Retirement Investing
Spotlighted here are the latest retirement investing tips, as well as in-depth reviews and analysis of retirement investing strategies.
Getting Your Retirement Plans On The Same Page
By Glenn DialBySome employers still offer defined benefit retirement plans along with defined contribution plans.One way for benefits advisors to help those employers is to recommend "total ...
October 11, 2004
AEGON Unit Adds Vanguard Investment OptionsNU Online News Service, Oct. 11, 2004, 3:44 p.m. EDTTransamerica Retirement Services, Los Angeles, will be offering a group of 6 "lifecycle" funds to ...
October 07, 2004
NAVA Speakers Call For ClarityVariable annuity companies should deliver a simpler message and simpler variable annuity products.[@@]Many speakers echoed that theme here earlier this week at the annual ...
October 06, 2004
MassMutual Updates Retirement Plan SiteNU Online News Service, Oct. 7, 2004, 5:36 p.m. EDTMassachusetts Mutual Life Insurance Company, Springfield, Mass., has improved its retirement plan administration Web site.[@@]The ...
October 06, 2004
Pre-Retirement Planning At The Last MinutePre-RetirementPlanning AtTheLastMinutePatrickA.LangAtsomepoint,yourclientsinthe50-to65-year-oldrangewillaskyou,theirfinancialadvisor,whatlast-minutetechniquestheycanusetohelpensureacomfortableretirement.Fortunately,thereareanumberofplanningoptionsavailablethatallowpre-retireestotakeadvantageofspecialtaxexceptionsandattendtootherimportantdetailsduringtheirworkingyears.Thestartingpointforanyretirementplanningshouldbeacarefulreviewoftheclientswillsandtruststounderstandthescopeofhisorheroverallplan.Yourcompanysadvancedsalesdepartmentshouldbeabletohelpwiththisreview.Inaddition,everyclientshouldhaveadurablepowerofattorney,healthcaredirectiveandlivingwill,ensuringthatthefinancialaffairsareinorderforthelatterstagesoflife.Longtermcareinsuranceisanotherimportantoptiontoconsiderearlyintheplanningstages,becausefundingthisinsuranceearlywillhelpkeepthepremiumdowninthelongrun.Thepeaceofmindthisprotectionoffersalsowillallowtheclienttofocusonmoreimportantmatters.Nowthatpricingandproductdesignhavebeguntostabilizeforthisessentialcoverage,youlldowelltosurveythemarketandselectafewcarriersyouarecomfortablewithbeforeyourclientbeginsaskingquestions.Qualifiedplansshouldbeanotheroptioninthepre-retirementyears.Inmostcases,maximumfundingisessentialtofuturesecurity.Inaddition,thereareafewlast-minutecatch-upopportunitiesavailabletogetthemostmoneyintoaprogrambeforeretirement.Catch-upcontributionsareadditionalelectivedeferralsmadebyaneligibleparticipantinanapplicableemployerplan.For2004,catch-upforatraditional401(k)planinwhichtheparticipantis50yearsorolderis$3,000.Catch-upfora403(b)planisalso$3,000wheretheparticipantisatleast50.UnderaSection457plan,thecatch-upamountforclients50oroveris$3,000forallbutthelast3yearsbeforeretirement,duringwhichtimeits$13,000.Catch-upamountsare$1,500forSIMPLEIRAsandSIMPLE401(k)plans.FortraditionalIRAs,theamountis$500forindividualswhohavereachedage50.ThesamelimitappliesforRothIRAs.Thisperiodbeforeretirementisalsoanappropriatetimetodiscussretirementdistributionplanning.Clientsneedtoappreciatethatcertainwaysoftakingqualifiedplandistributionscanbemoreadvantageousthanothers.Theyalsoneedtoconsiderbothqualifiedandnonqualifiedassetsindesigninganefficientdistributionstrategy.Perhapsadiscussionofthenew,simplerrequiredminimumdistributionrulesalsowouldbebeneficial.Besuretoreviewqualifiedplanbeneficiarydesignationstoensuretheystillmatchtheclientscurrentobjectives.Fornonqualifiedinvestments,thetimevalueofmoneycanbeastrongpersuader.Createyourownchartsthatreflectthesavingsabilityofyourclienttoshowtheadvantageofsavingmorenowversustryingtoplaycatch-upwithnonqualifiedinvestmentsatage65.Whileyourclientsinvestmentphilosophymayneedtobeadjustedinthepre-retirementyears,moreadvisorsarepointingouttheneedtoretainasignificantequitypositionduringtheretirementyearstoprovideadequatefundsforever-increasingpost-retirementlongevity.Apre-retirementreviewofyourclientslifeinsuranceprogramisalsoimportant.Adequatelifeinsurancecanofferpeaceofmindbyallowingclientstospendassetsinretirementknowingtheirfamilieswillbeprovidedfor.Inaddition,manyclientsmayfeelcomfortablebeingmoreaggressivewiththeirequityinvestmentsduringretirementknowingtheirfamilieshaveanunderlyingsafetynetofsufficientincometax-freelifeinsuranceproceeds.Secondarydeathbenefitguaranteesmayhelpassuretheclientthatpolicyproceedswillbeavailablefortheirfamiliesregardlessoffuturefluctuationsinthefinancialmarkets.Furthermore,adequatelyfundedlifeinsurancecanprovideanincometax-freesupplementalretirementincomeinthelateryears.Annuitiesalsoneedtobeconsideredatthispointbecauseoftheirtax-deferredgrowthandtax-advantagedpayouts.Atthisstageintheirlives,manyclientscaneffectivelytransfercertainunderperformingassetsintoannuitiesorlifeinsurancewithsignificantyieldsandtaxadvantagestotheclient.WhileMedicaresupplementsmaybeanichemarket,youshouldhaveabasicunderstandingoftheseprogramstospeakknowledgeablywithprospectswhomayexpressaninterestinthisarea.Remember,clientswanttoleavenostoneunturned.SocialSecurityisonemoreareatoreviewinthepre-retirementyears.SocialSecurityhasbegundistributingbenefitstatementsperiodicallytoparticipants,butyoullneedtohaveamethodtoreviewtheearlybenefitsquestion.Manycompanieshavesoftwarethatcanhelpwiththis.Finally,oneofthemostoverlookedopportunitiesforpost-retirementplanningischaritablegiving.Forthoseclientswhoindicateadesiretoallocatecertainassetsforpost-mortemcharitablegifts,youshouldpointoutthatthesesameassetscanbepreservedforthefamilybyfundingtheproposedgiftonadeeplydiscountedbasisusingasinglelifeorsurvivorshiplifeinsurancecontract.Weveonlyscratchedthesurfaceinexploringsomeofthetopicsyouneedtodiscusswiththepre-retiree.Makeupyourownchecklisttobesureyouvecoveredallthetoolsthatareappropriateineachclientssituation. PatrickA.Lang,JD,CLU,ChFC,CFP,CFS,FLMI,isvicepresidentofadvancedsalescasesupport,forJeffersonPilotFinancial.Youcane-mailhimat patrick.lang@jpfinancial.com.ReproducedfromNationalUnderwriterEdition,October7,2004.Copyright2004byTheNationalUnderwriterCompanyintheserialpublication.Allrightsreserved.Copyrightinthisarticleasanindependentworkmaybeheldbytheauthor. ...
October 06, 2004
Success Starts With Mutual CommitmentLike a good marriage, successful pre-retirement planning starts with a mutual commitmentand the similarities dont end there. During my 14 years in financial services, and ...
October 06, 2004
Exploring All Options Means Better Solutions And More SalesExploring All Options Means Better Solutions And More SalesTax-deferred plans like 401(k) and profit-sharing plans are great, but what can you do when your pre-retirement ...
October 06, 2004
Three Retirement Stumbling Blocks To Watch ForByI just got my annual notice from the Social Security Administrationyou know, the statement that estimates your future retirement benefits based on past earnings.Like most ...