Two simple steps toward a comfortable retirement…

Don’t make the mistake of counting on high market returns to fund your retirement.

Action Plan to an Anxiety-Free Retirement – Part 1

Senior couple in sports car

STEP 1 | Kiss market risk good-bye with an automatic savings plan


When the stocks take a sudden plummet, many investors panic and start seeking alternate ways to ensure a successful monetary outcome. The good news is that there is a simple solution to help ensure a secure retirement regardless of the market’s ups and downs. The best part? It might even be free to you, through your employer!

Many companies are offering automatic yearly increases in contribution rates to their employees’ 401(k). Currently close to 1/3 of employers have this option, but even if they don’t, you can make a habit of gradually increasing your savings annually in the same way a “cost of living” raise would usually kick in. Maybe choose to make the increase, each year on your birthday or another anniversary that’s easy to remember.

This step might seem simple, but don’t be deceived, there is a lot of bang for the buck here! More than 70% of employees who automatically increase their retirement are on track to a more comfortable retirement, according to Rob Austin, the director of retirement research at Aon Hewitt.* And if you compare this to the average success rate of only 20% you can see why this concept is a valid consideration!

You can trick your brain…It might seem silly, but there is a psychological aspect to automatic saving that makes it less difficult. Psychologists call this behavioral quirk “loss aversion” and it’s the basic idea that it’s much harder to give up a dollar you already have in hand, than it is to “lose” it before you ever see it. Somehow the sacrifice isn’t felt as intensely when saving is carried out this way.

Risk is reduced… And obviously, saving more helps you to steadily build your wealth. But let’s circle back to the issue we mentioned in the title of this article: Being immune to market highs and lows. If you have a steadily growing savings plan you are less dependent on high returns from the market.

Here’s an example. Imagine Jane, a 30 year old, starts saving 15% of her salary. If she works until age 67 she can reach a preset goal of having enough money to replace 75% of her pre-retirement income, even if her investments only deliver at 6% or less. Now Jane is free to invest however she wishes. Can she take a plunge and dive into something risky? Sure! Or what if she wants to conservatively and carefully invest so as not to lose anything? Play it safe. Either scenario works because she has the guaranteed savings plan to back her up, regardless of what happens with her investments.

STEP 2 | Don’t be scared to ask for help!

 


No matter your age or the stage of retirement planning you are currently in, you will learn and grow by seeking help from those experienced and trained in these areas.

Many financial planning companies are glad to do an annual financial review to help you determine where you currently stand and what you need to do differently.

Whoever you turn to, make sure they gather ALL the data. Don’t let them advise you without a full picture of your financial situation. This includes your life and health insurance and ANY investments you have, plus the simple stuff, like your savings bonds, and rainy day cash in your savings account- and don’t forget all your expenses as well. Which ones will continue into retirement, and what extra liabilities may you take on in the future? It all matters and it’s important that whoever is giving advice has a full understanding and awareness of exactly what you have to work with.

The bottom line: Don’t be afraid to ask questions and be innovative with the way you map out your future! The younger you start the better, but it’s NEVER too late to make changes that can help you in the future.

Cornerstone Wealth Advisory Group has a team of professionals dedicated to retirement and financial planning. Contact us for more information and to schedule your annual review. (always at NO COST to you)

http://www.cswta.com

866-262-2245

 

*This firm defined success as saving 11 times salary by age 65

Tips to make your retirement savings last

PennylessOutliving your savings. Those are 3 scary words that most retirees do NOT want to hear! Even if you’ve planned carefully and have a sizable nest egg, living longer than your money is still a possibility. What can you do to alleviate these concerns? Read on for Cornerstone’s 5 steps for retirement security!

1) Buy longevity insurance 

With this type of insurance, you give the insurance company a small premium at the age of 65. The insurance company invests it until you’re in your 80’s and then begins paying you in monthly increments for the rest of your life. A policy like this might typically cost around $25,000 and would pay out $3,000 per month when you turn 85.

The timing on policies like these are ideal because the payouts are coming at a time when you are likely to start acquiring some significant medical bills and if you consider the years of inflation on your nest egg, these could really diminish your resources.

Using this approach for your financial planning makes it easier to plan long term because your payout date is determined when you buy the policy. You will know exactly what you have coming in the future, as you move through your initial retirement savings.

2) Delay taking Social Security

The longer you wait to start collecting your Social Security benefits the more your monthly retirement benefit will increase.

For example, 66 is the full retirement age and if you start collecting at that age you will receive 100% of your retirement. However, if you delay until you’re 67 years old to start collecting, that benefit goes up by 8%.

