Posts Taged 401k

Figuring Out a 401(k) Strategy That Works for You

Matching your tolerance for risk with your investment objectives


Everyone wants a comfortable retirement, but the road you take there will depend on your specific situation. When you invest, you assume a certain level of risk (but like everyone you’re hoping that your holdings will increase in value).

One of the most challenging aspects of investing involves matching your tolerance for risk with your investment objectives.

Beyond Your 401(k)

Have you taken the time to really project the amount of money you may need in retirement? While setting aside a percentage of your income in a 401(k) is an important step, chances are you will need more than current limitations may allow you to save. Most people supplement their employer-sponsored retirement benefits and Social Security income with personal investments. In order to develop a fitting plan, you need to have your goals in sight.

In 2022, your elective deferral (contribution) limit for your 401(k) is $20,500. If you’re age 50 or older, you may save an additional $6,500. While the contribution often rises in upcoming years and your employer may match contributions above this limit, will your employer-sponsored plan allow you to save enough? Cast your net as far as possible—can you contribute to your 401(k) and afford to invest in other opportunities? Increasing your savings rate now may help you later.

Asset Allocation and Diversification

Are you an aggressive, moderate, or conservative investor? Your answer probably depends in large part on your stage in life and your financial resources, and will most likely change over time.

Aggressive investors tend to have a longer time frame—as many as 35 years or more to save and invest until they reach retirement—and a greater capacity to withstand loss. For example (the following percentages will vary greatly by investor and their definition of the terms aggressive and conservative investments), stocks may account for 85% of a relatively aggressive portfolio compared to 40% for a more conservative portfolio. As investors near retirement, their asset allocation strategies generally change to account for lower risk tolerance and an emphasis on income over growth.

With a 401(k), you become responsible for managing your portfolio, not your employer. While one aspect of a retirement savings plan is investing for the long term, it is still important to stay involved and make adjustments as needed. Choosing to be an active money manager rather than a passive investor can help you maintain the appropriate allocation strategies and pursue your long-term goals.

Remember that it may be important to diversify within asset categories. For example, spread your equity investments among large-cap, mid-cap, and small-cap stocks, as well as vary your fixed-income investments with different types of bonds and cash holdings. The diversification strategy you choose for your 401(k) should complement your strategies for investments outside of your retirement plan.

Tax Considerations

Because retirement plans offer tax benefits, they carry certain restrictions, such as when withdrawals can be made without penalty. While funds in a 401(k) are made with pre-tax dollars and have the potential for tax-deferred growth, withdrawals made before the age of 59½ may be subject to a 10% Federal income tax penalty, in addition to the ordinary income tax that will be due.

Some 401(k) plans are featuring the Roth 401(k) too. If your employer offers this option, you may be able to designate all or part of your elective salary deferrals to a Roth account. Although contributions are made with after-tax dollars, earnings and distributions are tax free, provided you have held the account for five years and are at least 59½ years old when you access funds.

If you’re looking to save specifically for retirement, in addition to your 401(k), consider a Roth IRA, which allows earnings to grow tax free. While contributions are made with after-tax dollars, your withdrawals will be tax free provided you are older than age 59½ and have owned the account for five years. Early withdrawals may be subject to a 10% Federal income tax penalty, unless you qualify for an exemption. Certain income limits apply.

Taking advantage of the tax benefits retirement arrangements offer is a valuable strategy, but also consider building more liquidity and flexibility into your overall savings and investment plan. In the event you need access to funds before retirement, have a contingency plan such as an emergency cash reserve and relatively liquid investments. However, keep in mind how accessing savings in the short term will affect your long-term goals.

As you look toward retirement, consider increasing your overall savings rate, maintaining appropriate asset allocation and diversification strategies, and planning for taxes. Over time, your investments will inevitably be affected by legislative reform and market swings, but with a long-term outlook and continued involvement you are better positioned to manage the fluctuations and changes to work towards your objectives.

Investment returns and principal values will change due to market conditions and, as a result, when shares are redeemed, they may be worth more or less than their original cost. Past performance is no guarantee of future results.



Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
Asset allocation does not ensure a profit or protect against a loss.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
This article was prepared by AdviceIQ.
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What is the Difference Between an Account Rollover and a Transfer?

An important financial planning activity is reviewing your financial plan to ensure that everything is on track to help you meet your financial goals. Life changes, market shifts, and any number of factors can cause plans to change.

One common change that investors make during their financial journeys is to move funds from one retirement account to another. Whether this move occurs for tax purposes, because of a change in employment, or for another reason, it’s important to consider how this change will be made: as a rollover or transfer.

Of course, if your situation involves moving retirement accounts from your former employer, you have a variety of options from which to choose. These include:

  • Leave the money in your former employer’s plan, if permitted
  • Roll over the assets to your new employer’s plan, if one is available and rollovers are permitted
  • Roll over to an IRA
  • Cash out the account value


Because of this, it’s important to understand the differences between transfers and rollovers, as well as the benefits and drawbacks of each. Today we’re going to explore these options to help you get a better understanding of how a rollover or transfer could impact your financial planning activities.

What is a Transfer?

A transfer involves transferring funds from one account to another. Generally, transfers move from one account of the same type to another, such as moving funds from a 401(k) plan at a previous employer to a 401(k) plan offered by your current employer.

More commonly, transfers are used to move funds from one IRA to another, since you can move funds between accounts without incurring a tax penalty. However, if you need to move funds from a Traditional IRA to a Roth IRA, you must perform a Roth conversion, and make the necessary adjustments when you file.


What is a Rollover?

A rollover occurs when you move funds from one type of account to another, such as from a 401(k) to an IRA, either directly or indirectly. During a direct rollover, funds move straight from Account A to Account B. During an indirect rollover, you take possession of funds for a period of time before putting them into the second account.

There are limits to the way that you conduct rollovers, especially indirect rollovers, and it’s important that you work with a financial professional to help you understand how your funds will move and how to make those moves without incurring tax penalties.


How to Choose between a Transfer and a Rollover

Sometimes, the account types or the transfer initiator will determine whether your account transition takes place as a transfer or a rollover. In these instances, your financial advisor or another party will inform you of how the move will operate.

When you have the option to choose between transfer or rollover, it’s important to consider the account types that you’re working with and the potential tax implications of each option. While there may not be direct penalties associated with transfers or rollovers, long-term impacts might make one a more favorable option than the other.

As always, when it comes to challenging financial questions, it’s a good idea to discuss the matter with your financial advisor for a personal recommendation that meets your unique needs. To learn more about financial planning, contact Puckett & Sturgill Financial Group today for a consultation!



    Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation. 

    Ask an Advisor – Nonqualified deferred compensation

    Different parts of the retirement planning equation have different benefits and are better suited to some individuals than others. To understand which parts are more ideal for your planning, it’s important to understand how different plans work.

    Today, we’re going to talk to advisor Paul Sorenson about nonqualified deferred compensation (NQDC) plans. He’ll tell us some of the important items to consider when looking at NQDC plans and how they might fit into an existing retirement plan.

    What are NQDC plans?

    Nonqualified deferred compensation plans (NQDC) are offered by employers to employees to set aside tax-deferred compensation to be paid out at a later date. For employees who maximize contributions to their current employer-sponsored retirement plans like a 401(k) or 403(b) an NQDC represents an opportunity to save more for a future goal or retirement in a tax-deferred manner. Not all employees have the chance to participate in an NQDC plan but if you have the opportunity, it may be worth looking into this benefit a look to see if it might have a place as a part of your financial plan.

    Unlike other qualified employer-sponsored plans, such as a 401(k) or 403 (b), NQDC plans usually allow you to defer receiving a portion of your compensation over and above what is allowed into a qualified plan. When you elect to participate, you choose how much to defer to the plan and your employer then segregates the chosen potion of your salary into a trust which is invested on your behalf. Since the compensation is not paid to the employee currently it is not taxed until some future date when it is actually paid out to the employee. 

