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Retirement Planning: The Big Picture

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As a future or current retiree, it is important for you to take into consideration the big picture of your retirement planning. Once you have the full picture, it helps you make more detailed and necessary decisions to achieve the retirement for which you have worked your whole life.
One of the first steps to take when planning your retirement is to find a financial professional who puts your needs and interests first. At American Financial Security, we take your whole financial and tax position into consideration and actively help you meet your retirement goals and objectives.
The next step we encourage is to collect and organize all your important documents. Making sure your documents are accounted for and managed is a great step on the path to a comfortable and well planned retirement. Unfortunately, this step is overlooked far too frequently.
Often, it’s only when tax season rolls around, or when a move happens, or a death in the family occurs, that people start really paying attention to the essential documents they may have. Having all your resources and documentation organized will allow your financial professional to provide you with the tools you need to make the decisions to help guide and prepare you for retirement.
Another essential step to take is to figure out how much money you will need in retirement and where it will come from. Many of our clients are confused about not only how much they have in terms of financial assets, but also how much they will need when they retire. Every client is different. By assessing each client on an individual basis, it allows us to properly evaluate each person’s situation to make a proper financial recommendation that will best prepare them for or assist them in retirement.
Most of our clients have some assets on which they can rely, maybe in their savings, a retirement account, or in other financial investments, but this often isn’t enough to provide them with a lifetime’s worth of retirement income. In other words, a shortfall often exists between the amount of money you have and the amount of money you will need during retirement. This shortfall is known as the income gap, and we work with our clients to help them develop strategies to fill it.
An important strategy to plan for is knowing what your Social Security benefit is and how to maximize it. This is important because Social Security can play a large role in helping bridge the income gap in retirement. Making the wrong Social Security decisions, like triggering your benefit at the inopportune time, may impact whether you are able to collect your maximum benefit.
Social Security has a significant impact on retirement planning. It is difficult to talk about retirement planning without also talking about Social Security and vice versa. The most common and challenging decision regarding Social Security is knowing when to apply for benefits. Knowing when to apply for your Social Security benefits can make a financial difference in your retirement. You can begin to receive early benefits from Social Security at age 62. However, depending on your life span, if you choose to take your benefit right at 62, it could drastically reduce the amount of Social Security you receive over your lifetime. Also taking Social Security and working prior to full retirement age may have an impact on your benefits.
At American Financial Security, we take a holistic approach to retirement planning. A major part of that is trying to plan for the future. We like to plan for what inflation will look like, what health care costs may look like in retirement and, if debt is acquired in retirement, how it will be paid off.
Nobody can predict the future, but by preparing for the future financially, you may be saving yourself from future financial hardship. QCBN

By Ronald Stevenson and Barbara Clark Stevenson

Ronald F. Stevenson & Barbara Clark Stevenson own American Financial Security, LLC. They specialise in Retirement Income Planning, Social Security Maximization, Tax Free Income Design, Personal & Corporate Tax Preparation and Planning. For more information, call 928-771-8368 or visit
AmericanFinancialSecurity.net, 3112 Clearwater Dr., Suite B, Prescott, Arizona 86305.

Rebalancing Your Portfolio Allocations 

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In today’s uncertain financial landscape and based on the market run-up we have seen the last few years, we believe it is more important than ever to establish a well-maintained portfolio that can help you reach your financial goals. Your portfolio needs to not only meet your need for capital, but also provide you with financial peace of mind.

While there’s no simple formula to help you figure out how your portfolio should be constructed, determining the right asset allocation should be the first step in the process. In order to properly ascertain your financial situation, there are a few important things to consider: age, time horizon, amount of capital to invest and future capital needs.

Another important thing to be aware of is your risk tolerance. Would you be willing to risk funds for the possibility of greater gains? While everyone wants to reap the rewards of high returns, not everyone can handle the high stress levels it can cause.

On the other side, avoiding investment risk isn’t always a wise decision. It is possible for portfolios to be too conservatively constructed, which makes them unable to provide the necessary long-term growth that is needed to outpace inflation and build wealth. Many investors seek absolute safety and keep their money in bank accounts, Certificates of Deposit (CDs) and other financial products without realizing that these “safe” choices may incur their own set of risks.

These risks include investment opportunity loss and the destruction of purchasing power resulting from inflation. When investors fail to take advantage of returns that a portfolio of growth investments can produce over time, this is called investment opportunity loss. Inflation can also hurt your investments, as it is often regarded as the silent destroyer of low-risk portfolios as purchasing power declines over time.

You need to find the right balance for you – one that satisfies your risk tolerance while also achieving an appropriate amount of growth and income.

