A recent Wall Street Journal Article has this shocking news about 401(k)s: they dropped 24% in 2008.
The author goes on to say that this could have been worse – because the S&P 500 declined by 37% in the same year.
BUT – be careful. She later writes that doesn’t mean 401(k)s did any better than the market average. Why? Because that data includes worker contributions! So the losses were actually worse than 24%, but people kept adding to their accounts!
Someone with a small 401(k) could have lost much of its value in the market, but if she contributed that same amount during the year her account would have shown no change.
Is that how we are going to prepare for retirement? Contributing more and more every year and not knowing if the money invested will grow or shrink?
No wonder author Garrett Gunderson (see Wednesday's blog on Retirement Myths) says, “A 401(k) is not the "safe" and "smart" plan that you have been told it is; in fact, it's an extremely risky investment for most people.”
No wonder people worry if they will have enough money for retirement. It is not secure money. Why lose money? There is no need to lose money – you can have no downside risk and still have upside potential in an annuity.
Showing posts with label retirement. Show all posts
Showing posts with label retirement. Show all posts
Friday, November 13, 2009
Thursday, November 12, 2009
Roth IRAs
Did you know that on January 1, 2010 the Roth IRA conversion rules are changing? For one year only, people who make over $100,000 may convert their traditional IRA’s into a Roth IRA. (See an example in Advisor Today.) People under that threshold may convert at any time!
Why Consider a Roth:
1. There are no required minimum distributions in a Roth.
2. Assets in a Roth grow tax free, not tax deferred.
3. Beneficiaries can inherit the accounts tax free, and also start a “stretch Roth” to provide tax-free cash flow for life.
If you plan on using your IRA funds soon (within 10 years), or you expect to spend all of your IRA funds during your lifetime, the conversion may not be right for you. When you convert to a Roth, you have to pay the taxes on the money at that time. However, if you convert during 2010, you will be allowed to stretch the tax payments over 2 years.
To find out if a Roth is right for you, ask at least these 3 questions:
1. Do you believe taxes will be higher or lower for you in the future?
2. Do you plan on growing your retirement account for at least 10 years?
3. Do you want to avoid required minimum distributions so you can accumulate your money longer?
If you answered “yes” to the 3 questions, a Roth conversion may be right for you.
To find out what to put in your Roth that will have potential for growth without any chance of loss, click on the button to the right to consult with me today.
Why Consider a Roth:
1. There are no required minimum distributions in a Roth.
2. Assets in a Roth grow tax free, not tax deferred.
3. Beneficiaries can inherit the accounts tax free, and also start a “stretch Roth” to provide tax-free cash flow for life.
If you plan on using your IRA funds soon (within 10 years), or you expect to spend all of your IRA funds during your lifetime, the conversion may not be right for you. When you convert to a Roth, you have to pay the taxes on the money at that time. However, if you convert during 2010, you will be allowed to stretch the tax payments over 2 years.
To find out if a Roth is right for you, ask at least these 3 questions:
1. Do you believe taxes will be higher or lower for you in the future?
2. Do you plan on growing your retirement account for at least 10 years?
3. Do you want to avoid required minimum distributions so you can accumulate your money longer?
If you answered “yes” to the 3 questions, a Roth conversion may be right for you.
To find out what to put in your Roth that will have potential for growth without any chance of loss, click on the button to the right to consult with me today.
Wednesday, November 11, 2009
Retirement Myths
We have grown up thinking certain things about planning for our retirement, and some of these are just not true. Garrett Gunderson, in his book Killing Sacred Cows, dispels some of these myths.
I also just read a very concise article that made some of the same points, which I’ll summarize here.
Myth #1: You will not need as much income in retirement. But who wants to work hard and save money only to scrimp during retirement? And some costs, notably medical expenses, can go up.
Myth #2: Taxes will be lower in retirement. However, after the current recession and bailout, the government will continue to need more, not less, revenue in the future.
Myth #3: My house can provide retirement savings. With the downturn in housing values, this will no longer work for many people.
