Improving Your Financial Health

This Time It's Different?

2010-10-13T09:40:00.000-07:00

The late Sir John Templeton, founder of Franklin Templeton Investments liked to say, "The Four most expensive words in the English Language are ‘This time it’s Different.’"

Is it really?

The National Bureau of Economic Research states that the United States has weathered a recession in EVERY decade since the 1920′s.

It is easy to say “This time its different.” Many people are still feeling that way.
However, it is important to keep in mind a few points.

* Financial decisions (any financial decisions) should not be based on emotion.

* Historically, after every past recession, the market has gone on to hit new highs.

* Declines in the market & economy, even our most severe ones, have been temporary.

* Since 1926, the Dow Jones has had TWICE AS MANY positive returns as negative ones.

Despite more than 12 recessions dating back to 1926, $1.00 invested in the Dow in 1926 would have been worth $2045.00 at the end of 2008.

It was two years ago this week (Oct. 16, 2008), that Warren Buffett wrote his “Buy America, I Am” article in the New York Times. Buffett encouraged investors to “be fearful when others are greedy, and be greedy when others are fearful.” Since Mr. Buffett wrote this letter, the S&P 500 Index has gained 29.1% on a total return basis through the close of business on Friday October 8, 2010, according to the New York Times.

“This time it’s different?” Warren Buffett didn’t think so. Neither did Sir John Templeton. Neither should we. Investing is a long term process. Recessions are opportunities. My job as an advisor is to provide you with a beacon of hope, and see the light at the end of the dark tunnel.

Let me know how I may be of service. Contact me about the IRA Security Blanket!

Help! My 401(k) Has Fallen – And Must Get Up! is my new book. It has several ideas and strategies which will help you in your retirement savings journey. Get your ‘Fallen’ 401(k) back on its feet. Contact me to reserve your copy today. You can also get a FREE report at my website – The 5 Biggest Problems With 401(k) Plans – And How To Fix Them.

You may also listen to my weekly radio program – Improving Your Financial Health on WHME-FM in South Bend. Archives can be heard on my website as well. If you live in the South Bend, IN area, I specialize in 401(k) rollovers or IRA reviews. You can also follow me on Twitter, Linked In, or Facebook.

The Grand (Money) Illusion - Why Grow?

2010-10-08T06:29:00.000-07:00

Recently, I wrote an article here titled, It's Not Much, But It's All I Have . This has been a very common reaction among people when talking (or not talking) about their money. We continue to deal with economic uncertainty, and its human nature to be afraid of losing it. However when we let fear control our thoughts, we also prevent growth. Money closed inside of a fist serves no purpose and can't grow. To grow your funds, you have to open your hand - and your mind.

"Hold on loosely....but don't let go. If you cling too tightly....you're gonna lose control." (.38 Special)

Why do we need to grow our money? One word - INFLATION!

According to the US Bureau of Labor Studies, $400,000 of taxable income in 1953 is equivalent to $2.8 Million in today's dollars.

When you decide to retire, you could easily be retired for 20 years or more. Do you believe that the costs of living for you will go up - or stay the same? Consider this - in 1990, a loaf of bread costs about $1.00. Today, we pay an average of $2.69 for the same loaf. A postage stamp was only .08 in 1990, while today it's .44....and climbing.

If you have been on a fixed income for the last 20 years, you have suffered a 40% loss of purchasing power. Plain and simple - your money must continue to grow over the long term to keep up with rising costs. You just can't keep stuffing it under a mattress, which is paying about the same interest as a CD today.

So what can you do?

Start by putting more money into your 401(k) plan or IRA. Look at your cash flow, and give yourself a pay raise! Pay yourself first - 10% of your income should go into your 401(k) plan. Meet with an advisor to set up an ongoing program for you. Talk with them about which investments are most appropriate for you in your 401(k) or IRA, based on your time horizon, risk tolerance and future income.

“Some people say they want to wait for a clearer view of the future. But when the future is again clear, the present bargains will have vanished. In fact, does anyone think that today’s prices will prevail once full confidence has been restored?” (Dean Witter, May 1932)

Please Contact Me for more information on how to protect your long term savings and USE your money wisely. I can help you create lifetime income from an IRA or Roth IRA. If you live in the South Bend, IN area, I am also happy to help with 401(k) rollovers or IRA reviews. You can follow me on Twitter, Linked In, or Facebook.

You can also listen to my weekly radio show, Improving Your Financial Health on WHME-FM in South Bend, and archives are available for listening on my website. My book, Help My 401(k) Has Fallen – And Must Get Up is helping everyday people to get their 401(k) plan back on its feet and working harder. Contact me about how to get a copy.

The Grand (Money) Illusion

2010-10-07T10:59:00.000-07:00

OK, admit it. You've done it too. With the recent rise in the stock market, you've seen your 401(k) balance rise also. You've started to think "Its going up, so everything is fine. It was down for a while, but now its coming back."

Does that sound like you? When you open your 401(k) or IRA statement, do you just look at the total balance and try to figure out if it's up or down?

Money Magazine has their 2011 Retirement Guide out now. Senior Editor, and Retirement Expert Penelope Wang urges you to think of your retirement differently. Don't just look at the total lump sum. Look at what the future income will be, which the lump sum will generate. This is the Grand Illusion (not the Styx song) when it comes to your 401(k), she says. Remember that your future purchasing power also will be eroded by inflation.

Recently, I had a client ask me if $1,000,000 was enough to retire on. My answer was that we don't know until we look at your income needs, and cash flow. What are your monthly and yearly expenses?

Let's assume that you have $1,000,000 (I know, I know.....just play along, OK). Let's assume also that you will be drawing 4% per year from the $1,000,000 nest egg. In order to do that, your money needs to be invested so that you are getting at least a 4% real return (after taxes and inflation). That way you can take money out without shrinking your nest egg.

So, using the $1,000,000 figure we can multiply that by .04 and get $40,000. We will take $40,000 per year for income. Will $40,000 meet your expenses? Do you have other debt? How about other sources of income?

You MUST look at your 401(k) or IRA this way! It is a source of future income for you. The bigger the nest egg, the more income it will generate. But now you know WHY you need a bigger nest egg! "People understand how much money they need each month, so it makes the saving process more relevant," says UCLA behaviorial finance professor Shlomo Benartzi.

By the way, Ms. Wang also shows an illustration in her article on how long we think our money will last. Although most experts asvise retirees to limit their withdrawals to a maximum of 4%/year, there is a myth that you can take out more. According to the Met Life Retirement Income IQ Test (2008), about 26% of those surveyed thought that withdrawing 7%/year from a nest egg was safe. A whopping 43% (nearly HALF) of the respondants believed that it would be OK to withdraw 10% or more per year!!

Picture a small boat with a leak.

At first, you may not notice the leak. As water rushes into the boat, you start to panic. The water pours in

faster and faster, until the boat begins to sink. That's what happens to IRAs when you take out too much money. Eventually you reach a point where you can't keep up.

Let's keep your boat floating!

The 5 Biggest Problems With 401(k) Plans & How To Fix Them.

You may also listen to my weekly radio program – Improving Your Financial Health on WHME-FM in South Bend. Archives can be heard on my website as well. If you live in the South Bend, IN area, I specialize in 401(k) rollovers or IRA reviews. You can also follow me on Twitter, Linked In, or Facebook .

Its the Great Security Blanket Charlie Brown!

2010-10-04T11:12:00.000-07:00

Get A Blanket!

Did you have a "blankie" as a child? Was the "blankie" your contstant companion, protecting you from the forces of evil? No matter what happened, your blanket was there for you.

The late cartoonist, Charles Schulz popularized the image of Linus and his blanket in his Peanuts comic strips and cartoons. You may even remember that Linus was quite skilled at using it. He could catch fly balls, use it as a parachute, and even revive a sickly Christmas tree.

If you are like most people, your 401(k) or IRA has taken quite a beating the last few years.

What if I told you that you could have your very own IRA Security Blanket?

* Protect yourself against future market disasters.

* Protect yourself from inflation and rising costs.

* Protect yourself from the uncertain future of Social (In)Security.

To learn more about how to get your IRA Security Blanket, you can contact me at http://www.helpmy401k.us/.

Help! My 401(k) Has Fallen – And Must Get Up! is my new book. It has several ideas and strategies which will help you in your retirement savings journey. Get your ‘Fallen’ 401(k) back on its feet. Contact me to reserve your copy today. You can also get a FREE report at my website - The 5 Biggest Problems With 401(k) Plans – And How To Fix Them.

You may also listen to my weekly radio program – Improving Your Financial Health on WHME-FM in South Bend. Archives can be heard on my website as well.

If you live in the South Bend, IN area, I specialize in 401(k) rollovers or IRA reviews. You can also follow me on Twitter, Linked In, or Facebook.

Can Facebook Help You Save Money?

2010-09-28T06:37:00.000-07:00

As I have been out talking about my new book, Help! My 401(k) Has Fallen - And Must Get Up!, one of the most common questions I am asked is this -

What is the one thing I can do to fix my 401(k)?

Of course, the person asking wants a simple answer, not a lot of broker speak. So here it is. Regardless of age, gender, or income, the simplest best answer I can give is:

Save More Money!

How's that for simple? Money Magazine released some new information in a study from their Retirement Guide 2011 (Oct. 2010 issue). If you are 35 years old and earn $70,000/year and you save 10% of your pay, you'll have saved $936,100 by age 65.*

By waiting just 5 years to start and doing the same - saving 10% at age 40, your nest egg at age 65 will be $697,700.* (*Assumes 3% annual pay increases and 7% average annual returns on investment into a tax-sheltered account - IRA, 401k or 403b.)

While both figures sound like a lot of money, the difference of $238,400 means a difference of what you can potentially use for income. Assuming you take out 5% per year from your nest egg ($238,400 x .05 = $11,920/year) means that by starting at age 40, you could be cutting your future income by nearly $1,000/month!

Ben Franklin often preached on the virtues of compound interest. He called it the 8th wonder of the world.

So how do we save more money? As Nike might say, "Just Do It!"

It is much easier though if you can have someone to hold you accountable. This is where Facebook might come in. What if you posted a notice on your Facebook page to your friends and tell them to hold you to it. You could "tweet" it also.

"I promise, starting TODAY to pay myself first and put 10% of my pay into my 401(k)."

Honestly, when you see some of the others posts on Facebook (i.e. "I hate rainy days.", "Halloween is coming.", "Out walking the dog."), you'd have to feel a bit proud posting something inteligent that will make a positive difference in your life, wouldn't you? You could start a trend. Have your friends (or at least one or two) hold you accountable.

You could also set e-mail reminders which are specific. use a personal website such as http://www.mint.com/.
Send a message to your e-mail Inbox such as "Put $1000 into my Roth IRA this month." or "Every 3rd of the month I put $400 into my Roth IRA." You could arrange these to hit your Inbox when you get a bonus or unexpected money.

Don't despair if you've turned 45 and still haven't done much. Remember we had talked about how you could still achieve an added $1000/month of income at retirement by starting now and following a disciplined goal. I'll be reviewing some other ideas from the Money Magazine retirement guide in upcoming posts.

My book, Help! My 401(k) Has Fallen – And Must Get Up! has several ideas and strategies which will help you in your retirement savings journey. Get your ‘Fallen’ 401(k) back on its feet. Contact me to reserve your copy today. You can also get a FREE report at my website. The 5 Biggest Problems With 401(k) Plans – And How To Fix Them. I also host a 30 minute weekly radio program - Improving Your Financial Health on WHME-FM in South Bend. Archives can be heard on my website as well.

If you live in the South Bend, IN area, I am also happy to help with 401(k) rollovers or IRA reviews. You can follow me on Twitter, Linked In, or Facebook.

Seven Things You Should Knew About SIMPLE IRAs

2010-09-21T11:33:00.000-07:00

Most people have never heard of a SIMPLE IRA before, and are curious to know how it differs from a 401(k). A SIMPLE IRA stands for Savings Investment Match PLan for Employees.

One of the key differences of why your employer may have a SIMPLE IRA versus a 401(k), is that SIMPLE IRAs are geared for employers with less than a 100 employees. In addition to that, the administrative cost of a SIMPLE IRA for your employer is considerably much less than what a 401(k) would be. (It’s shortened to SIMPLE because it’s…..SIMPLE for small businesses.)

1. Your Employer’s Contributions Are 100% Vested

With some 401(k)s you need to have worked for the employer for a certain number of years to be vested. That means that if you were to leave that employer you could take that employer’s matching contribution. With 401(k)s, you have anywhere from three to five years to where you’re 100% vested. Anything you put in is yours, but anything which they put in may be subject to a vesting schedule. With a SIMPLE IRA, you are 100% vested whenever the employer deposits that into your account. There is no vesting schedule at all.

2. Employers Have To Match In A SIMPLE IRA

Each year, the employer is required to make a contribution to your SIMPLE IRA account whether it be in the form of a match or what’s called a non-elected contribution. Matching contribution states that the employer has to match at least what you match. So, if you’re matching 3%, the employer has to match 3% as well. Note that 3% is the most that the employer has to match, which could be considerably different than compared to a 401(k).

If the employer chooses to not do a match, then they may do what is called a non-elect contribution and what that means is that they will contribute 2% of your salary no matter what. Even if you are contributing 3% of your salary, they will only contribute the 2%.

To sum this up, the employer can choose:

* Match contributions up to 3% of salaries for any employees who choose to participate in the
SIMPLE IRA.

* Contribute 2% of salaries for ALL employees, whether or not they participate.

The decision should be based on which option provides the most benefits and tax savings to the employer.

3. Employees Control The Investments

With most 401(k)s, you are limited to the investment options that you have. This is considerably different when compared to the SIMPLE IRA. Being a self-directed retirement plan, the SIMPLE IRA gives you the discretion of what exactly you want your money invested into. That means that if you want to buy individual stocks, mutual funds, ETFs, or CDs, you are allowed.

To keep things “simple”, it is most common to work with an established family of mutual funds which offers a wide variety of investments.

4. Employees Can Contribute 100% Of Income Into A
SIMPLE IRA

As of 2010, you are allowed to contribute up to $11,500 per year in a SIMPLE IRA. For those who are age 50 and older, you are allowed a catch-up contribution, which is currently $2,500, for a maximum total of $14,000 in 2010. To do this, you must have at least $14,000 in earned income. Currently, the maximum contribution for a 401(k) is $16,500 with a catch-up of $5,500 for ages 50 and up. The SIMPLE IRA is tax-deferred similar to a 401(k).

5. SIMPLE IRAs Do Not Allow Loans

A lot of 401(k)s have loan provisions that allow the employee to borrow against their money if need be. With SIMPLE IRAs, this is not the case. For employers who are weighing their options on retirement savings plans, that may be a consideration. No matter which type of plan you have - Loans are NOT advised. Money which is contributed to retirement savings is to be used for exactly that - retirement! The drawback to using a loan in a 401(k) is that when you leave the company, the loan is immediately due, and then treated as a withdrawal. The withdrawal is then counted as income, and taxed and penalized accordingly.

6. The SIMPLE IRA Two-Year Rule

This is something that should be definitely different from a traditional IRA within the SIMPLE IRA. Most retirement plans — 401(k)s, IRAs, or Roth IRAs — have the 10% early withdrawal penalty if you take money out and you are under the age of 59.5. The SIMPLE IRA goes one step further. If the SIMPLE IRA that you’ve started is less than two years old, and you cash that out, you will be subject to a 25% penalty in addition to ordinary income tax. That is a huge item to not be overlooked. Again, we do not recommend withdrawing money from a retirement savings account before retirement.

If you were attempting to roll over your SIMPLE IRA into a rollover IRA, the 25% penalty would apply as well if the SIMPLE is less than two years old. Once the two year period has passed, a SIMPLE IRA can be easily rolled over into a traditional IRA with no tax consequence. Cashing it out would then incur the same 10 % penalty and taxation as any other account.

7. Which Businesses Use SIMPLE IRAs

Any business which has less than 100 employees may consider using a SIMPLE IRA. The main benefits are:

* SIMPLE to set up and maintain.

* Variety of investment choices available.

* Employer contributions are tax-deductible.

A SIMPLE IRA may be established prior to October 1 to be recognized for that year.

My book, Help! My 401(k) Has Fallen - And Must Get Up! has several ideas and strategies which will help you in your retirement savings journey. Get your 'Fallen' 401(k) back on its feet. Contact me to reserve your copy today. You can also get a FREE report at my website. The 5 Biggest Problems With 401(k) Plans - And How To Fix Them. If you live in the South Bend, IN area, I am also happy to help with
401(k) rollovers or IRA reviews. You can follow me on Twitter, Linked In, or Facebook.

My weekly radio show is Improving Your Financial Health on WHME-FM in South Bend, and archives are available for listening on my website.

It's Not Much But It's All I Have

2010-09-03T06:17:00.000-07:00

Probably the most common response I get when people talk about their long term savings or retirement money is this. "It's not much, but it's all I have. I can't afford to lose it."

Well, I certainly understand how you feel. I am investing and saving for my retirement as well. Author Robert Gignac writes that people are "afraid of money" in his book, Rich Is A State Of Mind. Mr. Gignac will be an upcoming guest on Improving Your Financial Health to discuss his book. He goes on to make a very interesting observation. If money was meant to make us happy, we should have better looking people - or at least smiling faces.

With all due respect to George Washington, would something like this encourage you to save a little more?

"It's not much, but it's all I have. I can't afford to lose it."

If that is true, then wouldn't it make sense to PROTECT it? To truly PROTECT your money, you also need to protect your purchasing power. Your money must be able to keep up with rising costs. Just how much interest is that Folger's coffee can or cookie jar paying these days? Perhaps you keep it under a mattress so you can 'sleep on it'. (Last time I checked, the First National Bank of "Sealy" was paying CD rates 0.25 % higher than the national average.) However, we all know that your money won't grow under the Sealy, or in the Folger's can.

"It's not much, but it's all I have. I can't afford to lose it."

This type of thinking practically guarantees that you WILL LOSE IT! Author Rhonda Byrne says that we transmit thoughts as if our brain was a powerful radio signal. In her book The Secret, she writes that we always get what we visualize. If you say you don't want to be late for a meeting, guess what almost always happens?

"It's not much, but it's all I have. I can't afford to lose it."

Perhaps you have heard this story before.

The kingdom of heaven is like a man traveling to a far country, who called his own servants and delivered his goods to them. And to one he gave five gold coins, to another two, and to another one, to each according to his own ability; and immediately he went on a journey.

Then he who had received the five gold coins went and traded with them, and made another five coins. And likewise he who had received two gold coins gained two more also.

But he who had received one went and dug in the ground, and hid the money there.

After a long time the man came home and settled accounts with his servants. He who had received five coins came and brought five other coins, saying, 'Lord, you gave to me five gold coins. Look, I have gained five more.' The man said to him, 'Well done, good and faithful servant; you were faithful over a few things, I will make you ruler over many things.'

He also who had received two talents came and said, 'Lord, you gave to me two gold coins. Look, I have gained two more.' The man said to him, 'Well done, good and faithful servant; you have been faithful over a few things, I will make you ruler over many things.'

Then he who had received the one coin came and said, 'Lord, I was afraid, and went and hid your coin in the ground. Look, there you have what is yours.'

His lord answered and said to him, 'You wicked and lazy servant, you ought to have deposited my money with the bankers, and at my coming I would have received back my own with interest. Take the coin from him, and give it to him who has ten gold coins.

For to everyone who has, more will be given, and he will have abundance; but from him who does not have, even what he has will be taken away.

This is the story from Matthew 25: 14-29. The moral is of course to use what we are given. We strengthen and grow our financial muscles from using them. Not using them makes us weak.

"It's not much, but it's all I have. I can't afford to lose it."

One other thought I am having today on this theme, from 1 Kings.

Elijah the prophet told the woman. “Please bring me some bread to eat.”

The widow stopped, turned around, and looked at him in surprise. The widow answered Elijah, “As the Lord your God lives, I do not have bread, only a handful of flour in a bin, and a little oil in a jar; and see, I am gathering a couple of sticks that I may go in and prepare it for myself and my son, that we may eat it, and then we will die.”

Elijah then said to her, “Do not fear; go and do as you have said, but make me a small loaf from it first, and bring it to me; and afterward make some for yourself and your son. For thus says the Lord God of Israel: ‘The bin of flour shall not be used up, nor shall the jar of oil run dry, until the day the Lord sends rain on the earth.’”

She took the last of her flour and oil and made some bread for Elijah to eat.

Here is what happened; “She and her household ate for many days. The bin of flour was not used up, nor did the jar of oil run dry, according to the word of the Lord which He spoke by Elijah.”

USE it - or LOSE it!

Keep your money HAPPY!

Please Contact Me for more information on how to protect your long term savings and USE your money wisely. I can help you create lifetime income from an IRA or Roth IRA. If you live in the South Bend, IN area, I am also happy to help with 401(k) rollovers or IRA reviews. You can follow me on Twitter, Linked In, or Facebook.

My weekly radio show is Improving Your Financial Health on WHME-FM in South Bend, and archives are available for listening on my website. My book, Help My 401(k) Has Fallen - And Must Get Up is helping everyday people to get their 401(k) plan back on its feet and working harder. Contact me about how to get a copy.

Could You Use An Extra $1000/Month - Legally?

2010-08-25T07:01:00.000-07:00

OK, that's a silly question. OF COURSE you could use an extra $1000/month. Who couldn't?

For someone in retirement, an extra $1000 would certainly help to make ends meet. According to a recent survey done by the Employee Benefit Retirement Institute (EBRI), only 3 in 5 retirees (60%) feel "very" or "somewhat" confident that they would have a comfortable retirement. This is sharply down from just 3 years ago, when in 2007, 79% felt confident in their retirement.

