In our 20s, we are just starting our adult life.  Income is not that high, and we have plenty of time to begin investing.  Sixty-five sounds like an eternity away.  So, we’ll just wait until we get a little older and we have more income.

In our 30s, a growing family and a large mortgage take all of our income.  After the kids grow up a little, we’ll be able to find money for investing.

In our 40s, we are shocked to discover our children became more, not less, expensive.  Every available penny is going to finance our children’s educations, and we still don’t have enough.  We also have to assume large college loans.

In our 50s, we finally begin to realize the importance of investing, but we still can’t find the money to do so.  Some of us are still helping to pay our children’s college, while others have been forced out of their jobs and now need to begin a new career.  The money we hoped to find for investing just isn’t available.

Suddenly, we wake up to find that we are already 65 years old with an extremely small nest egg that won’t fund much of a retirement.  We truly regret that we didn’t start investing when we were 20.

It is important to begin investing today to reach your financial goals.  The best way to start is with a Financial Plan.  Financial planning is the development and implementation of a plan to pursue financial objectives.  It is a process to consolidate your financial concerns so every activity and investment can be viewed in the context of specific financial goals.  Several areas, such as tax planning, estate planning, investments, risk management, retirement planning, and education planning, are encompassed in financial planning.

The financial planning process is ongoing, since it changes as your personal situation changes.  Changing tax laws and economic cycles must also be considered in yearly reviews.  With a financial plan covering everything from the benefits provided by your employer to the taxes on your estate, you will gain control of your financial destiny.  Financial independence can be possible with a well-coordinated plan.  Because no two financial situations are identical, you should call to request an initial consultation to discuss in which direction your plan should proceed.

The bottom line is whether you are still working or already retired, you now need more than ever to have a sound financial plan to cover your retirement income needs.

Reesa Manning is a Senior Financial Advisor at Integrated Wealth Management.  For more information, call Reesa at (760)834-7200, or reesa@IWMgmt.com.

See full Bio: Reesa Manning

Integrated Wealth Management is a Registered Investment Adviser.

• expected to pay out $45 billion more than it takes in as tax revenue this year
• projecting that its Trust Fund will completely evaporate by 2036

A huge part of the problem is driven by demographics.

• People are living longer and having fewer children. Those who were born in and before the 1930s — the era when Social Security got started — simply weren’t expected to live all that far into their 60s, much less past the retirement age of 65.
• The American birthrate has fallen steadily, too — from 18.7 live births per 1,000 population in 1935 to 13.8 per 1,000 in 2009.
• To top it off, the economy has of course been less than stellar for the past few years, resulting in a smaller percentage of the working age population actually working. The civilian labor-force participation rate is down to 63.9% as of November 2011 — down from 66.6% a decade earlier.

Even if Social Security weren’t falling apart, the average retiree benefits from Social Security essentially amount to about what you’d earn working full time at a minimum wage job.  That’s hardly the retirement lifestyle of the rich and famous.  If you’re looking for anything resembling a comfortable retirement, you’ll have to look well beyond what Social Security will provide.

The Plan That’ll Get You There

Fortunately, there’s a straightforward, three-step plan that will enable you to retire comfortably without having to rely on Social Security.  In fact, if you start it early enough in your career, it could even let you retire downright rich. All you need to do is:

Step 1: Spend less than you earn.
Step 2: Invest the rest.
Step 3: Repeat.

It’s not rocket science, but it does take the discipline to both save aggressively and keep at it for a few decades.  You don’t even need to be all that great at investing if you put enough cash toward it for a long enough period of time.

The table below shows the number of years it’ll take to amass $1 million, based on a handful of potential annual return rates and monthly contributions.

What should jump out at you right away is that the amount you invest each month matters at least as much as the rate of return you earn when it comes to reaching that $1 million milestone.  If you sock away enough cash each month, even long run 2% returns can make you a millionaire within the span of a typical career.  On the flip side, if you’re only able to turn up $100 a month, it’ll be significantly tougher to pass that millionaire threshold within your working life.

This is really good news if you’ve been watching the market’s behavior over the past decade or so and wondering if it’ll ever consistently provide decent returns. Indeed, it means the toughest part of your long-run investing success is really figuring out how to arrange your lifestyle to enable you to routinely make those significant investments.

