WSJ 2 SUNDAY, JUNE 10, 2012
THE AGGREGATOR AL’S EMPORIUM
A Cheat Sheet for Students Traveling Abroad Shop ‘Gay C. Penney’
It’s almost a rite of passage: there are few cookie-cutter so- BY AL LEWIS ney’s pricing structure.
As soon as the dorm room is Stat of the Week lutions for drawing up legal The result? Larger-than-ex-
packed up, college students and documents for unwed partners, If you sup- pected losses, plunging reve-
recent graduates start packing Street Talk: Due to recent events, 82% of Americans surveyed think says James Lange, an attorney port the gay nues, dwindling customer traf-
again to head overseas to study, Wall Street should be subject to tougher regulations. and certified public accountant c o m m u n i t y, fic and a plunging stock price.
teach English or just travel, Do you agree or disagree with the who owns Lange Financial please shop It’s more proof that the more
sometimes for a year or more. following statements about Wall Street? AGREE DISAGREE Group in Pittsburgh. J.C. Penney. you pay a CEO, the more over-
But with foreign-transaction Even small planning matters Ron John- confident he becomes. Mr.
Most Wall Street employees would be 70% 2012 27%
fees on credit cards, stiff fees on can cause problems, says J.T. son, the department-store Johnson, a lauded former Apple
willing to break the law for ﬁnancial gain 63% 2006 35%
ATM withdrawals and loopholes Hatfield Smith, a vice president chain’s new chief executive, is executive, didn’t begin as Pen-
in health insurance, families Wall Street is absolutely essential because 62 34 of SPC Financial in Rockville, portraying alternative lifestyles ney’s so-called turnaround art-
ought to consider more than it provides money to businesses 71 25 Md. Take homeowners insur- as a wholesome part of Ameri- ist until November. That didn’t
transportation and the weather Successful people on Wall Street deserve ance: If the property is under can consumer culture. He has stop the company from paying
as they plan. Here are some tips the money they earn 40 56 only one partner’s name, the pol- hired Ellen DeGeneres as a him $52.6 million for 2011, most
for keeping costs down. icy won’t necessarily cover the spokeswoman and printed cata- of it in stock awards. Compare
Credit cards. Most U.S. What's good for Wall Street is good for the 30 67 other’s personal items. logs with smiling gay parents that to America’s median
banks add foreign-transaction country 37 60 —Charles Passy and their adorable children. household income of less than
fees of as much as 3% on each People on Wall Street are as honest and 28 68 SmartMoney magazine Diversity, inclusion, accep- $53,000 a year. Any wonder he
credit-card purchase. moral as others 41 54 tance for all—these are laudable doesn’t see the need for cou-
American Express, J.P. Mor- New Job, Lower Pay values. The problem is, well, I pons or sales?
Note: Numbers don't add to 100 because responses ‘not sure’ and ‘refused’ were omitted
gan Chase and Citigroup offer Source: Harris Interactive poll of 1,016 adults conducted April 10 to 17
The weak pace of hiring in have never actually met an This is starting to look like
reward cards without transac- The Wall Street Journal May cast a big cloud on the fu- openly gay person who openly the turnaround at Sears-Kmart,
tion fees, but the cards usually ture of consumer spending. But shops at J.C. Penney. and it could end up looking like
are aimed at consumers with the outlook dims more when you Nevertheless, Mr. Johnson is the turnaround at Montgomery
top-notch credit and charge an Even with all the charges, started offering services for un- consider even those fortunate to inspiring boycotts from some of Ward. In a webcast conference
annual fee. Those factors make you likely are better off getting married couples—same-sex or get jobs are generally earning the straight people who are last week, Mr. Johnson conceded
them more appropriate for par- cash in the local currency from not—who must deal with the less than the average worker. more likely to shop in his stores. he did a poor job communicat-
ents, who can make their kids an airport ATM than from a same financial issues as their Economists at the Royal One Million Moms, an off- ing his pricing strategy. He even
authorized users on the account. bank or currency-exchange wedded compatriots but lack Bank of Canada have calculated shoot of the conservative Ameri- started to resurrect the term
Students and recent grads desk. And be sure to call your the piece of paper that makes the average weekly pay of new can Family Association, is partic- he’d tried to banish, “sale.” But
should consider Capital One Fi- bank and credit-card issuer be- the process much simpler. And workers in the U.S. versus the ularly upset about a Father’s Day he can’t change course.
