Gold and silver in IRAs: Approach with caution

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Gold and silver IRAs: Approach with caution
Clients have the option to hold an IRA backed by gold and other precious metals, but they should weigh their options before owning one, according to this article on MarketWatch. For example, “gold does tend to hold its value in the long-term, but it is also volatile — roughly as volatile as stocks — so you may need decades to ride out its ups and downs,” says an expert. “So gold would be at the bottom of the list [as an investment choice] for people who are retired or close to retirement.”

Medicaid cuts may force retirees out of nursing homes
More retirees are depending on Medicaid to cover the cost of staying in a nursing home, but the benefit would be reduced under proposed legislation that seeks to repeal the Affordable Care Act, according to this article from The New York Times. Even if Congress does not repeal the Affordable Care Act, Medicaid will remain a target for cuts, experts say. “The Medicaid pieces of the House bill could be incorporated into other pieces of legislation that are moving this year,” says an expert with the Center on Budget and Policy Priorities. “Certainly, nursing homes would be part of those cuts, not only in reimbursement rates but in reductions in eligibility for nursing home care.”

Corporate pension relief: Who benefited most?
A study has found that a 2012 law that encourages employers to generate new jobs by lowering the minimum amounts for their pension plan contributions has failed to accomplish what the proponents have promised, according to this article on CBS Moneywatch. Instead of using the windfall to create new jobs, companies either shore up their balance sheets or buy back their own stock, says the researcher. "Of the estimated $145 billion in pension funding relief provided by MAP-21, managers spent nearly $40 billion on stock repurchases and retained more than $52 billion on their balance sheets."

How clients can get out of a low-return rut
Retirement investors have to think outside the box to enhance their investment returns, as the buy-and-hold strategy for a 60/40 portfolio allocation may not enable them to get the desired results, according to this article from Kiplinger. In lieu of passive approaches, they may consider other tactical strategies, such as sector rotation or momentum investing. They may also want to consider moving some assets to markets with cheaper valuations and include non-traditional investments in their portfolio.

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