Allgen Financial Services, Inc. (www.allgenfinancial.com) serves individuals, families, and businesses in Winter Park, Florida. Despite the economic downturn in 2008, Allgen continues to grow. In 2009, Allgen plans to have a greater presence in Winter Park, Florida. “We are excited to continue serving the Winter Park community,” said James Zimbardi a Senior Partner at Allgen Financial Services, Inc.
The business community in Winter Park is especially on Allgen’s radar screen. “Businesses are looking for solutions on how they can reduce cost in this economy. Company benefits and retirement benefits like a 401(k) is a business cost executives and HR directors should consider evaluating. For this reason, Allgen Financial Services, Inc. provides a complementary audit to determine if costs can be reduced, while not sacrificing quality of service or investment options. In many cases, when going through the audit process, Allgen’s financial team has found opportunities to increase the quality of service while decreasing cost,” said Paul Roldan Senior Partner at Allgen Financial Services Inc.
Investment advisory services tend to play a more important role when investors are uncertain about market conditions. Since major institutions are making significant cuts and layoffs, a firm like Allgen is benefiting and demonstrating bigger is not necessarily better. More and more people are reaching out to Allgen because they have lost their advisor, or they are unsatisfied with the level of service they are receiving in these current market conditions.
Allgen specializes in retirement asset management for both individuals and businesses. It serves business owners, high-net-worth individuals, and individuals in career transition or planning for retirement.
Definition
A traditional IRA is a personal savings plan that offers tax benefits to encourage retirement savings. Contributions are either deductible or nondeductible. Regardless of whether your contributions are deductible, earnings in a traditional IRA grow tax deferred.
A Roth IRA is another type of personal retirement savings plan. All contributions to a Roth IRA are nondeductible. If certain conditions are met, withdrawals from a Roth IRA, including earnings, are tax free.
Traditional IRAs and Roth IRAs can be used to accumulate funds for college. The 10 percent penalty tax that normally applies to withdrawals from traditional and Roth IRAs before age 59½ does not apply if the money is used to pay the qualified education expenses of you, your spouse, or the children or grandchildren of you or your spouse.
Prerequisites
• You qualify to make contributions to a traditional IRA or Roth IRA
• You, your spouse, or the children or grandchildren of you or your spouse have qualified higher education expenses
Key Strengths
• Early withdrawal penalty is waived
• The federal government does not consider the value of your traditional IRA or Roth IRA in determining your child’s financial aid eligibility
Key Tradeoffs
• Your retirement nest egg is reduced
• Colleges may consider the value of your traditional IRA and Roth IRA before awarding their own financial aid
Variations from State to State
• States may vary in their tax treatment of traditional IRAs and Roth IRAs
• States vary in their protection of traditional IRAs and Roth IRAs from creditors
How Is It Implemented?
• Open a traditional IRA or Roth IRA with a bank, financial institution, mutual fund company, life insurance company, or stockbroker
• Select actual type of investment (e.g., certificate of deposit, mutual fund)
• Make contributions as desired up to the due date of your federal tax return for that year (usually April 15 of the following year) Article Written By: Forefield Inc.
Neither Forefield Inc. nor Forefield Advisor provides legal, taxation, or investment advice. All content provided by Forefield is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources.
For professional investment advice on this topic contact: Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com www.allgenfinancial.com
Tax-deferred annuities can be a valuable tool, particularly for retirement savings. However, they are not appropriate for everyone.
Five questions to consider
Think about each of the following questions. If you can answer yes to all of them, an annuity may be a good choice for you.
Are you making the maximum allowable pretax contribution to employer-sponsored retirement plans (a 401(k) or 403(b) plan through your employer, or a Keogh plan or SEP-IRA if you are self-employed), or to a deductible traditional IRA? These are tax-advantaged vehicles that should be fully utilized before you contribute to an annuity.
Are you making the maximum allowable contribution to a Roth IRA, Roth 401(k), or Roth 403(b), which provide additional tax benefits not available in a nonqualified annuity?
