Kiplinger: Only You Can Prevent Portfolio Fires

By | Kiplinger

Know your comfort level when it comes to risk. If you’re feeling uneasy, there’s probably a good reason for it.

Everybody wants to make money, and nobody wants to lose it. Seems simple enough.

Unfortunately, there aren’t many financial vehicles that can offer that guarantee. Typically, to make enough money to live on in retirement, you must take some risks.

But if your financial professional is truly looking out for you, he’ll put as much focus on managing that risk as he does on helping you get the best returns.

Most planners will talk about risk tolerance and ask you questions about your age, your income, your net worth and when you hope to retire to determine your ability to handle market volatility. But there should be so much more to it than that. My firm has an acronym for our process – CAN: Capacity, Attitude, Need. You really can’t put together a workable financial plan without considering all three.  Click here for the full story.

How Much Money Do You Need To Retire?

By | Planning

How much money do you need to retire? That’s about as personal a question as, “What do you look for in a spouse?” or “What is your dream job?” The answer is different for everyone.

So are questions about when you want to retire, how you want to retire (suddenly or gradually) and where you want to retire. There are vast combinations of these and many other variables that serve to make the style and level of retirement different for every individual — even within the same household.

Americans are retiring at a rate of 10,000 per day, which means a lot of people need retirement planning advice.1Financial services firms like ours develop relationships with neighbors and friends in our local community to offer personalized guidance and advice on financial matters. If you’re pondering how much money you may need to retire, please come and see us. Not only can we help you with that assessment, we create financial strategies through the use of insurance and investment products to help you work toward your retirement goals.

Fidelity recently conducted a survey that yielded wildly divergent responses in terms of how much money people think they need to retire. For example, 25 percent think they will need to have saved two to three times their annual salary during their last year of full-time work, while many financial advisors say it’s more like 10 years’ worth of salary saved. Overall, 74 percent of Americans underestimate how much they will need for a comfortable retirement.2

It’s important to keep in mind that issues may arise even if you’ve saved an appropriate amount for your household by the time you retire. Some circumstances — such as the unexpected death of one spouse before the other — could expose the need to replace a lost source of income. This is a possible circumstance where buying a life insurance policy, even long after your children have grown up and are on their own, may still be a part of your overall financial strategy, depending on your personal circumstances. At a minimum, one of the two Social Security benefits the couple was receiving will stop when one spouse dies. A life insurance payout can help augment any lost Social Security or pension benefits to help a surviving spouse maintain his or her current standard of living throughout retirement.3

While some retirement factors are personal, others may be cultural in nature. The most current available data shows that in the U.S., the average white family has more than $130,000 in retirement savings while the average African American household has only $19,000. Over time, disparities in income and personal wealth have an even more dramatic impact: By the time they enter their 60s, whites have accumulated 11 times more in savings than African Americans — on average at least $1 million more in wealth.4

Unequal pay and career opportunities also may impact a woman’s ability to save enough for retirement. To complicate matters further, women tend to live longer. A couple estimating how much they need to retire may make the assumption that they’ll need, for example, 25 years of retirement income. The husband might pass away after 15 years while the wife lives another 15 years on her own. However, their income plan may not reflect a loss of income sources once the husband dies nor increased expenses the surviving wife may incur in her later years of life.5

If you’re interested in estimating about how much money you may need to save each year, try out an online retirement calculator, like this one provided by the U.S. Financial Industry Regulatory Authority (FINRA).6 You also can contact us to schedule a more in-depth retirement analysis.

 

 

