Monthly Archives: September 2014

Planning Ahead for Your Snowbird Lifestyle

Snowbird Lifestyle

We have all entertained the idea of escaping to another place for a while. Whether it’s because we’re tired of living in a colder climate, or because we just need a change of scenery, the allure of becoming a snowbird seems to swell with each passing year.

Yet, for as much as we dream of the eventual escape, many of us have not executed on the most important component of making this happen: the plan.

This doesn’t come as a surprise, considering that one in five people near retirement age have saved zero money (Federal Reserve).

Fortunately, you don’t have to be one of the 20 percent – not now, and certainly not in your future plans of becoming a snowbird.

Here’s how to start planning now for your escapee future:

Seek out a financial planner to help. Research Certified Financial Planners and meet with a few of them to determine if their philosophies match your own. Once you have settled on a planner, talk with them about your intentions of spending time in more than one location. Be specific about the destinations, the accommodations, and the periods of time. They should be realistic with you about the costs of maintaining the properties.
Prepare for the road ahead. After having a thorough discussion with your financial planner, the next step is to prepare for the financial obligation of becoming a snowbird. The planner will take a look at your current finances and devise a plan for a down payment as well as the funds for general upkeep. If your properties are in flood, earthquake or hurricane regions, then you should consider the costs of extra insurance, too.
Understand the snowbird life cycle. When planning for the snowbird lifestyle, you have to consider the beginning and the end. That is, you not only need to see how you can acquire the property and enjoy it for many years, but you also need to understand how you are going to sell it and finish with cash flow afterward. Again, the financial planner should help you visualize and plan for all of the phases of the snowbird lifestyle.

When planning to spend your time in more than one place, it is essential to understand the long-term impact of owning and maintaining multiple real estate properties. The sooner you can start the planning process, the better the chances are that you can fully enjoy a change of scenery in the next season of your life.

When is it time for a financial planner?

Throughout your life, you have probably had many thoughts about your money – where it is coming from, where it is going, and certainly how much of it you are getting (or not getting). And while you may have spent a great deal of time managing this money, you still had questions about the big picture: How am I going to make the most of my money to accomplish the goals that are important to me?

At these times, you may have even thought about seeing a financial planner, but neglected to follow through for a variety of reasons: you thought you did not have enough money to warrant financial planning, or you did not have enough of a plan in place yet, or maybe you just felt like you did not have the time for it.

Fortunately, you do not need to be wealthy to start a financial plan – in fact, you can create a plan that will help you work towards your goal to build wealth over time. You also do not need a plan before starting with a financial consultant – creating a plan is the job of the financial planner. And as far as time is concerned, are you going to have more time in the future?

With all that being said, when is the right time to see a financial planner? Of course, anytime is a good time to make a way for the future, but here are some milestones that have served as excellent launching points for some:

  • First Job: When we accept an offer for our first, full-time employment, it can be an exciting opportunity to make more money than we ever have before – and the temptation to spend, spend, spend is also greater. While some employers offer retirement plans through the company, this may not be enough to accomplish short- and long-term goals, like buying real estate, traveling, or even these next two milestones.
  • Getting Married: We all want the fairytale wedding and the happily ever after, and fortunately with financial planning you can put those wheels into motion and make those plans a reality.
  • Starting a Family: Whether you are just thinking about the next big step, or you have already begun expanding your clan, these are excellent points to schedule time with a financial planner. They can help you set aside funds you will need to support your children throughout childhood and into the college years.

While these events are just the beginning, they are helpful reminders that big life events require some planning and preparation. But even if you have already begun those events, you will have others – and getting ahead of them now will make the future more attainable.

Assigning a Power of Attorney for Your Healthcare

While it is never pleasant to think about, there may come a time in your life when you may not be able to make decisions about your own healthcare. Instead, someone else will be in charge of these decisions. The good news is that you can be the one to select a medical power of attorney (also called an agent) for your healthcare – as long as you do it ahead of time.

