Joe Lucey

On the popular television show “Star Trek,” the Vulcan character Mr. Spock was known for his salutation “Live long and prosper.” However, those two concepts may sometimes work at odds with each other, especially if people don’t have a plan for their retirement income. Many retirees can live a prosperous lifestyle, but without a retirement income strategy, they may run out of prosperity for the very reason that they live a long life.

The risks associated with aging may increase over time. The buying power of our retirement savings is more likely to erode due to the long-term impact of inflation. We are more likely to need part- or full-time assistance with daily activities as we grow older. Our health care expenses are likely to increase. We may lose friends and loved ones and become more isolated. And finally, we risk outliving our retirement income sources. In short, being able to both live long and to prosper may require substantial resources and a well-thought-out retirement plan.

There’s a silver lining, of course. More time means we can pursue more personal goals. Living longer allows us to watch our loved ones grow up and achieve their own successes and prosperity. A longer timeline has the potential to give our income sources more time to grow, which may help to smooth over periods of volatility. We can help you create a retirement plan that takes into account your goals and income needs; give us a call at (952) 460­-3260 to set up an appointment.

Many retirees can manage their household and their finances until they pass away, but that isn’t always the case. It’s a good idea to choose a power of attorney and complete the appropriate paperwork while you have the power to choose who you would like to look out for your interests. We encourage you to work with a legal professional who can help you make decisions to suit your personal situation. The risks that can be associated with aging may be many, but so are the people willing to help us face them.

 

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific retirement 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.

The National Flood Insurance Program (NFIP) was created by Congress in 1968 to offer property owners flood protection that is generally excluded from homeowner’s insurance. Unfortunately, the recent spate of hurricanes and storms has put the program under the microscope.

An NFIP policy can be purchased for coverage of up to $250,000 for the home structure and $100,000 for the home’s contents. Note that this policy does not currently cover expenses stemming from “loss of use” of a home.

The number of claims emanating from September’s weather events is expected to substantially increase the program’s already sizable debt. The NFIP has been altered by legislation in the past to keep up with the growing need for coverage and the funding resources to provide it. For example, in 2012 Congress passed the Biggert-Waters Act, which authorized an increase in premiums and other provisions to ensure the program could remain financially stable and solvent.

However, premiums increased so much in some high-risk coastal areas that public outcry prompted additional legislation in 2014, known as the Homeowners Flood Insurance Affordability Act. This legislation rolled back many of the premiums increased by the 2012 act.

In the short term, it will be necessary for Congress to increase the program’s borrowing authority to pay outstanding claims. Long term, other solutions will need to be examined, ranging from raising premiums once again to encouraging or mandating that more property owners purchase flood insurance — which is one way to help keep premiums from rising.

Use of Retirement Plans Allowed in Hurricane Recovery

After Hurricanes Harvey and Irma, the Internal Revenue Service announced that employer-sponsored retirement plans, including 401(k)s, can be used to take hardship distributions. The relaxed rules apply to account owners and members of their families who live or work in disaster areas that have been designated by FEMA for individual assistance (visit https://www.fema.gov/disasters for the list).

This means eligible account owners can access retirement funds quickly and may even continue making 401(k) and 403(b) contributions — a provision generally banned for at least six months by employees who take hardship distributions. The IRS rule also includes the following provisions:

• An eligible plan participant may withdraw funds from his or her retirement account up to the specified statutory limits of the plan.
• Money may even be withdrawn by a non-victim to help out a family member living or working in an affected area.
• Eligible family members include sons, daughters, parents, grandparents or other dependents.
• Hardship distributions may be used for food, shelter or other uses normally not applicable.
• Funds subject to this exception must be withdrawn by Jan. 31, 2018.

Be aware that hardship withdrawals are not considered loans for tax purposes. Therefore, these distributions are generally subject to both ordinary income taxes and a 10 percent early-withdrawal penalty.

Avoid Buying a Flood-Damaged Used Car 

Because flood water contains dirt and sometimes salt, it is particularly corrosive in automobiles. The cost to clean and recondition a flood-damaged vehicle could well exceed its value, rendering it “totaled” from an auto insurer’s viewpoint. However, thousands of flood-damaged cars are cleaned up and resold each year.

The following tips can help you check for flood damage:

• Check the title history by running its vehicle identification number (VIN) through CarFax, Experian’s Auto Check or VinCheck.
• Have a qualified mechanic inspect it for hidden water damage.
• Pull up a corner of the carpet to see if there is water residue or stain marks, signs of rust, evidence of mold or a musty odor.
• Look for water or signs of condensation in headlamps and taillights.
• Check for rust in wheel wells and around the doors, hood and trunk panels.

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.