Did you also know that according to the Social Security Administration that the Maximum Social Security retirement benefit the could be earned by an individual reaching full retirement age in 2010 (age 66) is only $2346/month? Think of how many people receive less than this, and depend on Social Security for the majority of their income in retirement.

What would you do with an extra $1000/month?

Would you do more travelling? Eat out a few more times? Spoil the grandkids? Play more golf? Would an extra $1000/month in income give you a little more peace of mind?

What if I told you that YOU CAN have an extra $1000/month TAX-FREE?

No, you don't have to rob a bank or do anything illegal. This is perfectly legitimate.
No silly multilevel marketing schemes either, where you try to sell junk to your friends and family.
You don't need to be able to dunk a basketball, or pound 300 yard drives that split the fairway.

All you need to do is......

Start putting money into a Roth IRA and make regular contributions. That's it! See - simple, legal, and you get to keep your friends.

Here is how it works. Let's use a 45 year old, starting from scratch. Currently, as of 2010, the most which you can put into a Roth IRA is $5000 per year. At age 50 and older, the maximum contribution is $6000.
Let's say that our 45 year old puts in $5000 per year, and at age 50 starts putting in $6000. Let's also say that we get a return of 6% per year on our money. (Contact me for information on how to get 6%.) For someone who is 45 years old now in 2010, their full retirement age to begin collecting Social Security benefits would be 67.

Age    Roth IRA Contribution   Ending Balance (6% Return)
45       $5,000                              $ 5,161
46      $5,000                              $ 10,632
47       $5,000                              $ 16,431
48       $5,000                              $ 22,578
49       $5,000                              $ 29,094
50       $6,000                              $ 37,033
51       $6,000                              $ 45,448
52       $6,000                              $ 54,368
53       $6,000                              $ 63,824
54       $6,000                              $ 73,846
55       $6,000                              $ 84,470
56       $6,000                              $ 95,732
57       $6,000                              $107,669
58       $6,000                              $120,322
59       $6,000                              $133,735
60       $6,000                              $147,952
61       $6,000                              $163,023
62       $6,000                              $178,997
63       $6,000                              $195,931
64       $6,000                              $213,880
65       $6,000                              $232,906
66       $6,000                              $253,073
        $147,000                          $253,073

Benjamin Franklin once remarked that Compound Interest was the 8th wonder of the world. Saving a nest egg of over $250,000 in 22 years is a great accomplishment.

If you are younger than 45, the message is start NOW. You can do even better.
If you are older than 45, the message is still start NOW!

So how do we get our $1000/month from this?
To get an income of $1000/month, just take 5% per year from this figure $253,073.

$253,073 x .05 = $12,653.65 This is our annual TAX-FREE income from our Roth IRA.
$12,653.65 Divided by 12 months = $1,054.47/Month.

Please Contact Me for more information on how to make this work for you, and create lifetime income from an IRA or Roth IRA. If you live in the South Bend, IN area, I am also happy to help with 401(k) rollovers or IRA reviews. You can follow me on Twitter, Linked In, or Facebook.

My weekly radio show is Improving Your Financial Health on WHME-FM in South Bend, and archives are available for listening on my website.

Match Game

2010-07-08T15:08:00.000-07:00

Employers want you in the 401(k) plan at work. The more money which is in their plan, the lower the fees should be. Also, because they most likely do not offer a pension, they want to be sure they are doing their part in helping you to save for retirement.

Many 401(k) plan sponsors are focusing on two features: automatic enrollment and automatic increases in savings as an employee's pay goes up. However, one of the biggest factors which drives plan participation is the matching contribution. Money Magazine writer Penelope Wang wrote in her March 2010 article Make the Best of a Bad 401(k) that in 2009, matches had dropped off due to the sluggish economy.

Matching contributions are great for employers though. They provide a tax deduction and studies have shown that it is a great way to get employees involved with the plan. 401(k) Plans with a match have higher particpation rates than those with no match.

Matching formulas vary widely. According to Schwab, one of the most common formulas for matching is for the employer to offer a 50% match of an employees deferred salary up to a 6% contribution. In English, that means that the most they put in for you is 3% of your pay - and you have to put in 6% to get that.

Here is an example. Let's say that Bob earns $60,000/year at ABC Company. He puts 6% of his pay into
his 401(k) - $3,600.

                    Bob's Salary (before taxes)                       $60,000
                    Bob's 401(k)                                              $3,600
                    Bob's Taxable Pay                                     $56,400
                    ABC Match                                                 $1,800
                    Total contribution into Bob's 401(k)              $5,400

Now if Bob bumped up his contribution to 10%, he would still only get $1800 from ABC. Many advisors (myself included) believe that we should be saving 10% or more into a 401(k) plan. Over a long period of time, this should allow someone to replace approximately 75% of their income at retirement.

Let's see what happens if Bob decides to put in 10%.

                    Bob's Salary                                               $60,000
                    Bob's 401(k)                                                $6,000
                    Bob's Taxable Pay                                      $54,000
                    ABC Match                                                  $1,800
                    Total contribution into Bob's 401(k)              $7,800

Changing his contribtuion from 6% to 10% gives him an extra $2,400/year into the plan. My book, Help! My 401(k) Has Fallen - And Must Get Up! shows that this could be huge over time. The other plus is that even though Bob raises his contribution by $2,400/year, his take home pay after taxes should only be about $1,800 less because the taxes are deferred on this. $1,800/year works out to less than $35/week.

$35/week - that's all!!

Over a 25 year period, if Bob was able to get a 7% average return on his 401(k) plan, here is the difference between 6% and 10% This also includes the employer match of 3% (50 cents per dollar, up to 6%).
The difference after 25 years is $157,493!!

6%   ($3,600) = $359,789
10% ($6,000) = $517,282
Difference     = $157,493

You can contact me in the South Bend, IN area for 401(k) rollovers. My website is http://www.helpmy401k.us/
Get a FREE REPORT titled "The 5 Biggest Problems With 401(k) Plans - And How To Fix Them!"

My book, Help! My 401(k) Has Fallen - And Must Get Up! is written to help everyday people to get more from their retirement savings. My radio program, Improving Your Financial Health is also heard weekly on WHME-FM in South Bend, IN and archives are available on my website.

Five Situations for Variable Annuities

2010-06-28T14:52:00.000-07:00

According to the Insured Retirement Institute, sales of Variable Annuities grew by 3% from this time last year. VAs aren't for everyone, however in the right circumstances, variable annuities offer solid benefits. There are at least 5 scenarios in which an advisor may consider recommending a variable annuity to clients.

Feel free to add your own to the list! You can contact me for more information on annuties at http://www.helpmy401k.us/

1. Lowering Income Taxes
If you are in the maximum federal and state tax bracket, a VA may help to lower your taxes. Please review your situation with a tax specialist, but a VA can work similarly to an IRA in deferring taxes until money is withdrawn from the acccount.

2. Calming Jittery Investors
This is likely the biggest reason why VA sales are up. If you are nervous about the market but still need your money to grow over time, a VA can act as a "life preserver" for your long term savings.

3. Saving Above Contribution Maximums
If you have maxed out your IRA and 401(k) and still want to save more for retirement, you can put money into a VA. If you are a small business owner, you may also consider a SEP IRA (Simplified Employee Pension). The SEP allows you to save up to 25% of your income and deduct it from your taxes.

4. Guaranteed Income
Annuities have a primary purpose of providing guaranteed income. With people living longer and needing income in retirement, having an annuity can be like setting up a personal pension plan from your savings. Look for plans which offer Lifetime Income.

5. Death Benefit
If you haven't taken income, many annuities will guarantee a death benefit of the amount you invested as a minimum. This is important, and this is where an annuity differs from ordinary mutual funds.

Here's an example. Let's take 2 investors, George and Jerry. Let's say that both of them retire at 65 years old and have 401(k) balances of $100,000. They roll their 401(k) plans over to IRAs. George invests in mutual funds, while Jerry invests in a variable annuity with a guaranteed minimum death benefit. After 4 years, we have another huge loss in the stock market, and their accounts drop to $80,000. Neither of them have taken any income out of their IRAs yet, and are still under the age of 70 1/2 when they would need to take a Required Minimum Distribution.

If George dies, he leaves the balance of his account - $80,000 to his beneficiaries. If Jerry dies, he would leave $100,000, which is what he started with, even if the value of the account is less. Of course, if the account balance in either case is more than $100,000, the death benefit would be the same as the account balance.

Annuities can be beneficial in the right situations. Please contact me and let me know how I may help further.

Ageism

2010-06-24T08:23:00.000-07:00

Ever heard of ageism? Ageism is a term coined by Dr. Robert Butler which refers to discrimination against the elderly. How does this affect you?

As a nation, we are getting older. People are living longer than they did in previous generations. According to http://www.socialsecurity.gov/ a male who lives to age 65 can reasonably expect to live until age 82. A female at age 65 can reasonably expect to live until age 85. Earlier this year, Federal Reserve Chairman Ben Bernanke discussed the effects of aging on the U.S. economy. Mr. Bernanke stated that "the U.S. must begin now to prepare for this coming demographic transition."
Dr. Robert Butler, 83 is in charge of the National Institute on Aging. Dr. Butler, a Pulitzer Prize winner, has also written six books about aging issues and is the the founder of the International Longevity Center. In a recent article in Investment Advisor magazine, Dr. Butler discusses his thoughts on aging. Did you know that in 2025, only 15 years from now, more than 1 in 5 persons will be 65 or older?

Dr. Butler says that older people "should probably plan to work longer than they envisioned." He adds that regarding Social Security and our workforce, "It's very obvious and striking that if people stay in the workforce longer, they put more money into the system and take less money out."

What does this mean for you?

For those in my generation (I am 46 at this time.) we need to think seriously about working longer. Also, we need to prepare for changer in Social Security. We must do a better job of saving and investing in our 401(k) or 403(b) plans. Since we don't have pensions and can't count on Social Security for our future income, the 401(k) has to be our main method for retirement savings.

Saving in a 401(k) means you have to do the work. No one else will care about your future the way you do. My book, Help! My 401(k) Has Fallen - And Must Get Up! has several ideas and strategies which will help you in your journey. Get your 'Fallen' 401(k) back on its feet. Contact me to reserve your copy today, or visit http://www.my401khasfallen.com/.

You can also get a FREE report at my website, http://www.helpmy401k.us/ The 5 Biggest Problems With 401(k) Plans - And How To Fix Them. If you live in the South Bend, IN area, I am also happy to help with 401(k) rollovers or IRA reviews. You can follow me on Twitter, Linked In, or Facebook.

My weekly radio show is Improving Your Financial Health on WHME-FM in South Bend, and archives are available for listening on my website.

3 Big 401(k) Mistakes

2010-06-17T11:50:00.000-07:00

I had a chance to read a great article this week by Joe Mont. Big 401(k) Mistakes That Hurt Savings - June 1, 2010. This article was interesting to me for a few reasons. The facts he outlines tell me that there is definitely a need for my book,
Help! My 401(k) Has Fallen - And Must Get Up!

Mr. Mont agrees with me that "neither the market losses of 2008 nor the robust rally of 2009 have motivated workers to make their 401(k) plans their top priority." This is based on Hewitt Associates annual retirement study.

"While it's encouraging that most workers stayed the course, most did so simply because they were disengaged with the retirement saving process or too paralyzed with fear and confusion to touch their 401(k) plans", says Pamela Hess, Hewitt's director of retirement research. "If employees continue to ignore their 401(k) plans, they're hurting themselves by letting the market dictate their retirement strategy."

Mistake #1 - We Don't Save Enough

We don't save enough in these plans! There STILL needs to be a sense of urgency. Your 401(k) = Your Retirement - PERIOD!

Pensions began to disappear at about the same time leisure suits and Betamax video did - and NONE of these are coming back! When it comes to Social Security, Americans everywhere of all ages are concerned about the Federal Government's ability to continue the program as it currently exists. Also, it was never intended to be anyone's main source of retirement income. However for 1/3 of elderly Americans, it is the source of nearly all their income. This is according to the Center on Budget and Policy Priorities.

Your 401(k) - or 403(b) if you work for a non-profit organization may be ALL YOU HAVE!

Hewitt's study also shows about 28% of participants don't contribute enough to even get the full matching benefit from their employers. That's frightening especially considering that many companies have reduced or eliminated matching contributions over the past year. Penelope Wang reports in her March 2010 article, Make the Best of a Bad 401(k) that "before the financial crisis, only 6% of plans didn't offer workers a matching contribution as an incentive to boost participation. But that number spiked last year, as another 12% of employers reduced or suspended their matches."

Ms. Wang goes on to add - "If you have a missing or reduced match, there's no getting around the fact that you'll have to make up the difference by saving more."

Pamela Hess of Hewitt says, "It was interesting to watch employee reactions to the match suspension. We had expected some really serious impacts to the savings rates, but it didn't change things as much as we thought."

Mistake # 2 - We Don't Rebalance

Here's a question for you. How often do you visit your dentist? What would happen to your teeth if you didn't brush or visit the dentist regularly?

Just like the dentist, you need to review your 401(k) plan with a professional to make sure you are on track with your retirement goals and that you have the right mix. Balance helps you to lower your overal risk. You get your tires re-balanced to keep your car straight, and rebalancing your account serves the same purpose.

With that in mind, target-date funds have become much more popular. A 'target-date fund' is one made up of a blend of several mutual funds. You can easily spot them in your menu of investment choices because they have a year in the name of the fund. "Fidelity Freedom 2040" would be an example of a target-date fund. The year represents the approximate time in which you would wish to retire. With this type of fund, it gradually become more and more conservative as the year approaches.

Hewitt's study from Mr. Mott's article shows that in 2009, 25% of workers use target-date funds in their 401(k) plans. Mr. Mott explains that some of this is due to employers who automatically enroll their new workers into the company 401(k) plan. 69% of these employers use a target-date fund as the default option.
Greg Johnson, president and CEO of Franklin Resources says that "target-date funds will become a bigger and bigger part of the new money that's flowing into 401(k)s."

Even if you do use a target-date fund, please review your account with an advisor. Ask them about the mix. Is it too conservative? too aggressive? or just about right? Are you saving enough to reach your goals? What will your income needs be at retirement? How will your 401(k) be able to meet your income needs? All great questions for an advisor. Don't do your own dental work! Get a pro to prevent 'decay' in your 401(k).

Mistake # 3 - We Kill Our 401(k)s From Withdrawals

Hewitt's study shows that in 2009, 7.1% of participants withdrew from reitrement plans. That is more than in any year since 2002. Loans kill 401(k)s also, and loans automatically become withdrawals once employment ends at the company. Hewitt reports that more than 25% of employees had an existing loan on their 401(k) plan at the end of 2009.

This isn't all that surprising to me. I have spoken with several people who have cashed out 401(k)s. The reasons are varied, but they all boil down to "I need the money right now." It is especially common among younger workers who don't see the future and feel the need to use the money for something else. They don't seem to realize or be concerned that this money may be cut almost IN HALF after taxes and penalties are taken out. A $20,000 account could be reduced to about $11,000 or $12,000 easily when it is withdrawn.

Joe Mont's article is right on time. Please AVOID these big mistakes in your 401(k). I have attempted to contact Mr. Mott after reading this piece and offer him a guest spot on Improving Your Financial Health. As of today, I am waiting to hear back from him.

Please contact me at my website, http://www.helpmy401k.us/ for more information and a FREE REPORT, The Five Biggest Problems With 401(k) Plans - And How To Fix Them! I'm also well equipped to help with 401(k) rollovers or plan reviews.

You can follow me on Twitter, Linked In, or Facebook. I also host a radio program, Improving Your Financial Health, on WHME-FM (103.1) in South Bend, IN.

Happy 30th Birthday!

2010-06-10T12:00:00.000-07:00

Happy 30th Birthday!

Did you know that the 401(k) plan is 30 this year? In 1980, Ted Benna, a Human Resources representative for Johnson & Johnson was asked to put together a new retirement savings plan for the employees there. The plan he devised was based on a new section of the Federal Tax Code, section 401(k).

Section 401(k) allowed corporate employees to direct a portion of their income into a special savings plan for their retirement. There are very similar sections in the code for employees of non-profit organizations - 403(b), and for governement workers - 457(b). Employees were encouraged to do this to create their own savings AND lower their taxable income. For example, if you had a salary of $40,000/year and you were able to put $4000 into your plan, your taxable income automatically drops to $36,000. Savings plans quickly became known as "401(k) plans" from this part of the tax code.

Mr. Benna realized that pensions could not continue effectively. People were living much longer than they did in the 1930's and 1940's. Because people were living longer on average, it created a serious cash flow problem for companies. They simply could not afford to pay retirees for 20 or 30 years. We are also seeing the same problem with Social Security, which is our national 'pension' plan.

What the 401(k) plan did was to shift the responsibility of retirement savings from the employer to the employee. That changed everything!

Once Mr. Benna's new savings plan was in place at Johnson & Johnson, this idea spread like crazy around the country. Companies saw that they could save millions of dollars by eliminating pensions and having workers fund their own retirement. Companies were able to acheive even greater tax savings by making matching contributions on behalf of their employees.

So what does the 401(k) mean to you?
Why do you need one as a corporate worker?

That's simple. No one else (including your employer) will help you to save for your future! For years, financial advisors have thought of retirement income as a three-legged stool - Pension Income, Social Security Income, and income from personal savings.

Well, these days 2 of the 3 legs are broken! If you have no savings, the whole stool is collapsed. For many people I know, the 401(k) at work may be the only real savings they have. Because "life happens", as I have seen on a bumper sticker, it can be very tempting to stop putting money into your 401(k). You may also be tempted because of the doom & gloom we see on the news. Some people have also taken money out which can significantly affect your taxes.
Even after 30 years, the biggest concern with 401(k) plans is that companies don't really do much to inform their employees on how to properly use their 401(k). It's just not enough to have a guy come out twice a year and hand out packets.

Remember, this is your future savings after all! Ask questions. Work out a plan for how much you should save based on your age, income needs, and willingness to take risk.

You need to build a solid 401(k) to give yourself a chance in retirement. Without it, your future vocabulary may include the sentence "Welcome to Walmart."

Those who are unwilling to take risk should listen to what Gen. Douglas Mac Arthur says on the subject. "There is no security on this earth; there is only opportunity."

There is a difference though between taking educated and uneducated risks.

My book, Help! My 401(k) Has Fallen - And Must Get Up! will help with this. In the book, I will share secrets with you about your 401(k) which will let you get more out of the plan. For about the price of a pizza, you can learn about how to get your 401(k) back on its feet. Please contact me at my website, http://www.helpmy401k.us/ for more information and a FREE REPORT, The Five Biggest Problems With 401(k) Plans - And How To Fix Them!

You can follow me on Twitter, Linked In, or Facebook. I also host a radio program, Improving Your Financial Health, on WHME-FM (103.1) in South Bend, IN.

Diary of a Wimpy 401(k) - Editing (Part 2)

2010-05-25T14:10:00.000-07:00

Well, I am finally done with typesetting and editing on the book, "Help! My 401(k) Has Fallen - And Must Get Up!" . The process of editing reminded me of watching a potter making a clay jar. We've all seen the image of a lump of wet clay on a turntable, spinning while the potter's hands mold the clay into a beautiful jar.

I actually finished writing in March, and have had my mother, my sister, an attorney friend, my compliance department, and several financial authors look at my "lump of clay" and give feedback. Then, when all of that was done, I turned it over to Angela Werner of Hohne-Werner Design. She was able to typeset the book and also offered a few tips of her own. Looking at the first draft she sent me almost felt like I was starting all over with a lump of wet clay again!

I pored through my review copy and made many edits, notes, and wording changes. I was pretty surprised at how many changes I wanted to make. My mother & sister did the same, and both of them caught things I had not. The great news is that now I have a finished "jar". Now we just need to take it to the kiln and bake it. Amazon can take my material, combine it with the book cover - and "Voila!" we have a book!

Tell a friend. Use the promo code "401k" when you order the book, "Help! My 401(k) Has Fallen - And Must Get Up!" and get $4.01 off the cover price. By the way, you can get FREE SHIPPING when you order TWO copies. I will also have the e-book version available, which would save you even more. Just download it directly and enjoy the book!

You can contact me for 401(k) questions or rollovers at my website http://www.helpmy401k.us/. You can also contact or follow me on Linked In or Twitter. My radio program, "Improving Your Financial Health" can be heard on Saturday mornings at 9:00 am on WHME-FM in South Bend and recorded archives can be heard on my website.

What Do Mary Kay and Your 401(k) Have In Common?

2010-05-19T06:39:00.000-07:00

I finally got some feedback from my compliance supervisor, regarding my upcoming book, "Help! My 401(k) Has Fallen - And Must Get Up!"
As a licensed Financial Advisor, I certainly want to be sure my book stays "in bounds". I need to "C M A" - so to say.

How do I C M A? (Cover My ***) Two main rules -

             1. No wild promises.
             2. No product endorsements.

Years ago, I remember reading the story of Mary Kay Ash, founder of Mary Kay Cosmetics. Mary Kay said that she lived by a principle which I found fitting. "I never promised a woman that my products would make her beautiful, but I always tried to give her hope."

I like that. You could certainly apply the same concept to financial services and even more specifically to my book. We have been bombarded by the media with "hopelessness" at every turn. My job is to be a beacon of light. Straight talk and common sense to show the way. With no pensions, a weak Social Security system, and people living much longer, you really need your 401(k) to grow strong.

In the book, there are examples which DO show specific mutual funds. However, I was asked to simply enter a disclaimer footnote. This avoids endorsement of a certain product or fund.

