Category Archives for "Retirement"

Why can’t we just call the kettle black?

I am in a business that seems to have fallen into the same undesirable, necessary evil, distasteful category as the TSA, lawyers, dentists and the DMV... that is until you need them.

It must be true because so many people in my industry are coming up with names and descriptions to disguise and re-label it from what it actually is. For example, concepts and strategies for growth and preservation of wealth, huh? What is that supposed to mean? Or strategies to address life planning challenges, what?

In this case, I'm going to call the kettle black. As a licensed insurance agent I offer financial services and sell insurance. According to various industry reports and experts, you can't lead with it because it turns people off. Well, I never thought finance and insurance was attractive enough to turn someone on. Most people know they need it just as much as other services I've previously mentioned. Without it, you and others you care about will definitely know what life planning challenges are when a crisis, accident, critical illness or death occurs.

Most of us know someone who's gone through a loss or tragic experience and usually our first question is, did they have insurance? Second question; why didn't they have insurance? Third question; what were they thinking? Fourth question; if I was in that same situation do I have adequate coverage? And a final comment, if they had only spent a little money on an insurance policy, they could have saved themselves from a lot of additional pain, trouble and financial hardship.

So, go ahead and call the kettle black.


When you're ready to say I need help with insurance and a financial plan for retirement please give me a call.

Craig Colley
(949) 216-8459
CA Lic. #0I48609

New Generation Retirement Plan

The Ultimate 5 Step Retirement Planning Process
Your FREE  guide to a safe and secure retirement

It wasn’t so long ago that retirement meant a pension and a gold watch, but today’s world looks much different than it has for generations past. From increased market volatility and historically low interest rates to the loss of pensions and the rising cost of health care, the burden of retirement falls more heavily on the shoulders of individual Americans than it ever has before. But you don’t have to carry it alone.


1. Selecting a Financial Services Professional

2. Fact and Feeling Finding

3. Planning

4. Solutions and Executing

5. Ongoing Relationship

New Generation Retirement Planning is a holistic approach to retirement planning. It consists of a five-step retirement planning process that incorporates three hallmarks of our company – stewardship, transparency and technology.

Click Image below

Together, we will traverse five important steps in the New Generation Retirement Planning process, where you will explore key areas that are fundamental to successful retirement planning. You will be confident knowing that you have given careful consideration to risk exposure, income planning, legacy planning and tax strategies.

Let us craft a plan uniquely suited to help you thrive in this new generation of retirement.


With a focus on a new generation of retirees, our company uses the New Generation Retirement Planning process, which is based on three hallmarks of successful retirement planning: stewardship, transparency and technology.


Finding a trusted financial services professional is one of the most important elements of planning your retirement. Providing you with a stewardship level of service means we have the responsibility to present solutions that are suitable for your situation. Our commitment to you is that we will always keep our focus on your goals and objectives and will  act with transparency throughout our relationship.


Our commitment to transparency ensures that each step of our work together is recorded and that every document and report are easily accessible to you. This allows us to track the evolution of your plan and make any necessary adjustments to it along the way. Our commitment to transparency is visible through a strong foundation of technology.


We think the challenges you face in retirement today are more complex than those faced by any other generation, but the right technology can make managing and organizing your retirement an easier process.

Our office utilizes Generational Vault, which is a proprietary online portal accessible through our website. It contains the necessary tools to help make decisions appropriate for you and your retirement. It also serves as the vehicle to document and record our commitment to act as a stewardship and act with transparency throughout our relationship.

Color of Money Risk Analysis

The Color of Money Risk Analysis assesses your financial picture and provides a roadmap to your overall risk preferences. The output will be a proprietary Color of Money score. This short, interactive analysis is the first step on the road to retirement.

Did my question make you wonder what colors have to do with money? The amount of money we earn, save and spend is driven by our personality and beliefs.

This can also drive the choices we make about what we do with that money. In short, the investments we choose determines the color of our money. It reflects our overall personality, lifestyle and values, as well as our spending and saving methodologies.

Red- These assets have a higher degree of risk. There is good growth opportunity, but preparing for volatility is important with these assets. Red does not mean the assets are dangerous. It simply means you should stop, look both directions and proceed with caution in making your investment decisions.

Yellow- These assets are safer but still call for cautious examination. There are unique growth opportunities and Yellow assets do not carry as much risk as Red assets. You may not have as much growth opportunity as Red money, but you do not need to come to a complete retirement stop before proceeding.

Green- Green money should be labeled on assets that have safety and guarantees. Your growth potential is less than Red and Yellow money, but you may move comfortably through retirement knowing your assets are safe and available to provide the income stream you are looking for in retirement.

