How to Protect Your Retirement in Volatile Times

Wednesday, January 30 at 02:00 PM
Category: Personal Finance

The volatility of the stock market over the past few years has resulted in many investors seeing their retirement accounts shrink in value. While the stock prices may rise over time, many individuals are being forced to re-examine their retirement plans. For older individuals with less time until their planned retirement, a serious review of their financial future may be essential.

Within the current environment, here are some options to consider as you refine your retirement plan:

Save more while you are working

Be sure to take full advantage of any company offered retirement plan. If you participate in a 401(k) plan, contribute as much as you can and at least enough to earn the entire match the company may offer.

Set up an automatic savings plan. Have a set amount deducted from each paycheck and deposited into an account you earmark for retirement.

Examine your monthly household spending to see if there are ways to spend a little less. Refinancing your mortgage, increasing your insurance deductibles and reducing spending on discretionary items can add up.

Earn more on your retirement assets before you retire

Examine how your funds are invested and how your "cash" is employed. A well thought out asset allocation for your investments, one that incorporates your time horizon and risk tolerance, can provide diversification and some peace of mind. Generally, the younger you are, the more of your long-term investments should be in equities. Over time, high quality stocks have produced greater returns than bonds and cash investments.

Your cash should be working hard too. Take advantage of higher interest rates on accounts that provide less liquidity and on longer term CDs if you can leave the money in the accounts or CDs for longer periods.

Work longer until you retire

Delaying your retirement enables you to have more for retirement in several ways:

  • While working, you can save more in your retirement plan and through regular savings.

  • Especially with your tax-deferred retirement accounts, leaving all your funds within the account enable them to grow faster. For example, if you delay retirement for five years and earn just 5% on the funds, you will have about 27% more just from the earnings.

  • Delaying when you start collecting Social Security will increase your monthly benefits. If you are currently 55 years old, you can start collecting full Social Security retirement benefits at age 66. If you start at age 62, you will only get about 75% of that amount and if you wait and start collecting at age 70, you will get about 130% of that amount.

Spend less during your retirement years

Everyone wants a "full and active lifestyle" during retirement. Perhaps you should consider changing exactly what the "full and active lifestyle" means. Less travel, less expensive cars or foregoing a second home (or opting for a smaller one) will make a difference. Anticipating and setting sensible spending priorities will probably be part of many individuals' retirement.

 

Tags: Financial Education, Retirement
 

6 Financial Tips for Service Members and Their Families

Monday, June 26 at 09:15 AM
Category: Personal Finance
Finances are often identified by service members and their families as one of their most significant stressors – even more than deployments and personal relationships. Financial concerns at home make it extremely difficult for service members to focus on the mission at hand. Planning ahead as much as possible is key for the millions of military families who face unique financial challenges like deployments and relocations.

These financial tips can help lessen the financial burden on military families:
  • Contribute automatically to a Thrift Savings Plan. Military members have access to the Federal Thrift Savings Program, which offers the lowest-cost retirement savings plan available. Have automatic contributions withdrawn from your paycheck. 
  • Plan for deployment. Before deployment, have a family conversation about managing the household budget. Military personnel also receive additional funds while deployed. Decide on the best use for that extra cash, whether it is paying off debt or increasing Thrift Savings Plan contributions. 
  • Meet with your banker before active duty. The Servicemembers Civil Relief Act offers all military personnel entering active duty a variety of financial protections. The SCRA covers issues ranging from interest rate reductions to limits on debt accrual. Ask your banker about the key provisions of this law and how they can help you.  
  • Set up automatic bill pay. Whether you’re stationed stateside or overseas, automatic bill pay will give you and your family one less thing to worry about each month. It can be particularly helpful during deployments in regions where internet access is unreliable and mobile banking isn’t an option.
  • Consider housing options. With mortgage rates at notably low levels, homeownership may seem like a no-brainer. However, service members should consider their options. Frequent relocations and deployments can make owning a home challenging and expensive. Renting may be a smart option for short-term assignments. Decide what’s best for your family and your finances. 
  • Consult a financial advisor. Schedule a visit at a Personal Financial Management Program (PFMP) office, located in your military and family support centers. They offer free one-on-one counseling, as well as other financial education resources. 
Service members juggle a lot of stresses, and we hope to reduce the financial stresses with these tips.
 
Information courtesy of American Bankers Association. 

Tags: Financial Education, Home Loans, Mortgage, Retirement, Savings
 

Join Us for Lobby Chats Fridays in June/July in Joplin, Mo.

Friday, June 16 at 06:10 AM
Category: Arvest Community News
Retirement planning is an ongoing process of preparing for and reacting to critical financial events. Critical financial events can be as diverse as retiring, a change in career path or just getting started. The right strategy for each stage is the key to success. 
 
Join us at noon for lobby chat round-ups on June 23, June 30 and July 7 at 3201 McClelland Blvd. Joplin, Mo., with our very own expert, Garrett Taylor**, client advisor for Arvest Wealth Management. He will share some basic insights on strategies to save, make time for Q&A and schedule follow-up appointments upon request. 
 
