Oops! Saving Is NOT the Key to Your Comfortable Retirement

Oops! Saving Is NOT the Key to Your Comfortable Retirement

Of course, it is important to save money. No question about that. Even a caveman knows that!

So I can understand if that subject line has you scratching your head a little bit. Maybe you are even thinking I’m a little nuts. But it is an accurate statement – and one you need to take serious note of and, most importantly, incorporate into your retirement preparations if you want to ensure that your years of hard work and saving will not end up in disappointment.

To be fair, though, it is not entirely your responsibility. That belongs more to your financial advisor/retirement consultant. However, the sad truth is that the overwhelming majority of financial advisors – somewhere in the neighborhood of 9 out of 10 – completely ignore this critical piece in their practice, leaving you to face the undesirable consequences.

Here’s what I’m saying: Saving for retirement, though it may be a routine exercise, cannot be an end in itself. The other equally if not more important leg of that stool is how you are actually going to turn that pot of money into income for the rest of your life. If your retirement plan only involves saving money, you may be setting yourself up for a rather nasty surprise.

I must admit, income planning is not easy. It requires a lot of heavy lifting, so to speak. Today it involves answering many tough, probing questions; making certain assumptions about the future; understanding how tax laws will impact you; incorporating social security strategies; considering health care and pensions; and a host of other things that will impact your income from day one of retirement through your very last day – and even beyond, if you have a spouse and/or dependents.

In fact, I tend to believe that the amount of detail initially involved as, well as the need for regular fine-tuning along the way, has something to do with why only a handful of retirement advisors specialize in income planning. But the thing is, it’s your retirement that’s at stake here. And you have only one shot at it. So of all things, shouldn’t you get your retirement income right from the beginning?

Many of my colleagues are probably not going to like me saying this, but if your so-called financial advisor is not actually incorporating how you will turn your pot of money into retirement income, it’s time you looked elsewhere because that’s not true and holistic retirement planning. You are saving money for your retirement, so make sure that you will have that retirement!

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Want to learn how you can KEEP more of your retirement money, even if the market crashes? Call 877.656.9111 or visit LaserFG.com to talk with an experienced retirement professional with a proven track record TODAY!

10 Things You Should Know About the New ‘myRA’ Retirement Account

10 things you should know about the new ‘myRA’ retirement account

During his State of the Union address last Tuesday, President Obama announced plans for the creation of a new type of retirement account, myRA, aimed at helping low-to-middle-income workers start saving toward retirement. On Wednesday, the President followed up by signing a memo directing the Department of Treasury to formally create the new account.

While it is still too early at this point to know all of the details and caveats about how myRA will turn out, here’s what I have gathered so far:

1.      Your employer will have to sign up in order for you to be able to contribute.

2.      To be eligible for a myRA, your yearly household income must be less than $191,000.

3.      You may open an account even if you already have a 401(k), granted that you meet the other thresholds, of course.

4.      You can only contribute through direct payroll deductions, but all your contributions must be in after-tax dollars. You can start with as little as $25 and continue with as little as $5 per paycheck. No investment fees will be deducted from your account.

5.      You can contribute to the same myRA from multiple jobs. So if you have more than one job, you can direct contributions from all your jobs into the same myRA account.

6.      myRA is a direct cousin of the Roth IRA, in the sense that the most you can contribute in any single year is currently $5,500.

7.      Once your account’s value reaches $15,000, you must roll it over to a regular Roth IRA. Regardless of how much you have in your myRA, you must roll it over to a regular IRA after 30 years, meaning the longest time you can keep your myRA account is 30 years. However, you can convert your myRA to a regular Roth IRA anytime you like.

8.      There is only one investment option. All your money will be invested in the Government Securities Investment Fund (G Fund), which is one of the account options currently offered to federal employees through their Thrift Savings Plan. Basically, your money will be invested in government bonds, so you shouldn’t expect to make a ton of money quickly, if ever. In 2012, the G Fund returned about 1.5 percent, but inflation was 1.8 percent. To be fair, the account is being marketed as a starter account, with the idea that folks will eventually move over to traditional investments. Not to mention that you’d probably end up a broke retiree if you kept your money in a myRA for 30 years.

