TAX CHEATING: (NY Times) tax cheating continues relatively unabated and the numerous crackdowns announced over the past two years by the Internal Revenue Service have had almost no impact. corporate tax cheating in 2000 cost the government $14 billion to $18 billion.

Witnesses will tell how auditors have been driven from their jobs at the big accounting firms for refusing to go along with crooked corporate tax schemes and how some rich individuals were lured into frauds by big accounting firms that sold tax shelters that they promoted as perfectly legal.

About eight of 10 known tax cheats are let go without having to even pay the taxes, interest or penalties.

LONGEVITY: based on actuarial tables, a woman who makes it to age 60 has an average life expectancy of 23 years. But that doesn't mean this woman is sure to die at 83.

What it means is that the woman has a 50-50 chance of living beyond 83, as well as a 50 percent chance of dying before that age.

SOCIAL SECURITY- Beneficiaries will get a 2.1 percent cost-of-living increase, providing an additional $19 a month for the typical retiree. For 2002, the increase was just 1.4 percent.

The latest adjustment will raise the average monthly benefit for a single retiree to $922 from the current $903.

But for many older Americans, the gain will be reduced by a 13.5 percent increase in Medicare premiums that also takes effect next year. Premiums will rise $7.90 a month to $66.60.

MONEY GRUBBER: (WSJ) Starting in October, Schwab quietly changed the way it chooses its list of ''pre-screened'' mutual funds. They are touted on its website as ''funds that meet our rigorous criteria for performance, risk and management.'' Nowadays, only those funds that pay Schwab a big chunk of their expense fees are even considered for the Select List.

But here is the saddest thing- Why should you care? Because, if you own any of the 1,700 mutual funds, you're paying for the Schwab program even if you didn't buy your fund shares through Schwab. That's because mutual funds, once they impose an expense fee, impose it on all shareholders in the same class. Even if you bought the fund directly from the fund company.

DISABILITY: (Census Bureau) In 1998, 17.2 million people or 9.9% had a disability that prevented or limited to work.

GOING UP: Average expenses — the amount taken by the company that runs a fund — had risen from an average 0.73% of a fund's assets in 1979 to 0.94% in 1999. Much of that increase was because of 12b-1 marketing charges, which go for advertising funds and paying brokers to sell them.

FHLMC and FNMA: New conforming loan limits for 2004 have been announced. They are:

MONEY AND HEALTH- Many more American adults with employer-provided health insurance are unhappy with changes to their health insurance than are unhappy with changes to their salary or retirement benefits. Among the survey's key findings are:

Only 17% say that their health insurance has been getting better, whereas 24% say that retirement benefits were getting better and 53% say their salary has improved. Significantly, three times as many say that their salary has improved compared with their health insurance.

Fully 42% of insured employees say that their health insurance has been getting worse compared to only 17% and 24% who feel this way about their pay and retirement benefits.

THIS AIN'T GOING UP: After enduring the lowest pay raises in nearly 30 years, workers should expect only modest hikes in 2004.

Employee pay raises are projected at about 3.6%, according to a September survey of 1,276 companies by human resource consultants Hewitt Associates. Salary increases in 2003 averaged 3.4% and were the smallest in 27 years.

Employers also are becoming more frugal with bonuses and other spot incentives: Company spending on performance-based pay was only about 8.8% of payroll this year, down from 10.8% in 2001, Hewitt found.

• Another survey of 1,160 small firms by the National Federation of Independent Business found only 10% plan to give raises in the next three months.

Here is one major reason- Over the past three years, the amount of the premium employees pay for family coverage has increased about 50%, from $1,619 to $2,412.

MAKES SENSE: As many as one in five of the 2.1 million Americans in jail and prison are seriously mentally ill, far outnumbering the number of mentally ill who are in mental hospitals. The level of illness among the mentally ill being admitted to jail and prison has been growing more severe in the past few years. And it suggests that the percentage of female inmates who are mentally ill is considerably higher than that of male inmates.

