Wealth Management Media Scan: What Consumer Financial Publications Wrote about This Week
Raab, Marian, American Banker
Consumer-directed health plans and health savings accounts may be stumbling because people are not comfortable using them.
According to The Wall Street Journal, these plans - savings accounts incorporated into high-deductible insurance policies to pay for out-of-pocket medical expenses - have lower premiums than a typical health insurance plan but shift more health-care responsibility to patients.
HSAs, created by the Medicare bill President Bush signed Dec. 1, 2003, help individuals save for qualified medical expenses on a tax-free basis. Balances are portable and build from year to year.
Though 8 million to 10 million Americans are enrolled in these plans, "low enrollment and low satisfaction among workers who are offered them raise the question of whether consumer-directed plans will stall before they ever hit the mainstream," the Journal says.
Nest Egg Nibbling
Though nothing rattles most financial planners like clientswho dip into their retirement funds before they retire, some advisers cannot help doing it themselves.
In an article warning consumers about the dangers of doing this, The New York Times finds financial planners who did it themselves.
Tim Wesling, a planner from Alexandria, Va., said that having the safety net of home equity and military retirement pay allowed him and his wife to start taking chunks out of a $450,000 individual retirement account while his wife searched for a new job.
The Weslings need the extra cash to maintain their lifestyle, which includes tickets to the symphony, $300 weekend dinners, and an annual art-buying vacation to Maine, he said.
Admitting that it hurt to pay the tax penalties for early withdrawals, Mr. Wesling said he would not allow the situation to continue for more than a few months before belt-tightening.
Top 40 Hits
From Abbott Laboratories to Vodafone Group PLC, Fortune just updated its "Fortune 40," the magazine's trademark equity portfolio designed to help consumers "thrive in markets both rocky and calm, and build for retirement."
Fortune says this year it created five mini-portfolios: growth and income; bargain growth; deep value; small wonders; and foreign value.
In addition to Abbott, the publication picked Altria Group, Coca-Cola Co., Colgate-Palmolive Co., General Mills Inc., Johnson & Johnson, Procter & Gamble Co., and Wyeth for growth and income.
For foreign value, the magazine mentions Diageo PLC, Novartis AG, Petroleo Brasileiro SA, Sanofi-Aventis SA, Total SA, UBS AG, Unilever PLC, and Vodafone. …