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24

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BEST STOCK WHEN TO TAKE A BITE
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 Why we believe in
active management

Outperformance. Thats the bottom line. You wont

beat the market by investing in an index fund.

Will Danoff and the deep bench of Fidelity analysts

cast a wide net to nd investments they think are
best of breed. That active approach has helped
Fidelity Contrafund outperform the market by
more than 3% on an average annualized basis
over the 25 years Will has managed it.

Contrafund is a shining example of why Fidelity

believes so strongly in active management.

Will Danoff
Portfolio Manager
Fidelity Contrafund

Before investing in any mutual fund, consider the investment objectives, risks, charges,
and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus
containing this information. Read it carefully.
Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any.
Cumulative total returns are reported as of the period indicated. Life of fund gures are reported as of the commencement
date to the period indicated.
Stock markets are volatile and can uctuate signicantly in response to company, industry, political, regulatory, market,
or economic developments. Investing in stock involves risks, including the loss of principal.
The chart above illustrates the performance of a hypothetical $10,000 investment made in the fund and a benchmark since the inception date of the product.
1

Benchmark returns include reinvestment of capital gains and dividends, if any, but do not reect any fees or expenses. It is not possible to invest in an index.
This chart is not intended to imply any future performance of the investment product.
 The $106,000 Difference $225,000
Hypothetical growth of $10,000 during managers tenure $210,000
Fidelity Contrafund (FCNTX) vs. S&P 500 Index
(09/17/199009/30/2015)1 $195,000

$180,000
$165,000
Contrafund ($209,209)
$150,000
S&P 500 Index ($102,386)
$135,000

Annualized return over benchmark: 3.17%* $120,000

$105,000
$90,000
$75,000

$60,000
$45,000
$30,000
$15,000

$0
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Average Annual Total Returns Life of Fund Manager Tenure Expense

as of 09/30/2015 1 year 3 year 5 year 10 year Since 5/17/1967 9/17/1990 Ratio2
Fidelity Contrafund 3.27% 13.15% 13.34% 8.45% 12.32% 12.90% 0.64%
3
S&P 500 Index 0.61% 12.40% 13.34% 6.80% 9.73%

Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value will uctuate, so investors may
have a gain or loss when shares are sold. Current performance may be higher or lower than what is quoted, and investors should visit [Link]/performance for
most recent month-end performance.

[Link] | [Link]/FCNTX
Or call your Advisor.

2
Expense Ratio is the total annual fund operating expense ratio from the funds most recent prospectus.
3
S&P 500 Index is a market capitalizationweighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to
represent U.S. equity performance.
*Contrafund has produced an average annual return of 12.90%, compared with 9.73% for the S&P 500 Index.
Fidelity Brokerage Services LLC, Member NYSE, SIPC. 2015 FMR LLC. All rights reserved. 726061.2.0
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Annual Percentage Yield (APY) is accurate as of 11/10/15 and subject to change at any time without notice. A minimum of $2,000 is required to open a CD
and must be deposited in a single transaction. A penalty may be imposed for early withdrawals. Fees may reduce earnings. After maturity, if you choose to
roll over your CD, you will earn the base rate of interest in effect at that time. Visit [Link] for current rates, terms and account requirements.
Offer applies to personal accounts only.
2
National Average APYs based on specific product types of top 50 U.S. banks (ranked by total deposits) provided by Informa Research Services, Inc. as
of 10/1/15. CD Rates: Average APYs are based on certificate of deposit accounts of $25,000. Although the information provided by Informa Research
Services, Inc. has been obtained from the various institutions, accuracy cannot be guaranteed.
FDIC Insurance up to $250,000 per depositor, per insured bank, for each ownership category.
2015 Synchrony Bank
 DECEMBER 2015 VOLUME 44, NUMBER 11

COVER STORY

56
17 Smart Ways
to Prosper
in 2016
Set your sights on these key trends and
follow our point-by-point action plan.
by Daniel Bortz, Paul J. Lim,
Ian Salisbury, Taylor Tepper,
and John Waggoner

Contents
F E AT U R E S

66 75 80
PROP STYLING BY BRIAN BYRNE

Your Year in Money Should Men and Coping With Agings

Our picks of the winners and losers, Women Manage Costliest Challenge
steals and deals that affected Money Diferently? Watching a loved one suffer from
your personal nances in 2015 Our expert panel offers perspective, dementia is heartbreaking, and the
and what they are likely to mean strategies, and advice for dealing expenses can be staggering. Heres
for you in the year ahead. with the distinctly different nancial how to manage your familys nances.
by the MONEY staf challenges that the two sexes face. by Donna Rosato

Photograph by gr e g o ry reid DECEMBER 2015 m o n e y. c o m 3

 
          
   
We know your life is about more than insurance. Thats why State Farm
is too. So when youre ready to take charge of your retirement, talk
to one of our registered agents. Theyll build you a personalized
free Client Portfolio Report. Just call to set up an appointment.

Minimal investable assets of $100,000 are required to complete the free Client Portfolio Report.
State Farm Bloomington, IL
 DECEMBER 2015 VOLUME 44, NUMBER 11

Plan Invest
27 / YEAR-END TAX
TO-DOs
Our checklist will help you
shrink next years tax bill.
80 51 / THE RIGHT WAY
TO REBALANCE
Avoid unnecessary tax hits
when adjusting your portfolio
at years end.
33 / BEST CHARITY
PERKS 54 / X-RAY: ALPHABET
Should their giveaways affect Will the reborn tech giant,
your giving plans? n Google, succeed in its
search for greater protability?

34 / DRILL YOUR
DENTIST
Asking questions can take
the bite out of dental bills.
COLUMNS
29
36 / SMART PHONE, FAMILY FINANCE
DUMB INVESTOR
How digital devices encourage Spoil or Scrooge
poor nancial decisions. Kids gifts that mean more
than ones from the store.
by Alexa von Tobel
38 / BUSINESS SAVVY
Best colleges for undergrad
business majors. A DEVOTED
53
DAUGHTER INTELLIGENT INVESTOR
CARES FOR Invest Like Grandpa
Retire HER MOM. Should todays young inves-
tors jump on the risky asset
41 / TIME TO COLLECT? IN THIS ISSUE bandwagon? Maybe not.
Heres how to know if its by John Waggoner
FIRST
too earlyor just the right 6 / [Link]
momentto start claiming 17 / THE BIG NUMBER 8 / Editors Note 96
Social Security.
18 / FAST TAKES 11 / Letters & MONEY WELL SPENT
PHOTOGRAPH BY CHRISTOPHER CHURCHILL

19 / SOCIAL CURRENCY Comments The Gift of Simplicity

44 / PASS IT ON 90 / The Numbers
Make the most of your 20 / TRAVEL A $20 present taught this
mom and her kids a priceless
contributions to the 22 / THE STATS Cover photograph by lesson in awesomeness.
grandkids education. 24 / TECH GREGORY REID by Elisabeth C. Browning
Prop styling by Brian Byrne
45 / RETIRING WITH
A MORTGAGE MONEY (ISSN 0149-4653) is published monthly (except one in January/February) by Time Inc. PRINCIPAL OFFICE: 225 Liberty Street, New York, N.Y. 10281-1008. Periodicals
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If you would prefer that we not include your name, please call or write us. PRINTED IN THE U.S.

DECEMBER 2015 m o n e y. c o m 5
DECEMBER 2015 VOLUME 44, NUMBER 11

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THE ULTIMATE GUIDE TO OWNING A PET MONEY IN

YOUR IN-BOX!
Theyre cute. Theyre furry. And if youre not careful, they can take a big bite out of your wallet. Whether youre
thinking about getting a pet or already have one, check out these budgeting tips; hidden costs to avoid; ways Sign up for our weekly
to save on food, meds, and vet bills; and more. Plus: the worlds richest pets. Really. [Link]/pets newsletters: Ask the
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TIPS FOR YEAR-END GIVING College Planner.
Find out which charities have the [Link]/newsletters
coolest perks, how to make sure
your donations are well spent, and
the most efective ways to help C O LUMN I ST
when you dont have a lot of money
to give. [Link]/giving

COLLEGE EXPERTS TELL ALL

We took our cameras to the annual
ALEXA VON TOBEL
meeting of the countrys top
RETIRE WITHOUT WORRY Our newest columnist
admissions counselors and asked
shares smart money tips
The best ways to buildand for their best advice on getting into, for young families.
preserveyour nest egg. and paying for, the school of your
@alexavontobel
[Link]/retirementguide choice. [Link]/video

6 m o n e y. c o m DECEMBER 2015
 OUR FUNDS
HAVE A RECORD
LIKE A BROKEN RECORD.

TIAA-CREF: Lippers Best Overall Large Fund

Company 1 three years in a row. For the rst time
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BUILT TO PERFORM.
CREATED TO SERVE.

1
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Consistent Return for eligible funds over the three-year period ended 11/30/12, 11/30/13, and
11/30/14 respectively. TIAA-CREF was ranked among 36 fund companies in 2012 and 48 fund
companies in 2013 and 2014 with at least ve equity, ve bond, or three mixed-asset portfolios.
Past performance does not guarantee future results. For current performance and rankings,
please visit the Research and Performance section on [Link]. TIAA-CREF Individual &
Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities,
LLC, members FINRA and SIPC, distribute securities products. 2015 Teachers Insurance and
Annuity Association of AmericaCollege Retirement Equities Fund (TIAA-CREF), 730 Third Avenue,
New York, NY 10017. C24849B
1
Consider investment objectives, risks, charges and expenses carefully
The Lipper Awards are based on a review of 36 companies 2012 before investing. Go to [Link] for product and fund prospectuses
and 48 companies 2013 and 2014 risk-adjusted performance.
that contain this and other information. Read carefully before investing.
TIAA-CREF funds are subject to market and other risk factors.
 Write the Editor: editor@[Link]

Closing the Book on

A Momentous Year
and travel, as well as expanded cov-
erage of core areas, such as invest-
ing and retirement. And to make
sure your New Year gets of to the
best start, our cover story, 17 Smart
Ways to Prosper in 2016 (page 56),
identies key trends in the nancial,
job, and real estate markets and of-
fers savvy, practical advice to help
you take advantage of them.
Id like to call your attention to
another story in this issue, Coping
With Agings Costliest Challenge
(page 80), a nancial guide for any-
one caring for a loved one with de-
mentia. This is intensely personal
for me: My mother spent the last
decade of her life battling this in-

A
S WE LOOK AHEAD to 2016 site has enjoyed phenomenal growth sidious disease. Anyone who has
in this issue, its only t- this year, with unique visitors up cared for someone with dementia
ting to reect on the year 55% and the addition of outstanding knows its staggering toll, both emo-
thats ending as well. For contributors, such as former USA tional and in dollars and cents.
MONEY, and for me, 2015 Today columnist John Waggoner on If your family is going through this,
has been an especially momentous investing; CBS News analyst and I hope you nd the advice helpful.
period, marked by sharp growth, CFP Jill Schlesinger on financial Best wishes to you and all of our
new ventures, and key milestones. planning; and Allan Sloan, winner readers for a joyous holiday season
For me personally, the pivotal of seven Loeb awards for business and a healthy, prosperous New Year.
PHOTOGRAPH BY GETTY IMAGES

development is clear: I became edi- journalism, on, well, whatever nan-

tor of MONEY, taking the helm from cial wisdom he cares to impart. We
Craig Matters, a terric steward of also launched the MONEY College
this brand for six years and launch Planner ([Link]/colleges), a site
captain of [Link], the website to help families nd great schools at
we debuted in 2014 following the an afordable price. DIANE HARRIS
spin-off of our parent company, Weve got big plans for 2016 too. EDITOR
Time Inc., from Time Warner. The Look for new franchises on careers [Link]/dianeharris

8 m o n e y. c o m DECEMBER 2015
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 MONEY
LETTERS & COMMENTS TALK
Write to MONEY: letters@[Link]

ONLINE COMMENTS
ABOUT RECENT RE: YOUR ULTIMATE RETIREMENT ROAD MAP [NOVEMBER]
MONEY STORIES Your cover story highlighted
a National Bureau of Economic
Brave woman Research study that found those
to speak up. who were among the healthiest
@aj18018 20% in their fifties retired with
Re: I dont have kids three times the assets of the least
because they are too expen- healthy. I strongly believe there is
siveand I have no regrets
a relationship between health and
Give it to me! wealth, not least because being wealthy alleviates money-
mike peterson
related stress and the devastating efects of that stress
Re: What to Do When on your long-term health. bill spofford, Platteville, Wis.
You Have Too Much Money in
Retirement
RELOCATE OR REMODEL? nowin case moving tomer service and low-
When Teresa Ghilar- doesnt work out when rate products. And they
I had a 90-pound bed frame
ducci talks about down- we are ready. are not-for-prot, so
delivered free. I cant think
sizing ones home after mary ann pumilia they are working for
of a downside. Pine Bush, N.Y.
the kids leave [Why their members. I hope
pythia sibyls Retirement Needs a they get an honorable
Re: Is Amazon Prime Reboot, November], YOU CAN BANK ON IT mention in the future!
Worth It? she is not taking into As a new subscriber to kristy empol
consideration that there MONEY, I was happy to West Sacramento, Calif.

are many places where see The Best Banks in

CLARIFICATIONS homes have actually America [November] in MORE LAPTOP FIXES
decreased in value, yet my rst issue. But I was Good advice for giving
There are additional caveats rents are sky-high. We disheartened that credit new life and pep to old
regarding the Aspiration have embarked on a ve- unions werent men- computers [Rx for Your
Summit account featured year interior-updating tioned anywhere. Credit Old Laptop, Novem-
in The Best Banks in America
home project before we unions exceed banks by ber]. An added resource:
(November). Customers cannot
open an account immediately: retire and are enjoying it far when it comes to cus- the hundreds of local
You can enroll within 14 days of technology/computer/
submitting an email address, says PC/Mac/etc. clubs.
Aspiration CEO Andrei Cherny. These community-
While it charges no maintenance O U R FA V O R I T E C O M M E N T oriented groups are a
fees, the account has a pay-what- As an active-duty service member planning on friendly setting in which
you-want plan that periodically separating from the Navy after nine years, your to receive clear and non-
asks for a $6 per month donation. Veterans Guide to Financial Success [November]
Also, the 1.1% rate on BBVA threatening free peer-
was extremely beneficial. It was refreshing to read
P H O TO G R A P H B Y T H E V O O R H E S

Compasss ClearChoice money to-peer advice, make

an article that explained that Id be okay when I get
market account is an online rate. out, as long as I plan accordingly. friends, and hear infor-
samuel brand, Spring Valley, Calif. mative presentations.
What to Do With $1,000 Now!
(October) misstated the rst gabriel goldberg
Falls Church, Va.
name of a source from the website
ClosetSpace. She is Annie Wazer.

DECEMBER 2015 m o n e y. c o m 11
 DECEMBER 2015
THE BIG NUMBER
FAST TAKES
SOCIAL CURRENCY
TRAVEL
THE STATS
TECH

Ex-employees who
return to the fold
A new study by HR consultants Kronos and [Link]
found that managers are increasingly eager for ex-employees
who boomerang back to their old firms. Why? Former employ-
ees are familiar with the company and cost about 10% less to train
than new hires, says workplace expert Steve Viscusi. Keep these
tips in mind if you might want to get rehired someday:

Photograph by dar r e n b r aun DECEMBER 2015 m o n e y. c o m 17

 FIRST
Want help landing the perfect job or making the most
FAST TAKES of the one youve got? Click on [Link]/careers.

RETIREMENT THE BUDGET AND DEBT-CEILING AGREEMENT reached by

Congress and signed by President Obama will ease

How the Budget the huge hikes in monthly premiums and annual
deductibles for Part B of Medicare that were set to go
into efect next year. And the deal also makes important

Deal Will Affect changes to Social Security, including ending the popular
le and suspend Social Security claiming option.
Under le and suspend, one spouse could le for

Social Security benets at full retirement age, then suspend them,

thereby allowing those benets to grow in value until
age 70. Meanwhile, the second spouse could le only for
spousal benets based on the others earnings record,
while allowing his own benets to grow.
The government is retaining some grandfathered
le and suspend benets, but only for people who turn
62 by the end of 2015. For more information, check with
Social Security ([Link]/retire) or with a website such
as [Link]. PHILIP MOELLER

Premium increases for Medicare Part B will affect about 30%

of all beneciaries in 2016. Deductibles will rise for everyone.

BASIC PREMIUMS DEDUCTIBLES

$105 $123 $147 $167

/month /month /month /month

2015 2016 2015 2016

SOURCE: Oice of Management and Budget

HOW TO HELP retail (40 days). One thing to

Health care do after youve
A JOB HUNT applicants dropped off your
QUOTED

The average job

search takes
wait 65
days on
rsum and had an
interview: follow up. Talking about
about six
weeks43 days, to
average.
Higher-
A short thank-you
email to the inter- irrelevant details,
be exactaccord-
ing to Jobvite, a re-
level positions
require even more
viewer keeps you
top of mind. such as members
of their family.
PHOTOGRAPHS BY GETTY (2)

cruiting-software cording to Job- patience. Jobs with Friendly persis-

company. But wait vites data, jobs vice president or tence, says Jobvite
times vary a good are lled most director in the vice president Matt
deal depending on quickly in hospital- title take 76 days Singer, is key. MIT management professor Duncan Simester,
the industry. Ac- ity (36 days) and to ll on average. MARTHA C. WHITE on one telltale way to spot a fake online review

18 m o n e y. c o m Illustration by mat t h a r r i s o n cl oug h

 FIRST
Join the conversation: [Link]/money
[Link]/moneymagazine [Link]/moneymagazine SOCIAL CURRENCY

READERS TO THE RESCUE

My sister-in-law is the
executor of her parents
estate but is terrible with
finances. What can we do?
Questioning on the various nancial tionship you do have.
MEN,
SEE EN, HOW DO WOMEN someone issues that arise. Family is too important
W O M FACEBOOK
ONEY elses deci- to lose for some money.
AND M 7 5 ) QUESTION AND MEN MANAGE gerald young
(PA G E
OF THE sions, espe- Wildwood, Mo. alexander
MONTH MONEY DIFFERENTLY? cially [regarding] your barrett
in-laws nal wishes, No estate Raymore, Mo.
needs to be handled advice would
Women are more impulse buyers. Men spend with care. How about be complete Maybe the
based on need. robin whitaker a dinner where you and without sister knows
your wife share some of encouragement to she doesnt
the advice or concerns consult an attorney. handle -
Men act now and focus on now. Women look you have together? ernie cash nances well and would
far beyond now. kajila harold marshal Bossier City, La. gladly give up the job.
gilliam-hines Usually a will names an
Financially mature men and women are the Spartanburg, S.C. You cant force people to alternate executor, who
same. They both live below their means, manage make the decisions you could be better suited.
what they have, and prepare for the future. If you live in the same want. Dont let estate ellen bigelow
rachel gause town as your wifes sister, drama undo what rela- Olympia, Wash.
look for a money man-
agement course. Your
Women are more detailed wife could sign up for it
and ask her sister to go
THE EXPERT SAYS
about every expense. Men with her every week. You dont need a lot of financial
suzanne knowledge to serve as an executor.
only care about overall cost. hutchinson Your wifes sister can engage the
zoe adgers Ozawkie, Kans. parents accountant to help manage
the financial aspects. The bottom line
Money management is easy. Whats hard is Recommend that the is that the choice is the will writers
dealing with the emotional decisions around it. estate be handled by decision. You need to honor it and
Males and females deal with these emotions the trust department at manage around it if theyre not
P H O TO G R A P H B Y S H AY L A H U N T E R

a nancial institution. inclined to change.

very differently. william james
The sister could still be patrick obrien
executor, but the trust Co-founder and CEO, [Link]
Men seem to be one extreme or the other department would
spendthrifts or frugal. Women are better at provide expert advice
living with a budget that includes some spending
for rewards. cindi pickering
Want solutions to a financial dilemma? Email your question to
I like to invest in the beer industry. social@[Link]. To join our reader panel, go to [Link].
boris krumov
DECEMBER 2015 m o n e y. c o m 19
 FIRST
TRAVEL CLOCKWISE
FROM TOP:
NEW YEARS IN
SEATTLE; THE
HILTON ARUBA;
SKATING IN
CHICAGO

SAVINGS
57%

POP YOUR CORK

Want to get away
for New Years? Skip

Holiday Deals
crowded, ball-drop-
ping New York City
(where rooms aver-
age $432, accord-
If you havent made your plans to go over the river and ing to STR) and try
through the woods, its not too late. With a few tips, Celebrate San Anto-
you might even find some great bargains. STIRLING KELSO nio, a free festival of
spicy food, live mu-
sic, and riverside
SKIP THE BEACH pyrotechnics. Hotel SAVINGS

