Part 7: Investment Vehicles

If you are a loyal reader of my blogs then you know that I talk about many types of investments. For retirement, you should rely on the following items;

1.     IRS Laws governing taxes for such accounts as SEP, IRAs, 401K and 403b plans and Keogh

     2.       Brokerage, Insurance, and Banking Rules for Retirement Accounts with tax exemptions or deductions

     3.       The Investment Vehicles or securities purchased for such accounts.

By following the rules, you can accumulate cash quickly for retirement.   We are going to concentrate on investing as cheap as we can without hurting safety.  Keep in mind, higher returns usually means higher risks. If you are young, taking big risk to make big gains may be” OK” because you have years to recover if you guess incorrectly. But you may not want to take big risks when you are near retirement.  You may not have time to recover before you start taking retirement withdraws.

Be aware of anyone who claims that they can sell you an investment vehicle that offers great returns without great risks.  That is your first clue that it is a scam. These scam artists can be as famous and rich as Burney Madoff who took rich and power people for billions of dollars. Financial firms can have newspaper articles written about them as financial saviors in national and local newspapers or TV shows.  But they can be as wrong and as bad for you as any poison.  Here is why you must know as much about the investment that you are about to discuss as your experts. When you meet with them, don’t be afraid to ask questions. Don’t judge a person by how smooth they talk. Remember, anyone can claim to be a financial consultant or investment counselor. That does not mean that they know what they are talking about. 

Remember to monitor your investments. Ask tough questions and insist on speedy and satisfactory answers. Make sure you get regular written and oral reports. Look for signs of excessive or unauthorized trading of your money when you receive financial statements.   If you do see something that is unusual ask questions. If you don’t like the answers, report your suspicions to the authorities.

www.sec.gov

The Securities and Exchange Commission (SEC) Web site offers a menu of online “Investor Information” topics for consumer reference.  If you have any complaints, contact the SEC.

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

Part 6: Taxes and Retirement

Eliza Thorne, exslave from Stony Point Va., ancestor 10th removed from Darnell L Williams. Owned an 11 acre farm with cattle, horses, and at least one Conestoga wagon. 

I have ten questions for you! Take out a sheet of paper and write down your answers.

1.       Income taxes go away when you are retired? (True or False)

2.       Social Security benefits are not sheltered from taxes! (True or False)

3.       There are no tax consequences if you don’t start to withdraw your pretax savings at age 70.5? (True or False)

4.       Everyone that wants to advise you about your retirement savings is a professional and has your interest at heart. (True or False)

5.       In general, stocks are safer than bonds when talking about retirement savings (True or False)

6.       A broker at the largest brokerage firm must know what they are doing and can give you the best advice in relation to your retirement savings. (True or False) 

7.       Bonds have steadier income than stocks. (True or False)

8.       Mutual Funds are safer than individual stocks or bonds (True or False)

9.       Bond Funds can give you steady income (True or False)

10.   An Annuity is a good savings vehicle for future steady income. (True or False)

Father and mother: Jean J. (Brown)Williams and William J. Williams II on their wedding day at First Baptist Church Steelton, Pa. on June 28, 1941. On the left, David Franklin and wife Alice (Brown) Franklin. On the right, Willie T. Williams, William's best man and his wife (not related).

Let's look at your answers!

1.       Remember all that pretax money you contributed to your retirement plan? When you withdraw it at retirement, you pay income taxes.
2.       That is true, they are not tax sheltered. A portion of your Social Security benefits is included in your taxable income.

3.       That is false. There is a 50% tax penalty on amounts that the IRS requires to be taken out after age 70.5 and that are not withdrawn when required.

4.       False, everyone has their own interest and their own biases. Some people have no clue what they are talking about.

5.       False, when a company goes bankrupt, stockholders get nothing. Stocks can’t get paid until bondholders get paid.

6.       Brokers must look after the interest of the brokerage firm first. You come second.

7.       True, bonds are paid by a schedule. Stock dividends can be cut or eliminated all together. 

8.       True, mutual funds are made up of many different securities. Because they have so many, one bad company makes little difference to the fund’s portfolio.

