China's manufacturing sector stumbles

The pace of manufacturing expansion has slowed in China, according to HSBC.

HONG KONG (CNNMoney)

Global bank HSBC said its "flash" index of purchasing managers' sentiment fell to 50.4 in February from January's final reading of 52.3. Any reading above 50 signals expansion in the manufacturing sector.

The index, which had been on a winning streak, is now at a 4-month low. Still, economists are not ringing the alarm bells.

"The underlying strength of Chinese growth recovery remains intact, as indicated by the still expanding employment and the recent pick-up of credit growth," said Hongbin Qu, an economist at HSBC.

The timing of the Lunar New Year further complicates reading of the data.

Many Chinese factories shut down during the holiday as workers return to the countryside, a migration that can skew PMI readings.

Related: Scenes from China's annual migration

Not all of February's decline can be attributed to the holiday, according to economists at Nomura. Still, the government will likely wait for more data before making policy changes.

"We believe China's leaders will wait for the batch of macro data ... before making an assessment of economic conditions and deciding an appropriate policy stance," the economists wrote Monday.

The fate of manufacturing in China is considered a barometer of the global economy due to the nation's role as a powerhouse exporter.

China's economy has grown at an average of around 10% a year for the past three decades, allowing the nation to rocket past competition to become the world's second-largest economy.

While the growth slowed in 2012 to 7.8%, that figure topped government targets and analyst expectations, signaling an exit to the slowdown that had worried economists.

HSBC's final reading of February purchasing managers' sentiment is due on March 1, as is the Chinese government's reading.

First Published: February 24, 2013: 11:21 PM ET

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Spending cuts showdown may drag on

With just days before the spending cuts begin, there is little expectation President Obama and House Speaker John Boehner will make a deal.

NEW YORK (CNNMoney)

But there's no telling when.

Funding for numerous federal agencies and programs will be slashed, half from defense and half from nondefense spending.

Generally speaking, both parties say they don't want the cuts to kick in as planned.

Just how the cuts would be replaced -- if they are -- remains unclear, however.

Scenario 1 - Shutdown threat pushes Congress to act: The current measure funding the government expires on March 27. Known as a continuing resolution, that law is separate from the one that mandates the automatic cuts. It sets spending levels and authorizes the government to continue operating.

If lawmakers don't agree to new funding levels soon, the government will shut down on March 28 and remain closed until Congress reaches a deal.

A shutdown wouldn't bode well for either party. Most government offices and services would be shuttered. The only exception: services deemed "essential" -- those related to the safety of human life and protection of property. Taxpayer money would be wasted in the process because it costs money to close the government and to ramp it back up when Congress reaches a deal.

The urgency to avert a shutdown might spur lawmakers to agree on a replacement of the automatic spending cuts as part of a final deal.

Related: What you need to know about the cuts

Scenario 2 - Lawmakers keep fighting over the cuts: The pressure to avoid a shutdown may be so great that Congress takes the threat off the table before it even addresses the spending cuts.

One possibility is that House Republicans quickly pass a continuing resolution for six months until Sept. 30 at current funding levels, which would fall once the so-called sequester kicks in.

Senate Democrats, not wanting to be seen as the ones risking a government shutdown, sign on and decide to fight for a replacement to the automatic cuts later.

In that case, interest groups would step up pressure on lawmakers once the pain of the cuts really starts to set in.

"The sequester is a slow bleed that gets worse as it goes on," said Sean West, the U.S. policy director for the Eurasia Group.

Indeed, its bite won't be nearly as deep in March as it will be in April and beyond.

For instance, while more than 2 million federal workers may face unpaid furloughs for a day or two a week, those furloughs likely wouldn't start before April.

And the White House budget office may be able to instruct some agencies to hold off on implementing cuts for a short period of time.

The elephant in the room - Spending vs. taxes: Of course, there's no guarantee that lawmakers can bridge their ideological differences over spending and taxes.

Democrats have proposed replacing the automatic spending cuts with a combination of tax increases and spending cuts. Republicans want to replace the defense cuts with more non-defense cuts, and they oppose any revenue increases.

West of the Eurasia Group believes the two sides will agree on a replacement package by April. It may include mandatory spending cuts and tax increases, but the kind both parties can tolerate.

For instance, revenue increases might come from raising fees rather than tax rates, and thus be more palatable to Republicans. And mandatory spending cuts may not affect Medicare or Social Security benefits but rather reduce non-health-related spending -- for instance, by reforming federal retirement programs, he said.

Whatever ends up happening, get ready for a long and messy few weeks. Or months.

First Published: February 25, 2013: 2:15 AM ET

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Japan to tap Kuroda as next central bank governor

Haruhiko Kuroda is likely to be named the BoJ's next governor.

HONG KONG (CNNMoney)

After weeks of speculation, multiple Japanese media reports indicate that Prime Minister Shinzo Abe is preparing to select Asian Development Bank President Haruhiko Kuroda as the BoJ's next governor.

Kuroda is seen as a likely candidate due to his experience in international finance, and monetary prescriptions that largely mirror those of Abe.

Abe based his election campaign last year on a commitment to take radical steps to end years of deflation, combining promises of looser monetary policy with pledges of fiscal stimulus.

The Japanese yen has already weakened significantly in response to policy changes, falling almost 21% against the U.S. dollar since the beginning of October and driving up the stock market. It has also lost ground against the euro and some Asian peers, raising concerns that Japan may be engaged in a race to the bottom to promote exports.

The yen weakened further Monday on news of Kuroda's likely nomination, falling to 94.3 against the U.S. dollar. The Nikkei, meanwhile, gained 2% in early trading.

Weak currency cheapens the price of a country's exports, making them more attractive to international buyers by undercutting competitors. Japan's exporters have cheered the yen's decline, and Abe's popularity has skyrocketed in recent weeks.

Related: Japan's economy contracts for third straight quarter

Kuroda appears willing to follow through on Abe's policies, telling the Wall Street Journal earlier this month that Japan has "plenty of room for monetary easing."

"If necessary and if appropriate, of course additional monetary easing this year could be justified," he said.

Masaaki Shirakawa, the current BoJ head, has announced he will stand down on March 19, several weeks before his term was due to end. The official nomination of Kuroda, along with two deputies, is expected later this week.

Shirakawa agreed last month to double the bank's inflation target and adopt open-ended purchases of government bonds but is opposed to some of the more extreme proposals considered by the bank and has been accused of doing too little, too late.

Related: Don't fight the BoJ

By way of contrast, Kuroda told the Journal that the BoJ must move aggressively to meet its 2% inflation target.

"You cannot wait for five years, 10 years or 15 years. You have to achieve the target within a reasonably short time period," he said.

The political pressure on the Bank of Japan has caused consternation in the international community, with some lobbing charges of currency manipulation in Japan's direction.

Tokyo has rejected those claims, saying its policies are aimed at the economy not the yen, but the G7 group of leading industrial nations - including Japan - felt compelled to issue a rare statement earlier this month aimed at cooling talk of a currency war.

Kuroda, for one, seems undeterred, telling the Journal that the yen's weakening is good for the global economy.

"From a global point of view, is it good for the Japanese economy to continue to suffer from deflation...and low growth?" he asked. "That is not good for Japan, not good for the world economy."

First Published: February 24, 2013: 10:16 PM ET

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Marijuana dealers get slammed by taxes

Denver Relief, one of the largest marijuana dispensaries in Colorado, has an effective tax rate of around 50%, according to co-owner Kayvan Khalatbari.

NEW YORK (CNNMoney)

The hefty levy is the result of a 1982 provision to the tax code, known as 280E, that stemmed from a successful attempt by a convicted drug trafficker to claim his yacht, weapons and bribes as businesses expenses, according to 280E Reform, a group working to overturn the statute.

Enacted in the wake of that PR debacle, the rule bars those selling illegal substances from deducting related expenses on their federal income taxes.

It may have been effective against cocaine dealers and smugglers of other hard drugs, but the law now means purveyors of medical marijuana in the 18 states that have legalized the drug can't can't take typical things like rent or payroll as a business expense. That's taking a heavy toll on this new field.

"I'd personally love to give my employees a raise," said Kayvan Khalatbari, co-owner of Denver Relief, a medical marijuana center in its namesake city. "But because of the industry we're in, that's not always possible."

Related: Newest government job - expert pothead

Khalatbari said Denver Relief does just over $1 million a year in sales, and that not being able to take some standard business deductions costs him tens of thousands of dollars annually. He estimates his effective federal tax rate is about 50%.

For Denver Relief -- one of the largest marijuana dispensaries in Colorado, with a full-time staff of 15 -- the burden isn't killing the business. But for others, it's been lethal.

Jim Marty, an accountant in Colorado specializing in medicinal marijuana tax law, said he has one client that didn't turn a profit in 2009, 2010 or 2011. In 2012, though, she was handed a $300,000 tax bill from the IRS for those three proceeding years.

Entrepreneurs whose businesses are legal under state laws are getting hammered by outdated federal tax rules.

