NEW YORK Dec 21 If you're reading this article
after Dec 21, the Mayans got it wrong. The world is still here.
But there's still plenty to worry about, financial experts
say. Below are excerpts of what the top money professionals told
Reuters Money about their concerns for consumers in 2013:
JOHN ULZHEIMER, PRESIDENT OF CONSUMER EDUCATION AT
Over the past two years, the terms for most credit cards
have been changed to variable rates tied to the prime rate from
fixed rates. If a variable rate is tied to an index, the credit
card issuer doesn't have to notify you.
It's a mathematical certainty that the prime rate will go
up; it can't go any lower. So, any debt incurred from that date
going forward will be more expensive than you're already paying,
which is already too much.
ANISHA SEKAR, VICE PRESIDENT OF CREDIT AND DEBIT PRODUCTS
My major focus of concern is transparency. Overdraft fees
and prepaid debit cards are confusing, and consumers may not be
able to take in their disclosures in a way that is meaningful.
I'd like to see a focus on presenting information in a way that
consumers can understand.
GREG MCBRIDE, SENIOR FINANCIAL ANALYST AT BANKRATE.COM:
Despite an obvious bubble in bonds, there is still a lot of
money moving into them, even though equities are showing better
valuations. Investors are still very risk-averse. The point at
which investors start to embrace risk is going to be at the
wrong end of the economic cycle. It will happen too late to
benefit the economy.
MARILYN COHEN, MONEY MANAGER AND EDITOR, "BOND SMART
The bond markets aren't as deep as they once were, so who is
going to be the ultimate buyer of bonds when a big sell-off
repricing occurs? There are new rules based on how much
proprietary trading can go on; if there are massive liquidations
in high-yield bond funds, who are you going to call?
SVENJA GUDELL, SENIOR ECONOMIST FOR ZILLOW:
After a pretty good 2012, I have been sleeping fairly well,
but of course there are still risk factors. One of the biggest
ones is negative equity. Currently 28.2 percent of homes are
still underwater, that's going to cast a fairly long shadow.
STUART RITTER, SENIOR FINANCIAL PLANNER AT T. ROWE PRICE:
Auto-enrollment in retirement plans gets people to save, but
it doesn't get them to 15 percent of their income, which means
they face a radically curtailed lifestyle in retirement.
Right now, people are typically saving 3 percent, 4 percent
or somewhere around the plan sponsor's match formula. That's
just not enough to live on in retirement.
All the research shows that plan design is a powerful
signaler to people. They are looking to their employer for
guidance on what to do. We need to make sure they have
auto-increases in their plans to get them to that 15 percent
ALISON BORLAND, AON HEWITT'S VICE PRESIDENT OF RETIREMENT
What keeps me up at night is tax reform. The reason is that
retirement plans are such a huge percentage of accounts. I'm
very concerned that they are going to be a target at the expense
of the future financial security of American workers.
CARRIE MCLEAN, SENIOR MANAGER, CUSTOMER SERVICE & RETENTION
With the Supreme Court decision and the Presidential
election, the fate of the Affordable Care Act is no longer an
issue. But is there enough awareness? We take thousands of calls
from consumers, and what comes up is that people think that the
big part of healthcare reform takes place in January 2013.
We see people applying for health insurance now and getting
declined, sometimes because of pre-existing conditions, and they
are wondering why that is still happening. I feel like my hands
are tied because so many people just don't understand it.
KATHY PICKERING, EXECUTIVE DIRECTOR OF THE TAX INSTITUTE AT
H&R BLOCK INC :
The main thing that's keeping us up at night is the
uncertainty - not knowing what's coming from the fiscal cliff
(Outside of the fiscal cliff) one of the things we're really
trying to prepare our clients for is the implementation of
health care. We know it's here to stay. Now people really do
need to get ready for it.
This coming year is a critical moment in time - your 2012
tax return will be the defining record of your income, which
will help determine your eligibility for a health care subsidy.
So we need to start talking to people about the tax implications
of health care and helping them get ready to make those
decisions for themselves.
BOB MEIGHAN, VICE PRESIDENT AT TURBOTAX, OWNED BY INTUIT
, AND A CERTIFIED PUBLIC ACCOUNTANT:
Come January 1st, 140 million taxpayers will be thinking
about their tax return.
I worry about people overlooking valuable deductions and
credits. For example, the earned income tax credit is
overlooked by 20 percent of all taxpayers. That credit can be
worth up to $3800. It's unfortunate that the credit ... is also
one of the most difficult to compute if you're doing it
MARK KANTROWITZ OF FINAID.ORG:
Short-sighted steps to cut spending will ultimately hurt
college access and completion, especially if changes are
implemented without adequate testing and analysis.
The failure of grants to keep pace with increases in college
costs is shifting more of the burden of paying for college onto
the backs of students and their families. This is making college
less affordable and causes increases in the average debt at
graduation. More graduates (and dropouts) are struggling to
repay their loans. The new income-based repayment plan, Pay as
you Earn, will help, but not all borrowers are aware of their
Given that college graduates pay more than twice the federal
income tax of high school graduates, we should be increasing
spending on student aid (especially grants), not cutting it.
HOWARD LINZON, CO-FOUNDER AND CEO OF STOCKTWITS, A SOCIAL
NETWORK FOR INVESTORS AND TRADERS:
Taxes and the government worry me the most. Taxes aren't
going to solve our problems. I worry about the government
because we are over-supervised, in general, but under-supervised
in financials. There hasn't been any change yet in that
I'm hoping we are near the end in this cycle. If not,
there's a lot of pain ahead. People will save more instead of
spend more, which doesn't help the economy. They will just
TOM LYDON, EDITOR, ETF TRENDS:
The Securities & Exchange Commission recently announced that
they'll be lifting the freeze on active exchange-traded funds
that use derivatives. This may open the floodgates for new
active entries into the ETF market from fund companies that
missed the boat during the initial growth stage of ETFs.
Will American Funds and T. Rowe Price make a huge
splash in the ETF world? Probably not, but we're going to have
to watch as many big-name firms take a stab at it.