Monday, November 24, 2014

#1 For Life And Retirement Strategies Tip of the day! Secure Retirement Income Streams

How annuities can provide a secure retirement income stream

#1 For Life And Retirement Strategies Tip of the day!
https://www.google.com/+VasiliosVossSperos 602-531-5141

If you're retired and you use traditional withdrawal strategies, you probably ask yourself the following question each year, "Should I withdraw 4%, 5%, or 6% of my investment portfolio value?"

This question is often accompanied by one or more of the following six questions:

Which portfolio value should I use to calculate my withdrawal amount — the value when I retired or the value at the end of last year?
Should I increase my withdrawals by an inflation factor, and, if so, how much?
Should I really withdraw 5% this year after the hit my portfolio took last year as a result of the stock market decline?
From which account(s) should I take my withdrawals — nonretirement, retirement, or both?
How should I adjust my strategy when I turn 70-1/2 and am required to begin taking minimum withdrawals from my retirement accounts?
Is it OK to withdraw additional funds this year to pay for a large onetime expense?

The unsafe withdrawal rate strategy

As a retirement income planner whose primary mission is to design and monitor plans for clients to provide sufficient after-tax income to pay for planned and unexpected expenses for the duration of retirement, the foregoing approach is unsettling.

In addition to creating confusion and uncertainty, not to mention complexity, the "safe withdrawal rate" strategy as it's commonly known, lacks the ability to generate a predictable and dependable amount of income in a given year to pay for retirees' fixed and discretionary expenses. Simply put, its reliability as a stand-alone solution for providing long-term financial security is questionable.

Match projected expenses with predictable income streams

The basic goal of retirement income planning is to match projected annual expenses with predictable income streams throughout one's retirement years. While there are several investment strategies that are touted for their ability to achieve this goal, including bond laddering, there's only one that can guarantee it, subject to the claims-paying ability of individual providers: fixed-income annuities.

For those of you who may not be familiar with it, a fixed-income annuity is a fixed annuity that provides either lifetime payments or payments over a contractually-defined term. The start date of the payments may be either immediate or deferred, depending upon whether an immediate or deferred annuity is used.

Unlike the safe withdrawal strategy which lacks the ability to provide known and predictable income in a single year, let alone for the duration of retirement, fixed-income annuities are designed for this purpose. In addition, the income amounts and timing of same can be precisely defined at the time of investment.

A flexible and potentially tax-favored strategy

A plan using multiple types of fixed-income annuities with different start and end dates and income amounts, adjusted for inflation and projected income-tax liability, can be structured to dovetail income with projected after-tax expenses, the annual amount of which can vary over different stages of retirement.

Income flexibility can be incorporated in the plan by including fixed-index annuities with income riders and deferred-income annuities, or DIAs, that offer a flexible income start date. Nonqualified, or nonretirement, DIAs are often used since a portion of their payments is excluded from taxation.

Part of a total solution

Unlike the safe-withdrawal strategy which is an all-or-nothing solution, fixed-income annuities are generally part of a retirement income plan.

The choice of types, as well as initial and ongoing investment amounts, can be optimized to use the least amount of investment assets to provide a targeted amount of income to meet projected expenses during different stages of retirement. By doing this, assets will be available to meet unplanned needs and potentially be left to future generations or provide funds for charitable causes.

If your goal is to receive a secure predictable income stream to pay for planned and unexpected expenses throughout retirement, I recommend that you research the use of fixed-income annuities as part of your plan.

Vasilios "Voss" Speros 602-531-5141
Spence Cassidy and Associates
#LifeInsurance #RetirementStrategies
http://www.scaaz.com/
http://1lifeandretirementstrategies.blogspot.com/
https://www.linkedin.com/pub/vasilios-%22voss%22-speros/60/722/67b
vsperos@scaaz.com
85018

— in Phoenix, AZ.

Wednesday, November 19, 2014

#1 For Life And Retirement Strategies Tip of the day for Small Business Owners

Small Business Owners Must Plan for Retirement

#1 For Life And Retirement Strategies Tip of the day!
https://www.google.com/+VasiliosVossSperos 602-531-5141

Most people entertain the idea of becoming an entrepreneur or independent contractor to become their own boss. Being in control can be a satisfying aspect of business. For certain things, including retirement planning, however, self-employed small business owners are more likely to delay.

