Palm Beach Post

"Target funds really aren't so scary"

By EVE SAMPLES

Staff Writer

Sunday, May 18, 2008

My retirement-planning prowess generally amounts to this: glancing at quarterly 401(k) statements when they arrive in the mail, then forgetting about the account.

That's what young adults are supposed to do with their retirement money - forget about it.

Right?

But that changed a few weeks ago, when I got my most recent statement. Instead of growing as it always has, my 401(k) balance had shrunk.

It was no surprise, given the market turmoil this year, but it made me wonder: Am I invested in the right funds?

I opened the account three years ago, when I was 26 and - I admit it - I chose rather haphazardly. I tried to pick funds with the best returns and aimed for a mix of 80 percent stocks and 20 percent bonds.

Could I do better?

Charles Buck, a certified financial planner based in Woodbury, Minn., thinks I probably could. He prescribes a quick fix for young adults: invest in a target-date retirement fund.  "You have instant diversification," Buck told me. "You can invest in it and forget about it."

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What's your pension plan?

By Kara McGuire, Star Tribune

February 13, 2008

Certified Financial Planner Charles Buck of Woodbury generally advises younger clients to save between 10 and 15 percent of their salaries. That range includes any employer money -- whether in the form of a 401(k) match or a pension benefit. For example, if you receive a 3 percent match from an employer, then shoot for saving between 7 and 12 percent out of your own pocket.

But Buck doesn't even plug pension numbers into a savings formula until a client is 40 or older. Instead, he emphasizes that workers such as Thompson concentrate on developing the habits of saving and spending less than she makes.

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Paydirt: Don't panic; it's not another Depression

To survive your first economic downturn, realize it's not another Depression. Hold expenses down, but keep on making investments.

By Kara McGuire, Star Tribune

Certified financial planner Charles Buck of Woodbury puts buying stocks on the dip in a context we can all understand: "If Best Buy took 20 percent off their big-screen TVs, you wouldn't be able to get in the place. Wall Street has a sale, and nobody shows up."

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September 2007

Role Reversal
By Bruce W. Fraser

What you can do to prepare your clients to care for elderly parents.

    "Both Charles P. Buck, a fee-only advisor in Woodbury, Minn., and his wife have direct experience, having dealt with aging issues with their own parents. “My dad voiced concern about Social Security being taxed,” relates Buck. “That was a trigger to me that he had income from investments, but my younger sister didn’t pick up on that. She was concerned whether they had enough money to support themselves.
    “After I found out they had some assets, I led them to an estate planning attorney who made sure they were set up in case something happened to one or the other of them. It also gave my sister some peace of mind. They have since passed on.”
    Buck believes clients with caregiving responsibilities for aging parents need to open the lines of communication, as older people may be more susceptible to fraud, especially if they have assets in sufficient amounts. With better communication, parents may be more willing to tell their children about suspicious activity. Buck also advises clients whose parents don’t live near them to learn about elder care where their parents are, so when the need arises they’re able to contact the right people."

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What to Do with $2,500:
                   Advice for Young Investors

By Emily Meehan

After a few years in the workforce we may find ourselves with a little extra cash. Maybe it's a delightfully large tax refund or an apartment deposit you finally got back, but it's the first significant sum of money you've had that doesn't need to be spent paying back loans or furnishing an empty apartment. For the first time, you want to save or invest that money, instead of spoiling yourself with a spray-on-tan.

I spoke with five financial advisers about what a young investor should do with a small windfall: $2,500. I created a profile of a twentysomething novice investor who doesn't have debts and is diligently paying into a 401(k). Investor X doesn't necessarily want to lock up this money until retirement. He or she may want to buy a house, fund a year off or have something socked away in case of a car crash or other emergency.

After each planner made a recommendation, I asked for numbers on the performance of their picks from the beginning of 2002 until this May.

Set up a Roth IRA

Charles Buck, a financial planner in Woodbury, Minn., recommends that you set up a Roth IRA, as he did for his 27-year-old son. The nifty thing about the Roth is that we don't have to pay taxes when we finally withdraw the money after age 59 ½. We don't get a tax refund now on our contributions, but it's likely that we'll enter a higher tax bracket by retirement and will thus save the difference in taxes. In special cases, like when buying a home for the first time, all of the money in a Roth IRA can be tapped pre-retirement without penalties. We can also withdraw our contributions -- but not returns -- early without penalties. Keep in mind Roths are only for singles who make less than $110k or marrieds who make less than $160k.