nancial, since the bank doesn’t fore you go to tell them what professionals catering to this average weekly check earned by promotion featuring two gay See, before Mr. Johnson came
charge foreign-transaction fees countries you will be in and for group say they can barely keep all private-sector employees. dads. The ad read: “First Pals: along, Penney’s was in a race to
on any of its cards, including its how long. up with demand. They looked at changes in hir- What makes Dad so cool? He’s the bottom. Nobody would buy
card designed for students. Bank Health insurance. Many U.S. Married couples can take ing and average pay for the ma- the swim coach, tent maker, best anything unless it was 60% off.
of America’s new Travel Re- health plans offer little or no much for granted, like the ability jor employment sectors. friend, bike fixer and hug giver— And now Penney’s faces a stall-
wards Card has no annual fee or coverage when you’re abroad or to transfer assets between What RBC found was that all rolled into one. Or two.” ing economic recovery that
foreign-transaction fees. they may impose time limits on spouses without tax implications new-hire pay is starting to lag Seems like lame ad copy to threatens to crush even more of
Be wary of merchants who coverage, so most formal study- or the right to assume end-of- behind that of embedded work- me. Yet this is the kind of mate- its middle-class consumers.
offer to ring up a transaction in abroad programs include a life caregiving decisions. ers. Over the past year, the rial One Million Moms routinely Mr. Johnson promises a “year
U.S. dollars. Typically, they will health plan. If your time abroad But for unmarried couples, weekly paycheck for new work- denounces as “trash in the me- of transformation,” after which
use a less-favorable exchange is open-ended, you might need to there’s a range of paperwork— ers is about $36 less than the dia!” we’ll compare Penney’s to Apple,
rate, so you’ll pay more than purchase travel insurance or in- from trusts (which can cost salary of existing workers. It’s fair to say One Million Starbucks, Whole Foods and
you should. ternational medical coverage, $1,500 to $5,000 to establish) to The gap doesn’t mean the Moms hardly represents a mil- other companies where value
Bank accounts. The more ru- which generally costs a young prenup-style domestic-partner- economy is creating only low- lion moms, and if it did, many of isn’t determined by price but by
ral the areas you visit, the more person a few hundred dollars. ship agreements—that’s re- paying jobs. It also suggests their children would be gay, ac- perceived coolness. This is a tall
cash you will need, as fewer mer- Regardless of the health plan, quired to guarantee the proper that, with so many job-seekers cording to the law of large num- order. J.C. Penney, incorporated
chants accept plastic. But cash look to see what’s covered. protections and cost-saving in the labor markets, businesses bers. But it’s also fair to say this in 1913, occupies a class of
might be harder to get, since Many plans exclude treatment measures. Otherwise, they could are able to offer lower starting organization, though often stodgy retailers that tend to run
ATMs aren’t as plentiful. On top for pre-existing conditions or run into problems with issues salaries for higher-skilled, pro- branded as antigay, is expressing themselves out of business every
of any ATM fees assessed by the mental-health issues or reim- like, say, whether a surviving fessional jobs. a sentiment common among the hundred years or so.
machine’s owner, you might pay burse you only after treatment. partner will be able to remain Slower income growth will middlebrow demographic that Mr. Johnson pleaded for pa-
foreign-transaction fees of up to Many plans offer emergency in the couple’s home after the limit future gains in consumer J.C. Penney serves. tience: “We believe there will be
3% and other charges. medical evacuation, but might other passes. spending, which remains the Mr. Johnson is alienating one year of sales going down
Bank of America offers free transport patients only to the But the problem, say experts, main engine of growth in the Penney’s traditional customers that sets the stage for a year of
ATM use through an alliance closest “appropriate” hospital is that the issues involved are economy. in a bid to attract new custom- takeoff.”
with certain banks in Europe, rather than bringing them home. so complex that even specialists —Kathleen Madigan ers from higher socio-economic So welcome to Penney’s “one
China and Mexico, such as Bar- —Karen Blumenthal devoted to this type of planning Real Time Economics Blog segments that now shop Macy’s, year of sales going down.”
clays and China Construction WSJ.com can make mistakes. Estate plan- WSJ.com Nordstrom and Target. Please go shop there before
Bank, but it charges $5 plus a ning is one potential trouble Marketing to gays is but one there’s two.
1% fee for using other ATMs. Wooing the Unwed spot. It’s a crucial piece of plan- The Aggregator, edited by Cristina example of the many ways Mr.
