Robert Wicks, Chartered Life Underwriter, Chartered Financial Consultant, has been helping clients through Financial Visions of NC for nearly 40 years. Taking time to listen to the needs, wants and desires of his clients, Bob has professionally built long-lasting dynamic plans that give his clients flexibility and peace of mind now and into the futures of their personalized, doubt-free retirement. Safety of retirement assets, a reasonable expectation of growth, no-loss protection, and a guaranteed 'lifetime' income are available. And always ... the goal is guarantees, not guesses!

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Monday, March 13, 2017
Can You Afford To Gamble With Your Retirement?

The stock market has been surging to new highs. For the first time ever, the Dow Jones exceeded 20,000 in January. Then on the heels of President Trump’s first address to Congress, it charged ahead yet again. The Dow posted a 300-point jump, closing at over 21,000 on Wednesday, March 1. These gains come at a time when market volatility has also been on the decline. In early February the CBOE Volatility Index" more commonly known as the “investor fear index” showed investor concerns on the decline.

However, even as the market goes up many people still worry about their investments. What will the market do next? Do they own too many stocks? When the market goes down, will it be just be a spill, a correction, or a crash? For that matter, do they have too much money in other risky, market-based investments?

For people close to retirement, this brings up an important question. Should you stay with your current portfolio allocation mix, or is it time to move into a safer strategy?

How Does This Bull Market Rank Against Past Bull Markets?

At present, this bull run is the second longest-running since 1928, as Jeff Sommer notes in the New York Times. From January 1 until March 3, the S&P 500 rose over 6%. Since the bull market started in March 2009, according to Sommer, the index has grown around 250%.

  • According to the Bespoke Investment Group, quoted in the NYT article, the only longer bull run was from December 1987 to March 2000.
  • As for market strength, the current bull market comes in third. Again, the 1987-2000 bull market ranks first, having attained a 582% gain.
  • However, our current bull market runs close to the second. This second bull run occurred from June 1949 till August 1956 and achieved a gain of 267%.

Why does this matter? Because this bull run has been going for so long, data from past market performance may not be that useful in understanding future possibilities. But we do know from historical data that the market will go down.

The question is when it does trend downward, just how severe that downturn may be. And for people just 3-10 years out, investment losses could prove costly" especially for specific retirement financial and income goals.

What Might Lie Ahead?

No one ever really knows where the market is heading. But while historical data may not be as helpful, it can serve up indicators. Take, for instance, the long-term performance of the S&P 500.

Over the last 89 years, in all but one year the S&P 500 has fallen at least 4.4% from an intra-year peak. In 75% of the time, the decline has been 10% or greater! In fact, the market corrections averaged out at 17%, and the median correction was 13% over this 89-year period. During 2016, there were four market corrections. These trends can be seen in the image below, courtesy of Bloomberg, Haver Analytics, Gluskin Sheff.

 stock market chart

The Impact of Market Losses

Whenever speaking of investment losses and recovery, we use the language of “average returns.” But this doesn’t completely capture the statistical reality of what we need to recover from losses in the first place. Consider the example below.

If your assets fell 30% one year and then gained 10% the next year, that would be an average return of 20%. However, it wouldn’t be a full recovery of what you lost in year one. In order to get back to where you started, your assets’ value would have to increase 43%, in order to make up for the initial 30% loss. This concept is called “actual returns.”

To get an idea of what actual returns look like at different levels of loss, consider the following:

invest losses actual returns needed

For people who are retired or near retirement-age, these losses could prove costly. Ask yourself  "would you have the time to wait to fully recover, even when the market might fall again and lead to further setbacks? Can you afford to put retirement income-generating assets at risk? What would portfolio losses, before you enter retirement, do for your financial peace of mind?"

One Solution: Protecting Retirement Money with Safe Strategies

If you are in your fifties or older, you may want to consider ways you can keep your hard-earned money secure and intact. If appropriate, safe strategies with the contractual guarantees of annuities, or other fixed insurance products, may be worth evaluating. We can help you discover the best ways to keep your money safe with strong, top-rated insurance companies.


Should you have any questions, feedback, or requests for future content that may be helpful to your planning needs, please call Bob Wicks, CLU, Chartered Financial Consultant, at Financial Visions of NC #919-332-9265, or inquire ''.

Posted at 04:13 pm by finvisions777
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Friday, September 23, 2016
Focus On Income Over Assets In Your Retirement Planning
What is the more important marker in retirement planning: income or assets? This is an important question for retirees. After all, retirement can last for 30 years or longer.  It isn’t a time to make mistakes. Inferior planning may lead to income gaps or other unnecessary financial complications.

