LTC: 59% of boomers think others should prepare for the possibility of needing long term care by buying insurance, but only 35% expect to make LTC insurance part of their own preparations.

About 54% of the participants said they would protect themselves from LTC costs by maintaining a healthy lifestyle, and 39% said they would try to prepare for LTC costs by saving more money for retirement.

About 40% of those surveyed estimated that the average 65 year-old has a 60% chance of needing long term care for 3 months or more at some time, but only 30% of the participants said they themselves run the same risk of needing long term care.

About 49% of the participants said, incorrectly, that they could use Medicare or health insurance to pay for long term care.

EFM- A decade ago I could understand that 50% or so of the elderly might say that Medicare would cover for LTC. But at this point, to have 50% STILL say that, is indicative of the knowledge base of our populace. Or to put it another way- they do not read. They do not think.

And they were not poor- The researchers drew on a survey of about 1,000 U.S. residents ages 50 to 70, with household incomes of at least $75,000 or total household financial assets, excluding real estate, greater than $250,000.

The supply of long-term elder-care workers, traditionally drawn from a pool of women 25 to 44, is falling after decades of steady growth. In addition, more of the future elderly will be childless, which will increase total demand for paid caregiving.

According to widely used estimates, about 40% of the nation's 76 million elderly will require chronic custodial long term care services for an average of 2.5 years. The resulting caregiver shortage will increase care costs at a 5% compound annual growth rate.

As an example, the current cost of in-home or nursing home long term care in the New York area — where costs admittedly are among the highest in the nation — is now about $100,000. The cost will rise to $1 million in 2037 under our assumptions.

Many seniors still do not realize that Medicare covers only minimal LTC services. Medicare may cover nursing home rehabilitation for 100 days after a hospital stay but usually permits only 30 days.

It allows only 17 days annually for physical therapy and pays for hospice short visits for six months before expected death

Lots of math teachers have taught this for decades- at least mine did during the fifties. Very simple- though forgotten by just about everybody

Assume you have a number- say .075649231 accurate to the nearest ten or hundredth thousand or whatever. That is akin to the formulas designed by all these derivative folks with ghastly backgrounds in statistics.

Now multiply it by an estimated 83,600 rounded to the nearest hundred thousand (100,000) because of all the inconsistencies in its precision. That represents all the suppositions about what humans will do or do not do. It’s a nebulous subjective number rounded to even something more unknown.

What is the accuracy of the final number (7,564.9231)? Looks spectacular in its detail. But it is obviously not very valid at all since the worst part of the rounding is what reflects the final outcome.

And that is simply what happened. Great technical minds thought the second number was as perfect as the first and sold it as such. Were they incompetent, arrogant, stupid?

And that was all previously validated by the demise of Long Term Capital in 1998. 27 PhDs and two Nobel Laureates designed the most perfect strategy to leverage their $6 billion of equity to enormous lengths. Their formulas showed they could not lose more than $37 million no matter what happened. They lost $550 million in one day. Greenspan had to bail out the banking system. But then he goes on to allow LESS overview of derivatives.

So from the subsequent ‘brilliant’ minds came their brilliant formulas and their brilliant computers doing billions of brilliant calculations with synthetic derivatives - but couldn’t figure out that they were not even as ‘bright’ as the LTC braintrust. They rounded their limited ability and then rounded it again and then rounded it again and then........................ They rounded the higher prices of homes, then rounded them again, then.................... They rounded the bad loans and then rounded them again and then..............................

The end numbers had a huge underlying risk- but they sure looked good since they came out of a computer.

M.I.T. Computer Professor Joseph Weizenbaum had this very notable comment- “we have a ‘new computer generation as "bright young men of disheveled appearance [playing out] megalomaniacal fantasies of omnipotence." “...... they have no sense of limits. The assertion that all human knowledge is encodable in streams of zeros and ones--philosophically, that's very hard to swallow. In effect, the whole world is made to seem computable. This generates a kind of tunnel vision, where the only problems that seem legitimate are problems that can be put on a computer. There is a whole world of real problems, of human problems, which is essentially ignored."