Will you need more retirement income than your current retirement plan(s) will provide? If you begin making the maximum allowable contributions to both a qualified plan and an IRA in your 30s or early 40s, you may have enough retirement income without an annuity.
Are you sure you won’t need the money until at least age 59½? Withdrawals from an annuity made before this age are usually subject to a 10 percent early withdrawal penalty tax on earnings levied by the IRS.
Will you take distributions from your annuity on an ongoing basis throughout your retirement? You typically have the option of making a lump-sum withdrawal from an annuity, but this is almost always a bad idea. If you do, you’ll have to pay taxes on all of the earnings that have built up over the years. If you take gradual distributions, you pay taxes a little at a time, allowing the rest of the money to continue growing tax deferred. In addition, if the annuity is nonqualified and you elect to receive an annuity payout, you will enjoy an exclusion allowance on each payment, in which a portion of each payment is considered a return of principal and is not taxable.
Article Written By: Forefield Inc.
Neither Forefield Inc. nor Forefield Advisor provides legal, taxation, or investment advice. All content provided by Forefield is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources.
For professional investment advice on this topic contact: Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com www.allgenfinancial.com
When you determine how much income you’ll need in retirement, you may base your projection on the type of lifestyle you plan to have and when you want to retire. However, as you grow closer to retirement, you may discover that your income won’t be enough to meet your needs. If you find yourself in this situation, you’ll need to adopt a plan to bridge this projected income gap.
Delay retirement: 65 is just a number
One way of dealing with a projected income shortfall is to stay in the workforce longer than you had planned. This will allow you to continue supporting yourself with a salary rather than dipping into your retirement savings. Depending on your income, this could also increase your Social Security retirement benefit. You’ll also be able to delay taking your Social Security benefit or distributions from retirement accounts.
At normal retirement age (which varies, depending on the year you were born), you will receive your full Social Security retirement benefit. You can elect to receive your Social Security retirement benefit as early as age 62, but if you begin receiving your benefit before your normal retirement age, your benefit will be reduced. Conversely, if you delay retirement, you can increase your Social Security benefit.
Remember, too, that income from a job may affect the amount of Social Security retirement benefit you receive if you are under normal retirement age. Your benefit will be reduced by $1 for every $2 you earn over a certain earnings limit ($13,560 in 2008, up from $12,960 in 2007). But once you reach normal retirement age, you can earn as much as you want without affecting your Social Security retirement benefit.
Another advantage of delaying retirement is that you can continue to build tax-deferred funds in your IRA or employer-sponsored retirement plan. Keep in mind, though, that you may be required to start taking minimum distributions from your qualified retirement plan or traditional IRA once you reach age 70½, if you want to avoid harsh penalties.
And if you’re covered by a pension plan at work, you could also consider retiring and then seeking employment elsewhere. This way you can receive a salary and your pension benefit at the same time. Some employers, to avoid losing talented employees this way, are beginning to offer “phased retirement” programs that allow you to receive all or part of your pension benefit while you’re still working. Make sure you understand your pension plan options.
Spend less, save more
You may be able to deal with an income shortfall by adjusting your spending habits. If you’re still years away from retirement, you may be able to get by with a few minor changes. However, if retirement is just around the corner, you may need to drastically change your spending and saving habits. Saving even a little money can really add up if you do it consistently and earn a reasonable rate of return. Make permanent changes to your spending habits and you’ll find that your savings will last even longer. Start by preparing a budget to see where your money is going. Here are some suggested ways to stretch your retirement dollars:
• Refinance your home mortgage if interest rates have dropped since you took the loan.
• Reduce your housing expenses by moving to a less expensive home or apartment.
• Sell one of your cars if you have two. When your remaining car needs to be replaced, consider buying a used one.
• Access the equity in your home. Use the proceeds from a second mortgage or home equity line of credit to pay off higher-interest-rate debts.
