Getting ready to retire? Save more, spend less

Bill and Christina Balderaz, 39 and 37, Upper Arlington, Ohio. The couple got a windfall when Bill's company was sold. But in hopes of retiring before 60, they continue to spend as carefully as before.

NEW YORK (Money Magazine)

Rule 2: Early retirement means tradeoffs, now and later

MONEY readers weigh in

What are the biggest obstacles standing between you and early retirement?

SOURCE: Online poll among 358 members of the MONEY Matters Reader Panel, Sept. 17-23, 2013

Funding your retirement, never a breeze, has become tougher in this economy. Interest rates are hovering near historic lows, and bond guru Bill Gross recently warned that low rates may persist for decades. So what you can earn on low-risk cash and bonds will remain paltry.

Wade Pfau, a researcher and professor at the American College of Financial Services, has calculated sure-fire retirement savings rates in this rate environment.

If you hope to retire at age 65 and start saving at 35 -- when baby boomers typically began, a May 2013 Bank of America Merrill Edge survey found -- it's 15% to 19% a year. Move your retirement date up by five years, and those rates go to 23% to 29%, Pfau says.

You probably can't hit those daunting targets year in, year out. So the trick is to gain ground when you can -- and be willing to make the math work by living on less.

What to do

Buckle down. You can catch up with bursts of savings -- often easier once big expenses like college or a mortgage fall away.

According to retirement research firm Hearts & Wallets, saving 15% or more of your income for eight to 10 years -- early or late in your career -- can ensure that you save enough to retire comfortably at 65. Such power saving is common among early retirees too, says Hearts & Wallets co-founder Laura Varas, but the rate is 25% or more.

Related: 10 Best Places to Retire

Calvin Lawrence was able to retire from his job as executive director at Corinthian College in Chesapeake, Va., four years ago at 59, even though he hadn't gotten serious about retirement planning until after he divorced at 50.

At that point he had about $200,000 set aside. With his two children out of college (and out of the house), tuition and other child-care bills were gone. And a promotion had boosted his pay by $20,000.

Even though he made $110,000 a year, "I lived like I earned $50,000," says Lawrence, now 63. "I found that I don't need to spend a whole lot of money to be happy." The result: He built his savings to $800,000.

Put windfalls to work. Whether it's an inheritance or a bonus, a windfall can make the difference between leaving early and working until 65.

When Bill Balderaz, now 39, sold the social media marketing business he founded in 2011, he and his wife, Christina, an elementary-school teacher, put themselves on the road to retirement in their fifties. With profits of a few hundred thousand dollars, the couple wiped out the big expenses that often make saving for the future hard -- paying off the mortgage on their home in Upper Arlington, Ohio, and setting aside public school college tuition for their kids. The rest went toward retirement funds, which now total $600,000.

Related: Will you have enough to retire?

Just as critically, they didn't ratchet up their spending. "We didn't buy a Mercedes or build a new house or send our kids to private schools," says Bill, now president of Fathom Columbus, the online marketing firm that bought him out.

He still drives a 17-year-old Toyota Tacoma pickup truck. In the market for a boat for the family -- the children range from 10 months to 11 years -- he bought a decade-old 18-footer off Craigslist for $9,000. A similar new one would have cost $27,000. "We live like the acquisition didn't happen," Bill says.

Set low expectations. To get away with saving less, commit to living on less. Planners typically suggest you aim to replace 70% to 80% of your pre-retirement income, which doesn't amount to a dramatic lifestyle change once you eliminate the money you were saving, Social Security taxes, and commuting costs.

If you can make it on 50%, you need to save 11.8 times your income by age 60, vs. 17 times if you hope to live on 70%, says Charles Farrell, CEO of Northstar Investment Advisors.

As you'll see in rule No. 3, housing could be the key to doing this. Plus, "people who want to retire early are usually already living well below their means," notes Farrell. "This might not be a big change."

MORE: New rules for early retirement

Rule 1: Early retirees: Don't fear losing your health insurance
Rule 3: Use your home to boost retirement savings
Rule 4: Get the first decade of retirement right
Rule 5: A second paycheck comes in handy

First Published: October 28, 2013: 8:57 AM ET

23.10 | 0 komentar | Read More

Obamacare and deficits: Reality check

The fight du jour over Obamacare is the troubled rollout of healthcare.gov. But the more enduring fight will be about the law's potential effect on federal coffers.

NEW YORK (CNNMoney)

Democrats promise trillions in savings. Republicans swear the law will bankrupt the country.

Alright, whatever. Here's what nonpartisan experts have said.

Will it reduce deficits or not? When the Affordable Care Act passed in March 2010, the nonpartisan Congressional Budget Office estimated that it would reduce deficits by more than $100 billion in the first decade, and by considerably more in the second decade -- by half a percent of economic growth. A half percent of GDP over a decade could mean reducing deficits by more than $1 trillion.

So, what's the problem? The CBO's estimate assumes that the law would be adhered to exactly as written.

Except that almost never happens with big legislation.

The CBO itself noted that the ACA would "put into effect a number of policies that might be difficult to sustain over a long period of time."

A number of changes have already been made, and more are being proposed -- some of which could diminish the law's deficit-reduction potential.

For instance, there's a push to repeal Obamacare's tax on medical devices. The tax is expected to raise about $30 billion over the next decade.

And there is concern that Congress could have a hard time adhering to various cost containment provisions in the law, said Joshua Gordon, policy director of the Concord Coalition, a deficit watchdog group.

If lawmakers keep messing with the law, then what? It depends on what they do -- but they could end up adding to deficits.

What if, for instance, they phase out key provisions intended to restrain spending growth in Medicare and don't implement a policy to slow the growth of health insurance subsidies?

Related: Is Obamacare slowing healthcare spending?

The Government Accountability Office did a long-range simulation that included these and other assumptions about the broader budget.

In such a scenario, the GAO found that deficits would go up 0.7% of GDP over the next 75 years. That would be due in large part to increased spending on Medicaid, the Children's Health Insurance Program and subsidies offered on the health insurance exchanges.

When will we know who's right? It may be awhile. Obamacare is a very complex law with lots of moving parts that phase in (and out) over time.

Already, growth in national health spending -- of which federal spending is a big part -- has fallen to a record low rate. The CBO and economists think part of that slowing is attributable directly or indirectly to the ACA, but it's unclear how much. And the growth rate is expected to rise in the next few years as more people become insured under Obamacare.

It also remains to be seen whether the new health insurance exchanges will draw a diverse pool of enrollees and generate enough competition to fulfill the law's promise of providing affordable health care for most Americans.

What makes Gordon optimistic that Obamacare can help improve the country's fiscal outlook long-term are the changes that hospitals, doctors and insurance companies are already making in attempts to slow cost growth.

"Underneath this surface fight over Obamacare, there's a huge amount of change and consensus on different ways to slow down health care costs and shift to a value-based health care system," Gordon said.

So what stokes his pessimism? The prospect that Congress could muck things up.

First Published: October 28, 2013: 7:42 AM ET

23.10 | 0 komentar | Read More

Can we save Social Security?

Peter Diamond, 73, co-wrote "Social Security: A Balanced Approach," proposing fixes for the program.

(Money Magazine)

Can we save Social Security?

Yes, Social Security can be fixed. There's a long-term deficit problem, but it's far from a crisis yet. Projections show the trust fund will run out of money by 2033. At that point everyone's benefits would have to be cut by 25% if nothing is done.

But it won't go to zero -- there would still be enough money to pay remaining benefits for years to come. Still, this is a great time to fix Social Security precisely because we might do better if there isn't a crisis.

Yet many Americans view the deficits as a crisis. Surveys show that people think Social Security won't be there when they retire.

Sure, many people say that. But it's not consistent. Those surveys also often ask, "Thinking about your own retirement, where do you think the money will come from?"

The same people who say Social Security won't be there commonly include it in their expected retirement income.

So what fixes need to be made?

We need to make Social Security financially sustainable. There's a straightforward, nonradical way to do it.

Related: The Ultimate Guide to Retirement

In 2004 [former director of the White House Office of Management and Budget] Peter Orszag and I proposed balancing modest and gradual reductions in benefits with a modest and gradual increase in the Social Security payroll tax -- 2.8 percentage points over 70 years on top of the current 12.4% paid by employers and employees. Initially, the increase would be only about $25. The full tax, about $1,000, would be reached in 60 years.

Your plan is nearly 10 years old. Would it still work?

Yes, but the deficits have grown about 40% over the last decade, so fixes would have to be larger and kick in more quickly. [The Social Security Administration said this year that immediately raising the payroll tax 2.66 percentage points could repair the program.]

One of the few reforms proposed by President Obama is to use a different measure for cost-of-living increases, called chained CPI. This measure, which takes into account consumers' ability to buy cheaper versions of costly items, results in smaller benefit increases. What do you think?

It's bad economics and bad politics. Under this plan, the chained CPI would also be used to set federal income tax brackets [which are now based on the headline Consumer Price Index]. So it's both an income tax increase, because people would be pushed into higher brackets more quickly, and a Social Security cut, because benefits would increase more slowly.

