Retirement Planning Differs For Unmarried Couples

You have devoted your life to working hard, providing for the loved ones around you, and saving for your retirement years.  Now as you approach your golden years, you have raised your family, you have built an estate that you are proud of, and you are deeply committed to your relationship with your significant other.  You both are a happily unmarried couple, and you know that you want to spend the rest of your life with this person. With this said, is your retirement plan specifically tailored to your unmarried relationship with this individual?

Unmarried couples must realize that their retirement planning is a completely different animal compared that of married couples.  As an unmarried couple, don’t let your retirement years discriminate against your wishes for you and your significant other.  It’s important to plan  your retirement together now with a financial advisor/ financial planner to uphold your security in the long run.  Therefore, if you are in an unmarried long-term relationship, please consider the following elements when planning for these golden years with your partner:

Living Arrangements

When an unmarried couple initially moves in together, one of the partners may sell or rent his/her home.   That partner might move into the other partner’s residence, or the couple might decide to buy an entirely new house together.  Whatever the scenario might be, the couple might distribute living expenses depending on which partner qualifies for tax deductions.

 

Furthermore, if the couple did indeed buy a new home together, an expert might suggest that the couple purchases life insurance policies on each other to help pay off the mortgage in the unfortunate event that the other partner suddenly dies.  Considerations must also be made about whose name will be on the bills and the how expenses will be shared.  Also, additional considerations must be made regarding estate documents.   For example, if a partner dies, will the surviving partner continue to live in that home until his/her own death, or will the deceased partner’s family members immediately inherit the home?

 

Joint and Individual Accounts

Many unmarried couples prefer to keep both individual accounts and a joint account.  In regards to individual accounts, the couple can separate the assets/debts that each partner individually accumulated and incurred before “couplehood”.  Many couples also open up a joint account primarily funded by both partner’s monthly social security benefits.  This joint account can then be used to pay for expenses together, such as housing expenses, restaurants, vacations, etc.

 

IRA, Pension, and Retirement Assets

Unfortunately, the spousal advantages of retirement accounts and benefits can be nonexistent for an unmarried couple.  These spousal advantages include advantages, such as the spousal rollover IRA option and the spousal pension continuation benefit election.   An unmarried couple must also annually review beneficiary designations (such as IRAs, annuities, and life insurance) in order to uphold each partner’s exact wishes.  Because of the contractual nature, beneficiary designations will always supersede heirs in other estate documents.

 

Separate Tax Returns

Complex consideration must be taken when an unmarried couple files separate tax returns.  The couple has to determine which partner gets to deduct which expense.  Because each partner’s individual contributions can vary, deductions vary as well.  Thus, it’s best for an unmarried couple to seek the services of an accountant especially for tax returns.

 

Estate Planning

As an unmarried couple planning for your enjoyable retirement together, no partner wants to contemplate the possibility of an unexpected sickness, an accident, and even death; however, both partners must be strong and plan for the unexpected as well as the very end.   For this reason, a will, power of attorney, living will, and healthcare directive is essential to have. For instance, an unmarried couple must carefully consider who will make final medical decisions if one partner in the relationship is unexpectedly gravely ill and on life support. Will the other partner or the children of the sick partner ultimately determine when to “pull the plug”?

 

As for estates, many unmarried couples choose to keep estates separate.  Especially in these cases, financial advisors/ financial planners are needed to set up trust agreements, wills, and other estate documents.

The End Game

Compared to married couples, unmarried couples have a multitude of additional considerations to make when planning for their retirement together.  The complexity of an unmarried couple’s retirement plan increases especially with the presence of ex-spouses, children, grandchildren, separate estates, etc.  You and your significant other must navigate through this retirement planning process with the help of a trusted financial advisor/financial planner.  Especially if you are an unmarried couple over the age of 60, you must request the financial, legal, and tax advice of experts in order to protect  your happy retirement, your estate, and your wishes as a couple.  So, don’t navigate these waters alone; seek the help of an expert today.

 

Merkel, Steve. “Relationships And Retirement Planning.” Investors Business Daily. 2 November 2012. <http://news.investors.com/investing-personal-finance/110212-631985-relationships-and-retirement-planning.htm>

Image courtesy of: http://www.zuuply.com/article/649/what+is+the+best+retirement+plan+for+you.html

 

Maximize Your Social Security Benefits

You have worked hard all of your life.  You have raised a beautiful family that you are proud of, and you and your spouse are finally ready to enjoy your golden years together.  And yes, you have also planned and saved for these future retirement years.   Maybe you planned many years ago or maybe you planned just recently; but either way, you probably factored in the boost offered from your future Social Security benefits.  Whatever the boost might be, wouldn’t you rather maximize those benefits if possible?  If the answer is a resounding “YES”, then you want to learn about the various claiming strategies, and fully discuss them with your financial adviser/financial planner.  The proper strategy can amplify your lifetime Social Security benefits significantly.