"If you have a license from the state hanging on your wall, that doesn't fit the definition of trafficking," Marty said. "Yet the IRS is aggressively auditing this industry."

He said he often sees clients facing effective tax bills of 65% to 75%. That compares to 15% to 30% for businesses in general.

The Internal Revenue Service did not respond to a request for comment. In a letter to a congressman in 2011, the agency said it was merely enforcing the law, and that Congress needs to change the law if it does not want medicinal marijuana dealers caught up in the provision.

Several groups are working on just that, though it's unclear if the law will be changed anytime soon. The Obama administration has so far not expressed much interest in weighing in on the matter.

Until then, those in the industry will keep looking for crafty ways to minimize their tax bill, and pay the tax man when they can't.

"An emerging industry that can provide hundreds of thousands of jobs is being held back by these crazy tax rates," said Betty Aldworth, deputy director of the National Cannabis Industry Association. "We're like any other small businesses, that just happens to be illegal in some states."

First Published: February 25, 2013: 6:09 AM ET

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U.K. vows to stick with austerity

Finance minister George Osborne says loss of AAA rating means cuts must continue

LONDON (CNNMoney)

Moody's cut its rating to Aa1 late Friday, saying growth would remain weak into the second half of the decade, making it harder for the government to deliver on its debt-cutting targets and undermining the ability of the U.K. to withstand future shocks.

"Britain has to stick to the course, and we will," finance minister George Osborne wrote in The Sun newspaper on Sunday.

"For we've had a stark reminder this weekend of the single most important truth about our economy -- Britain has a debt problem, built up over many years, and we have got to deal with it."

Moody's said it expected the U.K.'s debt to peak at 96% of gross domestic product in 2016, up from around 90% today.

A downgrade had been talked about for months, against the backdrop of a deepening recession in Europe and Osborne's acknowledgment late last year that borrowing would remain higher for longer than expected.

But it still served as a reminder of the poor growth prospects for the world's sixth biggest economy, and added fuel to speculation that the Bank of England will have to compensate for the lack of growth -- and the government's hawkish stance on fiscal policy -- by easing monetary policy still further.

Related: Eurozone economy to shrink again in 2013

Investors took the downgrade as another reason to sell sterling, extending a slide which began at the start of the year. The currency dropped 0.1% to its lowest level since July 2010 against the dollar, and 0.6% against the euro to levels last seen in October 2011.

Yields on 10-year government bonds have been rising for about six months and they ticked higher again Monday to 2.1%, still low by historical standards.

The Bank of England has signalled recently that it may be prepared to tolerate above-target inflation for longer, while growth remains weak. Three members of its monetary policy committee -- including outgoing Governor Mervyn King -- voted at its last meeting to expand its bond-buying program.

They were outvoted, but the previous time the committee split 6-3, the bank followed up at its next meeting with more monetary stimulus.

Related: Europe: No retreat from austerity

Osborne said Germany and Canada -- the only big economies still with AAA-ratings from all three major agencies -- had taken advantage of better times before the financial crisis to reduce deficits and make their economies more competitive, while Britain had built up the biggest structural deficit of all.

"Now we have no choice but to continue the hard work of putting our house in order," he wrote.

First Published: February 25, 2013: 7:23 AM ET

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Stocks: It's all international

Click on chart for more premarket data.

NEW YORK (CNNMoney)

Multiple Japanese media reports say that Prime Minister Shinzo Abe is poised to nominate an advocate of aggressive monetary easing to head the Bank of Japan. The yen fell to the lowest point versus the dollar since May 2010 on the news.

And while results of Sunday's Italian elections are not yet known, late polls show center-left candidate Pier Luigi Bersani on track to defeat controversial three-time prime minister Silvio Berlusconi and ex-comedian Beppe Grillo, who is leading an anti-establishment movement. Markets could react badly if Berlusconi, who has promised to undo some austerity measures, or Grillo were to win, as it would raise new doubts about the future of the euro.

European markets were firmer in morning trading, following a strong lead in Asia. The Nikkei added 2.4%, while the Hang Seng increased 0.2% and the Shanghai Composite closed up 0.5%.

Related: Wall Street CEO pay: Who's paid the most

It's not all good news in overseas markets. After U.S. markets closed Friday, Moody's stripped the United Kingdom of its AAA credit rating, citing the country's rising debt burden and tepid growth outlook. The British pound fell versus the dollar and the euro in trading Monday. And a key gauge of momentum in Chinese manufacturing fell unexpectedly.

U.S. stocks rose Friday, capping the worst of 2013 for the S&P and the Nasdaq, though the Dow managed a slight gain.

Fear & Greed Index on the edge of extreme greed

In corporate news, shares of Barnes & Noble (BKS, Fortune 500) shot 18.5% higher after Chairman Leonard Riggio said he plans to buy the company's retail operations, leaving the Nook electronic book segment a separate company. No price was disclosed in his filing with the Securities and Exchange Commission.

Lowe's (LOW, Fortune 500) reported lower sales and earnings, but both results were slightly better than forecasts and the company announced a $5 billion share repurchase.

Results are due later in the week from companies including Home Depot (HD, Fortune 500), Macy's (M, Fortune 500) and Groupon (GRPN). But there is little in the way of U.S. corporate or economic news due Monday.

U.S. investors looking for domestic news can focus on Capitol Hill for signs of progress in talks to avoid deep cuts in federal spending due to take place at the end of the week. But there were few signs of compromise in comments Sunday.

First Published: February 25, 2013: 3:48 AM ET

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Barnes & Noble chairman wants to buy company - but not the Nook

NEW YORK (CNNMoney)

Riggio, who disclosed his plans in a filing with the Securities and Exchange Commission on Monday, did not name a price. Shares jumped 8% in early trading.

Riggio is already the largest shareholder of Barnes & Noble (BKS, Fortune 500), with nearly a 30% stake in the company.

The company had already been considering spinning off the Nook business as a separate company.

Last April, it announced a deal with Microsoft (MSFT, Fortune 500) in which Microsoft bought a 17.6% stake in Nook. Publisher Pearson (PSO) bought a 5% stake in Nook in December.

Those deals both value the overall Nook business at more than $1.7 billion, even though Barnes & Noble stock is worth just less than $800 million.

Related: Top 3 e-book picks

In early January, the company reported a weak Christmas season, with sales at its retail stores falling 11%. Sales at its Nook unit fell 12.6% to just $300 million.

Earlier this month, the company warned of rising losses and disappointing sales for its Nook unit in the past year, results of which are due Thursday.

Barnes and Noble and other traditional book retailers have struggled with competition from Amazon.com (AMZN, Fortune 500), which has its own Kindle e-book. Borders filed for bankruptcy two years ago and went out of business in July 2011.

First Published: February 25, 2013: 8:38 AM ET

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Wall Street follows overseas markets higher

Click for more market data

NEW YORK (CNNMoney)

The Dow Jones industrial average and the S&P 500 both gained about 0.5%, while the Nasdaq advanced 0.6%.

Multiple Japanese media reports say that Prime Minister Shinzo Abe is poised to nominate an advocate of aggressive monetary easing to head the Bank of Japan. The yen fell to the lowest point versus the dollar since May 2010.

Japan's benchmark Nikkei index added 2.4%. But gains in Chinese shares were modest after a report on Chinese manufacturing fell unexpectedly. The Hang Seng increased 0.2% and the Shanghai Composite closed up 0.5%.

European markets were higher, with the DAX (DAX) in Germany gaining 2.3% and France's CAC 40 (CAC40) up 1.6%.

The FTSE (UKX) in London lagged, as traders responded to Moody's decision late Friday to strip the United Kingdom of its AAA credit rating, citing the country's rising debt burden and tepid growth outlook. The British pound fell versus the dollar and the euro in trading Monday.

"Officially we are now 'Good' Britain. No longer 'Great' I'm afraid," wrote Gary Jenkins, a credit analyst at U.K.-based Swordfish Research, in a note to clients.

In Italy, results of Sunday's elections are not yet known. But late polls showed center-left candidate Pier Luigi Bersani on track to defeat controversial three-time prime minister Silvio Berlusconi and ex-comedian Beppe Grillo, who is leading an anti-establishment movement. Markets could react badly if Berlusconi, who has promised to undo some austerity measures, or Grillo were to win, as it would raise new doubts about the future of the euro.

Related: Wall Street CEO pay: Who's paid the most

U.S. stocks rose Friday, capping the worst of 2013 for the S&P and the Nasdaq, though the Dow managed a slight gain.

Fear & Greed Index on the edge of extreme greed

In corporate news, shares of Barnes & Noble (BKS, Fortune 500) shot higher after Chairman Leonard Riggio said he plans to buy the company's retail operations, leaving the Nook electronic book segment a separate company. No price was disclosed in his filing with the Securities and Exchange Commission.

Lowe's (LOW, Fortune 500) reported lower sales and earnings, but both results were slightly better than forecasts and the company announced a $5 billion share repurchase.