Related: How does Social Security work?

Let me start with the terrible economics. Since the benefits grow more slowly year after year, the impact is biggest for those who are oldest. So the elderly would suffer most. Is this who we particularly want to hit? Heavens, no.

Proponents recognize this, because they often say, "Oh, but we'll offset some of it when you hit 85." Terrible way to do it.

As for the bad politics, we have a long-standing tradition that Social Security financing is not part of the regular budget process. Rather, as it is funded by dedicated tax revenue, changes to financing are made separately. That way we have a secure system people can rely on for the long term.

And the proposal to switch both Social Security and tax brackets to chained CPI would be a real break with tradition. It would be a quid pro quo between cutting Social Security and raising income tax revenue.

It would be an unfortunate precedent -- using Social Security as a bargaining chip in annual budget negotiations. That would be bad for the country.

You're very familiar with today's political gridlock, which kept you off the Federal Reserve Board after your 2010 nomination. How might Washington reach a deal fixing Social Security?

Right now it's pretty hopeless. But that's not unusual. Washington typically postpones fixing the program until a crisis is imminent. Obama faces difficult gridlock, so it wouldn't be easy, but undertaking Social Security reform would be a great legacy -- one that's less controversial than health care.

Next to Social Security, 401(k)s have become the national retirement savings plan. But they don't provide the same security as defined-benefit plans.

The defined-benefit plan, as it operated in the U.S. labor market, was never as good as lots of people thought it was. It was hard for firms to fully fund. And how much you get from a DB plan depends on mobility -- when you come to the employer and how long you stay. Many of the formulas make little sense.

The President has proposed a cap on the total amount held in tax-advantaged retirement accounts. What's your view?

It's clear that there can be gaming of the system; we've seen some of it in reports of hedge fund accumulations that are just enormous. A tax break that extends to too much savings is just a weakening of the taxation of capital income. So, yes, we want to limit the tax breaks.

What else can the government do to improve the retirement system?

I look to the Thrift Savings Plan for federal civil servants as a model. The TSP doesn't have many choices, but they're great, and the costs are low. You can also easily turn your savings into income with an annuity. The government could make the TSP available to everybody, or it could set up a parallel plan as an IRA or 401(k) option.

Other IRA and 401(k) providers wouldn't be happy about that.

You will get screams from the financial firms. They don't like competing with the government, especially if the government's plan is subsidized -- say, by getting a break on administrative expenses. But this can be done on a fair-competition basis.

The question is, Can the government just do this better than you can? Often the answer is yes. Private industry won't disappear. There will be competition for the government. And the government will have to be doing it well.

First Published: October 28, 2013: 9:08 AM ET

23.10 | 0 komentar | Read More

'I was overpaid by Social Security'

Rebecca Rivetto had received disability payments for four years for her autistic son. Now the Social Security Administration is asking for it all back.

NEW YORK (CNNMoney)

One 33-year-old veteran began receiving Social Security disability payments after his left foot was amputated following an explosion in Iraq in 2007. After going through rehab for his prosthetic leg, he began working full-time for a defense contractor in 2009. As soon as he started collecting a paycheck, the veteran, who asked to remain anonymous, reported his roughly $100,000 annual salary to the Social Security Administration.

When recipients of disability benefits reenter the workforce, they have a nine-month trial period in which they continue to receive benefits. Once the trial period ends and their earnings exceed a certain level -- currently $1,040 a month -- the payments are supposed to stop. And that's exactly what happened in his case.

But then, last July, he noticed a $75,000 deposit in his checking account. Three days later, a letter arrived from the Social Security Administration saying it had reinstated his benefits because he had not been "gainfully employed" during the past three years.

Related: Social Security makes $1.3 billion in overpayments

He called the agency and was told the mistake would be investigated. Finally, in November, he was notified that the benefits he received were indeed a mistake and he must repay the agency. But, oddly, the amount requested was a few thousand dollars less than the $75,000 overpayment he had received.

Worried he'd be accused of defrauding a federal agency, he filed an appeal -- which he was later told had been lost. His second appeal is still pending. While he hasn't had to pay any interest on the overpayments, he has had to pay more than $23,000 in income tax on that additional "income."

It turns out Social Security overpayments like these are surprisingly common.

A recent audit conducted by the Government Accountability Office found that Social Security made $1.3 billion in potential overpayments to disability recipients in just two years. While some of that amount can be attributed to fraudsters who game the system, many innocent people are also receiving overpayments and then being asked to pay the agency back. Some continue being paid even after they notify the administration that they are no longer eligible for benefits, while others have no idea they are being overpaid.

"People assume that if the government sends them a check, they're entitled to it," said Cheryl Bates-Harris, who runs the Social Security program at the National Disability Rights Network, which helps disability beneficiaries return to work.

Related: Federal disability trust fund on the brink

Daniela de la Piedra, an attorney at the Legal Counsel for the Elderly, said she deals with around 30 cases of disability overpayments per year -- one of her current clients has been asked to repay as much as $133,000 in benefits that was received over nine years. Michael Elsken, an attorney at Disability Rights Nebraska, has had clients who were asked to pay back as much as $60,000.

"It's enough to give someone a stroke or panic attack," Elsken said.

The Social Security Administration is unable to comment on specific cases due to privacy laws, but said its accuracy rate for disability payments exceeds 99%. It said the GAO's audit may have been flawed, and it plans to investigate the potential overpayments identified during the audit.

That's little solace for Amanda McFarling. When McFarling was under the age of 18, her mother was receiving disability payments on McFarling's behalf since she was considered a dependent. Now 20, McFarling is being asked to repay $3,847 in benefits that had been overpaid.

She only found out about the overpayments when her tax refund didn't show up this year and the IRS told her it had been taken by the Social Security Administration to repay a debt she owed.

"On top of being a recent graduate, still unemployed, with student loans to cover, [this debt] will follow me, and possibly my credit, for a significant amount of time," she said.

Related: Paying for special needs

She has applied for a waiver of the debt, and her case is still pending.

Rebecca Rivetto, 33, had been receiving $700 to $800 per month in Supplemental Security Income benefits, which are disability payments administered for low-income individuals. The money was for her two autistic sons -- one of whom is a 7-year-old who needs constant care because he can't communicate and isn't potty-trained.

When Rivetto's husband received a raise that meant their family no longer qualified for benefits, she reported the change in income to Social Security six months later. That turned out to be a big mistake.

Related: Best Places to Retire

After a lot of back and forth between various offices, she was ultimately asked to pay back all the benefits she had received over the last four years -- not just the extra six months. The agency said it had made a mistake and she never should have qualified for disability in the first place.

The result: a bill for $20,000, which is more than double the $8,000 she believes she was actually overpaid. She doesn't have enough money to hire a lawyer so she has given up, agreeing to pay $50 a month. It will take her more than 30 years to fully repay the debt.

"If I can pay them as little as possible until I die, that's what I'm going to do," she said. "It's just sad to me that this entity is there to help people who need help but then something like this happens where they're basically doing the opposite."

First Published: October 28, 2013: 6:23 AM ET

23.10 | 0 komentar | Read More

Roving retirees do good, live practically free

Barbara Traynor is so dedicated to the volunteer retirement lifestyle that she wrote a how-to book about it.

NEW YORK (CNNMoney)

These 60-, 70- and even 80-year olds are traveling the country for months at a time, regardless of whether they have flush retirement savings or modest incomes. Their secret: volunteering for nonprofits and state and national parks, often in exchange for free room and board.

Not only do the volunteering stints help them save money, but many say it gives them a sense of purpose and adventure in their retirement years.

"It is very important to me to make my time count," said Betty Dotson, 83, who once drove her pop-up camper from Houstonia, Mo. to Sitka, Alaska, where she spent nine months volunteering as a cafeteria cashier and greeter at Sheldon Jackson College.

Related: Meet the country's roving retirees

One volunteer group, NOMADS (or Nomads on a Mission Active in Divine Service) boasts more than 1,000 members across the country. These volunteers roll up in their own RVs, ready to do anything from helping homeowners rebuild after natural disasters to spending time at a children's home to building fences. All they ask for in return is a place to park their RVs and for someone to supply the materials needed for the project.

"You always get a good feeling when you help someone else," said NOMADS member Dan Brown, 65, who with his wife Virgie has taken part in around 20 projects in the past five years. "And we've seen a lot of country that we hadn't been to before."

Roughly 15% of NOMADS members live year-round in their RVs. The Browns spend about three months on the road. The rest of the year, they spend at their home in Rogers, Ark.

With no mortgage or other debt, the Browns' largest expenses include healthcare, cell phone bills and donations to their church, as well as fuel for their travels.

Calculator: Will you have enough to retire?

Since Barbara Traynor retired from her administrative assistant job in 2005 she has gone on a wide range of six-month-long volunteering stints in Florida, Arkansas, Alabama, Alaska and New Mexico. The 72-year-old has been an assistant at an Alaskan college, provided information to tourists at the visitor center for a cave site in Alabama, and worked with families in Arkansas at Heifer Ranch, an educational center for the nonprofit Heifer International.

