Protecting Your Nest Egg Posted on July 6, 2020 by ladams Protecting principal while investing for growth With the inevitability of stock market fluctuation, many retirement investors look for an investment strategy that provides protection of their nest egg while still affording the potential for additional growth. By strategically combining a guaranteed fixed-rate investment* such as a fixed annuity with a diversified PlanMember growth portfolio, you can pursue just such a strategy. This principal protection strategy is designed help ensure that at least your initial investment will be available at retirement regardless of how the stock market performs. In the event that the stock market provides historically average or superior returns, this strategy positions you to potentially achieve higher long-term growth than a fixed-rate investment. How it works As a general rule, begin by subtracting your current age from the age that you will begin making withdrawals from the investment. The difference is your investment time horizon. Next, use your investment time horizon and the average annual interest crediting rate of the fixed-rate investment. These factors will determine the allocation of your savings to invest between the fixed-rate investment and the growth component of your portfolio. The idea is to find the percentage of the fixed-rate component of your portfolio that will restore your principal investment amount regardless of the performance of your growth investments. Is a principal protection strategy right for you? It is very important to note that a principal protection strategy is not for everyone. If you have a longer investment horizon, you should be aware that by investing a large percentage of your nest egg in fixed rate investments, you are sacrificing the potential to benefit from the historically higher long-term returns of the stock market. This could result in a significantly smaller nest egg in retirement. Before undertaking a principal protection strategy, you should enlist the help of your PlanMember Financial Professional. To determine an average annual interest crediting rate, you’ll need to consider factors such as first-year bonus crediting, extra surrender period crediting, old money/new money crediting and the historic or guaranteed post surrender period crediting. Because these calculations can be a little tricky, your PlanMember Financial Professional will be happy to assist you, as well as help you select an appropriate fixed-rate investment and prudently allocate the growth portion of your portfolio. * Guarantees and benefits are subject to the claims paying ability of the issuing insurance company. Withdrawals of taxable amounts prior to age 59½ are subject to ordinary income tax and a 10% IRS tax penalty may apply. This is not a solicitation or offer to purchase or sell any security. This information is not intended to be used as the primary basis for investment decisions and should not be construed as investment advice.
How Much Should I Save? Posted on July 6, 2020July 6, 2020 by ladams Living a comfortable retirement requires a savings plan For most of us, achieving a financially secure retirement takes careful planning. The first step in this planning process is to estimate your retirement income needs and then calculate how much you will need to save to meet your goals. Determine your retirement income needs Most experts say that you will need approximately 60% to 80% of your pre-retirement income in retirement. For a more thorough analysis of your retirement income needs, start by making a list of your current expenses. You may notice that some of these expenses, such as a mortgage or children’s educational expenses, may decrease or even disappear by the time you retire, while other expenses, such as travel or insurance expenses, may stay the same or perhaps increase in retirement. Next, consider additional anticipated expenses that you might incur during your retirement. Often, these are the expenses that will fund your retirement dreams. Examples include the payments on the boat or motor home you’ve always wanted, or the cost of a long-anticipated trip around the world. Identify sources of income After you have estimated your overall retirement income needs, deduct any retirement income you will receive from such things as Social Security, state retirement systems, pension plans, annuities or other sources. You can receive an estimate of your Social Security benefits by contacting the Social Security Administration at www.ssa.gov. By deducting these sources of income from your overall retirement income needs you can determine the amount of retirement income that must come from your personal savings. Calculate what you need to save Once you have determined the amount of your retirement income that must come from your personal savings, you can calculate how much total savings you will need to meet your income goal. Consider the age at which you will retire, when you will begin withdrawals and your overall life expectancy. Keep in mind that most of us will need a nest egg that will last for 15 to 20 years or more in retirement. The earlier you retire, the larger nest egg you will need. Monthly or weekly savings plan After you have calculated your total savings goal, estimate how much you will need to save on a regular basis. Factors include your current age, expected age at retirement, withdrawal age and any retirement savings amounts that you currently have. You will need to make certain assumptions about the growth of your investments and how inflation will affect this growth. It’s a good idea to keep your growth assumptions conservative. Overestimating the growth of your investments can lead to a savings shortfall when you reach retirement. PlanMember can provide a quick and simple Personal Plan & Savings Analysis to help you get started on the road to retirement. Contact us now, and start planning your future today.
