Getting More Out of Retirement


The Tax Increase Prevention and Reconciliation Act of 2006 provides plenty of tax breaks for individual taxpayers and business owners alike. One of the biggest of those breaks is scheduled to happen in 2010: being able to convert traditional (both non-deductible and deductible) IRAs into Roth IRAs and pay the taxes over a two-year period. With the proper planning this can help individuals grow their wealth. They will never again pay taxes on this money.

Roth History and Background

Roth IRAs were created by the Taxpayer Relief Act of 1997. After-tax dollars are contributed, allowing individuals to receive tax-free distributions … Read the rest

Market Volatility and Your Retirement: Can Timing Alter Your Plans?


Investors saving for long-term goals can usually overlook short-term market volatility in the interest of long-term gain. But for retirees, who increasingly rely on their investments to fund their living costs, market volatility can mean the difference between living comfortably and just scraping by. In fact, retirees are particularly vulnerable to market downturns, especially in the early years of retirement, because of their dependence on portfolio income, their limited investment horizon and their need to make sure their savings last throughout their retirement.

Market Volatility — An Historic Inevitability

Unfortunately, the timing of market losses and gains is something that … Read the rest

A Trust for Every Purpose


As the year draws to a close, many people take time to reflect on their financial circumstances and to plan ahead, making provisions for their future needs and those of their loved ones. As part of your year-end planning exercise, take a moment to consider what would happen to your assets and surviving family if you were no longer able to care for them. Then consider the potential benefits of setting up a trust. Trusts are an effective means of helping protect important assets, providing for beneficiaries and managing taxes. And, contrary to popular belief, trusts are not just for … Read the rest

Keep Your Portfolio in Balance With an Annual Review


Your target asset allocation, or the mix of stocks and bonds you have chosen to pursue your investment goals, provides the foundation for your financial plan. However, even the most appropriate asset allocation may be driven off-track by a number of factors, including bouts of market volatility. Given the turbulence that has prevailed over the stock market during much of the past year, now may be an ideal time to determine whether recent market performance has affected your asset allocation’s “balance.”

A portfolio review should be an integral part of an annual financial review that examines all aspects of your … Read the rest

Reversing the Role — How to Talk to Your Parents About Money


Regardless of whether you and your parents have always talked freely about money, or you have never discussed the subject, there may be important financial issues that you need to raise with them as they — and you — grow older. The following topics can help you start thinking about and planning for that conversation.

Getting Started

When you decide the time is right to discuss financial needs and priorities with your parents, be clear about your intentions, but also let them know that you are not trying to pry and that you respect their privacy.

An initial conversation should … Read the rest

Going for Growth


Long-Term Strategies for Managing Volatility

When the stock market exhibits more than the usual short-term ups and downs, investors’ thoughts typically turn to managing risk. Although it is usually not desirable to eliminate risk, there are strategies that may help to manage the volatility of your portfolio. A diversified investment mix, a focus on large cap growth stocks, and exposure to active portfolio managers may all help you deal with greater market volatility.

The Return of Diversification

We believe that effective diversification becomes more important in an environment of rising volatility. We expect the interrelationship of stocks and bonds to … Read the rest

Eliminate Debt and Save Money?


It’s All About Getting a Plan

With widespread concern about the value of homes, rising health care costs and the general outlook for the economy, now more than ever, Americans need to set a new course with regard to managing their household finances.

Debt Facts & Figures

There are two stories of debt in this country. One describes an America that is knee-deep and sinking:

  • Today U.S. consumers are carrying more than $900 billion in credit card balances.1
  • The average credit card debt load is $9,659 per household.2
  • Of cardholders carrying debt, more than one in 10 say
Read the rest

Disaster Planning for Your Finances


As survivors of the terrible hurricanes and tornadoes of past years can attest, disasters can have immediate and longer-term effects on personal finances, especially when people are forced to escape with little but the clothes on their backs. That’s why it’s important that any disaster preparations also include a plan for your finances.

