That's gonna do it for our 2nd Annual celebration of National Retirement Planning Month this July! Special thanks to Retirement Revolutionary Lin Schreiber and car-buying expert Barry Levine for being my guests during our teleseminar series. Also, special thanks to all of you who stopped by this blog to check out our daily entries during the month. We'll be back next July 2009! Until then, take care of yourself.
For information about National Retirement Planning Month, to suggest a potential guest for next years free teleseminar series, please contact Bill Losey at 1-866-786-2521 or by visiting www.MyRetirementSuccess.com or www.NationalRetirementPlanningMonth.com.
Thursday, July 31, 2008
Wednesday, July 30, 2008
What Wall Street Doesn't Want You to Know
Wondering how best to invest your six or seven figure retirement portfolio given all the volatility we're experiencing?
Learn new research on a simpler, more intuitive way to invest, how to build an investment portfolio and pay for it, and what you can realistically expect in the way of performance. Click here to download your FREE report: http://www.myretirementsuccess.com/pages/special.asp
Learn new research on a simpler, more intuitive way to invest, how to build an investment portfolio and pay for it, and what you can realistically expect in the way of performance. Click here to download your FREE report: http://www.myretirementsuccess.com/pages/special.asp
Tuesday, July 29, 2008
Should We Pay Off Our Mortgage?
Question: We are about to sell a rental property in New York and have considered a 1031 exchange but, contrary to most things I read, I like the idea of being debt free. Consequently, we’re thinking about paying off our primary home mortgage with the proceeds from the sale of the rental property. We know we can lose some tax benefits (including the hefty capital gains tax on the sale), but the security of owing nothing, to anyone, might be worth it. Your thoughts?
Answer: If I was a tax preparer, I would most likely tell you you’re foolish because you’d be paying all those taxes for nothing because they could be avoided or minimized. If I was an annuity salesman hungry for a commission, I’d tell you you’d be better off investing that money in a great insurance company product that will kick off some income. If I was a stock broker, I’d tell you that you could invest your money in cheap value stocks now and make a boat load of cash when the markets rebound.
But, I’m not any of these people.
Over the years, I’ve seen too many decent, hard-working people, get suckered into a tax saving strategy or new investment because the numbers said so. I’m telling you that I hear what you’re saying and I feel you. Realize though, that once you’ve plunked down all that money to be debt-free, that money is in the walls (equity) of your primary house. The only way to get the money out is through a loan, reverse mortgage or sale. Keep that in mind.
Bill’s Bottom-line: Being debt-free is a liberating feeling. If you’ve done your homework and your gut is telling you to pay the hefty taxes, pay off your primary mortgage and be debt-free regardless of what the numbers say, then follow your heart.
Answer: If I was a tax preparer, I would most likely tell you you’re foolish because you’d be paying all those taxes for nothing because they could be avoided or minimized. If I was an annuity salesman hungry for a commission, I’d tell you you’d be better off investing that money in a great insurance company product that will kick off some income. If I was a stock broker, I’d tell you that you could invest your money in cheap value stocks now and make a boat load of cash when the markets rebound.
But, I’m not any of these people.
Over the years, I’ve seen too many decent, hard-working people, get suckered into a tax saving strategy or new investment because the numbers said so. I’m telling you that I hear what you’re saying and I feel you. Realize though, that once you’ve plunked down all that money to be debt-free, that money is in the walls (equity) of your primary house. The only way to get the money out is through a loan, reverse mortgage or sale. Keep that in mind.
Bill’s Bottom-line: Being debt-free is a liberating feeling. If you’ve done your homework and your gut is telling you to pay the hefty taxes, pay off your primary mortgage and be debt-free regardless of what the numbers say, then follow your heart.
Monday, July 28, 2008
How Much Retirement Income Should You Withdraw?
The big question: how much is too much? In the first few years of retirement, some couples really “live it up” … and some of them risk spending down their retirement savings. Their portfolios aren’t earning enough to make back the income they’re withdrawing.
Some new retirees end up withdrawing as much as 7-10% of their retirement assets annually. A bull market tends to encourage this kind of exuberance. But what happens when the bulls don’t run? What if your portfolio only returns 1-2% this year? Can you see the potential problem?
Ultimately, the answer is highly personal. There is no “standard” retirement income withdrawal rate. Your withdrawal rate should be determined in consultation with your financial advisor, who can help you evaluate some very important matters: your risk tolerance, your age and health, and your lifestyle needs.
Many new retirees are told that a 4-5% annual withdrawal rate makes sense. If you withdraw 4-5% from your retirement nest egg annually and your investments steadily earn about 5-6% year-to-year, it is quite possible that your invested assets will last a quarter-century or longer given mild inflation. But that’s a rather stable scenario. Even more variables come into play.
Consumer costs. Over the past 50 years, consumer prices have increased (on average) about 4% annually. So you might assume that your portfolio should generate at least a 4% annual return just to help you keep up with the cost of living. But if you retire with that assumption and inflation should spike notably higher for some reason after you retire, you may need to adjust your withdrawal rate.
Now consider the price of health care. In recent years, health care costs have increased at a much greater rate than inflation. The same goes for nursing home care.
Market dips. When you are 35 or 40, your investments have time to rebound from a market downturn. When you are 70, things are different.
Let’s cite an example: let’s say you are 70 years old, and you have $250,000 in your portfolio. All of a sudden, your portfolio has two really bad years: you lose 12% in Year 1 and 7% in Year 2. So at 72, your portfolio is now worth $204,600. You want to get back to $250,000 or better. How long will that take? Well, your portfolio would have to gain almost 23% in Year 3 to get back to that $250,000 level. So if you suffer through a couple of bad years with ill-chosen investments or ill-advised asset allocations, your nest egg may be considerably smaller and your income withdrawal rate may have to change.
The merit of conservative withdrawals. With ongoing improvements in healthcare, today’s retirees stand a good chance of living into their eighties and nineties (and perhaps even longer). This is a good reason to exercise a little moderation when scheduling retirement income.
The wisdom of a retirement income plan. If you are in the need of a makeover on your retirement income plan, or have any general questions for me, I am always here to help. Please call me toll free at 1-866-786-2521.
Some new retirees end up withdrawing as much as 7-10% of their retirement assets annually. A bull market tends to encourage this kind of exuberance. But what happens when the bulls don’t run? What if your portfolio only returns 1-2% this year? Can you see the potential problem?
Ultimately, the answer is highly personal. There is no “standard” retirement income withdrawal rate. Your withdrawal rate should be determined in consultation with your financial advisor, who can help you evaluate some very important matters: your risk tolerance, your age and health, and your lifestyle needs.
Many new retirees are told that a 4-5% annual withdrawal rate makes sense. If you withdraw 4-5% from your retirement nest egg annually and your investments steadily earn about 5-6% year-to-year, it is quite possible that your invested assets will last a quarter-century or longer given mild inflation. But that’s a rather stable scenario. Even more variables come into play.
Consumer costs. Over the past 50 years, consumer prices have increased (on average) about 4% annually. So you might assume that your portfolio should generate at least a 4% annual return just to help you keep up with the cost of living. But if you retire with that assumption and inflation should spike notably higher for some reason after you retire, you may need to adjust your withdrawal rate.
Now consider the price of health care. In recent years, health care costs have increased at a much greater rate than inflation. The same goes for nursing home care.
