Ken Himmler.com

If you’re retired or close to retiring, then you’ve probably got nothing to worry about–your Social Security benefits will likely be paid to you in the amount you’ve planned on (at least that’s what most of the politicians say).  But what about the rest of us?

• Allow individuals to invest some of their current Social Security taxes in "personal retirement accounts" (the centerpiece of President Bush’s plan)
• Raise the current 12.4% payroll tax
• Raise the current ceiling on wages currently subject to the payroll tax
• Raise the retirement age beyond age 67
• Reduce future benefits, especially for wealthy retirees
• Tie initial benefit levels to a more modest price index instead of the current wage index
• Allow the Social Security program itself to invest in assets other than government bonds

Whether they’re snatching your purse, diving into your dumpster, stealing your mail, or hacking into your computer, they’re out to get you.  Who are they? Identity thieves. Identity thieves can empty your bank account, max out your credit cards, open new accounts in your name, and purchase furniture, cars, and even homes on the basis of your credit history. If they give your personal information to the police during an arrest and then don’t show up for a court date, you may be subsequently arrested and jailed.

1. Equifax: www.equifax.com
   (800) 685-1111
2. Experian: www.experian.com
   (888) 397-3742
3. TransUnion: www.transunion.com
   (800) 916-8800

• To stop telephone calls from national telemarketers, list your telephone number with the Federal Trade Commission’s National Do Not Call Registry by calling (888) 382-1222 or registering online at www.donotcall.gov
• To remove your name from most national mailing and e-mailing lists, as well as most telemarketing lists, write the Direct Marketing Association at 1120 Avenue of the Americas, New York, NY 10036-6700, or register online at www.dmachoice.org
• To remove your name from marketing lists prepared by the three national consumer reporting agencies, call (888) 567-8688 or register online at www.optoutprescreen.com
• When given the opportunity to do so by your bank, investment firm, insurance company, and credit card companies, opt out of allowing them to share your financial information with other organizations
• You may even want to consider having your name and address removed from the telephone book and reverse directories

Any good guide to personal financial freedom involves several things.  To make your money grow for you, you need to ensure that you are setting aside money for your personal long-term savings and investments.  This is all well and good in theory, but in practice it can be extremely difficult to make your income work for you in such a way to allow for these long-term savings and investments.  This is one of the reasons why having a budget is essential. 

One of the first things that you do when you set up a budget is divide your income into different categories.  This is where many people who live on a budget run into problems.  There are many budget categories that everybody shares.  Unfortunately, everybody’s needs and the way that they need them can differ vastly from individual to individual.  No one system of budgeting can work for everyone.  For this reason, individuals should never be afraid to create their own budget categories that suit his or her lifestyle.

The key to having a good, balanced budget is to include all of the necessities.  This may sound simple but some of the essentials are easily placed on the back burner in the light of ‘more important things.’ Some of the ‘less important’ necessities include money set aside for recreation and entertainment, clothing, property upkeep, and of course your savings and investments.  No matter what your circumstance is, you should NEVER neglect your retirement savings and investments.

It is your budget and it should work for you.  If you prioritize your money before you get it you will find that it is much easier to take care of the most important things in life.  This is why you should always pay yourself first and dedicate a portion of your money to savings before you do anything else.   Over time the little bit you set aside will add up to true financial freedom and a comfortable retirement. 

Talk to your personal financial retirement planner to find ways to make your budget work for you more effectively.  You’ll be glad you did.
 

As you get closer to retirement age, there are a few details that you need to think about for your post-retirement life.  No doubt there will be various unavoidable expenses in your life that you will need address financially.  You are also likely to have a lifestyle that you would like to continue, and hobbies that you are looking forward to taking up after retirement.  These are the things that you have been saving up for all along.  Now you need to be considering whether or not you are going to have enough money to fulfill your dreams.

The most important thing you need to consider as you get ready to retire is how much post-retirement income you are going to have, and how much you need.  There is no reason you should panic at this point, because if you have been keeping up with your retirement savings and investments you should be right on schedule.  Most people need between 70-80% of their current income to lead a comfortable, healthy retirement that suits their lifestyle.  Your individual needs may demand more or less money depending on a variety of factors in your life.

Because there are several facts that need to be considered, it is often much easier to use a retirement planning calculator to help discern your individual needs and whether or not you will have enough money to retire on time.  One such popular calculator can help, and can helpl provide a rough estimate of your monetary needs post-retirement.