Results are due later in the week from companies including Home Depot (HD, Fortune 500), Macy's (M, Fortune 500) and Groupon (GRPN).

Shares of 3D systems (DDD) plunged 17% after the maker of 3D printers reported quarterly results that were slightly better than expected. A three-for-two stock split, which 3D Systems announced earlier this month, went into effect Monday.

FarmVille maker Zynga (ZNGA) shares surged on reports New Jersey will revise online gambling laws.

U.S. investors looking for domestic news can focus on Capitol Hill for signs of progress in talks to avoid deep cuts in federal spending due to take place at the end of the week. But there were few signs of compromise in comments Sunday.

Oil and gold prices rose, while the U.S. dollar fell versus the euro. The yield on the 10-year Treasury note edged up to 1.99%, from 1.97% previously.

First Published: February 25, 2013: 9:40 AM ET

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HP takes cautious step into Android waters with new tablet

BARCELONA (CNNMoney)

HP's bid to rejuvenate its flagging business is the Slate 7 -- which is not a premium-grade tablet, nor a remarkably cheap device.

Instead, the $169 Slate 7 packs a 7-inch screen, 1024x600 resolution, a 1.6 GHz dual-core processor, and 8 gigabytes of storage. While it's not obnoxiously cumbersome, it is bigger and heavier than many of the notable 7-inch tablets, like Google's Nexus 7.

Those specs are fine, but hardly phenomenal by 2013 standards. And the same goes for performance and build quality. It isn't the fastest, or most powerful, or most attractive tablet, but it's powerful enough to do what most people need. And it's not an eyesore by any means. It does have a pretty recent version of Android installed -- 4.1 -- which means it has most of the new features.

The Slate 7 is HP's first major tablet release since the failed Touchpad tablet -- a byproduct of its disastrous acquisition of Palm in 2010. When rumors about a possible HP Android tablet surfaced, public expectations were a bit higher.

And rightfully so. But this latest offering is a tad bit perplexing. Going for the entry-level consumer market is a fine strategy in the short term (it has kept HP's computer sales afloat for awhile now). HP will probably need to be more aggressive with pricing.

Related: HP profit falls 16%, beating super-low expectations

Unlike the computer market, where HP (HPQ, Fortune 500) typically offers products that are a few hundred dollars cheaper than the top-rated machines, the Slate 7 is only $30 cheaper than Google's Nexus 7, which is thinner and lighter, more powerful and comes with a better display. The Nexus 7 will also have a slower decline into technological obsolescence.

The Slate 7 would be a fine tablet to buy if it were significantly cheaper than any other 7 or 8-inch tablet. But in this case, lower cost likely won't equate to a better value in the long run.

First Published: February 24, 2013: 10:35 PM ET

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Adoption tax credit for same-sex couples

Sharon McGowan, left, and her wife Emily expect to receive an adoption tax credit of more than $2,000 after Sharon legally adopted their daughter.

NEW YORK (CNNMoney)

A tax credit for what is known as a "second parent adoption" grants qualifying taxpayers up to $12,650 per child for certain expenses.

Those expenses include legal fees and court costs, which typically run from $1,500 to $2,500, along with a fee of around $1,200 for a home study -- a screening process that entails home checks and interviews. Altogether, second parent adoptions can cost up to $5,000, said Gideon Alper, a Florida adoption attorney who regularly counsels same-sex couples.

The credit is a twist on the usual pattern with the tax code, which often hurts same-sex couples. Straight couples who are married can claim the adoption tax credit when they adopt a child together, but don't qualify when one spouse adopts the child of his or her spouse.

Related: Businesses band together to support gay marriage

But because the Defense of Marriage Act means that gay couples aren't recognized as married in the eyes of the IRS, they can qualify for the credit when adopting a partner's child.

"Same-sex couples face a big disadvantage tax-wise through the rest of the system by not being married [at a federal level], so this is like a saving grace that lets them save a little money," said Alper.

Sharon McGowan, from Takoma Park, Md., went through a second parent adoption late last year, after her wife, Emily, gave birth to their daughter, Sadie.

While Sharon and Emily are married at a state level, the federal government doesn't recognize their union and many other states don't either. So to guarantee Sharon has full parental rights wherever she goes, the couple spent over $2,000 in legal fees and other costs to adopt Sadie.

"I never wanted to have the risk of someone refusing to let me see Sadie in hospital or make medical decisions for Sadie," said Sharon. "I wanted to make sure my relationship with Sadie was airtight."

Related: 'What legalizing gay marriage means for our money'

The couple made sure to complete the adoption before the end of the year so they could qualify for the credit -- which was originally scheduled to expire on Dec. 31, but ended up being permanently extended under the fiscal cliff deal. They're hoping the tax credit this year will cover the adoption expenses they incurred.

The credit is nonrefundable, so it will offset some of their overall tax bill. And the extra money they don't have to put toward taxes this year will go toward Sadie's daycare.

The couple says they are lucky their state even allows second parent adoptions, since some don't. But they don't think the credit should be considered a "benefit," because they wouldn't have had to go through the second parent adoption process and incur those costs at all if their marriage had been federally recognized in the first place.

Along with second parent adoptions, the adoption credit is also available for joint adoptions where neither parent is the birth parent -- and both same-sex and opposite-sex couples can claim the credit in this case. Since same-sex couples can't file their taxes jointly, however, only one partner can claim the credit, or they must each claim a portion of it.

Related: Financial benefits at stake in gay marriage case

If DOMA is overturned, which is a possibility since the Supreme Court is expected to weigh in on the constitutionality of the law for the first time this year, same-sex couples who are married at the state level would also be considered married for federal tax purposes.

This means they would be able to file jointly, but they would no longer receive a credit for a second parent adoption.

It's up in the air whether couples in civil unions or domestic partnerships would still be allowed to take the credit, however. It will depend on whether the federal government's definition of marriage would encompass those relationships, said Patricia Cain, a law professor at Santa Clara University in California.

For Sharon and Emily, the inequities same-sex couples face under DOMA far outweigh the couple thousand dollars they will get that a married couple won't.

"We would be very, very happy to give up the adoption credit to have our marriage recognized," said Sharon.

First Published: February 25, 2013: 6:28 AM ET

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Rebuild your nest egg after divorce

Divorcing? Go for the pension, not the house.

NEW YORK (Money Magazine)

PART 5: MIDLIFE CHANGES

The secret: Forget the house, go for the pension.

Retirement plans often go by the wayside when your marital status changes.

"As a married couple, you have this vision of riding off into the sunset together when you retire. When the marriage ends, you have to create a new vision of your retirement," says Raleigh, N.C., financial planner Steve Gaito.

Divorce or having a spouse die young saps income and assets, making it much harder to continue saving the same way you did as a married couple.

A recent survey by ING found that the average divorced person had $10,000 less in retirement savings than the average married person, even though the divorced respondents were typically five years older.

Related: 5 retirement choices: Get 'em right, live well

Women often find themselves especially pressed: Household income drops 41% for women after a divorce and 37% in widowhood, compared with under 25% in both cases for men, according to a report by the Government Accountability Office.

Although family changes put a lot of immediate worries on your plate, it's crucial to keep one eye on your long-term plan.

TAKE ACTION

Don't make 401(k) and pension plans an afterthought as you split up assets. While your first impulse might be to go for the family house, weigh the benefits of doing so if it means getting less of the retirement accounts you and your spouse built up together.

"The spouse who gets the retirement plan assets may be in much better shape for retirement than the one who got the house," says RegentAtlantic investment adviser Chris Cordaro. Houses are illiquid and have carrying costs that may be difficult to maintain on a single person's income.

Sometimes the best strategy for both parties is to sell the house, split the equity, and downsize.

Next, take control of your portfolio choices. If you get a portion of your spouse's workplace retirement accounts, the court will sign off on a qualified domestic relations order.

With a traditional pension, this allows your spouse's plan to create a separate account in your name. If it's a 401(k), the money could either go into an IRA or be kept in your name with your spouse's plan administrator, with a choice to roll over later. Converting to the IRA is usually best, as this will give you a wider choice of investment options and more control over the fees you pay.

Keep the investing part simple. Since in many couples just one spouse handles the chore of managing investments, you might feel like you suddenly have to climb a steep learning curve to run your retirement funds.

Related: Tips for talking retirement with your spouse

An easy start: Put the money in a target-date fund, which gives you a premixed, diversified portfolio appropriate for your age, at least until you've had a chance to consider other investments. The target funds from T. Rowe Price and Vanguard are on the MONEY 70 list.

If you remarry, you can keep the money separate, but don't let it be a secret. Prenuptial agreements are more common in second marriages, particularly if spouses want to preserve their assets for their own children. That doesn't mean you shouldn't be working together toward your goals.

"Individuals can keep things legally separate, but mentally they need to manage everything as if it's one," says financial planner Jacob Gold of Scottsdale.

When facing a spouse's early death, give yourself a financial cooling-off period. You may suddenly have a lot of money -- from life insurance or retirement accounts -- to deal with at all once.