Market dips. When you are 35 or 40, your investments have time to rebound from a market downturn. When you are 70, things are different.
Let’s cite an example: let’s say you are 70 years old, and you have $250,000 in your portfolio. All of a sudden, your portfolio has two really bad years: you lose 12% in Year 1 and 7% in Year 2. So at 72, your portfolio is now worth $204,600. You want to get back to $250,000 or better. How long will that take? Well, your portfolio would have to gain almost 23% in Year 3 to get back to that $250,000 level. So if you suffer through a couple of bad years with ill-chosen investments or ill-advised asset allocations, your nest egg may be considerably smaller and your income withdrawal rate may have to change.
The merit of conservative withdrawals. With ongoing improvements in healthcare, today’s retirees stand a good chance of living into their eighties and nineties (and perhaps even longer). This is a good reason to exercise a little moderation when scheduling retirement income.
The wisdom of a retirement income plan. If you are in the need of a makeover on your retirement income plan, or have any general questions for me, I am always here to help. Please call me toll free at 1-866-786-2521.
Friday, July 25, 2008
5 Ways to Make Retirement a Reality (in a bad economy)
If the recent mood swings in the stock market and your declining 401k balance are making you feel like you’ll never be able to fully retire…you’re not alone. The market gyrations are giving me more gray hairs every day and I’m going to have to start buying Grecian Formula in bulk to keep my youthful looks.
Seriously though, this market volatility is causing a lot of angst but there are some things you can consider doing to make retirement a reality.
1. Consider increasing your annual savings. This is one area you have direct control over. It may require that you reduce your current spending or earmark your raise for savings, but putting more away now will allow you to buy more shares at cheaper prices (since the market is lower). The younger you are and the earlier you start saving, the more years your money can grow tax deferred inside your 401k or IRA. This tax deferred compounding can mean thousands or tens of thousands of extra dollars for you to spend come retirement time. Also, every dollar you invest in your 401k plan today is one less dollar included in your income this year so you can lower your tax bite. Employee’s elective contributions are limited to $15,500 per year in 2008 ($20,500 for those people age 50 and over). How much are you saving?
2. Consider reallocating your 401k to higher yielding investments. I realize that this may be counterintuitive to what you’re feeling given the recent market slide but perhaps you should invest more aggressively. Over time, stocks have historically outpaced bonds and inflation. Certainly, the greater the potential return on your money, the more risk you’ll be taking. However, if you have 10 years or more until your retirement date, you may well be rewarded for taking this additional risk. Certainly, past performance is no guarantee of future results and I’m not saying you should get more aggressive. Take a few minutes and review your asset allocation. What percentage do you hold in stocks versus bonds? If you’re not sure, talk with a professional or trusted advisor and gets his or her guidance. Recognize that every extra 1% you can earn on your money over time will go along way to helping you enjoy the retirement you envision sooner.
3. Consider retiring later. Every year you earn an income is another year you defer money into your 401k, lower your tax bill and allow your savings to grow tax deferred. The longer you work the less you would need to accumulate to afford your desired lifestyle. If you love what you do, why would you ever completely retire? If you don’t love what you’re doing, why are you still doing it? What’s holding you back (time, money, confidence, knowledge, connections)? Research indicates that there is a direct correlation between our happiness, our health, and our financial wellness. When was the last time you examined your situation?
4. Consider lowering your investment costs. Do you have any idea what you’re paying in dollars and cents for your investments and/or investment management? If you’re like most people I see, you don’t have a clue. Recognize that each investment has its own internal cost structure. Usually this information is contained in small print in the back of the prospectus which most people never take the time to read. Additionally, these fees usually get skimmed off the top and you don’t even realize it. You get my point! Take some time and review your investments. Quantify what you’re paying. Determine if you’re getting good value for what you’re paying. Understand that every dollar you lower your investment costs by is another dollar in your pocket. Can you say ca-ching?
5. Consider reducing your retirement income needs. At the end of the day (or work week), you can only control what you can control. If you can make astute lifestyle choices, control your spending, eliminate your debts and live on less, you may feel more in control of your future. FYI - my happiest private clients are those that have downsized, organized and simplified their lives.
Seriously though, this market volatility is causing a lot of angst but there are some things you can consider doing to make retirement a reality.
1. Consider increasing your annual savings. This is one area you have direct control over. It may require that you reduce your current spending or earmark your raise for savings, but putting more away now will allow you to buy more shares at cheaper prices (since the market is lower). The younger you are and the earlier you start saving, the more years your money can grow tax deferred inside your 401k or IRA. This tax deferred compounding can mean thousands or tens of thousands of extra dollars for you to spend come retirement time. Also, every dollar you invest in your 401k plan today is one less dollar included in your income this year so you can lower your tax bite. Employee’s elective contributions are limited to $15,500 per year in 2008 ($20,500 for those people age 50 and over). How much are you saving?
2. Consider reallocating your 401k to higher yielding investments. I realize that this may be counterintuitive to what you’re feeling given the recent market slide but perhaps you should invest more aggressively. Over time, stocks have historically outpaced bonds and inflation. Certainly, the greater the potential return on your money, the more risk you’ll be taking. However, if you have 10 years or more until your retirement date, you may well be rewarded for taking this additional risk. Certainly, past performance is no guarantee of future results and I’m not saying you should get more aggressive. Take a few minutes and review your asset allocation. What percentage do you hold in stocks versus bonds? If you’re not sure, talk with a professional or trusted advisor and gets his or her guidance. Recognize that every extra 1% you can earn on your money over time will go along way to helping you enjoy the retirement you envision sooner.
3. Consider retiring later. Every year you earn an income is another year you defer money into your 401k, lower your tax bill and allow your savings to grow tax deferred. The longer you work the less you would need to accumulate to afford your desired lifestyle. If you love what you do, why would you ever completely retire? If you don’t love what you’re doing, why are you still doing it? What’s holding you back (time, money, confidence, knowledge, connections)? Research indicates that there is a direct correlation between our happiness, our health, and our financial wellness. When was the last time you examined your situation?
4. Consider lowering your investment costs. Do you have any idea what you’re paying in dollars and cents for your investments and/or investment management? If you’re like most people I see, you don’t have a clue. Recognize that each investment has its own internal cost structure. Usually this information is contained in small print in the back of the prospectus which most people never take the time to read. Additionally, these fees usually get skimmed off the top and you don’t even realize it. You get my point! Take some time and review your investments. Quantify what you’re paying. Determine if you’re getting good value for what you’re paying. Understand that every dollar you lower your investment costs by is another dollar in your pocket. Can you say ca-ching?
5. Consider reducing your retirement income needs. At the end of the day (or work week), you can only control what you can control. If you can make astute lifestyle choices, control your spending, eliminate your debts and live on less, you may feel more in control of your future. FYI - my happiest private clients are those that have downsized, organized and simplified their lives.
Thursday, July 24, 2008
Balancing College & Saving for Retirement
Question: What are your thoughts re: balancing retirement savings with college savings? I’m saving for my retirement, yet have no savings allocated for my child’s college expenses.
Answer: I may catch some flack for this, but I think you should worry about funding your retirement program (401k and IRAs) first - before you worry about saving money for college. This may sound kind of harsh, but junior can always get a job, take out a loan, perform college work study, get a grant, get a scholarship, perform military service and utilize many ways to fund his college education. You, on the other hand, cannot finance a 30+ year retirement on loans – you need cash.
