Here's hoping that 2009 is a better year than 2008. It's hard to imagine how it could be much worse.
The economy has been in recession all year. Housing prices have plunged. Nearly 2 million jobs have been lost. The S&P 500 has plummeted more than 40% this year.

 

So what's going to happen with the economy and markets next year? Well, sorry to disappoint many of my doom and gloom readers out there, but I think the economy will slowly start to gain momentum sometime late next year.  But it's important to note that this still appears to be a long, painful recession and not another depression.

 

"We are in the eye of the storm. The fourth quarter of this year and first quarter of 2009 will be bad. But this is probably the worst of it. We should see banks becoming more willing to lend by the end of the first quarter," Joe Liro, an economist with Stone & McCarthy Research Associates in Princeton, N.J.

And the main reason for this is that the Federal Reserve has been extremely busy doing everything it can to prevent a full-blown depression. Even though it may seem like nothing that the Fed has done has helped, the many moves taken by the central bank will eventually have their desired effect.

In addition, the incoming Obama administration is expected to propose a massive stimulus package geared toward job creation and infrastructure building. That too, could provide a lift to the economy later in the year.

And with all that in mind, it's worth remembering that the stock markets often anticipate recoveries. So even though the economic numbers and corporate earnings reported released early next year will probably be horrific, investors may look past that.  At some point, investors will realize that the sky isn't really falling. And sentiment could wind up turning on a dime.

See full story, located at Yahoo! Finance.

 

Trying to rein in rising health care costs is like trying to stop a rocket launch with kite string. And finding the money to pay for medical expenses and long-term care may seem equally futile. But it's a big issue that can affect the quality of your retirement.

 

The average American spent $2,664 on health care in 2005 (including prescription drugs and vitamins), a 3.5 percent increase over the previous year, according to the U.S. Bureau of Labor Statistics. Not surprisingly, the tab for people 65 and older was much higher -- $4,193 on average.

 

Use tax-favorable savings vehicles - Health Savings Accounts, or HSAs, can be excellent vehicles to help individuals save for future qualified medical and retiree health expenses on a tax-free basis -- but they're not for everybody. They're great concepts for people who are healthy, who won't be taking all the money out and who can build up some kind of savings pot that they can use on a tax-advantaged basis for health coverage.

 

Consider long-term care insurance - Buying a long-term care, or LTC, policy can give you and your family peace of mind. But buyer beware! LTC premiums shouldn't cause you financial hardship, and these policies are highly variable in their coverage and premiums.

 

Stay on the payroll - In Bankrate's own survey, 85 percent of respondents answered (correctly) that Medicare won't cover all of their medical expenses, and 77 percent of those respondents acknowledged that they would be very or somewhat likely to return to work if necessary to pay for uncovered medical expenses. In fact, many experts believe that baby boomers will stay in the workforce for a longer period of time than earlier generations due to a number of factors, including rising health care costs.

Keep fit - No matter what the insurance landscape is like in the future, there are a few basic, yet effective, ways to help you steer clear of taking a job that involves pointing customers toward the plunger aisle. Keep yourself in good shape, eat right and exercise.

See full story, located at Bankrate.com.