 IRA Trusts: If Your IRA Exceeds $100,000, it might become your most valuable asset. Can it really be protected for years after your death?.......go here to find out.
South Carolina Financial Tip Of The Month Understand the Time Value of Money… The most basic law in finance! The time value of money states that a dollar today is worth more than a dollar at some time in the future. Okay, it’s not that simple to understand at first glance so let me delve into this advice a little with some financial examples: If I invest $1,000 in a 5% savings account today, it will be worth $1,050 in one year. Therefore, if I can have $1,000 today or choose to have $1,000 one year from now, it is always better to have the money now. By saving and investing today, you make the time value of money work for you. Let’s look at the reverse of this, to see how the time value of money can work against you. Suppose instead of receiving $1,000 that you spent $1,000 by purchasing merchandise on your credit card. Remember that a dollar today is worth more than a dollar tomorrow, so in this case, you will have lost money because you will need to pay off your credit card account with money from the future (which is worth less than money today). In addition to having to pay with future money, you will also have to pay interest expense. So, in this case, if you paid off the credit card in one year (assuming 15% interest), you’d have to pay $1,150. You should think about the time value of money before making any decisions. Another, maybe even more important concept related to the time value of money is the compounding effect of money. Please keep in mind that this tip is designed to be of help for you, but is not to be relied upon as advice. It is merely a reminder that there are many choices you have available to you, and that planning is the only way to find the right answers for your situation! As with any financial issues, make sure you get the right information before making a decision! If you have any questions, we’ll be glad to help you! | |
  South Carolina Retirement
Saving & Planning
Retirement saving and planning can be a tough balancing act. There are mortgages and car payments, kid's or grandkid's school to be paid. With so many financial priorities it can be hard to plan for retirement. If you are concerned about your own retirement, you are not alone. Many people are distressed about their own retirement and saving regimens. Some people are not contributing to a 401(k), IRA, or similar plan. It is never to early to get started. Set aside some time to read our financial planning information and if you still have questions, fill out our quick contact form at the bottom of the page. South Carolina Retirement Checklist This checklist is to help you most pressing financial concerns- for now, for the future or child's future. Getting your finances together means creating a balance between competing priorities. If your children are at home, you immediate concern might be funding their education. Or you may be looking further ahead to estate planning issues. ► Changing Lifestyle- What will be the same during retirement and what should stay the same? ► Add a living will to legal documents. ► Plan a family meeting to talk to heirs about your estate plan. ► Make provisions for new grandchildren in will or other estate planning documents. ► Make a wish list for your "dream retirement". Include in this list, where to live, places to travel, what to do, etc. ► Consider estate planning benefits of using a tax-free transfer of assets to start a child's or grandchild's 529 plan. ► Plot current and future funding needs of Education, IRAs or other tax-effective savings. ► Never miss the September 30th deadline for IRA cobeneficiaries, who have until that date of the year following an IRA-owner's death to decided whether to split the inherited IRA into separate IRAs. ► Get out last year's school expenses and break them into groups, including tuition, books, etc. Then make a monthly budget, listing sources of income or savings earmarked to cover those expenses. ► Review long-term savings goals for college and graduated studies. ► Schedule an extended appointment with a Financial Planner to review your retirement blueprint. Establish a strategy for achieving these goals. ► Calculate the after-tax costs of pretax retirement contributions. Could saving rate increase? ► Does your current asset allocation match the risk-return profile needed to achieve your financial goals? ► Review your income and expenses and check whether quarterly tax payments are on track. ► Use a current projection of this year's income, outline fourth-quarter strategies to maximize deductions. | * If you find yourself moving around, you may need to find a mortgage that doesn't tie you down. If you are thinking of relocating, than an interest-only mortgage could be what you want. The formula for a interest-only mortgage: your monthly house payment goes only to pay interest on a loan, you will have substantially lower costs than you'd have with a standard mortgage. It just means that people who move around a lot, won't have to tie up funds. You may have fixed or adjustable rate, and after five to ten years it typically reverts to conventional principal-and -interest form. During the interest-only period, you might cut your monthly payments by $300 or more- and could invest the money you save, building a fund to add to the down payment on another home. This strategy provides flexibility, giving you a cash reserve you could you for other purposes. Because your entire payment goes toward interest, it's all deductible on your taxes! |
Articles  Millions of Baby Boomers Approaching Retirement At The Same Time! With Medicaid, Social Security and Medicare already running in the red, what in the world are they going to do when millions of new people start asking for their government’s financial assistance for things like Social Security, nursing home care, medical expenses, and so on?......
