If you haven't already done so, now is the time to make your IRA contribution for the year. You have until the due date of your income tax return to make contributions. There are no extensions allowed, and contributions not made in a given year cannot be made up in subsequent years.
While you are thinking about retirement, now is a good time to review your existing retirement plan. Have you estimated how much you will need on an annual basis during retirement? Are you taking full advantage of your company-sponsored retirement plan? Have you evaluated the performance of the assets you earmarked for retirement? If so, are those assets performing above or below the level you need to satisfy your retirement goals? If actual performance deviated from expected performance, perhaps it's time to consider adjusting your expectations, asset allocations, or your level of saving.
If you have not established a formal retirement plan, the sooner you do so, the better. The longer your time horizon until retirement, the longer you will have to enjoy the benefits of tax-deferred savings, the more options you will have in the way that you save, and the higher the probability that you will be able to meet your retirement goals.
Plans are geared to your personal circumstances allowing you to save as much as or as little as you can. Just thinking in terms of what you will need to do to fund your retirement is a good start. There has never been a client who regretted planning ahead. Please call if you would like to discuss your retirement plan.
Are you making the most of IRA rollovers? If you change jobs, are a victim of downsizing, or decide to retire, you will be faced with one of the most important decisions of your life - the transfer of your retirement nest egg. I can help you find an account with:
If you would like to discuss your retirement
status or more details about opening an account or transferring
your 401(k) payout to a Self-Directed IRA, please call.
As we head into the warmer weather, many people begin to forget about their finances. After a long, snowy winter, it can be easy to be distracted by the warm temperatures, blue sky, and sunshine.
I'm sure there will be many things to keep you preoccupied during the summer, like golf, gardening, and family vacations. Just keep in mind that all of these things you enjoy during the summertime are the same things you are going to want to enjoy during your retirement. For you to be in a position to reach your retirement objectives, it will be necessary for you to continue to move forward with your financial plans.
I am not suggesting you stay inside all summer and crunch numbers. All I'm trying to say is that you should continue to watch your finances and manage your financial plan on an ongoing basis. Remember, retirement planning is for the long term. It is important you stay on track as you progress toward your goals.
As always, please call if there is anything I can do to assist you.
The biggest financial concern for most people seems to be retirement and planning, investing, and saving for it. People seem very aware that our retirements will be very different from the ones our parents and grandparents experienced. With life expectancies increasing, retirement length increases, too. That means today's retiree might need to make a retirement nest egg last up to twice as long as previous generations did.
What can you do about retirement concerns? Begin by educating yourself and your loved ones about money and how to use it to your advantage. My commitment to you is to help educate you about the topics that will help you achieve your retirement plans.
If you would like to schedule a time to
discuss your retirement concerns, please call to schedule an appointment.
Until recently, you could often count on many of the traditional sources of retirement support such as Social Security, your company's pension plan, Medicaid or Medicare, and an exponential return on the sale of your home. However, that is all changing.
The immense strain that 76 million retiring baby boomers will put on the system is forcing the federal government to reevaluate the Social Security system. Because significantly more people are expected to receive Social Security benefits, Social Security eligibility may become limited.
The federal government is also planning billions of dollars of cuts in Medicaid and Medicare. Inflation and higher taxes are eroding salaries and company pensions. Your largest retirement asset, your home, will probably not appreciate as much in the next 20 years as it did in the past. To compound the problem, people are retiring earlier and living longer.
A big mistake investors often make is thinking it is wise to continue conservatively investing for retirement. In fact, the opposite is commonly true. I am not recommending trading on speculation, but a disciplined and consistent approach to investing in quality companies for the long term. You are likely to have your longest time frame for your retirement assets, which allows you the time to ride out short-term market volatility and ensure the growth necessary for a happy and secure retirement.
We frequently spend so much time discussing patient, long-term investing that we often neglect how the client gets to spend the money. How we spend our accumulated savings and investments has a lot to do with our goals in life. Do you anticipate a long life? Have you determined when your death will occur? If so, the task is simplified. Divide your allotted days by how much money you have accumulated.
If you depend on your investments for a portion of your income, you can't count on spending down your nest egg over the allotted time and expiring in exuberance. Your calculations might be wrong. You might live too long. You might want to leave assets to your surviving spouse, children, or charity.
The key to building a successful retirement investing and withdrawal program is to define your goals and set up a well-diversified, stock-oriented investment mix. When it comes time to use your investment income, begin a cautious withdrawal program and stick to it.
If you want higher returns over the years, you have to invest in an asset mix higher in stocks. Higher returns mean more volatility. Take on only as much risk as you are comfortable with rationally and emotionally. I can help you build an investment program to meet your objectives and will explain the potential risks and rewards involved. Only you can decide how much risk to take.
As a professional investment advisor, I will make modest, periodic asset allocation changes according to my view of current market and economic conditions. Most individual investors are well advised to concentrate their efforts on determining their goals and emotional and economic comfort level. Change this investment mix when your goals change and ignore short-term market fluctuations. A disciplined program puts the odds in your favor to building a growing retirement income stream with real, inflation-adjusted returns.
There are three ways I can help you to minimize your retirement worries and concerns. Consider the following:
Investment Review - Analyzing your current investment holdings and allocation of additional deposits. This includes the prior and potential investment growth, after-tax income, risk/return factors, and the maintenance required. Development of a plan to bring current and future holdings into alignment with your personal objectives and retirement circumstances. Includes a written report with supporting schedules and recommendations.
Retirement Income Analysis - Projecting the anticipated income at retirement from all sources, including employee benefits, private plans, investments, insurance, and government benefits. Recommendations for how to increase the projected income and offset inflation.
Retirement Plan Distribution Analysis - Evaluating the alternatives with regard to one or more qualified retirement plans, such as an IRA, TSA, 401(k), profit sharing, money, purchase pension, etc. Current account and all future deposits are projected to alternate retirement dates. Various forms of distribution are calculated: rollovers, lump sum, fixed period installments, commercial insured annuities, and life assumptions. A projection is made comparing the results for 30 years.
