Insurance Archives - Southwestern Retirement Planning Advisors - Retirement Planning Chandler, AZ

20 Retirement Mistakes to Avoid

Kurt Rohrs — Sat, 08 Sep 2018 01:15:33 +0000

Mistaking Journalists for Financial Advisors

Most of these people majored in English or Journalism, not Finance. They give general advice targeting a general audience. There is no attention paid to your specific situation or wants needs, and desires. You need to sit down with a professional Financial Advisor to properly address those concerns.

Retiring without Liquidity or Diversity

“Don’t put all your eggs in one basket” … Yes, they were talking about your investments too. You need to address any number of possible market situations and personal situations and make sure to have funds readily available to deal with them.

Living on the Interest without Touching Principal

This locks you in to one distribution strategy that may not be appropriate under every circumstance. Some prudent management of multiple sources of income may give you more flexibility in dealing with changing circumstances.

Retiring without any Real Goals

If you have no idea what you want to do with the rest of your life it will be difficult to determine what your needs will be. This kind of uncertainty can be troubling.

Assuming you will be in a Lower Tax Bracket when you Retire

This assumes that Congress would never raise taxes. This may not be a reliable assumption.

Trusting a Calculator to tell you When to Retire

“Retirement Calculators” are designed for a general audience and may give you a general idea of what you may need. They also give very little direction on how to provide sufficient retirement income to meet your needs.

Retiring early only to Reduce your Social Security Benefit

Taking Social Security benefits early but needing a part-time job to fill the gap may cause the benefit to be reduced as well as permanently losing increased benefits available to you by delaying retirement.

Drawing Income form the Wrong Assets

If you have choices between multiple streams of income, which when should you choose and in what proportion? You may need to consider many factors including Taxation, Liquidity, Reliability, and Returns. A detailed analysis may be a good idea.

Choosing the Wrong Beneficiary

When you pass away, who will receive your remaining wealth? IRAs, Pensions, Life Insurance policies, Annuities and other financial instruments may all have beneficiary designations that need to be reviewed periodically to make sur e that they are up to date and align with your intentions.

Retiring without Estate or Insurance Planning

How do you protect the transfer against “Creditors and Predators”? How do you avoid taxation? How do you avoid Probate? You may want to consider careful Estate Planning to make sure your financial affairs are in order before that time.

Retiring on Hope

You should have an idea of what your expenses will be in retirement, how much you will need to save, when you can afford to retire, and how long your savings should last.

Ignoring Inflation

Prices for goods and services don’t stay the same. They may increase over time, especially Health Care costs, which have been rising faster than most other costs. You usually need more Health Care as you get older.

Making Seat-of-Your-Pants Money Decisions

What looked good today may not look so good tomorrow. One bad mistake can damage your retirement plans badly. Getting experienced, objective advice from a professional Financial Advisor can help you make more informed decisions.

Handing your Heirs Tax Problems

Proper Estate Planning can help ensure that your heirs maximize their inheritance instead of passing it along to the Government in the form of taxes.

Dismissing the Need for Long-Term Care

Contrary to popular belief, Medicare does not cover much on Long-Term Care expenses. You will have to come up with most of the funds yourself. Have you planned for this?

Being Talked into the Wrong Investments

Are you being sold a particular investment or are you being provided with options that are appropriate for your situation. You should insist on financial advice that is based on what is in your best interest.

Losing a Big Chunk of your Retirement Money in One Wrong Move

There are many decisions to make on moving money around at retirement including distributions options and rollovers. These need to be done properly to maximize your retirement benefits and to avoid undesirable outcomes.

Thinking Tomorrow will be just like Today

Past performance is not an indicator of future results. You may need to periodically reposition assets to address liquidity, stability, and income needs.

Retiring without an Investment Strategy

Investing in Retirement can be far different than investing before Retirement. You will be living off of savings during Retirement instead of trying to grow your portfolio. This needs a new strategy to be considered.

Set Goals as you Save and Invest

What are you trying to accomplish? Fund Retirement? Save for College? Build an Emergency Fund? Saving and investing based on well-defined goals can give you more focus on strategy and planning activities necessary to achieve your desired outcomes.