So here we are today. And unless Obama’s economic choices understand what they learned in grade school, we won’t get better for a very long time.

Personally, I think we are in for a very long, rotten economic period before they ‘get it.’ (That is not a reflection against Obama- same thing was going to be said about McCain’s picks). Whenever we do get out, we have to face the budget deficits of Medicare and Social Security- also brought to their knees by the ‘brilliant’ computer minds and a bunch of politicians, et al, that forgot about their fifth grade math. Absolute gross incompetence and ego.

RICK FERRI ON "FINANCIAL PLANNERS AND INVESTMENT ADVISERS" I have this conversation with many people who claim to be 'financial planners' but are really asset gatherers change investment management fees based on assets under management (AUM). You cannot have it both ways. Either you are going to give unbiased investment 'advice', or you are going to be an investment manager. Unbiased advice means recommending other investment managers. It is very rare that a financial planners whose goal it is to manage money will ever recommend another investment advisor even if another advisor is clearly in the best interest of the client.

LIFE INSURANCE: The premium finance market has not been left unscathed by the correction, as lenders suddenly find that the value of their collateral (e.g., the policies) may be impaired. Policies financed using the shorter 21st Services Life Expectancy reports (or some blended approach) now may have insufficient value to cover the repayment of a loan when it comes due, meaning a loss for the lenders.

The market for premium financed life policies has experienced massive disruption:

1. Large blocks of premium financed life settlements are overwhelming the market. Visible supply runs from $15 to $20 billion, in our estimate.

2. Many life settlement funders are out of funds or are declining to bid on premium financed policies.

3. In addition, numerous litigations brought on by AXA, Lincoln, West Coast Life and others against those purportedly violating the public trust may expose those individuals that promote STOLI transactions. The policies that they have manufactured could be held to be worthless, further diminishing the value of policies that do not fit this description. Please, beware of "BS" transactions, better known as "Brooklyn Specials".

4. Some policy owners, who may have put policies into force speculatively using their own cash, based on optimistic projections and outdated life expectancies are now seeking to recover at least their premiums already paid. These same policy owners may have been mislead into these transactions are now starting recovery litigation against their advisors. Many producers will have to face their responsibility and answer to their clients.

5. Some insurance carriers are aggressively pursuing rescission of existing policies that are suspected of being investor owned. Many other carriers are aware of what's going on in the life insurance business and are planning their own actions.

6. Thorny tax issues have arisen for some policy owners and trust grantors that may result in "income from discharge of indebtedness" treatment under §61(a)(3) of the Internal Revenue Code.

Finally, the LE adjustment adversely affects policy owners, who could be left with policies that they are unable to sell or must sell at a much lower price. In addition, depending on the financing program, owners with financed policies may be required to provide additional security to make up for the collateral shortfall caused by the policy’s devaluation. Policy owners that have premium finance loans coming due in the near future may face even more difficulties. The nationwide credit crisis leaves little to no opportunity to refinance these loans, and, as noted, a sale of the policy on the secondary market will likely draw less than previously expected, leaving owners without adequate proceeds to repay the loans. Depending on the financing program, owners may now have unanticipated personal liability or tax exposure from the discharge of their debt. Thus, consumers who thought they were entering into low or no cost transactions may now find that is not the case.

COMFY THOUGHT: if a person lives to be 65, there is a 69 percent chance he or she will need some kind of long-term care.

government data shows that not-for-profit nursing homes have fewer deficiencies and higher staffing ratios. All not-for-profits have boards of directors providing oversight, creating a transparent environment that consumers can examine and scrutinize.

about 13 percent of Americans are over age 65. By 2030, more than 20 percent of Americans will be in that group. By 2050, about 89 million Americans will be over age 65, more than double the number today.

By 2025, the number of centenarians will more than double to 175,000, from fewer than 80,000 now.

By 2035, the number of people ages 85 and over will double to 11.5 million, from about 5 million now.

