Let’s Talk About Retirement

Paul Hata asked:


We all know that there is a growing need in this country to take our retirements into our own hands if we want the funds necessary to have any quality of life upon retirement. The problem is that most of us have no idea where to begin when it comes to financial retirement planning or investing.

The sad news is that for most of our lives retirement was something that was taken care of if we put in an honest lifetime of work. However, the climate has changed and the retirement funds that many of us have labored to pay for the vast majority of our lives are slipping away.

The good news is that this need has not gone unnoticed by the powers that be and while they aren’t offering solutions for the funds we’ve already invested or in salvaging what is left of the failing system, they are empowering people to take some control for their personal retirements by offering investment options and strategies that provide tax benefits along the way in order to reward you for your efforts.

The four common types of retirement plans include 401(K) plans, Keough Plans, IRAs (individual retirement accounts), and qualifying pension or profit sharing plans offered by corporations.

In most retirement plans, the contributions to those plans are tax deductible and taxes aren’t paid on these plans until the funds are received and retirement payment begins. You should be careful of your investments and guard them well as there are often hefty penalties involved when you take funds out of your retirement funds before you actually retire.

These of course are not the only types of investments you can make for your golden years and it never hurts to have more eggs in many baskets. The more the merrier in most cases. My personal preference for investing is real estate.

This is an investment that you can actually see and reach out and touch. It is also an investment that often gets overlooked when planning for retirement, though when you consider it is an excellent choice. Property values are much lower today than they will be ten, twenty, or fifty years from now.

This means the sooner you buy the property the more it will be worth (in theory) when you retire. The thing to remember is that property investing, like other types of investing, requires some degree of risk. You need to learn as much as you can about the process and discuss your interest with a financial advisor before you make any major decisions concerning your retirement investments.

There are more traditional investment methods you may want to consider as well. Mutual funds and the stock market are great ways to invest your money, build a decent portfolio, and increase your net worth. This type of investing also carries some degree of risk and isn’t always considered financial retirement planning but more along the lines of simple financial planning.

The thing to remember is that it is always good to have a plan. For this reason, I strongly encourage you to engage the services of a good financial planner. He or she can help you navigate the tricky language that is involved in many transactions, set realistic and obtainable retirement goals according to your needs as well as your means, and offer excellent advice and guidance on other investment ventures you may wish to pursue. In other words, a good financial planner can help you plan for your retirement.

When it comes to the world of finance, many of us are far from experts. We seek legal advice from attorneys, tax advice from accountants, and medical advice from doctors yet very few of us go to financial planners when planning our financial retirement.

In many ways it makes little sense to approach our futures so carelessly and yet this is not something that our parents and grandparents would have done so there is no precedence for doing so.

The problem is that money is such a limited commodity in this world, we are living longer than ever before, and we are enjoying much more mobility in our golden years than in times long past. We now need expert advice and guidance in order to insure that we are in the best possible position when the time comes to face our own retirements.



BRYCE

James Steele asked:


You have several rollover options when deciding what to do with your IRA or 401k account. Make sure to think about your personal situation when reading through these options, so you can weigh what the best choice is for you. And keep in mind that more than one option may pertain to your retirement needs, especially when you consider those retirement needs in the future.

The easiest thing to do is not act at all. Keep any and all accounts exactly where they are and do not give them a second thought until you are ready to retire. As you can imagine we do not advocate this choice. While it is easier to bury your head in the sand then learn about and act on your financial future, it will only cause bigger retirement problems in the future. Can you imagine finally being ready to step away from work and all of your retirement assets are scattered between a dozen or more past employers that you have worked for over the last 40 years?

You can consolidate your retirement accounts into a Rollover IRA. If you already have a past employer or two where you are still keep your retirement funds, or an individual retirement account opened years ago when you were younger, you can transfer the funds to a Rollover IRA account, so they are all consolidated and easy to locate. This way you can add simplicity to your retirement planning. Rollover retirement accounts also allow you to rollover your money again in the future, so that you can adjust your investing goals as you get closer to retirement age.

If you like to take personal charge of your retirement funds, you can rollover into separate IRA accounts that will allow you to greatly diversify your retirement investments. Each retirement account can be given a different purpose, such as a self directed IRA that you use to purchase rental properties, or an retirement account that you do not intend to touch personally, but is set aside as a inheritance for your children.

