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Ask an Advisor: How Much Do I Need for Retirement?

March 10, 2020 Tags: , , Jacob Sturgill

Transcript

David: 00:08

Hello, I’m David Hemler, and we’re here with Jake Sturgill on our Ask An Advisor series with Puckett & Sturgill Financial Group. And Jake, one of the questions that I know you’re often asked as well as I am is: how much do I need to retire?

Jake: 00:23

Saving for retirement is an incredibly complex decision and conversation. And, to your point exactly, it’s got to be one of the most common questions that we’re asked. And there’s a lot of rules of thumb out there. But, at the end of the day, it’s an incredibly personal decision, and there’s no ‘one size fits all’ approach.

David: 00:42

Those rules of thumbs, they can be both a benefit and maybe, at times, a detriment as well. Yeah.

Jake: 00:48

Especially if you don’t understand the decisions and the pros and cons involved with all the decisions. Some basic tenets that you are going to want to consider and then really factor into this decision-making framework are: what sort of lifestyle do you want to live? In other words, how much money do you think you’d like to spend? When would you like to retire? And how long do you think you’re going to need that money to last? Because, at the end of the day, nobody knows when their final day will be. There’s no way of predicting that, but these are all critical elements.

David: 01:19

A lot of pieces to the puzzle to put together, figuring it all out.

Jake: 01:24

Absolutely, but I think if you’re like most people, you don’t want to necessarily live a lesser standard of living, you want to maintain your standard of living throughout retirement.

David: 01:34

I know I’ve read and see a lot of things in the literature in financial planning about this 60 to 80% of your preretirement income needed in retirement. Would you agree with that rule of thumb? Does that fit into the picture a lot?

Jake: 01:47

Certainly, and I think it’s well-documented that you don’t necessarily need to replace all of your income in retirement. Because, after all, in retirement you’re not going to be saving for a retirement. You might pay a little bit less in taxes, and you might even spend less or just spend differently than you were in those years saving up to retirement.

David: 02:05

Mm-hmm (affirmative). Where do we go from here then, Jake?

Jake: 02:08

I would encourage you to meet with your financial advisor to get an objective opinion and look at things like: how much have you accumulated so far? What’s your asset allocation? What’s your savings rate? And what’s your time to retirement?

David: 02:22

Mm-hmm (affirmative). So, a lot of pieces to this puzzle for us to figure out. And we, the folks here at Puckett & Sturgill, the advisors, we’re happy to help you. Just give us a call, or click on our email and send us a question of your own. Thanks.

It’s Your Turn to Ask

    Savings Rates for Retirement

    February 24, 2020 Tags: , P&S

    As you plan for retirement, there are a few items that may get a larger amount of your attention as you try to fit everything into place. Things like your ideal retirement date, investment performance, and predicted retirement budget are likely some of the top considerations that come to mind when you think of your retirement plans.

    However, as you look toward your retirement, it’s important to remember an essential factor that sometimes gets pushed to the side: savings rates.

     

    What is a Savings Rate?

    According to Investopedia, a savings rate “is a measurement of the amount of money, expressed as a percentage or ratio, that a person deducts from his disposable personal income to set aside as a nest egg or for retirement”. The amount you save will generally goes directly into various savings vehicles such as your bank account, 401(k), IRA, and taxable investment accounts so that when you ultimately retire you have accumulated enough money to pay for your future living expenses.

    What Savings Rate Should I Aim For?

    There are lots of rules of thumb regarding savings rates. How much you need to save is often a reflection on the type of lifestyle you want to live, your current age, your current assets, and your remaining time to retirement. Unfortunately, these generic rules sometimes lead to generic recommendations that may or may not suit your needs.

    You may have seen figures of the “ideal” percentage that investors should aim for when saving for retirement, but these recommendations are certainly not ideal for everyone. Depending on your age and personal income, this percentage could vary. It’s important to find the figure that works for your lifestyle, this year and in years to come.

    Younger individuals with more time to work and save will often need to set less money aside, as a percentage, annually than older individuals who are coming up on their retirement years. For those close to retirement age and without significant existing savings, a more aggressive saving rate may be ideal.

