How Much Annual Income Can Your Retirement Portfolio Provide?

Concerned About outliving your money?

Provided by: Broadridge Investor Communication Solutions, Inc.
Your retirement lifestyle will depend not only on your assets and investment choices, but also on how quickly you draw down your retirement portfolio. The annual percentage that you take out of your portfolio, whether from returns or the principal itself, is known as your withdrawal rate. Figuring out an appropriate initial withdrawal rate is a key issue in retirement planning and presents many challenges.

Why is your withdrawal rate important?
Take out too much too soon, and you might run out of money in your later years. Take out too little, and you might not enjoy your retirement years as much as you could. Your withdrawal rate is especially important in the early years of your retirement; how your portfolio is structured then and how much you take out can have a significant impact on how long your savings will last.Gains in life expectancy have been dramatic. According to the National Center for Health Statistics, people today can expect to live more than 30 years longer than they did a century ago. Individuals who reached age 65 in 1950 could anticipate living an average of 14 years more, to age 79; now a 65-year-old might expect to live for roughly an additional 19 years. Assuming rising inflation, your projected annual income in retirement will need to factor in those cost-of-living increases. That means you’ll need to think carefully about how to structure your portfolio to provide an appropriate withdrawal rate, especially in the early years of retirement.

Current Life Expectancy Estimates
At birth: Men = 76.2 Women = 81.2
At age 65: Men = 83.1 Women =85.7
Source: NCHS Data Brief, Number 355, January 2020

Conventional wisdom
So what withdrawal rate should you expect from your retirement savings? The answer: it all depends. The seminal study on withdrawal rates for tax-deferred retirement accounts (William P. Bengen, “Determining Withdrawal Rates Using Historical Data,” Journal of Financial Planning, October 1994) looked at the annual performance of hypothetical portfolios that are continually rebalanced to achieve a 50-50 mix of large-cap (S&P 500 Index) common stocks and intermediate-term Treasury notes. The study took into account the potential impact of major financial events such as the early Depression years, the stock decline of 1937-1941, and the 1973-1974 recession. It found that a withdrawal rate of slightly more than 4% would have provided inflation-adjusted income for at least 30 years.

Other later studies have shown that broader portfolio diversification, rebalancing strategies, variable inflation rate assumptions, and being willing to accept greater uncertainty about your annual income and how long your retirement nest egg will be able to provide an income also can have a significant impact on initial withdrawal rates. For example, if you’re unwilling to accept a 25% chance that your chosen strategy will be successful, your sustainable initial withdrawal rate may need to be lower than you’d prefer to increase your odds of getting the results you desire. Conversely, a higher withdrawal rate might mean greater uncertainty about whether you risk running out of money. However, don’t forget that studies of withdrawal rates are based on historical data about the performance of various types of investments in the past. Given market performance in recent years, many experts are suggesting being more conservative in estimating future returns.

Past results don’t guarantee future performance. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Rebalancing involves selling some investments in order to buy others. Investors should keep in mind that selling investments in a taxable account could result in a tax liability. Diversification does not guarantee a profit or protect against investment loss.

Inflation is a major consideration

To better understand why suggested initial withdrawal rates aren’t higher, it’s essential to think about how inflation can affect your retirement income. Here’s a hypothetical illustration; to keep it simple, it does not account for the impact of any taxes. If a $1 million portfolio is invested in an account that yields 5%, it provides $50,000 of annual income. But if annual inflation pushes prices up by 3%, more income — $51,500 — would be needed next year to preserve purchasing power. Since the account provides only $50,000 income, an additional $1,500 must be withdrawn from the principal to meet expenses. That principal reduction, in turn, reduces the portfolio’s ability to produce income the following year. In a straight linear model, principal reductions accelerate, ultimately resulting in a zero portfolio balance after 25 to 27 years, depending on the timing of the withdrawals.

Volatility and portfolio longevity
When setting an initial withdrawal rate, it’s important to take a portfolio’s ups and downs into account — and the need for a relatively predictable income stream in retirement isn’t the only reason. According to several studies done in the late 1990s and updated in 2011 by Philip L. Cooley, Carl M. Hubbard, and Daniel T. Walz, the more dramatic a portfolio’s fluctuations, the greater the odds that the portfolio might not last as long as needed. If it becomes necessary during market downturns to sell some securities in order to continue to meet a fixed withdrawal rate, selling at an inopportune time could affect a portfolio’s ability to generate future income.

