Category Archives: Retirement Planning

By David Kopyc

Retirement planning is a critical aspect of ensuring financial security in later years. While individuals often focus on personal savings, investments, and pensions, the broader economy plays a pivotal role in shaping their retirement plans. Economic factors such as inflation, interest rates, stock market performance, and governmental policies profoundly influence how much individuals can save and how effectively they can manage their retirement funds.

Inflation is one of the most insidious economic factors affecting retirement planning. It represents the rate at which the general level of prices for goods and services rises, eroding purchasing power. For retirees, especially those relying on fixed income sources like pensions or Social Security, high inflation can severely diminish their standard of living. 

When planning for retirement, individuals must consider the expected inflation rate over their retirement years. For example, if inflation averages 3% annually, a retirement nest egg needs to grow at a rate that at least matches inflation to maintain its real value. Investors often seek assets that tend to outpace inflation, such as stocks or real estate, but these come with their own risks. As a result, a sound retirement strategy must include a diversified investment portfolio that considers inflation risk.

Interest rates, determined largely by the economic environment and actions of central banks, directly influence the cost of borrowing and the return on savings. Low interest rates may seem appealing for borrowers; however, they can negatively affect savers and retirees who depend on interest yield from fixed-income investments for support. 

When interest rates are low, the returns on savings accounts, bonds, and similar instruments decrease. This scenario forces retirees to seek riskier investments to secure adequate returns, which can increase the likelihood of losses during market downturns. Conversely, higher interest rates can benefit retirees; they encourage savings, increase yields on fixed income, and stabilize the economy. Therefore, understanding interest rate trends is essential for effective retirement planning.

By Matthew Burnell, CFP®, MBA

A question that is often asked to me in my line of work is what is a financial advisor? A financial advisor is a broad title and can go by many names, often depending on what a particular firm likes to use or may have meaning depending on the types of clients one works with or a specialty they may possess. A few names that can be interchangeable include financial planner, registered representative, financial consultant, wealth advisor, wealth manager, investment advisor representative, etc.

For this article we will use the term financial advisor. As Financial Advisors, one primary responsibility of ours is to understand the financial goals of our clients which can include businesses, organizations and/or individuals, and use that understanding to help develop a plan to reach those goals. This is often established early in the relationship and updated as needed. During this process, educating clients on the steps being taken to reach these goals is important.

The exact duties that we as financial advisors perform will vary from client to client and will depend on what, if any, area of finance the advisor specializes in. However, most financial advisors will perform some combination of the tasks below.

Investment management: Offer advice on or directly invest in assets based on the client’s risk tolerance and goals. Assets can include stocks, bonds, mutual funds, exchange-traded funds, annuities, real estate, private equity and many other options. While we may handle the investment needs of our clients, we like to educate our clients as to how any of the investments meet their goals.

Taxation: Depending on the advisor, they may prepare tax returns, create tax plans and scenarios, educate or answer questions for specific individuals needs which can cover anything from the tax implications associated with actions taken in their portfolios to tax planning on the sale of a business that works into investable assets. As an example, our Wealth Management practice and tax practice allow us to coordinate our tax and financial planning for clients.

By Christine Graf

According to the Federal Reserve, only 36 percent of Americans are adequately saving for retirement.  The National Institute on Retirement Security estimates that almost 40 million U.S. households have no retirement savings. 

According to Steve Bouchey, president and CEO of Bouchey Financial Group in Saratoga Springs, it is never too early to start saving for retirement. He  has been helping clients for 34 year and has a team of 16 professionals who manage approximately $1 billion in assets for clients in 25 states and overseas.

“Start saving for retirement sooner than later. The sooner you get started, the more money you will have at retirement, and you may be able to retire sooner than expected or have the quality of life you always hoped to have,” he said. “The best advice I can give to a college graduate is that the first thing they need to do is put away as much as they can into a pension plan, and because they are likely in a low tax bracket, fund a Roth IRA.”

Roth IRA contributions are taxable, but earnings and withdrawals are tax free. Individuals who are covered by an employer’s retirement plan can make contributions to a Roth IRA as long as they do not exceed IRS income limits.

Those who haven’t adequately saved for retirement often find themselves having to work for much longer than they had planned. This is a major concern for those who begin to experience health issues as they get older.

“For a lot of people, they don’t have their health and may not have a job they are able to work at,” said Bouchey. “My goal for my clients is that if they are working during their retirement years it is because they are bored silly and not because they need to work.”

By Rob Snell
Your employer-sponsored retirement plan is a valuable asset. But sometimes things happen that can affect the status of your plan. So, for example, if you work for a hospital that changes ownership, and you have been participating in a 403(b), 457(b) or 401(k) retirement plan, what should you do with it now?
Basically, you have four options:
Cash out your plan. You can simply cash out your plan and take the money, but you’ll have to pay taxes on it, and possibly penalties as well. So, unless you really need the funds and you have no other alternative, you may want to avoid liquidating your account.
Roll your account into your new employer’s plan. If it’s allowed, you can roll over your old 403(b), 457(b) or 401(k) plan into your new employer’s plan. Before making this move, you’ll want to look at the new plan’s investment options (which should be numerous) and fees (which should be low). If you move the money directly to the new plan, you won’t be taxed at the time of the transfer, and your funds can continue to grow tax-deferred.
Leave your plan with your old employer. If your account balance is above a certain level, you may be able to leave your plan with your old employer’s plan administrator. You won’t be able to contribute any more money to the plan, but if you like the investment options you’ve chosen, keeping the money in your old plan might be a viable choice.

By Stephen Kyne, CFP
The end of another year is rapidly approaching, and just as you cross items off your checklist and prepare your home for the winter, it’s also important to complete maintenance items to prepare your finances to close out 2020.
The first piece of financial housekeeping will be to begin to gather documents you’ll be needing just after the new year to prepare your taxes. Compile receipts for medical bills, tuition payments, child care and charitable contributions, among others.
While many of us will no longer be able to itemize deductions due to recent tax law changes, there are credits for things like child care and education expenses which you may still be eligible for. For those with large medical bills, mortgage interest, or who have been particularly philanthropic this year, you may still be able to itemize, so it is important to have those receipts handy.
When it comes to planning for your retirement, this is the perfect time to evaluate your contribution levels to your retirement plans at work. If you have the ability, and you’re not yet contributing to the maximum levels allowed, consider topping these accounts off to take advantage of the possible tax deduction this year, as well as the ability to simply squirrel as much away for the future as possible.
Even if you can’t contribute to the maximum, be sure to at least contribute enough to take advantage of any employer matching contributions.
You may not be aware, but once you reach age 50, you are eligible for higher contribution levels than in prior years. So, if you’ve turned 50 this year, consider increasing your contributions. For 401(k) and 403(b) plans, you can contribute an additional $6,000 to a max of $25,500 from $19,500 for those under 50. For SIMPLE plans, you get to contribute an additional $3,000, up to a new max of $16,500. Take advantage of this opportunity to catch-up on contributions you may not have been able to make when you were younger.