My suggestion is to max out your company retirement plan and take advantage of a company match, if offered. If you have additional monies available and are eligible, consider funding an IRA or Roth IRA. 2008 contribution limits have jumped to $5,000 this year ($6,000 if you’re over age 50).
After you’ve accomplished the above, if you still have additional cash flow available to save more, then I’d consider establishing a college account such as the New York 529 College Savings Program administered by Vanguard. As a New York State taxpayer, you can deduct up to $5,000 of contributions to your account ($10,000 for a married couple filing jointly) on your state income tax return each year. Please talk with your accountant or tax preparer for specific information relative to your situation.
Bill’s Bottom-line: If you only have enough money to set aside for one goal, and have to choose between saving for your retirement or a child’s education, my vote is for your retirement. Good luck and good saving. To learn more about the New York 529 College Savings program, visit their website at: http://nysaves.uii.upromise.com/index.html. As an alternative, call 1-877-NYSAVES (1-877-697-2837) Monday through Friday, 8 a.m. to 9 p.m., Eastern.
Answer: I may catch some flack for this, but I think you should worry about funding your retirement program (401k and IRAs) first - before you worry about saving money for college. This may sound kind of harsh, but junior can always get a job, take out a loan, perform college work study, get a grant, get a scholarship, perform military service and utilize many ways to fund his college education. You, on the other hand, cannot finance a 30+ year retirement on loans – you need cash.
My suggestion is to max out your company retirement plan and take advantage of a company match, if offered. If you have additional monies available and are eligible, consider funding an IRA or Roth IRA. 2008 contribution limits have jumped to $5,000 this year ($6,000 if you’re over age 50).
After you’ve accomplished the above, if you still have additional cash flow available to save more, then I’d consider establishing a college account such as the New York 529 College Savings Program administered by Vanguard. As a New York State taxpayer, you can deduct up to $5,000 of contributions to your account ($10,000 for a married couple filing jointly) on your state income tax return each year. Please talk with your accountant or tax preparer for specific information relative to your situation.
Bill’s Bottom-line: If you only have enough money to set aside for one goal, and have to choose between saving for your retirement or a child’s education, my vote is for your retirement. Good luck and good saving. To learn more about the New York 529 College Savings program, visit their website at: http://nysaves.uii.upromise.com/index.html. As an alternative, call 1-877-NYSAVES (1-877-697-2837) Monday through Friday, 8 a.m. to 9 p.m., Eastern.
Wednesday, July 23, 2008
Common Financial Mistakes & How to Avoid Them
Are you making mistakes with your money? Many people do, because of inattention, a lack of knowledge or confidence, or relying of the advice of friends rather than professionals. Here are some all-too-common money errors to avoid …
Putting off financial planning. This may be the biggest mistake of all. Procrastination does not help you save for retirement, and it will not help you reduce your taxes or transfer money to your heirs. Delaying necessary financial planning can be perilous. Some avoid planning out of fear – they simply don’t know where to begin. Don’t let this stop you. Decide today to do something about your financial future.
Putting all your eggs in one basket. Too many people invest everything in just one place. Try spreading your assets across multiple investments, and you’ll help to insulate them against the effects of economic ups and downs.
Buying more home than you can afford. Interest-only loans, option adjustable-rate mortgages (option ARMs) and lease purchases still tantalize couples and families with small nest eggs, modest salaries and credit blemishes into taking on much more liability than they can bear. The result is often foreclosure. Speak to a professional to make sure the amount of home you purchase makes sense for you.
Making impulsive or emotional money decisions. A decision that feels good (or exciting) may not be appropriate for you financially. Avoid spur-of-the-moment financial choices, and the influences that may trigger them. The next time you’re about to make a snap decision, stop and think. Will you lose the opportunity if you take a while to consider your next move? Consider and compare whenever possible.
Living above your means. In the acclaimed book The Millionaire Next Door, authors Thomas Stanley and William Danko found that most millionaires drive used American cars and shun a champagne-and-caviar lifestyle. It is the middle class that is generally seduced by big-debt, big-ticket luxury items … sometimes all the way into bankruptcy. Make wise decisions about money, take the time to consider big purchases, and be mindful of what effect they’ll have on finances down the road.
Avoiding all risk. Caution is good, but being extremely risk-averse (for example, refraining from investment and just putting your money in an FDIC-insured bank account) may cost you in terms of the growth of your retirement savings and assets. If you’re holding back because you’re unsure, speak with a financial advisor.
Putting off financial planning. This may be the biggest mistake of all. Procrastination does not help you save for retirement, and it will not help you reduce your taxes or transfer money to your heirs. Delaying necessary financial planning can be perilous. Some avoid planning out of fear – they simply don’t know where to begin. Don’t let this stop you. Decide today to do something about your financial future.
Putting all your eggs in one basket. Too many people invest everything in just one place. Try spreading your assets across multiple investments, and you’ll help to insulate them against the effects of economic ups and downs.
Buying more home than you can afford. Interest-only loans, option adjustable-rate mortgages (option ARMs) and lease purchases still tantalize couples and families with small nest eggs, modest salaries and credit blemishes into taking on much more liability than they can bear. The result is often foreclosure. Speak to a professional to make sure the amount of home you purchase makes sense for you.
Making impulsive or emotional money decisions. A decision that feels good (or exciting) may not be appropriate for you financially. Avoid spur-of-the-moment financial choices, and the influences that may trigger them. The next time you’re about to make a snap decision, stop and think. Will you lose the opportunity if you take a while to consider your next move? Consider and compare whenever possible.
Living above your means. In the acclaimed book The Millionaire Next Door, authors Thomas Stanley and William Danko found that most millionaires drive used American cars and shun a champagne-and-caviar lifestyle. It is the middle class that is generally seduced by big-debt, big-ticket luxury items … sometimes all the way into bankruptcy. Make wise decisions about money, take the time to consider big purchases, and be mindful of what effect they’ll have on finances down the road.
Avoiding all risk. Caution is good, but being extremely risk-averse (for example, refraining from investment and just putting your money in an FDIC-insured bank account) may cost you in terms of the growth of your retirement savings and assets. If you’re holding back because you’re unsure, speak with a financial advisor.
Tuesday, July 22, 2008
Coping With Stock Market Volatility
Question: The stock market is so volatile! It’s making me real nervous and my investments are going down. How do you deal with this for a living?
Answer: After nearly 20 years of helping retirees and pre-retirees manage their portfolios, I’ve actually gotten used to it. I deal with it by tuning out the white noise and controlling what I can control like my diversification, asset allocation, investment costs, and household expenses.
While we’ve probably never seen such a confluence of so many events at a given point in time – surging oil prices, inflation, housing bust, credit crisis, world economic slowdown, all in an election year – the markets have actually remained fairly resilient. The sky is not falling, despite what the pessimists would have you believe. Yes, the Dow Jones Industrial Average entered bear market territory in early July. Yes, oil prices are incredibly high. Yes, June was a really lousy month for stocks. We can’t change all this. But you might be surprised at how fast the stock market can change … for the better. Looking back, the market has recovered remarkably – and quickly – from some notable downturns. While it may seem trite to put it in such terms, it really could be much worse.
During this volatile period and every volatile period there is always a cycle of greed and fear. Greed and fear are the two things that move the market. We have periods where the markets get ahead of themselves and investors become too optimistic – and other periods where investors begin to panic, throw the baby out with the bath water, and become overly pessimistic. We are obviously in the throes, or very close to the latter scenario.