If you would like to take advantage of these
services, please call.
Preparing for retirement requires extensive time and planning. The process, stated simply, can be divided into three steps:
To assist you in preparing for retirement, we offer a personal retirement review. We identify, inventory, and analyze all resources available for retirement. Needed cash flows to maintain anticipated lifestyles are projected and compared to estimated qualified retirement benefits and investment income. Asset allocation and risk management strategies are developed and implemented accordingly. Ongoing consultation is provided where necessary.
Please call if you would like a preretirement
checkup.
What's been most impressive to me is the increasing number of both new and long-term clients who take advantage of the other services I offer beyond investing.
I'm delighted that most of my clients are becoming knowledgeable about some of the ways to determine how much income can be taken from their investments during retirement. For new clients, sorting out all the confusing mass of accumulated investments is very important. It can mean an earlier and more secure retirement, and for others, it may call for estate planning to keep future taxes minimized.
It is also gratifying to see more of my clients updating or obtaining wills, living wills, and durable powers of attorney, and learning more about long-term care. Many are also considering their parents' situation in their planning discussions. This is extremely important, because making a wrong move, like gifting a house, could be financially disastrous.
To keep your goals on track, one must be up to date and knowledgeable in many areas. This is where I can help you. Please call if you would like to set up an appointment to discuss other services I can offer to you.
The complex issues surrounding retirement suggest you should begin planning years before your anticipated retirement date. A realistic look at your current and future financial situation may cause you to rethink your retirement plans.
The key to retirement planning is to set realistic goals. Ask yourself these critical questions: Where do I plan to live? What kind of lifestyle do I want? How is my health and my spouse's health, because any long-term illness or special medical needs could place severe limitations on my retirement plans?
Next, thoroughly analyze your current finances.
Begin with a review of your assets, including your home, bank
account balances, investments, pensions, profit-
sharing plans, and personal property. Go through the same process
with your liabilities, including debt such as mortgages, car loans,
and credit card balances. Deduct the liabilities from the assets
to calculate the available funds for your retirement.
This is where the financial planning process becomes complicated. You must match the income and growth potential of your assets against your retirement objectives to see if you prudently will be able to afford your desired standard of living. If not, you may need to change your retirement choices or consider postponing retirement. If ample assets are available, the next major issue is how you will invest them for retirement.
There is no single investment strategy that is right for the early years of retirement. Your portfolio will probably include current income, growth of principal, and tax advantages to help ensure you do not outlive your assets.
This is a simplified look at retirement
planning. In reality, few individuals are in a position to accurately
assess such variables as retirement costs, tax consequences, health
costs and insurance, the impact of inflation, and yield from assets.
Therefore, it is always a good idea to consult with a qualified
financial advisor early in the planning process. Please call if
you have any questions or if you would like to review your current
retirement plan.
Most individuals have as a goal to be financially independent and to enjoy a comfortable retirement. In past years, this was less difficult to accomplish as inflation rates were relatively low, wage earners tended to remain with the same company throughout their career, and pension plans were more generous. Also, Social Security payments were not taxed, and health care costs were not dramatically rising.
Today, we face a very different set of circumstances. Pension plan and Social Security payments alone are rarely sufficient to meet retirement goals. The old rule of thumb that you will need 70% of your preretirement income to maintain your retirement lifestyle does not allow for the additional time or money needed to travel and pursue other hobbies. These represent increased expenses, not to mention the escalating cost of medical expenses, increased taxes, and rising life expectancies. Over the long term, it is not the volatility of the markets or the economy that is the main risk to the erosion of your capital. It is inflation.
The good news is that I have very sophisticated tools at my disposal to assist in the planning process. With the aid of software, I can obtain a snapshot of your current situation and what it will take to reach your retirement goal. I can project the rate of return needed on your investments to address your goals and help you design a portfolio consistent with your risk profile.
If you would like help with this, I would be glad to discuss it with you. Feel free to give me a call at your convenience.
Recent tax law changes reduced the long-term capital gains tax and the tax on qualifying dividends to 15%. However, interest income, nonqualified dividends, and short-term capital gains are still considered ordinary income and taxed as high as 35%. In light of these changes, you may want to reevaluate which investments should be held in your IRA and which should be held in taxable accounts.
Distributions from your deductible IRA are considered ordinary income, and therefore, they are taxed as high as 35%. On the other hand, withdrawals from a taxable account might be treated at the more favorable 15% rate if they are qualifying dividends or long-term capital gains. Based on these numbers, you could conclude that you would be better off putting bond funds in your IRA and stock funds into a taxable account. But the answer may not always be that simple. Other factors should be considered, including how long you will own the investments.
Saving money on taxes is certainly important,
but you need to take your full financial picture into consideration
before making any decisions. If you are not sure whether your
investments are making the best of the recent tax changes, please
call.
The complexity of issues surrounding retirement suggests you should begin your planning many years before your projected retirement. A realistic look at your current and future finances may cause you to rethink your early retirement plans.
The key to retirement planning is to set realistic objectives. Ask yourself these critical questions: Where do I plan to live? What kind of lifestyle do I want to enjoy? How is my health and that of my spouse? Are there any long-term or special medical needs that could place severe limitations on my retirement plans?
Make a thorough analysis of your current finances. Begin with a review of assets: your home, bank account balances, investments, pension/profit-sharing benefits, and personal property. Use the same process for your liabilities: mortgages, car loans, credit card balances, etc. Deduct the liabilities from your assets to calculate the funds you can use to finance your retirement.
This is where the process becomes complicated. You must match the income and growth potential of your assets against your retirement objectives to see if you can prudently afford your desired lifestyle. If not, you may need to change your retirement choices or consider postponing your retirement.
If ample assets are available, the next major issue is how you will invest those assets for retirement. There is no investment strategy that is right for early retirement. Your portfolio will probably include current income, growth of principal, and tax advantages to help ensure you do not outlive your assets.
