Monday, June 29, 2015

We Can Expect to Live Longer, But Our Money Must Last Longer, Too!

We can expect to live longer, but our money must last longer, too!

Good news! You more likely than not can expect to live a much longer lifespan than in previous
generations. That's the conclusion from the latest mortality tables released last October by the Retirement Plans Experience Committee of the Society of Actuaries. According to the updated tables, a 65-year-old male alive today has a life expectancy of 86.6 years, two years longer when compared to the 2000 mortality tables. It gets even better if you are female because a 65-year-old female today has a life expectancy of 88.8 years, an improvement of 4.2 years over the 2000 tables.

So we can expect to be around much longer, enjoying our golden years and spending time with our loved ones. On the other hand, that also means that now, more than ever, the need to make sure you have enough savings to last through your lifetime is crucial. How fun will it be when you have to face the ordeal of outliving your savings?

Just how much will you potentially need throughout your retirement years? Well, the answer to this question depends on each individual’s particular set of circumstances and could be best answered by a competent retirement adviser. But let me give you some generic insight.

Let's say you are the typical 65-year-old male and you live through age 86.6, as suggested by the latest mortality tables, and you require just $2,000 a month ($24,000 a year) to supplement your retirement income. Without accounting for any adjustment for cost of living increases, that comes to approximately $528,000. For the typical female spending 24 years in retirement, that amount will be $576,000. What if you needed $2,500 a month instead? You’d be looking at approximately $660,000 and $720,000 for the typical male and female respectively.


It is important to point out that these numbers are just averages. So in all likelihood, some folks will fall below them, but others will exceed them. My wish and prayer is for you to exceed them and live a long, healthy life. But keep in mind that it is up to you to make sure that you take the necessary steps to be ready financially. Hopefully I have given you the motivation to act and make sure that you are headed in the right direction.
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Want an independent assessment to confirm that you are on the right track when it comes to saving for your retirement, including the money you will leave to your heirs? Come in so we can help you to  objectively evaluate your current approach. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session

Monday, June 8, 2015

You Could Eliminate Taxes from Your Social Security Benefit Checks by Shuffling Your Other Income

You Could Eliminate Taxes from Your Social Security Benefit Checks by Shuffling Your Other Income

Yes, it’s possible to collect every last penny of your Social Security retirement checks, completely tax free. But that depends on “where” your other income is coming from.

As the principal of a retirement planning practice, I can confidently tell you – without the need to reference any formal study – that one of the major issues on the list of every single retiree who consults with us is finding ways to reduce the enormous tax bill they face, year after year.

You obviously understand why this is such a huge thing. Who wouldn’t want to keep as much of his or her money as possible, especially in retirement? Personally, I think there’s a much bigger issue at stake, because the overwhelming majority of the folks I’m referring to here don’t consider themselves to be in a higher income bracket, by any measure. So why in the world will paying too much taxes even become an issue? Let me answer it this way: it is one of those “mysteries” that most folks have to literally experience to believe.

The unfortunate truth here is that more and more unsuspecting folks are meeting a nasty surprise as they enter their retirement years. Many Americans seem to be under the mistaken impression that just because they expect to have less income in retirement, their tax bill will shrink, too. It would certainly be great if that were, in fact, the case. But it’s not, at least based on what I see happening in real life, to real people, every day.

One huge blind spot, for lack of a better word, surrounds the way Social Security retirement checks are taxed: in general, if one-half (50 percent) of your Social Security benefits, plus your other countable (note the keyword countable) sources of income amount to more than $25,000 (if you’re single) or $32,000 (if you file jointly with your spouse), up to 85 percent of your Social Security benefit checks may be subject to taxes, on top of and in addition to your other taxable income.

I certainly haven’t met everyone out there, but I’m fairly confident that single folks with the $25,000 base threshold or couples with the $32,000 base threshold wouldn’t consider themselves candidates for paying taxes on their Social Security retirement checks – until they literally experience it.

Here’s some great news! The IRS formula that is used to determine the taxable portion of Social Security benefits does not count income from certain specifically designated sources/accounts. So, in simpler terms, there’s the possibility that by simply reshuffling “where” or “from which account” your non-Social Security income is coming, you may be able to completely skip the tax on your Social Security benefit checks.

Really? Yes, really!

Our latest special report, Skip the Tax, breaks down the rules and also provides suggestions about how you can position yourself to reduce to the bare minimum – or wipe out altogether – any tax from your Social Security checks. You are welcome to grab your complimentary copy HERE.
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If you'd like to learn more about how to reduce your tax bill in retirement, visit LaserFG.com or call 877.656.9111 right now to book your complimentary session with a seasoned financial professional with a proven track record who can help you create the financial future you desire.

Tuesday, May 26, 2015

How to Keep Your Emotions from Interfering with Your Investment Decisions

How to keep your emotions from interfering with your investment decisions 

A lot has been said about the need to keep emotions out of your investment portfolio simply because, as we all know, emotion-based decisions almost always breaks all the rules of sound judgement. This, in turn, leads to poor choices/actions and ultimately disastrous results.

