Monday, 30 May 2016

Estate Planning: Importance and Advantages
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Creating an estate plan is the best way to ensure that what you have labored for throughout your life will go to the rightful beneficiaries. An estate plan allows you to transfer your assets and to specify where each of your assets goes upon death. Estate planning requires significant time and effort, but the numerous advantages a comprehensive estate plan offers are worth it.

Estate planning is not solely for wealthy individuals. Middle-income earners with good investments also benefit from estate planning. Regardless of the value of your assets, it is important to plan for your estate to guarantee that your financial and philanthropic goals are met even after death. An estate plan comprises documents that address problems that often arise upon death. Some of these include decisions about the care of minor children, rightful recipients of property, and charitable donations. Without an estate plan, these decisions will be carried out by the courts and state law and often, state law is indifferent to individual needs and preferences. Moreover, it does not take into consideration personal relationships. An estate plan ensures that your assets are distributed to your intended beneficiaries.

Estate planning eases the strain on your family in the time of death. It warrants that your beneficiaries will be well provided for and that they will get the most out of your assets. A good estate plan can minimize the costs of transferring property to beneficiaries leaving more money for the recipients. Estate planning, to put it simply, will make sure that your loved ones will be taken care of even when you are gone.
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Linda O. Foster is a Poulsbo, WA-based federal employee benefits specialist. Learn more about estate and retirement planning through this blog.

Wednesday, 2 March 2016

Practical Investing Post-retirement

When planning one’s retirement, there are four things to consider: finances, health, relationships, and passion for life. The retirement plan hinges on these four factors.

First, let’s take a look at finances. Has the retiree saved enough? How healthy is the nest egg? Is the bank account fat enough to support factors two and four (health and passion for life)? If the answer to that last question was yes, then how long can it support those two factors? If the answer was no, then are there safe options to invest in? Perhaps, trade in a small condo unit for the house? Are there any other assets that the retiree won’t need in the next twenty to thirty years? Those are all good investments that can be sold to beef up the nest egg.

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Second is health. Once a woman hits the age of 65, her chances of reaching ninety are a little over 50 percent. For men, it’s a little over forty percent. Those are amazing odds. But also, as one ages, more health problems and complications come into play. Practical investing at this point would involve healthcare and insurance plans.

Practical investing when it comes to one’s family and friends means having to leave something behind for everyone. Hiring an estate and retirement specialist at this juncture would be a good investment.
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Finally, passion for life. Does the retiree love to travel? Does the retiree love to play golf? What are the things the retiree has his or her heart been set on doing? How much will they cost? Are there more affordable ways to experience all these things?

Linda O. Foster from Poulsbo, WA, is an estate and retirement specialist whose area of expertise also includes federal employee benefits. She also looks for ways to offer retirees tax-advantaged low-cost investment options. To learn more about investing post-retirement, read this blog.

Tuesday, 16 February 2016

Longest Holiday: The ‘When’ And ‘Why’ In Retirement Planning

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Retirement is foreseeable for anyone with a job, whether in the government, private sector, or as a self-employed professional. Retirement is like an inevitable destination that demands preparation.

Despite the good sense in preparing, however, many still end up struggling during their retirement years. Indeed, retiring often paints a picture of relaxation and endless free time—it is known as life’s longest holiday. However, it also means having a large nest egg to pay for leisure activities and probably, for long-term care needs. Here, financial readiness and stability play crucial roles.

Gradually, people are learning the benefits of financial management in retirement. Relying on government-sponsored retirement alone is not advisable because of unstable economic conditions and for the usually low yield it offers to civil servants. However, even private sector pension plans can be affected by corporate tides and changes in the business climate.

In addition, as people grow older, healthcare-related expenses increase and the retirement age is where most medical problems occur or get worse. To prevent financial catastrophe, a backup plan—like long-term health insurance and investments in various securities—must be available to take care of these future needs. 

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Everything may seem a lot to take in when it comes to planning one’s own retirement, but it’s actually a task that’s easier accomplished early. Starting to invest in retirement at around 20 years old seems ridiculous, but this is a smart move often ignored by many.

The earlier people start investing, the more earnings they get once they reach retirement. Moreover, insurance is at its cheapest during the younger years. This will help holders prepare for future healthcare costs and have a buffer against possible large financial obligations. Insurance assures a generally comfortable and happy retirement.

Linda Foster works with federal employees to help them understand their benefits and maximize their retirement plans. For more about financial planning, subscribe to this blog.

Friday, 12 February 2016

Three things Federal Employees Need to Know about Retirement

Government employees may be aware of the Federal Employees Retirement System or FERS, but there are more benefits in store for those who have served their country for more than five years. Before making retirement plans, here are three things every federal employee should know.
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The basic benefits

The monthly cut from the paycheck goes to these three plans: Basic Benefit Plan, Social Security, and Thrift Savings Plan. The agency also gives a share on behalf of each worker. The TSP and Social Security can still be used even after retiring in federal service while the share from the Basic Benefit Plan can be obtained after working for five years for the government.