Where statistics are available, mentally ill inmates have higher than average disciplinary rates. A study in Washington found that while mentally ill inmates constituted 18.7 of the state's prison population, they accounted for 41 percent of infractions.

NEW ALZHEIMERS DRUG: The Food and Drug Administration has approved Forest Laboratories' memantine and will sell it here under the brand name Namenda, for patients with moderate to severe Alzheimer's symptoms.

Some patients given memantine have experienced improvements in memory and thinking skills. But for the vast majority the drug instead slows the pace of deterioration, letting patients maintain certain functions a little longer. For example, the drug helped some patients maintain the ability to go to the bathroom independently for six more months, a benefit caregivers called very important.

Memantine is the first option for advanced stages of Alzheimer's. The nation's four other Alzheimer's medications -- Aricept, Exelon, Reminyl and Cognex -- work in early stages of the disease.

About 4 million Americans have Alzheimer's, and a million of them are believed to suffer severe symptoms.

FUND SALES: The most recent data available show that 90 percent of the American households that bought fund shares in 2001 purchased them through some sort of intermediary.

MEDICARE DRUG BILL: An analysis concludes that the benefit would consume nearly one-quarter of all federal tax revenue by 2030, compared to 7% today. A major part of that increase is attributable to the impact of the 78 million Baby Boomers who will reach retirement by that time; the rest is the cost of the drug benefit itself.

SAVINGS BONDS: If you cash in Savings Bonds to pay for college tuition, you may qualify for a tax break on interest. Interest on Series EE and I Savings Bonds used for education is exempt from federal taxes if the bonds were issued in 1990 or later, are redeemed in the year the college expenses are paid, and you meet the government's income eligibility requirements.

DON'T COMPLAIN: (NY Times) 1.2 billion people in the world live on less than what $1 a day will buy in America. And 2.8 billion live on less than $2.

Fifty-four countries are poorer, as measured by per capita G.D.P. Sub-Saharan Africa is worst off, with per-capita G.D.P. falling in 20 nations. It fell in 17 nations in Eastern Europe, 6 in Latin America, and 6 in East Asia and the Pacific.

The rate of hunger has increased in 21 nations. The proportion of children who die under the age of 5 has risen in 14 nations. The development index itself, which almost always rises over time, fell in 21 nations. In the 1980's, it declined in only four nations.

Still, some countries, even poor ones, have done well by many measures. China and India stand out, of course. Ghana reduced its hunger rates greatly in the 1990's, and Vietnam's index rose significantly.

Some take solace in the fact that only 23 percent of the global population lives on less than $1 a day, compared with 30 percent in 1990. But most of this improvement has to do with the stunning economic progress in China, a nation that conspicuously did not follow Western economic policies. In absolute numbers, more people are now extremely poor than in 1990 if China is excluded.

What has gone wrong? Aside from generally slow growth, the spread of AIDS has been a tragic setback, reducing longevity significantly in many African nations. The collapse of Soviet-style economies is still extracting a heavy price.

What is becoming increasingly clear is that advanced nations with highly educated populations and sophisticated technologies have an inherent advantage because they can exploit still more educated workers and newer technologies in ways that poorer nations cannot. And the gap between rich and poor keeps widening.

LTC: Certain nursing homes and services that have a growing private pay patient load may cut their losses- or even make money- by having empty beds rather than staff and resource for underpaid beds.

Last year a major LTC entity reported on the growing nursing home trend of cost shifting Medicaid patient costs to the private pay patients because their particular state had maxed out their Medicaid budget and the Medicaid daily payment level was not enough to sustain the cost of care, creating cash shortfalls for the providers. Others evicted Medicaid patients to make room for more private pay patients. The law does allow nursing home to maintain Medicaid/Medicare certification under certain bed reductions.

THE FUNDAMENTALS OF INVESTING HAVE NEVER TAUGHT TO ARBITRATORS: Here are the issues now being offered by the NASD- It is offering several half-day and one-day seminars during the remainder of 2003. Programs will cover various topics, including Fundamentals of Securities Laws and SRO Rules, Branch Management, Recordkeeping, Compliance Fundamentals: Dealing with Customers, Supervisory Practices, Compliance Fundamentals: Secondary Market Trading, Capital Adequacy Requirements: Rule 15c3-1, Trading with TRACE, and Anti-Money Laundering and more.