Brandt Kuhn, CFP® is Integrated Wealth Management’s Wealth Strategist and financial planner.  For more information, please visit www.IWMgmt.com or contact Brandt Kuhn at (760) 969-7102 or Brandt@IWMgmt.com

See Full Bio: Brandt Kuhn

Integrated Wealth Management, Inc. is a Registered Investment Adviser.

–John Hussman

They say money doesn’t grow on trees, but, for some governments, it metaphorically does. Earlier this year, the U.S. Federal Reserve completed a $600 billion “quantitative easing” program, which is a fancy way of saying “money printing,” according to Forbes. Similarly, the Bank of England recently announced an additional 75 billion pound sterling quantitative easing program on top of an earlier 200 billion program, according to The Wall Street Journal.

These programs are designed to help reduce long-term interest rates and boost the economy. Critics say they may lead to hyperinflation.

Now, some folks are saying a similar money printing program is the only way to solve the eurozone debt crisis.

As the sovereign debt crisis spreads in Europe, government bond interest rates are rising above what’s considered a sustainable level. Rates are rising because bond buyers are scarce; they’re concerned that certain governments may default on their payments so they demand a higher rate to compensate for the risk of default.

If demand for government bonds drops too much, then some countries may have to default because they won’t have enough money to pay their bills. That’s where the European Central Bank (ECB) may have to step in.

The ECB is the central bank for 11 national central banks, each serving its own country. Those 11 national central banks are the original members of the Eurozone, according to CNBC.

As a highly respected organization, the ECB could step in and say it will back its member countries’ debt and buy that debt in unlimited quantities to keep interest rates down. If it did, then the current crisis would likely abate (at least temporarily) and give the troubled countries some breathing room to implement reforms and restart economic growth, according to Reuters.

So far, though, the ECB has declined to make such a statement for several reasons:

1. It might undermine its independence from politics and its price stability mandate.
2. It could push up eurozone inflation.
3. It would reduce pressure on wayward countries to cut spending and implement growth-boosting structural overhauls.

Sources: Reuters, The Wall Street Journal

In short, it’s “politics as usual” in Europe. Meanwhile, as Europe fiddles, the markets remain unsettled.

HERE ARE A FEW QUOTES from top investors that are worth pondering:

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

–Warren Buffett

“In investing, what is comfortable is rarely profitable.”

–Robert Arnott

“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”

–Sir John Templeton

“Your success in investing will depend in part on your character and guts, and in part on your ability to realize at the height of the ebullience and the depth of despair alike that this too shall pass.”

–John Bogle

 “You make most of your money in a bear market, you just don’t realize it at the time.”

–Shelby Cullom Davis

“To achieve long-term success over many financial market and economic cycles, observing a few rules is not enough. Too many things change too quickly in the investment world for that approach to succeed. It is necessary instead to understand the rationale behind the rules in order to appreciate why they work when they do and don’t when they don’t.”

–Seth Klarman

Weekly Focus – Think About It

“It is one of the paradoxes of success that the things and ways that got you there are seldom those that keep you there.”

–Charles Handy, Irish author/philosopher

Jim Casey is the President and CEO of Integrated Wealth Management. For more information visit www.iwmgmt.com or call Jim Casey at 866-888-6563 x315.

See Full Bio: Jim Casey

Integrated Wealth Management, Inc. is a Registered Investment Adviser.

Taking it another step is to teach your children about investing.  This is a golden opportunity to start them on a solid financial path.  Where to start in discussing investment basics with your children largely depends on their age and maturity.  That said, here are some effective approaches for children of all ages.

Start with savings.  Savings should come before investing.  Make sure your children have a firm grasp of the importance of saving.  If they have a regular job, discuss with them the idea of setting aside about 10% of their earnings.  Consider opening a savings account for them and discuss how interest works.  These are important first steps in learning to manage money.  Once your children have a savings plan, investment topics will come more easily.

Keep it simple.  As obvious as this seems, use your children’s language, not sophisticated financial terms.  Start by explaining to your children that investing is a means of using their money to create more money.  It can be as simple as that.