An example of one strategy is waiting as long as possible to start claiming your Social Security benefits.  The earliest age that a retiree can start claiming these benefits is 62 years old.  However, did you know that once you reach your full retirement age (between 65 -67), your social security benefits increase by 8% each year plus inflation adjustments? Wow, the money claimed increase considerably just by waiting a little longer.

Are there claiming strategies that can optimize your Social Security benefits even if you need to start collecting at an earlier age?  The answer is “Yes”.  Advantageous strategies can be applied to this situation as well when you know how to maneuver through the claiming process… you just need the proper expertise to guide you through the rules.  Once you know these rules and know how to navigate confidently through the claiming process, you can apply a strategy that works in your favor, and maximizes this money.

Some of these claiming strategies involve the idea of spousal benefits.  Here, spousal benefits can be applied to a “Restricted Spousal” strategy as well as a “File and Suspend” strategy.  According to Jim Blankenship, CFP, EA of Forbes Advisor Network, “File and Suspend allows for the lower wage earner to increase his or her benefits by adding the Spousal Benefit, while the higher wage earner continues to delay his or her benefit, adding the delay credits.” On the other hand, the Restricted Application for Spousal Benefits “provides one spouse or the other with the option of collecting a Spousal Benefit, while at the same time delaying his or her own retirement benefit.” All and all, any couple must carefully consider the particular rules pertaining to these strategies in order to determine the appropriate strategy that applies to their specific situation.

Overall, these claiming strategies can cushion your retirement years with thousands of dollars.  If you are thinking about navigating through your Social Security claiming process alone, it might be very unrealistic because the rules behind these strategies can be complex and meticulous.   Even the employees at the national and local Social Security offices cannot give any advice; therefore, it’s best to seek the help of a financial advisor who has an in-depth knowledge of the best Social Security strategies for retirees.  The world today is very different… life expectancy has increased, pensions have dwindled, medical costs have increased, and the economy remains uncertain.  Especially now, maximizing your Social Security benefits is necessary because these are unfavorable conditions.  So, make certain that you fully learn and understand the rules of each strategy before you chose.  You can add thousands of dollars to your retirement funds just by applying the right Social Security claiming strategy for you.

Investment Advisory services provided by Gregory Ricks & Associates

Blankenship, Jim. “Are You Leaving Social Security Money on the Table.” Forbes. 26 November 2012. <http://www.forbes.com/sites/advisor/2012/11/26/are-you-leaving-social-security-money-on-the-table-you-might-be-if-you-dont-understand-and-use-this-one-rule/>

Roberts, Damon. “The Retirement Planning Edge: Maximizing Social Security.” Fox Business. 27 November 2012. <http://www.foxbusiness.com/industries/2012/11/27/retirement-planning-edge-maximizing-social-security/>

Image courtesy of: http://www.bankrate.com/finance/retirement/5-little-known-facts-about-social-security-1.aspx

March 2013 Newsletter

Click here to view our March 2013 Newsletter! 

 

 

 

If you want the answers to the crossword puzzle, click HERE!

The Ricks Report – March 4, 2013

The Ricks Report

March 4, 2013

Gregory’s Upcoming Speaking Events

Gregory will be speaking at Andrea’s on March 5, 2013 at 6:00 pm.  Please click the link below for more information.

http://www.gregoryricks.wordpress.com/educational-events/

You will also get a chance to meet William Perry and Courtland Crouchet.

Winning at Life with Gregory Ricks

This Saturday on WRNO 99.5 at 10 am Gregory’s guests on the show will be Courtland Crouchet, CPA . 

The Markets

It was a bumpy week for stock markets. Early on, markets in many countries were negatively affected by the outcome of Italian elections. Italy’s anti-establishment Five-Star Movement, led by comedian Beppe Grillo, won about one-fourth of the votes in both the country’s upper and lower houses. Markets lost value as investors anticipated political gridlock could delay Italian economic reforms. Since Italy is the third largest economy in Eurozone and its public debt is significantly higher than its Gross Domestic Product, political stalemate in Italy could negatively affect the Eurozone.

As the week progressed, events in Italy were eclipsed. Ben Bernanke reiterated the U.S. Federal Reserve’s intention to keep monetary policy loose until unemployment levels drop. This helped stock markets recover some lost ground. Positive economic news, including higher pending home sales and a rise in consumer sentiment helped push the Dow Jones Industrials, NASDAQ, and Standard & Poor’s 500 Indices even higher, and they finished the week in positive territory.