"Investors should carefully consider the investment objectives, risks, charges, and expenses of mutual funds. This and other important information is contained in each fund's summary prospectus and/or prospectus, which can be obtained from a financial professional and should be read carefully before investing. Investments outside the United States involve additional risks - as does investing in smaller companies - such as currency fluctuations, political instability, differing securities regulations, and periods of illiquidity. Equity investments are subject to market fluctuations."

There. I feel much better now, don't you? I have also taken a lot of time to make sure that "Help! My 401(k) Has Fallen - And Must Get Up!" is properly referenced and indexed. If someone else said it, it must be OK for me to say it - as long as I credit the source.

In the end, I'm happy with the way the book is turning out. My next piece will be on the final editing.
I'm proud to say - I covered my "A".

You can contact me through my website. I am currently accepting new clients and specialize in 401(k) rollovers. You can get a FREE REPORT there also, "The 5 Biggest Problems With 401(k) Plans - And How to Fix Them". Follow me on Twitter or Linked In.

My radio program, "Improving Your Financial Health" is weekly on Saturday mornings at 9:00am EST on Harvest 103.1 WHME-FM in South Bend. Archived programs are also on my website under WHME.
Best wishes to you!

Get The Word OUT!

2010-05-14T12:11:00.000-07:00

I've been getting a lot of questions about the book, "Help! My 401(k) Has Fallen - And Must Get Up!" The book will be available shortly (end of May) for ordering from Amazon. Since this book was written to help EVERYONE with a 401(k) or 403(b), my biggest concern now is -

How do I make sure that EVERYONE knows about it?

Having a radio program is a real bonus. In fact, on May 29, I am doing a special edition of "Improving Your Financial Health". With so many questions about this unique book, I thought the best way to answer them would be on the air. Be sure to listen to the program Sat. May 29 at 9:00 am on Harvest 103.1 WHME-FM. If you don't live in the South Bend area, or aren't able to listen at that time, no worries. You can still catch the archived recording on my website, www.helpmy401k.us . All previously recorded programs are kept there.

My book website, http://www.my401khasfallen.com/ will also include FAQs and resources which were helpful in writing the book. The new video will be there also, and can currently be seen on You Tube. I will write some more about this, and I've gotten a lot of positive feedback so far on the video.

Most people are thrilled that I didn't strip nude, a la Erykah Badu. (You DON'T want to see this body in the buff!) Although I can't say the same for the pig, who is the main character in the video.

Sooooo, if you want to see a naked piggy bank reading a book, you will like this! (Don't worry the nudity is tastefully done in an 'artsy' way.)

Anything that you can do to help get the word out about the book

"Help! My 401(k) Has Fallen - And Must Get Up!" would be greatly appreciated.

For rolling over a 401(k), or the best rates on tax-free bonds, you can contact me through my website http://www.helpmy401k.us/. You can also follow me on Twitter @deanvoelker or Linked In.

"Improving Your Financial Health" is a weekly financial advice radio program, which also showcases interesting guests. This program airs Saturday mornings at 9:00 am on WHME-FM in South Bend, IN and on my website.

You DO Judge A Book By Its Cover

2010-04-16T12:29:00.000-07:00

Well, its all coming together now. Here is the final cover design by Aimee Sims for my upcoming book "Help! My 401(k) Has Fallen - And Must Get Up!"
Currently the book is in typesetting and from there will be sent to Create Space. I am very excited about this and look forward to helping people get more from their 401(k) or IRA. Because it focuses on the
401(k), which is the biggest source of savings for many of us, and it is easy to understand - this book is unique.

It should be available to order by the end of May!

If you feel like you need your 401(k) working harder for you, please contact me. You can contact me through my website , Linked In, or on Twitter. I also host an advice program "Improving Your Financial Health" on Blog Talk Radio and on Harvest 103.1 WHME-FM in South Bend.

The book website will be http://www.my401khasfallen.com/.

Diary of a Wimpy 401(k) - Typesetting

2010-04-07T14:32:00.000-07:00

One of the things I wasn't looking forward to with my book was typesetting. I am actually not the greatest typist in the world, and Microsoft Word isn't equipped for a clean copy. Typesetting means 'formatting' the words so that all paragraphs and spacing is even, and all graphs look clean and sharp.

When you self-publish, typesetting is one of those things that will make the book look more professional as opposed to just having it printed yourself. "Help! My 401(k) Has Fallen - And Must Get Up!" may sound like a catchy title, but I really want a professional look for it, not a 'wimpy' one. This is an opportunity to establish myself as THE authority on 401(k) plans.

I had about 2 options for this. First, I could have used Create Space, which will also assemble and print the book. Since Create Space is part of Amazon, they will also handle the customer ordering and shipping. They offered to do the typesetting also, and thought they could do it for about $1000 for my 100 page book.

They also told me that because I am using some graphs and tables in the book, I should make the size about 7"x10". Fine with me. I just need to let my graphic artist, Aimee Sims know that.

From reading "The Well-Fed Self Publisher" by Peter Bowerman, he also makes suggestions for firms which he uses to get his books done. Peter seems like a straight shooter, who knows what he is talking about, so I e-mailed a copy to a firm he endorses, Hoehne-Werner Book & Graphic Design.

I have spoken with Angela Werner there, and looked at their work on the website. Angela gave me an estimate of $800. If they are good enough for Peter, they are good enough for me. He suggests cutting costs where possible. Its also important to remember that you get what you pay for. With Hoehne-Werner, I believe it will be the right call. Typesetting is their specialty.

One thing I learned right away - I had wasted a LOT of time putting page numbers with my index. Angela suggested taking the page numbers out. Once the book is typeset, the page numbers could easily change!
"D'OH!" Oh well, I will know that next time.

The whole process should take about a month, so I am hoping to have the book out now by the end of May.

You can contact me for more information on "Help! My 401(k) Has Fallen - And Must Get Up!" at my website, http://www.helpmy401k.us/. Follow me on Linked In or Twitter also. I am currently hosting an advice show, "Improving Your Financial Health" on Blog Talk Radio, which also airs on Harvest 103.1 WHME-FM in South Bend.

James Gandolfini Won't Call Me Back

2010-04-02T05:03:00.000-07:00

I got to spend some time this week working on the promotional video for the book, "Help! My 401(k) Has Fallen - And Must Get Up!"

I must clear up the crazy rumor that's been going around. James Gandolfini is NOT playing the lead role.....mostly because I can't get him to call me back. Bruce Willis either. (What's with these Hollywood guys anyway?)

James may be pretty useful though for those 401(k) reviews such as the one I mentioned in my last couple of posts - "Is Your Employer Wimpy?"

You know, he could tag along. We would just "have a little talk." Get these companies and their HR people to see my point of view. Bada Bing! Yes, I need to keep that idea on file.

Also, there is NO truth to the other rumor about the video. After seeing all the fuss this past week about singer Erykah Badu and her new video, I won't be shedding any clothing. The book could certainly use publicity, but you DON'T want to see me naked - TRUST ME on that!

What you WILL see when the video is done will be some cool animation with a piggy bank. My new friend Michael Rupchock (who does return calls) does some free lance video work through Pentavision here in South Bend. Michael & I worked through a small script this week and will continue smoothing it out. We are hoping it will be done in a few weeks, about the time the book should be available. This book is one of a kind, one of the few which focuses on helping average people to get more from their 401(k) plan.

Once the video is complete, I will post it here, and on sites such as You Tube. The video will also be on the book website, http://www.my401khasfallen.com/ . The website will be up once we have all the material in place to launch it. You can still contact me through my website, http://www.helpmy401k.us/.

Happy Easter!!

Legal Disclaimer: No animals or trees were harmed in writing this article. James Gandolfini was not actually contacted about making a video. He also was not harmed in any way.

Is Your Employer 'Wimpy'? - Part 2

2010-03-31T13:40:00.000-07:00

Last week, I shared the first part of my 'adventure' with G.K. (G.K. is for Gate Keeper, a junior officer I encountered during a recent 401(k) review for a local business.) There is certainly a lot of danger in sponsoring a 401(k) plan for your employees when you don't give a s*** about it.

Danger to employees - They aren't getting the most from this company benefit - which affects their future
                                      and their abilty to retire later.
Danger to employer -   By not taking their fiduciary responsibiltity seriously, the company may be open
                                       to potential legal action.

The problem is that there are too many "wimpy" G.K.s out there. I am purposely leaving the name generic, so you may ask yourself "Is this MY company?" People like G.K. are one of the main reasons I wrote the book, "Help! My 401(k) Has Fallen - And Must Get Up!" You need to know what to do if you are stuck in a bad 401(k) plan. You also need to know what to do if your employer is "wimpy".

Anyway, as I mentioned in my post last week, I had asked G.K. my usual review questions and was suprised at her careless attitude towards their plan. She had provided me with a 2008 version of their enrollment kit. This was for me to prepare a report on their mutual funds in terms of performance and expenses.

After seeing this, I was pretty sure what to expect. I knew that I could help this company, but only if I was able to talk to the right people. I asked G.K. to please have the President and Vice President available for our next meeting. She said she would 'try' to do this. I told her how urgent this was. The others MUST be present. At the very least, have ONE of them. She needed to understand that being negligent about the plan was costing them money. Surely the other guys would get that.

We scheduled a follow-up appointment on a time when the Pres. & V.P. were scheduled to be in the office.

How did the funds look? Hmmm......imagine letting your lawn grow for several months without mowing or watering. That should give you a pretty good idea.

There were 59 funds in all! That is already a problem, even if they were all great. Imagine going to a restaurant and being handed a menu with that many entree choices (which happens). What do you do?
How long does it take to decide? If it is that hard in a restaurant, imagine poring over mutual funds.

People want SIMPLE! A good selection for a 401(k) is 15-20 funds which include the best possible ones in each asset class.

One of my resources allows me to measure funds and compare them to their peer group. A Large Company fund is compared to other Large Company funds. Internationals are compared to other internationals. In other words - apples to apples. Funds are measured in terms of performance, management fees, risk, and Morningstar ratings.

The finished report tells us very simply whether the fund passes or fails. Passing funds are printed in GREEN on the report. Failing funds are printed in RED. How is that for SIMPLE?

Guess what? Would you believe that 51 out of 59 funds were in RED?

Well, I burned up my toner cartridge and printed out 3 copies of this "tree-killer" report. That showed the problem clearly enough. Now I needed a solution for the company. We needed to address the glaring issues of monitoring mutual funds regularly and keeping fees low. As an advisor, I would also need to be pro-active in showing employees how to use the plan. As long as the "powers that be" were there, I felt pretty good about being able to serve them.

Another great benefit for the company was that because the plan held more than $1 Million in assets, there is no cost for them to change!

Ask Yourself This: If you could trade in your broken down, smelly, rusted out 1980's gas guzzler for a shiny new car - and the cost to you was ZERO - how long would it take to decide?

Wouldn't you know it though? Even though I had called G.K. the day before to confirm that everyone would be there......when I showed up, they were missing. No President. No Vice President. Only G.K.

She mumbled an "apology" without looking me in the eye, saying that "something had suddenly come up" for the guys and I could just show her my report.

"Something suddenly came up"? What is this - a 'Brady Bunch' episode?

I showed her my report and pointed out my concerns. When I showed her the mutual funds and that 51 out of 59 were in RED, she started looking for which funds were most common to the plan. Then she looked up HER OWN PLAN to see if HER funds were Green or Red. For a few seconds, I could only stare in disbelief - What kind of MORON is this??

I interrupted the insanity. "Ummm....Aren't we missing the big picture here? Rather than try to pick out individual funds, wouldn't you be concerned that 51 out of 59 are failing? You have a real need for a system to monitor the funds in your plan on a regular basis - which lowers your company liability. Think of it this way - if you have a bunch of bananas in the house, and they've gone brown and soft, what would you do? Would you try to pick out a few good parts? Or would it really be better to replace the bananas?"

G.K. thought for a bit, and admitted that I may have a point.

Amazing! Was I actually getting through?

Not really. G.K. sat there as I pointed out a few other red flags, then said goodbye. "I'll share this with the others. We'll call you if we're interested."

Let me make this clear. I'm not mocking G.K. and the company because they have a bad 401(k) plan. Also, I know not everyone will work with me as their 401(k) advisor. However, the reason for my anger is that the plan stinks - AND they aren't willing to do anything about it!

Again - If you could trade in your broken down, smelly, rusted out 1980's gas guzzler for a shiny new car - and the cost to you was ZERO - how long would it take to decide?

There are too many G.K.s out there - Lazy, narrow-minded people who oversee the 401(k) at your company. That's why I wrote this book, "Help! My 401(k) Has Fallen - And Must Get Up!" due out soon. This is to help YOU fight back - AND get more from your 401(k).

You can contact me at http://www.helpmy401k.us/. I am also at Linked In. You can pick up your free report on my website – "The 5 Biggest Problems With 401(k) Plans – And How to Fix Them".

My weekly financial advice program, Improving Your Financial Health is on Blog Talk Radio and Saturday mornings at WHME-FM.

Is Your Employer 'Wimpy'?

2010-03-26T08:17:00.000-07:00

When was the last time you had something happen that really pissed you off - but you were also extremely thankful for it?

First, if you are offended by the word "pissed", I apologize. I use that word to get your attention and it does a much better job of describing my feelings in this case than "angry" or "mad". I was "pissed" because I witnessed some real wimpiness from an employer.

I did a 401(k) plan review for a local small business recently. These reviews are to help employers to look at their retirement savings plans and find places where they can improve. The goal for everyone is to lower their fees, reduce their liability, and provide better education for employees as well. Everyone wins!

So what pissed me off? My contact person at the company ABSOLUTELY DID NOT CARE!! It doesn't bother me if someone doesn't know their 401(k), and wants to learn. It bothers me greatly when you don't give a ****. She wasn't even the owner, but a rather small-minded, pencil-pushing "Gate Keeper".

Why am I extremely thankful? Simple. This is one of the main reasons I wrote my book "Help! My 401(k) Has Fallen - And Must Get Up!"

There are some wimpy employers out there, and this "Gate Keeper" (I'll refer to her as G.K.) was a vivid example of what's wrong with many 401(k) plans today. She is part of a 3 person 401(k) committee, which also included the company president and V.P. The first part of my review is a questionaire and gathering information about the funds in the plan.

Money Magazine Senior Writer Penelope Wang wrote a recent article "Make the Best of a Bad 401(k)" . She points out that "even the nation's biggest 401(k) plans fall short in some key areas".

Employers must understand that they have a fiduciary responsibility to their employees. If a retirement plan is offered by the company, it needs to include the best possible mutual funds at the lowest possible cost. Also, employees must be kept well-informed about how the plan works and what the benefits are.

Fiduciary responsibility is not just a "good idea". Its the law, part of the Pension Protection Act of 2006, and recent updates to ERISA (Employee Retirement Income Security Act). Companies may be exposed to potential lawsuits by not doing their best for their employees.

Let's get back to "G.K." Here are some of the highlights (or lowlights) of her responses to my questions about their plan.

Q: How often does the trustee committee meet to review the plan.
A: We let the advisor take care of that.

Q: Are all 3 members of your committee aware of the meaning & responsibility of being a 'fiduciary'?
A: Yes.

Q: Are you also aware of potential personal liability which comes with fiduciary repsonsibility?
A: Well, that's what we have insurance for.

Q: How does your company help the participants in the plan to make informed investment decisions?
A: Information is available on-line and they can call the advisor.

Q: How often does he meet with your employees?
A: I think once a year. People can call him if they have other questions.

Q: What process do you use for monitoring the mutual funds in the plan for performance and expenses?
A: We rely on the advisor for that.

Q: Do you have a current enrollment kit?
A: (She handed me a packet from 2008 - NO KIDDING, I couldn't make this stuff up!)

Q: Do you have a more current kit?
A: Our advisor needs to get us some new ones. We haven't had any new employees so it hasn't been
needed.

Q: How are employees kept informed of mutual fund expenses?
A: We rely on the advisor for that.

There is more, but you get the idea. People like G.K. just don't get it. Her small-minded attitude costs her company money. She is also depriving the employees there of their rights to learn more about their benefits and their rights to better investments. (I will talk about this in the next segment. Stay tuned - it gets MUCH WORSE when we review the investments.)

The bad news is that there are plenty of G.K. s out there. If I were an employee at this company, I'd either want a different person in charge of the 401(k) plan or learn what my legal options are. G.K. is a time-bomb.

You can contact me at http://www.helpmy401k.us/ . Pick up your free report on my website – "The 5 Biggest Problems With 401(k) Plans – And How to Fix Them". My new book, "Help! My 401(k) Has Fallen - And Must Get Up!" is due out in April.

My weekly financial advice program, Improving Your Financial Health is on Blog Talk Radio and Saturday mornings at WHME-FM.

Diary of a Wimpy 401(k) - Editing

2010-03-24T14:33:00.000-07:00

Today I spent some time on editing. I had sent out my book to several people and have gotten some good feedback on it.

If you ever write a book, I would absolutely recommend having others take a look and do editing for you. It's almost impossible to do it yourself. I know I probably still missed and have a typo somewhere. Some of the editing also involved changing wording to make it clearer.

One thing that did make me feel a bit better - I was reading "The Christmas Sweater" by Glenn Beck ("Wimpy", I know.) recently and noticed a typo in it. I'm not going to say what or where - you can find it on your own. But its nice to know that others slip up too.

The hardest part was putting together an index. I had done one a few weeks ago and put page numbers on everything. Now with my edits, it changed the page numbers. (As Homer Simpson would say - "D'OH!")
A book like "Help! My 401(k) Has Fallen - And Must Get Up!" definitely needs a good index and also a guide for resources and websites. This book uses several resources for 401(k)s as well as financial authors.

I also had a chance to speak with Pentavision once more. I'm very excited about doing the video for it - even if I can't get Bruce Willis to star. It should be about 30-40 sec and will go up on You Tube when its done. To save on costs, I am trying to locate images myself and send them to be added in.

Also, the domain name is http://www.my401khasfallen.com/ .You can try to go there, but the site isn't ready yet. Once the cover and video are done and also some other details, I'll get it up & running.

In the mean time you can still contact me at http://www.helpmy401k.us/ . Pick up your free report on my website – “The 5 Biggest Problems With 401(k) Plans – And How to Fix Them”.

You may also contact me on Linked In or Twitter . I also host a weekly financial advice program, Improving Your Financial Health on Blog Talk Radio and WHME-FM.

Diary of a Wimpy 401(k) - Movie

2010-03-22T19:33:00.000-07:00

Well, my daughter wanted to see the "Wimpy Kid" movie yesterday. I know she likes the book series and they are pretty funny so we went.

The movie was pretty funny, a bit different from the book with several new adventures for the Wimpy Kid, Greg Heffley, as he deals with surviving middle school. You really don't want to know about the "cheese touch".

I'm not planning a "movie" for my book "Help! My 401(k) Has Fallen - And Must Get Up!" Although if Bruce Willis' agent will return my calls, I may change my mind. James Gandolfini might be interesting also......
a 'mafia' financial advisor......hmmmmm.

Seriously, don't look for a movie with either of these guys. Although I am still planning a short video clip with Pentavision. I'm supposed to meet with them again this week.When we put up the new website, the video will be there and we can direct orders to the page on Amazon.

I'm also getting more book cover ideas this week, which I hope to be able to post and get feedback.

My other project is to find blogs on 401(k)s and IRAs and post responses to questions. I have several which I know of.

If any readers want to send me links for 401(k) blogs, please contact me.

You can get a copy of a free report on my website – "The 5 Biggest Problems With 401(k) Plans – And How to Fix Them".

You may also contact me on Linked In or Twitter at http://www.twitter.com/deanvoelker. I also host a weekly financial advice program, Improving Your Financial Health on Blog Talk Radio and WHME-FM.

Diary of a Wimpy 401(k) - Wimpy Cost Explanation

2010-03-19T12:10:00.000-07:00

When I go to buy something – a new pair of shoes, furniture, or dinner at a restaurant – I want to know exactly what I am paying for. You probably do also, unless your name is Bill Gates. Fee clarity is more important than ever.

Since I have been an advisor in South Bend, I’ve gotten to know a lot of people. I’ve been asked on several occasions to join marketing or networking groups. Recently I was invited to join a group which focused on marketing ideas. The ideas seemed good, and I saw some value in joining the group. I thought it may be a great way to plug the upcoming book as well.

However, this week I decided absolutely not to join this marketing group.

Why not ? The group leader did a poor job of explaining all of the costs involved (wimpy?). I went to 3 different meetings, I was bombarded with marketing information, but never once saw cost explained either verbally or in print. When I finally did find out HOW MUCH, it was quite a lot more than what I was originally told. Whatever credibility he had worked to build was gone.

“No B.S.”?…….Yeah, Riiiiiiiiight. One of my first sales managers told me “A confused prospect never buys.”

What does this have to do with 401(k) plans? Simple. One of the biggest problems with plans now is that fees aren’t clearly explained. Employers don’t know costs, and therefore can’t explain them to employees, who are really picking up the bill. Federal law has made it mandatory that all fees for 401(k) plans are clearly itemized and easy to understand.

If a contractor came to my house and told me he would fix my roof for $10,000, and then due to “unforseen expenses” the tab came to $15,000 or more, I’d be upset. You would be too! By the same token, when I review plans for employers, I want to make sure they know all of the fees in the plan. I have also stumbled onto plans which are badly in need of an update. They are still paying for the plan as a ’small’ business, when in fact they could be saving a lot of money once they have reached certain dollar amounts, or breakpoints.

In my book, “Help! My 401(k) Has Fallen – And Must Get Up!” I use an example of cell phones to explain this.