 I believe there is a lot of truth to that hypothesis and have, in fact, witnessed this first hand over the course of my almost two-decade career working with hundreds of folks: whenever emotions lead the way, bad choices usually follow.

What makes things even worse for us in todays technologically advanced age is that we have access to all sorts of information and can always find some article, TV show, blog post, or radio guru that supports our emotional leanings.

So how do we bridge the gap as investors? How can we avoid making investment decisions based solely on emotions?

Here’s the thing. I don't think it is humanly possible to keep one’s emotions entirely out of our investment decisions. We are always going to be human. I mean you turn on the TV or hear on the radio that a certain stock is raising the roof, and that is just the beginning. Your next move is likely to get your advisor on the phone to demand that you get in on that “hot action.”

But there’s a rather simple approach to getting around this issue. You must work with an experienced advisor who knows what he or she is doing to devise an investment strategy you can live with based on your specific individual objectives. This is crucial, because it is where you set the rules of engagement, so to speak. Prior to investing even a single penny, you should sit with your advisor for an objective, neutral assessment of your investment strategy. Ask as many questions as you need to so that you understand all the likely possibilities, as well as defining the variables that may cause things to change.

Going forward, it will be your advisor’s job to hold you to that operating strategy when your emotions come calling. Absent of such clearly defined “rules of engagement,” a news segment about today’s hottest stocks may mean it’s open season on your investments, making them subject to your emotions and vulnerable to some less-than-optimal decision-making.
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If you'd like to avoid falling into the trap of investing by emotion, visit LaserFG.com or call 877.656.9111 right now to book your complimentary session with a seasoned financial professional with a proven track record who can help you create the Rules of Engagement to see you through to the financial future you desire.

Monday, May 11, 2015

Is It Time to Swap Your Financial Advisor for a Financial Coach?

Is it time to swap your financial advisor for a financial coach?

Obviously when it comes to financial planning – and retirement investing, in particular – no one sets out to fail. We all want the same outcome: to be successful by making as much money as is humanly possible so that we can live the golden years of our dreams. So how is it, then, that only a tiny minority make it to this promised land in reality? The vast majority fail miserably, missing the mark by terribly wide margins.

Of course, one could cite a myriad of explanations and causes for this unfortunate situation. Personally, I believe the reasons most often cited are just symptoms of one main underlying cause. So let’s dig deeper and get to the actual root cause.

Most so-called financial advisors allow their clients to dictate how their portfolios should be allocated, down to the minutest details. On top of that, clients may call any time to mandate changes to their underlying asset mix, and most advisors willingly comply. I understand how, as an investor, this may appear as giving you control over your hard-earned money, but that’s not what this is about at all. If your advisor is letting you dictate all the details, you are on a very slippery slope.

Here’s why. As an investor, in 9.9 out of 10 instances, you’re bound to react based on something you hear or see in the media or read in a magazine or on a website – and this tendency is more rampant in today’s information age than ever before. You get excited and want to make changes to your portfolio that you perceive to be advantageous. While this is an understandable natural tendency, when it comes your investment portfolio, it is precisely the wrong move and the surest way to destroy your wealth.

This past week, one of our clients reminded me of an interesting encounter we had some years back. He wanted to change his portfolio allocations to include something that was being discussed everywhere in the media at the time as THE thing to do to hit the investment jackpot. In my professional opinion, it was a bad move so I refused to do it. Of course, he was free to move his portfolio elsewhere, and I’m pretty sure it would have been easy enough for him to find an advisor who’d do whatever he wanted. Long story short, seven years later, he thanked me for taking a strong stand to protect his investments. In hindsight, the move he wanted me to make would have been a very expensive mistake with devastating consequences to his retirement income.  

Situations like these are the reason you need what I term a financial coach instead of an advisor who will just go along and let you do whatever you perceive to be the right thing, even if it breaks the rules of prudent investing. What, exactly, is the role your financial advisor is playing? Helping you to make prudent decisions and preventing potentially destructive behavior? Or just making you happy by doing whatever you perceive to be the right move?
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If you're ready to swap your financial advisor for a seasoned coach with a proven track record who will give you guidance to help  you achieve a secure financial future, visit LaserFG.com or call 877.656.9111 right now to book your complimentary session.

Monday, April 27, 2015

A noteworthy tax lesson: Less Earnings, More Taxes – what NOW??

A noteworthy tax lesson: Less Earnings, More Taxes – what NOW??

April 15, the dreaded day of reckoning for millions of American taxpayers, has come and gone. For Ms. J.R., this year being the third year into her retirement, it was particularly brutal, as her tax bill skyrocketed far beyond anything she could have imagined. What was particularly mind boggling to her was the fact that she’s not making nearly as much income in retirement compared to her working years, and yet her tax bill “keeps going up.” 