Striking a healthy balance with the colors of your money can help you reach your pre and post retirement goals.

Each color of money has unique benefits and features.

Course Corrections to Consider

Retirement planning course corrections to consider4

It’s no secret that millions of Americans are approaching their retirement years with meager savings and high anxiety about their financial security. And a recent study from Merrill Lynch and Age Wave reveals steps that Americans are willing to take to get their retirement back on track.

The overwhelming majority (88 percent) of people surveyed said their primary objective is peace of mind, while just 12 percent say they want to accumulate as much wealth as possible. But peace of mind means different things to different people:

  • 57 percent report they want to live comfortably within their means.
  • 39 percent say they want to have the financial resources to live the life they choose.
  • 34 percent want to feel they could handle a major unexpected expense.
  • 25 percent want to feel confident they won’t outlive their money.
  • 17 percent want to provide for their family if something happens to them.

Only 8 percent of survey respondents feel personal finances can be discussed openly, while the remainder consider the topic a private matter or one that can be discussed with a spouse or partner or only very close family and friends. It would certainly help if older workers and retirees would share their ideas and insights with their family and friends.

What changes are people willing to make to enhance their  financial security in retirement? Here are steps the survey found Americans are willing to take:

  • 90 percent would be willing to cut back on their expenses. Perhaps they can focus on spending just enough to meet their basic living needs and what truly makes them happy.
  • 79 percent would seek financial advice. In this case, they’ll want to make sure their advisers are qualified and act in their best interests.
  • 77 percent would increase the use of tax-protected retirement accounts.
  • 75 percent would seek expert advice on how to pay lower taxes. Note that this may not be a good use of time for Americans with meager savings, since they could already be in a very low tax bracket when they retire.
  • 66 percent would sell real estate or other personal belongings. Finding the best way to deploy home equity is a good use of time for older workers and retirees who own a home but have modest retirement savings.
  • 64 percent would postpone taking Social Security. This is a smart move for many retirees.
  • 43 percent would withdraw the cash value from a life insurance policy. Such people would want to explore their options: some policies allow the holder to convert the policy’s cash value into a lifetime annuity.

In addition to taking these steps, older workers would be wise to develop a strategy for generating lifetime retirement income, explore their options for continuing to work and make sure they have adequate medical insurance that supplements Medicare.

As you can see, your financial security in retirement has many moving parts. It is well worth spending hours and days planning for peace of mind in your retirement years, so you can go enjoy the rest of your life.5

1. 2. Broadridge Investor Communication Solutions, Inc. Copyright, 2017 3. 4. https: // 6. Newsletter  Insurance products and services are offered through Craig Colley | Coliday and is not affiliated with Gradient Securities, LLC. Some of these materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. The above information is not intended to provide, and should not be relied on for, financial, insurance, tax, legal, or accounting advice.


How women can be different than men, financially speaking 1

We all know men and women are different in some fundamental ways. But is this true when it comes to financial planning? In a word, yes. In the financial world, women often find themselves in very different circumstances than their male counterparts.

Everyone wants financial security. Yet women often face financial headwinds that can affect their ability to achieve it. The good news is that many women today find themselves in a better position to achieve financial security for themselves and their families.

More women than ever are successful professionals, business owners, entrepreneurs, and knowledgeable investors. Their economic clout is growing, and women's impact on the traditional workplace is still unfolding positively as women earn college and graduate degrees in record numbers and seek to successfully integrate their work and home lives to provide for their families. So what financial course will you chart?

Some key differences

On the path to financial security, it's important for women to understand what they might be up against, financially speaking:

Women have longer life expectancies.

Women live an average of 4.8 years longer than men.1 A longer life expectancy presents several financial challenges for women:

This could mean that they will need to stretch their retirement dollars further

They may be more likely to need some type of long-term care, and may have to face some of their health-care needs alone

If they are married, they are more likely to outlive their husbands, which means they could have ultimate responsibility for disposition of the marital estate.

Women generally earn less and have fewer savings.
According to the Bureau of Labor Statistics, within most occupational categories, women who work full-time, year-round, earn only 83% (on average) of what men earn.2 This wage gap can significantly impact women's overall savings, Social Security retirement benefits, and pensions.

The dilemma is that while women generally earn less than men, they need those dollars to last longer due to a longer life expectancy. With smaller financial cushions, women are more vulnerable to unexpected economic obstacles, such as a job loss, divorce, or single parenthood. And according to U.S. Census Bureau statistics, women are more likely than men to be living in poverty throughout their lives.3

Women are more likely to take career breaks for caregiving.