Making your portfolio either more aggressive or more conservative will affect its lifespan. A more aggressive portfolio may produce higher returns but might also be subject to a higher degree of loss. A more conservative portfolio might produce steadier returns at a lower rate, but could lose purchasing power to inflation.

Calculating an appropriate withdrawal rate
Your withdrawal rate needs to take into account many factors, including (but not limited to) your asset allocation, projected inflation rate, expected rate of return, annual income targets, investment horizon, and comfort with uncertainty. The higher your withdrawal rate, the more you’ll have to consider whether it is sustainable over the long term.

Ultimately, however, there is no standard rule of thumb; every individual has unique retirement goals, means, and circumstances that come into play.
IMPORTANT DISCLOSURES
Registered representatives offer securities and investment advisor representatives offer advisory services through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Mutual of Omaha Advisors is a marketing name for Mutual of Omaha Investor Services, Inc. Mutual of Omaha Investor Services, Inc., The Wheeler Group LLC and Broadridge Investor Communication Solutions, Inc. are not affiliated.

Trading instructions sent via e-mail will not be honored. Please contact my Hawaii Division Office at (808) 942-8133 or Mutual of Omaha Investor Services, Inc. at (800) 228-2499 for all buy or sell orders. Please note that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets.

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable–we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Copyright 2020 by Broadridge Investor Communication Solutions Inc.
All Rights Reserved.

Changing Jobs? Know Your 401(k) Options

What should you do with your 401(k) when you switch jobs?

Provided by: Broadridge Investor Communication Solutions, Inc.
If you’ve lost your job, or are changing jobs, you may be wondering what to do with your 401(k) plan account. It’s important to understand your options.

What will I be entitled to?
If you leave your job (voluntarily or involuntarily), you’ll be entitled to a distribution of your vested balance. Your vested balance always includes your own contributions (pre-tax, after-tax, and Roth) and typically any investment earnings on those amounts. It also includes employer contributions (and earnings) that have satisfied your plan’s vesting schedule.In general, you must be 100% vested in your employer’s contributions after 3 years of service (“cliff vesting”), or you must vest gradually, 20% per year until you’re fully vested after 6 years (“graded vesting”). Plans can have faster vesting schedules, and some even have 100% immediate vesting. You’ll also be 100% vested once you’ve reached your plan’s normal retirement age.It’s important for you to understand how your particular plan’s vesting schedule works, because you’ll forfeit any employer contributions that haven’t vested by the time you leave your job. Your summary plan description (SPD) will spell out how the vesting schedule for your particular plan works. If you don’t have one, ask your plan administrator for it. If you’re on the cusp of vesting, it may make sense to wait a bit before leaving, if you have that luxury.

Don’t spend it.
While this pool of dollars may look attractive, don’t spend it unless you absolutely need to. If you take a distribution you’ll be taxed, at ordinary income tax rates, on the entire value of your account except for any after-tax or Roth 401(k) contributions you’ve made. And, if you’re not yet age 55, an additional 10% penalty may apply to the taxable portion of your payout. (Special rules may apply if you receive a lump-sum distribution and you were born before 1936, or if the lump-sum includes employer stock.)If your vested balance is more than $5,000, you can leave your money in your employer’s plan at least until you reach the plan’s normal retirement age (typically age 65). But your employer must also allow you to make a direct rollover to an IRA or to another employer’s 401(k) plan. As the name suggests, in a direct rollover the money passes directly from your 401(k) plan account to the IRA or other plan. This is preferable to a “60-day rollover,” where you get the check and then roll the money over yourself, because your employer has to withhold 20% of the taxable portion of a 60-day rollover. You can still roll over the entire amount of your distribution, but you’ll need to come up with the 20% that’s been withheld until you recapture that amount when you file your income tax return.