Content prepared by Kara Stefan Communications

1 Insured Retirement Institute. 2016. “Boomer Expectations for Retirement 2016.” https://www.myirionline.org/docs/default-source/research/boomer-expectations-for-retirement-2016.pdf. Accessed April 28, 2017.
2 Lee Barney. Plan Sponsor. March 6, 2017. “Most People Think They Will Need a Paltry Amount for Retirement.” http://www.plansponsor.com/Most-People-Think-They-Will-Need-a-Paltry-Amount-for-Retirement/?fullstory=true. Accessed April 28, 2017.
3 Jamie Hopkins. Forbes. April 27, 2017. “Why Life Insurance Is Essential for Retirement Planning.” https://www.forbes.com/sites/jamiehopkins/2017/04/27/why-life-insurance-is-essential-for-retirement-planning/#78b4ee9f31cd. Accessed April 28, 2017.
4 Rodney Brooks. Chicago Defender. April 28, 2017. “The African American Retirement Planning Gap.” https://chicagodefender.com/2017/04/28/the-retirement-crisis-facing-african-americans/. Accessed April 28, 2017.
5 LeAnn Bjerken. Spokane Journal of Business. April 27, 2017. “Women face unique challenges in retirement planning.” https://www.spokanejournal.com/local-news/women-face-unique-challenges-in-retirement-planning/. Accessed April 28, 2017.
6 FINRA. 2017. “Retirement Calculator.” http://apps.finra.org/calcs/1/retirement. Accessed April 28, 2017.

Life insurance policies are contracts between your client and an insurance company. Life insurance product guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

Financial calculators are designed as informational tools to help you estimate answers to common financial questions. They are not intended to predict future returns or results, nor do they represent the performance of any specific investment or product.

This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Will Power be Restored to the Coal Industry?

By | Food for thought

In March, President Donald Trump signed executive orders to rescind several regulations that were in place to limit pollution from mining and burning coal.1 The administration’s goal is to revive the coal mining industry, but the downside is coal emissions release more greenhouse gases than natural gas.2

These recent actions serve as a reminder that nearly every sector, no matter how reliable it has been in the past, goes through cycles of uncertainty. The utilities sector, for example, has long been recognized as a steady provider of dividend payments and thus is a popular instrument for retirement income.3

Like any industry, it has its ups and downs, which can affect an investor’s returns and income stream. That’s why we believe it’s generally a good idea to remain diversified, even within a historically reliable sector, to help mitigate risk. As financial professionals, we’re here to help you analyze your personal financial situation and create strategies utilizing a variety of investment and insurance products that can help you work toward your financial goals. Please remember that investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

In 2016, natural gas (34 percent) surpassed coal (30 percent) as the country’s No. 1 source of energy for the first time in U.S. history. Nuclear power accounted for a 20 percent share of electricity generation. Renewable power sources, such as wind and solar power, are the fastest-growing power sources today, but they still represent only 8 percent.4

As for the future of coal, the CEO of the country’s third-largest coal mining company believes the industry will see most of its future gains not from policy changes, but from demand by China and South Korea. Last fall, these countries agreed to stop importing coal from North Korea, which was a boon for the U.S. industry.

The CEO for the U.S.’s largest public utility says his company closed many of its coal plants because it could produce energy at a lower cost with fewer facilities — not because of regulations. He also reiterated the company’s commitment to reducing carbon emissions by 60 percent by 2020. Having been raised near coal plants in Philadelphia, with coal cinders floating frequently through the air, he said he appreciates the great strides that have been made in clean air.6

While clean energy sources have a way to go before they become the more affordable choice, many experts believe that eventually will happen. When it does, it’s unlikely consumers or corporations would choose a more expensive option to fuel their electricity.

 

 

 

Content prepared by Kara Stefan Communications

1 CNBC. March 28, 2017. “Coal can be more profitable and efficient going forward, expert says.” http://www.cnbc.com/2017/03/28/coal-can-be-more-profitable-and-efficient-going-forward-expert-says.html. Accessed April 25, 2017.

2 Ryan Handy. Houston Chronicle. Jan. 16, 2017. “Natural gas surpasses coal as fuel for power production.” http://www.houstonchronicle.com/business/article/Natural-gas-surpasses-coal-as-fuel-for-power-10861176.php. Accessed April 25, 2017.

3 Kira Brecht. U.S. News & World Report. Feb. 5, 2016. “Generate Income and Play Defense With Utility Stocks.” http://money.usnews.com/investing/articles/2016-02-05/generate-income-and-play-defense-with-utility-stocks. Accessed April 25, 2017.

4 Ryan Handy. Houston Chronicle. Jan. 16, 2017. “Natural gas surpasses coal as fuel for power production.” http://www.houstonchronicle.com/business/article/Natural-gas-surpasses-coal-as-fuel-for-power-10861176.php. Accessed April 25, 2017.

