Thursday, December 10, 2015

December 7, 2015 Weekly Market Review from Maier & Associates Financial Group

The first week of December proved quite volatile, with some of the major indexes listed here rallying on Friday to close ahead of the week before. Some of the upward movement from investors may have come in response to another good jobs report and the fact that the economy is stable enough to warrant a likely interest rate increase when the Fed meets later this month. The S&P 500, Dow, and Nasdaq registered marginal gains week-on-week, while the Russell 2000 and the Global Dow lost value. With additional stimulus measures announced by the European Central Bank, it will be interesting to see the effect they have on European stocks in the coming weeks.

The price of gold (COMEX) rebounded after several weeks of trending downward, selling at $1,085.80 by late Friday afternoon compared to $1,056.10 a week earlier. Crude oil (WTI) prices fell, selling at $40.14 per barrel by week's end. The national average retail regular gasoline price decreased to $2.059 per gallon on November 30, 2015, $0.035 below the previous week's price of $2.094 per gallon, and $0.719 below a year ago.


December 7, 2015 Weekly Market Review from Maier & Associates Financial Group

Maier & Associates Financial Group is here to help!

At Maier & Associates, we are committed to helping you manage your finances as you strive to achieve your financial goals today, tomorrow, and many years down the road. Your financial success is important to us, which is why we create a wealth management strategy designed to meet your personal financial goals and dreams. Visit our website at http://maierandassociates.com/ or simply give us a call at (800) 282-4503.

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Monday, November 30, 2015

November 23, 2015 Weekly Market Review from Maier & Associates Financial Group

Despite the terrorist attacks in Paris and Mali, stocks climbed higher by the close of last week. Investors may have been influenced by favorable earnings reports from some large companies and the feeling that the impending Fed interest rate hike may be a sign the government believes the economy is on a definite upswing. The S & P 500 and the Dow saw significant gains, rising 3.27% and 3.35%, respectively. Nasdaq continues to be a consistent performer, closing last week up almost 8% year-to-date.

The price of gold (COMEX) decreased, selling at $1,077.30 by late Friday afternoon compared to $1,083.20 a week earlier. Crude oil (WTI) prices gained, selling at $41.46 per barrel by week's end. The national average retail regular gasoline price decreased to $2.178 per gallon on November 16, 2015, $0.057 below the previous week's price of $2.235 per gallon, and $0.716 below a year ago.


November 23, 2015 Weekly Market Review from Maier & Associates Financial Group

Maier & Associates Financial Group is here to help!

At Maier & Associates, we are committed to helping you manage your finances as you strive to achieve your financial goals today, tomorrow, and many years down the road. Your financial success is important to us, which is why we create a wealth management strategy designed to meet your personal financial goals and dreams. Visit our website at http://maierandassociates.com/ or simply give us a call at (800) 282-4503.

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Monday, November 23, 2015

November 16, 2015 Weekly Market Review from Maier & Associates Financial Group

November 16, 2015 – Stocks fell sharply this week, possibly in anticipation of the Federal Reserve's impending interest rate hike, maybe as soon as next month. The Dow lost a little over 665 points, or 3.71%, closing the week at 17245.24. The S&P 500 fell 3.63%, and the Nasdaq, which has been a consistent gainer, dropped over 4%. Last week's declines follow an October during with equities climbed out of a summer slump to register positive gains year-to-date. Those gains have dissipated for the most part, with only the Nasdaq ahead of last year.

The price of gold (COMEX) decreased, selling at $1,083.90 a week earlier. Crude oil (WTI) prices fell, selling at $40.73 per barrel by week's end. The national average retail regular gasoline price increased to $2.235 per gallon on November 9, 2015, $0.011 over the previous week's price of $2.224 per gallon, but still $0.706 below a year ago.

November 16, 2015 Weekly Market Review from Maier & Associates Financial Group

Maier & Associates Financial Group is here to help!

At Maier & Associates, we are committed to helping you manage your finances as you strive to achieve your financial goals today, tomorrow, and many years down the road. Your financial success is important to us, which is why we create a wealth management strategy designed to meet your personal financial goals and dreams. Visit our website at http://maierandassociates.com/ or simply give us a call at (800) 282-4503.

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Tuesday, November 3, 2015

October 28, 2015 Weekly Market Review from Maier & Associates Financial Group

October 28, 2015 – Below are three financial facts that you might find interesting:

Fact #1
New orders for durable goods – turbines, trucks and other products designed to last at least three years – declined a seasonally adjusted 1.2% in September from a month earlier, the Commerce Department reported.

Fact #2
Nearly 54 million Americans are now doing freelance work, according to a new study conducted by Upwork.com, and an estimated 60% of them made the jump by choice, an increase of 7% from last year.

