Trends in Retirement Planning Navigating your way toward retirement

What Insurance Policies should be discussed Life Disability Income/Social Security/Total Disability Annuities – Fixed, Indexed, and Variable Long Term Care Insurance Medicare and or Medicaid – cost est. @ age 65 is $240,000 today!

Pensions, Profit Sharing and/or personal IRA’s, HR-10’s or HSA’s 1. Roth IRA – Contribution limits 2012 are $5,000 single and $10,000 joint 2. Regular IRA Contributions for 2012 are $5,000 single up to age 49, $6,000 per year if age 50 or older, $10,000 for couples 3. Roth 401K vs Traditional 401K A. Contributions taxed at different times 1) Traditional at time of withdrawal 2) Roth at time of contribution B. Annual Required Minimum distributions 1) Traditional in yr turn 70 ½ 2) Roth @ 70 ½ unless converted prior

A. Contribution Limits—25% of compensation or $50,000 C. Limits: same, $17,000 single if under age 50, $22,500 if over age 50 4. SEP IRA – Employer sponsored—deposits direct to employees IRA, not locked into making contributions every year. No start-up or annual program admin. fees and no IRS of 5,500. A. Contribution Limits—25% of compensation or $50,000 B. 2012 limit: Compensation per employee is $250,000 C. Eligibility—at least 21 years of age, earn a minimum of $550 in 2012 and work for the company at least 3 of the past 5 years.

Using Home Equity in Retirement Good or Bad? 1. Reverse Mortgages 2. Loans – Home Equity, etc….

Types of Non-Taxable Income to look for in Retirement 1. Tax exempt municipal bonds 2. Sale of your primary residence $250,000 single, $500,000 joint/spouse (owned last 2 of 5 years) 3. Life insurance money—tax free death benefits, return of premiums paid are not taxable 4. Non-taxable gifts $13,000 in 2012 to each child, grandchild, per year, per spouse! 5. Employer fringe benefits 6. Personal injury awards 7. Annuities earn tax-free (no 1099’s) until withdrawal 8. Income tax rates or brackets are probably going up in the future—plan accordingly

Investments—less and less in stocks as you get older Buying dividend paying stocks are always a good choice.

The 4% a year retirement rule 1. A rule of thumb for retirees that they withdraw 4% per year from their portfolios to live on and it should last easily 30 years. (Social security and pensions would be on top of the 4%) 2. The last 5 years are putting this rule of thumb to the test—due to the very low interest and poor dividend payments.

To summarize saving for retirement: 1. SPEND less than you make 2. Invest the difference 3. Manage your money and insurance products with DIVERSITY in mind. 4. Avoid the Madoff’s and scams

How well can you ride the life extension wave—living longer? 1. Living healthy 2. Taking care of yourself—(If 50 or older today—expect you or your spouse to live to 90—is less that 50, use 95 as life expectancy)

What is your magic number needed for a comfortable retirement? 1. Several ways to obtain a number, but all are based on assumptions and they are unknown other than that for short periods or what history has told us over the years. 2. The magic dollar figure for retirement is different for everyone—based on lifestyle, hobbies, company benefits that carry-over to retirement, pensions, life expectancy, habits. 3. Also unknowns of inflation, and the rate of return on investments.

Will our government entitlement programs survive and be there when you are ready to retire? 1. Social Security—current problems, D.C. has not addressed yet! 2. Medicare/Health Insurance?? June 2012 Supreme Court decision. 3. All Eurozone retirement programs are struggling to survive and not funded properly

The following are findings of a 2009 Financial Finesse survey: 1. 86% of employed Americans have no idea whether or not they are on track 2. 53% don’t have a basic knowledge of stocks, bonds, and mutual funds 3. 73% aren’t sure if their portfolios asset allocations make sense 4. 43% spend more than they make each month 5. 62% don’t have an emergency cash fund 6. 23% don’t pay their bills on time each month

Will you be able to retire at 60, 65, 70 or at any age? Only time and proper planning will answer this question.