At American Financial Investments LLC, we can help you create a financial strategy that fits your individualized investment objectives and goals. Allow our team to utilize our knowledge and experience to help manage your portfolio during various economic conditions and investment market cycles. Allow us to help you determine your risk tolerance using proprietary surveys, analyzing your finances and discussing your retirement and financial goals in depth.

We believe that your best bet for steady, long-term growth of your investments is having a well-diversified portfolio. This can help protect your assets from the risks of large drops and structural changes in the economy over time. When you work with the right financial professional, they can help you diversify, make adjustments when necessary and help increase your odds for long-term financial success. QCBN

By Ronald Stevenson and Barbara Clark Stevenson

Ronald F. Stevenson & Barbara Clark Stevenson own American Financial Security, LLC and American Financial Investments, LLC, a Registered Investment Advisor in the State of Arizona. They specialize in Retirement Income Planning, Social Security Maximization, Tax Free Income Design, Personal & Corporate Tax Preparation and Planning.  For more information, call 928-771-8368 or visit AFSprescott.com, 3112 Clearwater Dr., Suite B, Prescott, AZ 86305

Planning for a Retirement That’s Better Than a Vacation

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StevensonSome people spend more time planning their vacation than they spend planning for retirement. When it comes to retirement, many Americans don’t know where to begin.

It is important to have a retirement plan that considers ways to have income for life. Finding the most efficient and beneficial way to address this may impact your lifestyle, your asset accumulation, and your legacy planning after you retire. Satisfying that need for daily income entails first knowing how much you need and when you need it.

Knowing how much retirement income you need is different for everyone. The general rule of thumb is that a retiree will require 70 to 80 percent of their pre-retirement income to maintain their current lifestyle. Once you figure out what the amount is you need, the next step would be to find beneficial investment strategies, options and tools to help you achieve your income goals.

One of the best strategies for income planning is very similar to a portion of the vacation planning process, which is the flight. You book your tickets, pay for the airfare and arrive at the airport. Because you have faith in the airport, you typically don’t give it much more thought. The airlines are the ones who take into consideration that not every flight goes as smoothly as planned. And, although they plan for the best, they prepare for the worst. Our income planning process at American Financial Security takes a similar approach.

At American Financial Security, we understand that your financial situation will change at different stages in your retirement. We project for potential health care costs, emergencies, plans for moving or traveling, and other retirement expenses. You can really give your calculator a workout with all this planning.

Once we identify your various projected stages in retirement and the associated expenses with each stage in the income planning process, we begin creating your personal income plan. Your retirement income plan can consist of a variety of financial resources. Social Security is one of the best-known ways to fill a retiree’s income need and is the foundation of income planning for most anyone who is about to retire and need a reliable source of income. We help you determine when the best time for you to begin claiming your benefit in order to receive the maximum amount possible.

Once your retirement income plan has been completed, we then address your current financial situation in order to determine an appropriate strategy to generate specific income sources needed to help you live a happy and comfortable retirement.

At American Financial Security, we offer to help book your flight so you can fly away from the confusion and uncertainty and help you arrive at your desired retirement destination. Call us today, and we’ll take care of your income retirement plan to help make your retirement as enjoyable as a vacation. QCBN

By Ronald Stevenson and Barbara Clark Stevenson

Ronald F. Stevenson & Barbara E. Clark Stevenson own American Financial Security, LLC. They specialize in Retirement Income Planning, Social Security Maximization, Tax Free Income Design, Personal & Corporate Tax Preparation and Planning. For more information, call 928-771-8368 or visit www.AmericanFinancialSecurity.net, 3112 Clearwater Dr., Suite B, Prescott, AZ 86305

 

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Retirement Planning: The Big Picture

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StevensonFuture and current retirees should take into consideration the big picture of their retirement planning, which includes conducting financial planning and tax reviews. Once you have the full picture, it helps you make more detailed and necessary decisions to achieve the retirement for which you have worked so hard.

Planning for retirement is a multi-step process that can bring along many questions. For example, there is inflation, healthcare costs, and debt. At American Financial Security, we take a holistic approach to retirement planning, and a major part of that is trying to plan for the future.

It is helpful and important to know what steps to take when preparing for your retirement. It is also good to know that if you are already retired, it is not too late to incorporate some of these steps to help strengthen and improve your current retirement situation.

There are many things to take into consideration when preparing for retirement. But making sure your documents are accounted for and managed is a great step on the path to a comfortable and well-planned retirement. This step is important because there can be a lot of documents to manage from tax, estate, property, personal, etc. Unfortunately, the unquestionable amount of important documents that some people have can lead to the disorganization of document management and, more often than not, become overwhelming.