Bill’s Bottom-line: This volatile period will pass like all the others have.
Answer: After nearly 20 years of helping retirees and pre-retirees manage their portfolios, I’ve actually gotten used to it. I deal with it by tuning out the white noise and controlling what I can control like my diversification, asset allocation, investment costs, and household expenses.
While we’ve probably never seen such a confluence of so many events at a given point in time – surging oil prices, inflation, housing bust, credit crisis, world economic slowdown, all in an election year – the markets have actually remained fairly resilient. The sky is not falling, despite what the pessimists would have you believe. Yes, the Dow Jones Industrial Average entered bear market territory in early July. Yes, oil prices are incredibly high. Yes, June was a really lousy month for stocks. We can’t change all this. But you might be surprised at how fast the stock market can change … for the better. Looking back, the market has recovered remarkably – and quickly – from some notable downturns. While it may seem trite to put it in such terms, it really could be much worse.
During this volatile period and every volatile period there is always a cycle of greed and fear. Greed and fear are the two things that move the market. We have periods where the markets get ahead of themselves and investors become too optimistic – and other periods where investors begin to panic, throw the baby out with the bath water, and become overly pessimistic. We are obviously in the throes, or very close to the latter scenario.
Bill’s Bottom-line: This volatile period will pass like all the others have.
Monday, July 21, 2008
The State of Fannie Mae, Freddie Mac and IndyMac
Fannie Mae, Freddie Mac: stocks rise, concerns ease. Fannie Mae and Freddie Mac shares rose on July 17 and July 18 after falling 60% in the previous five trading days. Though their shares were still down more than 70% for 2008 through the end of last week, the federal government proposal to inject taxpayer money into both companies via the purchase of newly issued stock helped their fortunes in the market.
The concern last week was that Fannie Mae and Freddie Mac were heading toward collapse. Both government-sponsored firms convert mortgages sold by banks into bonds sold to investors, a process that brings liquidity to home loan companies. Last week, the Federal Reserve offered Fannie Mae and Freddie Mac access to its emergency cash, and on July 13, the Treasury Department said it would temporarily raise its line of credit to them and make an unprecedented equity investment in them if necessary. Both mortgage giants welcomed the assistance but publicly maintained that they were adequately capitalized.
As Fannie and Freddie guarantee about half of America’s residential mortgages, anything like failure would be disastrous for the housing market and the economy. Since July 2007, both firms have lost a total of $11 billion. But last week, things looked more optimistic. Securities and Exchange Commission chairman Christopher Cox pledged that the SEC would tighten regulations concerning short sales of major financial stocks. Consequently, the value of Fannie Mae shares had almost doubled by Friday, and Freddie Mac shares have risen 80%. Friday, Freddie Mac announced that it had registered its stock with the SEC in order to generate $5.5 billion through the sale of common and preferred shares. (Fannie Mae registered its stock with the SEC in 2003.)
IndyMac: the FDIC restores control. At the start of July, officials at the bank spun off from Countrywide Financial insisted it would not collapse, despite its specialty of originating (and selling) stated-income loans, jumbo mortgages and sub-prime loans. On July 11, federal regulators took IndyMac over. Over 200,000 IndyMac depositors were covered by federal insurance (up to $100,000 of their account balances); 10,000 more IndyMac clients had $1 billion of uninsured deposits, making them eligible to receive 50 cents on the dollar for deposits above $100,000, with the possibility of recouping more after IndyMac is sold. IndyMac clients with joint accounts or retirement accounts could immediately withdraw sums of greater than $100,000.
Last week, a few IndyMac customers found that other banks wouldn’t take their cashier’s checks, or were told the checks would take weeks to clear. That wasn’t true. Under federal law, other banks must make IndyMac cashier's check deposits of up to $5,000 available for withdrawal in one business day. But, cashier’s checks for more than $5,000 can be subject to a hold of as long as nine business days.
For the record, if you are an IndyMac customer and you are having problems with a check, you may contact the FDIC toll free at 1-866-806-5919. If you have other banking issues concerning IndyMac, you may call the Federal Office of Thrift Supervision at 1-800-842-6929.
A word about SIPC coverage. You know what the FDIC does for troubled banks, but as an investor, you may be wondering if there is any protection in case something happens with your investments. Did you know that the Securities Investor Protection Corporation (SIPC) offers coverage for your investment accounts?
Should a broker/dealer fail or have to liquidate assets, SIPC coverage kicks in (provided that broker/dealer is an SIPC member; nearly all are). The coverage doesn’t protect against market risk or market downturn; it simply covers the value of the securities. It is limited to $500,000 per client, including up to $100,000 for cash. General creditors of the broker/dealer cannot share in these distributions. Also, many investment broker/dealers have put what is termed “excess SIPC” coverage in place, for those statistically small chances in which the SIPC coverage would not be able to settle a claim against the broker/dealer.
SIPC coverage does not cover all types of investments. Coverage generally applies to stocks, bonds, mutual fund and other investment company shares, notes, and other registered securities. But it does not apply to commodity futures contracts, commodity options, currency or fixed annuity contracts.
Do you have some questions? Maybe this article made you think about the state of your investments and savings – where you have invested, where you have your money today. If you have questions regarding your finances, now is an excellent time to speak with a qualified financial advisor.
The concern last week was that Fannie Mae and Freddie Mac were heading toward collapse. Both government-sponsored firms convert mortgages sold by banks into bonds sold to investors, a process that brings liquidity to home loan companies. Last week, the Federal Reserve offered Fannie Mae and Freddie Mac access to its emergency cash, and on July 13, the Treasury Department said it would temporarily raise its line of credit to them and make an unprecedented equity investment in them if necessary. Both mortgage giants welcomed the assistance but publicly maintained that they were adequately capitalized.
As Fannie and Freddie guarantee about half of America’s residential mortgages, anything like failure would be disastrous for the housing market and the economy. Since July 2007, both firms have lost a total of $11 billion. But last week, things looked more optimistic. Securities and Exchange Commission chairman Christopher Cox pledged that the SEC would tighten regulations concerning short sales of major financial stocks. Consequently, the value of Fannie Mae shares had almost doubled by Friday, and Freddie Mac shares have risen 80%. Friday, Freddie Mac announced that it had registered its stock with the SEC in order to generate $5.5 billion through the sale of common and preferred shares. (Fannie Mae registered its stock with the SEC in 2003.)
IndyMac: the FDIC restores control. At the start of July, officials at the bank spun off from Countrywide Financial insisted it would not collapse, despite its specialty of originating (and selling) stated-income loans, jumbo mortgages and sub-prime loans. On July 11, federal regulators took IndyMac over. Over 200,000 IndyMac depositors were covered by federal insurance (up to $100,000 of their account balances); 10,000 more IndyMac clients had $1 billion of uninsured deposits, making them eligible to receive 50 cents on the dollar for deposits above $100,000, with the possibility of recouping more after IndyMac is sold. IndyMac clients with joint accounts or retirement accounts could immediately withdraw sums of greater than $100,000.
Last week, a few IndyMac customers found that other banks wouldn’t take their cashier’s checks, or were told the checks would take weeks to clear. That wasn’t true. Under federal law, other banks must make IndyMac cashier's check deposits of up to $5,000 available for withdrawal in one business day. But, cashier’s checks for more than $5,000 can be subject to a hold of as long as nine business days.
