Hail the mighty Red Sox. The BEST record in baseball! Now its on to the series!
Sunday, September 30, 2007
Tuesday, September 18, 2007
What does Ben know that you don't?
Fed Chairman Ben Bernanke seems to know that the stock market is not the best places for retirement assets. The Fed's Chief personal portfolio is a mix of money markets, bonds, and annuities. Mr. Bernanke has more than 80% of the total in annuities.
Monday, September 17, 2007
What Are American's Most Fearful Of?
American’s Number 1 Fear
Accordingly to a recent survey 74% of all Americans list running out of money in retirement as their number one fear. Yet, how to create a sustainable retirement income that assures that we live a comfortable retirement with the assurance that our funds won’t run out remains a mystery for many. Multiple uncertainties and assumptions complicate the task as investors must balance the need for growth and the need for safety.
Longer life expectancies, future inflation rates and retirement habits must be accounted for in any distribution planning. Typically investors believe that they can safely withdraw far more during retirement than is the reality. Simply put we overestimate investment returns and underestimate the effects of market downturns during our retirement years. The consequences can be devastating. While historic average returns may be a valuable stating point for modeling in the accumulation phase, distribution modeling is complicated by cash outflows. The sequence of how returns play out during the accumulation phase is largely irrelevant, but during the distribution or withdrawal phase it is critical. Downside risk management during the distribution phase is paramount to creating a long term sustainable income stream.
Today a structural shift is changing the landscape of retirement. Traditionally, Social Security and pensions provided retirees with a financial safety net. Institutions bore the cost and risk of providing lifelong retirement benefits and retirees received checks in the mail. Today the long term viability of Social Security is in question and corporate pension plans are disappearing faster than the dinosaurs did. With this two key risk have been transferred to individuals – longevity risk and investment risk.
Faced with these risks and uncertainties, investors and advisors must plan the more complicated distribution phase with care and precision. Accumulation-phase assumptions are no longer sufficient. The difference in the distribution phase is that regular portfolio withdrawals compound losses. Withdrawals taken during declining markets become unrecoverable losses and a nest egg can disappear far sooner than expected.
Fortunately, there are state-of-the-art solutions that allow the investor downside protection, growth potential, and guaranteed income that can’t be outlived. If you are concerned that your nest egg could perish before you do give us a call and we can run a complimentary analysis of your retirement income stream.
Accordingly to a recent survey 74% of all Americans list running out of money in retirement as their number one fear. Yet, how to create a sustainable retirement income that assures that we live a comfortable retirement with the assurance that our funds won’t run out remains a mystery for many. Multiple uncertainties and assumptions complicate the task as investors must balance the need for growth and the need for safety.
Longer life expectancies, future inflation rates and retirement habits must be accounted for in any distribution planning. Typically investors believe that they can safely withdraw far more during retirement than is the reality. Simply put we overestimate investment returns and underestimate the effects of market downturns during our retirement years. The consequences can be devastating. While historic average returns may be a valuable stating point for modeling in the accumulation phase, distribution modeling is complicated by cash outflows. The sequence of how returns play out during the accumulation phase is largely irrelevant, but during the distribution or withdrawal phase it is critical. Downside risk management during the distribution phase is paramount to creating a long term sustainable income stream.
Today a structural shift is changing the landscape of retirement. Traditionally, Social Security and pensions provided retirees with a financial safety net. Institutions bore the cost and risk of providing lifelong retirement benefits and retirees received checks in the mail. Today the long term viability of Social Security is in question and corporate pension plans are disappearing faster than the dinosaurs did. With this two key risk have been transferred to individuals – longevity risk and investment risk.
Faced with these risks and uncertainties, investors and advisors must plan the more complicated distribution phase with care and precision. Accumulation-phase assumptions are no longer sufficient. The difference in the distribution phase is that regular portfolio withdrawals compound losses. Withdrawals taken during declining markets become unrecoverable losses and a nest egg can disappear far sooner than expected.
Fortunately, there are state-of-the-art solutions that allow the investor downside protection, growth potential, and guaranteed income that can’t be outlived. If you are concerned that your nest egg could perish before you do give us a call and we can run a complimentary analysis of your retirement income stream.
Sunday, September 16, 2007
The Three Places to Leave Your Money
There are 3 places you can leave your money!