To paraphrase her two-minute-plus passionate voice message, “I need to come in and see you right away to look over my stuff because something is not right somewhere.” Her cousin, D.W., who has been our firm’s client for more than six years, suggested she contact me and followed up with a call of her own to stress the urgency of J.R.’s situation.

And, in many ways, I do understand where they are coming from. After all, how many of us wouldn’t think something was terribly wrong when someone who makes more than $32,000 more in income per year than you do, with pretty much the same tax profile in terms of exemptions/deductions, has a lower tax bill than you do? No, that wouldn’t be cool, would it?

I personally returned Ms. J.R.’s call the same afternoon, and we set an appointment for the following morning. Lo and behold, her income is significantly lower than her beloved cousin (by more than $32,000), yet to her surprise and greatest disappointment, I couldn't find anything wrong on her tax return. Of course, she didn’t like that news one bit.

Here’s the simple explanation and the point I hope to drive home for millions of American taxpayers: Although Ms. J.R.’s cousin made significantly more than her, and they both have pretty much the same situation in terms of tax deductions/exemptions, Ms. J.R.’s “taxable” income was much higher than her cousin’s. In other words, although D.W. brought in way more money, most of her income is considered “nontaxable.”

As I explain in great detail in 5 Mistakes Your Financial Advisor Is Making and also in Is Your 401(k) a Trap?, under our tax code, we pay tax only on taxable income. So instead of simply thinking and assuming that because your income might be lower when you retire you’ll automatically have to pay much less in the form of taxes, you’d be wise to work with a financial advisor who knows what he/she is doing to make sure that you are effectively shifting your income from the “taxable” column into the “nontaxable” column of your tax return. This is exactly what we helped D.W. accomplish successfully over the past six or so years.

Of course, Ms. J.R. now wants a plan of her own that will help her turn things around for the better. Who wouldn’t like to keep more of their hard-earned money? The great news is that we can help Ms. J.R. make that essential shift.
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If your tax burden is much higher than you think it should be, based on your new income in retirement, contact us so that we can help you to evaluate your current situation and see if you may be able to turn things around. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session.

Monday, April 13, 2015

Saving Money Is NOT the Most Crucial Thing to a Financially Successful Retirement

Saving Money Is NOT the Most Crucial Thing to a Financially Successful Retirement

Dont get me wrong at all. Working hard and saving as much money as you can toward your
retirement is not an inconsequential step in ensuring that youll have a financially comfortable life during your golden years - so by all means, go ahead and sock away as much as you possibly can. And then some more!

However, the fact that a lot of well-meaning retirement investors seem to be missing, in my opinion, is that you must first make sure that your particular investment vehicle of choice isnt going to bleed your money away.

Of course, who would set out to do that? Invest your hard-earned retirement money in an account that wouldnt bring you the best possible outcome? That is precisely the reason you must separate the act of saving money from the efficacy of the particular savings vehicle you choose to use for the purpose of growing your contributions.

View your investment account as a container into which youre storing your nest egg. Before you even begin making contributions into itas well as on an ongoing basis once you do start contributingensure that it doesnt have any big holes which may come in many forms, including things like unreasonably expensive/unwarranted commissions and fees or inefficient underlying investments.

So heres the point Im trying to drive home: You should by all means save money, and do so diligently. But before you write those investment checks, make sure that the containerinto which they are to be stored is intact in mint condition.
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Want real, fact-based information that will give you the financial serenity you're seeking? Contact us so that we can help you to evaluate your current situation and make a plan that you can live with. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session.

Monday, March 30, 2015

Is Your Actively Managed Mutual Fund Performing Up to Par?

Is Your Actively Managed Mutual Fund Performing Up to Par?
When it comes to the stock market, the past six years or so have been pretty great. But according to a study commissioned by S&P Dow Jones Indices, if you own an actively managed U.S. equity-based mutual fund, more likely than not your portfolio hasn’t seen any measurable growth - or at least nowhere near what the stock market has actually returned.

I believe the study’s findings give investors who own actively managed mutual funds something serious to consider because, generally speaking, the whole idea – and for that matter, the purpose and selling proposition – for owning an actively managed fund (as opposed to their passive/index counterparts) is to get returns that are superior to what the market generates. Not to mention that you generally end up paying a bit more in management fees to own an active fund.

One cannot and should not lump all actively managed mutual funds together in such a generic manner. So I’m not suggesting that you shouldn’t get yourself one, or as many of them as you’d like if that is, in fact, what you believe will lead to your financial promised land. However, it is worth noting that to date there hasn’t been any definitive proof to the contrary that actively managed mutual funds generate superior returns, compared to index funds.

As an investor, you’ll want to make sure that if you’re going to pay a fund manager “extra money” to help you “beat” the market and get you far superior returns, that you do, indeed, end up getting your extra money’s worth. The findings of this study seem to be adding to the considerable body of evidence in favor of owning low-cost index mutual funds.
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Want real, fact-based information that will give you the financial serenity you're seeking? Contact us so that we can help you to evaluate your current situation and make a plan that you can live with. Visit LaserFG.com or call 877.656.9111 right now to book your complimentary session.