P H OTO G R A P H S B Y ( C LO C K W I S E F R O M L E F T ) : A L A M Y ( 2 ) , C O U R T E SY O F T H E H I LTO N
rooms average $174
This is a great time
a night. In Seattle,
45%
to take the family on
an urban adventure. the reworks burst
Because most trav- over the Space
elers think of resort Needle, and hotels GO BETWEEN 21. The price on
UP TO go for $190 a night,
destinations for the THE HOLIDAYS Dec. 22: $369. In
holidays, says Jon 32% according to If youre set on a Aruba, rooms at the
OFF [Link]. 355-room Hilton
Gray, HomeAways popular tropical
chief revenue officer, getaway, going be- Aruba start at $199
prices in cities tend warm-weather cit- BE FLEXIBLE ABOUT WHEN YOU FLY tween Thanksgiving a night before
to drop. In San Fran- ies can be a bargain. To snag a hefty airfare deal, you usually and Christmas can Dec. 23, 45% less
cisco, two- and Last Christmas, ho- have to book months in advance, but there pay of. Orlando is than Christmas-
three-bedroom list- tels in San Diego av- are ways to save on late bookings too, says the most popular week rates. Youll
ings (all rated four or eraged $136 a night, Adam Goldstein, co-founder and CEO of Christmas destina- nd deals between
ve stars by Home- 33% less than in the Hipmunk. The key: Fly when most people tion for Americans, Christmas and New
Away users) during summer, according wont. For instance, dont go on Dec. 23, according to Orbitz, Years too: $71 a
Christmas week av- to Trivago; L.A. when prices are 5% to 6% higher than but rooms at the night on average in
erage $219. Similar hotels cost $185, those on Dec. 24, Goldstein suggests. And plush Waldorf Asto- Las Vegas, and $89
places in Chicago about 9% less than ying Dec. 21 (a Monday) can lead to a sav- ria Orlando start at in New Orleans on
go for $293. Even during the summer. ings of up to 30%, according to fare predic- $199 from Dec. 8 to [Link].
tor Hopper. Traveling on New Years Eve or
Jan. 1 may save you 25% on what it would Find more money-saving holiday-
20 m o n e y. c o m cost a few days later. travel tips at [Link]/travel.
 FOR AMAZON

Tis the Season

for a Staycation Unplug
Put the smartphones down for
an afternoon. Set aside a reading
Looking for ways to save during the holiday hour for all ages, bundle up and
spending rush? A staycation ofers go for a winter hike, or play your
quality family time without the cost of travel. favorite board game.
SCRABBLE DELUXE
The deluxe version of this classic family
game comes with special tile racks,

T
he holidays mean visits with the family, gift-giving, but best of all: no buffering required.
decadent feastsand copious spending. Chances are,
youre planning to trim more than just the tree. If
you hope to cut extra spending this year, nixing travel is one
of your biggest savings opportunities. To help you decide
whether its to grandmothers house you go or the prime
year for a staycation, here are ve entertaining ideas
from Amazon that will keep the family happy should you
decide to avoid the airport in favor of a holiday at home.

Go Caroling
Awaken the holiday spirit with traditional songs. To spread the
cheer, see if your city has an organized wassailing group your
family can join.
SINGING MACHINE SMC HOME KARAOKE SYSTEM
Warm up to the real thing with a practice round at home. Bring 10,000+ HD
karaoke videos to your living room with the sleek Singing Machine Home.

Alone
Time
Once the kids
Stay in
are in bed,
uncork a bottle
of wine, put
& stream
Game of
together a R
Thrones on
dessert cheese HBO NOW SM
Catch up on your
plate for two, favorite shows
GAME OF THRONES
and throw on Binge-watch without a stitch of this holiday season.
a movie or your guilt on staycation. Catch up
For under $40,
favorite series. on every season on HBO NOW.
get access to over
250,000 movies
and TV episodes
Set Up A from HBO, Amazon
Big Screen Video, Netix and
You dont need to go more to upgrade
to the movies for the pro Just plug
and play. your downtime.
experience. Set up a
projector and watch your favorite movies, TV shows and,
for some holiday nostalgia, old-school home videos.
EPSON HOME CINEMA 5030UB
Take the big screen home. Immerse yourself in 1080p and stream
your favorites with a projector like this one from Epson.

SHOP THESE GIFT IDEAS ON [Link].

 FIRST
Next months question: How many times have you
THE STATS changed careers? To cast your vote, go to [Link].

MONEY READERS WEIGH IN

Tis the Season:

Charitable Giving
THE GENDER
GAP: WHO GIVES VS.
MORE OFTEN? 33.5% 40.1%
Single men Single women

THE UNITED STATES VALUE OF VOLUNTEER TIME DEVOTED TO CHARITY WORK NATIONWIDE LAST YEAR
OF GENEROSITY

$173,000,000,000
AVG. TIME
MOST GENEROUS DONATED
1. Utah71% ANNUALLY
PER PERSON:
2. New Hampshire70% 32 HRS.
3. Illinois70%

GIVING TUESDAY The day after Cyber Monday, Giving

Tuesday was created by a New York charity four years WHICH GENERATION
DONATES THE MOST?
ago. In 2014 contributors donated $46 million on that day. (% OF ALL MONEY GIVEN)

LEAST GENEROUS 43% 26%

1. North Carolina55% INCOME GROUPS THAT GIVE Boomers Matures
CHARITIES SHARE OF THE AWAY THE MOST AND LEAST
2. Arkansas56% MONEY TELEMARKETERS
3. Kentucky56% RAISE FOR THEM OF THEIR MONEY

$10 mil.
AUDIT ALERT In one re- or more 5.9%
cent year the IRS found
273,000 returns with $200K 20% 11%
to $250K 2.4% Gen X Gen Y
invalid noncash gifts.
I L L U ST R AT I O N B Y T H E W O R K S

THE TYPES OF $114.9 $30.4 TOTAL

$54.6 $41.6 $17.2 $99.7
PHILANTHROPIES BILLION BILLION $358.4
AMERICANS BILLION BILLION BILLION BILLION
Religious Health and
GIVE TO MOST charities Education Foundations
medicine
Arts Other BILLION

22 NOTES: Online poll conducted in October, 1,263 responses; generous states based on percentage of individuals who said they had donated money in the past month. lRS data from 2012 report.
SOURCES: Giving USA, The Chronicle of Philanthropy, Indiana University, Treasury Department, Blackbaud, Gallup, National Center for Charitable Statistics, Attorney General of New York
 99 Tips to Make Your
Retirement More Comfortable
If You Are Approaching Retirement or Already Retired,
Call 1-888-288-8414 for Your FREE Copy!
While its easy to imagine retirement as a time of relaxation, enjoyment and fun, the fact of the matter is that a successful
retirement doesnt just happen. It takes thought, planning and action. To help Fortunes readers get ready for retirement or make
their retirement even better, weve assembled 99 retirement tips. Importantly, Ken Fisher has gleaned these tips from Fisher
Investments clients, people who have or are successfully navigating the transition from work to retirement.

Heres Just a Few of the hings Youll Learn

Determine how much you can take Why selecting a benchmark,
from your investment portfolio something few people do, can
without risking running out of help you maintain and grow
money. (Tip #10) your portfolio over time in bull
and bear markets. (Tip #19)
Why, if you are close to
retirement or already retired, Why paying down your
youll probably live longer mortgage before you retire
than you think. (Tip #12) might not be a good idea.
(Tip #26)
How not to get caught
in the inflation trap Estimate what your taxes are
and the fallacy of going to be and look for ways
most asset-allocation to reduce them in retirement.
advice. (Tip #13) (Tip #40)

What you should tell your adult children Why retirement can be a
about your inances. (Tip #23) strain for marriages. (Tip #87)

And many more inancial, lifestyle and health suggestions!

Retirement Is More Complicated than Just Money Management

99 Retirement Tips will help you better understand the concerns and issues that retired people face. Please claim your copy today,
at no cost or obligation, and take a step toward a better retirement.

About Fisher Investments and Ken Fisher

Fisher Investments is a money management irm serving successful individuals as well as large institutional investors. With over
$65 billion* in assets under management and a track record of over 35 years in bull and bear markets, Fisher Investments uses its
proprietary research to manage money for people with investable assets over $500,000.
Ken Fisher, Founder, CEO and Co-Chief Investment Officer, has been Forbes Portfolio Strategy columnist for over 30 years
and is the author of more than 10 inancial books, including 4 New York Times bestsellers.

Call today for your FREE copy!

Toll-free 1-888-288-8414
Reference code AQ10 when calling.

2015 Fisher Investments. 5525 NW Fisher Creek Drive, Camas, WA 98607.

Investments in securities involve the risk of loss.
Past performance is no guarantee of future returns.
*As of 6/30/2015.
 CORD CUTTERS
Each streaming
FIRST stick, box, and
connectable has
TECH its advantages.
For the Google
Chromecast, its
all about being
easy to use. Start
a video on your
phone, tap the
Chromecast
icon, and watch
it on your TV;
no interface.
LIST: $35
BUY IT PRICE: $20

Tech the Halls

Its easy to find pre-holiday electronics salestheyre as common as needles on a
pine tree. Whats harder is spotting the true bargains on gadgets your family wants.
Thats why this years guide doesnt just come with gift ideas for anyone on your list.
Its got price targets so youll know when youve found a real deal. DOUG AAMOTH

C O L L E C T I O N ( ST I L L F R O M L OV E A C T U A L LY ) , C O U R T E S Y O F G O P R O, C O U R T E S Y O F A P P L E , C O U R T E S Y O F S O N O S ,
P H O TO G R A P H S ( C L O C K W I S E F R O M TO P ) : C O U R T E S Y O F G O O G L E , C O U R T E S Y O F V I Z I O, C O U R T E S Y O F E V E R E T T
MOVIE NIGHT
ENTHUSIASTS
The Vat19 Smart- THE IN-HOUSE
phone Projector DAREDEVIL
Box takes the video
running on your The GoPro Hero
phone and projects helmet-mountable
it on a screen or videocamera is per-
wall. Requires fect for ski bums
some minor, kid- and skateboarders
level assembly. who like to go wild
and then show off
LIST: $32
to their friends.
BUY IT PRICE: $25
LIST: $130
BUY IT PRICE: $100

THE DAD (OR

MOM) CAVE BUDGET APPLE FANS
Perfect for a
The newer, svelter Mac-
medium-size room,
Book line has made the
the Sonos Play 3
MacBook Air a bit pass.
C O U R T E S Y O F VAT 1 9

speaker pushes out

But the older model is
great sound without
still a great, nimble,
using a whole table.
lightweight machine,
LIST: $300 and this season it will be
BUY IT PRICE: $280 an excellent bargain.
LIST: $899
BUY IT PRICE: $699

24 m o n e y. c o m DECEMBER 2015
 FAMILY ROOM
UPGRADERS
You get a lot for
a little with the
HARD-CORE
Vizio 43-inch
DUFFERS
4K TV, including
razor-sharp resolu- The Garmin S2
tion, streaming golf watch comes
video apps, and a loaded with the
keyboard-laden layouts of 30,000
remote control. courses to make
club selection a
LIST: $600
snap. Its built like
BUY IT PRICE: $500
a tank too.
LIST: $180
BUY IT PRICE: $150

THE SPY KIDS

The UDI RC quad-
copter drone is easy to
COU RT ESY O F F I T D ES K , COU RT ESY O F H A M M AC H E R SC H L E M M E R , COU RT ESY O F A M A ZO N , COU RT ESY O F RO KU

MEDIA OMNIVORES
y and takes HD video
Want access to a jillion that you can record for
streaming services, popu- later viewing. (Dont
P H OTO G R A P H S (C LO C KW I S E F R O M TO P R I G H T ) : C O U RT ESY O F G A R M I N , C O U RT ESY O F U D R I C TOYS,

lar to obscure? The Roku 4 tell the neighbors.)

pipes into just about every
LIST: $100
form of entertainment on
BUY IT PRICE: $50
the planet, and it features
a killer DVR-like interface.
LIST: $130
BUY IT PRICE: $100
JUNIOR WEB SURFERS
The Kindle Fire HD 8 is Ama-
zons Goldilocks tablet: not
too big, not too small, not
too cheap, not too expensive.
Its durable and plays con-
tent from almost anywhere.
LIST: $150 THE
BUY IT PRICE: $130 WORKAHOLIC
Convergence at its
OLD-SCHOOL DRIVERS sweatiest, the
FitDesk 2.0 Exer-
SZVs Bluetooth-to-FM cise Bike + Desk
transmitter brings features a laptop
Bluetooth to aging cars, tray so you can take
bridging the gap between care of business
phone and stereo for while raising your
hands-free, cable-free heart rate.
music and calls.
LIST: $350
LIST: $50 BUY IT PRICE: $299
BUY IT PRICE: $35
PROP STYLING BY ALMA MELENDEZ. DUCKS PROVIDED BY ALL CREATURES GREAT AND SMALL

YOU MAY THINK YOU HAVE MONTHS to go before

you have to get serious about your 2015 taxes.
Congress often doesnt nail down the nal tax
rules until December. Your W-2 and 1099s
wont show up in the mail until January. But
once the calendar ips to 2016, you have few
ways to trim your tax bill. So to avoid unneces-
sary pain next April, use the rest of 2015 wisely.
That could mean checking up on your invest-
ment portfolio, stepping up your charitable
giving, adding up what you made this year,
and more. Youll be glad you did next year.

Photograph by b il l d i o dato DECEMBER 2015 m o n e y. c o m 27

Plan TAX PLANNING | FAMILY FINANCE | GIVING | HEALTH | MONEY MANAGEMENT | COLLEGE

TALLY UP YOUR RETURNS your pay stubs and brokerage youll have to up your contribution
Profit from your losses. The statements and use last years tax rate quickly to squeeze more out
fall stock rally may have wiped out software to get a preview of your of your last paycheck or two.
any investment losses you were 2015 taxes. If AMT or phaseouts Collect your IRA income now.
sitting on. Still, check for holdings will be a one-time thing, delay Once you turn 70, you must start
that havent yet recovered from some deductible payments, such taking retirement plan withdraw-
the summer sellof (energy stocks, as property taxes, until January, alsor face a 50% penalty on the
anyone?). You can use losses to says Mark Luscombe, principal amount you should have taken out.
ofset capital gains, write of up federal tax analyst for Wolters There are exceptions: You can put
to $3,000 of whats left against Kluwer. That way youll get the of required minimum distribu-
ordinary income, and save the full benet of those write-ofs tions from your current 401(k) if
remainder for future years. For when your income falls next year. youre still working, and you never
more on selling strategies and tax Or look for ways to reduce your have to tap a Roth IRA.
rules, turn to page 51. AGI, such as seeing if your boss You have until April 1 of the
See if your winnings are free. will delay a bonus. year after you turn 70 to take
When your income dropssay Shrink your paycheck. You your rst RMD. Then the deadline
youve retiredyou have a chance have until next April to top of an is Dec. 31. But if you just turned
at tax-free prots. The long-term IRA or health savings account, but 70, waiting until next April
capital gains tax rate is zero if you Dec. 31 is the deadline to shelter would mean two distributions in
have less than $74,900 in taxable the max in your 401(k): $18,000, or a year, which could push you into
income for married couples ling $24,000 if youre 50 or older. But a higher bracket. Instead, make
jointly, or $37,450 for singles. your rst withdrawal in 2015.
Know when selling will sting.
With a high income, you need to be KNOW YOUR TRUE DEADLINES
careful about realizing any more Lock in health coverage early.
gains than necessary in one year.
Once your income tops $250,000
Get Your Gifts in If you need to buy your own health
insurance, the penalty for going
for couples ling jointly, $200,000 Under the Wire without rises next year to up to
for singles, youll pay an extra 3.8% 2.5% of income. You can enroll in
As you make last-minute
Medicare tax on net investment charitable donations, see how a plan as late as Jan. 31, 2016, to
income, including taxable interest, much givers like you write off. avoid that charge on your 2015 tax
dividends, and capital gains. bill. But to have coverage on Jan. 1,
AVERAGE DEDUCTION PER TAX RETURN you need to enroll by Dec. 15.
FIDDLE WITH YOUR INCOME Cash Non-cash Relax about your FSA (up to a
Dont let a banner year hurt INCOME: $75,000 to $100,000 point). Health care exible
you. If a juicy bonus or home sale $3,019 spending accounts traditionally had
pushed you up the income ladder a Dec. 31 use it or lose it deadline.
$1,150
in 2015, you could face a larger- The rules have changed, notes Lisa
than-expected tax bill next spring INCOME: $100,000 to $200,000 Greene-Lewis, a CPA at TurboTax.
due to the alternative minimum $3,664 Now 60% of companies let you roll
tax, a parallel tax system that over up to $500 of unused FSA
$1,111
curtails certain write-ofs, such as cash into next years plan, a survey
mortgage interest and taxes. And INCOME: $200,000 to $500,000 by WageWorks found; nearly a
with an adjusted gross income of $6,342 quarter ofer a 2 month grace
$309,900 for married couples ling $2,423 period. No extension or too big a
jointly ($258,250 for singles), your balance? Schedule overdue doctor
deductions could be phased out. NOTES: Based on 2013 tax year, for itemized returns and dentist appointments for
only; income is adjusted gross income. SOURCE: IRS
To see if youre at risk, pull out before you ring in the new year.

28 m o n e y. c o m DECEMBER 2015
 TAX PLANNING | FAMILY FINANCE | GIVING | HEALTH | MONEY MANAGEMENT | COLLEGE Plan

Give Without Spoiling

AS THE HOLIDAYS APPROACH, HERES HOW TO NAVIGATE THE SPACE
BETWEEN INDULGING YOUR CHILDREN AND FEELING MORE LIKE A SCROOGE.

by Alexa related picture or inexpensive toy, be spent immediately, however

and take a photo on site that you they choose; 30% should be saved
von Tobel can frame and keep. up and spent in a year; and the
Another option is sentimental other 50% should go toward their
AS A BRAND-NEW MOM, Im realizing gifts. Someone suggested that I long-term future (in a savings or
how easy it is to fall into the trap write my daughter a letter every 529 account).
of overindulging my daughter, time I have to be away from her My husband and I also use my
Toby. My challenge: I dont want to because of my job. Ive now set up daughters college fund to keep
refrain from gift-giving altogether, an email account for her, and I family members on message.
but I want to raise her to appreci- send my notes there, so she can Since 529s can accept third-party
ate presents, not expect them. open and read them later. I hope contributions, we ask relatives
As founder of a company that theyll mean more to her over time and friends to give there in lieu
promotes smart nancial decisions, than any toy I might buy. of big presents.
I also want to practice what I Give patience. Back in the Give generosity. A good friend
preach. Not all gifts need to ofer 1960s, a Stanford University recently told me that her grand-
a teaching moment, but Ive been researcher posed a marshmallow father gave her a birthday check
looking for ideas that are aford- test for children aged 3 to 5. That every year to donate to a charity
able and meaningful, and that study (and its follow-ups) found of her choice. Thats an idea I love
encourage children to appreciate those who could delay gratica- for older kids (though Ill prob-
what theyve been given. Here are tionwho could refrain from ably do it in addition to a gift, not
a few Ive come up with. eating a marshmallow immediately instead of one, as her grandfather
Give memories. Research has in order to earn more laterwere did). Its another way to involve
shown repeatedly that spending healthier and more successful kids in the decision-making.
money on stuf doesnt make us through high school and as adults. For younger kids, take them to
any happier. I love treating One way to teach that skill to a toy store to let them pick out
younger kids (as young as 3 or 4) to school-age children is to ofer and then go home and wrapa toy
a show or kid-friendly exhibition. money, instead of specic items, to be given to a local charity.
Make it special: Let them unwrap a but impose some rules: 20% can
Columnist Alexa von Tobel is the
founder of LearnVest. Catch more
Illustration by ch i b i r mi n g h a m from her at [Link].
 ADVERT I SEM EN T

ONE FAMILY. ONE CALENDAR.

Manage the chaos of everyday life with Cozi,
the must-have app for families.

Keep track of the new fall schedule and everyones activities,

all in one place
Share grocery, chore, and to-do lists in real-time
Access and update from any mobile device or computer

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2015 Cozi Inc. All rights reserved.

