The Future of Travel

Office Re-Opening A crisis has a way of giving you clarity. It challenges us to go back to the basics, re-discover our roots, and reflect on what is important. One thing we have all missed during quarantine was human connection – seeing people in 3-D and not just 2-D on a screen. The essence of travel and one of the reasons why people love it so much is very similar. We want to learn, connect with others, and have new and different experiences with friends and family. Seeing a place on tv or in a photograph just isn’t the same as live-and-in-person. Yet the speed and scale of this virus affecting the travel industry is unprecedented.

The virus went from East to West so it is not entirely surprising that recovery is (for the most part) happening that way too. COVID-19 is at a different phase of recovery in different countries. This makes international travel challenging and arguably not safe. Sensible decisions must be made and governments have a duty to protect their citizens. If this virus goes on for a LONG time then social, economic, and medical forces will start to conflict with each other more and more. This will put our governments in an increasingly difficult position. We see this happening in the travel industry. Take, for example, the travel ban for US citizens to go to Europe…

In a typical July, millions of US citizens travel to Europe. Surely with a validated test, a vaccine, or some other solution, Americans will be able to head to Europe again someday. The question is when. It will be crucial for Europe’s economic recovery to allow US citizens to travel back to their countries at some point but coming to an agreement on “medical fitness to travel” will be a challenge. Some of you may remember when you had to travel with little yellow books with your immunization records. Perhaps there will be a digital version of that in the future.

The future of travel seems very challenging to navigate at this point but I believe a solution of some sort will emerge from innovative ideas in technology and/or a vaccine. Then, hopefully we can get back to a world we at least recognize. 9/11 changed travel forever. This too will likely do the same

If you would like to discuss how the travel sector may influence your portfolio, or you have other questions or concerns that you would like to discuss I am available. You can schedule a meeting in person or via zoom, or a phone call with me from this website or by contacting my office. In the meantime, I hope you and your family have a safe and enjoyable Fourth of July!


Office Re-Opening

Office Re-Opening We are excited to announce that our office will be re-opening on Monday, June 1st! That said, we are taking several steps to proceed with caution, and we continue to welcome Zoom meetings for high-risk clients or for those that simply do not feel comfortable coming out yet. If you would like to schedule a Zoom meeting, phone review, or in-person meeting you can click the “Schedule an Appointment” link above.

For those coming to the office to see us, I cannot tell you how excited I am to see your faces live and in person! Here are the steps we are taking to keep everyone as safe and comfortable as possible:

When you enter the suite, Tammy will either take you immediately to my office or to the conference room to wait if there are other guests in the main lobby. We will ensure there is space to spread out and maintain social distancing if waiting.

If any employee in our office suite does not feel well, especially if they have a fever, they need to stay home. We ask the same for clients considering coming to our office.

We will have hand sanitizers throughout the suite – in the main lobby and in each office. We encourage everyone to use it regularly.

We will have disinfectant spray in the office being used regularly throughout the suite and I will disinfect my desk area between meetings.

So what about the mask?... Angel and I have given it much thought and, at least for right now, we will ask everyone to wear a mask while in my office meeting with me. I have a box of disposable masks so don’t worry if you don’t have your own. I will be happy to provide one when you enter my office. We made the decision to error on the side of caution especially after polling clients in Our New Normal discussion that took place on Wednesday, May 27th. 89% of those clients polled said they feel more comfortable being out with a mask on.

This is a fluid situation, therefor, what works today may not work a month from now. We just have to see how the trajectory of the virus plays out as well as watch the guidance from our local elected officials.

On a separate note, I wanted to apologize that we cannot have our client appreciation picnic at Deanna Rose Farmstead this year. We will be looking for ways to show our appreciation and keep in touch with out clients as the year progresses so watch for future emails.

Thank you all for your patience and generally calm-nature these past few months. The markets have been wild and you have all been exceptional investors! Your resilience will pay off. I feel like we are not out of the woods yet though. With most bear markets, there is a re-testing of the bottom or at least a second drop. During the great recession (2008-2009) as well as the tech crash (2000-2002), the bottom was re-tested about 3-4 months after the initial trough or bottom. No one knows if or when it will occur this time around but I'm ready to rebalance your portfolio should that happen.

Call us anytime if you have questions or concerns, stay safe, and enjoy the sunshine this weekend. After all the rain we had, it looks like my sump pump can finally take a break for a while.


Is the Coronavirus re-shaping the world?

Register for Our Webinar! I watched an excellent Bloomberg panel discussion the other day on how the Coronavirus could re-shape the world, and more specifically how COVID-19 has exposed vulnerabilities in our global supply chain. Before I get into that, let’s discuss the stock market and the overall economy. NOTE: These are 2 different things that, as we are seeing currently, aren’t always moving in the same direction.

The Overall Economy: The Chief Economist of the Organization for Economic Co-operation and Development (or the OECD) reported earlier this week that he predicts a very slow and gradual recovery in the global economy. In fact, I have even heard predictions that Global GDP will not get back to where it was until 2022. In the mean-time, CEO’s and national leaders are forced to reconcile how to re-open businesses to support the economy and GDP while keeping employees and the public-at-large as safe as possible. There are no clear or easy answers and each state has taken drastically different approaches. That said, the recovery might vary state-by-state as well.

The Stock Market: The global economy is not in good shape and could take a long time to recover, especially with added trade-war risk. The stock market, however, is trading closer to historic highs. April was the best month we’ve seen in gains since 1987. Where is the disconnect? Is the stock market “wrong”? Intervention by the Federal Reserve, which was arguably necessary, is largely what has boosted the stock market but how long will it last? This disconnect, between markets and the overall economy, combined with historic bear markets behavior presents a good case for another market correction. I wouldn’t necessarily bet on the Dow plunging all the way back down to 18,000 (March lows) but I also wouldn’t be surprised if we see another correction, especially after 2nd quarter earnings are reported and/or if there’s a resurgence in COVID-19 cases as things re-open. There are still more questions than answers though.

The Global Supply Chain: Before we discuss how this virus brought the current global supply chain into question, let’s define what the global supply chain really is. Put simply, it is the distribution of raw goods (made or grown around the world) moving from suppliers, to factories, to end users: the consumer. The creation of a GLOBAL supply chain has created a middle-class and lifted people out of poverty in China, Ethiopia, and other countries around the world. In response to the virus, however, borders are back (largely to protect our health). There is discussion about “re-shoring” or bringing the production back to the US and “deglobalization” or diminishing this interdependence that we’ve created around the world. One could argue valid points for or against this movement I suppose, but it does make the future of supply chain management look very different than what it was pre-COVID 19.

Another thing that is being discussed is “just-in-time” vs “just-in-case” inventory strategies in the supply chains. A “just-in-time” inventory is lean, efficient, and cost-effective. That sounds good, however, when there is a surge in demand for masks, ventilators, and medical equipment, this approach can be dangerous and even cost lives like we have seen. A “just-in-case” inventory reduces risk of back-orders and provides a larger inventory on-hand. It’s downside, however, is that it ties up capital in inventory. It is less cost-effective and frankly, not all countries can afford to stock-pile goods (especially in places like Africa).

Much like reopening the economy presents a delicate balance, so does managing these two styles of supply chains. I will not be surprised, if at least in the healthcare sector, we move toward “just-in-case” inventory. Having a brother on the front lines in the Emergency Room, it is very much my hope that we do!

Regarding our local supply chain, I went to 2 grocery stores yesterday getting food for myself and for my parents. FYI – If you wish to buy chicken right now, good luck! Both stores were out and Costco had a sign limiting 3 total meat purchases per Costco member. I realize this can be frustrating but considering the safety concerns for meat-packing plant workers, I don’t need meat that badly. But also, I’m really glad I split a side of beef last Fall with my best friend! I expect to see a spike in meat prices in coming months.

The great American philosopher, Yogi Berra, once said, “The future ain’t what it used to be.” I cannot think of anything that better sums up the fundamental changes and structural shifts to globalization and the future of supply chain management. Will we have to re-write the playbook post-COVID 19?

This post merely scratches the surface on these topics. I’d love to “geek-out” and discuss them more! Would you like to talk about them or do you have other questions? If so, I invite you to schedule a phone call or Zoom meeting with me by using the scheduler here on our website.


Embracing New Technology

Register for Our Webinar!Embracing new technology is a challenge for all of us – one I struggle with as well. But now more than ever, it’s important to roll up our sleeves and give it a try. One client with our firm told me he downloaded the Schwab mobile-app (with ease) on his phone since he does not have a home computer. Another client told me she learned how to order groceries online and get them delivered to her house since she does not feel safe shopping in the stores right now. What a great idea! Early last week, I thought I would never figure out how to host a webinar on Zoom, but with practice (and plenty of help from Angel), we were able to pull it off successfully and present to 30+ people in a live webinar on Thursday, April 16th. By the way, if you missed this event and/or if you want the slides from this timely presentation, let Angel or me know. We went over important tax and distribution strategies for your IRAs since the SECURE ACT passed on December 31st, 2019. This was the largest piece of legislation on retirement accounts since the Pension Protection Act of 2006 so it is very important to consider.

Back to embracing technology though, almost all of you have Charles Schwab account(s) with our firm now. I encourage you to login to your Schwab account(s) sometime if you haven’t already. Once you have created a username and password, Angel can send electronic documents for many of your service needs such as address or beneficiary changes, setting up a moneylink from Schwab to your bank account, and much more. If you would like a step-by-step guide to log in, select the button below. Again, if you have trouble setting up or navigating the site, you can give us or Schwab Alliance a call anytime at 800-515-2157.

In an effort to keep things business-as-usual, Angel will continue reaching out to schedule reviews with all of you. If you don’t hear from us first and want to chat, feel free to go to our website and click the "Schedule an Appointment” button in the upper right corner of our website. We encourage you to try the Client Zoom Review option for a face-to-face meeting over the computer or using the Zoom app on your phone. With Zoom, I can share my screen with you allowing us to review your financial plan, stress test your portfolio, review your risk levels, and so much more. So far, I have had several effective client reviews with Zoom. There is a slight learning curve but most folks are catching on and feel this is a comfortable alternative to live-and-in-person meetings. Here is a 1-minute tutorial on how to join a Zoom meeting from an email link (which is all you would need to do): https://support.zoom.us/hc/en-us/articles/201362193-Joining-a-Meeting. We have a professional Zoom account and enable security features on all calls. If you still have trouble, we can walk you through it. If using Zoom isn't an option, scheduling a phone review is a good alternative for now.

For a brief economic update, there are a lot of corporations reporting first quarter earnings this week (Netflix, Chipotle, Verizon, Southwest Airlines, and dozens more). In the short run, lots of events, news headlines, and even Trump tweets can affect stock prices moving them up or down. In the long-haul, however, earnings drive stock prices – period. Looking at 2020, Standard & Poor’s own analysts on April 9 2020 predicted a (year-over-year) decline in earnings in the first quarter (-9%) second quarter (-18%), third quarter (-4%), and fourth quarter (+4%). These are only predictions, however, I think we’ll see markets retest lows once investors see the toll coronavirus has taken on earnings.

Stay tuned for more updates and stay safe!

Kind Regards,
Mitzi Swaffar, CFP®


Register for Our Webinar!

Register for Our Webinar! With critical tax law changes this year (both from SECURE ACT and CARES ACT), we’re hosting a 30-minute webinar Thursday, April 16th at Noon, central time. If you own an IRA or other retirement account, this information applies to you.

Topics covered will include:

SECURE ACT – tax law changes to IRAs
- Strategies to minimize tax burden of your IRAs
- new distribution rules for beneficiaries
- Required Minimum Distribution rule changes

CARES ACT – tax relief for individuals
- Changes to IRA contributions and distributions for 2020 (including Required Minimum Distributions being waived!)
- Charitable Contribution changes
- Recovery rebates and more!

Roth Conversions – Is it right for you? Why now may be the time to consider Roth Conversions!

You must register in order to attend. Please call or email if you have any trouble or questions about getting registered: (913) 529-2304.

Webinar Details:
When: Apr 16, 2020 12:00 PM Central Time (US and Canada)
Topic: Timely Updates from MS Financial Resources

Click here to register for this webinar.


Tax Relief Act - What you need to know.

Tax Relief Act - What you need to knowWarren Buffet has a well-known philosophy about the stock market, “Be fearful when others are greedy and greedy when others are fearful.” Dave Ramsey also has a good analogy comparing the market to a roller coaster ride, “If you hold on and see it through to the end, you come out just fine. But if you try to jump off early, well, you’re going to get hurt.” … While we all know these are good investment principles to follow, acting on them is not so easy. We are wired to have a strong emotional response to losing money. It triggers the most primal part of our brain, our amygdala, which is responsible for keeping us safe from harm. Unfortunately, this self-protective and instinctual response can lead the most rational people to making poor investment decisions.

To that end, I find it helpful to step back and remind ourselves of the big picture by doing the following….

1. Revisit Long-Term Goals, Investment Objectives, and the Financial Plan: Put simply, the most common long-term goals that I see is saving for retirement and/or living comfortably in retirement without running out of money. Having equities (in the form of stocks, mutual funds, or ETFs) in a PORTION of your portfolio is arguably the best long-term hedge for inflation and a great way to keep your money growing and paying you an income over time. …. Call me to review your financial plan (or create one). While on quarantine, we can do this by phone, email and/or a Zoom video meeting online that I will set-up and walk you through.

2. Revisit Risk Tolerance: On our website, there is a link for a “Free Portfolio Risk Analysis.” We invite you to take (or re-take) this 5-minute assessment anytime and we can make sure your investments match your risk tolerance. If you are a client with our firm and in for regular reviews, then you will recognize this assessment. At various points, we review your “risk score” making sure your investments align with your appetite for risk.

3. Remember – Stocks Pay Dividends: Almost 1/3 of your return from the stock market comes from dividends. They can either pay you a consistent income stream or be reinvested purchasing more shares of stocks. Re-investing dividends when the market is down, we purchase shares at a lower price- this is a good thing! Over time, you profit from stocks in two ways: long-term appreciation (increased share price) and consistent income through dividends.

4. Stay Positive and Limit News Consumption: I encourage you to stay as positive as you can and remember: It is all but certain we will get through this crisis. Less certain is when. One way to stay positive: limit your news consumption. Try to schedule blocks of time for watching the news and then turn it off. This does not mean burying your head in the sand. It is good to follow what is going on, but once you have the story and information, move on from it.

5. Call Our Office Anytime: At this time and always, I make every effort to reach out to each of you and stay in touch. If you don’t hear from me first though, please do not hesitate to call. Office: (913) 529-2304.

Tax Relief for Individuals: On a separate note, here are some important components of the CARES act that will apply to many of you. For more information, please visit: https://www.irs.gov/coronavirus

Recovery Rebates: The most well-publicized provision is the $1,200 recovery rebates for individual taxpayers. This is a special one-time payment equal to $1,200 for individuals, or $2,400 for joint filers, with a $500 credit for each child. The amount of each rebate is phased out by $5 for every $100 in excess of a threshold amount. This threshold amount is based upon 2018 adjusted gross income (unless a 2019 return has already been filed), and the phaseout begins at $75,000 for single filers, $112,500 for heads of households, and $150,000 for joint filers. Thus, the rebates are completely phased out for single filers with 2018 (or 2019, if applicable) adjusted gross income over $99,000, heads of household with $136,500 (or higher, depending upon whether status is established because of children), and joint filers with $198,000. NOTE: Checks or direct deposit payments should arrive by the end of April.

Required Minimum Distributions are Waived for 2020: All 2020 RMDs from IRAs and retirement plans are waived, including RMDs from inherited IRAs (both traditional and Roth). NOTE: If you are a client with our firm and have NOT taken your required IRA distribution(s) yet, talk to me about this. Let us know if you’d still like to take it or keep it invested.

Charitable Contributions: Individuals who claim the standard deduction may also claim a new above-the-line deduction up to $300 for cash contributions made in 2020 to certain charities. Individuals who itemize deductions and make cash contributions in 2020 to certain charities may claim an itemized deduction up to 100% of AGI (increased from 60%). Eligible charities are those described in Section 170(b)(1)(A) of the Internal Revenue Code (for instance churches, educational organizations, and organizations providing medical or hospital care or research) and do not include donor advised funds or Section 509(a)(3) supporting organizations.

Tax-favored Early Distributions from Retirement Plans: The CARES Act waives the 10% penalty on early distributions for coronavirus related dispersals up to $100,000 from IRAs and qualified plans such as 401(k), 403(b), and governmental 457(b) plans. A coronavirus related distribution is a distribution made during calendar year 2020 to an individual (or spouse) diagnosed with COVID-19 by a CDC-approved test, or to one who experiences adverse financial consequences as a result of quarantine, business closure, layoff, or reduced hours due to the coronavirus. In addition, any income attributable to an early withdrawal is subject to income tax over a 3-year period unless the individual elects to have it all included in their 2020 income. Lastly, individuals may recontribute the withdrawn amounts back into an IRA or plan within 3 years without violating the 60-day rollover rule or annual contribution limits.

Retirement Plan Loans: Before the CARES Act, a participant could borrow from a retirement plan the lesser of 50% of the vested account balance or $50,000 (reduced by other outstanding loans). Beginning March 27, 2020 through 180 days thereafter, the maximum loan amount increases to the lesser of 100% of the vested account balance or $100,000 (reduced by other outstanding loans). In addition, participants who had outstanding loans as of March 27, 2020 may defer for one year any payments normally due from March 27 through December 31, 2020.

Unemployment Benefits: Unemployment insurance provisions now include an additional $600 per week payment to each recipient for up to four months, and extend UI benefits to self-employed workers, independent contractors, and those with limited work history. The federal government will provide temporary full funding of the first week of regular unemployment for states with no waiting period and extend UI benefits for an additional 13 weeks through December 31, 2020 after state UI benefits end.

For more information or to see what benefits specifically apply to you, contact our office at (913) 529-2304.

Small Business Owners: There is a lot to unpack from CARES act for small business owners too. For the sake of avoiding information overload in this newsletter, I will simply say this: If you are a small business owner client of ours, contact our office to review some of these resources.

Stay safe and remember, this too shall pass. It is all but certain we will get through this crisis. Less certain is when.

Kind Regards, Mitzi Swaffar, CFP®


Learning and Finding Comfort In History.

HealthGood afternoon. In today’s trying times, not only as a nation but around the globe, I find that history can be a powerful teacher and offer much needed perspective. Last weekend, my church pastor read newspaper headlines that his grandfather kept from the Great Depression. The Kansas City Times in 1945 had articles about Roosevelt dying and Truman going into office. They started to build a few cars again when they hadn’t in a while. Some even had gasoline! The lack of supplies we’ve seen in grocery stores is nothing compared to what this generation faced. Many people had to turn toward gardening and hunting in order to eat. I don’t see it coming to that for us today and I think many of you would agree.

In more recent times, you may remember what is popularly known as Black Monday: October 19, 1987. On that SINGLE DAY, the Dow declined almost 23% - the largest percentage drop in US history. Surprisingly for investors, that calendar year still managed to end with a positive stock market return.

While historical perspective helps, I also recognize the novelty in our current environment. This is the fastest move we have ever seen from market all-time highs and full employment to a recession and high unemployment. While this recession may be deep, it also may be quick. If it ends relatively soon, then it’s entirely possible the economy will have a strong rebound, especially given the backdrop of a strong economy before the virus.

For markets to move higher, we need to see 2 things: 1) what is being done to stop the spread of the virus and 2) what is being done to limit the economic disruption it creates.