So why is retirement planning often delayed or even ignored by small business owners?

Prioritizing business:
Most small business owners dedicate the majority of their wealth and effort to the business. When deciding between growing a business and saving for their own retirement, most often, small business owners choose to dedicate all their resources to the former.

Businesses can be sold or transferred, but retirement is much more difficult to delay or avoid altogether. Therefore, investing in a retirement plan should be a priority. What’s more, with a small business 401(k), also known as Solo 401(k), plan holders are also allowed to take out a loan from the retirement fund. The borrowed amount can be used to cover any urgent financial needs, including funding their businesses. As long as the interest and principal are paid back according to the terms, the loan is tax-free and penalty-free.

Relying on selling the business for retirement:
Most small business owners expect to sell their businesses at a high price when they are ready to retire. They expect proceeds from selling the business to cover their living costs during retirement.

Even if the business does sell for a healthy amount as planned, it won’t hurt to have an additional retirement fund. As the saying goes, it is not wise to have all your eggs in one basket, and having a retirement account is usually a good backup plan.

Simply delaying contribution:
There is no requirement for independent contractors and small business owners without full-time employees to set up a retirement plan. Therefore, many keep delaying it, thinking that they can start contributing to a small business 401(k) when the business improves.

No matter how much business owners plan, they can never guarantee that sales will improve and costs will decrease. Even when the business is growing, unexpected opportunities might come up and demand more cash. Therefore, delaying retirement saving in hopes of better cash flow in the future might not be a good idea. Also, investment in a small business 401(k) can grow exponentially, and the longer the money stays in the fund, the more it can grow.

Another point to keep in mind is that with a small business 401(k) plan such as Solo 401(k), contributions are entirely at the plan holder’s discretion. If a plan holder finds himself entirely short of cash for a year, he can contribute less or even suspend contribution for that year without any consequence to the existing fund.

Tuesday, November 11, 2014

#1 For Life And Retirement Strategies Tip of the day! Men vs. Women

Men vs. Women: The Wage and Savings Gap in 4 Charts

#1 For Life And Retirement Strategies Tip of the day!
https://www.google.com/+VasiliosVossSperos 602-531-5141

If you're a woman, I've got good news and bad news when it comes to retirement planning.

The good news is that despite the fact that, on average, you earn as much as 40% less than males and spend considerably less time in the workforce -- usually to care for a child or an elderly family member -- you are out-saving most of your male brethren for retirement. Considering the additional obstacles, that's a huge deal.

But the bad news -- aside from the aforementioned wage and time-in-the-workforce disparity -- is that among those earning above $100,000, women are leagues behind their male counterparts.

The big picture

Headline findings is that men simply have far more money invested in their 401(k)s than women do -- by a magnitude of 50% -- and they earn about 40% more per year.

Clearly, a host of factors are combining to make the retirement planning process far more difficult for women.

Going beyond the knee-jerk reaction
It would be easy to simply throw our arms up and say, "The system is rigged from the get-go." But if we delve a little deeper into the findings, we see some important distinctions.

First and foremost, women's approach to retirement planning is sound. On average, they participate more in defined-contribution plans and save more of their salary every year for retirement. Women are also more willing to allow professionals to manage that money. Over time, that professional management (especially considering that it comes from Spence, Cassidy and Associates) yields better results than the do-it-yourself approach many males try without the proper training.

In fact, when we look at all individuals earning less than $100,000 per year -- about 96% of Americans -- women are doing a better job of saving for retirement. It is only when we consider the country's top earners that we see disparity creep in.

When it comes to the vast majority of wage earners in the United States, such parity in retirement savings should provide a ray of hope.

Where the problem lies

It's clear that once we begin looking at the upper echelons of wage earners, men have a marked advantage over women.

The most demonstrable reason for this disparity is that women -- on average -- spend 12 fewer years in the workforce than men. Most importantly, these breaks in continuity make it increasingly difficult for women to get the types of promotions that lead to jobs paying over $100,000 per year.

For women who find themselves in this position -- entering the upper echelons of society and wishing to maintain an equal footing with men's retirement portfolios -- there are a few key steps that can be taken.

First, approach investing with a decades-long time frame. Remember, as a woman, you'll likely live longer than the average man and will thus need your money to last longer.