This is a simplified look at early retirement planning. In reality, few individuals are in a position to accurately assess such variables as retirement costs, tax consequences, health-care costs and insurance, the impact of inflation, and yield from assets. Therefore, it is always a good idea to consult with a qualified financial advisor early in the planning process. Please call me with any questions you may have or if you would like to review your current retirement plan.
There are so many considerations to retiring, and sometimes unexpected events occur before we really have time to think retirement over: an early offer, plant closing, workplace relocating out of state, spouse being transferred, or new employer. Such changes can accelerate your retirement decision. Before making a hasty decision, ask yourself if just because you are older than 55, or even in your 60s, do you really want to retire now?
Over the past 10 years, we have seen too
many people face a sudden change in job status that causes them
to prematurely consider retiring from the work force. After working
for many years, retirement sounds attractive. Just think, if you
retire, you can enjoy unlimited time off to do whatever you want,
such as staying up late, sleeping in, enjoying hobbies, or traveling.
Consider how you will feel when someone asks what you do. Are
you comfortable replying that you are retired?
Retirement is defined as ceasing to work for money. That means
one has to live the rest of your life (or two lives) on the assets
accumulated so far. And people who are age 65 need to plan on
20 years of retirement, at least. Making sure of enough income
is one concern, but another question to consider is what you want
to do with your life during the next 20-plus years?
Please call if you have any questions or concerns because you are contemplating an early retirement.
Whether you are at the early stages of a retirement program, have progressed to the midpoint of the accumulation phase, or are close to making critical decisions with retirement just around the corner, your financial plan can be evaluated in terms of its ability to meet your retirement needs.
I can help you evaluate your financial plan. I will take into consideration your retirement goals, current assets, goals you may want to pursue before retirement (such as children's educations or a major purchase), as well as retirement income available in the form of a retirement plan and/or Social Security benefits. Using conservative assumptions for long-term inflation, salary appreciation, and earnings on your current assets, we can determine a benchmark for future retirement evaluation, decision making, and planning.
This process is not a one-time event; lives and goals change and assumptions must be updated. If you have had a financial profile at some point in the past, it may be time to update the information in order to stay on target as retirement approaches. If you would like to initiate this process or have any questions, please call.
There is often a tendency to become overwhelmed with the abundance of material pertaining to a particular subject, such as the vast area of retirement planning. My mission is to help you reach your financial goals in many areas by providing the resources to apply this information to your personal retirement plan. By helping you clarify your long-term goals, I can assist as you investigate the issues and apply them to your own situation.
The retirement planning process is one in which projections are made with the purpose of matching your retirement goals to your personal assets and company pension benefits available, depending on a set of conservative assumptions and various scenarios. The variables include your planned retirement age, monthly retirement income goal, rate of return earned on current and future assets earmarked for retirement, estimated long-term inflation, planned future savings, and Social Security benefits.
The result will provide a glimpse into your future by combining these variables and projecting them into the future to determine just how long your retirement savings will last. This will reveal any need for additional savings, changes in strategy, or modification of retirement goals. Are you willing to increase your savings in order to retire earlier? Could additional contributions to your company pension plan provide a more efficient, tax-advantaged method of saving for retirement? Will your retirement income be sufficient to provide you with a comfortable standard of living? By identifying, discussing, and answering these questions, I can help you develop a plan that can be monitored and updated as your retirement approaches.
Please contact me if you do not have a personal
retirement plan and would like to discuss the process or if it
is time to update your current retirement plan.
Do you dream of retiring while you are still young and healthy enough to enjoy the rewards of your many years of hard work? Those dreams usually include a standard of living at least as good as, if not better than, your current standard of living. But how will you maintain that standard of living in retirement? To ensure a comfortable retirement, begin planning now.
1. Assess your current retirement benefits. Determine how much you can expect to receive from Social Security and pension benefits.
2. Assess your current retirement savings. Before determining how much you need to save, review how much you have currently saved toward retirement. Prepare a net worth statement; it will help in this effort.
3. Determine your retirement needs. Depending on your plans for retirement, you may need anywhere from 70 percent to over 100 percent of your current income to support the lifestyle you desire. It is important to consciously decide how you want to spend your retirement years.
4. Develop your retirement savings plan. Estimate how much it would cost today to pay for the lifestyle you want after retirement. Be prepared - the amount you need for retirement can be overwhelming. Although the numbers appear impossibly large, don't give up.
Call today so that together we can develop
retirement strategies designed to help you to enjoy the retirement
lifestyle you desire.
Beginning to save as soon as possible is the best strategy you can use to save for your retirement. Saving a little while you are young can contribute more to your long-term retirement funds than saving a lot when you are older. The elements of time and compound interest can make even modest savings grow into a significant amount. Look at the following example of the savings habits of a 20-year-old couple.
The wife begins putting $2,000 per year into a tax-deferred investment when she is 20. After 10 years, she decides to stop investing and just let her money grow until she retires. She invested a total of $20,000. The husband decides to begin investing when his wife stops. He invests $2,000 per year in a tax-deferred investment from the time he is 30 until he retires at 65. He saves every year for 35 years, making a total contribution of $70,000. That is $50,000 more than his wife saved. If they both earn 8% on their savings, who will have more money at age 65? Time and compound interest favor the wife. She will have $462,648 at 65; her husband will have $372,204. (This example is for illustrative purposes only and is not intended to project the performance of any specific investment.)
Use time and compound interest to your advantage. Even if the amount is small, begin saving now for your long-term goals. Please call if you would like help devising a strategy for your retirement plan.
Don't believe that your retirement is too distant to think about. Funding a retirement that may last 25 years or more requires you to begin saving and planning now. The important step is to get started, you can always change the plan later.
You need to assess how much money you should set aside for retirement. To make that calculation, the following information is needed:
Based on the above information, we can estimate how much you still need to save on a regular basis to ensure you will have the funds you need for retirement. Some of the variables can be changed to see the impact on the amount you need to save annually. For example, we can change retirement ages to calculate the impact on your annual savings.
