Volatility Isn't Risk And Temporary Decline Isn't Permanent Loss
It seems there are many people who can't distinguish between risk and volatility. Volatility isn't risk. They aren't the same thing at all.
Your NRECA R&S Lump Sum Pensions Are At All Time Highs Until The End Of 2022
It’s 2022 and interest rates that were at historic lows are steadily moving upwards. This means your NRECA R&S Lump Sum Pension Amounts are at all time highs until the end of 2022 but that could change drastically in 2023.
What Is Money?
If we know that on average our money is losing a value of between 2-3% yearly, then we know that in 20 years from now our money will have lost about half of its value. Or simply put, in 20 years our cost of living will double. That means if you make $50,000 per year now, you’ll need to be making around $100,000 in 2041 to maintain the same standard of living you have today. So what is your plan in retirement to double your income in 20 years?
Should I Be Investing In A Roth Account?
When reviewing the key differences between Roth accounts and Traditional accounts, it’s important to ask yourself: “When is the most advantageous time to pay tax on my income?”
Who Wants To Pay As Much Income Tax As Possible?
Here is an example of a potential tax nightmare for the beneficiary of your IRA, 401k, or any retirement account where taxes have been deferred. That's essentially any retirement savings account that doesn't have the word Roth associated with it.
Tax Implications of Working While Drawing Social Security
You've made it to age 62 or later and you still want to continuing working but you would also like to draw Social Security to add to or supplement your income. Sounds like a great plan and sometime it is a great plan, but be aware the same government that made you pay Social Security is waiting to tax your Social Security.
Tax Implications Of A Lifetime Monthly Pension Versus A One Time Lump Sum Cash Payment
Many of you will contemplate retirement this year and despite what the news is telling you, if you have a pension plan sometimes referred to as a defined benefit plan at your current employer, this could be a great time to retire. Most pension/defined benefit plans give you the option of taking a series of lifetime monthly payments or a one time lump sum cash payment. This is not a decision to take lightly or a decision to make quickly. This decision will affect you and your family for decades and even generations to come. And it has tax implications!
Buy High and Sell Low or Sell Low and Buy High?
The picture associated with this blog shows what the typical investor not working with an advisor often does. They buy high and sell low which is the exact opposite of what you should do. And I'm seeing that happen right now everywhere I look. When the market goes down it's normal to panic but should you actually get out of the market and sell your investments?
The Biggest Misconception In Retirement
As I write this blog in August 2022, we are currently getting a master class on how inflation can affect retirement planning and your purchasing power in general. Probably the biggest misconception I see when talking to retirees or soon to be retirees is that they don't account for 30 years of inflation in retirement. I hear statements like "Our retirement income will more than cover our living expenses in retirement." To which my question is this: Are you certain that your retirement income today will buy your favorite box of cereal 30 years from now?
Should You Sell? Should You Buy? Should You Invest More?
It depends on your goals, your long term financial plan, your age even factors into things here. Let's just run through these options real quick.
Don't Listen To The Serpent
In the Book of Genesis, God gives Adam and Eve authority over the earth, forbidding them of only one thing. They are forbidden from tasting the fruit of the knowledge of good and evil. And for a few moments, their innocence is perfect. Then it happens. They taste the fruit and commit the original transgression. And after that, everything bad and wrong with earthly life suddenly enters the world: sin, shame, struggle, sickness and death. They only made one little mistake, but it was the only mistake they couldn't afford to make.
Should We Get Out Of The Market Until Things Settle Down?
The impulse to get out of the market before something bad happens is an impulse in all of us but it's at best only half of a strategy. What impulse would you listen to for re-entry to the market? Impulses don't make a strategy, but they can totally destroy a strategy.
Retirement Planning Specifically For Electric Cooperative Employees
I've seen cooperative employees work for 20-40 years to reach retirement and then quickly settle for the monthly pension annuity option or the lump sum option without actually having a plan to determine if they were making the right choice. I can help you make the right decision for your situation. As an Independent Registered Investment Advisor, I work for you. You can be assured you are getting financial advice from an advisor you can trust, that knows your profession, that once had the same benefit plan as you, that is a Fiduciary who is required by law to put your interest ahead of my own. I worked for a Cooperative for 11 years. I know your profession and benefit plans better than any other financial advisor will. You have excellent retirement benefits available to you. I can help you optimize those benefits while creating a retirement income and investing plan that aligns with your retirement goals.
Why Is The Stock Market So Volatile At Times?
If you follow financial "journalism" at all you will inevitably hear how volatile the market is and how you should take action to protect yourself from the volatility. However, when we turn off the "news" and look at things rationally, we can see a completely different story. One that is actually true. It's not the market that is volatile. It's the investors that are volatile.
Do You Need Help Managing Your Cooperative 401k Plan?
Did you know that the S&P 500 Index Mutual Fund available to you through your NRECA 401k options has historically averaged a return of approximately 10 percent? Did you know over that same period of time the average cooperative employee in the 401k plan has averaged a return of only 3.9 percent?
The Financial "News" Cycle
As if we don't have enough to worry about in our day to day lives, along comes the 24/7 financial "news" cycle to fan the flames and magnify any fears we have about our retirement money and our investments. They are relentless with their clickbait and flat out false narratives. So what are we to do? First let's understand the function of the financial "news" cycle.