All referenced trademarks are the properties of their respective owners. Family life. Simplified.
 TAX PLANNING | FAMILY FINANCE | GIVING | HEALTH | MONEY MANAGEMENT | COLLEGE Plan

Andrew J. Feldman cites one

client who loves giving to
the Lincoln Park Zoo, for in-
stance, because its backstage

When to Pick a tours let her feed girafes and

rhinos. Such unusual experiences
are more common to large

Charitys Perks groups, Nilsen says: Smaller

nonprots tend to give more
tangible donor perks.
NONPROFITS OFFER SWEET REWARDS FOR BIG DONORS.
SHOULD YOU FACTOR THEM IN? by Kerri Anne Renzulli VET THE CHARITY
Donor rewards dont necessarily
mean good money management. So
RIGHT ABOUT NOW, your in-box and rewards tend to kick in with even if the benets are sweet, make
mailbox are probably stufed with larger contributions.) sure your dollars will actually
year-end solicitations from dozens Environmentalists in Northern support the charitys mission.
of nonprot groups. The pitch: A California, for instance, might Use Charity Navigator, which
generous gift will aid a good cause, choose between California vets nonprots for accountability,
cut down on your tax bill, and Trouta $1,000 gift to the group or a similar site to see what share
maybe give you a few extra perks. gets you a backpack, invitations to of a charitys income goes to
What could you get? Art conservation lectures, and access programs. Avoid groups if its
museums may bring you behind to its y-shing tripsand the below 75%, says Charity Naviga-
the scenesthe Tampa Museum Sierra Club, which gives $1,000 tors Sandra Miniutti. Donor gifts
of Art thanks $1,000 donors with donors holiday cards and a often fall into fundraising ex-
tours of local artists studios, for limited-edition photographic print. penses, she says; most established
instance. Service organizations Chicago nancial planner groups keep those below 10%.
ofer other kinds of access: $1,000
donors to CARE get invited to WEIGH THE TAX IMPACT
conference calls with the CEO. Finally, understand how the perks
Weve seen a big change in might afect your tax bill. The IRS
donor expectations, says Michael
Nilsen of the Association of
Last-Minute Gifts requires nonprots to include a
line on deduction receipts spelling
Fundraising Professionals. Charitable contributions tend to out any value received in return,
Before, you would write a check, surge each December during and it expects you to reduce your
and that was the end. But now the last days of the year. write-of accordingly.
donors have the power to research If getting the full tax break
their giving and select those 2014 ONLINE DONATIONS matters to you, suggests New
organizations that will involve York City planner Robert
them and treat them the best. Hayden, opt for perks that are
If these benets will sway your more experience based and thus
giving decision, you have three harder for a charity to assign a
things to do. specic value to. Note that
31% 12% benets that the IRS considers
Made in Made in the last three
COMPARE AND CONTRAST December days of December insubstantialsuch as free
If a particular donor pitch looks admission or a logo-bearing
enticing, check similar groups to mugwont reduce your deduct-
NOTE: Data reect online donations made via Network for
see how it stacks up. (The richest Good platform. SOURCE: Network for Good ible contribution at all.

DECEMBER 2015 m o n e y. c o m 33
Plan TAX PLANNING | FAMILY FINANCE | GIVING | HEALTH | MONEY MANAGEMENT | COLLEGE

You need to replace these

fillings. Ask why its urgent. You
may need a replacement if a lling
has broken or the area around it

How to Talk Back has decayed, van Dyk says. But be

wary if youre told to replace silver
amalgam llings because they

to Your Dentist hold mercury. Study after study

shows the mercury in undisturbed
amalgam llings is bonded to the
TOOTH CARE CAN BE COSTLY, EVEN IF YOURE INSURED. rest of the metals and doesnt leach
KNOW WHEN TO ASK QUESTIONS. by Kara Brandeisky out, Bader says.
You need a mouth guard.
Weekend warriors need mouth
DENTAL WORK ISNT as costly as drilled. Its now apparent that you guards (roughly $145) for contact
other health care, but the bills may can reverse early dental disease sports. We see too many fractured
leave a bad taste in your mouth. by rebuilding the enamel with incisors and knocked-out teeth,
Most plans cover all preventive prescription-strength toothpaste or Bader says. Replacing a tooth with
care, but patients usually pay 20% a gel supplement, says University an implant costs $1,988 on average,
to 40% on basic work like llings of North Carolina dentistry more than a typical plans annual
and extractions and half on major professor James Bader. A tube of cap. Also, youve lost a tooth.
procedures (dentures, crowns), generic toothpaste with 5,000 parts For some teeth grinders, an
says the National Association of per million of uoride should cost over-the-counter boil and bite
Dental Plans. The most common $10 to $16. Filling a big cavity could night guard (about $20) may
plans have low yearly payout cost about $259 (see chart)or $78 be enough to protect teeth, says
capstypically around $1,500. And out of pocket if youre insured. Louisiana State University
for some, all costs are out of pocket: dentistry professor Gary Klasser.
Only 60% of Americans have dental But it can exacerbate grinding or
coverage, the NADP says. even shift your bite. Dont want to
Small wonder 20% of adults say pay $500 or so for a custom guard?
they skipped dental care in 2014
because of cost, according to the
Big Financial Bite Take a DIY kit to your dentist and
ask for tting help, says Noshir
Urban Institute. Unlike medical insurance, dental Mehta of Tufts Universitys
If your dentist suddenly coverage tends to stick you with Craniofacial Pain Center.
suggests a lot of expensive work, a greater share of bigger bills. You need sealants. For kids,
ask questions. Patients shouldnt sealants make sense. The plastic
be afraid of getting second AVERAGE COSTS, TYPICAL COVERAGE coating is applied to molars
opinions, says dentist William van Out-of-pocket cost Amount covered to prevent food from getting into
Dyk of San Pablo, Calif. Heres grooves and causing decay. If
what you should know about a few Night $251 $251 theres a family history of cavities,
guard
common recommendations: I would recommend that the molars
You need to fill these cavities $78 $181 on children get sealed at age 6
Filling
now. Ask your dentist to show and 12, Bader says. Dental plans
you the cavities on the X-rays and Sealant $0 $53 usually cover 100% for children
(per tooth)
in the mirror, says dentist Jefrey but might not cover adults, the
Camm of Fircrest, Wash. You NADP says. And sealants usually
should be able to see them, he says. NOTES: Data based on national average for 201415. Filling arent cost-efective for adults
assumes resin-based composite for a large cavity in the back
Not all decay even needs to be of the mouth. SOURCES: FAIR Health; MONEY calculations unless theyre at risk of decay.

34 m o n e y. c o m DECEMBER 2015
While many factors affect heart disease, diets low in saturated fat
and cholesterol may reduce the risk of heart disease.
, TM, 2015 Kellogg NA Co.
Plan TAX PLANNING | FAMILY FINANCE | GIVING | HEALTH | MONEY MANAGEMENT | COLLEGE

as investors panic and sell at the

bottom, which led to the huge
losses of 2008 and 2009.
The risks of herding behavior

Your Phone May may be even greater today. In the

last crash, social media was just
getting going. Now, with market

Prove to Be Costly moves triggering alerts on smart-

phones worldwide, the next market
plunge may be led by a social media
DIGITAL DEVICES CAN CHANGE HOW YOU HANDLE MONEY, panic, Benartzi warns. When
OFTEN FOR THE WORSE. by Penelope Wang millions of people see their
balances shrink on their devices,
and they are being urged to act
THESE DAYS MANAGING your money At the same time, mobile quickly, and they can, its likely to
frequently involves looking at data devices tend to make you more make the next crash much worse.
on a computer screen or clicking impulsive. This research suggests The right on-screen data at
buy on an app. Its quick and that a lot of important nancial just the right time can help.
convenient, for sure. But do these transactions, like taking money Some forms of digital feedback
digital devices really improve your out of your 401(k), should probably can work in your favor. Benartzi
nances? Maybe not, says Shlomo not happen on mobile, he says. and USC assistant professor
Benartzi, a UCLA behavioral Screens could heighten Yaron Levi recently studied how
economist and the author of The market losses. As a 2013 study a mobile app inuenced spending
Smarter Screen, a new book that by Caltech researchers found, habits. Overall, those using the
examines the impact of digital investors who were closely app, which tracked spending
devices on consumer behavior. attuned to the behavior of others and illustrated the impact on
Emerging research shows that in the market were more likely the users budget and future net
our brains operate a bit diferently to buy into a speculative bubble. worth, decreased their monthly
when were using screens com- History shows that the reverse expenditures by nearly 16%,
pared with old-fashioned pen and happens when bubbles collapse, mostly by cutting back on
paper, Benartzi says. All too often, discretionary spending.
the speed and seeming simplicity Benartzi cautions that this
of technology can lead to poor nding is based on only a few
decisions. Heres what Benartzi months of data, but its an example
has to say about the key money of just in time information that can
lessons from this research: benet consumers by activating
Smartphones can make you their self-control. In other words,
less smart. In a preliminary test getting information at exactly the
of nancial literacy by Benartzi point when it can inuence your
and John Payne of Duke University, behavior is powerful.
people scored signicantly worse Still, in the end, the best way
when using mobile devices vs. pen to use digital devices may be to
and paper. One possible reason, get the information you need
PHOTOGRAPH BY SHAYLA HUNTER

Benartzi says, is that you might and then turn them off.
think and act faster in front of
screens, which leads to a greater
The Smarter Screen: Surprising Ways
reliance on instinctive responses to Influence and Improve Online Behavior
that are often incorrect. is available at [Link].

36 m o n e y. c o m DECEMBER 2015
haveKINDLE willTRAVEL
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Plan TAX PLANNING | FAMILY FINANCE | GIVING | HEALTH | MONEY MANAGEMENT | COLLEGE

MONEYs latest college rankings

([Link]/colleges).
Alumni network. Loyal and
involved alums can help get your

Best Schools rsum to the top of the pile where

they work. So ask each schools
career-services office what kinds

for Biz Majors of events and other outreach it

sponsors to connect business
students with established alumni.
CHOOSING THE RIGHT UNDERGRADUATE PROGRAM CAN Academic rigor. Look for
MEAN HIGH EARNINGSWITHOUT AN MBA. by Kim Clark programs that meet the standards
set by AACSB International,
the major accrediting body for
BUSINESS IS BOOMING. Whether supposedly less practical majors business schools. But dont stop
its the scary job market or the such as history. there. Some business programs
fascination with corporate celebs While alumni earnings are fail to provide students with the
like Steve Jobs and Sheryl one useful measure of a business soft skills, such as writing and
Sandberg, record numbers of programs value, students who critical thinking, they need to
undergraduates have signed up for want the most for their money succeed, according to a study
business courses in recent years. should also take a hard look at: by Richard Arum of New York
Today business is the single most Total costs. Compare the University and Josipa Roksa of
popular college major, accounting start-to-nish price of a business the University of Virginia. So ask
for nearly 20% of undergraduates. degree, after nancial aid, for each about breadth requirements too.
But heres the rst lesson college youre considering. You can At the best schools, business
tomorrows tycoons should learn: nd that information in the Net majors also get a solid grounding
The college you choose makes Price of a Degree column in in the liberal arts.
a big diference. Students in
little-known programs dont get
much attention from corporate
recruiters, for example. On the
other hand, graduates of strong 10 Great Colleges for Doing Business
schools, like Babson, Penn, and the
They offer excellent education, affordable prices, and substantial salaries.
others we list at right, typically
earn more than $50,000 in their RANK SCHOOL AVERAGE ANNUAL EARLY
CAREER EARNINGS
rst couple of years and reach six
1 BABSON COLLEGE Wellesley, Mass. $59,800
gures within about 15 years
without investing in an MBA. 2 UNIVERSITY OF PENNSYLVANIA Philadelphia $69,400
Even so, not every business 3 UNIVERSITY OF VIRGINIA, MAIN CAMPUS Charlottesville, Va. $61,300
degree is the ticket to a good job. 4 UNIVERSITY OF CALIFORNIA AT LOS ANGELES Los Angeles $59,900
Students in business specialties
5 UNIVERSITY OF CALIFORNIA AT BERKELEY Berkeley $72,800
like hospitality tend to earn less
than college graduates with 6 GEORGIA INST. OF TECHNOLOGY, MAIN CAMPUS Atlanta $56,100
7 CLARKSON UNIVERSITY Potsdam, N.Y. $64,400

MORE ONLINE For advice and 8 BRIGHAM YOUNG UNIVERSITY AT PROVO Provo, Utah $56,300
tools for picking the right college, 9 CORNELL UNIVERSITY Ithaca, N.Y. $60,300
visit the new MONEY College UNIVERSITY OF CALIFORNIA AT SAN DIEGO
10 La Jolla, Calif. $52,100
Planner at [Link]/colleges.
ESTIMATED AVERAGE FOR ALL BUSINESS MAJORS $37,000
SOURCES: MONEYs 20152016 best-value college ratings (two-thirds of score); PayScale early- and mid-career earnings data (one-third of score)

38 m o n e y. c o m
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FLOWER BY DANIEL SEAN MURPHY; PROP STYLING BY ALMA MELENDEZ

When Early IN DECIDING WHEN TO TAKE Social Security, later

is almost always better than sooner, and for good

Picking Pays reason. Each month you defer, from your 62nd
birthday to your 70th, your monthly benets
grow. That adds up to 7% to 8% higher payments
for every year you delay.
Yet despite the nancial incentive to wait,
most people are early lers. According to a recent
study by the Boston College Center for Retire-
ment Research, 58% of men and 64% of women
who claimed Social Security in 2013 had not yet
reached full retirement age, which is 66 today

Photograph by b il l d i o dato DECEMBER 2015 m o n e y. c o m 41

Retire SOCIAL SECURITY STRATEGIES | THE GOOD LIFE | YOUR HOME

(and 67 for those born in 1955 or lat- YOURE A LOT YOUNGER youd receive from delaying would
er); 48% of men and 42% of women THAN YOUR SPOUSE exceed what you got from ling
led at 62, the youngest age at which If youre signicantly younger early. Collecting for longer trumps a
you can claim retirement benets. than your spouse and have sub- higher benet later. And if your hus-
In fact, speeding up the clock stantially lower earnings, early band passes away before you, your
isnt always a bad choice. Heres claiming might put you ahead in early claiming wouldnt matter,
when an early timetable makes the some situations, says Baylor Uni- since you could switch to a survivor
most senseand when to let your versity nance professor Bill benet equal to his monthly check
benet grow a little longer. Reichenstein, co-author of Social (see the chart below for an illustra-
Security Strategies. tion of this strategy).
YOU REALLY NEED THE CASH Say youre a woman whos mar-
To be able to delay Social Security ried to a higher-earning man a YOUR HEALTH ISNT THE BEST
once you stop collecting a paycheck, dozen years older than you. He If you have a serious medical
you need extra savings to hold waits until hes 70 to maximize his problem that is likely to shorten
you over. Should you retire at the monthly payment, while you le your life and you have no other
traditional age of 65, postponing early, perhaps as young as 62. De- family members who depend on
benets until age 70 would mean pending on when you le for Social your benet, go ahead and claim
coming up with a way to replace Security and how large the benets Social Security as soon as you can.
that benet for four or ve years. based on your own record are com- When you have a less dire con-
If youre a high earner and youd pared with the benets based on dition but still anticipate a shorter-
end up receiving, say, $2,300 a his, it would take until youre about than-average life expectancy, have
month after delaying, youd need 78 and hes 90 before the money a frank talk with your doctor
at least $140,000 more in retire- and dont necessarily assume the
ment savings to replace that worst. Says Stanfords Shoven:
income until you le. Our study showed that although
Thats a daunting cash hoard many who led early reported
to assemble, even for wealthier
Americans. If putting of Social
Wait Less, Get More health issues, most would still have
been better of nancially if they
Security means draining down A younger, lower-earning had waited to claim.
your savings at a faster clip than spouse can come out ahead Consider that the breakeven
the standard 4% withdrawal rate, by claiming Social Security early. pointthe age you need to reach
thats a reason to claim early. to come out ahead by waiting to
But you may have enough sav- TOTAL BENEFITS UNTIL OLDER SPOUSE claim Social Securityis 78 for
TURNS 86 IF YOUNGER SPOUSE
ings to wait just a few years. someone who claims at 62 vs. wait-
Files at 62 Files at 67
A team including Stanford research- ing to 66, says Reichenstein. By
ers John Shoven and Gopi Shah Low
$172,800 contrast, the average life expectan-
Goda published a paper in 2015 earner $144,000 cy for a 65-year-old man today is
concluding that two-thirds of retir- age 86.6 and 88.8 for a woman, ac-
ees who claimed early had enough cording to the Society of Actuaries.
High $506,900
wealth to aford delaying Social Se- Hindsight is 20/20, of course.
earner $506,900
curity for two years or more. You cant predict with certainty
If you dont have enough money how long youll live or which claim-
to aford delaying at all, you might $679,700 ing strategy will prove most nan-
Couples
want to work another few years, total $650,900 cially rewarding. So once youve
says Jim Blankenship, a nancial done your homework, le when
planner in New Berlin, Ill. Cant NOTES: Assumes low earner collects $1,200 at 62, $1,714
its right for you. If collecting early
do that? Then le for your benets. at 67; high earner collects $2,640 at 70. Not ination helps you sleep better, thats a great
adjusted. SOURCES: Bill Reichenstein, Baylor University
Youve earned them. reason to do it.

42 m o n e y. c o m DECEMBER 2015
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Retire SOCIAL SECURITY STRATEGIES | THE GOOD LIFE | YOUR HOME

adult child a favor by simply

contributing to an account that he
opens for your grandchild, suggests
James Holtzman of Legend
Financial Advisors in Pittsburgh.
Thats because any money with-
drawn from a nonparental 529
counts as student income and cuts
a need-based aid package by up to
50% of the distribution. In contrast,
only 5.6% at most of a parent-
owned account is counted against
an aid package. And while rules
vary, you or your kids might be able
to get a state income tax deduction
on money you put in an account or

Smart Ways to give to them to deposit themselves.

AVOID THE MIDDLEMAN

Chip In for College A simple way to help a student
already in college is to send money
directly to your grandchilds
HELP YOUR GRANDKIDS WITHOUT RISKING FINANCIAL AID college. Payments for tuition
AND MAYBE NAB A TAX BREAK TOO. by Denise Topolnicki but not for other expenses, such as
room and boardare immune
from gift taxes. If your grandchild
SEARCHING FOR a meaningful gift BE SMART ABOUT A 529 receives need-based aid, however,
for your grandkids this holiday A 529 savings plan is ideal for kids your money will count as income on
season? Try money for college. If elementary-school age and younger, her next nancial aid application,
you do it the right way, you might and not just because your contribu- slashing her eligibility by 50% of
also end up with a little extra for tions will have many years to grow what you paid. In some cases,
yourself or your kids: maximized tax-free. (Withdrawals are also free warns nancial aid consultant
nancial aid or lower taxes. from federal taxes if used for qual- Kalman Chany, your money will
Your best choice depends in part ied school expenses.) To increase reduce her aid dollar for dollar.
on the amount youre giving and the your investments chances for
age of your grandchildren. Your growth, you can put up to $140,000 WAIT UNTIL LATER
childrens nances matter, too, since at a time in any one childs plan Worried about messing up your
that will afect how much your ($70,000 if youre single) every ve grandchilds nancial aid? Then
grandkids get in need-based aid. years without reducing your help her family pay of loans after
And if you expect to have a large estate-tax exemption. she graduates, suggests Chany.
estate$10.9 million for married You can open a 529 account in Dont co-sign loans, since youll be
couples and half that for singles any state, no matter where you or on the hook if your grandchild stops
know that any per-person gift over your grandchild lives. Look for a paying. But if your child or grand-
$28,000 ($14,000 if youre single) in low-cost plan sold directly to con- child takes out loans based on your
a year will reduce the portion of sumers, such as Utahs ([Link]); promise to help repay, you might
your estate exempt from taxes. nd a full list of plans at Saving- want to provide for that in your will,
Here are the top ways to help [Link]. But rather than in the unhappy event you arent
your grandkids pay for college. opening a 529 yourself, do your around to write the checks.