The longest you can wait is until age 70 and if you do this you will get 32% more than you would have gotten at full retirement age.

3) Get a job

If you’re able to take on some part time work you can put some extra cash in your pocket and this will allow you to delay withdrawing your Social Security for as long as possible. There are lots of great companies that are happy to hire retirees!

Here’s a great way to search for companies that are looking to hire those over 65. Senior Job Bank

4) Consider Long-Term Care Insurance

It’s really impossible to know what the future holds and what types of help and medical care you will need as time goes on.

Long Term Care insurance can provide a safety net for you and your family in the event that you have to use In-Home care, or Long-Term care services in a nursing home or assisted living facility. Some of these policies even provide benefits to your care-giver when they need a break!

There are also Life Insurance policies that can have Long-Term Care riders added to them. These are great because if the benefit isn’t used, it passes tax-free to the policy’s beneficiary! That is a win-win for everyone!

5) Find a good Financial Planner

All the information shared above is a great way to get started, but to truly assess all your specific financial needs and to determine which of these things would benefit you and your family the most, what you really want is a thorough financial review, conducted by a professional who has been trained to make sure that you get the most out of your retirement! Cornerstone has dozens of agents ready to work with you whenever you need us, in the comfort of your own home and at NO COST to you EVER. Here is a great article that shows what SHOULD happen at a typical Financial Review appointment and tips for making sure your agent is really doing their job!

The Importance of Fact Finding

Whatever your plans are for your future, we all want the same thing. Security! Cornerstone would like to help you optimize your chances at a safe, happy and secure retirement. Contact us today for more information!

Also see: Financial Tips for Baby Boomers and Facts about Retirement

The Perfect Gift

Grandparents And Grandchildren Reading Book On Garden Seat

Birthdays, holidays, various childhood milestones… As these come and go for your grandchildren you may spend much time searching for the perfect gift. It can be hard to know what to buy and obviously you want the money you spend, on the person you love, to be put to good use! Toys break and fall apart, clothes are outgrown, cash may be spent frivolously…it can make it a challenging decision!

It might sound a little strange, but many parents and grandparents are giving a new kind of gift to their family members. Life Insurance. Gifting a life insurance policy is a wonderful way to show your love and give a gift that is meaningful that serves a useful purpose.

A life insurance policy is an investment that can last the child’s entire life! It won’t break, wear out or fall apart over the years. These policies can be set up to earn cash value that accumulates over the years. This cash value can be withdrawn by the recipient at a later date and used for a variety of things. Imagine your gift going towards helping them purchase their first car, or even better, their first home! It could pay college tuition, or help them start a business. What a great way to show that you care about your grandchild’s future, when the gift you give them today can give them financial security in the future!

Another great feature of gifting a life insurance policy to a child, is that the premium rate locks in using their current age. Typically life insurance premiums increase with age, but starting young they will have their current rate for life!

In addition, this can help to guarantee their future insurability. Sadly, there’s no way to know what the future may hold or what unexpected illnesses may befall anyone. Sometimes illnesses like diabetes, heart disease, chronic lung problems etc. can keep a person from qualifying for good insurance at an affordable rate. Thankfully if the child’s policy is set up now, they will have future occasions to increase the benefit, if they desire, regardless of their health.

These are just a few of the reasons that a children’s whole life policy can be a wonderful, lasting gift. Cornerstone has many great options and we’d love to help you put together a memorable gift for your loved one’s next special occasion. Reach out to us today to speak with an agent for a consult at NO COST to you!

Financial Tips for Baby Boomers

in love African American couple in their eighties and seventies,Did you know that the average American spends more time researching the features of their cable television channel offerings, than they do finding a reliable financial advisor?

It sounds … insane … for lack of a better phrase, but it’s true. (see the Forbes Financial article we will reference at the end of this post) Sometimes this even involves making decisions about how pension or social security money will be received. These could be the only funds a person will be receiving, to live on for the rest of their life. Obviously it’s important that they be managed properly, yet so many are just “winging it” and this can have devastating consequences!

It’s also important to make sound financial decisions based not solely on where you are NOW, but where you will be in 20 or 30 years. Will your home be safe and comfortable for you when you are 75, 85? Do you have a plan in place for how you will manage if your spouse passes away before you, or a care plan for them to get along without YOU?

These can be uncomfortable conversations to have, but to secure your future, they are very necessary.