Should I roll over to my new employer’s 401(k) plan or to an IRA?
Assuming both options are available to you, there’s no right or wrong answer to this question. There are strong arguments to be made on both sides. You need to weigh all of the factors, and make a decision based on your own needs and priorities. It’s best to have a professional assist you with this, since the decision you make may have significant consequences — both now and in the future.
Reasons to consider rolling over to an IRA:
*You generally have more investment choices with an IRA than with an employer’s 401(k) plan. You typically may freely move your money around to the various investments offered by your IRA trustee, and you may divide up your balance among as many of those investments as you want. By contrast, employer-sponsored plans generally offer a limited menu of investments (usually mutual funds) from which to choose.
*You can freely allocate your IRA dollars among different IRA trustees/custodians. There’s no limit on how many direct, trustee-to-trustee IRA transfers you can do in a year. This gives you flexibility to change trustees often if you are dissatisfied with investment performance or customer service. It can also allow you to have IRA accounts with more than one institution for added diversification. With an employer’s plan, you can’t move the funds to a different trustee unless you leave your job and roll over the funds.
*An IRA may give you more flexibility with distributions. Your distribution options in a 401(k) plan depend on the terms of that particular plan, and your options may be limited. However, with an IRA, the timing and amount of distributions is generally at your discretion (until you reach age 72 and must start taking required minimum distributions in the case of a traditional IRA).
*You can roll over (essentially “convert”) your 401(k) plan distribution to a Roth IRA. You’ll generally have to pay taxes on the amount you roll over (minus any after-tax contributions you’ve made), but any qualified distributions from the Roth IRA in the future will be tax free.

Reasons to consider rolling over to your new employer’s 401(k) plan (or stay in your current plan):
*Many employer-sponsored plans have loan provisions. If you roll over your retirement funds to a new employer’s plan that permits loans, you may be able to borrow up to 50% of the amount you roll over if you need the money. You can’t borrow from an IRA — you can only access the money in an IRA by taking a distribution, which may be subject to income tax and penalties. (You can give yourself a short-term loan from an IRA by taking a distribution, and then rolling the dollars back to an IRA within 60 days; however, this move is permitted only once in any 12-month time period.)
*Employer retirement plans generally provide greater creditor protection than IRAs. Most 401(k) plans receive unlimited protection from your creditors under federal law. Your creditors (with certain exceptions) cannot attach your plan funds to satisfy any of your debts and obligations, regardless of whether you’ve declared bankruptcy. In contrast, any amounts you roll over to a traditional or Roth IRA are generally protected under federal law only if you declare bankruptcy. Any creditor protection your IRA may receive in cases outside of bankruptcy will generally depend on the laws of your particular state. If you are concerned about asset protection, be sure to seek the assistance of a qualified professional.
*You may be able to postpone required minimum distributions. For traditional IRAs, these distributions must begin by April 1 following the year you reach age 72. However, if you work past that age and are still participating in your employer’s 401(k) plan, you can delay your first distribution from that plan until April 1 following the year of your retirement. (You also must own no more than 5% of the company.)1
*If your distribution includes Roth 401(k) contributions and earnings, you can roll those amounts over to either a Roth IRA or your new employer’s Roth 401(k) plan (if it accepts rollovers). If you roll the funds over to a Roth IRA, the Roth IRA holding period will determine when you can begin receiving tax-free qualified distributions from the IRA. So if you’re establishing a Roth IRA for the first time, your Roth 401(k) dollars will be subject to a brand new five-year holding period. On the other hand, if you roll the dollars over to your new employer’s Roth 401 (k) plan, your existing five-year holding period will carry over to the new plan. This may enable you to receive tax-free qualified distributions sooner.

When evaluating whether to initiate a rollover always be sure to (1) ask about possible surrender charges that may be imposed by your employer plan, or new surrender charges that your IRA may impose, (2) compare investment fees and expenses charged by your IRA (and investment funds) with those charged by your employer plan (if any), and (3) understand any accumulated rights or guarantees that you may be giving up by transferring funds out of your employer plan.

What about outstanding plan loans?
In general, if you have an outstanding plan loan, you’ll need to pay it back, or the outstanding balance will be taxed as if it had been distributed to you in cash. If you can’t pay the loan back before you leave, you’ll still have 60 days to roll over the amount that’s been treated as a distribution to your IRA. Of course, you’ll need to come up with the dollars from other sources.