New Medicare Prescription Plan - A Nightmare Mostly Caused By Hidden Scoundrels… If you, or someone you love is eligible to receive Medicare, you best be ready to get confused as heck. Why? The new Prescription Plan Part D for Medicare recipients is so complicated, so confusing, so mysterious…that trying to figure out what to do is truly an experience in the Twilight Zone. A true nightmare!.... Asset "Option Plays" for Managing Retirement Risks (reprint FiftyPlus) Planning for Retirement (reprint from FiftyPlus) IT Pays To Be Wrong..... Now, we candidly admit that we don't have a crystal ball that can see into the future. But, unlike our overpaid friends in the economic community, we know the two secrets to financial stability, that can work year in, year out...regardless of the ups and downs of economic fortunes: Planning And Diversification! Yes, the one two punch of financial freedom. Planning and diversifying. Medical Doctor Needs a Financial Planner (a true story) Dr. Kelly (name has been changed) is probably one of the best known surgeons in her field. So well known, that no one would believe how messed up she was, financially speaking. Dr. Kelly's ex-husband is a highly paid executive, and because of her high income, didn't get forced to pay any alimony when they got divorced three and a half years ago. They split up their assets pretty much right down the middle (Although she originally wanted to nail him when she found out about his lack of faithfulness, she later realized that revenge is an ugly emotion, and maintained a cooler perspective.) and went his own way......... Walter Preserves Through Trials (a true story) When Walter met with us a couple years ago to go over his plan, he said that he had hooked up with a few other retirees in his area, and they were getting into investing in pre-construction real estate. He wanted to take some of his money, and do a little “flipping” on condos. He had always been very conservative, but now with Sally gone, and finding himself with a few extra bucks, he figured “what the hell”...... Who's Watching The Nation's Cash Register? History has shown over and over that when the spending gets so out of control, there are eventual repercussions that are unavoidable. Will the effects be felt by you this year, in 2006? What about next year? What about five years, ten years, fifteen years from now? Will there be a recession? Will interest rates stay low? Will they climb? Will jobs become more plentiful or lessen?....... New Law Makes It Harder To Wipe Out Debt
People who have to file for bankruptcy have six months from passage of the new law on April 20 to file under the old bankruptcy law. After that, those with income of a certain level will be given a repayment schedule for medical, credit card, and other debts.
Opponents of the new law say it will remove a safety net for those who have lost their jobs or face huge medical bills. It could be especially hard on low-income people and single mothers.
Backers of the bill say bankruptcy is often taken by multimillionaires who have mansions in states with liberal homestead exemptions that shelter assets from creditors. It is also used by gamblers, impulsive shoppers, and those who want to avoid child support.
For Americans overall, the legislation is expected to lower interest rates. Rep. David Dreier, R-Calif., says the average consumer could save $400 a year in higher interest rates now charged to recoup losses caused by those who abuse bankruptcy laws.
The reform will make the system stronger and is expected to give more Americans, especially lower-income earners, greater access to credit. The new law creates the most significant change in bankruptcy rules in 25 years.
Please keep in mind that this tip is designed to be of help for you, but is not to be relied upon as advice. It is merely a reminder that there are many choices you have available to you, and that planning is the only way to find the right answers for your situation! As with any financial issues, make sure you get the right information before making a decision! If you have any questions, we’ll be glad to help you!
It's OK To Shop For A Car Loan Or Mortgage…Many Inquiries Won't Harm A Credit Score…
Did you hear about the guy who was denied a low-interest rate mortgage because he had looked at rates on many Internet sites and each site checked his credit? Lenders thought that so many credit checks indicated that he had financial problems. Authorities at Fair Isaac say that such multiple inquiries shouldn't be a problem today because multiple credit checks are handled differently now.
Previously, the credit-scoring model recognized that consumers shop for the best interest rates before buying a house or car. Their searching results in many lenders requesting their credit reports. To compensate for this, multiple auto or mortgage inquiries in any 14-day period were counted as one inquiry. Now, their new formula to calculate FICO scores has been expanded from 14 days to a 45-day period. That means consumers can shop around for an auto or home loan for up to 45 days without affecting their scores. (Some lenders might not yet use the new version.) The latest FICO version went online in late 2004 at all three credit agencies, TransUnion, Equifax, and Experien. Other factors in the new version * The FICO score ignores all mortgage and auto inquiries made in the 30 days before scoring. * The score doesn't count requests for your credit report or credit score that are made in order to offer you a "pre-approved" credit card offer. Factors that could negatively affect your score: * Taking several months to shop for a new mortgage or car loan. * Shopping around in the same year for several lines of credit not associated with a mortgage or car loan. * Shopping for lines of credit when a score shows they barely qualify for credit they already have.
Please keep in mind that this tip is designed to be of help for you, but is not to be relied upon as advice. It is merely a reminder that there are many choices you have available to you, and that planning is the only way to find the right answers for your situation! As with any financial issues, make sure you get the right information before making a decision! If you have any questions, we’ll be glad to help you!
| He Who Hesitates...