44 m o n e y. c o m DECEMBER 2015 Illustration by ch r i s ga s h

 SOCIAL SECURITY STRATEGIES | THE GOOD LIFE | YOUR HOME Retire

plenty, you should make full use of

retirement account tax breaks. The
401(k) contribution limit in 2016 for
people 50 and older will be $24,000,

When It Pays to including $6,000 in catch-up

contributions. And while people
often consider cashing in retire-

Have a Mortgage ment savings to pay of a mortgage,

incurring a fat tax bill to pay of a
low-rate loan makes little sense.
SOMETIMES RETIRING WITH A HOME YOU OWN FREE AND You would be cash poor. Having
CLEAR ISNT THE BEST CHOICE. by Liz Weston too much of your net worth tied up
in your home leaves you vulnerable
to large unexpected expenses such
IF YOURE IN OR NEAR retirement tion loans (currently 6.84%), are as nursing-home bills, says
and still have a mortgage, you have more expensive than mortgage Thomas Anderson, author of The
plenty of company. People in their debt (30-year xed rates have been Value of Debt in Retirement.
fties and sixties are far more as low as 3.4% in recent years). So What are the danger signs? A
likely to have mortgages than prior repay those other loans rst. mortgage-free home isnt a good
generations had at their age. And Thats particularly true for PLUS idea if you dont have enough
the balance on todays mortgages loans if your income is too high to money left over to live comfortably
is higher than ever (see the chart). qualify for a student loan interest and pay your bills, says Michael
You may have purchased or deduction ($160,000 for couples Kitces, a partner at Pinnacle
renanced later in life and not had and half that for singles). Advisory Group in Columbia, Md.
enough time to repay. Or you may Your savings would sufer. Roth, for his part, thinks his clients
believe youll get higher returns by Unless you have already saved home equity before and during
investing in the stock market rather retirement shouldnt exceed half of
than paying of a low-rate loan. their net worth. You might believe
In fact, you usually benet from tapping that equity would be easy
owning your home outright before in an emergency, but it could be
retiringand not just for the peace More Mortgages tough. Lenders may balk at giving
of mindsays Allan Roth, a
certied nancial planner at
in Retirement you a mortgage because your
retirement income is too low, and
Wealth Logic in Colorado Springs. The prevalence and amount of can freeze or shut down home-
Having no monthly payment means housing debt have grown, even equity lines of credit as they did
youll pull less money out of your among wealthier retirees. during the recession.
portfolio, potentially lowering your One nal note: If you want to
HIGHEST-INCOME RETIREMENT-AGE
tax bill. Your nest egg may last HOUSEHOLDERS WITH MORTGAGES keep a mortgage balance solely to
longer, especially if you retire into 1989 2013
invest in stocks, think twice.
a bad market, since draining too Repaying your loan guarantees a
much from a shrinking pool is a return equal to its interest rate.
17% 23%
sure way to run out of money fast. But given stocks unpredictability,
Still, as you enter retirement, Kitces calculates youd have to
there are cases in which, even if Median debt expect average annual returns of
$36,200
(2013 dollars) 150,300
$
you have the cash, not retiring at least 10% to fully compensate for
your mortgage is a better choice: NOTE: Figures are for top-10%-income households
the chance theyd be much worse.
Other loans are costlier. Most headed by person 65 or over. SOURCE: 2013 Survey of Such a bet could be risky if you
Consumer Finances, Federal Reserve
other debt, such as PLUS educa- seek a peaceful retirement.

DECEMBER 2015 m o n e y. c o m 45
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 de

Shift the THE END OF THE YEAR is a natural time to

rebalancethat is, reset your mix of stocks,

Right Slices bonds, and other assets to keep your portfolio

P R O P ST Y L I N G B Y A L M A M E L E N D E Z

from veering of course. For instance, if you had

60% in stocks, 30% in bonds, and 10% in commodi-
ties at the start of last year, youd now have a 65%
equity/30% xed income/5% commodity mix. The
simple solution: When your allocation changes by
at least ve percentage points, take some prots
from your winners and replenish the losers.
Alas, things are never quite so easy. Chances
are, you dont hold your investments in a single

Photograph by b il l d i o dato DECEMBER 2015 m o n e y. c o m 51

Invest REBALANCE THE RIGHT WAY | THE INTELLIGENT INVESTOR | STOCK X-RAY

place. Your investments are even ofer short-term or high-yield Save taxable accounts for
probably scattered among 401(k)s, bondsuse the plans to boost your tax-efficient assets. That means
IRAs, and various brokerages. Fail plain-vanilla xed-income exposure. municipal bonds, which are usually
to view that collection of accounts Dont worry if your 401(k) gets tax-exempt, and index funds. Since
as a single overarching portfolio, bond-heavy as a result. What they rarely sell, stock-index funds
and you may unnecessarily sell matters is the overall balance of wont generate many unexpected
winners in your taxable account, stocks and bonds across your tax bills, says Brookeld, Wis.,
leading to an unfortunate side various portfolios, says Southeld, adviser Andrew Houte.
efecta tax bill, says McLean, Va., Mich., nancial planner Melissa Joy.
nancial planner Jason Williams. For specialty bonds or IF YOU MUST SELL
To prevent that outcome, here commodities, use an IRA. First sell shares in your tax-
are general rules to follow: Among the biggest losers over the advantaged accounts, where you
past year have been global bonds wont be hit with a tax bill (the
REBALANCE WITHOUT SELLING (emerging-markets bond funds typical rate is 15%). Realistically,
If your allocation is only modestly are down more than 8%) and though, that may not be enough to
of-kilter, you may not need to sell commodities (down 25%). Both fully rebalance. In that case:
anything. You can just buy more are relatively tax inefficient. For Pair losers with winners.
of the losers, says Pewaukee, Wis., instance, gold funds that own Selling a winning stock in a
nancial planner Kevin Reardon. physical metal are taxed at the brokerage account leads to a
Take a $200,000 portfolio that collectibles rate, which can go capital gains bill. Well, not
has 75% in stocks and 25% in bonds. as high as 31.8%. necessarily. Say you do end up
Want to dial that back to 70%/30%? Since both are small parts of selling winning equities like health
If you plan to save $10,000 next your overall strategy, theyre care stocks, which have doubled
year in your IRA and 401(k), perfect for IRAs, where annual over the past ve years. To lower
simply direct those new contribu- contributions are capped at $5,500 taxes, sell a loser toofor in-
tions to xed-income funds, and ($6,500 if you are 50 or older). stance, emerging-markets stock
youll pretty much get to your goal. funds, which are down more than
Make sure youre buying the 20% over the past ve years. The
right asset in the right account. losses can be used to ofset your
For basic bonds, use your gains dollar for dollar.
401(k). If you havent rebalanced Asset Relocation There is a catch. Tax-loss
in a few years, youll have to restore harvesting may alter your mix
your xed-income stake. Over the As you rebalance, shift stocks even as youre trying to rebalance.
to your taxable accounts,
past three years the S&P 500 has So reinvest the proceeds of the
and bonds to tax-deferred.
gained 15% a year, vs. 2% for bonds. loss in a related investment. Under
Why the 401(k)? The concept, $1 MILLION PORTFOLIO AFTER 10 YRS. the IRSs wash sales rule, you
in a nutshell, is to save the most arent allowed to buy the same or
tax-inefficient assets for your $1.7 a substantially identical security
MILLION $1.5
tax-advantaged accounts, notes MILLION for a month to preserve the loss.
Vanguard strategist Joel Dickson. In this example, sell health care
Bond interest is taxed as ordinary winners. Sell an actively managed
income, at a top rate of 43.4%, emerging-markets fund. Then buy
compared with a maximum of an emerging-markets index fund
Bond in Bond in taxable/
23.8% for long-term capital gains tax-deferred/ stock in diferent enough to keep the tax
and qualied stock dividends. stock in taxable tax-deferred break. The upshot: You rebalance
So shelter your bonds (see chart). NOTES: After-tax results based on 50% stock-index
without a huge tax bill, you
Also, since 401(k)s have limited funds/50% bond portfolio, with marginal tax rate of
35% and capital gains rate of 15%. SOURCE: Vanguard
maintain foreign exposure, and you
investment choicesmost dont reduce the cost of your portfolio.

52 m o n e y. c o m DECEMBER 2015
 REBALANCE THE RIGHT WAY | THE INTELLIGENT INVESTOR | STOCK X-RAY Invest

for at least 25 years. It has gained

11% annually over the past two
decades. This group includes
names that t right in your
grandmothers portfolio, such as
Coca-Cola and Procter & Gamble.
One thing Grandma may not
have told you: Dividends have
accounted for more than 40% of the
S&P 500s total return since 1926.
The younger you are, the sooner
you can take advantage of that by
reinvesting the cash in the market
and compounding your gains.

GRAYING YOUR PORTFOLIO

If you want to go old school, try
an equity-income fund like Ameri-

Invest Like Your

can Century Equity Income (TWEIX),
which has averaged 9.6% a year
for the past 20 years and charges

Grandparents a slightly below-average 0.93%

of assets a year. For a much
cheaper index fund option, theres
ProShares S&P 500 Dividend Aristo-
MILLENNIALS CAN AFFORD TO TAKE FLIERS ON RISKIER crats ETF (NOBL), which yields 2.34%
STOCKS. BUT WHY DO THAT IF YOU DONT HAVE TO? and charges just 0.35%.
These days you dont have to
limit yourself to the U.S. Through
THE DIVIDEND DIFFERENCE PowerShares International Dividend
by John True, shares of small budding Achievers ETF (PID), you can gain
Waggoner companies have beaten big exposure to global dividend
blue-chip stocks by two percent- growers such as the pharma-
BECAUSE YOUNG INVESTORS have so age points a year since 1926, ceutical giant GlaxoSmithKline
much time ahead of them, theyre according to Ibbotson Associates. and the spirits maker Diageo.
able to ride out the occasional This 89-year pattern has held It may be more exciting to
face-melting downturn. Thats why true more recently as well. The invest in an emerging company like
youll often hear that newbies can S&P 600 small-cap index has Shake Shack or GoPro. But theres
take more risks with stocks, gained an annualized 9.9% over something to be said for buying
especially shares of small compa- the past 20 years, vs. 8.1% for the proven winners and holding on.
nies, which like them are unpre- S&P 500 index of large stocks. Says Rhode Island nancial planner
dictable but lled with potential. However, big stocks that pay Malcolm Makin: When I look back
Yet millennials would be better and consistently raise dividends have over my life, I wish I had bought
of going with companies that their actually beaten small shares over Procter & Gamble or any number
grandparents likely favor: stodgy the past 10, 15, and 20 years. Take of solid, stable companies.
but dependable Steady Eddies that the S&P Dividend Aristocrats
will slip you a few bucks every now index, which consists of rms that Columnist John Waggoner is the author of
and then in the form of a dividend. have boosted payouts every year three books on Wall Street and investing.

Illustration by tay lo r ca lle ry DECEMBER 2015 m o n e y. c o m 53

Invest REBALANCE THE RIGHT WAY | THE INTELLIGENT INVESTOR | STOCK X-RAY

X-Ray: Alphabet (a.k.a. Google)

THE TECH GIANT RESTRUCTURED BUT HASNT REALLY CHANGED. by Taylor Tepper
Search has always been at Googles core. Yet one thing investors could never look up was how the behemoths other
businessesfrom driverless cars to the connected home to YouTubewere afecting the bottom line. So founders
Larry Page and Sergey Brin rechristened the company Alphabet, making old Google just one of several divisions.
Is this a sign the company is trying to de-emphasize search? Will this put pressure on futuristic projects to start
turning a prot soon? Or is this just window dressing to get investors to pay attention to this tech giant again?

Search Still Rules Mobile Is a Mixed Bag Stuck in the Middle

Googles search-related advertising Despite owning Android, Alphabet Alphabet is neither the fastest-
still dominates Alphabet. does not control smartphones. growing nor cheapest tech stock.

Q3 2015 REVENUES 2014 MOBILE SEARCH REVENUES FUNDAMENTALS

$11.8 BILLION TOTAL Google Apple Facebook

$1.9 21.3 24.1%

$16.8 BILLION 17.8%
BILLION 11.8

$8.9 BILLION
Advertising Other From iPhone and iPad web searches P/E Earnings growth

The reorganization was in part The new structure will make it After a rough 2014, Google
meant to shine a light on Alphabets easier for Wall Street to gure out shares jumped this summer after
wide array of other businesses, from how each division of the company is the restructuring was announced,
Google Ventures (which has seeded doing. Thats not necessarily a good and again in October after reporting
companies like Uber and Slack) to thing. Take mobile. It was certainly good mobile results at YouTube and
Calico (a biotech lab working on lon- a prescient move for the company to a $5.1 billion stock buyback. The
gevity) to Nest (makers of smart purchase Android in 2005, ensuring shares are now up 35% in 2015.
thermostats and smoke detectors). Google would be a dominant player But dont expect a more protable
But the truth is, 90% of revenue still in the post-PC, mobile world. Trouble or forthcoming company just because
comes from advertising, and much of is, it hasnt been all that protable. of the new structure, notes Pivotal
that is tied to traditional search and Alphabet doesnt make much Research Group analyst Brian Wieser.
related services, like Gmail, Google licensing Android to phonemakers Alphabets earnings growth rate still
Maps, and the Chrome browser. such as HTC. Smartphone users also lags Facebook, which has made big
More than two-thirds of global spend 85% of their time in apps, not inroads in mobile ads. Facebook
desktop search is still done via search. And since Apple iOS users are remains an open-ended challenge,
Google, says Net Market Share, as wealthier and use their phones more says Chris Baggini, senior portfolio
are about nine in 10 mobile and tablet often, Google generates 75% of its manager of Turner Titan II Fund,
searches. Googles dominance will mobile ad revenues from them, which owns Google. Meanwhile the
persist and not lose more than three according to Goldman Sachs. This shares are twice as pricey as Apples.
to ve points of market share, says is why Google has paid Apple billions That puts Alphabet between the
Morningstar analyst Rick Summer. to be Safaris default search engine. proverbial rock and a hard place.

NOTES: Price/earnings ratios are based on projected prots.

SOURCES: Bloomberg, Goldman Sachs, Google

54 m o n e y. c o m DECEMBER 2015
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 M O N E Y //// C O V E R S T O R Y

17 SMART
WAY S T O
PROSPER
IN 2O16
A steady economy will buoy
your investments, but youll need By DANIEL BORTZ,
PAUL J. LIM,
some savvy moves to snag a great IAN SALISBURY,
raise or a higher price for your TAYLOR TEPPER,
and JOHN
house. Here are the big trends WAGGONER
affecting your fortunes in the year
ahead, and a point-by-point action ILLUSTRATIONS BY
plan to capitalize on them. BEN MOUNSEY

DECEMBER 2015 m o n e y. c o m 57
 run for another one to two years, says
THE BIG TREND Anthony Valeri, investment strategist
for LPL Financial. The caveat is you

YOULL GET ONE should expect volatility to pick up.

Why? As an economic recovery ma-

MORE BITE AT THE BULL-

tures, investors start eyeing the Fed-
eral Reserve nervously, expecting a
series of interest rate hikes. The unem-

MARKET APPLE ployment rate is now at its lowest level

since 2008, and right on the verge of
dropping below 5%. That raises the
odds that the central bank will begin
acting to stop the economy from run-
ning hot enough to stoke ination. And
SURVIVORS OF CLOSE-CALL accidents harder for reasons to buy than for rea- historically, says James Paulsen, chief
sometimes emerge not scared and sons to sell, says James Stack, presi- investment strategist for Wells Capital
withdrawn but reinvigorated and con- dent of InvesTech Research. In the Management, volatility heats up when
fident. The same holds true for bull past when equities have hit the 5-to-1 the jobless rate runs south of 5%.
markets that almost come crashing ratio on multiple days, says Stack, This calls for seeking steady funds
down. After a harrowing late-summer theyve tended to rise in the following that will grow as the economy does, but
sellofsparked by a global panic over 12 monthsby an average of 24%. that tend to lose less in random months
Chinas deteriorating economythe when the market declines. For example,
nearly seven-year-old rally has gotten YOUR ACTION PLAN American Century Equity Income (TWEIX),
a new lease on life. From Augusts low Go big. The market rise that began with a 7% annualized return over the
point, the S&P 500 has already re- in March 2009 is now the third longest past decade, has beaten 72% of its
bounded more than 11% as of early in history. That argues for shifting large-cap value-fund peers. Part of that
November. And signs point to a con- some of your stock assets to stable, outperformance is because it has lost
tinued resurgence. Stocks could climb large companies. Ned Davis Research about a third less than the market in
another 8% in 2016, says S&P Capital has found that while small companies down months.
IQ, which calculates a market outlook have the most sizzle in the rst two- Go for big profits too. Speculative
based on earnings trends and inves- thirds of a bull, the advantage shifts to sectors of the marketlooking at you,
tors current valuation of stocks. the big blue chips in the nal third. biotech stockshavent bounced back
Economic fundamentals certainly Shares in large-company stocks as much from the summer drop as the
provide some reason for optimism. also tend to be less volatile. Thats im- general market has. Investors are
The U.S. economy shows few signs of portant now. The bull can continue to shifting to companies that are already
slipping into recession, with GDP ex-
pected to grow a modest but respect-
able 2.7% next year, according to the
Blue Chip Economic Indicators survey
of business economists. Corporate
earnings, which were stagnant this
HOW 2O15 SHAPED UP WHAT WE NEARLY
GOT RIGHT: The job
picture improved,
A scorecard for last years predictions.
year, are expected to reaccelerate and but ...when the un-
grow at 8% in 2016. employment rate was
Market psychology also points to WHAT WE GOT RIGHT: 5%. As it happened, looked to be a forecast to fall from
positive momentum. The autumn re- The U.S. shone amid America did grow drama-free zone in 5.9% to 5.7%, we
bound included a rare cluster of days global worries. We faster than Europe 2015, we said, and said those with jobs
in which trading volume in rising said that gross do- and Japan, and the for the most part it could aim for big
stocks swamped the volume on falling mestic product was dollar was even was. Home prices raises. As it turned
likely to grow mod- stronger than ex- rose about 5% na- out, the unemploy-
stocks by a ratio of more than 5 to 1.
estly, emboldening pected, rising 10%. tionally, slightly bet- ment rate did fall, but
That suggests investors are looking
U.S. stock investors The housing mar- ter than CoreLogics all the way down to
and boosting the ket got back to nor- forecast for the year 5%. Yet while the
value of the dollar by mal. Real estate of 4.4% growth. highest performers
58 m o n e y. c o m
 showing bottom-line results. Ulti-
mately it all comes down to earnings,
says Mark Freeman, chief investment
T H E B U L L M A R K E T I S ST I L L A L I V E , B UT
officer at Westwood Holdings Group.
Brace Yourself for a Rockier Ride and when unemployment improves
To find reliable profits, Freeman
as a recovery matures.
adds, look in industries where reve- Volatility tends to rise as bull markets age
% OF MONTHS IN WHICH
nues are rising. Four areas with both AVERAGE NUMBER OF DAYS WITH U.S. STOCKS DECLINE
strong earnings and revenue growth AT LEAST 1% SWING IN THE S&P 500

45% 38%
are health care (biotech notwithstand- 55
ing), consumer discretionary, nan- 44
cials, and technology. 37
31 33
You can emphasize all these with- When When
unemployment unemployment
out resorting to sector funds or in - is 5% or less is above 5%
dividual stocks. More than three- 3 4 5 6 7
quarters of the holdings in both Dodge Year of bull market NOTE: Months with stock declines since 1948. SOURCES: S&P
Capital IQ, Wells Capital Management, [Link]
& Cox Stock (DODGX) and T. Rowe Price Blue
Chip Growth (TRBCX) are in those four
Expect a New Focus on Earnings so go with sectors with strong growth.
sectors. Both funds have beaten more
than 90% of their peers over the past Speculative areas with spotty earnings 2016 PROFIT GROWTH FORECAST
three and ve years, and they are on have had a rougher time lately Consumer discretionary 15.1%
our MONEY 50 list of recommended PRICE CHANGE SINCE 2015 PEAK
mutual funds and ETFs. Financials 10.9%
Avoid drama in bonds. Fixed- 1.3%
income investors have some reason to Tech 9.4%
7.5%
feel jittery coming into 2016. The pros-
pect of Fed rate hikes will weigh on Health care 8.2%
15% 15.1%
U.S. bonds, since prices fall when rates
S&P Microcap Nasdaq Oil S&P 500 8.1%
rise. Dont panic, though. Fears over 500 stocks biotech stocks
rising rates have been with us for
years, and the Fed is likely to go slow.
To get some more yield now with-
out taking on too much added risk, AAA-rated 10-year municipal bonds market stocks in particular. As a re-
look to high-quality tax-advantaged yield 2.08%, the equivalent of earning sult, emerging-market shares are now
munis, says Mary Ellen Stanek, chief 2.9% on a taxable bond if you are in the 50% cheaper than U.S. stocks, based
investment officer for Baird Advisors. 28% bracket. Yet 10-year Treasuries on ve years of earnings. Historically,
are paying just 2.3%. the typical discount is 15%.
For a diversified national muni Based in part on those cheaper
fund, go with Vanguard Intermediate- prices, the money managers at Re-
got a bigger bump,
Term Tax-Exempt (VWITX), which is in the search Affiliates think emerging-
WHAT WE GOT
typical raises for WRONG: MONEY 50. More than 75% of the market shares could return seven
salaried employees Millennials were funds holdings are in bonds rated AA percentage points more than U.S.
were unspectacular expected to drive or AAA. Investors in high-tax states stocks annually over the next decade.
for a recovery, at economic and including New York and California can Trouble is, to gain that result you need
about 3%. housing-price get further tax savings using Van- to buy these stocks before they rally, and
The oil glut held growth, but ... de- guards state-specic municipal funds, youll see a lot of volatility in the mean-
down energy prices, mand for real es- which boast very low costs. time. Youll need a lot of patience.
but ... prices actually tate among the Embrace some drama in foreign T. Rowe Price Emerging Markets Stock
fell signicantly younger set didnt stocks. Historically, U.S. and foreign (PRMSX) is a seasoned pick on the
more than we ex- jump. Homeowner-
stocks take turns leading the markets MONEY 50. The fund holds only 10%
pected. Instead of ship among 35- to
dropping to $75 a
for a multiyear stretch. Yet since the of its assets in commodity-related
44-year-olds is
barrel, crude oil slid lower now than its bull market began in March 2009, the sectors, which have been hit hard by
below $50. been in 20 years. S&P 500 has doubled the gains of for- Chinas troubles. The typical emerging-
eign shares in general and emerging- market fund holds twice as much.
 set prices aggressively. Greater than
THE BIG TREND that and buyers have the upper hand.
(To look up this data, go to [Link],

THE HOUSING RECOVERY then click on the Data Center section

under the News & Advice tab.)

