This is us...last night

Your family is counting on you

For those who enjoy the show as much as my Wife and I should read this.  The worst thing that can happen to a young family is the loss of a parent.  That moment the doctor told Rebecca about her husband passing, I really hope that my Wife never has to go thru that.  While I know that she will be as strong as Rebecca was in the show for our daughter and soon to be second daughter I want to make sure she and my daughters will be financially secure

Please if you have a family with kids, you are not doing your family financial justice.  I know most have a small policy through their work but that probably doesn't even cover a funeral expense.  You need to meet with a Financial Professional  and go over your family's needs and make you have sufficient insurance for your family.  It does not cost as much as you think and your family is worth it.

Call me today and I will help you get protection you need.

Safeguard Financial Services

941-544-8546

813-495-8550

www.safeguardfinancialsvc.com

Top 4 Reasons To Save For Retirement Now

There are dozens of excuses that people use for not saving for retirement. And they all sound good. 

In fact, you probably have a few of your own. Rather than add fuel to the fire, in this article, we'll give you four reasons why you should save for retirement.

Excuses Vs. Reasons

Excuses are just justification for not doing what we know we should be doing or should have done. Therefore, you should save for retirement because:

     1. You don't want to rely on the welfare system to finance your retirement years.
     2. You won't to have to live with your children just because can't afford to live on your own.
     3. Saving in a tax-deferred account reduces your income taxes.
     4. Saving in a tax-deferred account produces a compound effect on your return-on-investments.

Sound good?

Then let's talk about these four reasons.

1. You don't want to rely on the welfare system to finance your retirement years.There's nothing wrong with relying on the country's welfare system for financial assistance if you have to. Many Americans have used it as a bridge to achieving their financial independence. And, it is your right to do so, especially when you have spent all of your working life paying into the system. The issue is, do you really want to be in the position where that is your only choice during your retirement years? How would that affect your retirement lifestyle? With the limitations that you would face with such limited financial resources, you run the risk of barely being able to afford the basic necessities. 

2. You won't to have to live with your children just because you can't afford to live on your own.If you have children, you probably wouldn't mind spending as much time with them as you possibly can. But - for the most part - you probably also want that to be at your discretion. Having to live with your children because you don't have the financial resources to live on your own isn't how most people want to spend their retirement years - regardless of whether your children feel you are a welcomed responsibility or a burden they simply cannot afford. Being financially dependent not only means depending on someone else to cover your living expenses, but it may also mean giving up your freedom and your independence! 

Apart from winning the lottery or getting a big inheritance, the key way to ensure that you do not fall into the categories above is to make sure that you save enough to cover your expenses during your retirement years.

The vehicles in which you can save are broad and varied, but they all fall into two key categories. Tax-deferred and non-tax deferred; we will call the latter "regular savings". While saving is generally a good thing to do, the compound effect of saving in a tax-deferred account cannot be overstated because it:

     1. reduces the amount of taxes you would owe on these amounts, 

     2. allows you defer (or even avoid) the taxes you owe on the earnings that accrue on your investments,

     3. produces the effect of earnings-on-earnings, resulting in a compound effect not available in regular savings accounts. 

3. Saving in a tax-deferred account reduces your income taxes.
If you make deductible contributions to a traditional IRA, it reduces the income that you have left because you must take funds from your savings in order to make that contribution. If you make salary deferral contributions to a 401(k) plan on a pre-tax basis, this reduces the amount of take-home pay you receive. However, the net effect is less than the amounts you contribute to these plans because the amount by which your income is reduces is less than the amount you contribute. 

Let's look at some examples:

Example 1

• - Adam earns $50,000 per year.
• - His income tax rate is 25%.
• - He gets paid on a weekly basis.
• - He contributes 10% of his salary to his 401(k) account each pay period.
• - Adam's weekly contributions to his 401(k) will be $96.
• - His paycheck would be reduced by only $72.

Example 2

• - Betty earns $100,000 per year.
• - Her income tax rate is 28%.
• - She gets paid on a weekly basis.
• - She contributes 10% of her salary to her 401(k) account each pay period.
• - Betty's weekly contributions to her 401(k) will be $192.
• - Her paycheck would be reduced by only $138.

Additionally, these contributions reduce the amount of income taxes you pay.

