Archive for February, 2016

4 Musts When Making Retirement Decisions as a Couple

Monday, February 8th, 2016

retirement couple - ssq

I’m a strong believer that a couple that budgets together, stays together. Because money can be the most contentious topic that couples have to deal with, why not put it all out in the open? Making decisions regarding money shouldn’t ever be one-sided, both parties should be involved, and there should be clear communication.
When it comes to making decisions about your retirement fund, it’s even more important to communicate. There is paperwork to fill out, and questions to answer like your investment options, what goals should we set? Roth or Traditional? and it’s a lot for one person to handle.

What are your investment options?

There are a lot of companies that like to get their employees involved in their retirement planning, and those companies usually have a lot of investment options. While the main holder of the account might feel that it’s their duty to decide what the money is invested in, it absolutely should be discussed with their partner.
There are new groups popping up everyday called Money Clubs, where couples and single people alike are getting actively involved in their finances. You and your partner talking about investments and money in general is an essential part of a couple working together for a brighter future.

Communicate with your partner

What’s unfortunate about a lot of couple’s retirement savings is that there’s usually one person that has more information than the other. Usually the person that’s more informed is the one that has the account (most likely) through their place of work, and the other is left in the dark.
The way that this can be remedied is by both partners getting as involved as possible, and seriously discussing their options, and their goals. How much can be contributed to retirement accounts? What age is best for us to start taking distributions? Don’t leave any stone unturned.

What are your goals?

Do you know where you will be in 30 years? Hopefully retired, right? But at what age specifically? How much do you plan on taking in distributions? Do you plan on still working after retirement? Where will you live? This all might seem too far off to start planning now, but it couldn’t be more important to have these goals clearly set now, so that inevitable surprises and setbacks don’t completely derail your goals.
Setting and meeting short term goals, such as quarterly and yearly financial goals is also important.

Be flexible

If you and your partner determine that there is a great divide between your retirement dreams and what you think you can afford, don’t despair. There’s plenty you can do to build your bridge.
First, how many “need” items can you afford? If you have enough resources to pay for all of your “needs”, your work may be done. At this point, it’s just a question of how much money you’ll have leftover to pay for the “wants” and “wishes” as well as your ability to compromise with your partner. But if you won’t have enough to cover all the things you agree you “need,” it’s time to compromise together.
Would you both agree to retire in a different, less expensive area? If so, you could save a bundle. For example, if you retire to Amarillo, Texas from Los Angeles, you might be able to maintain the same standard of living with 41% less income.
If you aren’t both willing to move, could you agree to sell your house and rent instead? That can free up a great deal of capital and reduce your costs.
If neither of these options work, would you be willing to cut spending, invest differently or do both? This shift could be meaningful.

The Burden Student Loans is Putting on Saving for Retirement

Thursday, February 4th, 2016

student and retirement

With the amount of student debt mushrooming over the last few years, and the decline of money that’s being put towards retirement, it’s hard not to see how the two have a correlation. These days, it’s not uncommon for college graduates to owe $50,000, $100,000 or even $150,000 in student loans after graduation. Unfortunately, it’s commonplace given the climbing costs of tuition and students taking more than four years to complete their education.

repaying student loans

The biggest issue is the timing; experts agree that the earlier that someone can start saving around 15% of their income for retirement, the better their chances are at retiring on time. Starting to save at 25 is ideal, but for most Americans, it’s definitely not realistic since (if we’re going on an “average” timeline) most graduate college at 22-24, and are immediately handed their first bill as an adult in the real world.

In choosing between the surmounting debt that a 24 year old has, or retirement in 40 years, most are going to make their student debt a priority. I don’t think many could take issue with the prioritization, but rather the student loan debt that young people are saddled with so year on in life.

There are lesser known effects of this monstrous debt that have yet to garner as much attention, and that’s all the other priorities that are being pushed aside such as putting off marriage, buying a house, or just buying the necessities. Some carry this burden through their lives, well past retirement, which is an issue all on it’s own.

infograph on retirement

Is there a solution to these issues? Not really. As experts see it, the student loan crisis will soon morph into a bigger retirement issue as soon as millennials start to retire.

Reasons Investing is Smarter With a Checkbook IRA

Monday, February 1st, 2016

checkbook ira - square

When a self-directed IRA owner has complete control and signing authority over their retirement funds, the term Checkbook IRA or Checkbook Control is used. With checkbook control, you never have to depend on custodian’s approval or consent to proceed with any investment decision (so long as rules are abided). Checkbook control isn’t a mandatory requirement to invest with your self-directed IRA, but it’s one of the many benefits that some IRA holders are missing out on.

Simple Rules

One big reasons that checkbook control is such an attractive option is the freedom it allows. The list of what are called “prohibited transactions” is short and sweet. Prohibited transactions are transactions between the IRA and disqualified persons. Prohibited transactions and disqualified persons are defined as follows:
The term “prohibited transaction” means any direct or indirect:

  • Sale or exchange, or leasing of any property between a plan and a disqualified person
  • Lending of money or other extension of credit between a plan and a disqualified person
  • Furnishing of goods, services, or facilities between a plan and a disqualified person
  • Transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan
  • Act by a disqualified person who is a fiduciary whereby the deals with the income or assets of a plan in his or her own interests or for his or her own account
  • Receipt of any consideration for his or her own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or assets of the plan.

Control on the Go

Through a checkbook IRA, your investments can be controlled easily. If you have found an investment opportunity, all you need to do is write a check to buy it. You can even wire the funds; filling out tedious paperwork, waiting for other’s approval/funds or them writing a check for you is a thing of the past. This helps save you crucial time.
Accuplan Benefits Services has gone a step further in making investing easy for our customers by introducing AccuPayz last year. Instead of writing a check to invest, our customers can swipe their AccuPayz card right then and there. AccuPayz is a debit card that’s directly linked to your IRA, and debits the account just like a bank card. Plain and simple.

A Variety of Options

With a self-directed IRA, you can invest in an array of allowable asset classes outside of the normal traditional investments.

Some alternative investments include:

  • Real Estate – residential and commercial – condos, mobile homes, foreign
  • Raw Land
  • Trust Deeds/Mortgage and Mortgage Pools
  • Private Notes and Loans – e.g. Loans to a non-disqualified person for a car etc.
  • Private Stock Offerings – also referred to as PPM’s
  • Limited Liability Companies – LLC’s
  • Limited Partnerships – LP’s
  • Tax Certificates – Tax Liens
  • Annuities
  • Options
  • Currency
  • Futures
  • Commercial Paper
  • And MANY other investments

Prohibited Investments:

  • Collectibles – Artwork, Rugs, Antiques, Metals, Gems, Stamps, Collectible Coins
  • Beverages
  • Stock in a S-Corporation