For many, the largest unknown during retirement and a source of much concern and worry is the potential for “extraordinary” health-related expenses. These costs including Medicare, Medicare Supplement, prescription drug coverage, dental, vision and out-of-pocket costs (deductibles and co-pays) can vary greatly at an individual level. When working on a Retirement Feasibility or Portfolio Sustainability Analysis for clients, we are …
This article examines relevant investment and economic data for the second quarter of 2018.
Required Minimum Distribution (RMD) Fast Facts: Required Minimum Distributions (RMDs) are based on: December 31st account values and… A person’s life expectancy There is currently no annual RMD requirement on Roth IRAs Neglecting to take a RMD can result in a penalty of 50% on the amount of the required to be withdrawn Required Minimum Distributions: A Deeper Look Those …
There is no doubt that people are living longer and enjoying a higher quality of life in their retirement years. Given the high demand of retirement communities, which can include independent living and assisted living alternatives, many are taking a proactive approach in evaluating and moving into these communities—prior to health changes that could warrant the necessity to move in. …
Asset “location” – which types of investments should be held in which accounts -is different based on your stage in life. An accumulator and a retiree should have a different investment strategy.
It’s hard to believe that it’s been 30 years since “Black Monday,” the day the stock market declined a whopping 22.6%! Although I was merely a sophomore in high school, I remember the day quite well. Having my first real job and being a “saver” by nature, I had just become interested in investing. I had recently invested in a …
The ability to contribute to Roth IRAs can represent one of the most beneficial financial planning decisions that people can make for their future. Roth IRAs were established by the Taxpayer Relief Act of 1997 and while most people are aware of the name, they may not be fully aware of all of the benefits. A Roth IRA is an …
The federal estate tax generally only applies to those who die with assets that exceed $5,490,000 (in 2017). While only about 0.2% of the population is subject to the estate tax, those who are impacted can be faced with a significant estate tax liability as the estate tax rate quickly exceeds the 40% mark! Here is a simple example of …
Research has shown that the timing of one’s retirement can be important – especially as it relates to investment returns in the early years of retirement. Someone who retired just prior to the “Great Recession” could have experienced significantly larger portfolio “drawdowns” than someone who retired during a period of economic expansion and higher investment returns.
The Economic Snapshot is a sampling of a number of widely followed economic and financial market statistics. Beacon Financial Strategies utilizes these and other economic indicators as a gauge of the general financial health of the economy when making investment decisions. The purpose of the information contained in this post is to provide you with a general gauge of domestic economic …
This article is the third of a three part series titled: 10 Years from Retirement, What is your financial focus? In Part 1, we discussed the importance of tracking and managing your living expenses, as well as, making projections around how much you will spend in retirement. We also stressed the importance of making strategic Social Security decisions. In Part 2, we explored pension decisions, …
Happy 2017! As we begin a new year, it’s always important to re-examine certain elements of your financial plan – especially things that relate to tax planning. Here are a few of the more common items that may impact your financial situation this year. Social Security & Medicare Part B For those receiving Social Security, there is a cost of living …
In Part 1, we discussed the importance of tracking and managing your living expenses, as well as, making projections around how much you will spend in retirement. We also stressed the importance of making strategic Social Security decisions. In this article, we wanted to spend some time addressing pension decisions, ideas for strengthening your personal balance sheet and helping you think through how much money you will likely need during retirement.
If you’re 10 years or so away from retirement, you’ve probably spent at least some time thinking about what your life will look like after retirement. How will you manage the transition? Will you travel, take up a new sport or hobby, or spend more time with friends and family? Should you consider relocating? Will you continue to work in some …
Have you ever heard of an “investment glide path?” It is an important concept for retirees and pre-retirees to consider. Choosing the correct glide path could make an enormous impact on your financial well-being in retirement.
For those of you who are charitably inclined and over the age of 70 ½, we have great news that could impact your charitable gifting strategy! In December 2015, Congress made permanent the ability for taxpayers to divert their required minimum distribution directly to a qualified charity. The ability to make this charitable election, technically called a Qualified Charitable Distribution …
Have you confirmed the beneficiary designations of your 401k, IRA, or life insurance policies recently? If not, you should! Find out why.
Here are answers to a number of common questions regarding your Social Security benefits.
As a 401(k) plan sponsor or decision maker, do you know that you can be held personally responsible for mistakes in your company’s 401(k) plan? Hiring the right professionals, those that can serve as fiduciaries to your 401(k) plan can help defray some of your liability. Find out how.
The Employee Retirement Income Security Act of 1974 (ERISA) imposes strict standards of conduct on fiduciaries who have discretion over the administration and investment of 401(k) retirement plans and plan assets. ERISA and its fiduciary rules apply to defined contribution plans like 401(k) plans, ERISA 403(b) plans and also defined benefit plans. Who are plan fiduciaries to 401(k) plans? Basically, …
Find out the maximum contribution limits that can be made to most retirement savings accounts including 401(k) plans, 403(b) plans, traditional and Roth IRAs for 2016.