In past discussion, we have noted how income planning differs from investment planning, especially with its focus on monthly income. Retirement is a phase of “distribution,” or where we draw on a nest egg for income. It’s different from the working years, when we are accumulating assets and can “refill the bucket” with employment income, should we incur investment losses. Seniors don’t have this luxury during their retirement years. For this reason, among others, we believe that income should be the primary focus.

Here’s a look at some reasons why income should be a planning priority, and why you may want to account for this in your planning, as well.

Why Should Income be Prioritized over Assets in Retirement Planning?

Income is related to cash-flow, which lends to more efficient planning. As we all know, income is an important part of retirement finances. However, cash-flow is also a critical part of the equation. It’s the process of how we use our income streams to pay for retirement expenses. Cash-flow management covers many areas, including:

• Income sources,  retirement plan distributions, Social Security benefits, guaranteed pension benefits, annuity payments, part-time employment income, or others
• Timing of income payments, efficiently managing when money comes from income sources, and using it to pay expenses and bills on time
• Dealing with expenses, having sufficient monies for different kinds of retirement spending: monthly fixed-income needs, miscellaneous expenses (for example, vacations), and unexpected costs for emergencies or unforeseen events. 

Because cash-flow relates income to expenses, an emphasis on monthly income can be more efficient from a planning standpoint. Nobel of Economics laureate Robert C. Merton writes that in today’s retirement planning landscape, where many investors rely upon 401(k)s and other defined-contribution plans for savings goals, decision-making is often driven by behavioral biases.

If retirement planning focuses more on assets, it prioritizes asset values and investment returns. Those are return and risk variables, which are different than monthly income, these units of measurements make it more difficult for us to set cash-flow goals and determine the likelihood of meeting them.

As a planning marker, income corresponds better to spending projections. Let’s elaborate on the last point. Spending forecasts are another part of retirement planning. This involves determining what future spending may look like, and what we will need to cover it.

Just as retirement brings different financial priorities from our working years, it gives way to new risks. A primary risk is income uncertainty, or the possibility of running out of money while in retirement. When we consider the role of Social Security benefits, or maybe even pension distributions, in retirement, we use the language of income to describe it. Likewise, we focus on income units when thinking about spending objectives, what sums of money we will need to pay for different retirement expenses. When thinking about a 401(k) plan or other investment-related vehicles, we use the language of net-worth to measure progress.

Because monthly income is more tangible to setting concrete spending goals in retirement, it can be a more efficient planning marker.

It may help create a better framework for managing retirement finances. Many people rely upon multiple income sources in retirement. According to the Social Security Administration, Americans aged 65 and older receive a majority of their income from four sources. Should a retirement portfolio be one of those income-generating vehicles, it’s important to be judicious in investment decisions.

As noted earlier, Dr. Merton observes that investment decisions tend to be based on emotional biases, instead of solid, objective insights. When income is prioritized as a retirement goal, it can help bring clarity to planning, we can see where income gaps may arise and determine what solutions are suitable to fill those gaps. On the other hand, if asset values are the primary focus, it raises the possibility of less-disciplined decision-making.

Consider, for instance, a situation in which we have lost money due to a falling stock market. It may be tempted to sell off investments to stave off further losses (when, in reality, we’re just putting off recovery), which means further losses in the income we would draw from those investments.

What about Your Retirement Strategy?

Do you know if your retirement financial strategy prioritizes income enough? Together we can evaluate your plan with income in mind.  Call Bob Wicks, Chartered Financial Consultant, at #919-332-9265 or email to ''.

Posted at 05:37 pm by finvisions777
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Wednesday, September 07, 2016
Evaluating The Progress of Your Retirement Income Plan
Is your retirement income plan well-suited to your financial needs and goals? Whether you’re creating a personalized strategy or examining one, it’s an important question to consider. After all, any income gaps or shortfalls could lead to real financial setbacks.

With that said, here are some markers you can use to evaluate your income strategy.

Evaluating Your Retirement Income Plan

Are there any income gaps? Many retirement plans are incomplete. In many cases, they don’t have enough income sources to cover all monthly living expenses. If you would like to maintain your present lifestyle, it’s important to estimate what you’ll need coming in – especially when accounting for the effects of inflation.

This can be accomplished by weighing projections for monthly expenses (what we think of in 30-day financial cycles, like mortgage payments and utilities) and miscellaneous costs against the income you’ll have to pay for those needs. Our “building an effective retirement plan” blog post can help with creating those spending projections.

