Freeman's Blog

Archive

November 22nd, 2013 by

More than one-third of retirees lack confidence that they will have enough money to live comfortably throughout their retirement years.1

The 4% Solution
One common approach has been to withdraw 4% of your portfolio in the first year of retirement, with inflation-adjusted amounts in subsequent years. The so-called “4% rule” was developed in the 1990s using historical market research, and it was based on a 30-year retirement with dollars in a tax-deferred account and nothing left for heirs.2

Lately, in response to a concern that future market growth might be lower than historical averages, some retirees have reduced their initial withdrawals to 3% or 3.5%.3 By contrast, more optimistic or aggressive risk takers (like those who can rely on a traditional pension for some income) might begin with a higher withdrawal rate.

The Three-Phase Solution
An alternative approach is to envision a three-phase retirement and divide your nest egg into three pools that reflect the needs, risk level, and growth potential of each phase. In the first pool you might hold cash and cash alternatives; in the second you could have mostly fixed-income securities, such as bonds; and in the third you could have growth-oriented vehicles such as stocks that might be more volatile but have higher growth potential over the long term.

For the first five years or so, you might receive income primarily from assets in the first pool. For the middle phase, five to 15 years in the future, you would have income from the second pool of assets. And during the third phase, more than 15 years in the future, you would have income from growth-oriented vehicles.
Sources:
1) Employee Benefit Research Institute, 2012
2) smartmoney.com, February 7, 2012
3) InvestmentNews, January 23, 2012

Don’t Navigate Retirement Planning Alone

Retirement planning can be stressful if you’re doing it alone. But, if you have an expert at your side, your nest egg dollars can go further and stay safer. Contact me at 833-313-7233 and allow me to partner with you on your retirement planning strategy. If you’re in Maryland, Virginia or Washington, DC, please visit me at my office in Upper Marlboro.

November 21st, 2013 by

College Financial Aid - DC, MD, VA

Headed To College?

Financial aid can be a valuable source to help finance your child’s college education. In fact, in some circumstances, families with incomes of $75,000 or more can still qualify.

Learn About Financial Aid For College

U.S. Government Grants

  • The federal government provides student aid through a variety of programs. The most prominent of these are Pell Grants and Federal Supplemental Educational Opportunity Grants (FSEOGs).
  • Pell Grants are administered by the U.S. government. They are awarded on the basis of college costs and a financial aid eligibility index. The eligibility index takes into account factors such as family income and assets, family size, and the number of college students in the family.
  • By law, Pell Grants can provide up to $5,550 per student for the 2012-2013 award year.1 However, only about 25 percent of recipients currently qualify for the maximum. The average grant was $3,685 in 2011-2012.2 Students must reapply every year to receive aid.
  • Most colleges will not process applications for Stafford loans until needy students have applied for Pell Grants. Students with Pell Grants also receive priority consideration for FSEOGs.
  • Students who can demonstrate severe financial need may also receive a Federal Supplemental Educational Opportunity Grant. FSEOGs award up to $4,000 per year per student.

State Grants

  • Many states offer grant programs as well. Each state’s grant program is different, but they do tend to award grants exclusively to state residents who are planning to attend an in-state school.
  • Many give special preference to students planning to attend a state school.

College Grants
Finally, many colleges and universities offer specialized grant programs. This is particularly true of older schools with many alumni and large endowments. These grants are usually based on need or scholastic ability. Consult the college or university’s financial aid office for full details.

Sources: 1–2) The College Board, 2012 life_guide_paying_for_college

Parents: Hold Onto Your Retirement Dollars

Before you make any decisions about college payments and before you think about withdrawing from your nest egg, get my FREE resource “LifeGuide: Paying For College” to determine your preparedness for the cost of college.

November 20th, 2013 by
Financial Education For Your Kids
In a recent survey of Generation Z (ages 13 to 22), 39% of teens and young adults said they expect to receive an inheritance and therefore don’t need to worry about saving for retirement! However, only 16% of Gen Z parents expect to provide an inheritance — and there’s no guarantee that an inheritance would be sufficient to replace retirement savings.¹
  • Advocate saving. Sixty-three percent of kids 18 and under have a savings account, and almost three out of four accounts were opened before the kids were three.2 Encourage your children to set aside a portion of money they receive from an allowance, gift, or job. Talk about goals that require a financial commitment, such as a car, college, and travel. As an added incentive, consider matching the funds they save for worthy purposes.
  • Show them the numbers. Use an online calculator to demonstrate the concept of long-term investing and the power of compound interest. Your children may be amazed to see how fast invested funds can accumulate.
  • Let them practice. About half of parents give their children a regular allowance.3 Let older teens become responsible for more of their own costs (such as clothing, activities, and car expenses). Running out of funds could require them to think about their spending choices and consider a budget.

Finances may seem complicated, but a little education could go a long way. Do yourself and your children a favor by helping them develop financial awareness.

