Articles and Videos

Is There a Solution to the Pension Dilemma?- Season 4: Episode 1
Managing Your Financial Future

Is There a Solution to the Pension Dilemma?- Season 4: Episode 1

November 3, 2020

If you happen to be one of those people with a traditional pension plan, there’s one important piece of information you should know about: unless your spouse elects to sign a waiver that allows otherwise, your pension benefits will be paid out to the both of you in the form of what’s called a “qualified joint and survivor annuity.” In other words, you’ll receive a reduced amount during your lifetime, so that your spouse will continue to get at least 50% of that amount if you happen to die first. But if you both elect instead to receive the higher single-life annuity payment, the payments (while significantly higher) would stop at your death and not continue for the surviving spouse.  This can be something of a dilemma for people who would want the higher payments, but are reluctant to lose that income if the pension owner doesn’t outlive the spouse. There is a potential solution to this problem, though.  Could you perhaps have both the larger payments AND provide an income for your surviving spouse?
Pension Decisions, Part 2: Lump Sum, or Annuity Payments?
Articles

Pension Decisions, Part 2: Lump Sum, or Annuity Payments?

October 29, 2020

A little while back we told you about a way to take your maximum pension benefit option while potentially mitigating the income risk to your spouse with a life insurance policy.  That technique is called “pension maximization.” If you have a pension, it’s just one of the decisions you’ll be faced with when it’s time to take your benefits. Another decision you may have is whether to take your benefits in the form of an annuity or a lump sum.  Which option you select can have a large impact on how much money you ultimately wind up with in retirement.  Factors such as current interest rates, future inflation, and your own investing abilities may all come into play.
A Strategy to Maximize Your Pension Payments
Articles

A Strategy to Maximize Your Pension Payments

October 22, 2020

If you’re the owner of a traditional pension plan, you need to be aware of an important rule when the payments start: unless your spouse elects to sign a waiver that allows otherwise, your pension benefits will be paid out to the both of you in the form of what’s called a “qualified joint and survivor annuity.” In other words, the amount you’ll get will be reduced during your lifetime, so that your spouse will continue to receive at least 50% of that amount if you happen to die first. You could both elect instead to receive the higher single-life annuity payment, but the payments, while significantly higher, would stop at your death and not continue for the surviving spouse.  This can be a real dilemma for people who want the higher payments, but are reluctant to lose that income if the pension owner doesn’t outlive the spouse. There is a potential solution to this problem, though.  Is it possible to have both the larger payments AND provide an income for your surviving spouse? 
Can You Make Your Retirement Dreams a Reality?
Lucia Capital Group Weekly

Can You Make Your Retirement Dreams a Reality?

August 20, 2020

A little while back we related some statistics that show personal spending tends to go down over the long-term course of retirement.  But for some people, usually right after they begin their retirement, their spending will actually increase – sometimes a lot.  And that makes sense, as they begin to finally do the things they always wanted to do, now that they have the time to make it happen.   Of course, when spending goes up, it may mean that you’re relying on your portfolio to supply more of the money you need to meet your expenses. This is where having a withdrawal strategy – a spending strategy – becomes crucial. If your assets are not set up with the anticipation of a market downturn, you may find yourself in a world of hurt when you withdraw those funds. Can you make your retirement dreams a reality? And what does it take to potentially see yourself through the next 30 years or more? It may be less complicated than you think.
Never Say Never, and Always Avoid Always!- Season 3: Episode 8
Managing Your Financial Future

Never Say Never, and Always Avoid Always!- Season 3: Episode 8

August 18, 2020

If you’ve ever read an article about finance or listened to a financial podcast (other than this one), you probably heard someone say that you should “never” buy a certain financial product. Or, conversely, you’ve heard that “everyone should buy XYZ financial product, no matter who they are!” These are both plainly wrong, on so many levels. The real truth is that everyone’s needs and goals are different; where one financial tool may work very well for a certain individual, it’s likely that exact same product is completely wrong for another person.  That’s why it’s important to be financially knowledgeable about what someone is recommending you should have – or shouldn’t have – in your portfolio.
How Much Money Will You Need to Spend in Retirement?
Lucia Capital Group Weekly

How Much Money Will You Need to Spend in Retirement?

August 13, 2020

Have you ever worked with one of those online retirement calculators?  You plug in certain information — like your current income and savings, your expected rate of return, maybe an inflation factor — and eventually it tells you how much money you should aim to have in your portfolio at retirement in order to give you the income you need.  Here’s the problem – they often give numbers that are far higher than you’ll actually need. If you require, say, $100,000 of income to retire at age 65, will you really need $230,000 per year 30 years later just to keep up with inflation? From our experience, as retirement goes on, spending needs (and thus your income needs) tend to go down over the long term – not up. What this means is that you may not need to have as much socked away in your portfolio as those online calculators would suggest.
Paying Off your Mortgage: Good idea, or Bad? – Season 3: Episode 7
Managing Your Financial Future

Paying Off your Mortgage: Good idea, or Bad? – Season 3: Episode 7

August 11, 2020

A few weeks back, we offered a strategy for people who want to pay off their mortgage in, say, 15 years, but don’t like the idea of making the higher principal payments that are required of a 15-year loan.  Following up on that topic, we received an email asking about whether paying off the mortgage is really nothing more than a cash-flow issue.  Is it?  Or are there other things to consider?
Did You Just Inherit an IRA?
Lucia Capital Group Weekly

Did You Just Inherit an IRA?

August 6, 2020

If you’ve been keeping up with latest tax laws, you may know that the rules regarding Required Minimum Distributions changed at the end of 2019 with the SECURE Act.  And if you look really closely, you’d see that some of those rules changed again in March with the CARES Act.  It’s not just important information, it’s also very confusing at the same time. Doing the wrong thing may cost you more in taxes than you’d normally have to pay.  This is especially true if you’ve recently inherited an IRA, or will inherit one very soon.  Knowing the rules, or at least having an advisor who knows the rules, may save you not only some taxes, but unnecessary headaches as well.