    There are many reasons employers offer NQDC plans but among the most common are their ability to help retain and attract talented employees as well as helping high-earning employees save enough of their current compensation to meet future needs. Typically high-earning employees are unable to save enough in a pre-tax 401k or 403b account to meet their retirement goals in full.

    NQDC participation: Some important items to consider

    NQDC plans can vary widely depending on what your employer offers but here are general items to think about:

    1. Do I currently contribute the maximum to my current employer-sponsored qualified plan such as a 403(b) or 401k? If you do not maximize contributions to your qualified accounts, you may want to consider this option first, since these plans are tax-deferred and protected under the Employee Retirement Income Security Act (ERISA).
    2. Do I believe my employer is financially secure? Should your employer fall into bankruptcy, the funds in NQDC plans might be accessible to the organization’s creditors which could mean your deferred compensation might not be paid.
    3. Can I afford to set aside a portion of my compensation knowing that I won’t be able to access it until a date in the future? NQDC plans do not have loan provisions like other employer-sponsored plans, so accessing the compensation which has been set aside is not an option prior to the distribution date that has been set.
    4. How does participation in an NQDC plan fit with the rest of my financial plan? Every NQDC plan is different so it is important to understand the distribution options, investment options, vesting options and service requirements available to you and along with the risks. Once you understand these risks these details the NQDC should become a part of your full financial plan. 

    Every NQDC plan is different and it is important to understand the details and risks of your employer’s plan before choosing to participate. For many, NQDC plans present a possible option to ramp up their savings for the future, but for others investing in accounts outside of their place of employment or combining multiple savings vehicles might be a better option.

    No matter what you decide, working with a financial professional, like a CERTIFIED FINANCIAL PLANNER™ professional, who can help you understand the options and set a strategy to pursue your needs, wants and wishes for today and well into the future is a good place to start.

    If you are trying to understand how an NQDC plan might fit into your financial picture or are just ready to get started with a well thought out financial plan, contact Paul Sorenson at Puckett & Sturgill Financial group today!

      This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. 

      Ask an Advisor: What Do I Do With My 401k?


      Paul Sorenson: 00:09

      Hi, welcome to the Puckett and Sturgill Ask An Advisor segment. We’re glad you joined us. I’m Paul Sorenson, financial planner with Puckett and Sturgill Financial Group. I’m here today with David Hemler, certified financial planner professional. David, we’re here to ask today, and discuss, I have a 401k plan. This is one of the questions we get almost every day. I have a 401k plan. What do I do with my 401k plan? Can you help me?

      David Hemler: 00:33

      That’s a great question, and yes, we can help you. The first thing is to define, are we talking about a former employer plan or a current employer plan? For the former employer plan, you have four options there. Those options are to leave it with the current custodian. To withdrawal it, which is called a distribution. To roll it into your current employer, if that current employer plan offers roll ins, and many do. Or, move it to an IRA. That’s the four options with a former employer plan. With your current plan, the key ingredients for you to understand are what is the matching program so that you can fully gain access to 100% of the match that’s available to you. If there’s a match available, not every 401k has to offer you a match, so that’s an important piece of the summary plan description, which governs that, that you want to understand. And we can help you to discern through that, to get those types of answers on behalf of your plan. Getting 100% of the match, and also understanding your allocation and how it aligns to your risk acceptance and your time horizon for the goals that you have for those retirement assets.

      Paul: 01:46

      Great, great. I think that answers a lot of it. For a former plan, we’re looking at keeping it where it’s at, rolling it into another 401k plan, potentially diversifying it into an IRA. Those are all great options. I think that’s …

      David: 02:02

      A lot of complexity there too, so our best advice would be to talk to a professional advisor. Get some guidance before you make a final decision on an old employer plan.

      Paul: 02:12

      Great. That’s really helpful, David. Thank you so much. We look forward to hearing from you, should you have any additional questions, and please feel free to submit additional questions to us online.