Here are some ideas for those who are considering advance directives:

· Take the time to really think about whom you trust to make choices on your behalf. Will this person carry out your wishes? Do they know you well enough to take on this responsibility? Note that a medical power of attorney must be at least 18 years of age, and that your physician cannot be assigned as your power of attorney. You can also assign successor agents in the case that your primary is not available.
· Consider the type of guidance you want to give your agent about making medical decisions that will affect you, and then talk to your agent about this information. It is important that your power of attorney for healthcare fully understand your wishes, so that the correct directions can be given to your physician. If you have existing medical conditions, then you should talk to your doctor about your wishes before you put them in writing.
· Put it in writing. While it is possible to handle the documentation on your own, you may want to talk to a lawyer who specializes in advance directives, depending on your situation, so that you can get your agent(s) and your wishes on paper. You should give a completed form to your agent as well as your physician, and provide new ones should you change any of the information.
· Don’t wait. Assigning a power of attorney for healthcare is not just a decision for when you are older. Get your affairs in order now, so that you can have peace of mind throughout your life.

What happens if I don’t choose a power of attorney for my healthcare?

If you decide not to select your own medical power of attorney, then a legal surrogate will be assigned to make a limited range of healthcare decisions under Illinois law. The order of these surrogates is:

· Court-appointed guardian (if any)
· Spouse
· Adult child
· Parent
· Adult brother or sister
· Adult grandchild
· Close friend
· Court-appointed guardian of the estate

Other states may have different requirements for assigning a power of attorney for healthcare and for completing and filing a legal document.

If you have any questions about qualifying an agent, or you need to talk about making it official, then please call Guidant Wealth Advisors. We are here to help.

When Will You Begin Taking Social Security Benefits ?

  • Nine out of ten individuals age 65 and older receive Social Security benefits.
  • Social Security benefits represent about 38% of the income of the elderly.
  • Among elderly Social Security beneficiaries, 52% of married couples and 74% of unmarried persons receive 50% or more of their income from Social Security.
  • Among elderly Social Security beneficiaries, 22% of married couples and about 47% of unmarried persons rely on Social Security for 90% or more of their income.

(Source: Official Social Security Website)

If you’re counting on Social Security to provide you with a secure retirement, think again. Social Security benefits only account for less than half of today’s retirees’ income. Longer life expectancies and the aging of the population will put an increasing burden on the Social Security system, making your own retirement funding more important than ever.

The exact amount of your Social Security benefit will depend upon the number of years you’ve been working and the amount you’ve earned. Retirement benefits are collectible at any time on or after age 62, but can be delayed until age 70. How much you get depends upon when you retire; reduced benefits are paid if you retire between ages 62 and your “normal retirement age,” as defined by Social Security, while delayed retirement credits apply if you wait until beyond your normal retirement age. In some cases, your children and your spouse may also be eligible for benefits on your account.

Note that retirement benefits are not automatic and you must first apply for benefits before you can receive them. Some time is required to process all the paperwork, so plan to apply several months in advance. Regardless of your Social Security options, think of Social Security as only a small percentage of your total retirement plan, and set aside a portion of your income on a regular basis.

What will your benefits be?

The exact amount of your Social Security benefit will depend upon your earnings history. You can obtain an estimate of your benefits at the Social Security Administration’s online estimator. http://www.ssa.gov/retire2/estimator.htm. You can also call the Social Security toll-free number at (800) 772-1213 and request form SSA 7004, the “Request for Personal Earnings and Benefit Estimate Statement.” Complete the form and send it back. You will receive a personalized estimate of your benefits, plus a statement showing your annual earnings. Like reconciling your bank statement, your Social Security summary of annual earnings should be verified against your tax return statements, W2 forms, or your own records. If there are any discrepancies, report them at once.

Where do the Social Security dollars come from?

