• What Expenses Could Change When You Retire?

    Some costs could rise, fall or even disappear.

      

    Provided by MidAmerica Financial Resources

     

     

    Your retirement may seem near at hand or far away, but one thing is certain: your future will differ from your present.

     

    Financially, that fact is worth remembering. Some of the costs you have paid regularly all these years may suddenly decrease or fade away. Others may increase.

      

    Will your insurance costs rise with age? Maybe not. You may find that your overall insurance expenses decline. Yes, health insurance becomes more expensive the older you get – but those premiums are merely part of the bigger insurance coverage picture. If you stop working in retirement, you have no need for disability insurance. You might have little need for life insurance, for that matter. You may have paid off your home and other major debts, and rather than drawing income from work, you will be drawing it from investments and Social Security.

     

    You can expect your medical expenses to increase. By how much, exactly? That will vary per household, but perhaps you have read some of the latest estimates. This summer, Fidelity Investments said that a 65-year-old couple retiring today will need around $260,000 to cover future health care costs. This estimate assumes they live 20-22 years after they retire. Long-term care coverage was not included in that projection; Fidelity projects that a policy providing three years of care at $8,000 a month would cost the same couple an extra $130,000.1 

      

    How about your income taxes? If you live on 70-80% of your end salary in retirement – which is not unusual – then you may find yourself in a lower income tax bracket. Yes, your Social Security income may be taxed – but, even in the worst-case scenario, no more than 85% of it will be.2

     

    If you have invested using a Roth IRA, you will be looking at some tax-free retirement income – provided, of course, you have owned the IRA for at least five years and are older than 59½ when you start making withdrawals. While a Roth account held in a workplace retirement plan requires withdrawals beginning at age 70½, the withdrawals will still be tax-free if you follow IRS rules.3

     

    Will your housing costs fall? Over the long term, they may. Some retirees own their homes free and clear and others nearly do. Homeowner association fees and property taxes must still be paid, so, while that mortgage balance may be gone or nearly gone, other recurring costs will remain.

     

    Homes inevitably need repairs, so, in some random year, you may find your housing costs jumping. Downsizing and moving into a smaller home can also mean a short-term rise in your housing expenses. If you do downsize and move, you will hopefully relocate to an area where housing costs are lower.

      

    Will you face education costs? You may have retired your own college debt, but if you have children forty or fifty years younger than you are, you could risk retiring with some of their student loan debt on your hands. That expense could linger into your retirement – a valid reason to reject assuming it in the first place.

     

    One “cost” may disappear, leaving you with a little more money each month. Once retired, your constant per-paycheck need to save for retirement vanishes. So if you are assigning 10% or 20% of your paychecks to your retirement accounts, you may be pleasantly surprised to find that money back in your wallet (so to speak) after you transition into your “second act.”

      

    MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@natplan.com. www.mid-america.us

      

    This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

      

    Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser.
    MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to NPC.

       

    Citations.

    1 - chicagotribune.com/business/columnists/ct-marksjarvis-retiree-health-costs-0821-biz-20160819-column.html [8/19/16]

    2 - ssa.gov/planners/taxes.html [9/22/16]

    3 - investors.com/etfs-and-funds/retirement/comparing-a-roth-401k-and-roth-ira/ [1/6/16]

     

  • Weekly Economic Update

    ­MidAmerica Financial Resources Presents:

     

    WEEKLY ECONOMIC UPDATE

     

     

    WEEKLY QUOTE

                 

    “Our greatest glory is not in never falling, but in getting up every time we do.”

        

    - Confucius

          

      

    WEEKLY TIP

                 

    Some pension plans let retirees choose between smaller lifelong income payments or a large lump sum. If one or both spouses are in line to receive pensions, a couple should at least explore some of the possibilities for lump sum investment.

         

      

    WEEKLY RIDDLE

                

    What jumps higher than a building?

      

     

    Last week’s riddle:

    How can you take three toothpicks and make them into the number nine?