      It’s Your Turn to Ask

        Leaving Your Employer? Here are Some Options for Transitioning Your 401(k)

        If the end of the year brings some big changes, like a promotion or new job, you might have some financial homework to do before you make the change. When you leave one employer for another (or to go into business for yourself), you have options for transitioning your 401(k). After all, the investment is the result of your savings over the time you spent with your employer.

        Here are some options available to you when transitioning your 401(k):

        Option 1: Keep Your 401(k) Where it Is

        In some situations, you may be able to simply leave your 401(k) where it is. Depending on your employer’s policy or specific plan, you may be able to leave your 401(k) indefinitely.

        However, this may not be ideal. If you find yourself moving to a new company every few years or so, it could become confusing to leave 401(k)s behind you at every former employer. Additionally, you may find it better to utilize the money for other investment purposes, rather than leaving it sit where you have it.

        Option 2: Rollover Your 401(k) to an IRA

        A popular choice for handling an old 401(k) is to roll it over into an IRA. This option allows you new opportunities for investment and provides tax incentives that protect your funds.

        If you have multiple 401(k)s that you need to consolidate, rolling them into an IRA could be ideal for your situation. You can open one account and dump all of your old 401(k)s into it, bringing some welcome simplification to your retirement savings.

        Option 3: Move Your 401(k) to a New 401(k)

        You may have the option to move your old 401(k) into a 401(k) offered by your next employer. In this case, you gain the benefit of keeping your funds in a single account, rather than juggling two (or more).

        If your new employer has awesome 401(k) benefits, you may find it advantageous to move your old 401(k) into your new one. Additionally, you can make this switch without taking a tax hit, making it a potentially appealing option for consolidation.

        Option 4: Cash in Your 401(k)

        There is, of course, the option to cash in on your old 401(k). This isn’t typically a popular route, since there are significant fees associated with cashing in early on a 401(k) — even one from a previous employer.

        In some cases, though, the benefits of cashing in outweigh the negatives. Only you and your financial advisor can know for certain whether this option is best for your 401(k).

        Deciding how to Handle an Old 401(k)

        When you’re handling your retirement accounts, it’s important to view each investment as part of the bigger financial picture. The actions you take today can have impacts that last well into your retirement years.

        If you want to learn more about using 401(k)s as part of your retirement plan, contact Jake Sturgill today to schedule a consultation!

          This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

          How to Check on your 401(k) — And Why You Might Want To

          Investing would be pretty easy if you could invest once and trust that your investment would perform exactly how you wanted it to. Of course, that’s not how investing actually works!

          Over time, it’s important to check in on your investments and monitor their performance. This is all part of preparing for your financial future. If you neglect an investment for any length of time, you might find that it hasn’t performed the way you’d planned and it could set you behind.

          Here’s how to check on your 401(k) — and why you might want to do so sooner rather than later.

          Locating Old 401(k)s

          Throughout your career, you may have participated in multiple 401(k)s through your various employers. If it’s been a while since you’ve checked in on one or more old 401(k)s, you need to contact your former employer(s) to get information regarding your investment. After all, it’s your money!

          Once you locate a 401(k) from a past employer, you will likely have four options and may engage in a combination of these options

          • Leave the money in your former employer’s plan, if permitted
          • Roll over the assets to your new employer’s plan, if one is available and rollovers are permitted
          • Roll over to an IRA
          • Cash out the account value

          Your financial advisor can help you to understand the advantages and disadvantages of each option.

          It may not take more than a few quick calls to HR and various investment companies to locate your old accounts. But there’s the possibility that the investment company that your employer used has since been purchased or had another change of identity and requires a bit of a deeper dive to find your important info. In this case, you may be able to contact former colleagues to learn where to look or you can consult a national registry to locate your specific 401(k). Your financial advisor may have some advice in navigating this search. Additionally, your financial advisor can help you consolidate old plans so to facilitate managing them in the future.

          Balancing Your 401(k)

          Your 401(k) is likely comprised of mutual funds. Your 401(k) statement should have a breakdown of your investments and the returns from each.

