There are 2,728 rules for filing Social Security
There are important decisions you need to make when claiming Social Security, and you want to understand the facts so you don’t make a costly mistake.
Karlan Tucker reviews 7 retirement income planning tips for 2017. Tucker Financial Solutions is a full service retirement planning, financial advisory and investment firm.
If you plan to retire in the next five years, or currently retired, December and January is a great time to conduct a review of your retirement income plan. Are you on track? Is your principal protected from market downside? Are you on track to meet your goals? “Every day we meet individuals, who plan to retire within the next 10 years, concerned they will run out of money during retirement. Your income plan must include a plan of reliable and increasing income that will outlast you. How could upcoming life events or employment impact your current plan? Year end is a great time to schedule a second opinion to review your plan,” noted Tucker.
Research and analyze the fees that are currently embedded in your portfolio. FINRA offers an excellent tool to analyze mutual funds, EFTs and ETNs. Enter the mutual funds, EFTs and ETNs in your portfolio and analyze the net fees for a specific holding period. Typically 10 years holding period provides a good benchmark to costs. “Many times after we provide a portfolio review for a prospective client, they are shocked at the amount of fees and other costs we uncover. Taxes and fees are corrosive to a retirement plan principal and earnings. Minimizing both taxes and fees can provide a more secure retirement,” added Tucker
As the Dow attempts to crack the 20K milestone, don’t get complacent and keep a majority of your assets exposed to the market. The stock market appears to have cyclical patterns; its highs and its lows can bring a sense of achievement or despair. Avoid the emotions of the market.
“In 2017, consider taking some risk off the table. Ask yourself: if the market drops substantially over the next several months, how will that impact my retirement income plan? In many cases, a market drop of 10% or greater, can substantially impact the plan. You might consider fixed index annuities as a way to lower the risk and yet provide a retirement income vehicle,” said Tucker. Karlan Tucker reviews portfolios regularly and has found that many retirees are 100% exposed to the market downside – this is a potential retirement income catastrophe should the market drop.
If you want to participate on the potential upside in the market; consider this, fixed index annuities as a way to participate in the market upside yet protect your principal from the market downside. The Financial Research Corporation of Boston noted “no other investment vehicle can rival the income annuity for retirement security.”
“The annualized Dow Jones Industrial Average (DJIA) has average just 3.4% in the last 16 years. You invest your hard earn capital into stock market. You take the risk; but, there isn’t much reward,” added Tucker.
Health care and long-term care continue to rise year over year. Start planning now on how to pay for these expenses during your retirement years. Health care and long term care costs are fast ways to exhaust retirement savings, home equity, and other assets. “The odds are high that many retirees will need some form of long-term care. It can financially wipe out a couple’s savings in a matter of months. You don’t have a retirement plan if health care and long-term care is not planned for,” said Tucker.
Saving when employed is easier than going back to work at age 70 because you didn’t save enough while working in younger years. Retirees who enter back into the work force after retirement are often working for minimum wage because of a lapse in skill set and experience. Find ways now to lower spending: housing, cell phone, cable, college expenses, insurance, automobiles, and etc. Take a lesson from the younger millennials. Millennials are creatively cutting housing, transportation, and entertainment costs to maintain their lifestyles.
“Review all of your household operating costs. What can you lower or cut to help achieve your retirement income goals? Lowering a cable, skipping going out to a restaurant or eliminate a cell phone bill can make a substantial difference. Calculating a 5% annual compound rate while saving $200 per month over 15 years, an individual could have $52,000 in savings,” added Tucker.
Income taxes and real estate taxes in retirement are difficult to predict. Many economists believe that the Federal government will need to increase taxes to offset the multi-trillion dollars deficit. If you plan now, there are several ways to get tax free income in retirement. “If taxes rise in retirement, you need a plan to receive tax free income from your Roth IRAs and the cash values of a life insurance policy,” said Tucker.
About Karlan Tucker
Karlan Tucker is the CEO and Founder of Tucker Financial Solutions located in Littleton, Colorado. He is also a radio talk host and author. He’s been interviewed nationwide on television and radio stations. Since 1991, he and his advisory team have helped Coloradans successfully retire. Regularly he reviews topics on investing, retirement, college planning and taxes.
About Tucker Financial Solutions
Tucker Financial Solutions, a retirement and investment advisory firm, specializes in fixed index annuities, life insurance, asset management, and college funding. Tucker Financial Solutions, founded in 1991, is located in Littleton, Colorado. Tucker Financial Solutions is part of the Tucker companies, which include Tucker Advisors, Tucker Asset Management, and Tucker College Solutions.