- Your children and grandchildren
- Charity
- The IRS
Our thought is to disinherit the IRS - what about you?
Tuesday, September 11, 2007
Remembering 9/11
Today was in many respects just another day. The day was unremarkable except for the nagging feeling that something was wrong all day. Most people have tried to move past the memories of 6 years ago. But should we?
The memories linger as they always do in situations like this. People ask, " where were you that morning." People share their stories and then move on to other business.
I was in the shower. I always watch the news in the morning except for the morning of 9/11. My office kept calling - I ignored the calls. Only an hour later did I learn what had happened on the other side of the country. As with many others my life changed that day as the events unfolded. I had worked on the 103rd floor of Tower 1 for many years. People I knew and talked to just days before died that day. America changed that day. We all did in some way.
Today I was on edge all day and very uneasy. I am uneasy that the lead story on the news was what Brittany Spears was wearing the other night. We as a nation are losing sight of what happened that day and what we all lost. We should also not forget that September 11, 2001 started out as a beautiful day on the East Coast. We never saw it coming - nor will we see it coming again.
For those people that think our Generals are idiots and we should withdraw our troops - shame on you. These people walk the line and face peril each day so that we can complain that the line at the bank is moving to slow, or the movie was not good enough, or our waiter not attentive enough. They fight so that we can live the lives we do.
We should never forget this date nor what happened to us. We as a nation need to support those brave men and women that risk it all so you and I can live a privileged life. I don't know about you but I would rather we fight the nut cases in their backyard rather than mine.
We should never forget this date - never!
The memories linger as they always do in situations like this. People ask, " where were you that morning." People share their stories and then move on to other business.
I was in the shower. I always watch the news in the morning except for the morning of 9/11. My office kept calling - I ignored the calls. Only an hour later did I learn what had happened on the other side of the country. As with many others my life changed that day as the events unfolded. I had worked on the 103rd floor of Tower 1 for many years. People I knew and talked to just days before died that day. America changed that day. We all did in some way.
Today I was on edge all day and very uneasy. I am uneasy that the lead story on the news was what Brittany Spears was wearing the other night. We as a nation are losing sight of what happened that day and what we all lost. We should also not forget that September 11, 2001 started out as a beautiful day on the East Coast. We never saw it coming - nor will we see it coming again.
For those people that think our Generals are idiots and we should withdraw our troops - shame on you. These people walk the line and face peril each day so that we can complain that the line at the bank is moving to slow, or the movie was not good enough, or our waiter not attentive enough. They fight so that we can live the lives we do.
We should never forget this date nor what happened to us. We as a nation need to support those brave men and women that risk it all so you and I can live a privileged life. I don't know about you but I would rather we fight the nut cases in their backyard rather than mine.
We should never forget this date - never!
Saturday, September 8, 2007
The 20th Anniversary of The Crash of 1987
On October 19th, 1987 the DJIA closed down 22.6% for the day. The stock market had crashed! Are there parallels to 2007. Former Federal Reserve Chief Alan Greenspan believes that the current market turmoil is in many ways "identical" to that which occured in 1987 and 1998.
A similar drop in the DJIA today would mean a point drop of 3000 for the day.
What to learn more? Call Table Bay and ask for the white paper " Can History Repeat Itself" to learn more about what happened in 1987 and if 2007 could be a repeat.
A similar drop in the DJIA today would mean a point drop of 3000 for the day.
What to learn more? Call Table Bay and ask for the white paper " Can History Repeat Itself" to learn more about what happened in 1987 and if 2007 could be a repeat.
Tax Strategy for 401(k) Holding Company Stock
About 24 million Americans hold company stock in 401(k) or other company sponsored retirement plans. Many of these individuals, when they retire, could take advantage of a little-known tax break know as net unrealized appreciation. Here is how it works:
First, after you leave your job, you withdraw your company stock from the company plan and move it into a taxable brokerage account. Second, during the same calendar year, you withdraw the rest of your assets from the company plan, as well. Most people move the balance into an individual retirement account to continue the tax deferral on that portion.
By taking these two steps any increase in the price of the company stock from the time you acquired it until the distribution - called the stock's net unrealized appreciation, or NUA - would be subject only to long-term capital-gains tax, which has a maximum 15% rate, rather than ordinary income tax of up to 35%. Ordinary income tax is what you pay on 401(k) or traditional IRA withdrawals. Alternatively, if you leave your company stock in your 401(k), or roll it over into an IRA, you could wind up paying higher income tax when you take it out. There are some up front taxes but you don't owe the capital-gains tax until you sell the shares.