          Over the life of your 401(k), you may determine that one or more investment types aren’t the best option for reaching your financial goals. If this happens, you’ll want to rebalance your 401(k) investments to reflect a blend that more accurately captures your risk acceptance and investment objective. Making rebalancing decisions can have a substantial impact on long-term performance both positively and negatively.  It is very important to seek professional advice before making these types of financial decisions. 

          In addition to balancing the investment portion of your 401(k), it is also wise to examine the tax choices offered in your employer sponsored plan.  Many 401(k) plans today will offer employees the option of choosing between Traditional or Roth contributions. Your selection between these two options will determine the current taxation of your contributions and the taxation of the income you draw from the plan in retirement.  The difference to your retirement income stream can be huge, so don’t take this decision lightly and get professional help.

          Why Check on Your 401(k)?

          It is easy to get caught up in life and lose track of what’s happening with your 401(k).  For many of us, our 401(k) will likely be the largest asset available to create retirement income, yet despite the importance, it can be out of sight and out of mind.  If you aren’t managing and maintaining this asset with care, then you might be missing opportunities or falling behind your goals.

          Sitting back and letting your 401(k) — or any investment for that matter — take on a life of its own isn’t a solid investment strategy. Staying engaged with a financial advisor is one way to avoid falling into the trap of complacency. 

          If you’d like to learn more about understanding your 401(k)s or balancing your retirement portfolio, contact Puckett & Sturgill Financial Group for a consultation!

            Ready for Retirement? Assess Your Retirement Readiness with this Handy Checklist

            As you look forward to your retirement — whether it’s two years or two decades down the line — you’re probably considering how you can prepare yourself financially to enjoy each moment of your retirement days. After all, you’re working hard for that big break!

            Many investors prepare for retirement by considering questions like: “How much money do I need per week?” and “How long will my retirement last?

            These questions are important, but they don’t tell the whole story. For example, you might be able to pay your bills on a certain figure and save toward that target. However, if you haven’t budgeted for tee time, you’re never going to be able to recognize your dream of being the best golfer in your retirement community. 

            In addition to crunching the numbers, take some time to run through this retirement checklist to see whether you’re heading in the right direction with your retirement planning.


            Who do you spend the most time with in a day? Your family? Friends? Colleagues? A volunteer network?

            Now, think about who you’ll be spending your time with during retirement. Does the lineup change or stay pretty consistent?

            Also consider who will be part of your health and wellness team. Are you going to maintain strong relationships with family members who will be able to assist you when needed? And are you planning to participate in the care of another family member or close friend?

            Your social network is as important in retirement as it is now. Look at ways that you can strengthen relationships and prepare for longevity in your family and social connections.


            Visualize your first day of retirement. What are you going to wake up and do? Cook an impressive breakfast spread? Spend time with your grandchildren? Read a book?

            The activities you do today might influence the activities that you’ll pursue in retirement. After all, you’re still going to be the same person. That being said, you will have more time to pursue various interests in your retirement years. Which ones will you choose?

            More importantly, how can you make changes today to help you live a vibrant retirement lifestyle that’s fulfilling and rewarding? Should you set aside funds for future travels? Are you interested in a hobby that you can get started with to some degree even now? Look into opportunities to invest time or assets in thoughtful ways for your future enjoyment.


            To some extent, you’ve probably already considered the question of when you’ll retire. If you haven’t, it’s important to get a firm idea of what age you’d like to retire at and start taking steps to achieve that goal.

            Your retirement age and the number of years that you think you’ll be in retirement are some of the biggest factors in determining the magic number for your total retirement income need. 

            Of course, age need not be the only factor in deciding a retirement year. Perhaps your asset level is a more pressing factor. If this is the case, simply adjust your retirement age to coordinate with the year when you anticipate that you’ll achieve the asset level at which you’ll feel prepared for retirement.


            Planning your retirement “where” involves two parts: the location to which you wish to retire and the home that you’ll live in while you’re there.

            Deciding on your retirement location can be tricky. Do you want to live close to family or in a destination you and your spouse have always dreamed about? Do you prefer an urban or rural environment? How about proximity to your favorite hiking trails or conservatory? Each investor will have a unique, very personal response to these questions.

