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 With homeownership, job opportunity and retirement security in
decline, an Allstate/National Journal Heartland Monitor poll shows
that most Americans agree with what the experts have said. Seven in
10 think that tomorrow’s adults – today’s kids – will have less
financial security than adults today.
“There are several long-term issues we need to address, including
our estimated $17.3 trillion debt, a legacy that our children are
poised to inherit; but I think the United States will be stable for
the next 10 years, and maybe longer if we get our financial house in
order,” says Stephen Ng, founder and president of Stephen Ng
Financial Group, (www.stephenngfg.com).
“Many Americans who’ve worked their entire lives for a comfortable,
if not luxurious, retirement want to know their money will be there
– that’s their dream.”
Ng is an international financial planner with certifications in 19
states. He’s passionate about teaching sound wealth practices to
both clients and his community. Here are three important tips every
pre-retiree and retiree should know to help preserve their wealth.
Go to an independent retirement-planning advisor. Financial
planning can be confusing. For most retirees who are not
professionals, the numbers, rules and terminology can seem like a
foreign language. An independent advisor, who is licensed in
multiple products – insurance, annuities and more – allows for a
higher degree of objectivity, tailoring options for a client’s
specific needs. He or she will not be bound to a corporate agenda or
limited in their knowledge. Also, talk to the person who will be the
architect of your financial future. Find out his or her values. How
do they feel about their job? Are they patient in explaining your
options? Do you trust your advisor?
Pre-retirees: know your start-date options for retirement. Be
aware that in most cases, withdrawals from tax-deferred retirement
plans before age 59½ may be subject to a 10 percent federal income
tax penalty. The latest date to begin required minimum distributions
is usually April 1 of the year after you turn age 70½. In most
cases, withdrawals are taxed as ordinary income. There are 10 common
planning options, some of which are funded by employers. They are
the defined benefit pension; money purchase pension; profit-sharing
plan; savings plan; employee stock ownership plan; tax-sheltered
annuities, or 403(b) plans; individual retirement accounts;
self-employed plans; simplified employee pensions; Savings Incentive
Match Plans for Employees; and annuity contracts.
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Make sure you feel good about your annuity. An annuity is a
contract with an insurance company in which you make one or more
payments in exchange for a future income stream in retirement. The
funds in an annuity accumulate tax-deferred, regardless of which
type of annuity you choose. Fixed annuity contracts are issued with
guaranteed minimum interest rates. Although the rate may be
adjusted, it should never fall below a guaranteed minimum rate
specified in the contract. Keep in mind that annuity guarantees are
subject to the claims-paying ability of the insurance company and
contain fees and charges which are not limited to sales and
surrender charges. All withdrawals of tax-deferred earnings are
subject to current income tax, and, if made prior to age 59½, may
also be subject to a 10 percent federal income tax penalty.
Additionally, if purchased within a qualified plan, an annuity will
provide no further tax deferral features. The contract, when
redeemed, may be worth more or less than the total amount invested.
“This may be plenty of information to take in for now, but this is
only the tip of the iceberg,” Ng says. “Don’t be afraid to ask
questions. And, the more education you have about your own money,
the better.”
[Text received; GINNY GRIMSLEY, NEWS
AND EXPERTS] About
Stephen Ng
Stephen Ng is the founder and president of Stephen Ng Financial
Group™ (www.stephenngfg.com). Since 1992, he has helped pre-retirees
and retirees preserve and increase their wealth by, in part, helping
them avoid common mistakes. He regularly holds financial management,
retirement investing and insurance planning seminars at businesses,
churches and non-profit organizations. Ng is a Chartered Life
Underwriter, Chartered Financial Consultant and a Certified Estate
Planner. He is also an Investment Advisor Representative offering
securities and advisory services through SagePoint Financial, Inc.,
member FINRA/SIPC. Stephen Ng Financial Group and SagePoint
Financial, Inc. are unaffiliated entities. Stephen brings a national
and international perspective to his financial advice, with
professional and educational roots in Australia and Asia, and
certifications in 19 states.
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