Myth #4: I can make larger returns in the stock market. The stock market has lost money in the last decade, and many experts think it could be volatile for years to come.
There are ways to leverage your savings with tax-deferred compounding interest that is guaranteed, and at retirement can provide income for life.
Click the button at the right to contact me about preserving your retirement money today!
I also just read a very concise article that made some of the same points, which I’ll summarize here.
Myth #1: You will not need as much income in retirement. But who wants to work hard and save money only to scrimp during retirement? And some costs, notably medical expenses, can go up.
Myth #2: Taxes will be lower in retirement. However, after the current recession and bailout, the government will continue to need more, not less, revenue in the future.
Myth #3: My house can provide retirement savings. With the downturn in housing values, this will no longer work for many people.
Myth #4: I can make larger returns in the stock market. The stock market has lost money in the last decade, and many experts think it could be volatile for years to come.
There are ways to leverage your savings with tax-deferred compounding interest that is guaranteed, and at retirement can provide income for life.
Click the button at the right to contact me about preserving your retirement money today!
Thursday, October 29, 2009
A Comprehensive Insurance Solution
“Living Benefits”
What is wrong with life insurance?
Traditional life insurance has the drawback of covering only 1 emergency – your passing away. And with term insurance, the vast majority of policies will never be paid because they are outlived. But the leading causes of death in America are also the primary causes of disability, the need for long term care, and ultimately most cases of financial struggle.
Every 29 seconds someone suffers from a coronary event, and 45% of heart attack victims are under the age of 45.
Every 45 seconds someone suffers from a stroke.
The chance of developing cancer during your lifetime is 1 in 3 for women, and 1 in 2 for men.
Of all Americans who reach age 65, about 60% will eventually need some form of long term care.
There are so many challenges a family faces long before the worst possibility of losing a loved one. What is wrong with life insurance is that it doesn’t address all these risks.
What is wrong with disability insurance and long term care insurance?
Disability insurance is very important for the breadwinner of the family to have, for how many months can your family live without that income? And yet, disability insurance will never pay the full amount of the income, and often comes with waiting periods.
Long term care insurance is another valuable protection, because the costs of long term care are so high that it protects your assets from being depleted in the event you need this care. However, many people hesitate to get it because they don’t know for sure that they’ll use it. Or what if you have a heart attack or stroke, but recover enough that you do not trigger the long term care because you can still perform the activities of daily living?
A Comprehensive Solution
The solution to these shortcomings of traditional, separate insurance policies is to get one policy that will provide “Living Benefits” as well as death benefits.
It is now possible to get such a policy through a 150-year-old, A-rated mutual company. The one policy will pay in three ways:
· Acceleratd living benefits
· Retirement income benefit
· Death benefit.
We can design a policy to cover disability, chronic and terminal illness, and long term care. In addition, you will be able to access the value for retirement or other needs.
We all have multiple risks to insure against, and it is hard to know which one we will need first. A “Living Benefits” life insurance policy provides one combined, affordable solution to all of these needs.
What is wrong with life insurance?
Traditional life insurance has the drawback of covering only 1 emergency – your passing away. And with term insurance, the vast majority of policies will never be paid because they are outlived. But the leading causes of death in America are also the primary causes of disability, the need for long term care, and ultimately most cases of financial struggle.
Every 29 seconds someone suffers from a coronary event, and 45% of heart attack victims are under the age of 45.
Every 45 seconds someone suffers from a stroke.
The chance of developing cancer during your lifetime is 1 in 3 for women, and 1 in 2 for men.
Of all Americans who reach age 65, about 60% will eventually need some form of long term care.
There are so many challenges a family faces long before the worst possibility of losing a loved one. What is wrong with life insurance is that it doesn’t address all these risks.
What is wrong with disability insurance and long term care insurance?
Disability insurance is very important for the breadwinner of the family to have, for how many months can your family live without that income? And yet, disability insurance will never pay the full amount of the income, and often comes with waiting periods.