And second, be willing to invest more aggressively. Though that usually means a more volatile ride, volatility isn’t the same as risk when you're willing to hold for the long term and not panic. Over a long enough time frame, you will earn higher returns for this higher risk, and it can help you keep pace with your male counterparts. So don't trade the risk of short-term losses for the risk of running out of money in what will hopefully be a long retirement.

Either way, women are doing a great job saving for retirement. And if they weren't taking time off to care for family members, they would be head and shoulders above men when it comes to retirement planning.

How to get even more income during retirement

Whether you're a man or woman, Social Security plays a key role in your financial security. But it's not the only way to boost your retirement income. Our retirement experts give their insight on a simple strategy that can help ensure a more comfortable retirement for you and your family.

Source: Social Security Administration.

Vasilios "Voss" Speros 602-531-5141
Spence Cassidy and Associates
#LifeInsurance #RetirementStrategies
http://www.scaaz.com/
http://1lifeandretirementstrategies.blogspot.com/
https://www.linkedin.com/pub/vasilios-%22voss%22-speros/60/722/67b
vsperos@scaaz.com
85018

Tuesday, November 4, 2014

#1 For Life And Retirement Strategies, Don't make mistakes!

#1 For Life And Retirement Strategies Tip of the day!
Vasilios "Voss" Speros 602-531-5141

Mistakes that could come back to haunt you

The money decisions you make today can lead to either a secure or a scary financial future. Don’t be tricked into being complacent. Think ahead, and plan ahead — and avoid these 14 money mistakes, which could haunt you for years to come.

1) Breaking your budget. Treating yourself is fine as long as you’re not living beyond your means. To create — and stick to — a realistic budget, make two lists: your necessary monthly expenses and your nice-to-haves. Can you cover both with your income? If not, get out the red pen and start crossing off those you can live without. Make those extras a goal, and start saving for them. This way, you won’t be haunted by bills you can’t pay.

2) Losing time on retirement savings. Outliving your money is a scary thought. So retirement savings should come first — even before saving for a house or a child’s education, but with a strategic plan you can save for all. At least contribute enough to your company retirement plan to capture the maximum match, in most cases that’s a (401k). Also you can contribute to a individual retirement account (IRA) or a whole life insurance policy, putting contributions on automatic withdrawal. And remember that the earlier you start the smaller the percentage of your salary you need to sock away.

3) Protecting yourself and your family. Reviewing your life insurance, disability and long term care insurance each year to make sure there are not any shortfalls that would cause serious irreversible consequences to your family should something happen to you.

4) Being unprepared for the unexpected. Unexpected expenses can jump out at you at any time. To protect yourself, set aside enough money to cover three to six months’ worth of essential expenses in an easily accessible savings or money market account. Retirees should try to increase this amount to cover a year.

5) Getting carried away by credit. Credit card bills don’t have to be a nightmare — as long as you only charge as much as you can pay off each month. Otherwise, you stand to lose upward of 14 percent to interest. To tackle current balances, start by paying as much as you can on the highest-interest debt while always making at least on-time minimum payments on the others. Work your way down until you’re free of credit card debt — and stay that way.

6) Putting your head in the sand. You can’t plan ahead unless you know where you are. It’s easy to set up a personal net worth statement to get a big-picture view of your finances. List both your assets (what you own) and your liabilities (what you owe). Then subtract liabilities from assets to find out whether you’re in the plus or the minus. This will give you not only a big-picture view of your finances but also a benchmark against which to measure your progress.

7) Betting on the market. When the market goes up, it’s hard not to get caught up in the rush. But the reality is that it’s almost impossible to time the market’s ups and downs. Your best move is to stay with a diversified mix of investments for the long term. (Note: Diversification cannot ensure a profit or eliminate the risk of investment losses.) What is your Risk Tolerance?

8) Betting on a single stock. Today’s hot stock can be tomorrow’s horror story. If one stock represents more than 20 percent of your portfolio, you’re over-concentrated — and you run the risk of big losses. Again, a diversified portfolio is your best move.

9) Losing track of student loans. You can’t hide from student loans. If you don’t stay on top of payments, they just get more onerous as interest and fees mount up. At least pay the minimum — and never miss a payment!

10) Not hanging on to health insurance. A 2013 study by the International Federation of Health Plans states that the average per-day hospital cost in the United States is $4,293. Talk about coming back to haunt you! A single illness or accident could wipe out your entire savings if you’re uninsured. The Affordable Care Act requires that you have health insurance — and so does smart financial planning.