To lesson or stop the spread of virus
Big pharma is working diligently to create therapeutics and vaccines and expediting their market-readiness. The Milken Institute tracks and publishes up-to-date research for companies pursuing such treatments and vaccines: https://milkeninstitute.org/covid-19-tracker. Scientists believe that anti-malaria drugs may be a good treatment as we’ve seen much fewer cases of COVID-19 in South America and Africa. Last week, the FDA granted New York 80,000 doses of this drug for extreme cases where survival is in question. We’ll see if it helps.

To limit economic disruption
I think it’s a stretch to call the $2 Trillion a “stimulus package” to rebound the economy but it gives us a place to start. To me, it acts more as a life-raft so individuals and businesses can stay afloat, weathering the storm over the next 6-8 weeks. Regardless, I was happy to see each party set aside their own political agendas (eventually) and come to some agreement. Employment is the #1 driver of economic growth though. If people have jobs, it drives consumption, which drives GDP. How quickly folks can safely get back to work is critical in our recovery.

It has been said that our current situation will create a permanent trend for working from home but that was also speculated after 9/11, SARS, MERS, Ebola, and the oil spike in 2008. They were wrong then so it is hard to predict how it will shake out now. I believe someday we will get back to face-to-face business interactions. That will always be preferred over virtual communication for important meetings and discussions.

If history teaches us anything, it’s that we don’t always learn from history. One thing I hope we do learn from all of this, however, is the need to spread our risk with sourcing pharmaceutical drugs. Going forward, we may continue to source many drugs from China, but we must look to other areas of the world (and within the US) in order to spread this risk. I spoke to one client last week who said she could only get a 3-DAY supply of her vital medication due to under-supply. Hopefully, we learn a lesson from this.

I would like to remind everyone that this situation is not permanent. Although the stock market can always present short-term risks, there is a significant reduction of risk over longer periods of time. Please keep in mind too, we have stress tested your portfolios and we hold asset classes that have low correlation to the stock market and less volatility.

Our office has contingency plans in place allowing us to work effectively from home. If you need anything, call us at (913) 529-2304, Tammy is still taking calls and routing them through to us. Angel and I are in communication throughout the day as well. If you would like to do a phone review or a Zoom meeting online in the coming weeks, give us a call to schedule it.

We pray that you and your families are safe, and we all look forward to a time when things get back to normal.

Kind Regards,
Mitzi Swaffar, CFP®


Here to Help With information and to Highlight Facts

Covid 19I’ve pulled together data from the Chief Economist for the National Association for Credit Management, Dr. Christopher Kuehl, PhD, several Chief Investment Strategists at Schwab, independent economist and market analyst, Fritz Meyer, and many others. With things changing constantly, I realize some of this information may even be outdated once it reaches you, but here’s what everything looks like currently (Thursday evening, March 19th).

Corona Virus Stats
Cases are quickly rising in New York and the city is on the brink of a “shelter-in-place” policy. The likely reason they are delaying it is to allow citizens to prepare. It wouldn’t surprise me if this is implemented by the time you read this.

Italy vs US: Italy’s mortality rate is double that of other nations at 7.9%! The cause: One could argue they did not take the virus seriously early on. Their rapid increase in cases overwhelmed their medical system and they couldn’t handle it. That is why our administration is willing to sacrifice the economy, at least in the shorter run, to save lives. Italy’s supply chain is breaking down and they are having trouble getting freight into regions under full lockdown. When you go to the grocery stores here, it may seem like a break-down in supply chain too but that’s not entirely true. Most stores are having trouble keeping inventory on their shelves to keep up with demand. That is why many grocery and 24 hour stores like Wal-Mart are limiting their store hours currently – to restock shelves and try to keep up with the demand.

According to my latest email update from Johnson County Government, there are 16 presumptive positive cases in Johnson County with 68 tests pending and 148 that came back negative.

Federal Reserve Measures
The Federal Reserve is taking several measures to ensure liquidity in the financial system such as:

  1. Lowering Fed Funds rate to nearly zero (Fed Funds rate is the rate banks charge each other for overnight loans.)
  2. Cutting Discount rate to 0.25% (This is the interest rate Federal Reserve Banks charge for collateralized loans.) This encourages liquidity.
  3. Quantitative Easing was announced: The Fed will increase their balance sheet by at least $700 billion in buying Treasuries and mortgage backed securities in coming months.
  4. Fed will increase its repo market operations to $175 billion.

Overall, we don’t entirely know the long-term financial impact that some of these big moves may bring, but they’re doing what they can to prevent financial markets from freezing up. Essentially, that is their job. Rates will stay near zero for a while but Jerome Powell and the FOMC don’t see negative rates coming here in the US as they have in other countries.

Oil and Crude Concerns
The US is the world’s largest producer of crude oil so a slump in prices really impacts our economy. We saw a similar situation in 2014/2015 when oil prices fell even lower than they are today: they went to $25/barrel. Global crude oil consumption collapsed in Jan/Feb of this year at the onset of the Coronavirus overseas. Additionally, Russia is “not wanting to play ball” in cutting their production. This contributes even more to over-supply. This collapse in oil will carry additional drag on the US economy.

What’s Next?
A US recession is increasingly more likely, but if it does occur, no one knows how long or how deep it will go. The possibly good news in all of this is that there were a lot of positives in the US Economy before the novel corona virus took hold. The index of leading economic indicators suggested economic expansion, new housing starts began to boom which permeates into other areas of the economy, and new job starts were high even amid low unemployment. Although we could see a surge in unemployment in coming weeks, it is entirely possible that it will be short-lived.

Also, keep in mind: The stock market is a leading economic indicator as well. Often times, it starts to go up ahead of the rest of the economy indicating an improving economy ahead. That said, this COULD BE a good time to get invested or stay invested depending on your individual situation and stomach for risk and volatility.

Additionally, as more testing kits become available for this virus, which they will, mortality rates in the US will come down. Big pharma is also working around the clock to develop vaccines and anti-viral therapies.

From an investment standpoint, there is no one-size-fits-all answer. If you are young investors, most likely, you should stay the course and continue to dollar-cost-average into the market. If you were considering converting your traditional IRA dollars to Roth IRA, now might be a good time due to the downturn. If you are unsure whether your portfolio matches your time horizon and risk tolerance, call me to discuss it.

Additionally, going over your financial plan (or creating one) can help us keep the big picture in perspective and allows us to stress-test your portfolio to see the impact from market downturns. If you are nearing retirement, having a financial plan is more important than ever.

Kind Regards,
Mitzi Swaffar, CFP®


Nearing Retirement? Give Yourself This Gift This Holiday Season

Nearing Retirement? Give Yourself This Gift This Holiday Season It’s that time of year again. Time to buy gifts for spouses, children, and all the other friends and family who play a meaningful role in your life. Have you finished your Christmas shopping?

If you’re approaching retirement, you may want to give yourself a gift this year. No, not an expensive gadget or vacation. Rather, use this holiday season to give yourself the gift of a financially stable retirement.

The new year will be here before you know it. Take some time now to review your retirement strategy so you can take action and start 2020 on the right foot. Below are a few tips to get you started:

Increase your retirement contributions.
Do you make retirement contributions to a 401(k), IRA, or another qualified retirement plan? These types of accounts are powerful retirement savings tools because of their tax-deferred status. You don’t pay taxes on growth as long as the funds stay inside the account. That may help your qualified savings compound at a faster rate than they would in a taxable account.

Consider increasing your contributions to your 401(k) or IRA in 2020. You can contribute up to $19,500 to a 401(k) in 2020. That number increases to $25,500 if you are age 50 or older. You can also contribute up to $6,000 to an IRA, or up to $7,000 if you are 50 or older.1

Of course, it may not possible for you to increase your contribution to the maximum level without busting your budget. Any increase in contributions is helpful. One effective strategy is to gradually increase your contributions over time. For example, you could set up your 401(k) contribution to increase 1% every year or even every six months.

Reduce your exposure to risk.
If you’re like many people nearing retirement, you’re not as comfortable with risk as you once were. That’s natural. Many people become more risk-averse as they approach retirement. After all, you don’t have as much time as you once did to recover from a market loss.

There are a few steps you can take to reduce your exposure to risk. One is to review your allocation and risk tolerance and make sure they’re aligned. Your risk tolerance is your specific comfort level with market volatility. It’s based on your unique needs, goals, and time horizon.

As you get older, your risk tolerance may change, so it’s important that your strategy changes along with it. You could shift your strategy to more conservative assets that have less exposure to risk and volatility. You could also utilize financial vehicles that offer growth potential without the chance of downside loss. A financial professional can help you identify strategies that can reduce your risk exposure.

Guarantee* your retirement income.
Are you approaching retirement? If so, this may be the time to start thinking about your retirement income. You’ll likely receive income from Social Security. Maybe you’ll even receive a defined benefit pension. However, you also may need to take distributions from your 401(k), IRA, or other retirement savings.

Often those withdrawals aren’t guaranteed. A market downturn could limit your ability to take retirement income. Or if you withdraw too much in the early years of retirement, you may not have assets left in the later years.

Fortunately, you minimize these risks by creating guaranteed* income from your retirement savings. There is a wide range of retirement vehicles available that you can use to convert a portion of your retirement savings into income that is guaranteed* for life, regardless of what happens in the market or how long you live.

Ready to give yourself the gift of financial stability? Let’s talk about it. Contact us today at MS Financial Resources. We can help you implement a strategy. Let’s connect soon and start the conversation.

  • https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19500-for-2020-catch-up-limit-rises-to-6500

*Guarantees provided by annuities, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

19524 - 2019/12/3


Year-in Review: How the Markets Performed in 2019 and Tips to Prepare for 2020

Year-in Review: How the Markets Performed in 2019 and Tips to Prepare for 2020 Another year is in the books. It’s almost time to turn the calendar to 2020. For many investors, this is the time to look back on the past year and make adjustments for the upcoming year.

The performance of your portfolio in 2019 depends on your allocation and your specific investments. However, generally speaking, investors enjoyed positive returns in 2019. Through November 22, the top market indexes had the following returns:

  • S&P 500: 24.60%1
  • DJIA: 19.88%2
  • NASDAQ: 29.41%3

Those positive returns haven’t come without a few bumps in the road though. The markets experienced a few sharp downturns in 2019, especially through the summer. Issues like the trade war between the United States and China have created uncertainty among some investors. 4 However, other developments, like interest rate cuts and strong corporate earnings, have helped extend the longest bull market in history.4

What’s in store for 2020? When it comes to investing, it’s impossible to predict the future, especially in the short-term. However, if you are concerned about market volatility, there are steps you can take to minimize your exposure to risk. Below are a few action items to consider as we head into the new year:

Review your risk tolerance.
Is your allocation aligned with your risk tolerance? If you’re like many investors, you may not actually know what your risk tolerance is. Risk tolerance is your specific ability to withstand volatility in your investments. Risk tolerance is unique for each person and is based on a wide range of factors, including your time horizon, your comfort level with risk, and your financial goals and needs.

Risk tolerance also changes over time. If you’re approaching retirement, you may not have the same tolerance you had when you were younger. Often, people who have decades until retirement have significantly more tolerance for risk because they have more time to recover from a loss. If you’re a few years away from retirement, you may be much more sensitive to a market downturn.

Now is a good time to review your risk tolerance and make sure your allocation is appropriate. A financial professional can use a variety of tools and methods to accurately gauge your tolerance for risk. He or she can then recommend specific allocation changes that may be more appropriate than your current investment approach.

Use risk protection tools.
Changing your allocation is one way to reduce your potential risk levels. It’s not the only option though. You could also incorporate into your strategy retirement vehicles like fixed indexed annuities that reduce or eliminate market risk.

For example, there are a wide range of vehicles that allow for growth and interest accumulation based on market index returns, but without exposure to downside risk. You could use this option to eliminate risk on a portion of your allocation, thus reducing your overall risk and volatility exposure.

Ready to develop your 2020 investing strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

  • https://www.marketwatch.com/investing/index/spx
  • https://www.marketwatch.com/investing/index/djia
  • https://www.marketwatch.com/investing/index/comp
  • https://www.cnbc.com/2019/12/02/in-2019-almost-every-investment-worked.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

19523 - 2019/12/3


You’ll Be Thankful You Made These Retirement Decisions

You’ll Be Thankful You Made These Retirement DecisionsWhat are you thankful for this holiday season? Family and friends? A few days off work? Perhaps your health? Good fortune in your career? You may have many blessings for which you’re thankful.

Many of our blessings and fortunate circumstances are determined by choices we made earlier in life. Your good health may be a result of your healthy lifestyle. Your financial stability is likely a result of your career choices and your savings habits.

What decisions can you make today that you will be thankful for in the future? Below are three actions your retired self may appreciate. If you’re approaching retirement and haven’t taken these steps, now may be the time to do so.

Adjust your allocation and minimize risk.
Are you feeling less comfortable with market volatility as you approach retirement? That’s normal. Most people become more risk-averse as they get older. When you’re young, you have a long time horizon. You have plenty of time to recover from a loss in the market, so you can afford to take some risk.

However, as you get closer to retirement, your time horizon shortens. You don’t have as much time to recover from a loss, so a market downturn may cause more anxiety and stress than it did in the past.

This may be a good time to review your overall allocation and possibly adjust to a more conservative strategy. Look for ways to pursue growth without exposure to high levels of risk. In addition to adjusting your allocation, you may want to explore retirement vehicles that offer growth potential without market risk. Your risk tolerance changes over time, so your allocation should change as well.

Maximizing tax-deferred savings.
If you’re like most Americans, you probably use some kind of tax-deferred vehicle to save for retirement. Accounts like IRAs and 401(k) plans are tax-deferred. You contribute money and then allocate your funds according to your goals.

In a tax-deferred account, you don’t pay taxes on your growth as long as the funds stay inside the account. Depending on which account you’re using, you may pay taxes on distributions in the future. However, the deferral of taxes inside the account may help your assets compound at a faster rate than they would in a comparable taxable account.

In 2019, you can contribute up to $19,000 to a 401(k), plus another $6,000 if you are age 50 or old. You can also contribute up to $6,000 to an IRA, with an additional $1,000 if you are 50 or older.1 Look for ways to trim your budget so you can put more money in your retirement accounts. Your future self will thank you.

Work with a professional.
Have you resisted using a financial professional for retirement income advice? Now may be the time to change your thinking, especially if you’re nearing retirement. A financial professional can help you adjust your allocations, plan your retirement income, develop a savings strategy, and even implement a personalized plan so you stay on track to hit your retirement goals. If you haven’t consulted with a financial professional about your retirement, now may be the right time to do so.

Ready to nail down your retirement strategy and make decisions you’ll be thankful for in the future? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

  • https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19000-for-2019-ira-limit-increases-to-6000

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

19446 - 2019/10/30


Volatility vs. Risk: What's the Difference and How Do They Impact Your Portfolio?

Volatility vs. Risk: What's the Difference and How Do They Impact Your Portfolio?Volatility and risk. When it comes to investing, those two terms mean the same thing, right? Not exactly. While volatility and risk can both refer to market downturns, they don’t have the exact same meaning. Understanding the difference between volatility and risk can help you make more informed investment decisions and implement the right long-term strategy for your needs and goals.

What is volatility?
Volatility is a statistical measure of the dispersion of returns for a given security or market index.1 In simpler terms, it’s range of returns that could be expected for a stock, bond, mutual fund, or other investment.

Volatility is often measured by something called standard deviation, which is the variance of returns for a specific investment. For instance, assume a stock has a historical average return of 8% annually with a standard deviation of 10. The average return is 8%, but you could expect returns in any given year as low as 10% below the average or 10% above the average. So the annual returns will usually fall somewhere between -2% and 18%.

Now consider a stock that has an average annual return of 6% with a standard deviation of 4. In this example, the annual returns will usually fall somewhere between 2% and 10%. Clearly, this stock is less volatile than the previous example.

Volatility refers to the potential downside, but it also refers to the potential upside as well. Volatility is a natural part of investing. Securities increase in value some days and decrease other days. It’s difficult to avoid volatility, but you can manage it by knowing your own comfort level and choosing investments that align with your tolerance.

What is risk?
Risk is different than volatility in that risk refers specifically to loss. It’s generally the possibility of loss. There are a few measurements that can be used to estimate your investment risk, like standard deviation, but there isn’t one objective way to measure your level of risk exposure.

Instead, the best way to measure and manage risk is often through careful, regular analysis. Your tolerance for risk is unique and subjective. The amount of risk that is too much for you may be perfectly fine for another individual. Only you can truly know what level of risk is appropriate for your strategy.

However, a financial professional can help you determine your risk tolerance and analyze your current exposure to market risk. It’s possible that a more conservative allocation could be appropriate. Or you might benefit from financial vehicles that don’t have any market risk exposure. Since risk is such a subjective term, it often takes regular monitoring, review, and adjustment to find the right strategy.

Are you ready to minimize the risk and volatility in your investment strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

  • https://www.investopedia.com/terms/v/volatility.asp

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

19441 - 2019/10/30


Three Investing Mistakes that Can Haunt Your Retirement

Three Investing Mistakes that Can Haunt Your Retirement It’s that time of year again … Halloween is here. It’s time to stock up on candy, carve your pumpkin, and find the perfect costume. Soon, scary movies will be on television and you’ll have little ghouls and goblins showing up at your door for trick-or-treating.

This may be the scariest time of the year, but it only lasts a month. The truth is there could be gaps in your retirement strategy that could come back to haunt you for years or even decades. Below are a few common retirement planning mistakes that can have frightening long-term consequences. If any of these sounds familiar, it may be time to meet with a financial professional.

Having the wrong allocation.
Asset allocation is an important part of any retirement strategy. Your allocation influences your risk exposure and your potential return. Generally, risk and return go hand-in-hand. Assets that offer greater potential return usually also have higher levels of risk. You can use asset allocation to find the right mix of assets for your retirement income goals and risk tolerance.

Having the wrong allocation can be problematic. For example, many people have less tolerance for risk as they approach retirement. As you get closer to retirement, you have less time to recover from a loss and thus less tolerance for risk. However, if you don’t adjust your allocation, you could have more risk exposure than is appropriate. A downturn could substantially impact the amount of income you have set aside for retirement.

One way to protect your assets and reduce your risk exposure is to use a fixed indexed annuity (FIA) for part of your allocation. FIAs offer potential interest that is tied to the performance of an external market index, like the S&P 500. If the market performs well, you may earn more interest, up to a maximum amount set by the insurance company.

However, if the index performs poorly over a given period, you won’t lose any premium. Most FIAs have a principal guarantee* which means you won’t lose money due to market loss. You may earn less interest, but your initial premium amount won’t go down.

Not guaranteeing* your income.
Income is the name of the game in retirement. One key to a successful retirement is having income that meets or exceeds your expenses. However, much of your income may be unpredictable. While Social Security income is guaranteed*, your income from your personal savings may not be. It can be difficult to plan your retirement when you don’t know how much income you will have or how long it needs to last.

Again, an FIA can help you manage this risk. Many FIAs offer optional benefits called guaranteed* withdrawal riders. With these features, you’re allowed to withdraw a certain amount each year. As long as you stay within the allowed withdrawal amount, the income is guaranteed* for life, no matter how long you live or what happens in the financial markets. This predictable income can help you make more informed financial decisions and live comfortably in retirement.

Not working with a financial professional.
Are you more of the DIY type? That’s an understandable approach, but it could also create some frightening risks. For instance, you may not see potential risks, like gaps in your asset allocation. Or you may not fully estimate your income need for a long retirement.

A financial professional can use their knowledge, experience, and resources to develop a customized strategy for you. They can identify gaps in your plan and recommend appropriate strategies, such as FIAs or other financial vehicles. Sometimes an outside opinion can help you identify risks that you didn’t see yourself.

Ready to take the fright out of your retirement strategy? Let’s talk about it. Contact us at MS Financial Resources. We can help you analyze your needs and develop a retirement income plan. Let’s connect soon and start the conversation.