Concerns about Italian election results affected bond markets, too, pushing yields on 10-year Treasuries lower during the week. Lower yields were also driven by uncertainty about the potential impact of sequestration – $85 billion in automatic spending cuts – on America’s economic growth.

Despite great political hullaballoo, no action was taken to prevent or modify the spending cuts and they took effect on Friday, March 1. Over the next decade, sequestration is expected to cut government spending by about $1.5 trillion. The cuts will reduce defense discretionary spending, including weapons purchases, base operations, construction work, and more. Cuts also will shrink mandatory and discretionary domestic spending. Two of the domestic programs affected are the unemployment trust fund and Medicare (specifically, Medicare’s provider payments).

Data as of 3/1/13	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 (Domestic Stocks)	0.2%	6.5%	10.5%	10.8%	2.7%	6.2%
10-year Treasury Note (Yield Only)	21.9	N/A	2.0	3.6	3.5	3.7
Gold (per ounce)	0.4	-6.6	-7.7	12.4	9.9	16.4
DJ-UBS Commodity Index	-0.7	-2.4	-8.6	0.7	-9.0	1.1
DJ Equity All REIT TR Index	0.2	5.3	18.8	19.8	7.5	12.5

Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

The National Retirement Risk Index (NRRI) measures whether Americans will be able to maintain the same standard of living they enjoy today after they retire. When it was updated for 2012, the index showed the number of “at risk” households had increased by nine percentage points – from 44 percent to 53 percent – between 2007 and 2010. In its explanatory comments the Center for Retirement Research at Boston College (the group that compiles the index) attributed the change to the combined effects of the financial crisis, poor investment returns, low interest rates, and the continuing rise in Social Security’s full retirement age.

Americans are not unaware of the situation. The 2012 Retirement Confidence Survey found almost one-half of working Americans are ‘not too’ or ‘not at all’ confident they’ll have enough money to live comfortably throughout retirement. If you fall into either of these categories – and even if you don’t – it’s important to evaluate your current retirement plan in light of key risks that may influence its effectiveness. These include:

• Longevity risk. A recent headline suggested that 72 is the new 30. The scientists who made the determination meant that modern man, at age 72, has the same chance of dying as primitive man did at age 30. That makes longevity risk – the chance you’ll outlive your savings – an essential consideration when planning for retirement. One way to address longevity risk is by developing a retirement income plan that will allow you to generate income for as many years as you may need it.

• Inflation risk is the chance your savings and investment will grow more slowly than inflation, reducing your purchasing power. For example, a gallon of milk that cost about $2.00 in 1990 would have set you back $3.50 in 2012 – and that was after a period of relatively low inflation. One way to address inflation risk is to consider investing in a well-allocated and well-diversified portfolio that may have the potential to outperform inflation over time.

If you have any questions about saving for retirement, or would like to review your retirement plan, please give us a call.

Weekly Focus – Think About It

When planning for a year, plant corn. When planning for a decade, plant trees. When planning for life, train and educate people.–Chinese proverb

Best regards,

Gregory Ricks

P.S.  Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

Gregory Ricks, LLC is a Registered Investment Advisor which offers services and charges fees as set forth in Form ADV, a copy of which you should obtain prior to investment.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. The information presented is for informational and educational purposes only and not intended to be a solicitation for the purchase or sale of a security.

* Past performance does not guarantee future results.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

Sources:

http://online.barrons.com/mdc/public/page/9_3063-economicCalendar.html (click on U.S. & Intl Recaps and then click on “Fed tops sequestration” under “Simply Economics”)

http://www.bbc.co.uk/news/business-21583576

http://online.barrons.com/mdc/public/page/9_3063-economicCalendar.html (click on U.S. & Intl Recaps and then click on “Information overload” under “International Perspective”)

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/9904403/American-Way-Why-85bn-sequestration-spending-cuts-are-not-really-the-end-of-the-world.html

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/20/the-sequester-absolutely-everything-you-could-possibly-need-to-know-in-one-faq/

http://crr.bc.edu/wp-content/uploads/2012/11/IB_12-20.pdf

http://www.ebri.org/pdf/surveys/rcs/2012/PR962_13Mar12_RCS.pdf

http://www.cnbc.com/id/100493887

http://www.investorwords.com/6856/longevity_risk.html

http://www.investorwords.com/2457/inflation_risk.html

http://www.minneapolisfed.org/index.cfm? (in the gray box on the upper right-hand side of the webpage, enter in 1990, $2.00, 2012 to get the answer)

http://www.marketwatch.com/story/since-87-is-the-new-65-invest-to-beat-inflation-2013-02-28

http://en.proverbia.net/citastema.asp?tematica=903

We are featured in the Spring 2013 WWII Museum Newsletter!