Why would you still pay for a “1980’s backpack style” cell phone, when newer, better, and cheaper models are available?

As an employer, you need to review your 401(k) plan and update it. Don’t be ‘wimpy’. Make sure you know all the costs and your people do too.

You can also get a copy of a free report on my website – “The 5 Biggest Problems With 401(k) Plans – And How to Fix Them”.

You may also contact me on Linked In at http://www.linkedin.com/in/dvoelker or Twitter at http://www.twitter.com/deanvoelker. I also host a weekly financial advice program, Improving Your Financial Health at http://www.blogtalkradio.com/401kcoach.

Diary of a Wimpy 401(k) - Wimpy Friends

2010-03-17T06:02:00.000-07:00

The interesting thing about writing a book - I am learning who my friends are.

One of the things I had wanted was to get testimonials from people from all walks of life. The book was written in simple language with plenty of stories to make it easy for anyone to understand.

We all have a 401(k) or 403(b) - almost all of us anyway. Unless you are self-employed or one of the rare few who still have a pension.

So about a month ago, I sent requests for testimonials to about 65 people. Some I knew better than others. Some were financial experts who I had interviewed on "Improving Your Financial Health". Some were friends in the financial industry. Some were friends and clients I knew locally, or small business owners. Still others were people who were involved in the project in some way.

A few were celebs who I didn't know, but I wanted to get a testimonial from them.

In asking for testimonials, I believe that we are all very busy. I am willing to be patient and follow up a few times to get testimonials. These 'blurbs' from others can help to promote the book.

If you have a 401(k) and you aren't happy with it, and you are nervous about the future, you should read this book!

One guy (a writer whom I won't name) turned me down, but was very nice about it. He explained that he gets many similar requests and he simply does not have time to answer them all. He also didn't believe that his testimonial would carry much weight, with him not having a financial background.

Although I was slightly disappointed, I appreciated his sincerity and his prompt response.

I've also had a few of my financial heroes tell me that although they like the book and see its value, they aren't allowed to respond due to compliance constraints. Again, I respect this.

That's one way to do it. Here's the WRONG WAY!

Another previous guest on my program (I won't name her - but I promise she WON'T BE BACK!) had her assistant send this "snooty form letter" remark. "As a policy, our team focuses on content that is being published by a major imprint. We don’t read or consider unsolicited material. Should your book get picked up by a major imprint, please do feel free to reach out to me at that time, and I’ll do my best to get it to (her) for a possible endorsement."

Again, this type of chilly response really alienated me. I've lost a lot of respect for this person and needless to say, she won't be back as a guest on my program.

I am still looking for testimonials. I've gotten several very ones so far. Let me kinow if you'd like a copy of the book for review. If you want to learn more about 401(k)s and think you can write a couple of kind words - contact me and I will gladly send you a copy of the draft.

Here are some of my favorite testimonials so far.

"Unless you plan to work till you drop, the 401(k) is your eventual ticket to freedom. Your plan may have fallen in 2008 and Dean Voelker is just the person to help get it back up." -

Jonathan Chevreau, Financial Post columnist, and author of Findependence Day.

“Dean Voelker does a great job of laying out the case for aggressively pursuing your 401(k). This book presents compelling reasons for getting involved in your future TODAY, rather than tomorrow. Dean’s story telling approach takes the 401(k) from its birth through today in an easy to read and storytelling manner.” - Len Fox, author of Recipe Investing.

“Dean Voelker is a real pro. He reveals some things about the Social Security system and how
401(k)s work that I never knew. This book is short, sweet and to the point. Everyone needs to read it quickly to see if they are doing what they should to get their retirement plans back on track. Thanks, Dean for putting this together for us.” - John S. Cohoat, President of Cohoat Business Growth Advisors, and author of No Thank You, Mr. President.

Go ahead, don't be "wimpy". Contact me today. You can also get a copy of a free report on my website -
"The 5 Biggest Problems With 401(k) Plans - And How to Fix Them"

You may also contact me on Linked In at http://www.linkedin.com/in/dvoelker or Twitter at http://www.twitter.com/deanvoelker. I also host a weekly financial advice program, Improving Your Financial Health at http://www.blogtalkradio.com/401kcoach.

Diary of a Wimpy 401(k) - Getting It Printed

2010-03-15T12:16:00.000-07:00

Probably the biggest question to answer was "How are we going to print this thing anyway?"

The LAST thing I want or need is to print up a bunch of books and have them sitting in my garage. I also know that most publishers have never heard of me. So I started getting all kinds of advice from different people. Also did you know that if you sell books to a "brick and mortar" bookstore, they will send you the unsold or damaged books back and are entitled to a full refund including shipping costs? Its in the 'fine print' of the contract.

People suggested e-books, or partial e-books, or different print houses. In January, I interviewed a man named Len Fox, author of Recipe Investing, a book which was not unlike mine, in terms of size and content. Len had used a division of Amazon called Create Space. Len had liked it because it was connected to Amazon. They handled the ordering through Amazon.com and could print 1 book orders. Once a month, they would then pay Len his cut from the book orders. Len didn't have to handle any of it. He got a statement once a month with the orders and a paycheck. No hassle, no damaged books, no refunds, no crates in his garage, no shipping. All of it was done there, by Create Space.

Hmmm - that sounds good to me. I was still working on the writing part at the time, so I kept it on the back burner and also continued to get ideas from others. A few weeks ago, I sent a copy to Carlos Frank, another friend of mine. I had interviewed Carlos twice for my financial show, "Improving Your Financial Health". Carlos suggested that I talk with John Rizzo, who worked for....Create Space.

John Rizzo called me last week and after speaking with him, I was convinced that this was the right path for me.

Create Space offers all types of services that will help you to self-publish your book. Self-Publishing allows you much more freedom and can really lower your cost. John was extremely helpful in explaining all of the services offered. There are 2 things I really like about using Create Space.

First, the services are all seperate. If you need them to typeset or edit or promote your book, they will do it OR if you already have someone that you are using, you can do that. You have the choice. When it comes to assembling the book, all I have to do is send them my material and cover design, and they do it. This is also impressive, since my index and resource guide are seperate from the main manuscript.

Secondly, because of their affiliation with Amazon, they will take care of posting your book on Amazon's site and handle customer ordering and shipping for you. Not only is this a real time and money saver, it also prevents the possiblity of having crates of books taking up space in my garage! I am really looking forward to working with John Rizzo, and I would certainly recommend Create Space if you are looking to get a book printed.

Diary of a Wimpy 401(k) - A Picture Is Worth....

2010-03-12T14:00:00.000-08:00

I had a chance to speak with Aimee Sims. Aimee will be working with me on the design of the book cover. You know the saying "Don't judge a book by its cover." Whether we think so or not, that is exactly what we all do.

Aimee was referred to me by my friends at Pentavision, Michael Lacognato and Missy Stanisz. Pentavision may also be helping me with a video idea for the book. More on that to come.

Anyway, since I am using this blog to detail the printing process, here is the first effort. Thanks Aimee for your help on this.

Here are a few other images which we are talking about as well.

If you could, I'd love to get feedback on these potential cover ideas. Good? Bad?
What may cause you to pick up the book in a bookstore?

Thanks for your help and I will keep you posted.

Diary of a Wimpy 401(k)

2010-03-11T19:46:00.000-08:00

OK, here we go. One of the things I have done so far in the publishing process was to read a book titled "The Well-Fed Self Publisher" by Peter Bowerman. Mr. Bowerman has some very good & practical ideas on why it is better to self publish instead of going through a publisher.

Kudos to my good friend, Nikki Stauffer who recommended the book. Nikki always seems to come through for me when I really need some advice. If her firm was willing to promote the book, I'd hire her in a heartbeat.

Bowerman told several "horror stories" about publishing houses. Most people have a fantasy that they can simply write a book and sell a gazillion copies and then live like John Grisham for the rest of their life. Needless to say, I am pretty grounded in reality. The truth is, many authors have a hard time getting it published. Jack Canfield, author of the "Chicken Soup" books has a favorite word when he was getting multiple rejections - "Next!"

Anyway, even if you finally do get a publisher to take on your book project, and a promotion agent to write a press release, you will still end of doing the promotion leg work yourself. also, the publisher gets to keep most of the money. He shows examples of authors who wrote books that sell for about $15 and their cut is about .50 per book. Now THAT is wimpy!

According to Bowerman, once they write the press release, the publisher is done. On to the next Stephen King wannabe. There is only one person in the whole world who really cares about making sure that your book is promoted regularly - the author. So if you have to promote it yourself, why not publish it yourself.

The whole reason for this book was that I was meeting many people in this area who really weren't getting the most from their 401(k). Northern Indiana is one of the hardest hit areas for unemployment, and many folks simply cashed it in, in spite of taxes and penalties. Others who didn't cash in stopped contributing to their 401(k) especially if their company stopped matching contributions. There is no doubt in my mind that people need to have a much better understanding of how the 401(k) works.

Someone needs to say - This is your retirement plan. It may also be the only savings you have, so you'd better stop being 'wimpy' about it and start saving.

"Help! My 401(k) Has Fallen - And Must Get Up!" reveals little known secrets about 401(k) plans and IRAs. If you read the book, you will understand them and get more from them.

That's all for today. I really apreciate those who have been reading this, and those who have been supporting me. Also thanks to those who have been listening to "Improving Your Financial Health" on either Blog Talk Radio or WHME-FM.

Diary of a Wimpy 401(k) - Day One

2010-03-11T14:41:00.000-08:00

I haven't blogged much lately for 2 reasons. First, I have spent most of my spare time on my book, which is basically finished, at least the writing part. It is titled, "Help! My 401(k) Has Fallen - And Must Get Up!"

That was the easy part. Now comes the hard part - getting it off of my computer and into book form. Then we need to get it into your hands, and the hands of those who need help with their 401(k).

Then I had an idea......why not write a diary? I could log the process of getting a book published.

My daughter has really enjoyed the "Diary of a Wimpy Kid" books by Jeff Kinney, which is now being made into a movie. The books really are funny, and bring back a lot of middle school memories. (OK, Jeff - since I just plugged your books, please don't sue me.)

My other inspiration here was from the movie "Julie & Julia". Don't worry, I can't talk like Julia Child, or cook like her. My main culinary feat is chili, and I don't think Ms. Child ever did that!

The movie talked about how the other main character, Julie Powell, wrote a daily blog about Julia Child's cookbook "How to Master the Art of French Cooking".

So, I have decided to chronicle my adventures of getting the book "Help! My 401(k) Has Fallen - And Must Get Up!" into print. Stay tuned, this could get 'wimpy'.

Blog Talk Radio - Be Our Guest

2010-02-21T21:26:00.000-08:00

I've been a bit busy this week, working on my upcoming book, "Help! My 401(k) Has Fallen - And Must Get Up!" . This is an "everyman's" (and everywoman's) guide to getting more from your 401(k) plan. Most books I have seen on 401(k) plans really are geared more to advisors and financial people, which is what inspired me to write it.

For most of us, the 401(k) is a major source of our savings, and for some it may be the ONLY source of savings. We need to get more out of it if we want to retire someday and have our money last the rest of our lives. I'm very excited to contribute something unique - and hope others find it helpful.

Anyway, I plan on doing more with the blog and hope that my message finds the right people. Last week I wrote about Blog Talk Radio. My experience with Blog Talk Radio has been great. I began using it in July 2009 on the advice of a friend of mine, Brian Seim, a radio veteran.

Although I have made a TON of mistakes (and still do!), I must have done a few things right also. A few weeks ago I began an affiliation with WHME-FM in South Bend (103.1) . We agreed to replay my interviews from Blog Talk Radio as a 30 minute program on Saturday mornings - "Improving Your Financial Health" .

If I had to pick the one factor which has made the show appealing - its the GUESTS! My guests have mostly been financial experts and authors, although some have been very interesting people with great personalities with no financial background at all. Even so, they had something of value to share with listeners and wer a lot of fun to talk with. Some examples would be Ruben Gonzalez, a 4 time Olympian who has written 3 books on staying motivated, or Charlie Adams, who is also a professional speaker and helps High School athletes to get college scholarships. Kristen Harmel who has written 6 novels and has a passion for helping kids with reading, Kay Yasin who overcame personal tragedies to change her life and is now an expert trainer and bodybuilder, and Darin Pritchett who is well known in the South Bend area for his Weekday Sportsbeat show. These and many others are wonderful people and gave fun & interesting interviews. All would all be welcome guests in the future.

Once I committed myself to doing the program, I have always been on the lookout for people who would make great guests . When I find someone I like, I contact them and and tell them about the program and try to schedule a time for them to be on. Always let them know that you are doing this regularly (for me once a week) and tell them names of other guests I've interviewed.

Whatever you choose to do a program about - for business or for fun - I would certainly recommend having interesting guests that fit in with your message. Again, the guests make the show fun. (Who would want to listen to just me for 30 minutes?)

People have often asked me where I find my guests. You can find guests in several places. My main source would be searching the internet for financial blogs or articles I also subscribe to Money and Smart Money magazines and have found great articles there.

Referrals can be a great source also once you tell others what you are doing. My friend, Nikki Stauffer in Ada, MI deserves a special mention. She has referred 2 nationally recognized financial experts and authors to me who are guests. Eric Tyson (author of "Investing for Dummies" and "Personal Finance for Dummies") was one. There aren't many financial advisors out there who can say they have their own "jingle" written by Paul Shaffer of the David Letterman band. Another is Robert Krakower, who has graciously agreed to be interviewed on March 23. His new book is titled "Redefining Retirement for a New Generation".

By the way, Nikki Stauffer has a great weekly show of her own, "Gather Round the Table" . She has also done pretty well with guests, including Megyn Price (Rules of Engagement), Maria Canals-Barrera (Wizards of Waverly Place), and Mayim Bialik (Blossom), among others. This program promotes the importance of family values by eating meals together, and Nikki's guests normally share one of their favorite recipes. Check out her site and archived interviews at http://www.gatherroundthetable.com/.

I also need to thank Erica Sandberg one of my early guests, and author of "Expecting Money", for her referral of a colleague of hers, Sally Herigstad, CPA, and author of "Help! I Can't Pay My Bills!". Both ladies were wonderful guests and I look to have them on Blog Talk Radio again.

Pam Batcho of Express Pros, also has been a great referral source. She referred Ruben Gonzalez, whom I mentioned earlier and also her boss, Norm Robertson, owner of the local Express Pros branch.

Sometimes, it pays to be persistant. Anya Kamenetz was a young lady I had really admired from reading her first book, "Generation Debt" a few years ago. It highlights the challenges of being young today, especially with the high costs of college and student loans. Anya was nominated for a Pulitzer Prize for her efforts.
She is also a nationally recognized speaker, and has appeared on college campuses nationwide.

I knew Anya would make a great guest, and tried to e-mail her (4 times over 6 weeks) with no reply. Finally one day out of the blue, I got a very kind note from her. She apologized that she had been out of town and wasn't getting her e-mails. She also sent me her personal e-mail and agreed to an interview. The interview went great and it was quite an honor for me.

Whoever the guest is, I really try to be respectful of their time. I really want to make sure the experience goes well for them - I may want to have them back sometime, or want their help with a project.

Before doing a program, I send the guest specific instructions confirming the date and time and Call-In phone number. Since some of my guests live in different parts of the country, I also make sure I note EST - and whatever time it may be for them. 1:00 pm here is 10:00 am in California. That may seem like a small thing, but trust me - its important!

Another habit of mine is to send the guest a list of questions personally tailored to them. Some guests have even suggested questions that the like to be asked. By reviewing their website or reading their books, it has helped me quite a bit to learn about them. It helps the interview to go more smoothly.

My objective is to build them up as an expert which (I hope) makes me look like a good guy as well. Speaking of building up, its also very important to use a proper introduction. A good introduction should be at least 3 sentences, highlighting their achievements. You are telling your listeners why you chose this person to be on your show and why their advice will be valuable to them.

One last point on guests - You can't say "Thank You" enough. I always thank them at the end of the program and give them a chance to give contact information and promote their book or services . After the show, I also send an e-mail thanking them for their time once more.

Blog Talk Radio has been a great venue for me. I plan on writing one more article about Blog Talk Radio, which includes tips and techniques. You can contact me through my website, http://www.helpmy401k.us/ and
through Linked In or Twitter.

There is a Free Report now available through my website, "The 5 Biggest Problems With 401(k)s - And How To Fix Them". Please contact me to receive your free copy. This is a sample of my upcoming book, "Help! My 401(k) Has Fallen - And Must Get Up!"

So You Want to be a Radio Star?

2010-02-15T08:12:00.000-08:00

Have you ever listened to people on the radio and thought "I can do that."? Perhaps it was during one of Rush Limbaugh's rants. Or hearing Dr. Phil's homespun Southern style advice. Maybe there are some hilarious morning personalities, like Bob & Tom that you enjoy. Sports call in shows are also quite popular.

Did you ever say to yourself "I could be a radio star too. I just need the chance!" and you never gave it another thought, because you had no idea how or where to start?

Well, if you ever thought these things, and you are reading this - TODAY is your lucky day!

What if I told you that you could host your very own radio program - ANYTIME - even TODAY if you want, and the cost is practically ZERO?

Great News! You CAN do this on Blog Talk Radio. You can talk sports, movies, celebrities, or be educational and informative. Say what you want - how you want. (Well, there may still be a few things you can't or shouldn't say.)

Blog Talk Radio was started in 2006 by Alan Levy, a former accountant and telecommunications executive, who wanted to provide a way for bloggers to communicate directly with their audiences in real time. He set up a blog for his family to provide updates on his ailing father which they could hear. In February of 2008, David Winer of the Scripting News called it "the simplest podcast ever". Blog Talk Radio has been referred to as a site that has become the dominant player in the latest media trend, one that allows anyone with a Web connection to host a talk show on any topic at any time of day. It is the newest form of new media; the audio version of the internet blog. All you need is a telephone and a computer!

Blog Talk Radio's website claims to have "tens of thousands of hosts and millions of listeners tuning in and joining the conversation each month".

It is becoming the newest force in Social Media, and its fun and easy to use. I should know. As a licensed advisor, I've hosted a financial advice program on Blog Talk Radio, "Improving Your Financial Health" since July 15, 2009. My listener base has gradually grown with each program. When I last checked, I had 1272 people who have listened to one or more of my programs and 2262 who have visited my page. My Blog Talk Radio program has just recently been picked up by WHME-FM 103.1 here in South Bend for re-broadcast Saturdays at 9:00 am.

When we normally hear about social media sites, it's normally the "Holy Trinity" of LinkedIn, Facebook, and Twitter which get the attention. I've heard LinkedIn referred to as "business formal", Facebook as "casual" and Twitter as a "worldwide cocktail party. So where does Blog Talk Radio fit in?

Simply put, it's the newest form of blogging - an audio blog. It you believe your message is important and needs to be HEARD verbally, (and you can't seem to limit yourself to 140 characters or less), then Blog Talk Radio may be for you.

I stumbled across Blog Talk Radio last summer. A friend of mine had e-mailed me the link, after I told him about hearing the usual rejections from local stations about doing a financial advice show. What a surprise I found there! There were shows on all types of topics 24 hours a day! A few of them even had celebrity hosts or guests. Bill Cosby has hosted a program there, and Pres. Barack Obama had also joined a broadcast last August during the healthcare debate.

Setting up a profile was very easy - about the same as doing it on any other website. Once you've set up a profile page, go ahead and browse through other programs. Get a feel for what you like (or don't like) You can have a free membership, or a premium one at $39.00/month. I find that the free membership works just fine. Paid memberships allow you to take more calls and schedule programs longer than 1 hour. (You really should be able to say what you want in less than 1 hour!)

Scheduling a program is simple also. Everything about Blog Talk Radio is very user friendly. Just 'name' your show, describe what it's about, and pick a date and time. You can even do a show the same day if you want. Before you know it, you'll be ranting like Rush! You can even select music or sound effects to enhance your show, or have guests. You can even select Revenue Sharing. Just don't expect Super Bowl style bucks to come rolling in.

Customer Service at Blog Talk Radio is exactly that. Even with my free account, I've only needed to contact them a few times. When I do, they are easy to reach, and have always been friendly and helpful at getting issues resolved. You can probably tell by now that I am a huge fan of Blog Talk Radio. There is plenty of potential here.

My next article will include some techniques for using Blog Talk Radio effectively and making it part of your social media package. Please contact me for more information on 401(k) plans or IRAs. You may also contact me on LinkedIn or Twitter. "Improving Your Financial Health" is a weekly financial advice program which often includes intriguing guests - both financial and non-financial.

Tax Credit For Small Businesses

2010-02-10T15:31:00.000-08:00

Are you a small business owner? If not, do you know any?

These days its hard enough to make ends meet and keep your business going. Small businesses like yours are the key to reviving our economy.

Would you like an idea that will help you and your employees to save money and reduce your taxes?

Did you know that when you establish a 401(k) or other kind of qualified retirement plan, you may be eligible for a tax credit equal to 50% of the cost of starting up and administering the plan? The maximum allowable credit is $500 per year for each of the first 3 years of the retirement program. This is according to EGTRRA (Economic Growth and Tax Relief Reconciliation Act of 2001) .

Other types of retirement plans for small businesses which qualify for the tax credit are the SEP IRA (Simplified Employee Pension Plan) and the SIMPLE IRA (Savings Incentive Match Plan for Employees) .

To qualify for the tax credit:

* The plan sponsor must incur qualified startup costs. These would be expenses for setting up or maintaining the plan, or for retirement-related employee education.

* The plan must be a new plan established AFTER December 31, 2001.

* The plan must have at least one non-highly compensated employee. Usually this would be someone who is not an owner and has earned less than $105,000 in the prior year.