5 Michael Bastasch. Daily Caller. 2017. “Mining CEO Expects A Record Year For Coal Exports.” http://dailycaller.com/2017/04/14/mining-ceo-expects-a-record-year-for-coal-exports/. Accessed April 25, 2017.

6 Jonathan Matisse. Knoxville News Sentinel. April 19, 2017. “TVA CEO: Coal plants not reopening under Trump.” http://www.knoxnews.com/story/money/business/2017/04/19/tva-ceo-coal-plants-not-reopening-under-trump/100641238/. Accessed April 25, 2017.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

AE05175059C

 

 

Can Longevity Truly Be Predicted?

By | Food for thought

Every morning, Emma Morano ate a raw egg and biscuits. When she died at age 117 in April of this year, she was the oldest person in the world. She lived in Verbania, a picturesque town situated on Lake Maggiore in northern Italy.1

Violet Brown, who was born in 1900 and lives in Jamaica, now holds the mantle as the world’s most senior senior.2 Like Morano, she resides in one of those beautiful locales that most of us only dream about. Could picturesque surroundings be a factor in longevity?

Surely happiness, time spent with good friends and family and a high quality of life can be factors. But no one really knows how long they’re going to live, which makes it particularly difficult to plan accurately for retirement income.

According to the Society of Actuaries, men who reach age 65 can expect to live to an average age of 86 and women to 88 — but those are just averages.2 In reality, some won’t make it to their predictive age and others will live longer. Which will you be?

As financial advisors, we understand the dilemma of planning for the unknown because it’s what we do every day. If we can help you develop a retirement plan, please contact us for a financial review. We can help you stay focused on your long-term goals and work with you to design a specific plan using a variety of insurance and investment products that help you work toward your desired financial future.

One tool to estimate your lifespan is the Actuaries Longevity Illustrator. Based on a few simple questions regarding health and demographic characteristics, it offers a series of percentages predicting your chances of living to various ages.3

If that’s too broad in nature, you might enjoy completing a more detailed questionnaire at the Biological-Age calculator. Based on how healthy a lifestyle you lead, this calculator knocks years off your current age for an estimate of how well your body is holding up.4

The Living to 100 Life Expectancy Calculator (livingto100.com), which was developed by Dr. Thomas Perls, of the New England Centenarian Study, asks 40 questions about health and family history to help estimate how long you may live based on researched medical and scientific data.5

If you’re concerned about getting older, here’s a bit of good news: People tend to get happier as they age. In a poll earlier this year, people age 70 and older said their quality of life has improved as they’ve aged.6 This could reflect the sentiment many people feel who either never enjoyed working or are simply happy to stop.

Either way, it’s probably more uplifting to stop thinking about the limitations of getting older, and reflect more on the advantages we can enjoy that were denied us at younger ages.

 

 

 

Content prepared by Kara Stefan Communications

1 Sean Rossman. USA Today. April 15, 2017. “World’s oldest person, last known to be born in 1800s dies.” https://www.usatoday.com/story/news/nation-now/2017/04/15/worlds-oldest-person-last-known-born-1800s-dies/100501238/. Accessed April 18, 2017.
2 Mark Miller. The New York Times. Feb. 18, 2017. “How to Make Your Money Last as Long as You Do.” https://www.nytimes.com/2017/02/18/your-money/retiring-longevity-planning-social-security.html?_r=0. Accessed April 18, 2017.
3 Society of Actuaries. 2017. “Actuaries Longevity Illustrator.” http://www.longevityillustrator.org/. Accessed April 18, 2017.
4 Biological Age. 2017. “Find Your Biological Age.” http://www.biological-age.com/#. Accessed April 18, 2017.
5 Dr. Thomas Perls. 2017. “Living to 100 Life Expectancy Calculator.” . Accessed April 18, 2017.
6 Matt Sedensky. The Detroit News. March 22, 2017. “Poll: As people move toward old age, optimism sets in.” http://www.detroitnews.com/story/life/wellness/2017/03/22/poll-old-age-optimism/99485000/. Accessed April 18, 2017.

This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Tax Reform: What’s On The Docket

By | Food for thought

From: AE Wealth Management

With a Republican president and the GOP controlling both houses of Congress, all the chess pieces are in place for meaningful tax reform. President Donald Trump and House Speaker Paul Ryan have each introduced proposals featuring reduced rates for individual and corporate taxes. While corporate tax reform enjoys broad bipartisan support, both sides of the aisle have grave concerns about how to pay for lower household income taxes.

