How Do you Plan to Retire?

How Do you Plan to Retire?

More to the point, what are you doing now to create that comfortable retirement?

Retiring with plenty of money to live on takes a lot of planning and disciplined saving, starting as early as possible (yes, 20- and 30-somethings, we’re talking to you!). You can always open a savings account or go to a brokerage house and set up a retirement account there; or, you can start investing in an employer-sponsored 401(k) if there is one offered. All good ideas … but there are some decisions to make sooner than later.

Will you be thrifty or a spendthrift?
Even those who’ve saved well and often throughout their work lives may not have enough to live a lifestyle of the rich and famous—especially when you figure that those retirement years could be several decades due to longer lifespans today. Saving enough money (wisely invested to grow) to support you for 20 or 30 years requires a robust retirement account or other income source. So, decide early on what kind of lifestyle you’d like (traveling the world or watching the world from your porch), check the online retirement calculators often to see if you’re on track to meet your financial goals, and consult a trusted financial advisor to develop a plan that makes sense for you.

Will you stay in your home or downsize?
If you’re someone who ended up in a larger home than when you began working, for whatever reason, you may find that it’s too large or too expensive for you to maintain in your later years. Real estate taxes and the cost of living might have risen to become unaffordable in your area, or perhaps once the kids are gone, you’d like to move to another community (or region of the country) or different type of housing arrangement. If you think you’ll be downsizing—and getting rid of a lot of accumulated possessions—you’ll have decisions to make that will affect your retirement finances and available cash.

Will you self-direct your retirement account?
Self-direction isn’t for everyone—but for savvy investors who know and understand various nontraditional investments (outside of money market funds, stocks and bonds), self-direction can be a great way to build a more eclectic and potentially more lucrative retirement portfolio.

Self-directed investors make all their own investment decisions and can include a broad array of alternative assets within their plans. Do you already invest in rental property? You can include that in your self-directed IRA. Do you have enough money saved up to make a loan to someone, with interest? You can make unsecured and secured loans from a self-directed retirement plan. Other types of assets include precious metals, private placements, commodities, shares in theatrical productions … the list goes on.

The financial decisions you make now will determine the type of retirement lifestyle you end up having. By self-directing your retirement plan, you aren’t stuck with what the stock market or bond market has available. Rather, you can take control of your future, today and include the types of assets you might already be investing in outside of your existing retirement plan. Think about it as you think about the type of retirement you’d like to have decades from now.

Then, contact us with your questions about this retirement strategy, or go straight to our Starter Kits to open your self-directed IRA. We’ve available at 888.857-8058 if you need help with the paperwork or need to understand more about the many options with self-direction.

Getting on Track to Hit a Million

No, we’re not taking about the lottery here. We’re talking about retirement savings. Many millennials believe they won’t hit a million dollars in savings by retirement. In fact, a study done by Wells Fargo showed that 64% of millennials surveyed think they will not hit that million dollar mark. About 41% of millennials have not started to save for retirement yet because they are either paying off their debt, or feel they do not make enough money to get started. A whopping 34% of millennials have an average debt balance of $19,978 and many of them are finding this debt to be holding them back from saving as much as they would like to.

Many millennials have a very realistic approach when it comes to their retirement. About 66% believe that retirees should be responsible for their own financial support, and roughly 75% believe that Social Security will not be around when the time comes for them to retire (You can read more about that here).  Millennials understand the importance of taking advantage of their employer-provided 401k plans, but too few millennial employees actually have them – roughly 52%.

It’s easy to see why many millennials might feel discouraged about their future retirement. More than half of millennials (52%) are nervous about investing because of the volatility they have witnessed within the stock market. This Harris Poll from March of 2016 explains how 79% of millennials are not investing in stocks because of this fear of volatility. With half of millennials nervous about stocks, and over three quarters of millennials not investing in stocks at all, how can they get on track to hit a million in retirement savings?

The Mark: How to Hit it

According to Wells Fargo, many millennials could be on their way to hitting the million dollar mark by retirement without even knowing it. The median salary for millennials is $27,900 and about 44% are putting away more than 5% of their income for retirement.
There are many options available to millennials who wish to start their retirement nest egg. A popular option is a Roth IRA. These allow your contributions and investment earnings to grow tax free, as you have already paid taxes on the funds that have entered the account. Another bonus of having a Roth IRA is when you take the money out of that account while in retirement  you don’t have to pay taxes on it. If you’re interested in opening a Roth IRA, here is how easy it is.istock_000011781243large
Once you open a self-directed IRA, you can invest as little or as much as you would like into a multitude of investment types. You can read more about that here and here.