And that means you'll soon hear from people, whether it's a well-meaning family member or an agent or broker, with ideas for how to invest it.

Park the money somewhere safe for the short-term. If you let six months or a year pass while you deal with the emotional impact of the loss, you can make financial decisions with a clearer head.

More secrets to a dream retirement

Investing

Health

Career

Family

Debt

The retirement gender gap

Women especially worry they won't have enough,and divorced women have the most concern.

% Confident about retirement
	Married	Divorced
Men	60%	55%
Women	46%	41%

Source: ING Retirement Research Institute survey

First Published: February 18, 2013: 10:12 AM ET

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Maker's Mark won't water down whiskey, after all

Emerging markets are driving growth in the liquor business, and bourbon, with its sweeter taste, is appealing to consumers in countries like India.

NEW YORK (CNNMoney)

After an outpouring of outrage, Maker's Mark announced Sunday that it won't be watering down its whiskey, after all. The bourbon producer last week said it would have to cut the alcohol volume of its signature red wax-sealed whiskey to 42%, from 45%, in order to meet rising global demand.

But Maker's Mark said it was reversing its decision, and starting Monday, it will resume production at 45%, just the way it has made it since the beginning.

"You spoke. We listened. And we're sincerely sorry we let you down," the company said in a statement. "While we thought we were doing what's right, this is your brand -- and you told us in large numbers to change our decision."

Related: Doubling down on bourbon in the heartland

The response to last week's announcement was immediate across social networks. A stream of whiskey-loving Twitter users remarked that this was a surefire way to lose customers.

Rob Samuels, chief operating officer of Maker's Mark, said the company heard from thousands of customers via phone calls, emails and social media. He said that the overwhelming feedback made it "very clear" that customers were less than pleased with that decision.

In a comment posted on CNNMoney's story about the change, reader Mike Carter said Maker's had been his favorite brand for many years, but he would now be switching to a competitor.

"I won't buy watered-down bourbon," he wrote. "This is a very bad decision."

Disgruntled customers may be breathing a sigh of relief, but Maker's Mark still faces the same issue that caused the whiskey maker to water down the drink in the first place.

Emerging markets consumption of liquor has soared, according to Matt Shattock, CEO of spirits company Beam (BEAM), which makes brands like Knob Creek and Jim Beam. Shattock told CNNMoney last year that bourbon, with its sweeter taste, is appealing to consumers in countries like India.

The surge in global demand has led to shortages, Maker's Mark said, and using less alcohol in each bottle would allow it to stretch the supply.

Bill Samuels Jr., the company's chairman emeritus, said Maker's Mark had faced 20 shortages in the 35 years he ran the company.

Bourbon is a type of American whiskey that must be aged in new barrels and distilled at less than 160 proof, or 80% alcohol.

According to the company, the response made it clear that customers were not willing to compromise on quality and would rather put up with occasional shortages.

Rob Samules said that moving forward, Maker's Mark will have to balance its inventory and work closely with its distillery to keep up supply with demand.

"The unanticipated dramatic growth rate of Maker's Mark is a good problem to have," he said.

First Published: February 17, 2013: 2:58 PM ET

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Federal worker furloughs could start in April

Food inspectors at USDA will be among those who will likely face furloughs in April.

WASHINGTON (CNNMoney)

Unless Congress steps in, some $85 billion in massive spending reductions will hit the federal government, doling out furloughs to much of the nation's 2.1 million federal workforce, experts say.

The cuts coming as a part of the "sequester" will end up carving some 9% from non-defense programs and 13% from defense programs. They're part of a larger effort to trim $1.2 trillion from federal deficits over 10 years.

Daniel Werfel, a controller for the Office of Management and Budget, told a Senate panel Thursday that furloughs won't happen until after agencies negotiate with unions, and that's not expected to be finished until after March 1.

After union bargaining, the agencies still need to give employees their official 30 days notice of impending furloughs, realistically pushing most furloughs off until April. However, some non-union employees could face furloughs in March.

Unions usually have the final say on how the furloughs will be implemented, said Colleen M. Kelley, president of the National Treasury Employees Union (NTEU). She said they get to bargain with federal agencies on issues such as how the furloughed days will be spread out.

The unions will also work with agencies to ensure that things such as performance reviews don't reflect work left incomplete due to furloughs.

"We believe that one furlough day is one too many for employees," said Kelley, whose group is among those pushing Congress to come up with an alternative to federal budget cuts.

Neither NTEU nor National Federation of Federal Employees have been approached to officially begin the bargaining process over furloughs, both confirmed.

Related: How Washington politics threatens my job

At Thursday's hearing, Werfel said agencies might not be able to avoid furloughs that would reduce essential services. At the Agriculture Department, for example, it's not possible to avoid furloughs that would result in fewer food inspections, because most of the agency's expenses are the salaries and benefits of people who perform those tasks.

"So it becomes a math issue, ultimately," he said. "This is one of the very tangible and clear and significant impacts of sequester: This division within USDA will not be able to make its core mission of sending the inspectors to these locations."

The exact number of total furloughs planned is still unavailable, since agencies are still deciding how to spread the cuts. It's possible some agencies may yet be able to spare some employees from furloughs or at least minimize days of unpaid leave.

Generally, workers would keep benefits such as health insurance, according to recent guidance from the Office of Personnel Management. But some workers may have to give up more from their paychecks when they return to work after a furlough, if their salary for the pay period wasn't enough to cover health insurance premiums.

The sequester -- a series of blunt, automatic funding cuts across much of the federal budget set to begin March 1 -- was never supposed to go into effect. Instead, the threat that it might was supposed to spur lawmakers to find a smarter way to reduce deficits over the next decade.

The only group that could escape furloughs are some 1,500 presidential appointees, including Cabinet positions, deputy secretaries and assistant secretaries. That's because those jobs are considered 24-hour-a-day positions, said Max Stier, president and CEO of Partnership for Public Service, a nonprofit that advocates for a more efficient federal workforce.

Most of those workers are at the top of the federal pay scale, Stier said.

"It's just craziness," he said. "You're telling the vast bulk of federal employees 'Guess what, you don't know how much money you're going to make.' And in all likelihood, these hard-working people will have to do the same amount of work."

First Published: February 17, 2013: 12:07 PM ET

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Thailand's economy races ahead

Workers in Thailand pictured next to containers filled with rice.

HONG KONG (CNNMoney)

Thailand's economy expanded rapidly in the fourth quarter, with the government reporting gross domestic product growth of 18.9% compared to the previous year.

The eye-popping growth figures are rooted in misfortune, as Thailand experienced crippling floods in late 2011 that depressed production and consumption.

But even with the lower baseline caused by the natural disaster, Monday's data suggests that Thailand's recovery is more robust than previously thought.

Economists had expected much slower growth of around 15% for the quarter -- a consensus that now appears conservative.

Su Sian Lim, an economist at HSBC, attributed the growth to better-than-expected gains in private consumption and net exports.

Related: World's largest economies

There are more indicators that suggest the growth is for real.

Compared to the third quarter, a more recent benchmark, the economy expanded by a very rapid 3.6%. And the government said Monday that full-year GDP growth in 2012 was 6.4%.

The massive floods in 2011 killed hundreds of people and caused damage worth billions of dollars. The country is a regional manufacturing hub, and is especially important for the auto and electronics sectors.

G20 pledge: No currency war

HSBC's Lim said the country's central bank is now less likely to cut rates later this week -- a strategy that some government officials have advocated in a bid to boost the economy.

"With growth this strong, it is difficult to make a case for more policy accommodation, no matter what the government may say about the need to compress interest rate differentials and keep [the baht] from strengthening," Lim said.

Rate cut or no, Thailand is projected to keep its momentum. The government forecasts growth of 4.5% to 5.5% for 2013, a number in line with private forecasts.

First Published: February 18, 2013: 3:56 AM ET

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32 days of higher gas prices comes at tough time

Gas prices have been rising due to higher oil prices, production cuts and refinery issues. Click chart for state-by-state data.

NEW YORK (CNNMoney)

That means that the average price for a gallon of regular unleaded gasoline has increased more than 13% over that period to $3.73.

It's hitting wallets right in the middle of winter, when people are already looking at large home heating bills. And it comes just after many Americans have been hit with smaller paychecks, and are worried about looming budget cuts that could deliver an even deeper blow.

What's behind the higher prices at the pump? It's a confluence of factors, from rising crude oil prices, to production cuts and refinery closings.

"Right now, things are tight worldwide," said Ray Carbone, president of New York commodities trading firm Paramount Options. "Refineries going down, unanticipated maintenance, and higher demand ... going into driving season."

Two-thirds of the cost of one gallon of gas comes from the price of crude, which has jumped 10% in the last two months, according to the Energy Information Administration. As the U.S. housing market experiences a resurgence, the jobs picture brightens and consumer spending expands, anticipation of higher oil demand is driving up prices. At the same time, fears have ebbed that there would be a protracted slowdown in China's economy, which would have dampened global demand for oil.