Fact #3
In Hong Kong, the average annual rent for a square foot of office space in a high-rise building is $255.50 compared to approximately $153 a square foot in New York City.


October 28, 2015 Weekly Market Review from Maier & Associates Financial Group

Maier & Associates Financial Group is here to help!

At Maier & Associates, we are committed to helping you manage your finances as you strive to achieve your financial goals today, tomorrow, and many years down the road. Your financial success is important to us, which is why we create a wealth management strategy designed to meet your personal financial goals and dreams. Visit our website at http://maierandassociates.com/ or simply give us a call at (800) 282-4503.

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Thursday, September 17, 2015

September 14, 2015 Weekly Market Update from Maier & Associates Financial Group

The stock market rebounded nicely from the prior week's sell-off with each of the major indexes listed here posting positive gains last week. The Nasdaq was the leader, increasing 2.96% ahead of the previous week's close, followed by the S&P 500 and the Dow. Nevertheless, market uncertainty abounds, as investors anxiously await news from this week's Federal Reserve policymakers' meeting relative to a potential interest rate hike.

The price of gold (COMEX) dropped again, selling at about $1,107.90 by late Friday afternoon compared to $1,122.30 a week earlier. Crude oil (WTI) prices remained relatively the same, selling at $44.78/barrel by week's end. The national average retail regular gasoline price decreased to $2.437 per gallon on September 7, 2015, $0.073 under the previous week's price of $2.510 per gallon and $1.02 below a year ago.
September 14, 2015 Weekly Market Update from Maier & Associates Financial Group
Maier & Associates Financial Group is here to help!

At Maier & Associates, we are committed to helping you manage your finances as you strive to achieve your financial goals today, tomorrow, and many years down the road. Your financial success is important to us, which is why we create a wealth management strategy designed to meet your personal financial goals and dreams. Visit our website at http://maierandassociates.com/ or simply give us a call at (800) 282-4503.

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Monday, September 14, 2015

7 Retirement Planning Challenges for Single Clients

7 Retirement Planning Challenges for Single Clients
Single clients generally face bigger financial limitations than married couples in retirement income planning, such as higher living costs, less savings, and restricted benefits. Help these clients effectively manage their retirement through education, special budgeting and savings strategies, investments, and other options that may be available to them.

In a retirement planning world oriented towards couples, the 42% of American seniors who are single are likely to face more significant retirement planning challenges than couples. As more investors enter retirement alone or find themselves widowed or divorced early in retirement, advisors are increasingly likely to see more single people near and in retirement in need of financial advice.

“Singles not only have many of the expenses of couples, but they also lack the ability and capacity to save as much,” says Jeff Nauta, CFA, CFP, CAIA of Henrickson Nauta Wealth Advisors in Belmont, Mich. “Singles can only save half as much through tax advantaged vehicles. In addition, savings and investing can take a back seat for many singles, especially women who have been through a divorce.”

A 2014 U.S. Census Bureau study reports that 4.3% of the 65+ population has never been married, 26.3% are widowed, and 9.9% are divorced. Factors contributing to the increase in retired singles include rising rates of midlife divorce, longer life spans of women versus men, and increases in the rates of those who have never married.

When working with singles planning for retirement, there are a number of factors to keep in mind, including:

1. Retirement expenses likely to remain high

A 2012 National Bureau of Economic Research report found that married couples may save up to 10 times as much (or more) as single people ($111,600 versus $12,500) for retirement. Costs of living for single people are much higher than for married individuals because, on a per-person basis, a single person spends 70% to 75% of what a couple spends.

Many fixed costs in retirement are not that much lower for single people than for couples. For instance, many couples can get by on one car in retirement, saving money by getting rid of a second car. That’s not an option for most retired singles, who need a car for transportation. And while a single person may be able to live in a smaller house, apartment, or condo, that living space is not likely to be half the expense of what it would cost to house a married couple.

Singles, especially those who don’t have children, may have a habit of spending freely and will need guidance around budgeting in retirement, said Andrew Wang, portfolio manager and senior vice president at Runnymede Capital Management, Inc. “Many singles are spenders rather than savers because they do not need to worry about costs like education and wedding costs for children, so budgeting and projecting expenses after retirement is important,” he added.

2. Savings opportunities limited

While single individuals obviously have the same access to retirement planning vehicles, such as IRAs and 401(k)s, as couples do, they can’t save as much as couples but face higher expenses. That’s why it’s important for single retirees to save as much before retirement as possible.

“For single clients, it is imperative to come up with a very coordinated approach to saving for retirement,” says Elle Kaplan, CEO of Lexion Capital Management LLC in New York. “Ultimately, those savings become a paycheck that has to support that client from the day she retires until her last day on earth. The plan should include a detailed analysis that discusses how much can safely be spent each year to have a comfortable retirement, taking into account a variety of different market scenarios.”

