FINANCIAL FOCUS – Here’s Your Retirement Countdown

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If you want to enjoy a comfortable retirement lifestyle, you don’t need to have been born rich or even to have earned scads of money during your working years. But you do need to make the right moves at the right time – which means you might want to start a “retirement countdown” well before you draw your final paycheck.

What might such a countdown look like? Here are a few ideas:

  • Ten years before retirement – At this stage of your career, you might be at, or at least near, your peak earning capacity. At the same time, your kids may have grown and left the home, and you might even have paid off your mortgage. All these factors, taken together, may mean that you can afford to “max out” on your IRA and your 401(k) or other employer-sponsored retirement plan. And that’s exactly what you should do, if you can, because these retirement accounts offer tax benefits and the opportunity to spread your dollars around a variety of investments.
  • Five years before retirement – Review your Social Security statement to see how much you can expect to receive each month at various ages. You can typically start collecting benefits as early as 62, but your monthly checks will be significantly larger if you wait until your “full” retirement age, which will likely be 66 (and a few months) or 67. Your payments will be bigger still if you can afford to wait until 70, at which point your benefits reach their ceiling. In any case, you’ll need to weigh several factors – your health, your family history of longevity, your other sources of retirement income – before deciding on when to start taking Social Security.
  • One to three years before retirement – To help increase your income stream during retirement, you may want to convert some – but likely not all – of your growth-oriented investments, such as stocks and stock-based vehicles, into income-producing ones, such as bonds. Keep in mind, though, that even during your retirement years, you’ll still likely need your portfolio to provide you with some growth potential to help keep you ahead of inflation.
  • One year before retirement – Evaluate your retirement income and expenses. It’s particularly important that you assess your health-care costs. Depending on your age at retirement, you may be eligible for Medicare, but you will likely need to pay for some supplemental coverage as well, so you will need to budget for this.

Also, as you get closer to your actual retirement date, you will need to determine an appropriate withdrawal rate for your investments. How much should you take each year from your IRA, 401(k) and other retirement accounts? The answer depends on many factors: the size of these accounts, your retirement lifestyle, your projected longevity, whether you’ve started taking Social Security, whether your spouse is still working, and so on. A financial professional can help you determine an appropriate withdrawal rate.

These aren’t the only steps you need to take before retirement, nor do they need to be taken in the precise order described above. But they can be useful as guidelines for a retirement countdown that can help ease your transition to the next phase of your life.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

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FINANCIAL FOCUS – Brighten Your Grandchildren’s Financial Future

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Mother’s Day and Father’s Day may get more attention, but National Grandparents Day, observed on Sept. 10, has gained in popularity. If you’re a grandparent, you might expect to receive some nice cards, but if you want to make the day especially meaningful, you may want to consider giving some long-lasting financial gifts to your grandchildren.

What might come to mind first, of course, is helping your grandchildren pay for college. You can choose from several college savings vehicles, but you may be especially interested in a 529 savings plan. With a 529 plan, your earnings accumulate tax free, provided they are used for qualified higher education expenses, such as tuition, books, and room and board. (Keep in mind that 529 plan distributions not used for qualified expenses may be subject to federal and state income taxes and a 10% IRS penalty on the earnings.) You may be eligible for a state income tax incentive for contributing to a 529 plan. Check with your tax advisor regarding these incentives, as well as all tax-related issues pertaining to 529 plans.

One benefit of using a 529 plan is contribution limits are quite generous. Plus, a 529 plan is flexible: If your grandchild decides against college, you can transfer the plan to another beneficiary.

Generally, a 529 plan owned by a grandparent won’t be reported as an asset on the Free Application For Federal Student Aid (FAFSA), but withdrawals from the plan are treated as untaxed income to the beneficiary (i.e., your grandchild) — and that has a big impact on financial aid, a much bigger impact than if the plan was listed as a parental asset. Beginning with the 2017-2018 academic year, however, FAFSA now requires families to report income from two years before the school year starts, rather than income from the prior calendar year. Consequently, it might be beneficial, from a financial aid standpoint, for you, as a grandparent, to start paying for college expenses from a 529 plan in the year in which your grandchild becomes a junior. Contact a financial aid professional about the potential financial aid impact of any gifts you’re considering.