By 2050, the Census Bureau says, the median age will be 44.6 for non-Hispanic whites, 43.4 for Asians, 38.9 for blacks, and just 31.2 for Hispanics.

LIFE INSURANCE (Barry Flagg) there have been 247 failures of life and health insurers since 1988, averaging more than 12 failures each year over this time, and with a high of 38 failures in 1994 and a low of only 1 failure in both 1988 and again in 1995. So while the number of life and health insurance companies who have failed has been low in recent years, averaging less than 1% per year since 2000, recent events serve as a reminder that diversification should at least be considered in life insurance portfolios.

The average Medicare Part D beneficiary will face a 12% monthly premium increase in 2009. Federal government projections show the cost of standard drug coverage rising $3, to $28 each month. The estimate was based on bids from the private insurance companies administering the plans, and the increase is due largely to higher drug costs and a larger number of prescriptions per person, according to Medicare officials. About 17.4 million people are enrolled in Part D plans offering only prescription drug coverage, while an additional 7.6 million pay for ones with more comprehensive health benefits.

IS IT ALWAYS GOOD?: After the start of the Great Depression in 1929, it took nearly a quarter-century for equity prices to fully recover. Stock prices were also essentially flat between 1966 and 1982

STOCKS: returns grew by an 11% average in the period 1926-1999, in the 5 year period 1972-1977, the stock market lost an average of 0.2% per annum.

AND ANOTHER ONE: John Hancock Financial Services says it has filed requests for rate increases for some of the long term care insurance policies it has originated.

The rate increases would average 14%. Rates on policies Hancock sold in the 1990s would increase 13%, and rates on the Fortis policies would increase 18%.

Hancock says it cannot make an adequate profit on the policies at existing rates because of low policy lapse rates.

The AALTCI recently found when it studied LTC insurance persistency that the product has an average first-year lapse rate of just 7.8%, and a second-year lapse rate of just 4.9%. By the end of 10 years, about 69% of consumers who bought an LTC insurance policy still have their coverage.

In contrast, only 46% of the purchasers of disability insurance policies would have their policies at the end of 10 years, and only 42% of the purchasers of individual life insurance policies would have their policies.

Genworth Financial Inc. cited low lapse rates in July 2007 when it filed for rate increases ranging from 8% to 12% on older LTC policies in all 50 states and the District of Columbia.

Gifts from women topped those from men by almost $5 billion in 2005, the last year for which the IRS includes gender information in its publicly available gift tax return data. That's a reversal from the ratio in the IRS's last study of gender in 1997, when men gave $17.6 billion in gifts and women gave only $14.7 billion. The IRS's most recent quarterly statistics of income bulletin shows that in 2005 female donors reported giving $21.7 billion in gifts, while male donors gave just $16.8 billion.

All the IRS data comes from gift tax returns (Form 709), which taxpayers generally must file if they've given any individual more than the yearly gift tax exemption ($11,000 in 2005). Gifts reported on Form 709 are most often made to heirs and are rarely charitable deductions, which the IRS tracks in other ways.

There is some evidence that women may not be exploiting sophisticated tax planning options, such as trusts, as often as men. The data shows that 26 percent of men make their gifts through trusts, while only 22 percent of women do. Conversely, 78 percent of women use the direct gift method, while 74 percent of men do.

LOTS OF CRAP "AARP says the nation's current financial crisis poses an unprecedented threat to the well-being of older Americans,.

At 63, Marian Rivman was semi-retired with plans to spend the next phase of her life re-living her globe-trotting youth.

Now those plans are on hold, after the stock market's nosedive put a huge dent in her retirement savings - Rivman estimates she's lost around 20 percent from its height. (And this was about two months ago)

Now she's back in the workforce, reprising her old job as a marketing specialist.

Like millions of baby boomers ages 55 to 65 who are on the brink of retirement, Rivman doesn't have years to recoup the losses to her retirement assets. According to the AARP, older Americans are the most vulnerable investors in these troubled times.