Women are much more likely than men to take time out of their careers to raise children and/or care for aging parents.4 Sometimes this is by choice. But by moving in and out of the workforce, women face several potential financial implications:

Lost income, employer-provided health insurance, retirement benefits, and other employee benefits

Less savings

Often a lower Social Security retirement benefit

Possibly a tougher time finding a job, or a comparable job (in terms of pay and benefits), when reentering the workforce

Increased vulnerability in the event of divorce or death of a spouse

In addition to stepping out of the workforce more frequently to care for others, women are more likely to try to balance work and family by working part-time, which results in less income, and by requesting flexible work schedules, which can impact their career advancement (and thus the bottom line) if an employer unfairly assumes that women's caregiving responsibilities will come at the expense of dedication to their jobs. 

Women are more likely to be living on their own.

Whether through choice, divorce, or death of a spouse, more women are living on their own. This means they'll need to take sole responsibility for protecting their income and making financial decisions.

Women sometimes are more conservative investors.
Whether they're saving for a home, college, retirement, or a trip around the world, women need their money to work hard for them. Sometimes, though, women tend to be more conservative investors than men,5 which means their savings might not be on track to meet their financial goals.

Women need to protect their assets.
As women continue to earn money, become the main breadwinners for their families, and run their own businesses, it's vital that they take steps to protect their assets, both personal and business. Without an asset protection plan, a woman's wealth is vulnerable to taxes, lawsuits, accidents, and other financial risks that are part of everyday life. But women may be too busy handling their day-to-day responsibilities to take the time to implement an appropriate plan.

A financial professional can help
Women are the key to their own financial futures--it's critical that women educate themselves about finances and be able to make financial decisions. Yet the world of financial planning isn't always easy or convenient. In many cases, women can benefit greatly from working with a financial professional who can help them understand their options and implement plans designed to help provide women and their families with financially secure lives.6

If you have questions about how we can help please me, Craig Colley at 949-216-8459.


1 NCHS Data Brief, Number 229, December 2015 2, 4 U.S. Department of Labor, Bureau of Labor Statistics, Women in the Labor Force: A Databook, December 20153 U.S. Census Bureau, Current Population Reports, P60-252, 20155 U.S. Department of Labor, Women and Retirement Savings Online Publication,; accessed January 2016 6 Newsletter  Insurance products and services are offered through Craig Colley | Coliday and is not affiliated with Gradient Securities, LLC. Some of these materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Time to Get Focused

Nearing Retirement? Time to Get Focused 1

If you're within 10 years of retirement, you've probably spent some time thinking about this major life change. The transition to retirement can seem a bit daunting, even overwhelming. If you find yourself wondering where to begin, the following points may help you focus.

Reassess your living expenses

A step you will probably take several times between now and retirement--and maybe several more times thereafter--is thinking about how your living expenses could or should change. For example, while commuting and dry cleaning costs may decrease, other budget items such as travel and health care may rise. Try to estimate what your monthly expense budget will look like in the first few years after you stop working. And then continue to reassess this budget as your vision of retirement becomes reality.

Consider all your income sources

Next, review all your possible sources of income. Chances are you have an employer-sponsored retirement plan and maybe an IRA or two. Try to estimate how much they could provide on a monthly basis. If you are married, be sure to include your spouse's retirement accounts as well. If your employer provides a traditional pension plan, contact the plan administrator for an estimate of your monthly benefit amount. >>>

Do you have rental income? Be sure to include that in your calculations. Is there a chance you may continue working in some capacity? Often retirees find they are able to consult, turn a hobby into an income source, or work part-time. Such income can provide a valuable cushion that helps retirees postpone tapping their investment accounts, giving them more time to potentially grow.

Finally, don't forget Social Security. You can get an estimate of your retirement benefit at the Social Security Administration's website, You can also sign up for a my Social Security account to view your online Social Security Statement, which contains a detailed record of your earnings and estimates of retirement, survivor, and disability benefits.

Manage taxes

As you think about your income strategy, also consider ways to help minimize taxes in retirement. Would it be better to tap taxable or tax-deferred accounts first? Would part-time work result in taxable Social Security benefits? What about state and local taxes? A qualified tax professional can help you develop an appropriate strategy. 

Pay off debt, power up your savings

Once you have an idea of what your possible expenses and income look like, it's time to bring your attention back to the here and now. Draw up a plan to pay off debt and power up your retirement savings before you retire.

Why pay off debt? Entering retirement debt-free--including paying off your mortgage--will put you in a position to modify your monthly expenses in retirement if the need arises. On the other hand, entering retirement with mortgage, loan, and credit card balances will put you at the mercy of those monthly payments. You'll have less of an opportunity to scale back your spending if necessary.