A trained financial planner can assist you in all areas mentioned above, and more! Check out this article from Forbes Financial, and feel free to reach out immediately if you’d like a consultation with one of Cornerstone’s Financial Advisors. Our services are always at no cost to you!

https://www.forbes.com/sites/feeonlyplanner/2015/06/05/five-easy-pieces-of-financial-advice-for-baby-boomers/#1fd30f854ae8

 

Facts About Retirement

Connected puzzle pieces labeled with the words "retirement" and "savings".

What does retirement mean to you? Is it a time to start up your dream business venture? Or maybe travel and spend time with your family?

Regardless of your plans, most individuals want the chance to take it easy after years of hard work.

In many cultures and areas, the standard retirement age is considered to be 65 years old.

It’s interesting to know that every day for the next 20 years another 8,000 individuals will turn 65. That is about 1 person every 10 seconds!

In the year 2013 14% of the population in the United States was made up of those who are 65 and older, and it’s estimated that by the year 2030, they are expected to make up more than 20% of the population!

Interestingly this group owned 31% of the US’s financial assets in 2001 and they are expected to hold 44% of the country’s financial assets by 2040.

If you are part of this group, or will be soon, you can see that you’re part of a large and influential group of people!

What will you do for your retirement when that time comes? Have you made arrangements for the future, for your healthcare, housing and income? Do you feel comfortable with the plans you have in place?

As a member of this influential part of our society, the choices you make now to plan for your retirement can make a difference in the abilities you will have to utilize these years when the time comes!

If you have an uncertainty about your decisions, contact us today so that we can help you develop a solid strategy for the future!

Healthy Body = Heavy Wallet

Calculator and stethoscope on financial statement concept for finance health check or cost of healthcare

Did you know that out of all the things people save for during retirement, that healthcare can potentially be the most expensive?

One study found that a 65 year old couple with average prescription drug expenses will need to save $207,000 for health care in retirement if they want a 75% chance of being able to pay all their future medical bills!*

Although your health isn’t something you can fully control during your retirement, there are some things you can do to stay healthier, plan ahead and possibly reduce the amount you will spend in the future!

First of all, Stay Informed! Keep yourself up- to-date on healthcare news, since we know medical expertise and advice are constantly changing. Especially if there are issues that have affected you or those related to you, and be sure to ask your doctor for help identifying areas that might be of particular concern.

Next, you want to do your best to maintain a healthy lifestyle. Eating healthy and exercising regularly can be key to staying healthy. Limiting fats and sugars and increasing whole grains, fruits and vegetables is a great way to start, as well as embarking on an exercise program that you feel comfortable continuing into the long term. Of course, always consult with your doctor before starting any new routine, to make sure it’s safe for you!

Relaxation can also be a great way to stay in good health. Maintaining friendships, focusing on hobbies and making time for relaxation each day can help ward off stress, which can be detrimental to your health. Some research even shows that staying socially active in retirement can reduce the risk of depression and might even aid in the prevention of Alzheimer’s disease!

Monitoring your blood pressure, cholesterol, body mass index and blood sugar levels are also important. Doing so can help you stay ahead of the game and make any changes if necessary, in the event that your health does begin to decline.

Finally, preventative care can be much less expensive than treating a disease or disorder. Make sure to always get your annual physical as this can help to screen you for potential health risks!

Overall, staying healthy is the best way to keep your healthcare costs low, but having a good healthcare plan in place for big and unexpected events is very important!

If you’d like a free consultation with a retirement specialist who can help you find the most fitting and affordable healthcare plan, contact us today!

*Employee Benefit Research Institute, 2013

Procrastination- What it can cost you

Concept for procrastination and urgency with torn newspaper headlines excuses reading later, one day, tomorrow, someday, whenever etc

Have you ever waited too long to do something and suffered the consequences? Maybe you put off renewing your car taxes, only to get a ticket for an expired registration…or what about waiting just a little too long to fill that gas tank, only to run out of gas before you can make it to a fill-up station?

Procrastination can cause many missed opportunities! And this can cost us!

Procrastinators can sabotage themselves. The paths they choose can hurt their performance and put obstacles into their paths.

But what does this have to do with financial planning?

Problems with procrastination can be particularly painful, and costly, when it comes to investments and financial decisions.

Here is an illustration:

Let’s look at two individuals we will call Sam and Patty. Let’s say they each have $100,000 to invest. Sam is ready to go RIGHT NOW! He immediately beings depositing $10,000 a year into an account that earns a 6% rate of return. After 10 years he stops making deposits. Patty on the other hand, procrastinates. She meant to meet with her financial advisor but other things kept getting in the way. Years go by… Finally 10 years after Sam started investing, Patty finally starts to invest that $10,000 per year into an account that also earns a 6% rate of return.

