Gaunt.)
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