"People who are starting to retire are starting to panic," said Bill Losey, a certified financial planner and author of "Retire in a Weekend."(Oy!!!) "The number one fear of American retirees is 'Will I outlive my money.' "

Losey is trying to convince jittery retired clients not to cash out of the market. The AARP says some Americans 45 years and older are already raiding 401(k)s or curtailing contributions to pension plans.

"The last thing you want to have to do is pull from your investment portfolio - your stocks and bonds - when they're going down in value,"

EFM: So what's the problem? You pull out money based on risk. But AARP and all its advisors effectively said and say, 'stay the course'. Why? If your ship is headed for an iceberg, do you steer clear or hit the thing and then ask someone on shore what to do next. The iceberg/ minefield was the inverted yield curve. AARP says the elderly were at risk- yet could not find anyone better than Losey to elaborate on the problem?

And once again is the caveat. What do they read? Suze Orman? AARP trivial articles?. Losey?. None knows risk- CFPs included.

There is only one real life book and that was mine. Certainly not perfect. There is not a lot of information about investing or asset allocation that I could impart because one of the most critical items is correlation (how one stock or funds reacts to another). The interpretation for that could fill several books- but they would all be out of date at the time of issue because you cannot know the numbers until at least a year has passed. That said, one can make a viable interpretation to risk- again referencing such as the inverted yield curve (and it is detailed in the book)- and apply proper restraints.

Recognize it is fairly easy to 'invest' when the market is up or at least stable. Maybe you don't need a planner or advisor. However, when times get bad, the public needs something to guide them. But since no broker has been taught the fundamentals of investing, they will not get the advice they need. None of the journalists have a clue. No wonder we are in the current situation when our selected advisors and officials are scampering around like hyperactive gerbils on Speed. Looks impressive but their brains are fried.

I started to get out of equities in late 2006 and was pretty much out by the end of 2007. A few things remain here and there but my clients are not complaining about having a bunch of stuff go down. They just collect money from CDs. Sure I may miss some 'opportunities' by not staying in the market. But the risk is too high and I want to sleep at night. So do they.

ACTIVE MANAGEMENT?" In some parts of the mutual-fund world, the performance of actively managed funds compared with indexes has been nothing short of abysmal. In the 12 months ended Sept. 30, roughly nine of every 10 actively managed midcap stock funds failed to beat the Standard & Poor's MidCap 400 Index, according to fund tracker Morningstar. During that time, the average midcap fund returned a negative 23.2%, versus the index's 16.7% decline.

Among small-cap funds, fewer than one in five has done better than the Russell 2000 Index. In past years, small stocks had been an area where managers fared well; during the bear-market years of 2000-02, roughly 60% of small-cap funds beat the index.

Roughly 39% of large-cap stock funds beat the S&P 500 over the past 12 months. On average, 47% of these funds beat the index from 1998 to 2007.

EFM- you can find some that will outproduce during times but falter badly thereafter and return less overall.

TOO LITTLE, TOO LATE: Single women estimate needing a median amount of $500,000 by the time they reach retirement. However, more than one-third report that they have saved less than $25,000 for retirement, while only one in 10 reports having saved more than $100,000. When asked how they arrived at their estimate, nearly two-thirds of single women admit they guessed the answer, while a mere 6% completed a worksheet or calculation, or received their estimate from a financial advise

Why are married women heavier than single women?

Single women come home, see what's in the fridge and go to bed. Married women come home, see what's in bed and go to the fridge.

SUBPRIME PRIMER - In 1971 Congress created a worthy project with noble intentions the Community Reinvestment Act (CRA). Over strong industry objections, it mandated that all banks meet the credit needs of their entire communities.

1995 saw stronger regulations and performance tests that coerced banks to substantially increase loans to low-income, poverty-area borrowers or face fines or possible restrictions on expansion. These revisions allowed for securitization of CRA loans containing subprime mortgages.

By 1997, bankers started bundling good loans with poor ones and sold them as prime packages to institutions here and abroad. That shifted risk from the loan originators, freeing banks to begin pyramiding and make more of these profitable subprime products.

