Best Business Commentary

last updated 11 January 2015

Golden-year parachute

How can you “avoid running out of money” in your golden years? says Jonathan Clements in The Wall Street Journal. Start by putting five years’ worth of spending, or “25 percent of your nest egg,” in a cash reserve “cushion”—high-yield savings accounts, short-term bonds, and money market funds. The rest should be for long-term growth, with maybe 50 percent in stocks and 25 percent in bonds, so “sit tight” if those funds “are underwater.” For more income certainty, “delay Social Security to get a larger monthly check” later on. And if you hit 85 going strong, you should consider investing your last investment “bucket” in an income annuity. At that age, the “payout should be handsome.” Le Petit Prince

“Chuck deserves to go,” says Roger Ehrenberg in SeekingAlpha.com. It isn’t that Charles Prince “is a bad guy, he just isn’t the right guy to run Citigroup.” True, managing an “unmanageable behemoth” like Citi is a tough task, but Prince’s way “was all wrong.” Asking managers to “make numbers that were not reasonable” led to the “unfortunate behaviors”—see “bad credit decisions”—that rewarded short-term performance. And who pays for those long-term mistakes? “The shareholders. You. And me. And our kids. It sucks.” Just like the protagonist of “Le Petit Prince,” the Citigroup CEO “was here, wide-eyed and optimistic about the future,” but then disappeared “to a place far, far away.” Bon voyage.