The Net Gains Blog

Housing law offers tax benefits to many, hurts some

For this week's Net Gains column on ABCNews.com, I reviewed some of the provisions in the recent housing law signed by President Bush. Aside from helping those facing foreclosure, the act contains a number of measures that will affect existing and future homeowners.

Those measures include a deduction on local property taxes and higher loan limits on reverse mortgages. The big losers are owners of second homes who had hoped to escape capital gains tax when selling.

Once again, I fell behind in posting links to other recent Net Gains columns. Here are those I missed:

• Why Everybody (Yes, You Too) Needs a Will / August 5, 2008
• Bernanke's Personal Portfolio Needs an Overhaul / July 29, 2008 (One of my favorites, but it generated much less feedback than I anticipated.)

Make that a million

A July 15th column about retiring into a bear market triggered responses from a couple readers who thought I was out of touch with reality when I used an example of a person retiring with $500,000 in an IRA.

At least a couple readers thought, "Who has $500,000?"

I responded this week outlining why it's not as ridiculous as it sounds and made the point everyone ought to be aiming to save at least that amount before retirement, if not more.

On ABCNews.com: Retirement planning questions

ABC News asked me this week to field questions on retirement planning in response to a story about folks postponing retirement  because of the recent economic and market market turmoil. The story ran Monday night on "World News with Charles Gibson," and at the end, Gibson welcomed viewers to email their questions to a "financial planner on call."

That planner on call was me. Here are the questions and answers.

When the Fed chairman speaks

The Cape Cod Times recently sought my input on how economic news influences individual investors. The article was prompted by Federal Reserve chairman Ben Bernanke's comments during an address in Harwich that many took to mean the Fed could soon be raising interst rates.

The article correctly reported correctly: "Most of McPherson's clients are content to think about the long-term success of their portfolios, he said. They are not, however, totally immune to the psychological effects of market fluctuations, he said.

'If there's a series of bad days on Wall Street,' McPherson said, 'I will hear about it from my clients.' "

Catching up

A heavy workload in recent weeks kept me from updating the latest Net Gains columns on a timely basis. Here are delinquent links to the three latest columns on ABCNews.com:

• A Guide to Surviving a Down Market (July 1, 2008)
• Sell Your Company Stock (June 24, 2008)
• New Savings on Student Loans (June 17, 2008)

Emergency fund ideas

Morningstar's new personal finance editor, Christine Benz, offers some decent ideas in a column about places to find cash when faced with a personal crisis. Suggestions she makes include life-insurance cash values, margin loans and family loans.

Target-date funds catch fire

The money keeps pouring into target-date mutual funds, according to new numbers from Financial Research Corp. as reported by the Wall Street Journal. Target-date funds are meant to make it easier to ensure workers are properly diversified in the Age of the 401(k).

Though some financial planners and investment managers deride them, my belief is the development of target-date funds is a positive thing. They need to be refined further, but they are just what's needed for those with little interest in making investment decisions on a regular basis.

Defend against ID theft with credit freeze

This week's Net Gains turned its attention to the handy credit freeze, which blocks access to your credit history. Placing such a block on your credit files became easier last fall when the three major credit bureaus voluntarily agreed to allow consumers to initiate credit freezes. The move came into response to dozens of state laws mandating the credit bureaus accept such requests as a response to identity theft.

The belief is that fraudsters will not be able to open phony accounts in your name if requests for a credit history are denied.

For more information on how to implement a credit or security freeze, visit FinancialPrivacyNow.org published by Consumers Union.

The Brennan reign at Vanguard

Morningstar reviews the tenure of outgoing Vanguard chairman and CEO Jack Brennan and concludes investors benefited from Brennan's 12-year reign at the low-cost leader of the mutual fund industry. Since Brennan took over in 1996, Vanguard's average expense ratio has fallen from a tiny .32% to an even tinier .20%.

And on the performance side, most Vanguard funds did better than the majority of their peers, according to Morningstar analyst Dan Culloton.

Brennan's toughest task may have been emerging from the shadow of Vanguard's legendary found.

Says Culloton: "The worst thing you can say about Jack Brennan is that he wasn't Jack Bogle. But who is?"

Catching up on Net Gains

This week's Net Gains reviews a warning from the Financial Industry Regulatory Authority about 401(k) debit cards. The "Invest Alert" issued by FINRA suggested workers think long and hard before signing up for one of these cards that provide an easy way -- too easy -- to borrow from a 401(k) plan.

Catching up on last week's Net Gains: A Consumer Reports study on whether it's worthwhile financially to trade in a gas guzzler for a more fuel efficient vehicle. The answer may surprise you.

By the way, the Net Gains blog was out of commission for a couple weeks due to technical difficulty, but all appears to be in working order again. I hope to be posting more frequently in the weeks ahead.