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Hello, and thanks so much for volunteering your time and expertise! My husband is a professor about ten years away from retirement. I do not work outside the home, and we are both in pretty good health. Now that our kids are out on their own, we are interested in ratcheting up our nest egg for our later years. (We already have CREF)

Both of us, however, being very conservative investors are both worried and frustrated with the current economy. Our banks accounts are paying very little interest and it has been hard to find anything we can trust to invest in in these volatile times. Recently we were made aware of the university my husband works for (a state research university with a very good reputation worldwide)offering a bond issue to expand its research facilities by issuing a tax-free bond at 5.5%. Dean Foods is also offering a corporate bond at 9.75. These just seem too good to be true, and we are too cautious to jump in.

We no longer have confidence in this nation and its leaders. There is hardly anything I would put past them in an effort to grab wealth, not unlike what is happening in Cyprus. Nor do we really expect there to be any Social Security income by the time we retire.

My questions are, are you seeing this type of corporate bonds being offered in the market today, and if so do you think they are sound? Have you heard of universities offering bonds before?

Thanks for any understanding you can give us.

Hi Eleanor,

I am not a bond expert, so please be advised that I cannot offer advice on particular bond issues with the exception of the fact that I would be more inclined to participate in a University issue than a corporate issue--especially if the university issue offers tax advantages.

I would note this, however, most investors are better served by looking at a bond fund ETF for bond exposure in lieu of individual bonds.  These trade like single ticker stocks and allow you to diversify your portfolio quite easily.

How you ramp up your investments depends on your age and how long until you need the money.

Typically you want a diversified portfolio which features stocks and bonds, with foreign exposure, and some cash as well.

You adjust the allocation of the portfolio as you approach the age at which you want to retire.

With ten years to go, you don't want to be as high risk as someone who is in early 20s.

This paragraph concerns me:  "We no longer have confidence in this nation and its leaders. There is hardly anything I would put past them in an effort to grab wealth, not unlike what is happening in Cyprus. Nor do we really expect there to be any Social Security income by the time we retire."

I can assure you that the US is NOT Cyprus and will not become Cyprus. I know of not a single instance of similar policies being proposed here and our banking system is pretty much the safest in the world and the most respected and trusted.  THIS IS WHY INTEREST RATES ARE SO LOW RIGHT NOW! Cash from across the globe has flowed into the US banks because people trust the dollar.

When someone tells you the US is like Cyprus, I suggest you put both hands on your purse and do NOT listen to their investment advice because they are not a serious person.

As far as Social Security goes, where on Earth would you get the idea that there will not be any income when you retire?  All respectable analysts--and here we are NOT referring to those with a political or economic axe to grind--note that the system is solvent well into the future and that even if there are no changes the system will be able to pay @85% of currently-promised benefits with no problems. This is not "bankrupt."  Minor changes to the system such as removing the upper income limit of contributions, raising retirement age slightly, or means-testing the wealthiest retirees allows the SSI system to pay full benefits to all with no issues.

Ask yourself these questions:

Who benefits if they get rid of Social Security and you are forced to put that money into Wall St instead?  

Would you prefer to get rid of your husband's guaranteed pension from CREF and instead rely on a 401k?  

Who has benefited most from getting rid of guaranteed pensions for the vast majority of US workers and making people put money into stocks and bonds via 401k plans?

What would have happened to you if there was no social security and you relied solely on a 401k and you wanted to retire in 2000 or 2008?

As far as I am concerned the worst possible thing you can do is to allow your investment decisions to be driven by those with a political or economic agenda.

So, make sure your husband maxes out his pension and any additional opportunities at work--additional 401k, IRA, etc.  Any retirement programs you access which offer tax advantages.

Pay off all your debts.

Live within your means--and teach your children this.  Watch out for student loans and such.  Those are killers.

I would be wary of individual bond issues for small investors, they are typically complicated and you can get burned.  

I would be more comfortable with a university issue than a corporate issue.

I would look to bond fund ETFs for bond exposure if you want to do this.

I would lay off the media and financial sources which have convinced you that social security will not be around, the US is like Cyprus, the leadership in DC is trying to take all your money, etc.


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Steve Hach


I can field general questions about the stock market and investing. The best ways to analyze stocks for investing, general financial questions about the markets, and questions about companies.


I am a research analyst for a quantitative stock market research firm. I also have extensive research, writing, and teaching experience in the field of US history with an emphasis on US foreign policy and international relations.

Various newspaper Op-Eds "Cold War in South Florida Historic Research Study" US Park Service, 2004

BA in US History and French MA in US History PhD ABD in US History

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