Use a real goal.  Make investing real by focusing on a tangible goal.  Chances are your children already have something they are working and saving for.  Depending on the age, it could be a new doll, the hottest video game, or their first car.  By showing them how investing money on a regular basis can help earn more money to achieve their goals, you’re more likely to catch – and keep – their interest.

Explain stocks with familiar companies.  Kids are drawn to the idea that buying a stock means buying a piece of a company – the stock can rise or fall as the company succeeds or fails.  If you tie the concept to a company that your children may be familiar with, say a sports company, computer manufacturer, or food and beverage company, they might be more interested in following its progress.  You might purchase a single share for them so they can experience ownership first hand.

Try virtual investing.  You don’t need to actually purchase a share of stock; rather, you can show your children how to research stocks online.  Once again, choose companies whose products they are familiar with and, this time, have them “buy” 10 shares of a few companies they like.  Record the “purchase price,” monitor the performance, and after a while, have them calculate how much they gained or lost.

Open a custodial account.  To give your children some real investing experience, consider setting up a custodial account under the provisions of the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act (depending on your state).  You can start the account with a small amount of money and then add contributions from their already established savings plan or other gifts.

As you and your children explore investing together, remember to have fun and keep it light, emphasizing the following:

• Long-term investing:  Any market has natural ups and downs; but the longer you have to invest, the greater chance you have to ride out these market movements.  Historically, over time, investing has been an effective way to help your money grow.
• Compound growth:  As earnings are reinvested back into your original investment and the aggregate amount keeps earning, it’s kind of like a snowball that gets bigger as it rolls downhill.  The earlier you start investing, the greater the snowball effect.
• Diversification:  It’s risky to put all your eggs in one basket – it’s probably not a good idea to invest all your money in the hottest video game or clothing company.  If the company falls on hard times, you could lose your entire investment.  A great way to minimize risk is to spread your money across different types of investments.

Food for thought……..don’t you wish your parents would have shared this type of information with you?  Or did they………?

The bottom line is whether you are still working or already retired, you now need more than ever to have a sound financial plan to cover your retirement income needs.

Reesa Manning is a Senior Financial Advisor at Integrated Wealth Management.  For more information, call Reesa at (760)834-7200, or reesa@IWMgmt.com.

See full Bio: Reesa Manning

Integrated Wealth Management is a Registered Investment Adviser.

While the focus on thanks is important, another question comes to mind.  What if this year we focused a bit more on the GIVING part of Thanksgiving?

Some years ago I had the opportunity to travel to Mexico with a group that built three homes for three families in a small community in 6 days time.  The homes we were building were two-room, with a cement foundation measuring 28 feet by 14 feet.  The homes were made of wood, finished with stucco and drywall, with a solid angling roof to keep the home, and the contents dry.  Each home had two windows and one door.

Many of people in the community worked for a large multinational corporation manufacturing  railroad box cars produced just outside of the town, making  just a bit more than $1 per day for intense labor.  A majority of the neighboring homes were made out of wooden garage doors, which were being imported from California and Arizona from homes that were installing rollup metal doors.  This town had no paved streets, very little electricity, and water only available by ground well.

Our trip took place over the Thanksgiving holiday.  We prepared a large meal for the group and invited the three families to join us for our celebration.  When they arrived at our camp, they were amazed at the overwhelming amount of food that had been prepared.  It was an honor to share a meal with these families who we had just met days before, but had quickly become very close to our group.  After the meal, the women of the families asked our group if they could take the turkey bones home to make soup for their families that would feed them long after our meal was over.

What occurred to me in the months and years following this trip was twofold.  First was the resourcefulness of people when resources are scarce.  These families found ulility for things that many of us toss away as useful, and life preserving necessities.  Secondly, I realized the availability we have to change our environment around us that others just have to live with.  As I sit at my desk each day, it is warm or it is cool depending on my preference.  If I’m hungry, I can simply walk to the refrigerator and get myself something to eat.  Many of these amenities we take for granted are almost beyond comprehension for the families we met on that trip.

