When you create a financial plan for your retirement, saving is essential, but investing your savings is equally significant. As your retirement plan takes form, watch out for these common investment errors.

Not Diversifying

Diversifying your investment means putting your capital into a variety of money making opportunities. If you prefer safe investments, focus on money market accounts, and government bonds. If you are also concerned with inflation, the stock market is a place to potentially grow your funds over a long time horizon. With any investment, remember to diversify. Investment diversification can help provide both safety and growth. Asset Allocation and/or Diversification of your overall investment portfolio does not assure a profit or protect against a loss in declining markets

Removing Funds Early

When you have a retirement account, you should leave the money in there until you retire. If you take any or all of it out early, you may be assessed a penalty, and you may also lose some of your investment earnings. For example, if you have invested part of an IRA in a Certificate of Deposit, and you pull it out before the five year required investment period, you will lose three months of earnings.

Not Investing

Another common retirement savings error is not investing your savings. When your funds sit for a long period of time in just one account, you run the risk of the interest earnings from that account being less than the rate of inflation. When this occurs, the value of your funds will decrease over time. Investment isn’t just about growing your reserves; it is also about keeping the value of your money above the rate of inflation.

Securities offered through 1st Global Capital Corp., Member FINRA, SIPC.

Investment advisory services offered through 1st Global Advisors, Inc.

Armstrong, Fisch & Tutoli is a member of the American Academy of Estate Planning Attorneys.

Long term care insurance is a very important component of your financial strategy and the reasons to get an LTC policy are very compelling.

The cost of assisted living or nursing home care alone should motivate you to pay the premiums. AARP notes that approximately 60% of people over age 65 will require some kind of long term care during their lifetimes.[1] Furthermore, in a 2008 annual Cost of Care Survey AARP and Genworth Financial found that:

• The national average annual cost of a private room in a nursing home is $76,460 – $209 per day, and 17% higher than it was in 2004.
• A private one-bedroom unit in an assisted living facility averages $36,090 annually – and that is 25% higher than it was in 2004.
• The average annual payments to a non-Medicare certified, state-licensed home health aide are $43,884.[2]

You may have heard that LTC insurance is expensive compared with some other forms of policies. The annual premiums are minimal compared to real-world LTC costs.[3] Asset based LTC insurance policies have also provided a balanced approach of self-insuring a portion of the cost, helping to preserve retirement savings and income.

Contact us to learn more about the risk of long term care expenses pose to the value of your estate and how to properly plan to maximize the long term care insurance benefits.

[1] aarp.org/families/caregiving/caring_help/what_does_long_term_care_cost.html [11/11/08]

[2] aarp.org/states/nj/articles/genworth_releases_2008_cost_of_care_survey_results.html [4/29/08]

[3] aarp.org/research/health/privinsurance/fs7r_ltc.html [6/07]

Armstrong, Fisch & Tutoli is a member of the American Academy of Estate Planning Attorneys.

There’s a growing concern among our aging workforce that there might not be enough money to retire.

After all, the recession hit everyone pretty hard and if you were only saving the minimum to start with, you might now be wondering if retirement is a dream that’s never going to happen.

But before you throw in the towel, consider this:

In the past, experts suggested you would need between 75 to 85 percent of your existing income to live comfortably during retirement. But that’s not necessary true.

75% of $100,000 is $75,000 for example, but if your mortgage and/or other major debts will be paid off, you wouldn’t need that much to cover your expenses. Likewise, if you’ve got kids living at home or putting some through college, you’re probably spending quite a bit more now than you will during retirement.

Yes, it’s better to have more than you need versus not enough but rather than following a generic percentage recommendation, start looking at your unique financial picture.

What do you pay now that you won’t be paying later? Based on an average return, what kind of income can you expect from your investments when you actually make the retirement leap?

You may find that the gap isn’t as big as you had previously thought.

What if you haven’t saved anything yet?

First, know that you’re not alone. A large number of working Americans in their 40s and 50s have yet to stash away any substantial amount of money. Unwise? Yes, but certainly not disastrous. If you start funneling money to retirement plans now, you can still expect to embrace your retirement without struggling to get by.

Experts suggest saving a minimum of 20% of your pre-tax income starting at the age of 50 to ensure you have enough to live comfortably during your retirement.

Armstrong, Fisch & Tutoli is a member of the American Academy of Estate Planning Attorneys.

We all know the importance of starting a savings plan for retirement early – after all, this is the only way to accumulate that million dollars the experts tell us we’ll need to live comfortably.