Social Security contributions are paid by you and your employer. Your contributions were deducted from your paychecks since the day you started working and are matched by an equal amount paid by your employer. These contributions pay for the following:

Retirement benefits: Collectible at any time after age 62 and based on the number of years you’ve been working and the amount you’ve earned. In some cases, your children and your spouse may also be eligible for benefits on your account.

Survivor’s benefits: A form of life insurance coverage available to your spouse and dependents.

Disability insurance: Provides a monthly income in the event you are unable to work due to a disability. Eligibility depends on the number of “credits” you have earned and your age.

Social Security may pay other family members as well

When you receive Social Security benefits, other payments may also be made to:

  • A spouse age 62 or older.
  • A spouse under age 62 who is caring for a child under 16, or a disabled child who is receiving benefits from your earnings.
  • Unmarried children under 18 (or under 19 if they are enrolled full-time in high school).

When you collect your benefit determines what you get

  • Currently you can retire at normal retirement age (between age 65 and age 67 depending on when you were born) and receive full benefits.
  • Retire between 62 and 65 and receive a reduced benefit.
  • Continue working and delay the receipt of benefits, and get a bonus for each year of work past normal retirement age, up to age 70.

Monthly benefit may change

Your monthly Social Security check may change to reflect the following:

  • Cost-of-living increases.
  • Eligibility for disability benefits after retirement, but before one reaches normal retirement age.

Maximize your benefit

You must apply for Social Security benefits.

Decide whether you’ll collect your own Social Security benefits, based on your earnings and work history, or your spouse’s. Presumably, you’ll want to choose the one that pays the most. If you retire before a spouse, you can collect your own benefits, then switch and choose the spousal benefits if they are greater. (Spousal Benefit Strategy)

  • Remember to apply for retirement benefits a few months before you want them to start. Some time is required to process all the paperwork, including Social Security number, proof of age, and evidence of recent earnings (W-2 forms from the last two years, or, if you’re self-employed, copies of your two most recent tax returns).
  • Reconcile your Social Security earnings report with your own records at three-year intervals. Report any discrepancies.
  • Don’t forget that Social Security checks can go to a former spouse to whom you were married 10 or more years — at 62 for a divorced spouse — at 60 for a surviving divorced spouse – and at 50 for a disabled surviving divorced spouse. Children, in certain cases, may be eligible for benefits under a grandparent’s earnings.
  • Bear in mind that “earnings limitations” (which change each year) may limit the amount you may earn while still receiving Social Security benefits. Those limitations end when you reach normal retirement age.
  • Keep Social Security records up-to-date if you change your name, in order to have your earnings credited properly.

Guidant Wealth Advisors can help

Trying to figure out when to take Social Security can feel overwhelming. When do you file? When do you start taking benefits? If you are married, should you or your spouse file first?

These choices determine the amount of Social Security you receive, and can impact the overall results of your financial plan. To select the best strategy, you need to consider more than simply maximizing your total benefits. You also should understand how Social Security choices affect your overall plan.

Guidant can help with a personalized evaluation of your Social Security benefits.

 

Automatic Transfers Help Pay the Bills

Investment Services include Automatic Transfer

Will automatic transfer from investment accounts help with expenses?

If you own a home, then you have to pay property taxes. If you are in business for yourself, then you have to pay estimated income taxes. Even if these two scenarios don’t apply to you, there are numerous potential bills that come up throughout the year, whether we want them to or not.

But what if there was a way to automatically transfer funds once or twice a year from your investment accounts to your everyday bank accounts in order to pay those big expenses?

At Guidant, we have offered automatic transfers to clients who don’t want to worry about saving money from their own income to foot the annual bills. Depending upon when payments are due, we make sure that the transfers are completed well ahead of time. All you have to do is pay the bill.

Talk about a major time saver.

When is the best time to enroll in automatic transfers?

You don’t have to wait until the beginning of the year to start the process; you can contact us anytime to discuss the details.