Take some time to reflect on your own living conditions this holiday.  As residence of the Coachella Valley, we know we don’t have to travel outside of our community to find opportunities to assist other families in need.  If you have the opportunity, give donations of food, clothing or blankets so others can enjoy a holiday meal or adjust their environment as the weather gets colder.  Giving time is also just as important, so spend a few hours volunteering at a food bank or a transitional housing center.

You will find no greater return on investment that lending some of your time and donating food and clothing.  And be sure to keep your receipts, as the IRS looks favorably on your contributions!

Happy Thanksgiving to you and your Family from all of us at Integrated Wealth Management!

Brandt Kuhn, CFP® is Integrated Wealth Management’s Wealth Strategist and financial planner.  For more information, please visit www.IWMgmt.com or contact Brandt Kuhn at (760) 969-7102 or Brandt@IWMgmt.com

See Full Bio: Brandt Kuhn

Integrated Wealth Management, Inc. is a Registered Investment Adviser.

Today, things are different. In the old retirement structure you had Social Security, a Pension and Savings all working to compliment each other.  Today’s retirement has lost one leg which was a crucial component – the pension.  You now must rely on savings to compliment your social security check which means you have an ongoing responsibility to manage and track your retirement plan.

For most working Americans there are a number of retirement plan options including defined contribution plan such as 401(k)s, 403(b)s and 457s.  Now, most of us change jobs more frequently and leave a trail of retirement accounts spread around multiple employers and investment firms.

Defined Contribution plans have now taken the place of most Defined Benefit plans shifting more of the responsibility to each of us individually to manage and maintain our retirement investments, which can ultimately define our retirement lifestyle in those golden years.  It is now more important than ever to manage our retirement accounts actively.  But how can one do this if the accounts are not in one place?  Here are a couple of tips:

Organize your accounts:
You should be receiving at least quarterly, account statements for each of your plans and accounts.  Keep them segregated in their own file, book or spreadsheet, tracking the balances of each account as well as your investment allocations.  This means knowing not only the balance but how each account is invested and diversified or the weighting of each investment style and composition.

Consolidate your assets:
By retirement we see that most want to simplify their life and it’s much easier to manage and track your assets if you have them all in one place.  Contact your Human Resources dept from each of your previous employers and explain that you have separated from service and desire to roll your retirement assets to another plan.  This could be and existing plan you are currently contributing to, if that plan will allow a rollover.  You can also add it to an existing Individual Retirement Account (IRA) or establish a new IRA to house your multiple plans.  Beware of the process for transfers: If you take a check made payable to you there could be tax withholdings versus having the check payable to your other plan.  You also must deposit these funds into a retirement plan within 60 days or the entire distribution will become taxable with a potential penalty as well if you are under 59 ½

Coordinating retirement plans:
Whether you have been married for years or just recently married, it’s important you and your spouse are on the same page when it comes to retirement.  Here are some questions that may help you coordinate plans.

*            What retirement plans do my spouse and I have?
*            Are they define contribution or defined benefit plans?
*            When we compare them, do they work well together? Are we diversified well? Do we have a consistent investment philosophy?
*            Do I have the same risk tolerance as my spouse?
*            How often do we review our investment plans together?
*            Are your beneficiaries current?
*            What distribution options does each plan provide at retirement?

The bottom line is that whether you are still working or already retired, you now need more than ever to have a sound financial plan to cover your retirement income needs.

Mark Hayek is a Senior Financial Advisor at Integrated Wealth Management.

For more information contact Mark at 760-834-7200 or Mark@iwmgmt.com.

See full bio: Mark Hayek

Integrated Wealth Management is a Registered Investment Advisor.

Since the recent October 3 low, the S&P 500 index has risen 12.6 percent on the back of “a lack of bad news,” according to data from Yahoo! Finance.

Here’s what we could classify as a lack of bad news in the past few weeks:

• Corporate earnings are coming in okay so far this quarter as 75 percent of the 118 companies that reported earnings have beaten estimates, according to financial data provider FactSet.
• Economic news has generally supported the idea that the economy, while soft, is not collapsing.
• European leaders, after months of tough talk, but little action, may finally be on the verge of taking “comprehensive” action to quell (at least temporarily) the sovereign debt crisis, according to Phil Orlando, chief equity market strategist at Federated Investors.