Long term care insurance is another valuable protection, because the costs of long term care are so high that it protects your assets from being depleted in the event you need this care. However, many people hesitate to get it because they don’t know for sure that they’ll use it. Or what if you have a heart attack or stroke, but recover enough that you do not trigger the long term care because you can still perform the activities of daily living?
A Comprehensive Solution
The solution to these shortcomings of traditional, separate insurance policies is to get one policy that will provide “Living Benefits” as well as death benefits.
It is now possible to get such a policy through a 150-year-old, A-rated mutual company. The one policy will pay in three ways:
· Acceleratd living benefits
· Retirement income benefit
· Death benefit.
We can design a policy to cover disability, chronic and terminal illness, and long term care. In addition, you will be able to access the value for retirement or other needs.
We all have multiple risks to insure against, and it is hard to know which one we will need first. A “Living Benefits” life insurance policy provides one combined, affordable solution to all of these needs.
Wednesday, August 19, 2009
Your Health is your own Choice
Make a Decision
How long do you plan to live?
What steps are you taking to get there?
And will you be healthy and wealthy, or decrepit and broke?
Placebos
The first thing that you need to realize is that you are responsible for your health. The mental attitude comes first, because all else flows from that. There have been too many placebo studies to have any doubt that our beliefs have a very powerful effect upon our health. Even medicine that itself is quite potent will often only be as useful as the patient thinks it will be. So you need to think healthy all the time. Picture yourself as completely healthy, and as acting only as a completely healthy person would act.
Action
The next thing you need to do is act on your beliefs – otherwise you will consider yourself a fraud and erode those very beliefs. Begin by moving more. Movement is the key to life. Muscles, blood, oxygen, and waste – everything needs to move. I have done Aikido, a Japanese martial art, where we move our bodies, our breath, and our ki (or chi/energy). In fact, in the East, they measure your health by the movement of your internal energy. When you are ill they say you have a blockage. So move. Take a walk. Climb the stairs. Do some gardening. Slow and steady is the safest, and will keep you living the longest.
Eating
Again, many studies confirm that you will live longer if you simply eat less. Digestion is the largest single expense of energy your body has to make during the day. We literally wear ourselves out with our large plates of food. Also, another handy guide to eating that is less well known is to compare the acidity and alkalinity of your food more than the calories. Your body and blood need to be slightly alkaline to make the most energy out of your oxygen. Foods like avocadoes and almonds may have a lot of fat, but they are alkaline foods, very healthy. Green foods are alkaline. Meats and dairy and breads are acidic foods. Eat them in moderation and make sure that you have a lot of vegetables and water to go along with them. If you are really serious, check out apple cider vinegar, the elixir of the Greeks, & favored by the Braggs.
How will you feel?
When you reach your target age, whether it is 75 or 100, how are you going to feel? Of course our health care system has serious problems – but what if every individual took it upon himself to think, act, and be completely healthy? It will be a small consolation when you end up feeble and diseased to be able to blame the poor health care system. Instead, take control of your destiny, and choose today to think, act, and live as healthy as you possibly can.
How long do you plan to live?
What steps are you taking to get there?
And will you be healthy and wealthy, or decrepit and broke?
Placebos
The first thing that you need to realize is that you are responsible for your health. The mental attitude comes first, because all else flows from that. There have been too many placebo studies to have any doubt that our beliefs have a very powerful effect upon our health. Even medicine that itself is quite potent will often only be as useful as the patient thinks it will be. So you need to think healthy all the time. Picture yourself as completely healthy, and as acting only as a completely healthy person would act.
Action
The next thing you need to do is act on your beliefs – otherwise you will consider yourself a fraud and erode those very beliefs. Begin by moving more. Movement is the key to life. Muscles, blood, oxygen, and waste – everything needs to move. I have done Aikido, a Japanese martial art, where we move our bodies, our breath, and our ki (or chi/energy). In fact, in the East, they measure your health by the movement of your internal energy. When you are ill they say you have a blockage. So move. Take a walk. Climb the stairs. Do some gardening. Slow and steady is the safest, and will keep you living the longest.