1Due to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, required minimum distributions (RMDs) are waived in 2020.
IMPORTANT DISCLOSURES
Registered representatives offer securities and investment advisor representatives offer advisory services through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Mutual of Omaha Advisors is a marketing name for Mutual of Omaha Investor Services, Inc. Mutual of Omaha Investor Services, Inc., The Wheeler Group LLC and Broadridge Investor Communication Solutions, Inc. are not affiliated. Trading instructions sent via e-mail will not be honored. Please contact my Hawaii Division Office at (808)942-8133 or Mutual of Omaha Investor Services, Inc. at (800) 228-2499 for all buy or sell orders. Please note that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets.Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable–we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.Copyright 2020 by Broadridge Investor Communication Solutions Inc. All Rights Reserved.

Need TDI? HawaiiTDI

Does your Hawaii-based business need Hawaii-state mandated, Temporary Disability Insurance(TDI) coverage? If yes, you’ve come to the best place. We guarantee it.

For the past twenty years, HawaiiTDI has been the market leader. We care about our clients. Call us and you’ll see the difference.

By state law, employers in Hawaii must provide temporary disability insurance (TDI) for their employees. However, state-mandated minimum coverage may not meet the needs of all employers and their employees. We offer competitively-priced TDI plans that fully comply with all state requirements, but we also offer plans that enhance required TDI plans and offer employees income protection beyond basic benefits.

As licensed Financial Advisors, we do a lot more than just ‘insurance’. But if trhat’s all you need, then that’s what we’ll give you. We look forward to having the chance to serve your business needs. Please email, or call today. Aloha and thank you very much!

M. Garrett Wheeler

mgarrettwheeler@gmail.com

(808)216-4147

 

Critical Illness Insurance Can Aid in Business Continuation Planning

We all know people who have had cancer, a heart attack or a stroke. In fact, every 19 seconds, someone in the U.S. is diagnosed with cancer. Every 25 seconds, someone suffers a coronary event. Every 40 seconds, someone in the U.S. suffers a stroke.*

I have found that when it “hits home” for people is when it has happened to someone they love. So I’m upfront and direct about the seriousness of not having this protection. I explain to clients who are business owners: Are you prepared for how one of these illnesses might impact not only your future personal plans, but your future business plans? Whatever their answer may be, my main concern is to serve them by helping them get this protection. In doing so, I’ve done my job in bringing it to their attention and offering to help with this type of planning. Of course, the bottom line is that not many of us can afford to say, “It won’t happen to me.”

It is impossible to predict how we might react if diagnosed with a life-threatening condition. Some may choose to return to normalcy as soon as possible, while others may make drastic changes to life and work routines. Others, because of their medical circumstances, have no choice. Critical illness insurance, a specified disease policy that provides a lump-sum benefit amount upon diagnosis of certain medical conditions (as defined by the policy), benefits different individuals in different ways. The proceeds from a critical illness policy can provide needed funds for those wanting to change their lifestyles and financial security for those whose medical conditions prevent them from having much choice.

Have you ever thought about how you would pay your mortgage if you couldn’t work because of an illness?

Following are some business applications where critical illness insurance can help.

Critical Illness and Buy-Sell Planning

With buy-sell planning in the life insurance context, business owners enter into a legal agreement requiring the purchase of their ownership interest upon their death. The most common structures for these agreements are the entity purchase (the business buys the interest) and the cross purchase (the co-owners buy the interest). In these scenarios, life insurance proceeds are used to effectuate the agreement.

Firms also can set up an agreement that is triggered and funded upon the diagnosis of a critical illness. Which type of plan – the entity or cross purchase – is better for a critical illness buy-sell agreement? The answer: It depends.

A cross-purchase agreement using critical illness insurance has the same benefits as the cross-purchase agreement that uses life insurance. The remaining owners have the funds to purchase the shares without incurring precarious debt. Also, they receive an increase in basis equal to the amount they pay for the shares. All of the owners have the security of knowing that, should they be the one to incur a critical illness, they won’t have to accept installment payments or worry that the business will collapse before the purchase price is paid.

An entity-purchase agreement may be the solution if flexibility is the primary concern. With this option, the proceeds would be paid directly to the corporation. The shareholders can agree in advance under which circumstances the critically ill shareholder could or must be bought out. Further, they may also wish to include a “waiting period” to allow the critically ill shareholder the time to decide whether he or she wishes to remain in the business postdiagnosis.

The key to using this strategy effectively is to plan in advance who is to decide whether and when the purchase will be carried out.