Credit unions, small banks Call it financial planning for ning for unmarried couples be- Lourosa-Ricardo, features news and Johnson is doing this. Earlier Al Lewis is a columnist for Dow
and online banks tend to charge the kind-of-married. cause there’s no assuming the commentary from The Wall Street this year, he started putting an Jones Newswires in Denver. He
lower fees and some reimburse In recent years, financial ad- “spouse” will get what he or Journal and other publications. end to coupons and the word blogs at tellittoal.com; his email
other banks’ ATM fees. visers and estate attorneys have she deserves or expects, and yet Email: firstname.lastname@example.org “sale” in a bid to change Pen- address is email@example.com
BARRON’S INSIGHT MARKETWATCH
Deckers’s UGGs Have Got Legs Get Retirement Saving Back on Track
BY CHRISTOPHER C. WILLIAMS Martinez, 57, was named CEO. BY ANDREA COOMBES
Deckers Outdoor (DECK) Mr. Martinez—formerly chief
Investors have kicked Deck- marketing officer at Reebok, Some Americans may be bet-
Daily share price
ers Outdoor to the curb, send- where he helped build that ter prepared for retirement
As of Friday, 1 p.m.: $53.23
ing shares of the maker of UGG company’s aerobic shoe brand than they realize.
boots down 34% in the past $120 from scratch—expanded UGG About 56% of baby boomers
year, to $53. Shares recently fell distribution carefully through and Generation X (those age 38
sharply after the company re- upscale department stores, in- to 65) are saving enough to
ported lower-than-expected 80 cluding Nordstrom, Neiman cover their basic retirement
first-quarter profits and low- Marcus and Bloomingdale’s. He costs, including uninsured med-
ered its profit outlook for all of kept the brand out of mass- ical expenses, according to a re-
2012—for a second time. Ugh, market chains and midlevel re- cent projection by the Employee
indeed. 40 tailers such as Macy’s, to help Benefit Research Institute, a
But UGGs still have legs. The maintain its cachet. Washington-based nonprofit
iconic footwear brand remains In the past six years, UGG think tank.
popular with customers, and 0 has been branching out from its The bad news: 44% aren’t
Deckers’s depressed shares look 2011 '12 signature “ugly” boots and slip- saving enough. And some of
attractive. The stock (DECK) Source: WSJ Market Data Group
pers with more fashion-oriented those people are on the lowest
could rebound to $75 or more in boots, shoes, sandals, accesso- rungs of the income ladder, so
the next year as high sheepskin ries and outerwear. Last fall, they may have little opportunity
prices fall and the company ex- investors make and lose money the company even began to to ramp up savings as they age.
pands internationally and opens chasing them. One of the hottest push an UGG for Men line of Still, while some people face
new retail stores. brands in the past decade is the boots, slippers, sandals, oxfords a troubling retirement outlook,
“This is a good entry point UGG line of fleece-lined boots, and sneakers. Mr. Martinez, others in that 44% group can
for the stock,” says Robert and they made Deckers one of who understands the value of take steps to get their savings
Luna, chief executive and chief the hottest stocks. The company sports-celebrity endorsements on track.
investment officer for SureVest paid about $15 million in 1995 from his Reebok years, signed “Some Americans face a re-
Capital Management, a wealth- for the UGG brand, which had New England Patriots quarter- tirement crisis, but it isn’t the Consider two hypothetical ing out until age 85.
management firm in Phoenix made its debut in the 1960s on back Tom Brady to be the face majority,” says Stephen Utkus, workers, each with $1 million in “You only have to put down a
that owns the stock. At Deck- the feet of Australian surfers. of the men’s brand. director of Vanguard Group’s savings. One retires at age 64, relatively small percentage of
ers’s current level, he says, “a UGG sales grew dramatically Center for Retirement Research. the other at 62. They both seek your 401(k) or IRA balance to
lot of the risk management has from a tiny base, but the brand Christopher C. Wiilliams is a People fall along a spectrum $75,000 a year in retirement. get relatively decent monthly
been done for you.” didn’t reach critical mass until writer for Barron’s. For more sto- of retirement readiness, with For the early retiree, the income at that point,” Mr. Van-
Shoe fads come and go, and the mid-2000s, after Angel ries, see barrons.com. 20% to 30% of Americans “par- combination of a lower Social Derhei says. That means you
tially ready” for retirement, he Security payout (about $1,500 can focus on saving for the
says. “A significant number of monthly versus $1,750), two years up until age 85.
ASK DOW JONES
Pick a Stock people can take some steps be-
tween now and retirement to
fewer years of earnings on his
savings, and the portfolio hit
That said, there are draw-
backs. You’ve locked up that
When to Claim Losses For Contest
move the dial and to get ‘pre-
from pulling $150,000 out for
living expenses in those two
years, adds up to him running
money. You’ll pay extra for in-
flation protection and the abil-
ity to leave that money to heirs.