This analysis is a good way to force you to become serious about funding your retirement. Please call if you would like to discuss this further.
Company-sponsored defined-benefit plans are decreasing and Social Security is becoming less generous. How do you plan to fund your retirement? In order to ensure a comfortable retirement, you must take responsibility for saving for your retirement. Your chances of saving enough improve dramatically if you:
Please call if you would like help designing a strategy to work
toward achieving your retirement goals.
If you are near retirement or just planning ahead, good retirement planning will help enable you to do the following:
I am frequently asked the question, "How do I set up my investment portfolio to efficiently draw income from my investments?" It would appear that most people feel they have done a good job of investing and saving during their working years. However, they are confused about what do when retired and attempting to generate income from those savings.
In this period of low income rates, attempting to generate income from fixed-income investments can be a challenge. Unfortunately, I see many people trying to supplement their income by aggressively trading stock, which can have disastrous results.
Retirement is a special time in your life. You should enjoy the benefits of years of hard work and planning that have helped you reach your retirement goals. You shouldn't worry about having enough income or outliving assets.
A financial advisor who understands your unique needs and how to tailor your portfolio so it efficiently works to meet your needs can help. A financial advisor can help you transition your portfolio to an asset allocation to draw potential income while continuing to grow principal.
I can help you manage volatility. I set a goal rate of return for the portfolio consistent with the client's risk tolerance. I then develop a plan to guide the portfolio and adhere to a strict schedule of reviews to keep the client well informed. I have used this process for many years and know it works.
If you are still investing today in the
same manner you did during your pre-retirement years, chances
are that your portfolio is not meeting your retirement needs.
Please call if you would like help transitioning your portfolio
for your retirement.
Today is just as good as any other day to begin planning for your retirement. If you are not already retired, have you even thought about what you want your retirement to be like? If not, you should talk to a friend or family member who is already living in their "golden years." You will find that one of the most important concerns of retirees is the lifestyle that Social Security and their own savings will provide.
If you are about to begin your retirement, or just beginning to think about it, call me to schedule a no-cost and no-obligation appointment. We can then analyze or outline your plan.
Some questions you will need to answer include:
1. How long do I have to plan?
2. What will I do in retirement?
3. Where do I want to live?
4. How long will I live in retirement?
5. Will I need long-term care?
6. What is the value of my present retirement savings?
For a financially independent retirement, it is never too early to begin working on your plan. Please call me for an appointment today.
When discussing retirement plans with a financial advisor, clients typically ask the following questions:
But, did you also realize there are three concerns that can prevent you from enjoying your retirement?
Inflation. An annual 3% inflation rate will cause prices to double every 24 years. If your investments are unable to keep up or if they just stay even with inflation, are you investing enough to finance your retirement years? Few of us will get there on savings alone. We will need to grow those savings at rates greater than inflation.
Waiting. Time is your best investment ally. While taking a long-term approach to investing usually means tolerating short-term price fluctuations, investing over a long time period demonstrates the power of compounding, which is especially relevant for retirement investors.
Being uninformed. We have all had occasions when we have learned important lessons after it was too late. There is never a better time to start filling that retirement information gap.
I welcome the opportunity to meet with you regarding your retirement questions.
If you are serious about retirement, you need to begin planning now. Do you have a retirement plan? Have you been procrastinating? Have you reviewed your 401(k) plan with a financial advisor? Will Social Security provide you with a comfortable retirement? Will your current investments be sufficient for your retirement?
Take the time right now to call me and let me help you to either review your current plan or assist you in setting up a retirement plan. Together, we can:
Do you know why some retirees are experiencing a shortage of cash flow in retirement? One of the reasons is that several years ago the investment community made assumptions about retirees based on past history (pre-1980) that included:
Based on these assumptions, a sound investment strategy was to be "safe" with retirees' money, allow them to spend principal, and ignore growth investments in their portfolio. However, these assumptions have proven false for many retirees. Today's retirees are far from inactive as they are the healthiest group of retirees in U.S. history, and many continue to earn money. In fact, many retirees are experiencing higher incomes than during their working years. Large inheritances, pension rollouts, and a propensity to save leave many with higher taxes.
A smarter approach today is to apply diversification and growth to add safety and more investment capital to your retirement portfolio. If you would like to further discuss retirement planning, please call.
Whether you realize it or not, the first phase in your financial life is wealth accumulation. In this phase, there is only one objective, to make sure enough investment capital is accumulated during your earning years to meet your desired living expenses during retirement years.
According to the U.S. National Center for Health Statistics, if you are a male age 50, you can expect to live another 26 years. At age 60, it's another 23 years. If you are female, you can add an additional five years. Keep in mind that these numbers are just averages, as we all know someone who is in his/her 90s and showing no signs of slowing down. Many people today will live in retirement as long as they lived in their earning years. The key question is, how much money do you need at retirement to maintain your desired standard of living?
Many people refer to retirement as living in the golden years. It's when you do what you want to, when you want to, without worrying about what time of the day it is or what day of the week. The wealth accumulation phase of your life will determine how golden these years will be for you.
A highly disciplined and well-planned approach to your savings and investment program is necessary if you want to enjoy the golden years. If you'd like further information on the wealth accumulation phase of your life, please call.
When was the last time you brought your retirement plan in for a financial "checkup?" Do you know if your asset allocation is still appropriate for your objectives and risk tolerance? I can help by reviewing your retirement plan held through your employer.
I am committed to preparing my clients for retirement security by helping their investments grow without unnecessary risk. I recognize that planning for retirement is one of the most important actions you undertake, and the protection of your nest egg is of even greater importance.
I can review your retirement plan held through your employer, along with your risk tolerance, and help you determine which options are best suited to meet your retirement needs. I feel this is necessary in order to provide an appropriate allocation among all your retirement assets.
Please feel free to call me to set up a checkup for your qualified retirement plan.