A 529 plan isn’t the only financial gift you could give to your grandchildren. You might also consider giving them shares of stock, possibly held in a custodial account, usually known as an UTMA or UGMA account. One possible drawback: You only control a custodial account until your grandchildren reach the age of majority, at which time they can use the money for whatever they want, whereas distributions from a 529 savings plan must be used for qualified higher education expenses.

Still, your grandchildren might be particularly interested in owning the stocks contained in the custodial account – most young people enjoy owning shares of companies that make familiar products. And to further interest your grandchildren in a lifetime of investing, you may want to show them how a particular stock you’ve owned for decades has grown over time. Naturally, you’ll also want to let them know that stocks can move up and down in the short term, and there are no guarantees of profits – but the long-term growth potential of stocks is still a compelling story.

You’d probably do whatever you could for your grandchildren – and with a smart financial gift, you can make a big difference in their lives.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

marques-young

FINANCIAL FOCUS – Are You a “Hardworking” Investor?

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Next week, we observe Labor Day, a celebration of the American worker. You work hard your whole life with the hope that your efforts will ultimately allow you to achieve your financial goals, such as a comfortable retirement. But for that to happen, you may need to apply some of the lessons of the workplace to your efforts as an investor.

So, what are these lessons? Here are a few to consider:

  • Be consistent. The most successful workers are the ones who show up, day after day, and strive to overcome the inevitable obstacles that crop up. As an investor, you, too, need to be consistent in your habits – which means you should keep investing in all types of markets. If you take a “time out” every time the market drops, you might end up missing opportunities when the next rally begins.
  • Be flexible. When good workers see that something is not going well, they change what they’re doing. And when you invest, you also may need to make adjustments. If an investment has consistently underperformed, or if you have too many others very similar to it, or if it just doesn’t meet your needs anymore, you may be better off by selling it and using the proceeds to invest elsewhere. This doesn’t mean you should constantly be buying and selling — in fact, you’ll likely be better off by purchasing quality investments and holding them for the long term. But you need to be flexible enough to make the appropriate moves at the appropriate times.
  • Be informed. The best workers are those who regularly update their skills and acquire knowledge that helps them do their jobs better. As an investor, you should also keep learning – about the investment world in general and about new opportunities for you to explore. And you should always understand what you are investing in – and why. Even if you work with a financial professional, you need to inform yourself about every aspect of your investment portfolio – after all, it’s your money and your future.
  • Be farsighted. Good workers not only know what they’re doing – they also can visualize the desired outcome of each task. And, of course, people who are in charge of a particular endeavor, or who are responsible for the fortunes of a business, have a clear view of what they want to accomplish, even if the achievement of that goal is many years in the future. When you invest, you also need to see where you want to go. If you can constantly keep in mind your long-term goals – such as the type of retirement lifestyle you desire – you will likely find it easier to stick with an investment strategy that’s appropriate for your needs and risk tolerance. Conversely, if you lose sight of your destination, you might be more prone to taking short-term detours, which could work against you.

Labor Day reminds us to appreciate the skills and dedication of all workers – and as an investor, you can put these same attributes to good use.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

marques-young

FINANCIAL FOCUS – Can You Save for College and Retirement?

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Few of us have unlimited financial resources — which means that almost all of us need to prioritize our financial goals. Consequently, you’ll have some decisions to make if you’d like to help pay for your children’s college educations someday while, at the same time, saving for your own retirement.

Your first step in addressing these objectives is to maintain realistic expectations. Consider the issue of paying for college. Right now, the average four-year cost (tuition, fees, room and board) is about $80,000 for in-state students at public universities and approximately $180,000 for private schools, according to the College Board. And these costs are likely to keep rising in the years ahead. Can you save this much for your kids’ education?