9.       True, most bond funds pay investors every month.

10.   True, you can have an annuity pay you every month, every quarter, or however you set it up.      

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

Part 5: I am Behind on Retirement Savings

OK, you bought a home, you have a current year car, and you put your children through college. You are getting old and you have no money for retirement. What should you do? I have five suggestions for you. 

First, contribute the maximum to your retirement savings account. If your employer gives matching funds then take the money and invest your money in a high yielding fund.   In most retirement accounts, you will also get a tax deduction while participating in the plan.  You maybe illegible for the Catch-up provision of your retirement plan. This will allow you to contribute extra cash if you are over 50 years old.  If this is the case, act on it now.

Second, stay employed as long as you can! This will help you in retirement in many ways.  Having an income gives your retirement savings a chance to grow some more. A regular income could mean regular savings. If you work for a company that provides health insurance, you won’t have to fully pay for a policy yourself. Don’t forget, you may have social benefits of working such as talking to people every day.

Third, you plan to move to a region with lower housing cost and living expenses, example moving from New York City to Franklin County, Pa. You may want to move out of your house and downsize to a smaller house condo, or apartment at a place with lower taxes.  Remember, moving has its own expenses plus you may have to leave friends behind.  Do not use your savings to buy things that you do not need. Do not start accumulating debt. This is not the time to lend money to friends and relatives. It is time for children and grandchildren to be on their own. They probably have more earning power than you do.

Fourth, you are going to have to decide when you are going to apply for Social Security. You must apply between age 62 and age 70. Regardless of the age you start receiving Social Security benefits, remember to sign up for Medicare at age 65.

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.
 

Fifth, if you are reading this blog and many other blogs that I have  written about finance then you are on your way to educating yourself about investing. Don’t put your money in the wrong place. You do not want to put your money in a checking account, savings account, or money market fund for retirement.  The objective for your retirement savings is to make far better than the rate of inflation.  

Part 4: Where Will I Live When I Retire?

That is a good question! This should be your first priority since where you live in retirement affects not only your income but also our emotional, social, and physical well-being. Your retirement home is the most important part of your overall retirement strategy.   Yes, the cost of housing has not gone up like it has from 1950 to 2008. Healthcare is going up faster than housing.  But housing is still high in most places outside the ghetto. Heating and cooling cost go up and down depending on the weather and the supply of natural resources such as gas, electric, and oil.  Don’t forget retirement homes come with maintenance, condo fees, real estate taxes, and insurance that is affected by inflation.

If you decide to look into Independent living facilities, design for reasonably healthy older people, you will find that it is not cheap. These homes often require a hefty down payment of $200,000 and a monthly fee of $2,000.  Getting an apartment can be a less expensive deal but you still have a monthly fee of $1,000 or more to pay besides rent.

I had a friend that was up in age. They put her in the hospital but she did not want them to keep her alive. She died. I could not understand why she felt that way until I started resourcing the cost of it all. In 2006, the average nursing home care per day in a private room was $206. Do you know that 40% of today’s age 65 Americans will spend some time in the future in a nursing home? This is why healthcare can consume most if not all your retirement money. Insurance companies have insurance policies that can protect you against such health care risk.  However, a typical annual premium for a 60 year old can be as high as $2,500 per year. The younger you are when taking out the policy, the less the cost per year.

Some preretirees are starting special health care savings funds at work, separate from their retirement savings.  A Health Savings Account (HSA) can help you save for future qualified medical and retiree health expenses on a tax-free basis. Individuals that do not belong to a workplace health plan can sign up for HSAs with some banks, insurance companies, and other approved organizations.  These accounts can receive contributions from you, your employer, or members of your family. You can use the funds from an HSA to help offset future medical costs, and the money in your account can be carried over from year to year.  This account stays with you as you move from one employer to another.  Here are two website that may help you with future health care;

www.medicare.gov

www.socialsecurity.gov/prescriptionhelp/

The “Centers for Medicare and Medicaid Services" site is your first and most reliable resource for information on Medicare. It includes information on billing, appeals, long-term care, and links to information on the prescription drug program.          

