The timing of your Social Security benefits can be important. It could make a difference of thousands of dollars in your retirement income. Although there are many factors to consider when making a decision about Social Security (more about that later), it’s fairly simple to calculate your break-even age. Let’s use an example to illustrate the calculation:
The co-ops are a great place to work, no doubt about it, and I'm sure you love your job but would you do it for free? Because if you are considering retirement soon and wondering if you should retire this year or next year that may be exactly what you are doing. One thing I've found that people totally disregard when they think about retirement is interest rates. Interest rates directly affect your R&S Pension amounts and the dollar amount between retiring this year versus next year could mean that you end up working for free when you could have retired.
If you are an electric cooperative employee and you are 55 or over there is a perfect retirement storm brewing right now until the end of 2022. Here are 2 reasons why you should retire in 2022.
When you retire from your cooperative you have several options on how to receive your R&S pension. For example, you can take it as series of payments, you can take it as a lump sum distribution or you can do a combination of both. For those of you interested in the lump sum distribution, I want to make sure you avoid a critical mistake that I have seen retirees make.
A 30 year retirement means more than likely facing many surprises with which a flat monthly payment isn't going to help. The lump sum option, invested properly, offers flexibility to meet those surprises, can be strategically invested to provide regular income, and most importantly could possibly change the lives of the loved ones you leave behind.
What a wild year so far in the in regards to the market. We've seen volatility like we haven't seen since March 2020 which was the beginning stages of the pandemic. Today I want to discuss why you should actually embrace temporary market declines rather than fear them. Notice I said, temporary market declines. I said temporary because they all are temporary and always have been temporary and will always be temporary. But the good news is:
It seems there are many people who can't distinguish between risk and volatility. Volatility isn't risk. They aren't the same thing at all.
It’s 2022 and interest rates that were at historic lows are steadily moving upwards. This means your NRECA R&S Lump Sum Pension Amounts are at all time highs until the end of 2022 but that could change drastically in 2023.
When reviewing the key differences between Roth accounts and Traditional accounts, it’s important to ask yourself: “When is the most advantageous time to pay tax on my income?”
Here is an example of a potential tax nightmare for the beneficiary of your IRA, 401k, or any retirement account where taxes have been deferred. That's essentially any retirement savings account that doesn't have the word Roth associated with it.
You've made it to age 62 or later and you still want to continuing working but you would also like to draw Social Security to add to or supplement your income. Sounds like a great plan and sometime it is a great plan, but be aware the same government that made you pay Social Security is waiting to tax your Social Security.
Many of you will contemplate retirement this year and despite what the news is telling you, if you have a pension plan sometimes referred to as a defined benefit plan at your current employer, this could be a great time to retire. Most pension/defined benefit plans give you the option of taking a series of lifetime monthly payments or a one time lump sum cash payment. This is not a decision to take lightly or a decision to make quickly. This decision will affect you and your family for decades and even generations to come. And it has tax implications!
The picture associated with this blog shows what the typical investor not working with an advisor often does. They buy high and sell low which is the exact opposite of what you should do. And I'm seeing that happen right now everywhere I look. When the market goes down it's normal to panic but should you actually get out of the market and sell your investments?
It depends on your goals, your long term financial plan, your age even factors into things here. Let's just run through these options real quick.
I've seen cooperative employees work for 20-40 years to reach retirement and then quickly settle for the monthly pension annuity option or the lump sum option without actually having a plan to determine if they were making the right choice. I can help you make the right decision for your situation. As an Independent Registered Investment Advisor, I work for you. You can be assured you are getting financial advice from an advisor you can trust, that knows your profession, that once had the same benefit plan as you, that is a Fiduciary who is required by law to put your interest ahead of my own. I worked for a Cooperative for 11 years. I know your profession and benefit plans better than any other financial advisor will. You have excellent retirement benefits available to you. I can help you optimize those benefits while creating a retirement income and investing plan that aligns with your retirement goals.
If you follow financial "journalism" at all you will inevitably hear how volatile the market is and how you should take action to protect yourself from the volatility. However, when we turn off the "news" and look at things rationally, we can see a completely different story. One that is actually true. It's not the market that is volatile. It's the investors that are volatile.
