How to use Amazon Family to save money on all the products your kids need

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  • Amazon Family helps parents save cash on many of the items that come standard with childcare, from diapers to baby food and childproofing gear. 
  • An Amazon Family membership is free if you already have Amazon Prime, and signing up for Family only takes a minute. 
  • When you sign up for Amazon Family, you also get access to thoughtful product lists, informational articles, and recommendations from leading parenting experts. 
  • If you want help choosing the best products for your family, check out our parenting and baby gear buying guides.


My wife and I have been Amazon Prime members since 2006 and parents since 2013, but it wasn’t until 2018 that we started using Amazon Family.

The occasion that led us to start using the service was the birth of our second child. And in the year that we’ve taken advantage of the program, it has saved us plenty of money, but even more notably, it has introduced us to products and information that we might otherwise never have known about.

So what is Amazon Family?

Amazon Family is a free service as long as you already have a Prime membership (if you don’t, sign up here). It offers discounts on myriad baby and childcare products, like diapers, wipes, bottles, and so forth, and membership comes with email newsletters rich with information tagged to your child’s age. Expect an email with information on teething sometime around the 10th month.

Yes, Amazon uses Family to try to sell you stuff — you can definitely expect to see content promoting baby gates around the time your kid turns a year, for example — but it’s stuff you were almost surely going to buy anyway, and at the best prices out there.

Amazon Family offers product ideas and information for kids aged zero through 12 years. You’ll start off with curated product lists like “Jumpstart Your Nursery,” a collection including rocking chairs, changing pads, cribs, and so on, and before you know it, you’ll be clicking on “Gifts for 12-year-olds.”

Am Fam Product PageAmazon

How to set up Amazon Family


If you already have Amazon Prime, then you’re just a few clicks away from setting up your Amazon Family account. Or accounts, as the case may be. You can create a profile for several children, and when you go to your Amazon Family account page, you can toggle between the kids to see product ideas and information tailored to for their age (and gender, though that’s only questionably positive).

  1. Click this link to go to Amazon Family.
  2. Sign into your account or sign up for your free trial of Prime, which includes Amazon Family.
  3. You will be taken to a page with the headline: “Tell us about your little one to start receiving exclusive discounts, parenting tips via email newsletter, and more.”
  4. Enter the kid’s gender, birthday (or due date or anticipated adoption date — you can set up your Amazon Family account before the child even arrives), and, if you want, his or her name.
  5. Then hit the button that says “Explore Amazon Family” and you can start doing just that.

You’ll see an extensive “Top picks for your family” with products aplenty, you can browse among articles organized by age (they have titles ranging from “How to raise responsible kids” to “No teeth, no problem. Solid foods for little eaters“) and you can sign up for subscriptions to diapers, baby food, and other items you’ll need on a recurring basis, saving up to 20% in many cases.

Again, you were going to buy all this stuff and read all about babies and kids and parenting anyway, right? So why not just stick with Amazon like you do for everything else you buy, most of the shows you watch, the music, the groceries…

Sign up for Amazon Family here or sign up to try Amazon Prime here.

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10 reasons why RIAs fail

Going strictly by the numbers, it’s the golden age of RIAs. The volume of financial advisors moving to independence has steadily increased year over year, according to a 2018 Schwab survey. That translates into a whopping 59% increase in the number of registrations from 2013 to 2017 — 238 firms that collectively represent $84 billion in AUM, according to the SEC.

But, as many an RIA principal has discovered, taking the plunge is almost the easy part. After that come the day-to-day strategy and practice-management decisions that make or break a firm’s long-term viability.

Here are 10 potential problem areas for new, and not-so-new RIAs, and how some experts address them.

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Schwab, Fidelity, TD are poaching RIA’s retail clients

Let’s get one thing straight: The independent advisory business wouldn’t have thrived without the support of the traditional custody-and-clearing firms. Large direct-to-consumer behemoths like TD Ameritrade, Schwab and Fidelity were willing to power channels that essentially competed with them for retail clients.

Of course, there was a business reason. With larger processing volumes, trading became more efficient and the firms could keep unit costs low and generate profits to fund technology and other strategic investments. In return, advisory firms got efficient support and access to platforms that included custody, clearing, bundled service options and outsourced technology.

Even the firms that offer an alternative to traditional clearing providers, like mine, have benefited from the arrangement.

It was certainly a win-win, but with a hidden cost. Along with all the bells and whistles came conflicts of interest and self-serving revenue streams from product distribution and fees. Moreover, the mega-custodians created deep hooks into the advisor’s business operations and their retail client base.

That’s become a big problem.

First of all, marketing suppression rules — like no direct mail, no outbound sales calls — used to put a fence between retail and the accounts on the third-party custody platform. With the rise of digital marketing, it’s no longer feasible to suppress all outreach.

With the marketing rules effectively outdated, these custodians argue that the difference between bespoke and mass-customized advice should be so apparent and so valuable that advisors have no reason to worry about losing clients.

Two things bother me about those assurances:

Blaming the victim — or the advisor — for not being good enough to keep clients is a low blow when the retail side of the custody giant can use micro-targeting (based on customer data) or slash pricing to get a competitive advantage.

If not outright poaching an advisor’s current clients, the retail behemoths do seem committed to capturing their prospects —younger, mass affluent investors for whom a less costly digital and human model is quite attractive. How will advisors grow with the next generation?

Schwab’s announcement of the subscription-based Intelligent Portfolios Premier is a case in point. For a $300 upfront fee and $30 monthly you get a comprehensive financial plan, a customized roadmap, unlimited time with a CFP for advice and 24/7 access to a highly collaborative planning tool that lets the client test out their own ideas and assumptions.