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

19301 - 2019/9/24


Fourth Quarter Planning Checklist: Four Financial Steps to Take before the End of the Year

Fourth Quarter Planning Checklist: Four Financial Steps to Take before the End of the Year It’s hard to believe the year is almost over, but October is already upon us. Soon the holidays will be here and then we will flip the calendar to 2020.

These last few months are also your last opportunity to make important financial decisions before the end of the year. It’s a great time to review your strategy and make adjustments as you head into 2020.

Below are a few items to include on your end-of-year planning checklist:

Review your tax strategy.
The deadline for filing your 2019 taxes may be in April 2020, but that doesn’t mean you can’t get started on your planning today. In fact, by starting your planning now, you can take advantage of deductions and other opportunities.

For example, there may be deductions that you haven’t fully used. You could make a contribution to your favorite charity before the end of the year to take advantage of the charitable deduction. You could make contributions to tax-deductible retirement accounts, like an IRA. Do you have any outstanding medical bills? You may be able to deduct those costs if you pay them before the end of the year.

Also, consider whether you can defer income until next year. Perhaps you’re due a sizable bonus or other compensation. Perhaps you could defer that income until after January 1 so it’s not included in your 2019 return. If you’re considering selling appreciated assets, like stocks, you may want to wait until after the beginning of the year to delay the capital gains. A financial and tax professional can help you identify these opportunities and make informed decisions.

Increase your contributions.
Will you maximize your contributions to your 401(k) and IRA this year? If not, you still have time to do so. In 2019, you can contribute up to $19,000 to a 401(k), or up to $25,000 if you are age 50 or older. You can contribute up to $6,000 to an IRA, or up $7,000 if you are 50 or older.1

This also may be a good time to consider your contributions for 2020. The IRS has not yet announced the 2020 contribution limits. However, increasing your contribution rate could help you accumulate more assets. Even a moderate increase of a percentage point could compound to significant savings over time. Think about increasing your retirement savings as you head into 2020.

Check your benefits.
The fall is usually open enrollment season for many employers. This is a good time to review your health coverage and other benefits to see if they still fit your needs. If you’re nearing retirement and have access to an HSA through your employer, you may want to consider making contributions. An HSA can be a tax-efficient funding source for health care costs and you can take the assets with you into retirement.

Adjust your allocation.
Finally, this may be the right time to review your allocation. Your needs and risk tolerance could change over time. It’s common for people to become more risk-averse as they approach retirement. It’s important that your allocation changes along with your tolerance for risk.

A fixed indexed annuity (FIA) might help you take some of the risk out of your strategy. FIAs offer the potential to earn interest based on the performance of a market index. If the index performs well over a certain time period, you may earn more interest, up to a limit. However, if it performs poorly, you simply earn less interest; you don’t lose money due to market declines.

Ready to start on your fourth-quarter financial checklist? Contact us at MS Financial Resources. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation.

  1. https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19000-for-2019-ira-limit-increases-to-6000

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

Annuities contain limitations including withdrawal charges, fees, and a market value adjustment which may affect contract values.

Annuities are products of the insurance industry; guarantees are backed by the claims-paying ability of the issuing company. Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.

19305 - 2019/9/25


Your First Year of Retirement: Why It Can Be More Stressful Than You Think

Your First Year of Retirement: Why It Can Be More Stressful Than You Think Are you preparing to retire? If so, this is probably an exciting time. You’ve worked and saved your entire career to get to this point. Very soon, you’ll be able to spend your time as you wish, without the constraints of career and work.

While retirement is a major accomplishment and an important milestone, it’s not always a joyous occasion. Some retirees struggle to make the transition. In fact, a recent study in the Journal of Population Ageing found that retirees are twice as likely to experience symptoms of depression than those who are still working.1

What could be depressing about not working anymore? Everyone’s situation is unique, so there aren’t universal answers to that question. However, there are a few common challenges that many retirees face, especially in their first year of retirement. You can make the transition easier by planning ahead. Below are a few issues you may want to consider as you finalize your retirement strategy:

Lack of Purpose
If you’re like many people, you’ve worked in some form or another for several decades. In fact, you’ve probably spent more of your adult life working than with any other activity. Even before you started your career, much of your time was probably focused on school or extracurricular activities.

For many, retirement marks the first time in their life where there isn’t a primary mandatory activity. You don’t have to wake up at a certain time to be at work. There aren't any tasks to complete or meetings to attend. Your time is yours to manage as you please.

While the freedom of retirement might be appealing, you may feel like you don’t have any purpose. You may want to think about how you will spend your time in retirement. What is important to you? What does your ideal day look like? Do you want to travel? Or perhaps learn a new hobby? Think about what your purpose will be and what activities will make you happy.

Loneliness
For many adults, work isn’t just a source of income. It’s also their primary place to socialize with other adults. Think of your network of associates and friends. How many of those relationships were formed during work-related activities?

Once you retire, you won’t have an office or workplace to go to. That means you may not have a natural opportunity to socialize with others. Think about ways in which you can get out of the house and interact with other adults. For example, you could join a golf league, or a club related to a favorite hobby. You could volunteer for a local charity. Some retirees even take low-pressure part-time jobs just so they can spend time around other people.

Overspending
Once you retire, you’ll have more free time available than you’ve likely ever had in your life. You also may have more money available than you’ve ever had, between your retirement assets, defined benefit pension income, and Social Security.

Many retirees fill their free time with costly activities, like travel, shopping, and dining out. It’s natural to want to enjoy your retirement. However, be careful not to overspend during the early years of retirement. You could put yourself in a difficult financial situation in the later years. A financial professional can help you develop a budget and implement an income strategy.

Ready to plan your upcoming retirement? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

  1. https://www.usatoday.com/story/money/2019/06/11/depression-during-retirement-how-cope-and-prepare/1416091001/

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

19149 - 2019/8/19

Is September the Worst Month for Investing?

Is September the Worst Month for Investing? Fall is here. Ok, it’s not actually official until September 22. However, the unofficial start of fall arrived in late August. Starbucks added pumpkin spice drinks to their menu. For many, that’s a surefire sign that cooler weather, football, and fall bonfires are right around the corner.

While fall may be a favorite time of year for many people, it hasn’t historically been a great season for investors. In fact, September is historically the worst month for stock market returns. Going back to 1950, the Dow Jones Industrial Average (DJIA) has a -0.8% average return in September while the S&P 500 has a -0.5% average return.1 Those averages are worse than the average return for any other month.

September isn’t down every year, but it happens frequently enough that the phenomenon has generated a nickname - the September Effect. What’s the cause of the September Effect? And how can you prepare? Below are some tips and guidance to help you plan.

Why does the September Effect happen?
There’s no clear answer why the September Effect happens. Or even if it’s a real phenomenon at all. Some people think it’s related to tax planning. People sell down positions before the fourth quarter in order to harvest potential tax losses. The widespread selling causes a downturn in the market.

Others suspect that the phenomenon is related to the end of summer. People think about their portfolio and investments over the summer, but don’t take action because they’re busy with vacations and other activities. After summer is over, they sell positions and make adjustments and, again, the widespread selling causes a slight downturn.

Of course, there’s also the possibility that there is no actual cause. It’s possible that the phenomenon is completely coincidental. It doesn’t happen every year. In fact, over the past 25 years, the median return in September for the S&P 500 has been positive.1 It’s possible that there is no actual September effect and the historical returns are a matter of circumstance.

How do you prepare for the September effect?
you may be curious about how you should prepare for the September effect, or if you should at all. The short answer is that it usually isn’t wise to plan your retirement strategy based on short-term expectations.

While September may have a history of being negative, that doesn’t mean it always is. Also, it’s incredibly difficult to predict the market’s movement in the short-term, if not impossible. You could make changes to your strategy in expectation of a downturn and the market could do the exact opposite.

Instead, focus on your long-term strategy. Your retirement planning approach should be based on your unique goals, needs, and risks. That strategy shouldn’t change just because one month may have poor returns.

If you don’t have a long-term retirement strategy, now may be the time to develop one. Let’s talk about it. Contact us at MS Financial Resources. We can help you analyze your needs and implement a strategy. We can help you analyze your goals and possible risks and implement a plan. Let’s connect soon and start the conversation.

  1. https://www.investopedia.com/ask/answers/06/septworstmonth.asp

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

19184 - 2019/8/23

Not Your Parents’ Retirement: How Retirement Has Changed Over the Last 30 Years

Do You Know Your Risk Tolerance? The world has changed significantly in the past few decades. Thirty years ago, there weren’t cell phones. Computers weren’t widely owned. There was no Uber or Airbnb. Social media was unheard of and virtual reality was the stuff of science fiction.

The world changes quickly, and not just in terms of technology. Retirement has changed significantly in the past few decades as well. The next generation of retirees will face challenges that previous generations didn’t face.

The good news is that you can overcome these potential challenges if you plan ahead. Below are a few ways in which retirement has changed over time. Do you have a strategy to address these challenges? If not, now may be the time to develop one. A financial professional can help you get started.

Longevity
People are living longer than ever. Usually, that’s a good thing, but a long lifespan can create financial challenges. According to the Society of Actuaries, today’s retirees can plan on a long lifespan. They estimate that a 65-year-old couple has a 50 percent chance of one spouse living to age 94 and a 25 percent chance of one spouse living to 98.1

If you retire in your mid-60s, there’s a chance your retirement could last 30 years. That means you’ll need your assets and your income to last that long. That could be difficult, especially if you overspend in the early years of retirement.

Income Sources
There was a time when retirees could count on income from Social Security and an employer defined benefit pension to fund their retirement. Those days are long gone. Defined benefit pensions are quickly disappearing from employer benefit options. In fact, the percentage of Fortune 500 companies that offer defined benefit pensions has dropped from 59 percent in 1998 to 16 percent in 2017.2

While you can likely count on Social Security income, it may not be enough to fund a full retirement. That means you may need to take withdrawals from your savings and investments to generate income. You’ll likely need an income strategy to make sure you savings lasts through a long, fulfilling retirement.

Health Care
Health care costs have risen dramatically in recent decades. Medicare helps cover some of those costs, but it doesn’t cover everything. In fact, Fidelity estimates that the average retiree will spend $285,000 out-of-pocket on healthcare.3 That figure is above and beyond what is covered by Medicare, and includes things like premiums, deductibles, copays and more.

How do you plan for high out-of-pocket healthcare costs? One effective strategy is to budget for them. You also may want to consider an investment strategy that generates enough income to cover potential health care costs.

Complexity
Retirement income. Healthcare costs. Budgeting. Longevity. How do you plan a retirement strategy that considers all these potential challenges and more? For many retirees, the complexity of managing these issues is the real challenge.

Fortunately, you can address retirement issues head-on by developing a personalized retirement income plan. A retirement plan can help you project your income, budget your spending, and make sure that your assets last as long as you need them to.

Ready to plan for a 21st-century retirement? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

  1. https://www.fidelity.com/viewpoints/retirement/longevity
  2. https://www.planadviser.com/mere-16-fortune-500-companies-offer-db-plan/
  3. https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs\

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

19094 - 2019/8/1

Women & Retirement Planning: 2 Unique Challenges

Do You Know Your Risk Tolerance? Who handles the money in your household? If your home is like most, it depends on the kind of financial planning involved. A new study from UBS found that 85 percent of married women handle the day-to-day financial management in their household. However, the same survey found that only 23 percent of married women are in charge of their long-term planning. The remainder defer that work to their husband.1

Why do so many women defer their long-term financial planning to their spouse? According to the study, 82 percent of women said they think their spouse is more knowledgeable about long-term financial planning.1

Partnership is always important in marriage, especially when it comes to financial planning. Finances are often a major cause of arguments and disagreements, so it’s helpful for both spouses to be involved in decision-making.

It’s also important for women to take control of their financial future because they may face challenges and risks that men do not face. Below are two such challenges. If you haven’t developed a long-term financial strategy, now may be the time to do so. A financial professional can help you get started.

Longevity
People are living longer than ever, primarily because of advances in health care and increased understanding about health and nutrition. However, women usually have the edge on men in terms of life expectancy.

According to the Society of Actuaries, the average 65-year-old man has a 50 percent chance of living to 87 and a 25 percent chance of living to 92. However, a 65-year-old woman has a 50 percent chance of living to 92 and a 25 percent chance of living to 96.2

This means that many women can expect to outlive their husbands. While that idea may not be pleasant to think about, it’s an important planning consideration. A longer lifespan means a longer retirement. That means you’ll need to make your assets and income last longer so you can live comfortably.

Career Earnings
Many women also may earn less over their career than their husbands or even their male counterparts in the workplace. According to a study from PayScale, a salary website, the average woman hits her peak in annual earnings at age 44. Men, on the other hand, hit their peak at age 55.3 PayScale also found that women earn less over the course of their career. The average woman has a peak annual income of $66,700. Men peak at just over $100,000.3

There are a number of reasons why this earnings gap exists. Some women may take time off to care for children. Others may sacrifice their career so their husbands can pursue a more demanding and time-consuming career. Others may suffer from the well-known pay gap that exists in the United States.

Regardless of the reason, it’s important for women to know that the earnings gap exists so they can plan accordingly. Career earnings often translates into savings. A woman who has less career earnings may also have fewer assets saved for retirement.

Ready to take control of your long-term financial planning? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.

  1. https://www.thinkadvisor.com/2019/03/07/many-women-defer-to-spouses-on-big-financial-decisions-ubs/
  2. https://www.fidelity.com/viewpoints/retirement/longevity
  3. https://www.cnbc.com/2019/06/11/gender-pay-gap-womens-earnings-peak-11-years-before-mens-payscale.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

19093 - 2019/8/1

Do You Know Your Risk Tolerance?

Do You Know Your Risk Tolerance? In an ideal world, you could save money and prepare for retirement without any risks or threats. Unfortunately, risk is a natural part of any financial strategy. There are a wide range of risks that could potentially derail your plan. Medical emergencies, disability, job loss, and more could cut into your savings and limit your ability to retire comfortably.

Your savings and investments also face market risk. Volatility is a component in nearly every financial market. Assets rise in value, but they can also fall. Depending on your allocation, those declines could put your investments at risk.

Risk and return also tend to go hand-in-hand. Many of the assets that have the highest long-term historical returns also have the high levels of volatility. Assets that tend to have little risk exposure also may have limited return potential.

How do you grow your assets without taking on too much risk exposure? One effective strategy is to align your allocation with your risk tolerance. Your risk tolerance is your own personal threshold for downside movement. Everyone’s risk tolerance is different. It should be based on your specific needs and goals, as well as other factors.

Is your allocation aligned with your risk tolerance? Do you know your risk tolerance level? If not, now may be the time to review your plan. A financial professional can help you determine how much risk is right for you. Below are a few factors to consider as you get started:

Goals
Any risk tolerance analysis should start with a review of your goals. Why are you saving money? The size of your goal will influence your strategy.

For example, assume you’re saving for retirement, which is a sizable goal. You’ll likely need to grow your money over a long period of time to reach your objective, so you may need to take some risk to get your desired level of return.

However, assume you’re saving for a down payment for a home purchase. In this case, growing your money may not be as important as simply protecting it. An account or asset with little or no risk could be more appropriate for a goal of that size.

Time Horizon
When will you actually need to use your savings? The amount of time you have until you need to use your assets is known as your time horizon. The longer your time horizon, the more tolerance you may have for risk.

Assume you intend to retire in five years. You may not have much tolerance for market loss. If the market declines, you may not have time to participate in the recovery. On the other hand, assume you aren’t retiring for 30 years. If the market declines, you have plenty of time to recover, so it may make sense to take on greater risk exposure in the pursuit of higher returns.

Personal Preference
Every person is different, so there’s no universal correct answer on how much risk is appropriate. Your personal preferences should be an important consideration. Some people are naturally more comfortable with risk than others.

How do you feel when your investments decline in value? Does it cause stress and anxiety? Or does it barely register on your radar? If your risk level keeps you up at night or causes you to question your strategy, that could be a sign that you are allocated too aggressively.

Ready for an allocation that is right for your risk tolerance? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

19014 - 2019/7/1

3 Affordable Tropical Locations for Your Retirement

3 Affordable Tropical Locations for Your RetirementSummer has finally arrived. It’s time for sunshine, barbeques and maybe even vacations to the beach. If you’re still working, you may only get one or two weeks a year to escape from the office and enjoy the great weather. However, once you’re retired, you’ll have the time and flexibility to enjoy a beach and a tropical climate as much as you want.

In fact, many retirees choose to not only vacation frequently, but to actually relocate to a warm, tropical location. Many do it for lifestyle reasons. They want to be able to enjoy the outdoors year-round. Others may do it for health reasons. They may have illnesses or conditions that are less severe in warmer weather.

Some people also move to tropical locations for financial reasons. There are many places, especially in other countries, where your retirement dollars might stretch further than they do in the United States.

In fact, every year International Living magazine rates the best tropical retirement destinations in its Global Retirement Index. Below are a few of the top locations in 2019’s index. If you’re looking for a warm tropical climate and want to make your retirement assets last, you may want to consider either a part-time or full-time relocation to one of these countries.

Panama
Panama claimed the top spot in 2019’s Global Retirement Index. It’s a modern, sophisticated country in Central America that’s popular with American ex-pats and retirees for a few reasons. One is the climate. It’s a tropical country with year-round great weather, but it also isn’t a frequent target of hurricanes or tropical storms. Whether you love the beach, golf, or other outdoor activities, you’ll find plenty of options in Panama.

Panama is also a great location for your wallet. The country actively courts retirees from other countries with its Pensionado program. This program offers substantial discounts on everything from airline tickets to hotel rooms and even energy costs. Also, you don’t pay taxes in Panama on income that originates in your home country.

Medical costs are also affordable in Panama. According to the study, office visits for minor issues have minimal costs and most patients can enjoy a direct relationship with their physician or specialist.

Malaysia
Want to relocate to somewhere tropical, but also with a completely different culture? You could try Malaysia, which ranks fifth in the Global Retirement Index. The country is home to pristine beaches, but also rainforests and mountains if you’re in the mood to explore. You can live in the city or a small countryside village.

The cost of living is also appealing. According to the report, Malaysia offers a cost-of-living at a fraction of the expenses here in the United States. In fact, a couple may be able to live comfortably in a beachside town for less than $2,000 per month. Health care is also affordable in Malaysia. Retirees in the country report low costs and high-quality care with access to skilled physicians and specialists.

Portugal
Want an inexpensive location with plenty of travel opportunities? Portugal could be the right option for you. According to the Global Retirement Index, Portugal is the second most affordable country in Europe, just behind Bulgaria. Retirees interviewed as part of the study say they can live comfortably in Portugal for less than $2,500 per month.

While Portugal is a foreign country, it could be an easy transition for an American retiree. English is widely used, and even basic knowledge of Spanish and Portuguese is sufficient. Also, Portugal is rated as the fourth-safest country in the world according to the 2018 Global Peace Index.

The biggest benefit to living in Portugal may be the lifestyle. You have access to beach towns or a relaxed lifestyle in the country. It’s also easy to travel throughout Europe. You can quickly travel to Spain, France, Italy, the United Kingdom, or more via train or air.

Steps to Take Before Retiring Overseas
Is an overseas retirement right for you? If so, it’s important to have a solid plan in place before you make the leap. One important piece of your plan is your income strategy. How will you generate income in retirement? And how much income can you expect?

A financial professional can help you map out your income sources, such as Social Security, defined benefit pensions, retirement account distributions and more. He or she can also help you estimate your spending in your new home country and determine how much income you will need. You may also want to take advantage of vehicles like annuities, which can be used to create guaranteed income for life.