OPEC, the powerful cartel of petroleum exporting countries, is also believed to have cut production by about 1 million barrels a day in the last few months, partly in response to rising oil production elsewhere, notably the United States.

Adding to that, several refineries are either preparing to, or have already, shut down for maintenance before their annual switch to summer gasoline, which is formulated differently.

For the average American, all this couldn't be happening at a worse time.

Most of the country's 160 million workers are taking home less pay each week since the payroll tax cuts expired last month.

The government in 2011 had temporarily lowered the payroll tax rate for the first $113,700 of annual earnings in an effort to keep more cash in the pockets of Americans and provide a boost to the economy.

Now, workers earning the national average salary of $41,000 are receiving about $60 less on every monthly paycheck.

Related: CNNMoney map: Check gas prices in your state

Many Americans are also worried that the federal aid programs they rely on are on the chopping block. Next month, lawmakers will face off against the so-called "sequester," which will slash $85 billion from federal agencies over seven months.

By some estimates, up to 1 million jobs will be lost even as millions of federal workers will be furloughed and a bevy of programs and services across the government will be curtailed.

In such a scenario of widespread furloughs and job cuts, gas price will likely have a deeper impact if they continue to rise.

First Published: February 17, 2013: 5:26 PM ET

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Six secrets to a dream retirement

Saving for retirement is easier if you spend a moment thinking about your future self.

NEW YORK (Money Magazine)

Hiding in plain view, however, are other keys to post-work bliss that are at least as important as savings rates and stock returns. Especially from your mid-forties, say, to your early sixties, you'll make money-related decisions that have clear implications for the near term but that require some imagination for you to see their critical impact on how you'll live 10, 20, or 30 years down the road.

After consulting retirement experts and poring over the latest academic research, MONEY has identified five of these secrets and, as a sixth, found a new twist on that admonition to save, save, save.

This story will lay out these hidden retirement drivers -- including your investments, health, career, family, midlife changes and debt -- and help you make use of them in your planning. You'll also see how they could affect your finances in the years after you call it a career, based on numbers crunched by Jack VanDerhei at the Employee Benefit Research Institute, whose computer model simulates 100,000 possible market paths.

INVESTMENTS

The secret: 16.6% is the magic number.

How much do you need to save to retire? It's a vexing question because different generations of savers have different luck.

Some feel the market winds at their back during their careers, while others trudge through with low returns. Wade Pfau, professor of retirement income at the American College, which trains financial planners, has crunched the numbers to find a safe level of saving that would have worked in every historical market stretch going back to periods beginning in the 19th century.

Related: 4 ways the market could really surprise you

He found that setting aside 16.6% of income and putting it in a diversified portfolio of stocks and bonds did the trick every time. (Good news: Employer matches count toward that savings rate.) That's if you're consistent about saving over 30 years.

A slow starter must ramp up higher -- a 45-year-old with two times salary saved would have to go for 20%. "During some boom times, workers could get away with saving less, but you can't count on above-average returns," says Pfau.

That's a useful warning right now because investors face some real challenges in the coming decade. Part of the problem is basic math: The 10-year Treasury bond yields less than 2%, and the Federal Reserve gives every indication that rates will stay low for years. "Current yields are a good predictor of bond returns," says David Blanchett, head of retirement income at Morningstar Investment Management.

Related: 5 retirement choices: Get 'em right, live well

Stocks are less predictable -- but risks today include a wobbly global economy and an aging population who may prefer holding bonds to stocks. The more you can save, the less you have to worry about this stuff.

Take action

Do more than the max. For higher earners, "maxing out" your 401(k), as satisfying as it feels, might be a trap. Within your 401(k) you can save $17,500 in 2013. Those 50 and older can save an additional $5,500.

Because of IRS rules that prevent plans from benefiting mainly higher-income workers, some plans limit the contributions you can make even more, says Rick Meigs, president of 401khelpcenter.com. Step up savings by adding to a Roth IRA, where after-tax money can grow tax-free. You may not be able to invest directly in a Roth if your salary is above income limits. (Starting at $178,000 for married couples filing jointly in 2013, the amount you can contribute begins to phase out.) Fortunately there's a backdoor: Save in a nondeductible IRA, which you can then convert to a Roth.

Buy cheap funds -- it's like saving more, but easier. One wrinkle of Pfau's study: He didn't include investing expenses in his returns. If you pay a management fee of 1% a year on your funds, says Pfau, the safe savings rate jumps to over 22%. You have one advantage over past investors who enjoyed more bullish times, though. You can buy index funds and ETFs that cost 0.10% or less.

Get in touch with the future you. Behavioral finance research suggests that saving is easier if you spend a moment thinking about your future self. Look at an age-morphed photo of your face, and you are likely to put away more, says NYU researcher Hal Hershfield. You can get a glimpse of your older self via a mobile app, such as Aging Booth (IOS, 99¢; Android, free).

Related: Your future self thinks you should save more

Know when to dial down risk. Five years before retirement, zero in on how much you'll need to pay essential expenses, says financial adviser Harold Evensky of Coral Gables, Fla. Shift the equivalent of one year of expenses to cash or short-term bonds so that if stocks plunge when your quitting date is in sight, you'll know you'll have some extra time for markets to recover. This cushion will help keep you from selling in a panic.

More secrets to a dream retirement

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Career

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Debt

First Published: February 18, 2013: 9:50 AM ET

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Healthy living: Key to a happy retirement

Good health means you have to save a bit more -- but that's because you're living longer.

NEW YORK (Money Magazine)

PART 2: HEALTH

The secret: A greasy burger is worse than a bear market.

When it comes to retirement, good health cuts both ways. As any financial calculator will tell you, living longer actually means you'll need a bigger nest egg. But the healthier you are leading up to retirement, the easier it is to build up the savings you'll need.

A recent National Bureau of Economic Research study by James Poterba, Steven Venti, and David Wise found that people who were among the healthiest 20% in their fifties retired with three times the assets of the least healthy. And the healthy also spent down their wealth more slowly.

Related: 8 apps for losing weight, staying fit

Poterba says that's because the impact of health on your finances begins well before you quit working.

"People in good health have lower health care costs, so they have less of a drain on their resources," he says. Also, other research shows that about half of people who retire earlier than they planned cite health as the reason. Staying healthy gives you more power to save for longer.

TAKE ACTION

Know your numbers. According to the U.S. Agency for Healthcare Research and Quality, one-third of adults with diabetes don't know it, and 20% of adults with high blood pressure are unaware. If you haven't been checked for a few years, do so now. Make sure your spouse does too.

Focus on what you can control. Just because you have a family history of a health condition doesn't mean you'll get it as well.

Related: 5 retirement choices: Get 'em right, live well

"DNA isn't your destiny," says Laura Carstensen of the Stanford Center on Longevity. "Research shows a very small number of factors make a big difference." Those probably won't come as a surprise: whether you smoke, how much you drink, your weight, and your exercise routine (you've got one, right?).

Any smoking is bad, but how much alcohol or weight is too much? Here's the scoop: No more than seven drinks a week for women or 14 for men, according to the National Institute of Alcohol Abuse and Alcoholism. For weight, check your body mass index at cdc.gov to see if you are in the healthy range.

You don't have to become a triathlete. Just 2½ hours of moderate exercise a week can make the difference, according to the Centers for Disease Control.

Need some extra motivation to hit the treadmill? People who are fit in middle age battle fewer chronic ailments in the last five years of life, so they get to enjoy more of their retirement being active and feeling good.

More secrets to a dream retirement

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Longevity cost, but it's a bargain

Good health actually means you have to save a bit more -- but that's just because you're living longer. Every year retiredpeople devote a lot less of their budget to health care.

	Good health	Poor health
Average lifetime health care costs, starting at 65	$260,000	$220,000
Average annual health care costs in middle years of retirement	$6,000	$7,416

Notes: Annual costs for households with husband ages 70 to 74. Costs include Medicare, home health care, and insurance premiums. Source: Center for Retirement Research

First Published: February 18, 2013: 9:57 AM ET

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How to manage the second half of your career

Successfully managing your career after 50 lets you retire later with an improved financial outlook.

NEW YORK (Money Magazine)

PART 3: CAREER

The secret: Success at 50 means a whole a new skill set.

Nearly half of workers in their fifties expect to retire after 65, according to a survey by TransAmerica. Smart plan.

"You can't finance a 30-year retirement with a 40-year career," says Martha Deevy of the Stanford Center's financial security division.

The reality, though, is that many careers don't make it to 65. (The median retirement age is 62.)

Being pushed out early isn't the only risk; losing a job in middle age can leave a hole in your savings even after you get back to work.

You may not always be able to avoid a layoff, but "you can't afford to become complacent," says Geoff Hoffmann of recruiting firm DHR International.

Related: Best Jobs in America

The rules of managing your career in its second half are different from those that worked when you were younger. You need a fresh strategy to get you up the ladder when there are fewer rungs to climb, with stiffer competition for jobs at your level.

