Retirement Guys: Financially fit as easy as 1, 2, 3Written by Nolan Baker Mark Clair | | firstname.lastname@example.org
Now that the new year is upon us and all of the holiday events are behind us, it is time again to work toward laying out our 2013 financial game plans.
The three steps we will help readers focus on are how to better manage money, protect assets
from a health care crisis and efficiently plan your estate. Which goal you start with depends on what is most important to your family.
Rebalance investment accounts to better manage your money. Assign a goal and a specific purpose for each
by creating buckets of money.
Creating buck- ets of money allows an investor to target specific goals and select appropriate levels of risk for each account. The more specific an investor can be as to the purpose of the money and time frame in which it will be used, the easier it will be to pick investments that are suitable for that account. In general, the shorter the time the money will be in an account, the less risk an investor should take with the money. We usually advise clients to break accounts down into buckets for current income, pay raises in the future, peak spending years, alternative assets, long-term growth and an emergency account.
The major areas of concern we see are the economic cycle, the age wave and political uncertainty. Over the past several years, the stock market and the economy have been growing. This has left many retirees getting comfortable again with drawing current income off risky stock and bond accounts. Don’t rely on growth alone to fund retirement income needs; have safe accounts to draw income from.
Next, we are seeing a unique dynamic that our country has never seen before. This, in part, is due to the millions of retiring baby boomers. The impact this will have on Wall Street as these baby boomers change from savers to spenders will have a dramatic impact in the future.
Last, the recent fiscal cliff debate has been partly solved in the short term, yet the long-term risks just continue to grow. Watch out as these issues heat back up in the months ahead and rebalance while times are good.
All Americans should take personal responsibility to protect their assets from a health care crisis with the proper insurance. Don’t rely on the government to take care of your health insurance needs now or in the future.
Health insurance and long-term care insurance are the two areas to focus on. Health insurance can be a very complicated matter and circumstances change all the time. The best way to stay on top of all the changes is to sit down once a year and review your current coverage. Look for gaps and get the proper coverage to avoid being financially wiped out by a health care crisis. Don’t just get advice in a group setting or try to make decisions on your own; seek out professional and customized advice based upon your family’s unique situation by meeting with a health insurance specialist.
Don’t forget to update your beneficiary forms for an efficiently planned estate. Many middle-class American families think they don’t need to update their estate plans since the federal estate taxes won’t affect them, but they could be wrong.
Every year or two, it is always a good idea to sit down and talk with an attorney to review your legal documents. A big mistake we often see people make is forgetting to keep beneficiary forms updated. This one simple mistake could mean family members end up wasting thousands of dollars in taxes, fees and expenses. The last thing you want to do is to unintentionally disinherit a family member, which could happen if the beneficiary form is not filled out correctly.
To avoid the most common beneficiary mistakes, stop by our website at www.RetirementGuysRadio.com and order a copy of the beneficiary checklist.
For more information about The Retirement Guys, tune in every Saturday at 1 p.m. on 1370 WSPD or visit www.retirementguysnetwork.com. Securities and Investment Advisory Services are offered through NEXT Financial Group Inc., Member FINRA / SIPC. NEXT Financial Group, Inc. does not provide tax or legal advice. The Retirement Guys are not an affiliate of NEXT Financial Group. The office is at 1700 Woodlands Drive, Suite 100, Maumee, OH 43537. (419) 842-0550
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