retirement Archives - Page 5 of 5 - Jerry Golden on Retirement

Product vs. Practice Model Innovation – Recent Articles by Retirement Income Experts

August 13, 2013 By Jerry Golden in Interesting Articles Tags: retirement, Retirement Income Experts

Recently, there has been a major uptick in articles, papers, and releases about retirement planning and retirement income. By our account, the number of stories about these topics more than doubled in the month of July alone, and the trend continues into early August. Set out below are links to a few recent postings.

The good news is retirement experts are seeing the benefits of converting “savings to income”. The bad news is there is no consistent approach, and even a slower adoption rate. What accounts for that? More

How Social Security Reform Can Improve Retiree Finances: Jerome Golden

December 19, 2011 By Jerry Golden in Interesting Articles, Social Security Tags: retirement, retirement income, Social Security, Social Security Reform

Understanding the Monetary Value of Social Security Benefits

In my Op-ed published on December 8 by Bloomberg News (at http://bloom.bg/v2UCRq ), I suggested that the Social Security System could be made financially stronger while giving Social Security beneficiaries more choices about how and when their benefits are distributed.

I indicated in last week’s blog that I would show the advantages of a strategy of staging the election of Social Security benefits.

Before doing that, it’s important to establish a principal not well understood – the monetary value of the right to receive income for the rest of your life from a trusted source such as Social Security, a pension plan, or insurance company. Just because this right may terminate at your death (which can be ameliorated with a surviving spouse or beneficiary option) doesn’t mean it has no value. As long you are of average health, that value can be calculated quite readily – and even if you are not of average health, there is still value.

For example, the value of a Social Security benefit of $2,000 per month for a male 66 in average health could be worth $400,000 or more. That’s the personal store of value referred to in my Op-ed piece. What are the implications of that number?

It’s large and can represent a significant part of your retirement savings.
You should have options on how best to utilize that $400,000 of value.
Delaying the election of benefits in whole or in part (under the reform proposal) can grow that value for future consumption.

Certain commentators described my Social Security reform proposal as overly complex. My responses are: (a) it’s a mistake not to provide the beneficiary more choices with so much at stake;(b) Social Security policymakers and administrators can determine how many choices they offer to individual beneficiaries; and (c) there’s a cottage industry today providing Social Security advice, and with this reform they’ll simply expand their tool set.

Jerry Golden
Your Retirement Advisor
www.GoldenRetirement.com

Retiree Choices Could Keep Social Security Afloat: Jerome Golden

December 14, 2011 By Jerry Golden in Interesting Articles, Social Security Tags: retirement, Social Security

In my Op-ed published on December 8 by Bloomberg News (at http://bloom.bg/v2UCRq) I suggested that the Social Security System could be made financially stronger while giving Social Security beneficiaries more choices about how and when their benefits are distributed.

Having already received questions about how this may be possible, this is the first of several blogs to provide more detail about elements of my reform proposal. Let me start with answering some of the critical questions.

Does my proposal represent a privatization of Social Security and turning over $12 to $15 trillion to Wall Street? Definitely not! It simply involves giving beneficiaries more options with their promised benefits. When the article refers to a personal retirement program, it’s not about a private investment account, but how you could customize your Social Security benefits to meet your personal circumstances.
Is the source of the projected savings the result of beneficiaries deferring the election of benefits until, say, age 75 and having Social Security recover their personal store of value at their death? Again, the answer is No, but requires a three-part answer:

While the headline writer changed the original headline above to “Cash in at Age 75 and Help Save Social Security”, there is nothing sinister about deferral. Under current Social Security rules, you can defer from age 66 to 70 and get a 40% increase in benefits. My proposal simply extends that concept.
The article states that any increase in the deferred payments reflects both interest and longevity credits. Thus deferred payments give you credit for the expected recovery to the System from deceased beneficiaries. To illustrate, deferral from age 70 to 75 might produce as much as a 70% increase in benefits.
While some few individuals will elect a 100% deferral, the more likely scenario under this reform is to stage retirement and coordinate the deferral with a savings drawdown and/or other income. A subsequent blog will show the advantages of such a strategy.

Will the future demographics of the country really help when the ratio of active workers to retired workers seems to be decreasing, creating greater pressure on the Social Security system? The answer is yes, but you need to look far enough into the future. While there’s a period with baby boomers retiring when that ratio is decreasing, that phenomenon eventually begins to reverse itself, in quite a dramatic fashion, according to US Census projections. This is particularly true using the Census Bureau’s “high immigration” scenario.

As I wrote to one individual with serious doubts about the proposal, I’m used to some initial skepticism, and I’ve always had confidence in the often predictable stages of any new idea:

*Ridicule
*Resist
*Embrace
*Self-evident

Hopefully, the information in this and future blog will help in beginning the path to the “self-evident” stage.

Jerry Golden

www.GoldenRetirement.com

Debt Deal and Market Downdraft Got You Worried?

August 11, 2011 By Jerry Golden in Interesting Articles Tags: Deb Deal, personal savings, retirement, retirement savings, U.S. Debt Deal

What you can do to protect your retirement savings.

With mind-numbing stories coming out about who won and who lost the debt deal debate, and whether the debt deal really solved anything or only pushed it to a super committee, individual investors are still bewildered, frustrated and nervous. Now, with the stock market falling and interest rates behaving in seemingly irrational ways, Americans are skeptical as to the right strategy to adopt today in planning for retirement.

Here are some smart moves that you and other investors can consider making right now that will save you money and perhaps help you sleep a little more peacefully.

Save taxes on additional savings –
Statistics show that investors are on average increasing their savings, and while economists see that as a negative for the economy, I view this as a positive. However, if the savings are invested in accounts, funds, etc. outside a 401(k) or IRA, everyone should be tax-smart with these savings. While we don’t know what any “tax reform” might bring, I suggest you consider investing a portion of your retirement savings in a no load variable annuity (VA). Not only will that enable you to defer taxes on investment earnings until these funds are withdrawn, it could also help result in a lower tax bracket for you. That might be particularly helpful if tax reform eliminates or caps some of your favorite deductions.

In terms of timing, with the value of these taxable accounts taking a beating these past few days, now may be the time to sell a portion of those securities with little or no gain, and have any market recovery take place in a tax-deferred account. Also, with the tax benefits of annuity-investing in otherwise taxable fixed income options, this new VA account could be invested more conservatively.

In general, the time to move up in tax class, e.g., regular IRA to Roth IRA, or taxable to tax deferred, is on a market downturn.

Lower Fees – While the government is
doing some belt-tightening, as are those who may be increasing their savings, why not ask financial service providers to do the same? That means you should:

Look for no load products;
Invest in low cost index funds; and
Find an advisor (if you use one) that charges asset-based fees of .50% or less.

These lower fees make any additional savings even more valuable. If the provider argues that you’ll get more value from their higher fees, then I would counter by stating that in this environment, the economy and the government moves or non-moves trump whatever the provider offers.

These are just two of my Seven Golden Rules intended to dramatically increase sustainable retirement income from Personal Retirement Savings.

You can find the Seven Golden Rules, and more about saving and investing for retirement, at www.GoldenRetirement.com.

Jerry Golden
President
Golden Retirement, LLC
www.GoldenRetirement.com