Often, it’s only when tax season rolls around, or when a move happens, or a death in the family occurs, when people start really paying attention to the essential documents they may have. That is why reviewing your financial retirement plan on your own time can help you organize your documents and determine what you may still need for retirement.

Another part of planning for your retirement is having a well-planned tax strategy. Since we are a tax planning and preparation firm, we look over our clients’ taxes and help them form a tax strategy. The strategy is meant to help them have an understanding about what the normal tax ramifications might be of some of the investment and financial decisions that they make. A strategy might include (but is not limited to) maximizing a tax-free income, taking advantage of standard or itemized deductions, or deferring your retirement plan distributions until needed. It is important to meet with a financial professional to help you determine which strategy is right for you.

One more step in making the financial transition into retirement would be understanding your Social Security benefit and how to maximize it. Many people don’t know what their retirement income gap may look like. And, because of this, they do not know how they will fill their potential income gap in retirement. By reviewing your financial plan for retirement, you can potentially determine how to handle any financial gap you may face in retirement.

In most cases, when it comes to filling your income gap, there is no better tool to use than your Social Security benefit because it provides you with a lifetime’s worth of guaranteed income. We help our clients develop a comprehensive understanding of Social Security so they can rest assured they are triggering their benefits in the way that’s best for them. The importance of maximizing your Social Security benefit really cannot be overstated. For some people, the difference can literally be thousands of dollars, and when it comes to retirement planning, every penny counts.

Nobody can predict the future, but by preparing for the future financially, you may be saving yourself from future financial hardship.

Every person is different. By assessing each person on an individual basis, we are able to properly evaluate their specific situation and make a proper financial recommendation that will best serve that individual or couple. QCBN

 

About the Authors: Ronald F. Stevenson & Barbara E. Clark own American Financial Security, LLC. They specialize in Retirement Income Planning, Social Security Maximization, Tax Free Income Design, Personal & Corporate Tax Preparation and Planning. For more information, call 928-771-8368 or visit www.AmericanFinancialSecurity.net, 3112 Clearwater Dr., Suite B, Prescott, AZ 86305

 

 

Taxes and Their Effect on Your Retirement

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StevensonMost retirees don’t anticipate all the expenses they will experience during retirement, especially taxes. More often than not, most are faced with tax issues. Why? Because when it comes to taxes, not all money is created equal.

Taxes are a topic everyone is concerned about, but most don’t want to deal with it any more than they have to. This can result in someone not taking the time to go back through their taxes for the year and making sure everything was done correctly.

Having a second opinion tax review is very beneficial to help you determine if you have completed your taxes correctly for the year. Our office conducts second opinions for business and personal taxes year round. To begin, we simply ask that you set up an appointment to meet with us and bring copies of your past year’s tax returns, investment statements and any other pertinent data. We go through the documents to get a general idea or an overview of what your total situation is. Then, we take the information you provide and analyze what was filed for accuracy and tax advantages.

There are many benefits to conducting a second opinion. For example, if you have a big tax bill to pay, the second opinion helps you think strategically and critically about what is in your tax return. Finding an error on your return may result in receiving some extra money back or even lowering your tax bill. But, it can also go the other way. However, there is good news! Even if you find an error that causes you to owe a little bit more, it is still a great idea to get that cleaned up and fixed on your own timetable, rather than the IRS catching the mistake a few years down the road.

In addition to getting a second opinion review, knowing the multiple ways you can PREPARE for taxes during retirement can help put you in the tax bracket you hoped for. Your retirement and taxes are closely intertwined, and it is valuable to implement a tax strategy in your retirement planning. A tax strategy will help you understand tax ramifications of the investment and financial decisions you make. A good tax strategy might include knowing when to withdraw from your various retirement plans, maximize tax-free income, time the sale of rentals and make sure you take full advantage of itemized deductions. It is important that you meet with financial professionals, such as American Financial Security, when discussing tax and financial options to help make sure you are able to determine which tax AND financial strategy is right for you.

Roth IRAs can be another helpful tool when preparing for taxes that you may face in retirement. Many retirement savings accounts are tax deferred. With the Roth IRA, the tax savings are on the back end, offering you years of potential tax-free growth followed by tax-free withdrawals of qualified distributions. To convert to a Roth IRA, you have to pay the income taxes upfront on the amount you are converting. In an ideal situation, tax free withdrawals you make in the future will outweigh the upfront tax hit. But again, you should work with a tax advisor to understand the full ramifications before converting. The Roth IRA is not for everyone.

