Financial Services for Seniors
& Conservative Investors
by
Paul M. League, QFP, CFP®
Seniors,
generally those age 55 and above, as well as other concerned & more
conservative investors, have a unique set of financial concerns that primarily center on not outliving assets and being able to pass on
a legacy to loved ones.
Accomplishing
these goals requires that one get the most they can out of their retirement
savings, while reducing the payment of taxes on investments, as well as avoiding
shrinkage in Social Security benefits due to taxes.
Look
at this astonishing history of events surrounding Social "Security":
-
"The
Social Security Act" was signed into law in 1935.
-
5
years later Social Security began making its first, non-taxable, benefit
payments.
-
By
1983 a 50% tax was levied on Social Security benefits.
-
Then,
only 10 years later, Congress increased the tax on Social Security to 85%!
The
"SST" (Social Security Tax) is levied as you exceed a specified
"threshold income", which includes the following sources of income:
If
your threshold income exceeds the following limits, up to 85% of the amount
received from Social Security could be subject to tax:
| $ |
Total Income
Including
Social Security |
Percentage of
Social
Security
That is Taxable (2004) |
| Single |
$25,000 -
$34,000 |
50% on Excess
Over 25k,
and Under 34k |
| |
Over
$34,000 |
85%
on Excess Above 34k |
| Married |
$32,000
- $44,000 |
50%
on Excess Over 32k, and Under 44k |
| |
Over $44,000 |
85% on Excess
Above 44k |
The
key to winning this tax quagmire is to be positioned in conservative and
guaranteed financial programs that do not contribute to the above "threshold
income" problems.
We
believe in the saying of the famous, widely liked, and well respected Will
Rogers, who said:
"...as
a senior, I'm more concerned about return OF PRINCIPLE (safety), rather than
return on my principle (risk)."
What
follows is a useful basic "financial tip" that may be helpful to you
as a kind of guideline in better understanding ways of viewing
your assets towards the goal of structuring financial programs that best limit your risk. Subtract your age from 100, and what remains is the outermost percentage amount
of your assets that you may wish to subject to risk. We generally advise
even less of an amount at risk than the amount this useful formula produces, especially for seniors,
although a personalized assessment of your risk tolerances and other factors
must always be taken into account:
EXAMPLE
of a 74 year old senior citizen:
100
minus their Age of 74 = 26%
I conduct my
advisory services around these conservative principals of asset
preservation, because I too believe in helping to protect one's hard-earned assets so
that such assets will stand a better chance of lasting one's lifetime or
providing a legacy to
future generations.
If
you are thinking retirement or preservation of assets, and like many you have
lost more than a few dollars in the stock market, then we do need to talk. If you are an advanced senior
who is dependent
on CD or other fixed income sources that have been dramatically reduced due
to rate cuts or other actions by the Federal Reserve Board, then we too need to talk.
Simply put, I don't recommend unsuitable investments for others anymore than I
would for myself! Instead, I work with my clientele to design
financial programs where they can select investment categories that allow them
to
participate in the broader financial markets, but that provide product
specific guarantees against loss of principle...even if the market drops! When you think about it, who needs
unnecessary risk at our age?
Call
me today 800.482.5347 to help you too take better control of your
financial affairs!
(0507179A)