Click here to read more…

The Power of Going Green

By | Planning

 Here’s a new twist to the renewable energy and save the planet story: The Kentucky Coal Mining Museum in Benham, Kentucky, has recently switched from coal to solar power to help save on operational costs.1

It just goes to show you that the power struggle over power may be better energized by not making it an “either/or” (traditional vs. renewable sources) conflict. Individuals might consider looking at their financial strategy in much the same way. For example, there are financial vehicles retirees traditionally use for income, such as government bonds, Treasury bills, CDs and money market accounts. But given the potential for higher inflation in the future and today’s longer lifespans, there is a greater call for incorporating growth opportunity in a retiree’s financial strategy.

This poses a challenging situation in that more growth potential generally involves more market risk. However, there are alternative options, such as insurance products, that can capture some of the gains of equity markets while protecting your principal from market losses, and we’d be happy to discuss them with you. Like the energy sources debate, a financial strategy may be best served by incorporating a combination of both traditional and alternative solutions.

While recent news for the coal-mining industry indicates a positive turn2, many experts believe that if the U.S. doesn’t continue to make substantial investments in renewable energy sources, we could fall behind in global competition.3 In fact, the global investment in renewable power in 2015 was more than twice that invested in new coal- and natural-gas-fired power generation. China alone represented 36 percent of that total investment.4

Speaking of global efforts, consider some of the ways other parts of the world are going green. For example, German households don’t just separate trash between garbage and recyclables; the average home has five different bins for dispersing paper, packaging, glass, compost and trash.5

And finally, studies in green trends have revealed positive effects on our health, particularly in the health of women. Research by Harvard Medical School found that women who lived among higher levels of green vegetation had lower rates of mortality. The study found that higher exposure to green landscapes was associated with lower levels of depression and increased levels of social engagement and physical activity.6

These factors may have a significant impact on longer lifespans. But it’s also interesting to note the vegetation correlation — plants have been found to remove pollutants, making them natural air filters.7 This may explain why women in the study who were continuously exposed to green environments were less likely to die of a respiratory disease.8 That’s one green benefit that can help you breathe easier.

 

 

 

Content prepared by Kara Stefan Communications.

1 Fox News. April 6, 2017. “Kentucky Coal Mining Museum Switches to Solar Power.” http://www.foxnews.com/us/2017/04/06/kentucky-coal-mining-museum-switches-to-solar-power.html. Accessed April 8, 2017.

2 John Kemp. Fortune. April 7, 2017. “Look for Coal and Mining Jobs to Come Back This Year” http://fortune.com/2017/04/07/coal-mining-jobs/. Accessed April 8, 2017.

3 Nick Stockton. Wired. March 16, 2017. “Clean Energy Could Spark a Trade War Between the US And China.” https://www.wired.com/2017/03/us-china-clean-energy/. Accessed April 8, 2017.

4 Jeff Nesbit. US News & World Report. March 15, 2017. “Clean Energy Is Seeing Monumental Job Growth.” https://www.usnews.com/news/at-the-edge/articles/2017-03-15/clean-energy-is-seeing-explosive-job-growth-dont-let-budget-kill-it. Accessed April 8, 2017.

5 Perfect Rubber Mulch. 2017. “Recycling Across the Globe.” https://static1.squarespace.com/static/5548ed90e4b0b0a763d0e704/t/58e69d90b8a79bf113147752/1491508625841/TheGlobe_by_GiuMagnani-2.jpg. Accessed April 8, 2017.

6 Elizabeth Pegg Frates, MD. Harvard Medical School. March 9, 2017. “Time Spent in ‘Green’ Places Linked With Longer Life in Women.” http://www.health.harvard.edu/blog/time-spent-green-places-linked-longer-life-women-2017030911152?utm_source=twitter&utm_medium=socialmedia&utm_campaign=030917&utm_content=blog. Accessed April 8, 2017.

7 Melanie Pinola. Life Hacker. May 20, 2015. “This Graphic Shows the Best Air-Cleaning Plants, According to NASA.” http://lifehacker.com/this-graphic-shows-the-best-air-cleaning-plants-accord-1705307836. Accessed April 13, 2017.