Do you have questions about 401(k) plans? I can help with the following:
The important thing is to take action now to help assure your retirement money is working as hard as you are. If you have questions regarding 401(k) plans, please call.
If you are presented with the option of early retirement, consider the following:
Do not make hasty decisions. If your employer requires you to make a decision regarding an early retirement offer, consult your financial advisor.
When designing your retirement plan, it is imperative you find out the options available through your employer. You will usually want to take advantage of a 401(k) plan or another type of defined-contribution plan your employer makes available to you.
These plans allow you to make tax-deferred contributions, and those contributions will continue to grow tax deferred until withdrawn. In some cases, employers will set aside a matching portion of your contribution. Many of these plans offer a variety of investment options that should be carefully evaluated with your long-term financial goals in mind.
The self-employed and those not covered by a pension plan have different options that can provide tax savings as well as a sound program to help you pursue your retirement goals.
Planning your retirement can be a complex
process of evaluating all available options, weighing risk versus
rates of return, tax consequences, and more. I can help you with
this analysis so you can assess the effects of varying conditions,
such as differing types of investments used to fund retirement,
age at retirement, the amount of income you desire during retirement,
and varying inflation rates. Please call for a free consultation.
Anyone faced with withdrawing all their employer-sponsored pension or profit sharing plan benefits should carefully consider the available options. Choosing the wrong one can result in the payment of taxes that might have been easily deferred.
Most distributions from qualified plans are eligible for roll-over treatment. This means, in most cases, a retiring employee or an employee who changes jobs can choose to take the balance of the plan benefit and roll it over into another qualified plan or individual retirement account (IRA). Many view this as a simple transfer of funds from one tax-favored vehicle to another, which continues to allow the funds to grow tax deferred.
That's the good news. The bad news is that, in most cases, if the amount distributed from the first plan is not "directly rolled over" to a new employer plan or IRA, the employer sponsoring the first plan must withhold 20% of the distributed amount. Directly rolled over means a transfer of funds from the old plan directly into the new plan's administrator or to the trustee of the IRA. If a direct rollover is not used, and the 20% is withheld, the recipient still has 60 days to transfer the funds to the new plan or IRA, so the rollover will not be considered a distribution. Note that the recipient only receives 80% of the funds -- so the other 20% will need to be provided from another source or only the 80% amount will be rolled over and the 20% will be considered a distribution.
If a person is uncertain as to what to do, the preferred method is usually to roll over the funds directly into an IRA.
If you would like help with your rollover or have questions about IRAs, please call.
The following questions can be helpful in reviewing how well you are preparing for retirement.
1. Do I believe retirement preparation begins many years before retirement, or would I prefer not to think about retirement at all? Do I know when I want to retire? Do I think of retirement as "quitting work"?
2. Have I considered if I should plan for another career after retirement? Are there hobbies I could expand into a second career, or do I have other marketable skills?
3. Have I adequately provided for my and my family's financial needs after retirement? Am I covered by a company pension plan? Do I contribute regularly to an individual retirement account (IRA) or other self-employment pension plan for my retirement? Do I have other savings and investments that will provide retirement income? What Social Security benefits will I be eligible to receive? Are my investments arranged so inflation will not erode my retirement income?
4. Have I thought about where and what type of retirement home I want, and will I want to relocate? Will my current home be too old to easily maintain considering the possibility of reduced income and physical strength?
5. Are my financial affairs in good enough order that another family member could assume control if an emergency occurs? Is someone else completely familiar with my financial affairs? In an emergency, would my spouse or someone else have access to funds and be empowered to act on my behalf in financial matters?
6. Do I have healthy attitudes about growing old? Am I able to adjust to changes, and do I see advantages and opportunities that will make retirement happy and fulfilling?
7. Do I have a list of specific activities I plan for retirement such as travel, subjects to study, community service, or hobbies?
This self-evaluation is a great thought
stimulator. Please remember, I have several planning tools to
assist you in this process.
According to the U.S. Census Bureau, people today can expect to live longer in retirement than ever before. Increased life expectancies mean we will probably need to do a better job of planning for our retirement and protecting estate assets than previous generations. Working out a sound financial plan before you need it can help accomplish retirement goals.
Creating a financial plan can help ensure a comfortable retirement. In designing your plan, you will review your anticipated costs of living during retirement, current retirement assets, current retirement savings and investments, expected rates of investment, and present and potential inflation rates.
Once this information is determined, any shortfall between projected retirement income and anticipated costs of living during your retirement can be calculated. It's important to plan so you have enough assets to get you through, not to, retirement. A comprehensive plan might include elements such as 401(k) plans, traditional or Roth IRAs, life insurance, and tax-advantaged investments.
Talking with your financial advisor regarding
the sufficiency of your current estate and retirement plans is
an essential first step for anyone interested in leaving behind
a lasting personal and financial legacy. If you would like to
learn more, please call.
Although much of what is written focuses on planning for retirement, we find ourselves working more and more with those entering or living in retirement. Life changes as we leave the work force and enter a lifestyle funded, not by a salary, but by pensions and investments. While no one is happy with the thought of seeing a portfolio decline 10 to 25 percent, the effect of a significant decline on a retirement portfolio can be a cause for concern.
We work with retirees to develop a diversified portfolio and to explain investment alternatives, which can help reduce portfolio volatility and provide consistent income. We can help you determine proper IRA distributions. We also keep in mind reducing your tax burden, thus helping keep the benefit with you, the individual who earned it.
If you are interested in learning about ways to help you better protect your retirement assets, please call.
Is it sinking in yet? I'm guessing it has. I'm guessing you are feeling overwhelmed these days with all the reminders about how important it is to save for retirement.
Many people say it is just too late for them to begin saving. Others say they don't have enough discretionary income left to fully invest in an Individual Retirement Account (IRA) contribution each year. Only a few can say with confidence they are adequately prepared and will be ready.
Where do you fit in? Have you started saving for retirement yet or do you feel it is just too late? Can you afford the big annual contribution? Do you know how your current savings program is working?