Nauta agreed, saying, “Single clients can only save half as much in tax-deferred vehicles as married couples can and with potential expenses higher, they need to save more, which isn’t always easy.”

A report from Bank of Montreal Financial Group, “Single in Retirement,” notes that many single retirees have to devote a larger share of their income towards basic needs such as shelter and transportation, leaving less for retirement savings. Inflation and longevity can take a higher toll on singles, raising the stakes in terms of saving more as early as possible. These factors also may mean that single people may have to work longer to amass sufficient savings to retire with a lessened longevity risk.

3. Social Security options more restricted

Single individuals have fewer options when it comes to taking Social Security. For most, the decision rests solely on when to take it. That is dependent upon a number of factors, but in many cases it makes sense to wait as long as possible to receive the maximum benefit, since single retirees have no other Social Security benefit to rely on.

Divorced women who were married for 10 years or more and haven’t remarried before age 60 are entitled to claim their ex-spouse’s benefit, Nauta noted. While some divorcees mistakenly believe that doing so will impact what their ex-spouse can receive from Social Security, that isn’t the case. For many women, especially those who took time off from work to take care of their children, that benefit may be significantly more than they could claim on their own.

4. Emergency savings needs greater

Without a second income and savings in the picture or survival benefits, singles planning for retirement or in retirement need to establish and maintain larger emergency funds. This is important both before and during retirement.

Before retirement, if a single person loses their job, there is no other income to fall back on. In this economy, it can take a prolonged job search, especially for a person in their 50s or 60s, and any new job may come with a lower salary and reduced benefits.

Nauta typically recommends a three-to-six-month emergency fund for couples. For a single person, that emergency fund should be six to 12 months, depending on the specific circumstances of that person’s job and finances.

5. Asset allocation decisions turn on risk tolerance

While asset allocation decisions aren’t that different for singles over couples—in fact they may be simplified because just one client is involved in making the decisions rather than two—singles may have a lower risk tolerance, because there is no other income or stream of retirement savings or pension to depend on.

“You have the same risks as far as investment risk, longevity risk, sequence of returns risk, inflation risk, long-term care, and death risk, ” said Richard Reyes, CFP, of the Financial Quarterback in Maitland, Fla. “However, many single individuals tend to believe that the risks inherent to a couple are not associated with those of single individuals. Individuals often think that no one is dependent on them or since they have been alone for so long that they will be able to take care of themselves forever.”

6. Risk management and estate issues need careful attention

Single retirees may have a greater need for additional insurance coverage. Before retirement, disability insurance can be helpful in case of an illness or injury that necessitates time off from work. During retirement, long-term care insurance can help pay for in-home or nursing home care, Nauta said, without depleting savings that may be needed in later years.

In terms of estate planning, make sure all documentation is thorough and is updated frequently as circumstances change, says Wang. “On investment accounts, singles should designate beneficiaries on their retirement accounts and maintain an appropriate will or a revocable living trust to control the ultimate disposition of his or her property at death,” he said. “Like married couples, singles should also have durable powers of attorney for financial matters and health care decisions. This should include a health care directive—or ‘living will’—to provide for management and health care decisions at the end of life. In the absence of immediate family, many singles can benefit by working closely with an advisor.”

7. Circumstances may change

While many individuals enter retirement as singles, that situation may change with co-habitation or remarriage, notes Reyes. “It’s important for single individuals to understand they might not be single forever,” he said. “They too can get married in later years, sometimes without them even intending or planning it.”

Of course, if the situation does change, it’s a good idea to consider a prenuptial agreement in the case of a remarriage or later first marriage so that both parties can protect assets that they are bringing into the marriage. A remarriage is a good time to re-examine estate planning documents as well.

Final advice on creating a solid retirement plan with single clients

Single clients face different challenges from those of married couples, so it is important to be aware of the variables they face and take those into consideration when crafting financial and investing plans. In the final analysis, as Brad Bofford, a partner with Financial Principles in Fairfield, N.J., noted, “The single client must be typically more active in their own planning since they do not have a partner to depend on, which relates not only to the monetary standpoint, but also administratively.”

Maier & Associates Financial Group is here to help!

At Maier & Associates, we are committed to helping you manage your finances as you strive to achieve your financial goals today, tomorrow, and many years down the road. Your financial success is important to us, which is why we create a wealth management strategy designed to meet your personal financial goals and dreams. Visit our website at http://maierandassociates.com/ or simply give us a call at (800) 282-4503.

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Friday, August 21, 2015

The Most Important Question in Retirement Planning

The Most Important Question in Retirement Planning

It’s a touchy subject, but walking clients through a life expectancy analysis is the best way to ensure they will have enough money to live their later years in comfort and ease.