Let's look at an example:Assume you contribute $15,000 to your 401(k) account each year at a rate of return of 8%. Assume that your tax rate is 28% and you invest these contributions for a 20-year period. The estimated net results, compared with the effect of adding these amount to your regular savings accounts, would be as follows :

Number or Years = Retirement Age - Age [1]	20
Total Value if Taxed Annually [2]	$568,732.24
Total Tax-Deferred Value [3]	$741,343.82
Income Tax for 100% Surrender [4]	$123,576.27
Total Tax-Deferred Value After-Tax [5]	$617,767.55
[#5-#2] The Tax-Deferred Advantage [6]	$49,035.31

Calculator at www.72.net

By adding the amounts to your tax-deferred account instead of your regular savings account, you save $49,035.31 in taxes.

4. Saving in a tax-deferred account produces a compound effect on your return-on-investments.If you add your savings to a regular savings account, the earnings that accrue on those amounts are taxed in the year those amounts are earned. This reduces the amount you have available to reinvest by the amount of taxes you must pay of these amounts.

Let's look another example:
Assume you invest $50,000 and it accrues earnings at a rate of 8%. This produces earnings of $4,000. If your tax rate is 28%, that amounts to $1,120 that is paid to the tax authorities, leaving $52,880 to reinvest. We can also go back to the example in No.3, which not only shows that you would pay less taxes, but that the value of your investments after tax would be even greater as a result of the compound effect of tax-deferred growth:

• - Net $617,767.55 if you saved the amount in a tax-deferred account
• - Net $568,732.24 if you saved the amount in an after-tax account

These numbers are compelling and get even more so when the earnings period is longer and the amount saved greater.

ConclusionThe examples presented in this article demonstrate the compound effect of tax-deferred growth, which is the key selling point and attraction for IRAs and employer-sponsored plans. The results can be even more compelling if the savings vehicle is a Roth, where earnings can be tax free. As such, if you are eligible for a Roth IRA or work for an employer that offers Roth 401(k)/403(b), careful consideration must be given to determine which is more suitable for your financial profile. The bottom line is, regardless of which type of retirement account suits your profile, the compound effect of growth could be your ticket to a financially secure and independent retirement.

Contact us to get yourself started....NO MORE EXCUSES!

SafeGuard Investments, LLC

11204 Clayridge Dr

Tampa, FL 33635

941-544-8546

813-495-8550

www.safeguardinvestments.net

The Bottom Line - Part 7

Congratulations! You have finally reached the finish line. If you followed the steps in this tutorial, you should now have at least a reasonably clear idea of where you are financially, how your assets are working for you and what you should have available to you when you stop working.

If you're a couple, you will have talked through this plan with your spouse or partner. You will also have a good idea of what you need to do now to get from what you've learned to where you want to be. You may need to make many changes to reorganize and consolidate your financial life – or have learned that you're already well organized.

Either way, give yourself a pat on the back: The steps you have taken now have the potential to make a huge difference in your quality of life at retirement.

Neil Buono

SafeGuard Investments

11204 Clayridge Dr

Tampa, FL 33635

813-495-8550 office

813-441-6850 fax

941-544-8546 cell

www.safeguardinvestments.net

Plan the Future of Your Retirement - Part 6

You’ve come a long way since you started this tutorial. First, you had to find and itemize your assets. Next, you learned how to discover your investment objectives and compare them to your portfolio to see if they matched. Lastly we showed you how to effectively consolidate your assets in order to streamline your planning. Now we will take one final step forward and look into the future to see what changes need to be made.

Calculate Your Retirement Needs

If you analyzed your portfolio and discovered that it either didn’t fit your objectives or that some of your accounts or investments need to be replaced or upgraded, you need to do some research to find suitable replacements. More important, you need to take figure out how much money you think you will really need to for retirement. You can get a basic idea of this by making the following computations.

      1. Look at your current budget. Start with how much you spend now and estimate how that might change during retirement. Would you still go to the ballpark every other weekend? Would you still eat out as much? How much more will you have to pay for medical and dental care? Try to come up with at least a rough estimate of what you think your monthly budget will look like after you stop working.

      2. Project that budget into the future. Use a time-value-of-money calculator and project what that monthly budget amount will be in X number of years when you retire, assuming a given rate of inflation.

      3. Estimate how your savings will grow. Look at your investment portfolio and use the calculator to estimate what your savings will grow to by your retirement date and how long they will last at a given (most likely lower, due to a more conservative portfolio allocation) rate of growth and distribution.

