Communicating with a Financial Professional
Be certain your financial professional is asking the right questions.
People generally expect financial professionals to focus on the fiscal side of their clients’ retirement plans. Without a doubt, ensuring clients have adequate savings to continue living comfortably is extremely important, and advisors do their best to help clients attain this security. But a deeper knowledge and understanding of the people they serve can help them provide an even higher level of service.
So let your financial professional get to know you not only professionally, as a client, but on a personal level as well. As a starting point, here are a few important things to share when you meet to talk about your retirement:
Activities – Discuss the activities you plan to participate in most during retirement. Your advisor may assume that golf, social activities and traveling will take up the bulk of your time. While sometimes that’s an accurate prediction, it’s often too simple. If that’s the case, provide a longer list of things you plan to do in the future.
Passion(s) – What did you enjoy most about your life’s work? Perhaps you could find a way to focus on that area in a new arena. Or is there something you have always wished you could do or a cause you’ve always wanted to become involved in? Share any visions you have for personal growth or things you would like to do to make a difference.
Legacy – It’s essential to let your financial professional know what you want to be remembered for. No one enjoys talking about death, but letting your financial professional know what charities or causes you want to benefit will ensure your estate will get distributed as you wish.
As a rule of thumb, you should remember communication is the most important aspect of retirement and estate planning. Express your complete desires to your financial professional, even those you may think are less important. With nothing left unsaid, your financial professional will get to know you better, understand your wishes fully and be better equipped to help you make important financial decisions.
3 Major Retirement Hazards to Avoid
Retirement can mean the beginning of a new life. Here are a few common dangers to avoid.
Retirement planning is a tricky process, one that requires careful planning and patience. But even if you have a retirement plan with a clear set of financial and lifestyle goals, it’s important to be aware of several common missteps that many fall victim to.
1 - Underestimating the costs of health care
As health care costs continue to rise dramatically, employers are shifting more weight of the costs onto their employees. More companies are beginning to drop retired workers from their health plans, and millions of Americans have no form of coverage at all.
Consequently, a common mistake made in retirement is a lack of preparation for the financial impact of health expenditures. One of the most overlooked and most expensive costs is long-term health care, which can be devastating to your financial goals. Long-term care insurance can provide some safeguards, and purchasing it early on can help lower its costs.
2 - Misjudging how long you or your spouse will live
Many underestimate the amount of assets that could be needed to last throughout their lifetimes. As medical technology improves and life expectancy increases, the odds are good that you or your spouse will live past age 90. So it’s vital that you are prepared to live longer.
3 - Presuming you’ll work a long time
Your generation is famous for working long, hard hours to get ahead, and most baby boomers believe that they’ll be working long into retirement. But that assumption can be one of the biggest retirement mistakes you make.
Census Bureau statistics indicate the average age of retirement in America is now 63. According to the 2018 Retirement Confidence Survey by Greenwald & Associates and the Employee Benefit Research Institute, 68 percent of retirees retire before age 65, but only 32 percent of workers expect to retire before age 65. Even if you want to work as long as you can, it may not always be possible because of circumstances such as poor health or disability, so it’s vital that you plan and save for such a scenario.
Working with a financial professional and having the proper planning in place are essential keys to a successful retirement. It’s also important to keep an eye on health care costs and stay informed on issues that will affect your retirement. By focusing on the long term and being aware of common pitfalls, you can be prepared to make your retirement the best years of your life.
September is Life Insurance Awareness Month, n response to growing concern about the number of Americans who lack adequate life insurance protection. According to the 2018 Insurance Barometer Study by Life Happens and the Life Insurance & Market Research Association, 35 percent of households would feel the financial impact within one month if the primary wage earner died.
So what is the right amount of life insurance? As with many personal finance numbers, that depends on your circumstances, your stage in life and your future plans. Certainly at its most basic, life insurance is intended to offset the financial impact your death may have on the lives of your dependents. That impact may be simply the costs of your final expenses, such as funeral costs, medical bills, taxes, debts and professional fees for attorneys or accountants. Or the impact may be more significant, as in the case of a stay-at-home parent and his or her children, who depend solely on a spouse’s income for all of their day-to-day needs.
Life insurance can factor into more complex financial needs, such as leaving a legacy to your children or favorite charities. It can be important for a small business owner, providing the funds for the heirs to purchase the business or replace the business income if they must close or sell it. If you have a large estate, life insurance can provide funds to pay for estate taxes that would otherwise limit your legacy.
Over your lifetime, your life insurance needs will change. At certain times, you may need to increase or decrease your life insurance coverage. While on its surface life insurance may seem to be a one-time decision – you buy it, have the premium deducted from your bank account and never think about it again – it can be a dynamic part of your financial picture.
If you or a loved one needs help in evaluating your life insurance needs, including whether your current coverage is appropriate, please contact our office. We will gladly work with your existing insurance agent, handle your insurance needs at our office or recommend an agent to work with you.
Should you accept your employer’s buyout offer? Financial and emotional issues can be difficult to balance.
Your employer has announced it wants to eliminate several hundred jobs by offering buyouts, also known as early retirement packages, to a group of employees. What if that group includes you? You had no intention of leaving. You like your job, you’re paid well and your benefits are good. But your employer now appears to consider you expendable. To quote a famous rock anthem – should you stay or should you go?