Noticeable by the absence are alpha, beta, correlation, standard deviation et al. I have stated directly to the NASD and SEC that attempting to understand mandatory suitability requirements requires an understanding of risk. And you cannot understand that without a complete knowledge of diversification by the numbers. And from there, asset allocation and more.

It reflects one of the many reasons why arbitrations are inherently flawed. The arbitrators know little about securities application.

COLLEGE: (USA TOday) Ohio has closed its prepaid college tuition plan to new investors, becoming the fifth state to shut down its prepaid program because investment returns haven't kept pace with tuition increases. The plan is backed by the state's full faith and credit, so it will fulfill its obligations to families that have invested. But a recent analysis of the plan concluded it may need a state bailout as early as 2014.

West Virginia, Kentucky, Texas and Colorado have also suspended enrollment in their prepaid plans.

"WILLFUL BLINDNESS" is the legal term to describe how people deliberately avert their eyes so as not to be held responsible for a particular action. In political circles, the term "plausible deniability" describes similar behavior. Neither is likely to work as a legal excuse, and both certainly fail on any ethical register.

They have a fiduciary and ethical responsibility to know about the major financial decisions made within a company.

"If they didn't know, they're incompetent," said Nell Minow, editor and co-founder of the Corporate Library, a research firm in Washington that monitors corporate boards. "And if they did know, then they're crooks. By accepting those jobs you are saying, 'I will make it my business to know.' "

"If you choose not to know something, especially if that something is something you should know, you are morally blameworthy,"

Robert P. Lawry, director of the Center for Professional Ethics

SANDWICHED: ( ComPsych Corporation) Workers who care for both children and elderly relatives put in enough caretaking hours to make it a second job. Of the employees who were polled, 8 percent are part of the so-called Sandwich Generation, caring for both children and elders. These individuals reported spending an average of 36 hours per week on caregiving duties. "Two things appear to be increasing: workload and what we call 'care-load,'". "More and more Baby Boomers are caring for elderly relatives as well as children. Add to this the increased pressures at work due to layoffs, and you've got employees in dire need of help. "To maintain morale and productivity for these time-taxed employees, it is important for companies to have a work-life and employee assistance program in place,

VOLATILITY: “The economy is far less volatile during the last 20 years. Economists have put forth three explanations why output growth may have become more stable in the past 20 years. One focuses on the conduct of monetary policy and the accompanying decline in inflation. Prior to the early 1980s, the Federal Reserve relied at times on recessions to rein in inflation. Since then, the Federal Reserve has been proactive in keeping inflation contained. Another explanation is that the U.S. economy simply has enjoyed good fortune in that there have been, for example, fewer tumultuous oil price shocks, which can cause volatility in economic activity. The third explanation suggests that improvements in inventory management are important for understanding the reduction in volatility. That is, while the durable goods sector has experienced a dramatic decline in output volatility in the past two decades, final sales of durable goods have seen only a moderate decline in volatility. Therefore, durable goods inventories—the difference between production and final sales—account for a substantial reduction in output variability in the durable goods sector and in the aggregate

MUTUAL FUND FEES (NY Times) How much did investors pay to stock and bond fund managers in the most recent 12 months? More than $35.2 billion, according to FundExpenses.com, a research firm that analyzes fund costs for institutional clients. That represents 0.86 percent of assets in these funds.

The fees are broken into four groups. The largest is adviser fees, which totaled $21 billion or 0.52 percent of assets. Other fees, including the self-serving 12b-1 charges fund companies use to attract new money, totaled $9.2 billion, or 0.23 percent of assets. Shareholder servicing fees added $5.6 billion, or 0.14 percent, and custodian fees brought in $537 million, or 0.01 percent.

