1)      Putting too much Stock in Bonds: Many people heading into retirement think that bonds hold more weight than stocks, but with the current rates of inflation, savings get eat into more and at a faster rate. With the risk of a continually increasing rate of inflation as well as increases governmental debt, Treasury bonds don’t have the best future. Stocks are becoming the recommended alternative, with 110-120 minus the retirees’ age as a percentage calculation for how much to invest in stocks.

2)      Leave it Alone: While target-date funds have their advantages when it comes to 401ks and other retirement plans, they have the tendency to lend a false sense of security and divert future retirees’ attention from continuing to save. Make sure you know the following details before investing in one: the rate of change for allocations, when the asset mix becomes more conservative, and how much money you have to sink into fees.

3)      Making up for Lost Time is Easy: A lot of times, people make plans to work part-time in retirement or to retire later on in order to make up for any periods in which they were saving less during the course of their career. But a lot of people over the age of 60 have to stop working sooner than they had anticipated, generally due to health reasons, the need to care for a loved one, or a layoff. This means that relying on the ability to continue working for income isn’t the safest financial decision.

The financial advisors at the Maryland retirement planning center can assist you in saving safely and wisely with our professional guidance. For more information, consult the financial advisors at Safe Retirement Solutions by calling 877-268-4086 or visit our website today!

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Sources:

7 retirement planning myths debunked

One of the biggest advantages of opening an IRA? Just as with a 401(k), the annual profits, gains, and dividends from an IRA are exempt from taxation. There are two types of IRAs: traditional and Roth. Let’s take a look at the former:

Traditional IRAs…

Allow for tax-deferred growth, making it so that taxes are only paid on withdrawals made in retirement. Some retirees may even qualify for a deductible IRA, meaning that either all or a portion of contributions made to the individual’s account may be exempt from taxes. You may be eligible for tax deductions if…

-          You don’t have another retirement savings system in place and you’re under the age of 70 ½. Investing in a deductible IRA in this situation will allow you to deduct the full amount from taxes.

-          You have a qualifying adjusted growth income (AGI). In this case, you may be able to completely or partially deduct contributions to your IRA, even if you have other retirement savings plans in place. If you are a single who makes over $68,000 or a couple raking in more than $112,000 each year, you won’t be able to take advantage of the deductions

-          You don’t personally have a retirement plan, but your spouse is covered under one and your joint AGI falls under $183,000 for the 2012 tax year.

The Maryland financial advisors at Safe Retirement solutions in Towson can help you make the most of your Traditional IRA and educate you on the ins and outs of this savings system. For more information, call 877-268-4086 or visit our website today!

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Retirement: IRA investment advantages

1. Know the Basics

The first step in choosing the right IRA is to understand the differences between the two. So below is a quick guide for determining which IRA is right for you.

Traditional IRA: The biggest advantage to this type of IRA is tax-deferred compounding. You will not have to pay taxes on your IRA’s investment earnings until you start taking distributions for it after you retire.

Roth IRA: Unlike traditional IRAs, this type of IRA has no restrictions governing when you are allowed to start taking distributions. Furthermore, qualified distributions from a Roth IRA are tax-free, not just tax-deferred.

2. Determine Your Eligibility

There are certain eligibility requirements associated with both Traditional IRAs and Roth IRAs. Do you know what they are?

For starters, you cannot make a deductible contribution to a traditional IRA is your income is above a certain level. Furthermore, if you make over a certain amount of money, you may not even be eligible for a Roth IRA. That is just the beginning. It gets complicated. To help simplify the task, I suggest you check out the TurboTax IRA Calculator.

3. Weigh Your Options

This is where a Safe Retirement Solutions and some in-depth financial planning can work wonders.

Safe Retirement Solutions is your full service, independent financial advisory firm dedicated to providing you with the very best in retirement income planning.

We help our clients in all phases of their retirement planning. We help them prepare for a retirement free from financial worries, so that they can enjoy their retirement years. We help to enable our retired clients with the transition of their wealth into a carefree income that will last them a lifetime.

If you have any questions or want to know more about what we can do for you, please contact Safe Retirement Solutions by calling 877-268-4086 or visit our website today!

You can also follow Safe Retirement Solutions on Facebook and Twitter.

According to the National Association of Estate Planners & Councils, more than 120 million Americans do not have up-to-date estate plans to protect themselves or their families in the event of sickness, accidents, or death.