    Additionally, individuals with particularly high annual income may find that they need to set aside yearly savings at a higher rate than those with lower incomes, if they desire to maintain a similar standard of living into their retirement years. Again, this can vary, depending on whether existing savings or outside payouts are at play.

    What Else Should I Consider?

    As with the other factors playing into retirement planning, it’s important not to view savings rates in isolation. Focusing too hard on this one part of the puzzle could leave you open to making poor decisions regarding other components of your retirement plan.

    Ultimately, you want to consider your personal savings rate as one of the tools that will help you to achieve the retirement lifestyle that you wish to live. Considerations of retirement age, location, standard of living, hobbies, healthcare needs, and more are important factors that make your individual retirement plan unique.

    If you plan to live a lifestyle fairly similar to the one you enjoy now, setting a dedicated portion of your annual income now can help you to fund your needs in the future. Savings rates are a helpful tool that can give you guidance in determining what amount of savings makes sense for your desired goals.

    If you’d like to learn more about planning for your retirement, contact Jake Sturgill today for a consultation!

      3 Career Transition Options to Consider

      February 21, 2020 Tags: , Jacob Sturgill

      Going from full-time employment to retirement is a major transition, both personally and professionally. With modern life expectancies and new medical breakthroughs every year, statistically speaking, you may look forward to a longer retirement than any previous generation.

      But with that extended retirement come some challenging questions: How much do I need to save for an extra 5-10 years of retirement? Will I get bored of early-bird specials and parcheesi every day for 25 or more years?

      For many retirees, a planned career transition that extends the working years by some measure into the retirement period makes sense both personally and financially. After all, a job can be about so much more than the paycheck. Working as you transition to, or even during, retirement can provide fulfillment and allow you professional flexibility that suits your changing lifestyle.

      Here are a few career transition options you might consider:

      Part-Time Employment

      Transitioning from your full-time job to retirement may be as simple as paring down your role as a full-time employee and taking on certain responsibilities as a part-time one. If you appreciate the benefits at your current job or love your company’s mission, it may be worthwhile to explore what a part-time employment option might look like.

      On the other hand, you may want to look at part-time employment in an entirely different field. If you’re eager to escape office life but want a steady paycheck that will keep you from dipping too far into your savings, look into part- or flex-time jobs in your community.

      Entrepreneurship

      Have an old idea that refuses to let go? Maybe your retirement transitional period is the time to flex your entrepreneurial muscle and see what happens.

      Whether your new time flexibility allows you to spend more time turning a beloved craft into a full-fledged artisan brand or you want to chronicle your retirement travels on a monetized blog, there are endless options for exploring entrepreneurship during your retirement. If you plan carefully, you may even be able to supplement some of your retirement income needs with income from your small business.

      Consulting

      Many retired professionals find themselves facing retirement with not only too much time on their hands, but too much knowledge that simply has no outlet. If you want to put your years of industry knowledge to good use, you may consider consulting or coaching.

      Business consultants have the ability to control their schedules by choosing which projects to take and how many they want to take on during a year. They can also command a decent hourly or per-project rate that can offset retirement expenses and help to support a robust retirement lifestyle. If you have already have people asking you for advice during your spare time or have unique skills to offer to the next generation, consulting might be a worthwhile career transition option.

      When considering a career transition option, it’s important to look at the big picture: where do you see yourself in your retirement years? While an extra paycheck might be nice, if the idea of working during your retirement or postponing full-fledged retirement as you phase out of the career world makes you uneasy, then you may want to consider other ways to meet your retirement ideals.

      As always, when piecing together the unique components of your retirement, it’s important to consult your financial advisor. They can provide insight to your retirement budget, feasibility of retirement dates, and ways to fill financial gaps in your retirement plan.

      To get started with your personalized retirement plan, contact Jake Sturgill today for a consultation!

        How will rising healtcare costs impact my retirement planning?

        December 18, 2019 Tags: , , P&S

        Your retirement planning is comprised of many factors that make up the amount of money you need to save for retirement and the income streams that can help you pursue that figure. As you’re building or reviewing your financial targets, you need to consider how individual expenses will contribute to the whole.