11) Putting off estate planning. To me, there’s nothing more frightening than not having a will naming a guardian for your minor children. Beyond that, the complexity of your estate plan will depend on your financial situation. But if you don’t put at least the basics in place — including an advance health care directive — you may be leaving your heirs with a web of difficulties.

12) Tapping Uncle Sam too early. Would you be willing to lose 6 to 8 percent of your income each month? Well, that’s what can happen to your Social Security benefits if you take them too early. Every year you delay collecting between age 62 (the earliest you’re eligible) and age 70, your monthly benefit goes up.

13) Not asking for help. You may be bravely following your own financial path, but when it comes to planning — especially retirement planning — it’s good to have a guide now and then. Talking to a financial adviser, at least occasionally, can give you a more realistic picture of where you are and where you want to go.

14) Keeping your family in the dark. Things are always scariest in the dark, so don’t be afraid to shed some light on your finances. Talk to your spouse openly about expenses, credit and debt, savings goals, and retirement. And when it comes to estate planning, make sure your adult children know what to expect.

Vasilios "Voss" Speros 602-531-5141
Spence Cassidy and Associates
#life #insurance #Retirement #Strategies
http://www.scaaz.com
https://www.linkedin.com/pub/vasilios-%22voss%22-speros/60/722/67b
vsperos@scaaz.com
85018

Sunday, November 2, 2014

#1 For Life And Retirement Strategies Tip of the day! Retirement Income

Why Retirement Income Now Costs More

#1 For Life And Retirement Strategies Tip of the day!
Vasilios "Voss" Speros 602-531-5141

For the year ending September 30, the cost of future lifetime retirement income has outpaced increases in retirement savings balances. That's left many pre-retirees with lower estimated retirement income despite strong market growth over the same period."

If that does not sound like a market update you've heard before, you're not alone. You're probably asking what does the cost of lifetime retirement income mean

What is retirement income? For our purposes, let's define retirement income as any method of obtaining a stream of income from a retirement account savings balance. We'll exclude other sources of retirement income not dependent on your savings, such as Social Security.

Why should income "cost" me anything? If you buy an income product, such as an annuity, you are paying a third party to assume longevity, market, interest and inflation risks on your behalf. (In other words, they are contracted to pay you for as long as you live, regardless of what the market does.) Even if you have no interest in an income product, we believe that estimating the cost of buying retirement income can help clarify your planning.

How does it help clarify my retirement planning? It gives you something to measure your retirement drawdown strategy against. For example, if your estimated retirement income is much lower than you anticipated, you may need to reexamine your plans. It can also help you estimate how much you need to save in order to obtain a certain income level.

Lessons Learned in the Q3 2014 Report So what have we learned? Perhaps the biggest takeaway for pre-retirees is that the relationship between asset growth and retirement income is far more complicated than it appears. For example, for the year ending September 30, 2014, the median retirement savings balance for a 55 year old rose 16.5% ¹ , largely due to strong market growth. At the same time, the estimated retirement income cost for a 55 year old increased from $12.76 per dollar to $15.12. The net result is they can expect less retirement income despite the asset growth.

The major driver of the increased cost of retirement income is that yields on 10-year Treasury notes fell over the year, from 2.64% to 2.52%. This change affected pre-retirees in their 60s less, who saw their market driven savings growth outpace the rise in retirement income costs, leaving them in relatively better shape than their younger peers. It is counterintuitive that your retirement savings balance can increase while your retirement spending power decreases. That is one of the reasons that by tracking retirement income costs, you can develop greater clarity in your retirement planning.

Vasilios "Voss" Speros 602-531-5141
Spence Cassidy and Associates
#life #insurance #Retirement #Strategies
http://www.scaaz.com
https://www.linkedin.com/pub/vasilios-%22voss%22-speros/60/722/67b
vsperos@scaaz.com
85018

Tuesday, October 28, 2014

#1 For Life And Retirement Strategies Halloween Time!

#1 For Life And Retirement Strategies Halloween Time!
http://www.sperosfinancial.com/ 602-531-5141

Create the retirement that you want by saving NOW!

Ahh retirement, when you can finally kiss that alarm clock goodbye. But before that can happen, you need to plan. Follow these tips for how to get started at any age.