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

Part 3: What if I am Self-Employed

Many of you probably have access to employer’s 401K programs. I like 401K programs as long as they give matching funds into my account.  That means that they give me free money.  I was in a 401K program back in 1980 to 1985 that matched 50% for the first 6% that I put into the account.  I loved it because it matched my funds.  If the program does not match my funds then I don’t need 401K programs.  For people who are in such a program, you can take your money with no penalty at age 59.5.

However, if you are not retiring at that age, I would roll the money over into an IRA to avoid the taxes. You can take the money without penalty for some medical reasons or financial hardship. You can also take the money if you receive it after age 55 in equal installments based on your life expectancy.  However, if you do and you are under age 59.5, you will have to pay taxes and a 10% penalty. It is better to take a loan against the account if you badly need the money.  See your plan for details about how to borrow money from your 401K.

Firms with fewer than 100 employees can establish a SIMPLE plan (Savings Incentive Match Plan for Employees). This plan is a cross between an IRA and a 401K program.  The employee chooses where the money goes just like in a regular IRA. Here employers must match up to 3% of pay contributed to the plan. Another way it can be set up is to give every employee of the company, contributing or not contributing to the plan, 2% of their pay automatically. Employees are vested immediately in the employees’ plan.  The plan grows tax deferred. However, the rules for withdraw are more than twice as harsh as the other plans.

What if you are Self-Employed? Keogh Plans are favored by doctors, dentist, architects, lawyers, and other professionals. Moonlighting consultants and free-lance writers have been known to use Keogh Plans. You can have this plan while you are in your company's pension plan and your IRA. Money for this plan is deducted from your taxable income in the year in which you made the money. You can use the “Money Purchase Keogh Plan”, “Profit-sharing Keogh Plan”, or “Defined-Benefit Keogh Plan.” See your investment adviser on what type of plan to use. 

Dividends, interest, and other earnings accumulate tax-deferred. Most of the rules for this plan are similar to most regular IRA Plans.  You can take the money at age 55 if the business closes.  If you have full-time employees, they must be included in your Keogh plan. 

A Simplified Employee Pension (SEP) is a combination of an IRA and a Keogh. The annual contribution limit is about 20% of income, the same as for profit-sharing Keoghs, up to $44,000 per year. The rules governing deductibility of contributions, tax-deferral of earnings, and penalties are the same as with an IRA. The advantage of a SEP over a Keogh is that it is simpler to administer.  This program is ideal for people with businesses as second jobs. It cuts the tax bill while saving for retirement.    

In these last three blogs, we studied how to get started in retirement accounts. Whether you are self-employed, you work for someone else, or your spouse has income, we covered a retirement program that fits your needs. The key is to start building that account today with whatever money you can. As you can afford more, increase your contributions. Start with $25 a month if you have no money, take full advantage of your tax-favored investment vehicles now while you can. When you are old and your income is limited, it will be too late to do something about it.        

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

Part 2: Moving Your Retirement Money

Over the past 40 years, I have moved my investments around from one place to another including my IRAs. You are not required to keep your money in the same IRA from the time you open it to the time you start withdrawing your money. Yes, the IRS has a penalty for premature withdraws. But the law also provides flexibility for moving your IRA from one type of account to another account for instance, a Bank to an Online Brokerage Firm.  You may find that you can do better at a self-directed IRA buying Discounted Corporate Bonds giving 8% while at the bank you are only getting 1%. You now have over $1,000 saved.  So you transferred the account. We will talk about two ways to do this.

Direct Transfers are done between the IRA sponsor that you have now and the IRA sponsor that you want to handle your account in the future. You can transfer your accounts this way anytime you like but keep in mind, these sponsors may have fees for opening and closing accounts. The future sponsor sends the current sponsor a transfer form and the current sponsor sends them the money. I usually do this type of transfer. But this type of transfer could cost you money if done too many times. Sponsors usually have a small fee to do this transfer. 

Rollovers are a transfer that I do not recommend. If you do this type of transfer, you better do it within 60 days from the time you receive the money to the time you place the funds in a new IRA.  If you do not, it will be considered a premature distribution.  That means that it will be taxed as ordinary income and trigger the 10% penalty, assuming that you are under 59.5 years old. This type of transfer can only be done once a year for each account that you own. 