Need some education about self-direction as a retirement strategy? Our website has load of helpful information to get you started and in the know, and the helpful professionals at Next Generation Trust Services will answer your questions and handle your transactions with expertise and efficiency. Contact our office at Info@NextGenerationTrust.com or 888.857.8058.

Want to know more? Check out this link or watch our informative videos. You can also download our free white paper that gives you the inside scoop on how to use self-direction to build your retirement nest egg, using nontraditional investments you already know and understand.

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Americans are Underutilizing IRAs

Raise your hands if you took a course in high school or college about IRAs and saving for retirement.

We thought so.

There is a keen need in the United States for more education on the importance of saving for retirement and on retirement plans, especially among young workers; 35 percent of millennials say they don’t know enough about these accounts to consider using one, according to a TIAA survey released Wednesday.

piggy-and-growthWe’ve written many times about Americans’ lack of retirement savings and lack of good savings habits. This was reflected in another result of the survey: 41 percent of people of all ages said they don’t use an IRA but would consider doing so as part of their retirement strategy, down from 56 percent in 2015. A major reason cited was that they believe they don’t have enough money to save any more than they
already do. What they don’t realize—and why some education is needed—is that they could contribute very small amounts and over time, allow their investment to grow.

That said, it seems that among the respondents of this survey, spending habits are partly to blame. Thirty percent of them said that if they were offered $5000 to spend or invest, they would spend the money on home renovations, a vacation, technology upgrades or a shopping spree. Only six percent said they would contribute the money to an IRA.

Are you utilizing a self-directed retirement plan?

Savvy investors know that investing in alternative assets through a self-directed retirement plan can help them grow a more eclectic and potentially more lucrative retirement portfolio … and that consistently funding their self-directed IRA is a smart habit to attain. Whether funding the plan for future real estate, precious metal or commodity investments, or to include loans, private placements or hedge funds, self-directing one’s retirement is a great way to take control of your retirement goals.

Need some education about self-direction as a retirement strategy? Our website has load of helpful information to get you started and in the know, and the helpful professionals at Next Generation Trust Services will answer your questions and handle your transactions with expertise and efficiency. Contact our office at Info@NextGenerationTrust.com or 888.857.8058.

Want to know more? Check out this link or watch our informative videos. You can also download our free white paper that gives you the inside scoop on how to use self-direction to build your retirement nest egg, using nontraditional investments you already know and understand.

 

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5 Easy Tips for Self-Directed Beginners

 

You may have read our previous article about Self-Directed IRAs, and now you’re interested in starting one of your own.  Self-directing can be easy, but in the beginning it can seem like there’s a lot of information being thrown at you at once. I have compiled a list of 5 tips that can help you navigate through the process of starting your retirement nest egg.

  1. Choose the Type of IRA

This is one of those things that’s easier said than done. There are actually quite a few different types of IRAs for you to choose from, and that can make the decision a bit overwhelming. Many people stick with a Traditional or a Roth IRA. Both have their advantages and are simple enough to navigate with once you do a bit of research on each.

  1. Find the Right Administrator for You

There are many self-directed IRA administrators and custodians out there, and we are one of them. You can call us up and ask us questions about our fees, processing time, anything you’d like really. The only way to know if we’re a good fit for you is to get in touch with us!

  1. Invest in What You Know

Investing in what you are familiar with can ensure that you are comfortable with your decisions. Do you know a lot about race horses? You can invest in that. Are you a precious metals guru? Go for it! Being comfortable in your knowledge of what you’re investing in makes the process easier. The longer you are investing, the more experience you will gain. As you gain that experience, you can become more comfortable in investing in other things to diversify your portfolio.

  1. Research Your Investment Further

You’ve probably heard this before, but be sure to research investments. As previously stated, investing in what you know can make you more comfortable with investing. With the added knowledge from your research on your investments, you can get an idea of what to expect on your returns.

  1. Open and Fund Your Account

Congratulations! You have chosen the type of IRA you want, you’ve decided on an administrator that has your best interest at heart, and you’ve even picked your investment. Once you open your account, you’ll need to fund it in order to start your investments. There are a few ways that you can fund your accounts; such as transfers, rollovers, and contributions. If you’re just starting out on your first IRA, it’s likely that you will be funding your account with contributions. You can find a helpful list of contribution limits here.