Whether this “lack of bad news” turns into good news or bad news going forward, remains to be seen. Either way, we’ll work hard to profit from it.

THE WORLD’S POPULATION IS EXPECTED TO HIT 7 BILLION on October 31, according to the United Nations’ population division. That’s up from 2.5 billion in 1950. To put 7 billion people in perspective, see if you can correctly answer the following question.

If 7 billion people stood shoulder to shoulder, which of the following geographic areas is the smallest that could accommodate them?

A)   Zanzibar (about 650 square miles)
B)   Maui (about 727 square miles)
C)   Rhode Island (about 1,033 square miles)
D)   Sicily (about 9,925 square miles)
E)    Cuba (about 42,845 square miles)
F)    New Zealand (about 103,733 square miles)

The answer… in a moment.

Here are some interesting facts regarding the rate of growth of the world’s population.

It took…

• 250,000 years for the world to reach a population of 1 billion (hit in 1804)
• 123 years for the next billion (2 billion in 1927)
• 33 years to reach the next billion (3 billion in 1960)
• 14 years to reach the next billion (4 billion in 1974)
• 13 years to reach the next billion (5 billion in 1987)
• 12 years to reach the next billion (6 billion in 1999)

Sources: The Economist; United Nations World Population Prospects: The 2000 Revision, Volume III: Analytical Report

And, the growth continues… we’re projected to hit 9.3 billion by 2050.

For decades, experts have argued over whether or not our planet can handle this growth. What is not up for debate, though, is the fact that a growing population will affect the demand for goods and services. Food, of course, is high on the list.

The World Bank says, “Between 2005 and 2055 agricultural productivity will have to increase by two-thirds to keep pace with rising population and changing diets.” Okay, this is interesting, but why should we pay attention to this type of information?

As financial advisors, we want to monitor trends that could impact the demand for goods and services, which, in turn, may suggest areas ripe (no pun intended!) for investment. By keeping a finger on the pulse of long-term trends — like the rising world population — we might get an early read on investment opportunities.

Getting back to the population/geography question, The Economist says the answer is A) Zanzibar. Does that surprise you?

Weekly Focus – Think About It

“The investor of today does not profit from yesterday’s growth.” –Warren Buffett 

Jim Casey is the President and CEO of Integrated Wealth Management. For more information visit www.iwmgmt.com or call Jim Casey at 866-888-6563 x315.

See Full Bio: Jim Casey

Integrated Wealth Management, Inc. is a Registered Investment Adviser.

The word “volatile” has been so overused in the media, but it’s hard to find a better way to describe recent movements in the financial markets. On any given day, the markets can rise or fall based on the latest thinking about euro-zone sovereign debt problems, a possible U.S. or Chinese recession, weak banks, inflation, deflation, or poor job numbers.

In the just completed third quarter, uncertainty (there’s another overused word!) was in full bloom as the three major U.S. stock market indices posted double-digit declines, according to Barron’s. Was the market sniffing out a new recession? Possibly. Last week, the respected Economic Cycle Research Institute was quoted in MarketWatch as saying, “The U.S. economy is headed for another recession that government intervention cannot prevent.”

Along those same lines, Goldman Sachs said we may be moving from the 2007-2009 “Great Recession” to an upcoming “Great Stagnation.” As quoted by Bloomberg, Goldman Sachs said a “Great Stagnation” would be characterized by “‘high and sticky’ unemployment, an average 0.5 percent growth rate in per capita gross domestic product, and stock markets that underperform historical averages.”

But, not everyone agrees with that assessment. Warren Buffett told CNBC last week, “it’s very, very unlikely we’ll go back into a recession.”

So, who are you going to believe? The market’s jumpiness may reflect the fact that smart people have completely different views of the economy.

WHAT TO WATCH IN THE FOURTH QUARTER

Here are a few things that made the headlines in the third quarter and may affect the markets over the final three months of the year:

• The S&P 500 index dropped 14.3 percent in the third quarter and is now down 10.0 percent for the year.