If you are already with a new employer that offers a great 401k program, the past retirement account funds can be switched directly into the new 401k. Make sure that your new company will match a portion of the money you save from each paycheck and that the investments they offer can produce good returns with reasonable management fees. There is no point in changing out of a flexible IRA unless the retirement program your company offers is top notch.

Your final option is that you can take the money out of the retirement accounts and use them, but if you are hoping to have any ability to really retire in the future, this is a huge mistake. Any money that you take out of your 401k or IRA for personal use will be heavily taxed by the IRS. On top of that early retirement account withdrawals are hit with large penalties. Avoid this choice at all costs.

These are a sample of the options given you when deciding what choice to make with your IRA rollover or 401k rollover. It is always recommended to speak with a trustworthy broker when deciding and implementing any retirement account changes.



ARMAND

Wayne Miller asked:


Perhaps it is looking toward the future in terms of insurance, planning for college and other issues such as this also gets your mind moving on how you will be ready when retirement gets here.

But if we were able to step back above our lives, the best time to start preparing for retirement is not the middle age years. Retirement planning experts tell us that if young people in their twenties or even teens can start putting a little bit back toward retirement, the rewards when they reach their golden years will be phenomenal. If a youth in his early twenties or teens were to just put one percent of what they make back, and that money stayed in some form of investment vehicle that would grow into a retirement account, the growth between the time of investment and retirement at 60 or 65 can be explosive even at a modest interest rate.

Unfortunately, few young people are looking that far ahead when they are in their early adult lives. That is a time when the transition from teen years to family life is pretty all consuming. So it might be the responsibility of parents and older advisors to help youth see the value of starting to work on their retirement savings well in advance so they have a well developed program when their retirement years come along.

One of the best places for a young person to start their retirement program is with the 401k or retirement benefits at their job. Now, in the last decade, many businesses have eliminated retirement benefits where the company pays for the retirement. But if the young person works for a company that offers 401K, they can set aside a percentage of their income and it will be put into a retirement fund before taxes. Moreover, often the company will match the funds up to dollar for dollar and the company will manage the investment of the funds as well.

The outcome is a healthy and rapidly growing fund that starts out with an immediate doubling of the invested funds and then grows steadily over the years as more is put into the fund with each paycheck. The young worker gets used to the retirement money coming out so they adjust their budget to live without it. And without giving retirement much more thought than that, within a few decades, the 401K can evolve into a very impressive retirement account to be sure.

If you are a young person and you are considering if you might think about starting a retirement account, congratulations. You are one of just a few people who have the foresight to think about retirement this early in life. And by starting now, you take advantage of the thing that is your greatest asset is time. Because if you only put a little bit back, that can grow and grow and grow and become a sizeable retirement nest egg for you and your spouse even if he or she is the spouse off in your future.



DARRIN

Richard J. Roll asked:


For the last thirty years, I’ve devoted my career to helping improve the personal finances of families and households across America. This year, I have watched the very ground we stand on undergo a series of seismic shifts that have tossed most Americans’ hopes and plans for finding eventual financial security into total disarray.

The bursting of the sub-prime credit markets, the stock market meltdown, and the accompanying credit crunch and recession that are now upon us could not be more alarming, especially for Baby Boomers who are approaching retirement.

Of the 30 million “early Baby Boomers” who are currently aged 53 to 63, 62% admit to feeling financially unprepared to retire. It’s easy to understand why. In fact, a Harris poll found that two thirds of Baby Boomers they surveyed said they believe the cost of living is too high to truly retire and never work again.

Planning for retirement and living on a fixed income become profoundly difficult when inflation is on the rise and the markets are in turmoil. You’ve got to start now to have a way to make an ongoing income after retirement from your primary career.

Unfortunately, retirement has become a do-it-yourself project. Twenty years ago, 80% of all workers at medium and large U.S. companies were covered by defined-benefit pension plans. That meant they knew they were going to receive a portion of their salary, every year, after they retired, usually adjusted upward annually to keep pace with inflation.

By 1997, that number had dropped to 50%. The latest figures show that just 21% of workers at all private companies are covered today by defined-benefit plans.

The situation has gotten far worse because U.S. property values have declined an average of 15% to 20% nationally since 2005. Most homeowners were banking on the ballooning equity in their homes to finance their debts and provide future financial security in retirement.

Millions of Baby Boomers have just not adjusted to the new economic reality: that the primary responsibility for funding the retirement years has shifted from business and the federal government, directly onto the shoulders of workers themselves.