If you ask yourself any of these questions, please call. I can help analyze your retirement needs and current situation.
Investing wisely today can help provide
the comfortable retirement you want and deserve. Call today so
we can discuss your options. After all, time is running out.
Are you among those whose retirement is nearing? If so, you can't allow your IRA to languish. Help your IRA grow up and develop into a valuable source of retirement income.
Does this sound familiar? You fully funded your IRA when your contributions were deductible and then stopped once the rules changed. If so, you are not alone.
IRA assets often were invested the same way for years without thought to changing market conditions. You may have made decisions about your IRA decades ago. Maybe you put your IRA contributions into one investment year after year and never investigated whether the investment evolved or your objectives changed.
Whether your IRA holds only a few thousand dollars or much more, you can take two immediate steps to help you increase its value:
1) Resume yearly contributions
2) Actively manage your account
If you expect your IRA to become a means of support during your retirement, you must take an active role in managing it. Determining which investment is right for you requires a careful analysis of the type of investor you are and matching your risk tolerance with specific investment choices.
The bottom line is that if you take care of your IRA and sustain it with yearly contributions and nurture it with appropriate investments, your IRA could pay you back with funds that may provide comfortable support during retirement.
Are you taking complete advantage of the retirement planning opportunities available to you? Did you know you can save current taxes by using a retirement plan? Even though you may not qualify for one or another doesn't mean that there isn't a plan that will work for you.
A Tax-Sheltered Annuity (TSA) is available to help plan for your retirement if you work for a school district, church, hospital, or other non-profit organization.
Are you taking advantage of the 401(k) plan where you work? 401(k)s allow you to put away pre-tax dollars for your retirement and, in some cases, the employer will match a certain percentage of your contribution.
Do you and your spouse have IRAs in place? Are you eligible? If you are married with a joint income of $40,000 or less, or single with an income of $25,000 or less, your contribution may still be 100% tax deductible.
If you are self-employed, you might want to think about contributing to a Simplified Employee Pension Plan (SEPP).
If you have any questions about which retirement savings plan may work for you, please call. Wouldn't you rather keep your money working for you than give the IRS more?
We are a team of retirement planning advisors who concentrate on investing for a secure retirement. We provide individualized, personalized service. We offer objective, independent advice in selecting top-quality investments best suited to meet our clients' needs.
By using a variety of financial products, we work with our clients to analyze, evaluate, and plan for long-term capital accumulation and appreciation of assets.
All our clients benefit from our commitment to quality advice based upon our constant interaction with other local, community-based financial experts such as:
We provide information specific to your circumstances on a complimentary basis. We invite you to take advantage of these services which will assist you in making a more informed decision about your retirement objectives.
One of the greatest challenges facing Americans is assuring financial security in retirement. Social Security may not be sufficient to meet the needs of future retirees and there is a move away from guaranteed employer retirement benefits. Americans now and in the future will be forced to rely more heavily on their own resources to support their retirement lifestyle. They are realizing they must become self-sufficient and take charge if they want to meet their retirement savings goals.
It's all about choices. Americans have more choices to assist in saving for retirement than ever before. The traditional IRA offers deductible contributions to more taxpayers and relaxed rules about penalty-free distributions. The Roth IRA should also be considered as a savings tool. Similar in many ways to the traditional IRA, the Roth IRA is designed to provide tax-free retirement savings.
Which IRA should you use to help meet your retirement savings goals? That choice will depend upon many factors, including some considerations unique to your own circumstances. Please call if you need help reaching your retirement goals.
The most important part of your retirement planning strategy is to figure out just how much you will need to accumulate to live comfortably when you are retired. That may seem obvious, but most people do not know what their target account balance should be. Therefore, they do not know how much they need to save when seeking to reach their goals. Here are several questions you must answer to help achieve your goals.
How much of your current level of income will you need to maintain after retirement? Most financial planners recommend you have enough saved so that you can withdraw at least 60 to 80 percent of the income you were living on before retirement. In other words, if you were earning $50,000 before retirement, you will want about $40,000 of annual income after retirement. How much money does it take to pay you $40,000 per year for the rest of your life, beginning at age 65?
What have you saved to reach this goal? The answer may include your current 401(k) plan balance, money in an employer's pension or profit-sharing plan, personal savings accounts, and home equity. You need to make an inventory of what you own now that can grow and create income for you at retirement.
How much will Social Security pay you when you retire? While the future of our Social Security system is open for debate, it is still worthwhile to review your annual Social Security statement for an estimate of what will be paid out on your behalf at retirement.
Lastly, do you know what the effect of inflation will be on your investments and your need for income at retirement?
So how do you begin to answer these questions? Talk to a financial planning professional who can help you to begin setting goals and understanding your current situation.
Remember, knowing your retirement goals is the first and most important step toward helping you achieve those goals.
Are you or is a member of your family considering retiring soon? If so, now is the time to prepare and take the worry out of retirement planning. Creating a solid foundation for your future financial security does not need to be complicated. However, it does require someone with the knowledge and experience to help you bring all your needs and desires together.
I strive to provide thoughtful and knowledgeable help and service to my clients, so they can make reasonable and satisfying decisions about very important retirement considerations.
I have been helping residents in this area for many years. My clients are people like you, people who are looking to make their dollars last longer and go further.
Why not give me a call? I would be happy to discuss your personal circumstances, confidentially and with no obligation.
To meet their retirement goals, many people will have to either increase savings or decrease retirement lifestyle expectations.
Consider increasing your savings contribution first. There are many ways to increase savings without significantly modifying your current lifestyle and other financial goals. Planning efforts should focus on creating practical and reasonable strategies designed to help you meet those requirements.
One easy and often overlooked method of increasing savings involves company-sponsored 401(k) plans. By using a 401(k) plan, you invest pre-tax income that accumulates on a tax-deferred basis. Even in the 15% tax bracket, you're investing 15% more than you would using after-tax dollars. Increasing savings by 15% or more will go a long way toward helping you reach your retirement goals.
