21 September 2018 FT — Articles to Read

21 September 2018


Question: According to MSN, what are four (4) retirement planning misakes you probably don’t even realize you’re making?


Markets at record high as boom in US drives investor confidence – Pg. 1

–          The S&P 500 index climbed 0.8% by midday in New York, led by technology stocks that have powered much of this year’s equity market rally as well as economy-sensitive sectors such as materials and banks

–          The DJIA also rose 1% to hit a new high, …

–          …domestic economy has received a big fillup from the Trump administration’s swingeing tax cuts

–          Investors now believe the US central bank will continue to raise interest rates in 2019, pushing the yield on the 10-year US government bond to a high of 3.09% yesterday, within touching distance of a seven-year high


OECD warns of chilling effect of trade conflicts – Pg. 4

–          The forecasts expect the world economy to grow 3.7% this year and next, a healthy rate compared with the early years of this decade.  Bu the OECD has cut its growth expectations from its May forecast by 0.1% in 2018 and 0.2% in 2019

–          The OECD’s forecast for UK growth was downgraded by 0.1% both this year and next, leaving the projections showing a sluggish 1.3% growth rate this year and 1.2% in 2019

–          The OECD expected jobs growth to remain strong in its largely rich country members


Trump threatens Beijing over global postal rates – Pg. 4

–          Mr Trump has threatened to take action if the Universal Postal Union, a UN body, does not change rules that make it cheaper to ship small items from China to the US than within the US itself.  …forces the US Postal Service to subsidize mail form China and other countries, damaging US retailers

–          If the US does take action, it could prompt other countries to increase the prices the US pays to ship packages internationally

–          The UPU sets terminal dues, which dictate how much national post offices must pay their counterparts for handling international mail.  China is classed among the least developed countries, so it pays only a fraction of what developed country post offices do

–          The USPS lost more than $125m handing inbound mail from across the world in 2016.  While a US business pays $7-$9 to send a 1lb package from Los Angeles to New York using priority mail retail rates, the USPS receives only $2.50 for a similar package originating in
China and travelling the same route

–          Terminal dues, which apply to packages up to 4.4lbs were set before the ecommerce explosion, which has connected US shoppers directly with retailers around the world through sites such as Amazon, Alibaba and Ebay


Answer: (1) Relying too heavily on Social Security (Prof Note: Be realistic early about the lifestyle desired in retirement and plan for it); (2) Assuming your living costs will drop drastically (Prof Note: I talk to a lot of expats on Nevis.  The general theme is that their costs went up in retirement, as their interests increased); (3) Not taking advantage of catch-up contributions; (4) Forgetting about taxes