Local Government Cuts Pension Plans
Trying to avoid possible bankruptcy, the city of Detroit continues to outline major budgetary cuts and cost saving maneuvers. Amongst the more noticeable of these cuts is a massive reduction in pension benefits. These would include reducing existing pension checks, as well as eliminating pensions completely for those who have less than ten years of city service. Typically, government positions have always been noted for the safety of their retirement plans, but it looks as if that era is coming to an end. Seemingly, even municipal and government employees can no longer rely on others taking care of their retirement for them. Find out more about Detroit and its budget cuts on Bloomberg.
Charitable Giving from a Retirement Account
The tax law allowing for charitable giving from a retirement account has been extended until the end of 2013. Although this is an obviously popular law amongst charities and lawmakers, it is possible that it will not be renewed next year. Currently up to $100,000 may be giving per year, and this amount will count as a RMD (Required Minimum Distribution). There are a number of possible tax benefits that could accrue by making a charitable contribution from a retirement account. Find out more about charitable contributions from a retirement plan on the WSJ.
Unreasonable Mutual Fund Fees
Although there are laws regarding transparency in mutual fund fees, and concerned investors can access fee schedules fairly easily, most investors are either not savvy enough to do so or don’t know what to do if the fees seem exorbitantly high. The problem with these fees (at least in the US) is that they are industry based. Due to the current sales structure of advisors and reps receiving commissions, and an industry profit model based on a fee-heavy format, any attempt to look out for the investor will automatically invoke a tremendous amount of protest. Currently, the only path left to the concerned investor is to do a tremendous amount of research and calculating to find a plan that makes sense in the long run. Find out more about mutual fund fees on Forbes.