* The plan sponsor must have employed 100 people or less who received at least $5000 or more in compensation during the prior year.

Does this sound like your business so far? If I can help you & your employees to save money for your future needs and lower your taxes, please contact me today. This will be part of my upcoming book as well – “Help! My 401(k) Has Fallen and Can’t Get Up!”

I should also mention that unless the current law changes, EGTRRA is set to expire at the end of 2010.

Please contact me for more information on 401(k) plans or IRAs at http://www.helpmy401k.us/.

You may also contact me on Linked In at http://www.linkedin.com/in/dvoelker or Twitter at http://www.twitter.com/deanvoelker. I also host a weekly financial advice program, Improving Your Financial Health at http://www.blogtalkradio.com/401kcoach.

Tax Free Interest In Indiana - Shhh, Your Bank Doesn't Want You To Know

2010-02-05T11:04:00.000-08:00

Do you live in "The Middle"? Besides unpredictable weather and being referred to as "Hoosiers", there are actually a few perks to living in Indiana.

Indiana offers some tax benefits to investors that are unique to our state. Municipal Bonds are very popular here. These bonds are a great (and Safe) way to earn more interest on your savings. The interest you earn on a bond from ANY STATE is FREE from Federal Tax, State Tax, and Local Taxes!

Municipal Bonds, or Munis have been used for over 200 years as a way to raise money to build or improve schools, hospitals, libraries, and roads. These days, stadiums have also been funded by having bonds issued. Once the bond is issued, you can loan money to the project and be repaid with interest which is free from Federal taxes. When the bond matures, you get the amount back which you loaned to the project.

If the bond is issued by your home state, your interest may also be free from State and Local taxes.

Again, the benefit for us "Hoosiers" living in Indiana is this. It doesn't matter which state the bond came from. We enjoy interest income on any muni bond which is free from Federal, State, and Local Taxes!
That may be worth an additional 1.5% - 2% or more on your savings, depending on your tax bracket.
(Check with your advisor when buying bonds to see if you may be subject to Alternative Minimum Tax, depending on your total income.)

Currently, http://www.bankrate.com/ (as of Feb. 4, 2010), shows us what the highest rates are for a 1 Year CD
(1.7%) and a 5 Year CD (3.55%). Dave Ramsey refers to these as "Certificates of Depression". You can see why!

Did you also know that CDs are RISKY? Why is that, you ask?
Easy - You LOSE Future Buying Power!

Let's do the math, and see which option may be better for long term savings.

5 Year Municipal (Investment Quality) Bond at 5%

$10,000 x .05 = $500/year.
$500 x 5 years = $2500 (TAX FREE)
Most Bonds pay interest twice per year, directly to you the investor, so you will get 2 checks each year for
$250 for 5 years. When the bond is due, you get the $10,000 back. That may also happen if the bond is called early, but that's another lesson.

5 Year CD at 3.55%
Remember that was the BEST rate in the US today on http://www.bankrate.com/.

$10,000 x .0355 = $355/year.
$355 x 5 years = $1775, and you WILL PAY TAXES on this.

Hmmmm......let's see.....I can get $2500 in interest that is tax free OR $1775 in interest that is taxable. I wonder which one I should pick......

Did you ever wonder how banks make money? They use your money and either loan it or invest it.
Now you can see why your bank may not share the muni bond idea with you.

If you would like to learn more about Municipal Bonds, please contact me.
You may also contact me for more information on 401(k) plans or IRAs at http://www.helpmy401k.us/.
You may also contact me on Linked In at http://www.linkedin.com/in/dvoelker or Twitter at http://www.twitter.com/deanvoelker. I also host a weekly financial advice program, Improving Your Financial Health at http://www.blogtalkradio.com/401kcoach.

Taking Stock

2010-02-03T05:50:00.000-08:00

I'm not a big individual stock fan. For most people, mutual funds are a much better way to invest. Its easier to be diverisfied and its also easier to add money systematically.

However, I did see something recently which I thought my readers may enjoy. If you were going to invest in stocks, which companies would be good ones to own long-term? At least one sign of a great company is one which is able to consistently increase their dividend payment.

If you aren't sure what a dividend is, think of it this way. When you own stock, you own a tiny piece of that company. Your investment rises and falls with the performance of the company. Over time, you would like to think the company will grow, and your money will grow with it. Companies which have established themselves and become profitable will share part of their profits with you as a part owner. Those profit sharing payments are known as dividends and are usually paid once every 3 months.

Again, the sign of a great company is one which has raised its dividend payment consistently, even in tough times. Raising the dividend for shareholders is like giving them a pay raise. (CDs don't do THAT!!) Those companies would be great to own long term.

What if a company were able to raise its dividend 25 years in a row or more?

Here are the ones which have:
Abbott Labs                     (ABT)
Bemis                               (BMS)
Century Tel                     (CTL)
Chubb                              (CB)
Coca-Cola                       (KO)
Exxon-Mobil                    (XOM)
Johnson & Johnson         (JNJ)
Mc Donalds                    (MCD)
3M                                  (MMM)
Pitney Bowes                  (PBI)
PPG                              (PPG)
Proctor & Gamble          (PG)
Walmart                          (WMT)

S&P reports that since 1926, dividends have contributed to about 1/3 of the total return on your investment.

Another thing I like about dividends is that when the stock price goes down, the dividend yield goes up. Its a great time to buy more of great companies. That is what Warren Buffett does!

For example, lets look at Proctor & Gamble. Shares of PG are currently (2/3/10) at $62.90. Dividends are paid at $1.76/share, which is divided into 4 quarterly payments. You will get a dividend return of 2.8% on any shares purchased at that price.

What if you had been fortunate enough to buy in March of 2009, when it was selling for around $44/share? Well, you still would have gotten $1.76 per share, but that works out to about a 4% dividend return. (Better than a CD, and with potential to grow!)

Warren Buffett has become extremely wealthy because he buys great companies and holds them, collecting dividends which increase year after year after year.

Again, I am not encouraging people to buy individual stocks. There are plenty of financial stocks such as Citigroup and Bank of America which also had wonderful histories of increased dividends, until 2008.
Dividends are certainly something to consider though for any investment - including mutual funds and annuities.

You can contact me through my website, http://www.helpmy401k.us/. You can also contact me on LinkedIn at http://www.linkedin.com/in/dvoelker, or Twitter at http://www.twitter.com/deanvoelker. I am currently hosting a weekly financial advice program, "Improving Your Financial Health" on Blog Talk Radio at http://www.blogtalkradio.com/401kcoach.  Let me know how I may help you!

Are You Linked In?

2010-01-29T12:30:00.000-08:00

Are you "LinkedIn" to social media? LinkedIn http://www.linkedin.com/ is a professional business networking website, which launched in May 2003.

Wikipedia states that Linked In has over 50 Million users in more than 200 countries and territories. According to LinkedIn, a new member joins the site every minute. You can learn some of the basics of LinkedIn at http://press.linkedin.com/about. There is an orientation video here which may help you to utilize some of the site's features.

My first exposure to LinkedIn was in 2006. I was invited to connect by Debra Gould, an acquaintance of mine, whom I had met at networking events a few times. I figured it wouldn't hurt, so I set up my profile, and "Voila!" - I was now part of social media and the internet!

Of course, I could say that my financial advisory business and LinkedIn page grew like wildfire from there, but that wouldn't be true. Several months went by before I even added a second connection. It can can a while for the "lights to come on". Even as I look through my contacts today, I counted 21 who have only 1 connection (me), and 87 (including the onesies) who have 10 or less. This tells me that LinkedIn is still a largely untapped resource.

After I finally did add a few more people in 2007, I started looking at LinkedIn as a good resource for networking. I could see some value in the site and started looking for ways to utilize it better. I started to join groups and also looked for companies in the South Bend, IN area that I wanted to build relationships with, especially for 401(k) marketing and employee education. Using LinkedIn gave me a chance to show them my 'online resume'.

Of all the Social Media sites, LinkedIn has been viewed by many as the most professional and businesslike. I know of a few people who have effectively used LinkedIn in their career search. (Maybe THAT should have been referred to in the "State Of The Union" address with the topic of 'Job Creation'.)

Before I digress too far - Here are a few basic ways you can use LinkedIn as an effective marketing tool and networking resource for your business.

* Add People - That seems like a no-brainer, but sometimes we need to figure out how to get started. Don't be shy. When you get business cards from others at networking events or other places, invite them to
connect. Most cards include an e-mail, which makes it easy. LinkedIn has also done many things to make
the site more user friendly. One of them is "People You May Know", which is a bit similar to Facebook's friend suggestions. If you know them, it is easy to invite and add them as contacts.

In fact, invite your Facebook friends also. You may be surprised at how many of them may view you in a
different light when they see your professional profile on LinkedIn. You can also go through your e-mail contacts and import the list into LinkedIn. This will tell you which of your friends already has a profile here. Again, you will be surprised.

* Enhance Your Profile - LinkedIn should be your online resume. Keep it real, and be yourself, but be your BEST self. Don't just fill in the boxes. Tell others up front what makes you unique and what you can do to help them. Why should they work with you? Do you write a blog? Manage a scout troop? Sing in the church choir? Put those things in your profile, along with previous jobs. You never know what may catch someone's eye and attract them to your business.

* Recommendations - These are your testimonials. Ask people you trust to write one for you. (They may ask for one in return.) My only rule of thumb on giving or receiving is - Make it specific and sincere! The testimonial must mention special skills or services you have performed. "John is a great guy." doesn't cut it. Only sincere, well thought out recommendations will make your profile stand out.

* Join A Group - What topics are you interested in? You can probably find a group that discusses them.
Participate in the discussions by asking and answering questions. Some of my current groups include
Chamber of Commerce of St. Joseph County, Indiana Small Business Development Center, Linking Indiana,
and the Economic Club of Michiana. I have also created 2 of my own, Help My 401(k), and Always Illinois.

A great way to add contacts is to look through the members list. Just click on their profile and send them an invite.

* What Are You Reading? - If you have read something recently which you think others may find interesting, add this to your profile. You may see others also who have read the same book, and that can be common ground for a new connection. If you write a blog on Wordpress, you can also have the blog connected to LinkedIn.

* Search - You can search for people or companies. Are there any companies you'd like to call on, but don't know where to start? Look for them on LinkedIn. More and more companies are on LinkedIn everyday. A company search can tell you everyone who is with that company who has a profile. One word of caution - if the person is no longer with the company, and they aren't an active LinkedIn user, the profile may not be current. But profiles do offer great contact information, including e-mail addresses. The search feature is very easy to use.

I hope these tips help you get started with LinkedIn, or help you utilize the site more effectively.

You can contact me through my website, http://www.helpmy401k.us/. You can also contact me on LinkedIn at http://www.linkedin.com/in/dvoelker, or Twitter at http://www.twitter.com/deanvoelker. I am currently hosting a weekly financial advice program, "Improving Your Financial Health" on Blog Talk Radio at http://www.blogtalkradio.com/401kcoach. Let me know how I may help you!

How I Use Social Media In South Bend

2010-01-29T07:00:00.000-08:00

Recently I thought of how social media has impacted my business as an independent financial advisor. February 5, 2010 officially marks my first anniversary of starting my own office.

Over the past year, I have put together a website, http://www.helpmy401k.us/ as a resource for individuals and small businesses for long-term savings. There are articles, links to other 401(k) related sites, calculators and budget forms to help you with your planning. These tools are especially helpful to help someone see how much they should be saving for retirement.

At that time 1 year ago, I also had a profile on Linked In http://www.linkedin.com/in/dvoelker .

However, I also knew I wasn’t using that as effectively as I could have used it.

Little did I know at the time that having a website was really one the tip of the iceberg. Over the next several months, I tried to learn more about e-mail marketing, blogs, search engines, Twitter, You Tube, and Facebook. I also learned more about how to expand my Linked In profile and improve how I was using it. I established profiles on these social media sites and others. I began writing blog articles, and added more friends on Facebook. I also learned about “breadcrumbs”, to add links to my website whenever I posted a blog, or responded to one. Breadcrumbs can help to drive potential clients back to your site.

Over the summer, I learned about another website, Blog Talk Radio. http://www.blogtalkradio.com/401kcoach. Blog Talk Radio provides a forum for creating a radio pod cast. You can talk about nearly any topic. Anyone with a computer and a telephone can use it. Simply create a profile, schedule a program, and you are all set.

I named my show, “Improving Your Financial Health”. The format is a financial advice program. Listeners can send me questions by e-mail or phone and I answer them on the program. Guests became a key part of the show also. Soon I had a diverse list of financial experts and other interesting people whom I had interviewed.

This was a WIN-WIN for both my guests and also for me. The guests were given a forum to promote their work and I also had a unique way of keeping my name in front of potential clients.

Guests have included Charlie Adams, Darin Pritchett, Kristin Harmel, Laura Rowley, Erica Sandberg, Ruben Gonzalez, and Eric Tyson, to name a few. Another thrill for me came when I was interviewed in December by the South Bend Tribune Business Weekly. Gene Stowe wrote a great article about my business and use of social media websites.
http://www.southbendtribune.com/article/20091207/TBW/912059939

Recently, I have been contacted by WHME-FM (103.1) in South Bend, IN. We have agreed to begin rebroadcast my “Improving Your Financial Health” programs with a 30 minute financial advice show. The first program will be Saturday February 6, 2010. Ruben Gonzalez will be my guest on the first broadcast. Ruben has an amazing story, and will be competing in his 4th Olympics in Vancouver (luge). He is also a top-notch author and motivational speaker.

Interestingly, February 6 is only 1 Day after my first anniversary of opening my own office. Who know what social media may do for my business over the next year?

My next article will cover specific ideas I have used with Linked In.

You can contact me through my website, http://www.helpmy401k.us/.
You can also follow me on Twitter at http://www.twitter.com/deanvoelker.

Farmville Gift Request

2010-01-24T08:53:00.001-08:00

If you have been on Facebook for any period of time at all, you've seen this.

"John (or Jane) Doe sent a request using Farmville." John or Jane sends you a cow or a tree, and courtesy suggests that you send them one back.

I confess that I am not the best 'Farmville neighbor', and really don't play.

Who knew it was such big business?

The latest issue of Smart Money magazine includes an article by Dyan Machan - "Virtual Goods, Real Profits".

Ms. Machan tells us that "this nascent industry is sucking in staggering amounts of capital. In one 30-day span, Playfish, creator of Pet Society, sold for $400 Million. Playdom, with its game Sorority Life, raised $43 Million in financing; and sector leader Zynga raised $180 Million."

(I kind of feel like Dr. Evil with his pinky finger - "$180 Miiiilllllllion Dollars".)

These virtual games don't have to fight for shelf space. They are passed along through Facebook from friend to friend and market themselves. "If the game is a hit, revenue expands exponentially, but not costs." she says.

Ironically, the bulk of social-gaming revenue comes from selling stuff that doesn't really exist - virtual goods.

Playfish claims in the article that it sells 60 million items per day. These items are for players to reach new levels and get more from their games. The game itself is free, but to do well, you need to buy things. Aaaahhhh!!

I guess I'm not really a "social gamer". Numbers like these do make you wonder though.

In case you are curious, Playfish was aquired by Electronic Arts on Nov 9, 2009 for $275 Million. "EA" as it is known, produces a smorgasboard of games for Playstation and X-Box.

Their stock symbol is ERTS and trades on NASDAQ.

Zynga, the "leader" in social media games with Farmville, Cafe World, and Mafia Wars, is not yet publicly traded. Digital Sky Corporation, based in Moscow, Russia purchased its stake in Zynga in December, 2009 for $180 Million.

Keep trading virtual "cows" and "apple trees". It may be keeping the economy going!

You can contact me through my website, http://www.helpmy401k.us. You can also follow me on Twitter at http://www.twitter.com/deanvoelker. I host a weekly internet radio program also, "Improving Your Financial Health" at http://www.blogtalkradio.com/401kcoach.

Tired of Taxes?

2010-01-08T10:16:00.000-08:00

Are you tired of taxes? Tired of hearing about them? Tired of giving your hard-earned dollars to Uncle Sam? Tired of politicians who say they will lower your taxes - then do the opposite?

How would you like a stream of income later in life that you WON'T pay taxes on at all?

That's what the Roth IRA is all about!

The Roth IRA was created as a future Tax Reduction Account in 1997. It's a great way to save for your future retirement. The name "Roth" is in honor of the bill's main creator - late Sen. William Roth of Delaware.

The beauty of the Roth is that there are NO TAXES on either the growth, or withdrawals you take after age 59 1/2. So your income will be TAX FREE!

You can contribute to a Roth IRA for either 2009 or 2010 right now - up to $5000/year. If you are 50 or older, you can put in an extra $1000.

Here are 2 new things in 2010 about the Roth IRA you should know.

* There are no income restrictions for making Roth IRA contributions this year. This allows

more people than ever before to use a Roth.

* You can convert your traditional pre-tax IRA to a Roth by simply paying taxes on the amount

you convert. That isn't new, but what IS new is that you can SPLIT the tax burden over

2 Years - 2011 & 2012.

If you really want less taxes later, set up your Roth IRA (Tax Reduction Account) today. You have until April 15 to contribute for 2009.

You can contact me in South Bend, IN through my website at www.helpmy401k.us. You can also follow my on Twitter at www.twitter.com/deanvoelker. I also host a weekly internet radio program, "Improving Your Financial Health" on Blog Talk Radio www.blogtalkradio.com/401kcoach.

New Years Resolutions

2010-01-04T11:23:00.000-08:00

"Now is the accepted time to make your regular annual good resolutions. Next week you can begin paving hell with them as usual." Mark Twain

Here we are - a New Year. Some also say a New Decade.

What 'Financial' Resolutions have you made? Can't think of any? Here are a few tips.

1. Review and Rebalance your Investments and 401(k)
If you have been putting it off for a while to "wait & see", your account is probably seriously out of balance. Sit down with an advisor to review your goals and make your your fund mix matches what your needs are.

2. Increase Contributions to Your 401(k)
Are you putting between 10% and 15% into your 401(k) at work? If not, then at least raise the amount you are putting in. Gradually work yourself up to that level. You will need the nest egg for income later.

3. Pay Off Credit Cards and Other Debt
If you are having trouble with #2, get these paid off and free up some money for yourself.

4. Set Up a Budget and Stick To It
There are a number of places you can find good basic worksheets for setting up a budget. It should be simple. Just make sure all of your money has a place to go - either savings or expenses. Here is a site with some downloadable sheets. http://www.betterbudgeting.com/

5. Contribute to a Roth IRA and Convert Pre-Tax Retirement Savings
You can put up to $5000 into a Roth ($6000 if you are 50 and older). You can still make 2009 contributions up until April 15. The Roth IRA of course grows tax free and allows you to make withdrawals at retirement which are also tax free.

There are no income restrictions for the Roth this year and if you choose to convert any money from your Traditional Pre-Tax IRA to the Roth, you may spread the taxes out over the next 2 years.

You can contact me through my website, http://www.helpmy401k.us/. You may also follow me on Twitter at http://www.twitter.com/deanvoelker. I also host a weekly internet radio program at http://www.blogtalkradio.com/401kcoach.

Retirement Calculators

2009-12-04T10:37:00.000-08:00

There are some great tools and calculators you can use for free to help plan for retirement. Some of the best ones are those which you may not even know about.

First, not to toot my own horn, but my website, www.helpmy401k.us has a great tab called Investment Tools .

There are calculators there for almost everything. The most commonly used one is the 401(k) Calculator. You could also use the 457(b) calculator if you are a government employee, but the concept is the same.

Simply go to the 401(k) calculator and plug in your own numbers. For example, lets say you are 29 years old with $1000 in a retirement savings account. Lets also say that you earn $50,000 per year and that you follow Dave Ramsey's advice and put in 10% of your pay into your 401(k) or $5000. If you earn an average return on this 401(k) account of 8% and keep doing this until age 66, you will have saved $1,076,087 for retirement. And that does not include an employer match or a raise in pay - EVER. Personal Finance expert Eric Tyson has an idea which may help provide an incentive to save more in 401(k) or IRAs - instead of calling them those names, we should try calling these "tax-reduction accounts".

What if we did figure those in? Easy - just enter those numbers.

Well, lets say your employer matches your contribution by 50% of whatever you put in up to 4%. If you put in at least 4% or more (and we are doing 10%, remember?), that means you are getting another 2% ($1000) from the employer. Also, lets assume they will raise your pay by

2% per year as a cost of living increase. Keeping the other earlier numbers the same, you will now have saved $1,598,680 for retirement.

Here is another one which my be helpful if you are planning to pay off credit card debt. And you should absolutely do that! It will have you save more in your "tax-reduction accounts."

Let's say you have a balance of $2000 in a credit card account. Your current monthly payment is $125/month and your interest rate on the card is 17.5%. (Ugh!) If you do as Dave Ramsey says and do some "plastic surgery" on your card (cut it up and dont use it anymore!), did you know that you can pay the card off in 12 months by just raising your payment to $183/month? It's true and very easy to figure out using the "Credit Card Payoff" calculator on the site. This can be very helpful to see yourself making progress towards your goal, if you can't pay the entire amount, but know you should pay less than the minimum.

In upcoming blog articles, we will look at a few more of the calculators.

You can see these calculators and many other helpful ideas on my website, www.helpmy401k.us. You can also follow me on Twitter at www.twitter.com/deanvoelker . I also host a weekly internet radio program "Improving Your Financial Health" at http://www.blogtalkradio.com/401kcoach .

Wipe Out The Fear in South Bend

2009-10-23T11:29:00.000-07:00

Feel like you are drowning in today's economy?
Inflation?
Shaky stock market?
Sinking dollar?
Unemployment?
Staggering debt?