Of course, it should be acknowledged that calculators are always subject to error and cannot account for every situation.  It is always advisable that you address any concerns you have about your retirement situation to your financial advisor or retirement planner.  These highly trained individuals can take into account factors beyond the scope of even the best retirement planning calculator.
 

Many people have different ideas about what they are going to do when they retire.  Retirement in general can open up many opportunities to live the life you want to live, and it is important that you have an understanding of your newfound potential.  Whether you want to travel or take up a hobby that you never had time for, it is important that you develop an appropriate strategy to turn your retirement dreams into retirement realities.

It is never too early to begin planning for your life after retirement.  The sooner you can start, the better.  While it is common knowledge that retirement takes a bit of planning to pull of successfully, not everyone considers their budget beyond the simple living expenses after they retire.  This can turn into a huge problem if you decide that you want to begin taking expensive trips on a regular basis after you retire, because if you have not allocated the proper funds with a view toward such luxurious activities then they may prove to be impossible.

The earlier you start planning for your post-retirement life, the better you will feel when you get there.  Setting up an alternate retirement savings for recreation is more or less exactly the same thing you are probably already doing to prepare for retirement.  Having an alternate account for recreational savings can also help you to absorb some last minute emergencies without breaking your budget.  It can help you feel more confident about your new life every time you put a little bit away for your personal enjoyment in the future.  It can also help the future feel more real to you as you ponder on how you will enjoy your future activities.  Your post retirement options are virtually unlimited, and a little bit put away now can help you to get the most out of the best years of your life.

In the wake of the recent 300-million dollar investment scandal in Sarasota, financial advisor Ken Himmler has five questions every investor should ask before selecting a financial representative. View this link to hear Ken’s recent interview on Tampa Bay’s Channel 10.  

http://www.tampabays10.com/news/local/story.aspx?storyid=98649

1) Does the advisor have a clean record? Regulatory bodies such as the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) provide on line resources for investors to research in any complaints have been filed against a financial professional. Third party resources, such as the National Ethics Bureau, allow for consumers to gather the comprehensive background information of a financial professional.

FINRA http://www.finra.org/brokercheck

SEC http://sec.gov/investor/brokers.htm

NEB www.ethicscheck.com

#2 Does your financial representative have custody of your financial accounts? Firms that have full custody of your financial accounts are technically in the position to liquidate those accounts. Advisors with custody do not have strict regulatory channels to go through when making trades on your behalf.

#3 Where is the advisor recommending you put your money? Be involved in your advisors investment strategy and don’t be afraid to check their work and ask questions.

#4 Does your financial representative invest your money in private funds? Hedge funds are private investment vehicles and are only lightly regulated. Often, the person who sells and manages the fund is also the controller of invested monies and is the one responsible for verifying the fund amount to any regulatory party.

#5 Is your financial representative held by fiduciary rules or rules of suitability? Stockbrokers otherwise referred to as registered representatives, are typically only held to the rules of suitability, rather than fiduciary responsibility. Suitability rules mean if the broker or manger loses your entire account value while under his or her management, but can establish you were an accredited investor or could afford the loss; their liability for the loss would be limited. Investment advisors, financial planners, and similar are subject to higher regulatory guidelines meaning they are liable for the overall financial strategy and could be held liable if they were to lose a significant portion of one’s investment portfolio.

Even if you fully intend to carry a bond through to maturity, the issuer of the bond may have other plans. If interest rates fall heavily and the issuer of your investment bond opts to lower its interest rate expenditures then they may exercise their right to redeem or call in their bonds even before they mature.

If you own a bond that is “callable” then there is some risk of this happening if interest rates drop to attractive levels for the issuer. Should this occur, the issuer will only be required to pay you par value for the bond and this will result in you receiving less than the current market price.

One of the unfortunate aspects of having a bond called is that the market environment that motivates issuers to redeem a bond is the same that often leads to higher bond prices. So not only do you lose the potential of a pre-maturity profit by selling the bond, you’re forced to sell earlier and for less money than you want.

While many callable bonds will have call protection where the bonds can’t be called for a certain period of time, you won’t have any choice but to take par value when and if they do opt to call it in.

It needs to be said that even if interest rates fall, this doesn’t mean your bonds are automatically going to be called in. The issuer will have to see that it can lower its costs by redeeming the bonds at par value and then selling additional bonds with lower yields. Typically, interest rates would have to drop significantly for this to happen.

Because callable bonds carry the risk that you won’t get the return you anticipate, they typically pay a higher rate of interest than non-callable bonds. When considering bond investments, you’ll want to weigh the pros and cons of higher interest/higher risk or lower interest/lower risk depending on your investment goals.