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Many folks facing retirement don’t start to think about things they want until they are retired. They just keep working and going about their daily lives and say to themselves, “I’ll get around to it someday when I retire”.Well, waiting until you retire may be too late! We often explain to clients that you need to start forming a plan for retirement somewhere between 1-5 years before you retire. It’s not just a question of money, savings, and cash flow in retirement. It’s also about what you expect your retirement life to look like after you don’t have to go to work anymore as part of the daily rat race. Where do you want to live? Do you still want to drive? Where’s the local library? How close are the local grocery stores? Who will be my doctor, and will they accept my medical insurance? The bottom line for these decisions…. what’s important to you?
Cliff and Abby, who we advised for several years while leading up to retirement, suddenly decided to move to the beach! They had vacationed at the beach off and on for several years, staying a week or two at a time. They were thinking once we move there the kids and grandkids will visit more often and we will love living there. Well, after selling their home and moving out of state, they came to discover that full-time beach living was not what they thought it would be. There was constant maintenance on the small house they had bought due to the salty sea moisture that seemed to coat and corrode everything. The couple was working far harder in their retirement than they had planned. Also, the kids and grandkids could come for a visit but since they now lived further away, the kids could only visit during the school holidays. So now they saw them much less than when they lived close at their old house. A few years later they sold the beach house and moved back closer to the family. The beach house was a fun idea but in reality, it turned out not to be the right choice for their retirement for what was important to them.
A positive side effect of moving twice in a short period of time was that they were able to downsize and get rid of many items they hadn’t used in years.
Another thought is that if you wait until full retirement to start planning, there may be options that are available now that won’t be in the future. Maybe there is a certain area you want to move to for retirement. What if it’s sold out? That’s no longer an option.
If you still have all your retirement money in a 401(k), 403(b), money market, or IRA, what happens if the stock market has a sudden drop like in 2001 or 2008? All of these types of fund vehicles are tied to the performance of the stock market. If there is a sudden large drop right before you retire, now you’ll have to work more years to recoup what you lost! You need to start moving your retirement funds into retirement vehicles that won’t leave you exposed to the whims of the market. The risks that can affect the stock market are many and include political risk, international risk, systematic risk, or unsystematic risk. These are just a handful of reasons the stock market can have a sudden shift, causing you to lose valuable retirement funds.
Where to go? What to do? You can avoid these issues by preparing now and start making plans and corrections to avoid these pitfalls! Call us! We can help!
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Feature Story 1 June 2018
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Oh June ...
June is our brightest month of the year with more hours in the sun than any other month. June 21st is the longest day of the year in our hemisphere for the single day with the most sunshine! So be careful outside and watch out for sunburn! Use lots of skin protection and wear a hat if you’re going to be outside.
Summer weather has been a curiosity for hundreds of years. Scientists of old were always fiddling with one scientific invention or another to better help us judge weather! Many of our current weather gauges are hundreds of years old, and not much has changed with these basic inventions since the original inventor came up with them.
Galileo Galilei was one of many inventors who came up with the modern invention of the thermometer. The scientist of old used various ways to tell the temperature and used Mercury or Alcohol in the glass tube.
The Barometer measures air pressure; low pressure usually means we’re in for some rain, whereas high pressure ensures clear skies. This was especially helpful to farmers. Evangelista Torricelli is historically credited with the invention of the Barometer. Wind velocity was an additional concern and how to measure it.
The Anemometer was invented in 1450 by Leon Battista Alberti with cups on a wheel in a circle so that he could measure the speed and, thus, judge how fast the wind was blowing. We see Anemometers on many rooftops in cities as well as in farm and agriculture areas.
A Hygrometer is used to measure moisture content. Francesco Folli invented a practical hygrometer in 1664. The first one was built by Leonardo da Vinci in the 1400s (he was one smart dude!)
Of course, with the current modern system of weather radars all over the USA (100 and counting) we do not need many of these old tried and true weather gauges. Our current radar system sends out microwave pulses and indicates rain, snow, and how hard these things are falling to give the weather folks a real good idea of current conditions almost anywhere in North America. This is especially helpful in predicting the path of storms as they move across the USA.
