September 2017 Blog Posts
September 29, 2017
Retirement planning is more than just participating in your company’s retirement plan. You have to take an active role to achieve your goal. Here are five retirement planning mistakes you could be making and how to fix them.
Turning Down Money
About 1 in 4 participants don’t take advantage of their employer's maximum match. It’s can be due to confusing policy choices, but be sure you are pocketing the maximum match from your employer. Also, a typical plan should include a 6 percent contribution from your salary. Most auto-enrollment programs default employee’s contribution to 3 percent.
The fix: Even with auto-enrollment, it’s important to check that you are contributing enough of your salary to achieve the maximum match.
2. Contributing Too Little
Studies have shown that you should save around 15 percent of your earnings to have the income you will need upon retiring. Most people are only saving up to 6 percent and even with a matching program from employers, it is still not enough.
The fix: Increase your contribution rate by at least one percent every year if not more. Contributing up to 15 percent is key to a steady retirement fund.
3. Turning down the Roth 401(k)
Half of employers now offer a Roth 401(k) but less than 10 percent of people take advantage of it.
The fix: Focus on the payoff of a Roth 401(k) even though your contributions are made with after-tax dollars.
4. Poor Allocation Strategy
Most people are either too conservative or gamble with no awareness of the downside.
The fix: Most retirement plans offer tools to help you sort through allocation decisions. Try to create an age-appropriate mix of stocks and bonds as well. With all of these allocation decisions, be sure to benchmark it using your expected retirement date.
5. Staying in an Expensive Plan
When you leave a company, you have the option to move your money out of that retirement fund. A good test to see if you should find another option is whether or not the plan’s investment options charge an above-average annual expense ratios which could easily be found online.
The fix: If the fees on your current 401(k) are high, it’s time to figure out your next move. Before transferring money into a new plan, check to be sure that the options are low cost. Another option is to move your money directly into an IRA account.
These are very common 401(k) mistakes but following these tips will jumpstart your retirement planning success.
September 15, 2017
Retirement planning is extremely important, but some people lose all of their money from scammers. The monetary cost of financial elder abuse has been estimated to be from $3 to $36 billion. While that’s a large range, the numbers tell a frightening story. What are the scams, big and small, that seniors need to be wary of?
1. Pump and Dump Investment – telemarketers often call seniors to sell them shares of a new company which sound too good to be true (trust us, it is). Once the share prices shoot up, the marketers dump their shares and collect their “hard earned” money, leaving seniors with a boat load of worthless stock.
The best way to avoid this scam is to either do independent research on the Internet from trusted sources like Yahoo Finance or work with a licensed professional.
2. Medicare Open-Enrollment – Every fall, right before Medicare Open Enrollment begins, scammers who claim to represent the Centers for Medicare and Medicaid Services call unsuspecting seniors about new Medicare identification cards. The ploy works by having the seniors give their bank account info and their social security numbers.
This is why it’s important to never respond to phone calls asking for sensitive personal information! In addition, Medicare does not call, e-mail, or visit anyone asking for that kind of information.
3. Anti-Aging – perhaps not as potentially disastrous as the above two scams, bogus anti-aging products can still put a serious dent in senior financials. "Anti-aging quackery and hucksterism are pervasive on the Internet and in clinics advertising anti-aging treatments," writes Thomas Perls, MD, MPH, of the New England Centenarian Study, Boston Medical Center.
You can typically spot a bogus anti-aging product by the excessive use of testimonials and “scientific” evidence, and absurd claims that they have helped thousands of people, even though you’ve never heard of them.
Remember, don’t believe everything you read. Now more than ever, false information is floating around, and people will use it to take your money! We help seniors find legitimate means of growing their savings and do the often difficult task of sorting the bad from the good.