One key is to distinguish between sources of permanent income – or guaranteed income from Social Security, pensions, and income vehicles like annuities – and maybe income – or income drawn from more volatile sources, like stocks and bonds. Once you have done estimates for income and sources, determine gaps, if any, between your income and the needed income to maintain your lifestyle. Then it’s a matter of determining how to fill those gaps.

Does your strategy rely too much on volatile investments? Retirement income planning isn’t the same as investment planning. For one, investment planning focuses on different markers, including net-worth, investor returns, and investment values. Retirement income planning uses the marker of monthly income to determine goals and means to attain them.

Let’s go back to the discussion of permanent income versus maybe income. Because monthly living expenses are recurring fixed costs, an income strategy should leverage permanent income sources to pay for them. Should the market swing down, maybe income sources will dip in value – which will dilute the income you can draw from those assets. And timespans for recovery are far shorter in retirement than when we’re accumulating assets during our working years.

In short, using maybe income for monthly living costs can leave your retirement financial security too exposed to market risk. Your income strategy should include a hedge against market downfalls, suitable to your age, needs, and situation.

Does your strategy account for longevity? Life expectancies are on the rise, and it raises the possibility of longevity risk – or running short of money in retirement. On the whole, a retirement lifetime can last for 30 years or even longer. It’s critical to ensure you’ll have enough income to pay for all those years you may live.

If you’re worried about outliving your money, annuities can help shore up financial security with their income guarantees. An annuity is one of the few vehicles which can generate permanent, guaranteed income for as long as you live. Depending on your needs, your strategy can adopt immediate or deferred annuity income sources to last throughout your golden years.

Need Help with Your Income Strategy?

As mentioned, retirement planning is a different process than investment planning.  Should you have questions about your retirement income planning, please call Bob Wicks, Chartered Financial Consultant (#919-332-9265) or ('').

Posted at 02:05 pm by finvisions777
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Thursday, August 25, 2016
5 Steps To Building A Sound Retirement Plan
As we approach retirement, we face many decisions. Many of these decision-points revolve around future financial life. Retirement income planning – or creating a plan to cover expenses and retirement uncertainty – is an essential step.

But everyone has different income needs, and they vary in their readiness for retirement. Plus today’s retirement landscape is far different than what our parents and grandparents dealt with. In the past, a steady pension from an employer, dependable income from Social Security, and a small fund of retirement savings was standard fare. Now those days are largely a distant memory for most Americans.

Even with retirement planning being more of a personal responsibility, there are measures you can take to achieve a financially confident future. Here’s a look at five effective steps to building a solid game plan for your retirement lifetime.

Five Steps for Retirement Financial Security

1. Avoiding debt. As Americans approach or enter into retirement, thriftiness becomes more important. If you’re nearing this stage, consider avoiding new debt. Taking on debt while you’re in the “retirement red zone” – or 10 years before you retire and 10 years into retirement – can be a costly mistake.

New liabilities will put more pressure on your budget, diluting savings that could be paid toward other needs. Baby boomers tend to not be thrifty as their parents were, so be self-critical. Say you’re thinking about buying something. It’s advisable to pay cash, and if you don’t have the money now, consider delaying the purchase until you do have the money.

2. Considering wiping out existing liabilities – especially the mortgage. If you’re around 10-15 years or less away from retirement, now is a good time to pay off existing debt. That especially goes for the mortgage. According to the most recent data from the U.S. Bureau of Labor Statistics, housing costs were the greatest expense for retired households in 2014 – inclusive of mortgage payments.

Once you’ve left the workforce, the paychecks for your employment cease. Now you’re living off savings that you’ve put aside over a lifetime. Getting rid of debt now means more financial freedom later on. It helps free up savings, leaving more money to invest or spend as you wish.

3. Determining future expenses. Consider your current financial life. Do you have anything now that you won’t have or do in your retirement years? Based on current spending habits and assuming a 2-3% inflation rate per year, it helps to develop a personalized snapshot of what future monthly income needs will be like.

An entire article could be devoted to this, but here are some overall basics to follow. Your income plan should account for the different areas of spending: housing, food, transportation, clothing, utilities, insurance, entertainment, gifts & donations, hobbies, and medical needs. Of course there are miscellaneous expense categories which might be outside of typical monthly costs: house maintenance, income and property taxes, automobile upkeep, holidays, vacations, appliance upkeep or replacements, and other such areas.