A fun project is to spend time with your kids or grandkids and build some of the weather gauges at home with stuff you more than likely have just laying around! www.wonderstruck.co.uk has videos you can use to have some fun!
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Featured Story 2 May 2018
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While there are many Americans who take advantage of Memorial Day as an opportunity for a three-day weekend trip to the lake, beach, or for a family cook-out, we should acknowledge the real reason for Memorial Day.
This is the day set aside for honoring those who have fought to keep our county safe from harm, and we have been doing so since the Civil War. After the Civil War, General John A. Logan issued a decree that May 30th will be known as a national day of commemoration and, initially, was known as Decoration Day, typically celebrated in the spring.
Decoration Day started as an informal day of remembrance for those heroes who gave their all for the cause! It didn’t matter whether they fought for the North or the South; both sides had their heroes, and the blood that was shed was for all Americans.
In 1971, Federal law made the last Monday in May the permanent, official, observance of Decoration Day and renamed it Memorial Day. These days, honoring the fallen is scattered on various days within each community by placing flags, flowers, or some other token, on the graves of soldiers.
As the USA became embroiled in World War I, more men and women were laid to rest. As we continued to fight for freedom in World War II, the Korean War, Vietnam, and the Middle East Wars, more and more of our brave men and women have given their lives for the cause of freedom.
One of the traditions that many Americans are unaware of is that the American Flag should be raised at half-staff until noon, then raised to full height. Another is that at 3 pm local time, all Americans should pause for the National Moment of Remembrance.
Please take this day of remembrance and support our many veterans! If you’re not sure how you can help, just reach out to any of the dozens of Veterans’ support groups to volunteer. Whether it’s a monetary donation or a donation of your time, it will be appreciated. You can start with the U.S. Department of Veterans Affairs website where it will list opportunities.
Three cheers for our GI Joes and GI Janes!
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Success Story May 2018
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We received a frantic call from Brenda, a long-time client. She was somewhat panicked in that she had received several messages and
phone calls from a caller who identified themselves as calling from Medicare and wanted her personal details to correct a problem
with her file at Medicare.
Brenda was extremely suspicious and was reluctant to give the caller the personal information they were requesting. Good for her!
She called our office and asked if we knew of any program that was being carried out by Medicare to correct personal information
in her file. We assured her absolutely not! The IRS, Social Security, and Medicare will never call you on the phone requesting information of a personal nature unless you call them and they are calling you back. They will communicate by mail.
There are currently several phone scams involving phone calls to inform you of your new member cards arriving from Medicare and
the caller just needs to verify your mailing address and other personal information. Some other scams to watch for:
--In some cases, the caller makes threatening or intimidating statements to scare you into cooperating and giving up your
personal information. “Do you want your new card or not?”
--The caller states you owe money to the IRS and you are going to be sued or arrested unless you cooperate and give them your
information, or make an immediate payment for the amount they claim you owe.
--The caller states there is something wrong with your Social Security check payments and they need your personal information
to correct the problem, so your payments are not interrupted. They may even promise you that they can get an increase in your
monthly check amount if you cooperate.
--The caller claims to be calling from Social Security, alerting you that you are the victim of identity fraud and they need to purge
your file or correct some other personal info in your file.
--The caller says they are from the FBI and you are in violation of some federal crime and need you to pay the fine right now or be arrested.
--The caller states they are from some police department and your spouse, child, or grandchild was arrested and they need a
credit card payment for the fine or bail to release your loved one.
These fraud calls can sometimes be very convincing in that the caller manipulates your caller ID so that it appears that they are
calling from a government facility or legitimate government phone number.
If you don’t recognize the number, don’t answer the phone. In one case, the caller merely asked a question designed where you
would say ‘yes.’ The ‘yes’ was recorded, and the caller then used your voice recording to approve a transaction for a fraudulent
purchase.
If you receive one of these calls hang up immediately! Check your credit cards and bank account to ensure nothing is amiss.
Then report the call online to the BBB Scam Tracker or the FCC Consumer Help Center. Both websites allow you to write an
explanation of exactly what happened and when.
DON’T BE A VICTIM! DO NOT SHARE PERSONAL INFORMATION OVER THE PHONE!!!!