TAKE ACTION

Go beyond mentors. Find champions. Early in your career you may have had a mentor who showed you the ropes of your job. Later on, though, you'll need higher-level contacts who can sing your praises when it comes time for raises, promotions, or job cuts, and who can connect you to decisionmakers in other departments or firms. "You want credible people who can advocate for you," says Hoffmann.

Related: 5 retirement choices: Get 'em right, live well

They may not be in the next cubicle over or people you're likely to see every day. Put yourself in positions to interact with senior-level people in a meaningful way: Seek out cross-departmental assignments or get actively involved in industry associations.

People are more likely to champion you if they feel that you've been a champion for them too. In your networking, give at least as much as you hope to get.

Show knowledge, not credentials. After 45, pricey degrees may not be worth the investment. You simply have less career time to make the cost pay off. Employers do like to see, though, that you're still learning, says Scott Kane, founder of the job-placement service Gray Hair Management.

Sign up for short courses that teach skills that apply to your industry. (Online providers Coursera and Udacity now offer many for free.) Or take on projects at work that force you to master a new technology.

Focus on transferable skills. Think about the things you've done that could be valuable to a wide variety of employers -- for example, the time you overhauled a training program or spearheaded a cost-cutting team.

Keep track of these accomplishments by regularly updating your résumé and LinkedIn profile.

More secrets to a dream retirement

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Debt

First Published: February 18, 2013: 10:02 AM ET

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Balancing retirement with supporting adult children

Saving for retirement while supporting adult children and aging parents can be difficult.

NEW YORK (Money Magazine)

PART 4: THE FAMILY

The secret: Know when to say no to the kids.

The plan was to speed up on retirement saving once your kids were out of school. Then your son lost his job and moved back home -- and Nana is becoming frail and needs help too.

A new survey by Pew Research found that 48% of middle-aged adults with grown children gave them financial support in 2012. Some 21% with a parent age 65 or older gave financially.

Others gave time, which has its own costs; over 60% of those providing care are saving less for retirement as a result, says a survey by the National Alliance for Caregiving.

And 15% in the Pew survey helped both adult kids and parents. "When it's both, it gets overwhelming," says Milwaukee financial planner Alan Moore.

Related: Tips for talking retirement with your spouse

By identifying early on what you can pay -- and what you don't have to -- you can save yourself both money and angst.

TAKE ACTION

With your kid, draw the lines upfront. One of Moore's clients ended up buying his son, who hadn't moved out, a house. "He told me, 'I just wanted my house back,' " says Moore. "I'm not sure he could really afford it."

Even if things haven't gone that far and your kids are on their own, you may still be chipping in for health care insurance or cellphone bills. However you pitch in, "set clear expectations upfront -- even put it in writing," says Theresa Wan, a financial planner in Dumont, N.J.

Related: 5 retirement choices: Get 'em right, live well

Ask: What specific help does she need? If she's living with you, what rent will she pay, and for how long? (You could deposit "rent" into a fund she can use for future costs after she moves out.)

Distinguish between investments in her future, such as a career counselor or job-related courses, and extras that should be her responsibility, like concert tickets.

Get a clear view of your parents' finances. That's often a tough conversation, but you can ease tension by enlisting a third party, such as a financial planner.

If you know what Mom or Dad can afford when a problem arises, you can take steps together with them to avoid unnecessarily damaging your own finances. For example, it might become clear that if your parents downsize to a smaller condo, it would free up some money for paying a home health aide, perhaps forestalling a costlier nursing home stay.

Tap senior services. Government and nonprofit agencies offer a range of help for the elderly, says Louise Schroeder, a financial planner in Stillwater, Okla. Services include adult day care and in-home aid, and may be low cost or free. To find help in your area, go to eldercare.gov.

You'll face a time drain, but you can get a hand. Having to provide aid to a parent gets in the way of your career and leaves little time left over for getting on top of your own financial planning. A geriatric care manager can help oversee your parents' home and health services, says Schroeder. Search for one at caremanager.org; expect to pay $150 to $200 an hour.

Don't miss tax breaks. You may be able to claim adult relatives you help as dependents. For them to qualify you must provide more than half their financial support, says CCH tax analyst Mark Luscombe. Their gross income for the year, excluding Social Security, must also be less than $3,900, as of 2013.

More secrets to a dream retirement

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Debt

First Published: February 18, 2013: 10:08 AM ET

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Don't let debt kill your retirement

Take steps to eliminate high-cost debt before you retire.

NEW YORK (Money Magazine)

PART 6: DEBT

The secret: Burn the credit card, not the mortgage.

Even longtime savers sometimes retire in the red, perhaps after getting pinched by a job loss or a health problem.

An Ameriprise survey of older workers with at least $100,000 in assets found that 22% weren't on track to pay off their credit cards by retirement.

High-cost debt is especially dangerous in retirement because you are likely to see your income go down, and if you draw heavily on your nest egg to keep up with payments, you're more vulnerable to outliving your money.

Well before 65, have a plan to wind down those obligations.

TAKE ACTION

Paying off pricey debt is the only good reason to save less. Just make sure to put away enough to get any employer match.

Related: How long will it take you to be free of debt?

Use these rules of thumb for college debt. It's tempting to take big loans to pay for a kid's dream school. Have your child look into Stafford loans first (borrowing over four years no more than his projected first-year salary), and then consider Parent Plus loans or co-signing on a private loan.

The rules: Don't borrow more for all of your children than your annual salary. And be sure you can pay it off in 10 years or by the time you retire, whichever is first, says Mark Kantrowitz of FinAid.org.

There's less rush to pay off a mortgage. With today's rates and favorable tax treatment of mortgage interest, you may be paying less than 4%. Eliminating the mortgage can make sense, since it lowers your expenses.

Related: 5 retirement choices: Get 'em right, live well

If you can afford the payments, however, you can hang on to the loan to leave more of your money in a diversified portfolio, says Kimberly Foss of Empyrion Wealth Management.

If most of your assets are in a tax-deferred account, then by not cashing out, you're also deferring taxes as your investments continue to grow.

More secrets to a dream retirement

Investing

Health

Career

Family

Midlife changes

First Published: February 18, 2013: 10:16 AM ET

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Do you need an investment adviser?

Once you start living off your savings, high investment fees make it more likely you'll deplete your retirement stash.

NEW YORK (Money Magazine)

Once you determine how much of a saver you are, you have several more decisions to make -- including whether you should pay for the advice of a financial planner.

Decision No. 3: How much help do you really need?

The decision: As you get deeper into retirement investing, you may find yourself at a crossroads: Should you go it alone -- set your own asset allocation, choose funds, monitor your progress, make adjustments -- or do you need professional input? In retirement, can you tackle the tricky drawdown solo?

There's no one right answer. The decision comes down to your comfort level and confidence, plus your ease with the online tools that make a DIY approach easier.

Why it's important: You can pay the skimpiest fees possible by picking index funds yourself.

If you prefer giving your money to an active fund manager in hopes of beating the market, you'll pay another half a percentage point or more a year. And turning your money over to an adviser can add 1% a year to your costs.

Related: Which type of financial planner makes sense for you?

The benefit of holding the line on expenses is pretty intuitive when you're saving for retirement. The less you spend on fees, the more of your gains you get to keep. Over a 35-year career, paying one percentage point less annually can mean a 20% larger nest egg.

Keeping a lid on expenses after you've retired is equally important. By reining in costs you may be able of reduce the chances of running out of money. And you'll be able to draw more from your portfolio every year.

Best move: Take advantage of free asset allocation and investment selection tools in your company's retirement plan or at fund company sites.

Last year the Department of Labor began requiring employers to be more transparent about 401(k) fees, which should make it easier for you to home in on the lowest-cost investments in your plain.

Related: Long-term investing - Keep it simple

Outside your plan, you can turn to online tools like Morningstar's Fund Screener, which allows you to sort funds by their expense ratios. And our MONEY 70 includes ETFs that charge as little as 0.05%.

See more decisions you need to get right

Are you a saver or an investor?

How should you divide your money?

What's the best use of tax-deferred plans?

How much can you draw from your savings?

First Published: February 11, 2013: 10:00 AM ET

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Pharmacist: Most equal job for men and women

NEW YORK (CNNMoney)

Pharmacists are a fast-growing profession offering a six-figure salary -- and the pay is nearly equal for men and women.

"The position of pharmacist is probably the most egalitarian of all U.S. professions today," Harvard economists Claudia Goldin and Lawrence Katz wrote in a paper on the subject they published in September.

Women make up slightly more than 50% of all full-time pharmacists, according to Census data collected in 2011. Once you factor in part-timers, they make up around 55% of the profession.

Full-time female pharmacists earned a median salary of $111,000 in 2011, about 92 cents to the dollar of their male counterparts.

Related: 6 jobs with most equal pay for men and women

Yes, there's a small pay gap there, but it can be almost entirely explained by some men working longer hours -- not discrimination.

