The Factors to Include on Your Retirement Readiness Checklist


A new study is highly critical of the retirement planning tools available online. The authors, including financial planning expert Harold Evensky, called the advice provided from the majority of these tools “extremely misleading.” We discuss the study in the online version of the March AAII Journal, which will be posted on next week. For those who prefer not to wait, the full study can be downloaded from SSRN. The Wall Street Journal also has a good summary article (and is how I heard about the study).

Though the analysis of retirement planning tools is the primary focus of the study, there is something else of value to individual investors in it: the variables to consider when determining how financially prepared one (or a couple) is for retirement. The researchers relied on accepted financial theory and then considered suggestions from 297 financial professionals to determine what additional variables should be included. In total, 36 variables were identified as being important for judging retirement readiness.

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AAII Sentiment Survey

Optimism about the short-term direction of stock prices rose above 30% for the first time since Thanksgiving. Pessimism, meanwhile, fell to its lowest level of 2016. More about this week’s results.

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The Week Ahead

Just 10 members of the S&P 500 will report earnings next week as fourth-quarter earnings season winds down. Included in this group will be Costco Wholesale (COST), on Wednesday, and several other retailers as well as Medtronic (MDT) on Tuesday and Broadcom (AVGO) on Thursday.

It will be a busy week in terms of economic data. Monday will feature the February Chicago PMI and January pending home sales. The February ISM manufacturing index, the February PMI manufacturing index and January construction spending will be released on Tuesday. Wednesday will feature the ADP’s February employment report and the Federal Reserve’s periodic Beige Book. Revised fourth-quarter productivity, January factory orders and the ISM’s February non-manufacturing index will be released on Thursday. Friday will feature February jobs data (including the change in nonfarm payrolls and the unemployment rate), as well as January international trade data.

San Francisco Federal Reserve Bank president John Williams will speak on Wednesday.

March starts on Tuesday, which means we’re getting closer to springtime.

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This month’s AAII Journal features our famed Guide to the Top Mutual Funds. The guide provides in-depth analysis of nearly 1,600 promising no-load and low-load funds. Plus, you’ll learn how to select the best funds for your own portfolio. If you Join AAII Today for only $29, you will get this widely acclaimed guide for free. Barron’s calls it “one of the best [guides] around on the subject.” Start your risk-free AAII membership today to get the Individual Investor’s Guide to the Top Mutual Funds 2016, and to benefit from everything else AAII has to offer.