You also may want to take this time to assess your investment strategy and allocation. In particular, consider how your investments and potential gains may be taxed in your new home country.

Also review whether your allocation is appropriate for your needs and goals. If you don’t need as much income in your new country, that could impact your strategy. Perhaps you should reduce your risk exposure. Or maybe you can pursue growth strategies. Your financial professional can help you find the right strategy for your objectives.

Ready to retire overseas? It all starts with a sound financial plan. Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your goals and develop a strategy. Let’s connect soon and start the conversation.

  • https://internationalliving.com/the-best-places-to-retire/

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18977 - 2019/6/18

Financial Reset: 3 Steps You Can Take to Minimize Risk in the 2nd Half of 2019

Financial Reset: 3 Steps You Can Take to Minimize Risk in the 2nd Half of 2019The year is flying by. It may be hard to believe, but we’re already halfway through 2019. Did you set financial goals at the beginning of the year? If so, how are those goals looking at the halfway point?

The good news is you have six more months to hit your objectives. Whether your goal was to save more money, pay down debt, or simply organize your financial strategy, you still have time to make it happen before the end of the year.

This also may be a good time to review your retirement plan. Generally, the financial markets have had a good year. The S&P 500 is up more than 13 percent year-to-date. However, that hasn’t come without turbulence. The index lost nearly 5 percent in May. 1

If you’re approaching retirement, it’s important to periodically review your retirement strategy to make sure it aligns with your risk tolerance and time horizon. If you suffer a loss, you may not have time before retirement to recover. Below are a few tips to help you reduce the risk exposure in your strategy.

Rebalance your allocation.
It’s possible that your target allocation is perfect for your risk tolerance and time horizon. However, it’s also possible that your actual allocation doesn’t match your target.

Investment portfolios naturally become unbalanced over time. Some assets classes perform better than others. Some increase in value while others decline. This happens all the time with investments and financial markets.

However, as asset classes increase and decrease in value, they also become unaligned with your target allocations. For instance, an asset that was supposed to account for only 5 percent of your allocation, may account for much more if it increases in value. Similarly, an asset that declines in value may account for much less than its target percentage. The result is that you get a portfolio that doesn’t match your desired allocation and may even have more risk than you want.

Fortunately, you can correct this issue by rebalancing your allocation back to the desired target. In fact, it’s good to do this regularly, even on a quarterly basis. Many financial professionals can set up your account to automatically rebalance so you know you’re always aligned with the right strategy.

Shift to more conservative assets.
When was the last time you reviewed your allocation? If it’s been a while, you may need to do more than rebalance. It could be time to change your allocation altogether.

As people get older and approach retirement, they tend to become more conservative. This is because your time horizon has shortened. You have fewer years until you retire and actually need to use your money. A more conservative allocation reduces the odds of a sizable loss. It helps you protect what you have while still potentially growing your assets.

Review your strategy and discuss it with your financial professional. Is it time to move to a more conservative allocation? If so, consult with your financial professional to determine what types of strategies are right for you.

Consider an annuity.
Finally, you may want to consider additional risk protection tools. One possible tool is an annuity. Some annuities, like fixed indexed annuities, offer upside potential without the downside risk that exists in the financial markets.

With a fixed indexed annuity (FIA), you receive interest that is tied to the performance of an external index, like the S&P 500. If the index performs well, you receive a portion of the upside performance as an interest payment. If the index performs poorly and loses value, you don’t receive interest, but you also don’t lose any money.

An FIA can be an effective tool to minimize risk in your portfolio. There are a number of different FIAs available, so it’s important to explore your options. Your financial professional can help you determine if an FIA is right for your strategy.

Ready to reset your strategy for the second half of 2019? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

1. https://money.cnn.com/data/markets/sandp

Annuities contain limitations including withdrawal charges, fees, and a market value adjustment which may affect contract values.

Annuities are products of the insurance industry; guarantees are backed by the claims-paying ability of the issuing company. Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18924 - 2019/5/29

Late on Retirement Planning? Tips to Jumpstart Your Savings

Late on Retirement Planning? Tips to Jumpstart Your Savings It’s graduation season. Do you have a graduate who finishing up on college? If so, this is a time to celebrate your child’s accomplishment and their entrance into adulthood.

It also may be a time to celebrate your new freedom. You have one less dependent in the house and one less tuition bill to pay. You might see a healthy boost in your bank account and budget in the near future, especially if you’re now an empty-nester.

Before you start spending all that extra cash, this could be a good time to review your retirement strategy. If you’re behind on your savings, you’re not alone. Many people wait until after their kids graduate and leave the home before they get serious about saving for retirement.

The good news is there’s still time to get back on track. Below are three steps you can take today to boost your savings and take back control of your retirement strategy. If you’ve waited until your kids were grown to get serious about retirement, now is the time to take action.

Use a budget.
Do you use a budget? If the answer is no, you have company. According to a recent survey, 60% of Americans don’t use one.1 That’s an unfortunate statistic because a budget is one of the most powerful financial tools at your disposal.

A budget is especially important if you now have a boost in cash flow because you’re no longer supporting a child or making tuition payments. You can use your budget to plan and analyze your spending so that additional cash flow goes toward retirement instead of unnecessary purchases.

There are a variety of online tools you can use to create your budget. A spreadsheet can also be effective. The key is to set spending goals for each type of purchase and then regularly review your budget to make sure you hit your targets.

Boost your contributions.
The most effective way to boost your retirement assets is to simply contribute more money to your retirement accounts each year. Once you turn 50, you have an opportunity to increase your savings rate through something called “catch-up contributions.” A catch-up contribution is simply an extra allowable contribution amount for those approaching retirement.

In 2019, you can make a regular contribution of up to $19,000 to a 401(k). However, if you are 50 or older, you can contribute an additional $6,000, giving you a total allowable amount of $25,000. You can contribute up to $6,000 to an IRA, plus an additional $1,000 if you are 50 or older.2 Catch-up contributions can help you boost your savings and get your retirement back on track.

Guarantee* your assets and income.
As you approach retirement, you may find that you have less tolerance for risk. That’s natural. After all, you don’t have as much time as you once did to recover from a substantial market loss. Of course, you also need to keep growing your assets, so you can’t avoid risk completely.

How do you balance your need for growth with your aversion to risk? One way to do it is with an annuity. Many annuities offer growth opportunities with downside guarantees*. For instance, a fixed indexed annuity allows you to earn interest that is linked to a market index. If the index performs well, you may earn more interest. If it performs poorly, your principal is protected.

Fixed annuities also offer ways to create guaranteed* lifetime income streams. You can convert a portion of your assets into a cash flow that will last for live, no matter how long you live. That could provide some certainty and predictability as you head into retirement.

Ready to get your retirement on track? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and goals and implement a strategy. Let’s connect soon and start the conversation.

  • https://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html
  • https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19000-for-2019-ira-limit-increases-to-6000

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18775 - 2019/4/16

College Planning vs. Retirement Planning: How the Strategies Differ

College Planning vs. Retirement Planning: How the Strategies DifferAnother school year is nearly over. If you have kids, you know how fast time flies. One day you’re dropping them off at daycare or sending them to kindergarten. The next thing you know, they’re preparing for college. Blink and you might miss it.

If your child is in middle school or even college, you may feel like you’re behind on their college savings. Of course, at the same time, you may also feel like you’re behind on your retirement savings. Both are big financial goals, and both are important, but there’s also only so much money available to contribute to savings. How do you balance the two goals?

Savings for college is much different than saving for retirement. There are different variables and factors involved. Below are a few things to consider.

Time Horizon
Time horizon is the amount of time you have before you actually need to use your savings. The longer your time horizon, the more risk you can afford to take. If you suffer a loss, you have time to recover, but as your time horizon shortens, you may want to become more conservative since you don’t have as much time to recover losses.

Depending on your age, your time horizon for college may be much shorter than your time horizon for retirement. You could have decades until retirement. On the other hand, if you have a child already in elementary or middle school, you may have 10 years or less until they’re ready for college.

Your time horizon should influence your saving strategy for both retirement and college savings. Don’t apply the same allocation to both goals. Rather, look at your time horizon and determine how much risk you can afford. Unless your kids are very young, you likely don’t have time in your college strategy to recover from a sizable loss, so you may want to take a more risk-averse position.

Amount
According to the College Board, the average cost of tuition and fees in the 2017-18 school year at an in-state public college was $9,970. For an out-of-state public school, the cost was $25,620 and a private school was $34,740.1 If your child attends college for four or five years, it’s possible the cost could be over six figures.

That’s a sizable amount, but it’s still not close to what you’ll need for retirement. Consider that you may live in retirement for several decades. You’ll need enough assets to cover your bills, your discretionary spending and more. Consider that Fidelity estimates the average retired couple will need $285,000 just to cover medical expenses.2

While college is big financial goal, it’s usually not as sizable as your retirement need. Don’t delay saving for retirement. It’s too big of a goal to fund at the last minute. Even if you have to start small, it pays to start saving early.

Alternative Funding
It’s also important to remember that your child has other funding options available for college. They could earn a scholarship or a grant. They may qualify for financial aid. Student loans aren’t popular, but they are an effective funding tool.

You may not have similar options available for retirement. You’ll likely receive Social Security benefits, but those payments usually aren’t enough to fund a full retirement. You’ll likely need to rely on your savings to make up the difference. While saving for college is important, don’t let it interfere with your retirement savings.

Ready to plan your college and retirement strategies? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

  • https://www.collegedata.com/en/pay-your-way/college-sticker-shock/how-much-does-college-cost/whats-the-price-tag-for-a-college-education/
  • https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18786 - 2019/4/18

Do You Have Enough Income to Survive a Rainy Day in Retirement?

Do You Have Enough Income to Survive a Rainy Day in Retirement?Everyone is familiar with the popular saying “April showers bring May flowers.” The arrival of spring also means the arrival of rainy weather. While rainy days are never fun, they signal the end of winter and the coming arrival of blossoming flowers and warmer weather. In retirement you might be able to avoid rainy weather by moving to a tropical climate.

Of course, you may not be able to avoid rainy days with regard to your financial strategy. Emergencies happen at all stages of life, including after you retire. Taxes could be a challenge and may stretch your budget. Medical expenses and long-term care costs could pose a financial threat. Market risk is always a concern.

One way to protect yourself from emergencies and unexpected costs is to boost your guaranteed* income in retirement. The more predictable, guaranteed* income you have, the less vulnerable you’ll be to unplanned costs.

Not sure whether you have enough guaranteed* income in retirement? Below is a three-step process you can use to evaluate your income and take action. If you haven’t projected your retirement income, now may be the time to do so.

Step 1: Establish your income floor.
Your income floor is the minimum amount of income you need to cover your most important expenses. The best way to determine your income floor is to develop a retirement budget. Granted, you can’t predict every cost you’ll face in retirement. However, you can probably make a reasonable projection based on your current expenses and your desired standard of living.

Highlight the expenses that are most important. These will include all your fixed expenses, which are the bills that have to be paid every month no matter what. You also may include a few discretionary costs, which are expenses that could fluctuate from month to month. For example, your most important expenses may include:

  • Housing
  • Utilities
  • Insurance premiums
  • Debt and credit card payments
  • Car payments
  • Medical costs
  • Food
  • Clothing
  • Cellphone bill
  • And more

Total up your most important expenses and see how much they will cost on a monthly basis. Also, don’t forget inflation. It’s likely that prices will rise slightly between now and your retirement date. The sum of your most important expenses is your income floor. That’s the minimum amount of income you need each month to live in retirement.

Step 2: Project your guaranteed* income.
The next step is to project your guaranteed* income in retirement. Guaranteed* income is cash flow that will last no matter how long you live and that isn’t affected by market performance or other economic factors.

Social Security and pension benefits are good examples of guaranteed* lifetime income. The amounts don’t fluctuate from month to month, and the income lasts for life. Distributions from 401(k) plans, IRAs or other investment vehicles may not be guaranteed*, so you don’t want to include them in this calculation.

Add up your projected guaranteed* income. Does it exceed your income floor? If so, you have enough to meet your bare minimum expenses. If it doesn’t, you may want to increase your guaranteed* retirement income.

Steps 3: Fill in the gaps.
Ideally, you don’t just want your guaranteed* income to match your income floor. You want it to exceed your income floor by a substantial amount. That way you can build a rainy day fund to cover life’s unexpected costs. Extra guaranteed* income could help you pay for medical bills, home repairs or other emergency costs.

One of the most effective ways to boost your guaranteed* income is to include an annuity in your retirement strategy. Many indexed annuities offer optional riders known as guaranteed* minimum withdrawal benefits. These benefits allow you to withdraw up to a certain amount each year. As long as your withdrawal stays within the limits, the distribution is guaranteed* for life. It doesn’t matter how long you live or how the market performs. Your income remains consistent and predictable.

Talk to a financial professional about how to use an annuity to boost your guaranteed* retirement income. They can help you determine your income floor, project your retirement income and take action to protect yourself from financial rainy days.

Ready to boost your retirement strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18686 - 2019/3/25

Retirement Egg Hunt: How to Find Hidden Assets in Your Strategy

Retirement Egg Hunt: How to Find Hidden Assets in Your StrategyRemember hunting for Easter eggs as a child? There were few thrills more exciting than racing around the yard or a park to find as many eggs as possible. Your eggs may have contained candy, money or other prizes.

As an adult, you may be too old to participate in a traditional Easter egg hunt. However, there may be another egg hunt that could be far more lucrative. It’s a hunt for hidden retirement assets. Many people fail to inventory their available retirement assets. In doing so, they fail to identify assets that could play an important role in their retirement strategy.

Below are four often-overlooked retirement assets. Some of these eggs may be hiding in plain sight. If you haven’t created an inventory of your retirement assets, now may be the time to do so. You could have some valuable eggs waiting to be found.

Old 401(k) Plans
There was a time when workers stayed with one company for most of their career. Those days are long gone. According to data from the Bureau of Labor Statistics, wage and salaried workers have been with their current employer for a median of only 4.6 years. In fact, the average worker changes jobs 11 times from age 18 to 48.1

When you leave a job, you also may leave behind a 401(k) balance. It’s possible that you still have balances held in former employers’ plans. Make a list of old employers and identify the ones where you may have participated in a 401(k) plan, profit-sharing plan or other qualified retirement plan. If you have an old balance, you could roll it over into an IRA and invest it according to your strategy.

Life Insurance Cash Value
Do you own permanent life insurance policies? If so, those policies may have a cash value that you can use in retirement. Permanent life insurance policies have a death benefit, but they also have what’s called a cash value account. When you make a premium payment, a portion of that payment is allocated toward the cash value.

Your cash value account grows on a tax-deferred basis. The method of potential growth depends on the type of policy. Whole life insurance pays dividends, while universal life policies pay interest. Variable universal life policies allow you to invest in the financial markets. Depending on your type of policy and how long you’ve owned the insurance, you could have a significant amount of cash value.

You can use that cash value to provide supplemental income in retirement. For instance, you can withdraw your premiums tax-free. You can also take tax-free loans from the policy, though the loans do have to be repaid. Review your life insurance policies and see whether you’ve accumulated cash value that you can use in retirement.

Home Equity
Thinking of downsizing in retirement? That could be a smart move. When you downsize to a smaller home, you may be able to reduce your costs for housing, taxes, maintenance, insurance and more.

If you have substantial equity in your home, you could also give your retirement savings a nice boost. For example, you could pocket the equity from the sale of your home and add it to your retirement assets.

Delaying Social Security
Technically, this strategy doesn’t represent an asset, but it is a simple way to increase your retirement income. You can file for full Social Security benefits once you reach full retirement age (FRA). Most people’s FRA lands between their 66th and 67th birthdays.2

However, you don’t have to file at your FRA. If you choose to delay your filing, Social Security will increase your benefit by 8 percent for each year that you wait up to age 70. That 8 percent increase is a permanent credit, so it could represent a significant pay raise, especially if you delay your benefit filing for several years.3

Ready to find the hidden eggs in your retirement strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

  1. https://www.nerdwallet.com/blog/investing/leaving-401k-behind-job-change-costly/
  2. https://www.ssa.gov/planners/retire/retirechart.html
  3. https://www.ssa.gov/planners/retire/delayret.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18692 - 2019/3/26

Do NCAA Tournament Winners Predict Market Returns?

Do NCAA Tournament Winners Predict Market Returns?If you’re a college basketball fan, this is your favorite time of year. March Madness is in full swing. That means a full schedule of games every weekend, buzzer-beating finishes and unbelievable upsets. If you’re like many fans, your bracket is already a mess.

It’s nearly impossible to predict the outcome of the NCAA Tournament. According to a Duke University professor, the odds of predicting a perfect bracket are 1 in 2.4 trillion.1 Even getting the Final Four correct can be difficult: In last year’s Capital One Bracket Challenge, only 54 entries had the Final Four teams correct.2

It may also feel like it’s impossible to predict the movement of the financial markets. The major indexes can swing in any direction on any given day, influenced by an infinite number of events and updates from around the world. In the short term, it’s virtually impossible to predict where the markets are headed.

But can you use the winner of the NCAA Tournament to make a market prediction? Researchers from Schaeffer’s Investment Research recently studied S&P 500 index returns from April to December along with past NCAA Tournament champions to see if there’s any correlation between the two.

The research found that the market has consistently had positive annual returns when the NCAA Tournament champion has come from the Southeastern Conference (SEC). That’s happened 11 times. The S&P 500 has gone on to have a positive return the rest of the year in each of those instances. The median return from April to December when the champion is an SEC team is 9.56 percent.3

The market has also had positive returns at least 75 percent of the time when the champion has come from the ACC, Pac-12 or Big East. The ACC and Pac-12 have produced the most champions, with each conference winning 16 times. During years in which the ACC has won, the market had a positive return 75 percent of the time, with a median return of 9.59 percent. When the Pac-12 wins, the market has been positive 88 percent of the time, with a median return of 8.91 percent.3

When does the S&P 500 have a negative return from April to December? When the NCAA Tournament winner comes from the Big Ten Conference. In those years, the market has been positive only 36 percent of the time, with a median return of -4.76 percent.3

Coincidence Isn’t the Same Thing as Correlation
Of course, just because these patterns exist doesn’t mean there’s an actual correlation between the tournament winner and the returns of the market. There’s no factor tying the championship outcome to the S&P 500, so these patterns are entirely coincidental. They shouldn’t be used to try to make any kind of market predictions.

If you want to stabilize your investment performance and reduce volatility, there are other steps you can take besides relying on the outcome of a basketball tournament. Below are a few steps to consider:

Review your allocation. As you get older and approach retirement, it’s natural to become less tolerant of risk. You may not be able to stomach the ups and downs of the market like you used to. That’s understandable. After all, you’ll need to rely on those savings for income in the near future.

Now could be a good time to review your allocation with your financial professional. It’s possible that your current allocation isn’t right for your goals, needs and risk tolerance.

Rebalance. The market moves up and down, but not all asset classes move in the same direction at the same time. As some asset classes increase in value, others decline. That means your actual allocation is always in a state of flux. Over time, it may become far different than your desired allocation.

It’s helpful to regularly rebalance your portfolio so it always adjusts back to your target allocation. When you rebalance, you sell some of the assets that have increased in value and buy those that have declined. That can help you lock in gains and stay aligned with your desired strategy.

Use an annuity. An annuity can be an effective tool to potentially increase your assets but also limit downside risk. For example, a fixed indexed annuity pays an interest rate based on the performance of an index, like the S&P 500. The better the index performs over a defined period, the higher your rate. If it performs poorly, you may get little or no interest.

In a fixed indexed annuity, however, your principal is guaranteed*. There’s no risk of loss due to market performance. That means you get upside potential without the volatility.