A single mother of three, Traynor had little in the way of retirement savings. The volunteer stints have allowed her to afford the cross-country travel she long dreamed of: Not only does she receive free room and board while volunteering, she is also able to stay with friends she's met over the years en route. And when she is not on the road, she lives with her son's family in upstate New York.

Related: 10 Best Places to Retire

This lifestyle enables her to live solely on her Social Security income of around $1,300 a month. While she is not able to save much, she is happy not to sink into debt.

Traynor has become so dedicated to the volunteer retirement lifestyle that she wrote a how-to book called "Second Career Volunteer" encouraging other retirees to take this "pennywise" approach to retirement.

"A lot of us are living longer and are healthier and we have these mystery years ahead of us," Traynor said. "And a lot of people, thank goodness, don't want to sit on the front porch and rock."

Does this sound like your kind of retirement lifestyle? Here's how to make it happen:

• Many state and national parks offer a variety of volunteer opportunities, and some come with free room and board or a free RV hookup at camp sites. To learn more, visit volunteer.gov or contact the volunteer coordinator at your favorite park.
• Nonprofits, such as Heifer International, also offer volunteer opportunities. Not all are widely advertised so don't be afraid to reach out to nonprofits you admire to ask if there are ways you can help. Traynor offers more tips on her website.
• Have an RV? For more information about how to join the NOMADS, visit their website.

First Published: October 28, 2013: 8:47 AM ET

23.10 | 0 komentar | Read More

Bond rates unlikely to soar again

Click the chart to track more bond yields.

NEW YORK (CNNMoney)

Treasuries have been rallying since the Federal Reserve decided to delay scaling back, or tapering, its bond buying program last month. The fact that Congress kicked its debt problems to next year helped spur more bond buying too.

That pushed Treasury yields down considerably during the past few weeks, with the 10-year yield sliding to around 2.5%, its lowest level since July. Bond prices and rates move in opposite directions.

How long will rates stay this low? Could they go even lower?

Most bond experts think long-term rates will rise again when the Fed begins to wind down its stimulus program. But that may not happen until sometime in 2014. Analysts also don't expect bond yields to jump as quickly and sharply as they did this summer. Tapering fears pushed the 10-year yield from 1.6% in May to almost 3% by early September.

Related: This could be the largest Fed stimulus yet

That dramatic spike led to a sizable increase in mortgage rates during the past few months. As a result, applications for loans to buy new homes dropped. And refinancing activity fell to its lowest levels since the depths of the financial crisis in 2008.

So if long-term bond rates don't surge again in the next few months, that could give consumers who missed out on the last great chance to refinance another opportunity to lock in low rates. Experts said that's the main reason why the Fed is likely to be cautious over the next few months,

"The Fed will be careful to avoid giving the market any surprises that would possibly result in unwanted tightening of credit conditions again," said Gary Thayer, chief macro strategist at Wells Fargo Advisors.

Related: World still (reluctantly) loves the dollar

The Fed is deeply concerned about derailing the housing recovery, which has been one of the bright spots of an otherwise sluggish economic rebound.

"Housing is critical to the recovery, and the big danger to housing is that mortgage rates rise too far or too fast," said Russ Koesterich, chief investment strategist at BlackRock. "The Fed knows this."

So what does this mean for interest rates? Thayer thinks the 10-year Treasury yield will creep up to 2.75% by the end of the year and 3% by the time the Fed begins cutting back on its monthly bond purchases early next year. He's not expecting a dramatic rise after that though, since he thinks the Fed will do what it can to keep interest rates relatively low through the middle of 2016.

But another bond expert said rates will remain around where they are now for some time. They could even fall further.

Robert Tipp, chief investment strategist at Prudential Fixed Income, said the Fed must do what it can to keep the 10-year Treasury yield between 2% and 2.5% in order to maintain economic growth of at least 2% a year.

"I don't think you'll see the Fed come out and signal that they are putting of tapering, but they're not willing to risk another debacle where they lose control of the bond market and rates spike so sharply that they threaten the economic recovery," he said.

First Published: October 28, 2013: 10:48 AM ET

23.10 | 0 komentar | Read More

Stocks struggle after record run

Click for more market data.

NEW YORK (CNNMoney)

The S&P 500 inched lower after closing at a record high Friday. The Dow Jones industrial average and the Nasdaq were were also down slightly.

Investors have been pleased by the latest batch of corporate earnings. About half of the companies in the S&P 500 have reported their third quarter results, and 75% of them were better than expected, according to FactSet.

Still, profit growth has been sluggish. So far, overall earnings have increased a mere 2.3%, led by companies in the consumer discretionary sector.

Shares of Merck (MRK, Fortune 500) fell after the drugmaker reported sales that missed forecasts.

Burger King (BKW) surged after the fast food chain reported earnings and revenue that topped forecasts. Apple (AAPL, Fortune 500) and Herbalife (HLF) are due to report in the afternoon.

Apple is expected to report earnings of $7.96 per share, down 8% from last year, according to a survey of analysts by Thomson Reuters. Earnings for the iPhone and iPad maker have declined for three quarters in a row.

Related: This could be Fed's largest stimulus yet

Fed on deck. Stocks have also found recent support on hopes of continued stimulus from the Federal Reserve.

The Fed has a policy meeting this week and is widely expected to say it will continue buying $85 billion in bonds and mortgage-backed securities a month.

Investors had expected the Fed to cut back, or taper, its bond buying this year. But the government shutdown may have caused economic damage and uncertainty that will keep the Fed from pulling back on stimulus just yet.

Steven Ricchiuto, chief U.S. economist at Mizuho Securities, expects the Fed to delay tapering until the middle of 2014, "at the earliest."

Related: Bond rates unlikely to soar again

John Stoltzfus, chief market strategist at Oppenheimer, said stocks have have also been powered by genuine improvement in economic "fundamentals," pointing to strong auto sales and a recovery in housing, among other things.

Stoltzfus expects stocks to move higher in the long term as the economy expands and investors shift money in out of safe havens like bonds and into more risky assets. But with many stock prices at all-time highs and the threat of additional political risk on the horizon, "don't be surprised if we experience some choppiness ahead," he added.

On the economic front Monday, the Fed said industrial production increased 0.6% in September, following a 0.4% rise in August. The National Association of Realtors said pending home sales, which measure the number of home sales in contract that have not yet closed, fell 5.6% in September.

European markets were lower in afternoon trading. Nearly all Asian markets ended with gains Monday. Japan's Nikkei surged more than 2%, recovering from a near 3% drop on Friday.

Marc Chandler, strategist for Brown Brothers Harriman, said the rally was supported by strong outlooks from Panasonic (PCRFF), Toyota (TM) and Canon (CAJ).

First Published: October 28, 2013: 9:48 AM ET

23.10 | 0 komentar | Read More

Early retirees: Don't fear losing your health insurance

Sheri and Bill Pyle, 62 and 65, Henry, Tenn. With Sheri's COBRA coverage running out in December, guaranteed access to health insurance is coming at just the right time.

NEW YORK (Money Magazine)

Rule 1: You need not fear losing heath insurance

Health insurance has long been one of the biggest obstacles to early retirement. Few employers offer coverage -- just 18% of current private-sector workers are eligible for pre-65 retiree benefits, vs. 29% in 1997, according to EBRI.

And buying a policy on the private market before you qualify for Medicare at 65 has been a challenge: A condition like diabetes or heart disease can leave you uninsurable, while even healthy 50- and 60-year-olds pay far more than young people for the same coverage.

Related: 10 Best Places to Retire

A recent Center for Retirement Research study found that the spike in retirement at 65 is due in large part to Medicare eligibility.

Under health reform, all that is poised to change. Regardless of your health, you can buy a comprehensive insurance policy through the state online exchanges that went live Oct. 1. Your age will still push up your premium, but a 60-year-old can't be charged more than three times what a 20-year-old pays, down from today's typical 5-to-1 ratio.

"Early retirees will be the biggest beneficiaries of the exchanges," says Caroline Pearson, vice president at the consulting group Avalere Health.

What to do

Put a price tag on it. Obamacare means you can't be turned down or charged more for health reasons, but it doesn't necessarily mean a policy will be cheap. In the 36 states where the federal government is operating exchanges, monthly premiums for mid-level plans are averaging $432 for a 55-year-old and $526 for a 60-year-old, says Carrie McLean, head of customer care at eHealthInsurance.com; rates for a 55- to 64-year-old on the private market today average $329.

But that price difference reflects more robust coverage. A bare-bones policy you could buy this year might carry a $10,000 deductible or omit prescription-drug coverage -- required for policies sold on the exchanges. Your combined deductible and out-of-pocket costs will also be capped, at $6,350 for an individual and $12,700 for a family.

"The insurance market is pretty scary for early retirees right now," says Karen Pollitz, a senior fellow at the Kaiser Family Foundation. "It won't be so scary anymore."

Start at healthcare.gov to find options in your state. Heavy traffic and tech glitches made applying a headache right after enrollment opened, but you have until Dec. 15 to sign up for coverage starting on Jan. 1.