RULES: The Securities and Exchange Commission (SEC) approved rule amendments requiring mutual funds and federally registered investment advisers to: adopt and implement written policies and procedures designed to prevent violations of the securities laws; review these policies and procedures at least annually; and designate a chief compliance officer.

MORE (OR LESS) RETIREMENT: (Employee Benefit Research Institute) In the aggregate, retirees in this country in the year 2030 will be at least $45 billion short of the income they need to cover basic living expenses plus expenses associated with nursing-home or even home health care. From 2020 to 2030 the aggregate deficit will be at least $400 billion.

INTERNATIONAL AGEING: Between 2000 and 2020, Japan will experience an increase of 102% in public financing of long-term care. In comparison, the United Kingdom and the U.S. will experience a 20-21% increase.

ASSET-PROTECTION TRUST. (WSJ) The idea is to put a big chunk of your money in an irrevocable trust. The trust is run by an independent trustee, who may opt to give you payments from time to time. If done correctly, the trust -- which has to be located in a jurisdiction that has passed special laws -- generally can't be touched by creditors if you're sued or file for bankruptcy protection.

Due to the passage of the Sarbanes-Oxley Act, which makes top executives and directors accountable for their company's financial results, more executives are seeking asset-protection trusts.

Most asset protection trusts are located offshore, in locales like the Cook Islands, Nevis and Gibraltar, which have attracted sizable trust business by enacting laws that protect trusts from U.S. creditor claims.

But the number of U.S.-based trusts is now picking up as states change their laws, partly to lure people who are worried about putting their wealth abroad. Alaska, Delaware, Rhode Island, Nevada, and as of this year, Utah, now permit these trusts for both residents and nonresidents.

Rising malpractice insurance rates are a key reason for physicians. In Florida, for example, climbing premiums have spurred many physicians to forgo coverage altogether, and instead use other asset-protection techniques. Marc Singer, a partner at Singer Xenos Wealth Management, Coral Gables, Fla., says that about 60% of his physician clients "go bare" and drop malpractice insurance because of the high cost and limited coverage of policies. That's a big jump from 10 years ago, when only about 20% of his clients practiced without insurance.

A recent survey of individuals with more than $1 million in assets found that 35% had some form of asset-protection plan, compared with just 17% of respondents in 2000. And more than 61% of the respondents who didn't have an asset-protection plan were interested in creating one, up from only 43% in 2000

Domestic asset-protection trusts are controversial, because they haven't yet been tested in court and it is still unclear how well they'll hold up.

Domestic asset-protection trusts also can also be used to ease estate taxes. Because you give your assets to the trust, the funds are out of your estate for estate-tax purposes. However, the trust can't make payments to you on a regular basis, or that would invite the scrutiny of the IRS.

Offshore asset-protection trusts can cost anywhere from $20,000 to $50,000 to set up, plus annual administrative fees of $2,000 to $5,000 and asset-management fees of about 1% on the assets placed in the trust. Domestic asset-protection trusts cost less, running anywhere from $3,000 to $10,000 in attorney's fees, plus asset-management fees of roughly 1%.

Because of the high fees, asset-protection trusts generally don't make sense unless you're willing to put at least $1 million in them.

RETIREMENT: There appears to be an emerging generation gap in retirement savings, and it doesn’t bode well for younger workers. The 2003 Transamerica Small Business Retirement Survey found that retirement plan participation among Gen Xers decreased significantly over the past year, dropping from 69% in 2002 to 59% in 2003, even though Baby Boomers increased their participation rates from 71% to 77%. Ironically, twice as many Gen Xers as Baby Boomers claim to have begun retirement savings before age 25 (71% vs. 30%).

CHANGING MEDICAL: With health insurance premiums rising rapidly, employers have shifted costs to workers, including charging them more for hospital care. For example, in 1999, only 17% of HMO plans had a separate co-payment for hospital care. Last year, 24% did.

The amounts workers pay have also risen. Small employers charged an average deductible of $250 for hospital care in 1997, an amount that doubled to $500 last year. In family coverage, the deductible went from $500 in 1997 to $1,000.