Investment advisory services provided through Tucker Asset Management LLC, a register investment adviser. Guarantees are based on the claims-paying ability of the insurance company.
Karlan Tucker reviews regularly financial planning, investing, taxes, college planning, wealth management, annuities and asset allocation.
By Karlan Tucker
Most Americans that accumulate retirement nest eggs have their assets in three categories. The first category is their long-term speculative investments that are generally in employer-sponsored retirement plans like a 401k or 403b or a Roth or Traditional IRA. The second category of assets are liquid investments, like CDs and Savings Accounts that have 6 months to one year’s worth of expenses set aside. The third category is the long-term guaranteed assets that include Social Security Income, Fixed Indexed Annuities and Pensions.
The harsh new economic reality that most Americans are facing is that many of their pension plans, which account for approximately 19% of their retirement nest eggs, according to the Social Security Administration’s Income of the Aged Chartbook, 2010, are being systematically cut in cities around the nation. What was once touted as an untouchable asset given to employees in exchange for their years of service at lower wages than their private-sector counterparts is now being greatly reduced or not offered.
What does this mean if you are a resident of Detroit, Michigan, San Bernardino, California or Chicago, Illinois? While you cannot count on receiving full pension benefits, you can count on working longer before receiving fewer benefits than you were promised. You can also be assured of experiencing marked decreases in overall benefits, up to 30% according to, “We Are One”.
What should you do? Consult with an income specialist immediately to come up with an amicable course of action to offset the amount of funds that your pension would have provided you in retirement, and discuss the opportunities that you have to maximize your Social Security income to help offset your decreased pension pay-outs.
Many people find themselves on the outside looking in when it comes to retirement. This means, quite simply, that before you retire, you are probably only seeing the retirees in a very limited capacity. You see someone enjoying their financial freedom. You see a person who dresses in golf attire every day, enjoying AARP benefits and movie theater discounts.
However, when you reach the age at which you plan to retire, there are personal feelings and desires that you must deal with. These are things you probably don’t notice too much, because the majority of them are internal. To assist you with your retirement planning, let’s take a look at some of the positives and negatives of what you might go through leading up to your retirement, and afterwards.
In today’s age, many retirees are utilizing their time to reinvent themselves. Maybe you have a passion that you’ve been forced to curtail due to your job. Now is the time to delve into that passion and have fun with it. That could be anything from rebuilding an old clunker to starting a book club. Or, thanks to technology, that could mean creating your own website and blogging on a daily basis about a subject you’re passionate about. And for some retirees, this is a time to reinvent themselves by embarking on a new career. Now that they are no longer shackled to their jobs, many see this as a period of self-discovery and improvement in a professional sense.
Negative: Pent-up Anger
There’s a good chance that you’ve felt some anger from time to time as you’ve progressed through life. Anger is a very natural reaction when things go wrong. Retirement is definitely no exception. For example, many retirees still feel a great deal of anger over the effects caused by the Great Recession. Despite the fact that it reportedly ended three years ago, Americans are still feeling its affects daily. They might also find themselves angry over rising health care costs or the years they spent working and saving to have their retirement accounts depleted. If you find yourself holding onto this anger, you need to find ways to cope with it. Anger can quickly become a debilitating problem. It’s best to get rid of it now.
Positive: Vast Opportunity
Many individuals have a successful retirement because they’ve worked tirelessly for years and saved opportunity along the way. Now that those days are over, you have a fantastic opportunity to improve other aspects of your life. Many retirees in this situation decide to improve their family relationship. They connect with lost relatives, invest more time with their children and spouse, and even spend a great deal of time working on relationships that might have been a bit forsaken while they were working so hard to create a strong retirement.
Negative: Petrifying Fear
This can be a big issue. Although “petrifying” might be too strong a word, the fact remains that a lot of people fear what is waiting for them throughout their retirement. They see older retirees, maybe their own parents, and have taken note of what they go through. They watch while others have health problems and become dependent on family and friends. This is a life that frightens them immensely. In addition to this, many also fear being unable to cope with no longer having a purpose in life, despite how incorrect that statement might be.
Although not the answer to all retirement problems, a strong and well managed porfolio can help alleviate many of these fears by offering peace of mind that you will be protects from life’s inevitable storms.
Although it takes a lot of hard work and dedication to get there, millions of Americans are looking forward to their retirement. They dream of the days when they can sit back, relax, play golf, and simply enjoy the rest of their years away from the rat race of the working world.