Compare that offer with what a traditional advisor’s website says and you will see that the words are similar.

Which custodians have the most RIA assets?

Charles Paikert | Lists

The average investor may not understand or appreciate what’s different between the experience at Schwab and what they get from a local RIA, but they will immediately grasp the pricing difference.

No one is denying that for the biggest custodians, like Schwab, Fidelity and TD Ameritrade, entering the custody business made great sense for their shareholder value. It makes good business sense to keep the scale from custody while the firms grow their retail market share.

That said, at this point in the evolution of custody, new models, which don’t have channel conflicts, are gaining traction with advisors who want to have more control over their futures.
When they launched their custodial businesses, Schwab, Fidelity and TD were discount brokers who didn’t offer relationships or advice —that has changed dramatically.

With massive marketing dollars, they are promoting human and digital advice relationships for mass-affluent and high-net-worth investors, with technology and pricing that grabs attention.

The competition is clear, and the conflicts are just beginning.


Bill Capuzzi


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Why You Need a Retirement Plan A, B and C

Mt. Tam Van and Bike

Stephen Chen

Did you know that according to a recent survey by Charles Schwab only 25% of people have a financial plan and that 60% of people live paycheck to paycheck?

Additionally:

  1. People in the top 10% of wealth tend to have plans and be active planners (so it’s a good practice to build and maintain a plan).
  2. 45% of people without plans believe that their finances don’t merit one (which is not true – everyone can benefit from the education and sense of control that comes from building a plan).

Plan A

Most people are counting on everything going right for their retirement plan to work out. For most people their Plan A looks like this: Work and ideally save/invest until 65, claim Social Security and Medicare and then live for 25+ years in retirement with income from a Pension (for about 30% of people), Social Security (Social Security accounts for half of retirement income for ~50% of the population) and drawing down Savings (excluding the approximately 20% of people with nothing saved).

Why You Need A Plan B (and maybe C)

If you break down the assumptions behind Plan A you’ll see why building a Plan B makes sense.

Working longer – for many people the core of their plan is to work deep into traditional retirement AND make as much money as they have been making during their careers. Per this recent New York Times article about 67% of people plan to work past age 65. There are two problems with this assumption:

  1. First – most people retire earlier than they planned due to health, layoffs, family circumstances or caregiving . Per a recent Pew Trust survey Although the median expected retirement age is 65, the median age at which people actually retire is 62.” 
  2. Second – many people reach their peak earning years around their 50s about the same time they start thinking about retirement. However, the key word here is peak – assuming that you’ll continue to make the same or more as your peak income for the next 10-15 years is a mistake. The downside of which can be pretty uncomfortable even for Harvard educated white collar higher earners.  

Saving Investing – based on recent census data the average retirement income and wealth of people age 65+ by quintile show how surprisingly low retirement income is across the board.

Retirement Income and Assets by quintile

Stephen Chen

Source: AARP Public Policy Institute

Assuming that half of people’s net worth is in their house, this only leaves the top 40% of the population with more than $100K of liquid savings.  Even for people with $1M saved for retirement that might translate to $40,000 (4% draw down) to $60,000 (annuitize) of lifetime income – probably a lot less than they have been making recently.

Social Security and Medicare – these programs are critical, but underfunded and some combination of changes across taxes, start dates and potentially benefit reductions will have to be implemented soon. Social Security is projected to only be able to pay 75% of promised benefits in 2035 and the Medicare Trust fund is projected to be depleted by 2026.

Retirement Income by source

AARP

What Levers Are Available for Your Plan B and C

Here’s a list of things you should consider as you prepare for retirement:

  1. Expenses – this is the single biggest lever for most people since the lower your expenses the less income and savings you need; and conversely the more you can save while working. Many people are considering relocating or downsizing inside the U.S.A. or internationally since your location drives housing costs, expenses, taxes and health care costs.
  2. Working – work is the single biggest source of income by far for everyone, but per above be prepared to think flexibly about work and ideally find a retirement job you love!
  3. Save Invest efficiently – first start saving and second invest efficiently to create a low fee and well diversified portfolio. Today investing has been commoditized and you can invest and re-balance for 0.35% using many robo advisors or do it yourself for 0.15%. Fees matter a lot – if you are paying someone 1% to manage your money – just know that it may be costing you about 33% of your long term returns (assuming returns of 4% annually and the fact that you lose future returns on the fees paid today.)
  4. Be smart about Social Security – today there are a number of tools and services available to help you evaluate the optimal way to claim Social Security based on your plan for work, your spouse and other factors. (In fact we are adding this right now for all of our users.) This is a big lever and can provide you a much higher lifetime benefit.
  5. Be smart about health care Medicare – this is the #1 concern in retirement and for good reason – it’s expensive and complex. Since most people are retiring from their main job before Medicare starts at 65 they have to figure out how to bridge healthcare from work to Medicare and then be smart about electing Medicare Parts A, B and D vs. Medicare Advantage.  
  6. Home Equity – this generally illiquid asset accounts for about half of retirees the net worth. Recently there have been a wave of Fintech firms getting funded to help people tap into this. The most widely used option is downsizing, but more people are exploring how much they could get from a Reverse Mortgage Calculator.
  7. Stay involved in your community – a key consideration for people making the transition to retirement is to have thought through what they want to do after they retire and who they want to do it with. As you look forward to potentially 25-30 years post your main career it pays to be thoughtful about how you want to use your scarcest resource, your time.
  8. Scenarios – life rarely works out the way we think, so it’s worth thinking through what your Plan B and C will be if things don’t work out as you envisioned in Plan A. You’ll also sleep better at night knowing that you are prepared.