Roth 401(k) vs. Traditional 401(k) Calculator Posted on June 9, 2020 by ckensinger Roth 401(k) vs. Traditional 401(k) Calculator A 401(k) contribution can be an effective retirement tool. As of January 2006, there is a new type of 401(k) – the Roth 401(k). The Roth 401(k) allows you to contribute to your 401(k) account on an after-tax basis – and pay no taxes on qualifying distributions when the money is withdrawn. For some investors, this could prove to be a better option than contributing on a pre-tax basis, where deposits are subject to taxes when the money is withdrawn. Use this calculator to help determine the best option for your retirement. Javascript is required for this calculator. If you are using Internet Explorer, you may need to select to ‘Allow Blocked Content’ to view this calculator. For more information about these these financial calculators please visit: Financial Calculators from KJE Computer Solutions, Inc. PlanMember6187 Carpinteria Ave.Carpinteria, CA Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
403(b) Savings Calculator Posted on June 1, 2020 by ckensinger 403(b) plans are only available for employees of certain non-profit tax-exempt organizations: 501c(3) Corps, including colleges, universities, schools, hospitals, etc. If you are an employee of one of these organizations, a 403(b) can be one of your best tools for creating a secure retirement. It provides you with two important advantages. First, all contributions and earnings to your 403(b) are tax-deferred. You only pay taxes on contributions and earnings when the money is withdrawn. Second, many employers provide additional contributions to your 403(b). The combined result is a retirement savings plan you cannot afford to pass up. Javascript is required for this calculator. If you are using Internet Explorer, you may need to select to ‘Allow Blocked Content’ to view this calculator. For more information about these these financial calculators please visit: Financial Calculators from KJE Computer Solutions, Inc. PlanMember6187 Carpinteria Ave.Carpinteria, CA Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
Maintaining a long-term focus Posted on May 26, 2020June 3, 2020 by ksimas The stock market’s history of volatility and growth As we all struggle with the unprecedented coronavirus crisis and the corresponding stock market crash, it may provide some small degree of comfort to view the current market turmoil from a historical perspective. When investing for the long term, it’s important to keep in mind that while stocks have far outperformed other investments over the long term, they have also been subject to short-term periods of sharp decline. Financial Market Performance Growth of $10,000 investments From January 1, 1970 – December 31, 2019 Source: Morningstar Office. Stocks measured by Standard & Poor’s 500 Index, bonds by the Ibbotson Associates SBBI US Long-Term Government Bond Index, and money market by the SBBI US 30-Day Treasury Bill Index. All results assume reinvestment of dividends on stocks or coupons on bonds and assume no taxes. It is not possible to invest directly in an index. The hypothetical investment results are for illustrative purposes only and should not be deemed a representation of past or future results. Actual investment results may be more or less than those shown. The graph above illustrates the growth of hypothetical $10,000 investments in stocks, bonds and money market securities over the last 50 years. Notice that during this 50-year period, stocks have provided vastly superior long-term performance than bond or money market investments, but at the same time have subject to a far higher level of short-term volatility. This volatility is illustrated by the more dramatic peaks and valleys of the blue line depicting stock market performance. Note that at the end of the fifty-year period, the $10,000 stock investment has grown to nearly three times the amount of the bond investment, and more than five times the amount of the money market investment. Included in this 50-year time period were the “2nd Black Monday” stock market crash of 1987, the “dot-com bust” crash of 1999–2000, and the “Great Recession” crash of 2008. Following these and other significant stock market declines, the market rebounded to eventually reach new record highs. While past stock market performance is not a guarantee of future results, the historical performance of the market suggests it will eventually recover from its current decline just as it did with previous ones. It is possible to lose money by investing in a money market fund. Although the fund seeks to preserve the value at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon the sale of shares or may temporarily suspend sales of shares if its liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide such support at any time.