Gregory Ricks and Associates was recently featured in the Spring 2013 Volume of the National WWII Museum Newsletter!!

Click here to view it! 

The Ricks Report – February 25, 2013

The Ricks Report

February 25, 2013 

Gregory’s Upcoming Speaking Events

Gregory will be speaking at Andrea’s on March 5, 2013 at 6:00 pm.  Please click the link below for more information.

http://www.gregoryricks.wordpress.com/educational-events/

You will also get a chance to meet William Perry and Courtland Crouchet.

Winning at Life with Gregory Ricks

This Saturday on WRNO 99.5 at 10 am Gregory’s guests on the show will be William Perry, Estate Planning Attorney and Marine Eurenclou, M.A., author of “The Take Charge Patient.”

The Markets

Like Canadian geese migrating in anticipation of winter, stock markets moved south last week in anticipation of monetary tightening. Minutes from the January Federal Reserve Open Market Committee meeting were released mid-week. After reviewing them, many analysts decided that quantitative easing may begin to taper off before the end of the year. Not everyone agreed with this interpretation; however, it caused major U.S. stock markets, as well as some Asian and European stock markets, to dip lower. Many markets recovered ground before Friday, but in the U.S., only the Dow Jones Industrial Index finished the week with a gain.

Interestingly, expectations that the Fed’s quantitative easing program may end relatively soon had little effect on Treasury bond markets. This seems counterintuitive because an end to quantitative easing (the Fed’s program of buying Treasuries to create liquidity and encourage economic improvement) could potentially lower demand for these securities and cause Treasury yields to move higher. Instead, yields moved lower last week. Experts suggested that bond investors’ apparent lack of concern may be rooted in the belief that the Federal Reserve will not ease interest rates even if it changes its policy on quantitative easing. In previous statements, the Fed has said it will not modify interest rates until unemployment rates and inflation reach specific targets.

Last week, The Conference Board announced that its Leading Economic Index® (LEI) for the U.S. showed America’s economy gaining some momentum. The LEI tracks 10 leading economic indicators to gauge short-term economic outlooks. The Conference Board’s LEI for China also signaled improvement. While this may prove to be good news, the impact of sequester – $85 billion in automatic spending cuts that are scheduled to begin in early March – on America’s economic growth remains unknown and highly debated.

Data as of 2/22/13	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 (Domestic Stocks)	-0.3%	6.3%	11.6%	11.0%	2.3%	6.2%
10-year Treasury Note (Yield Only)	2.0	N/A	2.0	3.8	3.8	3.8
Gold (per ounce)	-2.2	-6.9	-10.0	12.2	10.8	16.1
DJ-UBS Commodity Index	-1.8	-1.7	-7.8	0.6	-8.0	0.9
DJ Equity All REIT TR Index	0.1	5.1	17.9	20.2	7.5	12.6

Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

It’s important to look at more than tuition and fees when planning for college. That’s because tuition and fees account for just about 39 percent of the total budget for students who live on campus at public four-year state colleges and universities. Tuition and fees are about 20 percent of the budget for students who live off campus at public two-year state colleges and universities.

If that’s an unwelcome surprise, you won’t be thrilled to learn that during the 2012-2013 school year the average college budget for a student who lived on campus and attended an in-state, four-year public institution and was more than $22,000. That budget included:

• Tuition and fees
• Room and board
• Books and supplies
• Transportation
• Other expenses

On average, the same items for a student who commuted to a two-year, in-state public college ran about $15,500. At a private non-profit, four-year college or university the average budget was more than $43,000.

Making college possible

So, how do students and their families afford college? The good news is that financial aid is available for many. Total financial aid for full-time students was more than $14,000 on average during the 2011-2012 academic year (the most recent data available). In addition, according to the College Board, undergraduate students received financial assistance from a variety of sources:

• 39 percent received federal loans and work/study
• 26 percent received Pell and other federal grant programs
• 18 percent received institutional grants
• 9 percent received federal education tax credits and deductions
• 5 percent received state grants
• 4 percent received private or employer grants

Is it worth it?

Scrimping and saving to pay for college often has a significant pay off. The median income for a person with a bachelor’s degree who worked full-time, year-round in 2008 was almost $56,000. That’s about $22,000 more than the median income for a high school graduate. In addition, the unemployment rate for college graduates was significantly lower than that of high school graduates during 2008 (the most recent data available).

Weekly Focus – Think About It

“Education is the ability to listen to almost anything without losing your temper or your self-confidence.”

—Robert Frost, poet

Best regards,

Gregory Ricks

P.S.  Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

Gregory Ricks, LLC is a Registered Investment Advisor which offers services and charges fees as set forth in Form ADV, a copy of which you should obtain prior to investment.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. The information presented is for informational and educational purposes only and not intended to be a solicitation for the purchase or sale of a security.