While this may seem like a lot to coordinate the good news is there are new low cost online solutions that let you easily build and manage a plan for all of these things on your own or with expert help on a fee only basis. If you want to check how you’re doing you can run an easy retirement calculator here.

Here’s exactly how to tell if you need a financial advisor, a robot, or nobody at all

Money can be complex and intimidating, no matter how much or how little you have.

If you’ve considered seeking professional financial help but don’t know where to start, first identify exactly what it is you want to accomplish. Do you want to start investing or invest more money? Do you want to know how much you need to save to retire at 65? Do you need advice for paying off debt? Are you wondering how much life insurance you need?

The truth is that some financial decisions call for reinforcement; others, you can probably handle on your own — at least for now.

Financial advisor is a catch-all term that usually includes financial planners and investment advisors. It’s imperative to look for financial advisors who follow the fiduciary rule, meaning they operate in their clients’ best interest, and are fee-only. This means client fees are their only compensation and they don’t earn commission when you invest in certain funds or buy financial products.

A good certified financial planner can help organize your overall financial picture, including setting up a retirement saving and investing strategy; planning for big expenses, like buying a house or having kids; everyday budgeting and spending; plus tax and estate planning.

Considering a financial advisor? SmartAsset’s free tool can help you find a licensed professional near you »

You may also consider hiring a financial planner if you’re too overwhelmed or confused by your money to make big financial decisions, including how to balance multiple financial goals, manage a business, get out of crushing debt, or establish a retirement savings plan. If the alternative to meeting with a financial planner is decision paralysis, you’re better off seeking outside advice.

Investment advisors typically focus on the nuances of your investment strategy, such as what stocks or funds to buy in and out of your retirement accounts and how to minimize taxes. They can also manage your investments, but usually charge a fee of 0.5% to 2% of the portfolio.

You don’t have to be a sophisticated investor with millions in the market to have an investment advisor, but you probably don’t need one if you just want to know how to invest a few thousand dollars or which funds to choose in your retirement accounts.

A robo-advisor is often a cheaper alternative, and some even provide access to human investment advisors or financial planners for an extra fee.

Robo-advisors like Wealthfront, Betterment, and Ellevest set up and automatically rebalance an investment portfolio for you based on your goals and risk tolerance, and the annual management fee is just 0.25% of your account balance. Robo-advisors can be a valuable tool for the average person with a long-term outlook who truly wants to “set and forget” their investments.

SmartAsset’s free tool can help you find a licensed financial advisor near you »

Princeton looks to break up the white male money monopoly


  • People walk on Princeton University campus in Princeton, New Jersey, on Aug. 30, 2013. Photo: Bloomberg Photo By Craig Warga. / © 2013 Bloomberg Finance LP

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One morning in May 2018, two venture capitalists rented a Zipcar in Midtown Manhattan. They picked a 300-Class Mercedes on special for $15 an hour, perfect for the occasion and their tight budget. On a pilgrimage to suburban New Jersey, Aaron Holiday and Nnamdi Okike were heading to the audience of a lifetime.

After the 1½-hour drive, the two men entered a red-brick, colonial-style building across from one of the nation’s most beautiful and exclusive college campuses. They walked into a third-floor reception area decorated with framed business magazine covers signed by famous investors, people such as venture capitalist Benjamin Horowitz and bubble prognosticator Jeremy Grantham.


For Holiday and Okike, it was time to reach for the golden ticket, the chance to run money for Princeton.


Only in their 30s, Holiday and Okike ran their company, 645 Ventures Management, out of a WeWork space near Manhattan’s hip Flatiron District. But they had impressive investment results. Their first fund had cashed in with early bets on software company Source3, acquired by Facebook.; on photo editor Fly Labs, bought by Google; and on hotel-software maker Alice, in which Expedia Group Inc. snapped up a majority stake.

Their background stood out from the many other investors pitching Princeton’s $25.9 billion endowment. Both are black. Holiday’s mother had worked 30 years for Sears, mostly as a bill collector. His father counseled drug addicts. Neither had attended college. Okike’s father had immigrated to the U.S. from Nigeria.

The men had met with 300 funds and wealthy investors. Few were ready to hand over money to a company founded only four years earlier. Princeton’s endowment represented the ultimate challenge. It chose only one out of every 100 investment firms it considered; by contrast, the famously selective university across Nassau Street made offers to six out of 100 applicants to its freshman class. The odds against 645 Ventures were daunting. This is not going to happen, Holiday told himself.

As they settled into a conference room, Okike and Holiday discovered they were meeting none other than Andrew Golden, president of the Princeton University Investment Co. for the past quarter-century.

Golden wanted to know more, much more, about the algorithms that 645 Ventures used to select its portfolio. Golden, who once worked as a professional photographer, asked penetrating questions, as if he were training a telephoto lens at a distant subject.


“Are you putting together a recipe book or cooking a meal?” Golden asked. He was expressing skepticism about machines picking investments. In a promising sign, he then asked to look under the hood of what the founders called 645’s “data room.”

On their way home, Holiday and Okike couldn’t stop reliving the conversation with Golden. At one point, a truck bumped their rented Mercedes and drove away. They took it in stride. In another lucky break, Zipcar didn’t charge them for the small ding.

Getting a second look from Princeton would cause any investor to celebrate. But, for 645, it resonated more deeply. It had the chance to become a Princeton money manager owned by black investors. More to the point, it would be the only one.