8 Elizabeth Pegg Frates, MD. Harvard Medical School. March 9, 2017. “Time Spent in ‘Green’ Places Linked With Longer Life in Women.” http://www.health.harvard.edu/blog/time-spent-green-places-linked-longer-life-women-2017030911152?utm_source=twitter&utm_medium=socialmedia&utm_campaign=030917&utm_content=blog. Accessed April 8, 2017.

 

 

Guarantees and protections provided by insurance products including annuities are backed by the financial strength and claims-paying ability of the issuing insurance carrier.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

AE04175044C

 

 

Best Laid Plans: What Can Derail Retirement?

By | Planning

From: AE Wealth Management

We often fall into a trap where we think we have all the bases covered. Take retirement planning, for example. You can plan for the lifestyle you want. You can plan for the income you need. You can even stash away extra funds for unexpected expenses retirees typically encounter. But can you truly plan for every variable?

There are many threats than can derail even the most solid retirement plan. Here are three of the most common:

1. Underestimating income needs

2. Withdrawing more money than you should

3. Overexposure to market risk

Should your retirement plan misfire on any of these fronts, you could outlive your savings.

Piecing together an accurate retirement plan is a little like putting together a puzzle without having the finished picture to refer to: You don’t know if you’ve got it right until you get to the end.

Too often, people don’t realize they missed a base until they’re rounding their way to home plate.

To Read More Click Here.

Shifting the Focus to Long-Term Goals

By | Planning

Donald Trump set out to make big changes the moment he entered the White House. While Congress may move a bit more slowly, it’s worth noting the difference in styles and substance. For example, presidential executive orders do have the power to roll back previously passed regulations, but in many cases, they merely signal intent with regard to administrative policy.1

In some ways, this is similar to the approach people take with their own financial matters. It’s easy to make grandiose plans about how much we’re going save, or how much our investments will earn. But just like the lawn that didn’t get mowed last Saturday, we sometimes renege on our own best intentions.

There are many variables to being financially confident. For example, how much can we reasonably expect to save/invest each month? Regardless of initial plans, everyone has moments of weakness where they make an impulse purchase, invest on a whim or are overly generous with a donation or gift to a family member.

Most of the time, working toward financial goals requires a certain degree of discipline, commitment, due diligence, negotiation and good old-fashioned patience. In other words, not much can be accomplished in just a couple months. Just like a newly installed president, we need to develop a strategy and lay the foundation for long-term goals.

To Trump’s credit, he has made some in-roads in the early days of his administration, including a rollback on actions taken by his predecessor. For example, there’s the Presidential Memorandum Regarding Withdrawal of the United States from the Trans-Pacific Partnership Negotiations and Agreement.2 Other actions have been perhaps a bit more ceremonial, such as naming March as the official month of women’s history, American Red Cross and Irish-American heritage.3

Other orders, in a rush to take immediate action, have failed to achieve the desired results, such as the immigration and travel bans.4

Congress has not been sitting idle either. In the first 60 days of the Trump administration, it has passed several resolutions — many of which are also designed to roll back those of the previous administration. This includes H.J. Resolution 42, an order that now permits states to drug test all jobless workers filing for unemployment insurance.5

Some of Congress’ actions have been ceremonial, such as the Vietnam War Veterans Recognition Act of 2017, passed to encourage display of the U.S. flag each year on National Vietnam War Veterans Day, March 29.6

Congress has had its share of failures as well, such as the American Health Care Act, which was pulled before it was even put up for a vote because of its lack of support from Republican party members.7

As these examples show, smaller issues generally are easier to address than larger ones. Likewise, we sometimes focus on minor financial goals so much that perhaps we don’t spend enough time and savings toward major ones — like retirement income. Just as the new presidential administration has learned, it takes practice and perseverance to work toward major goals.

 

 

Content prepared by Kara Stefan Communications

1 This Nation. 2017. “What is an Executive Order?” http://www.thisnation.com/question/040.html. Accessed March 31, 2017.

2 Donald J. Trump. White House. Jan. 23, 2017. “Presidential Memorandum Regarding Withdrawal of the United States from the Trans-Pacific Partnership Negotiations and Agreement.” https://www.whitehouse.gov/the-press-office/2017/01/23/presidential-memorandum-regarding-withdrawal-united-states-trans-pacific. Accessed March 31, 2017.