* Past performance does not guarantee future results.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

Sources:

http://online.barrons.com/mdc/public/page/9_3063-economicCalendar.html (click on US & Intl Recaps; then “What the Fed really said”)

http://www.cnbc.com/id/100480839

http://www.npr.org/blogs/money/2010/10/07/130408926/quantitative-easing-explained

http://www.conference-board.org/press/pressdetail.cfm?pressid=4740

http://www.conference-board.org/data/bcicountry.cfm?cid=1

http://finance.yahoo.com/blogs/breakout/sequester-impact-real-imagined-180950502.html

http://trends.collegeboard.org/sites/default/files/college-pricing-2012-full-report-121203.pdf

http://trends.collegeboard.org/sites/default/files/student-aid-2012-full-report-130201.pdf

http://trends.collegeboard.org/sites/default/files/education-pays-2010-full-report.pdf

http://www.brainyquote.com/quotes/quotes/r/robertfros101423.html#awbj6aD1AVU0E9CJ.99

 

5 Basic Tips for Creating a Solid Retirement Plan

You know what the picture is supposed to look like: You spend your whole life on the job, working toward that magical retirement age when your golden years begin — that era when you’re rewarded for  your life’s labors with the time and resources to pursue your passions, whether it be traveling, spending time with your grandchildren, or pursuing a favorite hobby. But with a rocky economy and the cumulative changes over the last generation, that picture might not be so clear.

No matter how near or distant your retirement may be, there are more than a few simple things you can do to prevent your retirement picture from blurring into something unrecognizable. Consider these basic tips to see to it that your retirement is spent doing what you love, and ensure your retirement picture develops the way you’ve always hoped.

1. Set your retirement goals: As with everything you’ve worked for in your life, a secure retirement is a goal you must aim to achieve. Think about what you want your retirement picture to look like. Does it involve living in a paid-off home or relocating to a house on the beach? Would you like to spend your money on yourself, donate to charities, or provide for your children? Consider your retirement picture and what it will take to make it all come together. Be realistic about your goals, and start making some sacrifices now so you don’t have to make them when you’re 80 years old.

2. Start planning now: Whether you’ve just begun your professional career or are looking at retiring in five years, start taking the steps to prepare now. If you’re on the younger side, establish an IRA or participate in your employer-sponsored 401(k), and fund these retirement vehicles with as much as you can. If your retirement is in the not-too-distant future, contribute the maximum to your retirement accounts, and start modifying your portfolio from growth-oriented products to distribution-focused products. This may mean that you’ll have to readjust your spending and savings lifestyle today, but it will pay off in the years to come.

3. Reevaluate your life expectancy: It’s no secret that the average American is living longer than ever, thanks to tremendous medical advancements, but you might be surprised by just how long your retirement years could last, and consequently, how long your retirement funds must last. According to the Society of Actuaries, a 65-year-old man has a 41 percent chance of living to age 85, and a 20 percent chance of surviving to age 90. A 65-year-old woman has even better odds. She has a 53 percent chance of living to age 85, and an impressive 32 percent chance of reaching age 90. With these statistics in mind, ramping up your savings is more crucial than ever.

4. Determine your Social Security benefits: Did you know the longer you delay retirement, the larger your Social Security checks grow? While you can officially start drawing funds at age 62, if you hold off until age 70, you could almost double your benefit amount. Even if you wait until age 66, your Social Security checks would be significantly larger. While working past age 65 might not appeal to you, the higher payout most certainly should. There are many more strategies to get the most from Social Security, especially if you’re married. To explore your options and determine when you’ll begin to draw Social Security benefits, visit www.SSA.gov. They even have an online retirement estimator to help guide your decision.

5. Work with a trusted advisor: If you really want to get the best out of your retirement plan, it’s best to place it in the hands of a capable retirement specialist. A good advisor can talk you through the process, recommend appropriate investment tools, offer practical advice on savings, and what’s more, keep an eye on your retirement portfolio. Ask friends or colleagues for some trusted advisors, and then get to work.

Gregory Ricks & Associates is a registered investment adviser.

image courtesy of: http://rjscorner.net/tag/retirement/

The Ricks Report – February 19, 2013

The Ricks Report

February 19, 2013

Gregory’s Upcoming Speaking Events

Gregory will be speaking at Andrea’s on March 5, 2013 at 6:00 pm.  Please click the link below for more information.

http://www.gregoryricks.wordpress.com/educational-events/

You will also get a chance to meet William Perry and Courtland Crouchet.

Winning at Life with Gregory Ricks

This Saturday on WRNO 99.5 at 10 am Gregory’s guests on the show will be Traci Bird-Kestler and Stephanie Campani from DwellNola Realty.