3 Tools to Help Build Your Retirement Savings Posted on May 14, 2020 by ksimas All teachers have that one class that makes them feel like retirement can’t come soon enough. If that’s you this year, then it’s time to kick your savings into high gear. However, saving like you are in a mad dash toward retirement takes the dedication of a marathoner. Here are three tools to help you build your retirement savings. 1. Calculate how much you need to save The question of how much you need to save for retirement can be as big a buzzkill as seeing a back-to-school ad on your first day of summer vacation. The many variables used to determine your retirement savings needs can make calculating this magical number complex. But, once you’ve done some mental math and have a goal number in mind, our Investment Goal Calculator can help you figure out what you need to save today to get there. With it you can explore the many factors involved, including your initial savings, periodic contribution amounts and frequency, years to accumulate, interest compounding, inflation and more. By experimenting with these numbers using the calculator, you’ll see what you can do today to reach your retirement investment goal. 2. Pre-tax savings Also referred to as “tax-deferred” savings, in that it’s income you won’t pay taxes on now, but will when withdrawing from your retirement savings, pre-tax savings is automatically taken from your paycheck and deposited in your retirement savings plan. It can make saving for retirement easy and help you avoid the feeling that you’ve got to give something up to save. Because the money is automatically deposited into your savings instead of your bank, it doesn’t necessarily feel like you’re making a sacrifice. For those who have trouble saving, this may help establish positive savings habits. 3. A savings app Digital spending has become increasingly easy and convenient with applications like Venmo, Amazon Prime, and other retailers who make paying for goods and services a simple click of a button. Saving for retirement with the help of apps can be equally as simple. Try these apps to help you save using digital technology. Created by Intuit, Mint helps you create budgets, categorize spending to eliminate superfluous expenses, pay bills, vet credit card programs, and review your overall financial picture to find ways to save money and reduce fees. As a smartphone app, Mint can send you notifications and reminders to help keep you on track. Qapital and Acorns are both savings apps built on the idea of investing leftover funds into a savings account. Qapital invests unspent budget surplus into your savings account and allows you to set reminders to save when ad-hoc or contractor payments are received. Acorns use what they call ‘micro-investing.’ For each purchase you make, Acorns will round up to the nearest dollar and automatically invest the spare change. Budgeting apps like Mvelops and Claritymoney help you monitor your spending and both suggest ways to save, plus alert you if you go over budget. Clarity Money goes so far as to use AI to monitor your spending habits. Mvelopes uses Certified Budgeting coaches to help you stay on budget and increase your savings.
Shelter-in-place jobs Posted on May 11, 2020July 6, 2020 by ksimas Work remotely from the safety of your own home In these challenging times, if you’re looking to replace wages lost to the coronavirus crisis, you may want to explore remote job opportunities during this shelter-in-place era. The type of work and required skills vary widely, but all can be done from the safety of your home, and options are available to nearly everyone. Teach English If you are a native English speaker, you may be able to teach English to children in China through several online platforms. VIPKid, Qkids and Magic Ears all hire native English speakers to teach after dinner and on weekends, but on Beijing time. So a California-based teacher would need to need to be ready to work around 3 a.m. Tutoring If you have skills in things like English, science, math or the arts, you may be able make money tutoring online. Wyzant, Varsity Tutors and Chelsea International Education all offer work opportunities with students needing academic help. If you have art, dance, drama or music skills, you can tutor online through LessonFace and TakeLessons. Writing If you’re a writer, dozens of online platforms will pay you to write. Platforms where you can find well-paying writing jobs include Contently, Skyword and Cracked. Editing If you have experience editing books or documents for content or errors, you may be able to make money editing for Reedsy. This platform mainly works with self-published authors who need advice and copy editing. Be a virtual assistant Virtual assistants can do almost everything remotely that executive assistants do in an office. Some schedule meetings, travel and conferences, while others handle social media or update company websites. The higher pay tends to go to those with social media or technical skills. If you’re interested, check out Boldly or Belay. Professional services If your skill set is on the professional side, there are a variety of platforms that can connect you with well-paid work. FreeUp is where content creators, accountants, marketing experts, web developers and administrators can find work. Remote finds work-at- home positions for people in a variety of professional fields. Wahve connects executives in insurance, human resources and accounting with small businesses that need regular help. Get your side hustle on You can find information, rates and reviews about each of these online platforms and many other side-hustle opportunities at SideHusl.com. Source: latimes.com/business/story/2020-03-27/sidehusl-remote-jobs-coronavirus
