Colorado Springs Financial Briefs: August 24, 2007

U.S. Bancorp is extending a kind, warm invitation to the many baby boomers who aren't financially ready for retirement.

In June, the bank rolled out a prototype Retirement Planning Center in Minneapolis, where the bank is based. The office is a soft- edged facility that looks nothing like a bank and aims to ease some of the financial complexity and emotional discomfort surrounding retirement.

While quite a few baby boomers have made ample retirement plans, even more have not.

Bank officials estimate that only one in six baby boomers has designed a retirement income plan, and most who do are designing their own strategy, without help from a retirement planner.

Even though most haven't saved adequately, the 80 million baby boomers who retire during the next 10 years will still have acquired $13 trillion in assets when they leave work.

U.S Bank has surmised that those assets need to be carefully marshaled.

The retirement center seeks to help its visitors find ways to do that -- in a comfortable, personal and honest way.

Bank officials said one of the biggest hurdles boomers face is the embarrassment of having made no retirement plans -- and that makes them intimidated to seek advice.

The retirement center's design is U.S. Bancorp's first step toward a solution, getting information and planning tools flowing in ways that any potential client can handle comfortably.

The first thing a visitor sees after being greeted by a concierge -- as the bank calls its planning center employees -- is a granite coffee bar, with soft drinks, coffee and computer monitors where patrons can begin working with U.S. Bancorp's retirement planning software.

Two more "rooms" make up the public portion of the center: a "life theater," where professionals make presentations and lead discussions about everything from IRAs to planning how to stage your home for sale, and a "living room," where an individual or couple can work through decisions about whether to sign on as U.S. Bancorp retirement plan clients.

If after seeing all this they want to sign up, the office provides clients with the whole range of retirement services from nine professionals on hand -- brokers, retirement planners, a private banker and financial planners.

U.S. businesses stash the cash

It appears that U.S. businesses are keeping more cash on hand.

The Association for Financial Professionals' 2008 Liquidity Survey found that U.S. businesses are maintaining high levels of cash, and a significant percentage -- 36 percent -- are building their cash savings.

Twenty-seven percent expect their organizations to increase their short-term balances during the next year.

Cash on hand might sound like a good thing, but it makes analysts leery.

They say stockpiling cash is a sign that businesses are unwilling to invest in acquisitions, capital improvements and expansion because of uncertainty about economic and business conditions.

IRS regulations would limit fee deductions

Proposed IRS regulations that affect trusts and estates could mean more trust fees for beneficiaries, additional work for financial advisers and increased client exposure to the alternative minimum tax -- advisers and industry experts say.

At issue is whether investment management and advisory fees paid by trusts and estates should be fully deductible.

The Internal Revenue Service is proposing that those costs should be deductible only when they exceed 2 percent of the trust's adjusted gross income.

Advisers, attorneys and accountants have differing opinions about how the law works. The U.S. Supreme Court has agreed to review the matter in Rudkin Testamentary Trust v. Commissioner when it reconvenes in October.

Some financial planners believe that if taxpayers can't fully deduct advisory fees, more of them will likely end up in the alternative minimum tax bracket, because under that tax, advisory fees aren't counted as a deduction.

If investors can deduct only those fees that exceed 2 percent, they will have more taxable income.

And, some complain that it will be a burden to figure out what's subject to the 2 percent and what's not.

But the issue may be moot, depending on how the Supreme Court decides.

Copyright 2007 Dolan Media Newswires
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