FANG Stock: Be Diligent

fangOut of curiosity I just Googled, “FANG Stock”. Here’s what I got: Diamondback Energy Inc. NASDAQ: FANG – Sep 6, 4:40 PM EDT. That is not what I was looking for. What I was actually in search of was more details on FANG, the acronym for Facebook Inc., Amazon.com, Inc., Netflix, Inc. and Google (which is now Alphabet Inc.). Because these are top-performing technology stocks, they get a disproportionately large amount of the headlines when it comes to stocks. And that’s for good reason, what they have created is smack-dab-in-the-middle of pop culture. All four companies are disrupters. You could say they run our tech world. Of course there are other major players that I like (i.e. Cisco, etc.). But with my brother, Milton, introducing me to “Narcos,” on Netflix, FANG has been on my mind. That doesn’t mean you should go out and mortgage the house (or short the farm), but to me it’s worthwhile to look at, if you have an interest. And I’m curious.

The companies that make up FANG are popular for good reason. But what does analytics tell us about their past performance? Are they worthwhile investments? You bet they are and have been. Google it. How about moving forward? Your guess is as good as any. But before you pull the trigger, have a plan. Most new traders worry only about when to buy a stock. Experts tell us that we should have an exit strategy as well. That is, when you’ll sell. Investopedia says, “…while buying at the right price may ultimately determine the profit gained, selling at the right price guarantees the actual profit, if any.” (http://www.investopedia.com/articles/stocks/10/when-to-sell-stocks.asp)

Most recently (June 2016), headlines like, “US Equity Markets Plunge As ‘FANG’ Stocks Give Up 2016 Gains”, dominated. But today, other analysts are saying, “investors rushing into the safe haven of FANG stocks…all-time highs for Facebook and Amazon”. And course, no one person really knows what the future holds. So if you’re interested in dipping your toes into “FANG”, do your homework. That is, do your own due diligence, study it hard and go with what you know—not exactly like buying fine art, where some say one should buy what they enjoy looking at, aside from upside economic potential. The key to due diligence, I think, is the diligence part. You have to pay attention, be thorough and careful. And that takes time, interest and wherewithal. Right now, I plan to google and study Netflix. Because it’s been a stock that has been haunting me since I did not pull the trigger on a buy when Netflix shares hit a split-adjusted $2.56 per share during the crisis. And by the way, the stock has now risen 1,670 percent since. Ouch! But today Netflix is trading at a very high multiple and doesn’t generate positive cash flow. I think Netflix is good, yet it might be the least impressive FANG stock. As of today, Facebook and Alphabet seem most remarkable. So which FANG stock? Well, there are a lot of factors to consider, but for me the lower risk seems to be Google. But then again, you get to decide which FANG stock is worthy of your hard-earned dollars. Be diligent!

Continue reading

Retirement Liquidity: The Mango Tree

My-sweet-mango-tree-MyanmarDon’t tie-up all of your assets, but don’t have them all liquid either…

Having your assets liquid may feel good because it’s accessible. But at the same time, let’s consider the big, longevity picture. We American’s are all living longer than ever. And when it comes to generating income during retirement, having your assets liquid at all times may actually increase the risk of your assets not lasting for your lifetime.

Your Retirement Mango Tree

Think of all of your assets as one mango tree with branches (your principal) producing enough mangos (income) you need to live comfortably during retirement. In the beginning, you may think there’s no harm chopping off a branch or two (liquidity) for firewood due to the overall size of the tree. But, when doing this you are “double counting” the asset for being equal to meeting two needs. The number of mangos produced would be lower and if you keep chopping off branches, there may come a point when your tree cannot produce enough mangos and cannot grow new branches, ultimately reducing the life of your tree. No more tree, no more mangos.

There are many decisions you will need to make in your life as you enter into retirement. One of the many financial decisions is what to do with the assets you had accumulated for retirement. Your paycheck is ending. It’s up to you to make a new one to last for your lifetime with your assets.

Retirement at Risk

After the market crash of 2008, percentage of American households who are “at risk” at age 65 increased to 51% (2009) from 43% (2004) according to the National Retirement Risk Index.1

 

Now, think of your assets as being multiple mango trees…

You fence off and give up your access (liquidity) to some trees so that these trees are only there to produce enough mangos to cover your necessary expenses. The remaining trees are for producing mangos and firewood for when you need it.

Under this approach, you have established sources for solely producing income and you also have sources for your liquidity needs.

Create one mango tree or multiple mango trees?