Besides putting money in a 401(k) plan, you also need to analyze the available investment options. Please feel free to call if you'd like to know more about the options available to you in your 401(k) plan and how they can work with your other investments to put you on the course to a comfortable retirement.
Most people find it easier to earn and spend money than to save it. Planning and saving for retirement often take a back seat to other priorities. Why do people procrastinate when it comes to retirement planning? There are many excuses: thinking about retirement makes you uncomfortable, you are too busy to find the time to plan for retirement, you are too young to worry about retirement, and retirement planning is too complicated. If you make similar excuses to avoid thinking about retirement planning, it's time to change your attitude.
Saving for retirement is more important than ever before. Companies are putting the burden of funding pension plans largely on employees. Social Security is straining under the burden of an aging population. Life expectancies are longer. Aging baby boomers feel particularly squeezed because many are trying to save for their children's college educations and their own retirements, and some are supporting elderly parents at the same time.
Personal saving will need to fill the gap between pensions and government benefits as well as your retirement needs.
Setting Goals
When you want to retire and what lifestyle you realistically expect to maintain during retirement are specific goals you need to determine. Those answers will, in turn, help determine how much money you'll need at retirement. One recommendation is that in each year of retirement you'll need at least 60-80 percent of your annual pre-retirement income. Of course, your financial needs may be more or less, depending upon your circumstances. While the rate of inflation or the return on your pension investments over the next several years cannot be predicted, a financial planning professional can help make some projections of how these factors will affect your savings plan.
Investments
If projections show you'll have a financial shortfall in retirement, you have some choices: retire later, retire on less, save more, or improve your rate of return.
Setting up a retirement
planning strategy should be a top priority. More than ever, it's
up to you to achieve your financial goals.
You have an important decision to make when you change employers or retire. Do you leave your money in the employer-sponsored contribution plan or roll over your 401(k) into a self-directed IRA?
By rolling over your 401(k) to a self-directed IRA, you have the freedom and flexibility to choose the investments that best fit your portfolio. If you leave your money in the employer-sponsored plan, you limit yourself to the choices of your previous employer's plan.
Another point to consider when making this decision is that many employer-sponsored 401(k) plans require a lump-sum payout to your beneficiaries upon your death. This results in your beneficiaries paying a sizable income tax bill in a single year, and they are denied the option of spreading the tax deferral over their life expectancies. However, by choosing an IRA, your beneficiaries have the option with the inherited money to spread out the payments over their life expectancies.
Please call me if you would like to go over the pros and cons of remaining in a 401(k) plan or choosing an IRA rollover.
Most people are uncertain about their retirement outlook, but they don't know where to turn for information. There are plenty of professionals offering retirement planning services, but many people avoid these professionals because they do not feel they will receive objective information. Instead, they put trust in their employer's pension plan and Social Security, hoping for the best. Unfortunately, when retirement occurs, these people are often disappointed.
As your Financial Advisor, I feel it is important for you to know I have the skills and tools required to help you develop an objective and comprehensive plan that you will need to make sensible decisions regarding your retirement plans.
I'm not talking about providing investment advice - buy and sell decisions on individual stocks and bonds. I'm talking about the overriding factors that will determine whether you can retire without worrying about finances.
This is an important matter. The sooner you tackle it, the greater your odds of reaching your financial goals. Why not give me a call now so we can get started?
The complexity of issues surrounding retirement suggests you should begin your planning years before your projected retirement date. A realistic look at your current and future finances may cause you to rethink your retirement plans.
The key to retirement planning is to set realistic objectives. Ask yourself these critical questions:
Make a thorough analysis of your current financial situation. Begin with a review of assets, which includes your home, bank account balances, investments, pension/profit-sharing benefits, and personal property.
Go through the same process with your liabilities. Include any amounts you owe (mortgages, car loans, credit card balances, etc.). Deduct the liabilities from your assets to calculate the funds you can use to finance your retirement.
This is where the financial planning process becomes complicated. You must match the income and growth potential of your assets against your retirement objectives to see if you prudently will be able to afford your desired lifestyle. If not, you may need to change your retirement choices or consider postponing your retirement.
If ample assets are available, the next major issue is how you will invest those assets for retirement.
There is no single investment strategy that is right for early retirement. Your portfolio will probably include current income, growth of principal, and tax advantages to help ensure you do not outlive your assets.
This is a simplified look
at early retirement planning. In reality, few individuals are
in a position to accurately assess such variables as retirement
costs, tax consequences, health costs and insurance, the impact
of inflation, and yield from assets. Therefore, it is always a
good idea to consult with a qualified financial advisor early
in the planning process. Please call me with any questions you
may have or if you would like to review your current retirement
plan.
One of the more enjoyable aspects of my work as a financial advisor is speaking to groups. When doing so, I'm always struck by how similar everyone's concerns are, regardless of age, gender, or even net worth.
What are those concerns? The biggest concern always seems to be retirement - planning, investing, and saving for it. People seem to be very aware that our retirements will be very different from the ones experienced by our parents and grandparents. With life expectancies increasing, retirements can last 20 to 30 years, not just 10 or 15 years. That means today's retiree might need to make a retirement nest egg last up to twice as long as previous generations did.
What can you do about retirement concerns? Start by educating yourself and your loved ones about money and how to use it to your advantage. My commitment to you is to help educate you about the topics that will help you achieve your retirement plans.
As part of my commitment to you, I will be sending you this newsletter, which I hope will provide a starting place for your education. Additionally, I will be scheduling seminars throughout the year on a variety of topics. I'll be happy to speak to your club or group, and can modify topics and seminar length to meet any group's needs. Of course, I'm always available to discuss any questions or concerns related to your personal portfolio and financial goals.
My mission is to help you achieve your financial goals, whether short or long term. In particular, I want you to face your retirement with confidence and optimism. Yet I often feel that the confidence and optimism I work to give you are often under attack by media news in regards to your retirement. If it's not Social Security's imminent demise, Medicare is on its deathbed and pensions are at risk.