         

    Last week’s answer:

    Use three toothpicks, placing one straight and two across one another, to make the Roman numeral nine (IX).

     

     

     

     

    October 3, 2016

      

    NO ADVANCE IN CONSUMER SPENDING

    Personal spending was flat in August even as personal incomes rose 0.2%. These numbers from the Department of Commerce fell short of expectations: economists polled by MarketWatch had forecast a 0.2% gain in both categories. In other news linked to consumer spending, the federal government revised second-quarter GDP up to 1.4% in its third estimate; it had previously put Q2 growth at 1.1%.1

         

    HOUSEHOLD CONFIDENCE IMPROVES

    September brought a big jump in the Conference Board’s closely watched consumer confidence index, which rose 3.0 points to 104.1. The University of Michigan’s consumer sentiment index ended September at 91.2, up from 89.8 at the end of August; the main factor in that gain was an improved outlook among higher-income households.1,2

       

    New Home SAles DIP 7.6%

    This housing indicator tends to be very volatile, and this August retreat follows a 13.8% July advance. The median new home price was down 5.3% in August from a year earlier, the Census Bureau noted. Looking at other real estate data, the July edition of the 20-city S&P/Case-Shiller home price index showed a 5.0% annual increase in existing home values, ticking down from 5.1% in June; the National Association of Realtors said that pending home sales fell 2.4% in August.1,3

         

    MINOR GAINS IN A WEEK OF MAJOR UPS & DOWNS

    The last week of September saw the three major U.S. equity indices advance. The Dow Jones Industrial Average rose 0.26%; the S&P 500 gained 0.17%; and the Nasdaq Composite added 0.12%. The September 30 settlements: Dow, 18,308.15; S&P, 2,168.27; Nasdaq, 5,312.00.4

       

    THIS WEEK: Monday offers ISM’s September manufacturing PMI and quarterly results from The Container Store. Tuesday, Wall Street considers earnings from Darden Restaurants and Micron Technology. On Wednesday, ISM releases its September service sector PMI; ADP issues its September payrolls report; data on August factory orders appears; and Constellation Brands, Monsanto, and Yum! Brands announce earnings. In addition to a new initial jobless claims report, Thursday brings the latest Challenger job-cut data and Q3 results from Ruby Tuesday. Friday, the focus turns to the Department of Labor’s September jobs report.

     

    % CHANGE

    Y-T-D

    1-YR CHG

    5-YR AVG

    10-YR AVG

    DJIA

    5.07

    12.43

    13.55

    5.68

    NASDAQ

    6.08

    14.97

    23.98

    13.52

    S&P 500

    6.08

    12.93

    18.33

    6.23

    REAL YIELD

    9/30 RATE

    1 YR AGO

    5 YRS AGO

    10 YRS AGO

    10 YR TIPS

    0.00%

    0.65%

    0.17%

    2.27%

     


    Sources: wsj.com, bigcharts.com, treasury.gov - 9/30/164,5,6,7

    Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

     

     

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    Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser.
    MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to NPC.

     

    This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

     

    Citations.

    1 - marketwatch.com/economy-politics/calendars/economic [9/30/16]

    2 - sca.isr.umich.edu [9/30/16]

    3 - latimes.com/business/la-fi-new-home-sales-20160926-snap-story.html [9/26/16]

    4 - markets.wsj.com/us [9/30/16]

    5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F30%2F15&x=0&y=0 [9/30/16]

    5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F30%2F15&x=0&y=0 [9/30/16]

    5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F30%2F15&x=0&y=0 [9/30/16]

    5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F30%2F11&x=0&y=0 [9/30/16]

    5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F30%2F11&x=0&y=0 [9/30/16]

    5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F30%2F11&x=0&y=0 [9/30/16]

    5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F29%2F06&x=0&y=0 [9/30/16]

    5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F29%2F06&x=0&y=0 [9/30/16]

    5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F29%2F06&x=0&y=0 [9/30/16]

    6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/30/16]

    7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/30/16]