Wealth & Retirement

Wealth Management Tucson Arizona

Are You On The Right Track For Retirement?

Your probably ask yourself the very same question all the time. Are you going to have enough? Are you getting the most from your investments? Will your family have what they need to take care of things when you aren’t able to?

It’s tough thinking about it all. Stressful too. That’s why it’s a good idea to sit down with a licensed investment professional to evaluate your portfolio, your insurance, and make sure everything is in place to so you are in the best possible position. We have several ways to help you plan for your retirement – here are just a few.

For most seniors when I ask them about risk the most common answer I get is I do not want to risk my principle, especially if one is on a fixed income such as social security or a fixed pension. But on the other hand everyone wants a better rate of return then they can get at the bank and right now a savings account is yielding about .01% pathetic! That means if you invest 100,000 for one year your return is 10 dollars, oh and wait you get a 1099 and have to declare it as income whether you take the income or leave it to accumulate in the account. That seems like you are getting ripped off.  Do you agree?

So what’s the solution? Well one solution is fixed or index tax deferred annuities. These two annuities that carry little or no principle risk. Annuities are issued by life insurance companies, they are not considered securities, but they are not bank deposits either and are not FDIC insured, they are backed by the full faith and credit of the issuing insurance company. Annuities are designed for long term investing what I mean by long term is a time horizon of between 5 and 10 years depending on how the individual annuity is structured by the term of their surrender charges. Also if annuities are redeemed before the age of 59 years you will be subject to a 10% IRS penalty and taxes as ordinary income on the growth.

Let’s first discuss index annuities. Index annuities are structured like the name says it is tied to a stock index, the most common index used is the S&P 500 stock index. The S&P 500 is a capitalization weighted index what that means it is the largest publicly traded companies by how much they are worth. Their objective is to mirror the index not to over perform it because the index sets the standard. It is not an actively managed portfolio it is a passively managed portfolio. Because there are no fees involved in this type of annuity they generally cap the rate of return you receive for example if the S&P 500 index has a one year return of 10% your index annuity may have a cap of 5%, which means you cannot receive more than the cap in this example is 5%, The insurance company is taking all the risk so because they are the risk takers they pass it on to you by capping the rate of return. On the other hand they generally guarantee your principle-by their full faith and credit and give you a guaranteed rate of return. It’s like six of one half a dozen of another.

This type of annuity allows you to take advantage of the stock market without the usual risk involved in investing in the stock market.

Fixed Annuities are investments sold by insurance companies that guarantee a minimum rate of return. A fixed annuity is suitable for one who wants their money to be safe. Fixed annuities Have what is called a base rate, which means the current rate generally follows the 10 year treasury note, but you can never receive less than the minimum guarantee. Like index annuities the are considered long term investments and carry surrender charges for a certain number of years, the length of time will depend on the individual annuity, and if you withdraw it before age 59 you will be subject to a 10% IRS penalty and taxed as ordinary income on the interest.

Annuities are designed to grow tax deferred, which means the interest you receive is not taxed until you withdraw it and your money grows faster because it is not currently taxed. Fixed annuities can be set up for an income stream for either lifetime or for a certain period of time. The reason I like fixed annuities is that they are safe, secure and they avoid probate by designating beneficiaries.

Individual Retirement Accounts are savings accounts designed to help you save for retirement and offer many tax advantages. There are 2 types of IRA’S the first is a TRADITIONAL IRA and the second is a ROTH IRA. Both are structured for retirement but differ in tax advantages. The primary difference is with a ROTH IRA you get no deduction for contributions, but if you follow the rules set forth by the IRS your investment earnings will be distributed tax and penalty free in retirement.

A TRADITIONAL IRA can provide a deduction for contributions and delay taxes on investment earnings until your funds are withdrawn, typically in retirement. Contribution limits for both a TRADITIONAL and ROTH IRA’S are, under 50 years of age can contribute up to 5,500 dollars, over 50 years of age you can contribute an additional 1,000 dollars for a total contribution limit of 6,500 dollars and the additional 1,000 dollar contribution is considered a CATCH UP contribution. Sometimes it pays to be older…or not. The investment choices we offer are many, from stocks, corporate and government bonds, exchange traded funds, mutual funds and annuities both fixed and variable. The investment choices you choose should be considered by your risk tolerance, time horizon and age we can assist you in assessing these needs.

If you have had several different employers and have rolled your previous retirement accounts in several IRA’S consolidating your retirement assets offers you many benefits, especially the control of your investments on how and what they are invested in under the umbrella of a single account. Remember IRA’S offer beneficiaries which avoid probate and go directly to whom you designate to receive the proceeds after your death, Remember the earlier you start to save for retirement the earlier you can retire contact us and we can assist you in the many choices available .

Retirement Plans Retirement Plans can be broken down into two types, the first type is an employer sponsored plan, and the second are individual retirement plans. EMPLOYER SPONSORED PLANS – Our firm is a full service investment firm also offering investment advisory services through Trans America Investment Advisors Inc. and we are capable of implementing and servicing your 401K, 403b, pension and profit sharing plans. Peter DeChristopher one of the Senior Managing Partners is Registered as an Investment Advisor Representative and can determine your needs, give you options on the most suitable plans available that meet your company’s needs and fit into your budget.

Employer Sponsored retirement Plans also include Sep-Ira and Simple Ira and Self employed 401K , these are available for sole proprietors, C Corporations, S Corporations and Partnerships. These plans allow for larger contributions verses traditional IRA contribution limits. It also may be a contributing factor in retaining key employees. Contact Peter today and he can arrange a private conference to discuss your company needs and how you can achieve your business financial goals.

Despite the inevitable nature of death, we are seldom prepared for the flurry of emotions that accompanies the death of a family member or a friend. Grief, confusion and shock are typical responses of the news of a loved one passing. Final Expense Planning ensures your final wishes are carried out exactly as you dictate, and gives you the security of a greater peace of mind by removing the guess work for the surviving members.

This is one of the first steps that we explain in our initial consultation with clients, and the repercussions that can be avoided if a plan is put in place.We have to think clearly and logical, not emotional. Death enhances emotions in all of us and may cloud our thinking, and make our decisions vulnerable, so clear thinking by planning ahead is the most logical way to make the right decisions which are in yours and your family’s best interest.

Financial Planning, Estate Planning and Final Expense Planning are processes which take many hours to prepare and execute, and our firm is committed to insure you the most comprehensive and thorough plan by experienced financial planners

Contact us for a Free Wealth & Retirement Assessment. You’ll be glad you did.

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