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We all have had an experience at one time or another of feeling slightly out of touch. Maybe it was a breaking news item, or a friend discussing the latest book or movie you have not been exposed to. I find this happening more often as we get exposed to increasingly new information, entertainment, politics, etc. When the out of touch moments happen, these incidents are what make you…you!
More and more, the “out of touch” syndrome is happening between grandkids and grandparents. While we realize that kids are learning as they grow, we as adults need to keep up with new technology to keep the communication open to
our younger family members.
My co-worker was shopping for a gift for her grandson recently. She called her daughter to get an idea of what to get as a gift? “Oh, he loves his Gameboy, just get him a new game cartridge,” she instructed. Well, that seems simple enough thought the grandmother. So off to the toy store to find a cartridge for the grandson. No problem she thought. As she arrived at the store to shop for the birthday gift, she was amazed at the hundreds of video game products, and quickly realized she needed help. Spotting a salesperson, she flagged them
down and asked, “I’m looking for a cartridge for my grandson’s Playboy”. The clerk had a puzzled look and asked, “How old is your grandson?” She replied that he was seven. “Hmmm…I think you mean Gameboy?” After realizing what she had originally asked and the mistake, they both had a good laugh! But it was an out of touch moment! My personal experience with out of touch happened while I was growing up and visited our grandparents, who never owned a TV. There was always the radio in the kitchen tuned to the local gospel music station, but no TV. Now, a positive side effect to no TV was that we always had several books to read or board games to play, and it forced us to go outside and play in the fresh air!
On the other side of the coin, I often have a reverse out of touch moment with a young person who does not know something that I would consider common knowledge.
So, what was your out of touch moment or incident? Who were you with? What was it about? Did you cringe, or get a good laugh
at what you didn’t know?
Whatever it was, it made you….you!
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Why am I me? April 2018
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At some point, did you start collecting something? Dolls, coins, toys, stamps? Maybe a set of dishes? Remember when we were young and every time your mom bought a certain amount of groceries she got to add another free piece of her dish set? Remember S&H Green Stamps? Or the gas station where every time you filled up you got a glass? I know in Arizona there was a gas station chain back in the 50s and 60s that you collected a glass and pitcher set with each fill-up. This glass set has now become a collector’s item, and that set that was given away free 40 to 50 years ago could now be worth $400-$500 bucks! Remember when Union 76 gas stations gave away a free basketball with a fill-up? More recently, did your kids collect Beanie Babies?
Over the years we collected all these items and now some have value, and some don’t. But whatever you collected, it made you…you!
As kids, when we needed money, we took our wagon (yep, a Red Ryder), and walked up and down the roads around our house collecting pop bottles that people had just thrown out by the wayside. This was, of course, before the major campaign of “Make America Beautiful” in the 60s. We would collect hundreds of pop bottles and take them to the local grocery store and get a 2-cent redemption for each one. Ta-Da! Now we had $4-5 bucks to go see a movie matinee or go get an ice cream cone. Of course, back then a movie was only 25 cents for a Saturday matinee. Now we must hand our kids or grandkids a $20 bill and don’t expect any change.
Point is what did you collect? And more importantly where is your collection now? Back in the late 80s and 90s when comic books became so valuable as collector’s items, those comics we bought for 10-cents were now worth hundreds, if not thousands, of dollars. I remember going to my mom’s house and asking her where our big wooden box of comics was that we collected as boys, and she sheepishly admitted she had sold them at a yard sale several years ago for a whopping twenty dollars for the entire collection! I was stunned! There were first additions of Superman, Batman, and Spiderman comics worth who knows what. But no use crying over spilt milk. But it just showed me that when you have something and if you hold onto it, no telling what it will be worth in 50-100 years from now.
When assisting clients with their retirement planning, we often run into situations where the client didn’t know what they had and sold it, or terminated a policy that was old, only to find out that what they thought of as out-of-date or useless had value! Bits and pieces of policies and 401(k)s from old employers, collected over the years of their employment careers and sometimes over their entire life, are just sitting somewhere and they have no clue what it is, or what it’s worth. Don’t be a collector of retirement assets, only to get rid of something when you don’t know the value!