MEDIATION: I have a client that is setting up a mediation in Phoenix. I have had conversations with the NASD that the results of mediation were fairly successful. But when the client talked to their New York office, she was told that 90% of mediation requests are never even responded to by the brokerage firms. I also scheduled an arbitration just in case and I am sure glad I did since, with statistics like that, mediation has got to be a big joke on the consumer

GST: The Generation Skipping Transfer Tax exemption will increase to $1.5 million in 2004.

IRS RELEASES 2004 TAX TABLES (Tax facts) The tables will affect 2004 federal income tax returns that are filed in 2005. The tax tables include the income levels at which the 10%, 15%, 25%, 28%, and 33% marginal rates and the 35% surtax will apply for 2004. (As a result of 2003 legislation, the 10% rates are now being adjusted for inflation beginning in 2004.)

The 10% rate applies to taxable income up to the following amounts: Married filing jointly (and surviving spouses) - $14,300; heads of households - $10,200; single and married filing separately - $7,150. The 10% rate does not apply to estates and trusts.

The 15% marginal rate begins for income exceeding the following amounts: Married filing jointly (and surviving spouses) - $14,300; heads of households - $10,200; single and married filing separately - $7,150. The 15% rate applies to the first $1,950 of taxable income for estates and trusts.

The 25% marginal rate begins for income exceeding the following amounts: Married filing jointly (and surviving spouses) - $58,100; heads of households - $38,900; single - $29,050; married filing separately - $29,050; estates and trusts - $1,950.

The 28% marginal rate is effective for income exceeding the following amounts: Married filing jointly (and surviving spouses) - $117,250; heads of households - $100,500: single - $70,350; married filing separately - $58,625; estates and trusts - $4,600.

The 33% marginal rate is effective for income over the following amounts: Married filing jointly (and surviving spouses) - $178,650; heads of households - $162,700; single - $146,750; married filing separately - $89,325; estates and trusts - $7,000.

The 35% surtax is effective for income over the following amounts: Married filing jointly (and surviving spouses), heads of households, and single - $319,100; married filing separately - $159,550; estates and trusts - $9,550.

Standard deduction: The standard deduction for 2004 has been increased to $9,700 for married individuals filing jointly and surviving spouses, $7,150 for heads of households, $4,850 for single individuals, and $4,850 for married individuals filing separately. The additional standard deduction for elderly or blind individuals who are single (and not filing as a surviving spouse) increases to $1,200, while the additional standard deduction for married elderly or blind individuals remains at $950.

The standard deduction for an individual who may be claimed as a dependent of another is the greater of (1) $800; or (2) the amount of the individual’s earned income plus $250, up to $4,850. Because the standard deduction amount for a child who may be claimed as a dependent is $800, “net unearned income,” for purposes of the kiddie tax, will generally equal unearned income less the greater of (1) $1,600; or (2) $800 plus certain itemized deductions. Certain parents may elect to include their child’s unearned income over $1,600 on their own return, thus avoiding the necessity of the child filing a return. The election is available in 2004 to parents whose child has gross income of more than $800 and less than $8,000, all of which is from interest and dividends.

Personal exemption: The personal exemption amount for 2004 is $3,100; however, some upper-income taxpayers are subject to an additional phaseout that reduces their exemption amount. The exemption amount is phased out over levels of adjusted gross income beginning at the following amounts: married filing jointly (and surviving spouses) - $214,050 (phaseout completed after $336,550); heads of households - $178,350 (phaseout completed after $300,850); single - $142,700 (phaseout completed after $265,200); married filing separately - $107,025 (phaseout completed after $168,275).

