Joe Lucey

The Retiring Man

July 24, 2017 by Joe Lucey

We frequently read about the challenges retiring women may face — less income, higher health care costs and outliving their spouse. But what about men? It can be difficult for some men to retire after a lifetime of working outside the home. Not only do they miss the intellectual stimulation and daily camaraderie of colleagues, but they may have a sense of loss in not receiving a regular paycheck.

Suddenly, there is money coming in, but because they didn’t spend the two weeks prior working for it, it can create an odd feeling. Then there’s the issue of how to spend their time now that they have all day, every day, free and clear. Men have to familiarize themselves with the daily rhythms of the household, settle into longer and closer proximity with their spouse, and figure out the delicate balance of spending more time together without stepping on each other’s toes.

Just like every stage of life, retirement takes a bit of work. If you’re not aware of and proactively working to counter potential retirement-related issues, you could be in for a rough patch. According to a recent study, the following are some of the most common problems men face when they retire:

Identity disruption since who they thought they were revolved around their job
Decision paralysis
Diminished self-trust
An inability to form new relationships
An inability to find a purpose for continued living
Death anxiety

The important thing to realize is that you’re not alone; even if you live alone. There are other men just like you who are facing the same issues, feelings and concerns of adjusting to retirement. Go forth, see old friends and make new ones.

Ways to Help Manage Financial Stress

July 19, 2017 by Joe Lucey

When employees shoulder a greater responsibility to provide retirement income, their stress levels can increase. Here are a few tips to help manage financial stress.

Recognize that others have the same burden, but the difference may not be in how they manage their finances but in how they manage their stress.
Do as much as you can to manage your finances, including working with a financial professional, but don’t ruminate over the situation. If you find yourself caught up thinking about it often, just stop. Stand up, clap your hands, move around and distract yourself. Negative stress comes from rumination, but taking action to stop those thought patterns can create more positive emotions.
Draw a circle on paper. Inside the circle, write down all of the things you can control, and outside the circle, record all of things you cannot. When you feel stressed, use the circle as a reminder to focus on what you can control.

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.

What’s the Plan for Your Retirement Income?

July 18, 2017 by Joe Lucey

Today, only about one-third of America’s retirees have a pension plan, which is quite different from the reliability of employer-sponsored retirement income of the past. In fact, pensions used to represent one-third of the three-legged stool that represented a confident retirement, in combination with Social Security benefits and personal savings and investments.

Employees who don’t have a pension plan may have a defined contribution plan through work, such as a 401(k), 457 or 403(b) plan. Employers gradually have been transitioning their retirement plans from defined benefit to defined contribution as a cost-cutting measure. Yet according to research conducted by the Center for Retirement Research at Boston College, today’s employer-sponsored retirement plans are not providing as much income as in the past. Moreover, the transition from defined benefit to defined contribution plans appears to offer more advantages to employees who have a higher education and higher earnings.

The reason traditional pensions offer better retirement income protection is that they typically are guaranteed to last for life. However, providing guaranteed lifelong income is an expensive benefit for companies to provide, particularly now that retirees are living longer. But without a pension, the responsibility of providing for retirement income falls more to the individual.

One way for individuals to create steady and reliable retirement income is to use a portion of their accumulated 401(k) or other retirement plan assets to purchase an annuity, which also offers income for life guaranteed by the issuing insurance company. A second form of retirement income comes in Social Security benefits.

Combining an annuity with the rest of their retirement savings and investments, as well as Social Security benefits, can help individuals work toward their retirement income goals. We are happy to discuss your options for guaranteed income in retirement. Give us a call, and we can talk about whether an annuity may be appropriate for you.

Maintaining Independence in Retirement

July 17, 2017 by Joe Lucey

Independence is something we have to work for throughout our lifetimes, whether we want to or not. As babies, we push our way up from four limbs to two and start walking our way into messes. As toddlers, we profess “No!” and “Mine!” to make our point. In the teenage years, we rebel against parents in an effort to earn independence.