Want to take steps to make your portfolio less volatile? Don’t look toward coincidental trends. Instead, implement a thoughtful strategy. Contact us today at MS Financial Resources. We can help you review your portfolio and find areas for improvement. Let’s connect soon and start the conversation.

  1. https://ftw.usatoday.com/2015/03/duke-math-professor-says-odds-of-a-perfect-bracket-are-one-in-2-4-trillion
  2. https://www.ncaa.com/news/basketball-men/bracketiq/2018-03-26/54-ncaa-brackets-correctly-predicted-final-four
  3. https://www.schaeffersresearch.com/content/analysis/2017/03/23/march-madness-indicator-why-the-stock-market-should-root-for-kentucky

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18583 - 2019/2/27

Tax Season Is Here: 4 Tax Tips to Consider for 2019

Tax Season Is Here: 4 Tax Tips to Consider for 2019The deadline for filing your 2018 tax return is right around the corner. Have you filed your return yet? If so, were you satisfied with the outcome? Or were you surprised by how much you paid in taxes last year?

The recent tax law dramatically changed the tax code. For many Americans, the law means reduced taxes. If you don’t plan accordingly, however, it’s possible that you could owe money to the IRS after your filing. It’s also possible that you could pay more in taxes than necessary.

Now is a great time to review your strategy and identify action steps that could reduce your tax exposure. If you haven’t reviewed your financial plan recently, you may be missing out on a number of tax-efficient tools and products. Below are a few tips to consider as you review your taxes:

Review your deductions.
One of the biggest changes of the Tax Cuts and Jobs Act is the elimination and reduction of a wide range of deductions. Most itemized deductions were eliminated, including those for alimony payments and interest on many types of home equity loans. Caps were also implemented for state, local and property tax deductions. The law also eliminated personal exemptions.1

To make up for these changes, the law more than doubled the standard deduction.1 For many people, that means it will be more advantageous to take the standard deduction than to itemize deductions. If you’ve planned your spending based on the ability to itemize and deduct certain expenses, you may want to reconsider your strategy. Those deductions may no longer be allowed under the new law.

Check your withholding amount.
The law also reduced tax rates across the board and changed the income brackets for each rate level. As a result, many employers adjusted their withholding amounts. Not all did, however. And some may have adjusted their withholdings incorrectly.

In fact, according to a study from the Government Accountability Office, 30 million people, or just over 20 percent of taxpayers, are not withholding enough money from their paychecks to cover taxes.2 Are you part of that group? If you’re not sure, talk to your financial professional about whether you should increase your withholdings.

Maximize your tax-deferred savings.
Tax deferral is a great way to reduce current taxes and save for the future. In a tax-deferred account, you don’t pay taxes on growth in the current year as long as your money stays in the account. You may face taxes in the future when you take a distribution.

Many qualified retirement accounts, such as 401(k) plans and IRAs, offer tax-deferred growth. In 2019 you can contribute up to $19,000 to your 401(k), plus an additional $6,000 if you are age 50 or older. You can put as much as $6,000 into an IRA, or up to $7,000 if you’re 50 or older.3

Want more tax deferral beyond your 401(k) and IRA? Consider a deferred annuity. Annuities offer tax-deferred growth. They also offer a variety of ways to increase your assets. Some pay a fixed interest rate and have no downside risk. Others let you participate in the financial markets according to your risk tolerance and goals. A financial professional can help you find the right annuity for your strategy.

Develop sources of tax-efficient retirement income.
Taxes don’t stop when you quit working. If you’re approaching retirement, now may be the time to plan ahead and minimize your future tax exposure. You can take steps today to create tax-efficient income for your retirement.

For example, distributions from a Roth IRA are tax-free assuming you’re over age 59½. You may want to start contributing to a Roth or even consider converting your traditional IRA into a Roth.

You can also use a permanent life insurance policy as a source of tax-efficient income. You can withdraw your premiums from your life insurance cash value tax-free. Also, loans from life insurance policies are tax-free distributions. You may want to discuss with your financial professional how life insurance could reduce your future taxes in retirement.

Ready to take control of your tax strategy in 2019? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

  1. https://www.thebalance.com/trump-s-tax-plan-how-it-affects-you-4113968
  2. https://www.cnbc.com/2018/08/01/30-million-americans-are-not-withholding-enough-pay-for-taxes.html
  3. https://www.cnbc.com/2018/11/01/heres-how-much-you-can-sock-away-toward-retirement-in-2019.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18582 - 2019/2/27

Is the Downturn Threatening Your Retirement? 3 Tools to Protect Your Nest Egg

Is the Downturn Threatening Your Retirement? 3 Tools to Protect Your Nest EggWorried about the direction the financial markets have taken over the past few months? You’re not alone. After nine consecutive years of growth, the markets ended 2018 on a down note. The S&P 500 finished the year down more than 6 percent, the first time it has ever finished a year negative after being positive through the first three quarters.1

In fact, some indexes have already entered bear market territory. The Nasdaq dropped more than 23 percent from its Aug. 29 high. The Wilshire 5000 and Russell 2000 also dropped more than 20 percent from their respective peaks in early September.1

If you’re approaching retirement, these losses could be stressful. When you’re younger and just starting your career, you have time to absorb losses and recover. That may not be the case if you’re only a few years from retirement. You’ll soon need to use your assets to generate income. A substantial decline may force you to delay retirement or make cuts to your planned lifestyle.

Fortunately, there are steps you can take to protect your nest egg and your retirement. Below are three tools that can help you reduce your exposure to downside risk. Talk to your financial professional to see how these may play a role in your financial strategy.

Fixed Indexed Annuity
When it comes to investing, risk and return usually go hand in hand. Those assets that offer the most potential return often come with the highest exposure to risk. Assets that have little risk also offer little potential growth. It’s difficult to find growth opportunities that don’t have downside risk.

There are some tools available, though. One is a fixed indexed annuity. In a fixed indexed annuity, your assets grow on a tax-deferred basis. The growth comes in the form of annual interest payments.

Your interest rate each year is based on the return of a specific index, like the S&P 500. The better the index performs in a given period, the higher the interest rate will be, up to a limit. If the index performs poorly, you may receive less interest, but your contract won’t decline in value.

Many fixed indexed annuities have principal guarantees*. That means you’ll never lose principal because of market declines. A fixed indexed annuity could be an effective way to continue increasing your assets without exposing yourself to risk.

Deferred Income Annuity
Are you concerned about your ability to generate retirement income in the future? Or are you worried that your retirement income isn’t guaranteed*? A deferred income annuity, also known as a longevity annuity, could be an effective option.

With a deferred income annuity, you contribute a lump-sum amount and pick a date in the future. At the specified time, the annuity company will begin paying you an income stream that’s guaranteed* for life, no matter how long you live. Work with your financial professional to project your income and see if a deferred income annuity can help you fill any gaps.

Life Insurance
You’ve probably purchased life insurance at some point in your life with the goal of protecting your spouse, children or other loved ones. Life insurance is a highly effective protection tool, but it can also do more.

Some life insurance policies have a cash value account. Each time you make a premium payment, a portion goes into the cash value. Those funds grow on a tax-deferred basis over time. The growth usually comes in the form of dividends or interest, depending on the policy. You can also use the life insurance policy to generate tax-free income in retirement via loans or withdrawals.

If you have a life insurance policy, you may want to explore how you can use it to achieve low-risk, tax-deferred growth and possibly create supplemental income in the future. Or you may want to look at new policies and see how they can help you protect your assets.

Ready to protect your nest egg? Let’s talk about it. Contact us at MS Financial Resources. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

  1. https://www.nasdaq.com/article/is-a-recession-coming-heres-how-to-survive-cm1081931

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18412 - 2019/1/16

Volatility on Valentine’s Day: How Couples Can Overcome Disagreements About Investment Risk

Volatility on Valentine’s Day: How Couples Can Overcome Disagreements About Investment RiskValentine’s Day is supposed to be a day for romance and reconnection. For many couples, however, this time of year could be marked by disagreements about money. Nearly half of all married couples argue about financial issues.1

With the new year just starting and tax season right around the corner, many people use this time to evaluate their spending, earnings and financial performance over the previous year. That analysis could reopen sore spots about money management.

The performance of the financial markets over the past few months could also be a source for disagreement among couples, especially those who have differing investment styles. After starting strong for the first three quarters of the year, the S&P 500 finished with an epic meltdown in the fourth quarter. The index ended the year down 7 percent, the first time in history it’s finished the year negative after being positive for the first three quarters.2

Do you and your spouse disagree about investing styles? Does one of you take a more aggressive stance while the other prefers to play it safe? Below are a few helpful tips on how you and your spouse can meet in the middle and get past your investment-related disagreements:

Draft an investment policy statement.
Many couples disagree about their investment approach because they’ve never developed a formal investment strategy. They generally know they want to save for retirement, but they’ve never discussed their specific objectives or tactics. An investment policy statement does just that.

Your investment policy statement is a written document that states your goals, acceptable risks and the steps you will take to reach your objectives. It outlines which types of investments are appropriate for your strategy and which are not. You can use your investment policy statement as a guide for making future decisions.

The process of developing the investment policy statement could be beneficial for many couples. You’re forced to share your differing opinions and compromise to reach a strategy. Those conversations could help you work out differences and find areas where you agree, which could diffuse future arguments.

Develop a retirement income plan.
Often, arguments are fueled by uncertainty about the future. You’re unsure of when you’ll be able to retire or how much more you need to save, so that heightens your anxiety and sharpens disagreements. You may be able to avoid arguments by eliminating the uncertainty.

Work with your financial professional to develop a retirement income plan. You can project your future retirement income from sources such as Social Security, an employer pension and even your own savings. You can also build a retirement budget to estimate your spending. These two projections should give you an idea of how close you are to reaching your goals, how much more you need to save and how much risk you should take to achieve growth.

Don’t avoid the conversation.
Have you and your spouse agreed to disagree about your differing investment styles? Do you avoid the conversation? Or do you go it alone with your individual accounts so you don’t have to discuss issues that may lead to disagreement?

While you may not want to disagree or argue, it’s also not helpful to avoid the conversation. If you each have differing styles and don’t have a cohesive plan, you could be missing out on opportunity.

For example, assume your spouse is aggressive with his or her investment style and takes on a substantial amount of risk. Perhaps you’re conservative and choose assets that offer little return potential but also have little chance of loss. You may feel that the “go it alone” approach works because you each invest according to your comfort level and you avoid arguments.

By avoiding the conversation, however, you may be missing out on opportunities to meet in the middle and achieve better performance. For example, you could find an allocation that has growth potential and reduced risk. You could use tools such as annuities that offer growth without downside exposure. The only way to find these opportunities is to discuss your differing approaches and look for middle ground.

Work with a professional.
Finally, you may find it helpful to bring in a third party, like a financial professional. They can give objective, impartial feedback and also provide information and analysis that may change your approach. They can also help you develop a retirement strategy and an investment policy statement to guide your decision-making.

Ready to overcome your investment disagreements with your spouse? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

  1. https://nypost.com/2017/08/03/the-reasons-most-couples-argue-about-money/
  2. https://www.cnbc.com/2018/12/31/the-sp-500-will-make-history-when-it-ends-the-year-with-a-loss.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18408 - 2019/1/14

What Do January’s Market Returns Mean for the Rest of the Year?

What Do January’s Market Returns Mean for the Rest of the Year?It’s that time again. A new year is here, which means a volatile 2018 is in the rearview mirror. The markets suffered a steep drop at the end of last year after climbing steadily through the first three quarters. A number of factors contributed to the markets’ fourth-quarter tumble, including tariffs, interest rate hikes and trouble in the tech sector.

A new year doesn’t mean those challenges are gone, but it does represent a fresh start. And if history is any guide, January can be a strong month for investors. According to a study from LPL Research, in the 68 years from 1950 through 2017, January has been a positive month for the S&P 500 41 times. It’s been negative 27 times.1

As any investor knows, history doesn’t guarantee future performance. However, there does seem to be a correlation between market performance in January and the rest of the year.

How do January returns impact the rest of the year?
According to LPL Research, there’s a relationship between January returns and market returns over the remainder of the year. Its research showed that during years in which there was a positive January return, the market had an average return of 12.2 percent over the next 11 months. When the January return was negative, the S&P 500 returned only 1.2 percent the rest of the year.1

If January returns are more than 5 percent, the correlation is even more pronounced. In those years, the market had an average return of 15.8 percent over the next 11 months. In fact, when January has a return of more than 5 percent, the rest of the year is positive 91.7 percent of the time.1

What is the January effect?
Why has January been positive more often than not? And why does January’s return seem to impact the rest of the year? There are no definitive answers to these questions, but there are theories.

There’s an idea called the “January effect,” which suggests that January returns may be the product of tax strategy. Investors sell stocks in December to harvest tax losses before the end of the year. That depresses prices and creates a buying opportunity in January. Because investors sold at the end of the year, there’s cash on the table to buy in the beginning of the next year.

Of course, this is just a theory. There’s no way to conclusively prove whether the January effect is a real phenomenon. Even if it could be proved, it’s never wise to change your long-term investment strategy based on short-term opportunities.

If you’re concerned about the volatility in 2018 or the coming year, now is a great time to meet with a financial professional. They can help you review your strategy and possibly make changes that reduce your risk exposure and allow you to take advantage of opportunities.

Ready to evaluate your investment strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and goals and implement a plan. Let’s connect soon and start the conversation.

  1. https://www.thestreet.com/story/14469889/1/stock-market-s-strong-january-performance-bodes-well-for-the-rest-of-the-year.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18345 - 2018/12/31

What Can You Expect From the New Tax Law in 2019?

What Can You Expect From the New Tax Law in 2019?A new year is here, and with it comes a flood of year-end tax documents like W-2s, 1099s and others. Before you know it, the April 15 tax filing deadline will be upon us, and it will be time to submit your return.

It’s always wise to meet with your financial professional at the beginning of the year. It gives you an opportunity to discuss the past year, your goals for the coming year and your tax strategy. However, a consultation with your financial professional could be especially helpful this year.

The Tax Cuts and Jobs Act was signed into law in late 2017 by President Trump. While some of its changes went into effect last year, 2018 was the first full calendar year under the new law. The return you file in April will likely be the first that reflects much of the law’s changes. Below are a few of the biggest changes and how they could affect your return:

Increased Standard Deduction
The new tax law impacted a wide range of credits and deductions, from the deduction of medical expenses to credits for child care. Those who itemize deductions may have felt the brunt of these changes.

However, the tax law significantly increased the standard deduction. In 2017 the standard deduction was $6,350 for single filers and $12,700 for married couples. The new law increased those numbers to $12,000 and $24,000, respectively.1

Given the changes to itemized deductions and the increased standard deduction, you may want to consult with a financial or tax professional before you file your return. If you’ve traditionally itemized deductions in the past, that may no longer make sense.

New Tax Brackets
The new tax law also made significant changes to the tax brackets. There are still seven different brackets, just as there were before the passage of the law. And the lowest rate is still 10 percent. The top income tax rate is down to 37 percent, however, from 39.6 percent.2 There are similar cuts throughout the rest of the brackets as well.

The law also made changes to the income levels for each bracket. Generally, the bracket levels were increased throughout the tax code, which means you have to earn more before moving into a higher bracket. Under the old tax code, for example, a married couple earning $250,000 would be in the 33 percent bracket. Under the new law, that same couple would be in the 24 percent bracket. A single individual earning $80,000 would be in the 28 percent bracket under the old law but is now in the 22 percent bracket.2

Itemized Deduction Changes
As mentioned, the new tax law increased the standard deduction amounts. However, those increases came at the expense of many itemized deductions. The new law eliminated or reduced many common deductions, including those for state and local taxes, real estate taxes, mortgage and home equity loan interest, and even fees to accountants and other advisers.

However, there could be other opportunities to boost your itemized deductions above the standard deduction level. Charitable donations are still deductible, as are medical expenses assuming they exceed the 7.5 percent threshold. If you’re a business owner, you can deduct many of your expenses, including up to 20 percent of your income assuming you meet earnings thresholds.3

Ready to develop your tax strategy? Let’s connect soon and talk about taxes and your entire financial picture. Contact us today at MS Financial Resources. We can help you analyze your needs and goals and implement a plan.

  1. https://www.nerdwallet.com/blog/taxes/standard-deduction/
  2. https://www.hrblock.com/tax-center/irs/tax-reform/new-tax-brackets/
  3. https://money.usnews.com/investing/investing-101/articles/know-these-6-federal-tax-changes-to-avoid-a-surprise-in-2019

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18326 - 2018/12/26

Will Your Savings Last Through Your Retirement?

Will Your Savings Last Through Your Retirement?Most people dream of living a long, happy retirement. But what happens when your retirement lasts longer than you’d expected? Unfortunately, that’s a question many retirees will have to answer in coming years.

Recent studies show that, thanks to advances in medicine and technology, people are living longer than ever. A recent report from the Centers for Disease Control and Prevention revealed that the number of Americans age 100 or older increased more than 43 percent from 2000 to 2014.1 An additional study by the Pew Research Center predicted that globally there will be 3.7 million people age 100 or older by 2050.2

There’s a very real chance your retirement could last 40 years or more if you retire in your late 50s or early 60s. In fact, you may spend more time in retirement than you did saving for retirement. Such longevity may put a strain on your finances. The good news is there are steps you can take to plan ahead and maximize the number of years your funds last. Below are a few tips on how to manage the longevity risk:

Don’t be afraid of risk.
The instinct to avoid financial risks and limit investment losses in retirement is natural and understandable. After all, a downturn in the market has the potential to impact your retirement income and your ability to support yourself.

By being too conservative, however, you could create other financial challenges. Growth is often necessary to fight inflation and help your savings last decades. Very often, growth and risk go hand in hand. If you try to avoid risk, you may also limit your growth potential.

You can work with your financial professional to develop a strategy that strikes the ideal balance of growth potential and risk management. Annuities may be an option to consider, as they can offer both growth potential and downside protection.

Generate sources of lifetime income.
If you’re like many retirees, you may have only one or two sources of guaranteed* lifetime income, such as Social Security or a pension. However, developing additional sources of guaranteed* lifetime income can provide more steady cash flow to help support you through the later years of retirement. There are several ways you can use your savings to create your guaranteed* lifetime income stream.

Annuities are one potential strategy. There are several different types of annuities, many of which have options to generate guaranteed* lifetime income. The amount of income an annuity offers depends on the terms and features of the policy. You can explore your options with a financial professional to discover whether an annuity might be the right step for you.

Delay Social Security to maximize your payments.
Waiting to file your Social Security claim can be a beneficial strategy to increase the amount of your payments, which could help you manage rising costs in the later years of your life. You receive an 8 percent increase in your benefit for every year after your full retirement age that you wait to file. It’s possible to delay filing up to age 70.3 For example, this means if your full retirement age is 66 and you delay filing until age 70, your benefit will increase 32 percent.3

Ready to plan your long, happy retirement? Let’s talk about it. Contact us at MS Financial Resources. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.

  1. https://www.cdc.gov/nchs/data/databriefs/db233.htm
  2. http://www.pewresearch.org/fact-tank/2016/04/21/worlds-centenarian-population-projected-to-grow-eightfold-by-2050/
  3. https://www.ssa.gov/planners/retire/1943-delay.html

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18087 – 2018/10/1

When is the Last Time You Reviewed Your Estate Plan?

When is the Last Time You Reviewed Your Estate Plan?How current is your estate plan? Does it still align with your wishes? If you haven’t reviewed your estate plan recently, you may not know the answers to those questions. It’s possible that your strategy is no longer appropriate for you.

Many people fail to review their estate plan on a regular basis. After all, it’s never a pleasant experience to think about one’s own passing. You may even think that estate planning isn’t important right now because your death is unlikely.