In addition, six common hazards can torpedo even the best retirement planning and saving process. They include:

1. Divorce– one of the most common causes of retirement planning failure.

2. Treating your house as your primary retirement vehicle (especially when housing values are plummeting).

3. Investors nearing retirement get sweet-talked at seminars into buying property or other investments, sight unseen.

4. Your withdrawal strategy may be unrealistically excessive.

5. Not planning for longevity. A husband and wife who are 65 years old today have a 40% chance of one of them reaching age 95.

6. Dumping all stocks and moving into bonds is an unbalanced, outdated move that assures sub-par returns.

To truly prepare for a secure retirement, you’ve got to protect yourself against many complex risks, from the danger that inflation or falling markets will eat away at your assets, to the strong likelihood that you’ll need costly long term care. (Today, 9 out of 10 people over 80 need some kind of help to take care of themselves). Ideally, you’ll want to develop an ongoing income source through a passion or skill you can turn into a part-time business.

Determining an appropriate asset allocation is also crucial. You’ll need to divide your money among stocks, bonds, and cash as a time-tested strategy for helping you pursue your financial goals and obtain safe investments.

The Baby Boomers Retirement Club (BBRC) offers advice and resources that Baby Boomers need to stay afloat in the current economic crisis and in the challenging years ahead. There are resources that can help you create and maintain an ongoing income stream, which is a critical priority. The tools and calculators at http://www.mybbrc.com can help you develop an intelligent and workable roadmap and financial plan for your retirement years.

Richard Roll, a retirement expert and bestselling Book-of-the-Month Club author, is the founder of the Baby Boomers Retirement Club (BBRC) web portal and membership site. He also founded the American Homeowners Association (AHA).



BOYCE

Brooke Hayles asked:


Planning retirement is best done many years before you actually retire. Preferably, fifteen to twenty years before retirement. This will give you the foresight required to be able to live comfortably when you do actually retire. Many people don’t often realize all of the little things that will affect them financially in their future, not the least of which is what kind of lifestyle they wish to live. For example, would you like to take a vacation once a year, or twice? This is just one simple question that, for a lot of people, they don’t know the answer to which means they’re not effectively saving their money for retirement.

Retirement planning is best done earlier for one simple reason: You’ll be able to comfortably save more money. Comfortably being the key word there. For most people, putting two hundred dollars per month into a retirement savings fund for 20 years is much more comfortable than putting one thousand dollars per month in for 4 years. Either way banks you the same amount of money, but you’d feel the financial strain of missing one thousand dollars a month much more than a measly two hundred.

As you’re planning retirement you may run into some unanswerable financial questions. For example, you know you’ll probably need some sort of medical attention after you retire, but how much, and how much will it cost? Questions like these present stumbling blocks while planning retirement because they represent a true unknown value. One thing you can do however, is find out from a financial planner what the average cost of health care is, and base that part of your retirement budget on that figure.

An important factor in planning retirement is deciding where you’ll live. Will you stay in the house you’re in now, or would you not be able to afford it. Keep in mind that when you’re 75 years old, you’re not likely going to want to climb up a ladder and clean the leaves out of your gutters. Because of these kinds of factors, many people planning retirement choose to live in a retirement village. These areas are much like any other neighborhood, except that you will have better access to in-home support services, just in case ailments, like a sore back, get to the point where you’d really rather not attempt to pick up a dime off of the floor.

A great option for planning retirement and one that’s been steadily growing in popularity is purchasing a mobile home as soon as you retire. If you’ve spend your younger years working hard and not getting a chance to travel as much as you’d have liked, a mobile might be right for you. With one of these, you’ll be able to catch up on all of those vacations you missed.

All in all, planning retirement may seem like a bit of a chore now, but you’ll thank yourself when you turn 70 years old and find yourself exactly where you want to be.

Summary:

When you retire, would you like to take a vacation once a year, or twice? This is just one simple question that, for a lot of people, they don’t know the answer to. Planning retirement early is essential in working out the details of your golden years so that you’ll be able to live comfortably.



ROSALYN

Paul Hata asked:


The vast majority of people reading this will never receive the benefit of social security for the purpose of retirement-unless of course serious adjustments are made in the current system. There are simply too many people living much longer than anticipated.

At the same time, regardless of how much you’ve managed to pay into social security over time it is doubtful that anyone could live on the amount of money they would receive in social security benefits even if they had no other significant bills to pay such as house notes, car notes, or insurance on a home or automobile.