In his role, Garrett assists clients in the Joplin, Mo., area with investment advice, retirement planning, risk management and other areas of personal financial planning. Prior to joining Arvest in 2012, Garrett earned a degree in finance and economics from Missouri Southern State University in 2006. In 2009, he earned the CERTIFIED FINANCIAL PLANNER™ certification. Garrett is also a member of the Greater Kansas City chapter of the Financial Planning Association. Garrett also serves on the board of the Joplin Community Health Clinic. 
 
Garrett Taylor can be reached at (417) 627-8156 or gtaylor@arvest.com
 
**Missouri Insurance License # 375253 

Investments and Insurance Products: Not a Deposit | Not Guaranteed by the Bank or its Affiliates | Not FDIC Insured | Not Insured by Any Federal Government Agency | May Go Down in Value
Investment products and services are provided by Arvest Investments, Inc., doing business as Arvest Wealth Management, member FINRA/SIPC, an SEC registered investment adviser and a subsidiary of Arvest Bank. 

Insurance products are made available through Arvest Insurance, Inc., which is registered as an insurance agency. Insurance products are marketed through Arvest Insurance, Inc., but are underwritten by unaffiliated insurance companies.
 
Trust services are provided by Arvest Bank. 

Tags: Joplin, Missouri, Retirement
 

Tom Clancy’s Widow Wins Her Court Battle

Wednesday, June 14 at 02:05 PM
Category: Personal Finance
The estate plan of noted author Tom Clancy had three equal trusts, one for the children of his first marriage, a marital trust for his surviving second wife, and a family trust for the second wife and the daughter they had together. The trusts were funded from the residuary estate (whatever is left after paying expenses and any specific bequests), and Clancy’s will also called for estate and/or inheritance taxes to be paid from that same remaining fund. The personal representative of the estate (who also had drafted the will) proposed to pay half of the federal estate taxes due on Clancy’s $83 million estate from the trust for the adult children, the other half from the family trust. The taxes came to roughly $15 million. 

Mrs. Clancy objected. Before his death, Clancy had executed a codicil to his will, to clarify that he intended both the family trust and the marital trust to qualify for the federal estate tax marital deduction. That suggests that the trusts for Mrs. Clancy should not be tapped to pay taxes, because assets that don’t share in the creation of the estate tax burden should not have to pay those estate taxes. To the extent that the widow’s share is used to pay the estate tax, the marital deduction must be reduced, which means still more estate tax, and a further reduction in deduction, and yet more taxes, in an extended circular computation. In fact, if Mrs. Clancy’s share is free from the tax burden, the actual estate tax due will drop by nearly a third, to roughly $11 million. 
 
That’s what the probate court decided was proper, it’s what Clancy apparently intended with his codicil to the will. In a 4-3 decision, the Maryland Court of Appeals agreed with that conclusion in August. A savings clause in the codicil “explicitly directs that the personal representative not act to adversely impact the benefit of the marital deduction of the marital trust and the family trust.” Three dissenters believed that Clancy probably did not appreciate just how much that seemingly minor savings clause would upend the overall result of his estate plan. 
 
The result is decidedly unequal for the five children. The child from the second marriage will get roughly one-third of the estate, undiminished by taxes. The share for the other four will be reduced roughly 40% for taxes, and then split four ways among them. Whether Mr. Clancy expected an outcome for his estate plan to have as many twists and turns as the plots of the books that he wrote remains an open question. 
 
(December 2016) © 2016 M.A. Co. All rights reserved. 

Tags: Financial Education, Retirement
 

The Retirement “Tryout”

Tuesday, June 13 at 01:40 PM
Category: Personal Finance
Retirement is sometimes defined in terms of what one is leaving behind — a career, difficult clients, job stress, the daily commute, the grind. But for retirement to be fully satisfying, according to many experts, one needs to retire to something, not just from something. Defining that “to” and giving it a tryout is what we mean by “pretesting” your retirement. Here are some examples. 
 
Donate your time and expertise. An attorney acquaintance of ours spent most of his career as in-house counsel for a major oil company. As he approached his retirement years, he arranged to be allowed to do pro bono legal work for immigrants. He found the experience so rewarding that after he started drawing his oil company pension, he founded a law firm specializing in such pro bono work. 
 
The “soft launch” of a retirement consultancy. Another acquaintance thought his years of experience in the banking business might be valuable in creating a marketing consultancy for financial services firms. Before he retired, this person tried out some of his ideas with the advertising agency that his bank used. Both sides found the experience valuable, and a basis was created for the individual’s new marketing firm. He was able to have a clear financial path to follow once his regular full-time employment ended. 
 
Try a month’s vacation. It would be a shame to retire to a quiet, secluded lifestyle, only to find it boring after a few months. Many retirees report that they miss the camaraderie of their working lives after they retire. Before deciding upon retirement relocation, it can be helpful to spend an extended period of time in the possible new location, to see what day-to-day life would be like there. 
 
As you conduct these tryouts, you should monitor your finances, noting any adjustments that may be required. You may find that your spending needs change or vary from your expectations, and that may influence your choice of a retirement start date. 
 
Testing the water early can head off unpleasant surprises after one enters retirement. By then, many decisions have become irreversible. If you’d like a professional review of your financial readiness for retirement, we’d be pleased to give you our evaluation. 
 
(January 2017) © 2017 M.A. Co. All rights reserved. 

Tags: Financial Education, Retirement

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