23 August 2018 FT — Articles to Read

23 August 2018


Question: According to MSN: Money, what are the downsides of retirement that nobody talks about?


Trump lashes out at Cohen as prosecutors close on inner circle – Pg. 1

–          …Paul Manafort, the former campaign boss found guilty of tax evasion, bank fraud and hiding foreign bank accounts

–          (Prof Note: Just a comment but, I believe, Mr. Manafort’s personal spending habits were on trial.  I have no conclusion but I will be thinking twice about how I make any luxury purchases (I make very few, if any) in the future.  Are points on a credit card worth the loss of privacy?  I must ponder.)


Manafort faces years in prison after dramatic fall from grace – Pg. 3

–          The jury found Mr Manafort guilty of eight of the 18 charges levied against him by the US government: five counts of tax fraud, one count of hiding foreign bank account and two counts of bank fraud

–          A business law graduate of Georgetown University…

–          …Mr Manafort failed to pay tax on at least $16.5m

–          Next month, Mr Manafort will stand trial again – this time in Washington – as he confronts a separate set of charges…

–          (Prof Note:


Mortgage bond investors warm to retail sector after reversal of ‘big short’ trade – Pg. 17

–          Commercial mortgages of US retail properties are making up an increasing percentage of the loans that are bundled together in bonds for sale to investors, reflecting a thawing of sentiment towards the sector

–          The percentage of retail mortgages in new, so-called conduit commercial mortgage-backed securities, where multiple loans are combined for sale, have risen to 32% since the start of July, after almost two years of weak interest among investors

–          The figure so far this quarter compares with 24% in the second quarter and a low of 22% in the first – and with 24% for 2017 as a whole, …

–          Investors have worried about the ability of shopping mall owners to make mortgage payments and repay loans in an age where ecommerce is taking a toll on traditional retailers

–          Many bricks and mortar retail chains have pulled out of second-tier malls as they cut store numbers and lay off staff

–          The newly issued CMBS appear to include a narrower range of loans from the retail sector, excluding many of the regional malls most reliant on big-name “anchor” tenants to draw shoppers and focusing instead on top-tier properties


Answer: (1) Your net worth becomes meaningless when you retire (Prof Note: What have I been saing???!!!  Passive Income Baby, Passive Income!!!); (2) Taxes can take a big bite out of retirement income; (3) Inflation can impact your retirement income needs  (Prof Note: Did you really need those two Starbucks a week for 20 years?); (4) You might outlive your savings (Prof Note: Passive Income Baby, Not principal); (5) Long-term care costs could wipe out your savings (Prof Note: Look at family history, if possible); (6) You might not be prepared for high healthcare costs; (7) Living on social security alone will be challenging; (8) You might become bored; (9) You may have to keep working (Prof Note: Peter D, “Do what you love and you never work again!”; (10) You might have to move in with your kids (Prof Note: Ask yourself, would you child have rather you paid for their University or be self-sufficient in retirement?); (11) You might feel guilty about spending your savings; (12) You may be forced to withdraw retirement money you don’t need; (13) Moving might be a bad idea; (14) Keeping up with your friends may be harder (Prof Note: Friendships and relationships become more and more important to me as I age.  People are what matter!)