Instead of committing yourself to putting away this type of money, take a holistic approach to saving for your children’s higher education. After all, you probably won’t be the only one to help pay for college. Depending on your income and assets, your family might be eligible for some needs-based financial aid awarded by the college. Also, you should encourage your children to apply for as many scholarships as possible — but keep in mind that most scholarships don’t provide a “full ride.”  Here’s the bottom line: Don’t assume you will receive so much aid that you don’t need to save for college at all, but don’t burden yourself with the expectation that you need to pick up the full tab for your children’s schooling.

On a practical level, you may want to commit to putting a certain amount per month into a college savings vehicle, such as a 529 plan. You can generally invest in the 529 plan offered by most states, but in some cases, you may be eligible for a state income tax incentive. Also, all withdrawals from 529 plans will be free from federal income taxes, as long as the money is used for a qualified college or graduate school expense of the beneficiary you’ve named. (Withdrawals for expenses other than qualified education expenditures may be subject to federal and state taxes and a 10% penalty on the earnings.)

By starting your 529 plan early, when your children are young, you’ll give the investments within the plan more time to grow. Plus, you can make smaller contributions on a regular basis, rather than come up with big lump sums later on. And by following this approach, you may be in a better financial position for investing in your IRA and your 401(k) or other employer-sponsored retirement plan. Obviously, it’s to your benefit to contribute as much as you can to these plans, which offer tax advantages and a wide range of investment options. If you’re investing in a 401(k) or similar employer-backed plan, try to boost your contributions every time your salary increases. At the very least, always put in enough to earn your employer’s matching contribution, if one is offered.

And once your children are through with college, you can discontinue saving in your 529 plan (although you may want to open another one in the future for your grandchildren) and devote more money to your retirement accounts.

It can certainly be challenging to save for education and retirement – but with discipline and perseverance, it can be done. So, give it the “old college try.”

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

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FINANCIAL FOCUS – Stay Calm on the Investment “Roller Coaster”

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Unless you live near an amusement park that does a lot of advertising, you probably didn’t know that Aug. 16 is National Roller Coaster Day. Actual roller coasters provide people with thrills. But as an investor, how can you stay calm on the “roller coaster” of the financial markets?

Here are some suggestions:

  • Know what’s in front of you. If you’ve ever ridden a roller coaster in the dark, you may find it scarier than if you boarded it in daylight – after all, it can be unsettling not to know where you’re going. The same can be said about investing: If you have no idea what’s in front of you, you might find the journey unnerving – and if that happens, you could make panicky decisions, which are usually bad ones. So prepare for the inevitable market volatility – it’s a normal part of the investment landscape.
  • Buckle up. When you’re on a roller coaster, you need to buckle your seat belt or use a restraint. You want to have the excitement of the ride, but you certainly don’t want to take unnecessary risks. And you can enjoy some of the excitement of investing without incurring more risk than you are comfortable with, too. One way to lower your risk level is to diversify across a range of investments – stocks, bonds, government securities, and so on. That way, if a market downturn primarily affects just one type of investment, you’ll have some protection. However, although diversification can reduce the impact of volatility on your portfolio, it can’t protect against all losses or guarantee a profit.
  • Choose a strategy for the journey. Different people have different ways of handling a roller coaster ride. Some like to throw their hands up, enjoying the feeling of abandon, while others hold on tightly to the bar in front of them. When you invest, you also need a strategy that works for you, and the best one may be the simplest: Buy quality investments and hold them for the long term. How long is “long term”? It could be 10, 20, 30 years or more. Famed investor Warren Buffet says his favorite holding period is “forever.” If you’ve chosen a mix of quality investments appropriate for your risk tolerance, you may be able to hold them until either your goals change or the investments themselves undergo some transformation.
  • Stay for the whole “ride.” When you hop on a roller coaster, you’ve got no choice – you’re staying until the ride is over. As an investor, though, you can exit the investment world whenever you like. But if you take a “time out” from investing every time the market drops, you risk still being out of the market when it rallies – and the early stages of a rally are often when the biggest gains occur. Furthermore, if you keep investing during a “down” market, you’ll be buying shares when their price has dropped, which means your dollars can go further – and you’ll be following one of the basic rules of investing: “Buy low.”