Fannie Mae and Freddie Mac joined in the "greed fest." By 2003, these "quasi-governmental agencies had $1.5 trillion in outstanding debt and a bill was proposed to "rein" things in.

In 2005, a bill was proposed to "bring some oversight to Fannie and Freddie." Google the words inside the quotation marks if you are curious as to who proposed such a bill and who defeated it.

These subprime products have now permeated the entire world economy. And pretty much destroyed it.

GIFTING- only 13 percent of respondents expect to increase their giving for the remainder of 2008, while nearly a third (29%) admit to decrease their giving. Surprisingly, donors aged 25-34 were more likely to increase their giving in the fall, while those over the age of 65 were more likely to say they are giving less.

WORK,WORK, WORK: 52% of men ages 62 to 64 were employed in March 2008, compared with 43% in 1995 and 42% in 1990. Of men ages 65 to 69, 33% were employed in March 2008, compared with 27% in 1995 and 26% in 1990. The CRS report said that among women 62 to 64 years old, 41% were working in March 2008, compared with 32% in 1995 and 28% in 1990, while among women 65 to 69 years old, 27% were working in March 2008, compared with 17% in 1995 and 1990

BANKRUPTCY: While the bankruptcy filing rate for those under 55 has fallen, it has soared for older Americans.

The older the age group, the worse it got — people 65 and up became more than twice as likely to file during that period, and the filing rate for those 75 and older more than quadrupled.

FAT, FAT, FAT. Based on history, nine out of ten Americans could be overweight or obese within the next 25 years. .

ANNUITIZATION. Of all variable contracts in force from 2002 to 2004, about 0.1% were annuitized each year.

AUTO DONATIONS: For Tax Year 2005, tax law changes altered the deduction rules for some charitable contributions. The most significant change was made to the deduction amount allowable for vehicle donations. In previous years, taxpayers could deduct the fair market value of the automobile. Starting in 2005, the deductible amount for most donated vehicles was changed to the lesser of the fair market value or the gross proceeds from the sale of the vehicle by the donee. The effects of this tax law change are reflected in the data. The number of automobile donations decreased 67.0 percent from about 900.7 thousand in Tax Year 2004, to 297.1 thousand in Tax Year 2005. The amount claimed for these donations declined by 80.6 percent from $2.4 billion in 2004 to $0.5 billion in 2005.

"Borrow and Invest" - an individual can claim benefits and then reclaim at a later date, paying back the money received (without interest) during the interim.

Claim Now, Claim More Later" - a married individual can claim a spousal benefit, and then switch to her own retired worker benefit later.

"Claim and Suspend" - an individual may claim his benefit and then suspend payment, allowing his spouse to claim a spousal benefit.

These strategies were generally designed to encourage work, but are likely to benefit mainly those with substantial resources.

I HAD A CASE SETTLE. What a mess. Two planners split and fought each other tooth and nail over everything- including a non written non competition clause. What is a big joke is that the plaintiff was a CFP in 1997 and let the designation lapse- but kept calling himself one for another eight years. Once the supervisor found out, he did nothing because the guy brought in a bunch of money. Yelling screaming and more.

But here is another kicker- they are being investigated by FINRA for telling people that they could take out any money they wanted under a 72t guideline (how much a retiree can take out without subjecting themselves to the 10% penalty. And on top of that, they sold almost exclusively variable annuities to these retirees. I think they will both be fined as well as the supervisor and the firm.

But why did so many people use them. They initially made hundreds and hundreds of phone calls to Pacific Bell employees and a bunch of them bit. The two made close $1,000,000 in commissions each year.

PERFORMANCE??: Pension funds are paying higher fees than five years ago to outside investment managers, but are not necessarily getting market-beating performance.

Fees now average 110 basis points a year, compared with 65 basis points in 2002. Much of this rise is due to high fees paid to investment managers of alternative assets such as hedge funds, private equity and real estate, as pension funds look for market-beating "alpha" returns.

But pension funds are often not getting value for money. "Investors have naturally assumed that they are paying these fees to reward manager skills, but in many cases they are wrong.

