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How You Can Prepare For Retirement by Don Chamberlin

How You Can Prepare For Retirement

Financial security isn’t something that doesn’t just happen.  You might get lucky, but it’s something that takes planning, commitment and money.  Fewer than half of Americans have calculated how much they need to save for retirement.  30 percent of private industry workers in 2014 with access to a defined contribution plan didn’t take part.  Yet it’s something you need to prepare for; the average American spends about 20 years in retirement, a fairly long time.  I recently came across an article that shares 10 ways you can prepare for retirement, listed below:

Start saving: Start small if you have to, then try and increase how much you save each month.  The sooner you start saving, the more time your money has to grow.  Devise a saving plan, stick to it and set goals.

Know your retirement needs: Retirement is expensive; experts estimate that you’ll need at least 70 percent of your preretirement income to maintain your standard of living after you stop working.  The key to a secure retirement is to plan ahead.

Contribute to your employer’s retirement savings plan: If your employee offers a retirement savings plan, sign up and contribute as much as you can.  Over time, compound interest and tax deferrals make a big difference in how much you accumulate.

Learn about your employer’s pension plan: If your employer has a traditional pension plan, check to see if you’re covered by it and understand how it works.  If you’re going to change jobs, find out what will happen to your pension benefit.

Consider basic investment principles: Inflation and the type of investments you make play an important role in retirement.  Know how your savings or pension plan is invested; learn about your plan’s investment options and ask questions.  Put your savings in different types of investments, which will help reduce risk and improve return.

Don’t touch your retirement savings: If you withdraw your retirement savings now, you’ll lose principal interest and could lose tax benefits or have to pay withdrawal penalties.  If you change jobs, leave your savings invested in your current retirement plan or roll them over to an IRA or your new employer’s plan.

Ask your employer to start a plan: If your employer doesn’t offer a retirement plan, then suggest that it start one.  There are a number of retirement saving plan options available that can help both you and your employer.

Put your money into an IRA: You can put up to $5,500 a year into an IRA, and can contribute even more after you turn 50.  When you open an IRA, you have two options: a traditional or Roth.  The tax treatment of your contributions and withdrawals will depend on which option you choose.  IRAs can provide an easy way to save, and you can set one up so that an amount is automatically deducted from your checking or savings account and then deposited into the IRA.

Find out about Social Security benefits: Social Security pays benefits on average equal to about 40 percent of what you earned before retirement.

Ask questions: You can always know more.  Talk to your employer, bank, union or financial adviser.  Make sure you understand what they’re saying.

The Modern CFO

Don ChamberlinThe plight of the modern CFO is having to be more than their job title. As times change, so too must the face of business. With hundreds of companies around the world, each vying for the biggest slice of pie, it behooves the modern CFO to fold multiple skills into their portfolio. Rising above their station, CFO’s are tasked with more than ever before. What are some elements that make for a competent and modern CFO? Below is a short list of qualities that companies are looking for in their Chief Financial Officers.

Business Acumen: It goes without saying that to venture into the world of business demands an understanding of the terrain. A CFO’s job was once to just understand the financial side of the company they served, but now it has grown to something more all-encompassing. You cannot effectively lead a portion of the company without understanding how the whole will function as a result, so CFO’s must be able to see the bigger picture beyond their spreadsheets.

Flexibility: Now more than ever, CFO’s are being called to work with non-financial aspects of their companies. Most often paired with human resources, a modern CFO must be willing to adapt to a change in roles and involvement. As head of finance, the company relies on a CFO like a body relies on a heart. Without one, the other ceases to be.

Communication: A necessary skill branching off of the above two, communication is a vital skill in any workplace. However, as a CFO, you are tasked with translating your meticulously gathered financial data to the rest of your company. While your vernacular will clearly be suited for the task, being able to translate that information into bite-sized portions for the rest of the company requires the ability to communicate.

Financial Planning: When Dad Isn’t the Greatest Financial Role Model

The following article, written by st. louis based financial planner and founder of the chamberlin group, don chamberlin, was originally published on money.com on october 6th, 2015:

Sometimes the best money lessons come when you learn from someone else’s mistakes.

Financial Planning When Dad Isn’t the Greatest Financial Role Model

The bond between a father and son can be special. Fathers pass family traditions down with the idea that their son will maintain the legacy. However, if the family tradition is poor financial practices, it’s my job as a financial planner to step in and put a stop to those bad habits.

Some time ago, after a client’s father passed away, the client asked me to help make sense of his father’s assets. The father left his son with what he thought was a well-thought-out legacy, but a few elements of it ended up leaving the son extremely confused.

Reviewing the father’s assets, I realized he was a perpetual investor in certificates of deposit. The son explained that his dad would go online to find the state that offered the best interest rates, and he would open an account with a bank there and invest in a CD.

While this may have seemed like a smart strategy, the father didn’t keep accurate records of each of his accounts.

In fact, the son couldn’t even figure out how many CD accounts his father had opened up; he only learned about each of them as he received his father’s statements in the mail. To make the son’s life easier, I advised him to keep the estate open for at least a full year, while these surprise statements trickled in.

The father also had the foresight to establish a trust to hold the CDs, but he didn’t properly title all his assets. So two of the 12 CDs he turned out to have owned at his death had to go through the probate process.

Ultimately, much of the savings and earned interest in the father’s rate-hunting portfolio was wiped out by his estate planning mistakes. The legal fees associated with probate ate into the the two incorrectly titled accounts. So much for avoiding probate.

An Organized Legacy

Despite seeing his father’s mistakes, the son wasn’t sure how he could do it better. As a father himself, he wanted to ensure his family wouldn’t go through the same difficult experience in the future, so he came to me later for help.

I advised him to open his own trust to pass all his assets to his children outside of probate, and I made sure he worked with an attorney who could advise him how to title his family’s assets correctly. Then I helped create organized records in a “Family Estate Organizer” binder that compiled important legal, financial, and other estate planning information–everything from account statements to a personal belongings inventory.

We also prepared for his wife documentation on what to do in the event of his death. This “Survivor’s Checklist” gives family members guidance on the various steps of settling an estate. It’s particular helpful for surviving spouses or beneficiaries who have not been involved in deceased’s finances.

This was a crucial step for not just the son, but for his family legacy as well. He wanted to ensure he would leave his own family with a well-organized, easy-to-manage inheritance, and the binder provided just that. It allowed him to sleep better at night knowing his family could easily step in to manage the assets should the need arise.

As a financial planner, I understand a well-thought-out estate plan is a critical part of a holistic retirement plan. But I don’t think I realized how foreign this concept might be for some people until I met this client. I have since come to realize that some of the most valuable advice I have given clients is also the simplest: get organized and stay organized.

So share your plans with your loved ones and seek the assistance of a holistic adviser. You can even make it a family affair. Take the time to document your assets, then sit down with your loved ones so they can understand what you own, how it’s titled and what needs to happen as major life events take place. It will be time well spent and money well saved.

For the original Money.com article, please click here. To contact Don Chamberlin and The Chamberlin Group visit their website here.

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