Watching the news may seem like an ongoing care wreck - especially if you watch Glenn Beck, who always looks like he will suffer a breakdown right on camera - but as horrifying and overwhelming as the news is, you can't seem to pull yourself away.

We don't suffer from a lack of information - rather TOO MUCH information. Its all so confusing and you can feel like the rag doll being pulled apart from all directions.

How does all of this affect your ability to save for retirement? Is it possible to still have goals and dreams? Can you still retire with dignity?

Dan Rather was once quoted as saying "If all of the difficulties were known at the outset of a long journey, most of us would not start out at all."

Nothing great was ever achieved without hardships along the way. As an advisor, my job is to help you resolve your fears. Let's wipe them out and provide some peace of mind.

This year, when I became an iindependent advisor and opened my own office, I've been learning that most people would rather "not lose anymore" than to win with their long term savings. To quote another great American, Will Rogers - "I'm more concerned with the return OF my money than the return ON my money."

With that in mind, my purpose has been to focus on helping people to find a vehicle that would "not lose" and still let you win. What if I could toss you a "Life Preserver" for your savings? Remember when you first learned to swim? Those kickboards or noodles came in handy, didn't they? You learned eventually that the water is your friend. Once you stopped fighting it, and let it help you, swimming became more fun, right?

Russell Pearlman recently wrote an article titled, "Problems? What Problems?" from the November 2009 issue of "Smart Money" magazine. His article focused on annuities, which have become much more popular with investors as a life preserver for long term savings.
"Don't tell that (regarding annuity cost) to baby boomers looking for retirement security at a time when their 401(k) plans are still hurting; they just keep buying annuities. Through the first six months of the year, total annuity sales were almost $127 billion, only a 3 percent drop from 2008." he writes.

Again, the message I get from my clients and others I meet is "We want SAFETY and Peace of Mind."

Can we get "Guaranteed" growth for our long term savings?
Will it be better than current CD rates?
Can we get "Guaranteed" income when I retire - also better than current CD rates?
Can we make sure the income never goes down?
And lasts for a lifetime - even if we live to 100 or beyond?
And when that lifetime does end, can we leave something for our family and loved ones?

In short - YES! Mr. Pearlman goes on to write "Are annuities for you? Experts say the peace of mind may be worth it."

Another of my favorite articles this year was written by Leslie Scism of the Wall Street Journal. "Long Derided, This Investment Now Looks Wise". "Because of such guarantees, many holders of variable annuities actually saw their accounts increase 6% or more in value last year, when the Standard & Poors 500 stock index dropped nearly 39%." Ms. Scism writes.

Contact me today to learn more about how to get a life preserver (or noodle if you prefer) for your savings. Treat yourself to some Peace of Mind!

You can contact me through my website, http://www.helpmy401k.us and follow me on Twitter at http://www.twitter.com/deanvoelker. I also host a weekly internet radio braodcast, "Improving Your Financial Health" at http://www.blogtalkradio.com/401kcoach.

Cut The Fat in your 401(k)

2009-10-14T08:22:00.000-07:00

Last week, we asked “Where’s the Beef?” Today, we ask “Where’s the Fat?”
Its very important to trim the ‘fat’ in your 401(k) plan – or fund expenses. Today on my Blog Talk Radio program, I had a listener ask about fund expenses. These can really affect your long term return on your retirement savings.

Expenses come from managing the mutual fund. The fund family charges a percentage of the assets invested to manage the fund – deciding what to buy, what to sell, and how much to buy or sell and when to do it. Less trading = lower expenses. Also the advisor on the plan may be paid from these expenses.

Knowing this, it would make sense to look for funds in your plan which have a lower expense rate. If its about 1%, that isn’t too bad, much more than that can negatively affect your returns over time.

To give you an example, I did some figuring on my financial calculator . Let’s look at a 22 year old college graduate, starting their 401(k) plan. Of course you would expect them to bump up their contributions over time, but lets say they put in $300/month with an 8% average return until age 66. They would have saved $1,340,048 in 44 years.

What if they were using a fund with expenses that were 1% more? In other words, the fund may have averaged 8%, but the real return was 7% due to higher expenses. With all the other factors being the same, we now have a total savings of $993,985, which is a difference of $346,063. OUCH! If you figure on taking 4%/year of the nest egg at retirement for income, that means we would need to live on less income -$13842 per year less. See where 1% can make a big difference?

So look carefully at your statement. Don’t just look at ‘performance’ but also fund expenses, which do affect long term performance. Have an advisor help you with this and also help you determine how much to save, so you can have the type of retirement you want.

You may contact me through my website at http://www.helpmy401k.us. You can also follow me on Twitter at http://www.twitter.com/deanvoelker. I also host a Weekly Internet Radio Broadcast “Improving Your Financial Health on Blog Talk Radio http://www.blogtalkradio.com/401kcoach

Where's The Beef?

2009-10-09T14:25:00.001-07:00

During the 1980’s there was a very popular commercial by Wendy’s. An elderly lady ordered a burger at a generic fast food counter. Upon seeing how puny and pathetic her tiny burger was, she grilled the sales clerk repeatedly - “Where’s the beef?” The commercial was a huge hit and “Where’s the beef?” was a well known catch phrase.

These days “Where’s the beef?” could easily be applied to the 401(k)s & IRAs of many people. In Daniel R. Solin’s book, “The Smartest 401(k) Book You’ll Ever Read”, he points out that “the typical twenty-something only invests 50.4% of his or her account in stock mutual funds.” You can’t keep up with inflation that way! Mr. Solin goes on to say that as we get older, that figure is also pretty timid. “The typical worker in their forties invests only 54.3% in stock funds.”

It doesn’t matter how old you are. Even people on the verge of retirement should be invested in stock mutual funds with a good part of their long term savings. After all, you could be retired for 20-30 years.

Stocks have been the only investment which has beaten inflation over the long term. And we NEED to prepare for inflation! Did you know that in 1989 (20 years ago), a loaf of bread costs an average of 0.67? And a postage stamp was just 0.25?

Mr. Solin also points out that “If you invested $1.00 in blue chip stocks in 1926, it would be worth $3077.33 today. That pencils out to a 10.42 average yearly return.”

Don’t be too fancy trying to pick the “right” fund. Look for mutual funds with long histories (10 years or longer) and low expenses. High management fees can really affect the return on your investment.

We will be looking at a few other ways to put some “Beef” back into your 401(k) in a future article.

You may contact me through my website at http://www.helpmy401k.us. You can also follow me on Twitter at http://www.twitter.com/deanvoelker. I also host a Weekly Internet Radio Broadcast "Improving Your Financial Health on Blog Talk Radio http://www.blogtalkradio.com/401kcoach
　

Digging A Hole

2009-10-02T12:49:00.001-07:00

Do People still invest in CDs anymore? (Don’t answer that.) I know that they are the “investment” of choice for a number of folks and for banks. Let’s be honest though – Rates are TERRIBLE!!

As of today, Oct. 2, 2009, according to bankrate.com, the best rate on a 12 month CD in the USA is 2.05 at India Bank. For a 3 Year CD, the best available rate is 2.97 at Flagstar Bank.

When I called banks in the area, I actually had to keep a straight face when Diana told me about their “Special Rate” of 1.5% on a 13 month CD – only for current customers, though. Woo-Hoo!!

CDs do appeal to those who want “safety”, which means the FDIC Guarantee. That means your money is guaranteed by the Federal Deposit Insurance Corporation (i.e. the U.S. Government) OK, I feel MUCH BETTER about THAT!!

About a year ago, as part of the new financial legislation, the FDIC raised its limit on the maximum amount guaranteed from $100,000 to $250,000. I’m not sure exactly how that helps Joe Lunchbucket, but there was quite a bit of fuss made about it last October.

Dave Ramsey has often referred to CDs as “Certificates of Depression” and with good reason. Did you know that for 11 of the past 20 years, CDs actually have a “Real Return” that is Less Than 1%? Once you consider inflation and taxes on the interest, it is really about the same as burying your savings in the backyard.

As a retiree, wouldn’t you like to get a better return on your savings? What if you could have your nestegg generate income for you of at least 5% of the principal – and have that income paid to you for the rest of your life?

Often when I meet with clients, I learn about their situation and their goals and suggest an appropriate solution which will help them with their long term savings. Clients normally can see the value, but may get hung up on time frames with CD money. A common response may be “That sounds great. I’ve got a CD due in a couple of months. Call me back then, and we will get back together. I can’t touch it until then.” (The Early Withdrawal Penalty looms overhead like the ‘Grim Reaper’.)

So, being a good guy (I don’t want to see anyone lose money.) I mark the date on my calendar and follow up with them as they asked me to. Except now the situation has changed. The CD was renewed. OR the due date was different from what they thought. OR the dog needs braces. OR….. Bottom Line - EVERYONE (most of all the client) LOSES.

Soooo, this being October, I called 3 leading banks in South Bend to see just how “scary” the Early Withdrawal Penalty is. At Wells Fargo , I was told that the penalty would be forfeiting 6 months of interest on a 16 month CD and 3 months of interest on a 12 month. First Source Bank had the best rate locally on a CD – 1.5% on a 13 month CD, which also came with a penalty of 6 months of interest for early withdrawal. National City Bank (soon to be PNC) told me that you could lose 1/2 of your interest for the remainder of your term or 3 months of interest, whichever is greater.

OK, lets do the math. Let’s say you have a CD of $10,000. You have about 3 months left on the term. Let’s give you the BEST rate (a whopping 1.5%) and the stiffest penalty for taking it out early (6 months interest). $10,000 x .015 x .5 (6 months is 1/2 of a year) = a loss of $75.

But what do you gain? There are only 2 types of money – liquid cash (you need it NOW) and investment savings (you need it LATER). What if you invested it into something that gave you an average return of 5% or more? $10,000 x .05 = $500 after 1 year. Last time I checked, $500 – $75 = a GAIN of $425. And I want the best for my clients. So let’s leave the “scariness” to the little ghouls and goblins on Halloween.

Remember to invest for the long term!

You can always contact me through my website, http://www.helpmy401k.us/. You can also follow me on Twitter at www.twitter.com/deanvoelker My weekly Internet Radio Program is “Improving Your Financial Health” on Blog Talk Radio at http://www.blogtalkradio.com/401kcoach

How To Find A Financial Advisor in South Bend

2009-09-26T06:21:00.000-07:00

So the stock market has rebounded from its low point in March, 2009. As we are wrapping up the 3rd Quarter of this year, I have been reflecting on a few thoughts.

Although we have seen some market recovery, for many of us, 2009 has been more challenging than 2008.

* As I talk with people, I am sensing more uncertainty over the future of the economy and

their plans for retirement.

* Unemployment continues to stay at a high level. Some regions are higher than others

nationally. The Michiana area, with its long ties to the RV and automotive industry, has

experienced higher unemployment than other areas.

* Most recently, according to today’s South Bend Tribune we learned that the Braking

Division of Robert Bosch Corp. will be sold to Akebono Braking Industry of Tokyo, Japan. This

puts more strain on our area’s economy and could result in additional job losses.

* Many of those I have talked with are continuing to look for ways to pinch pennies, cut

corners and make their money last.

The one thing which hasn’t changed is that people still need to live their lives in dignity when they finally retire. And with people living longer than they used to, that takes Savings & Planning. Costs of living will continue to rise as well.

If you are living in the South Bend, IN area, how do you find someone who can help you develop the right strategy for you to reach your goals in these trying times? There are several qualities you should look for when shopping for an advisor, no matter where you live.

* Is he/she a Good Listener? Can you share your dreams & goals with them?

Do they make you feel important? Do they ask you questions such as “What is
important about your savings to you?” and “What would you like your retirement to be
like?” If all they do is tell you about the latest stock tip, or if they do all the talking, it
may be time to look elsewhere.

* Do they have a reasonable amount of experience?

Advisors can sometimes fall into 2 groups. You may not want an advisor that the ink on
their license has not yet dried. Most of us if asked would prefer an experienced advisor,
although you may want to find out if they are accepting new clients, or is there a
minimum amount to invest. There is a great website, http://www.financialadvisormatch.com/.
You can plug in the area you live in and it can give unbiased information on advisors in
that area. Also you can look up an advisor by name.

Another great website to learn information is http://www.linkedin.com/ which is a
professional networking site. This can give you great information about your
Advisor, much like an on-line resume.

* Does he/she have the “heart of a teacher”?

This is a comment often made by financial talk radio show host, Dave Ramsey.

Dave has grown in popularity because people are getting back to basics and
want common sense advice. Most people want investing concepts made simple.
Can your advisor help make this ‘fun’ to learn? Or do they talk in technical jargon?

* Does he/she talk about WHY Investing is so important for all of us?

Can they look at your budget with you and help you determine what type of income
you’ll need at retirement? By helping you know how much income you need (after
Social Security and any other sources of income), you should have a much better idea
for how much you need to be saving - AND put together a plan to do it!

* Will they offer to review your 401(k) and other statements for FREE?

Some advisors are “fee” based and charge by the session or by the hour for advice.
Others work on commission and are only paid when investments are made. For most of
us, this is the fairest method. There will always be times you have a question, and
advice should be free. Depending on how much you invest, you may also qualify for
volume discounts, also known as “breakpoints”.

* Is your advisor independent, or do they work with a larger firm?

This is really a matter of personal preference and there are pros & cons to each. Also
there are great advisors with either side. Many people prefer an established name brand
firm, while others enjoy the personal attention they may get from an independent.
In some ways, you could compare working with an advisor to eating at a restaurant.
There are large national chains, and also individually owned local restaurants which
have found their own niche.

There was a great article earlier this month (Sept 14, 2009)
“Schwab Says Independent Advisers Attract Brokerage Firm Assets”
http://www.bloomberg.com/apps/news?pid=20603037&sid=aYTCv4DGu76Y
by Alexis Leondis of Bloomberg.com. The article shows the results of a survey done by
Charles Schwab about where clients are holding their assets. Ms. Leondis states,
“Almost 90% of the independent Registered Investment Advisors said that they gained
assets in the last 6 months and 45% of the assets came from so-called full-service
brokerage firms.”

Whether he/she works independently, or with a larger firm, your advisor can’t prevent
market declines. However, working with someone you are comfortable with should at
least help you to feel better about the future of your retirement.
Best wishes in your search!

Dean Voelker is an Independent Registered Investment Advisor in South Bend. He has
been licensed in Indiana and Michigan since 2003. You can follow Dean on Twitter, and also find his profile at Linked In and Financial Advisor Match. Dean also hosts a weekly Podcast program

on Blog Talk Radio, "Improving Your Financial Health". 　
　
　
　

Raising Arizona - More SOLUTIONS for College Costs

2009-09-08T12:15:00.000-07:00

Last time we looked at some solutions for college savings such as a regular savings plan and also working part time during High School.

What if you do those things, but it still isn´t enough to cover college costs? Or perhaps you are getting started late in the game?

Here are some ways to help pay for college even if you haven't saved much. (Besides winning the lottery or robbing a bank.) The first way is actually pretty obvious - although families don´t utilize it as much as they should. Contact the Financial Aid department from your college and make sure you have applied for any and all scholarship money that you have a chance to qualify for. Don´t leave any "free" money on the table.

Going along with this scholarship idea, does Johnny (or Jill) play any sports? Recently, on my Blog Talk Radio program, http://www.blogtalkradio.com/401kCoach/2009/09/02/Improving-Your-Financial-Health
I visited with Charlie Adams, the Senior National Speaker for the National Collegiate Scouting Assocaiation of Chicago. Charlie helps many high school athletes get scholarships to play various sports in college. Normally when I think of athletic scholarships, I would think of football and basketball at large universities.

However, Charlie points out that there are plenty of scholarships given to students who are decent athletes and good students. Colleges offer a wide range of athletic opportunities such as golf, lacrosse, cross country, and rowing. In fact, Charlie´s son Jack earned a scholarship to Millsaps College in Mississippi for cross country.

Charlie also talks about a book, "Athletes Wanted" by Chris Krause. http://www.ncsasports.org/about-ncsa/about-chris-krause The book points out that employers have a growing need to ¨hire quality people for their companies. Recruiters love interviewing candidates who have played collegiate sports. They have learned the value of goal setting, teamwork, time management, and motivation. So if Johnny or Jill have some athletic skills, look into this as an option.

One thing to keep in mind - Johnny and Jill need to keep their grades up. To qualify for scholarships at smaller schools in sports, there is more of an emphasis on the "Student" part of student-athlete. You may contact Charlie Adams at www.stokethefirewithin.com.

What if your child doesn't play sports? Could they be entreprenuers? There are several examples of students who saw a need and figured out a way to fill the need and profit from it. They learn (on their own) valuable skills in sales, marketing, and business management. This would also set them apart from other candidates when its time to leave college and interview for work. Here is an article on "Teen Money Making Ideas". http://teenmoneymakingideas.com/how-college-students-can-make-money-in-the-summer-in-12-of-the-top-home-based-businesses/

If Johnny starts a business and it really takes off, he may find his career in the process. There was once a college student named Bill Gates who actually dropped out of Harvard to focus on his Microsoft business full time. (Of course the reason was that he felt he wasn´t learning anything new about computers.)

If you like this option, you may want to look at books about young men and women who have started successful businesses. A great website for information is http://www.quintcareers.com/college_entrepreneur_resources.html

"OK" you think. "But I´m not Bill Gates or Shaquille O´ Neal.What else can I do?"
There are other ways to learn entrprenuerial skills in organizations which are already established. Looking back on my college years, I had an opportunity to work with the Southwestern Company. www.southwestern.com. Southwestern has been around since 1855. They have a long history of helping college students to earn money for college. Students also learn some valuable lessons in the process - motivation, goal setting, business management, how to sell, and how to deal with all types of people.

Southwestern works with over 3000 students per year in the US and the UK, and the average First Year student earns $2733/mo during the summer months. Like many other opportunities, as a student gains experience, they may become more proficient.
http://www.southwesterninfo.com/FAQ.aspx Please contact Southwestern for more information.

If none of these really work for you, there is one more idea on paying for college, and its also a great one. Talk to a local recruiter about military service. For the student who hasn't yet figured out what they want from college or what they want to do in life (and at 18, who really has it figured out?), the military gives you time to figure things out. Military service also teaches skills such as teamwork, goal setting, perseverance, and time management. And they can help you to pay for school. http://www.military.com/money-for-school/tuition-assistance/army-tuition-assistance

I've met a number of people who have served for 4 years, then went to college with money from the government. As I mentioned in my last article, a 20 year old freshman has a good chance of being more mature than an 18 year old. Wouldn't you agree then that a 22 year old freshman with skills learned in the military would be even more mature and ready to learn? It certainly adds to a resume, and can lead to all types of career choices later.

I hope these have been helpful ideas. None of them involve taking out a loan, and if we can avoid that, we'd all be better off. You can contact me at my website, www.helpmy401k.us or follow me on Twitter at www.twitter.com/deanvoelker. My Blog Talk Radio program airs weekly and the archives may be heard at www.blogtalkradio.com/401kcoach.

Raising Arizona (and Arizona State and Others) - SOLUTIONS

2009-09-02T15:05:00.001-07:00

In my first part on this, we looked at the problem of rising college costs. I believe we are at a point where students must “do their homework” before taking out a college loan. You want to be sure that you will get a good return on your investment and be able to pay it back easily. Ideally, you’d like to NOT take a loan at all. College is now a “business” decision, not a right.

I wouldn’t be a good advisor to bring up a problem without mentioning some viable solutions. There are enough good ideas, that I will talk about a few now and a few more in my next piece. None of these are magic – but if you apply these common sense ideas you’ll be better off than doing nothing. So here are some ways to Make College More Affordable.

* Saving in a 529 or UTMA plan (regularly)

The key word here is “regularly”. You can set up either of these plans as soon as your baby is born. (And I highly recommend that!) Did you know that if you were to save $100/month for 18 years (216 months) at an average return of 8%, you’d have saved $46,865? And $200/month over the same period = $93,730.

The 2 plans are different, but the idea is the same. The 529 http://en.wikipedia.org/wiki/529_planallows for tax-free withdrawals for college related expenses. Here in Indiana, since 2007, you can also get a 20% tax credit on any contributions to a 529 plan. Put in $5000 and you get $1000 back in the spring. Also, money can be transferred between family members. If it isn’t used for college, you are simply taxed on the growth at withdrawal.

UTMA (U -T – M – A ….you ain’t got no alibi, its UTMA!) OK, so I should give up on ‘cheerleading’ – but I couldn’t resist. This is the Uniform Transfer to Minors Act. A parent or guardian acts as a “custodian” for an account in the child’s name. http://www.fairmark.com/custacct/regret1.htm until the child reaches age 21. At that time, the money is turned over to the child. This is also counted in the child’s assets when you go to apply for financial aid later.

One advantage that someone may see in the UTMA is that it doesn’t matter if the money is used for college or not – although there are no tax benefits. They have full control over the money.
Personally, I prefer the 529 plan (for the tax benefits) and have set one up for both of my daughters. Whichever plan you choose, (talk to your advisor) the most important thing is to save something regularly.

Another note here – a common question I get is whether families should contribute to retirement or college.If you must choose – retirement savings trump college. ‘Nuff said.

* Part Time Work

Wow, real genius stuff here, Dean! I told you this wouldn’t be ‘magic’. But think about this. I believe students should learn the value of a dollar – and appreciate the value of education. When I was in High School, I cleaned tables and washed dishes for a local family restaurant. Part of my pay went into my ‘college’ account.