        For many retirees, one of these big numbers is the amount that they need to set aside for healthcare expenses. Let’s face it: healthcare is expensive and costs are only on the rise.

        You need to be proactive in meeting the challenge of rising healthcare costs in order to avoid costly mistakes in your retirement planning. Easier said than done? Maybe not.

        Today we’re going to look at the question: How will rising healthcare costs impact my retirement planning? If you’re ready to learn more about this essential component of your retirement planning, grab a cup of coffee and let’s dive in!

        Assess Your Needs

        As with all aspects of financial planning, you can’t adequately plan for what you need until you know what it is that you need. To plan for healthcare costs in retirement, you will work around a few factors. These include:

        • You and your spouse’s continuing health coverage,
        • Your intended length of retirement,
        • Your health (and your spouse’s health)
        • Family medical history

        Obviously these factors vary from investor to investor. Your financial advisor can provide some guidance in parsing out your healthcare situation and help you to get a better idea of what your savings should look like.

        Look at Your Health Coverage Options

        While you should expect your healthcare costs to rise during retirement, thanks to a combination of increasing healthcare expenses and your own aging, you will not need to shoulder the entire burden of your retirement healthcare expenses.

        In the United States, retirees have the option of receiving Medicare as part of their Social Security benefit. This federal health insurance is designed to help retirees offset some of their healthcare expenses, but still leaves premiums, deductibles, and out-of-pocket expenses to your budget.

        In addition to applying for Medicare, you’ll want to carefully consider which Plan fits your needs the best — and you’ll want to review this information during each open enrollment period. You may also want to consider supplemental insurance options, like MediGap or private insurance, to keep your healthcare budget on track.

        Understand the Balance

        Your healthcare costs in retirement will probably not be evenly spaced each month, from the moment that you retire onward. Instead, you will probably experience what most retirees do: an increase in healthcare expenses the older that you get.

        This makes it a little tricky to plan for retirement healthcare costs, since you won’t be feeling the pain of increased medical bills until later on. When planning your monthly income, you’ll want to find a strategy that allows you to set funds aside for a healthcare rainy day fund. Sure, you may not need it until you’re a decade or more into your retirement, but when the rainy day comes, you’ll be thanking yourself for setting the funds aside.

        While the retirement healthcare question is multifaceted and there are certain unknowns that can’t be entirely accounted for, you can create a game plan that allows you to save to the best of your ability and that provides a cushion for those unseen needs that may arise. Your financial advisor can provide a wealth of knowledge and advice to help you establish a financial strategy for meeting you healthcare needs in retirement.

        Want to learn more about retirement planning and the financial advising process? Check out our Ask an Advisor section to hear our CFPs answer questions from readers like you — or submit a question of your own for us to cover in a later segment!

          Your Mid-Year Financial Check-In

          September 16, 2019 Tags: , , P&S

          Keeping an eye on your financial health and investment performance is essential for staying on track for meeting your financial goals. To stay up to date, it’s important to schedule regular meetings with your financial advisor – and a mid-year meeting may be just the right place to start.

          As summer comes to a close, it’s an ideal time for a financial tuneup. In addition to any personal questions and concerns you may have concerning your portfolio, here are some areas to check on when you meet with your financial advisor.

          Review Your Investments

          The only thing that’s certain about your investment portfolio is that it will always be changing. Over time and as markets fluctuate, certain investments may perform better than others. To stay on course with your financial benchmarks, you need to keep track of how your investments are performing.

          Your financial advisor can help you monitor portfolio performance and provide direction when you have questions or concerns. If you decide it’s time to take a different approach to your investment mix, your advisor can help you explore different options that might make sense for your situation.

          Take a Look at Your Tax Obligations

          It’s a good idea to take a mid-year review of your tax obligations and formulate a tax strategy before you file next tax season. A financial professional can provide the guidance you need to review your situation and try to avoid any surprises once the new year rolls around.

          As you work through your tax strategy, you will want to review your lifestyle and income to see whether there are any factors that could impact your potential tax return. Factors like a career change, a new home, or retirement could make a big difference when it comes time to file.

          Mid-year is also an ideal time to tweak your strategy in order to offset your tax liability. You can defer funds to charitable giving and retirement investing or look into other strategies in seeking to maximize your potential return.