What to Watch: Third quarter corporate earnings will start rolling in soon and investors will scour them for any sign of weakness. For the past few quarters, strong earnings helped the market recover from the Great Recession. While some earnings weakness may already be priced in the market, we have to wait for the actual earnings to see how the market reacts.

• Commodities and precious metals experienced significant price movements during the quarter. Gold prices finished the quarter up 8 percent, while silver dropped 14 percent, according to MarketWatch. Oil prices declined 17 percent for the quarter, while copper dropped a stunning 26 percent. On the agricultural side, corn prices finished the quarter down 25 percent from their June 10 all-time high, according to The Wall Street Journal.

What to Watch: Recent declines in oil and copper prices are particularly noteworthy because they may presage a slowing worldwide economy. If the declines continue, it may not bode well for stock prices.

• The housing market is still weak and that puts a significant drag on economic growth. According to the most recent S&P/Case-Shiller Home Price Indices, housing prices around the country are back to where they were in the summer of 2003.

What to Watch: Mortgage rates are at a record low yet the housing market is still in the doldrums, according to Bloomberg. Any sign that housing is turning the corner could bode well for the economy and the markets.

• Interest rates on U.S. government securities dropped significantly in the third quarter as the flight to safety continued. The yield on the 10-year Treasury note recently hit a paltry 1.67 percent — the lowest yield since the 1940s. While low rates are good for businesses and our indebted government, it’s bad for savers who rely on interest income to support their living expenses.

What to Watch: If interest rates keep dropping in the fourth quarter, it may suggest investors are still in a fearful state. Ironically, it could be a good thing to see interest rates rise — as long as it’s due to economic growth and not due to money printing by the Federal Reserve.

• Sovereign debt woes in Europe and budget wrangling in the U.S. weighed on the financial markets in the third quarter.

What to Watch: Continued bad news here could be very problematic. However, if there’s any concrete resolution to the Euro-zone debt problems or a credible bi-partisan budget solution in Washington — look out. The financial markets could rally strongly on that kind of news.

With the above issues looming, you can see why the markets are a bit nervous. Yet, even if the market swoons in the fourth quarter, it could make valuations so compelling that it sets the stage for the next bull market.

Weekly Focus – Think About It

“I wanted a perfect ending. Now I’ve learned, the hard way, that some poems don’t rhyme, and some stories don’t have a clear beginning, middle, and end. Life is about not knowing, having to change, taking the moment and making the best of it, without knowing what’s going to happen next. Delicious Ambiguity.” –Gilda Radner

Jim Casey is the President and CEO of Integrated Wealth Management. For more information visit www.iwmgmt.com or call Jim Casey at 866-888-6563 x315.

See Full Bio: Jim Casey

Integrated Wealth Management, Inc. is a Registered Investment Adviser.

Long-term care insurance can help mitigate some of the risks of aging, but not until the insured is unable to perform two of six specific activities of daily living.

Older people who simply need help getting to doctors’ appointments, remembering to take medications, fixing meals, shopping, cleaning and maintaining the house, paying bills, opening jars, and myriad other daily challenges do not qualify for benefits under a long-term care insurance policy.  But their needs are no less real.

When aging parents become dependent on adult children, financial planning becomes more entwined.  Now there are two families (or more, if there are siblings) all working toward the same goal of making sure the parents’ needs are met without compromising the adult children’s – and their children’s financial well-being.  Although each family may want to continue to keep their finances separate, holistic planning may allow resources to be shared or conserved for the benefit of everyone.

The goal in any integrative financial plan-providing all family members agree-is to dissolve the boundaries between what belongs to the parents and what belongs to the children and consider strategies that build and conserve resources for all.

Assemble Resources

Caregivers often underestimate the time required for caregiving and the impact of their obligations on their work.  They go into it providing only a small amount of care and then gradually take on more and more responsibility, incurring significant losses in career development, salary and retirement income, and substantial out-of-pocket expenses.

Ideally, you’ll want to begin thinking about this while everyone is still active and healthy so you can emphasize the importance of planning ahead.  It is never too soon to start assembling resources so you will be ready to help your parents when the time comes.

Planning Ahead

According to a USA Today/ABC News/Gallup Poll, 41% of baby boomers who have a living parent are providing personal care, financial assistance, or both.  Of those boomers who are not providing care for parents now, 37% think they will someday.  And about half of them say they are concerned about their ability to do so.