Eating
Again, many studies confirm that you will live longer if you simply eat less. Digestion is the largest single expense of energy your body has to make during the day. We literally wear ourselves out with our large plates of food. Also, another handy guide to eating that is less well known is to compare the acidity and alkalinity of your food more than the calories. Your body and blood need to be slightly alkaline to make the most energy out of your oxygen. Foods like avocadoes and almonds may have a lot of fat, but they are alkaline foods, very healthy. Green foods are alkaline. Meats and dairy and breads are acidic foods. Eat them in moderation and make sure that you have a lot of vegetables and water to go along with them. If you are really serious, check out apple cider vinegar, the elixir of the Greeks, & favored by the Braggs.
How will you feel?
When you reach your target age, whether it is 75 or 100, how are you going to feel? Of course our health care system has serious problems – but what if every individual took it upon himself to think, act, and be completely healthy? It will be a small consolation when you end up feeble and diseased to be able to blame the poor health care system. Instead, take control of your destiny, and choose today to think, act, and live as healthy as you possibly can.
Wednesday, July 29, 2009
Clear Vision, Decisive Action
When is a good time to provide for your future?
When I got out of college, I wanted to see the world. My friends were on the fast track to become lawyers and doctors and teachers, and they advised me that if I followed my dream, I would get behind. Well, I went, telling them that I would take my retirement then, and if I was behind I would just have to work in my later years when they were all retired.
You know what? I was behind them, and am still working to catch up. But I wouldn't exchange my two-and-a-half years living in Hawaii, Asia, Australia, and the Middle East for anything. I grew up, and gained a global perspective. I made friends I connect with to this day. I am grateful for that early retirement.
And who knows which of us will enjoy a full retirement? One of my classmates got on a cross-country flight out of Boston on 9/11, and we never were able to see him again. Others have contracted serious diseases, even in their 30's.
Adolescents typically think that they are invincible, and take risks. It is in their wiring, and they cannot help it. But after about age 20, when our brains have finished growing, we realize full well that we are not invincible. And if we're smart, we begin to take steps to prepare for our future; we calculate the risks; we take responsibility for the little ones in our lives who now depend on us.
Why do sensible people still procrastinate and put off taking action? In the back of our minds, we know we should take action to provide for tomorrow. But we think tomorrow will never come, and that is where surprises and even tragedies can occur.
You can be smart and take action before tomorrow comes. Think about your future needs and those of your family, take steps with an insurance professional to plan for them, and then enjoy your present moments with the ones you love. You may not be able to predict exactly what the future will bring, but you'll have the peace of mind of knowing, come what may, you provided for your family.
When I got out of college, I wanted to see the world. My friends were on the fast track to become lawyers and doctors and teachers, and they advised me that if I followed my dream, I would get behind. Well, I went, telling them that I would take my retirement then, and if I was behind I would just have to work in my later years when they were all retired.
You know what? I was behind them, and am still working to catch up. But I wouldn't exchange my two-and-a-half years living in Hawaii, Asia, Australia, and the Middle East for anything. I grew up, and gained a global perspective. I made friends I connect with to this day. I am grateful for that early retirement.
And who knows which of us will enjoy a full retirement? One of my classmates got on a cross-country flight out of Boston on 9/11, and we never were able to see him again. Others have contracted serious diseases, even in their 30's.
Adolescents typically think that they are invincible, and take risks. It is in their wiring, and they cannot help it. But after about age 20, when our brains have finished growing, we realize full well that we are not invincible. And if we're smart, we begin to take steps to prepare for our future; we calculate the risks; we take responsibility for the little ones in our lives who now depend on us.
Why do sensible people still procrastinate and put off taking action? In the back of our minds, we know we should take action to provide for tomorrow. But we think tomorrow will never come, and that is where surprises and even tragedies can occur.
You can be smart and take action before tomorrow comes. Think about your future needs and those of your family, take steps with an insurance professional to plan for them, and then enjoy your present moments with the ones you love. You may not be able to predict exactly what the future will bring, but you'll have the peace of mind of knowing, come what may, you provided for your family.
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