Tag Archives: retirement

I love saying yes!

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Last week I met with three different clients that all want to retire. Their retirement ages are 56, 58, and 67; all have been in their careers for 30+ years. What I asked them for was a list of their current expenses and any large expenses they expect to incur over the next few years, current tax return, statements on their savings and investments, and Social Security statement. I ran a comprehensive plan that included inflation and a conservative growth rate to age 90. I am happy to say that I was able to say “Yes you can retire” to all three. But then I asked the most important question……

“What do you plan on doing now?” Knowing that the economics of retirement will work is important but if you do not know why you will be getting out of bed each morning, you have no business retiring. Each of these three clients was able to tell me of their retirement plans and how they will spend their time. All three will walk different paths but they had put thought into their own view of what to do with their time and the many, many years in front of them.

It is possibly more important to think of the mental, emotional, and actual day to day of your retirement than the economic. I love saying yes!

Disclosures:http://www.hechteffect.net/?page_id=31

Strategies to lower your tax bill

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Unless Congress acts, your tax bill will be higher next year. Top income tax rates will go from 35% to 39.6%. On top of that, a piece of the health-care reform law goes into effect: For higher-income taxpayers, the provision means an additional 3.8% Medicare tax on investment income that most people are not aware of yet. That brings the highest marginal tax rate to about 43.4% before state and local taxes, if they apply to you. So what can you do?

One solution available to most of us is our retirement accounts. Many employees are only funding their 401k accounts to the company match. If you increase that by just 3%, you will lower your tax bill but make little or no difference in your spendable income.

Another solution is to take advantage of the tax rates we are under now and look into converting part of your Traditional IRA to a Roth IRA. You will pay tax on the amount that you convert but it will be at today’s lower tax rate vs. next years’ increased rates. Converting part of your Traditional IRA to a Roth may also help with tax management in the future. When calculating your Required Minimum Distribution, the Roth balances are not included.

A comprehensive review of your retirement accounts, cash flow, and taxes should be done annually. Contact your Certified Financial Planner Professional® today.

 

Disclosures:http://www.hechteffect.net/?page_id=31

You always spend more on vacation

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A major component that I look at when putting together a retirement plan is how my clients are living their life. I like to know not only what their fixed expenses are, but also what they spend on vacations, charitable gifting, personal care, pets, kids, and all of the little things that make up our lives. Retiring is like a long vacation, and you always spend more on vacation. So how do you prepare?

We like to start 2-3 years before you plan to retire by looking at the total expense figure plus tax and inflation. While inflation has been downplayed by the government over the last few years, I never ignore it. We like to take this budget and review it annually just as we do with the investment mix to make sure you are not falling off the track. Budgets are just as important in retirement as they are prior to retirement. You should not be surprised if you blow your budget in the first year of retirement. Most clients do.

By scheduling regular review and update appointments, we can keep close track of not only your investment portfolio but how well you are doing with your retirement budget. Knowledge is power. Knowing where your cash is going will give you the freedom to occasionally blow the budget in retirement.

 

Dsclosures:http://www.hechteffect.net/?page_id=31

What do you want?

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Many couples have not taken the time to ask what each other would like their retirement to look like. The first step is to write your own wish list with questions such as:
How long do you want to work?
Where do you want to live in retirement?
Do you want to work part-time?
Do you want to travel and how often?

Once each has written their list, it now is time to compare to see where your desires overlap or conflict. Many of the conflicting items will naturally works themselves out; others will require time and money to work out. Next, you need to take a clear view of just where you each have savings and investments. 37% of husbands and 21% of wives do not know the value of each other’s retirement accounts or what the potential pension might be. Now is the time to review these items.

So, pour a cup of coffee, pull out the statements, and review your investments. You will be able to see where you are going.

Take advantage of me!

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Many of you may think of me only as the girl that manages your investments, but I am so much more than that. I am licensed to provide all types of insurance such as Life, Health, Long Term Care, and Disability. I am trained to provide analysis regarding your taxes and estate planning, though I am not a CPA or Attorney. I have enough knowledge in those areas to perhaps save you some money when you do meet with those professionals. Beyond all of this, I am the one that can hold your hand and hopefully provide you with the answers you need to have a happy, long retirement.

A large part of what I do is hand holding. Deciding to actually retire is a big decision and there is a lot of mental discussion that goes along with the financial discussions. The biggest question becomes what to do when you finally retire. If you do not have a clear idea of how you will spend your time, you cannot pull this trigger. This is a big discussion I have with all of my clients. It can lead to many Life-Cycle event discussions. Where to live, what happens if you get sick, what happens when you pass? Through twenty nine years in business I have had all of these conversations. I can share what I have learned from other clients and the large network of services I have created to help with many of the Life-Cycle concerns.

Yes, I put together your retirement plan, I manage your accounts and I meet with you regularly to review and update. Beyond those very important issues, I have so much more to share. So go ahead, take advantage of all I have to offer.

Listen to 96.5FM this Saturday from 9-10 am. I will be presenting these topics and answering your questions.

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You are in the Retirement home stretch – 3 tips to keep in mind.

70 IS your magic number!
Why delaying retirement until age 70 makes a difference to you.

Email:
Q: We have remaining student loans @ 3.9% – should we increase our payment to that so we can pay it off faster or should we put the extra savings toward our kids 529?

Listen to us this Saturday 7/14/12 @ 9am on 96.5 fm WDBO

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Upcoming seminars

“Countdown to Retirement” with Roger Johnson Aug 4th at 11 AM
“Social Security: Maximize your benefits” with Nancy Hecht, Judi Sanborn, and Denise Kovach Sept 20th at 645 PM

Topics:

How to make the most out of your Social Security Survivor benefits.

What is all this recent talk about the LIBOR scandal and what does it mean to you?

What is the Fiscal Cliff and should you care?

What is the new investment tax that was passed as part of the healthcare law?

Reader question:
My wife and I just sold our home, we have netted about $175k. We are 2 years from retirement and would like to keep our principal safe. What would you recommend?

What is your “phrase to save?”

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We all know that we need to save money for the big things like buying a house, college for our kids, our own retirement, etc., but what is your “phrase to save” that gets you there?

Every journey begins with a single step and saving is no different. Many people now are saying that due to the economy it is much harder to save, but it is not impossible. Let’s say that you have already accomplished the big things, you love your home, and you contribute regularly to your retirement plan. But it is the small items that have you worried. Let’s say there is a big family event coming up next year and you don’t know how you can afford the airfare and hotel.

For two weeks, keep a receipt for everything you spend from a pack of gum to dinner and a movie to your mortgage payment. You will be surprised at all of the small areas you can cut back and save for that family trip. If your “phrase to save” is for the airline tickets, look at items such as that daily premium cup of coffee or buy movie tickets for $10 each vs. renting a movie from Netflix for $3.00. Maybe you will take a sabbatical from eating out for two months and save those dollars specifically for the airline tickets. Small changes in your everyday spending can make huge differences in your savings account.

Whether the goal is big or small, think about and write down your own “phrase to save” and you will be on your way to savings success.