It amazes me that my grandparents managed to live on the modest sum that was earned from my grandfather’s retirement and social security. They were never wealthy but in the last decade or so I understood just how little they had and yet they managed somehow to have all the things they absolutely needed in order to survive.

I know that in the world of today, their meager incomes would not even begin to make ends meet for groceries let alone utilities and other necessities in life.

It is because of the struggles my grandparent’s faced that I have devoted a good deal of time and effort into making sure that we do not go through those same challenges and struggles upon retirement.

We have taken steps today to insure that we will have income throughout our retirement as well as a few carefully crafted investments to pull us through. I do not believe that I have all the answers and for this reason we have relied heavily upon the advice of our financial planner.

He has helped us discover avenues for investing money and methods of doing so that have been nothing short of amazing for us as we watch our holdings grow year after year in preparation for retirement.

If you haven’t taken the time to find a financial advisor for your investments there is no time like the present to do so. Even if you are nearing that magical number you might be amazed at the guidance and advice that can be offered by a competent financial planner to maximize your short and long-term investment and retirement planning needs. I believe you will be amazed at the financial miracles a good financial planner can work with even the most modest of investments with which to work.

You should also make sure that you take care of as many of the recurring bills as possible before you retire. It helps greatly if you have your home paid off and do not have the worry of a monthly mortgage payment. Another thing that is good to keep in mind is that you will want to downsize rather than upsize at retirement. Eliminate the second car and ride together when possible (this also eliminates an insurance payment as well).

If you are planning to move to a particular area of the country for your retirement you may want to begin now, as early as possible, seeking property in that area at a much lower price than you will pay ten to twenty years down the road when you actually get around to retiring.

This will increase the likelihood that you either have your retirement home paid for or are very close to having it paid for. Another thing to remember is that you will want to get a smaller home for your retirement rather than a larger home that you will need to care for. This means you can eliminate some of the utility costs, which may prove substantial.

The most important thing to remember when planning for retirement is that it is your retirement for which you are planning. Make sure you set aside funds to make your retirement worth retiring for. Don’t merely exist throughout your retirement because you can’t afford to live, take the steps now to insure that this is not going to be a problem for your retirement years.



JEWEL

Jon Arnold asked:


There has always been a need for retirement planning and today is certainly no different. There are 401(k)s and many other types of retirement plans that are available to you. You will need to take the time needed to evaluate what your current financial needs are and what you expect the future to hold.

Recent events, such as the rise in energy costs and the ever-skyrocketing health care costs need to be factored in. Although gas prices have been fluctuating lately, I think they are going to go back up, possibly even surpassing the extremes we saw all too recently. These types of events can take a toll on your retirement plan very quickly. Prudent planning begins early and you need a good source of information. Websites like http://jag-info-resources.com/retirement/ are an excellent resource to go to find answers to the questions you may have.

Did you know that most retirement plans have a ceiling of 10% of your pre-tax wages that you can contribute? While that may sound good when you view it against a 2% inflation rate, you must keep in mind that your planning today is not just for the ideal future, but the future that will be reality for you if things turn out to not be ideal or according to your plans today.

By starting early and contributing the maximum that you can afford, you will have a better chance of being prepared for the unforeseen. This is made much easier today because your 401k plan is now transferable from one employer to another. This allows you to continue to grow your retirement account even when you choose to change jobs or even careers.

Unsure of what you will need for retirement? There are calculators like the one at my site as shown in my author box below that will help you figure it out for yourself. This is a helpful tool that lets you see if you are on track or not. Don’t forget that life expectancy is getting longer. When Social Security was passed in the 1930s people lived about 2 years after retirement. Today you can expect to live 20-30 years past retirement and, suddenly, the amount you need to retire comfortably with a major change in lifestyle gets very large.

Lets say that today you need $40,000 to live on and you retire in 20 years, you will need a minimum of $850,000 to carry you through retirement. That is assuming that you will live an additional 20 years after you retire and are in good health. There is something to be said for debt reduction as being part of your retirement planning, as well, since the last thing you want to do is go into retirement with a ton of debt still hanging over your head.

Having $40,000 a year to live on with little to no debt will obviously go farther than if you still have the same debt load as you do now. If you reduce your debt load by the same amount that you save for retirement, you double your retirement savings.