On November 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015, legislation that raises the federal debt limit and establishes the framework for a two-year budget deal. The legislation, necessary to avoid an impending default on U.S. debt, also contains multiple unrelated provisions, including an elimination of two Social Security retirement benefit claiming strategies and a …
Small business owners have a number of alternatives to choose from when it comes to establishing retirement plans for their business. Each plan type can vary in their contribution level and matching requirements, as well as their ongoing regulatory and administrative burden. In order to make an informed decision as to the type of retirement plan that works best for you, it is important that you consider the specifics of your business.
This article explores four elements of an investor’s risk profile – risk capacity, risk required, risk tolerance and risk perception. Understanding each type of risk is an essential element of building an investment portfolio that can both meet your specific investment needs, while allowing you to sleep easy during times of personal and financial stress.
This winter was brutal—especially by North Carolina standards. Being snowbound for a couple of days, I found myself being drawn to CNBC (the business news network), where economist, portfolio managers and market pundits discussed the financial markets, the economy and a host of other financial topics.
Increasingly, families have to figure out how to best deal with dementia and other memory-related impairments that naturally happen as people age. This is especially true when navigating the complex and often times confusing area of personal finances. So, what can you do to prepare yourself should you, or a member of your immediate family develop dementia? Here are a few ideas that you may find helpful.
Find out the maximum contribution limits that can be made to most retirement savings accounts including 401(k) plans, 403(b) plans, traditional and Roth IRAs for 2015.
There is no doubt that pensions are an extremely important asset and making decisions regarding these plans can be daunting and stressful. This is especially true since pension decisions are irrevocable! This article addresses common questions that should be considered when making decisions about your pension.
Are you seeking ideas to reduce your tax burden this year? This article provides insight into a number of financial planning strategies that could prove effective at reducing your taxes in 2014.
In order to make your meeting with the estate planning attorney more efficient and productive, here are few items that you need to think about or decide on.
When making financial planning and investment decisions, we believe that it is important to consider the probability of negative outcomes. We call this “stress-testing” a financial plan. By stress-testing financial planning assumptions, we are able to help our clients identify and protect against financial risks that could derail their financial plans.
Normally, when someone mentions hybrids they are referring to fuel-efficient, money-saving cars. Like hybrid cars, the intention of hybrid long term care insurance policies is to provide cost-saving insurance coverage by combining both life insurance (or an annuity) with long term care coverage.
Many people have questions regarding their Social Security retirement benefits. This article addresses several of the more common questions that people often ask us.
When it comes to taking account distributions in retirement, which account is best – IRAs, Roth IRAs, Brokerage accounts or 401k plans? Also, are there tax strategies that could be employed now to minimize taxes in the future?
With over 20 years in the investment industry, we have helped clients navigate through a number of economic and market cycles. Through the years, we have developed our own set of descriptive names that are used as an indication of where we are in the market cycle. These names are generally based on client emotions and range from “malaise” to “exuberance”. Currently, we are in what we call the “investor complacency” phase.
Chip Hymiller, CFP® was recently interviewed on the show Community Matters with host, Bill LuMaye. The topic for the show was financial wellness. Chip’s segment of the show highlighted the need to prioritize financial goals, manage debt and develop a strategic long term plan.
Do you know what to expect when it comes to the cost of health care during retirement? Projecting health care costs is a major component for those who are approaching retirement. Find out how much you could spend.
With the stock market approaching new highs – is now a good time to invest? Read further to find out the answer.
Is it best to contribute to your company sponsored 401k plan, a Roth IRA, or a personal brokerage account? The answer depends on many factors.
Let’s face it, seniors today are healthier, more active and are likely to have longer lives. So what are the financial implications for retirees who will likely live well into their 80s and possibly their 90s?
There are a number of important tax law changes that may impact your financial planning decisions this year. Here are several of the most common changes that you need to be aware of.
With the changing of the year, it is important to review your retirement savings strategy. Here are the 2014 contribution limits for the most common types of retirement plans.
Through hard work and sound financial planning, some find themselves in situations in which they are contemplating intra-family financial planning. That is, identifying financial planning techniques that can be used to financially strengthen the next generation—children and grandchildren.
Emotions can play a major role when it comes to investing. Understanding common investor biases can help prevent costly investment mistakes.
When taking withdrawals from your investment portfolio during retirement, making tax-efficient decisions can save you thousands. Find out how…
When planning for retirement, it is important to consider the possibility of an extended need for long term care. Can your assets withstand the cost of long term care? Under what circumstances should long term care insurance be considered?
Let’s face it, in today’s world, managing your personal financial affairs can be complex. There are many decisions that need to be made on a weekly or even daily basis. For a large and growing segment of the population, who are trying to help (often unwilling) aging parents with their finances, this can be incredibly frustrating, stressful and burdensome.
This video provides some insight into Beacon Financial Strategies’ Retirement Feasibility Analysis service. This service is normally a planned portion of our Net Worth Management and Ongoing Financial Planning Retainer arrangements. It can also be a component of an Introductory Financial Planning engagement.