– – –

America’s college endowments manage more than $600 billion, roughly equal to the gross domestic product of Taiwan. The biggest funds have a time horizon of centuries. Their leaders can afford to wait for the legendary payoff of startups that turn into the likes of Google and Facebook.

These vast investment funds remain almost exclusively the province of the white and the male, making them an anomaly in the world of higher education. Women now earn almost 60 percent of U.S. bachelor’s degrees, and nonwhite students, more than a third. The share of women on faculties is approaching one-half, if not in the most senior positions.

Yet the pipeline of women and underrepresented minorities starts narrowing in finance courses. It tightens in business school. At the pinnacle of investing, it all but shuts off. Firms owned by women and minorities manage just 1.3 percent of assets in the $69 trillion investment industry, though their performance is not statistically different from the industry as a whole, according to a Knight Foundation study published in January.

Men head the 10 largest college endowments. (Jane Mendillo did lead Harvard’s from 2008 to 2014 following a stretch as Wellesley College’s chief investment officer.) None of the people who run them is black or Latino, though the heads of Harvard’s and the University of California’s funds are of Indian descent. Some universities are diversifying their staffs. By August, nine of Princeton’s 23 investment professionals will be women-including two Asian Americans. There are two Latino men on the team.

Typically, endowments don’t manage the money themselves; they farm it out to the best money managers they can find. Princeton has more than 70, including 44 based in the U.S. Until 2018, women owned only one, Nancy Zimmerman’s Bracebridge Capital hedge fund, which also works for Yale. Black money managers owned none, though one did in the past. (Golden declined to name the company.)

Golden is a graduate of Duke University and Yale’s school of management, where he earned a master’s degree in public and private management. He started running Princeton’s fund after working five years for David Swensen in Yale’s investments office and a stint with Duke’s endowment.

Princeton and Yale use a similar strategy of making long-term bets on illiquid investments and have achieved some of the best results among university endowments, in part because of their early bets on successful venture capital firms. Over the 20 years ended June 30, 2018, Princeton has reported an 11.4 percent average annual return, right behind Yale’s 11.8 percent.

Because of its age (it was founded in 1746), the deep loyalty of its alumni, and its investing skill, Princeton is, by one measure, the richest major university in the U.S.: Its endowment per student is a stunning $3.2 million. It relies on the fund for half of its annual budget, a bigger proportion than any other Ivy League school.

Princeton picks perhaps three new investment firms a year. By design, two-thirds have less than a three-year record. Golden can build a meaningful position in the most successful companies by getting in early. Once an investment company becomes successful and well-known, everyone wants a piece, and entree becomes tougher. That strategy has led to some of his biggest successes, such as buying into Horowitz’s VC firm, Andreessen Horowitz, before it struck gold with investments in Facebook and Pinterest. (Bloomberg LP, which owns Bloomberg Markets, is an investor in Andreessen Horowitz.)

Entrusting money to untried companies requires using a mix of intuition and character judgment. Without intervention, the selection process tends to favor companies whose owners are already part of Princeton’s network and can therefore seem familiar, an implicit bias that can work against women and minorities-something Golden is seeking to counter, however slowly.

“I can’t imagine having a roster of managers providing the best possible returns without them being diverse and inclusive. We’re looking, ideally, for something that looks like America”

As one of America’s oldest universities, Princeton has a fraught history with race and gender. It admitted its first black undergraduates in 1945, decades after other Ivy League schools. It didn’t accept women as undergrads until 1969, sparking opposition from some alumni.

But Princeton has been a leader in expanding access to college, awarding among the most generous need-based financial aid packages in the country. In the class of 2022, 15 percent are the first in their family to go to college, and 18 percent are African American or Latino.

As part of his legacy, Golden, who turns 60 in May, would like Princeton’s outside money managers to become similarly diverse. Trim with a white-flecked beard, he looks and sounds more like a popular professor than a Wall Street type. He has a self-deprecating sense of humor, referring to himself at times as “Sparky” because of a small fire at his home more than a decade ago caused by a defective dryer vent pipe. His bio page on the Princeton website ends with a quip: “He wishes he had time to learn golf-he wouldn’t use it to learn golf, but he wishes he had the time.”

At the endowment’s headquarters recently, he peppered his conversation with literary, historical, and pop culture references, including Hemingway, Nixon, and the ’80s classic Fast Times at Ridgemont High.

In describing his quest for diversity, Golden at times seems to be echoing the admissions office, which likes to tout the demographics of Princeton’s student body. “I can’t imagine having a roster of managers providing the best possible returns without them being diverse and inclusive,” he says. “We’re looking, ideally, for something that looks like America.”

Last August, Golden picked San Francisco-based Forerunner Ventures as Princeton’s second money manager owned by a woman. Golden had met its founder, Kirsten Green, at an endowment conference in 2015, and his team had been tracking her. Green, now 47, was already an established Silicon Valley figure, having raised several hundred million in three funds.

A certified public accountant who once specialized in retail for Deloitte Touche, Green demonstrated the kind of special insight and experience Golden seeks. Walmart had bought two of Green’s investments, retail marketplace Jet.com and men’s retailer Bonobos. In March, Airbnb acquired another, lodging booker HotelTonight.

She also won a key endorsement from Joel Cutler, a co-founder of General Catalyst Partners, which manages money for Princeton and has invested alongside Green in companies such as glasses retailer Warby Parker Retail Inc. “I really want to believe we earned our way into all the relationships because we have top-tier returns,” Green says. “I want people to invest with us to see all of that, not only because we are a woman-led firm.”

