Category Archives: Retirement Planning

What is the best way to plan for your assets to remain within your bloodlines?

A 60-second read by Nicholas Scheibner:  When planning your estate, it is important to divide all of your accounts into two groups:  accounts with designated beneficiaries and accounts with no designated beneficiaries.  Examples of accounts with designated beneficiaries are 401(k)s, IRAs, transfer of death (TOD) accounts, and other retirement accounts. The designated beneficiary on an account bypasses your will.  For example, if your will states that all of your money is to pass on to your child, but your 401(k) primary beneficiary is an ex-spouse, your ex-spouse will inherit the money from your 401(k).  It is crucial that you review your beneficiaries on your accounts to make sure they agree with your desires.

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Class of 2017: It Isn’t Too Early to Start Thinking about Your Retirement

A 60-second read by the Baron Team:  Congratulations 2017 College graduates! Throw that mortarboard as high in the air as you can and before it circles back down to earth, start thinking about saving for your retirement. You are most likely going to be responsible for setting yourself up for a successful retirement, so your best bet is to invest early and often.

Invest in yourself first. Most people think investing is the key to wealth, but while certainly important, you have to have some money first to invest. So as soon as you begin your first job out of school, start saving a minimum of 10% of your annual income for retirement. This will ensure that you invest in yourself first.  You should plan on saving this much or more for the rest of your working career.

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Not all CDs are the same…

A 90-second read by Anthony Benante: When investing in a Certificate of Deposit (CD), you may have more options than you think.  You can purchase a CD at a local bank or you can purchase CDs in your investment accounts (such as a taxable account, IRA or Roth IRA, etc.).  These are typically known as Brokered CDs.  Even though the CDs you get from the bank and the CDs in your investment accounts are called Certificates of Deposit, you should know that there are differences.  In either case, we would recommend that the CDs you invest in are fully covered by FDIC insurance.  If you would like to learn more about FDIC insurance coverage, feel free to ask us or you can go online to www.fdic.gov.

Purchasing CDs from your local bank: If you were to purchase a CD from a local bank that is FDIC insured, you would receive interest and would get your principal investment at maturity. If you receive regular statements, the value of your CD would most likely never change because it is not tradeable.  If for some reason you wanted access to your funds prior to maturity, you would most likely be subject to a penalty, such as 90 days’ worth of interest (but this should be verified individually). Other factors to consider are that local banks can offer “teaser rates” (rates higher than the market) for CDs to attract deposits, but those rates may not be available after your CD matures.  Unless you want to consistently move your money from institution to institution, using time and effort, you will be subject to the rates being offered only by your bank.

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Where is the Best Place to Put My Emergency Funds? How Much is Enough?

A 60-second read by Anthony Benante:  You want to put your emergency funds in an account where the funds are easily accessible and not exposed to risk.  Examples include traditional bank accounts that carry FDIC insurance (savings, checking, etc.).  The current FDIC insurance limit is $250,000 (as of October 2016), so you should structure your accounts appropriately to ensure your emergency funds are protected.  You don’t want your emergency funds exposed to volatility, because it is possible you may need access to the funds when markets are experiencing volatility. If you put emergency funds in a risk asset (an investment that can change in value, such as a stock), it could wind-up causing you two financial problems, as opposed to having one financial solution.

How much you put in your emergency fund really depends on your specific situation, the stability of your job, your monthly budget and the consideration of all financial resources available. Typically, you want to put 6 to12 months of your salary away. If you are in a risky job or the majority of your income is from commissions or bonuses, the emergency fund may need to be more. Please contact us at Baron if you would like help in determining an appropriate amount for an emergency fund that would be best for your specific circumstance.

Medicare & Retirement Planning Webinar

Baron Financial Group’s Investment Committee provides an educational webinar on financial planning and investment management.  Medicare Consultant and guest presenter Mary Jean Cullen (MedicareAssist, LLC) discusses how Medicare works.  It is important to keep in mind that annual enrollment is open now through December 7th.

This presentation was first held at the September 13, 2016 Wine & Wealth event for our clients.