The Markets

Stocks delivered mixed performance last week. The Dow Jones Industrials and NASDAQ Indices moved lower while the Standard & Poor’s 500 and Russell 2000 Indices moved higher for the week. Stocks were helped by positive economic news in the United States, including modestly positive retail sales for January, improved consumer sentiment, and a decline in initial jobless claims. However, these positives were offset to some extent by concerns about weakness overseas. Germany reported that its economy contracted during the fourth quarter of 2012. It’s the country’s worst economic performance since 2009.

Overall, the major stock indices remain in positive territory for the year. They’ve been buoyed, in part, by better than expected fourth quarter earnings. On January 1, 2013, analysts expected profitability of companies in the S&P 500 Index would increase by about 2.9 percent year-to-year. As 2012 fourth quarter’s earnings season headed toward the finish line last week, that estimate had almost doubled to 5.6 percent. About 70 percent of companies have exceeded analysts’ expectations so far. On average, over the long term, about 62 percent of companies beat expectations.

The yield on benchmark 10-year Treasury bonds continued to hover around 2 percent during the week. Reports of weaker than expected economic growth in Europe during the last quarter of 2012 may have increased demand for Treasuries. When demand increases, prices often go up and yields go down. Bond yields also have been affected by the Federal Reserve’s quantitative easing program. The Fed has been buying Treasury bonds in an effort to help support the economy. In general, these purchases are believed to be keeping bond yields lower than they might be otherwise. Quantitative easing will not continue indefinitely which may be the reason the Financial Industry Regulatory Authority issued a statement last week that said, “Many economists believe that interest rates are not likely to get much lower and will eventually rise. If that is true, then outstanding bonds, particularly those with a low interest rate and high duration may experience significant price drops as interest rates rise along the way.”

Data as of 2/15/13	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 (Domestic Stocks)	0.1%	6.6%	13.1%	11.6%	2.4%	6.0%
10-year Treasury Note (Yield Only)	2.0	N/A	1.9	3.7	3.8	4.0
Gold (per ounce)	-3.4	-4.8	-7.0	13.7	12.1	16.6
DJ-UBS Commodity Index	-1.4	0.1	-3.8	1.2	-7.0	1.5
DJ Equity All REIT TR Index	0.4	5.0	18.2	22.5	7.6	12.7

Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.  Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.  Past performance is no guarantee of future results.  Indices are unmanaged and cannot be invested into directly.  N/A means not applicable.

Children are targeted for identity theft far MORE OFTEN than you might think. That’s right. A 2012 report from Carnegie Mellon CyLab found children are targeted for identity theft 35 times more frequently than adults. That’s because the unused social security numbers assigned to children for tax purposes are uniquely valuable to identity thieves. These numbers can be paired with any name and address and used for many years. Often the theft isn’t discovered until a child applies for a student loan or a job, or tries to buy a mobile phone or a car.

The report is based on 42,000 identity protection scans of children, ages 18 and under, that were completed during 2009 and 2010. Researchers found social security numbers for more than 4,300 children – 10.2 percent of those scanned – were being used by someone else (a stranger, a parent, or another family member) to:

• Buy homes and automobiles
• Establish credit card accounts
• Secure employment and get driver’s licenses

Source: Child Identity Theft, Richard Power, Carnegie Mellon CyLab

The youngest victim was five months old. The victim of the largest fraud (about three-quarters of a million dollars) was a 16-year-old girl.

The first step in protecting your child’s social security number is to check with credit bureaus and find out whether a file has been opened using your child’s social security number. In many cases, even if the number is being used, your child’s full identity has not been stolen. In addition to contacting credit bureaus, watch for warning signs your child’s social security number may be in play. These include receiving:

• Pre-approved credit card offers in your child’s name
• Notices from the IRS indicating your child didn’t pay income taxes
• Calls from collection agencies asking for your child

Source: Child Identity Theft, Richard Power, Carnegie Mellon CyLab; Federal Trade Commission Consumer Information, Child Identity Theft, August 2012

If you would like to learn more about how to protect your child from identity theft, visit the Federal Trade Commission’s web site at www.ftc.gov, and click on Privacy and Identity, Repairing Identity Theft, and then Child Identity Theft.

Weekly Focus – Think About It

“The greatest pleasure in life is doing what people say you cannot do.”

—Walter Bagehot, British economist and journalist

Best regards,

Gregory Ricks

P.S.  Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

Gregory Ricks, LLC is a Registered Investment Advisor which offers services and charges fees as set forth in Form ADV, a copy of which you should obtain prior to investment.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. The information presented is for informational and educational purposes only and not intended to be a solicitation for the purchase or sale of a security.