Living Arrangements

Housing options for older parents who are basically healthy but need help with certain activities due to frailty or forgetfulness include: (1) staying in their own home, (2) living with their children, or (3) moving to an assisted-living facility.  Each family must decide for itself which option is best based on costs and quality of life for all.

Costs may include modifications to either the parents’ or the children’s home to enable the parents to get around safely, plus the cost of bringing in outside housekeepers or caregivers to the extent needed.  Compare these costs with the cost of an assisted-living facility.  Then decide which arrangement would work out best for everyone.  Some children may want their parents close by, even under the same roof, while others would find such an arrangement too disruptive.

Providing Care

Before making any moves that could threaten your own future financial security, make sure to analyze the long-term consequences of the various options and try to strike a balance between financial and emotional considerations.

The occasion of a parent needing help gives families of all means an opportunity to come together and integrate their financial and life plans for the benefit of all.  You may wish to obtain professional advice to help evaluate everyone’s overall resources and determine who will be responsible for what costs.  A professional can help map out a strategy that makes sense from a tax and estate planning standpoint.

The bottom line is that whether you are still working or already retired, you now need more than ever to have a sound financial plan to cover your retirement income needs.

Reesa Manning is a Senior Financial Advisor at Integrated Wealth Management.  For more information, call Reesa at (760)834-7200, or reesa@IWMgmt.com.

See full Bio: Reesa Manning

Integrated Wealth Management is a Registered Investment Adviser.

An alternative may be to continue working full or part time and use money that had been going into savings to begin enjoying “retirement activities” before actually retiring.

With the right balance of time and money, those nearing retirement may find working in different capacities who do not like the two standard retirement options.  While this approach involves working longer, it can provide more discretionary income during these transition years to start seriously pursuing your retirement aspirations well before you thought you could.

One area of concern is when to take your social security, and depending on the income you are making, delaying may be the best option.

A study completed by T. Rowe Price shows a number of variations can be initiated, but a standard example might be a 62-year-old couple making $100,000 who wants to retire. Receiving Social Security benefits of $30,800, plus withdrawing $21,100 from retirement savings gives them only 52% of their preretirement income, less than the 75% recommended by T. Rowe Price. In addition, their $500,000 in savings would only grow to $526,000 by age 70.  (All figures are expressed in today’s dollars, using a 3% discount rate.)

The example couple decides to keep working, but discontinue making contributions to their retirement plan, which gives them an additional $15,000 to pay for some enjoyable activities. Each year they wait to start taking Social Security benefits, their initial benefits increase approximately 8%, based on Social Security formulas—regardless of what the market does.

In addition, if you do not tap into retirement savings prior to full retirement, your investment portfolio may have increased as well. If our example couple retire at 70, withdrawing $34,900 from savings and collecting combined Social Security benefits of $54,100, they have a total retirement income of $89,000 and their retirement nest egg would have grown to $775,000 by age 70, according to the T. Rowe Price calculations.  That’s almost a 90% replacement rate, rather than the 52% replacement income percentage the couple that retires at age 62 realizes.

Being able to use some of their time and money earlier to live out their retirement dreams might make working longer less onerous. Basically, their salaries would be funding their fun, giving them the freedom to work as much as they need to.

Unfortunately, given today’s economy, not everyone is in a position to consider these options.  However, even if you both work part-time in your 60s while you begin playing, the financial benefits may be significant, or, in some cases a couple may choose to have one spouse retire while the other continues working.  Whatever you do during the transition phase, if you are married, try to delay having the higher wage earner take his or her own Social Security benefits until age 70. That way, the benefit received will be as large as possible, and will be available for the rest of the surviving spouse’s life, regardless of which one survives. If you are single, the same rationale applies.

Brandt Kuhn, CFP® is Integrated Wealth Management’s Wealth Strategist and financial planner.  For more information, please visit www.IWMgmt.com or contact Brandt Kuhn at (760) 969-7102 or Brandt@IWMgmt.com

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Integrated Wealth Management, Inc. is a Registered Investment Adviser.