The webinar includes the following topics:

  • Beware of Market Doomsayers (0:00 -7:28) – Victor Cannillo
  • Asset Allocation and Diversification (7:30-15:53)   – Anthony Benante
  • Customized Financial Planning  (15:56-19:12) –  Nicholas Scheibner
  • What Role Does Life Expectancy Play in Retirement Planning? (19:13-23:15) – James Shagawat
  • Choosing A Medicare Plan: Learn What You Need To Know Prior and During Your Medicare Years    (23:30-51:44)  – Mary Jeanne Cullen

If you have any further questions, don’t hesitate to contact the Baron Financial Group team.

Should the Election Affect your Investment Strategy?

The answer is “no,” as long as you have a long-term globally-diversified
strategy

 

A 45-second read by Victor Cannillo: The simple truth is nobody knows what will happen when the election is over. No matter which candidate is elected President, historically, stocks will continue to rise and fall as they always have. This election will most likely be no different.

Right now, you might be hearing a lot of market commentary like “If Trump Wins…/If Clinton Wins…” We can be swayed to believe that because a certain president is elected, we should be making changes to our investment strategies and portfolios.

The number one thing to remember – always keep emotions out of investment decisions.

Keep in mind that we are not electing a king, but rather someone who will be in office at most 8 years, with a Congress and Senate that will account for checks and balances.

There might be some short-term volatility, but always remember that you are investing for the long-term, not just for the 4 to 8 years of a presidential term.  

If you have any further questions, don’t hesitate to contact the Baron Financial Group team.

What is the Best IRA for a Young Investor?

 A 30-second read by Nicholas Scheibner:  Before deciding which kind of IRA to open, the first thing you would want to do is check with your employer about 401(k) offerings. If your employer provides any company match into a 401(k) you will want to contribute to that account before you start an IRA. That way, you are able to take advantage of the “Free Money” provided by your employer. A Roth IRA is usually best for someone who is in a lower tax-bracket.  The idea is that you want to pay taxes in the lowest bracket possible.  So if you are making a lower income than you may in the future, you would want to pay taxes now, using a Roth.

Also, if you expect to be making less income now than in the future, a Roth is a good way to “prepay” taxes. You can’t avoid paying taxes, and the decision between a Roth and a Traditional IRA is, “pay taxes now or pay taxes in retirement?” Since a Roth provides tax-free withdrawals in retirement, the account provides for “tax diversification” that compliments your 401(k), traditional IRA, and taxable brokerage accounts.

If you have any further questions, don’t hesitate to contact the Baron Financial Group team.

Class of 2016: It Isn’t Too Early to Start Thinking about Your Retirement

A 60-second read by the Baron Team:  Congratulations 2016 College graduates! Throw that mortarboard as high in the air as you can and before it circles back down to earth, start thinking about saving for your retirement. You are most likely going to be responsible for setting yourself up for a successful retirement, so your best bet is to invest early and often.

Invest in yourself first. Most people think investing is the key to wealth, but while certainly important, you have to have some money first to invest. So as soon as you begin your first job out of school, start saving a minimum of 10% of your annual income for retirement. This will ensure that you invest in yourself first.  You should plan on saving this much or more for the rest of your working career.

Continue reading Class of 2016: It Isn’t Too Early to Start Thinking about Your Retirement

New Jersey Public Employees – Things to Know About Your Retirement Income

 A 30-second read by Nicholas Scheibner:    As public employees for the great state of New Jersey, there are some important factors to consider when it comes to your retirement income.

Regarding Your Pension:

New Jersey Pensions fall into two categories: “I contribute to my pension” or “I do not contribute to my pension”

  • For those employees who say, “I do not contribute to my pension” the entire portion of your pension in retirement will be taxable to New Jersey.
  • For those employees who say, “I do contribute to my pension”, when you retire, a portion of your pension will be taxable and a portion of your pension will be excluded from New Jersey state tax. Note: This is the reason your gross income is higher on your New Jersey tax return if you contribute to a pension. The federal government allows pension contributions to be deducted, but NJ State does NOT allow your pension contributions to be deducted.

Regarding Social Security:

Your Social Security may be greatly reduced if you have only worked as a public employee your entire life. The calculated estimates can be difficult, so it is important to speak with your financial planner about the possible impact a pension may have on your social security income.

As always, if you have any further questions, don’t hesitate to contact the Baron Financial Group team.