What is your clients’ #1 fear in retirement? Outliving their income. And what variable has the largest impact on whether or not they will outlive their income? Life expectancy. Your ability to successfully plan for your clients’ retirement is largely dependent on how well you can estimate their life span.

Longevity is the new buzzword in retirement planning, and rightfully so. It wasn’t that long ago when most people retired at 65 and maybe lived another five to 10 years if they were lucky. Those days are over, which makes current retirement planning a much more challenging endeavor. People are living much longer, and their retirement nest eggs must live much longer as well. Not only are life spans increasing, but statistics tell us that the longer people live, the longer they will live.

According the Social Security Administration, a man who reaches the age of 65 today is estimated to live until he is 84.3 years old. A woman turning 65 today is expected to live, on average, until she is 86.6 years of age. In addition to that, 25% of all 65-year-olds today will live past 90 and 10% will live beyond 95. This dramatic increase in life spans is also expected to continue well into the future.

Longevity planning is becoming a larger and larger component of successful retirement planning. In order to ensure that your clients do not outlive their income, maintain a comfortable lifestyle, and have choices in retirement, you must be as accurate as possible in estimating their life expectancy.

Unfortunately, estimating longevity is not even close to an exact science. The traditional approach for most advisors is to rely on actuarial tables for a best estimate. However, with life expectancies increasing practically every year, the mortality tables may no longer be enough.

Overestimating life expectancy is almost as bad as underestimating it. You may think a safe response to the whole longevity question would be to simply assume death at the age of 105. While underestimating could result in clients outliving their income, overestimating can affect the clients’ quality of life throughout their retirement by forcing them to spend less than they could.

Individual life expectancy analysis
To increase the probability of success in estimating life span, advisors should consider developing an individualized life expectancy analysis for each client. Begin by emphasizing to clients that everything you do in planning for their retirement revolves around this number. Therefore, it is critical to the success of their retirement plan that you are able to estimate their life span as accurately as possible. Only then can you begin to develop a plan that will adequately provide for that life span.

Areas you’ll want to consider when doing individualized life expectancy analysis are: medical history, family history, and lifestyle habits. Following are some questions you might want to include:

Medical and family history
  • Have they ever had a heart attack or been diagnosed with any kind of heart disease?
  • Are they or have they ever been on cholesterol medication?
  • Have they ever been diagnosed with high blood pressure?
  • If so, are they on medication?
  • Have they or anyone in their immediate family—parents, grandparents, siblings—ever had a stroke?
  • Have they or anyone in their family ever had any type of cancer?
  • Are their parents still alive?
  • If not, what did they die of and how old were they when they passed away?
  • Are all their siblings still alive?
  • Have any of their siblings experienced any serious health problems?

Lifestyle habits
  • On a scale of 1-10, with 10 being a health nut and 1 eating at McDonald’s every day, how would they rank their diet?
  • Do they exercise regularly?
  • How many times a week?
  • What kind of exercise?
  • Have they ever smoked?
  • Did either of their parents smoke?
  • How many days a week on average do they consume alcohol?
  • Do they always, sometimes, or never wear a seat belt?
  • On a scale of 1-10, with 10 being they could go postal any second and 1 they’re in a pleasant coma, how would they rank their daily stress levels?

It’s probably best to go through these questions with your client so you can add your personal touches and even some humor where appropriate. You can then explain to them that you’ll be reviewing their answers together with the actuarial tables to determine the life expectancy you’ll be using when developing their retirement plan.

Once you’ve completed the process, review the mortality tables and decide whether years should be added or subtracted from the client’s life expectancy based on their answers to the questions. A large number of “bad” answers, especially the parents’ age at death, would justify lowering your estimate, while a preponderance of “good” answers would suggest a higher estimate is appropriate. The parents’ age at death is generally considered an anchoring data point for most longevity estimates, unless death occurred by other than natural causes.

Obviously no one can know for sure how long a particular client will live. As mentioned earlier, this is definitely not an exact science, but it will likely give you a better estimate than relying on the actuarial tables alone.

The more accurate your estimate, the better your retirement planning will be. Taking clients through this process will give you additional insight into appropriate strategies to use in their retirement planning as well as proper asset allocations at different stages of their retirement.

Your clients will appreciate the extra time and thought you’ve put into getting their retirement plan right. Doing an individualized life expectancy analysis will also truly set you apart from your competition.

Maier & Associates Financial Group is here to help!

At Maier & Associates, we are committed to helping you manage your finances as you strive to achieve your financial goals today, tomorrow, and many years down the road. Your financial success is important to us, which is why we create a wealth management strategy designed to meet your personal financial goals and dreams. Visit our website at http://maierandassociates.com/ or simply give us a call at (800) 282-4503.

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