9.      Your principal will be guaranteed and backed by the U.S. government.

10.  You can withdraw your original contributions at any time without any tax or penalty. Once you retire (after age 59½), all of your money – including your gains – will be completely tax-free. However, if you withdraw your gains before you reach age 59½, you will be taxed, in addition to incurring a 10 percent penalty.

I think this program may be a positive first step, provided that the government can actually get employers to get on board. I find it somewhat ironic, though, that the authorities are using the fact that employers will not be burdened with administrative paperwork to incentivize and recruit businesses to sign up. Perhaps all that needs to happen is to cut the burdensome administrative processes surrounding current work-related retirement plans?

Then the folks must also find the means, willingness, and discipline to sign up and, most importantly, treat myRA as a long-term account. There seem to be mixed messages here, because on the one hand, officials are trying to help alleviate the shortage of retirement savings in America. Yet in the same breath, they are positioning myRA as a convenient savings account you can dip into at will. 

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Want to learn how you can KEEP more of your retirement money, even if the market crashes? Call 877.656.9111 or visit LaserFG.com to talk with an experienced retirement professional with a proven track record TODAY!

Did You Lose Money in Last Week's Market Drop? You Didn't Have To! Here's Why

Did you lose money in last week's market drop? You didn't have to! Here's why

Last week wasn’t a good one for the stock market, to say the least, with the DOW dipping more than 300 points on Friday alone. But is that really a big deal? I mean, what else should anyone expect the stock market to be doing? Keep going up all the time?

Of course, I understand what it means: some folks are losing hard-earned money that is earmarked for their retirement. But let’s look at reality here. When your money is invested directly in the stock market, is what happened on Friday out of the ordinary?

If you are calling your advisor looking for the exit because you think the market is in some kind of a freefall, I can understand. But the fact of the matter is that you’ve had the wrong investment strategy all along.

It’s rather unfortunate, but many unsuspecting folks have fallen victim to having an unrealistic and completely bogus expectation of how the stock market works. The only expectation you can count on when it comes to the market is that it will either go up or down. So, on the one hand, things could turn out really well and you could make a boatload of money; but there is also the opposite possibility that your investments won’t be very successful, to the point that you could end up losing everything. That’s hard to swallow, but again we are talking reality and the true range of possibilities here.

If you are unwilling to live within those extreme possibilities, perhaps you should consider investing in a way that will enable you to make money up to a certain cap when the market goes up, but will protect you from losing anything when weeks like last week happen – which is entirely likely at some point during your investing life.

Personally, I think we might have a little less drama and people could go about their daily lives more smoothly if so-called financial advisors and media money experts gave folks the straight facts and enabled them to consider the full range of investment possibilities. 

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Want to learn how you can KEEP more of your retirement money, even if the market crashes again? Call 877.656.9111 or visit LaserFG.com to talk with an experienced retirement professional with a proven track record TODAY!

Do You Have a Realistic Retirement Plan?

Do You Have a Realistic Retirement Plan?

The unfortunate reality in America today is that after years of hard work and investing, a staggering number of retirees continue to face the ugly ordeal of outliving their savings. In fact, studies tell us that the number one fear of Americans, above everything else – even including a terrorist attack – is running out of retirement income. 

What I find even more alarming is that most pundits seem to blame this predicament squarely on the average investor – for, apparently, not saving nearly enough or failing to diversify properly. While that may be true in some instances, based on my eye-witness observations into thousands of retirement plans over the course of my career, I tend to believe the overarching reason preventing millions of folks from enjoying the financially stress-free retirements they envisioned is unrealistic and flawed financial advice. One might expect that, as is usually the case in college and professional sports, as well as almost every other enterprise, the coach (or financial counselor, in this case) would face some intense scrutiny and be held accountable for what is clearly a dismal outcome.

Here’s the bottom line: Is it realistic to leave the money earmarked for your certain-to-arrive retirement at the whim of a stock market whose exact next moves no financial expert on the planet can predict? Of course, we always hope for the best outcome. But will hope ever change the fundamental truth about how the markets work?

For the record, I’m not suggesting that you avoid the stock market. I am, however, suggesting that you have a realistic expectation of how things might turn out and resist the temptation to invest your retirement nest egg as though it were an optional luxury – unless, of course, it really is.