            Of course, budget should factor into your retirement location, as well. Some locales are inexpensive and offer a nice financial reprieve for those who have lived and worked in major cities for the bulk of their careers.

            If you move, you might be able to comfortably settle into a home that’s grandkid-friendly for a fraction of what you would pay in your current zip code. But maybe you want to downsize anyway and location isn’t so important. Or perhaps you plan to live with family or in a retirement community instead of maintaining your own property during retirement.

            Think carefully about how much time you want to spend “keeping house” during retirement when you decide on what type of house, condo, or community you’d like to retire to.


            Research suggests that retirees who have a compelling “why” to their daily retirement lifestyle and routines stay healthier and more vibrant throughout their retirement. What’s your why?

            When you’re not waking up every morning to head off to work, what will you be doing instead? Think about fulfilling activities, hobbies, volunteer work and travel that will enrich your retirement and give you purpose.

            Planning your retirement isn’t something you can tackle in an afternoon. You might need to do some serious soul searching to paint a picture of the retirement lifestyle that will bring you joy and fulfillment.

            As you determine the details of your retirement “who, what, when, where, and why”, your financial advisor can help you to connect the dots between the day-to-day retirement living you imagine and the financial resources that’ll help you work towards getting there.

            To learn more about aligning your financial portfolio to help you pursue your dream retirement, contact Jake Sturgill today to schedule a consultation!

              Thinking Retirement? Be Sure to Log These Important Birthdays​

              Did you know that your birthdays become more important in the years approaching retirement? That’s right! Once you hit age 50, there are certain birthdays, also known as “legislative birthdays”, that indicate it’s time for you to take action on certain aspects of your retirement planning or that allow you to claim new financial benefits.

              Let’s take a look at some important birthdays you might want to keep special track of.

              Age 50

              Your 50th birthday is the first where you can take advantage of certain retirement planning privileges. After you turn 50, you’re eligible to begin making “catch up” contributions to your retirement accounts, including the following:

              • 401(k) plans
              • SIMPLE 401(k) plans
              • 403(b) plans
              • 457(b) plans
              • Traditional IRAs
              • SIMPLE IRAs


              Age 55

              At age 55, should you decide to stop working, you can start to take contributions from an employer-sponsored 401(k) plan without incurring the 10% early withdrawal penalty for early withdrawal. Of course, if you don’t plan to retire at 55, you may choose instead to use this time to review your retirement plans and make adjustments as necessary.

              Age 59 ½

              After age 59 ½, you can take withdrawals from your 401(k) plan without incurring the extra 10% tax penalty for withdrawals, whether or not you plan to retire at this age. You need to consult your individual 401(k) plan to ensure that you meet the requirements for withdrawal at 59 ½.

              Age 62

              When you turn 62, you become eligible to take Social Security benefits. However, it may not be financially advantageous to begin collecting right after you turn 62.

              You will want to wait until you reach full retirement age (FRA) if you want to maximize your Social Security benefits. Depending on your birth year, this age will vary; your financial advisor can help you to determine when it makes the most sense for you to start taking Social Security benefits.

              Prior to Age 65

              Three months before your 65th birthday, you will enter into a seven month window during which you are eligible to enroll for Medicare. By this point in time, if you’re already taking Social Security benefits, you may already be enrolled in Medicare. But if you’re not – or if you’re uncertain – it’s important not to miss this window.

              Age 70

              At age 70, you reach the maximum age for delaying your Social Security benefit. Even though you may not be ready to retire, you may want to consider your options for taking your Social Security benefit in order to receive the maximum benefit. Just remember, if you continue working and also take Social Security, you will continue to pay Social Security taxes on your taxable income.

              Age 70 ½

              For most investors, age 70 ½ is the age by which you must begin drawing the required minimum distribution (RMD) from your tax-deferred retirement accounts. Usually, you have until April 1 after you turn 70 ½, but it’s important to understand the requirements for your specific accounts.