Ahh, retirement, a time when the weekends and weekdays blend together and alarms are as necessary as high heels and makeup.

These days, the average age Americans retire at is 61, according to Gallup's most-recent Economy and Personal Finance survey. But before you can hit the golf course at 10 a.m. on a Tuesday or go for a week-long spa retreat with your girlfriends and really savor your retired years, you need to plan, and that planning should start early.

Retirement planning should start with your very first job, Join your company retirement plan — even if they don't offer a match.

And if they don't offer a retirement plan, open a Roth IRA and fully fund it. Every year. You can contribute $5,500 per year.

Make it a priority.

Just as it's never too early to start investing in your retirement, saying "it's too late to start" is also never a valid excuse. Even if you're approaching 50 and have yet to plan beyond Social Security and — if you're lucky — a pension, experts suggest you don't get too anxious — as long as you take some kind of action.
You can start building that nest egg no matter what your age.

What Every Woman Should Know
1 Women live longer as a rule, so they need to save more for a longer retirement.

2 Many women spend fewer years in the workforce and in many cases earn less than men even for the same job, which contributes to lower pension and Social Security benefits.

3 Lower pension and Social Security benefits mean many women may need to invest more aggressively and begin contributing to their retirement savings as early as possible.

4 Since females tend to outlive males, they should be actively involved in the retirement/financial plan for the family to ensure joint assets will not be wiped out should their spouse incur significant medical expenses, leaving them with little to live on. With the added protection of life insurance to cover loss of assets and income as well as long term care to is a must have.

Thursday, October 23, 2014

#1 For Life And Retirement Strategies Happy Friday!

#1 For Life And Retirement Strategies Key tip of the Day!
http://www.sperosfinancial.com/ 602-531-5141

Moving Toward Mid-Life
As they move into their 30’s, individuals may have begun to climb the career ladder and increase their earning power and income. At the same time, though, they may also have started a family and assumed more financial responsibilities like a mortgage, life insurance, multiple car payments, and all of the expenses involved in raising children. Ideally, this is the life stage where individuals should be gradually increasing the amount of money they are contributing to their retirement plans.

In their 40’s, many individuals are starting to see their incomes continue to rise. At the same time, though, they may also be facing higher living expenses than at any other time in their lives. For example, their children may be teenagers, which can be the most expensive age for supporting kids, or they may be saving for college or helping pay for their children’s college educations at this time.

The 50’s represent the peak earning years for many individuals, as well as a time when their living expenses may be starting to decrease as their children move out of the house and complete college. During this time, individuals should be kicking their retirement savings into overdrive by putting as much money as possible into their retirement plans. Their time-frame for saving is growing ever-shorter as their eventual retirement date draws closer each year.

Entering the Golden Years

Once they enter their 60’s, many individuals’ retirement planning focus shifts from asset accumulation to asset distribution and consumption. This is the time when most individuals should begin thinking about devising a portfolio distribution plan that details how they will withdraw enough money from their retirement plan to meet their living expenses, but not so much that they risk outliving their savings.

Vasilios "Voss" Speros 602-531-5141
#life #insurance #Retirement #Strategies
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#1 For Life And Retirement Strategies Key tip of the Day!

#1 For Life And Retirement Strategies Key tip of the Day!
http://www.sperosfinancial.com/ 602-531-5141
Retirement planning is not an isolated, one-time event—something that you do once in your life and then just put on cruise control. Instead, it should be an ongoing process that changes and evolves as you move through the various stages of your life.

Retirement saving and investing strategies should be adapted to reflect changing goals and circumstances as individuals move throughout their life. Individuals in their 20’s, for example, may be just starting out on the career ladder and earning less money than they will be later in life. But their expenses may also be lower, especially if they are single and have not yet started a family.

These and many other factors will influence how much money they can realistically save for retirement at this stage of their life, as well as how the money should be invested.

Vasilios "Voss" Speros 602-531-5141
Spence Cassidy and Associates
#life #insurance #Retirement #Strategies
http://www.sperosfinancial.com/
http://www.scaaz.com
http://www.sperosfinancial.blogspot.com/
http://www.linkedin.com/pub/vasilios-%22voss%22-speros/60/722/67b
https://plus.google.com/u/0/110837956257670674290/posts
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