Why power up your savings? In these final few years before retirement, you're likely to be earning the highest salary of your career. Why not save and invest as much as you can in your employer-sponsored retirement savings plan and/or your IRAs? Aim for the maximum allowable contributions.

And remember, if you're 50 or older, you can take advantage of catch-up contributions, which allow you to contribute an additional $6,000 to your employer-sponsored plan and an extra $1,000 to your IRA in 2016.

Account for health care

Finally, health care should get special attention as you plan the transition to retirement. As you age, the portion of your budget consumed by health-related costs will likely increase. Although Medicare will cover a portion of your medical costs, you'll still have deductibles, copayments, and coinsurance. Unless you're prepared to pay for these costs out of pocket, you may want to purchase a supplemental insurance policy.

In 2015, the Employee Benefit Research Institute reported that the average 65-year-old married couple would need $213,000 in savings to have at least a 75% chance of meeting their insurance premiums and out-of-pocket health care costs in retirement. And that doesn't include the cost of long-term care, which Medicare does not cover and can vary substantially depending on where you live. For this reason, you might consider a long-term care insurance policy.

4 Ways to Get Rid of Debt 3

It’s no secret that America runs on debt. The amount of outstanding consumer debt as of August last year stood at $3.25 trillion, according to the Federal Reserve. And according to a 2012 Experian report, Baby Boomers’ average total debt was $101,951, and those over 66 had a total debt of $38,043.

Even if your debt load is less than the average, it can still feel overwhelming, especially if you’re on fixed income. But help is here. The strategies below can get you on the road to being debt-free fast.

1. Credit card balance

A great way to increase your monthly payments is by transferring your balance to a card with a lower interest rate (so more of your money goes toward your actual balance rather than the interest charges).

2. Mortgage

Unlike other kinds of debt like from credit cards or a car loan, mortgage debt is not necessarily bad to have since you get a tax deduction on the interest you pay and hopefully will one day be able to sell your house at a profit. Of course, refinancing into a lower rate can be a good way to pay off your mortgage faster, but pay attention to the loan term—the shorter it is, the more you save.

3. Hospital/medical bills

Before you even try to pay your bill, check to make sure the fees are correct and reasonable. Always ask for an itemized bill, and challenge anything that doesn’t look right.

4. Student loans

If you’re among the growing number of seniors with federal student loans—student loan debt for seniors rose from $2.8 billion in 2005 to $18.2 billion in 2013, according to the Government Accountability Office—asking for a repayment plan that is income-based could make things more manageable (though you may pay more in total than you would with a standard 10-year repayment plan).5

1Broadridge Investor Communication Solutions, Inc. Copyright 2015. 2 3 If company does not provide tax planning services, add the following disclosure: CompanyName does not provide tax or legal advice. Please consult a qualified professional for assistance with any tax or legal issues. Coliday / Craig Colley is not affiliated or endorsed by the Social Security Administration or any government agency. 5 Newsletter  Insurance products and services are offered through Craig Colley | Coliday and is not affiliated with Gradient Securities, LLC. Some of these materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Bridging the Gap

Resolving Projected Income Shortfalls: Bridging the Gap  1

What is a projected income shortfall?

When you determine your retirement income needs, you make your projections based on the type of lifestyle you plan to have and the desired timing of your retirement. However, you may find that reality is not in sync with your projections and it looks like your retirement income will be insufficient for the rate you plan to spend it. This is called a projected income shortfall. If you find yourself in such a situation, finding the best solution will depend on several factors, including the following:

  • The severity of your projected shortfall
  • The length of time remaining before retirement
  • How long you need your retirement income to last

Several methods of coping with projected income shortfalls are described in the following sections.

Delay retirement

One way of dealing with a projected income shortfall is to stay in the workforce longer than you had planned. This will allow you to continue supporting yourself with a salary rather than dipping into your retirement savings.

What it means

Delaying your retirement could mean that you continue to work longer than you had originally planned. Or it might mean finding a new full- or part-time job and living off the income from this job. By doing so, you can delay taking Social Security benefits or distributions from retirement accounts. The longer you delay tapping into these sources, the longer the money will last when you do begin taking it.

While you might hesitate to start on a new career path late in life, there may actually be certain unique opportunities that would not have been available earlier in life. For example, you might consider entering the consulting field, based on the expertise you have gained through a lifetime of employment. This decision may involve tax issues, so it may be beneficial to review its tax impact with a tax professional.