              If you’re approaching retirement age and have questions about planning your retirement timeline, a CERTIFIED FINANCIAL PLANNER™ can help you to stay on track with managing important dates and accounts. To learn more about your retirement planning options, contact Jake Sturgill today to schedule a consultation!

                Plan Your Retirement with Longevity in Mind

                There are two important questions that investors need to answer in regards to their retirement planning:

                1. How much money do I need to save? AND
                2. How long should I expect it to last?

                Increasingly, investors need to consider even a third important question as they work through their retirement planning:

                What if I live to 100?

                As medical advancements improve quality of life and offer the potential to extend one’s longevity, there’s the very real possibility that individuals retiring today, next year, or within another few decades are going to enjoy longer, more active lives than generations before them. While this is great news for you and your loved ones, it adds some complexity to the retirement planning equation.

                Accordingly, you should plan your retirement with longevity in mind. Read on to learn how.

                It’s essential to plan your retirement with longevity in mind. Read on to learn how.It’s essential to plan your retirement with longevity in mind. Read on to learn how.Consider Your Retirement Age

                Age is an essential factor to consider as you look toward your retirement plan. Not only should you think of the age you ideally wish your retirement income to hold out until, but you also need to consider the age at which you’ll retire. The individual who plans to retire at age 65 needs to account for many more years of retirement savings than the one who holds off until age 72.

                You should also consider what your income will look like in the years as you approach retirement. Do you plan to work full-time at a day job and then launch straight into a full retirement? Or are you anticipating that you’ll have a gradual shift from full-time employment to part-time, and then a post-retirement hobby job that brings in some extra income on the side?

                The employment-to-retirement mix looks different for everyone. However, if you plan to remain employed to some degree throughout even a few of your retirement years, you can offset the amount of money you’ll need to rely on from retirement investments during that time. This can help you to extend the life of your retirement savings and may be a longevity strategy to consider.

                Hold Off on Claiming Social Security Benefits

                Social Security benefits are a part of most investors’ retirement plans, but they aren’t the same for everyone. It’s important to have a good understanding of what your Social Security benefits might look like in order to plot the best course for the remainder of your retirement income needs.

                One essential factor in determining the amount of Social Security income that you can rely on during your retirement years is the age at which you plan to start withdrawing your Social Security benefits. The longer you wait, the greater your month-to-month benefit will be.

                Ideally, you want to wait until you achieve your Full Retirement Age (FRA) or possibly to the maximum of age 70 in order to take advantage of all that your Social Security investment has to offer. You can consult an FRA table to understand more about maximizing your Social Security benefit.

                Evaluate Your Investment Mix

                You don’t want to put all of your eggs in one basket when it comes to your retirement planning. A diversified investment portfolio can help to provide confidence as you move forward in your plans.

                To plan your diversified retirement strategy, you should consider a variety of investment vehicles and strategies. Often investors will gravitate toward investments that offer certain guarantees or income benefits.  While these may be worthy of consideration, it is always important to remember that every investment has advantages and disadvantages and these products may carry additional fees, charges and restrictions. In the world of finance, diversification is important. Bear in mind that there is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. 

                Your financial advisor can provide personalized recommendations for diversifying your portfolio according to your income goals and risk acceptance. Additionally, they may have helpful tips for seeking to maximize your investments with the anticipation of longevity in mind.

                Stay on Top of Your Expenses

                It is never too early to begin preparing for the phase of life where you will either choose not to work, or be unable to maintain employment.  This is an inevitable event for almost everyone, but unfortunately many individuals fail to plan. Establishing good spending habits is one of the most basic, but also most significant steps that you can take as you think about retiring.  It is common for people to anticipate spending less in retirement, but learning new habits is extremely difficult. By controlling spending during your working years, it will make for a smoother transition to a phase of life where living within your means becomes even more critical. 

                With this in mind, it’s important to plan for your retirement with realistic figures that represent your desired lifestyle, length of retirement, and set expenses you can’t avoid. You need a retirement budget that accounts for the dollars you will spend year-to-year so that you can build a retirement income that matches your expenses.