The fight for independence doesn’t end in adulthood, as we manage relationships with significant others and bosses throughout our careers. And finally, we grow older and retire. While many of us would love to have millions of dollars so we could avoid any dependence on government entitlement programs, most retirees rely on Social Security and Medicare benefits to supplement their income and take care of a large portion of their medical expenses.

While the word “entitlement” often receives a bad rap, its true meaning is appropriate. Workers contribute 6.2 percent (on wages up to $127,200 per year) for Social Security old age, survivor and disability insurance and 1.45 percent of their earnings for Medicare throughout their working lives as a FICA tax, which stands for the Federal Insurance Contributions Act. In other words, it’s like deferring part of your pay toward a pension in retirement, which you are most certainly “entitled” to.

However, entitlement benefits are limited. As the quest for independence continues, it’s important to accumulate income for retirement through other sources, such as a pension or 401(k) plan and personal savings. The quality of our retirement lifestyle may well be defined by how much each of us saves and how we manage our finances. And fortunately, that’s one of the most satisfying measures of independence.

Spousal & Non-Spousal IRA Rules

July 12, 2017 by Joe Lucey

Spousal IRA Rules

When a spouse inherits an IRA, he or she has all of the same options as a non-spouse beneficiary, along with some other choices.

For example, if a wife is the sole beneficiary, she also has the option to “treat it as her own.” The surviving spouse will need to either transfer assets to her own existing IRA or open a new one in her name. After rolling or transforming the inherited funds into her own IRA, she may take withdrawals at any time but will be subject to the 10 percent penalty for withdrawals made before she turns age 59½. She also is responsible for any taxes owed on withdrawals.

Non-Spouse IRA Beneficiary Rules

The tax implications regarding what a child or other non-spouse beneficiary does with an inherited IRA can be complicated. Here is a brief look at just a few of the tax implications when a non-spouse inherits an IRA.

You must take required minimum distributions (RMDs) on the IRA; if you don’t, you can face a 50 percent penalty from the IRS.
You can withdraw money from the account at any age without an early distribution penalty, even before age 59 ½. If it is a traditional IRA, you will usually have to pay income tax on the entire amount withdrawn.
Because a Roth IRA is funded with nondeductible contributions, no taxes are owed on either original contributions or gains if the owner held it for at least five years.
If the deceased owner passed away before starting RMDs, you can wait to take distributions, but you must withdraw all the funds by Dec. 31 of the fifth year of the owner’s death.
No matter when the original owner died, you can take the RMDs over your life expectancy beginning with the year following the account owner’s death.

Making Plans for How We Want to Be Remembered

July 11, 2017 by Joe Lucey

It may sound morbid, but an uneventful death is one of the most thoughtful things you can give your children. As sad as it is to cope with the death of a loved one, the situation can be worsened by poor communication and disorganized planning.

For example, have you considered what you would like regarding a funeral? Do you have a favorite Psalm you’d like read or hymn sung? Do you want to be buried or cremated? Will your organs be donated? Yes, these can be very troubling and painful questions to address — but imagine having to consider them after you just lost that loved one. This is what it will be like for your spouse or children if you don’t address funeral planning issues while you’re alive.

Awash with grief, family members may not be able to recall details about your history — early jobs, places lived, volunteer activities, even some of the things you may be most proud of in your life — to include in your eulogy or obituary. If your children are not familiar with people in your everyday life, they may not even know to contact certain friends to let them know you’ve passed.

Consider writing out some of these things to help your loved ones plan a beautiful and loving tribute after your death. This way, they won’t have the regret of remembering your favorite hymn months after the funeral. Give your children access to your address book, email and cell phone contacts, and any other social media accounts so they can let people know. Don’t forget to include former colleagues they may have never met but that you know would like to pay their respects at your funeral.

And of course, have a will and/or or trust in place to make sure your wishes for your estate are followed. We can refer you to a qualified estate planning attorney who can assist you with this.

Why think about death now? Because it’s inevitable, and detailing how you would like to be remembered is one of the most considerate gifts you can provide your children during one of most difficult times in their life.

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