* Past performance does not guarantee future results.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

 

Sources:

http://online.barrons.com/mdc/public/page/9_3063-economicCalendar.html?mod=BOL_Nav_MAR_other

http://www.cbsnews.com/8301-505123_162-57569576/world-stocks-fall-on-slumping-german-economy/

http://finance.yahoo.com/news/decent-rally-perhaps-time-pause-201302503.html

http://online.wsj.com/article/BT-CO-20130215-712155.html

http://www.investopedia.com/university/bonds/bonds3.asp#axzz2LGPvivPS

http://www.investopedia.com/terms/l/law-of-supply-demand.asp#axzz2LGPvivPS

http://www.finra.org/Investors/ProtectYourself/InvestorAlerts/Bonds/P204318

http://www.consumeraffairs.com/news/identity-theft-increasingly-targeting-children-012813.html

http://www.cylab.cmu.edu/files/pdfs/reports/2011/child-identity-theft.pdf

http://www.experian.com/ask-experian/20111123-what-to-do-when-daughters-ssn-is-being-used-to-open-credit-cards.html

http://www.consumer.ftc.gov/articles/0040-child-identity-theft#Warning

http://thinkexist.com/quotes/top/occupation/economist/

The Ricks Report – February 11, 2013

The Ricks Report

February 11, 2013

Gregory’s Upcoming Speaking Events

Gregory will be speaking at Andrea’s on March 5, 2013 at 6:00 pm.  Please click the link below for more information.

http://www.gregoryricks.wordpress.com/educational-events/

You will also get a chance to meet William Perry and Courtland Crouchet.

Winning at Life with Gregory Ricks

Join Gregory this Saturday on WRNO 99.5 at 10 am

The Markets

Like a climber determined to reach a peak, stock markets continued to move higher last week.

Signs of strength in U.S. and international trade data improved the outlook for economic growth at home and abroad. The U.S. trade deficit narrowed in December, a sign that the economy did better than expected during the fourth quarter of last year. In China, robust domestic demand pushed imports significantly higher while exports grew more than anticipated. In Europe, Germany’s 2012 surplus was its second highest in more than 60 years which is a sign of underlying strength in one of the Eurozone’s biggest economies.

Positive economic news hurt gold futures which ended the week modestly lower. However, it made riskier assets, like stocks, attractive to investors, which helped push equity markets higher during the week (although trading volumes were low on Friday because of bad weather in the northeast). The NASDAQ closed at a 12-year high, the S&P 500 Index reached a five-year high, and the S&P 500 posted gains for a sixth consecutive week.

The Treasury bond market gained ground during the week. However, at a symposium at the St. Louis Federal Reserve, Federal Reserve Board Governor Jeremy Stein’s comments seemed to reinforce the idea that Fed officials are concerned that ongoing accommodative monetary policies could cause some sectors of the bond market to overheat. His comments reinforced the idea that the Fed is considering tightening its credit policies down the road.

Data as of 2/8/13	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 (Domestic Stocks)	0.3%	6.4%	12.4%	12.8%	2.7%	6.1%
10-year Treasury Note (Yield Only)	2.0	N/A	2.0	3.6	3.7	4.0
Gold (per ounce)	-0.05	-1.5	-4.5	16.2	12.7	16.2
DJ-UBS Commodity Index	-0.9	1.5	-1.3	-0.3	-5.8	2.2
DJ Equity All REIT TR Index	0.3	4.6	15.1	23.1	7.6	12.6

Notes: S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association. Past performance is no guarantee of future results.  Indices are unmanaged and cannot be invested into directly.  N/A means not applicable.

There is a new trend in Funerals: Plan your own. Susan Boyle, the Scottish chanteuse who was discovered on Britain’s Got Talent back in 2009 wants to leave mourners at her funeral laughing. What is her plan? She wants to have ‘Nellie the Elephant’ played during the service. Whether you applaud her approach or find it appalling, there is a new trend in the funeral industry: preplanning, prepaying, and personalization. Here are a few of the reasons people are choosing to plan and pay for their funerals ahead of time:

Control. When you plan the funeral, you have a pretty good idea about what will happen. You can decide whether there will be a viewing and how your life will be celebrated after the service. You can also create a file with personal information for your obituary, as well as any instructions you have for burial, cremation, or organ donation. Just make sure you leave it with a loved one so they know how to proceed.

Negotiate. Grieving family members are rarely good negotiators. Planning ahead gives you a chance to negotiate and secure a guaranteed price on a prepaid plan offered by a funeral home. Make sure you find out answers to questions such as: What happens if prices increase? What happens if you move? What happens if you change your mind?

Goodwill. If prepaid plans leave too many questions unanswered, you may choose to fund your funeral through a trust or an insurance policy. Regardless of the payment method, providing instructions with your wishes and funds to cover the expenses can relieve some of the anxiety and stress of a funeral.