Golden’s diversity push began about 15 years ago. An endowment board member at the time, John Rogers Jr., who runs Ariel Investments in Chicago, suggested surveying Princeton’s external managers annually to find out how many women or minorities they had in senior positions. Few, if any, he discovered. “If you want to be a successful 21st century company, you can’t look like the 1940s,” Rogers says.

Historical outsiders-that is, people who aren’t typically white and male-with Princeton links were making that case. Rogers, who’s black, played basketball at Princeton with Craig Robinson, the older brother of Michelle Obama, who also graduated from the university. Kathryn Hall, who runs her own asset management company in San Francisco, was the chair of the endowment board at the time. Another board member calling for greater diversity was Shirley Tilghman, who was then Princeton’s president, the first woman ever to hold that position.

Golden, who grew up in South River, New Jersey, the son of a dentist, is the grandchild of Russian-Jewish immigrants. Like other Ivy League schools, Princeton once had strict Jewish quotas to keep out people just like his ancestors.

Golden rejected the approach of some of the largest pension funds, which commit to investing a set percentage of their money with companies owned by women and minorities. He said he wanted to continue with the university’s strategy of starting with small investments in new managers. Along the way, Princeton had tried to encourage diversity by prodding existing managers to diversify their leadership. In 2017, after a decade of disappointing survey results, the university decided to try another strategy as well.

It’s hard to know how Princeton compares with other elite endowments, which are notoriously secretive. The rest of the five- largest private funds-Harvard, Yale, Stanford, and MIT-either declined or didn’t respond to questions from Bloomberg Markets about the makeup of their outside managers.

Lobbyist Robert Raben, who founded a nonprofit pushing for diversity in money management, says some private endowments won’t return his calls or disclose any information about the demographics of their outside investment managers. (Harvard has met with Raben.)

Raben, who’s spoken with Golden half a dozen times, praises his effort but urges him to move faster. “We’ve established everywhere in professional settings that diversity of background, diversity of networks strengthens outputs,” says Raben, who’d been an assistant attorney general in the Clinton administration. “Asset management, in part at elite institutions, is a holdout.”

At the same time, Golden risks drawing the wrath of those Princeton faculty and alumni who’ve long been skeptical of the college’s embrace of affirmative action and other efforts to promote inclusion. Robert George, a professor who directs Princeton’s James Madison Program in American Ideals and Institutions, says the endowment would be better off focusing on investment returns. “We should hire or contract with the people who are most likely to give us good decisions and access to markets,” George says.

Golden says he’s committed to maintaining his excruciating selection process, which involves an average of 350 hours of staff time to vet each candidate. “We don’t want to mess with the core elements of success,” he says.

– – –

645’s own journey shows why Golden’s effort is destined to move at a gradual pace. Holiday and Okike spent four years building the company, forgoing salaries part of the time and staying at Airbnbs as they pitched to potential investors. And that’s even though these two are a rarity: unconventional candidates who nonetheless check every meritocratic achievement box and travel in all the right circles.

They are ridiculously qualified, their résumés wrapped in ivy. The son of two doctors, Okike, who is 39, has a bachelor’s, a law degree, and an MBA, all from Harvard. He worked for eight years at New York-based Insight Venture Partners, where the companies he helped select for backing were acquired for more than $5 billion. A 6-foot-5-inch former track star who ran the 400 and 800 meters at Harvard, he literally stands above the crowd.

A head shorter, Holiday, 37, is, like Okike, bookish, given to reading physics texts and the tomes of the late cosmologist Stephen Hawking. He studied computer science at historically black Morehouse College, then developed trading software at Goldman Sachs. He earned an MBA at Cornell, where he led a campus venture fund.

Okike and Holiday are world-class networkers who vacation in Martha’s Vineyard, a gathering place for both Boston Brahmins and the black elite. They named their company after one of the Massachusetts island’s telephone exchanges: 645.

Holiday won his first introduction to Golden through Scott Kupor, a partner at Andreessen Horowitz whom he’d met through the Cornell fund. Ken Chenault, the former chairman of American Express Co. and now a venture capitalist at General Catalyst, which has been a longtime manager of Princeton’s money, told Golden he’s invested personally with 645. “I like how they were going about building their firm,” Chenault says.

Last July, two months or so after Holiday and Okike took their drive to Princeton, Golden and a team of investment staffers made a site visit to the WeWork space on East 28th Street. The next month, one of his lieutenants phoned with the news: Princeton committed to their $40.6 million fund. Holiday was standing behind Okike, who was seated, when the call came in. “We did it!” Holiday said, squeezing his partner’s shoulders with both hands.

As significant as they may be, Princeton’s investments in black-owned 645 and woman-owned Forerunner represent a rounding error: less than $50 million out of a $26 billion fund.

But Golden likes to think of it differently. Forerunner and 645 were two of only three managers Princeton picked during the past year. If successful, they could one day become major holdings. “By definition, it’s a glacial move to get to truly untapped pools of talent,” he says. “It’s planting seeds that grow into tall trees.”

Today’s effort resembles an initiative Princeton started about 15 years ago. To gain a deeper understanding of overseas markets, Golden says, the endowment decided to seek out the best international investors based in their home countries. Those managers now represent more than 30 percent of the portfolio.

It would be hard to overstate the impact of Princeton’s vote of confidence on the young VCs who’d been toiling away in their WeWork space. Several months after Golden picked 645, whose team of seven people now manages about $50 million, the company moved into permanent digs in an office building across from Grand Central Terminal.

