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Estate Planning Tips

Trying to deal and cope with a loss of a loved one is extremely challenging and emotionally draining in itself.  However, when you add the handling of the estate and all that can come with it, it can very well be too much for someone to handle during such a tough time in their lives.  Hopefully after reading this article, the handling of the estate process should be much simpler and easier.

Titling of accounts

Arguably one of the most important things you can do in advance is to ensure all of your accounts are titled properly.  If you are married, it usually makes sense to have all of your bank accounts held as “Joint tenants with rights of survivorship” with your spouse.  This means, that if one spouse passes away, the bank account would then be held in the surviving spouse’s name to avoid probate.  In addition to having the account held jointly, you can also add a “Transfer on Death” (TOD) or “Payable on Death” (POD).  If something happened to both you and your spouse, those accounts would then pass on to your TOD or POD (i.e., your children) and also avoid probate.  Any non-retirement account (i.e.,  brokerage accounts, bank accounts, etc.) should be titled either jointly with a TOD or POD, or both.

When it comes to any life insurance and retirement accounts, such as deferred compensation, DROP, IRAs, etc., you ALWAYS want to ensure you have both primary and contingent beneficiaries!  This again will avoid probate and ensure your assets are going to go to the proper people when you pass away.  It is very simple to update your beneficiaries and also important to know how your accounts are titled.  Too many times, we find out too late that a few accounts were missed or not titled properly; and it creates more headaches and also costs more money to get the assets to the appropriate people.

Legal Documents

In addition to titling all of your accounts properly, it is important to have your legal documents updated and in force prior to when a life-changing event happens.  These would include your Wills and Powers of Attorney.  Everyone should have a Will, as this will distribute any remaining property that has to go through probate.  It is important to remember that all of the accounts mentioned above would avoid going through probate and also avoid passing to your Will if they were titled properly.  However, anything remaining would then go through probate; and your Will would distribute the assets accordingly.

You should also make sure both you and your spouse have a Durable Power of Attorney and Health Care Power of Attorney established.  These become important in times where one of you is deemed incapacitated or incompetent.  In most cases, spouses make each other their powers of attorney so they can make the appropriate decisions on their spouse’s behalf.  It can, however, be any one of your choosing; but it’s very important that it is a well- trusted and well-known individual, as this title gives them a lot of control.

Some people want to take their legal documents a step further and create a trust.  Simply put, a trust can allow you to “control your assets from the grave” and also ensure your assets stay in your bloodline.  This would also avoid probate expenses.  Trusts can sometimes be relatively expensive to set up, so it’s important to understand what they do, and be sure that the cost justifies what you are trying to accomplish.

In summary, doing the above steps can help make the loss of a loved one less stressful and less of a burden when trying to settle the estate and final affairs.  It is also important to communicate your wishes with your spouse or other loved ones, and be sure everyone is on the same page.  Also, make sure you know where your important documents are held, and that they are in a secure place.

No one likes to talk about death, but none of us know what the future may hold; so it’s important to be prepared.  If you have further questions on any of the topics discussed, feel free to give us a call.

 

Lineweaver Financial Group
9035 Sweet Valley Drive
Valley View, OH 44125
216-520-1711
OhioRetire.com

Securities offered through Triad Advisors, member FINRA/SIPC. Advisory services offered through Lineweaver Wealth Advisors, LLC. Lineweaver Wealth Advisors is not affiliated with Triad Advisors.

This is not intended to be legal advice.  Please consult an attorney to address your specific situation.

 

Preparing for Market Volatility

Managing your retirement assets in a period of market volatility

If you follow the financial news, it comes as no surprise to you that the Dow Jones Industrial Average and the S&P 500 both have recently hit record levels.  It doesn’t seem that long ago that we were all concerned about the financial crisis, but the market has now seen gains for the last five years.   However, now is not the time to be complacent.

Coupled with market highs, we have recently witnessed increased volatility. A long list of concerns has recently increased ongoing instability in the financial markets. Concerns include a slowdown in China, weakening European economies, the strength of the dollar, border issues between Russia and Ukraine, ISIS, when and how much the Fed will raise interest rates, and Ebola. Financial markets don’t like uncertainty; but let’s face it, uncertainty is not going away. Investors should keep this volatility in perspective. Pullbacks of 5% to 10%, which we saw this past fall, are occurring more frequently. Investors have to understand market volatility is the new norm.