Check for price cuts. The premium is just the sticker price. About half of those who buy insurance on their own today will qualify for a subsidy, estimates Kaiser. And since that help is based on how much of your income must go toward insurance, an early retiree with a high premium has a good chance of qualifying for a break, especially if retirement means living on less.

Related: Will you have enough to retire?

A 60-year-old couple making $62,000, for example, would qualify for a subsidy that would bring a $1,140 monthly payment down to $491, according to the Kaiser Family Foundation subsidy calculator (available at kff.org). For a single person, the annual income cutoff to qualify for a subsidy is $45,000; for a family of four, it's $94,000.

All that is good news for 62-year-old Sheri Pyle, who retired to Henry, Tenn., last year with her husband, Bill, 18 months after he left his job at a family-owned heating and plumbing firm at 62. Weary of Chicago winters and 60-hour workweeks, the couple dreamed of spending their days in warmer climes, camping, fishing, and volunteering. They now pitch in at the county search and rescue.

"We wanted to quit working while we're still young enough to enjoy our lives and give back," says Sheri, who managed the accounting department for a food manufacturer. Bill, now 65, qualifies for Medicare. But Sheri, who has arthritis, has been worried about her insurance costs once her former employer's $400-a-month COBRA coverage ends in December. On the Tennessee exchange her monthly premium would run $593 for a midlevel plan. But she'll qualify for a subsidy that will knock it down to $345.

MORE: New rules for early retirement

Rule 2: Getting ready to retire? Save more, spend less
Rule 3: Use your home to boost retirement savings
Rule 4: Get the first decade of retirement right
Rule 5: A second paycheck comes in handy

First Published: October 28, 2013: 8:54 AM ET

23.10 | 0 komentar | Read More

Use your home to boost retirement savings

Sell your home, downsize and cut your housing costs. There's no better way to live on less.

NEW YORK (Money Magazine)

Rule 3: Be grateful, not greedy, about your gains

The housing market's recent recovery may be one of the things that's giving you the confidence -- and the wherewithal -- to retire ahead of schedule. Home prices in 20 major metro areas are up 12% over the past year, the biggest gain since 2006, according to the widely followed S&P/Case-Shiller home price index.

In seven of those markets, values are higher than or nearing their pre-crash peak, says David Blitzer, managing director at S&P Dow Jones Indices. American homeowners have seen their equity rise more than $2 trillion in just the past year, according to the Federal Reserve.

Alas, you can't count on a housing boom to keep padding your net worth. With rising mortgage rates and tepid economic growth, the pace of price gains is expected to slow. "A year from now home prices will be higher, but half the double-digit gains we've seen," says Blitzer.

You need to set realistic expectations for what your home can do for you, and plan prudently with what you have. That might mean leaving your old digs behind.

What to do

Lose two bedrooms. Moving out of your home of decades can pay off in two ways. By selling into a strong market now and buying a smaller house, you can lock in your good fortune, letting you add to your savings or wipe out any lingering debts.

Related: How much house can you afford?

Plus, if retiring early means learning to live on less, there's no better way to do that than to cut your housing costs, which typically eat up 40% of retirees' budgets, according to the Consumer Expenditure Survey.

Get out of town. Only 10% of retirees pick up stakes, though boomers look to be a bit more likely to relocate than previous generations were. In a 2012 AARP survey, two in 10 boomers said they planned to move in retirement.

"Boomers are different," says Fred Brock, author of Retire on Less Than You Think. "They are willing to move to cheaper parts of the country." With families more mobile, he adds, you don't need to be tied to one place to stay near your kids.

Join this minority and move to a town with lower property taxes and lower living costs, as well as cheaper homes, and you can leverage your profits even more. That's what Sheri and Bill Pyle did when they sold their three-bedroom Cape Cod outside Chicago for $185,000, paid cash for a $128,000 four-bedroom ranch in Tennessee, retired a home equity line and car loan, and added $30,000 to their savings.

And though their income is less than 40% of the $126,000 they used to earn, their cost of living is so low that they are able to get by on their combined Social Security, leaving their $400,000 in retirement savings to grow for now.

Their property taxes plummeted from $7,000 to $500 a year. Milder winters mean their heating bills are a third of what they used to pay. "We could never have done it if we stayed in Chicago," says Sheri.

Beware the trap of leisure fees. Whether you downsize locally or across the country, it's crucial that you don't simply trade maintenance costs for steep association fees.

"I see a lot of people who move into a new home for retirement, and their cost of living goes up, not down," says Colorado Springs financial planner Linda Leitz, national chair of the National Association of Personal Financial Advisors.

When Gundy and Karen Gunderson retired in 2007, the Seattle couple bought a home in a gated country-club community in Las Vegas. But they were surprised at how quickly the costs added up. Gundy, 66, a former commercial airline pilot, and Karen, 67, a homemaker, estimate they were spending $1,000 a month on dues for the private golf course, tennis and fitness classes, the club's restaurant minimum, and maintenance on their pool and lawn.

Related: 10 Best Places to Retire

"We ran the numbers and knew we had to make an adjustment if we wanted our money to last," says Gundy. So this year they downsized a second time, to a Henderson, Nev., retirement community overlooking two public golf courses. Now all they pay is a $93 monthly association fee.

Invest in staying put. All this said, what if you really don't want to leave your home? At a minimum, early retirees told us they avoided carrying a mortgage into retirement, as 30% of retirees do.

While you're still working, invest in improvements that will cut costs later, like replacing old appliances and drafty windows and upgrading your heat and electrical systems. "If you've been in your home a long time, there's a lot you can do to make it less costly," says Stillwater, Okla., financial planner Louise Schroeder.

MORE: New rules for early retirement

Rule 1: Early retirees: Don't fear losing your health insurance
Rule 2: Getting ready to retire? Save more, spend less
Rule 4: Get the first decade of retirement right
Rule 5: A second paycheck comes in handy

Downsizing the right way

Say you own a $400,000 four-bedroom house in Moorestown, N.J., with $50,000 left on the mortgage. You could pay cash for a two-bedroom condo in nearby Mount Laurel for $279,000. But to really profit, move to a low-cost town like Lexington, one of our Best Places to Retire.

Downsizing nearby	$71,000
Relocating	$220,000

NOTES:Moorestown home has $50,000 left on a $300,000 mortgage at 4.5%; home prices for a typical three- to four-bedroom home and two-bedroom townhouse. SOURCES: Runzheimer International, Donna Richardson, RE/MAX Main St. Realty, Lexington-Bluegrass Association of Realtors.

First Published: October 28, 2013: 9:03 AM ET

23.10 | 0 komentar | Read More

iCar? Analyst says Apple should buy Tesla

One analyst believes electric cars are the secret to a profitable future for Apple.

LONDON (CNNMoney)

Taking his lead from billionaire investor Carl Icahn, analyst Andaan Ahmad at German investment bank Berenberg has written an open letter to Apple chief executive Tim Cook and chairman Arthur Levinson. Ahmad calls on Apple (AAPL, Fortune 500) to buy electric carmaker Tesla (TSLA).

The London-based Ahmad -- who says he's covered the tech industry for nearly 20 years -- argued in Friday's letter that Apple's shift into the auto sector could give the company the kind of revenue growth that won't be sustainable from just smartphones and other mobile devices over the longer-term.

The move could reignite the U.S. auto industry and would be a catalyst to accelerate the current transition to hybrid and electric vehicles.

Ahmad said the strength of the Apple brand and its history of "disrupting" industries are reasons why his bold plan could make sense.

And then there's Tesla chief Elon Musk, who Ahmad sees as an innovative presence like the late Steve Jobs. Many analysts and investors have worried that Apple has not been the same since Jobs passed away two years ago.

"You could strike up a partnership and obtain a new iconic partner to lead Apple's innovation drive," Ahmad wrote.

While noting his proposal will be ridiculed by some, Ahmad said that Apple needs an "out of the box" move into a new market. Otherwise, he thinks "the key debate will always be about your ability to sustain these abnormal margins in your iPhone business."

Related: Icahn demands $150 billion Apple buyback

This is the second piece of unsolicited advice Apple has received in the past week. Icahn issued an open letter to Tim Cook on Thursday and urged the company to buy back $150 billion of its own stock.

Icahn thinks Apple's stock is extremely undervalued and that the company should invest in its own shares right now.

Berenberg's Ahmad poked fun at Icahn in his proposal, saying he'd love to meet Cook and Levinson in London and promised not to tweet about their talk.

Apple, Tesla and Icahn weren't immediately available for comment.

Apple will release its fourth-quarter results after the closing bell Monday. Sales are expected to be up slightly from last year but analysts are forecasting that earnings were down again.

Although Apple's stock has rebounded sharply lately on hopes of strong iPhone sales, shares are still down year-to-date and are 25% below their all-time high from September 2012.

Tesla, on the other hand, has been a darling of Wall Street. Shares are up nearly 400% this year. The company's market value is now about $20 billion. The stock's meteoric rise has prompted Musk to say on more than one occasion that he thinks the stock has a higher price than it deserves.