Effect on Social Security benefits

The Social Security Administration has set a "normal retirement age" which varies between 65 and 67, depending on your date of birth. You can elect to receive Social Security retirement benefits as early as age 62, but if you begin receiving benefits before your normal retirement age, your benefits will be decreased. Conversely, if you elect to delay retirement, you can increase your annual Social Security benefits. There are two reasons for this. First, each additional year that you work adds an additional year of earnings to your Social Security record, resulting in potentially higher retirement benefits. Second, the Social Security Administration gives you a credit for each month you delay retirement, up to age 70.

Effect on IRA and employer-sponsored retirement plan distributions

The longer you delay retirement, the longer you can contribute to your IRA or employer-sponsored retirement plan. However, if you have a traditional IRA, you must start taking required minimum distributions (and stop contributing) when you reach age 70½. If you fail to take the minimum distribution, you will be subject to a 50 percent penalty on the amount that should have been distributed. If you have a Roth IRA, you are not required to take any distributions while you are alive, and you can continue to make contributions after age 70½ if you are still working. Minimum distribution rules do not apply to money in qualified retirement plans until you reach age 70½ or retire (whichever occurs later), unless you own 5 percent or more of your employer. >

Save more money

You may be able to deal with projected retirement income shortfalls by adjusting your spending habits, thus allowing you to save more money for retirement. Depending on how many years you have before retirement, you may be able to get by with only minor changes to your spending habits. However, if retirement is fast approaching, drastic changes may be needed.

Make major changes to your spending pattern

If you expect to fall far short of your retirement income needs or if retirement is only a few years away, you may need to change your spending patterns drastically to save enough to cover the shortfall.

You should create a written budget so you can easily see where your money goes and where you can reduce your spending. The following are some suggested changes you may choose to implement:

  • Consolidate your loans to reduce your interest rate and/or monthly payment. Consider using home equity financing for this purpose.
  • Reduce your housing expenses by moving to a less expensive home or apartment.
  • Sell your second car, especially if it is only used occasionally.

Make minor changes to your spending patterns

Minor changes can also make a difference. You'd be surprised how quickly your savings add up when you implement several small changes to your spending patterns. The following are several areas you might consider when adjusting your spending patterns:

  • Consider buying a well-maintained used car instead of a new car.
  • Get books and movies from your local library instead of buying or renting them.
  • Plan your expenditures and avoid impulse buying.

Continue saving during your retirement

Don't think of your retirement date as your deadline for saving. Instead, continue to save money throughout your retirement years. Saving may become more difficult after retirement as a result of reduced income and potentially increased medical expenses. Putting away just a little each month can make a significant difference in how long your money will last.

Note that some of the powerful tax-deferred savings vehicles you took advantage of while working may no longer be available to you during retirement. To participate in a 401(k), for example, you must be employed by a company that offers such a plan and must meet the employer's eligibility requirements (e.g., length of service). IRAs only allow you to contribute earned income (i.e., job earnings) and generally don't permit any contributions after age 70½ (except in the case of Roth IRAs).

Re-evaluate your standard of living in retirement

If your projected income shortfall is severe enough or if time is too tight, you may realize that no matter what measures you take, you will not be able to afford the lifestyle you want during your retirement years. You may simply have to accept the fact that your retirement will not be the jet-setting, luxurious, permanent vacation you had envisioned. Recognize the difference between the things you want and the things you need and you'll have an easier time deciding where you can make adjustments. Here are a few suggestions:

  • Reduce your housing expectations
  • Cut down on travel plans
  • Consider a less expensive automobile
  • Lower household expenses

How much money should I keep in a savings account for emergencies?

Answer: You might consider putting away three to six months' worth of living expenses for emergencies. If you lose your job, or become disabled and don't have adequate disability insurance, you'll need that money to pay your regular monthly expenses, such as mortgage payments, insurance premiums, groceries, and car payments, until you can find another job. Similarly, if your car breaks down or your spouse has a medical emergency, you'll want to have the necessary cash to pay the bills. You don't want to be faced with an immediate need for cash, only to discover that you don't have any.

You may have already set up an emergency fund. Did you put the cash in a five-year certificate of deposit (CD) or other long-term investment? In an emergency, you will need to get at those funds immediately. You can certainly pull your money out of the CD early, but you'll pay a penalty. It's better to keep some funds more liquid, in a traditional savings account, a money market deposit account, or a six-month CD, for example. That way, the cash will be readily available when you need it.