Currently minimum wage for “flipping burgers” is $7.25/hour. What if Johnny flipped burgers for 3 years at Mc Donald’s and put $400/month into his college savings? In 3 years, Johnny would have saved $14,400. Between this idea and the last one, we’ve put a good dent into Johnny’s college costs, and haven’t even gotten to financial aid yet.

Not able to save as much as we’ve talked about? Getting started ‘late’ with savings? What about putting off college for a year or 2, to build up savings. There is no law that says YOU MUST enter college immediately after high school. (I checked). In fact, chances are very good that Johnny (or Jill) may be more mature at 20 and get more from their college experience, having spent some time in the ”real world”.

I’d much rather see Johnny (or Jill) wait a bit and not be burdened with debt after they graduate. If they do this, they must focus on the idea that college is still in the plan - flipping burgers is only temporary.

* Go to School, Live at Home

Being in the Chamber, I often attend networking events. Recently I had a chance to visit IUSB (Indiana University at South Bend). I was very impressed with the quality of the facilities and was very surprised to learn that their enrollment exceeds 7500 students. http://www.iusb.edu/about/ (You may have heard there is another school here in South Bend).

People are saving quite a bit by having Johnny and Jill live at home while going to college.Because IUSB is affiliated with Indiana University, many programs are similar. For those not living in this area, I would be willing to wager that you have a similar local university nearby.

In the next article I will continue to explore some other ideas which can help make college more affordable.

You can contact me at www.helpmy401k.us and follow me on Twitter at www.twitter.com/deanvoelker.My weekly Blog Talk Radio program, “Improving Your Financial Health” is at http://www.blogtalkradio.com/401kcoach.

Raising Arizona (and Arizona State and Others)

2009-08-26T10:57:00.000-07:00

OK, I know - cheap marketing gimmick to get you to read it. Sorry I don't have anything Nicholas Cage here. However this may be more valuable information than the movie.

Inflation affects everything - the price of bread, milk, gasoline etc. But one thing that seems to have gone up even more drastically is the cost of college. When I graduated from the University of Illinois in 1986, I left with about $3000 in student loans, which was easily repaid in a few years.

Today, student loans can reach $19,000 or more for a graduating senior from a public college.
http://encarta.msn.com/encnet/departments/financialaid/?article=averagestudentloans For
private schools that figure may be even higher.

Want to study law or medicine? For as long as I can remember (back to my finger painting days), those were the "good money" jobs. Both professions require years of post graduate education and loans can easily climb into the $100,000 range. Recently, I saw a young female med student on the news questioning President Obama about his healthcare proposal. Her concern was that at graduation, her total student debt would exceed $300,000 - yes that was not a typo. She wasn't sure if her future income would be sufficient to pay it back.

Really?? I think some thought should have gone into this before taking the loans. Its hard to blame either the President or his healthcare bill for that. Out of curiousity, I checked to see what a monthly payment on this would be. To pay off $300,000 in 12 years at 5% interest would require a monthly payment of $2775.00. Now you could take longer or the interest rate may be different, but this gives you an idea. Certainly its out of my ballpark.

Dave Ramsey always encourages his listeners to look at the opportunity cost of buying something - whether its a car, a flat screen TV, or even college. http://www.daveramsey.com/etc/cms/go_to_college_5788.htmlc

What that means is - even if you have the money, what other opportunities might you be missing? What else could the money be used for? When it comes to college, can you really afford it if it means loading yourself down with debt? What is your re-payment plan going to be?
How likely is it to get a career in your chosen field of study that will allow you to re-pay the loan?

I'm not anti-college. I just want us to think and ask questions first before jumping in.

In the early days of the United States, colleges such as Harvard and Yale were primarily for the wealthy. As the country grew and times changed, state schools offered a wider range of programs and more people were able to attend college.

"No qualified student who wants to go to college should be barred by lack of money. That has long been a great American goal. I propose that we achieve it now." Former President Richard M. Nixon said this in a special message to Congress in 1970. A lot has happened in the past 40 years. Are we back to a point where college is only for the wealthiest among us?

As a Financial Advisor, I will say that college does require financial planning and disciplined saving. Flipping burgers for the summer will only scratch the surface.

In my next part on this, we will look at some solutions which can help with college costs.

You can contact me at www.helpmy401k.us and follow me on Twitter at www.twitter.com/deanvoelker. You can also listen to me on Blog Talk Radio at www.blogtalkradio.com/401kcoach.

Top 10 Things About Being a Financial Advisor in 2009

2009-08-21T12:30:00.000-07:00

This was something I came up with today, mostly while driving to an appointment.

Hopefully you find 1 or 2 of these funny!

Top 10 Things About Being a Financial Advisor in 2009

10. Mac & Cheese for dinner again?

9. IRA means "I Raided my Account"

8. Going to Networking Meetings = FREE Food!

7. My Healthcare Plan = Take 2 aspirin. If that doesn't work, take two more.

6. My vocabulary now includes words like "Tweet", "Re-Tweet", "Un-Friend" and "Blog"

5. Drycleaning means airing out the suit when its "dry" outside.

4. "Honey, I sold the kids on E-Bay."

3. I've got "followers" from Spain who promise I can make a fortune on the web.

2. Really starting to look at those "Take a Penny" trays literally.

and the Number One thing about being a Financial Advisor in 2009 is.....

1. Going to Facebook Anonymous meetings. "Hi my name is Dean. I'm a Facebook-aholic."

Have a Great Weekend! You can contact me for real financial advice at http://www.helpmy401k.us. You may also follow me on Twitter at www.twitter.com/deanvoelker, and my web broadcasts at http://blogtalkradio.com/401kcoach.

If You Knew You'd Get a "B"

2009-08-18T09:21:00.000-07:00

Soon, all the kids will be back in school. My daughter can’t wait to see her friends and show off her new outfits. Back-To-School time usually also means plenty of sales which should get the cash registers ringing in your local retail shops.

Since we are just getting started, it’s too early to think about report cards and grades yet….or is it?

What if you knew at the beginning of the year, that your grade at the end of the year would be at least a “B” and no worse – no matter what? Better still, what if you got an “A” in one quarter, and a “C” in the other quarters – and at the end of the year, you got to keep the “A” as your grade for the year?

If that were true, how would you feel about going to school? Would you be more relaxed? Would you want to learn more? Would school be more fun?

Well, GUESS WHAT!! I can’t do much about Johnny’s math grade, or Susie’s US History Course, but I can provide solutions which may improve your confidence in investing.
How can you do that, you ask? Variable Annuities can provide Safe Growth and Safe Income.

Recently, Leslie Scism of the Wall Street Journal wrote “Because of such guarantees, many holders of variable annuities actually saw their accounts increase 6% or more in value last year, when the Standard & Poor’s 500-stock index dropped nearly 39%.” in her article “Long Derided, This Investment Now Looks Wise”. http://online.wsj.com/article/SB10001424052970204900904574302270919454880.html

Currently, you can earn as much as 7% or more on your principal base when you aren’t using it for income. That means if you start with $100,000, by the end of the year, you would have $107,000 to draw income from later – no matter what happens in the market. (As long as you leave it there.) And it can grow tax-deferred until you begin to take it out.

What if your account does better than 7%? Also, what if it only does better than 7% for one quarter? Wouldn’t it be great to keep the best quarter and lock it in for the year? Well….you CAN!

What if you could do this every year while you are building your Nest Egg? What if you went into the school year knowing you would at least get a “B”….and might get an “A”?

Then when you begin to take income from your savings, you can take 5% from the nest egg you’ve built for the rest of your life. The check would go up or stay the same, but never go down. (As long as you aren’t taking more than 5%.) Would that be OK?

There are some drawbacks to a Variable Annuity, which Ms. Scism also points out in her article http://online.wsj.com/article/SB10001424052970204900904574302270919454880.html the most obvious being the cost of the extra protection. George Lambert also points this out in his article, “The Cost of Variable Annuities” http://www.investopedia.com/articles/pf/06/variableannuity.asp in which he looks at the different types of protection – Growth Protection, Income Protection, and Death Benefit.

Another drawback is that when you consider investing into a Variable Annuity, you need to take a Long Term approach – like any other investment. Speak with a reliable advisor about whether or not it may be appropriate for you based on your time horizon and income needs at retirement. Early withdrawals may result in steep surrender charges, although many plans allow you to withdraw as much as 10% with no surrender charge.

The main advantage of course is taking the uncertainty over today’s economy out of the picture. And if you knew you’d get at least a “B”, wouldn’t you sleep better at night?

For more information on annuities, or other investment ideas, you may contact me at http://www.helpmy401k.us/. You may also follow me on Twitter at www.twitter.com/deanvoelker. I am also hosting a weekly internet radio podcast at http://www.blogtalkradio.com/401kcoach.

Most Magical Place

2009-08-14T10:47:00.001-07:00

Having 2 very young daughters, I’ve become quite familiar with the Disney Channel, but its amazing to think of how large this company is and how it affects our lives in many ways, known world wide for family friendly products.

This is NOT an opinion or endorsement of Disney Stock - simply a few interesting facts about its history. The Walt Disney Company (DIS) has been part of the Dow Jones Industrial Average since May 6, 1991.

The Walt Disney Company started in 1923 in the rear of a small office occupied by Holly-Vermont Realty in Los Angeles. It was there that Walt Disney, and his brother Roy, produced a series of short live-action/animated films collectively called the ALICE COMEDIES. http://studioservices.go.com/disneystudios/history.html

“Mickey Mouse” which still serves as the logo and mascot for Disney was originated in 1928, as one of the short animated films.

In 1937, Disney's innovative first full length animated feature, SNOW WHITE AND THE SEVEN DWARFS, was released. Walt Disney saw a need to increase the size of his studio, and moved it to Burbank, CA. He was involved with all aspects of the design, even the animators chairs. More movies such as FANTASIA, BAMBI, CINDERELLA, ALICE IN WONDERLAND, and PETER PAN were produced in the 1940’s and 1950s.

In 1954, Walt Disney had a vision of creating a Family Theme Park. Disneyland was completed in July, 1955. Disney World Magic Kingdom opened in Orlando, FL in October, 1971. To this day, Disneyland and Disney World are the standard for cleanliness, customer service, and family fun in theme parks. Sadly Walt Disney died in 1966, and did not see the opening of Disney World.

Today, the Disney entertainment empire includes Disney movies, the ABC family of networks, ESPN, the E! Entertainment Network, and of course the Disney Channel. Disney has helped launch the acting and musical careers of such recent stars as Justin Timberlake, Britney Spears, Christina Aguilera, Miley Cyrus, and the Jonas Brothers to name a few.

Disney issued its first public stock on November 12,1957. http://corporate.disney.go.com/investors/stockinfo/quote_1957.pdf The stock closed on its first day at $13.88. It has split 7 times since then, the last split happened in 1998. http://corporate.disney.go.com/investors/split_history.html. One share of DIS stock over that time due to splits & spinoffs would be worth close to $6000 today.

For more information, you can contact me directly at http://www.helpmy401k.us and you may also follow me on Twitter at www.twitter.com/deanvoelker.
　
　
　

Something's "Fishy"

2009-08-07T06:49:00.001-07:00

All this talk about "fishy" comments yesterday got me to thinking.....
　
Another great American Fast Food chain is Long John Silvers. According to their website, www.ljsilvers.com , the restaurant was inspired by Robert Louis Stevenson's "Treasure Island".

The first restaurant opened in 1969 in Lexington, Kentucky, as a response to other fast food chains which were becoming popular at the time - specializing in quick service seafood. The chain began as a division of Jerrico, Inc., which also operated Jerry's Restaurants, a chain of family restaurants which also began in Lexington, KY throughout the Midwest & South.

In the UK, fish and chips became a cheap food popular among the working classes in the second half of the nineteenth century. http://en.wikipedia.org/wiki/Fish_and_chips Deep-fried "chips" (slices or pieces of potato) as a dish, may have first appeared in Britain in about the same period. There was a mention of "chips" in Charles Dickens' "A Tale of Two Cities" (1859) "Husky chips of potatoes, fried with some reluctant drops of oil".

Earlier Long John Silvers restaurants were known for their Cape-Cod style buildings, blue roofs, small steeples, and nautically-themed decorations such as seats made to look like nautical flags. Most early restaurants also featured separate entrance and exit doors, a corridor-like waiting line area, food heaters that were transparent so customers could see the food waiting to be served, and a bell by the exit which customers could "ring if we did it well." Many of these buildings had dock-like walkways lined with pilings and thick ropes that wrapped around the building exterior.

Until its bankruptcy in 1998, Long John Silvers was a privately owned corporation. It was then acquired by Yorkshire Global Restaurants, which also owned A & W American Food Chains. In March 2002, Yorkshire was purchased by Tricon Global Restaurants, Inc. which had spun off from Pepsico, Inc. Tricon owned Taco Bell, Kentucky Fried Chicken, and Pizza Hut worldwide. Tricon then changed their name to Yum Brands, Inc. (NYSE: YUM)

www.yum.com

Until then, Long John Silvers had served Coca-Cola Products. Once the acquistion by Yum Brands was in effect, they switched to Pepsi. Currently, Long John Silvers has more than 1200 restaurants worldwide – and more than 200 additional locations in Yum Brands, Inc. multi-brand restaurants. Nearly four million customers each week "throw boring overboard".
This is NOT an endorsement or an opinion of YUM stock. From 1997, Yum Brands/Tricon has grown from $8.06/share to a high of $41.73 on April 30, 2008. http://finance.aol.com/charts/yum-brands-inc/yum/nys/tech-chart Yesterday, August 6, 2009, YUM closed at 36.05.

For more investing information, you may contact me at http://www.deanvoelker.com . You may also follow me on Twitter at www.twitter.com/deanvoelker, or Blog Talk Radio at

http://www.blogtalkradio.com/401kcoach.

The Real Thing

2009-08-06T09:30:00.000-07:00

Recently, I've been thinking about what else to write about. We've covered a wide range of topics - annuities, tax-free bonds, mutual funds, the importance of savings, and 401(k)s.

Although I am licensed to buy & sell individual common stock, I strongly believe that most people should own them within mutual funds. There are a number of companies that have some very interesting stories though. One of them is Coca-Cola.

This is NOT an opinion of Coca-Cola's stock, or an endorsement - merely some history, which I hope you will find as fascinating as I do.

According to Wikipedia,

http://en.wikipedia.org/wiki/Coca-Cola , the first Coca-Cola recipe was invented in a drugstore in Columbus, GA by John Pemberton in 1885. Pemberton developed it as a non-alcoholic version of French Wine Cola. The first sales were at Jacob's Pharmacy in Atlanta, GA on May 8, 1886. It was initially sold as a patent medicine for 5 cents a glass at soda fountains. Many people at that time believed that carbonated water was good for your health. Pemberton claimed Coca-Cola cured many diseases, including morphine addiction, headaches, and even impotence (the first "Viagra"?).

Asa Candler acquired a stake in Pemberton's company in 1887 and incorporated it as Coca-Cola Company in 1888. Due to some controversy in ownership, Candler incorpoarted a second time in 1892 as THE Coca-Cola Company. Coca-Cola was sold in bottles for the first time on March 12, 1894. The first outdoor wall advertisement was painted in 1894 as well in Cartersville, GA.

Although the company grew and even had a celebrity endorsement from baseball star and Georgia native, Ty Cobb http://www.tycobbfoundation.com/ common stock for Coca-Cola never went public until 1919. http://beginnersinvest.about.com/od/investmentbanking/a/aa073106a.htm

In 1919, you could buy one share of Coca-Cola (NYSE - KO) for about $40/share.

http://beginnersinvest.about.com/od/investmentbanking/a/aa073106a.htm

However, the price quickly fell to $19 due to a sugar shortage. http://query.nytimes.com/gst/abstract.html?res=990CEEDA1131E433A2575AC1A9619C946195D6CF Times were tough due to World War I. I'm certain many people gave up on this investment, and lost out. Had they stayed invested over the long term, that ONE SHARE of Coca-Cola stock, with splits and dividends reinvested is worth OVER $5 MILLION TODAY!!

http://beginnersinvest.about.com/od/investmentbanking/a/aa073106a.htm

Coca-Cola joined the Dow Jones Industrial Average on March 12, 1987.

http://www.encyclopedia.com/doc/1P2-1310943.html

For more information, please contact me at http://www.helpmy401k.us. You may also follow me on Twitter at http://www.twitter.com/deanvoelker.

Caught In The Web

2009-08-03T13:43:00.001-07:00

One of the truly wonderful things about being an Independent Financial Advisor is that it has really allowed me to open myself up and explore new and different ways of connecting with prospective clients.

I'm sure you'd agree that the past couple of years have been difficult for investors, haven't they? Difficult because of disappointing returns on your savings. Even if you don't consider yourself a stock market investor, you are discouraged with interest rates on your CDs and savings accounts.

However a dangerous side effect to all of this has been that many people have scrapped solid investing principles. They have become like ships without a rudder, not knowing where to turn, and fearful of trusting anyone or anything. Times like these are when we really NEED professional advice more than ever, wouldn't you agree? So where do you find good sound professional advice? Whom do you trust?

For someone like myself, I'm learning that traditional marketing methods - cold calling, mailers, and print ads have been less effective than usual in reaching out to others and making connections. Have you noticed that over the years, TV and Radio Programs include MORE ads and LESS programs? http://www.nydailynews.com/archives/entertainment/2005/07/28/2005-07-28_kelley__too_many_ads_on_netw.html

Its like that old Wendy's ad (oops there is another one!) "Where's the Beef?"

We've become jaded and resistant to traditional marketing. Again, my belief is that people need professional advice NOW more than ever. For me, its also very important to connect with clients whom I can truly serve. A great client is one that we have established a bond of trust. They have shared their goals and dreams with me, and they are open-minded to my advice. When they hear my advice, they can easily see that I want to help them reach their goals, and my advice is truly in their best interests.

So how does one find "great clients" without traditional marketing methods that aren't effective?Using social media websites has been one solution. Writing this blog has been fun, and its allowed me to provide professional advice which anyone can use and benefit from.

Linked In (www.linkedin.com/in/dvoelker) is a great site to reinforce my professional side. It is my online resume and helps me to establish my credentials. I'm also very active in my local Chamber of Commerce (www.sjchamber.org). This provides some great networking opportunities.

Twitter (www.twitter.com/DeanVoelker) allows us to say anything to the whole world (in 140 characters or less). This is a good way to post notices for my blog or other articles of interest.

Facebook (www.facebook.com/dean.voelker) is an absolute blast, which has allowed me to show a more personal side, as well as professsional. And of course, all of these sites allow you to access my own website (www.helpmy401k.us), which serves as another excellent resource for retirement savings.

Most recently, at the suggestion of my friend, Brian, whom I've know since high school, I've also begun a weekly internet radio broadcast (www.blogtalkradio.com/401kcoach). Brian has extensive radio experience and has been very helpful in helping me get started. This show has been a lot of work, but also fun to do, and certainly helps to set me apart from other advisors.

I've always been a believer in giving. What goes around comes around. My faith in God tells me that we will get throught this challenging time, and be stronger for it. Someone recently told me that God is never in a recession. Have Faith!

Please contact me at www.helpmy401k.us if I may be of service to you in any way.

Climbing The Mountain

2009-07-27T14:18:00.000-07:00

Thanks to my 7 years old daughter, I’ve been exposed (repeatedly) to the music of Miley Cyrus (aka Hannah Montana). Although my musical tastes are more in line with 1970’s & 1980’s Classic Rock, I have to admit that Miley’s music is pretty good.

One of her best songs, “The Climb” is popular right now, and it’s a very inspiring song. Hearing “The Climb” makes me think about how saving for retirement can be much like climbing a mountain. There may be obstacles along the way, but we keep climbing, and the climb is actually the best part of the process.

There are really 2 parts to climbing a mountain, going up and then coming back down. This makes a great analogy when thinking of your retirement savings. “Going up” is building your nest egg. “Coming down” is when you are beginning to take income from the nest egg you’ve built. Both parts are just as important, aren’t they?

If you are in the “Going Up” stage, and trying to build your nest egg, having a year like 2008 can be discouraging. What if you could get at least 7% or more every year on your savings? What if you were able to get even more in years when the market does better then 7%?
How about if I also told you that if you stayed invested for 10 years, you would DOUBLE your original investment? (By the way, according to the Rule of 72, that would be an average compound return of 7.2%.) http://en.wikipedia.org/wiki/Rule_of_72

Lets say you have an account which grows by 10% at the beginning of the year, hits its peak in June, then tails off for the rest of the year. What if I told you that the highest Quarterly Gain (in this case the end of June) would be locked in for you, in helping to build your nest egg?

The next year, the same thing would happen. The benefit base would increase by either 7% OR whatever the highest quarterly gain was.

What about “Coming Down” the mountain and taking income? How about if I told you that beginning at age 63, you would be able to take 5% from the benefit base you built and you could take 5% for life? Wouldn’t it be great to know that your pay can go up, if the account continues to grow - and your pay won’t go down?

And for those who can wait until age 75 to begin taking income, would you like to be able to take 6% FOR LIFE? Sounds pretty good so far? Wouldn’t you feel more comfortable climbing your mountain if you had a “safety net“? For more information, please contact me at http://helpmy401k.us/. You may also follow me on Twitter at www.twitter.com/deanvoelker.
　
　

This Time Its Different - II

2009-07-23T12:48:00.000-07:00

Recently I posted an article, titled “This Time It’s Different”. Most people when asked about the idea of investing in the market, have responded that “They are waiting to see what happens” and yes, “This Time It’s Different because…..”

