RSG welcomes
you to the September 2003 edition
of The Retirement Strategist. We hope you
enjoy
our actionable ideas for implementing a
better retirement stategy. Remember that
time can be your greatest friend; the sooner
you implement excellent retirement savings
ideas, the better.
- Timely
Investment Tip$: A Private, Defined Benefit Plan From GE Financial
- Business
Owner Strategies:
Ouch! Business Owners Personally Liable For Company 401(k) Plans
- Questions From
Members
- Retirement
Strategies Group
Service Highlight: How We Can Help You
TIMELY
INVESTMENT TIP$
A Private, Defined Benefit
Plan From GE Financial
Building Guaranteed
Retirement Security By now you’ve
probably read about the major retirement
crisis facing Americans over the next twenty
years. For prior generations of retirees,
Social Security and a defined benefit pension
met their retirement needs. Now, however,
the rules are different. Social Security
is in a state of flux and may be a “less
and later” component for many future
retirees. Defined contribution style 401k
plans have
replaced defined benefit plans in the corporate
world. Despite their many benefits,
401k plans may unfortunately prove to be
an inadequate primary
source of retirement security, for they are
unpredictable as to how much income they
will produce at retirement. We really need
defined benefit plans back.
There's good news,
then, because a new defined
benefit solution has just hit the market.
We believe it is one of the most innovative
and attractive retirement options
for individual investors. It’s
called the GE retirement Answer and it’s brought to you by GE Financial Assurance
- a part of the legendary GE family of
companies.
GE Retirement Answer is a
privately funded (meaning a deal just between
you and
GE) defined benefit pension arrangement.
It’s real simple too. First, you tell
GE how much you want as a minimum in guaranteed
retirement income. Next,
they tell you how much you need to deposit
into your account to accomplish
this - either on a monthly basis or in
one lump sum. It’s that simple.
You
don't need to worry about investments,
asset allocation, or market returns. All
you need to do is make your retirement
contributions and GE takes care of the
rest. Even better, the guaranteed income
for life from GE is a floor benefit;
you may receive more retirement income,
but never less!
Funding your retirement income – particularly
in an era of increasing life expectancy
and low market returns – needs
to be a higher priority than ever. The
GE Retirement Answer, a variable annuity,
might be the right answer for you
at the right time.
To obtain a prospectus
which describes
how the program works, including all applicable
charges and expenses, call Retirement Strategies
Group. As always, you should
read the prospectus for the GE Retirement
Answer carefully before committing your money.
BUSINESS
OWNER STRATEGIES
Ouch!
Business Owners Personally Liable For Company 401(k) Plans
As a business
owner, managing liability is an essential part of life. Today it seem you
can literally be
sued for anything. Although most lawsuits are frivolous, they can still be
a real headache and need to be managed. Even your company 401(k) plan can be a cause for liability concern. How could your 401(k)
be a cause for liability?
Because an owner who acts
as the trustee of their company’s 401(k) plan
is personally liable for the plan. Although this typically comes as a
surprise to most business owners, what's worse is that there is no “corporate” protection
or shield from liability for the 401(k) or other pension plans! This makes
it all the more important to be aware of all fiduciary obligations if
you are the plan trustee.
Although we feel strongly
that every business should offer a 401(k) or other defined contribution plan,
we also
advocate personal asset protection for business owners. Managing potential
liabilities is always crucial. The best way to protect yourself
from plan exposure is to implement “Best Practices” with
your 401(k) plan.
Call RSG for your
free copy of the special report, "Best Practices Today Will Keep The Lawyers
Away".
QUESTIONS
FROM MEMBERS
| |
| Q. |
I
understand that the IRA contributions for 2002 were changed. How much
can I contribute to my IRA this year?
|
| A. |
In addition to the tax rebate checks that showed up in millions of
mailboxes last summer, there were also considerable changes in tax law
that will deliver
benefits to taxpayers through the Economic Growth and Tax Reconciliation
Act of 2001. More than just a one time rebate, Congress has given people
a
golden opportunity to grow and expand their retirement nest eggs.
IRAs are probably
the most widely utilized savings accounts for most conscious investors.
For traditional IRAs, the 2002 funding
limits have increased to $3000 or $3500 for those 50 years
or older. However, the “deductibility” has
been phased out for upper income wage earners.
All in all, there
are eleven different types of IRAs including the traditional IRA, the
Roth IRA, and the Education IRA – all
of which have their own unique rules and contribution
limits.
|
| Q. |
I'm concerned
that I will not have enough money to retire. How much money do
I need to be able to retire at age 65?
|
| A. |
As a general
rule of thumb, most financial advisors would suggest that you
need 80% of your pre-retirement income per year to maintain your current
lifestyle throughout
retirement. However, this generalization is not always appropriate;
required retirement income is truly dependant on your personal goals
or plans
for retirement.
For example,
extensive travel, a new luxury car or motor coach, increased gifts
to grandchildren to help pay for college are just a few of
the things that may call for even more income in retirement.
The
key to meeting your retirement goals is proper planning. You need
to ensure that you income goals have been adequately addressed
through the three traditional sources of retirement income:
social security (a crumbling system), a company pension
(which is becoming quite rare these days), and personal savings and investments
(which will likely need to account for the lion's share of your retirement income
needs).
|
HOW WE CAN HELP YOU With
the myriad of financial programs and information available to you, investing
and retirement planning can become rather confusing, but we can help. We
specialize in helping our clients reach their financial goals by designing
specific programs based on each individual's goals.
You have already
taken the first step in requesting to receive our monthly e-bulletin. If
you would like additional information including a free review of your current
portfolio, information on brokerage services, mutual funds, tax-deferred
annuities, or have a question on a specific financial program, please contact
Retirement Strategies Group. |
