Photography by Iris Mack Dayoub
 

Fall 2016 Newsletter


Alpha Financial Management

Here's a collection of news items and some blog posts we've made over the past quarter. We hope you will find these useful in your financial life.  

Please use the "Share" "Tweet" or "Forward" button if there's an article here you'd like family or friends to read.

Share
Tweet
Forward
Note from Michael:

The difference between "fee only" and "fee based"


FEE ONLY means we cannot receive commissions, awards, kickbacks, or any other form of compensation for the products we recommend for our clients.

"Fee Based" is a term stockbrokers and insurance agents use to indicate they CAN charge a fee but CAN ALSO collect commissions, awards, vacations, or other marketing compensation from the funds and investments they sell their clients.

Alpha Financial is FEE ONLY.  We belong to NAPFA, the flagship organization of FEE ONLY advisors in the US.

We are Fiduciary in everything we do. 

Tax Planning  - Roth IRA vs Traditional IRA?

From a general tax perspective, the Roth IRA is the better choice if your tax rate will be higher in your retirement years than it is right now, as the Roth IRA lets you to pay tax on your income now, grow the investments tax free, and receive tax-free distributions later.

But if you think your tax rate will be lower in your retirement years, defer income now into your 401(k) and Traditional IRA, and pay those taxes later at a lower rate.

There are other factors. We can tell you which is better for you based on your current income and how long you intend to work.  

Read more: Roth Vs. Traditional IRA: Which Is Right For You? | Investopedia 

GUEST COLUMN
from paraplanner certficant, Rebecca Dayoub

"At what age should I start taking Social Security?"

When it comes to Social Security, it can be tempting to take the money and run as soon as you're eligible—typically at age 62.  But it can be a costly move. If you start taking Social Security at 62, rather than waiting until your full retirement age, you will receive reduced benefits.

If you can afford it, waiting could be the better option. But make sure to evaluate your decision based on how much you've saved for retirement and your other sources of income in retirement. While in general many people would benefit from waiting to, say, age 70 to take payments, others may need the income sooner and may lack the resources necessary to meet expenses during the delay period, or may not live long enough to reap the rewards of delaying.

Step 1. Get your Social Security statement from SocialSecurity.gov.
Step 2. If you're working and in good health, wait at least until full retirement age.
Step. 3. If you really like your job, wait even longer, but not beyond 70.
Step 4. If you don't need it, figure out when you can best use it.
Step 5. Check with your financial advisor to make sure you're doing the right thing.
Step 6. Apply with Uncle Sam.
Retirement Update

Michael reports on his mom's semi-retirement

Iris shows up for work occasionally to make sure Wayne and I are not wearing flip flops or cutoff shorts.  She's confident we're giving our clients excellent advisory service, but is watchful about our fashion and interior design direction.

Iris stays busy with 2 art classes at Armstrong.  Drawing With Pencils.  Black and White Photography.

Iris and Mike have 2 new parakeets and held a naming contest.  I suggested 2 Nobel Prize economists on Dimensional Fund Advisor's board of directors, Fama and French.  The birds don't seem to have names yet.

Iris and her husband Mike volunteered as paddleboard and boat escorts for the Savannah Triathlon Club 5K swim last month.  I (son Michael) swam the 5k.  We're all in this picture. See if you can find us.



Let me know if you like this "Retirement Update" and want Iris to provide a colored pencil drawing of the 2 parakeets in the next newsletter.

--Michael

You can support Girls On The Run Of Coastal Georgia Inc at AmazonSmile. 
 
You shop. Amazon gives.
When you shop at AmazonSmile, Amazon donates 0.5% of your AmazonSmile purchase price to the charitable organization of your choice. Who will you support? Choose from almost 1 million eligible 501(c)(3) public charitable organizations and support your favorite charity every time you shop. Learn more
Community 
Michael volunteered as a race worker for the Chattahoochee Nature Center's "Possum Trot 10k" this summer.  Yes, that's a possum.
Dimensional CEO David Booth explains how lower costs and better execution can add up for our clients.

Note from Iris

Here's an article from NerdWallet you might find helpful if you're approaching your retirement date.

We at Alpha love to help with these kinds of decisions. 

-- Iris

How the Wrong Choice Could Ruin Your Spouse’s Retirement:

Three key decisions about retirement benefits can help couples make their money last — or dramatically increase the chances the survivoru will end up old and broke.

Widowed women are twice as likely as their male counterparts to live in poverty during retirement, according to a March study by the National Institute on Retirement Security. But anyone who outlives a mate can be vulnerable to a big drop in income and lifestyle because of shortsighted decisions about claiming benefits.

“Most people don’t quite get the math,”   Click HERE for full article


Our new advisor, Wayne Jordan, introduces the following article for young professionals.
 

 












Should I save for retirement or pay off student debt first?

We know that student loan debt is incredibly high and maybe the biggest issue facing today’s generation. This article explains how millennials who are faced with the conflicting goals of paying off debt while saving for retirement shouldn’t ignore retirement for today’s lifestyle. For our clients with children or grandchildren in today’s generation starting the discussion early may save lots of headaches and stress down the road.    

LINK to rest of article
 
Wayne LOVES paying his student loans each month!
Hidden sinkhole in Buffalo, New York

State and local pension plan trouble

If you know someone working for a state or local government who has told you they're counting on that government pension, ask them if they're aware that many state and local government pension plans are underfunded.

Many employees generally aren’t aware just how dire the situation is. They may need to look closer at the chance that pension will not materialize by the time they retire.

Here's an article that gives background on the problem.  LINK  

Send them to us at Alpha Financial for an assessment of how troubled their pension plan is.
 

Donna Krohn, Paraplanner, introduces the following article from USA Today.
 



Donna says:   
In the years and months leading up to retirement, there are many moving parts that have to be considered.  It can wonderful to daydream about an ideal retirement, but a daunting task to actually create an effective retirement plan.  People can miscalculate their health care or tax expenses, for example, and it can have a significant impact on the success of  their plan.  Working with a Financial Planner helps ensure that all areas are considered for retirement planning.  A Financial Planner helps avoid pitfalls and capitalize on opportunities specific to an individual’s situation.  Regardless of whether you are years away from retirement or it’s right around the corner, it’s beneficial to start planning now.  Check out this article from USA Today, which asks some key questions to get you thinking about the ideal retirement you would like to have and how you can work with Financial Planner to make that dream a reality:
 

Pre-retirement checklist: 10 tasks to complete

 



 
Alpha Financial Management hopes you had a safe and happy Labor Day weekend.

Would you like to share our newsletter with someone?

Share
Tweet
Forward
Copyright © 2016 Alpha Financial Management, Inc., All rights reserved.


Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list

Email Marketing Powered by Mailchimp