Next Generation Trust Services is here to help you build your retirement nest egg. For more information please email Info@NextGenerationTrust.com or give us a call at 888.857.8058.

 

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Retirement on a Budget

Many millennials feel the pressure of student loans bearing down upon them and it can be terrifying trying to figure out how to get rid of all of that debt. On top of worrying about your current financials, you have everyone under the sun telling you to plan for your retirement. You’re probably thinking, “With WHAT money!? How can I get out of debt while saving for retirement at the same time?”. It can seem overwhelming. That’s where Self-Directed IRAs can come in handy for you.

The Basics: Traditional and Roth IRAs

An IRA is an Individual Retirement Account. These accounts are provided by an assortment of financial institutions and they are tax advantaged. There are a few different types, but for now we’ll stick with the basic two: Traditional IRAs and Roth IRAs. Traditional IRAs are tax deferred accounts. What this means is that in addition to the tax deduction you receive for contributing to your IRA, your earnings within the IRA (interest and gains) are also deferred until you distribute. When you withdraw money from your IRA, it is taxed as ordinary income. Roth IRAs are a bit different. There are contribution limits for Roth IRAs and the contributions you make are not deductible. The big draw for a Roth IRA is if you meet certain requirements when you take money out, it is tax free.

The Beauty of Self-Directing

With an IRA you can invest in things like stocks and bonds. With a self-directed IRA, your options become a little broader. Are you well versed in real estate? You can invest in that. Do you like the security of precious metal investments? Invest away! Maybe you’d like to invest in a business? No problem!  With self-direction you can pick something that you are familiar with and invest to your hearts content.  When you self-direct, you are in the driver’s seat. You can invest in ways that other IRAs and 401ks can’t.

Having a wider array of investment options isn’t the only bonus of self-directing your IRA. It may seem like you need a lot of money to start investing. The truth is you can start with whatever you feel comfortable with. Once you begin investing, you’ll gain the experience you’ll need to feel more comfortable with your decisions and invest more. Investing your money can seem scary at first. You can go your own pace and stick with what you feel most comfortable with.

If you would like to learn more about self-direction, contact us here at Next Generation Trust Services. We would be more than happy to answer any questions you might have. You can reach us at Info@NextGenerationTrust.com or 888.857.8058.

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66 million have NOTHING in Emergency Savings

Having a 6 month emergency savings nest is harder for some generations. According to a new survey from www.BankRate.com, 66 million Americans do not have emergency savings.  1/3 of Americans ages 36-51 years old (Gen X) have savings. Only 27% of other Americans of all ages have anything saved up.

It is very important to have an emergency savings account of 6 months of liquid cash so that in the event of an emergency such as losing your job, medical bills, or auto maintenance you will be covered. But only an astonishing 28% of all Americans, according to the new survey, have put aside any savings into this emergency fund of 6 months of expenses. The silver lining, if there is one? That percentage has risen by 6% from one year ago. Furthermore, nearly half of Americans older than 71 years old have enough savings for six months of living expenses.

Millennials (ages 18 through 34) have the same saving habits as Gen Xers, with 2/3 reporting at least some savings. The 1/3 without savings should check out ways to save by eliminating debt and alternative money making methods.

It may be difficult for millennials to save when they are in low-paying jobs and have crippling student loans. According to the study, half of the Americans with annual incomes of 75K or more have emergency savings, while more than half of Americans with incomes of less than 30k have nothing saved. One way to combat this is to check out the Millennial Money Guidewhich teaches you ways to combat debt and save up for an emergency fund regardless of your income.  While saving for an emergency fund competes with saving for retirement, paying off loans, rent, car payments, and all the expenses you incur every month it still is possible.

It is not your salary that makes your rich, it is your spending habits.

