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)

 

How Staying Educated Can Save You Money

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According to a recent Yahoo News article* millions of seniors enrolled in some of the most popular Medicare prescription drug plans face double-digit premium hikes next year if they don’t shop for a better deal, says a private firm that analyzes the highly competitive market.

“Seven of the top 10 prescription plans are raising their premiums by 11% to 23%,” says a report by Avalere Health.

This situation creates a real need for seniors to do their research and really make sure that they aren’t paying more than necessary.

“The average senior is going to benefit by carefully scrutinizing their situation, because every year the market changes,” Avalere President Dan Mendelson said.

The 7 plans with the double-digit premium increases were: the Humana Walmart-Preferred RX Plan (23%), First Health Part D Premier (18%), First Health Part D Value Plus (17%), Cigna Medicare RX Plan One (15%) Express Scripts Medicare-Value (13%) the HealthSpring Prescription Drug Plan (12%) and Humana Enhanced (11%). Another 2 plans in the top 10 also had single-digit increases. They were the SilverScript Basic (8%) and WellCare Classic (3%)

The good news is that there are new Plans out there right now that can save an average of $15/month nationally.

However, virtually all seniors pay a Part B premium for outpatient care, including those with traditional Medicare as well as those in private plans, and the part B premium is expected to rise by about $7 for 2013, according to the government’s own projections.

With changes in Medicare every year and uncertainty due to the Affordable Care Act (ObamaCare) and the economy, living on a fixed income- as most seniors do, creates a big challenge in making sure they have the best plan at the best price.

That is why it’s so important to do regular research on all the options available and seek out advice from trained professionals. Cornerstone representatives are always happy to do a free in-home consultation to fully explain the Medicare program, its changes for the current year and how they will affect YOU!

To remain educated through yet another year of changes, contact us today for a free consult!

 

 

*http://news.yahoo.com/report-premium-hikes-top-medicare-drug-plans-063601073–finance.html

Working With Your Best Interests In Mind

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“Its business,” is the excuse many professionals use when they are doing something they know is less than ethical. They aren’t doing anything illegal, they’re just maneuvering a situation to benefit the company they work for, or their own bank account, OVER the benefit of their client.

We see this frequently in the financial services industry, and it’s the reason so many individuals are leery to trust someone else to manage their money. And it’s logical to be cautious when you know that someone will make their living off of the decisions they lead you to make with your wealth.

Camouflaged under the concept of “Business is Business” many stock brokers make recommendations to their clients that are not really in their best interests. An article found in Yahoo Finance Online* says,

“Many of those who work on Wall Street go through a process in which they gradually learn that what is perceived as “smart investing” is often unbelievable dumb. Specifically, they learn that many of the recommendations that Wall Street makes, and the transactions that Wall Street gets paid to facilitate, are not in their clients’ best interests.” The article goes on to talk about a former stockbroker named Josh Brown who left the business when he was forced to do things that weren’t really in the best interest of his clients.  He is now a Financial Advisor and says that in this position his interests and his client’s interests are more closely aligned.

“Most people don’t recognize that there’s even a difference between a “Stock Broker” and a “Financial Advisor,” but there is, the article says. “Stock brokers generally work for brokerage firms and do not have to recommend trades that they think are in their clients’ best interests. Rather, they just have to recommend securities that are “suitable” (a much lower standard). Financial advisers, meanwhile, have a fiduciary duty to act in the best interests of their clients.”

The article concludes by saying that someone looking for “sound financial advice” would be wise to choose a Financial Advisor over a Stockbroker.

Articles like these make Cornerstone proud to have a group of Financial Advisors who have a DUTY to provide their clients with more than just “suitable options”. Cornerstone advisors are required by law to make sure that they offer the very best options to anyone who comes to them for advice.

In addition to the state specific laws and regulations they follow, Cornerstone itself has set very strict procedures that must be followed when their Advisors are meeting with clients. As mentioned in our previous article, “The Importance of Fact Finding,” (https://cswta.wordpress.com/2012/07/27/the-importance-of-fact-finding/) we take collecting information about our clients VERY seriously. Why? Because to make the best suggestions, we must have all the information!

Giving Cornerstone an even stronger ability to do the best for their clients, is the huge number of Investment Relationships they have. Cornerstone works with more than 30 different A+ rated companies (You’ve surely heard of some of them, like John Hancock, ING, MetLife, Lincoln Financial and Humana) and so their agents have the ability to compare the rates of a number of companies and find the best option for you!

Even dealing with a Financial Advisor who represents a specific Insurance Company or bank can bring on a challenge, because they may recommend the best option that THEIR COMPANY has to offer, but it may not be the best option for you overall. Cornerstone itself is not an insurance company and does not have any of its own products, so when meeting with a Cornerstone representative, clients can be assured that their Advisor has no ulterior motive in suggesting a certain product or service.

Their job is to pick the product that will save you the most money, make you the most money, or best meet any of your specific needs. When seeking good financial advice, as the Yahoo article mentioned above, contacting a Financial Advisor, such as the 50+ representatives Cornerstone has employed is the smart way to go!

Feel free to contact any one of our representatives for financial advice completely free of charge! http://www.cornerstonewealthsc.com/agents.php