For the record, if you are an IndyMac customer and you are having problems with a check, you may contact the FDIC toll free at 1-866-806-5919. If you have other banking issues concerning IndyMac, you may call the Federal Office of Thrift Supervision at 1-800-842-6929.
A word about SIPC coverage. You know what the FDIC does for troubled banks, but as an investor, you may be wondering if there is any protection in case something happens with your investments. Did you know that the Securities Investor Protection Corporation (SIPC) offers coverage for your investment accounts?
Should a broker/dealer fail or have to liquidate assets, SIPC coverage kicks in (provided that broker/dealer is an SIPC member; nearly all are). The coverage doesn’t protect against market risk or market downturn; it simply covers the value of the securities. It is limited to $500,000 per client, including up to $100,000 for cash. General creditors of the broker/dealer cannot share in these distributions. Also, many investment broker/dealers have put what is termed “excess SIPC” coverage in place, for those statistically small chances in which the SIPC coverage would not be able to settle a claim against the broker/dealer.
SIPC coverage does not cover all types of investments. Coverage generally applies to stocks, bonds, mutual fund and other investment company shares, notes, and other registered securities. But it does not apply to commodity futures contracts, commodity options, currency or fixed annuity contracts.
Do you have some questions? Maybe this article made you think about the state of your investments and savings – where you have invested, where you have your money today. If you have questions regarding your finances, now is an excellent time to speak with a qualified financial advisor.
Friday, July 18, 2008
When Will You Be A Millionaire?
Ahhhhh...to be a millionaire or multi-millionaire. Wouldn't it be nice to know when you'll reach that goal? CNNMoney.com has a great tool that's free to use so you can figure it out quickly.
Just visit http://cgi.money.cnn.com/tools/millionaire/millionaire.html and tell them how much you have, how long you will save and at what rate, and you'll find out when your nest egg will hit 7 figures.
Enjoy!
Just visit http://cgi.money.cnn.com/tools/millionaire/millionaire.html and tell them how much you have, how long you will save and at what rate, and you'll find out when your nest egg will hit 7 figures.
Enjoy!
Thursday, July 17, 2008
Cash is King!
In good times and in challenging times like we're experiencing, cash is king!
How much money do you have in your savings account now? Do you have the three to six months of living expenses that most financial planners recommend you have earmarked as an Emergency Fund?
Having money in cash isn't sexy. You won't earn a tremendous amount of interest. You won't boast to your friends about earning a paltry 1-3% interest....but it serves a purpose. The purpose is to give you a ready, liquid source to dip into in the event of an emergency so you don't have to charge it or tap your home equity or 401k plan.
If you haven't saved at least three to six months worth of living expenses yet, get saving today. Start with what you can, even if it's only $25 or $50 per month. It will build up over time and before you know it, you'll have a tidy pool of cash for protection.
How much money do you have in your savings account now? Do you have the three to six months of living expenses that most financial planners recommend you have earmarked as an Emergency Fund?
Having money in cash isn't sexy. You won't earn a tremendous amount of interest. You won't boast to your friends about earning a paltry 1-3% interest....but it serves a purpose. The purpose is to give you a ready, liquid source to dip into in the event of an emergency so you don't have to charge it or tap your home equity or 401k plan.
If you haven't saved at least three to six months worth of living expenses yet, get saving today. Start with what you can, even if it's only $25 or $50 per month. It will build up over time and before you know it, you'll have a tidy pool of cash for protection.
Wednesday, July 16, 2008
How To Win The New Car Buying Game
Want to save thousands of dollars off your next car purchase?
Special thanks to Barry Levine, Founder of www.carbuyershelpline.com, for being my guest on today's National Retirement Planning Month teleseminar. Barry explained the tactics dealers use that confuse and baffle most consumers.
Barry helps people buy cars at the best available price - he helped me save nearly $2,000 on a recent minivan purchase! He eliminates the need for haggling which makes most car buyers nervous. Barry does this by taking your side in the deal, not the dealer's, and he handles all the negotiations from start to finish.
He helps auto-buyers nationwide and can be reached at 800-836-4333. You'll be glad you called him.
Special thanks to Barry Levine, Founder of www.carbuyershelpline.com, for being my guest on today's National Retirement Planning Month teleseminar. Barry explained the tactics dealers use that confuse and baffle most consumers.
Barry helps people buy cars at the best available price - he helped me save nearly $2,000 on a recent minivan purchase! He eliminates the need for haggling which makes most car buyers nervous. Barry does this by taking your side in the deal, not the dealer's, and he handles all the negotiations from start to finish.
He helps auto-buyers nationwide and can be reached at 800-836-4333. You'll be glad you called him.
Tuesday, July 15, 2008
What is the FDIC?
The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. Founded upon a mission to “maintain the stability of and public confidence in the nation’s financial system,” the FDIC supervises certain banks, insures deposits and helps maintain a stable and sound banking system. Since the inception of the FDIC, no depositor has lost a single cent of insured funds.
The FDIC receives no Congressional funding, but is supported by premiums that banks and thrift institutions pay for deposit insurance coverage, as well as earnings on investments in U.S. Treasury securities. Today, the FDIC insures more than $3 trillion in deposits in virtually every bank and thrift in the country.
The standard limit on FDIC insurance is $100,000 per depositor and $250,000 for certain retirement accounts per FDIC-insured bank. This means that the combined total of your savings, checking and other deposit accounts in a single bank covered by the FDIC is insured only up to $100,000 of the total value and $250,000 for certain retirement accounts.
To help you better understand how different account ownership categories can increase FDIC coverage, I’ve provided you with an example of how one fictional couple – “Jane and John Smith” – achieve far more than the standard $100,000 limit in one financial institution. By having deposits in separate account ownership categories, the Smiths are able to have $750,000 of their total savings FDIC insured, all at one bank.
Individual Account
In order to determine the amount the FDIC insures in individual accounts, all individual accounts owned by the same person at the same institution are added together and the total is insured up to $100,000. This limitation applies to the total of an individual’s funds in checking deposits, savings deposits and certificates of deposits for which an insured bank is liable. FDIC insurance is not increased, for example, by depositing $100,000 into a savings account and $100,000 into a checking account in the same FDIC-insured bank.
In our fictional example, Jane Smith has deposits in the following individual accounts at one financial institution – “ABC Bank”:
Jane Smith’s Individual Accounts
Money Market Deposit Account $20,000
Checking Account $10,000
Certificate of Deposit $70,000
Total Deposits in Individual Accounts $100,000
Since the total of all of her individual accounts meets the standard $100,000 limitation, she has all of her deposits fully FDIC insured.
Joint Account
When an account qualifies as a joint account with the FDIC, each person’s share is added together and the total is insured up to $100,000. Separate coverage means that the insurance provided for a joint account is in addition to coverage provided for one co-owner’s individual account held in the same institution. However, no person can be covered for more than $100,000 in his/her interests in all joint accounts at an institution.
In our example, Jane and John Smith share the following bank accounts at ABC bank:
Jane and John Smith’s Joint Accounts
Money Market Deposit Account $50,000
Checking Account $10,000
Certificate of Deposit $120,000
Total Deposit $180,000
Since these funds are in joint accounts and qualify for separate coverage, Jane and John are each covered by the $100,000 individual limit, and their deposits are therefore fully FDIC insured.