Sources:
1) Business Wire, August 28, 2012
2–3) Jump Start Coalition for Personal Financial Literacy, 2012

Enhance Your Retirement Education Too

Planning for a better retirement is essential if you don’t want to outlive your nest egg dollars. Get my expert knowledge on retirement planning by listening to my Radio Show “Safe Money Talk”, via online streaming, every Saturday from 9-10am EST on CBS Sports Radio 1580AM OR listen to my Podcasts here.

November 18th, 2013 by

You may not realize it, but printer ink is one of the most expensive liquids you can buy. In fact, ounce for ounce, it can cost more than fine champagne! So when Consumer Reports’ readers complained that their printer ink seemed to be disappearing, testers investigated. Ink is used as the printer prepares to print after not being used for a while. So if you print infrequently, that could mean more ink used for maintenance chores such as cleaning the print heads.

Consumer Reports designed a special test to see how much ink was actually making it onto paper. Testers printed 30 pages of text or color graphics intermittently over a three-week period. Some printers were much less efficient with ink. The worst offenders used as much as $120 a year in ink that never gets used to print anything! They are the HP Officejet Pro 8600 and the Lexmark OfficeEdge Pro 4000.

Test data also showed most brands had printers that used a lot of ink for maintenance as well as ones that were easy on ink. If they can keep ink usage down for some, they should be able to keep it down for all their printers. But the Brother brand stood out. All three of the Brother printers tested were frugal with ink at start-up. A Consumer Reports Best Buy is the Brother DCP-J140W, at $80.

You can save on ink no matter which printer you own by following this advice from Consumer Reports. First of all, try to print all at once rather than every few days. Also, leave your printer on between jobs. The tiny amount of standby power used will cost much less than the ink used up when the printer turns on. And, investigate the option of generic ink for your printer. Many brand name printers can accept generic ink cartridges that will save you a substantial amount of cost.

Source: http://www.consumerreports.org/cro/magazine/2013/08/the-high-cost-of-wasted-printer-ink/index.htm : ConsumerReports Aug 2013

Everyday Pennies Add Up To Big Nest Egg Dollars

I’m a firm believer that you must plan to be successful in retirement. To ensure you have the retirement you always dreamed about, contact me for a no-obligation consultation if you’re in the Washington DC, Virginia or Maryland area. I’ll review your entire retirement strategy and help you keep your money safe.
Toll Free: 833-313-7233.

CBS Sports Radio 1580 - listen live
In addition, listen to my radio show “Safe Money Talk” every Saturday from 9-10am EST on CBS Sports Radio 1580AM to hear free advice on topics like 1) Lowering the tax burden of retired seniors 2) Avoiding irreversible and costly financial mistakes 3)Preventing the IRS from taking most of your money from your retirement nest egg.

November 15, 2013
November 15th, 2013 by

That may not seem like a lot now, but when you’re in those glorious retirement years, out of pocket expenses can dip into your disposable dollars. Retirement planning is about making sure you never have to worry about how far your dollars will stretch.

So, get the professional help you need to plan for your retirement correctly. I specialize in helping retirees and pre-retirees plan so that they never out live their resources and keep their money safe.

Get My Expert Knowledge For FREE

Listen to some of my FREE podcasts and start learning ways to keep your money safe in retirement.

November 11th, 2013 by

Starting a New Business in Retirement

A 2013 study of entrepreneurship found that more than a quarter of workers aged 65 and older plan to start their own businesses in the next three years.1

Developing a business after you retire from your regular job could be rewarding personally and financially, but like most potential rewards it comes with risks and challenges. If you have an entrepreneurial vision, here are some tips that may help you maintain a realistic perspective.

1. Don’t put in more money than you can afford to lose. Current failure rates suggest that 50% to 75% of entrepreneurs may not succeed and could lose their savings.2. You don’t have as much time to recover from potential losses as you might have had earlier in your life.

2. Do your research. Perform due diligence by researching all aspects of your business idea, including (but not limited to) competition, potential customers, marketing and sales opportunities, facilities and shipping needs, office and payroll costs, and supplies and raw materials. Put together a business plan with realistic projections of expenses and potential revenues for the first five years.

3. Consider consulting. If you developed expertise in your regular job or previous experience that might be used for consulting, this option could be a smoother transition to post-retirement employment than a brand-new business. Consultants often earn more for their time than regular employees and have more freedom to choose their own hours.

4. Be realistic about your time and energy. Starting your own business is a big project at any age, so consider how much time and energy you want to expend. If you’re ready for retirement, you probably don’t want to work 60 hours a week on your new business, yet many entrepreneurs may work longer hours than salaried employees.

If you do start a new business, keep in mind that you may have to file a variety of tax forms and other legal documents. Be sure to obtain appropriate professional guidance.

Source:(1–2) The Wall Street Journal, April 7 and May 8, 2013

Retirement Planning in DC, MD, VA

Acquiring professional guidance for business planning, tax consulting or retirement planning is a wise decision if you want to be successful in each of those areas. I specialize in retirement planning so that you can protect your nest egg dollars and create a retirement lifestyle you always dreamed about.
I give free consultations, with no obligations.
Contact me today to get an assessment of your retirement plan.
Call Toll Free: 833-313-7233