3 Donald J. Trump. White House. March 1, 2017. “President Donald J. Trump Proclaims March 2017 As Irish-American Heritage Month.” https://www.whitehouse.gov/the-press-office/2017/03/01/president-donald-j-trump-proclaims-march-2017-irish-american-heritage. Accessed March 31, 2017.

4 Donald J. Trump. White House. March 6, 2017. “Executive Order Protecting The Nation From Foreign Terrorist Entry Into The United States.” https://www.whitehouse.gov/the-press-office/2017/03/06/executive-order-protecting-nation-foreign-terrorist-entry-united-states. Accessed March 31, 2017.

5 Congress.gov. March 3, 2017. “H.J.Res.42 – Disapproving the rule submitted by the Department of Labor relating to drug testing of unemployment compensation applicants.” https://www.congress.gov/bill/115th-congress/house-joint-resolution/42/text. Accessed March 31, 2017.

6 Congress.gov. March 28, 2017. “S.305 – Vietnam War Veterans Recognition Act of 2017.” https://www.congress.gov/bill/115th-congress/senate-bill/305. Accessed March 31, 2017.

7 Congress.gov. March 3, 2017. “H.R.1628 – American Health Care Act of 2017.” https://www.congress.gov/bill/115th-congress/house-bill/1628?q=%7B%22search%22%3A%5B%22American+Health+Care+Act%22%5D%7D&r=2. Accessed March 31, 2017.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

AE04175048C

Are We “Shovel-Ready”?

By | Investments

A famous line of dialogue came from the 1989 film “Field of Dreams”: “If you build it, he will come.” Perhaps the quote endures because of its inherent irony — it’s not always true. In fact, during the Obama Administration, there was an unfortunate lesson best illustrated by paraphrasing this quote: “If you fund it, it will get built.” Unfortunately, even President Obama was forced to concede that the 2009 American Recovery and Reinvestment Act’s $69 billion funding for “shovel-ready” infrastructure improvements was ill conceived.1

The problem? With provisions requiring project funding to be committed within about a year and a half of passage of the bill, not enough attention was paid to the time-consuming myriad of bidding, design and approval processes that caused inevitable delays.2

That’s one thing about short-term planning: It seldom leads to long-term success. For example, if you need a new roof on your home, it may be better to invest in a high-quality roof replacement that will last the rest of your life. If you opt to pay for a cheaper “patch job,” you may end up having to replace the whole roof later. Big projects like that could cause stress on your retirement savings, especially toward the latter years of retirement. If you’d like help planning and budgeting for big and small expenses in retirement, please give us a call. 

According to President Trump’s latest bill, his promised U.S.-Mexico border wall is to be an integral part of America’s infrastructure. That’s because in March, the president called for immediate budget cuts of $18 billion from a variety of programs in order to put a down payment on construction of the border wall.3 Programs with proposed cuts in his budget include the Transportation Investment Generating Economic Recovery (TIGER) grant program, a popular infrastructure funding tool for cities and states.4

While that proposed budget has little chance of being passed in its current form, it may be worth pondering what the new administration considers to be viable infrastructure projects during its tenure. It has been reported that Trump is prioritizing “shovel-ready” projects to begin within 90 days of passing an infrastructure funding bill.5

Some investment analysts are excited about Trump’s infrastructure plans, many of which are slated to be privately funded. In fact, given the White House’s propensity toward deregulation, it may forge a path for more predictable, streamlined regulatory processes to facilitate expediting new projects.6

Trump’s team put together an infrastructure wish list early on in his budget proposal process. The inventory includes a vast array of interesting options, such as Project Clean Lake in Cleveland, an Atlantic coast pipeline for natural gas and a satellite-based next-gen air traffic control system.7

 

 

 

Content prepared by Kara Stefan Communications

1 Mark Niquette. Bloomberg. March 2, 2017. “Trump’s $1 Trillion Infrastructure Dream Faces the Same Old Nightmares.” https://www.bloomberg.com/news/articles/2017-03-02/trump-s-1-trillion-infrastructure-dream-faces-the-same-old-nightmares. Accessed March 28, 2017.