Did you know there is a proven investing strategy that will allow you to make gains up to a certain cap when the markets go up, with the ability to lock in your gains each year so that your retirement won’t be in jeopardy, should the market dip? Additionally, you can guarantee a specific lifetime income for you (and your spouse), regardless of what the stock market does and irrespective of how long you both end up living. What is particularly interesting here is that you may plan in such a way that if the markets outperform your guarantees, you can still benefit from the uptick, but if things don’t turn out so well, you can rest assured of a certain guaranteed lifetime income.

I can only speculate, but might the millions whose retirement lives stand devastated or those who are losing sleep over the possibility of outliving their savings have appreciated knowing about some of these options? While many so-called financial advisors are, quite frankly, in denial and will only tell their clients about the specific products offered by their firms, in the end you must do what you think is best and realistic for you.

Even if you are already retired, an objective and independent Laser Financial Group professional can review your existing plan and offer you suggestions to help ensure your secure retirement. Simply call 877.656.9111 or visit LaserFG.com to schedule your complimentary session today!

Want to Assure Savings Success in 2014? Put it on Paper!

Want to assure savings success in 2014? Put it on paper!

Happy New Year! My entire team and I wish you and your family all the best this year. I’m guessing that you probably have a few things you’d like to accomplish this year (a.k.a. resolutions). That’s good! But don’t forget what we already know about resolutions – most of them evaporate without a trace within a couple months, if not weeks.

Obviously, that’s a broad statement and probably does not apply to everyone. So let me narrow it down to my area of specialization. Here are some steps my team has used over the years to help countless folks overcome the ever-challenging task of really following through with their resolution to start saving money – toward retirement, down payment on a home, their children’s college tuition, emergency money, or any other purpose.   

Determine your discretionary surplus – on paper!

Yeah, I know! Like most folks, you probably don’t have anything left over at the end of the month, right? In the more than a decade that we’ve been coaching folks through this exercise, the thing I always find completely mind blowing is that nine of 10 people didn’t think they could afford to save anything. But in the end, they surprised themselves. Notice, though, that my point specifically says “on paper” – not just in your mind. I’m not doubting or challenging you. All I’m suggesting is to let the paper do the talking. As they say, numbers don’t lie.

What this exercise requires is writing down what you spend your money on with as much detail as possible. Ideally, I’d suggest that you work with a financial advisor who has experience in expense/cash-flow management, so they can help you capture everything. Like I mentioned earlier, in almost every case I have personally overseen, we ended up with a surplus on paper, even though these folks didn’t believe they had that much discretionary spending or could save anything.

So what causes the gap between our beliefs and the reality we can see when we write it down? Obviously there may be many causes, but here’s what I have observed in my practice. We are all impulse spenders at some level. Some folks flat-out spend on unnecessary stuff. But for the most part, the trickier issue has to do with the fact that you are probably spending way too much money on stuff you consider to be legitimate.  By penning your spending, you will get a true bird’s eye view, and the rest of the exercise will take its natural course.

At our firm, we simply review these numbers with the client, speaking each line item out loud. What happens as we go down the list is that the client reviews their own spending and makes whichever adjustments they deem necessary. On hearing the expenses read out loud, if they thought they were spending too much in a given area, they reduced it to what they believed to be reasonable.  Try this exercise. I can tell, you without a doubt, you’ll be pleasantly surprised by what you find.

Commit to saving: “Automatic bank draft, please!”

Let me put it this way: the reason most folks aren’t saving what they could save isn’t because they don’t want to or don’t understand the importance of saving. It’s because they don’t have anything left at the end of the day to save. So here’s the catch! As soon as that money hits your account, it needs to go into savings – automatically – because waiting to see that surplus appear at the end of the mouth might never happen. Remember, the genesis of the problem for most of us is impulse/overspending, although we sometimes find this difficult to admit.

Another interesting observation is that most folks, once they start saving – via bank draft – are pleasantly surprised by the fact that their standards of living don’t take any hits. And if it weren’t for the debits on their bank statements, they wouldn’t even notice that they are saving.

Make yourself accountable

You need to be accountable to someone. Well, technically speaking, it’s your life and money, so you don’t have to. But I’m going to suggest that if you really want to make this resolution a reality, you call a financial advisor who has the right kind of experience in this area and is willing to take the time to work with you.  I’d be glad to refer you to the professionals on my team. Simply call 877.656.9111 or visit LaserFG.com to set up your complimentary consultation today.