          Make Adjustments as Necessary

          Likely, after reviewing your income, investments, tax liability, and other factors, you’ll probably have some questions. Perhaps you’ll feel the need to make an adjustment here or reconsider an investment there.

          Your financial advisor is the ideal partner for working through these mid-year changes. Not only can your advisor help you to work through paperwork and get into the details of your specific portfolio, but they can also provide professional guidance to interpret how your financial activity aligns with your financial goals and benchmarks.

          By taking advantage of periodic check-ins – such as the mid-year meeting -, you can keep a finger on the pulse of your financial performance and hopefully avoid major surprises. Even when unexpected events occur, your advisor can help you navigate the outcome by bringing a more neutral perspective to balance any emotionality you might be tempted to act upon.

          Are you ready for your mid-year financial check-in? Contact Puckett & Sturgill Financial Group today to schedule a consultation.

            Investment Options for Building Your Retirement Portfolio

            July 26, 2019 Tags: , , P&S

            You probably already know the importance of setting money aside for retirement. But with so many investment options available, it can be tricky to determine which mix makes the most sense for your needs and goals.

            To make matters even more complicated, there’s no single investment strategy that is ideal for every investor. In fact, even when you’ve decided on a strategy, you may later find that it’s not as well-suited to your needs as you initially thought.

            While the best course of action for planning for retirement is to align yourself with a trusted financial professional who can help you sort through your retirement needs and investment choices, it’s good to know what options you have available to you. Here are some retirement investments you may consider:

            Retirement Income Funds

            A retirement income fund is, as the name implies, a managed investment that has the goal to produce income for use during retirement. Typically, these funds are comprised of a portfolio that features stocks, bonds, and other variable investments, in a similar fashion to a mutual fund, but are available exclusively to individuals of retirement age.

            Retirement income funds offer the option of a monthly payout, which is appealing to investors looking to budget for their anticipated retirement income needs. Funds are also available at any time, should the investor require a withdrawal at a certain point.

            Investors might consider retirement income funds if they anticipate that they will require a month-to-month income replacement at some point during their retirement years but don’t want to spend time continually keeping tabs on their investments. Of course, there’s no guarantee of a monthly payout from a retirement income fund, which is why it’s important to work with a financial professional who can understand the nuances of your investment fund, even if managing the details isn’t your specialty. There is risk, including possible loss of principal. You will need to make sure that the asset allocation is suitable.

            Annuities

            Annuities are another popular retirement planning vehicle because they, too, offer the benefit of a monthly payout. Many investors find the option to budget monthly around this type of income a boon to successful retirement planning.

            While annuities are insurance products, rather than actual investments in the technical sense, they are often considered part of the investment mix because the benefits they offer can be combined with a robust investment portfolio. There are a few different types of annuities out there and some are more appealing for retirement planning purposes.

            A popular choice for retirement is an immediate annuity, which begins paying out as soon as you contribute your initial investment. For investors already enjoying their retirement years, this type of annuity is appealing because the benefits are felt right away.

            Another option that some use to fill their retirement portfolio is the variable annuity, which allows you some freedom to customize the annuity mix. While this may seem like an appealing option, it’s important to scrutinize the details of any annuity you consider, in order to avoid incurring unnecessary fees or hidden charges.

            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.

            Bonds

            Bonds are somewhat lower-risk investments that offer payout in two ways: first, on monthly interest accrued, and second, on a return of investment at the end of the bond period. These investments are offered by the government and municipalities, so they’re particularly well-backed and should provide the expected payout amount throughout the agreed-upon terms.

            When considering bonds as a retirement investment, you may want to consider a “bond ladder” that contains multiple bond investments with varying maturity dates. This way, you’ll earn back investment dollars at different maturity dates throughout the years of your retirement.

            Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. Bond yields are subject to change. Certain call or special redemption features may exist which could impact yield.

            Real Estate Investment Trusts (REITs)

            For some, the idea of investing in tangible assets makes sense as part of the retirement investment mix. Real estate investments are a popular choice for investing, and with Real Estate Investment Trusts or REITs, you can have ownership in a basket of properties. Investing in Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.