2 Ibid.

3 Andrew Taylor. Chicago Tribune. March 28, 2017. “White House calls for domestic cuts to finance border wall.” http://www.chicagotribune.com/news/nationworld/politics/ct-mexico-border-wall-cost-funding-20170328-story.html. Accessed March 28, 2017.

4 Melanie Zanona. The Hill. March 12, 2017. “Infrastructure grants could be on chopping block in Trump budget.” http://thehill.com/policy/transportation/323287-infrastructure-grants-could-be-on-chopping-block-in-trump-budget. Accessed March 28, 2017.

5 Maxwell Tani. Business Insider. March 25, 2017. “‘Seems like it’s going to be about his corporate cronies’: Environmental groups fret over Trump’s infrastructure plan.” http://www.businessinsider.com/environmental-impact-trumps-infrastructure-plan-2017-3. Accessed March 28, 2017.

6 Diana Britton. Wealth Management. Feb. 1, 2017. “Are We Entering the Golden Age of Infrastructure?” http://www.wealthmanagement.com/alternative-investments/are-we-entering-golden-age-infrastructure. Accessed March 28, 2017.

7 President-elect Trump. Dec. 14, 2016, “Emergency & National Security Projects.” https://assets.documentcloud.org/documents/3409546/Emergency-NatSec50Projects-121416-1-Reduced.pdf. Accessed March 28, 2017.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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The Fiduciary Standard: What It Means

By | Planning

Recently, the U.S. Department of Labor published the final regulation of what is known as the “Fiduciary Rule,” delaying implementation for 60 days from its scheduled start date. The newly expanded definition of fiduciary investment advice is scheduled to go into effect June 9, 2017.1

The rule holds certain financial professionals to a fiduciary standard that requires them to put their clients’ interests above their own. Starting in June, that rule will extend to any financial advice regarding retirement accounts, such as IRAs and 401(k) plans.2

The Fiduciary Rule is designed to deter certain types of financial professionals from making recommendations that benefit their own financial gain rather than providing individuals with the most appropriate advice for their situation. Financial professionals who aren’t required to adhere to the fiduciary standard are held to a suitability standard, which means that their recommendations must be suitable to their clients’ situations but aren’t necessarily in their best interest. A financial professional held to the fiduciary standard, on the other hand, is legally obligated to recommend products based on the best interest of his or her client. 3

However, note that even when the Fiduciary Rule is implemented, it will not apply to non-retirement accounts.4 That’s why it’s important to work with a financial adviser you trust to always look out for your best interest and who is held to a fiduciary standard.

Please note that there could still be further changes to the rule or further delays to its implementation. This is possible because back in February, President Trump issued a memorandum directing the DOL to examine the Fiduciary Rule and decide if it should be revised or withdrawn.5

 

 

 

Content prepared by Kara Stefan Communications

1 DrinkerBiddle. April 6, 2017. “Fiduciary Rule Delayed – But It’s Not Entirely What Was Expected.” http://www.drinkerbiddle.com/insights/publications/2017/04/fiduciary-rule-delayed?utm_source=Drinker_Communications&utm_medium=Email&utm_campaign=Fiduciary-Rule-Delayed. Accessed April 7, 2017.

2 Kathleen Elkins. Business Insider. April 6, 2016. “The Obama Administration’s New $12 Trillion-Dollar Rule Highlights a Major Misconception People Have About Financial Advice.” http://www.businessinsider.com/dol-fiduciary-rule-limited-to-retirement-accounts-2016-4. Accessed April 7, 2017.

3 Investopedia. April 18, 2017. “DOL Fiduciary Rule Explained as of April 18, 2017.” http://www.investopedia.com/updates/dol-fiduciary-rule/. Accessed April 20, 2017.

4 Ibid.

5 DrinkerBiddle. April 6, 2017. “Fiduciary Rule Delayed – But It’s Not Entirely What Was Expected.” http://www.drinkerbiddle.com/insights/publications/2017/04/fiduciary-rule-delayed?utm_source=Drinker_Communications&utm_medium=Email&utm_campaign=Fiduciary-Rule-Delayed. Accessed April 7, 2017.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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