                There are calculators and general rules of thumb that can help you to estimate an ideal retirement budget for your lifestyle and longevity plans. But when it comes to getting the best idea of what you as an individual will actually need for your future plans, it’s best to work with a financial advisor who can show you how your financial goals align with your retirement needs with longevity in mind.

                Work with a Professional to Plot Your Course

                Establishing a retirement savings plan isn’t a simple task. If you’re looking at popular financial resources, blogs, and free calculators to help you put the pieces together, you probably have a lot of questions.

                You don’t want to tackle the task of retirement savings on your own. There are too many variables – including the longevity question – that complicate the planning process and challenge oft-repeated rules of thumb.

                Don’t leave your retirement savings plans to your best interpretation. Instead, call on the aid of a professional financial advisor who can evaluate your specific situation and help you determine a course that makes sense for your desired retirement.

                Your financial advisor will work with you to look at lifestyle factors, anticipated retirement needs, and your risk acceptance to give you some practical options for building a portfolio that’ll work to serve your needs once you hit your retirement years. The experienced advisor will even give you some practical pointers for considering retirement with your longevity in mind.

                To learn more about how a CERTIFIED FINANCIAL PLANNER™ professional can help you work through your retirement planning, contact Puckett & Sturgill Financial Group today for a consultation!

                What Does the SECURE Act Mean for Annuities and Your 401(k)?

                Your retirement plans require review and tweaking from time to time. Sometimes, you need to take a step back and review because of life changes on your end. Other times, outside factors, like changing retirement legislation require your attention.

                If you’ve been following the news, you’ve probably heard about the SECURE Act. This is a proposed retirement reform that’s poised to be signed into law and will have an impact on some of your retirement planning activities, should it become law.

                While there are a few main areas where the SECURE Act will make a difference in your retirement planning, one big component of this reform is how it’ll impact annuities and 401(k) planning. If you’re curious about how this could change your retirement portfolio or open new investment opportunities, read on to see how you may be able to anticipate the effects of this reform.

                Annuities and the 401(k) Mix

                Currently, many 401(k) providers don’t add annuities to their plans because annuities are considered a riskier investment and place an unwelcome amount of liability in the provider’s hands. Annuity payouts can fail to materialize, which hurts the investors relying on them as part of their retirement package. Under current laws, plan providers have the fiduciary responsibility to cover the loss of an annuity, which makes them an unpopular part of the 401(k) mix.

                Under certain provisions of the SECURE Act, the responsibility for a failed annuity shifts from the retirement plan provider to the insurance company that offers the annuity. With this shift in liability, we may see more annuities pop up in different retirement packages.

                What are the Prospective Benefits to Investors?

                If you’re looking to add new investments to your retirement portfolio or are investing for the first time, you probably want to know: what’s in it for me?

                Annuities can be an option for investors looking for a long-term plan to payout over a certain period of time. Investors who don’t have a whole lot set away in retirement accounts may enjoy the prospect of reliable monthly income, especially if they don’t have other investments that may provide a similar payout.

                What are Some Potential Problems to Look For?

                As an investor, you want to be aware of the investments that comprise any retirement package that you invest in. If your employer offers annuities as part of your investment options, you should be able to trust that they are worthy of your consideration. However, there is a certain risk that employers will not have the insight to provide annuity options that are particularly beneficial for you as an investor.

                There’s also a likelihood that annuities as part of the 401(k) mix will incur extra fees on the investor’s end, as annuity plans tend to come with certain expenses that are often passed onto the consumer. Additionally, as part of the 401(k) mix, annuities may add more limitations to the amount of money you can draw from your retirement account or the age at which you can take these withdrawals.

                Have You Reviewed Your Retirement Plan?

                An essential factor in choosing your retirement portfolio mix is understanding your options and making decisions that are best suited to meeting your future financial goals. There’s never a bad time to review your existing retirement plan to monitor its performance and change your investment mix, if necessary.

                If you’re new to retirement planning and want to learn more about how to invest for your long-term financial planning, contact Jacob Sturgill Financial today for a consultation!

                  Fixed and Variable annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.