      4. Include Social Security. Get your latest benefit statement from the SSA and be sure to put those numbers into your projection as well. 

Once again, a financial planner can be of assistance here. If all you need is limited advice, a fee-based financial advisor might be adequate. However, if you expect to be effecting some transactions, a full-service broker or planner may be a better idea.

If you're a couple, you obviously need to go through this whole process with both of your resources and look at how well they mesh together. You also need to review your individual time frames for retirement; one of you may be hoping to retire sooner than the other one.

In either situation, this could be a good time to do a comprehensive financial plan, especially if you feel there’s a good chance that your earnings and circumstances will stay relatively stable between now and retirement. Planners have sophisticated programs that can run a variety of hypothetical scenarios showing what will happen if things go the way you think they will – and what could happen if they don’t.

It’s wise to pay for a few different scenarios, including one that projects an outcome under dire economic conditions and one that shows how things would play out if you were to become disabled. If you’re a do-it-yourselfer, try www.futureadvisor.com. Running these numbers, either on your own or with professional assistance, will help reveal what you need to do between now and retirement in order to adequately provide for yourself and possibly your spouse.

Neil Buono

SafeGuard Investments

11204 Clayridge Dr

Tampa, FL 33635

813-495-8550 office

813-441-6850 fax

941-544-8546 cell

www.safeguardinvestments.net

Consolidate Your Retirement Accounts - Part 5

Now that you have evaluated your portfolio, you may wonder whether you really need to keep all of your accounts separate. In many cases, the answer is no, but there are a few things to take into consideration, such as taxation. If you have both Roth and traditional IRAs in various bank or brokerage accounts, you can simplify your life by combining all of each kind into two accounts. If you invested your IRAs in CDs (probably not a good idea unless you’re at least 60 years old), wait for each of them to mature before consolidating them. The following scenario shows when this can – and can’t – be done.

A Consolidation Scenario

Eric G. is 48 years old and works for a software publishing company as a computer programmer. He makes $200,000 a year and is maxing out his company’s Roth 401(k) plan, which is invested in a diversified aggressive portfolio of small cap, biotech, technology and healthcare funds. His employer also contributes to a nonqualified deferred compensation plan that is funded with an indexed universal life plan and will pay him $1,000 a month for life during retirement. Here are his other assets:

• $3,500 IRA at discount broker

• $4,500 IRA CD at his bank

• $2,500 Roth IRA CD at his bank

• $12,400 IRA variable annuity rollover at discount broker

• $0 balance traditional IRA

• $30,000 Roth IRA at full-service broker

• $50,000 nonqualified variable annuity

• $15,000 money market with full-service broker

• $40,000 of stocks and bonds with full-service broker

Obviously, Eric isn’t exactly hiding from the paperboy. But he probably could simplify his life somewhat by combining a few of his accounts. He could move the $2,500 Roth IRA CD at his bank into the Roth IRA with his broker. He could also move the small traditional IRAs he has at his bank and discount broker into his variable annuity IRA, or combine those three accounts into one in another way. But it will probably be easiest to move his other assets into the annuity contract, especially if he would have to pay back-end sales charges if he were to liquidate it.

However, he cannot combine his IRA annuity with his nonqualified annuity because it was funded with after-tax dollars and cannot be commingled with IRA money that was funded with deductible contributions. He will also leave his traditional IRA with the zero balance open because he uses that to fund a backdoor Roth IRA conversion strategy that allows him to make a nondeductible contribution to that account and then convert it to the Roth IRA he holds with his broker . Eric might also consider moving his retirement money into more moderate holdings, since he is able to max out his contributions each year and probably doesn’t need extreme growth in order to retire comfortably, especially since he’ll be getting another thousand dollars a month from his deferred compensation plan.

Use these same strategies to look at your resources and discuss whether any could be consolidated. Remember that IRAs and 401(k)s are individual, so if you are a couple you cannot consolidate them. You should, however, discuss how well they mesh with your retirement goals.

Neil Buono

SafeGuard Investments

11204 Clayridge Dr

Tampa, FL 33635

813-495-8550 office

813-441-6850 fax

941-544-8546 cell

www.safeguardinvestments.net

Evaluate the Performance of Your Investments - Part 4

Congratulations, you’re halfway done! Now that you know what you have along with some idea of how to accomplish your goals, it’s time to go over your portfolio to see whether it fits the investment objectives and risk tolerance that you identified. You also need to examine each of your investments and other assets to see whether each one is providing you with a competitive return relative to its peers.

