When it comes to planning for retirement, there is a lot to consider. What you can control plays a big part. For example, you can control your expenses. Let’s look at coffee. Many people like to buy a premium coffee each day at a cost of about $5.00/cup. You can invest in a good coffee maker, buy a pound of premium coffee and brew your own each day for much less than the $5.00/cup. This example is a small one, but a number of small changes add up to big savings.
You can control some of the costs of investing. By working with a CFP® Professional, you may be able to attain investments at institutional prices while getting expert advice for a very reasonable fee.
You can control your expectations. By being disciplined and engaged, you can control how you feel about the growth of your retirement portfolio and block out some of the noise from the instant news about the markets.

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Life is never boring, there are constant changes. Some make us happy, others, not so much. Here are a few life changes that should prompt you to change your will.

You got married!
Not all States automatically consider your spouse as the primary beneficiary. You need to state this in your will. While you are at it, change your 401k, IRA, and life insurance beneficiary at the same time.

You have kids!
We all think about college for our kids but what if something happens to you? You need to think about not only the financial needs of your child but also the emotional and life style, religious preferences, and values with which your child will be raised. When it comes to naming a guardian if you are not around, these needs may be provided from one or more of the people in your life. You need to name a guardian for the physical and financial well being of your children.

You got divorced!
Many times, we see clients have not changed their beneficiary once a divorce occurs. You need to review all of your accounts and estate issues. If you remarry, you will not want to forget your new spouse.

You move to another State!
Often, this is due to retirement, a big life change. Not all States have the same laws regarding health care, guardianship for the elderly, estate and income tax. Please update your will and all estate planning documents when you move.

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Q: I have $35,000 that I received from the sale of property that I would like to use over the next 6 months to fix up my kitchen. Where can I invest this money to get more than the .25% my bank will pay?

A: Because you wish to use these funds in less than 24 months, you cannot “invest”, you need to just “save” the $35,000. Short term funds, as well as emergency funds need to be liquid. Your bank savings or money market account is the best place to park these funds.

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I am here to tell you, we may be able to help.

57% of 401(k) participants wish it was easier to manage their 401(k) accounts. Many participants are suffering from what I call “analysis paralysis.” Too many choices, how do they mix with other investments, which investments are right for me?

A 401(k) is the easiest way to save for retirement. Payroll deduction of whole, pre-tax dollars, allows an employee to accumulate a retirement nest egg almost without thinking. But then there are the choices: how much to contribute, which funds to pick, how often to re-balance – it can be overwhelming.

At Certified Financial Group, Inc., through our affiliated Registered Investment Advisor firm, we manage 401(k) accounts for our clients. The account stays right where it is; with your permission, we just have access to the account. I can help my clients with all of the concerns I have just listed. I do the analysis on the investment choices and co-ordinate them with their outside investments so my client has true diversification. I perform a quarterly analysis of the funds to make sure their retirement is on track. If there is a change in income, the contribution is adjusted.

Call me for a second opinion and to learn how you can take yourself out of the 57%.

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I love shoes, what girl doesn’t? Many years ago, a wise man told me to buy better quality shoes; they can be re-soled, and will last longer. I started down that path. It took a while to get used to spending a bit more per pair, but buying fewer shoes. This is the lesson that many people take into retirement. Budgeting is a big issue in retirement – spending usually declines in the areas of food, transportation, and personal care, (i.e.) clothing. Let’s take a look at how these areas of spending change in retirement.

Transportation is easy – if you are not driving to work each day, you usually spend less on gas and auto maintenance. Many people will eat lunch out almost every day while on the job, and there is often a business dinner. Once you retire, cooking at home becomes an art or hobby for many people, as well as a money saver. Then there are the shoes….

A work wardrobe generally cost more than a leisure wardrobe. There is less of a need for a suit & tie or the business dress, but we all like to feel good in what we are wearing. Buy quality clothing and shoes vs. quantity. Your budget and piece of mind will be richer through your retirement.

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They’ll be discussing . . .
What to do if your pension is at risk.
(i.e.) Detroit retirees preparing for a cut in their pension.
Costly Social Security Mistakes

Q & A: I received a letter from my employer stating that I “over contributed” to my 401k and have to withdraw a few thousand dollars from the account. I know I have not contributed the max of $17,500. So why? Why do I have to take this money out and pay more in tax?

Call or eMail
Your Questions:
407-290-0058 OR
1-800-328-5858
Nancy@CertifiedFinancialGroup.com
Denise@FinancialGroup.com

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File and suspend is a way to boost Social Security payments for one Spouse while allowing the other to get payments now. Let’s look at Ken & Barbie.

Ken & Barbie are age 66, Ken wants to keep working, and Barbie wants to hang around her dream house. Ken’s Social Security payment at age 66 would be $2000, Barbie’s would be $900. If Ken files, but suspends taking his payment, his benefit will grow by 8%/year until age 70. Barbie can now receive her Spousal benefit on Ken’s record, receiving $1000/month. Barbie has now increased her monthly benefit by 11%, and Ken will now receive $2640/month at age 70. They can buy some new furniture for the dream house with the extra $100/mo. she will receive by using this strategy.

Go to www.ssa.gov and check out what your benefits are.

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Q: I received a letter from my employer stating that I “over contributed” to my 401k and have to withdraw a few thousand dollars from the account. I know I have not contributed the max of $17,500. So why? Why do I have to take this money out and pay more in tax?

A: The simple answer is testing. Annually, each company that offers a 401k plan has to go through DOL/IRS testing to make sure the highly compensated employers are not contributing a disproportionally high amount compared to everyone else who participates in the plan. If a number of the lower wage employees do not participate, or contribute a much smaller percentage vs. the higher compensated participants, you will be told you have over contributed.

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No, I don’t mean divorce, I mean your investments. Often, I meet with couples that have completely different attitudes about risk, time to keep money invested, types of investments, and where it should go when they are gone. It is o.k., financial plans, as well as the specific investments, can be carried out as if the couple were just two separate clients.

My clients that ask to be treated individually do pay a bit more in planning fees, but that is the only area where I treat them differently. If I am asked to produce two plans it is more work, generally not double the work, but sometimes it is. I always tailor my investment recommendations to the individual, so there is no change in that regard for my clients.

So take a deep breath and know that it is o.k. to separate, but just in this instance.

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