The silver-framed photos greeting visitors suggest the founders’ ambitions: Okike with Billy Beane, the numbers-minded Oakland A’s general manager, star of Michael Lewis’ “Moneyball” and idol of quantitative-minded investors everywhere; and Holiday with Robert F. Smith, a prominent African American investor who founded Vista Equity Partners and has put money with 645.

“We could really move more into the big leagues,” Okike says. “Once you have a strong institutional investor, all things open up. This is an opportunity, but we have to make the most of it. Now we’re in the game.”

– – –

Lorin covers endowments for Bloomberg in New York.

Here’s How Many U.S. Households Will Run Out of Money in Retirement

Saving too little for retirement is a major fear of most Americans, and studies have shown that more Americans fear insufficient retirement savings than fear death. Running out of money is indeed very frightening, as no one wants to be without the cash they need in their 70s and 80s. But how likely is it that you’ll actually run out of money during your retirement years?

Unfortunately, research from the Employee Benefit Research Institute shows there’s a pretty good chance that many Americans will run short of cash. In fact, the data about retirement savings shortfalls is startling. The good news is, if you know the risk of running out of money, you can take some steps to reduce the chances you’ll become one of the seniors with too little saved to see you through. 

Image source: Getty Images.

How many U.S. households are going to run short of money?

According to the EBRI Retirement Security Projection Model, which was developed in 2003 and has been updated numerous times since, an estimated 40.6% of all U.S. households headed by someone aged 35 to 64 are projected to run short of money during retirement. This is based on a database of 27 million 401(k) participants and IRA account holders. This seems like a whole lot of households are going to run short, but it’s actually a decline of 1.7 percentage points compared with the same model in 2014 — so things are getting a little better.

Sadly, for those families likely to run out of cash, the shortfall isn’t small. Even taking into account Social Security benefits, the aggregate retirement deficit for households headed by someone aged 35 to 64 is $3.83 trillion. Again, this is a slight decline from the $4.44 trillion shortage in 2014, but a shortage in the trillions isn’t good news for anyone.

When looked at on an individual basis, the data becomes even more worrisome. In fact, EBRI projected average retirement savings shortfalls of $12,640 for widowers, $15,782 for widows, $24,905 for single men, and $62,127 for single women. Those who live the longest will also be far worse off, with Americans expected to live the longest facing 10.2 times the retirement deficit compared to retirees with the shortest projected lifespans. 

This data should be worrisome to everyone, because even if you’re not one of the four in 10 Americans who will have thousands too little in retirement funds, your friends and neighbors are likely among this cohort — and having millions of broke retirees across the country isn’t exactly good news for the economy. 

How can you make sure your household won’t run out of cash?

With such large financial shortfalls, the best solutions would likely require systemic change — such as an increase in Social Security benefits to provide more income for retirees or policy changes that facilitate broader access to retirement plans, as EBRI found that eligibility for a defined contribution plan, such as a 401(k) or a 403(k), has a significant impact on the retirement deficit. For individuals 35 to 39 not eligible for a defined contribution plan now or in the future, the retirement deficit is projected to be $78,046 — which is more than five times the average retirement deficit of $14,638 that individuals with 20 years of future eligibility in a defined contribution plan face. 

In a time of political polarization, however, broad policy changes seem unlikely. If nothing changes, the only way you can make sure you’re not part of the 40.6% of households with a retirement deficit is to make sure you’re saving enough for retirement. You should aim to save at least 15% of your income, including any employer match available to you, to ensure you have the cash to support yourself during your senior years. 

The retirement deficit is a major problem

The EBRI data clearly shows Americans are woefully ill-prepared for a secure retirement. Large-scale changes are needed, but unless and until those are forthcoming, individuals need to make sure they’re prioritizing their own retirement savings and finding ways to put cash aside for the future.

If you don’t find a way to save, there’s a very serious likelihood you’ll be tens of thousands of dollars short of the retirement funds you need. To help you get started, check out our tips for increasing the total you’re saving for retirement to find some ideas to put away more cash for the future.

5 ways to avoid regret with Social Security, retirement planning

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Financial reporter Russ Wiles shares five regrets to avoid when planning for or entering retirement.
Brian Snyder, Arizona Republic

Life is filled with choices, and some of them will lead to regrets. That’s certainly true in the financial area, where Americans routinely grapple with difficult decisions.

Most everyone has financial regrets (if they’re being honest), though 15% of respondents in a survey by Bankrate.com said they have no such concerns.

Maybe these people put all their money into the stock market at the start of the bull rally in 2009, bought their dream homes with little cash down and adequately funded their retirement accounts and children’s college education. But chances are, they didn’t.

At any rate, here are five issues related to retirement and Social Security that can cause second-guessing years from now.

1. Don’t tap Social Security early

Yes, there might be good personal reasons to start taking Social Security retirement benefits as soon as you can, at age 62, or soon thereafter. These include a recent job loss, financial stress such as that centered around high medical bills and even an expectation that you might not live that much longer and want to recoup the money you paid into the system.

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Still, this is an area of possible regret because recipients who tap into Social Security early are locking themselves into lower monthly payments than would be the case if they delayed, thus increasing the odds that they eventually could run out of money.

In a study released this month by MassMutual, 38% of respondents now collecting Social Security said they wished they had waited longer. More than half said they decided to claim benefits at an early age owing to a financial need, with one in three citing issues such as health problems or employment changes. But six in 10 respondents admitted that they didn’t receive advice before making this key decision.

The MassMutual survey elicited responses from more than 600 Social Security recipients ages 70 and up.

