Financial Planning

65 RETIRING AS RETIREMENT AGEAmericans age 50 and over are increasingly disregarding age 65 as the time to stop working, according to a poll conducted by Penn, Schoen & Berland Associates and commissioned by Experience Wave, a project that advances federal and state policies to keep older adults engaged in work and community life.

So, let me ask you something. Do you believe that a person's approach to financial planning should be based on the future well-being of the family or on meeting a set of financial objectives? By the same token, do you really want to reach financial independence? Although these two questions appear relatively simple on the surface, the answers you may give can vary greatly depending on your sex. At least, that is what the results of a survey by the Desjardins Group, Canada's largest integrated cooperative financial group uncovered. This was a survey taken in the fall of 2007 among a group of 1,400 respondents that included an equal number of women and men. It was designed to measure the differences between the two groups’ concerns and attitudes on financial planning. The survey had 40 questions that covered ease of discussing financial planning with an advisor, the importance given to the various aspects of financial planning, and the understanding of financial planning vocabulary. "Even if the average spread between men's and women's answers is relatively narrow (seven points), the trend that emerges from our study shows a significant difference in terms of the approach,” says Eric Lemieux, vice-president, Wealth Management at Desjardins. “Women see financial planning as a whole that involves the well-being of the family, while men have a more compartmentalized approach, based on fixed objectives. This observation confirms the accuracy of our orientation, which is based on personalized, value-added service,” According to the survey, women appear more concerned about the well-being of others and more worried than men about the idea of being a burden on the family. In effect, they are more concerned than men by such things as financing the children's education, the importance of having a budget, and increasing the value of investments in the short term. They are also more aware than men about the importance of having a notarized will and a health mandate in case of inability. Desjardins notes that men's targeted approach comes across mainly in their greater concern for reaching financial objectives, for the tax consequences of their financial decisions, and for their retirement planning strategy. In fact, there are also more men than women who say they are solely responsible for their decisions and are consequently less inclined to ask for advice. As to the language of financial planning, this also seems more familiar to men. They were more likely to understand expressions such as "investor profile," "investment horizon,” and "net worth.” However, keep the following in mind: the more general concept of "financial independence" is understood equally well by women as by men, while women are more likely than men to desire such independence. "This survey is a tool that can help Desjardins Financial Planning Advisors to better understand members, both men and women, and to better accompany them on the path to financial security for themselves and their families," adds Lemieux, speaking for an organization with overall assets of $147 billion, as at September 30, 2007. They must know what they are talking about, eh?

The Federal Reserve cut its benchmark rate 75 basis points to 3.5 percent in response to a worldwide sell-off in stock exchanges as fears of a recession widened.

The stimulus package that President Bush and Congress are hammering out could be enough to jumpstart the economy, but don't count on it.

It’s the East vs. the West again, no doubt about it. If you look at Baby Boomers today, they seem to have a lot in common but a recent nationwide survey by Bell Investment Advisors shows that those Boomers living in the Western part of the country have a markedly different outlook on their life and that includes health and money. Jim Bell, who is president of Bell Investment, says that people who get the greatest enjoyment from their lives are also the people who are the most proactive about planning for their future. “People’s physical condition, their family, career, and finances are all integral parts of their retirement well being.” He points out that these are the key areas where he finds the major differences between the West and the rest of the country. Now, I’m an Easterner, born, bred, and educated, and have questions about my Western brethren but according to Bell the survey of 500 high-net-worth 60-year olds uncovers the fact that Western boomer investors are less likely to get conservative in their investments and plan to continue reaching for higher investment returns over the next five years. Then too, the survey seems to indicate that Western boomers exhibit more optimism than Boomers living elsewhere and that they are more likely to pursue personal passions or alternative careers during retirement. So, what does this all mean? According to Bell, Westerners are taking a much more proactive approach to shaping the future of their retirement. “Whether it’s due to social atmosphere or political environment, Boomers in the West seem to be more open in discussing finances with their families and more committed to earning higher investment returns.” Bell points out that Boomers in the Northeast seem to show the most dissatisfaction with their lives and most expressed the need to improve their community, finances, career, and their relationships with family and friends. In fact, Bell notes that Northeasterners have the lowest rate in the country when it comes to discussing finances with their parents or children. As to the Midwest and South, Bell says they are squarely in the middle, showing enough confidence in their financial well being and ample interest in having a good life. But is there any common ground here? Yup! According to Bell, all the regions share in common a positive outlook on their future as they continue to redefine the meaning of retirement.

The Supreme Court has handed down a unanimous decision in a case involving the deductibility of investment advisory fees by trusts, ruling that the expenses are deductible only to the extent that they exceed 2 percent of the adjusted gross income.

Payroll processor Paychex has introduced a debit card that offers a way for a business client's employees to access their flexible spending account funds.

Tax practitioners who take the plunge into financial planning find that it's a natural step to go from preparing a tax return and answering a client's questions, to tax planning and full-scale financial services."Financial planning has been a nice blend of what I'm already doing for my clients," explained Matawan, N.J.-based CPA Salim Omar.

By now, the excitement of receiving college acceptance letters is likely to have been long ago replaced by the shock of the tuition bills that follow enrollment. Or the joy of a child's graduating from college - and no longer incurring tuition - is eclipsed by the obligation to repay student loans. As families scramble to get the largest grants and lowest interest rates available, they should not overlook the tax implications of the arrangements they make.The tax breaks fall into two categories: ones for paying the education costs themselves, and deductions for paying interest on loans used to pay the bills. Most of the tax provisions are restricted to those with incomes below specified amounts, and those amounts vary from one tax provision to another. This creates additional confusion for families attempting tax planning and increases their need for professional guidance.

FIXED-INCOME ANNUITY HELPS RETIREMENT INCOMEMixing a fixed-income annuity into a retirement income account provides greater long-term wealth for investors than a portfolio of equity and bond investments alone, according to a study by MassMutual Financial.