Instead of market-beating performance, many funds have simply got "leveraged beta" performance, where investment managers have geared up their portfolios to boost what are simply market-average returns when markets have been strong.

Worse, many pensions funds have unwittingly paid away much of the excess return they have earned in higher management fees.

Investment management fee agreements, which are generally poorly designed and tipped in managers' favour, should be changed.

"Annual performance fees can amount to a free option for the manager," it said, "as the upside is uncapped, but the downside is limited to the base fee."

An ideal fee structure should have a low base fee, be calculated over three to five years rather than annually and should include hurdles, such as beating Treasury bills by a certain percentage.

REVERSE MORTGAGES: For a 70-year-old homeowner in New York with a house worth $500,000, World Alliance may loan as much as $240,000, with $17,000 in fees, including mortgage insurance. The interest rate for the loan is tied to the monthly London Interbank Offered Rate, or Libor, plus a margin and starts at 1.5%+ currently (over 4% a year ago). The rate may go as high as 13.5 percent during the life of the loan, if interest rates rise substantially.

LIFE EXPECTANCY: (2008) Overall U.S. life expectancy at birth rose to 78.1 years in 2006, up 0.3 years from the 2005 average,

Age-adjusted death rates associated with 11 of the 15 leading causes of death dropped significantly between 2005 and 20006, researchers say.

CDC researchers say life expectancy for men ages 60 to 70 increased by about 0.23 years, and that life expectancy increased 0.1 years for men ages 70 to 100.

Life expectancy increased 0.27 years for women ages 60 to 70, and 0.18 years for women in the 70-100 age group.

Traditionally, women older than 65 have been twice as likely as older men to need nursing home care.

Life expectancy at birth hit a new record high in 2006 of 78.1 years, a 0.3 increase from 2005. Record high life expectancy was recorded for both white males and black males (76 years and 70 years, respectively) as well as for white females and black females (81 years and 76.9 years).

The preliminary number of deaths in the United States in 2006 was 2,425,900, a 22,117 decrease from the 2005 total. With a rapidly growing older population, declines in the number of deaths (as opposed to death rates) are unusual, and the 2006 decline is likely the result of more mild influenza mortality in 2006 compared with 2005.

Between 2005 and 2006, the largest decline in age-adjusted death rates occurred for influenza and pneumonia, with a 12.8 percent decline. Other declines were observed for chronic lower respiratory diseases (6.5 percent), stroke (6.4 percent), heart disease (5.5 percent), diabetes (5.3 percent), hypertension (5 percent), chronic liver disease and cirrhosis (3.3 percent), suicide (2.8 percent), septicemia or blood poisoning (2.7 percent), cancer (1.6 percent) and accidents (1.5 percent).

There were an estimated 12,045 deaths from HIV/AIDS in 2006, and age-adjusted death rates from the disease declined 4.8% from 2005.

The preliminary infant mortality rate for 2006 was 6.7 infant deaths per 1,000 live births, a 2.3 percent decline from the 2005 rate of 6.9.

Alzheimer’s disease passed diabetes to become the sixth leading cause of death in the United States in 2006. An estimated 72,914 Americans died of Alzheimer’s disease in 2006. However, the preliminary age-adjusted death rate from Alzheimer’s did not change significantly between 2005 and 2006.

Over the 63 successive 20-year periods since 1925 to 1945, total returns for common stocks (price change plus dividends) averaged 7.2 percent a year, after inflation; at that rate of return, your real wealth doubles in just nine years. There were no negative returns in any of those 20-year periods, and 15 of them scored total returns that were above 10 percent a year.

Nearly one in five of those 20-year spans produced real, or inflation-adjusted, total returns of less than 3 percent a year. At that rate, you would have to wait 25 years for your money to double.

More important, not all investors can afford to hang on for the long run. Most of us are not university endowments or other kinds of institutional funds designed for perpetuity. In all likelihood, we will have to dip into our capital at some point, often at moments beyond our control — for example, to educate our children, to care for aging parents, to handle medical emergencies or to help finance our retirement.