You can’t take out all the twists and turns of the investment road, but by following the above suggestions, you can help make the ride less stressful – and possibly more rewarding.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

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FINANCIAL FOCUS – How Can You Leave the Legacy You Desire?

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You may not see it in the greeting card section of your local drugstore, but August is “What Will Be Your Legacy Month.” So it’s a good time to think about the type of legacy you’d like to leave.

Of course, “legacy” can mean many things. In the broadest sense, your legacy is  how you will be remembered by your loved ones, friends and the communities to which you belong. On a practical level, establishing your legacy means providing your family and the charitable organizations you support with the resources you’d like them to have.

And that means you may need to take the following actions: create your plans, communicate your wishes and review and update your documents.

Let’s take a quick look at all these steps:

  • Create your plans. You will want to work with your legal professional, and possibly your tax and financial professionals, too, to draft the plans needed to fulfill your legacy wishes. These plans may include drafting a will, living trust, health care directive, power of attorney and other documents. Ideally, you want these plans to do more than just convey where you want your money to go – you want to impart, to the next generation, a sense of the effort that went into building the wealth they receive. Without such an appreciation, your heirs may be less than rigorous in retaining the tangible legacies you’ve left them.
  • Communicate your wishes. It’s important to communicate your legacy-related wishes to your family members as early as possible. By doing so, you can hopefully avoid unpleasant surprises and hurt feelings when it’s time for your estate to be settled – and you’ll also let people know what tasks, if any, they need to perform. For example, if you’re choosing a family member to be the executor of your estate, or if you’re giving someone power of attorney over your financial or health-related matters, they should be prepared.
  • Update your documents. During your life, you may well experience any number of changes – new marriage, new children, opening a family business, and so on. You need to make sure your legal documents and financial accounts reflect these changes. For example, if you’ve remarried, you may want to change the beneficiary designations on your IRA, 401(k) and other retirement accounts – if left untouched, these designations may even supersede the instructions left in your will. And the directions in life chosen by your grown children may also dictate changes in your will or living trust. In any case, it’s a good idea to review all your legacy-related documents periodically, and update them as needed.

In addition to taking the above steps, you also need to protect the financial resources that go into your legacy. So, when you retire and begin taking funds from your IRA, 401(k) and other retirement accounts, make sure your withdrawal rate is sufficient for your living expenses, but not so high that it eventually jeopardizes the amounts you planned to leave to your family or to your preferred charities. A financial professional can help you determine the withdrawal rate  appropriate for your situation.

With careful planning, and by making the right moves, you can create the type of legacy you desire – one that can benefit your loved ones far into the future.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

marques-young

FINANCIAL FOCUS – Diversify Your Investments … But Consolidate Your Providers

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You have probably heard that diversification is a key to investment success. So, you might think that if diversifying your investments is a good idea, it might also be wise to diversify your investment providers – after all, aren’t two (or more) heads better than one?

Before we look at that issue, let’s consider the first half of the “diversification” question – namely, how does diversifying your investment portfolio help you?

Consider the two broadest categories of investments: stocks and bonds. Stock prices will move up and down in response to many different factors, including good or bad corporate earnings, corporate management issues, political developments and even natural disasters. Bond prices are not immune to these dynamics, but they are usually more strongly driven by changes in interest rates. To illustrate: If your existing bond pays 2 percent interest, and new bonds are being issued at 3 percent, the value of your bond will fall, because no one will pay you full price for it. (Of course, it may not matter to you anyway, especially if you planned to hold your bond until maturity, at which point you can expect to get your full investment back, providing the bond issuer doesn’t default.)

Here’s the key point: Stocks and bonds often move in different directions. If you only own U.S. stocks, you could take a big hit during a market downturn, but if you own domestic and international stocks, bonds, government securities, certificates of deposit and other types of investments, your portfolio may be better protected against market volatility, and you’ll have more opportunities for positive results. (Keep in mind, though, that even a diversified portfolio can’t prevent all losses or guarantee profits.)

So, it clearly is a good idea to diversify your investment portfolio. Now, let’s move on to diversifying financial service providers. Why shouldn’t you have one IRA here and another one there, or enlist one advisor to help you with some types of investments and a different advisor assisting you with others?