Unfortunately, reality doesn’t always make that possible and many of us end up in our 40s and 50s with very little saved, stressed about the retirement that’s looming in our near future.

So, can you still retire comfortably without having the coveted million dollars in savings?

Yes… yes you can. While a million bucks would certainly make things easier, it’s not mandatory for a carefree retirement. In fact, you can enjoy a wonderful retirement with much, much less.

To start, do your math and figure out how much money you would need each year in order to live. Factor in future changes such as paying off a mortgage or dependents moving away from home. Then estimate how much money you expect to have coming in, including both Social Security and any pension or retirement plans you might have.

With these two numbers, you can start focusing on how to fill the gap.

The best way to do this is with savings and investments, such as an employer-sponsored 401k or an IRA account. But while you’re socking money away in savings, also remember that you don’t have to stop working when you retire.

Maybe this is when you’ll finally launch that small business you’ve always dreamed about or work part-time as a florist or at a day-care center. This is an opportunity for you to actually choose something you’red really want to do instead of choosing a career because it pays all your bills.

For most people, figuring out how to close the financial gap opens up a whole new range of possibilities and if you let your imagination run with those possibilities, you might find that you’re a little excited about the idea of retiring after all.

Armstrong, Fisch & Tutoli is a member of the American Academy of Estate Planning Attorneys.

Planning for retirement is one of the most important things you will do during your lifetime, and any mistakes you make today can be extremely costly later. In fact, according to experts, of those people that do have retirement plans, about 90% will still live in poverty or run out of money before they die.

You Need a Goal – Having an IRA and/or 401k in place is not enough. You need to know how much money retirement will cost you so that you can start planning and working toward that goal. Unfortunately, most people never calculate this important number and don’t know there’s a problem until it’s too late.

Not Saving Enough Money – Simply socking away 2 or 3% in your 401k isn’t going to cut it. Recent surveys revealed that about 75% of people between the ages of 55 and 64 had less than $56,000 saved for retirement. To keep from making this mistake, you will need to start saving for retirement, and do so aggressively. Put as much money as possible away now so that you’re not scrimping for cash later.

Not Saving While Still Young – While planning for retirement might not seem a like a big deal when you’re in your 20s and 30s, the truth is, time flies. Before you know it, you’re pushing 50, retirement is just around the corner and you’re just starting to think about saving. If you haven’t already started a retirement plan, do it now.

Never Rely on Social Security or a Pension – Company pension plans are a risky thing to rely on as many are underfunded and the majority of companies are moving towards dropping pension plans altogether. Social Security doesn’t offer much more security, and even if it did, the benefit amount that you receive is likely just a fraction of what you’ll need to live.

Not Investing – One of the best things you could do as far as a retirement plan is to add some investments beyond your 401k. If you get some extra money, why not put it in some type of investment, such as annuities or CDs. Of course before you invest, you should retain the services of a professional financial consultant to help you choose the investments that are right for you.

Armstrong, Fisch & Tutoli is a member of the American Academy of Estate Planning Attorneys.

If you are nearing retirement and are thinking of selling your home because you no longer want the problems of taking care of a large house, or maybe you plan to travel, you might want to reconsider. You can actually turn your home into a monthly cash flow that can help you finance your retirement.

This is a good option for retirees that no longer want to live in their home. There are a number of benefits to renting instead of selling your house, especially if you already have your house paid for. When your home is already paid for most of what you get in rental income will be profit. If you want to travel, you can hire a management firm to oversee the rental or ask one of your adult children to take care of it.

Does it Makes Sense for You To Rent Out Your Home

Assuming that your home is paid for, most of what you get in rental income will be profit, but you do have to factor in some costs, such as upkeep on your home, as well as vacancy time. Before you decide if renting your home will be the better alternative to selling, you will first have to look at the expenses.

How much will you likely be able to charge for rent? Once you have come up with an amount, you will need to add together the costs you are likely to incur, such as home insurance, repairs to the house, taxes, and possibly property management fees. The cost should be about 10%, but can be up to 20%. With these calculations, if you rent your home for $1,500 a month you should make about $1,200 a month profit. Adding this monthly income to your retirement cash flow will obviously be very helpful.

Another advantage to renting your home instead of selling is that you will still be building equity in the property, and can sell it at a later date if you choose. Your house will likely continue to increase in value over the long term so when you do sell it, you may possibly make a bigger profit than you would if you put it on the market now.