Once these numbers have been determined, the total can be divided by 12 for a total monthly projection and added to the total of your other cost projections. With life expectancy on the rise, it’s ideal to have projections run for 30 years. Be sure that inflation is accounted for in each year, as well.

4. Creating a plan to pay the bills. With a snapshot of future income needs, it’s important to know how you’ll cover those expenses. Social Security plays a role in the finances of most retired households. Know what age at which you’ll claim your benefit and what you can expect for benefit payouts. Remember, deferring Social Security increases your benefit by 7-8% per year.

When considering what sources you’ll be drawing income from, you may want to consider withdrawal rates and tax implications. When they participate in an employer-sponsored retirement plan, many Americans opt to take a lump sum withdrawal (if an option). However, managing income streams from a retirement portfolio can be quite complicated – not to mention the possible tax liability. With contractual guarantees for income lasting as long as you could live, annuities may be an option to consider for steady, scheduled income payments.

5. Evaluating the risk profile of your plan. In retirement, it’s important to be mindful of risk. For those of us with a low tolerance for bear markets or investment losses, a falling market can provoke us to sell off stocks. We may think we’re staving off further losses, but in reality it’s foregoing recovery. And for seniors and baby boomers with a bigger appetite for market risk, having too much of their assets in volatile investments can lead to “sequence of returns” risk – or having to deal with the effects of investment losses early in retirement. A diversified portfolio with a suitable balance of risk and return potential, based on individual needs, age, and circumstances, can help.

With the ability to protect assets from market downturns, annuities may be a financial strategy for more conservative-minded retirees and pre-retirees to consider.

What about Your Personalized Income Strategy?

Dr. Robert C. Merton, a widely-respected economist and Nobel Prize winner, argues that too much of today’s financial planning focuses on investment values, returns, and return potential – not monthly income goals. Ultimately, we believe that a retirement plan should focus on preserving assets and ensuring they’ll be around to generate income when you need them.

Want to talk about your retirement plan?  Contact Bob Wicks, Chartered Financial Consultant: #919-332-9265; ''.

Posted at 03:15 pm by finvisions777
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Thursday, August 04, 2016
Making The Shift From Saving To Spending In Retirement
Retirement has been referred to as the stage of “decumulation,” or when you start drawing on lifetime savings for income. It’s a notable shift after many years of building up a nest egg for future needs and goals. For many retirees, it can also be a period of uncertainty or stress. After so many years of preparation, what spending patterns are suitable for the golden years?

Financial behavior at this stage varies. Some of us refrain from spending when we can while others draw on retirement income more steadily. For many retirees, the fear of compromising retirement income security is one motivation for reduced spending levels. In a 2015 study, Hearts & Wallets, a financial research firm, found about 33.3% of Americans aged 65 and older drew no retirement income from their nest egg over the last five years.

Let’s look at some factors to consider when determining your “spending strategy” for your retirement lifetime.

Avoiding Spending Mistakes or a Downgraded Retirement Lifestyle

When approaching the question of retirement spending, it helps to look at it from the two extremes: excessive spending and thriftiness to the point of a reduced standard-of-living.

According to the Employee Benefit Research Institute, nearly 40% of retirees report their retirement expenses are higher than what they expected. Of course, retirement expectations vary from person to person.

There are some areas of retirement expenses which are easier to budget for than others: monthly housing costs, utility costs, and living costs, to name a few. On the other hand, some costs are more difficult to forecast: health costs, personal care costs, and miscellaneous expenses such as travel costs for family events, helping grandchildren with post-secondary education expenses, luxury vacation costs, and others.

For spending tied to aging, life events, or unforeseen situations, you can prepare by either having enough liquid assets laid aside or taking steps for cost control. Or it can be a combination of both. Of course, this should be considered in the context of the “spending extremes.”

Which camp do you fall into? Consider the following:

Conservative Spending Camp

• If you’re a conservative spender in retirement ��" or you anticipate you will be ��" it’s a matter of evaluating the severity of the retirement risks which affect your spending habits.
• Are you worried about the costs of healthcare or long-term care as you age? This is understandable, as the Employee Benefit Research Institute reports health costs skyrocket past age 74.
• Other factors which can affect spending decisions are inflation risk, market risk, and longevity risk. This is certainly understandable. Research shows the average retirement lifetime can last for 20 years or longer. As we have noted in other posts, inflation has risen 0.1-4.1% in the past 15 years or so, and if you’re relying upon stock market earnings for income, a falling market can be detrimental.
• However, if your fear of these risks is crimping spending to the point of a largely bare-bones lifestyle, it may be time to reconsider your approach to risk management.