However, death is always a possibility, even if it’s not likely. If you pass away and your estate plan is out of date or doesn’t reflect your wishes, you may put your loved ones in a difficult position. Your assets could be distributed to the incorrect people. Without your guidance, your loved ones may disagree and argue about how to settle the estate. It’s possible your dependents may face financial challenges.

Below is a quick checklist of items to review in your estate plan. If you haven’t reviewed your plan recently, now may be the time to do so. A financial professional can also help you conduct a thorough review.

Will
A will is one of the simplest and most powerful estate planning tools available. You can use it to state which assets should go to which heirs. You can also use your will to state who should care for your minor children after you pass away.

Estates that don’t have a will are considered intestate. The local court makes all the decisions that would normally be determined in a will, such as child custody and who gets which assets. This process can trigger a legal fight among your loved ones and may result in outcomes that don’t align with your wishes. You can avoid this risk by creating a will and keeping it up to date.

Incapacitation
You may think your estate plan is only for what happens after you pass away. However, you can also use it to manage incapacitation, which many people face in the final months or years of their life. Incapacitation is the inability to make or communicate decisions, and it’s often caused by cognitive diseases like Alzheimer’s.

You can create documents such as a living will or power of attorney to communicate your wishes and designate someone as your decision-maker. In fact, your power of attorney can pay your bills, manage your investments and make any other financial decision that you can’t make for yourself if you become incapacitated.

Beneficiaries
You likely have assets and accounts that have beneficiary designations. Life insurance, annuities, 401(k) plans, IRAs and more all use beneficiaries to transfer assets after the account owner passes away.

It’s important to review your beneficiaries periodically to make sure they’re up to date. Beneficiary designations usually can’t be challenged after the account owner passes away. That means if you inadvertently leave a former spouse or other person as a beneficiary on your life insurance, they will likely receive that benefit, even if it’s not what you intended. If you experience any kind of major life change, it’s wise to review your beneficiaries.

Ready to review your estate plan? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

18086 – 2018/10/1

Term or Permanent: Which Type of Life Insurance Is Best for Your Needs?

Want to Retire Early? 3 Tips to Make It HappenRisk management is an essential part of any financial strategy. Before you can try to achieve your biggest goals, you need to protect yourself from risk. All it takes is one costly emergency to throw your strategy off track.

If you’re the primary breadwinner in your home, your unexpected death is one of the biggest risks your family may face. It could leave the family in a challenging financial position. Even if you don’t provide most of the income in the house, you likely contribute in other important ways, and your family may struggle to overcome your loss.

Life insurance is an effective tool to minimize the financial fallout from death. It provides a tax-free, lump-sum benefit to your family, friends, business partners or whomever else you may name as a beneficiary. They can use those funds in any manner they’d like, such as paying off debt, saving for the future or replacing your lost income.

There are many different types of life insurance, all designed to meet a variety of needs and goals. However, most types fall into one of two categories: term or permanent. Both offer specific types of protection for specific goals. Below are the differences between the two and how you can use them to meet your objectives:

Term Insurance
Term insurance provides temporary protection for a defined period of time. You choose your term when you open the contract, and they often span from 10 years to 30 years. The longer your term, the higher the premium is likely to be.

Term insurance usually has a set premium amount that stays constant for the life of the policy. As long as you meet the premium requirements, you are covered by a death benefit. At the end of the term, you may have a few options. You can continue the policy, though the premium may be recalculated to reflect your older age. You also may have the opportunity to convert the insurance into a permanent policy, again with a new premium amount.

Unlike permanent life insurance, term insurance usually doesn’t accumulate cash value. All of your premium payment generally goes toward the cost of the insurance. If you choose not to renew the coverage at the end of the term, you don’t get your premiums back.

Term policies are effective strategies when you have a finite need for protection. For instance, many parents buy term insurance when they have young children in the home. However, they may no longer need the coverage when the kids are grown and out of the house. You also may consider term insurance that aligns with a long-term loan, like a mortgage.

Permanent Insurance
As the name suggests, permanent insurance provides coverage for life, assuming you make the required premium payments. The premiums for permanent insurance are generally higher than those for term policies because there is certainty that you will pass away at some point during the policy’s life span.

In a permanent policy, some of your premium payment goes toward the cost of the insurance, but a portion also goes into an account inside the policy. That account grows on a tax-deferred basis. Depending on the policy, the cash value may earn dividends, interest or even growth through market returns.

You can use your cash value for a variety of goals. You can increase your death benefit or pay down your premiums. You can also use it as a source of tax-efficient income through either loans or withdrawals.

Permanent insurance is a great option when you have an indefinite coverage need. For instance, perhaps you want to leave money for your spouse or children, no matter your age when you pass away. Or maybe you own a business that will need liquidity after your passing.

Ready to develop your life insurance strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and choose the coverage that’s right for you. Let’s connect soon and start the conversation.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17963 – 2018/9/4

Is It Time to Review Your Life Insurance?

Want to Retire Early? 3 Tips to Make It HappenLife insurance is one of the most effective risk management tools at your disposal. While you may not feel that death is a likely threat for you, it’s not impossible. People do pass away unexpectedly, even at young ages. Your death may create financial challenges for your loved ones. Life insurance minimizes the financial risk by paying a tax-free lump sum to your beneficiaries.

Life insurance is one of the most effective risk management tools at your disposal. While you may not feel that death is a likely threat for you, it’s not impossible. People do pass away unexpectedly, even at young ages. Your death may create financial challenges for your loved ones. Life insurance minimizes the financial risk by paying a tax-free lump sum to your beneficiaries.

You may have already purchased life insurance. For instance, many people buy life insurance when they get married or have children. Some purchase protection when they buy their first home.

If you bought your policy years ago, you may not have reviewed it recently. At first glance, you may not think your life insurance needs regular review. After all, as long as you pay the premiums, your policy is in force. What’s there to review?

Life can change quickly. It’s possible that your needs and your financial objectives have changed over time. If so, a review of your life insurance may be in order. Below are three common areas of change in life and how they can impact your life insurance needs:

Family
Many people use life insurance to protect their spouse, kids or other dependents. If you’re the breadwinner in your family and you pass away, your spouse and kids could struggle with debt and a lack of income.

It’s possible that your family situation has changed since you first purchased coverage. You may have recently gotten married or had more children. If so, it may be time to evaluate your protection. More people in the house means a greater potential financial need after your death.

There’s also the possibility that you have fewer dependents in the home. Maybe you’re an empty nester and your children have become financially independent. Or maybe you recently got divorced. In that case, you may not need as much protection. You also may consider keeping your policy but simply changing your beneficiary. A financial professional can help you develop the right strategy.

Health
Has your health improved significantly since you first purchased life insurance? Have you quit smoking or perhaps lost a significant amount of weight? If so, you may want to apply for a new policy. Even if you’re older, a new policy that gives you a better health rating could have a significantly lower premium.

You also may want to review your insurance if your health has declined. This is especially true if you have a term policy that’s expiring soon. Your term policy may allow you to convert to a permanent policy without going through underwriting.

Career
Have you made a major career change? Perhaps you changed employers or received a promotion. If so, you may want to review your needs and coverage. In fact, the whole point of your insurance may be to replace your income if you pass away. If your income increases, so too does the amount that needs to be replaced.

Your life insurance coverage amount should be based on your family’s specific needs. How much would your spouse and children need to pay off debts? How much would they need to survive and pay the bills? Do you want to pay for any other goals, such as education or your spouse’s retirement? Again, a financial professional can help you answer these questions and more.

Ready to review your life insurance strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and make the necessary adjustments. Let’s connect soon and start the conversation.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17962 – 2018/9/4

A 3-Step Retirement Catch-Up Plan for Gen X

Want to Retire Early? 3 Tips to Make It HappenAccording to a new study from Transamerica, Generation X doesn’t feel too confident about its chances in retirement. In a recent study, the financial company found that only 12 percent of those in Generation X feel comfortable about being able to retire. The average Generation X household had only $69,000 in retirement savings.1

Generation X is generally defined as those born between the mid-1960s and the early 1980s. Most Gen Xers are in their 40s or 50s now. That means that while they still have time to save, retirement is approaching soon.

If you’re a Gen Xer and are behind on saving for retirement, now is the time to take action. The good news is you still have time left to accumulate assets and implement a strategy. Below are a few good starting steps to get you back on track:

Estimate your savings goal.
Every plan needs an endpoint. Imagine if you started a road trip without a destination. You’d likely wander without making much forward progress. Your retirement strategy is no different. You need to know your end goal so you can track and monitor your progress.

In a retirement strategy, your end goal is the amount of money you need to save to fund your retirement. It’s based on your specific needs and goals and your expected lifestyle in retirement.

You can estimate your retirement number by developing a projected budget. List all your planned expenses and estimate their costs. Then add them up to project your total annual expenses in retirement. Assume that you’ll be retired for decades, and multiply your annual cost of living by an estimated number of years in retirement. That’s your total funding need.

During this step, it’s important to consider inflation. Your cost of living will likely increase throughout your retirement. Be sure to consider that as you estimate your savings goal. Also, you may want to consult with a financial professional to help you develop a precise funding goal.

Use a budget to cut your expenses and save more.
A simple budget may be the most powerful financial tool at your disposal. A budget helps you manage your spending and track your progress toward large financial goals, such as retirement. Unfortunately, nearly 60 percent of Americans don’t use a budget.2

If you’re among that group, now may be the time to make a change. List your expenses and look for areas to cut back so you can increase your retirement contributions. You may want to find ways to reduce your debt or cut spending on discretionary items like dining out or entertainment. Develop a budget and stick to it so you can maximize your savings.

Invest in your ability to increase your income.
Perhaps your most powerful strategy is to increase your income so you can save more for retirement. That may be easier said than done. However, you may have years or even decades left in your career. If you can increase your earnings and then put the extra income toward retirement, that will go a long way toward helping you overcome your savings gap.

Look for opportunities to advance and grow in your career. Perhaps you need to further your education or expand your skill set at work. Maybe you should consider freelance work opportunities to supplement your current income.

Ready to develop your retirement strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and goals and develop a plan. Let’s connect soon and start the conversation.

  1. https://www.thinkadvisor.com/2016/08/23/transamerica-survey-highlights-american-retirement/?slreturn=20180616152205
  2. https://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17847 – 2018/7/30

Long-Term Care Insurance: How to Tell Which Policy Is Right for You

Want to Retire Early? 3 Tips to Make It HappenConsidering buying a long-term care insurance policy? That could be a smart move. The U.S. Department of Health and Human Services estimates that today’s 65-year-olds have a 70 percent chance of needing long-term care at some point.1

Long-term care is usually provided either in a facility or in one’s home. It often consists of assistance with day-to-day activities, like eating, bathing, and mobility. Regardless of where the care is provided, it’s usually a costly service. Long-term care often costs thousands of dollars per month, and care is often needed for years. It’s easy to see how it can be a long-term drain on your savings.

Long-term care insurance is an effective funding strategy because it limits the amount you have to pay out-of-pocket. You pay premiums to an insurer, and the policy then provides coverage for some or all of your long-term care costs. However, policies can vary widely in terms of cost and benefits. Many retirees find the choices overwhelming.

Below are five key components in every long-term care policy. If you understand these elements, you may be better informed to make a decision. A financial professional can also help you find the right policy for you.

Premiums
Like all insurance policies, you have to pay premiums for your long-term care coverage. The premium type can differ between policies. Some require one-time, lump-sum premiums while others allow you to make monthly or annual premium payments.

Your premium amount is based on a few factors, including the policy benefits, your age and your health. You may have to go through an underwriting process that includes a medical exam before your premiums are finalized. Generally, the older or less healthy you are when you buy your policy, the higher your premiums will be.

Coverage Amount
The amount of long-term care coverage can also vary by policy. This is usually expressed in a daily or monthly benefit amount. For example, a policy may pay up to $200 per day or $6,000 per month for care. You would be responsible for any costs that exceed that limit.

Some policies also have maximum lifetime benefit amounts. Again, if your care exceeds this amount, you’re responsible for covering the difference. Higher benefit amounts usually lead to higher premiums.

Eligible Services
Most policies spell out exactly which services they do and don’t cover. For instance, some policies may not cover private rooms. Other policies may cover in-home care or even home modifications to accommodate wheelchairs or hospital beds. Some policies can even be used to reimburse your loved ones for care they provide.

Coverage varies widely by policy. It’s important to think about your goals and which types of services are important for you. Be sure to research policies carefully to make sure the covered care aligns with your objectives.

Elimination Period
Nearly all long-term care policies have something called an elimination period, also known as a waiting period. This is a period of time you must wait after you need care before the coverage kicks in. These periods usually last 30, 60 or 90 days. The longer your elimination period, the lower your premiums are likely to be.

Inflation Adjustments
Finally, some policies offer inflation protection as an optional benefit. It may increase your premiums, but it could be worth considering because it helps you keep up with rising long-term care costs. Inflation protection increases your benefit amount by a certain percentage each year. That could be especially helpful if you don’t expect to use the coverage until long into the future.

Ready to develop your long-term care funding plan? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation.

  1. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17748 - 2018/6/19

Are You Maximizing Your Qualified Account Contributions?

Want to Retire Early? 3 Tips to Make It HappenThe year is halfway over. Have you met your savings goals so far this year? Are you behind on your savings for retirement? It’s easy to get behind on savings, especially when it comes to retirement, which may be years or decades in the future. After all, you probably have many other expenses and financial challenges that seem more urgent.

Fortunately, there’s still plenty of time left in the year to put away money for retirement. You may want to use qualified accounts to do so. These accounts, which include 401(k) plans and individual retirement accounts (IRAs), allow you to grow your funds on a tax-deferred basis. That means you don’t pay taxes on growth while the assets are inside the account.

Below are three commonly used qualified accounts and how they can help you save for retirement. You still have time left this year to ramp up your savings. Work with a financial professional to implement a savings strategy.

Employer 401(k) Plan
Do you participate in your employer’s 401(k) plan? If so, it may be your most powerful available savings tool. Your 401(k) funds grow tax-deferred, which means you don’t pay taxes on the growth until you take distributions. That could help you accumulate funds faster than you would in a taxable account.

You could also see current tax benefits from your 401(k) contributions. They’re usually deducted pretax from your checks. That means your contributions reduce your taxable income, thus reducing the amount of taxes you ultimately pay.

Matching employer contributions also make the 401(k) a powerful savings tool. Many employers match their employees’ contributions on a dollar-for-dollar basis up to a certain limit. For instance, your employer may match as much as 3 percent of your annual salary in contributions. You can significantly increase your savings rate by contributing enough to get the full employer match.

In 2018 you can contribute as much as $18,500 to your 401(k) plan. If you’re age 50 or older, you can also contribute an extra $6,000 in catch-up contributions, bringing your total allowable contribution to $24,500.1

Traditional IRA
You also have the option of contributing money to an IRA, even if you’re also contributing to a 401(k) plan. An IRA is an individual account that offers tax-deferred growth specifically for retirement savings. If you don’t have an IRA, you can open one through a financial professional, who can also help you develop and implement a strategy that aligns with your needs and goals.

There are various types of IRAs, but the traditional is the most widely held. It receives tax treatment that’s similar to that of the 401(k). You make tax-deductible contributions to the account and then allocate the funds based on your goals and risk tolerance. The money grows tax-deferred, and all distributions are taxable.

Remember, IRA funds are meant for retirement. Distributions from the account are tax-free assuming you’re age 59½ or older and the account has been open at least five years.There are exceptions to this policy for things like disability and financial hardship. However, most early withdrawals are subject to the penalty in addition to income taxes.

In 2018 you can contribute $5,500 to an IRA. If you’re age 50 or older, you can contribute an additional $1,000 in catch-up contributions, giving you a total allowable contribution of $6,500.2

Roth IRA
While the traditional IRA may be the most widely held type of IRA, the Roth IRA has actually grown in popularity in recent years. The Roth’s popularity is largely due to its unique tax treatment.

Unlike the traditional IRA and 401(k), Roth contributions are made with after-tax dollars. This means you can’t deduct your contributions. Your funds still grow on a tax-deferred basis inside the account. Distributions from the account are tax-free assuming you’re age 59½ or older. You can use the Roth to create a stream of tax-free retirement income.

Ready to implement your retirement savings strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

  1. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/2018-irs-401k-contribution-limits.aspx
  2. https://www.fool.com/retirement/2017/10/22/heres-the-2018-ira-contribution-limit.aspx

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17747 - 2018/6/19

Catch-Up Strategies for Your Retirement Shortfall

Want to Retire Early? 3 Tips to Make It HappenIs retirement approaching? Worried that you won’t have enough money? You have company. According to a recent study from the Transamerica Center for Retirement Studies, baby boomers have a median retirement savings balance of only $147,000.1 While that number may represent a good start, it’s unlikely to be sufficient to fund a long retirement.

Baby boomers face a number of unprecedented retirement challenges. Many don’t have pensions, which means they have to shoulder the burden of funding their expenses in retirement. Retirees also have to contend with a longer life span, which means they need to cover more years of spending. Health care is also a substantial area of expense.

Fortunately, it’s never too late to correct course. With careful planning and quick action, you can retake control of your retirement. Below are three steps you may want to consider. A financial professional can help you analyze your needs and implement the best course of action.

Wait to retire.
One of the most effective ways to catch up on your savings is to delay your retirement date. While you may want to retire in your early or mid-60s, you can benefit greatly by putting retirement off for a few years. You get more time to save money, and you eliminate a few years of spending from your retirement.

If you delay your retirement, you also may be able to wait to file for Social Security. That could lead to an increased benefit. Social Security offers an 8 percent increase in benefits for every year past your full retirement age (FRA) that you wait to file. You can delay all the way to age 70, which means you could earn a cumulative 32 percent increase in your Social Security payments.2 That increased income could also help you overcome your savings shortfall.

Save more money.
An obvious strategy is to increase your annual retirement contributions. Of course, that’s easier said than done. You may feel that you’re already saving as much as possible. If you examine your spending and your budget, however, it’s likely that you may be able to find areas to cut back.

If you are age 50 or older, you can take advantage of catch-up contributions to put more money in your qualified accounts. In 2018 you can contribute as much as $18,500 to your 401(k). However, those age 50 and older can contribute an additional $6,000. Similarly, people age 50 and older can put an additional $1,000 into an IRA, on top of the standard $5,500 limit.3

Cut your retirement budget.
It’s possible that you’re already saving as much as possible and you can’t delay your retirement any further. If so, you may want to cut back on your planned spending in retirement. Think of ways you can reduce your expenses. For example, you could downsize to a more affordable home or move to an area with a lower cost of living.

Also, don’t rule out the possibility of working in retirement. A part-time or seasonal job could give you supplemental income, which could help you minimize your withdrawals from your savings.

Ready to catch up on your retirement planning? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.

  1. https://www.rothira.com/average-retirement-savings-age-2017
  2. https://www.ssa.gov/planners/retire/delayret.html
  3. https://www.forbes.com/sites/ashleaebeling/2017/10/19/irs-announces-2018-retirement-plan-contribution-limits-for-401ks-and-more/#5b5edb7b25ac

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17698 - 2018/5/30

3 Important Retirement Planning Steps for Your 50s

Want to Retire Early? 3 Tips to Make It HappenDid you just turn 50? Or are you within 10 to 15 years of retirement? If so, you may already be dreaming about your future life after you leave the working world. While it may be easy to plan vacations and think about your free time after you retire, this is also a good time to implement the final steps in your financial planning.

Below are a few action items to consider as you approach retirement. If you haven’t developed a retirement strategy, now may be the time to do so. A financial professional can help you fill the gaps in your planning so you can enter retirement with confidence.