Your view about retirement should be long-term because it is unknown as to how long your retirement years will be; therefore, you should explore financial products that can provide income for your lifetime and that of your spouse’s lifetime. One of the main reasons that you save for retirement is to produce income (mangos) for your necessary expenditures, like paying your mortgage/rent, food and utilities, so you can live comfortably during these years. In addition, a portion of your income should be independent from and not reliant on market performance. Finishing confident is just as important as beginning confident.

Earlier the Better: Create Your Plan Today

Here are some action steps you can take today to better prepare for retirement:

  • Understand how your lifetime sources of income work, like Social Security, and explore possible ways to increase these sources.
  • Compare your retirement income with the total amount of your expenses — necessary expenses and comfort-living expenses — to see if you have a retirement income gap.
  • Purchase financial products that can provide guaranteed payments for life or for the life of the surviving spouse, and that can provide protection for unexpected events.
  • Follow a distribution/withdrawal plan by accessing pools of assets at certain points in time during retirement. This can help you lengthen the life of your assets, gain the potential benefit of compounding growth and systematically increase your retirement income when you need it most.
  • Work with a financial professional to fully explore your options for developing your income plan for retirement.

1The National Retirement Risk Index measures the amount of American households who are at risk of not being able to support their pre-retirement lifestyle during retirement. This index is calculated by The Center of Retirement Research at Boston College and the report can be found at http://www.crr.bc.edu®

Seminar for Hawaii Military: Achieving Financial Security in an Uncertain World

MoO.TeamHawaiiIt was a pleasure being invited as a “Community Partner”, to the recent 4th of July Celebration on Pearl Harbor. The overall response we received was tremendous. Many of the participants—active-duty military servicemembers—expressed an interest in getting more information from us. Because of this incredible outpouring of support, we would like to “give back” and invite our hard-fighting warriors and their spouses to a free, informational seminar here in Honolulu. (Register here: Hawaii Military: Achieving Financial Security in an Uncertain World)

For over 100 years, Mutual of Omaha Advisors has helped millions of families by delivering stable performance in turbulent times. We offer a huge range of financial solutions and tools for clients. From financial planning to family protection, retirement and college saving to estate planning—we can help to preserve your assets, pursue safe returns and achieve your financial goals.

Although all of our clients have unique goals and concerns, there are some common trends that apply to most. For example, many want to better understand how to save for a more secure retirement, reduce future taxes, and protect their family if something happens to them.  We focus on the things that are well within your control financially.

Mutual of Omaha Advisors is sponsoring this must-see, free seminar for Hawaii-based service members: “Achieving Financial Security in an Uncertain World: Establishing a Sound Strategy”.

In this timely workshop, you will learn about:

  • Risk protection plans to protect retirement assets
  • Thrift Savings Plan (TSP): Tax-Advantaged Options
  • Survivor Benefit Plan (SBP): Conversion Options
  • SGLI-VGLI: Understand How It Works/Facts You Need to Know
  • The necessary paperwork to request and obtain valuable VA & SSA benefits.

If You Fail to Plan, You Plan to Fail

It’s a cliché, but it’s also true – if you fail to plan, you plan to fail . . . meaning that it is likely that if you do not have a plan to guide you when you set out to accomplish an objective, you will end up short of your goals.

Here’s a disturbing fact: More than 95% of Americans are not financially secure at age 65. None of these people started out to fail financially. Yet, according to the facts, most did. To prove the old adage: They didn’t plan to fail…they failed to plan. We can’t predict the future, but we can help you plan for a better one. It all starts with a plan.

Whether you are planning for retirement far down the road or developing an overall financial strategy to see you and your family through any of the many upcoming milestones in your lives, the importance of planning cannot be overstated. The good news is that it’s never too late or too early to establish a financial plan. You Might Be Planning for:

  • Enjoying the retirement of your dreams, free from financial worry
  • Leaving your heirs a sizable inheritance from your estate
  • Minimizing your taxes to maximize your net income
  • Helping your children through college with little or no debt
  • Purchasing a vacation home where you can get away from it all
  • Providing your family with a financially secure lifestyle

Regardless of your objective, you need to plan. By taking a few simple steps, you can plot a course that will help enable you to meet your financial goals.