BEGINS TO COOL
If youre in a soft market, make
buyers feel as if theyre getting a good
value. One way to sweeten the pot
without slashing the price is to throw
in extras like a credit for refurbishing
scufed oors or to cover closing ex-
penses. The cost to yousay, $2,000
REAL ESTATE ENJOYED a better-than- your home could languish on the mar- to $3,000may not be much diferent
average rebound in the past three ket, making it harder to move even if from a 1% price cut, but the psycho-
years. But while home values jumped you slash your price later on. Keep in logical efect on shoppers is bigger. It
24%, workers incomes havent kept mind that real estate website listings removes the objection in the buyers
pace; wages are up just 7% in that time. usually get four times as many visits in mind and helps seal the deal, says Las
That means, once again, Ameri- the first week as they do after one Vegas realtor Linda Rheinberger.
cans who dont own are nding houses month, according to Redn. Flex your muscle as a buyer. In a
out of reach. Homeownership rates for The trick, says Beverly Hills broker soft market where other buyers arent
35- to 44-year-olds has continued to Bahare Rabadi, is to choose an aggres- crowding you, be aggressive with an
sink ever since the global nancial cri- sive but realistic listing price right out initial bid thats 10% below what youre
sis, according a Harvard study. Yet of the gate. Use actual sales data, not willing to pay, says Brian Buffini,
Gen Xers and millennials are exactly asking prices, of nearby homes that founder of a company that trains bro-
the type of rst-time buyers who are are truly comparable to yours. Key kers. This way you get to anchor the
needed to propel the market. variables to focus on, says Rabadi, are negotiations around your initial bid,
Factor in the likelihood of higher location, views, and square footage, not the asking price, leaving you room
rates next year, and dont be surprised since these things cant be easily to haggle comfortably.
if prices rise just 3% in 2016, according changedunlike, say, kitchen updates In a more competitive market, es-
to Moodys Analytics. Thats down or backyard amenities. tablished buyers still have an advan-
from 5% this year and 11% in 2013. Next step: Gauge your markets tage vs. struggling younger bidders,
Home prices have to plateau until the health by looking at the number of Buffini says. Make sure sellers are
rest of the economy catches up, says homes waiting to be sold. In general, aware of your nancial wherewithal.
RealtyTrac analyst Daren Blomquist. markets with fewer than six months of Offer more than 20% down and get
inventory favor sellers, who can then lender pre-approval, which can help
ACTION PLAN smooth the closing.
Be patient. Theres little reason to Renovate before its too late. Home-
race to list your home next year if you renovation spending only recently re-
can wait, says Redn chief economist turned to pre-financial-crisis levels.
Nela Richardson. While the inventory TALE OF TWO MARKETS Dont miss your chance to nance home
of single-family homes is expected to improvements cheaply, says Denver
rise in the next several years, demand While most markets are expected real estate agent Paul Stone.
to rise next year, how much of a
will too, driven by millennials who will bump varies depending on region.
Interest rates on home-equity
eventually emerge from Mom and loans are still low but are due to rise
WHATS HOT
Dads basement. Demographics are in coming years. So owners who arent
Sacramento 15.0%
on your side, Richardson says. Fort Lauderdale 14.0% looking to sell should consider updat-
If you must sell, price it right. Until Seattle 7.2% ing their homes now. Modest projects
millennials are ready to buy, demand WHATS NOT that will eventually pay of with mil-
will be modest, so dont waste oppor- Houston 1.1% lennial buyers down the road include
tunities. Set your listing too high and Knoxville 1.7% replacing old windows with energy-
Detroit 2.7%
efficient ones. Plus, until you sell, you
NOTES: 2016 forecast for single-family homes.
SOURCE: CoreLogic
can save on heating bills. Says Stone:
60 m o n e y. c o m It benets the buyer and the seller.
 MAKE SURE
ITS YOU WHO
RETIRES.
NOT YOUR
MONEY.
Ally Bank IRA Savings and CDs.
Put your money to work with an IRA from Ally
Bank. Because your hard-earned retirement
savings deser ve a secure place to grow.
Just remember an early withdrawal penalty
may apply. An additional IRS tax may also
apply, so please consult your tax professional.
Bank where No Branches = Great Rates.

[Link] | 1-877-247-ALLY

2009 - 2015 Ally Financial Inc.

 dence. Managers want to see quan-
THE BIG TREND tifiable achievements, says Nancy
Segal, owner of HR consulting rm

THERE WILL BE RAISES, Solutions for the Workplace.

And yet many employers dont

BUT YOU NEED A HOOK

track performance measurements
carefully. So the onus is on you to
know your numbers and highlight the
ones that are most compelling. Maybe
youve done something in the past 12
months that moved the needle for the
companys bottom line (for example,
THE UNEMPLOYMENT RATE dropped to ment number. Even as hiring picks up, closed $2 million in sales volume).
5% in October, the lowest in seven companies may feel less pressure to Even if your work cant be measured
years. That sounds like the sort of hot raise wages as some of those people in dollars, you can still find data to
job market that would give you serious trickle back into the workforce. showcase your outstanding perfor-
bargaining power. But the pay bumps Employers have also shifted their mance. A web designer may have
companies plan to give most salaried strategy for rewarding employees. helped boost traffic by 100,000 page
workers in 2016 are just okay. A sur- Since the mid-1990s, says Aon Hewitt, views per month. Or perhaps you
vey of employers by Aon Hewitt puts variable pay, such as bonuses, has streamlined a process to trim meeting
raises at 3%, about the same as last gone from 7.5% of payroll to almost times from 60 to 30 minutes. (What
year and below the 4% that was more 13% today. Bonuses, unfortunately, manager wouldnt love that?)
typical before the 2008 recession. This dont build on themselves over the Suss out the key skills you need on
looks better if you consider that ina- years like raises can. So to nab a your rsum. Employers complain
tion has been running low, but this better-than-average bump in the com- that talent is in short supply, with one-
deep into a recovery, you might expect ing yearor get a higher-paying job third reporting difficulties lling va-
to be gaining more ground. elsewherend ways to make your cancies because of a lack of people
Peter Cappelli, a labor economist long-term value more visible. with the right training, according to
at Wharton, says part of the issue is ManpowerGroup. If you have the
that many people stopped looking for YOUR ACTION PLAN right set of skills, it could pay of to
work after a brutal recession and so Use metrics as leverage. Focus nd a new employer, says Cappelli.
arent counted in the main unemploy- your salary negotiation on hard evi- To learn what employers are look-
ing for now, LinkedIn can be a power-
ful tool, advises job-search and social-
media coach Miriam Salpeter. Use the
W H Y YO U L L HAV E TO M A K E YO U R C A S E site to visit the proles of companies
youd like to work for and see people
Employers are spending more on And they say they care more about your connected to that organization who
benefits and bonuses, but not on wages. performance than the cost of living. are also in your network. Note the
CHANGE SINCE THE END OF THE MAIN REASON FOR GIVING RAISES abilities and credentials they highlight
RECESSION, AFTER INFLATION Pay for Cost-of-living in their proles.
performance adjustment
8% Find low-cost ways to train up.
55% 20%
You cant count on a prospective em-
2% ployer to have a training program,
Keeping says PayScale lead economist Katie
0.4% employees
who might Bardaro. Websites including Udemy
Wages leave Other and Coursera ofer courses in market-
Benets and Total
bonuses compensation 7% 18% able know-howfrom data analysis in
NOTE: Employer cost for managers and professionals, per hour worked. SOURCES: Bureau of Labor Statistics, PayScale
Excel to mastering Salesforce soft-
warefor free or at a modest cost.

62 m o n e y. c o m DECEMBER 2015 WHATS YOUR ACTION PLAN FOR 2016? TELL US AT letters@[Link].
 SPECIAL ADVERTISING SECTION EDUCATION MARKETPLACE

TO ADVERTISE IN OUR EXECUTIVE EDUCATION SECTIONS, CONTACT DIRECT ACTION MEDIA 1-800-938-4660 OR RON MOSS 212.522.6069
 with an attachment to update their
security details, but actually sent that
information to identity thieves.
For many, the horse is already out
of the barn. Tens of millions of data
records, including names, Social Se-
curity numbers, and birthdays, were
found to have been stolen in the past
year. The sources included health in-
surers and even the federal govern-
ment (see page 68). Purloined data is
so common that its price on online
black markets dropped 75% in 2015,
according to Trend Micro. Yet it can
still potentially be used to open fake
accounts in your name or even to le
your taxes and nab your refund. Ac-
cording to a federal study of 2013 l-
ings, almost 1 million refunds were
paid to fraudsters for that year.

YOUR ACTION PLAN

THE BIG TREND Keep your eye on the right risks.
The new chip cards may be reassur-

ONLINE CROOKS LEARN ing, but stolen credit card numbers

are a bigger problem for banks than

NEW TRICKS for you. By law, youre responsible for

only $50 of fraudulent purchases, and
in practice most issuers will charge
you nothing. Debit cards are trickier:
The legal limit on your loss is higher
(again, your bank may ofer additional
IN 2016 YOULL SEE a noticeable change tech-security rm Symantec. Instead protection), and you may be left short
in the security of your credit cards of sending random spam, crooks keep of cash while you sort things out. So
but that will be no reason to let your honing ways to impersonate legit com- you are better of using a credit card
guard down. By the end of next year, panies you do business with, to lure as your go-to plastic, says Velasquez,
84% of credit cards will have a secure you into giving up banking info, log-in assuming you pay your bill in full.
computer chip, according to Mercator credentials, or personal details like a A bigger concern is someone open-
Advisory Group. (Look for a replace- birth date or Social Security number. ing a credit account in your name.
ment card in the mail soon, if you For example, one recent strike aimed Detect this by ordering a free credit
havent gotten one already.) The chip at LinkedIn users sent them an email report each year from each of the three
makes it harder for crooks to manu-
facture fake cards to use in stores.
Trouble is, it wont do much to stop
them from using stolen card data on-
C HA N G E O L D Percentage of consumers who say they
line, says Identity Theft Resource Cen-
PA S S W O R D S
ter chief executive Eva Velasquez.
Meanwhile, other kinds of scams Its your first line 73% 47% 50%
are becoming more targeted and of defensebut
intelligent, says Satnam Narang of for many people,
its a weak one. Use the same Use a password Experienced an online
password on multiple thats at least security incident in
accounts ve years old the past year
SOURCE: TeleSign

64 m o n e y. c o m
 credit agenciesExperian, Trans-
Union, and Equifaxat Annual- THE BIG TREND
[Link]. Many credit
cards, from issuers including Dis-
cover, American Express, and Citi, THE DOLLAR WILL STILL
GO A LONG WAY
now offer free monthly FICO or
similar credit scores. If you see a big
change that doesnt make sense,
youll know somethings up. While
you investigate, place a 90-day fraud
alert for free with one credit agency,
and it will alert the other two. THE U.S. DOLLAR rolled over the euro efectively expose the fund to an equiv-
Unless you initiated contact, like a tank over a Tonka truck this year. alent amount of dollars.
clam up. Whether they say theyre And theres no reason to think it wont For overseas stocks, currency vola-
a retailer or the IRS, never authen- keep going. The buck, which buys 0.93 tility is less of a concern, since equities
ticate yourself to any entity thats euros (up 12% in 2015) could reach par- are rocky to begin with. But theres a
contacting you, says Adam Levin, ity with the euro next year, assuming strong case to hedge new overseas in-
co-founder of [Link]. Add the Fed lifts rates, says Ronald Simp- vestments next year to protect gains.
banks and social media accounts to son, managing director of global cur- Over the past three years Deutsch X-
that list. If you get an email asking rency analysis at Action Economics. Trackers MSCI EAFE Hedged Equity (DBEF)
for personal details, click on noth- The reason: Money ows to curren- has beaten 99% of its peers.
ing and close it. Give information cies that pay the highest interest. Buy American stocks. An obvious
only if youve logged in directly to a While the Fed is likely to raise rates play on the dollar next year is to stick
site you trust or called customer next year, central banks in Europe, with companies that do most of their
service yourself. China, and Japan are poised to lower business here, says Todd Rosenbluth,
File taxes early, if you fit the pro- or sit on rates to try to reate their director of ETF research for S&P Capi-
file. Velasquez says theres not weak economies. The Fed is the only tal IQ. Among the top holdings in Wis-
much you can do to stop tax-refund central bank not talking about easing, domTree Strong Dollar U.S. Equity Fund
fraudthis ones up to the IRS to Simpson says. And if the global econ- (USSD) are U.S.-centric companies like
foil. (In 2013 it did catch 4 million omy takes a turn for the worse, the Verizon and UnitedHealth Group.
fake returns for the million that dollar still stands to benet, as the U.S. Take foreign vacations. A 30-euro
slipped through.) But if you know is viewed as a shelter in a storm. dinner in Paris would have set you back
your Social Security number has $41.41 at the start of the year. By mid-
already been nabbed in a data YOUR ACTION PLAN October, that fell to $33.06 and could
breach, it makes sense to file as Hedge some of your bets. A rising soon be headed to $30. Delicious.
early as you can to beat potential dollar erodes returns Americans earn Seek out trips to distressed econo-
fraudsters to the punch or change on overseas investments. Germanys mies, and youll get low prices on top
your withholding to minimize the stock market, for example, gained 8.3% of good exchange rates. A night at the
refund youre due. If you do get in the rst 10 months of 2015. But when Hilton Athens in April is listed at
stung, contact the IRS and le Form that was converted back to dollars, about $155 a night, vs. $263 for the
14039, the identity-theft affidavit. U.S. investors got hit with a 1.1% loss. Hilton Paris Opera hotel. Kurt Crowl
To be sure, the value of currencies of Connoisseur Travel in Washington,
ebb and ow over time, and you want D.C., says prices in Istanbul, where
some assets held in foreign currencies the Turkish lira is near an all-time
for diversication. But theres a reason low, are particularly low now.
to hedge your foreign bonds aside from Other places to look: commodity-
preserving gains next year. Currency focused economies hurting in the
30% 70% uctuations account for two-thirds of global slump like Canada, whose dollar
the volatility of foreign bonds over time. has fallen nearly 20% vs. the U.S. buck
Whenever it buys debt denomi- since January. The Brazilian real is
Didnt change Say they arent
their password condent their pass- nated in a foreign currency, Vanguard down about 30%. If you want to stay
afterward words protect them
Total International Bond (VTIBX) offsets in this hemisphere, all of South Amer-
the move with futures contracts that ica is amazing, Crowl says.
 THE WINNERS AND LOSERS, LESSONS AND LOSSES,
STEALS AND DEALS THAT MADE NEWS IN 2015AND
WHAT THEY MEAN FOR YOU IN THE YEAR AHEAD.
PHOTO ILLUSTRATION BY SEAN McCABE

Gas was down; rents were up. Jobs rebounded Yellen held her fire (so far), and Wall Street couldnt
nicely, although salaries stayed flat, sadly. Apple have been happier. Happiest of all may be investors
proved it could win over the wearable worldalong in one particular TV network. After all, Netflix really
with most everything elsebut got a beat-down is the new money machine. Thats the story of 2015
from Taylor Swift. And a fictional woman named in a nutshell, told here in all its tumultuous, Tech-
Ashley Madison scared the bejesus out of millions of nicolor glory. Its a fun trip down memory lane, but
married men, while an epidemic of cyberbreaches if you read these lists carefully, you may also find
rattled just about everyone. On the plus side, Janet some valuable lessons for the coming year.
 YEAR OF THE TRUCK Car sales were up 5%, but trucks were the big movers. The four top sellers 1. Ford F-Series ($27,225): 564,451 sold YTD

The Economy
YOUR
YEAR
IN

P R E V I O U S S P R E A D, P H OTO G R A P H S B Y G E T T Y I M A G E S ( 2 3 ) , R E U T E R S ( B P, STA R B U C K S ) , I STO C K ( B L U E B E L L , AT M ) , A P ( C A R ,

MONEY

A I R B A G , N E T F L I X ) , C O U R T E S Y O F D I S N E Y ( STA R WA R S ) , C O U R T E S Y O F A P P L E ( WATC H ) , E V E R E T T C O L L E C T I O N ( M A D M E N )
WINNERS OF THE YEAR Is anyone else freaking
out right now? Im kind
AS RANKED BY THE EDITORS OF MONEY
of freaking out.
1. TAYLOR SWIFT 3. STAR WARS DAN PRICE
Last year Swift The Force Awakens The CEO of credit card processor Gravity Payments,
took on Spotify; is already exerting after announcing that he would raise the salary of all 120
this year she got a gravitational of the companys employees to a minimum of $70,000,
Apple Music to blink. The pull on your wallet. The movie in part by cutting his own million-dollar paycheck.
company acceded to her has racked up more than
demand to change how it paid $1 billion in merchandise sales
musicians, which meant 1989 and $6.5 million in advance
BEST PLACES TO HANG A FOR-RENT SIGN
fans could enjoy their free trial IMAX ticketsand it doesnt
and their favorite artist too. even open until Dec. 18.
The current surge in single-family home rentals is
unprecedented, reports the Harvard Joint Center
2. DANNY MEYER 4. AMERICAN for Housing studies. These four areas saw the biggest
year-over-year rent increases through Sept. 30.
In a bid to PHAROAH
transform how Clutching a 1 2 3 4
Americans dine, potential piece of Cape Sacramento, Bradenton/ San
the restaurateur said he would history, very few of the 94,128 Coral/Fort Calif., Sarasota, Francisco/
do away with tipping at his people who bet $2 on Pharoah Myers, metropolitan Fla., Oakland
Fla. area area region
high-end venues. Meanwhile, to win the Belmontand thus
his stake in new-IPO burger become the first Triple Crown
joint Shake Shack was worth winner in 37 yearscashed in 23.6% 17.6% 17.2% 17.0%
$347 million at press time. the slips (which paid $3.80).