Maximize your catch-up contributions.
Do you use a 401(k) or an IRA as your primary retirement savings vehicle? These accounts are popular because of their unique tax treatment. They offer tax-deferred growth, which means you don’t pay taxes on growth that occurs inside the account as long as the funds stay inside the plan.

In 2018 your 401(k) has a standard contribution limit of $18,500. If you’re age 50 or older, however, you can contribute an additional $6,000 in catch-up contributions, giving you a total allowable contribution of $24,500. Similarly, you can contribute as much as $5,500 to an IRA, with an extra $1,000 in catch-up contributions available for those 50 and older.1

You may feel like there’s no room in your budget to make additional retirement contributions. However, this may be your last, best opportunity to accumulate retirement assets. Look for areas to make spending cuts so you can take advantage of the increased contribution limits.

Create a retirement budget.
Nearly 60 percent of Americans don’t use a budget, which is unfortunate because a budget is one of the most powerful planning tools at your disposal.2 It’s especially useful for retirees. It helps you make smart spending decisions and lets you know whether you’re on track to reach your goals.

Remember that you could be retired for several decades. If you spend too much money in the early years, you could deplete your assets before you reach the later years of retirement. A budget can help you minimize that risk.

You can use your current spending to estimate your expenses in retirement. Factor in potential changes, such as downsizing to a smaller home or paying off outstanding debt. Also, be sure to account for inflation. Your cost of living is likely to increase throughout your retirement.

Create guaranteed* retirement income streams.
You’ll likely have some source of guaranteed income in retirement. Social Security is the most common example. It’s guaranteed to last as long as you live. You could also have a pension. These types of income are helpful because they provide a base of financial security no matter how long you live or how the financial markets perform.

You can create additional sources of guaranteed income with your personal savings. Annuities are often an effective strategy. Many annuities offer various ways in which you can convert a portion of your savings into a guaranteed lifetime income stream. For example, a single premium annuity lets you create a guaranteed stream of income based on your life expectancy.

Ready to finalize your retirement strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.

  1. https://www.forbes.com/sites/ashleaebeling/2017/10/19/irs-announces-2018-retirement-plan-contribution-limits-for-401ks-and-more/#20b6990a25ac
  2. http://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17596 - 2018/4/19

Want to Retire Early? 3 Tips to Make It Happen

Want to Retire Early? 3 Tips to Make It HappenLooking to retire early? You have company. For many Americans, early retirement is the ultimate dream. It gives you the opportunity to enjoy your free time while you’re still healthy and relatively young. You can use that time to travel, pursue new interests or even launch a second career.

However, retirement itself can be a challenging goal, let alone early retirement. A Gallup poll recently found that more than 50 percent of Americans are concerned about not having enough money to stop working at traditional retirement age. Early retirement is an even greater challenge.1

The good news is that early retirement is possible if you’re disciplined and you plan ahead. Below are a few tips to consider as you begin your planning. You may also want to meet with a financial professional to help you implement an early retirement strategy.

Figure out which sacrifices you are willing to make.
Compromise is a key component of any financial plan. You have to choose between certain goals and expenses and determine which trade-offs are acceptable to you. To retire early, though, you may have to make even greater compromises.

For instance, you may have to make deep cuts to your current standard of living to fund an early retirement. Even typical retirees can expect to live an additional 20 to 30 years after they stop working. If you retire early, you may live even longer in retirement. You will need to accumulate a significant amount of assets to fund that kind of longevity.

Look at your current budget and think about areas in which you can make cuts so you can save more. Perhaps you can cut back on traveling or dining out. Maybe you can even take a second job to help you save for retirement. These kinds of sacrifices can give you the savings boost you need to reach your goal.

Stick to a budget.
For many retirees, the first few years of retirement can be challenging. You may have more free time and more money than you’ve ever had in your life. It’s easy to fill that time with costly activities such as travel, shopping or new hobbies.

It’s important to enjoy your retirement, but it’s even more important to use a budget to control your spending. Evaluate your assets and determine the safe withdrawal amount you can take each year to fund your retirement. Then develop a budget based on that withdrawal amount and follow it carefully.

If you overspend in the early years of retirement, you could face serious challenges later. For instance, you may not have enough assets to pay for health care as you get older. You may be forced to downsize to a smaller home or make other spending cuts. You may even have to go back to work. Manage your spending in the early years so you aren’t forced into difficult decisions in the later years.

Consider part-time work.
The idea of work may go against the entire point of retirement. After all, you retire to leave the working world, not to get a new job. If you retire early, however, you may want to consider a part-time or seasonal job that allows you to enjoy schedule flexibility. A side job can provide some income so you can limit withdrawals from your savings. That can make your assets last longer.

Look for opportunities that are aligned with your interests and skills. For instance, if you have a special talent, perhaps you could consult or teach lessons. You may be able to work as a freelancer. You could even drive for a ride-sharing service. Even a little extra income can help protect your savings.

Ready to plan your early retirement? Let’s talk about it. Contact us at MS Financial Resources. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

  1. http://news.gallup.com/poll/210890/americans-financial-anxieties-ease-2017.aspx

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17596 - 2018/4/19

Life Insurance for Single Parents: 3 Common Questions and Answers

Life Insurance for Single Parents: 3 Common Questions and AnswersA 2017 study from Life Happens found that only 60 percent of respondents believe that single parents of young children need life insurance. On the other hand, 82 percent of respondents said married couples with young children need life insurance protection.1

That discrepancy in results is somewhat perplexing. Single parents often have a greater life insurance need than married couples. After all, a single parent could be a child’s primary caretaker. If a single parent passes away, the child may have little financial support.

Life insurance minimizes that risk and provides a safety net of financial stability in the aftermath of a parent’s passing. If you’re a single parent without life insurance, now may be the time to examine your options. Below are a few tips to help you get started. Your financial professional can help you determine the correct amount and type of life insurance for your needs.

How much coverage do you need?
It’s popular to use a simple formula, like a multiple of earnings, to estimate your coverage amount. Instead of using a cookie-cutter formula, base your life insurance amount on your specific needs. Think about what costs and needs your child may face after your death, and then use those estimates to calculate your coverage.

How much money would the guardian need to provide proper care for your child? Do you want to leave money to pay for your child’s education? Would you like to leave a lump sum that your child can tap into when they become an adult? Consider your specific goals, and then estimate amounts for each objective.

Who should be the beneficiary?
Your first instinct may be to name your child as the beneficiary on your life insurance policy. After all, the policy is for their benefit. However, leaving insurance funds directly to a child can create complications. In fact, many life insurance companies won’t pay a death benefit directly to a child.

Instead, consider establishing a trust for your child and then making the trust the beneficiary on the life insurance policy. In the trust document, you can state exactly how the money should be managed and used. This reduces the risk that the money is used for some unintended purpose. You can even name a loved one or an adviser as the trustee to make sure your wishes are followed.

Should you buy term or permanent?
Many parents choose term insurance because it’s an affordable protection tool. It provides temporary protection when your child is a minor. The insurance then goes away after a certain period of time.

Don’t ignore permanent insurance, though. Permanent life insurance has a cash value accumulation feature that isn’t found in term insurance. You can use that feature to save money on a tax-advantaged basis. In the future, when your child is grown, you can tap into the policy to fund your goals, such as retirement. A financial professional can help you analyze permanent policies to see if they make sense for you.

Ready to develop your life insurance protection strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

  1. https://www.nerdwallet.com/blog/insurance/life/single-parents-guide-life-insurance/

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17600 - 2018/4/19

Do You Need Long-Term Care Insurance?

Do You Need Long-Term Care Insurance?According to the U.S. Department of Health and Human Services, most retirees should expect to use long-term care. The agency estimates that today’s 65-year-olds have a 70 percent likelihood of needing long-term care at some point in their lives.1

Long-term care is extended assistance with basic daily functions such as bathing, mobility and eating. It’s usually needed because of a chronic health condition or a cognitive issue such as Alzheimer’s.

Long-term care is often provided in a facility but can also be administered in the home by a nurse, health aide or even a family member. Whether provided in a facility or in the home, such care is usually costly. A recent Genworth study found that the average monthly cost of an extended living facility was $3,750. A full-time home health aide cost more than $4,000 per month. 2

Fortunately, there are tools you can use to prevent long-term care expenses from depleting your savings. One such tool is long-term care insurance. You pay premiums to an insurance company and, in return, it covers some or all of your long-term care expenses in the future. The amount of coverage depends on your specific policy.

Is long-term care insurance the right strategy for you? There’s no correct answer for everyone. It depends on your budget, needs and goals. Below are a few questions to ask yourself as you consider your long-term care options:

How is your health?
You may assume that if you are healthy, you won’t need long-term care in the future. It’s possible, however, that the opposite could be true. Your good health could actually increase your likelihood of needing long-term care.

Retirees struggling with health issues in the early years of retirement often pass away before they need long-term care. Those struggling with cancer or heart ailments may not reach the later ages of retirement. However, those who are healthy could live to age 80, 90 or beyond.

If you reach those ages in retirement, you may struggle with things like mobility or bathing. You may have cognitive issues that make it unsafe for you to be alone for long periods of time. You may find it necessary to hire a part-time aide or even move into an independent living facility. Don’t assume that your good health today means you won’t need care in the future. It could mean the opposite.

Do you want to stay in your home?
Some seniors avoid long-term care insurance because they believe it can only be used by entering a nursing home. There was a time when long-term care policies only covered care provided in a facility. Today’s policies, however, usually cover care provided either in a facility or in the home. Some even provide coverage for home modifications to accommodate wheelchairs, medical beds and other equipment.

If you’re like most retirees, you want to stay in your own home as long as possible, even if doing so requires some assistance. Long-term care insurance can help you accomplish that goal. Without coverage, you may be forced to use Medicaid to pay for care, and Medicaid may require you to leave your home for a facility. Far from being so-called nursing home insurance, long-term care coverage can actually be a tool to help you stay in your home.

What is your backup funding strategy?
Perhaps the most important question is how you will pay for care if you don’t have long-term care insurance. You’ll need some other strategy. You could self-fund with your retirement assets, but that may be unsustainable over a long period of time.

You could count on children or other family members for support. However, long-term care is often a full-time responsibility. Consider whether your kids or other relatives have the time or ability to provide the level of care you may need.

Finally, you may plan on using Medicare and Medicaid to pay for your care. Unfortunately, Medicare usually doesn’t offer funding for long-term care. Medicaid will cover care, but only in a facility and only after you’ve depleted your own assets. Also, you may find that your options under Medicaid don’t meet your own expectations.

Ready to develop your long-term care strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and create a plan. Let’s connect soon and start the conversation.

  1. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
  2. https://www.genworth.com/about-us/industry-expertise/cost-of-care.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17509 - 2018/3/26

Do You Have a Plan to Pay These Medical Costs in Retirement?

Do You Have a Plan to Pay These Medical Costs in Retirement?Have you developed your retirement budget? It’s an important financial tool that can help you manage your spending and preserve your retirement assets. You’ll likely face expenses for things such as housing, food, utilities, travel and more. You may also face costs for things like taxes and debt.

One expense you don’t want to ignore, though, is health care. You may think that Medicare will cover most or all of your health care costs. The truth is there are many medical expenses that aren’t covered by Medicare. In fact, Fidelity estimates that the average retired couple will spend $275,000 on out-of-pocket medical expenses.1 That figure doesn’t even include the cost of long-term care.

Out-of-pocket medical costs can present a difficult challenge for retirees. As you get older, your risk of suffering an injury or illness increases. Depending on your needs, medical expenses could be a drain on your retirement assets.

The good news is you can take action to limit your out-of-pocket expenses and protect your budget. Below are a few of the most common sources of health care costs in retirement. By understanding your potential health care costs, you can develop a funding strategy.

Premiums, Deductibles and Copays
You’ve likely been paying into the Medicare system your entire career. Because all workers pay Medicare taxes, you may assume that coverage is free. Part A, which covers hospitalizations, doesn’t have a premium. The other parts, however, do have monthly premiums.

It’s also important to remember that all parts of Medicare have deductibles and copays. The amounts depend on your specific policy. The more robust your coverage, the higher your premiums are likely to be. You can reduce your premiums by changing your coverage, but doing so may increase your deductible and copay.

Noncovered Services
There are many services that simply aren’t covered by Medicare. Things such as dental services, vision, hearing and even physical therapy usually aren’t included in Medicare plans. That means you’ll have to pay out of pocket for all those services.

You can use a program called Medicare Advantage to obtain coverage for these services and more. Medicare Advantage, also known as Part C, allows private insurers to offer Medicare policies directly to seniors. These policies usually include traditional Medicare protection plus enhanced coverage.

There are a wide range of Medicare Advantage policies available, so it’s important to consider your specific needs, budget and objectives before you purchase a policy.

Long-Term Care
According to the U.S. Department of Health and Human Services, many retirees can expect to utilize long-term care at some point in their lives. The agency estimates that today’s 65-year-olds have a 70 percent chance of needing long-term care in the future.2

As you may know, long-term care can be costly. According to Genworth, the average monthly cost for an assisted living facility in 2017 was $3,750. The average cost of an in-home health aide was more than $4,000.3 Many retirees need long-term care for many months or even several years, and the costs can add up to be a drain on retirement assets.

You may want to consider purchasing long-term care insurance. You pay premiums to an insurer, which then covers some or all of your long-term care expenses. Most policies cover care provided either in a facility or in the home. Some even provide a death benefit to loved ones in the event that you don’t need the long-term coverage.

Ready to develop your health care funding strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.

  1. https://www.fidelity.com/viewpoints/retirement/retiree-health-costs-rise
  2. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
  3. https://www.genworth.com/about-us/industry-expertise/cost-of-care.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

17508 - 2018/3/26

Prepare for Your Pension Income With These 3 Tips

Prepare for Your Pension Income With These 3 TipsWill you receive income from a pension in retirement? If so, you’re fortunate. Pensions are quickly becoming a rare benefit. In 1998, 58 percent of Fortune 500 companies offered pensions, also known as defined benefit plans. By 2015 that figure was down to 20 percent.1

Many employers have transitioned away from pensions in favor of defined contribution plans, like the 401(k). In a pension, the employer funds the plan and is responsible for providing plan participants with retirement benefits. In a 401(k) and similar defined contribution plans, the employer may make some contributions, but the funding responsibility largely lies with the employee.

Pensions are helpful in retirement because they provide a guaranteed, predictable source of lifetime income. Even if you haven’t put much money away for retirement, you can still count on your reliable pension income after you leave the working world.

There may be some elements of your pension benefit that require advanced planning. Below are a few tips to help you can make informed decisions and better plan for your retirement.

Consider all your payment options.
There are a few factors that go into the calculation of your payment amount. One is your career earnings with the employer and contributions made on your behalf to the plan. Another is the payment option you choose. Your employer’s human resources department should be able to give you an overview of your options and an estimate of your payment.

Most pension plans offer a variety of different payment terms. You will almost certainly be able to choose a lifetime payment, which provides a guaranteed income stream over your lifetime. You also may have the option to select a payment that lasts for your lifetime and your spouse’s. Generally, if you choose an income option that will continue for a beneficiary after you pass away, your benefit amount will be lower than it would have been if it lasted only for your lifetime.

Plan ahead for taxes.
If your pension plan is like most, it was funded with pretax dollars. It was also tax-deferred, which means growth in the plan wasn’t taxed. At some point, these funds have to face tax exposure. That’s why most pension benefits are treated as taxable income.

If you will rely on pension income in retirement, you could face a substantial tax bill. It’s important to understand what your tax exposure may be so you can budget accordingly. A financial professional can help you map out your pension and all other taxable income so you can create a tax strategy.

Find out if you can take a lump-sum distribution.
Some pension plans offer the ability to take your benefit in a one-time payment. In this option, you are paid a discounted lump-sum amount instead of lifetime payments. Of course, if you take your entire pension in one payment, you could face a substantial tax bill.

Instead, you could roll the benefit into an IRA. By rolling over the lump sum, you avoid tax liability. The pension goes into an IRA, which would allow you to take advantage of tax-deferred growth going forward. You could also invest the funds based on your specific needs, goals and risk tolerance, and you could better manage your distributions and tax exposure. This isn’t the correct strategy for everyone, but it may be worth exploring.

Ready to develop your pension benefit strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and create a plan. Let’s connect soon and start the conversation.

  1. https://www.towerswatson.com/en-US/Insights/Newsletters/Americas/insider/2016/02/a-continuing-shift-in-retirement-offerings-in-the-fortune-500

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

17380 - 2018/2/13

3 Strategies to Manage RMD Income

3 Strategies to Manage RMD IncomeHave you used an IRA to accumulate retirement assets? If so, you have company. According to a 2013 study, Americans hold nearly $2.5 trillion worth of assets inside IRA accounts.1 Much of those assets are held in traditional IRAs.

Traditional IRAs, 401(k) plans and similar qualified accounts are popular savings tools because of their unique tax treatment. They’re often funded with pretax dollars. Your 401(k) contributions are taken out of your paycheck pretax. If you meet income guidelines, you can take a tax deduction for your traditional IRA contributions. Also, you don’t pay taxes on growth as long as the funds stay inside the account.

You can’t avoid taxes on these dollars forever, though. At age 70½, you must begin taking required minimum distributions, also known as RMDs. The amount of your RMD is based on your age and your end-of-year account balance. Generally, your withdrawal will increase relative to your balance as you get older.

As is the case with all qualified plan distributions, RMDs are taxed as income. If you don’t plan accordingly, you could face higher-than-expected taxes. The good news is there are steps you can take to minimize your tax burden. Below are three strategies to consider as you plan for your RMDs:

Donate your RMDs to a charitable organization.
All RMDs are taxed as income. However, there’s one exception to this rule. You can donate your RMDs to a charity and avoid taxation on the distribution. The catch is that the distribution must go straight from the IRA to the charitable organization.

If charitable giving is already a part of your retirement strategy, this could be a way to meet your RMD requirements and minimize your taxable income. A financial professional could help you develop and implement a charitable strategy for your RMDs.

Consider converting your IRA to a Roth.
Not all IRAs are subject to RMD rules. There are no RMDs for Roth IRAs, primarily because Roth IRA distributions are tax-free after age 59½. Thus, the IRS has no incentive to force you to take distributions.

If you’ve used a traditional IRA to accumulate much of your retirement assets, you can convert some or all of those funds to a Roth IRA. You have to pay taxes on the converted amount. However, you won’t pay any taxes on growth or distributions once the funds are in the Roth. It could be worth it to pay the taxes today in order to avoid RMDs and taxes in the future.

Take withdrawals before age 70½.
If the whole point is to minimize your tax exposure, it may seem counterintuitive to take distributions before they’re required. However, distributions earlier in retirement could reduce your account balance, which would then reduce the amount you’re required to take via RMDs when you turn 70½.

This could be an especially helpful strategy if you’re trying to keep your income or your tax rate under a certain threshold. A financial professional can help you carefully plan your distributions. If you take out modest withdrawals before you’re required, you may have less in your account at age 70½, which could reduce your RMDs.

Ready to develop your RMD strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and create a plan. Let’s connect soon and start the conversation.

  1. https://www.fool.com/retirement/2016/06/27/heres-how-much-the-average-american-has-in-an-ira.aspx

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

17378 - 2018/2/13

Improve Your Income Stability in Retirement With These 3 Tips

Could Your Old 401(k) Disappear?Retirement is supposed to be your time to enjoy yourself. You’re free from the structure and commitment of work. You’re in control of your schedule. You can travel, pursue a new hobby, enjoy time with loved ones or simply spend time enjoying your newfound freedom.