Itemized deductions overall limit: Certain upper-income taxpayers are subject to phaseout of some itemized deductions. For taxable years beginning in 2004, the aggregate of most itemized deductions is reduced, dollar for dollar, by the lesser of (1) 3% of the amount of the individual’s adjusted gross income that exceeds $142,700 ($71,350 in the case of married taxpayers filing separately); or (2) 80% of the amount of itemized deductions. [Rev. Proc. 2003-85, 2003-__ IRB ___. ]

OUTSOURCING: While India and China have long been recognized as centers for U.S. offshore outsourcing, other nations also are hustling to tap into this lucrative market. Ghana, South Africa, Israel, Russia and several Eastern European countries all are vying for jobs and money in the sector.

BOOMERS: Boomers were most hurt by the bear market because they had so much invested in equities. Their losses are enough to cause them to postpone expected retirements to age 67 from about age 60 before the onset of the bear market.

HEDGE FUNDS (NY Times) I do not use these. The returns are too unpredictable and the risk too high. A study suggests that, on average, hedge funds may perform worse than mutual funds.

Previous studies have overstated average hedge fund returns because of several deficiencies in hedge fund performance databases.

A Reality Check on Hedge Fund Returns," by Pieter Jelle van der Sluis, an assistant professor of finance at the Free University of Amsterdam, and Nolke Posthuma, vice president for research at ABP Investments.

Databases for hedge fund performance are misleading because participation in them is voluntary. Each hedge fund decides whether to provide its performance data. Because young hedge funds have too little data to interest those databases' customers, the managers of these new funds often wait several years before starting to report their track records. If their records over those initial years turn out to be poor, they may choose not to report at all.

That wouldn't necessarily create a bias, however, if the databases recorded a hedge fund's returns only after it began reporting performance. But at major databases, that has not been the case. When adding a hedge fund, they also include its historical returns. Because that process, known as backfilling, excludes the poor returns of funds that choose not to report, it paints an overly optimistic portrait of the average hedge fund's performance

Once backfilled returns were eliminated, they found, the average annual return of hedge funds from 1996 through 2002 dropped to 6.4 percent from 10.7 percent.

But even the 6.4 percent figure is upwardly biased, the researchers said, because hedge funds typically do not report their returns over the last few months before they go out of business, during which their returns may be dismal. For example, the record of Long Term Capital Management in the TASS database ends in October 1997, nearly a year before its collapse.

The researchers were unable to measure the magnitude of this second type of bias. Professor van der Sluis and Mr. Posthuma came up with an estimate, however, by assuming that the net asset value of a fund that is closing shop declines 50 percent in the month it stops reporting to the databases. On that assumption, average hedge fund returns from 1996 through 2002 dropped to almost nothing - just 0.1 percent a year, annualized.

That is far worse than the performance of the average mutual fund. According to Lipper Inc., the average annual return of a domestic equity fund over that period was 4.9 percent; for domestic bond funds, it was 6.1 percent.

OVERSEAS NURSES: For more than three decades, American hospitals, periodically short of skilled nurses, have aggressively recruited nurses from the Philippines, sometimes enticing them with bonuses of thousands of dollars. They prize Filipino nurses for their English-language skills and their education in public and professional schools that are modeled on American counterparts.

The hospitals also value the nurses for their work ethic, their loyalty to employers and a tenderness that seems to stem from a culture where people insist on caring for their own aging or sick relatives.

INSURANCE: less than one policy in ten survives the period for which it is written;

- and, only 1% of all term life insurance ever manifests itself in a death claim!

The average male life expectancy is age 84, yet the average group life insurance walks out the door at age 70!

PROPERTY INSURANCE- 75% of all homes nationwide are undervalued for insurance purposes by an average of 35%

STOCK PICKING: Vanguard analysed the performance of 420 US balanced mutual funds that operated in the period between 1962 and 2001. Balanced funds were defined as those with average long-run allocations to both bonds and equities of more than 20 per cent. Only funds with five years of return history were included. The actual performance of the funds was compared with a model portfolio - what the fund manager would have achieved if he or she had simply recreated the chosen asset allocation with index funds.

Vanguard found that, on average, more than 100 per cent of the long-term return of funds was attributable to asset allocation. In other words, the costs incurred in operating the fund were greater than the skills the managers displayed in either market timing or security selection.