• Transfer credit card balances from higher-interest cards to a low- or no-interest card, and then cancel the old accounts.
• Ask about insurance discounts and review your insurance needs (e.g., your need for life insurance may have lessened).
• Reduce discretionary expenses such as lunches and dinners out.
Earmark the money you save for retirement and invest it immediately. If you can take advantage of an IRA, 401(k), or other tax-deferred retirement plan, you should do so. Funds invested in a tax-deferred account will generally grow more rapidly than funds invested in a non-tax-deferred account. Reallocate your assets: consider investing more aggressively
Some people make the mistake of investing too conservatively to achieve their retirement goals. That’s not surprising, because as you take on more risk, your potential for loss grows as well. But greater risk also generally entails greater reward. And with life expectancies rising and people retiring earlier, retirement funds need to last a long time.
That’s why if you are facing a projected income shortfall, you should consider shifting some of your assets to investments that have the potential to substantially outpace inflation. The amount of investment dollars you should keep in growth-oriented investments depends on your time horizon (how long you have to save) and your tolerance for risk. In general, the longer you have until retirement, the more aggressive you can afford to be. Still, if you are at or near retirement, you may want to keep some of your funds in growth-oriented investments, even if you decide to keep the bulk of your funds in more conservative, fixed-income investments. Get advice from a financial professional if you need help deciding how your assets should be allocated.
And remember, no matter how you decide to allocate your money, rebalance your portfolio now and again. Your needs will change over time, and so should your investment strategy.
Accept reality: lower your standard of living
If your projected income shortfall is severe enough or if you’re already close to retirement, you may realize that no matter what measures you take, you will not be able to afford the retirement lifestyle you’ve dreamed of. In other words, you will have to lower your expectations and accept a lower standard of living.
Fortunately, this may be easier to do than when you were younger. Although some expenses, like health care, generally increase in retirement, other expenses, like housing costs and automobile expenses, tend to decrease. And it’s likely that your days of paying college bills and growing-family expenses are over.
Once you are within a few years of retirement, you can prepare a realistic budget that will help you manage your money in retirement. Think long term: Retirees frequently get into budget trouble in the early years of retirement, when they are adjusting to their new lifestyles. Remember that when you are retired, every day is Saturday, so it’s easy to start overspending.
Article Written By: Forefield Inc.
Neither Forefield Inc. nor Forefield Advisor provides legal, taxation, or investment advice. All content provided by Forefield is protected by copyright. Forefield claims no liability for any modifications to its content and/or information provided by other sources.
For professional investment advice on this topic contact: Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com www.allgenfinancial.com
The recent economic downturn has created real challenges with respect to financial goals, specifically retirement goals. As many have witnessed a severe decrease of their portfolio values, the issue as to the ability to retire when expected or planned is being challenged. The truth of the matter is that there are four main components of the retirement decision:
1) How much will I need or desire?
2) When do I want to retire?
3) How much have I already accumulated
These three components work together regarding the reality of obtaining retirement goals; if one is affected or changed, the other two are impacted as well. In our current situation, the third (how much have I accumulated) has changed for many investors (for the most part decreased). This being the case, there are basically four decisions that now many Americans face, and those are to either:
1) Retire later
2) Live on less in retirement
3) Save more for retirement
4) Pursue more aggressive returns
The nature of how these are chosen obviously depends on each individual situation as personal risk tolerance, time horizons and cash flow situations will vary. However, it is prudent to take a serious look at the above mentioned variables in the quest for retirement as severe changes in a portfolio value obviously create the need for intense analysis and redesign of any previous investment strategies. Many investors, weather it be those participating in 401Ks, IRAs or other investment vehicles, tend to drive investment decisions based on fear during times of extreme market volatility. This may lead to anything from selling out completely and staying in cash for too long or deciding to not even look at what is going on with their money. The last thing one should be doing is hiding the statement in hopes that the portfolio will eventually come back. For while this may be true, one should not leave one’s financial future to the strategy of “Hope.”
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