By definition, estate planning is a process designed to help you manage and preserve your assets while you are alive, and to conserve and control their distribution after your death according to your goals and objectives. But what estate planning means to you specifically depends on who you are.

Your age, health, wealth, lifestyle, life stage, goals, and many other factors determine your particular estate planning needs. For example, you may have a small estate and may be concerned only that certain people receive particular things. A simple will is probably all you’ll need. Or, you may have a large estate, and minimizing any potential estate tax impact is your foremost goal. Here, you’ll need to use more sophisticated techniques in your estate plan, such as a trust.

Here are a few estate planning tips from Safe Retirement Solutions:

• Prepare a will – If you don’t prepare a will, the laws that govern your domicile will determine who inherits what. This is important for non-financial resources such as your prized possessions that relatives may want. Making a will can ensure that your possessions get inherited by the correct people.

• Create a trust – A trust will make sure that your funds are allocated to cover specific expenses after you’ve passed on. Expenses such as funeral costs, school loans, house payments and any other bills that are overdue can be adequately planned and paid for using a trust.

• Minimize the impact of Estate & Income Taxes – Using tax-efficient strategies can help curb the costs of estate and income taxes. Strategies such as giving your saved-up wealth as a gift to beneficiaries or leaving your taxable assets to charities are both great ways to minimize the effects of these taxes. Talking with your local Annapolis estate planning professionals at Safe Retirement Solutions can help you figure out ways to avoid heavy taxes.

If you’re ready to plan your estate, that’s where we come in. The financial advisors in Annapolis at Safe Retirement Solutions can help you develop a diversified portfolio to help you make the most of your investments. The Baltimore financial advisors at Safe Retirement Solutions can help you determine what steps to take to make sure your estate is properly taken care of, and provide alternative retirement savings guidance. To get started, call 877-268-4086 or visit our website today!

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A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you.  However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage.  You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

With traditional mortgages, the homeowner makes monthly payments to their lender, with a reverse mortgage, money is received from the lender and given to the borrower. As a general practice, this money isn’t expected to be paid back during the lifetime of the homeowner; it is only repaid during a resale or in the case of death – in which case the homeowner or his heirs must repay their debts.

The difference between a reverse mortgage and a home equity loan is that with a second mortgage, or a home equity line of credit, borrowers must have adequate   income to qualify for the loan, and they make monthly payments on the principal and interest.  A reverse mortgage is different, because it pays you – there are no monthly principal and interest payments.  With a reverse mortgage, you are required to pay real estate taxes, utilities, and hazard and flood insurance premiums.

To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home.

That’s where we come in. The financial advisors in Annapolis at Safe Retirement Solutions can help you develop a diversified portfolio to help you make the most of your investments. The Baltimore financial advisors at Safe Retirement Solutions can help you determine whether a reverse mortgage is the right choice for you, and provide alternative retirement savings guidance. To get started, call 877-268-4086 or visit our website today!

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Source: Frequently Asked Questions about HUD’s Reverse Mortgages, HUD.gov

There are various approaches to calculating an asset allocation that makes the most sense for you.

The most popular approach is to look at what you’re investing for and how long you have to reach each goal. Those goals get balanced against your need for money to live on. The more secure your immediate income and the longer you have to achieve your investing goals, the more aggressively you might be able to invest for them. Your asset allocation might have a greater percentage of stocks than either bonds or cash, for example. Or you might be in the opposite situation. If you’re stretched financially and would have to tap your investments in an emergency, you’ll need to balance that fact against your longer-term goals. In addition to establishing an emergency fund, you may need to invest more conservatively than you might otherwise want to.

Some investors believe in shifting their assets among asset classes based on which types of investments they expect will do well or poorly in the near term. However, this approach, called “market timing,” is extremely difficult even for experienced investors. If you’re determined to try this, you should probably get some expert advice—and recognize that no one really knows where markets are headed.

Some people try to match market returns with an overall “core” strategy for most of their portfolio. They then put a smaller portion in very targeted investments that may behave very differently from those in the core and provide greater overall diversification. These often are asset classes that an investor thinks could benefit from more active management.

Just as you allocate your assets in an overall portfolio, you can also allocate assets for a specific goal. For example, you might have one asset allocation for retirement savings and another for college tuition bills. A retired professional with a conservative overall portfolio might still be comfortable investing more aggressively with money intended to be a grandchild’s inheritance. Someone who has taken the risk of starting a business might decide to be more conservative with his or her personal portfolio.

