(PUB) Investing 2016

operations for TIAA-CREF, originally founded by Andrew Carnegie to pro- vide investment options for teachers. Hassara’s article was about lifetime income, but it began with a vignette. She wrote that TIAA-CREF’s CEO sends a bouquet of flowers to every retirement plan participant when he or she turns 100. My initial thought was, “Big deal. What could that be, a dozen a year or so?” Wrong. Hassara says the company sends out 30 to 40 every month! Think about that for a moment, and then con- sider what long really means. To me, it means there’s a distinct possibility that you and I, with a little luck and attention to our health, could easily make it to the triple-digits, something our parents and their parents probably never considered to be anything other than a novelty. It’s no novelty now. So think long- term, and don’t let the market’s machi- nations, and the scare tactics of pundits with pulpits, knock you off your invest- ment course. And Happy NewYear. n

funds. It will be much better to con- tinue relying on the teams running International Growth rather than buying the whole market as offered by Total International Stock Index or World ex-U.S. Index . I do think Vanguard has a winner in its Global Minimum Volatility option, and if markets remain volatile and don’t veer to the upside, this fund should do well. However, as I have cautioned (and Vanguard has confirmed), strong for- eign markets will see Global Minimum Volatility lag. On the bond side, you can pretty much ignore Total International Bond Index . I’d wager it’s seen the best of its days for a while now, relative to the U.S. market. And even with the tailwind of higher yields, the fund, up 1.0%, couldn’t keep up with Intermediate- Term Investment-Grade , one of my favorites in the intermediate-maturity category. Just because foreign bond funds are available doesn’t mean you need to own them. YOU MAY THINK it’s 2016, but for retirement savers, you can still invest like it’s 2015 if you haven’t reached the contribution limits on your retirement savings accounts. I bring this up each newyear because it bears repeating: Tax-deferred accounts such as 401(k)s, 403(b)s and IRAs are unmatched when it comes to saving for retirement, particularly for those who regularly add to their accounts through the markets’ ups and downs. While there’s no definitive retirement spending strategy, I don’t think there’s much to argue about when it comes to saving. One of the best ways to ensure you can live the lifestyle you desire in retirement is to save long and hard, well before you get there. How much is enough? Well, that’s going to depend on your individual situa- tion. Fidelity offers a guideline for retire- ment savings that suggests you need to

Are the “Teens” a Golden Decade?

$1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000

Monthly High Monthly Low

▼ Predicted price

5/10

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5/15

11/10

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Note: Chart shows price per ounce of gold.

Keeping It Long For more than 25 years now, I’ve taken the long view, and recommended that you do the same. “Time in the market,” rather than trying to time the market, has been my watchword. Still, there may be times when you ask your- self, “Just how long is ‘long-term’”? Well, as I was thinking about this, I came upon an article by Teresa Hassara, who runs the institutional retirement

RETIREMENT Contribute the Max for Retirement

Contribution Limits for Retirement Savings Accounts 2015 2016

Notes

IRA

$5,500 $12,500 $53,000 $18,000

$5,500 $12,500

Indexed to inflation Indexed to inflation

SIMPLE IRA SEP IRA*

$53,000 Up to 25% of comp.

401(k), 403(b) & 457 Plans Indexed to inflation *Contribution is the lesser of the percentage allowed or the limits as stated. Check with your accountant for the specifics of your individual situation. $18,000

Catch-Up Limits

2015

2016

Notes

IRA

$1,000 $3,000 $6,000

$1,000 $3,000 $6,000

Indexed to inflation Indexed to inflation Indexed to inflation

SIMPLE IRA

401(k), 403(b) & 457 Plans

Saving is the one thing that is really under your control. Neither you nor I, nor anyone I know, can control the market or the Fed or the economy. And while we’d all like to get a performance boost out of our portfolios, if you are banking on higher market returns to bail your retirement plan out, well, that’s not >

have put away eight times your annual income by the time you hit age 67 to have a shot at 85% of your pre-retirement annual income available to you after you retire. While I can’t vouch for Fidelity’s math, I do agree with the underlying message: When it comes to your retire- ment, the more you can save, the better.

The Independent Adviser for Vanguard Investors • January 2016 • 13

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