Developing a financial strategy can be difficult and complex. But, at its very basic level, it really boils down to evaluating where you currently stand financially, determining how much you need to achieve your goals and then developing, implementing and sticking to your strategy.

We’ll take you through the process of determining your financial goals and objectives and talk about some different ways you can address them. And just so you know, we choose to provide this valuable service to Hawaii-based, active-duty military members without a fee or any obligation.

It’ll be an easy way to learn the ins and outs of developing a financial strategy and why it’s important. Please Join Us… It’ll be time well spent.

WHEN

Thursday July 21, 2016 from 6:30pm-8:00pm

Saturday July 30, 2016 from 11:00am-12:30pm

Thursday August 4, 2016 from 6:30pm-8:00pm

Where

Pan Am Building

1600 Kapiolani Blvd Suite 1200

Honolulu, HAWAII 96814

And with a strong, stable and secure company like Mutual of Omaha Advisors standing behind you, you can know you’ve taken a positive step to help prepare for the future.

Please take a moment to reply back with the best dates/times that fit your schedule. I will try my best to accommodate your preferences. We will call you in the next few days to discuss any questions you have with respect to creating a financial plan, and to invite you to one of our free, upcoming seminars. We look forward to serving you and your family.

To register online, please visit Eventbrite:

Hawaii Military: Achieving Financial Security in an Uncertain World)

Insuring Your Key Employees…And Your Business’ Future

As a business owner, you have put your time, work and money into your business to make it a success. To help protect what you’ve built you’ve probably insured your inventory, equipment, real estate and other physical assets. Yet the things that make your business successful, that make it stand out from the competition, probably isn’t any of those things.

What makes people choose you over the competition is probably you and your key employees who turn all those physical assets into the work of your business and keep the customers coming back. You could say that your employees are your most valuable asset. But…have you insured that asset?

If you lose or break a piece of equipment, it may be expensive but it can usually be replaced as good as new. Is the same true of your key employees, including yourself? If you or one of your key employees was suddenly out of the picture, how quickly could the business find someone to take that person’s place? How long would it take and how much would it cost the business to, let’s say, replace you? Could it even be done?

Just like you have insured your physical assets, you can insure yourself and your employees and help protect the value you bring to the business. Life insurance is one of the ways to help protect the business you created from the loss of an important employee.

Here’s how it works:

First, determine who your key employees are. You are one, along with your more highly compensated employees and those who are an essential part of your company’s profitability. If the company would suffer a financial hardship in their absence, they are key employees.

The next step is to work with your agent/producer to determine the insurable value of that employee to your company. One way is to use a multiple of up to 10 times the employee’s income. Another way is to consider the role that employee has in the company’s sales and profit. In general, the harder an employee would be to replace, the higher their insurance value to the company.

Once you know the insurance value of the employee, the business could obtain a life insurance policy on the employee, with the business as the owner and beneficiary of the policy. There are strategies you can discuss with your agent/producer that can let you get your premium on the policy paid back to you down the road, or can let you build cash that eventually you can use to supplement your own retirement or to provide deferred compensation to an employee (the promise of deferred compensation might keep that employee with you instead of going to work for the competition).

If you and your employees are your business’ most important assets, doesn’t it make sense to protect them the same way you protect your physical assets?

2016 Cost of Living Adjustments

2016 Tax Data You Should Know

The tax law places limits on contributions to retirement plans and individual retirement arrangements.  These limits are adjusted annually for cost-of-living increases, but for 2016 most contribution limits are unchanged.

For example, the elective deferral limit for 401(k) plans remains at $18,000, the compensation cap for qualified retirement plans remains at $265,000, and the contribution limit for IRAs remains at $5,500.  Many other limits will remain unchanged as well.

NOTE: The Wheeler Group LLC agents or employees do not give tax or legal advice.  Clients must consult their own tax or legal advisors regarding their individual situations.

Weekly Market Recap from JP Morgan

Market Update 9-21-15

The week in review
Retail sales increased 0.2% m/m  Industrial production fell -0.4% m/m  Empire State survey weak at -14.7  Core CPI maintained 1.8% y/y growth  Housing starts fell to 1.126m saar  Philadelphia Fed survey fell to -6.0

The week ahead
Existing & new home sales  FHFA HPI  Flash Markit Mfg. and Non-Mfg. PMIs  Durable Goods  Consumer sentiment  Final statement of 2Q15 Real GDP