Both Sam and Patty have invested $100,000, but at the end of 20 years Sam has more than $280,000, while Patty only has a little more than $150,000. Sam is significantly wealthier because his account has had more time for the investment returns to compound.

Regardless of the amount of money you may have to invest, the point is to take action NOW! Don’t wait! Every day that you wait, you are potentially losing money that could be used for your retirement, or money that could be left as a legacy to your children and grandchildren.

The first step towards getting started with your investment is to contact a financial advisor and set up a financial review.

At Cornerstone we have dozens of agents who will do a free financial review in the comfort of your home! After fully analyzing your situation, they will be able to point you in the best direction to start investing, or even help you modify your current investments to better meet your needs.

Don’t procrastinate! Contact us today!

Income Certainty in an Uncertain Economy

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I have been working with retirees for a number of years now and I am always interested in what concerns people have when it comes to their finances. There are several consistent answers that continually arise but none more common than income. There are people from all walks of life that are concerned about outliving their money. How do we get through this difficult economic condition, with a volatile market and consistent inflation knowing that at the end of the day there will be enough money to sustain a favorable lifestyle? It is a valid question and a real concern and without appropriate planning, there could certainly be some very real consequences. There is good news in this story however. There are programs available in the investment world designed specifically for the purpose of income generation. Not just income until you run out of money, but income that CAN NOT BE OUTLIVED. They are called annuities. Many of you reading this may have experience with annuities and many of you may have heard terrible reviews about annuities as well. Some of the information is true and some should be left by the curb with the trash. What I can tell you, is that annuities present an opportunity to generate a lifetime income stream that can’t be outlived as opposed to the alternative methods of income generation typically used such as a bond portfolio and other market driven investment options. I am a registered investment advisor representative and will maintain that there are effective ways to generate income in the securities world that have been used effectively for years. However, none of these methods has the protection of principal that the equity indexed annuity does. These programs allow for growth when the market does well and protection from loss when the market fails. These programs also offer clients opportunities to use certain riders to guarantee income for life while still having the ability to grow the underlying cash value of the account. This enables the investors to have a consistent income stream whether or not the investment performs well. On top of the income, it also protects and grows the cash value that supports the income with no market downside so that there can be dollars leftover to pass to the investors loved ones if so desired. These riders are so effective that the income stream can persist even past the distribution of all of the original principal and any growth that would have been earned. This is a security that many investors are moving towards with today’s current market conditions. As with any investment vehicle, these products are not right for everyone and certainly not right for all of someone’s assets. However, the equity indexed annuity provides for the opportunity to grow with market potential overcoming the lackluster fixed rates available today and brings protection that almost no other market driven program can offer. It is a nice marriage of features. Being able to add to that, the option for lifetime income with growth opportunity of the base value simultaneously taking place, makes for an attractive offer. For many retirees, the worry of a foregone income stream is now a thing of the past due to the implementation of programs such as these. David Armbruster is President of the Financial Division of Cornerstone Wealth and Tax Advisory Group, Inc. in Charleston South Carolina as well as a Investment Advisor Representative through the Investment Advisor Alliance, LLC. This column is for informational purposes only. Please consult an investment advisor prior to any financial decisions. One of the greatest challenges facing retirees is finding a way to maintain their lifestyle when there is no longer a company paycheck coming in each week. Each family now needs to create an income stream from their own resources that has, hopefully, been saved through the years. They also must determine their income needs for this lifestyle. There are several ways to generate a stream of income from these funds including the drawing from a diversified portfolio, using the dividends and income from a portfolio, earning interest in a fixed income portfolio that coincides with your needs, and the use of annuities. Annuities can be an important way to ensure a specific amount of income each month, but since they are an insurance product I will discuss the first three. Drawing funds from a diversified portfolio means you will be taking money from the investment accounts. You are effectively counting on the growth and steadiness of the portfolio’s returns to fund your retirement. During periods of negative returns retirees will need to decide if they really need the full draw; if the percentage chosen as a withdrawal rate is reasonable, this should not be a problem. Designing an investment portfolio of high yielding equities and income producing instruments often leads to investment in financial and utility stocks, as well as, preferred issues. These will often be value stocks, or stocks that trade at a ‘cheap’ price compared to what the company is worth; however, investment in individual equities leads to other risks of which to be wary. Also, companies in this category may be companies in dire straits and as such may not continue a lofty payout rate. This method is often used when the investor wishes to leave the principal untouched and live solely off the dividends. Building a portfolio of bonds that approximates the cash flow needs of an investor seems like a sure bet. A portfolio of bonds paying interest at roughly monthly periods to create income fulfills the need for steady pay. The drawback, though, is the lack of appreciation potential and that the principal is only attained at maturity with reasonable surety. If there comes a need to sell the instrument, the market price may be substantially lower than the price paid. The thought of a fixed income product often gives an investor a false sense of security regarding the valuations. Upon maturity and the need for reinvestment, this method leaves your income to the coupon rate available in the market. While annuities, equities, bonds, and all investments inherently carry risk; there are ways to mitigate a prospective catastrophe, one of which is to diversify in as many ways as possible. The best portfolio for the investor is one that achieves reasonable goals, has a high likelihood of lasting through the investor’s lifetime, and does not keep them constantly worried. A balance of the three methods above may be the answer. A portfolio diversified across asset classes with a supplement of high yielding sectors in the equities and a well planned fixed income allocation will provide the flexibility, potential for growth, and income needed to help a retiree comfortably live in retirement – assuming the starting value is sufficient. Robert Keeler is CEO and portfolio manager at The Investment Advisor Alliance LLC, a Registered Investment Advisor. IAA can be reached at 800-607-3340. This column is for informational purposes only. Please consult an investment advisor prior to any financial decisions.