Don’t wonder, get some help! We are here to assist all our clients by going through your collected stuff of old policies, 401(k)s, 403(b)s, IRAs, Roths; you name it, we can research it and give you peace of mind about what you have and what it’s worth! As you near your retirement years, it’s time to access and put to work those assets you’ve collected for your retirement income. Call us we can help!
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Marge called us in tears and let us know that she had lost her husband of some 40 years; she was confused about what to do and where to start. After expressing sorrow and condolences on hearing the news, we began a dialog of making a list of things for her to start to work on.
Since her husband, George, was already taking his Social Security benefit checks at 71 years of age, one of the first orders of business was to inform Social Security of his death. This would entail going to the local Social Security office and presenting them with (1) A marriage certificate, and, (2) an original death certificate.
Marge had been a stay-at-home mom most of their marriage and, while she worked from time to time, she had not paid into Social Security very much over the years; her Social Security monthly benefit check was only about $500 a month.
“I can’t live on $500 a month,” she cried.
We responded to her to not worry, that she would be eligible for George’s Social Security benefits, which was a much larger benefit check, at $2,900.00 per month. After giving Marge a sigh of relief, we then explained exactly what she needed to do to collect the benefits she was entitled to as a widow.
When you lose your spouse, you may be eligible for Widow/Widower financial benefits, and you need to call Social Security (1-800-772-1213) to start the process of your Spousal benefits. You must have been married at least 10 years and not remarried.
You can claim monthly benefits under the deceased spouse and defer your personal Social Security benefits until age 70 while your benefits grow at approximately 8% per year. Your Social Security benefits may grow to be worth more than your widow/widower benefits using this method.
Another option is that you can claim your benefits and Social Security will also pay you the difference between your benefits and your deceased spouse if their benefits were a larger amount. Basically, you receive the larger of the two benefit amounts for you or your spouse.
Point is, call Social Security and find out what you are eligible for and when.
Social Security will not offer advice and you must be diligent in asking specific questions. We recommend that you write these questions down before you visit your local Social Security office. Your questions should be focused on your financial benefits such as:
1) What are my current benefits and what are my options?
2) At what age can I receive my most financial benefits?
3) If I take my widow/widower benefits now how much will I receive?
4) If I take widow/widower benefits now and suspend my personal benefits until age 70, what will my benefits then be?
What you are trying to ascertain is the way in which you will receive the most financial benefits in the long run.
The Inspector General’s office recently performed an internal audit and found that Social Security regularly underpaid widow and widowers’Social Security benefits due to not informing them that they have options. This same report added that, based on the review, this group of beneficiaries was estimated to have missed out on some $132 million dollars in added benefits.
Don’t miss out on what you are due and what you and your spouse have paid into the system for all your working careers. Call or visit your local Social Security office and ask questions!
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Featured Story April 2018
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We all know the little ditty we learned in grammar school, “April showers bring May flowers”, but I guess it depends on where you live whether those showers are welcome! But here in the great southwest, we can’t wait to get rain!
April is a month full of fun and traditional dates! And what better way to start a month than with a humor-filled day on April fool’s day, the first of April! Now, when is the last time you pulled a great joke on a friend or relative? Has it been a while? Well, get busy! You get a day to play a gag on that person in your life that can take a joke!
One day that is no joke is the 17th where we have a deadline to file our last year’s taxes to good old Uncle Sam. Phooey!
The big traditional religious days in April are, of course, Easter and Passover! So, put on your fancy clothes and attend a service! Ladies, when is the last time you wore an Easter Hat? Easter colors are all aglow with all the paisley blue, purple, pinks, and yellows! Of course, we also have our large furry friend paying his yearly visit with Easter Eggs in his big basket. Do you still have kiddies having their Easter Egg hunt? Now, you just know that almost everyone takes a bite out of the chocolate bunnies’ ears on that first bite.
The fourth Thursday each April is “Take your daughter to work” day. Don’t forget!
All you Bosses out there, you’ll want to remember the support team at your office that are so important to you on “Administrative Professionals Day” (formerly Secretary’s Day). Some appreciation will be treasured by your circle of folks that help you be successful at work!
April 22nd is Earth Day so let’s take some time to assist with trash pickup or plant a new tree. Do something to assist Mother Nature with our planet in keeping it clean and smart. It’s a great day to volunteer with a local group for a project to beautify your local environment.