Things to think about

• Don’t forget about the impact of inflation on your savings. As time goes by, your money will probably buy less and less unless your portfolio at least keeps pace with the inflation rate. Even if you think of yourself as a conservative investor, your asset allocation should take long-term inflation into account.
• Your asset allocation should balance your financial goals with your emotional needs. If the way your money is invested keeps you awake worrying at night, you may need to rethink your investing goals and whether the strategy you’re pursuing is worth the lost sleep.
• Your tax status might affect your asset allocation, though your decisions shouldn’t be based solely on tax concerns.

Even if your asset allocation was right for you when you chose it, it may not be right for you now. It should change as your circumstances do and as new ways to invest are introduced. A piece of clothing you wore 10 years ago may not fit now; similarly, you just might need to update your asset allocation, too.

That’s where we come in. The financial advisors in Annapolis at Safe Retirement Solutions can help you allocate your assets to help you make the most of your investments. To get started, call 877-268-4086 or visit our website today!

All of your investment choices will have their own set of strengths and weaknesses, that combined, will create a synergistic cohesion. You might choose some investments because of their potential for growth over time. Others, because of the steady stream of income they provide. Still others because they allow a safe place for you to keep your money over a long period of time. Whatever investments you choose, you must analyze your risk and return on a product in order to develop the right balance.

That’s where we come in. The financial advisors in Annapolis at Safe Retirement Solutions can help you develop a diversified portfolio to help you make the most of your investments. To get started, call 877-268-4086 or visit our website today!

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Planning for retirement demands an integrated approach to saving and investment. In 2013, you can contribute up to $5,500 towards your IRA. If you’re over the age of 50, that amount increases by $1,000 to make for a total contribution of $6,500. Depending upon your salary, there may be limitations upon your ability to make deductible contributions to a traditional IRA if you’re already participating in a 401(k) plan, so check with your HR department to figure out how to partition your contributions.

So – how much of that money is taxed each year? The answer depends on whether you have a traditional or Roth IRA. In a traditional IRA, much like a 401(k), the contribution you make to your account isn’t subject to income taxes until you begin receiving a distribution from the plan. With a Roth IRA on the other hand, you pay income tax, and then make your contribution with post-tax dollars. Upon withdrawal, you’ll owe no taxed, and your principal will grow tax-free.

For more information about IRAs and retirement planning in Baltimore, Maryland, call 877-268-4086 or visit our website today!

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Currently, you can contribute up to $17,500 to your 401(k) annually. If you’re over the age of 50, you may qualify for an additional $5,500, bringing the total up to $23,000.  Each year, contribution limits are adjusted in order to account for inflation, which decreases the value of the dollar over time. What this means in planning for retirement is that you have to put more money into your savings in order to have the same purchasing power.

The best way to save with a 401(k) is to contribute as much as you need to in order to qualify for your employer’s highest matching contribution percentage. Work with your company’s human resources department to determine how much you need to contribute to get the best possible match that you can, thereby maximizing your retirement savings.

For more information about retirement planning and consultations in and around Baltimore, Maryland, call 877-268-4086 or visit our website today!

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Start Early

The early bird gets the worm, as the maxim goes. Start saving as early as you can, so that your money and investments can grow and give you gains that compound over time to help you reach your financial goals.

Be on Target

Speaking of goals, make sure you have them, and that they’re honest ones. Figure out how much you actually need to have to live comfortably in retirement and how much you need to have set aside outside of supplemental income sources like Social Security.

Get in on a 401(k), ‘K? 

With matching company contributions, tax deductions, and tax-deferred growth, a 401(k) is one of the best savings plans you can set up for yourself.

Don’t Let IRAs be MIA

An IRA also offers tax advantages, depending on the type you choose, making them great ways to invest.  With a traditional IRA, you’ll have tax-deferred growth, and with a Roth IRA, you’ll be offered tax-free growth.

Allocate your Assets 

Be smart about how you invest in stocks and bonds in order to see true ROI in the long run.

The Baltimore financial advisors at Safe Retirement solutions can help you make the most out of your retirement savings, offering advice, insights, and plans to help you save and invest well.

For more information about retirement planning and consultations in and around Baltimore, Maryland, call 877-268-4086 or visit our website today!

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Sources:

Tips for Planning Your Retirement