A New Government Resource: Aging.Gov

By Rich Topps, Sr.

The Obama Administration recently launched a website named Aging.Gov.  This new site contains information that seniors may wish to access if they do not have access to advisors to counsel them on the myriad issues unique to senior citizens. The website, which curates a broad range of information on topics ranging from healthy eating habit suggestions to Medicare enrollment, aims to be a one-stop hub to all the available federal government resources for the aging population. It may be a good starting place from which to pursue further information.

There is an extraordinary amount of information, which some may find confusing due to its sheer volume. Although intended to provide a wealth of information to all Americans, not just the seniors, the website is designed for those who may not be as tech-savvy as the millennial generation.  Although more specific personalized information is best obtained from a person’s doctor, lawyer, financial advisor, etc., Aging.gov is probably a good starting point for many.


Source: www.aging.gov

A New Member to the Team

J. Michael Tuohey has joined Bolmgren RetirePLAN as a Partner and Financial Advisor.  As a former Executive and Chief Financial Officer of multiple Financial Services firms, Mr. Tuohey brings nearly 30 years of financial industry experience to Bolmgren RetirePLAN.  A CPA, Mr. Tuohey will advise clients on not only investments and retirement planning, but on a unique perspective of tax minimizing strategies. 

Should I Pay Off My Mortgage Before I Retire?

Ideally so.  However, it used to be that you worked for a company 30 years, got a watch and a pension, health insurance paid for,  and enjoyed a “care-free” retirement.  The impetus was on controlling cash-flow… not asset accumulation.  Managing and controlling debt was a way of life and it often dictated when to retire.  In recent decades, however, people change employers more frequently taking their “portable” retirement plans (401k, 403b, IRAs, etc.) with them as they go.  Thus, the retirement "trigger" is more likely to be a certain dollar amount saved than a net cash flow number.  Not to mention, the increased probability of moving or relocating. Meaning, the odds of carrying a mortgage into retirement has increased dramatically in recent years.

According to the Survey of Consumer Finance published by the Federal Reserve Board, in 1992 the median outstanding mortgage balance for Baby Boomers was a little over $48,000.  Today, that figure has more than doubled.  So the big question for those looking at retirement: Should you pay off your mortgage when you retire?  Let’s discuss three possible answers.

I’ll start with the easy answer.  No...if you need to take money out of a retirement account to pay it off.  Taking money out of your retirement account is a taxable event.  With our graduated income tax system, you can push yourself  into higher and higher tax brackets.  Especially if you are in the back third of your mortgage when you are paying little interest.  Why pay additional federal and state income taxes just to reduce a monthly expense?

Then of course there is the tricky answer. Probably…if you have taxable accounts i.e. savings account or taxable money market account.  Why do I say “probably” and not an affirmative yes? Retirement planning has more to do with using financial resources wisely, as it does investing appropriately.  Many such recipes to reduce taxes and/or maximize social security call for taxable savings accounts in the recipe.  Often, those strategies add far more value to your financial situation than the benefit of eliminating mortgage interest.

The least common answer. Yes…if financially advantageous.  If you have a small mortgage left and savings on hand, by all means.  A lot of people, I've found, have it in their heads to pay off their mortgages when they retire as a financial goal.  Perhaps, they may have missed that goal by a couple years and would find peace of mind in reaching that goal. Paying off the rest of your mortgage, in this case, make perfect sense.

When Over-Saving is a Problem

Hard to believe that it is possible to be penalized for over-saving for retirement.  However, the IRS has shown much favor towards Individual Retirement Accounts (IRA) and wants to balance encouraging saving for retirement with not losing tax revenue .  Sometimes our zeal for saving may not match our prudence in evaluating the most appropriate way to do so.  This article shows the common pitfalls and, more so,  that it is possible to over-save in one retirement vehicle; an IRA.

A world where cash is king and credit is queen

Credit Cards have been around for more than 60 years yet a recent study showed Millennials (adults born earlier than 1980) are shying away from the product more than their generational counterparts.  The Great Recession may have left some younger consumers reluctant to rack up charges. In any case, credit cards have their purpose and can be very useful for routine or even at times large family purchases.  However, horror stories of getting buried in credit card debt are all so true.  This article discusses two main reasons for credit card debt and ways to avoid. (Read Full Article)

When Will the Market "Drop Out"?

Merriam-Websters Dictionary defines the intransitive verb "drop out" as: "to withdraw from participation or membership."  Many use this terminology to describe a quick and sharp decline in the stock market.  Makes sense... when the stock market declines rapidly it is often caused by investors "withdrawing from participation".  You may see, hear, or read predictions in the financial media that sound quite convincing, and may even be based on past events, but virtually all market cycles are different and sooner or later the stock market will "drop out".  The question is how close are we and what should we be doing today?  This article weighs in. (Read Full Article)

Socially Responsible or Fiscally Irresponsible?

The rapid growth of Socially Responsible Investing (SRI) has captured the attention of investors and advisers alike.  In its early days, this discipline in investment management was known for what it did not invest in; alcohol, tobacco, gambling, firearms, etc.  Now it wants to be know for what it does invest in... a "better" society.  Many, though, still may wonder; "Will my pursuit to invest strictly socially responsible be personally a fiscal irresponsibility?" In this article, I stack up the performance of a large socially responsible mutual fund to answer that question. (Read Full Article)

Your IRA Rollover Just Got "Ran Over"

Navigating the retirement planning landscape requires some difficult decisions: when to retire, how much to save, what investments are best, etc.  However, the myriads of IRS and ERISA rules as you save and plan for retirement can turn this landscape into a minefield.  One such IRS rule, the so called "60 day rule",  has recent guidance by the IRS that could spell catastrophe for unsuspecting DIYers.  When planning your next IRA rollover, make sure it doesn't get "ran over" by taxes and penalties. (Read Full Article)

How Much Your Refund is Costing You

The Scenerio: Sam and Sara are married with a couple kids. Between the two of them, they make $80,000 per year. They both contribute 6% per year to employer sponsored retirement plans. This year they are excited because they are getting a few hundred dollar refund from the IRS. Not being rude I tell them, "Great, but do not make the same mistake this year!" Why did I say that?  They likely have a typical Married with perhaps Four Allowances as W4 payroll deductions.  If they increased the number of allowances (witholding less taxes out of each paycheck) and at the same time increased retirement plan contributions from 6% to 6.5%; their net paycheck would be about the same. They've put next year's expected refund to better use than a year long interest-free loan to the IRS, increased retirement savings by few hundred dollars, and kept take home pay the same. 

A New Way of Delivering Financial Advice

If you are a Gen X'er or Millennial, among other qualities, are notoriously web savvy. Bolmgren RetirePLAN has adapted to meet the financial planning needs of those generations by offering services ONLINE.  There are no long-term commitments, you can conveniently pay for our services via credit card, and get the advice you want via the phone or video conference.  Who has the time to take an afternoon off work, go downtown, and spend a couple hours with their Financial Planner.  Furthermore, isn't it the quality of advice and competence of a Financial Planner you pay for ... not the leather sofas, executive desks, and 12th floor office space.