Personalize. There are many new and unusual options available for funerals and memorial services. Whether you opt for traditional burial, cremation, green burial, mummification, cryonics, a memorial space flight, a memorial reef, or having your ashes compressed into a gemstone, there is a business willing to help.

Funeral preferences are changing. Alternatives to traditional funeral home services are becoming popular, especially among Baby Boomers. If you would like to learn more about the options available, visit the Funeral Consumers Alliance web site (www.funerals.org) and the National Funeral Directors Associations web site (www.nfda.org).

Weekly Focus – Think About It

“Live as if you were to die tomorrow. Learn as if you were to live forever.”

Mahatma Gandhi, philosopher

Best regards,

Gregory Ricks

P.S.  Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

Gregory Ricks, LLC is a Registered Investment Advisor which offers services and charges fees as set forth in Form ADV, a copy of which you should obtain prior to investment.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. The information presented is for informational and educational purposes only and not intended to be a solicitation for the purchase or sale of a security.

* Past performance does not guarantee future results.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

Sources:

http://finance.yahoo.com/news/stock-futures-signal-flat-open-105219016.html

http://www.marketwatch.com/story/gold-flat-takes-cue-from-stable-euro-2013-02-08

http://online.wsj.com/article/BT-CO-20130208-712926.html

http://online.wsj.com/article/SB10001424127887324906004578290113820357742.html?mod=googlenews_wsj

http://www.contactmusic.com/news/susan-boyles-funeral-fun_1145111

www.kiplinger.com/article/retirement/T021-C000-S001-should-you-prepay-your-funeral.html#pG7Cgva2A0V5eMKS.99

http://www.cnbc.com/id/100408257/page/3

http://www.cnbc.com/id/100408257/page/2

http://www.cnbc.com/id/100408257/page/5

http://www.cnbc.com/id/100408257/page/4

http://thinkexist.com/quotation/live_as_if_your_were_to_die_tomorrow-learn_as_if/253507.html

How to Prevent Outliving your Retirement Savings

It’s what every retirement planner speculates; it’s what every pre-retire dreads; it’s every retiree’s nightmare – will I outlive my retirement savings?  This question sits on the minds of each and every person associated with the retirement process, and with good reason.  The U.S.’s current life expectancy is 78.3, up from around age 50 in the early 1900’s, thanks to modern medical advances and other factors.  But what happens when the economy starts reducing benefits and increasing the costs of retirement plans and care?  And what happens if I die early?  What happens if I die too late?  No one can predict every individual’s future and how they should plan and save, but we can prepare for each situation possible.  A recent report issued by the Government Accountability Office offers a look at what the experts are recommending, and how retirees make do.

The Senate Committee on Aging asked the Government Accountability Office to review three specific areas and make suggestions: strategies that experts recommend for ensuring income throughout retirement, choices retirees have made for managing their pension and assets to generate income, and policy options available to ensure retirement income.  Because everyone’s expenses, income level, health, and risk tolerance are different, it’s important to understand that there’s not single design for everyone to follow.  Make sure you talk with your retirement advisor about the best options for you, and at the same time, keep these suggestions in mind.

First of all, retirees should systematically draw down their savings and convert a portion of their savings to an income annuity to cover necessary expenses.  If you have the option of getting annuity payments from a traditional pension plan, experts suggest opting for that over a lump-sum withdrawal.  The experts also recommended delaying Social Security retirement benefits until reaching full-retirement age, and if possible, continuing to work and save. 

So do retirees actually follow this advice?  Typically, no.  According to the report, most retirees rely primarily on Social Security – and many take it before their full retirement age.  Only 6% of those with a defined-contribution plan, such as a 401(k), chose or bought an annuity when they retired.  And fewer and fewer people having traditional pension benefits available, pointing to the need for policy proposals educating retirees on the best ways to get the most out of their savings.  What’s more, employee sponsors are getting more and more worried about potential lawsuits and issues arising if they add annuities to their defined-contribution plans, further limiting retirement plan options.

So what should you take away from this report?  Even if you’re just starting to save, or you’re deep in the retirement planning stages, you need to take each and every factor into account when making decisions.  Think about it – if most retirees rely primarily on Social Security, what happens when the government cuts Social Security funding?  And what happens if they cut funding to government-sponsored medical care?  These are factors that you have to take into account, in addition to the myriad retirement plans available – annuities, stocks, bonds and pension plans.  Talk with an expert earlier than later and devise a plan that will give you the peace of mind that you and your retirement savings will live a long and happy life together.

the image is from http://www.dailymail.co.uk , by  alamy and is called article-1309939-026CC428000005DC-272_233x412.jpg