1 2 3 4
The Worst TARGET ANTHEM ASHLEY OFFICE OF PERSONNEL EXPERIAN
Cyber- MADISON MANAGEMENT

attacks WHEN IT
TOLD US
Feb. 4, 2015 July 20, 2015 June 4, 2015 Oct. 1, 2015

Another day, another NUMBER OF

data breach. In 2015 not
even the feds could
RECORDS
ACCESSED
78.8 million 37 million 21.5 million 15 million
avoid getting hacked.
TYPES OF Social Security numbers, Names, passwords, Social Security numbers, Social Security
RECORDS member ID numbers, email addresses, ngerprints numbers
other personal data phone numbers

NOTES: Truck prices are base model MSRP. SOURCES: Motor Intelligence; [Link]; IMAX; Harvard Joint Center for Housing Studies; [Link]; State of California

68 m o n e y. c o m Oice of the Attorney General; [Link]; ABC News; [Link]; Wired; Identity Theft Resource Center; Privacy Rights Clearinghouse; company press releases
 1.3% YOY // 2. Chevrolet Silverado ($27,815): 440,904, 15.4% // 3. Ram P/U ($27,240): 330,643, 3.4% // 4. GMC Sierra ($28,315): 161,653, 9.8%

2015 ROGUES GALLERY Where the Jobs Are

Ice cream, soccer, and road tripstheyre supposed to be fun. This year
those simple pleasures got caught in some high-stakes scandals. JOB GROWTH/LOSS BY STATE
Job growth nationwide held steady
1. UNITED AIRLINES 5. TAKATA at about 2%. But some places did a lot
CEO Jef Smisek 3. VOLKSWAGEN In one of the biggest
betterand others much worse.
got $28.6 million in The German auto- consumer recalls
severance after maker took a huge hit in history, roughly WYOMING NORTH DAKOTA
stepping down amid when it admitted to 34 million cars have 0.9% 1.6%
T H I S S P R E A D, P H OTO G R A P H S B Y G E T T Y I M A G E S ( 6 ) , C O U R T E S Y O F F O R D ( T R U C K ) , C O U R T E S Y

a corruption debacle. faking pollution been called back for

Adding insult to ratings in 9 million faulty airbags made by
injury for everyday air diesels. To atone, the the Japanese supplier, IDAHO
O F D I S N E Y ( S TA R WA R S ) , C O U R T E S Y O F V W ( C A R ) , I STO C K ( B L U E B E L L ) , A P ( TA K ATA )

travelers, he also gets company is giving which was ordered 3.1%

WEST
to y rst class for owners $500 gift to pay a ne of up to
VIRGINIA
freeforever. $200 million.
cards and a $500 1.5%
credit at dealers. UTAH
2. FIFA 4. BLUE BELL 3.7%
In a blow to the worlds The ice cream and SOUTH CAROLINA
most popular sport, frozen-snacks maker 3.2%
U.S. prosecutors recalled all its products
indicted nine officials and trashed 8 million
of the international gallons of ice cream JOB GROWTH/LOSS BY INDUSTRY
soccer organization because of listeria
in a $150 million contamination linked to The measure of industries adding jobs (the
bribery scheme. at least three deaths. diffusion index) went up, a sign that more
companies were growing than shrinking.

1 Information 1 Support activities

services: +7.5% for mining: 18.3%
2 Nonstore 2 Coal mining: 9.4%
R E A LLY BA D retailers: +6.5% 3 Oil and gas
AD 3 Warehousing and extraction: 7.0%
B

storage: +6.2%
AW
TA

The 4 Mining, excluding

SO R

F
U L!

Scandal Meter 4 Computer sys- oil and gas: 5.8%

tems design and 5 Water transporta-
related: +5.8% tion: 5.7%
5 TIE Pipeline trans-
6 Communications
portation: +5.7% equipment
5 6 Misc. nondurable manufacturing:
Hackers also hit goods manufac-
PREMERA EXCELLUS BLUECROSS 4.8%
United Airlines, TurboTax, turing: +5.7%
BLUE CROSS BLUESHIELD and the IRS, using 7 TIE Primary metals
6 TIE Sightseeing
passwords and personal manufacturing:
details obtained elsewhere. transport: +5.4% 2.4%
March 17, 2015 Sept. 9, 2015
Data processing, Machinery manu-
hosting, and facturing: 2.4%
related: +5.4%
11 million 10 million Sporting goods,
7 Motor vehicle hobby, book, and
and parts manu- music stores:
Social Security numbers, Social Security numbers, member
facturing: +5.3% 2.4%
member ID numbers, bank ID numbers, nancial account
account information, other data information, other data

NOTES: Year-over-year percent employment change from October 2014 to October 2015, seasonally adjusted. Information services excludes publishing,
motion picture and sound recording, broadcasting, telecommunication, or data processing/hosting/related services. SOURCE: Bureau of Labor Statistics DECEMBER 2015 m o n e y. c o m 69
 BESTSELLING BUSINESS BOOKS OF THE YEAR 1. Get Whats Yours by Laurence J. Kotlikoff, Philip MUTUAL
FUND
WINNERS
AND LOSERS

Investing
Best and worst
YOUR
YEAR performers on the
IN MONEY 50 list.
MONEY

WINNERS
1
Do you
understand
WHAT THE FED SAID T. Rowe Price Blue
Chip Growth (TRBCX)
YTD RETURN:
When Janet Yellen and company talk, Wall Street listens. But that +15.1%
that for doesnt mean investors always read their thoughts as youd expect. 2
nearly four Cohen & Steers
2
hours 1
MARCH 18
3 Realty (CSRSX)
YTD RETURN:
Americas JAN. 28 This time, Fed ditches APRIL 29 +7.0%
Fed removes phrase patient from its statement Fed says the

P H O TO G R A P H S B Y G E T T Y I M A G E S ( 9 ) , A P ( C H I N E S E S TO C K M A R K E T, N E T F L I X , W Y N N ) , R E U T E R S ( C O H E N , STA R B U C K S ) , S H U T T E R ST O C K
bankers considerable time
for when it will raise
(as the Street expected) but economy slowed
during the winter
3
says economic growth has Primecap Odyssey
had no rates, signaling faith moderated somewhat. months, a signal Growth (POGRX)
in the economy Investors bet on a delay in that it may delay YTD RETURN:
idea how

( A M A Z O N ) , S H AY L A H U N T E R ( K O R S ) , C O U R T E S Y O F A P P L E ( C O M P U T E R ) , C O U R T E S Y O F V W ( C A R ) , D R E A M ST I M E ( WAT C H )
and perhaps an rate hikes and buy big. raising rates. +6.5%
impending rate hike.
rich they Dow up Dow down 4
Dow down 227 points 75 points
were? 196 points
T. Rowe Price
Diversified Mid-Cap
STEPHEN COLBERT Growth (PRDMX)
5 6 YTD RETURN:
On the July 8 technical JULY 29 SEPT. 17 +6.2%
glitch that temporarily 4 Fed displays calm Fed keeps rates 7
shut down the New York despite global steady but
Stock Exchange JUNE 17 OCT. 28
Fed leaves rates concerns, saying is monitoring Concerned about
untouched, economic activity developments weak job growth, LOSERS
despite noting has been expanding abroad, enough the Fed says it 1
FOREIGN MARKET that the pace of moderately. to send slight will assess
The Street feels shivers down Wall Delafield (DEFIX)
UPS AND DOWNS job gains picked progressboth
reassured. Streets spine. YTD RETURN:
International stocks fared up. Wall Street, realized and
worse than domestic befuddled, sits on expected at 12.6%
Dow up Dow down
shares overall, but some its hands. the December 2
121 points 65 points
markets bucked the trend. meeting. For
Vanguard Emerging
investors, no rate
The Winners Dow up Markets Stock Index
hike now (for now)
(VEIEX)
1 Jamaica +48.2% 31 points is good news.
YTD RETURN:
2 Hungary +22.2% 11.2%
Dow up
3 Denmark +16.1% 198 points 3
4 Argentina +13.6%
Royce Opportunity
5 Russia +13.1% (RYPNX)
YTD RETURN:
The Losers
9.3%
1 Kazakhstan 48.3%
4
2 Greece 45.6%
Berwyn (BERWX)
3 Brazil 38.2%
YTD RETURN:
4 Ukraine 36.3% 9.0%
5 Bulgaria 35.0%

NOTE: Prices for mutual funds and international stock markets as of close on Nov. 2, 2015.

70 m o n e y. c o m DECEMBER 2015 SOURCES: Nielsen BookScan, Fidelity, Morningstar, Bitcoin Charts, Lipper, MSCI, Federal Reserve
Moeller, and Paul Solman, 160,000 copies sold (pub. Feb.) // 2. Triggers by Marshall Goldsmith, 57,000 sold (May) // 3. Elon Musk by Ashlee Vance, 54,000 sold (May)

THE YEARS BEST AND WORST CALLS

Some people have a gift for seeing into the future. And some people have a way of getting it wrong.

BRILLIANT

While most of Wall Street was

bracing for an interest-rate hike, After Bitcoin lost 80% of its value
DoubleLine funds chief in 2014, investor and booster
Jeff Gundlach was saying Marc Andreessen insisted
that rates would stay low the virtual currency was still
and so far they have. Abby Joseph Cohen a thing of beauty. Into
became famous for November 2015, it was up 27%.
calling the 1980s bull
market. This January
she predicted the
S&P 500 could reach

SPECULATORS
MAIN STREET

2300. The high: 2134.

Famed for coining the
term BRIC (Brazil,
Russia, India, China) Bad news, bacon lovers.
economist Jim ONeill In January experts at the
Last January billionaire in January dismissed University of Illinois predict-
Carl Icahn, one of Apples talk of a Beijing ed live pork prices in the
biggest shareholders, market bubble. mid-$60s per live hundred-
said his target price of Chinese equities went weight. Instead the market
$203 was too low. on to doublethen
Oil tycoon T. Boone dropped as low as $41.
Shares of Apple were plunged 30%.
Pickens told CNBC that And in October, the World
$115 then; they hover
oil would jump from $67 Health Organization linked
around $121 today.
a barrel to $100 in the bacon to cancer.
year. Today oil is at $47.

WHATS
ONLINE BONEHEADED
For more of the year
in lists, go to money
.com/lists2015

Best of the Best Worst of the Best

The consumer discretionary sector led the S&P, up 12.15%. And these were the bottom five. The fashion industry and luxury goods
The top five performing stocks were: stumbled through an especially rough year.
5. Starbucks 1. Wynn Resorts 4. Ralph Lauren
1. Netflix
+51.7% 51.5% 40.1%
+120.6%

2. Fossil
2. Amazon 4. Cablevision 50.2% 5. Gap
+102.5% +57.5%
35.3%

3. Michael Kors
3. Expedia +58.6% 48.1%

GOT YOUR OWN LIST? letters@[Link] DECEMBER 2015 m o n e y. c o m 71

 YEAR OF THE WEARABLE Top sellers in technology that never leave your side (or wrist): 1. Fitbit: 8.3 million sold, $59 to $199 // 2. Apple Watch:

Your Wallet
YOUR
YEAR
IN
MONEY

WHO SAID THAT? WHAT

GOT PRICIER

1. EGGS
Did your mother ever tell you it isnt polite to talk about money in public? These outspoken
Because of a bird-u epidemic,
folks dont buy that. Match the brash comment to the correct talking head. (Answers below.) a dozen eggs neared $3,
a 50% increase over 2014.

2. DISNEY WORLD

P H O TO G R A P H S B Y G E T T Y I M A G E S ( 1 6 ) , S H U T T E R STO C K ( A M A Z O N ) , C O U R T E S Y O F M C D O N A L D S ( E G G M C M U F F I N ) , C O U R T E S Y O F F I T B I T ( F I T B I T )
A Platinum Plus Pass for non-
Floridians went from $659
a year to $829, up 26%.

50 CENT DONALD TRUMP JESSICA SIMPSON MARCO RUBIO 3. PRESCRIPTION DRUGS

Turing made headlines when
it raised the price of Daraprim
The biggest money mistakes? I dont know.
1 For some reason I thought of my first marriage.
by 5,000%. Specialty drugs
overall went up 20%.

4. NETFLIX
I had to work my way through school. I had to borrow money to go to Standard subs are up 11%, to
2 school. Try telling my wife, early in my marriage, why someone named
Sallie Mae was taking $1,000 out of our bank account every month.
$10 a month for new custom-
ers. The rest pay up in 2016.

4. DIAMONDS
It has not been easy for me. I started off in Brooklyn. About 14% less precious
3 My father gave me a small loan of a million dollars. this year. Why? Diminished
demand in China.

Walt Disney has filed bankruptcy. Donald Trump has filed bankruptcy. 3. AIRFARES

4 It means youre reorganizing your finances, but it does stop things from
moving forward that you dont want moving forward.
Prices were down an average
of 18% year over year.
Thank you, cheap oil.

2. COFFEE
The price per pound is near
$1.15 on average, down 18%
Top Return on Investment Minimal ROI this year. Starbucks, take note.
REMODELING JOBS:
THE MOST (AND LEAST) 1 Entry-door replacement (steel). 1 Sunroom addition.
BANG FOR YOUR BUCK RECOUPED COST: 101.8% RECOUPED: 48.5%
1. GAS
Americans spent more than 2 Manufactured exterior stone 2 Home-office remodel. At about $2 a gallon,
$300 billion on home makeovers, veneer. RECOUPED: 92.2% RECOUPED: 48.7% regular costs 40% less than
but its the rare project that recoups 3 Garage-door replacement. 3 Bathroom addition. in 2014 ($3.34).
its cost once the house is sold. RECOUPED: 88.4% RECOUPED: 57.8%
WHAT GOT
CHEAPER
72 m o n e y. c o m DECEMBER 2015
ANSWERS: 1. SIMPSON 2. RUBIO 3. TRUMP 4: 50 CENT
3.6 million sold, $549 to $1,099 // 3. Garmin: 1.4 million sold, $79 to $599 // 4. Samsung: 1.2 million sold, $20 to $350 BIGGEST
TUITION HIKES
AT PUBLIC
UNIVERSITIES

RIVALRIES OF THE YEAR Tuition rose 3% overall

last year, but these
Debating politicians arent the only ones who are fun to watch when theyre mixing it up schools raised prices
in public. This year featured a bumper crop of business matchups. the most from
2010 to 2015.

BIG BEER vs. CRAFT BEER [Link] vs. AMAZON 1 University of

      Tennessee, Knoxville
Up 54%
Anheuser-Busch InBev and SABMiller, the worlds Has Amazon become your go-to shopping center?
(to $12,436 a year)
two biggest beer companies, joined forces in [Link] set out to unravel your prime relationship
a $104 billion merger. Will brew prices go up? by pledging Costco-level prices and no membership fee, 2 University of Georgia
Well, the new company now vs. the $99 Amazon Up 45% (to $11,622)
owns 400-plus brands, Prime members 3 Louisiana State Uni-
including eight of the top 10 pay. Your move, versity and Agricultural
bestselling labels in the U.S. Mr. Bezos. and Mechanical College
Up 40% (to $8,827)

JENNIFER THE MEN OF West Virginia

McDONALDS TACO BELL
4
vs. LAWRENCE vs. HOLLYWOOD University
Up 29% (to $7,632)
     
5 University of Arizona
Round one: Taco Bell ads mock egg mcmuffins as Lawrence may have won an Oscar, but after the big Sony
Up 26% (to $11,400)
old-fashioned. Round two: The Golden Arches rolls out hack and leak, she discovered that she had earned less
an all-day breakfast menu in October. Winner: than her three Oscar-less male co-stars in American 6 University of Hawaii
fast-food fans, who are lovin the fact that Hustle. her revenge: an at Manoa
McDs breakfasts are online column called Why Up 26% (to $11,164)
$1 cheaper on average Do I Make Less Than My Male 7 University of
than its other fare. Co-Stars? that went viral. Mississippi
Up 25% (to $7,444)

Youre gonna get a statement THINGS WE SAID GOODBYE TO 8 University of Virginia

1 Pay TV (subs dropped 958,000) Up 24% (to $14,468)
every month. Never open it. 2 A&P (a grocery staple for 156 years) 9State University of
JACK BOGLE 3 Mad Men (death of a TV salesman) New York at Buffalo
The Vanguard founders No. 1 piece of advice for retirement investors 4 US Airways (united with American) Up 21% (to $9,461)

Great Trips
That Got
Cheaper
This Year
BY THE EDITORS
1 RIO DE JANEIRO
The World Cup is
gone, and with it sky-high
2 REYKJAVIK, ICELAND
Budget airline
WOW began $99 non-
3 TOKYO
The yen fell slightly
vs. the dollar, and carriers
4 STOCKHOLM
Flights dropped
10% this year, and the
OF HOPPER airfaresat least until the stops from Baltimore began direct service from Swedish krona fell about
2016 Olympics. Average and Boston (average Dallas and Chicago. The 18%. Average ight from
ight from U.S.: $642. roundtrip: about $700). average ight is down 20%. the U.S.: $635.

SOURCES: Remodeling Magazines 2015 Cost. vs. Value Report, International Coffee Organization, Hopper, IDC, SNL Kagan, MoffettNathanson, Deutsche Bank Markets Research m o n e y. c o m 73
 MEN AND WOMEN
FACE DIFFERENT
CHALLENGES
WHEN IT COMES
TO SAVING AND
INVESTING. TO
DISCUSS HOW
THAT SHOULD
IMPACT YOUR
PLANNING, MONEY
ASSEMBLED A
PANEL OF EXPERTS.

should men
panelists
LAZETTA
RAINEY
BRAXTON

and women
Certified financial
planner (CFP),
founder of the
planning firm
Financial
Fountains

KERRY HANNON
Author of 10
career and
manage money
differently?
personal finance
books, including
Whats Next? and
Great Jobs for
Everyone 50+

DIANE HARRIS
Editor of MONEY
and co-author
of It Takes Money,
Honey, a personal
finance book
for women

EILEEN OCONNOR
CFP, managing
principal of
Hemington Wealth
Management,
and co-author of
the Women
of Wealth
series of studies

moderator
RACHEL F. ELSON
Assistant managing
editor of MONEY

m o n e y. c o m 75
 how men and women feel

s
KEY:
MEN, WOMEN, AND MONEY

about money management

Men
Women

Men and women express

much different levels of I know less than the average
confidence when it comes investor about nancial markets
to investing. and investing in general.
AGREE OR STRONGLY AGREE

27%

saving, investing, budgeting, 55%

earning, and protecting assets Both share top financial goals, but women place more weight on them ...
are nancial management tasks
that have no gender. Yet men % WHO SAY ITS VERY IMPORTANT...

and women face diferent chal- to maintain lifestyle not to outlive to protect family in case
throughout retirement. your savings. I die or become disabled.
lenges when it comes to their
money. Men typically earn 65% 66% 49%

morea recent PayScale study

found a 25.6% overall pay gap 75% 72% 60%
while women tend to live longer
(three years, on average) and NOTE: Financial togetherness survey of baby boomers only. SOURCES: Merrill Lynch, Women and Investing: A Behavioral Finance
Perspective, Fall 2014; Prudential, Financial Experience & Behaviors Among Women, 2012 and 2014; MONEY research, 2015
are also more apt to take time
of from their careers. Studies
show that women feel less
knowledgeable and less con- Before we get into the nitty-gritty, Well, no consensus there. So lets
lets do a lightning round on the big dig into the specifics. What are
dent about their investing
question: Should men and women the diferences between what men
decisions. manage money diferently? and women say they want when it
All these differences have Diane Harris: The saving and comes to advice?
broad financial implications investing basics are the same for LRB: Most of the women that I
when it comes to your long- everyone, but there are tremendous work with are just very busy. Theyre
gender differences in knowledge, professionals, but theyre not profes-
term planning.
temperament, and attitude toward sional investors. And they really
So do men and women need money. And some of the very specic want to understand what they have,
diferent approaches? MONEY and unique challenges that women starting with retirement plans, and
assembled a panel of experts at face may necessitate a different to think about what their options are.
the Financial Planners Asso- approach. So what they want is education.
Kerry Hannon: Not necessarily, Many peoplemen and women
ciation (FPA) conference in
PHOTOGRAPHS BY CARL TREMBLAY

but men and women can certainly didnt get this education formally,
Boston this fall to tackle this learn from each other. and some of us didnt get it within
question. The conversation Eileen OConnor: I would say no. our households. But women tend to
addressed attitudes and apti- Men and women should let their say, I just want to understand what
tudes, savings rates, long-term- goals, not their gender, drive the were doing so that I can feel con-
investment choices. dent about the decisions that Im
care coverage, personal goals,
Lazetta Rainey Braxton: Yes making about my investments.
investing strategy, Social Secu- because the diferences give balance Men, on the other hand, have a no-
rity claiming, and more. to a married couples portfolio. ticeably diferent risk appetite. They

76 m o n e y. c o m DECEMBER 2015 This discussion has been edited and added to in follow-up interviews.
Men and women diverge when it
comes to financial togetherness.

HOW SHOULD MARRIED COUPLES

MANAGE THEIR ACCOUNTS?

All 49%
joint 38%

All 5%
apart 3%

Yours/ 43%
mine/
59%
ours

Men are more likely to say they

are DIY investors.
Lazetta Rainey
HOW DO YOU INVEST?
Braxton addresses
I do my own research and buy directly. FPA attendees. Also
pictured: Rachel F.

54% 41% Elson, standing,

and Diane Harris.

women tend to say, i want to meet my goals

I rely on adviser input but make
my own decisions.