“Go Big or Go Home” Camp

• Say you fall into the other camp: enjoying life to the fullest. The greatest risk is outliving your retirement savings, or burning through the nest egg to the point of income shortfalls.
• Of course what defines “aggressive” spending will vary, depending on an individual or couple’s assets, needs, goals, and circumstances.
• Say a thorough, individualized financial analysis shows spending levels or future spending expectations may produce an income gap. It’s worthwhile to consider better spending habits for long-term financial security.
• If you’re enjoying your retirement years but still spending less than your income, remember this. As you age, reducing tax liability, being ready for costly health expenses, and leaving a legacy to loved ones (if it’s part of your goals) take center stage.

Overall, decisions about retirement spending should be in the framework of a long-term outlook. What amount of income do you need for the lifestyle you desire, and what measures do you need to take to meet that income goal?

Personalized Spending Strategies

Cash-flow is an important part of retirement income security. Say you fall on the conservative end of spending and you’re worried about the retirement risks we discussed above or something else. Consider ways you can mitigate these risks.

If later-term health costs or outliving retirement monies is a concern, annuities can help with their guarantees of permanent income. Likewise, if what a falling market can do to your retirement assets scares you, annuities are great as a safe money vehicle. They are protected by robust, contractual obligations upheld by the insurance company.

What about if you fall on the opposite spectrum? Consider segmenting your income sources for different needs. Many retirees and pre-retirees allocate money from annuities, Social Security and, if they have it, defined-benefit pensions to fixed-income needs. Then they can draw on other income sources for other retirement expenses.

Then perhaps investigate measures of cost control. Finding ways to cut or eliminate costs will lead to greater independence in the long run. Ultimately, the way we approach our retirement money is up to us.


• Should you have any questions, feedback, or requests for future content that may be helpful to your planning needs, please call Bob Wicks, CLU, ChFC, at #919-332-9265, or email to him at ''.

Posted at 02:51 pm by finvisions777
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Wednesday, July 27, 2016
5 Ways To Botch Your Lifetime Income Plan
Financial security in retirement is a concern for many Americans. According to LIMRA, seven out of 10 retirees and pre-retirees name “having enough money to last their lifetime” as a top priority. LIMRA also reports 67% of retirees and pre-retirees say “remaining financially independent” is another retirement objective.

With these expectations, the importance of ensuring sufficient income for retirement can’t be overstated. But even with careful retirement planning, there are a number of pitfalls which could put income security at risk. Here’s a look at some challenges which may disrupt your financial security if they’re neglected.

Common Hazards for Retirement Income

Early withdrawals from retirement accounts. According to IRS rules, withdrawals from a retirement account before age 59.5 are subject to penalty. On top of income tax on your withdrawn funds, you have to pay a 10% penalty fee. From that standpoint, early withdrawals erode the amount of retirement income you would otherwise have later on.

Once you turn 59.5 years old, withdrawals from your IRA or 401(k) plan are penalty-free. However, there are some exceptions in which the 10% penalty doesn’t apply. A few exceptions are disability, an IRS levy, and other exceptional circumstances. In some cases, people turn to early withdrawals due to unforeseen events or emergencies. One way to be ready for such a situation is to maintain some liquidity in your personal finances.

Not having a suitable plan for distributions. Another important “retirement milestone” is age 70.5. When you reach this benchmark, required minimum distributions kick in. If you don’t start taking RMDs by this date, the IRS can impose a 50% excise tax on the amount you’re supposed to take out " which can be a substantial sum. Note that distribution rules differ for IRAs from 401(k) plans, particularly in the timing of when distributions must start.

Aside from providing the benefit of guaranteed, permanent income, annuities can help offset the rigors of preparing for this stage. But it’s important to choose the right annuity strategy. If an immediate annuity is purchased within an IRA, care should be taken to ensure payments will start no later than when the buyer turns age 70.5. The benefit is an immediate annuity within an IRA is calculated in the same manner as required minimum distributions are, based upon actuarial variables such as longevity.
In the case of deferred annuities, a number of options are available, including qualified longevity annuity contracts, which are designed to meet IRS mandates. Note, though, that this type of annuity contracts is subject to different rules than traditional deferred annuities are.

Under-planning for inflation. From 1999 to 2015, inflation ranged from 0.1% to 4.1%. In recent years, inflation has been low, but this doesn’t mean it won’t eat into the buying power of your retirement savings. Under-planning for inflation can be detrimental to your retirement later on. It might mean a shortfall in income over the long term.