First Published: October 28, 2013: 11:48 AM ET

23.10 | 0 komentar | Read More

Stocks waver after record run

Click for more market data.

NEW YORK (CNNMoney)

The S&P 500 pulled back a bit, after opening at a record high. The Dow Jones industrial average was also off a few points, while the Nasdaq held modest gains.

Investors jumped back into the market last week after the U.S. government reopened and lawmakers ended a budget showdown that threatened the nation's credit rating.

But the tone was more muted Monday as investors asses the economic damage caused by the shutdown and weigh the outlook for corporate earnings.

"The market will be looking for an excuse" to pull back by 1% or 2%, said Peter Cardillo, chief economist at Rockwell Global Capital. That excuse, he said, might be the October jobs report, which will be released Tuesday after being delayed by the partial government shutdown.

Related: Fear & Greed Index, back to greed

What's moving: McDonald's (MCD, Fortune 500) shares fell after the fast food chain reported earnings that met expectations, but global sales growth was tepid. Halliburto (HAL, Fortune 500)n shares fell after the oil field services company's earnings met expectations.

AT&T (T, Fortune 500) shares gained after the company announced over the weekend that it had inked a $4.8 billion lease deal with Crown Castle International Corp (CCI).

Netflix (NFLX) is among the companies slated to release quarterly results after the market closes.

Shares of JPMorgan Chase (JPM, Fortune 500) rose following news over the weekend that the bank and the Department of Justice have tentatively agreed to a $13 billion civil settlement to resolve several investigations into the bank's mortgage securities business.

Despite the record fine, the settlement would be a positive for the stock since it means JPMorgan can finally move beyond its legal woes, according to analysts at Biard Equity Research.

Apple (AAPL, Fortune 500) shares were up 2% one day before the company is expected to reveal its first revamped iPad in a year.

Related: Trading in your iPad? Don't wait

On the economic front, the National Association of Realtors said existing home sales fell 1.9% in September. The group said rising interest rates and the fallout from the government shutdown will weigh on the housing market in the months ahead.

European markets were mixed in midday trading. Asian markets closed higher Monday.

First Published: October 21, 2013: 9:43 AM ET

23.11 | 0 komentar | Read More

Five things to know about JPMorgan settlement

JPMorgan Chase CEO Jamie Dimon is about to accept a $13 billion mortgage settlement with the Justice Department.

NEW YORK (CNNMoney)

Details of the proposed settlement have yet to be announced, although they are expected soon.

Here are the answers to five questions about the deal:

What was the wrongdoing that this settles?

In the years ahead of the financial meltdown of 2008, the nation's banks took trillions of dollars in individual home mortgages and created investments for people seeking to capitalize on the hot housing market. Some of the mortgages were of questionable quality, given to potential home buyers with weak credit or without verifying income.

Many of the securities were then sold to Fannie Mae and Freddie Mac, two private mortgage-backing firms that had the implicit backing of the U.S. government.

The government says units of JPMorgan were among those that deceived Fannie and Freddie about the quality of the home loans packaged in those securities between 2005 and 2007.

When the housing bubble burst and foreclosures started to soar, Fannie and Freddie both ended up with billions in losses they couldn't afford. That prompted one of the largest bailouts of the financial crisis. Eventually, taxpayers poured $187.5 billion into the two firms.

Who was responsible for the wrongdoing?

While some of the risky mortgages were written and packaged into securities by JPMorgan Chase, the bank says that 80% of the losses from problem loans were from Bear Stearns and Washington Mutual, two companies it acquired during the height of the financial crisis.

Wall Street firm Bear Stearns was bought by the bank at a bargain price in March 2008, when the firm was on the cusp of bankruptcy. Federal authorities, including Treasury and the Federal Reserve, pushed for the deal in the hopes that by finding a buyer it could prevent a broader meltdown in financial markets -- something that occurred six months later when Lehman Brothers filed for bankruptcy.

In the midst of that fall meltdown, JPMorgan stepped in to buy Washington Mutual, the nation's largest savings and loan association at the time and a major mortgage lender. Once again, it was urged to make the purchase by federal authorities.

What are the potential criminal charges faced by the bank?

The proposed settlement only covers civil charges. It does not settle the question of whether any of the bankers engaged in criminal wrongdoing. There is an ongoing federal criminal probe based in Sacramento, Calif., the state where Washington Mutual was based.

JPMorgan originally sought to be protected from any criminal charges as part of this deal, but that was rejected by authorities.

Related: JPMorgan posts loss on big legal costs

Criminal charges against Wall Street firms have been limited. Most of the large fines that have been paid by banks have only settled civil charges. This includes the nearly $1 billion that JPMorgan agreed to pay earlier this year related to so-called London Whale trading losses.

The civil fines are likely to be greater than any criminal penalties. The largest criminal settlement reached with a corporation was the $4 billion that oil company BP (BP) agreed to pay last November when it pleaded guilty to manslaughter charges stemming from the Deepwater Horizon explosion and oil spill in the Gulf of Mexico.

Who will get the money?

A U.S. official familiar with the details of the tentative settlement tells CNN that $9 billion of the payment will be in fines and penalties and $4 billion in "consumer relief," including home loan modifications.

It's not yet clear which agency will receive what fine money. But any money received by the different agencies will eventually find its way to the Treasury Department's general fund.

What does this mean for JPMorgan and its CEO Jamie Dimon?

While $13 billion is a staggering amount of money, JPMorgan is large enough to pay it easily. It is the largest bank in the nation, with assets of $2.5 trillion. Its 2012 net income was $21.3 billion.

Earlier this month, the bank disclosed it has set aside about $23 billion to handle legal costs. Those legal costs caused the company to report a loss in the most recent quarter. But shares of JPMorgan (JPM, Fortune 500) were little changed in trading Monday on reports of the settlement, and are up more than 20% so far this year.

Dimon was once thought of as President Obama's favorite banker, and had been discussed as a possible candidate for Treasury secretary. That status has certainly been lost, but it's seen as very unlikely that he will lose his job at the head of JPMorgan due to this settlement.

First Published: October 21, 2013: 12:04 PM ET

23.11 | 0 komentar | Read More

Stocks: Nothing holding the market back

The Nasdaq rallied this week. Click the chart for more markets data.

NEW YORK (CNNMoney)

They'll turn their attention back to the economy and earnings.

The September jobs report, delayed by the government shutdown, will finally be released Tuesday. The report was originally scheduled to come out on October 4. According to economists surveyed by Briefing.com, it is expected that 183,000 jobs were added last month and that unemployment rate remained steady, at 7.3%.

This report won't provide any clues as to the effects of the government shutdown. But weekly jobless claims reports have already shown that impact. Last week's report, which covered the first portion of the shutdown, revealed unemployment filings from about 70,000 federal workers. Many will be forced to pay the benefits they received back, as Congress has approved to retroactively pay federal workers.

Related: Shutdown took $24 billion bite out of economy

Stocks may also set some more records. The major U.S. indexes are all up sharply this year and held up well despite fears of a possible debt default. The S&P 500 ended the week at an all-time high while the Dow is about 2% off its peak of 15,709.60 from last month. The tech-heavy Nasdaq was even above 3,900. It hasn't been that high since the dot-com bubble burst in 2000.

Last week, the Nasdaq gained 3%, including 1% growth on Friday. The S&P added 2% -- and posted only one losing day last week -- and the Dow was up about 1% on the week.

Related: Fear & Greed Index

Keeping an eye on earnings: The federal government shut down after the third quarter closed, but two of the largest federal government contractors may give some clues about the damage that was done during their latest earnings reports.

Lockheed Martin (LMT, Fortune 500), which reports results Tuesday morning, received almost $40 billion in government contracts last year and blamed the shutdown for causing at least 3,000 employee furloughs at the company. Dow component Boeing (BA, Fortune 500) releases earnings Wednesday morning. It landed nearly $30 billion in contracts last year, according to the General Services Administration.

Many other high-profile companies are on tap to report their latest numbers, including McDonalds (MCD, Fortune 500), Netflix (NFLX), Caterpillar (CAT, Fortune 500), Ford Motor (F, Fortune 500), AT&T (T, Fortune 500), Microsoft (MSFT, Fortune 500) and Amazon.com (AMZN, Fortune 500).

New iPads coming? The biggest tech event of the week isn't likely to be an earnings report. Apple (AAPL, Fortune 500), which isn't set to release its latest results until October 28, is holding an event on Tuesday. The company is widely expected to unveil its latest iterations of its iPad tablet. Apple's stock is still well below its all-time highs from September 2012. But shares have rebounded lately and are back above $500 thanks to indications of strong demand for its new iPhone 5S. Apple investors will be hoping that the new iPads will continue its recent hot streak.

First Published: October 20, 2013: 11:31 AM ET

23.11 | 0 komentar | Read More

Obamacare website a work in progress, government says

Employees prepare for the Minnesota exchange to open.

NEW YORK (CNNMoney)

A White House official told CNN President Barack Obama would speak publicly about the site's issues on Monday. He said in a recent interview with an Iowa television station the site has made "some significant progress but until it's 100%, I'm not going to be satisfied."