Mr. Buck advises that the twentysomething investor's Roth IRA include shares in a diversified mutual fund targeted for retirement withdrawal in 2045. "Target-date funds are good for young people," he says: "Pick a fund, forget about it and it takes care of itself." Mr. Buck's fund pick is the T. Rowe Price Retirement 2045 Fund. It charges a fee of 0.76%. T.Rowe Price has reported returns of 17.01% from the fund's inception on May 31, 2005 to April 30, 2007.

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Index funds: Dull but dependable

Index funds may not be sexy, but they're low-cost, easy to understand and can beat the stock pickers.

By Kara McGuire, Star Tribune

Last update: January 11, 2007 – 8:36 PM

...

"In investing, the only thing you can be guaranteed is the lower your cost, the lower your cost," said Charles Buck, a certified financial planner in Woodbury who also teaches retirement planning at Minnesota State University, Mankato. Fees matter because they come right out of your returns. It doesn't matter if your mutual fund beats up my index fund if your fees eat up the difference.

Q Are you a big cheese or a small fry?

A Buck likes index funds for investors with a small amount to save because you can "get a diversified portfolio without a lot of money, without a lot of funds." A cheap, easy-to-understand and well-diversified portfolio can be created using three funds: a total-market index fund that invests in domestic companies of all shapes and sizes, an international index fund and a broad-based bond market index fund.

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When Your Paycheck Stops

Ready to retire? Better make sure you can afford it. Here's how to make the most of what you've stashed in your piggy bank.

By Jane Bryant Quinn

Except  April 18, 2006

Cover the Cost of Care
"Don't risk a lot for a little." That's what financial planner Charles Buck, 58, of Woodbury, Minn., tells the students who take his retirement-planning class at the state university's Mankato campus. Taking his own advice, he and his wife, Dianne, 53, bought a joint long-term-care insurance policy. They've both seen dementia in their extended families, and don't want to impoverish each other if one of them becomes ill.

These policies aren't for people with modest incomes (you can't afford them) or the superrich. They're for people in between, says planner Dean Harmon of The Woodlands, Texas, who recommends them to clients with assets ranging from $500,000 to $4 million. Shop when you're 55 to 65. Generally, you shouldn't pay more than 7 percent of your future retirement income (not your working income), says planner Robert Pagliarini of Allied Consulting Group in Los Angeles. You might balk even at that expense—but it sure brings peace of mind.

Most of all, you need to save—and yes, "panic saving" works. Hurl money into a retirement account. It's never too late.

Some valuable reading: Retirement account statements
Kara McGuire,
October 28, 2005

Am I too late? Did you throw your quarterly 401(k) statement in the trash? Or better yet, in the shredder? If so, go get a copy online. I'll wait.

What's that? You don't have a statement to review because you're not saving into a 401(k)? That's the biggest problem with young people today, said Charles Buck, a certified financial planner who also teaches retirement planning for Minnesota State University's Financial Planning Certificate Program. If you have a retirement plan at work and aren't participating, you're missing out on a valuable benefit.

LETTERS
November 2004

I enjoyed the excellent article “Embrace the Middle Class” by Kevin P. Condon in the September issue. That concept is what drew me to Garrett Planning Network when I was looking to set up my own business. First, the middle class provides more people to approach for clients, but most advisors who have high minimums do not serve them. As the limits for 401K and Roth IRAs have and continue to increase, the middle class will hold the majority of their savings and investments in these accounts. Many times the client just wants to know “Am I saving enough?” and “What are the appropriate choices?” This situation is where an hourly, as-needed advisor can provide value in a cost effective manner.
Charles P. Buck, CFP
Buck Financial Advisors, LLC
Woodbury, Minnesota

...It’s the Place To Be
Thank you for publishing the article by Kevin P. Condon, “Embrace the Middle Class.” As a proud member of the Garrett Planning Network, I fully support working with the middle class. The financial planning profession has shunned this market for much too long. Objective, professional advice should be available to anyone who needs it.