Furthermore, the volatility of the model portfolio was only 86.6 per cent of the average fund. In other words, not only does a model portfolio achieve a higher return than most fund managers, it does so with lower risk.

Vanguard found that 7 per cent of the funds in its sample consistently outperformed the model portfolios, while 41 per cent consistently underperformed. On average, the funds that regularly outperformed had lower expenses and lower portfolio turnover than the underperforming funds.

Indeed, the funds with the highest costs produced a performance that fell short of the model portfolio by around a third (eg the model earned 15 per cent a year and the high-cost funds 10 per cent).

MICROSOFT EMPLOYEES SUE MERRILL LYNCH- The suit alleges that Merrill Lynch failed to recommend to its Unlimited Advantage account holders, hedging strategies to protect their concentrated position in Microsoft as a result of their exercise of Microsoft Employee Stock Options through the use of margin. The suit contends that Merrill Lynch owed these fee-based account holders a continuous and ongoing fiduciary duty to manage and provide advice beyond the exercise and initial deposit of Microsoft stock obtained through Microsoft's Employee Stock Option Plan. Merrill Lynch represents, through its advertisements and solicitations, that investors with large holdings in a single company need strategies to reduce risk and volatility, as well as strategies for diversification and liquidity. Merrill Lynch promotes that it helps customers develop a customized plan that uses hedging strategies, diversification and manages downside risk and taxes. However, Merrill Lynch failed to implement these services when advising Microsoft's stock option participants. As such, the suit focuses on the firm's mismanagement of their clients' portfolios given the fact that at the time of exercise, there existed option strategies that would have protected the value of the margined, concentrated portfolios, known as a "zero cost" collar.

OLD?:- older people now make up 12 percent of the nation's workers, up from 10.2 percent in 2000.

Since March 2001, when the last recession began, the percentage of working people in the population of 55- to 64-year-olds has steadily risen, reaching a peak of 60 percent in the spring, or 16.4 million men and women, up from 58.1 percent and 14.5 million workers. While that gain appears to have tapered off this summer, the older workers were still the only age group to improve their lot in the recession and jobless recovery.

the average weekly wage of the 55- to 64-year-olds, adjusted for inflation, reached $673 by the end of last year, up 4.5 percent from the $644 in 2000. That is a faster pace than the wage gains of any other age group, according to the Economic Policy Institute, which analyzed the bureau's wage data. Only the 25- to 34-year-olds, earning $590 in 2002, came close, increasing their average wage by 2.7 percent over the same period.

EDUCATIONAL ATTAINMENT: The educational level of the older population is increasing. Between 1970 and 2002, the percentage who had completed high school rose from 28% to 70% About 17% in 2002 had a bachelor's degree or more

PERCEPTION: (NY Times) research on affective forecasting suggests that people may have little ability to anticipate their adaptation beyond the early stages.'' Loewenstein, along with his collaborator Dr. Peter Ubel, has done a great deal of work showing that nonpatients overestimate the displeasure of living with the loss of a limb, for instance, or paraplegia. To use affective forecasting to prove that people adapt to serious physical challenges far better and will be happier than they imagine, Loewenstein says, could prove invaluable.

DEPRESSION: - If you have depression after surgery, the odds of dying go way up. People with moderate to severe depression at surgery were more than twice as likely to die after a major operation than non depressed people. Sustained mild depression doubles death risk. MORE 401(K) The Profit Sharing/401k Council of America found that 51.9 percent1 of company respondents provide investment advice. Of those that don't, the three most frequently cited reasons that potentially deter employers from making advice available were:

Fiduciary concern about liability for advice that results in a loss, even if the advisor is competent and there is no conflict of interest (cited by 93.1% of respondents)2

Fiduciary concerns about ability to select competent advice provider under ERISA "prudent man" standard (cited by 91.1% of respondents)2

Fiduciary concern about ability to monitor advice provider under ERISA "prudent man" standard (cited by 90.2% of respondents)2

Per U.S. Labor Department's- several salient points answering specific concerns voiced by the plan community about investment advice including the following:

Many employees need investment advice. Many employees are not schooled in complexities of investment management, risk/return strategies, asset allocation and diversification principles yet often have the responsibility for making investment decisions in their 401k plans.