I own a regular IRA. That means that I take money from my paycheck, place it in my IRA and take deductions off my income tax. But when I am ready to withdraw the money and live off of it, I have to pay taxes on the money withdrawn.  

I could have opened a Roth IRA. Here, contributions are made with after-tax money. These people do not take a tax deduction at tax time. However, all earnings within the Roth are tax-free, not tax-deferred as it is with the regular IRA. Roth owners can withdraw money at any time without incurring a penalty or tax. Note that this rule applies only to your contributions, not  your earnings. If your account withdraws reach the point at which you are dipping into earnings, you may owe the penalty and tax if you are less than 59.5 years old. The tax and penalty are both waived on up to $10,000 of earnings withdrawn, after the account has been open for 5 years for the purchase of a first home.   

If you plan to live past 71 years old, you can continue to contribute to the account. There is no requirement that you begin withdrawing money from a Roth IRA at age 70.5 years old. If you wish, you can leave the money in your account until such time as death. If you die with a balance in your account, the money goes to your heirs tax-free. In a regular IRA, the beneficiary owes tax on the balance. If you earn less than $150,000, you qualify to open a Roth IRA.  

If you don’t know what type of IRA to open discuss it with your IRA Sponsor or your investment advisor.      

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.
http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html
The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

Part 1: How to Get Started With Retirement Accounts

 Young Store Sales Assistant Amanda Ann Williams III has only 40 years to retirement.

We talked about the overall plan from when people are in their twenties and thirties, getting started with opening their retirement accounts. Now let’s pay some attention to the details.  In my day, my parents did not believe in teaching us about how to handle money or talk to us about objectives concerning money. In my day, talking about money was considered bragging or rude. Here is the reason why it is so easy to scam people out of their money. By acting like the use of money is so secret, families allow scam artist to use this lack of knowledge to remove the money from the ignorant. This is the major reason why I write this blog on finance.

We will start with the most common investment to your retirement, the IRA. IRAs can be opened and contributions made any time before the 15^th of April. That is the deadline for filing your Federal Income Taxes.  There is a maximum investment per year that you can make. Check with our custodian or trustee to see what that maximum is because it may change according to tax law in that year. You can contribute any amount under that maximum that you want.  Depending on how you are paid, for example, you can deduct $192.30 every two weeks from your paycheck or bank account and send it to your IRA custodian or trustee.  Recently, the maximum yearly investment was $5,000 and for people over 50 years old, it was $6,000. There is a 6% penalty tax on contributions over the annual maximum and the excess counts as taxable income when you withdraw it. 

The custodian or trustee that supervises the account and reports to the government each year are the Banks, Brokerage Firms, Credit Unions, Mutual Fund Companies, Insurance Companies, and other corporations. They have standard IRS-approved custodial or trustee agreements.  All you have to do is contact one of these companies and they will walk you through opening an account.

You have to know what you want to do first. You should also ask these institutions some questions before you commit money. I would shop around for the institution that fits my needs and fee structure. Some companies do not charge to open an IRA. Other companies have a set up charge. Some have yearly fees, yet others have exit fees when you want to move your IRA to another institution. I would ask about their fee schedules before I commit to any money. If you are just starting out at 24 years old and you can only spare $25 per month to invest in your IRA,  you may want to start with a Bank, Savings and Loan, Credit Union, or the Share Builders Plan. You may think that $25 per month is not worth it but consider that $25 per month is $270,000 saved over 30 years.  If it grows just by a total of 6% simple interest that is a total of $286,200. 

The Share Builders Plan allows you to buy stocks and sometimes bonds in an IRA brokerage account, purchasing full and fractions of shares. As I told you about income stock in a previous blog, you can buy income stocks in this account and have the dividends automatically reinvested into more stock that gives more dividends. This would compound your return in your Share Builders IRA Account.  Look up “Share Builders Plan” in your Web Search on your computer internet for more information.  If you are prepared to put the maximum amount of money into your IRA, just about any option is open to you.   

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.

I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.