Consider, for instance, the effects of cumulative inflation on health costs. From 1984 to 2013, just the cost of prescription drugs increased 338%. And retirees also face a unique challenge in healthcare inflation. According to the Employee Benefit Research Institute, a couple aged 65 desiring a 90% chance of having enough money for retirement lifetime health costs should have $392,000 saved up. EBRI research also shows that from age 65 to 74, average out-of-pocket health costs consume about 11% of aggregate household spending, but once you move past age 74, health costs skyrocket. The Centers for Medicare and Medicaid report that health costs will increase almost 6% per year until 2024 " a pace that is twice the rate of overall inflation at present".

Underestimating longevity. Life expectancies are on the rise, which gives us a longer time horizon to plan for. Research data shows retirement today can last for 20 years or longer. According to the National Center for Health Statistics, a 65-year-old man has an average life expectancy of another 17.9 years. A 65-year-old woman could anticipate an average life expectancy of another 20.5 years. This increased time horizon means more years to plan to have sufficient income for, along with accounting for other variables: market volatility, cumulative inflation, and more.

Concluding Thoughts

The point is it’s important to have a financial plan that balances all of these factors. A retirement strategy should include measures for how you’ll meet monthly living costs as well as spending on retirement goals and more specialized expenses as you age ��" house repairs, healthcare, and other factors. It’s also important to take heed of the retirement milestones we discussed prior and to minimize tax liability.

If you’d like to supplement income from Social Security or another vehicle, many seniors and retirees have found income security in annuities. They offer the benefit of giving income for up to as long as you live, bound by contractual guarantees backed by the issuing insurance company.


Should you have any questions, feedback, or requests for future content that may be helpful to your planning needs, please call Bob Wicks, CLU, Chartered Financial Consultant, at #919-332-9265; or, contact me at ''.

Posted at 02:59 pm by finvisions777
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Friday, July 22, 2016
5 Ways To Compromise Your Retirement
Through careful deliberation, many Americans have figured out their retirement planning requirements. But a comfortable retirement needs more than just creation of a financial strategy. It also means sticking to the plan you have developed.

Of course, there are some events beyond our control, events which can disrupt a retirement plan. Stock market downturns, costly unforeseen situations, and medical emergencies are a handful of such occurrences. There are some ways to mitigate the effects of these situations, but there are other mistakes which can prove detrimental to retirement security.

Here’s a look at some pitfalls which can put a retirement plan on the line – and which we recommend you take measures to avoid.

Retirement Plan Catastrophes to Avoid

Putting off saving. You may have outlined your financial goals in retirement and what you’ll need to achieve them. Nonetheless, people delay saving for a variety of reasons. It could be to pay for existing obligations, due to uncertainty over retirement accounts, due to money already being tight, or simply because of forgetfulness. However, because accumulating retirement savings is a long-term goal, it should be a top priority. Delays can otherwise prove far too costly.

Evaluate what sources of income you’ll be relying on in retirement. Do they have the sums of monies you need for your goals? If not, develop a plan of what you need to invest and save to attain those numbers, advisably with the guidance of a qualified financial professional. That way you can have greater financial security in your golden years.

Not getting help from a financial professional. According to research data, retirement often lasts for 20 years or longer. That is a long stretch to plan for. When you retire, monthly income and asset protection take on more importance. If your financial plan doesn’t prioritize these objectives, it may be in your best interest to work with a wealth planner specializing in retirement strategies.

The outcomes may be painful otherwise: a shortfall in income over time or unnecessary losses due to inadequate diversification. A wealth planner can help you evaluate existing income and asset preservation strategies, see if there are any gaps, and determine some options for customized solutions. You may also want to consult with a professional qualified in tax planning to solidify your plan’s tax-efficiency and minimize your tax liability.

Poor timing on Social Security, Medicare, account withdrawals, and other decisions. There are many retirement milestones: filing for Social Security, signing up for Medicare, and age deadlines for early withdrawal penalties and required minimum distributions, to name a few. In these matters and other decisions, timing is paramount. Claiming your Social Security benefit at the wrong time can mean missing out on tens of thousands of dollars, and a late sign-up for Medicare leads to costly lifetime surcharges.

Taking action at the right time for these deadlines is vital. In addition, if you withdraw money before you’re age 59.5, on top of paying income tax on your withdrawn sum, there is a 10% penalty. Likewise, when you reach age 70.5, required minimum distributions, or required minimum withdrawal amounts per year, kick in. You will want to carefully time when you take monies from your retirement vehicles so you avoid the effects of these deadlines.