Counseling and assistance

Every government agency is obligated to give counseling and assistance to their retiring employees. Would-be retirees will be assisted from the application to the selection of the retirement date to facilitate the transition. Even after the retirement date, they may receive help for getting deposits and creditable service.

Unused sick leaves

Beginning January 2014, federal employees with unused sick leaves will receive 100 percent credit. Those who retired on or before Dec. 31, 2013 are still going to receive 50 percent credit. A formal letter must be filed with the employing agency to get credit for these absences.

Government employees deserve to get first-class benefits for serving the nation. It is only best to treat them well even in retirement to reward them for their contribution.
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Linda O. Foster from Poulsbo, Washington is a federal employee benefits specialist helping employees of all ages reach their financial goals. Read more articles on retirement planning here.

Tuesday, 5 January 2016

Achieve Your Heart’s Desires by having a Sound Financial Plan

Spending huge for something temporary (but not necessarily educational or profitable) could be dangerous to financial wellbeing. To get the best life has to offer, it is imperative to have a long-term financial plan. Some important and relevant events in life require money; in fact, almost everything in life requires money. Whether building a family, jump-starting a business, constructing a dream home, or saving up for future needs, a secure financial base will be the starting point.

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A financial plan is a set of goals, strategies, and opportunities that puts a structure around one’s financial life. It involves budgeting, prioritizing important expenses, creating an emergency fund, estate planning, insurance, and investing in a wide range of securities such as stocks, bonds, money markets, and pooled funds. With a proper financial plan, one’s desires in every life stage (a car while still single, college education for kids, travel, and retirement come old age, among others) can be achieved without necessarily neglecting security.

Simply saving money in the bank is not enough to secure the future and give way to the little luxuries in life. Bank interest rates are often beaten by inflation, leaving little opportunity for wealth building or even preservation. People must start foraying into smarter ways of earning money and should create plans that include business ventures, partnerships with stable equities, creating passive income through real estate, and other forms of investments. Taking risks, especially when long-term capital growth is in kind, should be worth it.

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Linda O. Foster of Washington advises her clients on how to reach their financial goals and enhance their retirement plans. For more smart financial tips, visit this blog.

Tuesday, 3 November 2015

Common Retirement Planning Mistakes and How to Avoid Them

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Retirement planning is crucial in ensuring financial independence and continuous cash flow even beyond working age. While the process may be relatively simple, some people still make mistakes——whether knowingly or unknowingly—that otherwise defeat the purpose. The following are three of the most common blunders people make with retirement planning that everyone should avoid: 

1. Disregarding the value of ‘employer match.’ The U.S. retirement savings plan 401(k) (tax-qualified, defined-contribution pension) is not mandatory for all employers, but for those who offer it to their employees, a match program (employer pays part of it) is often offered. Employees, especially those have worked at the company long enough to have an absolute right to any portion of the account value, must take advantage of this benefit. For the match money to be fully accessed by employees, however, they must also play their part in co-funding their 401(k).

2. Taking a loan from retirement account. It is a cardinal sin to take a loan out of a retirement savings account. Emergencies sometimes force people to do this but as much as possible, other sources must be tapped for this purpose. Retirement funds are often parked in investment machines such as stocks, bonds, and dividend-yielding opportunities. This means that when people pay the money back, the money they took out may have just lost the opportunity to grow and compound.
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3. Putting all eggs in just one basket. Diversification is key to achieving reliable returns. When one builds an investment portfolio for his or her retirement, it is necessary to place his or her many in various investment instruments (some portions must go to equities, others on fixed-income assets, and so on). A lack of proper diversification can be detrimental to the investment.

Linda O. Foster specializes in federal employee benefits, estate planning, and retirement planning, offering tax-advantaged low-cost investments and financial planning guidance to her clients. For more about her professional background, click here.

Tuesday, 1 September 2015

Checklist: Components that Constitute a Good Estate Plan defines estate planning as “the collection of preparation tasks that serve to manage an individual’s asset base in the event of their incapacitation or death, including the bequest of assets to heirs and the settlement of estate taxes.”
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Estate planning encompasses plenty of factors and must be started as soon as one acquires a substantial amount of assets such as bank savings, properties, jewelry, and other investments. As people age and goals change, estate plans must be redesigned to satisfy new demands. Poor or inadequate estate planning can lead to financial burdens to loved ones; estate taxes, which could be as high as 40 percent, still apply even after the owner dies. Regardless of the estate’s size, one has to carry out effective preparation.

The following are the most important components of or tasks that must be accomplished in estate planning:

  • Creating a will
  • Assigning a guardian for living dependents
  • Managing estate taxes by setting up trust accounts for the beneficiaries
  • Naming an executor of the estate to oversee the terms of the will
  • Frequent gifting to qualify for the annual exclusion from federal gift taxes
  • Buying IRAs, 401(k)s, and life insurance; the policy benefits can be used to pay off the estate tax
  • Establishing a durable power of attorney (POA) to direct other assets and investments
  • Setting up funeral arrangements
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Washington-based Linda O. Foster advises her clients on how to reach their financial goals and enhance their estate plans by offering tax-advantaged low-cost investment options. To arrange an appointment with her, click here.