One cannot have a conversation about retirement without the subject of taxes coming into it. The money you put into your 401(k) is pre-tax so you will pay taxes on it when you get disbursements. The 401(k) is intended for retirement, so there are also very heavy tax penalties if you withdraw any funds before you turn 59.5 years of age. If at all possible, do not make any early withdrawals from your retirement account, since most people have found that in addition to the heavy tax penalties for doing so, the prospect of paying it back, even with good intentions, is tougher than it seems.



YOUNG

Scott Goodman asked:


This may come as a shock to many people, but after a lifetime of working, Social Security retirement benefits do not provide enough for most people to live on, especially if they plan to continue their previous standard of living. In order to maintain their quality of life, they will need something to supplement the government retirement benefits they earned during their lifetime.

Although many people will also receive benefits from the place of employment, that plus Social Security retirement benefits still may not equal the income they were receiving while they were working. Additionally, there may be some income received by retired workers that will affect the amount of retirement benefits they are entitled to receive. At any time during a person’s working life, they can contact the Social Security Administration for an update on the benefits they would be eligible to receive upon retirement.

The age at which a person chooses to retire will affect the amount they receive in benefits and the full retirement age, according to SSA is based on the year of birth.

Benefits Reduced By Early Retirement

Laws governing SSA retirement benefits recently changed, and could change again in the future, but currently with an age of 66 considered as full retirement age, if a person has earned enough credits, they can retire at the age of 62 with a 25 percent reduction in SSA benefits. At age 63 they would receive a 20 percent reduction of the full amount and at 64, a 13 and one-third percent cut and at age 65, their benefit would be reduced by six and two-thirds percent.

The amount received in Social Security retirement benefits will be determined by the amount a person has earned over their lifetime. A person who continues to work past their retirement age may see an increase in their benefits. SSA will annually review a person’s work record each year and notify them if there will be any change in their benefits.

Persons who opt to retire before reaching full retirement age will be restricted to the amount of income they can earn before losing some of the Social Security retirement benefits to which they were qualified at the time of taking early retirement. The maximum amount a person can earn each year without losing benefits is currently $12,960 and the benefits will be reduced by $1 for each $2 earned over that limit.



ALEJANDRA

Joseph Kenny asked:


With an increasing number of people scheduled to begin retirement in the next few years, it is important to begin thinking about the subject. Even if you’re not near the age of retirement yet, it’s a good idea to begin thinking about how you plan to fund your retirement as soon as possible. The sooner you begin to plan for retirement the more you can be sure your retirement won’t be plagued by money issues.

So, how much money do you need for retirement? A lot of that answer, of course, depends on what plans you have for retirement. If you plan to travel, want to purchase a RV or you have similar specific plans, you will naturally need more money in order to fund your retirement. Above and beyond those expenses; however, it is important to think about your day to day essential needs.

For example, consider whether you will still owe any debt payments when you choose to retire. Of course, many of use would like to think that we’ll be out of debt by then but in reality you may still owe on a vehicle or credit card or even a house. Be sure to calculate those costs into the amount you need for retirement.

You’ll also need enough money to cover such costs as utilities, auto and home insurance, groceries and other miscellaneous expenses we all must pay on a month to month basis.

Healthcare will be an extremely important aspect of your retirement. Naturally, as we grow older our healthcare needs increase and that means spending more money. If you fail to fund your retirement in a sufficient manner, even one serious health problem could wipe out your retirement fund and you might find yourself facing the rest of your retirement with serious money problems. Just for your healthcare costs alone it’s a good idea to plan on budgeting at least $15,000 per year for every year of your retirement.

You also need to consider whether there will be expenses when you first retire that you’ll still need to cover such as support for aging parents (with life expectancy figures today, it’s definitely a possibility) as well as college education expenses for kids.

In addition, don’t forget miscellaneous costs which may pop up that we tend to forget. These costs include home repair costs, such as replacing a roof, purchasing another vehicle, etc.

After adding up all of the costs you’ll need to cover during retirement, don’t forget to take into consideration the effects of inflation. Figure on costs today rising an average of about 4% a year for every year you have left until retirement and then some.

Finally, don’t forget to give serious thought to how long you may need to fund your retirement. Quite surprisingly, many people tend to underestimate how long they’ll live and as a result run out of money. Don’t let that happen to you. The best rule of thumb is to assume you’ll live to at least age 90 and calculate for that.



LESA

Steve Selengut asked:


Your retirement income investment plan starts now, right now, no matter how old or well heeled you happen to be.

