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Retirement Planning – Preparing for ‘Guaranteed Income in Life’

Monday, October 4th, 2010

In the thick of the stock-market catastrophe in November 2008, Craig Smith, a new retiree at 58, was seized with dread and anxiousness. He wasn’t aware of retirement funds, he was too young to collect Social Security benefits, and he was banking wholly on his savings.

In his mind, he was aware that he couldn’t cash out his stocks because he might live another 30 years or so and would want higher investment returns that would come in from stocks, but emotionally, he was completely scarred.

As retired folks watched their account balances drop sharply, most of them were counseled to cut down their retractions or head back to work to maintain their steady income. The thought of turning into a Wal-Mart welcomer or McDonald’s counter person was certainly not appealing to Craig as he found impossible to sleep at night.

Probabilities are alright — till you become a data point. The recent global recession that gripped the world in fear and horror was so serious and so uncommon (since nearly every asset class, save treasury bonds, endured grievous losses) that it has challenged the accuracy, integrity, and propriety of every conservative strategy.

The biggest source of danger to retirement income lies in removing too much money from a shriveling nest egg, for there may not be adequate left to gain from the unavoidable market backlash. Making the most of all the financial assistance you have at the moment and setting a plan in place that will take care of unforeseen outcomes into consideration is the most crucial and primary step in insuring against them.

Over the next few days we will touch topics such as how to map your time and how you can look out for while looking for a Fulfilling Retirement.

Why Buy-Sell Agreements make Good Business Sense

Wednesday, June 23rd, 2010

A business is largely dependant on its owners for its survival. So it is only fair that the owners will be concerned with the fate of the business in case something was to happen to the owner. One would want to ensure continuity of ownership and management without having to compromise on the business in any way. A fail-safe guarantee is a well-drafted buy-sell agreement. Think of it as a pre-martial agreement or even a will between business owners. Such a buyout agreement, between co-owners of a business is binding on the signees. Its purpose is to govern any situation, in relation to the owner, that can cause distress to the business.
The most important part of such an agreement is the listing of trigger events, or specific situations that will cause a mandatory or optional buyout of an owner’s interest.
These trigger events usually include;
Death: This is a universal clause in almost all buy-sell agreements. In the event of an owner’s death, the entity or the surviving shareholders have the obligation to purchase the interest of the deceased.
Disability: In case of an owner’s disability, after a defined period of time, the corporation can have a defined right or obligation, to purchase the disabled employee’s shares.
Sellout to a third party: The buy-sell agreement should specify the terms under which a potential sale can be presented to the co-owners of the business.
Retirement of an owner: The owner’s retirement will usually result in a mandatory buyout of the business, after deciding on the valuation methods and payment terms.
Owner’s divorce or bankruptcy: In either event, the business is liable to be subjected to outsider interference. As a safety measure, the co-owners should include a clause that forces the affected owner to sell either shares or the entity itself, after deciding on the valuation methods and payment terms.
Keeping these major trigger events in mind, a well-drafted buy-sell agreement will provide reasonable and workable solutions for your business.

Pre-Planning for your Retirement

Friday, April 16th, 2010

Didn’t hiring a wedding planner to create perfect moments on your big day seem like a good investment? So why not let a retirement planner help you live the life of comfort that you crave for during your working years. A lot of people ask me how much money I should set aside for my retirement. I always repeat that the quality of life you would like to enjoy, when you are older, depends on how much you are able to save for it now.

Do A Quick Calculation

Considering your current financial situation-

* Think of all the things you would like to be able to afford in the near future.
* Think of how much you currently save, and how much you would need to save to live comfortably for the next five years.
* Now triple that. This should give you a target of the bare minimum you need to save for five years post retiring.

The first step of a good retirement plan would be to determine your objectives. By doing this, you are listing out all the wants and needs for whenever it is you plan to retire. Every person has individual needs; these necessities need to be well taken care of. Are you availing of any IRA or any sort of pension? Keep all this in mind before going ahead.

From the above points, gather all the information you would need to consider before even thinking of making a retirement plan. Three other major things you need to consider are-

1. The cost of living in the future, inflation, taxes, as well as health care costs.
2. Your stocks, ventures, etc for their current worth, as well as their projected worth to gauge what sort of income you can expect from them.
3. Estate planning encompasses protection of your assets for you as well as for your beneficiaries. Most people assume they can over look this part. However, never underestimate it’s role in your retirement portfolio.

If you wish to learn more about other factors which affect retirement planning, please feel free to request for more information

Also, visit out services list to know how we help you with your retirement planning.

My personal advice to you is- “If you wish to work through your retirement, you must make sure it’s an optional job and you are not working with the purpose of supporting yourself and your family.” All the best!