Category - Retirement

1
Free Financial Advice has Hidden Costs: Motivations Matter
2
Roth IRAs Make Great Estate Planning Tools
3
Retiring Well When You Can’t Count on Relatives
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Why Financial Advisers Aren’t Telling Rich People about Social Security
5
Write Down Your Investment Plan

Free Financial Advice has Hidden Costs: Motivations Matter

Here is a common retirement investment scenario for Baby Boomers.  Mr. Jones is retiring and has different options available in his pension plan.

  • Option 1 – Accept a large lump sum, transfer it tax-free to an IRA and invest it for his future. He is personally accepting the risk of investing the money to help provide for the rest of his and his wife’s life.
  • Option 2 – Begin receiving guaranteed monthly payments for the rest of his life (and his wife’s life with survivor benefits).  This option places the risks and rewards of investing solely on the pension plan.
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Roth IRAs Make Great Estate Planning Tools

A Roth IRA will protect your investments from its worst enemies: taxes and required distributions. Unlike their traditional counterparts, Roths don’t require you to begin withdrawals from the account once you reach the age of 70 1/2. With time on your side and your investments sheltered from taxes, your Roth will begin to experience what Einstein called the “greatest discovery of all time” – compounding interest.

If the tax-free growth of a Roth IRA isn’t enough to whet your appetite, the estate planning benefits it offers should seal the deal. Bequeathing a Roth is much the same as setting up …

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Retiring Well When You Can’t Count on Relatives

retirement signLast week we discussed how mothers need to be aware of family finances, but what if you are not a mother? Sixty-something Sheila Sullivan Zubrod wrote a piece for The Washington Post about navigating her widowed mother’s later years and figuring out she herself can retire well. Women who have no children or find themselves without relatives to depend on can ensure a comfortable retirement when they plan ahead. In the category she refers to as Aging Solo, Zubrod includes, “…countless members of families plagued by addiction, disease, cults, rapacious children, even married progeny who much prefer their …

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Why Financial Advisers Aren’t Telling Rich People about Social Security

Recent research from the Spectrem Group found that a majority of rich people (people with a net worth of $1,000,000-$5,000,000) will rely on Social Security benefits for at least 25% of their income in retirement. Unfortunately, the same study found that only about 1/3 of these individuals talked about Social Security with their financial adviser. That is an alarming statistic considering the impact Social Security income has for retirees. So why aren’t more advisers helping their clients with Social Security benefits? Commissioned Advisers Lack Incentive to Talk about Social Security It seems that the most common answer may be because… Read More

Write Down Your Investment Plan

Charles Rotblut has a nice article in the American Association of Individual Investors Journal (AAII) entitled “Investing Strategies For An Irrational Brain.” First, he chronicles many ways that our brains are hard wired against making rational decisions. A combination of cognitive biases, emotions and reactive thinking leads to investing decisions that are not rational in terms of maximizing profits. Then, and most helpfully, he provides some of the best methods to prevent behavioral errors from occurring. Here are two of the easiest methods you can employ:

Use the Power of the Written Word

One of the simplest and

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