Evaluating the financial implications of a buyout package can be difficult enough if you’re more than happy to go. It gets complicated on the emotional side when you intended to be loyal but now see that loyalty as betrayed. So consider first the security of your job if you decide to stay. Will it be eliminated later with a less attractive severance package or none at all? And if you stay and the job lasts, how will you feel about working for an employer that gave you the highway option?
Your age and life stage will greatly impact your decision. You may be young enough that retirement now isn’t an option, so the severance will be your paycheck while you find another job. Or you may have young children and decide severance will provide income while you stay at home for a few years. If you were looking at retirement within a few years anyway, this may give you the opportunity to start early.
Of course, you’ll need to evaluate the financial pros and cons of accepting or rejecting the offer. That means more than just the bottom line cash, which companies usually calculate based on seniority and years of service. Consider bonuses, stock options, paid time off and insurance premium subsidies that you will no longer receive. Consult a tax specialist about the impact of receiving a lump sum or stretching it out over time – severance or early retirement pay is considered taxable income.
You may have only a limited time to consider a buyout package, so it’s important not to wait until the 11th hour. By signing a buyout agreement, you forfeit your right to sue your employer later on any employment and compensation-related issues, so resolve those before time runs out.
Buyouts often occur after a merger when duplicate positions need to be eliminated. Companies may offer a staying bonus to those who don’t jump ship to ensure they have adequate staff to complete the transition. If you accept a staying bonus, you should still dust off your resume and check your finances to make sure you can survive being terminated when the transition is done.
Take advantage of any extra services your employer may be offering to those who accept the buyout, such as career counseling or placement services, even if you plan to retire, so you can walk away assured you took advantage of every opportunity. Then meet with your financial advisor to determine how your goals and objectives may change in light of the buyout. Even if you decide to stay, you may determine a need for greater cash reserves or other financial plan revisions to prepare for moving to another job if your employment future looks uncertain.
Do you have the three Items everyone needs?
You also need a living will that contains provisions and directions related to medical treatments and interventions that you want or do not want taken
And a trust could be set up to safeguard your assets and distribute them to your beneficiaries avoiding a lengthy and costly probate process.
2. A Durable Power of AttorneyThis is written authorization to have someone of your choosing act on your behalf in matters of your choosing in the event that you cannot.
3. Updated Beneficiary Designation FormsBeneficiaries must be kept up to date, life events alter the people you choose to inherit.
If you do not have these 3 essential items, please call to schedule your free estate planning check up today!
Securities America and its representatives do not provide legal advice; therefore it is important to coordinate with your legal advisor regarding your specific situation. Securities offered through Securities America, Inc., a Registered Broker/Dealer. Member FINRA/SIPC, www.sipc.org, Charles C. Bartler, Registered Representative. Advisory Services offered through Securities America Advisors, Inc., an SEC Registered Investment Advisory Firm, Charles C. Bartler, Investment Advisor Representative. Bartler Wealth Management and Securities America are unaffiliated.
Gifting To Reduce Your Taxable Estate
Gifting is one of the many estate planning tools available.
If you’re like most Americans, you like to give gifts nearly as much as you like to receive them. Luckily, if you’re serious about estate planning, there’s a handy technique called gifting that can potentially save your family, friends and heirs a lot of money on estate taxes in the future.
With gifting, you not only benefit yourself, you potentially save future generations from a heavy tax burden. In addition to a reduction in taxes, by reducing the size of your estate, you generally reduce the amount of probate costs and legal fees, which can often eat away much of your estate. So what exactly is gifting?
Gifting is exactly what it sounds like: a gift. It’s a gift that can be given to a spouse, a family member or a friend. It’s a technique that has been used frequently by people to reduce the value of their estate and can be done several ways.
For 2017, each person in the U.S. can give assets or property of up to $14,000 a year per recipient. That amount applies to each individual they gift to. This gift can be given to basically anyone without paying any gift taxes, as long as the amount gifted stays under the limit. You can give gifts, tax-free, to as many people as you wish. You can also gift an unlimited amount of property to charity and your spouse.
By law, you can gift a spouse unlimited amounts of property each year without paying any taxes. This isn’t always suggested however, since it just shifts the larger estate burden onto your spouse. One helpful technique is to team up with your spouse and gift to specific individuals, such as children and grandchildren. When you and a spouse get together and gift, which the IRS has termed “gift splitting,” you can give up to $28,000 to each individual without paying any gift tax. This allows you to quickly reduce your estate by a large amount.
Gifting is also a great way to give assets to your family that will end up appreciating in value. You not only reduce the amount that may be taxed in your estate, but you reduce the amount that your asset would have grown to by the time you passed away.
There are a great many details involving taxes and gifting that remain to be seen. The tax laws and regulations can get extremely complicated, which is why estate planning is best left up to
Avoid misunderstandings by planning now for the day you can no longer care for yourself.
Becoming increasingly dependent on others for the normal activities of daily life can be a harsh reality. It can be even harder to admit needing help. Creating a plan for how you, your family and your medical professionals will handle that possible scenario can alleviate misunderstanding and confusion when a crisis arises. Here are six tips to help you prepare:
A final word of advice: Don’t ask your family to make promises they can’t keep, like withholding information from other family members or vowing not to place you in a nursing facility. Discussing such issues ahead of time can help you and your family avoid these situations. If you would like help in creating a plan for those times when you are unable to care for yourself, contact your financial professional. Most are happy to include your family and your other professional advisors, including your attorney and accountant, in discussions.