Monday, February 27, 2012

Should You Join Just Because Your Employer Matches Your 401(k)?

Should you join just because your employer matches your 401(k)?

There seems to be an agreement in the financial planning community that the only litmus test for determining whether or not you should join your employer’s 401(k) plan depends on whether or not your employer matches your contributions. If they do, then you must jump on board to claim the free money.
Obviously, I like the idea of free money, too. But I don’t think it should be the litmus test for signing up for a 401(k). From the way I look at things, judging the validity of a plan for something as vital as retirement solely on an employer’s matching dollars is a horrible mistake.

For one thing, what if that matching stops? Does this great plan all of a sudden become bad? Or, what if the choice of available fund options within that employer-matched plan is lousy? Should you still go for it because of the matching? What if such a plan has completely outrageous fees that might end up hurting you more than helping you? Should you hop aboard anyway?

Sometimes I really wonder what ever happened to good old common sense, because we desperately need some today! The thing is, an “employer’s matching contribution” may simply beg the real question, which happens to be: Is this the plan that will give me the retirement I’m looking forward to?

I happen to believe there are many much more critical variables than matching contributions that must come into play when making such a vital decision, because retirement is not as simple as jut saving money. And all plans are not the same, are they?

Of course, we will always have to make a few assumptions. However, in order to give yourself the best shot at a truly comfortable retirement, you must make sure that your assumptions are not dubious or unrealistic.

Just something else to think about...
Contact a financial professional at Laser Financial Group to schedule your complimentary session. Investigate whether your employer's matching fund is the best choice for you, or whether something else might work better! or 301.949.4449.

Monday, February 20, 2012

Answer This Question and You're SET for Retirement!

Answer This Question and You’re SET for Retirement!

A few years back, when Amy – my now 12-year-old daughter (who’d rather have me tell you that she’s almost 13) – was 7 or 8 years old, we were driving somewhere, and as you may expect for a girl of the age, she was chatting me up.

Although I don’t remember exactly where we were headed, I vividly remember where we were and the question she asked me out of nowhere: “Daddy, what’s retirement?” Apparently, someone was eavesdropping on some of my audio works or taking a peak at my gazillion books and newspaper/magazine columns on this subject.

One part of my brain wondered, “Where did that question come from?” while the other part was, of course, trying to figure out an answer she’d understand, because I wasn’t ready to lose my daddy-knows-everything status just yet. Little did I know that I’d come up with one of the best answers to a question that, quite frankly, I haven’t really thought about – even though I had been helping clients to get there successfully for many years. My answer? “Retirement is when you stop working.”

“Cool,” she replied, and then followed up with this: “Daddy, then just do retirement so that you don’t have to work anymore!” That’s pretty cute, right? Now let me ask YOU just one question:

Your retirement is certain to arrive
one day (if it’s not already here)
and will last for as long as you do,
so is your source of retirement income
equally as CERTAIN?

Most Americans make the terrible mistake of thinking that just because they are saving money or that they have some money saved that it will be there when the time comes. The fact is that some investment vehicles have those guarantees, but many don’t.

If you were to ask me to help you prepare for retirement, I wouldn’t want to take the gamble that you might retire very wealthy IF everything turned out as planned. Meanwhile, you could end up completely broke, should the stock market plummet just before you were about to retire. You could even wind up in dire circumstances if the market took a dive many years before your retirement and you were not able to “recover”.

You see, I prefer to be realistic and guarantee you, my client, that your money will be there to provide you the income you need for as long as your retirement lasts, regardless of whether the stock market is up or down – rather than bet the certainty of your retirement on hope or the probability that you’ll be okay. As fate would have it, the clock never misses a beat, so your retirement is guaranteed to be arrive, come what may.

Of course it’s your money and your retirement, so you should choose to invest it whichever way you’d prefer. I just wanted to give you some practical food for thought.

Contact a financial professional at Laser Financial Group TODAY to schedule your complimentary session where you can learn how to protect and guarantee your retirement income for as long as you live, regardless of what the stock market does. 877.656.9111 or

Monday, February 6, 2012

BEWARE! Your Tax Preparer May Be Sending You to Tax Hell…

BEWARE! Your Tax Preparer May Be Sending You to Tax Hell…

As tax season gets into full gear, I hear a lot of tax preparers, in attempt to “save” their clients on the amount of taxes they’d otherwise pay, advise them to make contributions into tax-qualified IRAs. But will that move really “save” you any money on taxes at the end of the day?

By funding a deductible IRA, you would pay less in taxes today – but according to current tax law, you are only postponing paying those taxes until a later date, more than likely when you are retired. As many so-called tax experts and financial gurus will explain, you’ll be outsmarting the IRS because by retirement, you’ll presumably need much less income (because you’ll have paid off the mortgage on your house and your children will be grown and out of the nest). So by implication, your taxes will be much, much lower. Seriously?
That Thinking Is Nonsense and Very Short-Sighted
I don’t know about you, but I’m looking forward to a much better retirement after all those years of hard work – and I just don’t quite see how I can do that on a significantly lower income than today. Besides I wouldn’t want anyone to tell me I’m “saving” money, when in fact I am going to HAVE to pay it back – is that called savings?
I hear daily, by virtue of my consistent interactions with seniors through the educational workshops I teach and private consultations with our firm, that many of those who followed this shallow theory now find themselves in tax hell, although their income may have indeed gone down.
You see, you cannot keep postponing your taxes forever. At some point, you must voluntarily withdraw those funds from your IRA, or the IRS will force you to do so, at which time you’ll be hit with an additional 50 percent penalty tax, on top of the regular tax on the amount you should have withdrawn.
What you must understand is that by the time your retirement rolls around, you will – if your situation is like most people’s – more than likely have lost the three most important and significant tax deductions you enjoy today: (1) mortgage interest (if you paid it off), (2) dependent children exemptions (they’ve moved out and are now taking their own exemptions), and of course, (3) you’ll be making no more contributions into that IRA (you’re now withdrawing, instead).
Now let’s think about this: with those deductions gone, what do you expect will happen to your “taxable income”? It will, of course, become disproportionately higher – just ask someone who’s currently retired to confirm this. Given their so-called advice, I think many of these tax gurus are completely delusional. I’m happy to be proven wrong, so would one of those strong advocates of the traditional IRA strategy please tell me what I’m missing here?
Another thing that apparently eludes many retirees is the fact that every dollar you withdraw from your IRA directly contributes to the amount of taxes you end up paying on your Social Security checks in retirement. Talk about a double-whammy! 
Did you know there are alternatives within the tax code that allow you to contribute after-tax money and then never have to worry again about taxes on those funds? Hey, all I’m advising here is knowing exactly what you’re getting into before you sign on the dotted line, because I’d hate to be talking with you years down the road and hearing, “I should have met you some years back” as I hear quite often.
The good news is that irrespective of where you are – even if you’re already retired – there are things you can start doing TODAY to begin keeping more of your hard-earned dollars, without leaving yourself exposed so that your retirement plan comes back to bite you later on.
Contact us TODAY to schedule your complimentary, completely no-obligation consultation with a knowledgeable financial expert who can explain money-saving alternatives your current financial advisor may not be aware of. 877.656.9111 or