You may want to hire a professional to help you analyze your holdings, in part because there are some tough things they can do fairly easily – such as mathematically quantify the volatility of your portfolio. From reading the previous chapter, you should have at least a general idea of whether your current portfolio fits your objectives. In order to give you an idea of how this works, let’s look at a hypothetical scenario.

A Performance Scenario

Wendy P. is 42 years old and works full time in marketing. She moved around from job to job in years past, but is making good money in her current position and plans to stay there for the foreseeable future.

Wendy has a moderate risk tolerance and plans to work until age 67 (25 years from now). She has accumulated the following assets since she graduated from college:

     • Whole life insurance policy: $100K face value; $11,000 cash value

     • 300 shares of Sprint, purchased for her as a college graduation gift and held in a retail brokerage account

     • $10,000 in her employer’s 401(k) plan with a 3% matching contribution (she contributes 7% of her $50,000 salary), invested in an aggressive growth fund

     • $20,000 IRA rollover at Merrill Lynch, invested in a utility stock fund

     • $15,000 contributory Roth IRA at her bank, invested in a growth-and-income fund

     • $10,000 in a money market fund

     • $40,000 of home equity, remaining balance on mortgage of $70,000, which will be paid off in 18 years

Wendy appears to be reasonably on track. Because of her age, her primary investment objective at this point should still be growth, and, for the most part, her portfolio seems to reflect that. She has an adequate emergency fund and her home equity is increasing, as it should be. The mutual funds in her retirement accounts seem to be weighted a bit conservatively at this point since they can grow for another 25 years, but if Wendy continues to contribute $3,500 annually to her aggressive growth fund with a matching contribution of $1,500, it will become her main holding in just a few years. In 25 years, it could be worth about $600,000 if it grows at an average annual rate of 10%.

Meanwhile, if her utility and growth-and-income funds grow at a rate of 6% over that time, they will be collectively worth about $150,000 by retirement. Her house should be paid off by then, and when she stops working, she may want to look at rolling over her retirement plan into a fixed or indexed annuity that can pay her a guaranteed stream of income for life. In fact, her growth fund may actually be housed inside an annuity contract inside her retirement plan now, but this may only reduce her returns over time, as variable annuities come with several layers of fees and expenses that will reduce her returns over time. If Wendy wants to really let her money grow, she would be wise to invest directly in a growth fund that is not part of a variable contract if that is available in her plan.

As noted in the introduction to this section, it’s also a good idea to examine each of your holdings separately. Wendy would be wise to get a fact sheet on each of her mutual funds from Morning star or another third-party analyst that can provide unbiased commentary on the fund’s performance as well as a breakdown of historical performance, fees and expenses and how the fund compares to its peers. She is wise to hold her stock outside of a retirement account so that she can get long-term capital gains treatment on the sale whenever she decides to liquidate it. If she reinvests the dividends now, that may be another source of income when she retires.

Of course, your risk tolerance and time horizon will likely differ from Wendy’s. If you were in her shoes, perhaps you wouldn’t feel comfortable having that much of your retirement money invested in an aggressive mutual fund and would choose more moderate alternatives. Just remember that you need to have at least the majority of your retirement money growing faster than inflation over time, so that your purchasing power is increasing. Wendy still has her moderate funds, plus her home equity and the cash value in her policy, to access in addition to her emergency fund (the money market account) if she needs to.

Neil Buono

SafeGuard Investments

11204 Clayridge Dr

Tampa, FL 33635

813-495-8550 office

813-441-6850 fax

941-544-8546 cell

www.safeguardinvestments.net

Determine Your Retirement Objectives & Goals - Part 3

Now that you know what you have and where everything is, you may think that it’s time to take action. But in order to do that, you need a plan, and that requires knowing what kind of investor you are. Finding this out starts with having a basic understanding of investment objectives and how you can use them. Even if you went through this exercise when you first started investing, now is a good time to review your strategy to see what, if anything, has changed and whether your plan needs an update.

3 Components to Consider

Here is a brief rundown of the three components that make up an investment objective: goals, risk tolerance and time horizon.

• Financial goals: These include saving – say, for retirement, your children's college or a car – paying off debt or buying a home. 

• Risk tolerance: How much risk you are willing to take to reach a financial goal? Are you willing, for example, to invest in something that could lose 20% of its value next year? If so, then you have a high risk tolerance. (Check out What Is Your Risk Tolerance? and Risk Tolerance Only Tells Half the Story to learn more.)