"Women with children earn less largely because they work fewer hours," Goldin and Katz said in their paper.

Related: Men in female-dominated jobs

It wasn't always this way. Fifty years ago, women made up only about 8% of all pharmacists. What changed?

Your corner drugstore. The pharmacist profession was once dominated by men who owned small stores, but the rise of drug store chains Walgreens (WAG, Fortune 500), CVS (CVS, Fortune 500) and Rite Aid (RAD, Fortune 500) greatly increased job opportunities for women in the field.

A pharmacist no longer had to juggle the responsibilities and long hours of owning a small business. Chain stores offered fewer barriers to entry and more flexible work schedules.

"In the 1950s and 1960s, before the real cultural revolution for women, independent pharmacy owners were a little reluctant to hire women," said Lucinda Maine, CEO of the American Association of Colleges of Pharmacy. "It was just purely, 'you're not big enough to lift these boxes' or 'we're worried about you closing a store at night.'"

Then came the chains ... with longer hours and bigger staffs.

"By the time we got to the 1980s, half of the graduating class was women, and the industry needed them," she said.

The field's professional associations also made an effort to reach out. The American Pharmacists' Association elected its first female president in 1979 and marketed the fact that a woman could have flexibility -- to work part-time, for example, if she wanted to raise a family.

"That was really the magnet," said Maine, who enrolled in pharmacy school at the time. "I can be a health professional. It's a reasonable length of study. The job itself is in a clean, professional environment, and I have some work-life flexibility."

Decades later, that work-life balance still attracts women to the job. Mandee Pierce, 30, is a Walgreens pharmacist in Manhattan. After taking off for a few months on maternity leave, she'll soon be heading back to work with a part-time schedule.

Related: Why secretary is still the top job for women

Pharmacy colleges, which used to require five years of study, reached an equal number of male and female grads around 1984. By comparison, nursing schools have always been dominated by women, and med schools didn't reach gender parity until 2008.

The pharmacy degree is now a six-year professional doctorate program that students can enter straight out of high school. The field's high pay is a selling point.

"For me personally, an important thing was a good return on investment," Pierce said. "In pharmacy you can count on making a good living."

Unlike other "feminized" professions, pharmacist wages have increased even as women entered the field. It avoided the "pink-collar" curse.

"Competition, and a shortage of pharmacists, came into play," Maine said.

She points to the early 2000s, when Walgreens alone was adding a new store nearly every 17 hours. The chain would sometimes hire nearly half of all new pharmacy grads nationwide, she said.

The boom is still going: The Labor Department expects the field to grow 25% between 2010 and 2020, adding about 225,000 jobs. Pharmacists are taking on more clinical roles, like administering immunizations, blood pressure screenings and medication management programs.

"Most people thought of pharmacists as the person behind the counter, counting pills from a big bottle to a small bottle," Maine said. "That never was a very accurate depiction, and is especially inaccurate now. All of our new grads are trained to offer many services."

First Published: February 11, 2013: 5:26 AM ET

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Firefighters, teachers face smaller retirement safety net

Many new state workers — ranging from police officers to street cleaners — will retire with fewer retirement benefits than their current counterparts.

NEW YORK (CNNMoney)

Facing ballooning bills and strained budgets, 45 states have either cut pension benefits or increased mandatory employee retirement plan contributions, or both, since 2009.

While some of the changes and cutbacks impact current state workers and retirees, the most significant ones affect new hires. As a result, those who become firefighters, teachers, garbage men or other public sector workers after the cuts go into effect will end up with considerably smaller nest eggs.

Take California: A state highway patrol officer hired before September 2010 can retire at age 50 after 30 years on the job with 90% of his salary. At an average salary of $100,000, that would translate into a pension of $90,000 a year. But if that same officer was hired this year instead, his annual retirement check at age 50 would total $60,000. That's a $900,000 difference over the course of a 30-year retirement.

In New York, a public employee hired in April 2012 or later will retire with benefits that are roughly 11% lower than someone hired a month earlier, according to the National Conference of State Legislatures. In Pennsylvania, workers hired in 2011 or later will contribute the same chunk of their paychecks to their pensions as those hired before them but will receive about 20% less come retirement.

And in Alabama, state employees hired this year will have to work longer to qualify for retirement benefits that will be roughly 20% lower than those promised to workers hired last year -- although new employees will contribute slightly less out of each paycheck.

Related: 25 best places to retire

Benefits for employees who are already on the payrolls are contractually obligated so major changes would require making an agreement at the bargaining table. Some state laws even bar the reduction of benefits for current employees, leaving new hires as the main targets for cost cuts.

"These people are not at the table; they do not have a voice," Center for Retirement Research Director Alicia Munnell and Rebecca Cannon Fraenkel said in a January report on cuts to teacher pension plans.

Proponents say that the cuts trim excessive benefit levels, especially among top earners who have retired with six-figure pension checks.

"(Pensions) are taking away from the essential services that our constituents need and deserve," New York City Mayor Michael Bloomberg said in a speech in Albany, N.Y., last year. "We see how they're increasing our tax rates all across this state, money that's coming out of the pockets of people who are working hard trying to make ends meet."

Related: What is a pension?

Many states expanded benefits when times were flush without setting aside extra cash to fund them. When the recession hit, major investment losses combined with plummeting tax revenues created a pension burden that was far greater than many states and cities could handle.

In 2010, the gap between what states had promised in retirement benefits and the amount of cash they had set aside to fund them was $1.38 trillion, according to the Pew Center.

Yet, critics counter that the states' pension cuts could leave millions of future retirees without an adequate safety net. In some states, public workers are exempt from Social Security payments -- making pensions their main source of retirement security.

"For most of our members, their pensions are their life savings," said Steven Kreisberg, collective bargaining director for the American Federation of State County and Municipal Employees.

In Louisiana, state actuaries cautioned against switching new workers to a cash balance pension plan -- where payments are largely determined by the performance of invested contributions instead of a percentage of the worker's final salary -- since the change limits benefits for employees who become disabled or for family members of employees who die before reaching retirement age.

"Because there is no Social Security coverage, such a member may very well become a ward of the state because he or she has no other available resources," the actuaries wrote.

That plan, scheduled to take effect in July, is now in limbo after a Baton Rouge judge ruled last month that the law was unconstitutional for not receiving a two-thirds vote in the state legislature. State Governor Bobby Jindal plans to appeal the ruling.

Related: Couple plans for the loss of a pension

State pension cuts could also affect the attraction and retention of future public employees and the quality of applicants.

Before the recession, studies showed that public and private-sector workers had roughly equal compensation when both salaries and benefits were considered, said Jean-Pierre Aubry, at Boston College's Center for Retirement Research. "But now, with the cuts, employees should recognize that there is a chance that they might be getting a worse deal than in the private sector" he said.

In their report on teacher pension cuts, Munnell and Fraenkel warned that cutting pension benefits without increasing salaries could hurt the recruitment of quality public school teachers.

"Cutting their compensation is not costless," the report said. "It will almost certainly result in a lower quality of applicants for one of the nation's most important jobs."

First Published: February 11, 2013: 5:47 AM ET

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Millions of credit reports have errors

NEW YORK (CNNMoney)

As many as 42 million consumers have errors on their credit reports, and around 20 million have significant mistakes, a Federal Trade Commission study of nearly 3,000 credit reports to be released Monday indicates.

"Errors in credit reports can cost you a loan, a competitive interest rate, a job, security clearance and insurance," said John Ulzheimer, president of consumer education at SmartCredit.com.

Related: Great credit score? Think again

Not all of these errors will impact your ability to get credit, however. About 13% of study participants saw their FICO credit score change once a mistake on their credit report was fixed, and those changes were big enough to potentially result in better credit offers for 2.2% of participants.

The Consumer Data Industry Association defended this 2.2% rate, saying in a statement that overall, the report "shows that 98% of credit reports are materially accurate."

Related: How can my teenager build her credit history?

"[T]he measure of accuracy is tied to the question of when an error has a consequence for consumers, not just when a report contains an error that will have little or no impact on creditworthiness," the CDIA said.

But since the three biggest credit bureaus -- Experian, Equifax and TransUnion -- maintain credit reports for about 200 million consumers, the 2.2% error rate still means millions of Americans are being denied loans or given higher-priced credit due to errors on their reports, said Ulzheimer.

To avoid being deemed a higher risk than you really are, it's important to look at your credit report from all three major credit bureaus to make sure everything is correct. Currently, fewer than one in five consumers check their credit report, according to a separate study released by the Consumer Financial Protection Bureau.

First Published: February 11, 2013: 8:24 AM ET

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Pope fell short in cleaning up finances

LONDON (CNNMoney)

Independent experts say much progress has been made in a short period of time. But the Pope resigns with the Vatican still falling well short of its goal of inclusion on a "white list" of states and embroiled in an embarrassing row with the Bank of Italy.

In 2010, the Vatican created a supervisory body, the Financial Information Authority (FIA), and drafted a new law to make sure all departments met international standards on money laundering and terrorism financing.