2. Don’t wait too long to start saving

Not saving early enough for retirement is the recurring top choice when respondents cite their top financial regrets, according to an annual survey by Bankrate.com.

It was cited by 18% of respondents in last year’s poll, eclipsing not saving for emergency expenses (cited by 14%) and carrying too much credit card and other debts (10%). Bankrate will publish this year’s results later this month.

Regrets about not saving early for retirement grow more pronounced with age, according to the study. Unfortunately, the older people get, the more difficult it is do anything about it by boosting incomes.

Meanwhile, younger adults often are more preoccupied with different priorities such as paying down student loans and trying to afford cars, homes and other big-ticket items.

“Retirement seems so far away, and there are more pressing financial needs” such as repaying student loans, said Dagmar Nikles, a retirement-plan specialist for investment giant BlackRock.

But eventually, retirement will come into focus for younger adults, too.

3. Don’t be too conservative

Retirement planning is a long-term pursuit, often spanning three decades or more. This means young investors have the luxury of gravitating toward stocks and other growth assets without worrying about price fluctuations along the way. Unless you will need to cash out within a few years, growth assets are the sensible choice.

Still, it’s not easy to avoid overreacting to those occasional jarring down days or to prolonged swoons that might last a year or two. That’s why most people prefer to anchor a growth portfolio with bonds, cash instruments and other stable investments.

“If you play it too safe, your retirement income won’t be enough to keep pace with inflation,” said Dana Anspach, a certified financial planner with Sensible Money in Scottsdale. But if you’re too aggressive, you’re likely to react to market downturns by selling out when prices are low, she added.

In short, a balanced portfolio usually is the best option, especially one that starts out with riskier assets at earlier ages and grows more conservative over time. But older investors who might not tap their accounts for maybe a decade often can be more aggressive than they think.

4. Be smart about withdrawing retirement funds

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Even if you get a decent start on retirement planning, you still can mess things up later. Aside from depleting your savings with early withdrawals, you can incur taxes and penalties and subject your Social Security benefits to taxes if you’re not careful.

“Two common mistakes are taking Social Security at the wrong time or withdrawing money in a way that costs more in taxes,” Anspach said.

Up to 85% of Social Security benefits potentially are taxable. “When you have other sources of income, such as a withdrawal from your IRA, that can result in more of your benefits subject to taxation,” she said.

By planning ahead, you could time some of those IRA withdrawals to occur in years when you might be able to minimize the tax bite. In particular, retirees in their 60s often can reduce the tax bill by withdrawing and living on funds from IRAs while delaying  Social Security benefits until around age 70, when payments will be larger anyway. 

5. Have a financial cushion

Lacking a rainy-day fund wouldn’t seem to be a retirement problem nor a regret but it can be, as not having emergency funds can trigger a chain reaction of negative consequences. In fact, that was a theme at a mid-May conference in Scottsdale hosted by the Financial Health Network, a group focused on helping lower-income individuals with their finances.

About half of people 50 and up have insufficient short-term savings, said Paolo Narciso, a vice president at the AARP Foundation. About 40% have unmanageable debt.

When people in this age group get hit with an unexpected expense such as big car repairs or medical bills, they might need to pull money from retirement accounts and thereby incur taxes prematurely or otherwise-avoidable penalties. They also might need to start taking early Social Security benefits, at reduced rates.

After not saving enough for retirement, not having an emergency fund was the No. 2 regret cited by respondents in the Bankrate survey.

This dovetails with a finding from another Bankrate study, which found too many older adults are imperiling their retirements by subsidizing adult children. Half of parents with adult kids said supporting them has impeded the growth of their own nest eggs.

More troubling, people 50 and up have amassed a sizable $290 billion of student loans of their own, noted the AARP Public Policy Institute, citing Federal Reserve data. That’s one-fifth of the student-debt total, and it represents a fivefold increase over a decade and a half for people in this age group.

Reach Wiles at russ.wiles@arizonarepublic.com or 602-444-8616.

The hidden cost of your 401(k)

With 401(k) balances near all-time highs, retirement savers are probably feeling pretty good about themselves these days.

The first part of this year saw record contributions, thanks, in part, to a strong stock market, according to Fidelity, the nation’s largest provider of 401(k) plans.

Eventually though, savers will have to take distributions from those accounts.

And that’s when they may realize that their nest egg isn’t as flush as they previously thought.

More from Invest in You:
3 steps to determine whether you’ve earned the right to invest
Take this simple step if you want to be rich someday
Here’s what it takes to become a 401(k) millionaire

Because contributions to regular 401(k) accounts are made with pre-tax dollars, at some point they’ll have to pay the piper (in this case, the federal government and perhaps also the state they live in).

Money taken out in retirement is taxed at your ordinary income rate, which, for the top tax bracket, is currently 37% — plus state marginal rates. (If your income is lower in retirement than it was prior, you’ll likely find yourself in a lower tax bracket, but you’ll still have to pay taxes — at your new lower rate, of course — on any withdrawals from retirement savings.)

“People forget about the tax impact,” said Alicia Munnell, director of the Center for Retirement Research at Boston College. “It’s going to be a shock to them, finding out the government may be getting a third.”

To lessen the tax bite, financial pros recommend a few key tips:

For starters, as you are building a nest egg, consider a Roth 401(k) or Roth individual retirement account in addition to a traditional 401(k), said Howard Hook, a certified financial planner and CPA with wealth management firm EKS Associates in Princeton, New Jersey.

This is a better bet if you’re going to be in a higher, or the same, tax bracket down the road, he said. Contributions to a Roth are taxed up front and then withdrawals are tax-free in retirement.