To illustrate, during this past fall the Dow Jones Industrial Average’s 275 point gain on Wednesday, October 8, was the biggest one-day rally in 2014; while the 335 point pullback on Thursday, October 9 was the worst one-day decline in 2014. This was the first time in 17 years that the biggest one-day gain and decline occurred in back-to-back sessions, and spoke volumes about the market’s recent volatility.

When markets become volatile, investors frequently let emotions rule their investment decisions and attempt to head for safe cover. This only increases the problem, which causes additional fear. But the impulse to let emotions rule and sell can make it difficult for investors to meet their investment goals. We believe the recent market volatility is primarily driven by fear, not fundamentals.

Despite recent hiccups, most U.S. economic indicators continue to signal that the economy is expanding. A strong labor market, coupled with a decline in gasoline prices, should provide a boost to consumer income and spending.  However, the recent and ongoing turbulence in the market has investors questioning how they should strategize for the long term.  Rather than reacting emotionally and panicking by running for the door, a better approach might be to think through what one's risk appetite might be and adjust your asset allocation gradually, probably to something more conservative but not giving up the chance for some upside potential.

Now is a great time to revisit the Rule of 100 and make sure you are not assuming too much risk with your deferred compensation and other retirement assets. We have long preached that you need to follow this rule. Take 100 and subtract your age, and the resulting number is the maximum percentage of your assets that should be at risk.  The gains in the markets over the past five years may have increased your percentage of equities in your portfolio higher than you want or need. It might be a great time to consider rebalancing your portfolio, and possibly lock-in some of the gains that until now were just paper gains.

No one knows exactly how this year will play out. But the prudent response for long-term investors is tried and tested: focus on fundamentals and hold a balanced, well-diversified portfolio.  If you haven’t looked at your deferred compensation account recently, now may be the time to ensure you are properly allocated.  If you have questions on how to do this and want to make sure you are prepared for this ongoing period of market volatility, call our office to schedule a complimentary review with one of our advisors.

Lineweaver Financial Group s 9035 Sweet Valley Drive s Valley View, OH 44125 s 216.520.1711

www.ohioretire.com

Securities offered through Triad Advisors, Member FINRA/SIPC. Advisory services offered through Lineweaver Wealth Advisors, LLC. Lineweaver Wealth Advisors is not affiliated with Triad Advisors.

 

Asset allocation does not ensure a profit or guarantee against loss; it is a method used to help manage risk.
Source: Yahoo Finance

 

 

The Risk No One Wants to Talk About

Are you going to run out of money?

Most investors perceive risk in terms of the dollar amount they will or have lost over a relatively short period. They also perceive future risk in terms of events they worry could occur, such as a stock market crash, Treasury yields soaring because of the federal debt, or a global war or catastrophe.  It's easy to understand why: These risks are easy to identify and potentially quantify.

What is much tougher for us to wrap our heads around is risk from the standpoint of longevity. This is the possibility of outliving your savings. From a purely financial standpoint, it is the key definition of risk you should be most concerned with.

The good news is that most police officers are able to retire with a strong pension, but will that be enough?  Also, DROP has been added into the picture to create a nice nest egg to be used to supplement your pension in retirement.  When you add DROP to your deferred compensation or other retirement accounts you were able to save on your own, you could be in a good position to have your assets more than last your lifetime.  However, excessive distributions and improper management of your funds can have a negative impact on accomplishing that important feat.

What are you doing to help ensure you have saved enough and managed your portfolio in a manner that provides an adequate level of income on an inflation-adjusted basis in retirement?  The decisions that you make throughout your career—including what you save, how long you work, how you allocate your portfolio and whether or not you panic during times of market turbulence— could help ensure you do not outlive your assets.  In many cases, having professional guidance can really help take the emotion out of investing during turbulent market times.  Too many times we see people in retirement that have too much of their assets at risk, even though they may not need or desire the potential high returns they could get by being solely in the market.

Unfortunately, whether our money will last our lifetimes isn’t always top of mind.  Our minds don't do well with big numbers that are far out in the future.  We think in the short-term and we don't do well with big, uncertain events. We certainly don't like thinking about exactly how many years we'll spend in retirement before the grim reaper comes or what our medical expenses might be like.  It's simply easier to focus on potential risks that are currently more identifiable.

Having a properly allocated, diversified retirement portfolio could help prevent you from outliving your assets.  Do you need help in crunching the numbers based on your pension, living expenses, age and retirement assets?  If so, feel free to give us a call so we can help you get a better feeling on the longevity of your money.