Finally, keep your emergency fund separate from your everyday accounts. You might even want to use a different bank. Unless you are extremely disciplined, you'll be tempted to spend those extra funds if you keep them in your checking account. Remember, if you can put off an expense until next week, it is probably not an emergency.5

1 3Broadridge Investor Communication Solutions, Inc. Copyright 2015. 2 4  5 Newsletter  Insurance products and services are offered through Craig Colley | Coliday and is not affiliated with Gradient Securities, LLC. Some of these materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.


Which Birthdays Are Financial Milestones?

Quiz: Which Birthdays Are Financial Milestones?  4

When it comes to your finances, some birthdays are more important than others. Take this quiz to see if you can identify the ages that might trigger financial changes.


1. Eligibility for Medicare coverage begins at what age?

a. 62

b. 65

c. 66

2. A child can stay on a parent's health insurance plan until what age?

a. 18

b. 21

c. 26

3. At this age individuals who are making contributions to a traditional or Roth IRA or an employer-sponsored retirement plan can begin making "catch-up" contributions.

a. 50

b. 55

c. 60

d. 66

4. This age is most often associated with drops in auto insurance premiums.

a. 18

b. 25

c. 40

d. 50

5. Individuals who have contributed enough to Social Security to qualify for retirement benefits become eligible to begin collecting reduced benefits starting at what age?

a. 62

b. 65

c. 66

d. 70

Quiz Answers

1. b. 65. Medicare eligibility begins at age 65, although people with certain conditions or disabilities may be able to enroll at a younger age. You'll be automatically enrolled in Medicare when you turn 65 if you're already receiving Social Security benefits, or you can sign up on your own if you meet eligibility requirements.

2. c. 26. Under the Affordable Care Act, a child may retain his or her status as a dependent on a parent's health insurance plan until age 26. If your child is covered by your employer-based plan, coverage will typically end during the month of your child's 26th birthday. Check with the plan or your employer to find out exactly when coverage ends.

3. a. 50. If you're 50 or older, you may be able to make contributions to your IRA or employer-sponsored retirement plan above the normal contribution limit. These "catch-up" contributions are designed to help you make up a retirement savings shortfall by bumping up the amount you can save in the years leading up to retirement. If you participate in an employer-sponsored retirement plan, check plan rules--not all plans allow catch-up contributions.

4. b. 25. By age 25, drivers generally see their premiums decrease because, statistically, drivers younger than this age have higher accident rates. Gaining experience and maintaining a clean driving record should lead to lower premiums over time. However, there's no age when auto insurance rates automatically drop because rates are based on many factors, including type of vehicle and claims history, and vary by state and insurer; each individual's situation is unique.

5. a. 62. You can begin receiving Social Security retirement benefits as early as age 62. However, your benefits will be reduced by as much as 30% below what you would have received if you had waited until your full retirement age (66 to 67, depending on your year of birth).5

1 3 4Broadridge Investor Communication Solutions, Inc. Copyright 2015. 5 Newsletter  Insurance products and services are offered through Craig Colley | Coliday and is not affiliated with Gradient Securities, LLC. Some of these materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Changes to Social Security Claiming Strategies

Changes to Social Security Claiming Strategies  1

The Bipartisan Budget Act of 2015 included a section titled "Closure of Unintended Loopholes" that ends two Social Security claiming strategies that have become increasingly popular over the last several years. These two strategies, known as "file and suspend" and "restricted application" for a spousal benefit, have often been used to optimize Social Security income for married couples.

If you have not yet filed for Social Security, it's important to understand how these new rules could affect your retirement strategy. Depending on your age, you may still be able to take advantage of the expiring claiming options. The changes should not affect current Social Security beneficiaries and do not apply to survivor benefits.

File and suspend

Under the previous rules, an individual who had reached full retirement age could file for retired worker benefits--typically to enable a spouse to file for spousal benefits--and then suspend his or her benefit. By doing so, the individual would earn delayed retirement credits (up to 8% annually) and claim a higher worker benefit at a later date, up to age 70. Meanwhile, his or her spouse could be receiving spousal benefits. For some married couples, especially those with dual incomes, this strategy increased their total combined lifetime benefits.

Under the new rules, which are effective as of April 30, 2016, a worker who reaches full retirement age can still file and suspend, but no one can collect benefits on the worker's earnings record during the suspension period. This strategy effectively ends the file-and-suspend strategy for couples and families.

The new rules also mean that a worker cannot later request a retroactive lump-sum payment for the entire period during which benefits were suspended. (This previously available claiming option was helpful to someone who faced a change of circumstances, such as a serious illness.)

Tip: If you are age 66 or older before the new rules take effect, you may still be able to take advantage of the combined file-and-suspend and spousal/dependent filing strategy.

