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.
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
Allgen Finnacial Services, Inc. just launched a program that will allow small and medium size businesses the ability to cost effectively establish a 401(k) using a fully integrated online system which will allow businesses to signing-up, administer, and monitor their retirement benefits with great ease.
How we work with our small business clients
Allgen Financial Services, Inc. provides superior investment solutions to 401k participants. As an independent Registered Investment Advisor (RIA), we implement 401(k) plans using low-cost mutual funds to build diversified portfolios. Along with
Nobel Laureates and leading academics, we believe the best way to grow your retirement investments is through a fully diversified global portfolio.
For 401(k) participants, we provide five model investment portfolios. This takes away the guesswork (and wasted time) by employees trying to pick individual mutual funds, and will help them have a better investment experience. Our five portfolios give a full array of choices, from aggressive to conservative - and everything in between. Importantly, because our portfolios are fully diversified (over 10,000 securities) in low-cost mutual funds, you avoid employee liability problems associated with a lack of diversification or high expenses.
Services and support you can expect
Allgen will help establish and customize an appropriate 401(k) plan for your business and will ensure that this is communicated properly to participants. Allgen will also provide ongoing plan review services and participant education.
How we get compensated for our services
It should come as a surprise that how your financial advisor is paid may determine the content of the advice you receive. Most financial advisors sell financial products. As such, they are paid commission by the Wall Street companies whose products they sell.
Allgen Financial Services, Inc. is a fee-based investment manager. We are paid by our clients for providing investment advice, not by Wall Street companies for selling their products. As an independent company we have no conflicts of interest, nor do we earn commissions on your transactions. There are no sales loads or commissions paid in Allgen’s 401(k) plans. Allgen is paid an asset management fee equal to a percentage of assets under management for the entire 401(k) plan.
For professional investment advice on this topic contact: Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com www.allgenfinancial.com
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