Another beneficial tool is life insurance, which is often overlooked. We believe life insurance is one of the best tax-free devices available. It holds some of the greatest value for your financial lives during life and upon death. By having a life insurance strategy, your loved ones are financially protected upon your death and the life insurance is not taxed. In some situations, you may have tax-free money available to you during your lifetime in the form of tax-free loans.

In addition, Arizona provides many unique tax advantages. For instance, there is no tax on Social Security, there is a partial exclusion on Arizona State Retirement Pensions, and a wonderful array of dollar-for-dollar tax credits.

People’s tax situations change and vary from person to person and, yes, even year to year. That is why we would like to meet with you and help make sure you have the information you need to make the best decisions for you and your retirement needs. QCBN

 

Ronald F. Stevenson & Barbara E. Clark own American Financial Security, LLC. They specialize in Retirement Income Planning, Social Security Maximization, Tax Free Income Design, Personal & Corporate Tax Preparation and Planning. For more information, call 928-771-8368 or visit www.AmericanFinancialSecurity.net, 3112 Clearwater Dr., Suite B, Prescott, AZ 86305.

 

 

Creating A Lifetime of Income

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StevensonThere are various retirement income pillars on which Americans rely. One such pillar is fixed indexed annuities,* also referred to as FIAs, which help create a retirement income that will last. These annuities are versatile financial tools that can provide you with the income and growth potential you need during retirement, without exposing you to undue risk.

A fixed indexed annuity is an insurance contract linked to a common market index, such as the S&P 500.** If the index experiences a gain, you and the insurance company are both entitled to a share of the earnings. If the index suffers a loss, depending on the fixed indexed annuity in which you are invested, typically the insurance company will absorb it, but your account value will not decrease.

When you buy a fixed indexed annuity, the insurance company may offer you the option to purchase an income rider to add to the policy, which will provide income in the form of regular withdrawals from your annuity rather than annuitized payments. An income rider is basically the amount of money from which the insurance company may pay you an income while you have your money in their annuity. Your income rider is a larger number than what your investment is actually worth and may increase in value over time, potentially providing you with more income.

Having a lifetime income benefit rider helps you take lifetime income from your fixed indexed annuity without losing control of your retirement assets. They are designed to help provide principal protection, and for predictability and minimum income guarantees to people who are worried about running out of money in retirement.

If you don’t need your fixed indexed annuity to provide you with income right away, the income rider of a fixed indexed annuity often has a “roll up” value. This means that every year that you don’t tap into the income stream created by the income rider, its value will increase by a set amount and this increase will continue, regardless of the market’s performance, until you trigger the income rider and begin receiving payments from it.

When you purchase a fixed indexed annuity with this type of feature, you can be reasonably sure that your income needs will be met, and possibly surpassed, even in an uncertain economy or volatile market.

Fixed indexed income annuities with an income rider can help address changes that retirement brings and help you financially survive, even thrive, during your retirement – and enjoy the retirement you have been working for without having to worry about outliving your income! QCBN

 

*Annuities are designed to be long-term investments and frequently involve substantial charges such as administrative fees, annual contract fees, mortality & risk expense charges and surrender charges. Early withdrawals may impact annuity cash values and death benefits. Taxes are payable upon withdrawal of funds. An additional 10 percent IRS penalty may apply to withdrawals prior to age 59 ½. Annuities are not guaranteed by the FDIC or any other governmental agency and are not deposits or other obligations of or guaranteed or endorsed by any bank or savings association. With fixed annuities, both the money you invest and the interest paid out are guaranteed by the claims-paying ability of the insurer. Investments in variable annuities will fluctuate and values upon redemption may be less than the original amount invested. Investors should consider the investment objectives, risks, charges and expenses of a fixed and/or variable annuity carefully before investing. Prospectuses containing this and other information about the annuity are available by contacting your registered representative. Please read the prospectus carefully before investing to ensure the fixed and/or variable annuity is appropriate for your goals and risk tolerance.

** The Standard and Poor’s 500 is an unmanaged, capitalization weighted benchmark that tracks broad-based changes in the U.S. stock market. This index of 500 common stocks is comprised of 400 industrial, 20 transportation, 40 utility and 40 financial companies representing major U.S. industry sectors. The index is calculated on a total return basis with dividends reinvested and is not available for direct investment.

Ronald F. Stevenson & Barbara E. Clark own American Financial Security, LLC. They specialize in Retirement Income Planning, Social Security Maximization, Tax Free Income Design, Personal & Corporate Tax Preparation and Planning. For more information, call 928-771-8368 or visit www.AmericanFinancialSecurity.net, 3112 Clearwater Dr., Suite B, Prescott, AZ 86305.