Contribution limits to IRAs and other employer-sponsored retirement plans have changed for 2013. Here are the most recent deferral limitations:
Do you want to take control of your finances? If so, find out what you need to do now to begin making progress toward your financial goals.
Small business owners have a number of alternatives to choose from when it comes to establishing retirement plans for their business. Each plan type can vary in their contribution level and matching requirements, as well as their ongoing regulatory and administrative burden.
One of the most pronounced fears for retirees is outliving their assets. Taking portfolio withdrawals that are sustainable over an extended retirement period is an important decision and one that should not be taken lightly.
There are a number of indexes that attempt to measure the performance of the financial markets and serve as a gauge of economic activity. The following are descriptions of several of the most common indexes:
Roth IRAs are great savings mechanisms and can be used effectively for retirement and education planning. One of the less publicized advantages to Roth IRAs is that they can be a great estate planning technique when someone wants to pass along as much as possible to their heirs.
When we begin new client engagements, one of the first things we review is whom our clients have chosen as their primary and contingent beneficiaries on life insurance policies, qualified plans and IRAs. There have been many occasions that we discover a serious mistake or oversight during this process.
One of the major goals that most people have is to, at some point, be debt free. This is a goal that we (Chip and Erin) strive for in our personal lives and we highly encourage our clients to prudently consider as well. In fact, research has consistently shown that people with manageable debt levels tend to be happier than …
Let’s face it, seniors today are healthier, more active and are likely to have longer lives. So what are the financial implications for retirees who will likely live well into their 80s and possibly their 90s? We believe that from a financial standpoint, retirees need to make financial planning decisions that reflect the high probability that they will live longer. Here are a few recommendations to consider.
On the surface, it would seem that the decision to begin collecting Social Security retirement benefits is a straight-forward one – take the money as soon as possible. However, for many people, taking their Social Security retirement benefit as soon as they become eligible may not be the best alternative.
As we help clients make long-term financial decisions, we also like to consider the probability of various negative outcomes. While we consider ourselves generally optimistic people, we believe that it is both important and helpful to also think about “worst case scenarios” – those financial uncertainties that have the potential to derail financial goals.
A major consideration when conducting a retirement feasibility analysis for clients is how potential long term care costs would be covered. With the cost of long term care increasing at a projected rate of 5% to 7% for the foreseeable future, in ten years from now a three year stay in the average facility in North Carolina could cost upwards …
With the belief that tax rates are likely to rise over time, many people are considering the merits of converting their traditional IRAs into Roth IRAs. Here are a number of considerations that may impact your decision.
During retirement, is it best to take distributions from IRAs, Roth IRAs or personal brokerage or savings accounts? The decision of “Which account?” is an important one with many factors to consider.
Social Security was originally intended to provide older Americans with continuing income after retirement. As people approach retirement, they generally have questions about Social Security and the benefit it provides.
In our office, we talk quite a bit about risk. Financial risk, and more importantly, identifying strategies to help our clients mitigate or manage those risks is a very real and important component of the financial planning process.
Long term care costs are expensive and rising every year. For many, a two or three year stay in a skilled nursing facility could cost several hundred thousand dollars and potentially wipe out a retirement nest egg.
Many financial planning objectives can be accomplished through the utilization of trusts. Here are several of the most common types of trusts and a brief overview of their purpose:
Is there another crisis looming? We have been getting this question quite a bit recently from clients, as well as from other professionals in our network. This is a good question. After all, many things can go wrong.
This article discusses several simple items that can help ease the estate settlement burden on your heirs.
We are often asked the question, “How much money do I need to retire?” While it is impossible to answer this question definitively as every situation varies, we do maintain mental benchmarks that are based on a number academic studies as well as our overall experience conducting Retirement Feasibility Analyses for clients.
One of the most important financial decisions people face with regard to retirement planning is when to start taking their Social Security retirement benefit. Making the most of this decision requires careful consideration of a number of variables including tax, cash flow and even elder care issues. The economic downturn has forced many families to consider taking Social Security earlier than expected. With that in mind, here are some ideas to consider, when making this important decision.
A key component of our one-time financial planning engagements involve assessing how much insurance coverage our clients need while also reviewing the insurance policies that clients have in order to determine if they are adequate or necessary. In doing so, we often find that people have purchased insurance products that are either not necessary or entirely too costly.
Given the turbulence in the financial markets during the week of May 3rd, we would like to provide our blog followers with a few thoughts and insights.
This article by Fortune magazine’s Allan Sloan gives an indication of some of the trouble facing the Social Security system. Consider the following statistics:
Much has changed over the last year—especially for those who are taking withdrawals from their investments to fund living expenses. Even investors who maintained a moderate portfolio allocation may have sustained significant investment losses over the last year. With portfolio declines, some retirees may find that they are having to distribute a greater percentage of their portfolio to fund “lifestyle” …
“Deciding on a retirement community is very difficult from many standpoints, including a financial standpoint,” said Hymiller. “From affordability and financing issues to how the costs may impact other financial goals such as estate distribution wishes or charitable bequests.”