Total Fully FDIC Insured $180,000 ($90,000 each)
In addition, Jane also shares a joint bank account at ABC bank with her sister Joan:
Jane and Joan Smith’s Joint Account
Jane & Joan’s Certificate of Deposit Account $20,000 ($10,000 per owner)
Jane is fully FDIC insured for her share of the CD account with Joan because she still has $10,000 of FDIC coverage available in the joint account category.
Since Joan has no other joint accounts, she is fully covered for her share of the account, or $10,000 – and still has $90,000 available for future joint account deposits.
Testamentary Account
Testamentary accounts provide separate coverage for payable-on-death and other revocable trust accounts. A depositor can hold in a testamentary account funds that are insured up to $100,000 for each parent, sibling, spouse, child or grandchild named as a beneficiary. The person who has the power of revoking the trust is considered the “owner” of the account.
In our example, Jane and John Smith have two children. Jane has the following revocable trust account, naming her two children and husband as beneficiaries:
Jane Smith’s Testamentary Account
Jane Smith CD in trust for John Smith and two children $300,000 ($100,000 each beneficiary)
In this case, each beneficiary is entitled to $100,000 of FDIC coverage, so the total of Jane Smith’s testamentary account is fully insured.
Total Fully FDIC Insured $300,000
Retirement Account
Retirement accounts are treated much the same way as individual accounts. All of the self-directed retirement accounts at the same insured bank are added together and the total is insured up to $250,000. Please note that unlike testamentary accounts, naming beneficiaries does not increase FDIC coverage.
Jane Smith also has a $250,000 IRA CD at ABC Bank:
Jane Smith’s IRA CD Account $250,000
Total Fully FDIC Insured $250,000
Jane Smith Account Summary
By utilizing separate account ownership categories for their deposits, the Smiths are able to have nearly all of their funds FDIC insured at one financial institution. In fact, the total amount that is FDIC insured is $750,000 – a substantial increase from the commonly held belief that the maximum amount that can be covered by the FDIC at one financial institution is $100,000.
Jane Smith’s Total FDIC Coverage
Jane Smith Individual Account $100,000
Jane and John Smith Joint Account (50%) $90,000
Jane and Joan Smith Joint Account $10,000
Jane Smith Testamentary Account $300,000
Jane Smith IRA CD Account $250,000
Jane Smith Total FDIC Coverage at ABC Bank $750,000
The FDIC receives no Congressional funding, but is supported by premiums that banks and thrift institutions pay for deposit insurance coverage, as well as earnings on investments in U.S. Treasury securities. Today, the FDIC insures more than $3 trillion in deposits in virtually every bank and thrift in the country.
The standard limit on FDIC insurance is $100,000 per depositor and $250,000 for certain retirement accounts per FDIC-insured bank. This means that the combined total of your savings, checking and other deposit accounts in a single bank covered by the FDIC is insured only up to $100,000 of the total value and $250,000 for certain retirement accounts.
To help you better understand how different account ownership categories can increase FDIC coverage, I’ve provided you with an example of how one fictional couple – “Jane and John Smith” – achieve far more than the standard $100,000 limit in one financial institution. By having deposits in separate account ownership categories, the Smiths are able to have $750,000 of their total savings FDIC insured, all at one bank.
Individual Account
In order to determine the amount the FDIC insures in individual accounts, all individual accounts owned by the same person at the same institution are added together and the total is insured up to $100,000. This limitation applies to the total of an individual’s funds in checking deposits, savings deposits and certificates of deposits for which an insured bank is liable. FDIC insurance is not increased, for example, by depositing $100,000 into a savings account and $100,000 into a checking account in the same FDIC-insured bank.
In our fictional example, Jane Smith has deposits in the following individual accounts at one financial institution – “ABC Bank”:
Jane Smith’s Individual Accounts
Money Market Deposit Account $20,000
Checking Account $10,000
Certificate of Deposit $70,000
Total Deposits in Individual Accounts $100,000
Since the total of all of her individual accounts meets the standard $100,000 limitation, she has all of her deposits fully FDIC insured.
Joint Account
When an account qualifies as a joint account with the FDIC, each person’s share is added together and the total is insured up to $100,000. Separate coverage means that the insurance provided for a joint account is in addition to coverage provided for one co-owner’s individual account held in the same institution. However, no person can be covered for more than $100,000 in his/her interests in all joint accounts at an institution.
In our example, Jane and John Smith share the following bank accounts at ABC bank:
Jane and John Smith’s Joint Accounts
Money Market Deposit Account $50,000
Checking Account $10,000
Certificate of Deposit $120,000
Total Deposit $180,000
Since these funds are in joint accounts and qualify for separate coverage, Jane and John are each covered by the $100,000 individual limit, and their deposits are therefore fully FDIC insured.
Total Fully FDIC Insured $180,000 ($90,000 each)
In addition, Jane also shares a joint bank account at ABC bank with her sister Joan:
Jane and Joan Smith’s Joint Account
Jane & Joan’s Certificate of Deposit Account $20,000 ($10,000 per owner)
Jane is fully FDIC insured for her share of the CD account with Joan because she still has $10,000 of FDIC coverage available in the joint account category.
Since Joan has no other joint accounts, she is fully covered for her share of the account, or $10,000 – and still has $90,000 available for future joint account deposits.
Testamentary Account
Testamentary accounts provide separate coverage for payable-on-death and other revocable trust accounts. A depositor can hold in a testamentary account funds that are insured up to $100,000 for each parent, sibling, spouse, child or grandchild named as a beneficiary. The person who has the power of revoking the trust is considered the “owner” of the account.
In our example, Jane and John Smith have two children. Jane has the following revocable trust account, naming her two children and husband as beneficiaries:
Jane Smith’s Testamentary Account
Jane Smith CD in trust for John Smith and two children $300,000 ($100,000 each beneficiary)
In this case, each beneficiary is entitled to $100,000 of FDIC coverage, so the total of Jane Smith’s testamentary account is fully insured.
Total Fully FDIC Insured $300,000
Retirement Account
Retirement accounts are treated much the same way as individual accounts. All of the self-directed retirement accounts at the same insured bank are added together and the total is insured up to $250,000. Please note that unlike testamentary accounts, naming beneficiaries does not increase FDIC coverage.
Jane Smith also has a $250,000 IRA CD at ABC Bank:
Jane Smith’s IRA CD Account $250,000
Total Fully FDIC Insured $250,000
Jane Smith Account Summary
By utilizing separate account ownership categories for their deposits, the Smiths are able to have nearly all of their funds FDIC insured at one financial institution. In fact, the total amount that is FDIC insured is $750,000 – a substantial increase from the commonly held belief that the maximum amount that can be covered by the FDIC at one financial institution is $100,000.
Jane Smith’s Total FDIC Coverage
Jane Smith Individual Account $100,000
Jane and John Smith Joint Account (50%) $90,000
Jane and Joan Smith Joint Account $10,000
Jane Smith Testamentary Account $300,000
Jane Smith IRA CD Account $250,000
Jane Smith Total FDIC Coverage at ABC Bank $750,000
Friday, July 11, 2008
Financial & Retirement Calculators
If you've ever longed for having one website where you could find a host of financial and retirement calculators, your search is over.
From college to loans to mortgages to auto financing to retirement, crunch your numbers here. Visit www.myretirementsuccess.com/pages/fcalcs.asp.