The objective of these contingency preparations is two-fold: to provide the money and identification needed to get through the first few days of an emergency and to ensure that you have copies of the records and documentation that would help you return to a normal, financially secure … Read the rest

Net Worth — It’s Your Most Important Number


Many investors can quickly recall their annual income, the value of their home and other measures of how they are doing financially. But when it comes to knowing their net worth, the same investors may be scratching their heads. It’s important to know your net worth — and monitor it periodically — because net worth is the most important gauge of whether you are building wealth over time.

A Quick Tally

Your net worth is what’s left over when you add up your financial assets and subtract your financial liabilities. Your assets may include money in bank accounts, stocks, bonds, … Read the rest

Long-Term Care Insurance


Research the Options Before You Buy

The growing interest in long-term care insurance can be attributed largely to the aging of America. According to the U.S. Census Bureau, the median age in the United States was 35.9 in 2003 — the highest ever. This demographic shift is due to the 76 million Baby Boomers, the last of which will reach age 65 by 2030.

The U.S. Department of Health and Human Services estimates that about 40% of people aged 65 or older have at least a 50% lifetime risk of entering a nursing home. At a time when the average … Read the rest

Advance Directives: Making Your Wishes Known


The Terri Schiavo case a few years ago brought the nation’s attention to a difficult but important issue: Who will make critical decisions regarding your health care if you are unable to do so? Fortunately, there is a legal means of addressing this potential future concern — an advance directive.

Generally speaking, an advance directive names someone to act on your behalf or outlines how you want medical decisions to be made if you are unable to speak for yourself. While advance directives are not financial documents, they are often part of the overall estate planning process, because they arrange … Read the rest

Should Your Mutual Fund Strategy Go International?


For investors watching their calendar year returns, last year was the fifth consecutive year that returns of domestic stocks trailed international equities.1 While recent returns should not dictate how a long-term investor allocates a portfolio, those relying solely on domestic stock funds may want to consider adding an international fund.

Reasons for Going International

Foreign stock and bond markets can potentially move independently from the U.S. financial markets — for example, when domestic stock prices are falling, other markets may be posting gains. For this reason, U.S. investors may reduce overall portfolio risk by combining domestic funds with international … Read the rest

Is Health Care Part of Your Retirement Plan?


Ask a group of investors aged 50 and older to identify their top financial concern relating to retirement, and chances are they’ll answer “health care.”

With medical costs skyrocketing and limited coverage by programs such as Medicare, many retirees face expensive monthly insurance premiums and significant out-of-pocket costs. That’s why it’s important for pre-retirees to consider health care costs when planning for their later years and for current retirees to carefully manage their sources of income.

A Sizable Cost

A look at the cost of health care can help put the issue in perspective. The Employee Benefit Research Institute has … Read the rest

Retirement Income Planning:
Why an Appropriate Withdrawal Rate Matters


Accumulating enough assets for retirement may be the top priority for investors. However, the amount that is withdrawn from a portfolio each year during retirement is what may ultimately determine how long retirement assets will last. That is why calculating the annual withdrawal rate from personal savings and investments is so critical for retirees and people about to retire. It’s also a helpful exercise for younger investors who would like to gauge how much they will need to accumulate in order to provide adequate income during retirement.

Something to Consider

Several factors will influence your choice of an appropriate withdrawal … Read the rest

Preserving Wealth: Planning Steps for Your Stage of Life


The current tax law calls for a gradual increase in how much you can leave behind to loved ones over the next several years. Then, in 2010, the entire estate tax is scheduled to be repealed, only to revert back to 2001 levels in 2011 and beyond. That is, unless Congress alters the law. As it turns out, there is a long-running debate in Congress about whether or not to change the existing law, extend the repeal beyond 2010 or even get rid of estate taxes altogether.

What does this mean for you? Be proactive and review your own estate … Read the rest

Preparing for the Coming Wave of Wealth Transfers


Rising affluence and an aging population are expected to trigger a vast transfer of wealth over the next 30 years. According to Boston College’s Social Welfare Research Institute, approximately $40 trillion or more will pass from one generation to the next by 2052. With so much wealth changing hands, the need for estate planning is bound to increase among those who pass on assets. At the same time, investment planning will be paramount for those who inherit assets.

While each situation is unique, here are a few planning thoughts for givers and receivers.

Making Wishes Happen

A variety of legal … Read the rest