Actually, some good reasons exist to consider consolidating all your investment accounts with one provider. For one thing, you’ll keep better track of your assets. Many people do misplace or forget about some of their savings and investments, but this will be far less likely to happen to you if you hold all your accounts in one place.

Also, if you have accounts with several different financial service providers, you might be incurring a lot of paperwork – and many fees. You can cut down on clutter and expense by consolidating your accounts.

But most important, by placing all your accounts with a single provider, possibly under the supervision of a single financial advisor, you will find it much easier to follow a single, unified investment strategy, based on your goals, risk tolerance and time horizon.  You won’t get conflicting advice and you’ll receive clear guidance on important issues, such as the amounts you can afford to withdraw each year from your retirement accounts once you do retire.

Diversification and consolidation – one is good for building an investment portfolio, while the other can help you invest more efficiently and effectively. Put the two concepts together, and make them work for you.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

marques-young

How To Start A Business With Only $100 In The Bank

100 bill

Chris Guillebeau is a writer, entrepreneur, and traveler. His latest book, The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future, is now a New York Times bestseller. During a lifetime of self-employment and ventures ranging from online publishing to volunteer work in West Africa, he has visited nearly every country on earth before the age of 35. Host of the World Domination Summit, an international gathering of creative people, Chris is focused on encouraging individual quests while also “giving back.” His main website, ChrisGuillebeau.com, is visited by more than 300,000 people a month.

What are your top three tips for a $100 startup to get off the ground?

  1. Turn your general idea into a specific idea. What’s the product or service? Who is going to buy it? How will you get paid? Again, be as specific as possible.
  2. Don’t wait to get going. Aim for 30 days or less to actual startup time. Do whatever it takes to make that happen — get a free website fromWordPress.com, sign up for a PayPal account if you don’t have one, and put your offer out to the world even if you don’t think everything is 100% ready.
  3. Tell everyone you know about what you’re doing. Don’t spam people, but do contact your friends to say, “Hey, I’m doing this thing — want to help? Can you spread the word?”

Click on the Forbes link for the full article and to get the 4th Bonus Tip!

http://www.forbes.com/sites/danschawbel/2012/05/31/how-to-start-a-business-with-only-100-in-the-bank/

How to Create Cash Flow

Do you know the difference between Linear Income and Residual Income?

Don’t have a business yet and want some suggestions to create residual income? Did you know your 9 to 5 is considered linear income. Here are some great suggestions in creating positive cash flow with residual income.

Winning the cash flow game isn’t about immediate gratification or making a quick buck—it’s about creating wealth, peace of mind, and financial security for the future.

For the full article and great tips see more at:http://www.quickanddirtytips.com/money-finance/investing/how-to-increase-your-cash-flow-part-2?page=2#sthash.a3PFMObZ.dpuf

Faucet

Attract What You Expect!

A quote I always keep near my desk to remind me that when I am having a rough day to, “Attract what you expect, reflect what you desire, become what you respect, mirror what you admire.” By Anonymous.

What does that mean exactly? Lets break it down…..

Attract what you expect

Thoughts you focus on is what manifests in your life. So if you are focusing on positive situations, habits and life experiences, then you will not draw as much negative in your life. When we focus on the negative we attract more negative then anything else in our life.

Reflect what you desire

Be the person you want to attract in your life. Many times people are wanting to attract certain people and situations in their life, however, their habits, personality and who they are is not attracting that. Be what you desire to have!

Become what you respect

We all have had a mentor or someone we have looked up to in life. Anytime I see how people have become successful I study them, their books, their thought process, how they live their life and I desire to develop those traits, which will make me a better person and be able to give back like them. That is how you become what you respect.

Mirror what you admire

Take your habits, what you do on a daily basis, how you treat people and mirror that after people who are doing positive things and that you admire and look to be like.

Most of all, find great qualities in those you wish to have a life like, make it your own and ALWAYS BE YOU!

 

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Jacqueline H. Waller
Founder
Connecting Atlanta
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