Warren is a very motivated type of guy. He goes out as soon as the first sign of spring arrives and begins to manicure the yard. He scans the TV guide every Sunday to circle the shows he wants to watch in the coming week. He is the kind of person that actually does change the anti-freeze each winter and rotate his tires every six thousand miles. And...well, you get the idea.
His wife, Carla is basically the same way. She makes a list of everything she has to do the next day, each night before she goes to bed. She coordinates the car pool to work, so that there are no slip-ups. She puts the pictures in albums the minute they get back from the drug store, and labels and dates each one. And...well, you get the idea.
Warren and Carla are what you might call very, very organized. They are the kind of people that make many of us feel a little, well, inadequate. You know, when you go in their house and it always looks like it was cleaned from top to bottom. Nothing ever seems to be lying around or out of place. And you think about all the games lying on your kitchen table and the kid's messy bedrooms at your own house.
Yes, they are the kind of people who appear to have life well under control. And they do, for many things. But, one situation surfaced recently that put them both into a state that they are not accustomed to at all....being totally unprepared for a major life event!
As weird as this sounds, it's true! See, Warren worked for a steel importer for over 35 years. At age 56, he was expecting to be able to retire in comfort at age 65. He loved his job as the director of engineering, which paid him very well, and took him all over the world. Carla, who was two years older than Warren, was the assistant manager at a local bank. Both of them had made the following assumptions about their retirement:
1. They would have the jobs until they reached age 65.
2. They would have about $2,000 a month in pension income plus $1,500 a month in Social Security.
3. They would have about $300,000 in retirement savings (401(k)) when they were done working.
4. They would be set for life.
After all, $3,500 a month plus $300,000 is a lot of money. Isn't it? Warren and Carla can't help but feeling that 300 grand is a lot of money. From their viewpoint, that's a ton of cash! It just sounds and feels like a big wad of money. Right?
See, they, like many of us, still live in the sixties when it comes to how they think about money. Not that they aren't very aware of how much more things cost now, as compared to forty years ago. It's actually more of a subconscious feeling about the relative worth of amounts of money. They think that a few hundred grand is a lot of money...because it was a lot of money back then! Warren and Carla are like many of us who haven't made the reality switch from the good old days, about what is, or isn't, a lot of money!
See, what happened to them is pretty scary. Warren got a month's notice that his entire division was being eliminated because of overseas costs being so much cheaper...and that he was going to have to decide which form of early retirement he would take. Then two weeks later, Carla found out that her bank had been bought out, and that her branch was being closed down. They offered her a job in the main branch, but it was for a lower position with less pay.
What a disaster. Warren and Carla, who had always been so meticulous about planning, now faced a hurdle that was very high indeed. When they came in to see us, we had to tell them they had made one of the biggest mistakes they could have made:
Planning For Their Retirement At The Time Of Retirement!
See, they had not made the connection that retirement would look anything like this. Now, with only a month to make decisions, they were floored to find out the facts. Their goal of spending about $4,000 a month to live on was nearly impossible. Based on the retirement income, and assets they had, they would only be able to live on the inflated equivalent of $2,500 a month, with their money running out at age 77!
There was no way they could realize their goals without getting new jobs, and continue to work until age 70!
And, if they wanted to quit work sooner, they would have to cut back their lifestyle dramatically!
The only other way they could make their money last throughout their expected lifetime was to increase the rate of earnings from its current 3% after tax, to 9% after tax! (Which is very difficult to imagine without taking enormous risks with their cash.)
Not a pretty picture, is it? At first, Warren was very angry with us. He couldn't understand how the money was going to run out. He didn't see why we were telling them they had to keep working. And, well, he was basically mad about everything we showed him. (Sort of chopping off the head of the messenger.)
But, after he had a chance to look at things, he realized that the math…was simply the math. He and Carla spent a couple of weeks studying the options we laid out for them, and came back in to see us. They apologized for their anger. We knew they really weren't mad at us. They were mad at themselves for being so naive, and for waiting until retirement hit them squarely on the jaw before addressing how long their money would last.  Make Sure You Bookmark This Site! You'll Always Know Where To Find Us! Just Click On The Book To The Left. |
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Answer to quiz question: A. False. You must actively enroll in one of the private insurance plans that Medicare has approved to provide it. Some companies will operate this plan nationally, some will only offer the plan regionally. You can get Medicare drug coverage in one of two ways: 1. “Standalone” plans that offer only drug coverage. 2. Medicare Advantage plans that cover both medical services and prescription drugs. This new law is VERY COMPLICATED, and you shouldn’t even THINK about making a decision without getting professional help! (Hint- An insurance company trying to sell you a policy is NOT objective advice!) |
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