With many demands on your time, it's likely that you haven't heard more than sound bites on these topics. However, with a good understanding of your own situation, you have taken the first step. Some points to consider:
I can help you clarify your financial goals and design a sound financial plan to help you reach them. With the stresses of life and multiple demands on your time, a personal financial consultant is a necessity. I will be happy to work with you to plan for your future.
Roth IRAs have given investors another excellent vehicle for retirement savings. The advantages of a Roth IRA over a traditional IRA can be substantial, but is it the right choice for you? The decision can be complex. Do you already have a traditional IRA? How old are you and how long do you have before retirement? What are your current and estimated future tax brackets?
We can provide you with a free Roth IRA analysis to help you decide whether a Roth IRA is right for you. Please give us a call to schedule your free Roth IRA analysis. We're looking forward to meeting with you.
To meet their retirement goals, many people will have to either increase savings or decrease retirement lifestyle expectations.
My preference is to increase savings. There are many ways to help you increase savings without derailing your current lifestyle and other financial goals. Of course, as with all financial planning, each case is unique. My planning efforts are focused on creating practical, reasonable strategies designed to meet those requirements.
One relatively easy and often overlooked method of increasing savings involves company-sponsored 401(k) plans. With a 401(k) plan, you invest pre-tax income, with investments accumulating on a tax-deferred basis. Even in the 15% tax bracket, you're investing 15% more than you would using after-tax dollars. Increasing your savings by 15% or more will go a long way toward helping you reach your retirement goals.
In addition to putting money in a 401(k) plan, you also need to analyze the available investment options. Please feel free to contact me if you'd like an opinion about the options available to you in your 401(k) plan, and how they can work with your other investments to get you on the road to a comfortable retirement.
What are your retirement plans? Warm, sandy beaches? Year-round golf? Travel to exotic places? Unlimited time spent with loved ones? There are an infinite number of possibilities, but they all have one thing in common: they require planning to achieve.
If you're like a lot of Americans, you may not have started planning for retirement. Why do so many people procrastinate when it comes to retirement planning?
Fortunately, despite the
difficulties you'll face in planning your retirement, it's not
an insurmountable task. There are many good resources available
to you (like this newsletter) which can provide the broad outlines
for beginning effective retirement planning. For more personalized
assistance, please feel free to give me a call.
One of the more important decisions you'll make when you retire is deciding how much to withdraw annually from your investments. Take too much out and you may outlive your investments, leaving you impoverished in your later years. Take too little out and you could live an unnecessarily frugal lifestyle. Yet, deciding how much you can safely withdraw each year can be difficult for a couple of reasons:
Due to these uncertainties,
many individuals feel more comfortable if they annuitize a portion
of their retirement income, which provides a certain amount of
income for the rest of their lives. Social Security payments and
defined-benefit pension benefits are forms of annuities. However,
you may also want to use a portion of your investment portfolio
to purchase an annuity. If you'd like to discuss this concept
in more detail, please call.
Making certain you have enough money for retirement is a common concern. However, due to factors like longer life expectancies, declining pension benefits, and fluctuating rates of return, inflation, and income taxes, it can be difficult to calculate how much you will need for retirement.
Here are seven steps to consider for your nest egg at retirement:
If you are interested in more information or assistance in planning your retirement, please give me a call.
There are three traditional sources of retirement funds - Social Security benefits, employer pension plans, and personal savings. While the Social Security system is expected to survive, changes are anticipated, with reductions to current benefits a likely result. The trend in company-sponsored pension plans has been a significant increase in defined-contribution plans (where employers and employees make specific contributions to the plan) at the expense of defined-benefit plans (where the employer promises a specific benefit to retirees). Thus, you must shoulder much of the responsibility for funding your retirement through your personal savings.
You need a personal investment program that is flexible, disciplined, convenient, and designed to help you meet the demands of today's less assured retirement outlook. After calculating how much you need at retirement, decide how you will save these sums. Use any available tax-deferred vehicles. Invest in your company's 401(k), 403(b), or other defined-contribution plan as soon as you become eligible. Also consider a traditional or Roth individual retirement account (IRA). Carefully analyze how you will invest your retirement assets, using alternatives appropriate for the long-term nature of your savings.
We can help you invest for a sound retirement. While financial markets offer opportunities to grow your savings, they can also be cyclical. Buffering your investments against market volatility is a matter of asset allocation - allocating your money to specific asset classes in such a way that you maximize your expected return for a given and acceptable level of risk.
If you'd like help with your retirement plans, please give us a call.
Are you positive that you will have enough money to live comfortably in retirement? Chances are, not many of you were able to answer that question with a resounding "yes." Thus, we encourage you to come in for a retirement planning review. In this review, we will discuss your current retirement savings, your future needs, and ways to help you get there.
First, we will determine the value of your current retirement nest egg, which may include savings, insurance, and employer retirement plans.
Then, we will look at how much money you will need for retirement. We will explore factors such as life expectancies, long-term-care costs, medical expenses, and inflation. We will also discuss your particular goals for retirement. Whether you want to travel, enjoy hobbies, or work or volunteer part time, your style of living will determine your living costs during retirement.
Last, we will work together to create a financial plan that will help you meet your retirement requirements. We will choose investments that will help you seek the growth you need, based on your risk tolerance and time frame for investing.
Together, we can implement a strategy that will help you plan for your retirement. Please give us a call if you would like to schedule a retirement planning review.
One of our worst fears is that we will outlive our money. With longer retirements and the prospect of fewer benefits from Social Security and employer pension plans, it is more important than ever to plot a strategy for a comfortable retirement.
But this is often easier said than done. As we navigate through day-to-day financial obligations, struggling with mortgage and car payments, educational needs, and medical bills, retirement is often the last thing on our minds. But your retirement will require a significant amount of money. To help you meet that goal, you should start planning now, by following these steps:
We would be happy to assist you with any of these points. Drafting a financial plan customized to your personal needs is our focus. Please contact us for more information or to schedule a planning session.