Are you planning to work past traditional retirement age so you can shore up your savings? That could be an effective strategy. Working later in life gives you a few more years to save money, and it also may let you delay Social Security, which can increase your benefit amount.
Many workers have a similar strategy in mind. According to a study from Transamerica, two-thirds of baby boomers are planning to work past age 65. In fact, 15 percent of baby boomers say they will never retire. Why the strong desire to work past traditional retirement age? Most say they will work late into life because of financial reasons. They believe that working longer will help them overcome their retirement savings gap.1
What is your attitude towards financial planning? Do you look at it from a comprehensive perspective, analyzing all your financial goals and developing a strategy to achieve all your objectives? Or do you plan for specific goals and needs as they arise? Or, perhaps, do you not do any planning at all?
The Certified Financial Planner Board of Standards published a study about Americans’ attitudes towards financial planning. It found that most Americans fall into one of four distinct groups: Comprehensive Planners, Basic Planners, Limited Planners and Non-Planners.1
Maybe the subtitle for this post should be Tiny Bubbles, Temper Tantrums and 3 Ways to Go North or South with Your Portfolio as 2017 unfolds but let me more blunt and to the point. The Bible tells us:
"Ecclesiastes 5:10 tells us Whoever loves money never has enough;
whoever loves wealth is never satisfied with their income.
This too is meaningless."
Way before the Longest Bull Market in History started in the late 1980s there stood a confident Humpty Dumpty Bull Market that started with the ascension of the Reagan Revolution. This Bull Market in the early 1980s began with the confidence that President Reagan initiated through overturning cumbersome business regulations, crushing staggering inflation and reducing the tax burden on all Americans. Retirees were even able to pad their portfolio with : AAA tax free and tax deferred savings & investments vehicles producing double-digit returns with liquidity. Many survivors of the sideways 1960s-1970s market that went nowhere recalled the big Don Ho hit of the times which helped them forget the civic and social unrest of the decade that saw the stock market stagnate from Dow 1000 in 1966 to the same level in 1982 16 years later.
Economic forecasting is like trying to drive a car blindfolded and following directions given by a person who is looking out of the back window. It seems rather curious, however, that the last two Federal Reserve Governors, Ben Bernanke and Janet Yellen, along with ardent annuity adversary, Senator Elizabeth Warren, would all own annuities as part of their own investment portfolios. Warren’s first crusade, as head of the newly- created Consumer Finance Protection Bureau’s, was to lambast the sales practices of over 15 annuity companies and brokerage general agencies, sometimes known as Independent Marketing Organizations(IMOs) that market a fast- growing product called a fixed index annuity(FIA) and its sister product fixed index universal life(FIUL). Last year, middle class- Americans bought over $250 billion of annuities. As the self -ordained crusader for the middle class, despite a net worth, according to disclosures of over $15 million, Warren has quoted a plethora of sales incentives that drive the $250 billion annuity market such as exotic trips and stock options. Can the financial crusader be both for retirement income annuities as a solution for middle class retirement and be against them? It's kind of like saying your part Cherokee indian and later saying you are not. My friend's wife is part Cherokee Indian and fair as a white sheet but she is fair in not taking advantage of the 5% of her DNA that is indian. Come on Miss Warren.
After visiting with my CPA the other day, I realized exactly what he means now by a red flag: That’s the amount many of us have left in our bank account after paying taxes. Here in Marietta, Georgia, according to the Tax Foundation, “Tax Freedom Day” comes after settling up with the Federal and State governments in early May for this calendar year. For purposes of this blog, I will not discuss the controversial proposal to cap mortgage and charitable interest deductions as it will most likely affect tax payers at the top brackets the most. Let’s touch, however, on the topic of stretch or inherited IRA’s for a minute which can be vital tools for preserving a legacy, increasing beneficiary income and reducing taxes in a retirement plan.
After a record-setting run to glory approaching a pinnacle for the most consecutive days of market gains that date back to 1898, just two years after the founding of the Dow Jones Industrials, it appears the stock market is on terra firma. It’s true there is little more firma and there’s lot less terror than last Summer. On March 9, the bull market for the S&P 500 reached 8 years in length surpassed only by the big run from 1987 until 2000, according to BTN Research. Since then we have stalled and are stuck as a result of one of 28 stock markets risks: Political Uncertainty. This time the culprit is the failure to replace and repeal the ACA and upcoming tax reform legislation.Stock market volatility and the potential for a significant correction, as measured by the number of days with 1% gains or losses, remains near all-time lows but is increasing significantly after the March 24 collapse of Health care reform.
Dove-Award Winning Artist, Ellie Holcomb, portrays in her latest album effort “Red Sea Road”, the reasons why a delay in taking Social Security until Full Retirement Age or age 70 may not be the best option for many of us and we can certainly empathize at MasterPlan Retirement Consultants.
The daughter of legendary songwriter, Brown Bannister, and wife of Drew Holcombe pens in her brand new title song:
“We bury dreams laid them deep into the earth”
Behind our sad, hard goodbyes.
At the grave but everything reminds us
God knows we ache
When he asks us to go on
How do we go on?
We will sing to our souls, we won’t bury our hope, where he leads us to go there is a Red Sea Road”.
Like Moses, our clients were and are asked to go down a Red Sea Road many times in life where we feel trapped by the rushing waves of water on one side and fear of the enemy on the other.
It won’t be long before “take me out to the ballgame” is sung in Cobb County at a brand new Sun Trust Ball Park down the road. It always baffled me why we sing that song when we are already there. The same thing can be said for semi-retirees who choose to take Social Security while continuing to work part-time. As we make more to but more peanuts, cracker jacks, and Braves tickets to usher in the new park, don’t forget Uncle Sam wants to settle a score and implore you to pay taxes that can take as much as half of your gross wages. In most cases, money is not everything but it does encourage relatives to stay in touch. In this case, you should consult with a Master Plan Retirement Social Security Specialist, before talking to Uncle Sam.
I first became familiar with Actor Tom Selleck in one of his early movies “Quigley Down Under” which was and still is ideal, clean family entertainment. Selleck today is a true ‘Blue Blood” police captain representing the Big Apples finest on a top television show and the official pitchman for the top reverse mortgage company in America-American Advisory Group(AAG). Reverse mortgages are not for everyone but continue to grow since their inception in 1961 for one reason: America’s retirement system is broken and needs fixing.
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