Despite those issues, an unsigned posting on Sunday from the Department of Health and Human Services said, "nearly half a million applications for coverage have been submitted from across the nation."

It did not indicate if those applications were only for the federal exchange, which covers 36 states. Fourteen states and the District of Columbia are running their own marketplaces. It also did not specify if applications completed by phone were included in the number.

Related: Obamacare exchange websites overloaded

CNN surveyed the 15 exchanges run independently of the federal government and found just over 257,000 people have nearly completed or completed an enrollment in those programs.

The administration has previously reported the total number of visitors to the site but resisted requests for enrollment numbers. It has said that data would be available next month.

Since the website debuted on Oct. 1, it has been taken offline several times for maintenance. For coverage to kick in on January 1, individuals must enroll by mid-December.

"Our team is bringing in some of the best and brightest from both inside and outside government to scrub in with the team and help improve HealthCare.gov," the online post read. "We're also putting in place tools and processes to aggressively monitor and identify parts of HealthCare.gov where individuals are encountering errors or having difficulty using the site, so we can prioritize and fix them."

The department said it is "proud of these quick improvements, but we know there's still more work to be done. We will continue to conduct regular maintenance nearly every night to improve the experience."

First Published: October 20, 2013: 4:42 PM ET

23.11 | 0 komentar | Read More

Lew pushes to eliminate spending cuts

Treasury Secretary Jack Lew.

NEW YORK (CNNMoney)

He laid out the Obama administration's case in an op-ed for The International New York Times that the failure to replace the across-the-board "blunt spending cuts" would hurt the U.S. economy.

"As independent economists and business leaders will tell you, these cuts have already slowed economic growth, just as the economy was getting traction," he wrote. "The nonpartisan Congressional Budget Office has estimated that by the third quarter of next year, sequestration will have reduced real gross domestic product by as much as 1.2 percent, which means as many as 1.6 million fewer American jobs."

Related: Spending cuts are hurting economy

The blanket cuts are a product of the 2011 fiscal stalemate and subsequent failed attempts to produce an alternative. The sequester is widely disliked but took effect anyways, shaving spending from nearly every piece of the federal budget, except funds for mandatory programs like Social Security.

Even some Republicans who favor cutting government spending see the sequester cuts as too indiscriminate.

"The real problems are that we're continuing to spend money that we don't have on things that we don't need," Sen. Tom Coburn said Sunday on NBC.

"There's tremendous amounts of waste and fraud. We have to protect the promises made to American people. And we can do that, but we can do that spending a whole lot less money than we're doing today," he continued.

Related: What the heck is the sequester?

The next scheduled round of cuts will be even deeper.

The debt ceiling deal Congress reached this month funded the government at current levels and put off a decision on the sequester until January 15.

But their track record of resolving these issues isn't great.

Related: Congress votes to do its job

Lew, however, said the U.S. remains a stable "backbone of the global financial system."

"The world now knows we are and will remain the safest, most reliable place to invest," he wrote, according to a copy of the text from the Treasury Department. "Make no mistake: What took place was a political crisis, not an economic one."

First Published: October 20, 2013: 3:24 PM ET

23.11 | 0 komentar | Read More

Flood insurance costs soaring for thousands of homeowners

George Kosimos in his back yard, which FEMA has mapped out as a high risk of flooding.

NEW YORK (CNNMoney)

Earlier this month, part of a new law, called the Biggert-Waters Insurance Reform Act of 2012, went into effect that phases out flood insurance subsidies on hundreds of thousands of older homes. The government has also been revising its flood zone maps and reassessing the level of flood risk for various areas.

As a result, millions of homeowners either have to buy flood insurance for the first time or pay a significantly higher premium on their existing policies.

Related: Top 10 markets to buy rental properties

George Kosimos, a Toms River, N.J., resident whose home was hit hard by Superstorm Sandy, was told his premium would increase from less than $1,000 a year to $8,000 or $9,000 over the course of next five years because his home is now considered to be in a higher risk area.

Each year, his premiums will jump by $1,600 or so until they reach the amount FEMA estimates to be his true value of coverage, he said. This year, Kosimos will owe $2,200.

Otto Harling, a semi-retired professor of nuclear science and engineering at MIT, has it even worse. He never had to pay for flood insurance on his Hingham, Mass., home before. But now his home is in a flood zone -- and it's in a high-risk area. In the next year, he is facing a $10,000 flood insurance bill.

Before FEMA's latest maps were drawn, only seven homes in Hingham were even considered to be in a flood zone, he said. Now, there are 40. And many of those homes are considered to be at a high risk of flooding, even though none of them were flooded in the 27 years since the old maps were drawn, he said.

Related: America's Best Places to Live

Robert Hunter, a director for the Consumer Federation of America and a former head of the NFIP during the 1970s, said the rate shock happening now could have been avoided if the maps had been updated regularly. Under his leadership, the maps were redrawn about every three years. The previous maps were 20 years old or more.

"The rates should have been going up gradually in 5% or 10% increases," he said. "People will be saying I wouldn't have bought [my home] or I wouldn't have built it if I had known."

All of these changes are meant to bolster the finances of the federal flood insurance program, which has been struggling under the weight of some $30 billion in debt after being hit hard by storms like Sandy and Hurricane Katrina.

Related: Colorado floods: Costly and often uninsured

But it is leaving homeowners in an expensive bind. When John Fullerton bought a cottage for $155,000 just blocks away from the Delaware Bay in New Jersey last year, he had been told that he would continue to pay the same flood insurance rate as the previous owner: about $900 a year.

But in March, he received word from his insurer that his premiums would reach $7,000 to $12,000 a year by 2018, with the increases kicking in next year. (He doesn't know the exact amount he'll have to pay yet because mapping for his area isn't complete).

Fullerton could pay off his mortgage, carry no flood insurance and hope a storm doesn't destroy the house. Or he could raise the cottage by several feet to reduce the flood risk and lower his premium, a move that would cost him close to $80,000. Or, he could walk away, lose his down payment and kill his credit.

Related: Selling your home? Here's what you need to know.

Such choices are impacting coastal communities. In Massachusetts, home buyers find out how much flood insurance will cost and they walk away, said Peter Ruffini, a local real estate broker and president of the Massachusetts Association of Realtors.

"We don't have hard numbers yet, but we have a lot of anecdotal information about lost deals," he said. "Our company has lost several."

"Deals are dying on the vine," agreed Kosimos, who is a realtor in New Jersey. "For every $5,000 a year your flood insurance goes up, you're losing $100,000 in property value."

First Published: October 21, 2013: 4:57 AM ET

23.11 | 0 komentar | Read More

Stocks enter uncertain times

Click on chart to track premarkets

NEW YORK (CNNMoney)

U.S. stock futures were little changed.

The wave of third-quarter earnings results continues Monday with results due in the morning from McDonald's (MCD, Fortune 500) and Halliburton (HAL, Fortune 500). Netflix (NFLX) is due after the closing bell.

Related: Fear & Greed Index, back to greed

At 10 a.m. ET, the National Association of Realtors will release its monthly report on existing home sales.

Stocks finished higher Friday, continuing a rally in the aftermath of the end of U.S. government debt and budget crisis. The S&P 500 hit a record high. The Nasdaq posted a gain of more than 1% on Friday and was up more than 3% for the week. The Dow Jones industrial average was up more than 1% for the week, and has advanced for two consecutive weeks.

Peter Cardillo, chief economist at Rockwell Global Capital, said the rally "seems to have long legs," driven by decent earnings reports. But he added that "the market will be looking for an excuse" to pull back by 1% or 2%. That excuse, he said, might be the monthly jobs report, which was postponed for Tuesday from Oct. 4, as a result of the partial shutdown of the federal government.

Related: Nothing holding the market back

Bank stocks will be in focus after weekend news that JPMorgan Chase (JPM, Fortune 500) and the Department of Justice have tentatively agreed to a $13 billion civil settlement to resolve several investigations into the bank's mortgage securities business.

European markets were mixed in midday trading. Indexes in Germany and France slipped, while the FTSE 100 managed a modest gain.

Asian markets closed higher Monday. Shares in Hong Kong added 0.4% and the Shanghai Composite increased 1.6%. Japan's Nikkei gained 0.9% and the yen weakened as export data for September fell short of analyst expectations.

First Published: October 21, 2013: 5:17 AM ET

23.11 | 0 komentar | Read More

Starbucks in hot water over China prices

Starbucks has been accused of charging more for coffee in China than in other countries.

LONDON (CNNMoney)

Separate reports from state-backed China Central Television and the China Daily newspaper in the past week have accused the company of making consumers pay more for its coffee and related products in China than in other markets, including the United States.

The CCTV report said a medium size latte costs 27 yuan or $4.40 in China, compared with $3.20 in Chicago and about $4 in London.

The reports also said a Starbucks coffee mug - which is made in China - sells for between $10 and $14 in the U.S., and as much as $18 in China.

Starbucks (SBUX, Fortune 500) was not immediately available for comment.