The stock market’s history of volatility and growth Posted on May 11, 2020 by ksimas As we all struggle with the unprecedented Coronavirus crisis and the corresponding stock market crash, it may provide some small degree of comfort to view the current market turmoil from a historical perspective. When investing for the long term, it’s important to keep in mind that while stocks have far outperformed other investments over the long term, they have also been subject to short-term periods of sharp decline. Financial Market Performance Growth of $10,000 investments From January 1, 1970 –– December 31, 2019 Source: Morningstar Office. Stocks measured by Standard & Poor’s 500 Index, bonds by the Ibbotson Associates SBBI US Long-Term Government Bond Index, and money market by the SBBI US 30-Day Treasury Bill Index. All results assume reinvestment of dividends on stocks or coupons on bonds and assume no taxes. It is not possible to invest directly in an index. The hypothetical investment results are for illustrative purposes only and should not be deemed a representation of past or future results. Actual investment results may be more or less than those shown. The graph above illustrates the growth of hypothetical $10,000 investments in stocks, bonds and money market securities over the last 50 years. Notice that during this 50-year period, stocks have provided vastly superior long-term performance than bond or money market investments, but at the same time have subject to a far higher level of short-term volatility. This volatility is illustrated by the more dramatic peaks and valleys of the blue line depicting stock market performance. Note that at the end of the fifty-year period, the $10,000 stock investment has grown to nearly three times the amount of the bond investment, and more than five times the amount of the money market investment. Included in this 50-year time period were the “2nd Black Monday” stock market crash of 1987, the “dot-com bust” crash of 1999–2000, and the “Great Recession” crash of 2008. Following these and other significant stock market declines, the market rebounded to eventually reach new record highs. While past stock market performance is not a guarantee of future results, the historical performance of the market suggests it will eventually recover from its current decline just as it did with previous ones. It is possible to lose money by investing in a money market fund. Although the fund seeks to preserve the value at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon the sale of shares or may temporarily suspend sales of shares if its liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide such support at any time.
3 common coronavirus scams Posted on May 11, 2020July 6, 2020 by ksimas Avoid adding to your financial struggles As millions of Americans struggle financially from the coronavirus pandemic, scammers are flourishing. According to the Federal Trade Commission (FTC), Americans have lost more than $13 million to coronavirus-related scams.1 Here’s a look at three of the most common coronavirus-related scams. 1. Stimulus payment scams The government is in the process of sending out stimulus payments to millions of Americans, and scammers are capitalizing on the confusion of the process to trick people into divulging their bank account information. This can result in both the theft of your money and identity. They may call pretending to be from the government or your bank and ask you to verify your bank account info for quick delivery of your check. Keep in mind that IRS and any other government branch, as well as your bank, will never contact you by phone, email or mail asking you to verify your information. 2. Coronavirus product, testing and treatment scams Scammers are creating fake websites pretending to offer hand sanitizer, face masks and other hard-to-find products. Some are also claiming to have access to home coronavirus test kits or treatments, but there are none approved by the Food and Drug Administration for home use at this time. When you visit these types of sites, you may be paying for something you will never receive, and/or malicious software may be downloaded to your computer that steals your personal information. Don’t visit or buy anything from unfamiliar websites without first investigating the site’s legitimacy, and look for a lock icon near the URL bar that indicates the site is secure. 3. Charity scams Many companies and individuals are generously donating money to charities to help those affected by the coronavirus. Scammers may call or email you claiming to work for a well-known or fake charity to request a donation, but your donation will go into their pockets instead of the intended recipient. If you’re going to donate, make sure it’s to a legitimate charity. You can search for the certified charitable organizations through the IRS Tax-Exempt Organization Search Tool.2 If it’s a genuine charity, go to their website for safe ways to contribute. If you think there is any possibility that you’re being scammed, do not give out any personal information. Make note of whatever information the scammer gives you, including names, websites, and phone numbers, and report it to the FTC3and/or the IRS4. Also, never click on any links within the emails of unfamiliar senders. For more information about coronavirus scams, visit FTC Coronavirus Advice for Consumers. Sources: 1. consumer.ftc.gov/blog/2020/04/covid-%2019-scam-reports%20numbers 2. apps.irs.gov/app/eos/ 3. ftccomplaintassistant.gov/#crnt&panel1-1 4. irs.gov/privacy-disclosure/report-phishing