We’ve Moved! 6121 Excelsior Blvd. St. Louis Park, MN 55416

Joe Lucey

Spooky season! What's your greatest fear?

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With spooky decorations in doorways and a smell of leaves in the air, this time of year is all about apple cider and trick-or-treating.  It gets me thinking about scary things that keep people up at night. For most people I know, that fear is outliving their retirement nest egg.

If you are concerned that your savings might run out leaving you broke, you are not alone. In fact, studies show that outliving their money is the #1 fear among those at or near retirement.

That makes perfect sense! At the end of the day, we are most afraid of the unknown. While it is easy to budget for routine expenses like food, entertainment and travel; life expectancy and health care expenses are completely unpredictable. No matter how disciplined you are with your budget, it is tough to know whether you have saved enough just by looking at a bank account balance. With the costs of health care on the rise, a single injury or unexpected diagnosis can wipe out a lifetime of savings in just a few short months.

Having worked with hundreds of individuals like you, I understand what it is like to lay awake at night worrying about money. That anxiety may be well-justified. The good news is that retirement fears can be overcome with proper planning.

Call us at (952) 460­-3260 to schedule a time to discuss your financial strategy.  We will create a custom-fit retirement plan that puts you back in the driver’s seat and gives you the peace of mind you deserve. If you already have a retirement plan, we will review it to make sure it is serving you well.

You might be concerned that it is too late to start planning. The truth is that it is never too late to get on track financially. I know that because I have helped others like you who have come to our office in their 50’s, 60’s and even 70’s. Don’t give up! No matter your age and financial situation, there are always options and tools to improve your retirement outcomes. Let us shine a light into those dark corners and help you see what’s there.

I look forward to saying hello at the office and helping you get a good night’s sleep – even around Halloween!

 

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

Volunteering Vacations

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Volunteering vacations allow you to donate your vacation time and skills to a worthy cause while expanding your horizons in another culture. Plenty of charitable opportunities do not require special training, such as helping out with child care, tutoring, environmental conservation and working with animals.

Before you book your trip, make sure the charity is reputable. A variety of organizations help travelers find meaningful volunteer opportunities in destinations around the world, including GivingWay, International Volunteer HQ and Volunteers for Peace. After completing the application process, including a criminal background check, the organizations help travelers find volunteer opportunities and assist them with their travel plans.

There are numerous projects and locations to choose from, and the opportunities to volunteer can span from one week to several months. Most organizations allow you to use weekends to explore the culture, with tours or recommendations by the local people with whom you work. Be aware, though, that a volunteering vacation doesn’t mean it’s free. There’s often a placement fee, and volunteers are usually responsible for their travel expenses.

Here are some examples we found:

  • Innovative companies are unveiling enticing voluntourism (volunteer tourism) opportunities in a variety of locations, giving travelers the chance to lend a hand on their next spring break, summer hiatus or family vacation.  Read more…
  • There are hundreds of causes to volunteer for, and finding one close to your heart will lead to a more worthwhile trip.   Read more…
  • Volunteer vacations vary widely, not only in intent but also in cost, accommodations, the amount of free time, and the physical effort required, so research carefully before signing up.  Read more…

Losing a Furry Friend

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Many of us rely on the unconditional love and support of a pet, and the sadness we feel when we lose one can be devastating. But because the process for how we mourn the loss of a pet is quite different from that of a person, our coping mechanisms can be hindered.

For example, we as a society do not have a widely accepted formal process to acknowledge the passing of an animal, such as a funeral or burial ceremony. With a person, this kind of an event recognizes the value of the deceased and his or her impact on others, and enables a mourning process with a distinct beginning and end. Not so for a pet. Whether a pet is cremated or buried, there is seldom a formal ceremony shared by others, and for many, the bereavement process can be very lonely.

In fact, family and friends may not fully appreciate the sense of loss that comes with the death of a pet. They may express condolences but often expect us to move on much more quickly than we would with a person. However, some people share a deeper connection with a beloved pet than with others; it is an unspoken bond that may be underappreciated until it is gone. This is particularly true for seniors who live alone, and, unfortunately, this bond cannot be replaced by simply getting another pet. At least not for some time.