Related: Starbucks CEO Schultz has another grande plan

The Seattle-based coffee chain is doing well in China. Strong sales contributed to a 30% year-on-year jump in revenues from its Asia-Pacific region, according to a report published in July.

The heat on Starbucks pricing in China comes as local authorities step up the pressure on international companies.

The country's state media launched an aggressive campaign against Apple (AAPL, Fortune 500)in March, after CCTV broadcast an expose on the tech firm's warranty standards and customer service in China.

CCTV reported that Apple was using refurbished parts to repair products in China, and limiting some warranties to one year.

Related: Apple dust-up leaves Chinese wondering

At the same time, a series of investigations into price fixing and anti-competitive conduct targeted U.S. and other global companies.

A powerful state agency in China announced record fines against five international dairy firms in August after they were accused of fixing the prices of baby formula.

Mead Johnson, Abbott Laboratories (ABT, Fortune 500) and France's Danone (DANOY) were among those slugged with penalties.

Related: China opens investigation into drug prices

Pharmaceutical companies are also being probed as part of a wider anti-corruption crackdown in China.

Chinese regulators are investigating production costs and price setting practices at 60 pharmaceutical companies, including GlaxoSmithKline (GLAXF), Astellas (ALPMF) and Sandoz.

First Published: October 21, 2013: 8:28 AM ET

23.11 | 0 komentar | Read More

Lionel Trains: 113-year-old icon goes digital

After 113 years of making model trains sets, Lionel Trains is going digital with an app that interfaces with the actual trains.

NEW YORK (CNNMoney)

"There are very few 113-year-old brands out there. This is both good and challenging," said CEO Jerry Calabrese. "While Lionel Trains is perhaps one of the most recognized brands of the 20th century, it isn't of the 21st century."

So Calabrese is on a mission to reinvent Lionel Trains, and going digital is a big part of that. His goal is to make the brand relevant to how kids play today while not alienating the legions of fans who grew up with the electric model trains.

Related: Check out Lionel's model trains over the last 100 years

To merge the old and the new worlds, Lionel recently launched an iPad app that interfaces with its model trains, allowing users to control the trains, tracks and other components digitally. The company also launched Lionel Battle Train, an iPad game where players fend off enemy attacks while moving their digital trains from one location to another.

Lionel has stood the test of time -- but it hasn't been easy. Over the past century, it changed ownership four times, went bankrupt and was brought back to life just as the U.S. economy fell apart.

Joshua Lionel Cowen, who also invented dry cell batteries, started Lionel in 1900. Cowen first made crude model trains that looked more like wagons and used his batteries to power the trains. He initially sold his train sets to local hardware stores to use as window displays.

Related: This Iron Man toy soars 200 feet

"People started liking them so much that they wanted to buy them for their homes," said Calabrese. "The business really took off after that."

It helped that railroads were a huge part of popular culture of the early 20th century. "Railroads then were the new frontier of science," he said.

By the 1930s, Lionel Trains had grown to became a household name, but the sets weren't cheap. A train set in the 1950s cost about $80, which was "the average mortgage payment of an average house in the U.S.," according to Calabrese.

Related: Hot toys for the holidays

At its peak, Lionel Trains employed about 3,000 workers at its factory in Hillside, N.J. After World War II, the glamor of train travel was supplanted by planes, and "trains weren't as sexy or exciting," said Calabrese. Struggling to stay relevant, Lionel licensed its trains to General Mills (GIS, Fortune 500) in 1969.

That began its descent into financial ruin. Calabrese said the brand lost its luster, foothold and audience very quickly. Manufacturing moved to Michigan, then to Mexico, then back to Michigan, as the company switched hands several times.

In late 2004, Lionel which had since been bought by a private equity firm, was forced to file for bankruptcy after losing a patent infringement lawsuit and incurring a $41 million penalty.

Four years later, the company came out of bankruptcy and tried to rebuild in the midst of an economic slump.

Calabrese and his team have spent the past few years trying to get the company back on solid footing, looking for growth opportunities to bolster the company's $100 million annual revenue and honing its new digital effort.

"Digital gaming is the future. We want a new generation of kids to discover us digitally," he said. He also wants to partner with online marketplaces such as eBay (EBAY, Fortune 500) and Amazon (AMZN, Fortune 500) to launch future products. This holiday season, Lionel is also introducing a line of Christmas train ornaments, which it hopes will appeal to people's nostalgia.

"This brand has survived world wars and endured a lot of change over a century," said Calabrese. "It's in our interest to keep going."

First Published: October 21, 2013: 3:51 AM ET

23.11 | 0 komentar | Read More

Top 4 Obamacare complaints

Obamacare has sparked many complaints.

NEW YORK (CNNMoney)

Three weeks after the exchanges opened, Americans are still having a tough time signing onto the Obamacare websites. And once they manage to get in, many aren't so happy with what they're finding.

Here are some of the major complaints from CNNMoney readers:

Complaint #1: I can't log in

Many people are still having trouble signing onto healthcare.gov, the federal exchange that's handling enrollment for 36 states. While the site no longer leaves applicants hanging with a hold screen, many are still receiving error messages when they try to log in.

Maura Grady of Florida told CNNMoney last week that the federal site was still giving her trouble. It was not accepting her username and password. When she clicked on the Forgot Password button, she was told she'd receive an email with reset instructions. But she didn't.

Asked whether she'd try again, she responded: "2, maybe 3 years! When I'm in the mood for some aggravation."

Both the federal and state exchanges have been working to address the problems. Maryland, for instance, took down its state-run exchange for the last two weekends to make some upgrades. And the federal site continues to make improvements.

"We are seeing progress: wait times to begin the online process have been virtually eliminated, and more consumers are creating accounts, completing applications and ultimately enrolling in coverage," said Joanne Peters, spokeswoman for the federal Department of Health and Human Services. "However, we will not stop addressing issues and improving the system until the doors to HealthCare.gov are wide open."

The exchanges still have some time to fix the bugs. Folks have until Dec. 15 to sign up for coverage that begins January 1.

Share your story: Are you planning to sign up for Obamacare?

Complaint #2: My info's not right

Some insurers are saying the applications they're getting from the exchanges are riddled with errors. Some forms are missing full names or numbers. Others contain duplicates, with the same person signing up for different plans.

One person who signed up for coverage through Medical Mutual of Ohio submitted several applications requesting different plans, said Heather Thiltgen, vice president of individual sales and marketing. The insurer, which has received fewer than 100 applications through the federal exchange so far, called the person and learned he kept receiving error messages when enrolling so he hit the submit button several times.

The insurers are contacting applicants to verify the information. Scott & White Health Plan has called the handful of people who signed up for the Texas insurer's plans through the federal exchange because their forms are missing data or contain dates that don't make sense.

Right now, it's not much of a burden because of the small number of enrollees, said Allan Einboden, the insurer's chief executive. But he's concerned about what will happen when the flow picks up.

"We're glad we haven't had tremendous volume because we wouldn't have wanted to handle all that manually," he said.

The administration says it is working with insurers to address problems as they come up.

"Our technical experts are working very aggressively to fix this well before December 15," Peters said.

Related: Some families left out in the cold by Obamacare

Complaint #3: The costs are too high

Some people trolling for insurance on the exchanges are questioning why Obamacare is called the "Affordable" Care Act.

Many who were uninsured before are feeling forced to buy pricey insurance they don't want. Others who had bare-bones individual plans are seeing the premium prices soar because the Obamacare plans are more comprehensive.

One North Carolina reader was upset to learn her current $267 a month plan was being canceled and the cheapest option on the exchange would cost her family $750 a month. They don't qualify for a subsidy.

"Obamacare is a nightmare for my family," she wrote.

Others were surprised to see how high the deductibles and out-of-pocket costs were in some plans. Deductibles for bronze plans, which carry the cheapest monthly charges, can run $5,000 to $6,000.

"This is like a catastrophic plan, said Deb Hornbacher of Colorado. "I am totally shocked and taken aback at how little it did provide at the level I could afford."

For others, however, Obamacare is a godsend. Many, particularly those with pre-existing conditions, weren't eligible or couldn't afford coverage before. Now, they can get insurance since health reform bans insurers from discriminating against those who had been sick.

Many people signing up for coverage are also eligible for federal subsidies, which can greatly reduce the monthly premiums.

Complaint #4: My employer is raising my premiums because of Obamacare

Several readers with employer-sponsored insurance say their premiums are going up for 2014, and blaming Obamacare.

Companies are also changing their plans because of Obamacare. UPS (UPS, Fortune 500) for instance is ending coverage for spouses with access to policies elsewhere, while Trader Joe's and Home Depot (HD, Fortune 500) are shifting their part-time workers to the exchanges.

It's true that health reform is contributing to higher premiums and plan changes. But Obamacare, which is imposing new fees on companies and insurers starting in 2014, is not the driving factor, experts say. Health care costs are rising because the economy is improving so people are going to the doctor more.

CNN's Dugald McConnell contributed to this report.

First Published: October 21, 2013: 7:05 AM ET

23.11 | 0 komentar | Read More

Paying more for chocolate? You will be

High-end dark chocolates could face the steepest price increases over the next few months.