Using retirement monies for impulse buys or things you don’t need. After many years of saving, it can be tempting to spend money on stuff you have put off buying. But some time down the road, that decision likely won’t seem as attractive. When you take money from your retirement accounts, you’re foregoing money in more than one way:

• Your retirement savings are less the sum you withdrew
• That is money that can no longer grow at a compound rate and make more money
• You have to pay taxes on your withdrawn sum, along with a penalty from the IRS if taken early

If you keep your money in your retirement account, it will continue to work for you. It’s definitely in your interest to leave your retirement savings alone and let them grow so you have more “retirement reserves” later on.

Asset allocation: not separating your “pay money” from your “play money.” During the working years, many Americans work with an advisor. You get guidance and look for investments which are likely to rise in value over time. However, in retirement, protecting your assets from market losses is important. In our professional opinion, the focus of a financial strategy should shift from net-worth to income and asset preservation.

Of course, it may be in retirees’ interest to have a suitable proportion of assets in the stock market. It helps to combat inflation. And of course many of us would like to try our hand at getting nice returns on certain stocks we favor. Nevertheless, putting too much of your nest egg into riskier vehicles can be disastrous, as recovery could take time you don’t have. Be sure your portfolio has a balance of risk and security which is suitable to your age, circumstances, and goals.


• Should you have any questions, feedback, or requests for future content that may be helpful to your planning needs, leave a comment below or call Bob Wicks, CLU, ChFC at #919-332-9265 or email to ''.  See us on Facebook at 'Financial Visions of NC'.

Posted at 06:52 am by finvisions777
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Thursday, July 07, 2016
What You Need To Know About Longevity

More than half of pre-retirees and retirees estimate their life expectancy to be well below actuarial projections, according to the Society of Actuaries.

Of the more than 900 pre-retirees surveyed in SOA’s biennial Risks and Processes of Retirement Survey, 55 percent underestimate how long they will live relative to recently updated mortality tables. One in five pre-retirees, which the study defines as being age 45 and over, say they expect to die 10 or more years before actuarial averages.

And 17 percent of retirees assume they will live 10 or more years below the actuarial average. SOA’s mortality tables show the average 65 year-old male will live to be 86.6, and the average 65-year old female will live to be 86.4.

Paying for long-term care, inflation, and the cost of health care were the top concerns for both pre-retirees and retirees, according to the study.                  

Behind the scenes of the new longevity estimates

Plan sponsors and professional organizations voiced concerns about the Society of Actuaries' release of its 2014 longevity tables--which had a...

Almost two-thirds of pre-retirees express concern that they will outlive savings in retirement, compared to 43 percent of retirees.

To avoid that risk, roughly 70 percent of pre-retirees said they expect to work in retirement, and 46 percent said they plan to postpone retirement.

That indicates a “disconnect between what people think they will do in retirement to manage risks, compared to what approaches retirees actually use,” said Cindy Levering, a member of the SOA committee that lead the research effort.

The reality, said Levering in a statement, is that only 30 percent of retirees are employed in some form, and only 12 percent attempted to postpone retirement.

Two-thirds of pre-retirees expect to have assets from an employer-sponsored defined contribution plan, and 48 percent said they will have assets from a traditional defined benefit plan. Only 14 percent of pre-retirees expect income from annuities.

For retirees over age 70, 44 percent report having a defined contribution plan or IRA from which they must take a required minimum distribution. Over half said they spend the RMDs, 47 percent said they save or invest it, and 23 percent said they use it to pay taxes.

Nearly one-quarter of pre-retirees and retirees said they have no plan for managing assets in retirement. One-third of retirees said their current level of savings is less than they expected they would have before they left the workforce.

About 30 percent of pre-retirees report having at least $30,000 in debt aside from mortgages, and another one-third are carrying between $10,000 and $30,000, the report found.

Posted at 11:45 am by finvisions777
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Thursday, June 23, 2016
Consumer Interest Grows In Income Streams
According to various sources, the consumer “craving” for guaranteed income options is on the rise. One area in which it is growing is workplace retirement plans.

Prudential Retirement reports that 78% of employer plan participants who say they’re familiar with guaranteed lifetime income options believe it’s “very important” to include them in workplace savings plans. Furthermore, 77% of plan participants indicated they would choose a guaranteed lifetime income option, if available.