The following tips may help you or someone you know cope with the loss of a beloved pet:

  • Recognize that it is normal to experience deep grief over the loss of a pet. Allow yourself the time to mourn the loss; it is important to transition through the various stages of grief, much as you would for a person.
  • Reach out to others who have experienced similar loss to share your feelings. Veterinary schools and local animal shelters often have support resources such as self-help groups or support hotlines to help you share, cope and move on. Online forums also can help.
  • While grieving, try to focus on maintaining your daily and weekly personal and professional activities.
  • Incorporate activities you enjoy into your daily regimen.
  • Discover ways to grieve productively, such as writing a journal or making a scrapbook or photo album about your pet.

What Type of Investor Are You?

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Each person is unique. We are composed of many variables, such as genetics, family influence, geographic influence and even the birth order among siblings – a veritable combination of the forces of biology and society. So when it comes to managing your finances, the debate isn’t about nature versus nurture; it’s both.

For example, consider two siblings raised in the same household: same socio-economic background, same parental influence, even the same level and type of education. Yet one sibling is a saver while the other is a spendthrift. Why is that?

We can’t always control whatever personal characteristics drive our needs, desires and indulgences, but we can learn to manage them responsibly. One way to pursue your financial goals is to work with an objective and knowledgeable financial advisor, a role we’re proud to fill for our clients. We can research and analyze your financial needs and objectives to help match appropriate investment and insurance products for your financial situation.

While self-knowledge is important, so is investor knowledge. Knowing how and where to invest isn’t an instinct we’re born with, but takes time and effort. If you’re wondering where you currently stand with financial literacy, consider taking the investor quiz at the Financial Industry Regulatory Authority (FINRA).

Investors tend to fall into various personality types. According to psychologists who study financial psychology, financial personality types can run the gamut from hoarder to social value spender to the ostrich (i.e., the proverbial “head in the sand”). To help counteract any obstacles that may be driven by your financial personality, one strategy is to focus on your goals. We may have very tangible components that influence our financial goals, such as the timeline for needing specific funds, the amount we’ll need and our personal tolerance for market risk. These three factors are instrumental in determining where and how to invest your money.

When it comes to investing with the goal of creating retirement income, designing your retirement plan may become even more complex. Not only should we take into consideration our household budget and all the travel, philanthropic and expensive items on our bucket list, but we also must weigh the potential impact of additional factors, such as:

  • How long we expect to live
  • How long we expect our spouse to live
  • Whether or not our children or grandchildren might need financial help
  • Whether we’ll experience significant health care expenses
  • Whether we’ll need full- or part-time assistance as we age

The point is, even if we are natural savers, ongoing students of financial education, experienced investors or obsessive planners, there are still plenty of unknowns that can potentially knock us off course.

But the more we know, the better prepared we can be.

 

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

How to Take Off Without Breaking the Bank

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Value Flight Offerings on the Rise

For travelers jet-setting all over the world, finding airfare at the right price may be the most stressful part of the vacation.

The rise of cheap, no-frills nationwide airline options have provided more than affordable flights — they’ve offered stiff competition to the major airlines. This may partially explain why industry giants like American, Delta and United have begun offering lower rates — with restrictions.

It’s common for companies to offer very few seats at the lowest fares, so they go quick. Those seats also may come with no frills, mirroring the limited luxuries that are available through small regional competitors such as Allegiant, Spirit and Frontier. For example, additional charges for luggage and fees for in-flight snacks and beverages.

A recent airfare analysis revealed basic economy rates from these major airlines run between $30 and $62 below the standard economy ticket on the same airline. However, they are still higher than fares offered by some ultra-low-cost carriers, by as much as $65 to $122 per ticket. Note, too, that larger airlines tend to offer low fares only on select routes and airports, although they are starting to expand to more flights nationwide. They also come with more restrictions than we’re used to from the larger carriers, such as the inability to change or cancel tickets, choose your seats or even store your luggage in the overhead bins. Basic economy fares tend to be the last to board and the last to deplane.

However, if you’re on a budget, it may be worth pursuing these lower fares since larger airlines do offer more flight times, locations, larger aircrafts and tend to be more reliable.

When researching airfares for your next trip, keep these tips in mind:

  • If you’re a longtime traveler of a specific airline and a member of its loyalty program, such as an American Airlines AAdvantage member, you may be exempt from certain restrictions imposed by your booking. You may be able to board earlier, for example.
  • Also consider you may have overriding perks offered by a travel credit card, such as the option to check a bag for free and receive priority boarding.
  • When shopping for basic economy rates, check out the specific airline’s website for booking, as it will provide more accurate information about rates and their limitations. Third-party travel sites may be long on promotional information and short on pertinent details. Be sure to read all the information in the ticket description before making a purchase.
  • Airfares change all the time. If you find an affordable rate, it might be better to book it rather than continue shopping. The next time you go back to that site, the fare may have increased.
  • Delta’s basic economy tickets were priced lowest eight weeks in advance of departure, and United’s best fares were two weeks in advance. American fares have been known to drop both eight weeks and two weeks out, but fares increased during the intervening weeks.