One caveat: Contributions to a Roth IRA do have income limits, although the threshold is high. Alternatively, there’s no income limit on who can participate in a Roth 401(k) — and the maximum annual contribution for workers under age 50 is more than three times higher.

You can contribute $6,000 to a Roth IRA with an additional catch-up contribution of $1,000 if you’re 50 or older. Similarly, you can save up to $19,000 a year in a Roth 401(k) plus an additional $6,000 if you are over age 50.

Once you’ve reached retirement, manage distributions from all your taxable, tax-deferred and Roth accounts in a way that will keep you in the lowest tax bracket as possible, Hook said. Tap the accounts that allow tax-free withdrawals first — such as Roth accounts and brokerage accounts, which are only taxable when you sell appreciated assets to distribute cash.

The hidden cost of your 401(k)

With 401(k) balances near all-time highs, retirement savers are probably feeling pretty good about themselves these days.

The first part of this year saw record contributions, thanks, in part, to a strong stock market, according to Fidelity, the nation’s largest provider of 401(k) plans.

Eventually though, savers will have to take distributions from those accounts.

And that’s when they may realize that their nest egg isn’t as flush as they previously thought.

More from Invest in You:
3 steps to determine whether you’ve earned the right to invest
Take this simple step if you want to be rich someday
Here’s what it takes to become a 401(k) millionaire

Because contributions to regular 401(k) accounts are made with pre-tax dollars, at some point they’ll have to pay the piper (in this case, the federal government and perhaps also the state they live in).

Money taken out in retirement is taxed at your ordinary income rate, which, for the top tax bracket, is currently 37% — plus state marginal rates. (If your income is lower in retirement than it was prior, you’ll likely find yourself in a lower tax bracket, but you’ll still have to pay taxes — at your new lower rate, of course — on any withdrawals from retirement savings.)

“People forget about the tax impact,” said Alicia Munnell, director of the Center for Retirement Research at Boston College. “It’s going to be a shock to them, finding out the government may be getting a third.”

To lessen the tax bite, financial pros recommend a few key tips:

For starters, as you are building a nest egg, consider a Roth 401(k) or Roth individual retirement account in addition to a traditional 401(k), said Howard Hook, a certified financial planner and CPA with wealth management firm EKS Associates in Princeton, New Jersey.

This is a better bet if you’re going to be in a higher, or the same, tax bracket down the road, he said. Contributions to a Roth are taxed up front and then withdrawals are tax-free in retirement.

One caveat: Contributions to a Roth IRA do have income limits, although the threshold is high. Alternatively, there’s no income limit on who can participate in a Roth 401(k) — and the maximum annual contribution for workers under age 50 is more than three times higher.

You can contribute $6,000 to a Roth IRA with an additional catch-up contribution of $1,000 if you’re 50 or older. Similarly, you can save up to $19,000 a year in a Roth 401(k) plus an additional $6,000 if you are over age 50.

Once you’ve reached retirement, manage distributions from all your taxable, tax-deferred and Roth accounts in a way that will keep you in the lowest tax bracket as possible, Hook said. Tap the accounts that allow tax-free withdrawals first — such as Roth accounts and brokerage accounts, which are only taxable when you sell appreciated assets to distribute cash.

UPDATE: 2 Lewisbug financial planners to offer free advice to Wood-Mode employees

SUNBURY — City attorney Joel Wiest will meet with former Wood-Mode employees and their families at 7 p.m. Thursday at the Shikellamy High School gymnasium, but they’ll have some company.

Two Lewisburg area financial planners are donating their services to the nearly 1,000 people who lost their jobs Monday.

John M. Machak, an investment advisor from The Wealth Factory in Lewisburg, said he wants to help employees work through the difficult time.

“I was moved by Attorney Wiest offering free legal advice to the employees of Wood-mode and I would also like to help out during this difficult time and offer financial planning services to those employees free of charge,” Machak said. “I can provide financial counseling, help plan a strategy, map out priorities, analyze cash flow and perhaps most importantly prepare a survival budget. Facing a sudden job loss with a plan can lower stress and make coping with it much easier.”

Joshua Knauss, founder and CEO of Omniwealth Group, said was surprised by the decision, particularly “the abruptness of the announcement and the lack of notice for their employees.” 

“These individuals are dealing with a tough blow and I feel obligated to help in any way I can,” Knauss said. “I am offering financial counsel, pro bono, to any affected employees to help them navigate this sudden transition and avoid any rash and harmful financial decisions in the process. Clearly many of these individuals are coping with shock, both emotional and financial, which can be disorienting. The loss of a job is disruptive, but it doesn’t have to derail financial plans or severely alter your goals. Sound advice can be invaluable during times like these. We want to use our expertise and experience to help people navigate this transition well.”

Furloughed employees will be invited to discuss any potential legal matters concerning the sudden closure of the Snyder County custom cabinetry manufacturer tonight in Sunbury.

“I want to thank everyone who offered venues for this,” Wiest said. “This shows our community can and does come together in times of stress and need and I want to thank the Shikellamy Area School District for the use of the building.”

Wiest’s offer to answer any legal questions from the affected employees and their families first came Tuesday night. At the time, he explained he’s not certain about what legal options are open to the employees but said he could help them properly file any legal paperwork or offer guidance on related issues.

“I have been flooded with calls and emails since Tuesday and I just want to make sure everyone knows there are people that care,” Wiest said. “We will do the best we can to get everyone heard and see what we can offer to them.”

Wiest said he is also creating a social media page for employees to speak with him.