From college to loans to mortgages to auto financing to retirement, crunch your numbers here. Visit www.myretirementsuccess.com/pages/fcalcs.asp.
Wednesday, July 9, 2008
Phased Retirement
Question: I’m turning 60 next year. While I don’t want to continue working full-time anymore, I don’t have the desire (or nest egg) to retire completely. What do you suggest?
Answer: How about a phased retirement? Instead of working 40 hours per week, talk with your employer about a reduced workload with a corresponding pay cut. The result could be just the answer you’re looking for.
Phased retirement is a new phrase being tossed around corporate America in recent years. While there are some really progressive employers with structured phased retirement programs, many employers have informal programs that most employees don’t even know exist.
Some employers allow workers over age 50 to work half-time at half-salary for up to three or five years while collecting partial pension benefits, if applicable. Often times, a half-time salary combined with a small pension or a monthly supplement from your own investment portfolio will result in a drop to a lower tax bracket.
Phased retirement is an attractive option for older workers because you continue earning an income while getting more free time for yourself. Your employer benefits by retaining a valued employee at a reduced cost. Often times, an employer will free up those financial resources to hire an additional employee and improve productivity. It’s a win-win for everyone.
Unfortunately, many pension plans will not allow a company to employ an individual and distribute a full or partial pension benefit after they reach retirement age. What this normally means is that if you want your pension benefit, you’d have to retire and work somewhere else (which raises a whole new set of challenges). Will you like your new employer? Can you work for them part-time? Will the part-time pay be enough to let you live your life and maintain your standard of living?
Bill’s Bottom-line: Do your homework. Talk with your employer and other colleagues who have successfully completed a phased retirement. Know your options before you leap.
Answer: How about a phased retirement? Instead of working 40 hours per week, talk with your employer about a reduced workload with a corresponding pay cut. The result could be just the answer you’re looking for.
Phased retirement is a new phrase being tossed around corporate America in recent years. While there are some really progressive employers with structured phased retirement programs, many employers have informal programs that most employees don’t even know exist.
Some employers allow workers over age 50 to work half-time at half-salary for up to three or five years while collecting partial pension benefits, if applicable. Often times, a half-time salary combined with a small pension or a monthly supplement from your own investment portfolio will result in a drop to a lower tax bracket.
Phased retirement is an attractive option for older workers because you continue earning an income while getting more free time for yourself. Your employer benefits by retaining a valued employee at a reduced cost. Often times, an employer will free up those financial resources to hire an additional employee and improve productivity. It’s a win-win for everyone.
Unfortunately, many pension plans will not allow a company to employ an individual and distribute a full or partial pension benefit after they reach retirement age. What this normally means is that if you want your pension benefit, you’d have to retire and work somewhere else (which raises a whole new set of challenges). Will you like your new employer? Can you work for them part-time? Will the part-time pay be enough to let you live your life and maintain your standard of living?
Bill’s Bottom-line: Do your homework. Talk with your employer and other colleagues who have successfully completed a phased retirement. Know your options before you leap.
Tuesday, July 8, 2008
Do I Need a Retirement Coach?
Question: Is it true that I can hire a retirement coach to help me transition from work to the next stage of my life? I didn’t know retirement coaches even existed.
Answer: Yes Virginia there is a retirement coach. In fact, there are hundreds or thousands of them (me included). I didn’t know this was even a career option until just a couple of years ago; however, with the millions of baby boomers approaching retirement and wondering what’s next some genius developed a program (and others followed).
Make no mistake. Retiring from a successful career into your first "retirement" is unlike any transition you've experienced before. It's filled with challenges and pitfalls you'll need special skills to handle. Especially, if you don't want to end up with more of the same old same old you've gotten from previous transitions.
Retirement coaching is not for everyone. As one of my retirement coach colleagues has said, "This work is not for sissies." It requires learning new skills, letting go of old ways of doing things, and facing your fears about aging and change. It demands flying in the face of what society says about how you "should" live this next stage of life.
So, is retirement coaching right for you? If you’re eager to retire the part(s) of your life that no longer fit (including your work), and reinvent them; if you’re looking for a guide who clearly sees who you are, who you're capable of becoming, and all the amazing options that are open to you; if you’re ready to have someone listen to your ideas and ask questions that push you into a higher level of thinking and acting; and if you’re willing to be accountable for what you say you'll do to get where you want to go...then you’re a good candidate.
Bill’s Bottom-line: Retirement coaching can be done over the telephone. To find a coach, visit two friends and esteemed colleagues of mine (Lin Schreiber and Ann Fry) at www.revolutionizeretirement.com or www.itsboomertime.com.
Answer: Yes Virginia there is a retirement coach. In fact, there are hundreds or thousands of them (me included). I didn’t know this was even a career option until just a couple of years ago; however, with the millions of baby boomers approaching retirement and wondering what’s next some genius developed a program (and others followed).
Make no mistake. Retiring from a successful career into your first "retirement" is unlike any transition you've experienced before. It's filled with challenges and pitfalls you'll need special skills to handle. Especially, if you don't want to end up with more of the same old same old you've gotten from previous transitions.
Retirement coaching is not for everyone. As one of my retirement coach colleagues has said, "This work is not for sissies." It requires learning new skills, letting go of old ways of doing things, and facing your fears about aging and change. It demands flying in the face of what society says about how you "should" live this next stage of life.
So, is retirement coaching right for you? If you’re eager to retire the part(s) of your life that no longer fit (including your work), and reinvent them; if you’re looking for a guide who clearly sees who you are, who you're capable of becoming, and all the amazing options that are open to you; if you’re ready to have someone listen to your ideas and ask questions that push you into a higher level of thinking and acting; and if you’re willing to be accountable for what you say you'll do to get where you want to go...then you’re a good candidate.
Bill’s Bottom-line: Retirement coaching can be done over the telephone. To find a coach, visit two friends and esteemed colleagues of mine (Lin Schreiber and Ann Fry) at www.revolutionizeretirement.com or www.itsboomertime.com.
Monday, July 7, 2008
Diversification & Asset Allocation
Question: I’m confused by the terms asset allocation and diversification. My friend says they’re the same thing but I think they’re different. Who is right?
Answer: You are.
Asset allocation is an investment strategy designed to reduce risk and enhance your return, by spreading your money among the three major asset classes – stocks, bonds and cash.
Diversification refers to how you spread your money among the sub-asset classes. For example, stocks are one of the three major asset classes; however, within this asset class you have various sub-asset classes such as large cap, small cap, mid cap, blend, growth, value, domestic, international and emerging stocks. Bonds, another major asset class have their own sub-asset classes such as government, municipal, corporate, domestic, international and emerging market debt bonds. If you’ve heard the saying, “don’t put all your eggs in one basket”, diversification is what they’re referring to.
Depending on your needs, preferences and tolerance for risk, you may also wish to include additional sector funds for tangible assets such as real estate or gold. Additionally, you may wish to underweight or overweight certain sectors or countries such as gas, oil, commodities or Brazil.
There is no single asset allocation model that fits every investors needs for every stage of their life. Generally speaking, as people get older they tend to invest more conservatively. This is a potential risk reduction technique – reducing the amount you hold in stocks and increasing your allocation to bonds or cash.
Key questions to answer before deciding on your asset allocation: When will I need this money? How quickly can I convert my investment to cash? Is it liquid? How much fluctuation can I handle? Are the investments taxable, tax-free or tax-deferred? What’s the tax impact? How comfortable am I investing in foreign markets? Can I figure this out on my own?