            Managed Funds

            Managed funds are another popular choice for retirement investing because they give you the flexibility to pick and choose your investment categories without the day-to-day need to oversee markets and performance. While we mentioned retirement income funds – a type of managed fund – above, it’s important to recognize that there are many other investment options for planning for your retirement.

            Depending on your age and asset availability, you may have a variety of managed funds from which to choose when establishing your retirement portfolio. There are a lot of different ways to narrow down which managed fund(s) may work for your situation, but trying to sift through options without missing important details or contrasts can be overwhelming.

            As with any type of investing activity, it’s always a good idea to consult your financial advisor when it comes to sorting through your options for managed funds. They have the experience and expertise to give you some ideas of what to look for and what to avoid when comparing and contrasting your investment options.

            Are You Ready to Start Your Retirement Planning Journey?

            If you’re inspired to start your retirement plans or review an existing retirement portfolio, it’s time to reach out and take that next step. Working with a CFP® professional can give you the boost you need to sort out your retirement goals and establish targets for your future spending needs.

            Additionally, working with a professional advisor can provide you with insight to investments that are better-suited to you (or you and your spouse) specifically, depending on your goals, values, and risk tolerance. Your retirement portfolio should be diverse, but not to the point of recklessness. With careful cultivation and portfolio management, you can stay on top of the various components that comprise your unique retirement portfolio.

            At Puckett & Sturgill Financial Group, we have plenty of experience in connecting investors with retirement planning tools and investment strategies that are customized to their needs specifically. We would love to meet with you and discuss your retirement needs and answer your questions. Connect today to get started on planning your retirement portfolio!

              The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

              Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.

              Municipal bonds are subject to availability and change in price. They are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply. If sold prior to maturity, capital gains tax could apply.

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

              June 24, 2019 Tags: , , Jacob Sturgill

              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.

                6 Ways that the SECURE Act Might Impact Your Retirement Planning

                June 20, 2019 Tags: , , P&S

                The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) is a major federal retirement reform measure. This bill puts forth a series of revisions to previous laws governing taxes on retirement income, collection ages, and more.

                While it’s not law yet, there is a lot of talk about how the SECURE Act impacts retirement planning for the average American. Investors want to know how this is going to make a difference to their portfolios, present and future. After all, there are a lot of ways in which new regulations can change existing plans for better or worse.

                There are dozens of measures included in the SECURE Act, some more significant than others. Here are the ones that are most likely to make a difference to your retirement planning activities or existing portfolio.

                1. Provides More Opportunities for Small Businesses to Offer Retirement Plans

                Under the SECURE Act, there are more opportunities than ever for small businesses to opt into retirement planning for their employees. This bill has provisions to extend previously unreachable 401(k) sharing options for small businesses by allowing multiple small businesses to work together as a larger group and pool contributions into bigger funds. This would, in effect, give employees of small businesses retirement planning options on par with what they would see if they worked for a larger employer, provided that the owner(s) of the small business join a 401(k) pool.

                Until now, small businesses have been limited in their ability to provide a variety of retirement planning options for employees, which can impact a small business’s ability to attract and retain talented employees. Options like SIMPLE IRA and SEP IRA, while adequate, don’t have the same luster as 401(k) options. As a result, many small businesses simply don’t offer retirement plans for their employees. Opening 401(k) options for small businesses can provide value for small business owners and confidence for employees at these companies.

                2. Removes Age Limitations for IRA Contributions

                Another impact that the SECURE Act would have is the removal of age limitations for IRA contributions. Currently, there is an age limit on IRA contribution that limits individuals over age 70.5 from contributing to IRAs. This seemingly discourages retirement savings for individuals who are approaching or past the traditional retirement age.

                Removing the age limitation for IRA contributions will encourage continued IRA contribution, even into one’s 70s and beyond. Interestingly, there is already no age limit for contributions to Roth IRA accounts, so this would bring more balance for investors on the fence about IRA conversion.

                3. Add Opportunities for Annuities within Retirement Plans

                Provisions in the SECURE Act would provide the opportunity for 401(k) plan providers to add annuities to the 401(k) mix, further diversifying investment options for those who invest in these plans. Until now, there has been hesitation on the part of providers to add annuity options, since annuities have presented a certain level of liability when packaged as part of a 401(k) plan. However, the SECURE Act provisions remove this liability from the provider’s side, which may open more options to add annuities to the 401(k) mix.