33% 44% and be comfortable. men say, i want

to maximize every dollar. Lazetta Rainey Braxton

want to know how much money they original Women of Wealth study, not spend, while women in that age
can make, based on their investments. we found they were looking for guid- group spend and dont save. That
Women tend to say, I want to meet ance about a wide range of issues, flips in their forties and fifties
my goals and be comfortable. Men from charitable giving to career men start spending, and women
say, I want to maximize every dollar. development to higher education. start saving more. But at that point
Its almost a competitive thing. women have missed that compound-
DH: Women also tend to like a Men and women also tend to save ing boat. That concerns me.
more collaborative approach than diferently, right? Also, I think men may be invest-
men do, and prefer joint decision mak- KH: A few studies show that men ing more outside their retirement
ing, according to a study MONEY contribute less than women do to accounts; they may be more apt to
did last year on married couples - their retirement accounts. Fidelity, play the stock market.
nances. When it comes to managing for instance, found that women were
money with their spouses, men tend contributing more to workplace re- We hear about this investing
to say, I do; women say, We do. tirement accounts than men were, confidence gap between men and
We also found, in a separate sur- no matter their salary. And a Van- women. Are there planning impli-
vey, that women are more likely than guard study found that across the cations for couples?
men to want a little money of their board, 73% of women fund employee DH: Heres the problem with the
own. They want some spending money retirement accounts, compared confidence gap. When you ask
in a judgment-free zone. Men are with 66% of men. women a broad question about con-
more likely to want all assets merged. But anecdotally I see something dence, they express that they dont
EO: Women generally are dissat- a bit more nuanced. When I talk to feel condent. But when you get to
ised with the advice theyre getting people, I nd that men in their twen- specicswhen you talk about the
from professional advisers. In our ties and thirties tend to save and specic, diferent aspects of money

HOW DO YOU MANAGE MONEY WITH YOUR SPOUSE? LET US KNOW AT letters@[Link].
managementthe picture changes.
In a MONEY survey last year, for
instance, only 28% of women said
their husbands are actually better
than they are at retirement plan-
ning. Another 41% said they were
equally good at it, and 31% said they
were better than their husbands.
At the same time, women really
like to feel that we understand what
were doing. Im going to make a
gross generalization here, but unlike
menwho might occasionally take a
stock tip on the golf coursewomen
are not going to pick up a stock tip
from somebody whos, say, coloring
our roots. We want to know what
were doing and understand it. It can
feel overwhelming.
The trick is to make nancial tasks
manageable. Focus on three key goals
or three steps to take, not 37.

our male clients have a harder time

KH: Theres another aspect to con-
sider. Mens investments can actually
sufer from overcondence. Male in-
vestors tend to swing for the fences; giving up trading. women tend to say,
they think they can beat the market.
That bravado, which tends to result just take it off my plate. Eileen OConnor

in more trading in and out of the mar-

ket, doesnt really serve them well. Men and women have diferent ment decisions, and then we match
DH: Exactly. In survey after sur- strengths. The best thing couples up their goals with what the portfo-
vey after survey, women express managing their money together lio looks like. I say, Its a tradeofif
that they are a lot more conserva- can do is to play to those diferent you want to do this, maybe we need
tive than men when it comes to strengths. So men may want a to be a little bit more aggressive in
managing money. And its seen as a higher equity allocation and may your portfolio.
negative. want more aggressive investments With male clients, by contrast,
But a seminal study from Univer- say, more in small-caps. But the fact I often have to share what invest-
sity of California professors Terry that women are more conservative ments may be off limits. For my
Odean and Brad Barber, called Boys may give them a blue-chip, steady- clients who have a few hundred
Will Be Boys, looked at account data growth orientation. And a mix of thousand dollars to invest, I have to
for 35,000 diferent households and those two approaches creates a tell them, If you want a higher-risk
found that mens trading decisions better, balanced portfolio. asset, like certain private equity or
reduced their returns by almost one other alternative investments, you
percentage point more per year When do the different attitudes have to wait until youre at a difer-
than womens did. The difference become a problem for clients? ent wealth level.
did not come because men were LRB: For investments, you cant EO: I find that, in general, our
worse at picking investments. It be extremely conservative and gen- male clients love trading for them-
came because women traded less erate enough growth to cover ex- selves; they have a harder time giv-
often, making fewer bad bets and penses in retirement years. So if ing it up. Women tend to say, Just
incurring fewer fees. women are more conservative, I take it of my plate.
make sure they are comfortable with Thats a generalization: I have
the investment strategy. I try to hear stay-at-home-mom clients who are
78 m o n e y. c o m why theyre making certain invest- very sophisticated and want to get
 KEY:
how men and women MEN, WOMEN, AND MONEY

invest for retirement

Men
Women

Women are more likely to ... And both save at similar rates not as a male or female in a couple.
fund retirement accounts ... and see near-identical returns ... For everyone, we plan as if the client
will live to 100, for both men and
SAVE IN A DEFINED-
10.1% 9.7% women105 in some cases, if theres
CONTRIBUTION PLAN
good longevity in the family.
6.8% 7%
66%
66% KH: One way to address womens
longer life expectancy is to adjust a
couples Social Security strategy.
73% Its imperative that both men and
Average savings rate Average annual 5-year returns women understand this. If a woman
made less than her husband or didnt
... but due to work, you need strategies that allow
womens the wife to take from her husbands
lower wages, AVERAGE $123,262 benet. For example, delaying the
the end result 401(k) benet for the higher earner is often
BALANCE
is different. $79,572 55% MORE the best move.
Most women over 65 will be
single at some point in their life, and
SOURCE: Vanguard, Women Versus Men in DC Plans, October 2015
for quite a while. So married couples
have to do Social Security planning
both as a couple and as individuals.
Make sure you talk to a planner
under the hood in terms of invest- stepped out of the workplace to who has that expertise, because
ments, and I have very high-powered raise a family for a few years, getting you need to consider as a couple
executive women clients who really back into the workplace is really how your strategy will affect the
dont care about the details. trickyparticularly when youre surviving spouse.
If our male clients want to make over 50. So a lot of these women LRB: With my clients, long-term-
their own bets, though, well tell start their own businesses. care coverage is extremely signi-
them to keep a separate account The tendency, particularly for cant. If a husband becomes ill rst
where they can make trades, try women, is to dip into retirement ac- and requires care, those costs could
something outjust 1% or 2% of counts to get that business of the deplete a couples assets before the
their total portfolio. But we wont ground. In fact, women are more wife has a chance to use them.
take trading orders from them. likely to borrow from their retire- DH: This advice holds true for
Were the experts; thats what ment accounts than men are. women and men, but it is particu-
theyre paying us for. But there are plenty of other larly important for women who
ways to find the capital to start a have not been deeply involved in
How do some of the differences business. I often suggest tapping their familys financial planning:
weve talked about afect various friends and family, borrowing from Know where all the documents
types of clients? Do entrepreneurs, your own network. Kickstarter or are. Because it is more likely that
for instance, have distinct needs? other crowdfunding sites can be women will nd themselves on their
KH: When it comes to being a suc- helpful, particularly for smaller own one dayand you dont want
cessful business operator, male or amounts. There may also be eco- to be in a state of grief and still have
female, its all about nancial tness. nomic development loans in your to gure out where everything is,
How do you do a budget? Where can community. And although Im not how much youve got, and who
you cut back? How can you get nan- always a fan, home-equity loans youre working with.
cially t? Because debt is an incred- can be an option, depending on your
ible dream killer. familys nancial security.
But I think small-business help is MORE ONLINE
more important for women than for What are some specific ways youd See video excerpts from the
men, especially boomers, because suggest that couples address FPA panel at [Link]/video.
running a business is going to be a womens longer life expectancy?
bigger piece of their economic EO: Its critically important for us
picture. For women who have to treat each client as an individual, m o n e y. c o m 79
Dick Pell wants to be
sure he can finance
dementia care for
his wife, Helen.
COPING
with
AG I NGS
COSTLIE ST
CHALLENGE
WHEN SOMEONE YOU LOVE HAS DEMENTIA,
THE EXPERIENCE CAN BE HEARTBREAKING
AND THE EXPENSES ENORMOUS. HERES
HOW TO MANAGE YOUR FAMILYS FINANCES
WHILE PROVIDING THE BEST CARE.
By D O N NA R O S AT O
P h otogra phs by
C HRIST OPHER C HURC HIL L

81 m o n e y. c o m DECEMBER 2015
throughout their 39-year marriage, dick and
Helen Pell have shared a love of the theater. And it was in
a theater that Dick rst noticed something wrong.
Rehearsing a skit in an amateur production four years
ago, Helen had trouble remembering her lines. Soon she
was asking Dick the same questions repeatedly. He took
her to a doctor, who diagnosed Helen with dementia.
Today Dick, 82, and Helen, 79, still go to the theater. But
Helen doesnt act. In their one-story home she gets lost look-
ing for the bathroom. She doesnt know how to use a toaster,
or even a light switch. I get very sad when I realize I am losing
my gal, says Dick. And it gets more apparent every day.
Also apparent are the mounting expenses they face. Right
now Dick is spending $255 a week for 15 hours of help from
a home care aide. A nursing home stay, which Helen is likely
to need someday, will cost about $6,000 a month. Says Dick:
You dont have to be a genius to see that well run out of
money, depending on how long Helen will need care.
If you are one of the estimated 15 million Americans 20% of patients sufering from heart disease or cancer.
caring for someone with dementia, you know that its a Driving the cost arent drugs or treatments, but the years
uniquely devastating disease. Dementiathe most common of care necessary to get a person safely through lifes every-
form is Alzheimersrobs you of the person you love. It day activities. Medicare, the primary health insurance for
attacks memory, personality, language, and physical abili- people 65 and older, doesnt cover that long-term nonmedical
ties. It can last for years, even decades. And it has no cure. care. The burden is on families to gure out how to pay for
The nancial toll can be nearly as large as the personal it, says Amy Kelley, lead author of the dementia study.
loss. Over the last ve years of life, the average out-of-pocket In the pages that follow, youll nd detailed guidance on
cost of care for dementia patients totaled $61,50081% more how to address the nancial challenges of caring for a parent
than for people without dementiaaccording to a new study or spouse with dementiathe most important steps you can
in the Annals of Internal Medicine. Nearly half of the dementia take in each of the three major phases of the disease. Youll
patients ended up on Medicaid, the government health care also meet three families coping with the economics of demen-
program for impoverished Americans, compared to about tia care and getting advice from nancial professionals.
Losing a loved one to dementia is always painful. But
learning how to handle the nancial obstacles youll face
82 m o n e y. c o m DECEMBER 2015 can take some of the inevitable stress away.
 C o p i n g w i t h AG I N G S
COSTLIEST CHALLENGE

ADVICE FOR DEE

Tap home equity.
Instead of draining her
own nances, Dee should
help her parents set up
a reverse mortgage on
their condo, says Miami
certied nancial plan-
ner Glenn Downing. The
$200,000 home, now
mortgage-free, could
get them a $140,000
line of credit, by one
industry estimate.
Increase care. Use
that money, says
Downing, to up the
number of hours that
the home health aide
works. That will mean
Dee has more time of
from caregiving.
Go back to work. With
more time available, Dee
can work part-time as
a tax consultanta job
she thinks will net
$15,000 a year. With
that money she can pay
down her credit card
balance and start saving
again. Dee wont be
good to anyone, says
Downing, if she doesnt
take care of herself.

STAGE 1 Dementia comes on gradually, But youll need to plan for more expensive care later on,
so you can easily miss the and move quickly, since your husband, wife, or parent has
Facing a first signs of it in someone
you love, especially if you live
a limited window to participate in nancial decisions and
sign any necessary legal documents before cognitive abili-
Difficult with that person or see him
or her on a regular basis.
ties fade. When people dont recognize dementia earlier,
says Fuschillo, it costs you more in the end.
Truth Thats partly because the
early symptoms of dementia KNOW WHAT IS NOT NORMAL AGING
are often confused with the Be on the lookout for subtle but distinct diferences from
senior moments that naturally come with aging. Its also typical signs of aging, says Ruth Drew, director of family and
because the condition can be so frightening. All too often, information services for the Alzheimers Association. For-
Ive seen denial by the spouse, the family, or the person getting names or appointments isnt a big deal. More alarm-
themselves, says Charles J. Fuschillo Jr., CEO of the Alz- ing is asking the same questions over and over or forgetting
heimers Foundation of America. how to do familiar tasks like preparing a favorite recipe. You
In this early stage of dementia, which lasts an average might also notice your parent or spouse misplacing things
of two years, your out-of-pocket costs wont be burdensome. that turn up later in unusual places, like a phone in the re-
frigerator. (Visit [Link] for more tip-offs.) If the person
youre concerned about doesnt live close by, enlist friends
and neighbors to alert you to any troubling incidents, advises
Kevin Jameson, president of the Dementia Society.

ADD A DOCTOR TO THE MIX GENTLY

Bringing up the subject of dementia is an emotionally
loaded conversation, and you dont want to put your loved COSTS, LAST FIVE YEARS OF LIFE
one on the defensive. Pick a time when the person is relaxed. Total Out of pocket
Start with a general question like, Hows your health? What $287,000
has the doctor been saying? Then raise your specific
concerns. Andy Cohen, CEO of the caregiving information
website [Link], suggests ltering your conversation
through your own thoughts and feelings, along the lines of $173,400 $175,100
Ive noticed some behavior changes in you, Im concerned,
and it would make me feel better if you checked in with your
doctor. A precipitating eventsay, getting lost or bouncing $61,500
checkswill make it hard to dismiss the problem, says $28,800 $35,300
Jameson, but if your loved one gets defensive, enlist a
neutral third party, like a trusted friend, to bring up the Cancer Heart disease Dementia
issue. Ofer to make the doctors appointment and go along.

APPOINT KEY DECISION-MAKERS

Once you have a formal diagnosis in hand, ask for a family
meeting to gure out who will be the point person, or per- of the National Academy of Elder Law Attorneys (NAELA):
sons, for managing your loved ones condition. As the de- a durable power of attorney, authorizing a person to make
mentia progresses, dozens of decisions will need to be made nancial decisions for your family member, and a health care
about care, housing, and nancesdecisions that Dad, say, proxy, appointing someone to make medical decisions.
will be increasingly unable to make alone. Talk it through: This, too, can be a tough subject to broach with a parent.
Who lives the closest? Who has the most exible schedule? Long-held roles are reversing: Now youre the one caring
Who is most comfortable with handling nancial matters? for Mom. Losing control can be scary and embarrassing for
Whoever ends up managing Dads nances doesnt have her, so make the conversation about you. You might say that
to be the same person taking the lead on health care, but youre getting your medical and nancial paperwork to-
if it isnt, the two of them should gether, so maybe she should too.
be people who get along well Or you can say that youre wor-
enough to work together. YEARS ried and youd feel a lot better if
At the same time, sort out AVERAGE DELAY FROM FIRST SIGNS this paperwork were in place.
what will be needed in terms of OF DEMENTIA UNTIL DIAGNOSIS You can draft these documents
relatives money and time, and with the help of a local certied
reach an agreement about who elder-care attorney who under-
can contribute what. Even a long-distance relative can be stands the relevant state laws and regulations. Start your
of assistance by sending money or taking on tasks like search for a lawyer at the websites for NAELA ([Link])
paying bills online or handling taxes. In the beginning the and the National Elder Law Foundation ([Link]).
biggest cost is time and stress, says Jameson. But those
incremental costs can start to snowball quickly, so you TAKE A FINANCIAL INVENTORY
need to always be thinking about the next steps. Its important to get a handle on all the assets your family
member has available for funding care, starting with money
GATHER THE PAPERWORK in the bank, investments, pensions, and Social Security. You
Along with a will, youll need to have at least two key docu- also want to know if he or she has a long-term-care insurance
ments, says Shirley B. Whitenack, a lawyer and the president policy in force. (Only 7% of the population does, and after a
diagnosis of dementia its too late to apply for one.) Youll also
want to know the equity in the home, in case you might want
84 m o n e y. c o m D E C E M B E R 2 0 1 5 to tap it via a reverse mortgage or sale. Such an inventory
 C o p i n g w i t h AG I N G S
COSTLIEST CHALLENGE

Another wealth-preservation tactic is to transfer assets

of the person with dementia (again, plus the spouses assets,
PERCENTAGE OF WEALTH SPENT BY PATIENT
if married) to someone else. Theres a catch, though: Med-
11% 32% icaid has what is known as a ve-year look-back rule. If the
dementia patient transfers the assets and then applies for
Medicaid within ve years, the patient will be expected to
Cancer, heart disease, Dementia
pay for caregiving equal in value to those assets. So if your
and other ailments mother impulsively gives all of her money to her grandchil-
dren to spend down assetsbut then needs that money for
care within ve yearsyou and other family members are
SHARE OF PATIENTS ON MEDICAID AT TIME OF DEATH going to have to gure out how to replace that money so
she can qualify for Medicaid.
Cancer 20%

Heart 22% STAGE 2 At this stage of dementia,

disease
which lasts about 1 years on

Dementia 49%
Managing average, your loved one has
trouble looking after himself.

NOTES: Cost gures are averages. Figures for spending as a percentage of wealth are
Rising You mother, for example,
might forget to eat, wander
medians. SOURCE: Annals of Internal Medicine, November 2015. Sources for additional
statistics throughout article: University of Portland, [Link], GenWorth Costs off, or be at risk of physical
harm from lapses such as
leaving the stove on. Her per-
sonality might change too: Shell grow increasingly frus-
may not be easy; when Theresa Von Vreckin (see prole on trated or angry with you and need help to reduce her anxiety.
page 87) took over her fathers finances, his investments Her need for care will rise, but her symptoms may not yet
turned out to be in more than a dozen diferent accounts. And be severe enough for long-term-care insurance or other help,
your parent may not want to share this information with you so funding at this stage is often entirely out of pocket.
for privacy reasons. If so, ofer to make an appointment with
a nancial planner who can help sort things out. But that ARRANGE FOR HELP AT HOME
planner should get Dads okay that the adviser can get in touch In the early parts of this stage, Mom or Dad can continue to
with you if he is worried about Dads cognitive abilitiesan live at home, but youll need to bring in helpnonmedical
increasingly common practice among nancial planners. home care aides who can cook, run errands, keep your family
If its your husband or wife who has been diagnosed with member company, and provide personal care by helping with
dementia, you might want to do what Dick Pell has done dressing or bathing. This will cost you the same as a home
for Helen: set up a special-needs trust so that if you die health aideabout $20 an hour. For help nding local re-
rst, your assets will be earmarked for your spouses care. sources, you can consult the Alzheimers Association ([Link]),
Again, consult an elder-care attorney. which has 80 chapters across the U.S., and the Alzheimers
Foundation of America ([Link]), which has licensed social
GET READY FOR MEDICAID workers available for free by phone and Skype.
Theres a substantial likelihood that your loved one may Its a good idea to join a local support groupnot just
need to go on Medicaid for care: In the Annals of Internal for the company but also for the information you can get
Medicine study, for example, the share of dementia patients about local resources, experts, and facilities. The Alzheim-
on Medicaid went from 21% to 49% during their last ve ers Association has message boards, chat rooms, and
years of life. You can start planning for that possibility now. meetings at local chapters across the U.S.
Medicaid, however, has strict rules limiting the assets
a patientand a patients spousecan own while qualify- GET A GREATER LEVEL OF CARE
ing for the program (see page 89 for more). One wealth- For someone who needs more than a few hours worth of
preserving tactic to keep in mind for now is for the patient help daily, one option is adult day-care services, where he
to pay off any home mortgage. Because your primary can get meals and participate in exercise classes and other
residence is exempt for the purposes of determining Med- activities. Costing an average of $70 a day, adult day care is
icaid, that move will increase the amount of home equity best for people who are still able to engage socially and move
you can tap later, if you end up needing those funds. around easily. To nd a day-care service and other resources
Explore your
options before you
reach a crisis point.
MARYBETH MUSUMECI

in your community, go to the U.S. Adminis-

tration on Agings [Link] website.
You should also have a backup plan for
emergencies or if you need to be away.
Some assisted-living and nursing homes
will take people for overnight stays or even
for a few weeks.
Whatever local service you use, inter-
view caregivers to nd out if they have
specific dementia-care training, which
includes creating regular routines and
working with individuals to understand
what calms a person or reduces anxiety.
Its a personalized approach and difer-
ent for everyone, says Gina Kaurich, head
of client care for FirstLight HomeCare,
a national provider of nonmedical home
care services. Maybe its taking them for
a daily walk or talking about their years
in the service or gardening.