Conclusion

Proper planning can help you avoid mistakes that can lead to undesirable outcomes. You should meet with an experienced Financial Advisor to get some help. You can also get some more detailed information on this topic by requesting a free copy of our eBook “20 Retirement Mistakes Retirees Make and How to Avoid Them” by emailing to info@SWRetire.com.

What Should You Keep?

Kurt Rohrs — Sun, 01 Jul 2018 19:03:00 +0000

Fewer taxpayers are itemizing in the wake of federal tax reforms. You may be one of them, and you may be wondering how many receipts, forms, and records you need to hold onto for the future. Is it okay to shred more of them? Maybe not.

The Internal Revenue Service has not changed its viewpoint. It still wants you to keep a copy of this year’s 1040 form (and the supporting documents) for at least three years. If you somehow fail to report some income, or file a claim for a loss related to worthless securities or bad debt deduction, make that six years or longer. (It also wants you to keep employment tax records for at least four years.)1

Insurers or creditors may want you to keep records around longer than the I.R.S. recommends – especially if they concern property transactions. For the record, the I.R.S. advises you to keep documents linked to a property acquisition until the year when you sell the property, so you can do the math necessary to figure capital gains or losses and depreciation, amortization, and depletion deductions.1

Can you scan documents for future reference and cut down the clutter? Yes. The I.R.S. says that legibly scanned documents are acceptable to its auditors. It wants to you keep digitized versions of paper records for as long as you would keep the hard-copy equivalents. Assuming you back them up, digital records may be more durable than hard copies; after all, ink on receipts frequently fades with time.2

While many itemized deductions are gone, many records are worth keeping. Take the records related to investment transactions. It is true that since 2011, U.S. brokerage firms have routinely tracked the cost basis of equity investments purchased by their clients, to help their clients figure capital gains. Some of the biggest investment providers, like Fidelity and Vanguard, have records for brokerage transactions going back to the 1990s. Even so, errors are occasionally made. Why not save your year-end account statement (or digital trading notifications) to be safe? In addition, you will certainly want to keep any records related to Roth IRA conversions (which as of the 2018 tax year can no longer be recharacterized).3,4,5

The paper trail pertaining to health care should also be retained. In 2018, you can deduct qualified medical expenses that exceed 7.5% of your adjusted gross income (the threshold is scheduled to rise to 10% in 2019).4,5

Some records really should be kept for decades. Documentation for mortgages, education loans, loans from a retirement plan at work, and loans from an insurance policy should be retained even after the loan is paid back. Documentation pertaining to a divorce should probably be kept for the rest of your life, along with paperwork related to life insurance. You should also keep copies of property and casualty insurance policies, receipts of expenses for home repair or upgrades, and inventories of valuable and moderately valuable items at your home or business.3

The big picture of personal financial record keeping has not changed much. It is still wise to keep records pertaining to financial, health care, insurance, and real estate matters for at least a few years, and perhaps much longer.

Kurt Rohrs may be reached at (480) 812-8640 or kurtrohrs@SWRetire.com

Southwestern Retirement Planning Advisors, Inc.

3800 S. Alma School Road, Suite 123

Chandler, AZ 85248

www.SWRetire.com

Registered Representative offering securities and advisory services through Independent Financial Group LLC,

a registered broker-dealer and registered investment adviser. Member FINRA/SIPC

Southwestern Retirement Planning Advisors, Inc. is not affiliated with Independent Financial Group LLC

OSJ Branch: 4041 MacArthur Blvd. Ste. 240, Newport Beach, CA 92660

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment

Citations.

1 – irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records [2/23/18]

2 – turbotax.intuit.com/tax-tips/tax-planning-and-checklists/keeping-good-tax-records/L61fGcXtc [3/15/18]

3 – nytimes.com/2018/02/23/your-money/financial-documents-you-should-keep.html [2/23/18]

4- turbotax.intuit.com/tax-tips/health-care/can-i-claim-medical-expenses-on-my-taxes/L1htkVqq9 [3/15/18]

5- irs.gov/retirement-plans/ira-faqs-recharacterization-of-ira-contributions [1/23/18]

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