Known as the â€śsandwich generation,â€ť they are squeezed by obligations to almost-grown kids and aging parents. Combined with the fact that they are staring down the barrel of retirement within the next decade or so, it becomes necessary to:
- Reassess their financial situation and determine if theyâ€™ll meet their retirement goals
- Look to combine retirement accounts and re-balance their portfolio depending
- on their situation
- Remember that the IRS has catch-up retirement savings provisions for people age 50 and up
- Consider at purchasing long-term care insurance
Lopez recommends this group invest in â€śmunicipal bonds, as they secure future payments and let you readjust a portfolio without relinquishing control.â€ť Investors should investigate state municipal bonds since interest payments are usually federal and state tax free.
Lopez advised a couple in this age group to readjust their asset allocation from 90% stock and 10% cash to 60% stock and 40% cash instruments. The reason, he says: â€śIf the market retreats, their portfolio has less time to recover.â€ť He also asked the couple to consider purchasing fixed annuities (financial insurance contracts that earn interest).
Lopez favors company stock such as Microsoft Corp., which had a record $21 billion in earnings for the second fiscal quarter of 2012 and is scheduled to launch Windows 8. Another is Chandler, Arizona-based Microchip Technology Inc. (MCHP), which provides microcontroller and analog semiconductors. It has growth potential and since 2007 has paid a total of $6.26 per share in dividends. Lopez also likes Sirius XM Radio Inc. (SIRI), because it has 22 million subscribers. He says nearly half of new car owners extend their subscription.
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