KNOW YOUR INSURANCE COVERAGE

If your loved one has long-term care insur-
ance, you can start tapping it as his need for
care increases and the cost of that care grows.
Check your policy for whats coveredusu-
ally, multiple types of care, including home
care, day care, assisted living, and nursing home stays. day during a war. The paperwork is daunting, and as with
Youll also need to know the policys benefit caps Medicaid, there are strict caps on assets and income for
a daily dollar amount and a maximum number of years or qualifying. Youll have to document all of your long-term-care
lifetime payout. LTC policies also specify a certain level of expenses to make sure you max out this benet.
physical or cognitive impairment that interferes with daily
activities, such as eating and dressing unassisted, before GET CONSERVATIVE WITH INVESTMENTS
they can be tapped. So be aware of the conditions under As you start paying for care by drawing money from your
which a policy will start to pay. loved ones investment portfolio, you need to reallocate it,
says Stig Nybo, president of U.S. retirement strategy at
TAP VA BENEFITS Transamerica Retirement Solutions. If the money was ear-
Are Mom or Dad veterans 65 or older? They may qualify for marked for retirement and invested to grow over 20 or 30
long-term-care benets up to $2,800 a monthcovering years, its likely to be heavily weighted toward stocks. Now
home care, assisted living, or a nursing homethrough the that youre planning for larger near-term expenses, youll
Veterans Afairs Aid and Attendance program. A vet must have to get a lot more conservative with the investments,
have served at least 90 days in the military and at least one he says. Nybo suggests putting money into diferent buckets
to balance immediate needs with long-term growth. Put
two years worth of projected expensesincluding for cost-
86 m o n e y. c o m DECEMBER 2015 lier care options, such as a nursing home stayin cash or
 C o p i n g w i t h AG I N G S
COSTLIEST CHALLENGE

see what youre eligible for, use a calcula-

Theodores portfolio tor such as the one ofered by the National
easier, Theresa should Reverse Mortgage Lenders Association
combine the $640,000 ([Link]).
he has in four IRAs into For more cash, you can sell the family
one account, says San home. If you go that way, consult a real es-
Antonio certied tate agent for an estimate of the market
nancial planner Ben value and an assessment of any repairs
Gurwitz. She should that might be needed before listing.
consolidate his taxable
accounts as well.
Sticks with stocks.
JUGGLE CAREGIVING WITH YOUR JOB
The portfolio is heavily
If youre managing the care of a relative
invested in stocks, but with dementia, chances are youre feeling
Gurwitz doesnt recom- it at work. Between daily responsibilities
mend selling to reduce and emergencies, one in ve family care-
the riskeven though givers of dementia patients have quit
benets from the their jobs, and 36% say their career has
long-term-care policy been hurt by their caregiving duties, ac-
will expire in three years. cording to [Link].
Between Theodores A starting point for protecting your
pension and Social standing at work is to explain the problem
Security, his income is
youre dealing with. Be open with your
nearly $7,000 a month.
employer about whats going on in your
Im not concerned
about him running out life, says the Dementia Societys Jame-
of money, Gurwitz says. son, whose wife passed away last year
Selling long-held stocks after battling dementia for more than a
in the taxable accounts decade. If your wife or mother had can-
would trigger a big tax cer, youd tell your boss. It should be the
bill now, but after same with dementia.
Theodores death, that Ask your boss if you can temporarily
capital-gains liability cut back hours or make arrangements,
will be erased for heirs. such as working at home more, that make
it easier to provide care. You may be able
to take advantage of the federal Family
and Medical Leave Act, which allows em-
a money-market fund. Invest the next ve years worth of ployees at a company with 50 or more workers to take up
expenses conservatively, mostly in bonds, and invest the to 12 unpaid weeks of a year for caregiving. Most workers
balance in stocks. are guaranteed to keep their jobs.

TAP HOME EQUITY START RESEARCHING NURSING HOMES

For many people, their biggest assetand the most valu- Even though the person youre caring for may not be
able resource for funding dementia careis their home. ready for assisted living or a nursing home yet, this is the
If other sources of money for time to see whats available in
your spouse or parent are scant, your area. Explore your op-
FAMILY CAREGIVERS WHOSE

36%
you can use his or her home eq- tions as early as possible, be-
uity to set up a reverse mort- CAREER HAS BEEN HURT fore you reach a crisis point,
gage line of credit, allowing you BY DEMENTIA CAREGIVING says MaryBeth Musumeci, an
to borrow roughly 50% of the associate director at the Kaiser
value of the home. A family Family Foundation. Assisted
member with dementia, along with a spouse, can stay living is expensive and usually not covered by Medicaid,
in the house as long as their names are on the deed. If, so this may not be an option if you dont have funds to
when the house is sold, its sales price is less than what was pay privately. Most nursing homes take Medicaid, but
borrowed, you wont be on the hook for the diference. To there are often waiting lists.
STAGE 3 In the later stages of dementia,
which typically last four to ve
Getting years, the need for care inten-
sies. Your spouse eventually
24-Hour will require around-the-clock
assistance with most activities
Care of daily living. Your toughest
decision: whether to try to con-
tinue caregiving at home or
move your loved one to an assisted-living facility or a nursing
home. You may feel guilty at the prospect of putting someone
you love in a homethats common and understandable
but a setting where professionals are providing the intense
level of care needed at this point is often the best path, espe-
cially if theyre trained in the needs of dementia patients. That
said, its also the most expensive care option by far.

ACT BEFORE THE MONEY RUNS OUT

Unless your loved one has enough assets to fund home care
for years without a problemor you do, without jeopardizing
your own long-term nancial securityyoull want to make
the move to a nursing home sooner rather than later, because
Medicaid wont cover 24-hour at-home care. And its easier
to get into a facility if you start out as a private pay patient,
says Whitenack, because Medicaid usually pays only a frac-
tion of what a family would pay. Once youre in, they cant
kick you out if you run out of money, but theres no law that
Dick Pell looks
a nursing home must take you in the rst place, she says. after his wife,
Helen, at their
AIM FOR A HOME WITH MEMORY CARE Sarasota home.
A useful resource for nding a nursing home is the Centers
for Medicare and Medicaids comparison tool ([Link]/
nursinghomecompare). Use the sites checklist to judge facili-
ties: For example, are residents clean, well-groomed, and TAP ASSETS STRATEGICALLY
appropriately dressed? Does the staf wear name tags? Semi- Your money will probably last longer if you make withdrawals
private rooms cost from $50,000 to $130,000 a year, depend- rst from IRAs and taxable investment accounts before draw-
ing where you live; go to [Link] to nd local prices. ing on cash reserves, says Christopher Olsen, a certied -
About half of nursing homes have specialized dementia nancial planner in Lodi, Calif. Thats because the taxes in-
care services. The cost is curred by selling those assets can
greater than that of a standard be ofset by tax breaks on medical
nursing home stay, which Gen- AVERAGE DAILY COST expenses. Currently, for people
Worth says averages $6,600 a
month for a semi-private room.
In return, you get lower staf-to-
$220 OF A NURSING HOME
SEMI-PRIVATE ROOM
who are 65 or older, health care
costs above 7.5% of their adjusted
gross income are deductible, vs.
patient ratios than traditional 10% for younger taxpayers.
nursing home units, and greater attention paid to regular Whitenack recommends applying for Medicaid on your
routines and other measures designed to keep residents loved ones behalf once he is down to about $50,000 in assets
calm and reassured. People with dementia do much better enough to pay for care for about the next six monthssince
when they have care thats tailored to them, says Ruth it can take a few months for Medicaid to determine whether
Drew of the Alzheimers Association. a dementia suferer qualies. Youll need to gather ve years

88 m o n e y. c o m DECEMBER 2015 Additional reporting by Alexandra Mondalek

 C o p i n g w i t h AG I N G S
COSTLIEST CHALLENGE

equity stake to 35%

and diversify by adding
international stocks.
Dick should also be
diversifying into bond
funds or multiple
municipal and corporate
bonds. Those moves will
help protect money he
can use to put Helen
in an assisted-living
facility or a nursing
home with memory
care. If that money runs
out, he can apply for
Medicaid on her behalf.
Protect himself. Dick
might one day need care
for himself, says McClan-
ahan, so he should
formalize his own wishes.
Dick and Helens children
from previous marriages
think the couple should
move to assisted living
now, but Dick has pushed
back. We live on a
beautiful lake. Life is still
pretty good right now,
he says. I am not ready
to give this up yet.

income, so one option is to liquidate investments and buy

Life is still pretty good what is known as a Medicaid-compliant annuity. Its similar
right now. I am not ready to an immediate annuity: You put a lump sum in and get a
stream of income. The downsides: It cant be cancelled,
to give this up yet. youll get lower payments than youd get from a traditional
DICK PELL annuity, and if you die, your heirs get nothing. Work with an
elder-law attorney to buy one, because rules vary by state.
Caring for someone with dementia is emotionally exhaust-
worth of nancial documents, le the application in person, ing and nancially draining, but it comes with one particular
and give Medicaid time to review the paperwork. satisfaction: knowing that youve done whatever you can to
make the last years easier for someone you love. The likeli-
PLAN FOR YOUR OWN FUTURE hood is that Helen will outlive me, says Dick Pell. I want to
Are you the spouse of a dementia patient going on Medicaid? make sure I am doing everything I can to protect her.
You have to think ahead. If your spouse is to qualify for
Medicaid, youre allowed no more than $119,200 in assets, MORE ONLINE
including any IRAs and 401(k)s but excluding a primary Watch video and see more photos of the families in this story,
residence or car. You, the spouse, have no limits on your and get additional resources at [Link]/dementia.

SHARE YOUR CARE STORY: drosato@[Link] DECEMBER 2015 m o n e y. c o m 89

 THE NUMBERS

STOCKS
& FUNDS
BIGGEST MUTUAL FUNDS BY CATEGORY TOTAL RETURN EXPENSES
(AS % OF
ONE THREE ASSETS)
CATEGORY YEAR YEARS1

LARGE-CAP STOCKS
Fidelity Contrafund (FCNTX) 11.3% 17.5% 0.64
American Funds Growth Fund of America (AGTHX) 8.7 17.2 0.66
Dodge & Cox Stock (DODGX) 3.6 16.8 0.52

Expect a Modest American Funds Investment Co. of America (AIVSX)

American Funds Wash. Mutual Investors (AWSHX)
MIDCAP
3.1
5.4
15.5
14.8
0.59
0.58

Santa Rally Fidelity Low-Priced Stock (FLPSX)

Vanguard Mid-Cap Index (VIMAX)
Fidelity Spartan Extended Market Index (FSEVX)
5.3
6.1
3.8
15.6
17.6
15.9
0.79
0.09
0.07
HISTORICALLY, stocks gain 3% in the last two months of the Vanguard Extended Market Index (VEXAX) 3.7 16.1 0.10
Columbia Acorn (ACRNX) 2.9 12.1 0.79
year, called the Santa rally. But lower your expectations this
SMALL-CAP
year. Why? The S&P 500 surged 11% in the month ended
Vanguard Small-Cap Index (VSMAX) 3.7 15.8 0.09
Oct. 28. When stocks have risen that much in October, Vanguard Explorer (VEXRX) 1.9 15.9 0.36
theyve returned just 1.9% in November and December. T. Rowe Price Small-Cap Value (PRSVX) 2.5 11.6 0.96
Vanguard Small-Cap Value Index Fund (VSIAX) 4.1 16.4 0.09
Vanguard Small-Cap Growth Index (VSGAX) 3.1 14.6 0.09
S&P 500 RATIOS
BALANCED
P/E DIVIDEND YIELD Vanguard Wellington (VWENX) 4.9 10.8 0.18
American Funds American Balanced (ABALX) 6.0 11.7 0.59
Fidelity Balanced (FBALX) 4.3 11.1 0.56
20.0 2.4% Fidelity Puritan Fund (FPURX) 5.3 11.5 0.56
CURRENT Vanguard STAR Fund (VGSTX) 3.8 9.7 0.34
2.3 INTERNATIONAL
19.0 19.2
Vanguard Total International Stock Index (VGTSX) 2.5 5.4 0.22
ONE-
YEAR 2.2 Harbor International (HAINX) 0.2 5.9 0.75
RANGE ONE- American Funds EuroPacific Growth (AEPGX) 2.7 8.5 0.83
18.0 CURRENT YEAR Vanguard International Growth Fund (VWILX) 0.6 7.8 0.34
2.1 RANGE
2.12 T. Rowe Price International Stock Fund (PRITX) 1.0 6.8 0.83

17.0 EMERGING MARKETS

2.0 American Funds New World (NEWFX) 6.5 2.5 1.03
T. Rowe Price Emerging Markets Stock (PRMSX) 9.5 1.2 1.24
16.0 1.9 Vanguard Emerging Markets Stock Index (VEMAX) 12.1 2.1 0.15
Fidelity Emerging Markets (FEMKX) 7.6 1.8 1.07
Russell Emerging Markets (REMSX) 13.2 2.3 1.51

BENCHMARKS U.S. GOVERNMENT BONDS

TOTAL RETURN
Fidelity Government Income (FGOVX) 1.9 1.4 0.45
ONE ONE THREE
INDEX MONTH YEAR YEARS1 American Funds U.S. Government Securities (AMUSX) 2.4 1.3 0.64
S&P 500 11.2% 7.5% 16.4% MFS Government Securities (MFGSX) 1.5 0.9 0.88
Nasdaq2 12.1 11.6 19.5 Sit U.S. Government Securities (SNGVX) 1.6 0.5 0.80
Russell 2000 8.2 3.9 14.7 J.P. Morgan Government Bond (OGGAX) 2.0 1.1 0.75
Morgan Stanley EAFE 8.5 1.5 8.1 INVESTMENT-GRADE
Dow Jones industrial average 11.2 7.1 13.4 Vanguard Total Bond Market Index (VBTLX) 1.9 1.7 0.07
Barclays U.S. aggregate bond index 0.4 2.0 1.8 Vanguard Total Bond Market II Index (VTBIX) 1.8 1.6 0.10
SECTOR Dodge & Cox Income (DODIX) 0.6 2.3 0.44
Basic materials 16.0 3.6 9.9 Vanguard Short-Term Investment-Grade (VFSUX) 1.3 1.6 0.10
Information technology 13.9 14.5 19.0 T. Rowe Price New Income (PRCIX) 1.4 1.6 0.59
Energy 13.0 18.6 0.3
Industrials 11.9 2.7 16.9 HIGH YIELD
Health care 11.3 10.3 23.1 Vanguard High-Yield Corporate (VWEAX) 1.2 4.5 0.13
Consumer discretionary 11.1 21.9 22.6 American Funds American High-Income Trust (AHITX) 4.4 2.2 0.66
Financials 10.0 6.7 17.9 Fidelity Capital & Income (FAGIX) 1.5 6.9 0.72
Consumer staples 8.1 11.8 15.6 Fidelity High Income (SPHIX) 2.3 3.2 0.72
Telecom services 7.8 1.7 4.9 Northern High Yield Fixed Income (NHFIX) 1.4 4.3 0.81
Utilities 3.0 1.4 10.3 TAX-EXEMPT
Vanguard Intermediate-Term Tax-Exempt (VWIUX) 2.4 2.7 0.12
Fidelity Municipal Money Market (FTEXX) 0.0 0.0 0.40
NOTES AND SOURCES: Stock index data as of Oct. 28 from Lipper, New York; 877-955-4773.
Sector returns from Bloomberg. Bond index data from Barclays. Monthly S&P 500 ratios Vanguard Limited-Term Tax-Exempt (VMLUX) 1.1 1.2 0.12
are from Standard & Poors as of Oct. 30. P/E ratios are based on previous four quarters of Vanguard Tax-Exempt Money Market (VMSXX) 0.0 0.0 0.16
operating earnings. Biggest funds ranked by total net assets. 1Annualized. 2Price change only.
Vanguard Short-Term Tax-Exempt (VWSUX) 0.5 0.7 0.12

90 m o n e y. c o m DECEMBER 2015
 ADVERTISEMENT FRANCHISING

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 THE NUMBERS

MONEY 50

TOTAL RETURN EXPENSES PHONE

Stocks Enjoy an
(AS % OF NUMBER
ONE THREE ASSETS) (800)
FUND (TICKER) YEAR YEARS 1

Epic Rebound
AS CENTRAL BANKERS REASSURE INVESTORS,
EQUITY FUNDS IN THE MONEY 50 GET A LIFT.

AFTER TEETERING on the brink of a bear market, global

equities bounced back in a big way in the four weeks ended
Oct. 28. Most of the stock portfolios in our recommended
list of mutual and exchange-traded funds saw what
amounts to a years worth of gains in a month. Vanguard
International Growth, for instance, was up 12.3%.
Chalk up some of that stellar performance to strong
earnings, led by tech titans Apple and Google. Central
banks around the world also played a big role. The Peoples
Bank of China cut interest rates and reduced the amount
of cash banks need to hold in hopes of promoting business
activity. At the same time, the European Central Bank
hinted that it is open to more stimulus, while the Federal
Reserve kept short-term rates untouched. TAYLOR TEPPER

HOW TO USE OUR RECOMMENDED LIST

Building-block funds: For broad exposure to core asset classes
Custom funds: Specialized investments that can tilt your strategy
One-decision funds: If you want stocks and bonds in one portfolio

TOTAL RETURN EXPENSES PHONE

(AS % OF NUMBER
ONE ONE THREE ASSETS) (800)
FUND (TICKER) MONTH YEAR YEARS 1

BUILDING-BLOCK FUNDS
Large-Cap
Schwab S&P 500 Index (SWPPX) 11.2% 7.4% 16.3% 0.09 435-4000
Schwab Total Stock Market Index (SWTSX) 10.5 6.7 16.2 0.09 435-4000
Midcap/Small-Cap
iShares Core S&P Mid-Cap (IJH) 7.5 5.4 15.9 0.12 474-2737
iShares Core S&P Small Cap (IJR) 8.4 6.6 16.9 0.12 474-2737
Foreign
Fidelity Spartan International (FSIIX) 9.1 1.0 8.0 0.20 544-8544
Vanguard Total Intl. Stock (VGTSX) 9.3 2.5 5.4 0.22 662-7447
Vanguard FTSE A/W ex-U.S. Small (VFSVX) 6.6 1.2 6.1 0.37 662-7447
Vanguard Emerging Markets (VEIEX) 10.7 12.3 2.3 0.33 662-7447
Specialty
Vanguard REIT Index Investor (VGSIX) 9.0 7.6 12.4 0.26 662-7447
Bond
Vanguard Total Bond Market (VBMFX) 0.3 1.8 1.6 0.20 662-7447
NOTES: As of Oct. 28, 2015. N.A.: Not available. Load funds are included for those
who prefer to use a broker. 1 Annualized. 2 Phone numbers are 866. 3 4.25% sales
load. SOURCES: Lipper, New York, 877-955-4773; the fund companies

92 m o n e y. c o m DECEMBER 2015
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promised, I could never tell what

the boys would use more than once.
So I had low expectations for
the tree swing. My younger son had
played on a friends, and now he
wanted one. The friends swing
was homemade and adorable, but
there was one onlinemade, less
adorably, of blue plastic, but also
less than $20. Okay, I thought, we
have a tree. I ordered it.
When it arrived, I contemplated
tossing it aside, where it would end
up on one of our dreaded to-do lists.
(Update wills, hang swing.) But
the boys were already pretending
to throttle each other with the rope,
so I grabbed the stepladder and
went outside. They watched me
attempt to throw the rope over a
branch, only to have it nally land
ominously close to the tree trunk.
Later, I said, wed move it farther
out and maybe add mulch under-
neath. Of course, we never did.

Getting Into the It didnt matter. The kids loved

it. That night they tried to go out
in their pajamas for one last whirl.

Gift-Giving Swing That was two years ago, and

they still love it. They swing in the
drizzle, under the canopy of leaves.
by Elisabeth C. Browning They swing in winter in coats and
mittens. Sometimes one of them
twirls slowly for an hour with a

I
N THE WEEKS before his eighth birthday, my son would sit at the comic book. We have never gotten
kitchen table compiling his wish list. Oooh, he said, pointing to more use out of a product, ever.
a $100 3D-printer pen that made gurines by extruding molten Not always, not even all that
plastic. Wouldnt that be awesome? He was drawn to the fancy often, the simple things win out.
Hammacher Schlemmer catalogue, and to items with commas in Awesomeness and value are inter-
their prices. I shook my head. As his 11-year-old brother once put it, correctly, twined, for me, in the gift of
You always look at the price. Dad concentrates on the awesomeness. watching my sons on our swing,
Or maybe the kids and I just have diferent ideas. When my sons were tracing three-dimensional shapes
toddlers, everyone told me theyd prefer the holiday wrapping paper to in the air.
the toys inside. I didnt learn that lesson until I had bought a succession
of European-made trucks, puzzles, and nontoxic tea sets. No matter Elisabeth C. Browning is a writer in
how many gold seals from parenting groups or hours of fun the boxes Philadelphia.

96 m o n e y. c o m DECEMBER 2015 Illustration by ga ry m u s g r av e

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