Monthly Articles - Information you may have missed

Tick. Tick. Tick.

 

The beautiful children you see here are four of my six grandkids. They are happy and well-adjusted, and they bring much joy to my life. They are also blissfully unaware of a potential disaster that might confront them when they are old like me: a vastly reduced Social Security benefit.

 Shortly before I started to write this article, I read that the trustees of our nation’s Social Security program are predicting that the funds supporting the program will be depleted in 2034, one year earlier than was reported last year. If nothing is done to fix this, 70 million Americans will receive less than what they are receiving now in their monthly checks. It will not be pretty. It also won’t be pretty for my grandkids or anyone else. The clock is ticking.

 I am not in a position to fix the Social Security problem, but I can help you prepare for what might be an uncertain future. Here are two things everyone needs to know:

 -  If you don’t save at least 15 to 20% of your gross income for your later years, those years might end up pretty crummy. Yes, it’s a big chunk out of your paycheck, but I honestly do not know of any other realistic way to deal with this.

 -  Compound interest is a beautiful thing, and it works best over a long period of time. One hundred dollars a month invested on the first of the month and earning 7% per year for 40 years will result in $264,012.48. That’s not a miracle, it’s math. No one can guarantee 7% every year, but you get the picture about how this might work for you.1

 -  Don’t put all of your retirement money in your 401(k) or tax-deductible IRA. Just as the future of Social Security is cloudy, we also don’t know about future tax rates, but my guess is they will be higher than today. Under current law, any money coming out of a qualified retirement plan will be taxed as ordinary income. The last thing I want for my clients is to have all of their retirement money taxed before they have a chance to spend it. When it comes to investing, tax diversification is just as important as asset allocation, but tax planning has to happen l-o-n-g before you are ready to start using your money.

 My cute little grandkids probably don’t spend much time thinking about these things, but you should. If you are ready to take control of your financial life, call me for an appointment and let’s make a plan.

 

Mike Rich, CFP®, Pontchartrain Investment Management, 2065 1st Street, Slidell, LA 70458 985-605-5064

 1This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rate of return used does not reflect the deduction of fees and charges inherent to investing. In this example, compounding occurs monthly. Investing involves risk, including loss of principal.

 Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.

 The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

 

Past Articles

January 2019 - Reflection

February 2019 - When Life Gets in the Way

March 2019 - The Only Financial Plan

April 2019 - I Have Had It

May 2019 - Your Money Might Leave

June 2019 - When the Stars Align

July 2019 - Are You Alright

August 2019 - Going For The Green

September 2019 - Grandchildren

October 2019 - Recession

November 2019 - Long Term Care

December 2019 - Experiments

January 2020 - Financial Checklist

February 2020 - Financial Roadmap

July 2020 - Intro to New Clients 

*Note that there is a gap due to Covid 19.

October 2020 - Asset Domain

November 2020 - Liabilities and Taxes

December 2020 - Cash Flow

January 2021 - Financial Checklist

February 2021 - The Salami Smuggler

March 2021 - Do You Want To Be a Financially Successful Person?

April 2021 - Baby Steps

May 2021 - Time Is On Your Side

June 2021 - I Did It!!!

July 2021 - Live for the Present

August 2021 - Family Advice

September 2021 - Clarity

October 2021- Storms Can Be Scary

November 2021 - LTC Insurance

December 2021- Don't Peek

January 2022 - The Secret

February 2022 - Estate Planning

March 2022 - Waste Not

April 2022 - Have your cake and eat it too

May 2022 - What is your money lifeline?

June 2022 - Crystal Ball

July 2022 - Do you have a financial 'road map'

August 2022 - Italy

September 2022 - Risk

October 2022 - Father Knows Best

November 2022 - Why you need me as your Financial Advisor

December 2022 - Eat your Cake

January 2023 - I don't care how you spend your

February 2023 - News Flash!!!! Wealthy People Have More Money

March 2023 - Rewards

April 2023 - Change