Lineweaver Financial Group • 9035 Sweet Valley Drive, Valley View, OH 44125
216.520.1711 • OhioRetire.com

Securities offered through Sigma Financial Corporation, member FINRA/SIPC. Lineweaver Financial Group is independently owned and operated. Diversification does not guarantee against loss or ensure a profit; it is a method used to help manage risk.

 

Planning for your Retirement

Planning for retirement can be a very complex task, especially for those that are ill prepared.  There are many things you should address prior to punching your final ticket to retirement, and many police officers may not know what those are.

At Lineweaver Financial Group, we feel it is best to be informed and educated about your pension system and the decisions you will need to make.  Too many times, we have met with a police officer AFTER they have already retired, only to find out they made choices that weren’t best for themselves and their family.  In many cases, these decisions are irrevocable and there is nothing we can do to change them, only try to help them in their future.  We prefer to meet with employees BEFORE they retire and provide them complimentary advice to help them address the necessary hurdles of retirement planning.  This way they can confidently head into retirement knowing they are making informed decisions based on their specific situation.

Following is a helpful retirement checklist that will help get you started in your preparation:

  1. Do you know when you should visit the pension board?
  2. Do you know what your approximate monthly pension will be?
  3. Do you know what pension options are available and which one is best for your family?
  4. How can you get the most from your pension yet still leave assets to your heirs?
  5. Is there a cost effective way to bridge health insurance gaps between retirement and Medicare?
  6. Will the pension option you choose support your current lifestyle?
  7. Are you planning on working after retirement?
  8. Will your social security payments be reduced in retirement?
  9. Do you have all your legal documents updated and accounts titled properly?
  10. Are you aware of the tax restrictions of rolling over your deferred compensation and DROP in retirement?
  11. Have you met with a financial consultant who focuses on helping public employees plan for a successful retirement?

While this checklist won’t fully prepare you for the choices and decisions you need to make to have a successful retirement, it will definitely help.  We also host complimentary retirement dinners, exclusively for public employees, where we develop these and other topics in greater detail.  If you are interested in attending one or simply learning more about our company, feel free to visit our website at www.ohioretire.com or call our office to schedule a complimentary, no obligation retirement consultation with one of our advisors.

Lineweaver Financial Group s 9035 Sweet Valley Drive s Valley View, OH 44125 s 216.520.1711

www.ohioretire.com

Securities offered through Sigma Financial Corporation. Member FINRA/SIPC.

Lineweaver Financial Group is independently owned and operated.

 

Understanding Annuities Life is confusing…and so are annuities!

The complexity of modern day life seems to add to confusion, and annuities are no exception. There are many types of annuities and the variations of them continually evolve, making them even more confusing.  Before you consider using an annuity in your deferred compensation plan or other retirement planning, make sure you understand the benefits, costs, and surrender charge period. Not all annuities are created equal. Annuities can provide valuable benefits, but there are typically costs associated with these benefits. As with any investment decision, you need to make certain it is appropriate for your unique circumstances.

There are basically two types of annuities: deferred annuities and immediate annuities. A deferred annuity defers payment, while an immediate annuity begins payment immediately. While this is pretty simple, from this point, annuities get very complex. There are many variations, and they are changing all the time.

If a concern of yours is to help manage your principal from potential losses associated with downturns in the market, annuities can be used to help manage risk. We tend to think that principal protection is always a financial goal that should be considered, but it is even more important as you enter into retirement.

If providing yourself with an income stream is a goal, an immediate annuity might fit into your plan. When you buy an immediate income annuity you are buying an insurance product in which you exchange a lump sum for guaranteed payments for life or a period of time. This may help you manage two big retirement risks: a down market or outliving your money.

Have you used an annuity in your retirement planning, or are you considering using one in the future?  If you have further questions on the various types and features of annuities, feel free to give us a call.

Lineweaver Financial Group w 9035 Sweet Valley DrivewValley View, OH 44125w216.520.1711

Securities offered through Sigma Financial Corporation. Member FINRA/SIPC. Lineweaver Financial Group is independent of Sigma Financial Corporation.

Some fixed annuities come with high guaranteed interest rates that can decrease after a set number of years to a much lower minimum interest rate determined by law.

Investors can lose principal if an indexed annuity is terminated prior to the end of the surrender period.

The principal guarantee and income for life guarantee features of fixed annuities are subject to the claims-paying ability of the issuing company.

If you take an early distribution from an annuity you may be subject to a surrender charge which could result in a loss of principal.  You may also be subject to a tax penalty if you make a withdrawal before age 59.5.

 

 
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