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Want to learn how you can KEEP more of your retirement money, even if the market crashes again? Call 877.656.9111 or visit LaserFG.com to talk with an experienced retirement professional with a proven track record TODAY!

Could Lightning Strike the Stock Market Twice?

Could lightning strike the stock market twice? 

Here’s a rather simple question for you to answer about your retirement portfolio: What happens in the worst-case scenario that the stock market takes a rather huge plunge, like it did in September 2008?

Of course, like many in the financial planning community/press would have you believe, that’s highly unlikely, right? But how unlikely is it?

In my defense, I did describe it as the worst-case scenario. More likely than not, that’s not going to happen again, but isn’t such a suggestion pure speculation on my part? The thing is, simply hoping – or even strongly believing, as many financial experts apparently do – that the stock market will only move in a certain direction isn’t a sensible retirement strategy. In fact, I’d be willing to bet that prior to the 2008 market crash, many of those whose retirement dreams were completely dismantled or seriously damaged didn’t think anything of such a magnitude could happen, especially to their hard-earned nest eggs.

Five years have passed since the infamous crash, and while many in the financial planning community seem to have forgotten or moved beyond what happened, I personally think that any retirement investor who doesn’t take a hard look at their portfolio, and simply goes with conventional wisdom flow, is making a rather unfortunate mistake. 

Please don’t take this as a caution about not investing in the stock market, because that’s not my point here. Not to mention that I couldn’t make such a recommendation without having had any consultations with you. What I’m hoping to do here is encourage you to thoroughly understand both the best and worst possible outcomes for whichever strategy you are using. And, most important of all, make sure that your assumptions and those of your financial advisor or the media money guru you’re following belong in the real world and not fantasyland.

Perhaps you have heard that the market has fully recovered and the outlook is great. But that still begs my very simple question: What might happen to your retirement livelihood if the market were to tank? Could it happen again? Since the nature of the stock market is to go up AND down, of course it could. It might be a while till we see such a severe crash again, but if lightning can strike the same spot twice, another big market crash is always possible.

By the way, ask any of those retirees (or those who were nearing retirement) whose portfolios took a beating after the 2008 crash if they have recovered – as in, earned back all of the seed money + interest that they lost – and let me know you can find anyone who has.

Here's the bottom line. Ask the hard questions before it's too late, because the price could be unbearable. Remember, it's your money and your retirement that are at stake here.

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Want to learn how you can KEEP more of your retirement money, even if the market crashes again? Call 877.656.9111 or visit LaserFG.com to talk with an experienced retirement professional with a proven track record TODAY!

Pulling Back the Curtain on the Real Reason for Unsuccessful Retirements

Pulling back the curtain on the real reason for unsuccessful retirements

It’s no secret that the vast majority of Americans arrive at retirement significantly short of their intended financial dreams. In fact, the number one fear among Americans, above everything else, is the fear of running out of money in retirement. The most recent Retirement Confidence Survey numbers, published by the Employee Benefit Research Institute, put the percentage of retirees who are confident about having enough money to live comfortably in retirement at around 18 percent. 

That’s extremely alarming, to say the least! But here’s what I find even more sickening. Pundits are quick to run down the list of factors responsible for this unfortunate situation and every one of those reasons has to do with something that the American investor did wrong: 

• They didn’t save enough money.
• They chose the wrong funds to invest in.
• They didn’t diversify properly. 

Of course, these may well be part of the problem, but why isn’t anyone questioning the financial advice/guidance that these Americans receive and follow?

The fact of the matter is that if the financial advice vis-à-vis retirement strategy that you follow is flawed, simply saving a whole lot of money will not magically help you retire successfully. And I’m willing to bet that most of these folks followed some kind of financial advice – strangely enough, along the exact same lines that some of these so-called money gurus are espousing.

So why don’t we take a step back and dig deeper into the real underlying issues that are driving more than 80 percent of folks to spend their retirement in financial nervousness? Are we ignoring this obvious question because we don’t really want to know the answer? Are we afraid we might discover that impractical, unhelpful, and/or unrealistic financial advice is ruining more retirements than any other thing?

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Want to learn how you can KEEP more of your retirement money? Call 877.656.9111 or visit LaserFG.com to talk with an experienced retirement professional with a proven track record TODAY!