• Time horizon: This simply means the length of time it will take you to reach your goal – or at least try to prepare for it. If you are saving for retirement, for example, and plan to stop working in 20 years, then that is your time horizon. If you are a couple, realize that you may not have the exact same time frame in mind when it comes to retirement. Your plan need to look at both of you.

When you have defined what each of these is for yourself, your objective will become clear. Simply defined, an investment objective is the type of strategy that you use to accomplish a financial goal. There are four basic types of investment objectives: growth, income, capital preservation and tax reduction. 

Objective 1: Growth

Growth is appropriate for long-term and aggressive investors who can ride out the ups and downs of the stock market. Growth entails risking your principal because investments that produce large returns also can have large losses. This objective typically fits those who need to fulfill long-term goals, such as saving for retirement or paying for a child’s college education. Growth investments include common stocks, stock mutual funds and exchange traded funds (ETFs), and real estate and real estate investment trusts (REITs).

Objective 2: Income

As you might have guessed, income is for those who seek a regular payout from their investments. This objective may or may not have risk of principal depending upon the type of vehicle used. Preferred and utility stocks, corporate and municipal bonds, government agency securities such as Sallie Mae and Ginnie Mae, and senior secured loans pay higher rates of income with relative price stability. Guaranteed instruments include certificates of deposit (CDs), Treasury securities and savings bonds. Annuities can also provide guaranteed income with certain restrictions if income benefit riders are offered inside the contract.

Objective 3: Capital Preservation

Capital preservation means safety. CDs, Treasury securities and savings bonds do pay interest, but they are all backed by the full faith and credit of the U.S. government. Fixed and indexed annuities are backed by the cash reserves of the insurance carrier, which is in turn backed by state guaranty funds in the event the insurer becomes insolvent. This level of security comes ate a price: Such vehicles almost always pay much lower interest rates than growth or income investments.

Objective 4: Tax Reduction

Tax reduction is fairly self-explanatory. The goal is simply to minimize the income tax bill of whatever investment strategy you are using. If you are a growth investor saving for retirement, for example, you can achieve tax reduction by putting your retirement savings inside an individual retirement account (IRA) or other tax-deferred plan or account. Annuities also provide tax-deferral without having to be placed inside any type of tax-advantaged plan.

Applying It All to You

Now it’s time to see how this information applies to your situation. If you are somewhere in midlife, you could be retiring in 15 to 25 years. If that is the case, your primary investment objective should probably still be growth, as opposed to income or capital preservation. The further away from retirement you are, the more aggressive your portfolio should likely be.

Appropriate growth instruments can include stocks, real estate, REITs or mutual funds, or ETFs that invest in these things. If you follow this course, be prepared to experience some ups and downs in your investments, but generally, the more risk you take with your investments, the greater the reward you can reap from them. Whatever you do, make sure that the majority of your portfolio is growing faster than inflation over time. And keep in mind that your risk of loss in the markets goes way down when your time horizon is 10 years or more.

As you get nearer to retirement, you will need to start moving some of your holdings into more conservative instruments such as bonds or CDs. If you are a very conservative investor, then you might be wise to look at an annuity that provides guaranteed income benefits in addition to traditional safe investments such as CDs or Treasury securities. And be sure that your portfolio is sufficiently diversified, regardless of your risk tolerance or time horizon. Also, in your analysis, remember to include assets such as the cash value in your life insurance, your home and any pension benefits to which you are entitled. If, for example, you will receive $500 per month of benefits from a defined benefit plan that you are (or were) in, that reduces the amount of income that your portfolio will have to generate when you retire. And that means you can take slightly less risk with your investments, retire a bit sooner or live a little more comfortably.

If you are a couple, this is the stage to discuss whether your risk tolerance and financial goals are similar or whether you have different feelings about money. Any plans and objectives you make need to incorporate both of you.

If you are unsure about what your investment objectives should be, don’t hesitate to enlist the aid of a financial planner to help you. A professional can help you decide what type of strategy you need to pursue in order to achieve your goals – and may be able to assist you in putting your objectives into effect.

Neil Buono

SafeGuard Investments

11204 Clayridge Dr

Tampa, FL 33635

813-495-8550 office

813-441-6850 fax

941-544-8546 cell

www.safeguardinvestments.net