Investment education is an important tool. When the Department of Labor issued Interpretive Bulletin 96-1, it distinguished a variety of investment-related investment education activities from the fiduciary act of providing investment advice, and made clear that designating a person to provide investment advice to participants would not, in and of itself, give rise to liability for losses resulting from the individual participant's investment decisions.

Investment education may not be enough for some employees. Many employees may not wish to assume responsibility for making such decisions and may need professional advice. A plan may pay reasonable expenses in providing such investment advice to the plan's participants.

Employers are not liable for acts of investment advisors. IB 96-1 indicated that in ERISA Section 404(c) plans, the person designated to provide investment advice would not be liable for loss that is directly the result of the participant's exercise of control. As with any selection of a service provider, however, the plan fiduciary is still responsible for the prudent selection and periodic monitoring of the designated advisor.

Prudent selection of an investment advisor limits the employer's liability. The rules applying to the prudent selection of one or more investment advisors for plan participants are similar to those applying to selecting any plan service provider. Responsible plan fiduciaries must engage in an objective process to elicit information necessary to assess the provider's qualifications, quality of services offered and reasonableness of fees charged for the service. The process also should be designed to avoid self dealing, conflicts of interest or other improper influence.

TERM INSURANCE: - Studies show only 2 to 3 % of all death claims are paid from temporary insurance. But what’s the point?

CORPORATE KEY EXECUTIVE INSURANCE: In the past, corporations paid the premiums on the insurance and the policies grew in value with minimal taxes for the executive. Now, executives will have to pay significantly more tax or, in some cases, tax and interest.

Previously, when executives retired, they repaid the premiums to the corporation from the cash that had accumulated. The policies still had enough cash remaining to pay for premiums for the rest of the executive's life.

Under the new rules, executives, in some cases, will be required to pay taxes on the premiums at a significantly higher rate. In others they will be required to pay the corporation interest on the premiums, as if they were loans. Should the corporation charge interest at below-market rates, the executive will be required to pay tax on the difference between the market rate and the actual interest paid.

These policies are often called split-dollar policies because on paper the corporations and their executives split the benefits. That is, the corporation provides a benefit for which it is reimbursed, and the executive gets free life insurance.

401(K) CASH OUTS UPON JOB CHANGES: While cash-outs were highest among workers ages 20 to 29, about a third of job changers ages 50 to 59 took their 401(k) distributions in cash.

While the greatest percentage of cash-outs involved plans valued at less than $10,000, 20% of job changers with a balance of between $40,000 and $49,000 opted to take cash and enrich the federal government.

WILLS: (MetLife) Half of Spouses Whose Partners Died Within the Last Five Years Still Have No Will. A recent survey by MetLife of widows and widowers who experienced the premature death of their spouse within the last five years revealed disturbing statistics on the financial preparedness of American families. Nearly half (46%) of deceased spouses did not have a will, and, more surprisingly, almost half (48%) of the survivors still have no will in place

SCHWAB SHOWS YOU HOW TO BEAT THE MARKET. Guaranteed! Schwab's computer-driven model divides about 3,500 stocks into five categories rated A (most likely to succeed) through F (poorest prospects).

The system, which premiered in May 2002, performed as expected during its first year. Although stocks in all five categories were down on average, stocks rated A and B declined about half as much as the broad market, while D-rated stocks fell twice as much and F-rated stocks were down three times as much.

The new system won accolades when Schwab revealed those first-year results in May 2003.

From May 6, 2002 through Oct. 20, 2003, Schwab's F-rated stocks have done the best, with an average return of 30.09 percent.

Stocks rated C and B were next, with an identical 23.3 percent average increase.

Jon Chambers, a principal with Schultz Collins Lawson Chambers in San Francisco, says the results suggest that Schwab's approach "doesn't really work. It shows you how hard it is to come up with a system for beating the market."