Bill’s Bottom-line: Your asset allocation dictates your risk and return potential. Make sure your allocation is appropriate given your age, goals, and timeframe.
Answer: You are.
Asset allocation is an investment strategy designed to reduce risk and enhance your return, by spreading your money among the three major asset classes – stocks, bonds and cash.
Diversification refers to how you spread your money among the sub-asset classes. For example, stocks are one of the three major asset classes; however, within this asset class you have various sub-asset classes such as large cap, small cap, mid cap, blend, growth, value, domestic, international and emerging stocks. Bonds, another major asset class have their own sub-asset classes such as government, municipal, corporate, domestic, international and emerging market debt bonds. If you’ve heard the saying, “don’t put all your eggs in one basket”, diversification is what they’re referring to.
Depending on your needs, preferences and tolerance for risk, you may also wish to include additional sector funds for tangible assets such as real estate or gold. Additionally, you may wish to underweight or overweight certain sectors or countries such as gas, oil, commodities or Brazil.
There is no single asset allocation model that fits every investors needs for every stage of their life. Generally speaking, as people get older they tend to invest more conservatively. This is a potential risk reduction technique – reducing the amount you hold in stocks and increasing your allocation to bonds or cash.
Key questions to answer before deciding on your asset allocation: When will I need this money? How quickly can I convert my investment to cash? Is it liquid? How much fluctuation can I handle? Are the investments taxable, tax-free or tax-deferred? What’s the tax impact? How comfortable am I investing in foreign markets? Can I figure this out on my own?
Bill’s Bottom-line: Your asset allocation dictates your risk and return potential. Make sure your allocation is appropriate given your age, goals, and timeframe.
Saturday, July 5, 2008
The 10 Biggest Mistakes Retirees Make & How To Avoid Them
Do you know if you are making any of The 10 Biggest Financial Mistakes many people make…that could cost you a fortune and jeopardize your retirement security?
Because if you’re not sure, you aren’t alone!
I don’t know if you know this or not, but according to information on the Social Security Administration website, 96% of Americans are not able to fund a retirement that will last their lifetime. This is the case for highly compensated people as well as average wage earners.
That’s why I have prepared a FREE 30-page step-by-step, down-to-earth report for you.
I wanted you to have an easy-to-understand set of facts that cuts through all the baloney, and tells you the biggest mistakes retirees make…and more importantly, how to avoid them!
To download your FREE 30-page report, The 10 Biggest Mistakes People Make When Retiring & How YOU Can Avoid Them, please click on the following link: http://www.myretirementsuccess.com/pages/hp_freeReport.asp
Because if you’re not sure, you aren’t alone!
I don’t know if you know this or not, but according to information on the Social Security Administration website, 96% of Americans are not able to fund a retirement that will last their lifetime. This is the case for highly compensated people as well as average wage earners.
That’s why I have prepared a FREE 30-page step-by-step, down-to-earth report for you.
I wanted you to have an easy-to-understand set of facts that cuts through all the baloney, and tells you the biggest mistakes retirees make…and more importantly, how to avoid them!
To download your FREE 30-page report, The 10 Biggest Mistakes People Make When Retiring & How YOU Can Avoid Them, please click on the following link: http://www.myretirementsuccess.com/pages/hp_freeReport.asp
Friday, July 4, 2008
What is REWIRING?
A new way “to do” the future! REWIRING™ is all about your personal energy flow, where you want it to go, and how using it will fulfill your mind, body, and soul.
Through research Jeri Sedlar and Rick Miners discovered that three out of four boomers said they hated the word retirement, and didn’t ever plan on totally retiring. When asked about a retirement vision, many answered reading, traveling, volunteering, learning and doing some type of work. Key was that whatever work they did it would be of their choosing--- minus the 24/7 stress and pressure of their traditional work and would give them fulfillment, value and purpose!
Learn more at http://www.dontretirerewire.com/index.php. Enjoy!
Through research Jeri Sedlar and Rick Miners discovered that three out of four boomers said they hated the word retirement, and didn’t ever plan on totally retiring. When asked about a retirement vision, many answered reading, traveling, volunteering, learning and doing some type of work. Key was that whatever work they did it would be of their choosing--- minus the 24/7 stress and pressure of their traditional work and would give them fulfillment, value and purpose!
Learn more at http://www.dontretirerewire.com/index.php. Enjoy!
Thursday, July 3, 2008
Take a Vacation, try a new Vocation
This is so coooool.
VocationVacations, www.VocationVacations.com enables you to test-drive your dream job; empowering you to turn your passions into your career.
Does your job spark your passion? Does it give your life meaning? Does it make you happy?At VocationVacations they know that work and passion are not mutually exclusive. In fact, they help people turn their passions into their careers.
VocationVacations lets people test-drive their dream jobs. They match you up with an expert mentor in the field of your dreams for a one to three day total immersion mentorship. On your dream job “Vocation” you will:
VocationVacations, www.VocationVacations.com enables you to test-drive your dream job; empowering you to turn your passions into your career.
Does your job spark your passion? Does it give your life meaning? Does it make you happy?At VocationVacations they know that work and passion are not mutually exclusive. In fact, they help people turn their passions into their careers.
VocationVacations lets people test-drive their dream jobs. They match you up with an expert mentor in the field of your dreams for a one to three day total immersion mentorship. On your dream job “Vocation” you will:
- work one-on-one with a personal mentor
- learn the ins and outs of your dream career
- try on your dream job lifestyle
- make valuable contacts in your field
- and begin plotting a concrete strategy for moving from the job you have to the job you love.
Check them out at www.vocationvacations.com. Enjoy!
Wednesday, July 2, 2008
www.RevolutionizeRetirement.com
Retirement Revolutionary Lin Schreiber was a fantastic guest on our FREE National Retirement Planning Month teleseminar this afternoon. In case you missed it, Lin spoke about how self-reliant women (and men) can transition from work to an encore career.
Lin believes that you and I each have a special gift. When we haven't fully developed, and shared our gift with others, we're not aligned with our purpose, and therefore we're not living with integrity. When we share our gift, we live our purpose, and are a beacon of light inspiring others to live theirs. When we share our gift, we make a difference on the planet. When we share our gift...anything is possible.
Wanna learn more? Visit http://www.revolutionizeretirement.com/articles.htm and download FREE articles and resources today!
Best, Bill Losey
www.MyRetirementSuccess.com
www.RetireinaWeekend.com
www.NationalRetirementPlanningMonth.com
Lin believes that you and I each have a special gift. When we haven't fully developed, and shared our gift with others, we're not aligned with our purpose, and therefore we're not living with integrity. When we share our gift, we live our purpose, and are a beacon of light inspiring others to live theirs. When we share our gift, we make a difference on the planet. When we share our gift...anything is possible.
Wanna learn more? Visit http://www.revolutionizeretirement.com/articles.htm and download FREE articles and resources today!
Best, Bill Losey
www.MyRetirementSuccess.com
www.RetireinaWeekend.com
www.NationalRetirementPlanningMonth.com
www.smallbusinessboomers.com
I was recently interviewed by Jean Wilson Murray who writes an awesome blog found at www.smallbusinessboomers.com. If it has to do with boomers, Jean knows it and writes about it. Consider adding her to your favorites... you won't be disappointed. Enjoy!
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