Of course, financial worry could dampen your ability to enjoy retirement. According to a recent study from Gallup, more than half of Americans are worried they won’t have enough money in retirement. In fact, retirement has been America’s top financial worry since Gallup started the survey 16 years ago.1

If you’re concerned about your financial stability in retirement, you may want to look at your projected income. Specifically, the more you can increase your guaranteed income, the less reliant you may be on withdrawals from savings. That could reduce your exposure to market volatility and other threats.

Fortunately, there are steps you can take in your retirement strategy to maximize your sources of stable, predictable income in retirement. Below are three such steps. If you haven’t implemented these actions, now may be the time to do so.

Wait to file for Social Security.
You’ll likely become eligible for full Social Security benefits sometime between your 66th and 67th birthdays.2 However, you don’t have to take benefits at that time. You can wait all the way until age 70, and there is substantial benefit to doing so.

For every year you delay benefits past your full retirement age, your benefit increases 8 percent. You can delay the benefits up to age 70. If, for example, your full retirement age is 66 and you delay to age 70, your benefit amount could increase 8 percent for four years. That’s a total increase of 32 percent.3

Although it may be tempting to file for benefits as soon as possible, the increased benefits could provide valuable income stability in retirement. The increased payments could help you fight inflation, offset market volatility or even pay for costly health care.

Create a source of side income.
The whole point of retirement is to stop working, so the idea of generating side income may not be appealing. However, part-time work could yield valuable benefits. There’s the added income, which could help you deal with financial challenges. If you’ve reached full retirement age, you can earn as much as you want without the wages impacting your benefits. If you are younger than full retirement age, however, your side income could affect your benefit amount.

There are other benefits to working other than the income, however. Part-time work may give you a chance to socialize with others, meet new friends and overcome boredom. It may give you newfound purpose in retirement. Your part-time job could simply give you an opportunity to participate in a hobby or activity that you love.

Consider an annuity.
Annuities offer a number of ways to convert your savings into a guaranteed* lifetime income stream. For example, you could purchase a single premium immediate annuity, which converts a lump sum into a lifetime income stream based on your age and other factors.

Deferred annuities may offer growth potential, either through interest payments or through investment in the market. Many of these annuities allow you to take withdrawals that are guaranteed for life. This kind of predictable income may eliminate stress and worry so you can enjoy your retirement.

Ready to maximize your guaranteed income in retirement? Let’s talk about it. Contact us at MS Financial Resources. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

  1. http://news.gallup.com/poll/210890/americans-financial-anxieties-ease-2017.aspx
  2. https://www.ssa.gov/planners/retire/retirechart.html
  3. https://www.ssa.gov/planners/retire/1943-delay.html

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

17287 - 2018/1/17

Could Your Old 401(k) Disappear?

Could Your Old 401(k) Disappear?Since its inception nearly 40 years ago, the 401(k) has become one of the most commonly used retirement savings vehicles. It’s popular with employers because it relieves them of the burden of funding a pension. The 401(k) plan is popular with employees because it usually offers a broad range of investment options, tax-deferred growth and employer matching contributions.

While a 401(k) can be a powerful retirement accumulation tool, it can also be complex to manage, especially after you leave your employer. Many workers leave their 401(k) balances in their former employer’s plan after they leave. They may feel that’s their best option, or they may forget about the balance altogether.

However, many employers have decided they aren’t going to keep former employee balances in the plan forever. Many companies have adopted a policy known as “forced rollover.” Under a forced rollover, your balance is automatically rolled out of the plan and into an IRA. Most plans only enforce this type of rollover for balances under a certain threshold.

If your balance is forced into an IRA, it won’t trigger taxes or penalties. However, your funds will likely be invested in low-risk funds such as a money market. These investments may not offer the kind of growth you need to fund your retirement. If you aren’t aware that the balance exists or that it’s been rolled out of the plan, you may not be able to make changes to your allocation.

Do you have a 401(k) balance in a former employer’s plan? Are you vulnerable to a forced rollover? If so, below are a few tips to help you take control of your retirement assets and implement the correct strategy:

Collect statements for all outstanding accounts.
If you’ve changed jobs multiple times in your career, it’s possible that you have outstanding balances in former employer plans. You may want to start by contacting the human resources or benefits department at your former employer. They can likely either tell you if you have an outstanding balance or direct you to the right sources.

Before taking action, collect statements from all outstanding plans. For simplification purposes, you may want to roll your outstanding balances into one IRA. That way, you only have to manage one account, not several different balances and strategies.

Roll over your vested balances.
You have two rollover options available. You likely can roll your old 401(k) balances into your current employer’s plan. You may find this easier from a management perspective, as all of your 401(k) funds are then in one location. However, your 401(k) may have limited investment options.

Another option is to roll your old balances into an IRA. An IRA gives you the ability to choose from a wide range of investment options. You can choose the allocation that best fits your needs and risk tolerance, and you can better control fees and expenses. Once you roll your balances into an IRA, all of your funds are in one account so you can implement a cohesive strategy.

Ready to take control of your old 401(k) balances? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

17287 - 2018/1/17

3 Items for Your Annual Financial Checklist

5 New Year’s Financial Resolutions for Your FamilyThe new year is a great time to take stock of your life and identify areas for improvement. Many people use this time to think about their health and fitness, and they subsequently resolve to eat healthier or exercise more frequently. Others may focus on their education or career development. Some people may use this time to look at their house and plan out various home improvement projects for the coming year.

You may want to include your financial picture in this period of self-analysis. The beginning of the year is the perfect time to analyze your financial situation and develop a list of action items. A regular annual financial checkup can help you stay on top of potential risks and on track to meet your biggest financial goals.

Ready for your annual financial review? Below are three items to include on your financial checklist. If you haven’t reviewed these items recently, now is the perfect time to do so.

Create a financial inventory
A financial inventory can help you gain transparency into your financial picture. Your financial inventory is a document that contains every important component of your personal finances. For example, it may list your assets, debts, investments and much more. You can use the document to gain insight into your finances so you can set goals and priorities.

Start by collecting statements and documents related to your savings, investments, property and other assets. Then collect documentation related to your debts, such as your mortgage, car loans, credit cards and others. By subtracting your debts from your assets, you can calculate your net worth.

You also may want to include other important items. Your credit score and full credit report contain important financial information. You may want to highlight those investments that are liquid, stable and easily accessible, as they may provide the most assistance in the event of an emergency.

Once you have completed your financial inventory document, you can use it as a reference point to quickly gauge your current financial standing. For example, your financial inventory may tell you that your debt is very high relative to your assets. Or you may learn that your credit card balances are higher than you thought. This can help you set goals for the coming year.

Establish a budget.
A budget can be a powerful financial tool. You can use it to gain greater understanding about your spending and to make important purchasing decisions. Unfortunately, nearly 60 percent of all Americans don’t use a budget.1

If you’ve never used a budget in the past, now may be the time to start. There are plenty of apps, websites and software that can help you develop your budget. However, you could also use a spreadsheet or even a pen and paper.

Start with your monthly income. Then list out your expenses and break them into categories. The categories should fall into two groups: fixed and discretionary. Fixed expenses are those that you have to pay every month, such as your mortgage or your utilities. Discretionary costs are those that are flexible, like dining out or shopping.

Compare your income with your total expenses. If your income exceeds your spending, you have money available to save. If your expenses are higher, you need to make changes to your lifestyle and your purchasing decisions. Visit your budget frequently to make sure you’re being disciplined and staying within your means.

Set short- and long-term goals.
Finally, your annual financial checkup should include some form of goal-setting for the coming year and beyond. The new year is all about setting resolutions. Use your financial checkup as a springboard for action that can help you retake control of your financial future.

You could set a goal to pay off your high-interest debt by some point in the future. You could increase your retirement savings. Perhaps you could work to build a larger emergency fund. Set goals for the short and long term to improve your financial stability.

Ready for your annual financial review? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and goals, and then implement a plan. Let’s connect soon and start the conversation.

  1. http://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

17189 - 2017/12/12

5 New Year’s Financial Resolutions for Your Family

5 New Year’s Financial Resolutions for Your FamilyNew Year’s is a time to set goals and chart a new course. Many people take advantage of the new year as a time to implement new habits and pursue new goals. Perhaps you’ve decided that 2018 is the year you’ll get your financial house in order. Perhaps you’ve fallen behind on your savings or feel that you may be too exposed to risk. The new year might be the right time to analyze your current situation and make changes.

Fortunately, there are many simple steps you can take that can have a big impact on your family’s financial picture. Below are five such steps. If you haven’t taken the following actions, 2018 may be the year to do so.

Raise your 401(k) contribution.
A 401(k) plan can be a powerful retirement savings vehicle. It offers tax-deferred growth, which means you don’t pay taxes on your gains as long as the funds stay in the account. This could help your money grow at a faster rate than it would in a taxable account.

Many employers offer 401(k) matching contributions. For example, some employers will match their employees’ 401(k) contributions dollar-for-dollar up to a certain threshold, such as 3 percent of salary. These matching dollars are a great way to increase your savings level.

If you want to improve your preparedness for retirement, increasing your 401(k) contribution levels is a great way to start. You don’t have to make a big increase all at once. Instead, simply resolve to increase your contribution by 1 percentage point at the start of each year. Over time, you’ll see a sizable increase in your savings level.

Create a debt paydown plan.
Debt is a fact of life for many Americans, and in some cases, it can be a useful financial tool. You may use debt to pay for your home, car, education and more. But do you really know how much you’re paying to service debt? And do you know how much of your payments are going toward interest?

Take time at the beginning of the year to add up your monthly debt payments. Also, document the interest rate associated with each debt. If debt is consuming a large portion of your budget, 2018 may be the year to get serious about eliminating it.

Consolidate your retirement accounts.
Did you leave your 401(k) behind at your last job? Do you have multiple IRAs that you’ve opened over the years? It’s not unusual for people to have several different accounts with retirement assets. It may be difficult to implement a unified, cohesive investment strategy if your savings are spread among multiple accounts.

Obtain statements for all your retirement accounts and see what you can consolidate. You likely can’t do anything with your 401(k) for your existing employer, and you can’t mix pretax dollars with post-tax accounts like Roth IRAs. However, you can consolidate traditional IRAs and 401(k) balances from former employers. By doing so, you may be able to implement and better manage an investment strategy that’s aligned with your goals.

Take a fresh look at your risk tolerance and allocation.
Speaking of your investment strategy, this could be a good time to reassess your allocation and whether it still reflects your goals. As you get older, your risk tolerance could change. Make sure your investment strategy adjusts with your changing preferences. A financial professional can help you analyze your goals and current portfolio, and then implement changes.

Review your insurance needs and protection.
Finally, make sure your family is fully protected in the event that you die or become disabled. This is especially important if you are the breadwinner of the family. If you pass away, would your family have enough assets to maintain their standard of living? What if you became unable to work because of disability? Insurance can help fund that gap. Work with your financial professional to determine whether your coverage is adequate.

Ready to stabilize your financial future? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

17187 - 2017/12/12

Avoid These 3 Estate Planning Issues

Developing Your Retirement Withdrawal PlanAre you starting to think about your legacy and how you’ll pass it on to the next generation? It’s never fun to think about your own death. However, it’s too important to ignore. You may have a substantial amount of assets that you want to distribute to loved ones. You may have a spouse, children or other family members who are dependent on you for support. You might even own a business that could face hardship after your death.

All these issues require some level of estate planning. If you fail to develop a robust estate plan, you could leave your loved ones, business partners and others in a difficult financial situation.

Fortunately, you can protect those you care about with some simple planning. Wills, trusts and other estate planning documents can provide a significant amount of protection. Other tools, such as life insurance, can help loved ones overcome their biggest financial challenges.

Below are three common, but lesser-known, mistakes that many people make with their estate. If you can avoid these, you’ll have taken a big step toward protecting your legacy for your friends and family:

No Will
A will is the simplest and most basic of all estate planning documents. It provides instructions on who should receive which assets. It’s a powerful tool because it eliminates confusion, protects your heirs and reduces the chances for conflict and argument about assets after your death.

Even given all those benefits, though, 64 percent of Americans don’t have a will.1 That could be a big mistake. Without a will, your estate will be intestate. That means the probate court will decide who gets which assets and even who will serve as guardian for your minor children. The court’s decisions may not be in line with what you would choose for yourself. You can eliminate this risk with a will.

Too Little Liquidity
Dying can be expensive business. Your family will face final expenses and possibly medical costs related to your death. They may also face bills for long-term care that you needed in your final months. If you have dependents, they may face financial challenges related to the loss of your income.

There’s also the cost of settling your estate. Your heirs will likely have to pay legal and administrative fees during the probate process. They also may face a tax bill for your final tax return.

Many people make the mistake of leaving an estate that has few liquid assets. The estate doesn’t have enough cash to pay all of the outstanding expenses. Then the heirs are forced to sell assets that they’d prefer to keep, such as a family home or a valuable collection.

Don’t put your heirs in this position. Make sure your estate has liquid assets to cover immediate costs, such as cash or investments that can be easily distributed. Life insurance is also an effective tool for generating fast liquidity.

Wrong Executor
Your executor is the individual who is responsible for guiding your estate through probate and implementing the directions in your will. Although you will spell out your wishes in your estate planning documents, your executor still has latitude to make important decisions. For example, he or she can decide which assets to sell to raise liquidity and when to distribute assets.

The wrong executor could make decisions that benefit himself or herself at the cost of other heirs. He or she could create conflict and even legal issues among your family members.

If possible, try to choose someone who is not an heir to act as your executor. That way, they can be an impartial, objective administrator. If you must choose an heir as executor, try to choose the one you believe will act according to your wishes.

Ready to develop your estate planning strategy? Let’s talk about it. Contact us at MS Financial Resources. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

  1. https://www.usatoday.com/story/money/personalfinance/2015/07/11/estate-plan-will/71270548/

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

17107 - 2017/10/30

3 Tips for Developing Your Retirement Withdrawal Plan

Developing Your Retirement Withdrawal PlanRetirement is a major financial challenge for many workers. In fact, according to a study from Gallup, it’s the top financial worry for 54 percent of Americans.1 They’re concerned that they won’t be able to save enough money to fund their desired lifestyle in retirement.

Retirement planning isn’t just about saving, though. While it’s important to accumulate assets during your working years, you also need a plan to make those assets last throughout retirement. It’s possible your retirement could last decades, so you’ll need a strategy to make sure you don’t outlive your money.

If you’re like many Americans, you’ve used qualified accounts such as IRAs and 401(k)s to save for retirement. Those accounts are helpful because they offer tax-deferred growth and other favorable tax benefits. Without a clear plan in place, however, your qualified accounts could generate taxes and other complications.

Below are a few helpful tips for your retirement withdrawal strategy. If you don’t have a plan in place, now may be the time to create one.

Base your withdrawals on your unique spending needs.
Conventional advice is to take a flat percentage of your assets as an annual withdrawal in retirement. For example, you might take 4 percent of your asset balance and divide that amount into monthly distributions.

The problem with this strategy is that it may not be the right approach for your unique needs. Instead, create a detailed retirement budget. Include any other income sources, like Social Security or pension benefits. If those income sources don’t cover your expenses, you can use withdrawals from savings to make up the difference.

This approach helps you withdraw only the amount you actually need to fund your lifestyle. That amount could be less than a flat 4 percent withdrawal. This strategy also may help you better track your spending and make changes when necessary.

Remember to plan for taxes.
Taxes don’t stop just because you stop working. In fact, you could face tax liability on a wide range of income sources, including Social Security and pension benefits. Distributions from most qualified accounts are considered to be taxable income.

It’s wise to remember taxes as part of your income strategy. Sizable distributions could bump you into a higher tax bracket. You may want to make use of other account types, like a Roth IRA, which can generate tax-free income. Also consider life insurance cash value as a possible tax-efficient income source.

Consider guaranteed* income strategies.
The primary retirement withdrawal challenge is developing a strategy that makes your assets and income last throughout your entire lifetime. That can be difficult, since you don’t know exactly how long you will live.

Fortunately, there are tools available that allow you to create income streams that are guaranteed for life, no matter how long you live. For example, annuities offer a variety of different guaranteed income strategies. You may want to consider using an annuity as part of your retirement income plan.

Ready to develop your income strategy? Let’s talk about it. Contact us today at MS Financial Resources. We can help you analyze your needs and create a plan. Let’s connect soon and start the conversation.

  1. http://news.gallup.com/poll/210890/americans-financial-anxieties-ease-2017.aspx

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

17106 - 2017/10/30

Why You Can’t Plan on Working Past 65

Forced early retirement is a real thing, and it’s more prevalent than you might expect. There are a number of reasons why you could be forced to retire at an early age. If you don’t have a backup plan in place, you could find yourself in a challenging situation.

Are you behind on your retirement savings? You’re not alone. Millions of Americans are off track when it comes to hitting their savings goals. If you are approaching retirement and are behind in your savings efforts, you have a few options available. You can increase the amount you save every month in an effort to get back on track. Or you can scale back your retirement goals and reduce the amount of money you will need after you stop working.

There’s also a third option, and for many Americans, it may seem like the simplest solution. You can simply delay your retirement age. By doing so, you give yourself additional years to save for retirement, and you eliminate years that might have to be funded with distributions from your retirement savings. At first glance, working longer may seem like a no-brainer.

In fact, according to a study from Transamerica, two-thirds of baby boomers plan on working past age 65. A full 15 percent say they will never retire. And of those who say they will work past 65, two-thirds say their decision is based on financial reasons.1

The truth is, though, the decision on when you retire may not be up to you. A study from the Employee Benefit Research Institute found that nearly half of all retirees were forced to retire earlier than they had planned.2

Below are a few common reasons why retirees are forced to leave their careers earlier than they’d anticipated:

Job Loss
Another common reason why people are forced to retire early is job loss. While your position may seem secure today, the economic environment can change quickly. In fact, even in strong economic cycles, businesses are always looking for ways to become more efficient and streamlined. Those efforts could include a restructuring that eliminates your position.

Even if you are nearing the end of your career, take efforts to sharpen your skills and retain your value to your current employer or potential new employers. Also, make sure you have an emergency fund set aside that you can use to support yourself should you become unemployed.

Long-Term Care
Even if you don’t suffer a disability, it’s possible that others in your family could have health care needs that require you to leave your career. For example, long-term care has become a common need for those age 65 and over. In fact, the U.S. Department of Health and Human Services estimates that 70 percent of all retirees will need long-term care at some point in their lives.4

If you have an elderly parent who requires round-the-clock care, would you be able to contribute to that care and also balance your career? Or what if it’s your spouse who requires some level of care and support? How could you balance those needs with your career?

Again, these scenarios may not seem likely or probable, but they happen frequently enough that they shouldn’t be ignored. Ideally, your retirement would happen exactly as you have planned. However, it’s worth developing backup plans in case the unexpected happens.

Disability
Think you can’t suffer a disability? Think again. According to the Council for Disability Awareness, American workers on average think they have a 2 percent chance of becoming disabled. The reality is that the average worker has nearly a 25 percent chance.3

A wide range of injuries and illnesses could force you to take an extended absence from work or even leave your career altogether. If you were to suffer a long-term disability, would you be able to support yourself and your family without receiving a paycheck? Would you have to tap into your retirement savings earlier than anticipated?

You can minimize this risk through tools like long-term disability insurance. You pay premiums today, and in exchange, you receive benefit payments should you become disabled in the future.

Ready to develop your backup plan? Let’s talk about it. We can help you analyze your needs and create a strategy. Let’s connect soon and start the conversation.

References:

  1. http://www.transamericacenter.org/docs/default-source/retirement-survey-of-workers/tcrs2016_sr_retirement_survey_of_workers_compendium.pdf
  2. https://www.ebri.org/files/RCS_16.FS-2_Expects1.pdf
  3. http://www.disabilitycanhappen.org/chances_disability
  4. https://longtermcare.acl.gov/the-basics/who-needs-care.html

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