The best jobs for Ambitious People

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If you’re confident in your abilities and ready to accept the challenge of a career with a fluctuating salary, a recent Yahoo Education article recommends becoming a Personal Financial Advisor or Insurance Agent! (Full article may be seen here for reference http://education.yahoo.net/articles/jobs_that_pay_commissions.htm?kid=1O12Y )

Many job seekers initially shy away from the idea of a commission based career, due to that fluctuation in income which can seem frightening to some. But who doesn’t like the idea of a job that pays you based on your successes?

Laura M. Labovich, the president of the Career Strategy Group and co-author of “100 Conversations for Career Success” says that often, those who are paid on commission can make more than those on salary if they are really good and motivated.

Labovich also offers a warning about exactly which types of personalities find success in commission based jobs.

“The people who do best in commission jobs tend to have a high sense of urgency, but also a low stress threshold. These are aggressive go-getters who are self-motivating and definitely not clock-watchers,” she says.” She counters this by saying that the wrong personality type will have a rough time with the lack of security created by not receiving a steady paycheck.  

All in all, the independence and high earning potential that can be found with a commission based job is very appealing to many in the work-force today.

The top 5 High-Commission Careers are: Personal Financial Advisor, Advertising Sales Agent, Insurance Agent, Real Estate Sales Agent, and a Sales Engineer.

At Cornerstone, we are regularly looking for the type of self-motivated people mentioned in Yahoo’s article. If Personal Finance or Insurance Sales are something you’d be interested in, be sure to check out the “Careers” Page of our website for more information! http://www.cornerstonewealthsc.com/careers.php

We’d love to meet with you! 

Cornerstone’s Columbia, SC office Rebuild America Beautification Campaign

 ImageCornerstone Wealth and Tax Advisory Group is proud to be partnering with the city of Columbia, SC to help in restoration and beautification efforts of the downtown area.

In early 2013, Edward Marion, branch manager of the Columbia, SC office of Cornerstone Wealth and Tax Advisory Group, was informed that his recent request had been approved. This request was for a $10,000 grant through the Rebuild American Campaign (rebuild-america.com), that would be used toward construction of his office building.

“Our office is located in a wonderful part of downtown Columbia,” Marion says “And we chose that location because we knew that it had great potential.”

When Marion heard about the option to apply for the grant he knew he had to
give it a try. Being accepted for the grant means that funds have been made

available to him to renovate the front of his building and thus add to the overall appearance of the area.

Cornerstone’s CEO Michael Haskett feels that participating in these types of efforts is very important.

“Any time Cornerstone can help out the local communities in which our offices are located, we embrace that opportunity,” He says. “We are all about giving back and sometimes that means more than just donating to charity. It’s about doing your research, finding out what tools are available and then taking advantage of them in a way that will better the community. I’m excited about this opportunity and proud that one of my Branch Managers worked to make this happen. We are eager to see the work that will be done!”

 

Cornerstone, with the City of Columbia, will be having a press release party at their office on May30, 2013 at 1 pm where the Mayor of Columbia and other city officials will be present. Light refreshments will be served. We invite any members of the community to join us in this celebration. The Columbia office address is: 3612 Main Street , Columbia, SC 29203. Contact Edward Marion at (803) 691-6765 for more information.

For more information about Cornerstone Wealth and Tax Advisory Group please visit www.cswta.com or www.facebook.com/cswta or check out our recent feature in Forbes Magazine! (Link available on Facebook page)