We will never know in advance whether stock prices will be high or low when we have to sell some of our assets, but we will have no choice. Negative annual returns have occurred about 20 percent of the time since World War II. Unless you can sock your fortune away and forget about it, you are going to live in the tempestuous seasons.

From January 1926 to December 2007, the monthly return from dividends exceeded the monthly return from price appreciation in two of every five months. Over the last 20 years, dividends have provided 39 percent of the total return.

BUT that was the past. Today, the dividend yield is only about 2 percent, compared with the long-run average of more than 4 percent since 1925.

AND THEY ARE ABSOLUTELY RIGHT. The amount of 12(b)-1 fees that shareholders pay through mutual funds rose from a few million dollars in the early 1980s to almost $12 billion in 2006.

Critics, however, contend the primary use of 12(b)-1 fees has shifted from paying for fund marketing, to being used primarily as a sales compensation vehicle.

FROM A FEBRUARY COMMENT. In the major metropolitan regions of the United States, house prices rose 82 percent from the end of the last recession in November 2001 to their peak in June 2006, according to the Standard & Poor’s Case-Shiller home price index. Since the peak, house prices have declined about 10 percent, and most economists expect a further decline of 10 to 15 percent.

In Japan, housing prices in the major metropolitan regions nearly tripled from 1985 to 1991, then proceeded to lose two-thirds of their value over the next 14 years. Today, prices have risen slightly, according to Japanese government statistics. Still, Japanese house prices last year were only slightly higher than the level before the boom, more than two decades ago.

The average woman born in 2006 is likely to live 2.7 years longer than one born in 1992 while men can expect to live 3.8 years longer.

The data show significant improvements in life expectancy both at birth and for those aged 65 of both genders and in all geographical regions of the country. But what is most striking is that life expectancy and improvements in life expectancy are strongest in parts of the country where incomes are highest.

Actuarial studies for years have demonstrated the gap between the wealthiest and poorest members of society, as well as that between men and women. Indeed, it is common for life assurers selling annuities to charge lower prices to people living in postal codes where median income is lower. That is because they are not expected to live as long and the payout period is shorter.

QDIA: The Qualified Default Investment Alternative regs relieve fiduciaries of liability to employees, provided the default investments include a mixture of equities and fixed income. What's acceptable: life-cycle or target-date funds, managed accounts, and balanced funds. What's not acceptable: Stable-value funds, money markets, and other capital preservation vehicles generally don't qualify as QDIAs. However, certain stable-value funds are grandfathered in and will qualify as QDIAs under certain circumstances. In addition, notice requirements must be met, and employees in QDIAs can't be charged any fees for the first 90 days.

The first clarification concerns who's covered under the regs. Under the amendment, fiduciary relief is extended to a committee that is a named fiduciary of the plan and is comprised primarily of employees who manage a QDIA.

The second clarification makes a technical change to the acceptability of stable-value funds as a QDIA option. Accordingly, a stable-value fund will qualify under the grandfather clause as a QDIA if it's invested primarily in investment products that are backed by state or federally regulated financial institutions.

The third clarification concerns statements the DOL made in the introduction to the final regs, which prohibit as fees "round-trip" restrictions. These restrictions limit employees' ability to reinvest within a defined period of time. As clarified, "round-trip" restrictions aren't prohibited fees because they're not assessed directly upon the liquidation of, or transfer from, an investment. Instead, these restrictions generally affect only an employee's ability to reinvest in the QDIA for a limited period of time. Caveat: "Round-trip" restrictions will be considered prohibited fees if they affect an employee's ability to liquidate or transfer from a QDIA, or restrict his/her ability to invest in any other investment alternative available under the plan.

EFM- Only problem is that they underperform during good times and generally fail to provide the needed assets at retirement. Of course all investments are a moot point right now if you stayed in the current debacle and lost over 40%.

The only course on investments ever approved for continuing education by the California State Bar-Practical Investment Theory and Application

Seminars available throughout the U.S. for Law, Arbitration and Mediation firms and Bar Associations