                4. Extends the Required Minimum Distribution Age

                By law, you’re required to take a required minimum distribution (RMD) from certain retirement accounts by the time you reach age 70.5. Some investors don’t appreciate the constriction of this requirement, especially if they’re still working at age 70.5 or don’t plan to fully rely on their retirement savings until a later date.

                Under the SECURE Act, investors will see the RMD age moved from age 70.5 to age 72. This provides a cushion for investors to add a final push of savings to their retirement accounts. Of course, if you plan on drawing from those accounts earlier than age 72, you’ll still have the option to do so.

                5. Provides Penalty-Free Distribution for Certain Withdrawals

                Generally, investors shy away from taking pre-retirement withdrawals from their retirement accounts because of the rate at which those withdrawals are taxed. But in some life circumstances, the future nest egg is a valuable tool that could provide some much needed relief in the short-term.

                The SECURE Act, in part, seeks to answer the challenge of accessing retirement funds for certain life changes by removing the penalties associated with these withdrawals. Most notably, the SECURE Act has a provision that allows investors to take qualified withdrawals for the birth or adoption of a child. It opens up to $5,000 in penalty-free withdrawals for a qualified birth or adoption within one year of the child’s birth- or adoption-date.

                6. Removes Certain Qualifications from Inherited Accounts

                Inherited retirement accounts (401(k)s, IRAs, Roth IRAs) have, in the past, provided beneficiaries with the ability to withdraw funds over the course of their lifetimes. However, under provisions in the SECURE Act, these distributions would be limited to a ten year period.

                While this doesn’t necessarily make a big impact for smaller inherited accounts, like 401(k)s, since they’re typically liquidated within a short period of time, it does make a difference for investors collecting so-called “stretch” benefits from inherited IRAs. In a technical sense, IRAs are not strictly retirement accounts. The rationale of the SECURE Act’s limitations is to reduce the length of time that beneficiaries can receive penalty-free inherited IRA distributions and infuse a certain amount of tax money back into the economy, by bringing back penalties for distributions taken outside of the designated decade.

                So, How Might the SECURE Act Impact Your Retirement Planning

                As an investor, you want the confidence that your investments are working hard for you and will one day, hopefully, help you to reach your future financial goals. With a big piece of legislation, such as the SECURE Act, on the table, there are ways in which today’s planning may not be sufficient for reaching tomorrow’s goals.

                Instead of trying to work through this on your own, look to your financial advisor for information about how retirement reform might impact your bottom line. Your advisor can help you to sift through new requirements, evaluate your current accounts, and make adjustments that align you with the track you want to take.

                If you have any questions about the SECURE Act or want to learn more about your retirement planning options, contact Puckett & Sturgill Financial Group today for a consultation!

                  Important Considerations for Small Business Financial Planning

                  May 29, 2019 Tags: , , P&S

                  With Small Business Week kicking off the month of May, this is an ideal time of year to consider the unique aspects of small business financial planning. After all, if you are a small business owner, you already know how much goes into the day-to-day of keeping everything running smoothly.

                  As a small business owner, there are resources available to help your business profits go the extra mile. Check out some ways to make the most of your small business income and save for a rainy day.

                  Keep Track of Your Finances

                  Of course, the most important aspect of managing your financial resources is keeping track of the money that you bring in. Accounting software can help you manage income, expenses, invoices, and more, so you can focus on the things that you do best.

                  You will also want to prepare a cohesive tax strategy that helps you to determine how much tax you’ll owe at tax time and how you can offset your tax expenses through legitimate business deductions. Before filing, you’ll want to consult with a tax professional to ensure that your numbers are accurate and that you comply with applicable tax codes to avoid unexpected expenses later on.

                  Prepare for a Graceful Exit

                  When considering retirement, developing a succession plan makes sense. But life can throw plans off course with a sudden twist, and in these cases, succession plans are even more important.

                  Your succession plan should ideally pinpoint a potential next owner or buyer and should outline how you will go about dispersing business assets, whether you plan to offer a buyout option to a co-owner or key employee or sell the business to an outside party. No matter if you’re a new business owner or a well-established entrepreneur, taking time to draw up a succession plan is an ideal opportunity to consolidate financial and business records and determine key contributors to your business’s success.

                  Your financial advisor may be able to help with organizing these documents and helping you to lay the groundwork for a solid succession plan. With that succession plan in place, you can have enjoy the daily challenges and thrills of running your business with the peace of mind that comes with having a plan for the future.

                  Add Value for Your Employees

                  Most of us are familiar with the 401(k) programs large companies establish on behalf of their employees, but even if you’re a small business owner, there are still options for you to offer retirement plans for your employees. Offering a 401(k) program can help you to attract top talent and invest your own retirement savings as the company owner.

                  In fact, preparing a retirement package for your business allows you to take advantage of pre-tax contributions, which will save you money on the personal and business side of things. Many business owners overlook this aspect of financial planning for their business and come to the end of their careers without a nest egg of their own.

                  But you don’t need to let this pitfall endanger your ideal financial future! At Puckett & Sturgill Financial Group, we can walk you through the ins and outs of choosing a retirement plan and can help you develop a customized strategy for implementing a retirement package for your small business. Your next step is as easy as contacting us.

                    What are the Benefits of Providing a Company Retirement Plan?

                    May 23, 2019 Tags: , , Jacob Sturgill

                    When you’re working through your strategy for adding a retirement plan to your employee benefits strategy, you may wonder what the benefits of providing this perk are for your business and bottom line. Even though you may want to offer a stellar package that attracts top talent or sets your business apart from your competitors, it can be hard to see how else your company might benefit long-term from such an offering.

                    However, you’ll find that offering a generous package can be a win-win scenario for your employees and for your business. Read on to learn more about the perks of your business providing a company retirement plan.

                    Benefits for You as an Employer:

                    When you choose to offer a company retirement plan, you can benefit in a direct way through the ability to invest in the plan for yourself. Saving for retirement through a company plan allows you to participate in a plan that you might not otherwise have access to.

                    You can also benefit from company tax breaks and incentives from the federal government when you choose to divert income into employee retirement funds. In fact, you can deduct your employer contributions from your current taxes, which can contribute positively to your company’s tax strategy.

                    Direct financial benefits aside, one of the biggest perks to offering a retirement plan is your ability to set your brand apart as an employer that provides competitive benefits for attracting new employees. If you find yourself competing for top talent or are working in an industry that’s not particularly well-known for going above and beyond when it comes to employee perks, you could find yourself in an enviable position just for adding an attractive retirement plan to your benefits lineup.

                    Even better? If your retirement plan is tied to company profitability, your employees may be more motivated to work hard and push productivity in order to build their retirement income.

                    Benefits for Your Employees:

                    Of course, one of your ultimate goals in establishing a retirement plan for your employees is to help them succeed in planning their financial futures. To this end, you should consider their financial well-being and ability to make long-term plans a significant benefit to your brand.

                    Even though it requires extra research and investment to establish and maintain a company retirement plan for your employees, you should consider this an investment in your employees’ overall happiness and job satisfaction. Both of these factors can contribute a significant return on your investment; after all, happy employees can be very motivated employees.

                    When you offer a company retirement plan, you open more savings options for your employees than they might achieve through using a personal IRA investment vehicle alone. Not only can they (and you, as a part of the plan) enjoy the savings benefits of the package, but you and your employees can enjoy the tax benefits of setting aside income for retirement.

                    Are You Ready to Talk Company Retirement Plans?

                    Another benefit of choosing a company retirement plan is that you and your employees will gain the opportunity to work closely with the financial advisor associated with your plan. Even if you have questions beyond the scope of your retirement plan, you now have a trusted professional to whom you can turn for personalized financial guidance.

                    If you’re ready to look into your options for adding a retirement plan to your company’s benefits package, contact Jacob Sturgill today to get a personalized look at your brand’s needs and to receive recommendations for moving forward with your retirement planning!

                      For Plan Sponsor Use Only – Not for use with Participants or the General Public.

                      This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.