It is incredible how many bizarre and unique holidays there are in April. Visit www.holidayinsights.com to see a complete list! Did you know that April 22nd is
When it comes to birthdays and holidays, we have a common tradition of giving our loved ones gifts. Now, the last time you had one
of these events in your life was there any disappointment or did you get everything? During your life, and having expectations, either getting surprised or experiencing disappointment in not getting that something special…well these events made you…you!
What was the event, Birthday, Christmas, or Graduation? There was one of these events where either you were greatly surprised or greatly disappointed. Which was it? Who were you with, what was the occasion, and what was your expectation? Just exactly what was the thing you were expecting and didn’t get? I would bet that you have had one of these events in your life and you’ll remember rather quickly when and where it happened.
There were times growing up that us boys had very few Christmas gifts under the tree, and some years we were happy to get just some new shoes or a new winter coat from Santa. There were no expectations of the toys that a lot of our childhood friends received. Bags of fruit and nuts were welcome, as these items were scarce during winter months. Usually, there was a stick of sassafras or peppermint candy tucked in the fruit that was an added treat. There was never any shortage of love from our Mom as she worked hard to make sure we had a roof over our heads. But there was this one Christmas where all three of us got airplane models to build and a birthday that we all got a brand-new bicycle. These were special moments, indeed, that exceeded any expectations we had at that young age.
I do have one reminder gift that is very special to me that I’ve kept over all these years. I keep it right at my office desk. It’s a simple gold Cross pen and pencil set that my mother gave me when I graduated from University. You see, I paid my own way through school, often working full-time and going to class full-time. It was tough, but I made it. At my graduation, she handed me this simple leather box. Both the pen and pencil are engraved with my name on them. I didn’t expect anything other than her attendance at the graduation ceremony. So the Cross set was a complete and unexpected surprise. I keep them with me as a reminder of what hard work it was and that I crossed the finish line.
So what was the event? What was the gift? What made it special? Who was it from? No matter the memory, it’s part of what makes you…
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With the recent stock market correction, we always get panicked calls from clients about “Oh My Goodness, is my stuff affected?” Their “stuff”, of course, is their retirement plans that we built for them.
We must assure each and every one that “No, your stuff is just fine”. Their panic-induced phone call is a result of years of panic when folks’ 401(k) or other market investments have experienced major losses in their retirement funds while they were still working. Think back to 1987, 2001, and 2008, when in each of these years people lost as much as 30% of their funds’ value. Good news is that they were still working and could have the time to build up their retirement fund again. But now, if they are retired and not working, or within five years of retirement, the recovery time is different.
Therefore, when we build a retirement income plan, we focus on limiting your exposure to market losses in your retirement years. We look at performance over the past 10-20 years to see how those vehicles or companies weathered the downturns in the market. Did they continue to pay dividends? Did they downsize? Did they continue to grow? Some folks look at histories over the past 4-5 years. Well, duh! The market has been roaring the past eight years and you could not lose with just about anything you invested in.
Many brokers use an old, tired, and not-so-true method of a 50/50 balanced portfolio with some stocks, bonds, or mutual funds. The method is somewhat outdated in that if stocks are doing well, bonds are not. If bonds are doing well, stocks traditionally are not. As the investor, you are in the middle of the seesaw, so no matter which one is up or down, you’re in the middle and still earning dividend income off your investments. The problem with this type of plan is that when the government implemented the quantitative easing, this basically propped up the stock market and made bonds almost impossible to buy. So, the old seesaw method won’t work.
Bill and Jeanie came into our offices as a referral and were unhappy with their current planner, as they only saw loss after loss after loss with their current plan. Their advisor was an accumulation advisor and was still gambling with their money in the market. They were frustrated and wanted a change before they fully retired. They were relieved when we presented a plan that would protect a large portion of their savings from market risk and use dividend paying strategies for the portion still exposed to the market. With this type of plan, we are looking to smooth out the roller coaster ride and provide a greater peace of mind in their retirement years.
If you’re retired, or within five years of retirement and still gambling, it might be time to take a second look.
We focus on the “know-so money” not the “hope-so money”.
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