Restricted application

Under the previous rules, a married person who had reached full retirement age could file a "restricted application" for spousal benefits after the other spouse had filed for Social Security worker benefits. This allowed the individual to collect spousal benefits while earning delayed retirement credits on his or her own work record. In combination with the file-and-suspend option, this enabled both spouses to earn delayed retirement credits while one spouse received a spousal benefit, a type of "double dipping" that was not intended by the original legislation.

Under the new rules, an individual eligible for both a spousal benefit and a worker benefit will be "deemed" to be filing for whichever benefit is higher and will not be able to change from one to the other later.

Tip: If you reached age 62 before the end of December 2015, you are grandfathered under the old rules. If your spouse has filed for Social Security worker benefits, you can still file a restricted application for spouse-only benefits at full retirement age and claim your own worker benefit at a later date.

Basic Social Security claiming options remain unchanged. You can file for a permanently reduced benefit starting at age 62, receive your full benefit at full retirement age, or postpone filing for benefits and earn delayed retirement credits, up to age 70.

Although some claiming options are going away, plenty of planning opportunities remain, and you may benefit from taking the time to make an informed decision about when to file for Social Security.

Call us at 949-216-8459 to request your personalized Social Security Report. Even if we have provided you with a report in the past these changes may impact the outcome of that report!

What Are ​Required Minimum Distributions3

Traditional IRAs and employer retirement plans such as 401(k)s and 403(b)s offer several tax advantages, including the ability to defer income taxes on both contributions and earnings until they're distributed from the plan.

But, unfortunately, you can't keep your money in these retirement accounts forever. The law requires that you begin taking distributions, called "required minimum distributions" or RMDs, when you reach age 70½ (or in some cases, when you retire), whether you need the money or not. (Minimum distributions are not required from Roth IRAs during your lifetime.)

Your IRA trustee or custodian must either tell you the required amount each year or offer to calculate it for you. For an employer plan, the plan administrator will generally calculate the RMD. But you're ultimately responsible for determining the correct amount. It's easy to do. The IRS, in Publication 590-B, provides a chart called the Uniform Lifetime Table. In most cases, you simply find the distribution period for your age and then divide your account balance as of the end of the prior year by the distribution period to arrive at your RMD for the year.

For example, if you turn 76 in 2016, your distribution period under the Uniform Lifetime Table is 22 years. You divide your account balance as of December 31, 2015, by 22 to arrive at your RMD for 2016.

The only exception is if you're married and your spouse is more than 10 years younger than you. If this special situation applies, use IRS Table II (also found in Publication 590-B) instead of the Uniform Lifetime Table. Table II provides a distribution period that's based on the joint life expectancy of you and your spouse.

Remember, you can always withdraw more than the required amount, but if you withdraw less you will be hit with a penalty tax equal to 50% of the amount you failed to withdraw.6

1 3 4Broadridge Investor Communication Solutions, Inc. Copyright 2015.
2 5 
6 Newsletter  Insurance products and services are offered through Craig Colley | Coliday and is not affiliated with Gradient Securities, LLC. Some of these materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Give Your Retirement Plan an Annual Checkup

Give Your Retirement Plan an Annual Checkup  1

At Coliday Insurance, Health & Financial, we recommend that you review your retirement savings plan annually and when major life changes occur. If you haven’t already revisited your plan, the beginning of a new year may be the ideal time to do so.

Re-examine your risk tolerance

This past year saw moments that would try even the most resilient investor's resolve. When you hear media reports about stock market volatility, is your immediate reaction to consider selling some of the stock investments in your plan? If that's the case, you might begin your annual review by re-examining your risk tolerance.

Risk tolerance refers to how well you can ride out fluctuations in the value of your investments while pursuing your long-term goals. An assessment of your risk tolerance considers, among other factors, your investment time horizon, your accumulation goal, and assets you may have outside of your plan account. Your retirement plan's educational materials likely include tools to help you evaluate your risk tolerance, typically worksheets that ask a series of questions. After answering the questions, you will likely be assigned a risk tolerance ranking from conservative to aggressive. In addition, suggested asset allocations are often provided for consideration.

Have you experienced any life changes?

Since your last retirement plan review, did you get married or divorced, buy or sell a house, have a baby, or send a child to college? Perhaps you or your spouse changed jobs, received a promotion, or left the workforce entirely. Has someone in your family experienced a change in health? Or maybe you inherited a sum of money that has had a material impact on your net worth. Any of these situations can affect both your current and future financial situation.

In addition, if your marital situation has changed, you may want to review the beneficiary designations in your plan account to make sure they reflect your current wishes. With many employer-sponsored plans, your spouse is automatically your plan beneficiary unless he or she waives that right in writing.