Step One is to understand what a retirement plan is, and to identify the three large numbers you need to keep track of while you are developing your stash. With these three totals on your spreadsheet, it’s much easier to develop long-range retirement income goals that make personal sense. A retirement plan is an income production plan. Guaranteed retirement income - projected expenses = the gap. No gap, add parents and children to the expense number. There’s always a gap.

Employer provided pension plans, Social Security, and (always much too expensive) fixed annuity contracts, are retirement income providers. They are monthly income machines that you have paid dearly for but which may not be adequate to cover your retirement expenses— most of us will need more income than our guaranteed benefits will provide.

And we need to develop these additional income sources while we are still earning some kind of income. The retirement plan is the investment process you employ to eliminate the gap between your projected guaranteed income and a conservative estimate of your retirement expenses. The sooner and smarter you invest before retirement, the easier the transition from full employment to full vacation will be. Smart investing involves separating your security selections by purpose, and monitoring their performance in the same way. You’re never to young to start developing the income side of the portfolio.

Once you start to draw income at retirement, it is much more difficult to invest effectively and unemotionally. Since your income will need to remain secure and constant through several economic, market, and IRE (interest rate expectation) cycles, you really need to develop appropriate portfolio market value expectations if your program is to survive. You cannot afford to take your eye off the income ball, because income is the only thing you can spend without depleting the productive value of the assets in your investment portfolio.

Obvious? Yes, but only until the market value of your portfolio begins to shrink as a result of economic, market, and IRE cycles. If you invest properly, it (the income) should continue to grow in spite of changing market conditions and fluctuating market value numbers. You must learn to expect market value fluctuations and take advantage of them— assuming, of course, that you are following appropriate quality, diversification and income generation standards.

Retirement income planning became more difficult for most of us around the time corporate America realized that defined benefit pension plans were far too expensive to manage and maintain. At around the same time, the Social Security trust fund somehow disappeared (Did it ever exist at all?), and more and more of our hard earned was needed to support our aging friends and relatives. Why haven’t the myriad of defined contribution programs been able to fill the retirement income gap?

Because millions of totally investment-inexperienced people were given discretion over billions of investment dollars that could be tax detoured out of their paychecks and into IRAs, 401ks, 403bs, Thrift, Savings, Thrift/Savings Plans, etc. Self directed investment programs generated a need for an investment media; the investment media fueled the speculative juices of an emotional and naive mass of newbie investor/speculators; Wall Street created tens of thousands of new products and compound income schemes to sponge up the wayward dollars.

The Masters of the Universe were ROTFLOL while the Investment gods gaped in disbelief.

Defined Contribution plans are just not retirement plans— even if your employee benefits department, the media, Wall Street, and Uncle assure you that they are. Most plans are difficult to self-manage with a retirement income objective. Still, these benefit plans are necessary and quite capable of taking you close to where you want to be. Their only drawback is the false sense of wealth and retirement security that they promote. Either the money has to be converted into an income portfolio— a costly and time-consuming process— or far too many mutual fund shares have to be sold to produce the spending money

Most people think of savings and investment programs as retirement plans, and rationalize away the need for additional, outside development of an income investment portfolio. This is because all of the information they receive speaks to market value growth instead of to income. It’s very likely that less than half the money will ever be yours to spend! What, you say— why? Here’s an example. A NYC resident with a $3 million IRA retires with the expectation of maintaining her life style. Even invested for income alone, $15,000 per month is easy to generate. But how much more has to be disbursed to satisfy three levels of tax collection?

Next example. The same portfolio in equity mutual funds during a correction— now you’re dipping into principal!

Even though defined-contribution plans are excellent mechanisms for growing an investment portfolio with your hard earned, pre-tax, dollars, most plans and most plan participants worship the market value god to the exclusion of all others. Most people are too greedy and/or tax-averse to convert them into income producers during rallies— when they can lock in a meaningful cash flow. Additionally, the counter productive IRC encourages our use of owned assets first— a universally ignored phenomenon.

The “buy and hold” mutual fund mentality doesn’t transition well from growth to income— regardless of the fund category or description; the idea of helping people into a comfortable retirement hasn’t stopped the tax collectors; the market cycle is just as likely to be down as up when your gold watch is presented. You have to do more, and less, to secure that comfortable retirement.

Step One of the retirement plan is developing a focus on income, and understanding that spending money and market value are not blood relatives. Step Two is developing the right combination of tax deferred and tax-exempt income— among other things.



CAROLINA