Financial News Friday – July 11, 2014

Biggest Retirement Income Gap Seen for Oldest Pre-Retirees (ThinkAdvisor)

According to a study conducted by BlackRock, the youngest pre-retirees (around age 55) have the smallest income replacement shortfall and have enough resources between Social Security and retirement savings to replace 86% of their income. 60 year-olds only have enough to replaces 80% of their pre-retirement income and 64 year-olds only have enough to replace 74% of their pre-retirement income. Remember, a great way to bolster retirement income is to maximize your Social Security benefits, you can grab a copy of my free Social Security course by signing up for blog updates, or if you’re already an email subscriber, just click the link in the newsletter that went out today.

Fed Mulls Policy Exit, Eyes End of Asset Purchases (Yahoo Finance)

The Federal Reserve has moved one step closer to ending the loose monetary policy the markets have benefited from since the financial crisis. It seems the target for the end of bond purchases would be October of this year. The Fed expects to begin targeting higher interest rates sometime in the middle of next year. These two factors will likely see bond interest rates rising toward the end of this year, with further increases to follow once the Fed begins actively putting pressure to raise rates.

Citigroup Faces $7 Billion Mortgage Reckoning (CNN Money)

The Justice Department is expected to finalize a settlement with Citigroup over the packaging of bad mortgages that contributed to the morass of defaults during the financial crisis. The settlement includes $4 billion in penalties and $3 billion in mortgage modifications and aid to homeowners.

The Aereo Saga Takes A Weird Turn, With A Possible Ally And Shades Of … Obamacare? (Forbes)

As I covered in last week’s Financial News Friday, last week the Supreme court ruled against Aereo, stating that it was a cable company, not an antenna rental/streaming company, and as such it was required to pay retransmission fees to the broadcasting companies. Many (myself included) thought this would signal the end of the company, but in a surprise turn of events, Aereo is embracing the cable company categorization. Because it is now categorized as a cable company, it is entitled to the protections of cable companies, which includes paying networks a percentage fee of its revenues so that it can broadcast their content. This will be interesting for the future of internet streaming, as we may see more streaming companies enter the fray and rebroadcast network television as part of their services.

There Are Now 50 Colleges That Charge More Than $60,000 Per Year (BusinessInsider)

Unless you have prepared for your children’s education by utilizing a prepaid plan or a college savings fund, it may be wise to reconsider sending your children to a private university. Business Insider lists 50 colleges where the all-in cost is over $60,000 per year. While many private universities have name recognition that can boost a resume, you need to balance this with the amount of debt both you and your children may take on when attending such a school. Burdensome debt can add unneeded stress to your children’s 20’s and 30’s and can hamper you from saving adequately for retirement.

Carl Icahn Says ‘Time To Be Cautious’ On U.S. Stocks (HedgeWorld)

Activist investor Carl Icahn says investors should be “cautious about U.S. stock markets” and that he is “being very selective about the companies I purchase.” Items like this that you see in the news should be utilized as a reminder to diversify your portfolio beyond US stocks and bonds and to have contingency plans in place in case the market becomes more turbulent as you are about to retire.