These discoveries match prior findings. In past research, LIMRA has found 80% of U.S. workers would like a guaranteed income option in their workplace savings plan. General consumer interest in guaranteed income is also strong. LIMRA research shows 70% of retirees and pre-retirees say having enough money to last their lifetime is a top priority.

The Prudential study yielded many other insights:

• 54% say they believe offering guaranteed income options in employer plans would yield better-than-average outcomes in retirement.
• 80% will use their workplace savings plans as their primary lifetime income sources over other sources, including Social Security.
• 45% worry they won’t be able to meet retirement goals with current plans.

Despite these trends, most employers don’t offer annuity options in their plan offerings. Around 35,000 defined-contribution plans offer guaranteed lifetime income options ��" about 4% of the plan option landscape, at present.

What Does This Mean for Consumers?

Today, retirement preparation is largely an individual affair. In the past, we have discussed how workers benefited from employer-sponsored lifetime income-generating defined-benefit pensions. Since those days, workplace plan options have shifted to defined-contribution plan offerings. This can be seen in the decline in the number of defined-benefit plans over time.

According to the U.S. Department of Labor, since their height in 1983 to 2013, the number of defined-benefit plans declined 74.5%. Since 1983, defined-contribution plans have increased 48.9%. This increase in defined-contribution plans is also observable from the mid-1970s until the present.

With the rigors of retirement preparation now up to us, so is making certain we’ll have enough income in retirement. Many Americans can expect to spend 20 years or more in retirement. According to data from the CDC, a 65-year-old couple today has a 73% chance of one of them living until age 90. This longevity brings more years to plan for in retirement, including being sure you have sufficient income for all those years.

How can Income Needs be Met?

Depending on someone’s needs and circumstances, an annuity can provide financial security with a guaranteed income stream. It’s designed to help consumers achieve long-term financial goals, whether they want a guaranteed income anywhere from 10 years to the rest of their lifetime.

To determine if an annuity may be a good fit for your needs, it’s advisable to work with a knowledgeable professional. Use our “Find an Advisor” feature to locate an independent wealth planner and to evaluate different income strategy possibilities for you in retirement. Should you have any questions or need immediate help, please don’t hesitate to call Bob Wicks, Chartered Financial Consultant, at Financial Visions #919-332-9265, or, send to me at '' -- mention this June 23rd blog in your message.

Posted at 04:22 pm by finvisions777
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Thursday, June 16, 2016
Are You Generating Enough Retirement Income?
Do you have a dependable level of income for retirement? According to a new study, many seniors aren’t generating the retirement income they need. reports seniors in 47 states and the District of Columbia aren’t replacing enough of the income they earned in their working years.

The study found that at best, seniors are living off 60% of the income they had in their pre-retirement years. Financial experts believe retirees need at least 70% of their pre-retirement income. reports the national average to be 60.27%.

Why Does It Matter?

Of course there is more than one way to build a nest egg, including savings. That’s certainly good news, given the study findings. According to, much of the income shortfall can be attributed to a lack of savings among seniors.

Notably, if seniors have a shortfall in retirement income, there are other strategies which experts recommend:

• Working longer
• Delaying Social Security claiming until full retirement age or later
• Getting rid of debt
• Cutting back on spending levels
• Moving to an area with lower cost-of-living

However, not all of these “delay” or “reduction” strategies will be options for everyone. It does underscore the importance of making proper retirement decisions. For income planning purposes, a critical juncture lies in the 10 years before people retire and 10 years into their retirement. Retirement decisions made in this period can have a critical impact on the rest of someone’s retirement lifetime.

Financial Security with Guaranteed Income

Another strategy to consider is use of annuities. They can be used to generate a guaranteed income stream for as long as someone lives. Annuities are increasingly being used to supplement income from Social Security, pensions, and other sources.

What about people with healthy life savings? Annuities could be used to cover certain monthly expenses such as living costs. This could free up other sources of income and offer seniors greater financial flexibility.

Avoid the Alternatives

Without a set plan, a few undesirable outcomes could arise. Retirement money could be spent too quickly, seniors could outlive their retirement assets, or there may be unnecessary cutbacks in retirees’ standard of living. When used properly, annuities allow retirees and pre-retirees to avoid these possibilities.

There are many different types of annuities, and each comes with different features and benefits. Suitability depends on a number of variables, including personal circumstances, needs, and objectives. If you are interested in seeing an annuity may be a good addition to your retirement income strategy,  please contact Bob Wicks, CLU, ChFC, at #919-332-9265 or ''.

Posted at 06:17 am by finvisions777
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