How to Take Off Without Boarding a Plane

Travel can be good for the soul, especially when daily life causes stress and sadness.

The Centers for Disease Control and Prevention reports that use of antidepressants has increased by almost 400 percent over the past 20 years, with anxiety at an all-time high. For those who feel overwhelmed and in need of a break, packing up and going somewhere can help lift us out of present circumstances.

However, not everyone has the money, time and good health for a vacation. Those who can’t afford a getaway trip still need a way to find an occasional escape. It turns out walks in nature can provide a similarly soothing effect.

According to scientists, the impact nature has on our psyche is biological. A walk through the forest can decrease cortisol levels, blood pressure, heart rate and neural activity in the part of the brain associated with anxiety and depression. Fresh air also helps us improve thinking tasks.

Despite studies showing people feel significantly happier when they are outdoors, we spend less than 5 percent of our waking hours in nature on average. But even those cooped up inside can experience some positive effects of the great outdoors. A study by the University of Michigan discovered that simply looking at pictures of nature can help overstimulated brains chill out.

The following are a few tips to help enhance your travels through nature:

  • Change your computer screensaver to images of nature.
  • Make a nature walk part of your daily or weekly routine.
  • Plan vacations to incorporate beautiful landscape vistas.
  • Put your cellphone on mute and keep it buried in your pocket when enjoying the outdoors.
  • If you’re considering a relocation or second home, look for areas with convenient proximity to nature where you can spend time benefitting from its biological advantages.

IRS News to Know

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As we head into the final quarter of 2017, it’s a good idea to stay cognizant of any tax issues that may affect your finances come April 2018. Now is the time to review your investments and income distribution plans to help ensure you don’t trigger additional taxes or penalties later on.

We can help retirees create income distribution strategies that provide a reliable stream of income. As some income-generating strategies could increase your tax liability in a single year, we recommend clients also consult with an experienced tax professional to understand issues regarding their specific situation. We are happy to make a recommendation from our network of professional colleagues.

One common income distribution strategy is to transfer assets from an employer-sponsored 401(k) plan to a self-directed IRA. This move can give some individuals more investment choices. The IRS encourages eligible taxpayers to consider requesting a direct trustee-to-trustee transfer, rather than doing a rollover. However, if you do not conduct a direct trustee-to-trustee transfer, it’s important to understand the rules related to personally withdrawing money from one account and depositing it to another. The IRS allows a 60-day window to do this without penalty. If an individual misses that deadline, he may qualify for a waiver to extend the deposit window. The IRS will generally allow an extension for one or more of 11 circumstances, including the death of a family member or because the taxpayer becomes seriously ill. Furthermore, a taxpayer can use a new self-certification procedure to apply for the waiver of the 60-day period to avoid possible early distribution taxes.

Speaking of IRAs, one income distribution strategy that early retirees may be able to take advantage of is IRS Rule 72(t). Normally, someone who retires before age 59 ½ would be subject to a 10 percent penalty on early withdrawals from a retirement plan. However, Rule 72(t) waives this penalty for individuals who make a series of “substantially equal periodic payments” for five years or until the retirement account owner reaches age 59 ½ – whichever is longer. The allowable amount is based on life expectancy and must be calculated using one of the IRS approved methods. Since every situation is different, individuals are encouraged to consult with a qualified tax professional before making any decisions.

A 2011 rule from the IRS relates to the “portability deadline.” This is the rule that allows a surviving spouse to absorb any unused portion of a deceased spouse’s estate tax exemption amount. The surviving spouse must file an estate tax return on behalf of the decedent in order to qualify for the portability rule, even if the estate is under the filing threshold and typically would not be required to file an estate tax return. A new IRS guideline grants a permanent automatic extension of the time to file an estate tax return just to claim portability, extending it from nine months to up to two years after the decedent’s death.

Also, as a reminder, 2017 is the first tax year in which taxpayers age 65 and over are subject to the same 10 percent threshold of adjusted gross income (AGI) for deducting unreimbursed medical expenses as all other taxpayers (in previous years the threshold was 7.5 percent for those 65 and over). Eligible medical and dental expenses must be over 10 percent of the taxpayer’s 2017 AGI in order to claim the deduction.

 

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.