For example: let's say that you bought 100 shares of company stock for $20 a share in your 401(k) plan. When you retire the shares are worth $35, bringing the total market value to $3500. You move the stock to a taxable brokerage account meaning that you owe income tax on the $2000 cost basis. But you can defer the capital-gains tax on the $1500 market appreciation until you sell the stock.
There are some other caveats. Give us a call and we can explore more fully if the NUA option is right for you.
First, after you leave your job, you withdraw your company stock from the company plan and move it into a taxable brokerage account. Second, during the same calendar year, you withdraw the rest of your assets from the company plan, as well. Most people move the balance into an individual retirement account to continue the tax deferral on that portion.
By taking these two steps any increase in the price of the company stock from the time you acquired it until the distribution - called the stock's net unrealized appreciation, or NUA - would be subject only to long-term capital-gains tax, which has a maximum 15% rate, rather than ordinary income tax of up to 35%. Ordinary income tax is what you pay on 401(k) or traditional IRA withdrawals. Alternatively, if you leave your company stock in your 401(k), or roll it over into an IRA, you could wind up paying higher income tax when you take it out. There are some up front taxes but you don't owe the capital-gains tax until you sell the shares.
For example: let's say that you bought 100 shares of company stock for $20 a share in your 401(k) plan. When you retire the shares are worth $35, bringing the total market value to $3500. You move the stock to a taxable brokerage account meaning that you owe income tax on the $2000 cost basis. But you can defer the capital-gains tax on the $1500 market appreciation until you sell the stock.
There are some other caveats. Give us a call and we can explore more fully if the NUA option is right for you.
Friday, September 7, 2007
NFL Opening Weekend
Finally we are done with the stupid preseason games and this weekend get to the real games. Table Bay Man can save all you folks from wasting time watching your loser teams - get the Direct TV NFL Game Package and watch New England and New Orleans...those are your Super Bowl teams this year - final score will be:
New England 21
New Orleans 19
TAKE IT TO THE BANK!
New England 21
New Orleans 19
TAKE IT TO THE BANK!
Monday, September 3, 2007
How far away June seems. The days were long and the thoughts of Summer fun and sun were just beginning. Now it's over and the sun sets a little sooner each day.
Summer 2007 saw Table Bay have a great Summer Educational Conference in Park City. It was a great trip and we enjoyed spending time with our friends both new and old.
America's IRA Experts took flight this summer and was announced to the world in Las Vegas at the end of August.
While summer is typically a slow season for the financial industry we saw record sales at Table Bay and anticipate a great last half of the year.
Fall is a favorite time of year as we anticipate the cooler air, the holidays, and the Red Sox in the World Series. We are sad to see the time go so fast but excited about what is to come. How about those Red Sox!
Tablebay Man watched the complete no hitter Saturday night. It was the first no hitter he ever saw from beginning to end live. It was something special.
So it is back to school and work. Suits everyday and longer work days. The leaves will turn and soon the snow will fly. Goodbye Summer 2007!
Summer 2007 saw Table Bay have a great Summer Educational Conference in Park City. It was a great trip and we enjoyed spending time with our friends both new and old.
America's IRA Experts took flight this summer and was announced to the world in Las Vegas at the end of August.
While summer is typically a slow season for the financial industry we saw record sales at Table Bay and anticipate a great last half of the year.
Fall is a favorite time of year as we anticipate the cooler air, the holidays, and the Red Sox in the World Series. We are sad to see the time go so fast but excited about what is to come. How about those Red Sox!
Tablebay Man watched the complete no hitter Saturday night. It was the first no hitter he ever saw from beginning to end live. It was something special.
So it is back to school and work. Suits everyday and longer work days. The leaves will turn and soon the snow will fly. Goodbye Summer 2007!
Sunday, September 2, 2007
Hey - I'm back!
Hey boys and girls - I'm back...
I had a year off while they were making my new super hero outfit, but its done now and we are back with our irreverant look at the financial world and the business of financial services.
So check in daily as we poke a little fun at our business and the world.
See Ya soon!
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