-Charles. A. Jaffe

The overall picture appears to be improving, however. June marks the 25th consecutive month that Americans’ financial security has improved, with men reporting more security for the 28th straight month. Women have reported increasing financial security in 16 of 28 months including eight of the past 12. Sites such as MillennialMoneyGuide.com provide guidance and financial clarity for those who need it. It is no longer the day and age where you need a financial adviser, with the internet you can gather the help you need. If you have any financial questions feel free to contact me. I am always happy to help and utilize my experience in the field of money to help out fellow young adults and millennials. Contact me here: admin@millennialmoneyguide.com

mmg2Brian is 25 years old and is the founder of Millennial Money Guide, a financial blog aimed to help millennials battle student loans and plan for retirement. When he’s not blogging, he can be found working out or traveling. If you want to learn more about how to become debt free you can email admin@millennialmoneyguide.com

 

 

DISCLAIMER

Next Generation Trust Services LLC/Next Generation TS, LLC does not evaluate, recommend, warrant, guarantee, or endorse the legality, propriety, performance, or reliability of any investment, service, statement, opinion, or other representation of any professional listed in our service providers network; carry any liability in any event for any misinformation, misrepresentation, negligence, act, omission, investment results, or wrongdoing of any professional network service provider; have any agreement or arrangement with any professional service provider with regard to any investment or service that may be provided to NGTS account owners or other investors; have any financial arrangement or affiliation with any professional network service provider.

 

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Millennial Employees: Have you Used a Retirement Calculator?

Check on Your Road Map to Your Retirement Goals.

Millennials have a long work life ahead of them, which comes with a long retirement horizon. Those who start saving early and often will do well when it comes to building retirement wealth.

As part of your retirement planning, have you tried a retirement calculator? You can plug in your age, income and other information into these online tools, which determine if you are saving enough to meet stated retirement income goals, or tell you how much you’ll need in your IRA to live comfortably. You can check some of them out at Bankrate.com, AARP, or CNN Money among other sites.

If you are a millennial (described as between the ages of 18 and 35), you are looking ahead to decades more of work life and earning—but are you thinking about your retirement life as well? No matter what your income level or living expenses, it’s always a great idea to find a way to put a little something away (and put away more as your earnings rise).

12208851_865760420158913_4730622320896721441_nIt’s scary to think about, or too intangible when you’re in your 20s or 30s to think about what you’ll need to live on in your 70s, 80s, and beyond; but planning and saving now—and investing well—will help you be more prepared for what lies ahead. After all, the numbers associated with comfortable retirement living far exceed what you’ll
collect (if you’ll collect) from Social Security.

Save early and often – and self-direct your retirement investments

As you progress through life, your needs will change, as will your priorities and perhaps your investing knowledge as well. If you are comfortable researching various types of investments and making your own investment decisions, you can kick your retirement journey into a higher gear by opening a self-directed retirement plan. The retirement calculators provide something of a road map but self-direction can help get you where you want to go by investing in alternative assets; these nontraditional investments are prohibited from typical retirement plans but savvy investors can take advantage of what they already know and understand with alternatives.house Arrows

Self-directed retirement plans can include a wide variety of alternative assets such as commodities, precious metals, real estate, hedge funds, secured or unsecured loans, and much more. As the years go by and your investing knowledge grows, you can build a more eclectic retirement portfolio and of course, as a younger worker now, you have the luxury of time for course corrections along the way that older people don’t have.

So, go ahead and fill out that retirement calculator—and do it periodically to make sure you’re on the right track. Stay the course, or correct it as needed to keep building up your retirement nest egg. And, make a pit stop to Next Generation Trust Services’ Starter Kits to open a self-directed IRA and ramp up your savings with alternative assets. You can also download our white paper that explains it all to you, or contact our self-direction experts at Info@NextGenerationTrust.com or 888.857.8058 with your questions.

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Whoa … Wait, Where are Younger Workers Investing for Retirement?

A new Harris poll* revealed that a large majority of millennials—almost 80 percent—don’t have stock market investments. Many (more than 40 percent) cited perceived lack of funds, about 24 percent said they don’t know how to make these investments, and 13 percent said student debt was to blame.

There were some gender differences around investing in stocks as well. 75 percent of women said it was confusing as well as  foreign (as opposed to 60 percent of their male counterparts) and 60 percent of women also saw the typical investor as “an old white man.” About half of the men who participated agreed with that assessment.

financial-literacySo what about those young workers who are earning but not investing? With their enviably long investing time horizon, they should get busy building up their retirement savings. If they want to avoid the stock market for whatever reason, there are still plenty of ways to grow a healthy retirement nest egg. Self-directed retirement plans offer investors greater freedom around the types of assets they want to include in their portfolios, so no one has to be “stuck” with stocks, bonds or mutual funds if that’s not their thing.

This younger generation was also coming of age during the Great Recession, and saw their parents’ stock portfolios take a major hit (and let’s not forget the first downhill slide of the century, after 9/11/2001) so they have reasons to be wary.