But a 2012 report by European anti-money laundering group Moneyval found the Vatican still failing to measure up in seven of 16 key areas. Also in 2012, Gotti Tedeschi was removed as head of the Vatican bank, or Institute for Works of Religion as it is formally known.

In response to the Moneyval report, the Vatican appointed lawyer Rene Bruelhart to head the FIA and lead its push for greater transparency. Bruelhart had previously fulfilled a similar role in Liechtenstein, the principality sandwiched between Switzerland and Austria.

The Vatican has been trying for years to raise its game and throw off a reputation for murky financial dealings that dates back at least 30 years, to the death in London of Roberto Calvi, known as "God's banker".

Calvi was found hanging from a bridge and his death has never been fully explained. He was chairman of Banco Ambrosiano, in which the Vatican bank held a small stake.

Related: Vatican can't take credit card payments

The Vatican bank serves the 500-or-so inhabitants of the world's smallest state, but also thousands of Catholic charities, religious orders and dioceses around the world. It has some 33,400 accounts. Vatican transactions are conducted in euros.

Moneyval found the threat of financial crime at the Vatican to be very low. But it said the bank's global reach, high volume of cash transactions and a lack of information about some non-profit organizations could make it a target for money-launderers.

"Further important issues still need addressing in order to demonstrate that a fully effective regime has been instituted in practice," the report stated.

The Bank of Italy cited the Moneyval report when it moved to close down credit and debit card payments at Vatican shops and museums at the end of last year, leaving tourists dependent on cash to buy souvenirs and tickets for attractions such as the Sistine Chapel.

Interviewed by an Italian newspaper shortly after the central bank's action, Bruelhart expressed surprise and said the Vatican had implemented all measures required by the European Union, and in some cases adopted even tougher standards.

First Published: February 11, 2013: 9:12 AM ET

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Stocks hover below recent highs

Click for more market data.

NEW YORK (CNNMoney)

The Dow Jones industrial average and the S&P 500 and the Nasdaq were all down between 0.2% and 0.3%.

Markets have had a good run so far in 2013. The Dow Jones industrial average and S&P 500 are both up nearly 7% and near their all-time highs, while the Nasdaq has gained nearly 6%.

The big advance came after officials in Washington resolved some of the nation's fiscal problems and punted on others. Investors have also welcomed some upbeat economic news, such as improvement in the housing market, and corporate earnings that beat analysts' modest expectations.

So far, two-thirds of the companies in the S&P 500 have reported results for the fourth quarter, with 70% of them beating forecasts, notes Oliver Pursche, president at Gary Goldberg & Company. Overall, the results are "painting a healthy picture for corporate profitability," he said.

There are still a few large corporations scheduled to report this week, including Coca-Cola (KO, Fortune 500), General Motors (GM, Fortune 500) and PepsiCo (PEP, Fortune 500).

On the economic front, the main event this week will probably be Wednesday's retail sales data. Economists expect modest improvement in sales during January, according to estimates from Briefing.com.

With earnings season winding down and the economy continuing to grow at a modest pace, stocks are headed for a period of "consolidation," said Dan Greenhaus, market strategist at BTIG in New York.

"We had a nice rally to start the year, and I wouldn't be surprised if we trade sideways for a while," he said.

Related: Fear & Greed index still in 'extreme greed'

U.S. stocks finished higher Friday, with the Nasdaq and S&P 500 logging their sixth straight week of gains.

In company news, Google (GOOG, Fortune 500) disclosed late Friday that executive chairman Eric Schmidt plans to sell 3.2 million shares of his stock in the company, worth about $2.5 billion. Shares of Google were lower.

Shares of Tesla Motors (TSLA) fell more than 3% in early trading after the New York Times published a scathing review of the Model S sedan over the weekend..

Related: Stocks we love

European markets were mixed in afternoon trading. Euro area finance ministers will meet Monday evening in Brussels to discuss, among other things, a financial rescue for Cyprus. Exchanges in Tokyo, Shanghai and Hong Kong were closed for holidays.

Related: Nikkei sprints ahead on Abe fever

With the G-20 meeting set to be held this week in Moscow, there are reports that finance ministers are discussing releasing a statement on exchange rates to try to calm concerns that developed economies might engage in a currency war, sparked by Japanese efforts to lower the value of the yen.

First Published: February 11, 2013: 9:41 AM ET

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Make your money last all through retirement

NEW YORK (Money Magazine)

Once you determine how much of a saver you are, you have several more decisions to make -- including how to safely draw down your retirement savings.

Decision No. 5: How much can you draw from your savings?

The decision: After you stop working, you'll have to figure out how much you can safely take out of your retirement portfolio each year -- a daunting task.

Why it's important: The conventional strategy is to start with a modest withdrawal rate -- typically 4% or so -- and then adjust for inflation annually.

Doing that usually means you'll have an 80% or so chance that your savings will last at least 30 years.

Related: 3 tips for tapping your nest egg

When it comes to tapping your retirement accounts, however, you're walking a fine line: You don't want to run out of money -- even a 4% withdrawal rate can deplete your savings quickly if the market dives right after you retire.

You also don't want to be so frugal that you end up with a huge balance you could have enjoyed earlier. Follow the 4% regimen strictly and see your investments perform well, and you could wind up late in life with as much money, if not more, than you started with, which means you would have scrimped more than was necessary.

Best move: Recalculate your withdrawals every year to take into account your current account balances and the fact that your nest egg doesn't have to support you for as long.

Morningstar estimates that annually adjusting the amount you pull from savings rather than simply upping your initial draw by the inflation rate can increase the amount of spendable income you pull from your portfolio by nearly 9%.

Related: Get help meeting your financial goals

"It's the single most effective way of boosting your income during retirement," says Morning-star's Blanchett.

As a practical matter, though, recalculating your withdrawal rate this way can be quite complicated. So unless you're working with a financial planner capable of doing the number crunching for you, your best bet is to go to an online tool like T. Rowe Price's Retirement Income Calculator every year, plug in your most up-to-date information, and adjust your withdrawals up or down as necessary.

With a decision this big, you don't want to blindly stick to the 4% rule or any other rigid system for spending down the hard-earned rewards of your years of careful planning, saving, and investing.

See more decisions you need to get right

Are you a saver or an investor?

How should you divide your money?

How much help do you really need?

What's the best use of tax-deferred plans?

First Published: February 11, 2013: 10:07 AM ET

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How to use your retirement plans to lower your taxes

Having your retirement savings in a variety of accounts gives you more flexibility in managing your withdrawals and your tax bill.

NEW YORK (Money Magazine)

Once you determine how much of a saver you are, you have several more decisions to make -- including how to best take advantage of tax-deferred plans.

Decision No. 4: What's the best use of tax-deferred plans?

The decision: When it comes to your 401(k), IRA, and Roth IRA, you potentially face two decisions. One is divvying up your investments between taxable and tax-advantaged accounts. The other is when to tap each type of account.

Why it's important: You have virtually no control over what happens to tax rates. But you can reduce the drag that taxes can have on your investments.

Regardless of how Congress may change taxes in the future, you'll almost certainly continue to face different tax rates on different types of investments. All gains in 401(k)s and traditional IRAs are taxed at ordinary income rates when withdrawn (a top rate of 39.6% in 2013); outside of these plans, you face lower rates on long-term capital gains and dividends (a max of 20% in 2013).

Related: Middle class tax breaks on the line

You can minimize the tax man's take by keeping investments like stock index funds, stock ETFs, and dividend funds in taxable accounts to take advantage of long-term capital gains rates and holding bond funds and actively managed stock funds that trade a lot in tax-deferred accounts.

In retirement, the idea is to blunt the effect of taxes by tapping your nest egg in a tax-efficient manner. The traditional advice is to pull money from taxable accounts first, where you'll presumable pay the lower capital gains rate, then move on to tax-deferred accounts like 401(k)s and IRAs, and finally Roth IRAs. The balances in your tax-advantaged accounts will have more time to compound tax-free.

Best move: While these strategies can be effective -- Morningstar estimates that following both in retirement can up your income by roughly 8% -- stay flexible. In fact, says David Blanchett, Morningstar's head of retirement research, "you should maintain your target stocks/bonds mix first and then allocate your assets as best you can for tax efficiency."

Related: The other way to invest in a Roth IRA

Similarly, you don't want to be too rigid about withdrawals. In some years, for example, you may be able to sell taxable investments at a loss and use that loss to offset taxes on your 401(k) or IRA withdrawals. By liquidating taxable accounts early in retirement, you lose that flexibility. And once you reach age 70½, you're required to draw at least some money from your IRA and, unless you're still working, your 401(k).

Besides, you can't know what the tax system will look like down the road. Having savings in a variety of accounts that receive different tax treatment gives you more leeway for managing withdrawals -- and your tax bill -- later.

See more decisions you need to get right

Are you a saver or an investor?

How should you divide your money?

How much help do you really need?

How much can you draw from your savings?

First Published: February 11, 2013: 10:03 AM ET

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