Decrease Tax Liability

When you rent out your home there are some tax deductions that can be helpful in lowering your tax obligation. All of the repairs that you make on the home can be deducted from your income, or depreciated, as well as some travel expenses, if the travel involves taking care of your rental property. You might even be able to get a deduction for a home office if you use it to manage your rental property. Travel expenses and home office deductions can be tricky with the IRS, so be sure that you get the advice of a tax professional before using these deductions.

Armstrong, Fisch & Tutoli is a member of the American Academy of Estate Planning Attorneys.

While retirement can be a happy occasion for some people, it can be a source of anxiety for others. Some are happy to be retired because it allows them more time to travel and do all of the things that they didn’t have time to do while working. Others worry about finances, or if they will feel needed or useful. And then for some, retirement includes a generous mixture of all these feelings.

If you want to go into retirement without the anxiety, it is best to plan your retirement, and the earlier you do this the better. No matter how old you are there are steps you can take to plan a retirement that you will feel secure and happy with. This is especially true when you consider funding your retirement.

This checklist can help you get ready for retirement, even if you are decades away from those golden years.

• The first thing to look at is what you want to do when you retire. Will you want to live in a retirement community and take life slow, visit relatives, or travel the world?
• Once you know what you want to do in your retirement years, you will then need to calculate how much money you will need for retirement. There are retirement calculators available online that can help you to determine the amount of money you need.
• After calculating how much money you need to retire, you will then be able to tell where you are financially for retirement and how much longer you will have to save and work before you can retire.
• Look for ways that you can save money for your retirement, such as an employer sponsored 401k, an IRA, as well as investing in stocks and bonds.
• Keep track of what your benefits will be from Social Security. Each year you will get a letter from the Social Security Administration that will tell you how many credits you have toward retirement benefits, and what the amount of your benefits will be.
• Find out when you will qualify for Medicare, and the best age to apply for your Social Security benefits. For some people it may make sense to delay collecting these benefits so they will have a larger monthly income.
• Get information on withdrawing money from your retirement early if the need arises, as well as the best time to start taking withdrawals for retirement.
• Don’t forget to put an estate plan into place that includes your Last Will and Testament, a Power of Attorney, and any trusts that may be necessary to protect your assets for yourself, as well as your beneficiaries.

The better prepared you are for retirement, the more you will be able to relax and enjoy this time in your life.

Armstrong, Fisch & Tutoli is a member of the American Academy of Estate Planning Attorneys.

A 401(k) is a retirement savings plan that is usually employer-sponsored. This means you, as an employee, elect to have part of your earnings placed into an individual 401(k) account, which is managed by your employer. Generally, you can select from among a variety of different investment options for your account, usually a mix of different types of mutual funds. Often, you can also use your account to invest in your employer’s stock. Some employers also “match” part or all of their employees’ contributions by putting additional funds into the 401(k) account.

Since 2006, there have been two types of 401(k)s available (although not all companies offer both types) – the traditional 401(k) and the Roth 401(k). With a traditional 401(k), your contributions are tax-deductible , meaning that the 401(k) is funded with pre-tax dollars and tax-deferred, meaning that you don’t pay income tax on the money in the account until you withdraw it. This type of 401(k) is especially attractive to higher income earners who get a significant benefit from the up-front tax break, and who prefer to postpone the income tax until their 401(k) withdrawals.

A Roth 401(k) works in the opposite way – you pay income tax on money contributed to your Roth 401(k) in the year that you put the money into the account. But, the money also grows tax-deferred, and qualified withdrawals from the account – including investment income – are tax-free. This plan is attractive to lower income earners who don’t make enough to miss the tax break during the year of initial contribution but who benefit a great deal from not having to pay taxes during retirement.

If your employer offers both traditional and Roth 401(k)plans, you may want to divide your retirement savings between the two types of plans so that you can take advantage of the benefits of both.

A new law that became effective January 1st, allows the owner of a traditional IRA or 401(k) to convert these accounts to a Roth IRA. Tax is paid on the amount converted, but future qualified withdrawals are tax-free. For this year only, you can choose to pay the tax this year, or defer the income equally to your 2011 and 2012 tax years. For more information, contact a qualified attorney, tax or financila advisor.

Securities offered through 1st Global Capital Corp., Member FINRA /SIPC 8150 N. Central Expressway., Ste 500, Dallas, TX 75206 (877) 959-8400 Investment advisory services offered through 1st Global Advisors, Inc.

Armstrong, Fisch & Tutoli is a member of the American Academy of Estate Planning Attorneys.