So if they’re not into stocks, what about self-directed alternative assets in a retirement plan instead?

See if self-direction is the  path for you to follow for your retirement 

Self-direction can be a great strategy for investment self-starters. For one thing, you can choose from a wide variety of investments—the types of assets you already might be investing in outside of your retirement plan. You can include these assets in a self-directed plan and enjoy all the same tax advantages of regular plans, with the benefit of making your own investment decisions.

  1. Find out if your workplace 401(k) plan can be self-directed. It’s up to the plan administrator but if this is possible, you can build a more aggressive nest egg with what you already know and understand.shutterstock_70970371
  2. Open your own self-directed IRA. Our Starter Kits have everything you need.
  3. Research what is possible, and how to make the investment. For example, do you want to own rental property? Want to invest in that restaurant that’s opening? How about shares in a rubber tree plantation? As a self-directed investor, you can make these investments within your plan. It’s up to you to research and thoroughly understand the “what” and “how” of each investment, and work out the terms.
  4. You make your own investment decisions; we handle the rest. The self-directed IRA administrator (like Next Generation Trust Services) will execute the transaction based on your instructions, handle all the mandatory paperwork and reporting, and any other activities associated with account administration.

Younger investors have decades ahead of them to build up retirement wealth. And, with a self-directed Roth IRA, they can continue to add to the plan after age 70-1/2 (it sounds so far off but it’s always good to plan ahead). You can read more about the different types of plans, annual contribution limits, and more on our website. You can also contact our helpful self-direction professionals at Info@NextGenerationTrust.com or 888.857. 8058; we’re here to answer your questions as well as ensure you are investing within IRS guidelines.

*The online survey polled 2,093 Americans aged 18 through 34 in March 2016.

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Millennials: On Your Mark, Get Set, Start Saving for Retirement!

The millennial generation (Gen Y) is the group comprising people ages 18 to early 30s (more or less), right behind Gen X. According to a report issued by the White House’s Council of Economic Advisors, they are a lot of things: the largest generation, comprising one-third of the US population now; the most diverse and most educated; and very tech savvy. This generation is busy studying or starting careers and getting involved in their communities and social causes.

millenialsBut how involved in their retirement plans are they being? And can they overcome the two financial downturns that came in the wake of 9/11 and of course, the Great Recession? After all, members of this group are starting their careers in a market still shaken by those financial crises and will likely be dealing with the after-effects for many years.

As the report notes, “Millennials are currently about a third of the labor force and … they have faced substantial challenges in entering the workforce during the most pronounced downturn since the Great Recession.” The Great Recession had a negative impact on many Americans’ ability to save and invest, including the millennial crowd. Many are living with parents to save money.

It’s time for this generation to get a foothold at the savings starting line and put their retirement goals in front of them. And, as a large portion of today’s workforce, they will be shaping the economy in decades to come.

Millennials lag behind in the retirement savings race

The bad news:

An Indexed Annuity Leadership Council (IALC) retirement data survey revealed that 37 percent of millennials have no money saved for retirement and that nearly a quarter of this group owes more money than they have. For some of them, they are probably not putting retirement on their savings radar since it is so far away and therefore, not a priority. Others are facing student debt or have other life expenses to consider (paying high rent or saving for a new home, for instance).

The good news:

This population has plenty of catchup time ahead of them to build up retirement savings. And you’re never too young to start saving (even college students can start).

The better news:

Opening a self-directed retirement plan, and investing in alternative assets, can be a great way to close that retirement savings gap.

Those tech savvy millennials have lots of resources at their disposal to research all about nontraditional investments, and to find out more about self-direction as a retirement strategy. For those who are comfortable making their own investment decisions, and already know and understand certain alternative asset classes (or have a trusted advisor to turn to), self-direction can give their retirement accounts some much-needed forward momentum.

It doesn’t take much money to open a self-directed retirement plan and with steady, disciplined contributions, that last-place status can move up to a great finish when it’s time to retire. (Slow and steady wins the race, right?)

The professionals at Next Generation Trust Services are here to help millennials, Gen Xers and baby boomers who want to self-direct their retirement plans, with helpful information and guidance; and all the forms you need to open and account or make most transactions are right on our website.

Contact Next Generation with questions about self-direction at (888) 857-8058 or Info@NextGenerationTrust.com … and step up to the starting line in the race to building a healthy retirement nest egg.