Re-assess your retirement income needs

After you evaluate your risk tolerance and consider any life changes, you may want to take another look at the future. Have your dreams for retirement changed at all? And if so, will those changes affect how much money you will need to live on? Maybe you've reconsidered plans to relocate or travel extensively, or now plan to start a business or work part-time during retirement.

All of these factors can affect your retirement income needs, which in turn affects how much you need to save and how you invest today.

Is your asset allocation still on track?

Once you have assessed your current situation related to your risk tolerance, life changes, and retirement income needs, a good next step is to revisit the asset allocation in your plan. Is your investment mix still appropriate? Should you aim for a higher or lower percentage of aggressive investments, such as stocks? Or maybe your original target is still on track, but your portfolio calls for a little rebalancing.

There are two ways to rebalance your retirement plan portfolio. The quickest way is to sell investments in which you are over-weighted and invest the proceeds in under-weighted assets until you hit your target. For example, if your target allocation is 75% stocks, 20% bonds, and 5% cash but your current allocation is 80% stocks, 15% bonds, and 5% cash, then you'd likely sell some stock investments and invest the proceeds in bonds. Another way to rebalance is to direct new investments into the under-weighted assets until the target is achieved. In the example above, you would direct new money into bond investments until you reach your 75/20/5 target allocation.

Revisit your plan rules and features

Finally, an annual review is also a good time to take a fresh look at your employer-sponsored plan documents and plan features. For example, if your plan offers a Roth account and you haven't investigated its potential benefits, you might consider whether directing a portion of your contributions into it might be a good idea. Also consider how much you're contributing in relation to plan maximums. Could you add a little more each pay period? If you're 50 or older, you might also review the rules for catch-up contributions, which allow those approaching retirement to contribute more than younger employees.

Although it's generally not a good idea to monitor your employer-sponsored retirement plan on a daily, or even monthly, basis, it's important to take a look at least once a year. With a little annual maintenance, you can help your plan keep working for you.

Organizing Important Records and Documents 3

A record keeping system is a systematic approach to retaining and filing documents in a way that makes them easy to find when needed, even if it's several years later. Record keeping systems range from simple to elaborate and from basic to comprehensive. The ideal system is designed to fit your personal and family situation and lifestyle.

Some record keeping is mandatory; good record keeping is important

The most important thing to know about record keeping is that doing it well will save you a lot of time and money during your lifetime. Conversely, poor record keeping is sure to cost you in terms of money, time, and aggravation, perhaps dearly. For instance, assuming that you've been generally honest with the IRS, the only reason to fear a tax audit is that your records are incomplete or in disarray. If so, the IRS could find that you owe more tax than you paid. Insurance and legal claims frequently require supporting documents as well.

Record keeping is also important for estate planning purposes. After you pass away, your family and the executor of your estate will be grateful to find your records complete and in a meaningful order.

It is up to you to decide what your record keeping system will include

The items you decide to retain in your record keeping system will depend on several factors, including:

  • Your personal and family situation
  • The nature of your assets and investments
  • Your household's number and type of income sources
  • Your tolerance for risk
  • The time you'll realistically devote to keeping records systematically

In addition to financial documents, you'll probably want your system to retain other types of important documents, such as insurance policies; health and employment records; property titles; certificates of birth, death, and citizenship; and product and service guarantees. Today, it is also common to videotape personal property for potential use as evidence in an insurance claim.

Create a record keeping system that works best for you

If throwing all your receipts, bills, and paycheck stubs into the proverbial shoe box until tax time is the best you can manage, then it will have to do. However, devising a systematic approach to retaining and filing your important documents will bring rewards you will appreciate in the future. If you can find little time for record keeping, then a simple system may be the answer. On the other hand, a more complex system that retains and files all potentially necessary documents on a weekly or monthly basis assures that when a need arises, you'll be able to retrieve whatever you need promptly and without fuss. You might view this as pay now or pay later.5

When it comes to a safe and secure method of storing your documents and records, we have the solution! Generational Vault is a virtual safe deposit box that allows you to store your important files, pictures and other items. Additionally, the Vault offers a comprehensive view of your financial picture. Better yet, your stored data is accessible anywhere you have an Internet connection – 365 days a year, 24 hours a day.

Call our office at 949-216-8459.

1 3Broadridge Investor Communication Solutions, Inc. Copyright 2015.
2  4

 5 Newsletter  Insurance products and services are offered through Craig Colley | Coliday and is not affiliated with Gradient Securities, LLC. Some of these materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these 
materials may change at any time and without notice.