LONDON (CNNMoney)

Growing demand in emerging markets and bad weather in major cocoa producing countries is pushing up the cost of key ingredients, leaving manufacturers little choice but to pass on some of that pain to consumers.

The price of cocoa butter, for example, stands at a four-year high, having risen by 70% over the past 12 months, according to Mintec commodity consultant Liliana Gonzalez.

And the production cost of an average milk chocolate bar has surged by 25% over the same period, she wrote in a report for British trade magazine The Grocer.

"If manufacturers are bearing an increased cost over an extended period of time, it's no surprise they'll have to pass that cost along," said Peter Greweling, an artisan chocolatier and professor of baking and pastry arts at the Culinary Institute of America.

Related: India's new craving for luxury chocolates

But don't expect jaw-dropping surprises when you next visit the vending machine or grocery store. Manufacturers don't want to scare away loyal customers.

"What the industry usually does is either increase the price, reduce the cocoa content or reduce the size of their products," explained Laurent Pipitone, a director at the International Cocoa Organization.

Susan Smith, a spokesperson for the Chocolate Council at the National Confectioners' Association in Washington, acknowledged that ingredient costs have been rising but manufacturers have been doing their best to spare their consumers.

"Chocolates are supposed to be an affordable treat," she said. "They do what they can to not increase the prices -- but if their costs go up over time, they do have to make some adjustments."

Over the past 12 months, retail chocolate prices in the U.S. have risen by 7%, Smith said. That compares with annual consumer price inflation of about 1.5%.

Related: Tons of Nutella stolen in food crime spree

Those who crave high-end dark chocolate, with a higher cocoa content, are likely to be hit hardest.

"Those [chocolates] are made by smaller manufacturers and they're less able to absorb extra costs compared to the bigger manufacturers," said Greweling.

Related: Twinkies make a comeback at Wal-Mart

The global chocolate confectionery market, already worth $110 billion, is growing by more than 6% per year, according to Euromonitor. Demand in Latin America, the Middle East and Africa is expanding at an even faster pace.

And as demand rises, cocoa shortages due to bad weather in major producing countries such as the Ivory Coast, Ghana and Indonesia, are squeezing suppliers.

Cocoa has been the best performing agricultural commodity so far this year, according to Macquarie agricultural commodities analyst Kona Haque. Prices have risen by nearly 20% since hitting a low point in March 2013, and Haque expects further gains in 2014.

First Published: October 14, 2013: 7:59 AM ET

23.10 | 0 komentar | Read More

Doctor choice in Obamacare? Not so much

Who gets help to pay for Obamacare? Click on the map to see the share of people eligible for assistance.

NEW YORK (CNNMoney)

Some folks looking for coverage may find themselves restricted to more limited doctor and hospital networks than their peers outside the state-based exchanges enjoy.

Many insurers have opted to limit their selection of doctors in some exchange plans to keep premiums and other costs down. And they are also excluding large academic medical centers, which are often pricier because they tackle sicker patients and more complex cases.

"The sticker price will be lower if the number of options are lower," said Joe Mondy, a spokesman with Cigna (CI, Fortune 500), which is participating in five state exchanges. "The issue is how many options can you do without?"

Enrollees in the exchanges are expected to be particularly cost conscious because many of them will be lower income, said Ceci Connolly, managing director of PricewaterhouseCoopers Health Research Institute. Some 86% will be eligible for federal subsidies, according to the institute. Many of these new participants are currently uninsured, making it likely that they don't have strong relationships with doctors.

For example, WellPoint (WLP, Fortune 500), a Blue Cross Blue Shield insurer that offers policies in 14 states, is narrowing its networks in many markets after research showed consumers care more about the price than the provider.

In areas with a heavy concentration of doctors, WellPoint might offer Obamacare plans with only half the number of doctors available in its off-exchange plans, said Colin Drozdowski, vice president of provider engagement and contracting. But where there's less choice, the network might be only 10% to 20% smaller.

Insurers are also restricting participants access to doctors through HMO plans that don't offer out-of-network benefits. So patients have to stick to a certain set of physicians and hospitals or foot the full bill themselves.

Share your story: Are you planning to sign up for Obamacare?

Some people looking for coverage on the exchange, however, do care about provider networks. They'll have to shop carefully to find plans in which their doctors are participating and may even have to pay more to keep their current providers.

For Don Lane, 59, doctor networks are key. Lane is looking to retire next year so he and his wife, Amanda, are expecting to sign up for an exchange policy. But they want to make sure their primary care doctor, whom they've seen for years and has all their records, is in the plan they pick.

So far, Lane found that his physician is in a platinum plan offered by Humana (HUM, Fortune 500). But he hasn't been able to access the networks offered by the other insurers in his area because of ongoing technical glitches, so he doesn't yet know if he has other options.

"I will have to make a choice -- should I pay a little more to get my doctor?" said Lane, who lives in Wyoming, Ohio.

In California, many of those shopping on the exchange are conscious of the doctors in the plans, said Jeff Rideout, senior medical adviser at Covered California. One reason is because 700,000 residents who are eligible for subsidies currently have insurance.

"They are saying "I really hope my doctor is in the plan I want,'" he said.

Californians, however, won't be able to find out until sometime this week because the exchange has temporarily taken down its doctor search function to make sure the listings are complete and correct, Rideout said.

First Published: October 14, 2013: 9:54 AM ET

23.10 | 0 komentar | Read More

Despite shutdown, taxes are due Tuesday

A Miami-area man advertises the services of a tax preparer in this file photo.

NEW YORK (CNNMoney)

Oct. 15 is the filing deadline for more than 12 million individuals who in April requested a six-month extension on their 2012 taxes. The agency said that many of them have yet to file their 1040's for last year.

"Payments accompanying paper and e-filed tax returns will be accepted and processed as the IRS receives them," the Internal Revenue Service said in a statement ahead of the deadline.

However, if you are expecting some money back, you will likely have to wait until the government reopens.

"Tax refunds will not be issued until normal government operations resume," the IRS said.

The agency also isn't open to take calls or assist taxpayers in person, but it said the resources on its website and some automated phone lines will remain available.

Related: The shutdown and your taxes

Over 90% of agency's staff is on government-wide furlough due to the federal shutdown.

Those still on the clock include over 2,700 law enforcement-related employees and nearly 2,000 employees at submission processing centers, according to the agency's shutdown contingency plan.

Additional extensions have been granted to members of the military serving in Afghanistan and also to residents of Colorado impacted by recent storms.

First Published: October 13, 2013: 3:13 PM ET

23.10 | 0 komentar | Read More

World chastises U.S. as debt ceiling looms

World leaders have called on the United States to resolve its fiscal impasse.

HONG KONG (CNNMoney)

On this, there is absolute consensus. Leaders from China, Japan, Saudi Arabia, Germany and Singapore have all pleaded for a speedy resolution -- saying that a default by the United States would have a profound effect on their economies.

It's a risk that dominated last week's meeting of the International Monetary Fund in Washington, an event attended by nearly all central bankers and finance chiefs.

"I've just spent the last two days with representatives of about 188 countries around the world ... they are very anxious to see this crisis resolved, because they know it's going to impact their economy," IMF chief Christine Lagarde told CNN.

Many economies around the world are still struggling in the wake of the 2008 financial crisis, and leaders are unnerved by the idea that growth could be reversed by a self-inflicted financial calamity in the U.S.

"The U.S. needs to take urgent action to address short-term fiscal uncertainties," finance ministers and central bankers representing the world's top 20 economies said in a statement after meeting in Washington.

Related story: Shutdown still hurts in week two

Economists say that should the U.S. fail to honor its obligations, investors would likely drop the dollar, an event that would stress other currencies. Equity markets would surely take a hit, and transactions pegged to the value of Treasuries would be difficult to execute.

Regulators are also watching closely. Hong Kong has already reduced the value of Treasuries used as security for financial trading.

Market reaction has thus far been muted, but investors could grow more rattled in the run-up to Thursday -- when the Treasury Department has warned it will become difficult to pay all government bills.

Related story: The crisis with an on/off switch

The debt ceiling is a quirk of governance shared by few countries. Denmark and Japan have similar systems but no history of mixing borrowing limits and political brinkmanship. Beyond the immediate financial consequences, the episode has led some to question the U.S. role in the world.

China -- the largest foreign holder of U.S. debt -- has been particularly vocal.

Vice Finance Minister Zhu Guangyao said last week that a solution must be found quickly in order to "ensure the safety of Chinese investments" and provide stability for economies around the globe.

"We ask that the United States earnestly take steps to resolve in a timely way the political issues around the debt ceiling and prevent a debt default," he said. "This is the United States' responsibility."

Xinhua, the country's official news agency, went further, saying in a scathing op-ed that the "pernicious impasse" warrants a move to an "de-Americanized world."

"The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonized," Xinhua said.

-- CNNMoney's Mark Thompson contributed to this article

First Published: October 14, 2013: 3:46 AM ET

23.10 | 0 komentar | Read More