BY TOM HERMAN deducting capital losses.
If the stock became worthless
It’s time to pick a stock for
Sunday Journal’s 48th Invest- 1 Increase your savings rate
by 1% or 2% each year.
out of money by age 88.
Meanwhile, by waiting two
And you have to trust that the
annuity provider will survive
Q: I enjoy reading your col-
umn in the Knoxville,
in a prior year, and you didn’t
claim it on your return for that
ment Dartboard Contest.
Select a stock from the New
Saving more can be relatively
painless with small annual in-
years to retire, the other person
has $242,358 in savings at age
for decades to come.
Tenn., News Sentinel. I believe
you might have had an error
in a recent column regarding
year, you can file an “amended”
return, using Form 1040X.
How far back can you go?
York Stock Exchange or Nasdaq
market that you
think will per-
Ramping up your current 5%
401(k) contribution rate to 10%
90, according to an analysis by
Richard Jackson, chartered re-
tirement planning counselor
4 Work part time
for five years.
Getting a part-time job—if
worthless stock (and how to “You must file it within seven form well over over a four-year period means and a principal at Dallas-based you can find one and your
claim a capital loss). You said years from the date your origi- the next six an extra $550 in monthly in- Schlindwein Associates. The health allows it—is another way
you must file an amended re- nal return for that year had to months. We will come in retirement, according analysis assumes a 6% annual to prime the retirement-savings
turn within seven years. But be filed, or two years from the then choose six to an analysis by Fidelity In- rate of return, and doesn’t take pump.
IRS Publication 17 said you date you paid the tax, whichever reader entries to compete vestments. The analysis as- into account taxes, variability of Take someone who retires at
must file within three years. is later,” says Publication 17. against each other and six sumes a 37-year-old worker returns or additional savings 65 with a final salary of $75,000.
F.E.R., Fairfield Glade, Tenn. The instructions for Form stocks chosen by tossing darts with a $74,000 annual salary, a from delaying retirement for He’ll need a total of about
1040X say: “A Form 1040X at stock listings. $20,000 401(k) account balance, two years. Social Security pay- $780,600 in retirement savings
A: Our column was correct.
There is a special rule for
worthless securities. You can
based on a bad debt or worth-
less security generally must be
filed within seven years after
The reader whose stock per-
forms best between July 1 and
Dec. 31 wins a Sunday Journal
a 3% employer match, an 8.35%
annual return and expected re-
tirement at age 67.
out estimates are based on his
if he doesn’t work part time, but
$661,000 if he works part time
for five years earning 30% of his
find details in the instructions
for Form 1040X and in Internal
Revenue Service Publication 17.
the due date of the return for
the tax year in which the debt
or security became worthless.”
blanket and, most importantly,
lifetime bragging rights.
Email your stock pick to
Then consider going beyond
10%. “If somebody is going to be
saving their entire career, 15% is
3 Purchase an annuity.
A major conundrum of
retirement planning is estimat-
former salary, according to an
analysis by Mr. VanDerhei.
The analysis assumes the re-
A few readers raised the This rule is different from firstname.lastname@example.org by typically what most financial ing how long you will live. Lon- tiree wants to replace 85% of
same question, so here is an- the general time limit on June 23. Include your name, professionals suggest you put gevity insurance helps savers pre-retirement income, a 3% in-
other summary of the rules on amending returns. address, daytime phone num- in,” says Jack VanDerhei, re- mitigate the risk of getting that flation rate, a 5% rate of return,
deducting losses on worthless ber and the newspaper where search director at EBRI. answer wrong—that is, living the retiree doesn’t have a tradi-
stocks and other securities. Send your questions to us at you read Sunday Journal. In- longer than expected and run- tional pension and he dies at
First, find out when the stock
became worthless. If it’s this
year, claim the loss next year on
and include your name, address
and telephone number. Questions
vestment professionals and
previous contestants can’t
compete. You must be willing
2 Work two extra years.
Working just two years
more than planned can make a
ning out of money.
The idea is that when you re-
tire at, say, 65, you take 10% or
Andrea Coombes is a personal-fi-
your federal tax return for 2012, may be edited; we regret that we to be interviewed. big difference in retirement in- 15% of your savings to buy an nance editor for MarketWatch.
subject to the usual rules for cannot answer every letter. —Rachel Louise Ensign come. annuity that doesn’t start pay- Read more at marketwatch.com.