If you read my previous article, “This Time It’s Different”, http://5reasonsyoushouldownaroth.blogspot.com/2009/07/this-time-its-different.html I referred to a study done by Hartford on the Recession of the mid 1970’s (1973 & 1974), arguably the closest parallel to our present economic situation. The low point in the market was Sept. 30, 1974. The Dow closed at 607.87 (not a misprint) This was down more than 40% from its high in 1972, when it crossed the 1000 mark for the first time. http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389×4124348

The stock market had gone through back-to-back negative years for the first time since the Great Depression.

We should set the stage a bit at this point. In 1972, we were still heavily involved in the Vietnam War, which was highly unpopular, and dragged on for several years. Also, in 1972, the Watergate scandal began. This resulted in the indictment and conviction of several of Nixon’s closest advisors, and ultimately in the resignation of the President himself, on August 9, 1974. http://en.wikipedia.org/wiki/Watergate_scandal

To make matters worse, the Oil Embargo http://en.wikipedia.org/wiki/1973_oil_crisis was put into effect by OPEC, which refused to ship oil to the US due to their support of Israel at that time. Unemployment had reached a high of 6.7% in 1974. http://www.nytimes.com/2008/12/06/business/economy/06jobs.html

So things in 1974 looked pretty bleak. I recently read a letter written by Jim Fullerton of the Capital Group to shareholders at that time(November 1974). Here are some highlights from Mr. Fullerton’s letter.

“Each economic, market, and financial crisis is different from previous ones. But in their very difference, there is commonality….. Today there are thoughtful, experienced, respected, economists, bankers, investors, and businessmen who can (tell) you why this time the economic problems are different; why this time things are going to get even worse – and hence, why this is NOT a good time to invest in common stocks, even though they may appear low…..This time is a whole new ball game.”

“In 1942 everybody knew it was a whole new ball game…..The Germans had overrun France. The British had been thrown out of Dunkirk. The Pacific Fleet had been disastrously crippled at Pearl Harbor. We had surrendered Bataan, and the British had surrendered Singapore. The U.S. was so ill-prepared for a war that……75% of our field artillery was equipped with horse-drawn, French 75mm guns.” (Mr. Fullerton served in WWII.)

“In April 1942, inflation was rampant…..On April 8, 1942, the lead article in the (Wall Street) Journal was: ‘Home Construction, Total far behind last year’s. Private Builders hardest hit.’…..Washington D.C. also considered more drastic rationing with price fixing, or still higher taxes as a means of filling the ‘inflationary gap’ between increased public buying power and the diminishing supply of consumer goods.”

“A leading stock market commentator wrote: ‘The market remains in the dark as to just what it has to discount. And as yet, the signs are still lacking that the market has reached permanently solid ground for a sustained reversal.”

“Yet on April 28, 1942, in that gloomy environment, in the midst of a war we were losing, faced with excess-profits taxes and wage and price controls, shortages of gasoline and rubber…..and with the virtual certainty…..that once the war was over, we’d face a post-war depression, the market turned around.”

“Now I’d like to close with this: ‘Some people say they want to wait for a clearer view of the future. But when the future is again clear, the present bargains will have vanished. In fact, does anyone think that today’s prices will prevail once full confidence has been restored?’ That comment was made by Dean Witter in May of 1932 – only a few weeks before the end of the worst bear market in history.”

“Have Courage! We have been here before – and we’ve survived and prospered.”

Jim Fullerton

As of today, July 23, 2009, the Dow is up nearly 200 points, crossing the 9000 mark for the first time this year. This is a gain of over 38% from its low point of 6547 on March 9, 2009. Yes, This Time It’s Different.

For more information, you may contact me at http://www.helpmy401k.us. You may also follow me on Twitter at www.twitter.com/deanvoelker.

Credit Myths

2009-07-20T09:54:00.000-07:00

There is an old saying that if you tell a lie loud enough and long enough, then over time, the lie will become accepted as truth.

Like many of you, I had bought into the credit card myth. I believed that having a credit card was aprt of life and that you "needed" one to rent a hotel room or make other purchases.

Recently, I've discovered that one of the best ways to Improve Your Financial Health is to perform some "Plastic Surgery". There is an overwhelming feeling of freedom and relief when you take a pair of scissors to that piece of plastic in your purse or wallet.

Dave Ramsey discusses this in further detail in his Financial Peace University course.
www.daveramsey.com

Imagine how much simpler your life would be without credit card payments or other loan payments. Imagine being totally debt free, or at lest debt free except for your home.
How much money could you save if that were your situation?

If you had $10,000 or more in a savings account, to be used only for emergencies, would you be able to worry less about the possibility of something happening?

One of the best definitions I have heard of "Financial Security" is this:
Financial Security means being able to afford almost anything you want - AND wanting very little.

When you tell a lie or spread a myth long enough, it will eventually be accepted as truth.

Here are a few "myths" about credit which have been told to us over & over again through marketing and the media.

Myth: You need a credit card to build credit.
Truth: A credit card does not "build" credit. In mnay cases, it can even destroy credit.

There is NO positive side to credit card use. You will spend more if you use credit cards. Even by paying the bills on time, you are not beating the system! Most families don't pay on time. The average family today carries $8,000 in credit card debt according to the American Bankers' Association.

When you pay cash for a purchase, you can "feel pain" of the money leaving your hand. This is not true with credit cards. Flipping a credit card up on a counter registers nothing emotionally. If you use credit cards instead of cash you will spend 12-18% more. This is money you could have saved.

Myth: What about my credit score or FICO score? Don't I need a good score for getting a job,
getting loans.
Truth: The FICO score (Fair Issac Corporation) was created in 1958 as a way of determining the likelyhood that a person will pay their debts. http://en.wikipedia.org/wiki/Credit_score_(United_States)

In other words, it is a debt score. It measures what debts you have and how likely you are to pay them. People with no debt over a period of several years actually have a ZERO score. Wouldn't it be better to have ZERO debt as a measurement of managing your money, than a 'score'?

Myth: Wouldn't it help to get a debt consolidation loan? That is a good way to get out of debt.
Truth: When you do a debt consolidation, you just move the debt from one place to another. 88 percent of the time people do debt consolidation, they don’t change their behavior and go right back into debt. You can't borrow your way out.

The best way to eliminate debt is by putting together a budget, and putting your debts on a sheet and knocking them out one by one, starting with the smallest balance.

Myth: 90 Days Same as Cash or 0% Financing is a good deal.
Truth: This is an advertising gimmick. Businesses are in business to make a profit.

When companies use this method, they simply build the extra right into the price. Then when you don't pay it off in 90 days, they can charge you interest on top of it at rates from 24-35%. Worse, they will backcharge the rate all the way back to the date of purchase. And they know that most of the time, people won't pay it off on time. Again, the reason for doing this is to make a profit - once when they sell the item, and again when they can charge you interest.

Please contact me for more information. You may reach me through my web site. www.helpmy401k.us. You may also follow me on Twitter. www.twitter.com/deanvoelker

How Do I Keep My IRA From Being Eroded By Taxes When I Die?

2009-07-09T14:58:00.000-07:00

Recently, I have been reading “The Retirement Savings Time Bomb…and How To Diffuse It” by Ed Slott. Ed is a highly renowned CPA and tax advisor. He has written for the Wall Street Journal, the New York Times, and USA Today. His book focuses on strategies to keep money in your savings, and away from the IRS.

One strategy of his, which I also recommend to my high net worth clients is the use of Life Insurance for estate planning. Because Life Insurance proceeds are not taxable, it’s a great way to pass money to your beneficiaries without creating a tax burden for them.

Ed uses a great story to make his point on why insurance is important. With his permission, I have included an excerpt from his book. Ed Slott’s website is www.irahelp.com.
******************************************************************************
If you’re not a baseball fan, then the name Bill Buckner probably doesn’t ring a bell. But if you follow the game, you’ll recognize it as one of the most ignominious names in the history of baseball.

Bill Buckner was the first baseman for the Boston Red Sox in the 1986 World Series when the Sox were matched against the New York Mets. It was Game 6. The Red Sox were an out away from winning a World Series for the first time in 68 years. The ball was pitched, the Mets batter swung and connected with a thunderous c-r-a-c-c-k-k, sending the ball straight to first base and the outstretched arms of Bill Buckner, who flubbed the catch before the stunned but elated crowd in New York’s Shea Stadium, letting the ball roll between his legs!

Thanks to this colossal error, the Mets were able to pull their fanny from the fire, win the game that night, and go on to win Game 7 and the World Series title. The city of Boston has never forgiven Bill Buckner. Last I heard, he’d moved to Idaho, which apparently still wasn’t far enough for Boston fans. To Boston Red Sox fans in particular, and to baseball fans in general, Bill Buckner remains but one thing: The Man Who Dropped the Ball.

Now, what if I told you the Bill Buckner was also one of the best players ever to play the game of baseball? Would you be shocked? Disbelieving? I know I was when I heard that exact statement mad in a recent show about Buckner called “Beyond the Glory” on the Fox Sports Network. Being an accountant by trade, I decided to do my own audit of Buckner’s statistics to see if the show was right.

But how would I find those statistics? Easy. I went to a local baseball card store and asked the owner if he had any Bill Buckner cards for sale. He looked at me like I’d sprouted two heads.
“Why would you want a Bill Buckner card?” he asked. “Nobody wants them. That’s why I don’t carry any. We’d never sell them.” But I persisted, and he said he’d check around the baseball card grapevine to see if he could come up with one.

I went back in a few weeks and, lo and behold, he’d managed to dig up a few old Bill Buckner cards for me. “How much?” I asked.

He said, “They’re worthless. You can have ’em for free.”

I thanked him, took the cards home, and quickly checked Bill Buckner’s statistics. Fox was right. The numbers were astounding!

Bill Buckner played 22 seasons. Only 25 players in the history of baseball have pleyed more games then he did. He’d gotten more hits than 70% of the players currently in the Baseball Hall of Fame, including such superstar names as Mickey Mantle, Ernie Banks, Reggie Jackson, Johnny Bench, and even Ted Williams. He had 500 more hit’s the Joe Di Maggio!

When Buckner played for the Chicago Cubs, he won a National League batting title. He was also an exceptional fielder. He genuinely was one of the greatest players the game of baseball has ever had. And yet he will be forever locked in the Baseball Hall of Shame for that one slip-up at the end of his career that cost the Red Sox the World Series.

As I pondered the ill-fated career of Bill Buckner, I found myself thinking, “He’s a lot like an IRA. He had such a brilliant career, accumulated so much, but in the end lost it all due to one error, and now his name is mud.”

Is that how you want your family to remember you? As the guy (or gal) who dropped the ball?
Most people don’t think about it much, but the combination of estate and income taxes can easily consume an IRA of any size. Combined, estate taxes, along with federal and state income taxes could easily exceed 90%.…..

When it comes to retirement accounts, its not enough to earn great investment returns. Yes, that is important in building the account, but even if you earn 30% per year, every year for 30 years, what good is it if, at the end of the line, up to 90% of the account’s value is lost - which can happen if the funds aren’t there to pay the combined estate and income taxes on an inherited IRA, and so the IRA itself must be used to pay those taxes.

If an IRA must be tapped to pay tax when the IRA owner dies, the result is a cycle of taxation that doesn’t stop until the beneficiaries are so punch drunk that they don’t know what’s happened to them, let alone to their IRA…..

Do something now while you are still alive and options to protect that money for your heirs still exist. Life Insurance is your retirement account’s best defense to offset the tax burden which beneficiaries may face.
******************************************************************************
For more information, please contact me at http://helpmy401k.us. You may also follow me on Twitter at www.twitter.com/deanvoelker

This Time Its Different

2009-07-02T11:33:00.001-07:00

Last year (2008), the Dow Jones Industrial Average fell about 34% (www.djindexes.com), then dropped ANOTHER 20% in the first 2 months of 2009.

It is estimated that investors accounts have declined in value by about $10 TRILLION DOLLARS TOTAL. http://www.businessweek.com/mediacenter/podcasts/cover_stories/covercast_03_05_09.htm

Severe recessions such as this one can test the resolve of even the most experienced investors.
It is easy to say "This time its different." Many people are still feeling that way.

However, it is important to keep in mind a few points.

* Financial decisions (any financial decisions) should not be based on emotion.
* Historically, after every past recession, the market has gone on to hit new highs.
* Declines in the market & economy, even our most severe ones, have been temporary.
* Since 1926, the Dow Jones has had TWICE AS MANY positive returns as negative ones.
Despite more than 12 recessions dating back to 1926, $1.00 invested in the Dow in 1926
would have been worth $2045.00 at the end of 2008.

The late Sir John Templeton, founder of Franklin Templeton Investments liked to say, "The Four most expensive words in the English Language are 'This time it's Different.' "

The National Bureau of Economic Research www.nber.com http://www.nber.org/cycles/
states that the United States has weathered a recession EVERY decade since the 1920's. https://financialprofessional.hartfordinvestor.com/planco/om/P7135.pdf - Page 4.

As painful as the recessions are, when we are experiencing one, they have always been short lived, about 11 months on average. It can be difficult to predict when one will end, and announcing the "end" may take a while. According to NBER, they have waited an average of 15 months before declaring an "end". This way they avoid confusion. If there is further economic turmoil, it can be linked to a new recession, rather than the old one.

While we are "waiting to see what will happen" rebounds are often quick and robust. Stocks tend to recover about 6 months before the economy does. According to Morningstar www.morningstar.com, stocks are referred to as a leading indicator. On average, stocks have returned about 25% from market lows to the "end of the recession".

Did you know that the Dow Jones has increased by nearly 30% since its low point on
March 9, 2009? Have you been "in" the whole time, or did you go to something "safe"?

3/9/2009 - 6547
7/1/2009 - 8504

"The most expensive words in the English Language are 'This time it's different'."
Sir John Templeton

If you went to cash, thinking you were being "smart", think again. Cash can actually slow your recovery, and make it much harder to get your savings back.

In a recent study, Hartford shows data from the recession of 1973-1974, which had been our most severe until the present one. The study (please contact me at www.helpmy401k.us for more information) shows 4 seperate scenarios, each starting with $100,000 invested in equities on Dec. 31, 1972.
(Equities are represented by the S & P 500 Index. Cash is represented by the 30 Day Treasury Bill Index.)

In the study, they wanted to see how long it would take to recover the original $100,000 for the Low Point in the Market (Sept. 30, 1974)

Investor A (stayed in Equities) - back to $100,000 in July 1976 (1.75 years)
Investor B (moved to cash for 6 months, starting 9/30/1974) (5.3 years, or Jan. 1980)
Investor C (moved to cash for 12 months, starting 9/30/1974) (also 5.3 years)
Investor D (moved to cash for 18 months, starting 9/30/1974) (6.2 years, or Nov. 1980)

Yogi Berra sometimes said, "Its deja vu all over again."

In a challenging economy such as this one, isn't this precisely when you need a financial professional working side by side with you?

For more information, please contact me at http://www.helpmy401k.us. You may also follow me on Twitter at www.twitter.com/deanvoelker.

Lets Say I Live To 100

2009-06-30T06:22:00.000-07:00

People are living much longer these days. With modern medicine, technology, and taking better care of ourselves, reaching 100 is much more common than it used to be. According to a Wall Street Journal article from April 14, 2008, Hallmark sold over 85,000 “Happy 100th Birthday”
cards in 2007. And that is just Hallmark. Currently the average life expectancy for a Female is 87 years, and 85 years for a Male.

Living that long is great, but it can also raise concerns about your savings. What are you doing to make sure your money lasts that long also? Can your savings generate income for the rest of your life, even if you live to 100 or beyond?

Also, how prepared are you to keep up with rising costs? Did you know that 20 years ago (1989), the cost of a postage stamp was 0.25 and a gallon of gas was about 0.97? Compare those prices with today. A stamp is 0.44 and a gallon of gas…..well it fluctuates more than the stock market. As of today, it is about 2.45, and last summer had peaked well over 4.00.

If you are retired for 20 years or more, costs will go up. How can your savings handle that? Can you give yourself “Pay Raises” and still make it last?

One last question for consideration - this past year was one of the most challenging ever for investors. How can you grow your income, make your money last, and do it “Safely”?

Here are some tips that may help answer these burning questions.

* Talk with your advisor. And if you don’t have a strong relationship with your advisor, or
you don’t feel they have your best interests in mind, find a new one. Your advisor needs to be a
great listener, and your partner - NOT just a stockbroker. Tell them what your needs are.
What is most important to you about your money?

* Be Open Minded. If your money is going to last for your lifetime, CDs aren’t going to get it
done. Especially at the current bank rates today. There are other ways you can invest, and
let your money grow over time safely. A good advisor should learn as much about you as
they are able - just like a doctor who will learn your history before prescribing anything.

“Whatever you fear most has no power - it is your fear that has the power.”
Oprah Winfrey

* Be Diversified. I’ve always thought of “diversification” like clothes in your closet.
You need to have clothing for summer, winter, fall, casual wear, dressing up,
working in the yard…..ALL occasions and ALL types of weather. Investing needs to be
the same. Would you like less risk? The best way to do that is by diversifying.

“Money, you should pardon the expression, is a little bit like manure. It doesn’t
do any good unless it’s spread around, encouraging young things to grow.”
Barbra Streisand

For more information on how to make your money last to 100 or beyond, please contact me at
www.helpmy401k.us. You may also follow me on Twitter at www.twitter.com/deanvoelker.

Income For Life

2009-06-25T08:23:00.000-07:00

One of my clients once told me that the biggest lesson he learned in retirement was this. You don't retire on a Lump Sum of Money. Rather, you retire on the INCOME which the Lump Sum of Money can create. Think about that statement for a bit. Let it sink in. In fact, let me repeat it, because this is what retirement means. You don't retire on a Lump Sum of Money. Rather, you retire on the INCOME which the Lump Sum of Money can create. You spend your working career saving, accumulating, investing, and building a "lump sum". At some point, you will want to use it for income.

Soooo.....what exactly is a "Lump Sum of Money"? Is it $100,000? $300,000? How about $1,000,000? More than that?

The best way to answer that is that the amouth may be different for everyone. However, we can help you to narrow down what you amount should be at retirement. Here are 4 steps.

1. Determine your monthly budget. You don't want any debt at retirement. Leave plenty of
room for "Miscellaneous" expenses - travel, kids, hobbies. If you aren't working, you are
spending.

2. Determine your Social Security Income amount. There are 3 categories for Social
Security income - Reduced Benefit (usually age 62), Full Benefit (usually age 66), and
Enhanced Benefit (age 70). As the terms suggest, if you take Social Security at an earlier age,
you are "stuck" with a smaller amount of income - and "Grounded For Life." There has also
been a growing movement for proposed changes in Social Security in order to make the
money last longer. At least one of those changes includes pushing back the age for Full
Retirement Benefits, which would force most of us to work longer. Whatever benefit amount
you select, you need to know the amount so it can be applied to your budget.

3. Do you have other sources of income? These may include rental property, part time
work, or anything else which generates income.

4. Look at your budget again, and deduct your budgeted expenses from your total
income.
This sounds simple - and it is- however you would be surprised at how many people don't do
it. Do you have enough income to cover your expenses? Is there money to do "special" things
you want to do in retirement? Travel? Golf when you want?

If there is a "gap", how much is the gap? Let's assume there is a gap of $800/month. $800 x
12 months = $9600/year. Now let's take $9600 and divide it by .04. (4% is a reasonably
"safe" amount to withdraw from a lump sum.) $9600/.04 = $240,000. Now we have a "lump
sum" goal of saving for retirement. This can be saved in your 401(k), IRA, Roth IRA, or
ordinary savings. Do not retire until you have this amount saved to cover your additional
budgeted expenses.

In a future article we will look further at annuities and how they can provide income for life. We also need to consider the impact of inflation on your savings.

For more income on annuities or on budgeting, please contact me at http://www.helpmy401k.us. You may also follow me on Twitter at www.twitter.com/deanvoelker

Using Protection?

2009-06-16T12:19:00.000-07:00

That should have gotten your attention!

In my last post, I discussed some basics of annuities. Annuities can offer some protection for your savings which other investments, such as stocks or mutual funds do not. Keep in mind that the value of your account may still go down.

Lets talk about a few protections which you may get from an annuity.

GUARANTEED DEATH BENEFIT - The first one, common to most annuities, is the Guranteed Death Benefit. What is means is that if you invested a sum of money into an annuity, your beneficiaries will receive at least that amount (minus any income or withdrawals taken).

For example, lets say that John puts $100,000 into a variable annuity. The market goes south, and the value of the annuity dips to $80,000, when John dies. If he has not taken income, his heirs will get the full $100,000. Now lets say that the market goes up, and the account grows to $120,000. When John dies, his heirs get $120,000. In this case, it would not matter if he has taken income - if the account value has grown from his original investment, his heirs get the account value.

GUARANTEED GROWTH - There are a lot of different insurance brokers who provide annuities, and not all of them offer this. Whichever provider you use, I would certainly recommend using a large, stable, reputable (Name Brand) company. The protection is only as good as the insurance company backing it.

I have become familiar with Jackson National Life, one of the largest annuity providers in the US. They have an AA rating in Financial Strength from Fitch & Standard & Poors, which is Very Strong. What that means to a client is that they should feel secure with the protections they are getting on their money. (Source: Jackson Life http://www.jackson.com/)

Jackson offers a Fixed Account Option on its annuities. The Fixed Option offers a 1 Year Interest Rate, which is reset each year, but is never less than 3% (Special Benefit Value). 3% actually looks pretty good right now, doesn't it?

Lets say that John starts out at age 55 by investing his $100,000 in a Fixed Index Annuity. Assuming that the annuity value has grown by 3% per year, by age 65 (10 years) it will be worth $134,392 minimum. (Source: Jackson Ascender Plus Select Brochure, http://www.jackson.com/).

A Variable Annuity should provide more growth over time, however its performance is related to the stock market. The Standard & Poors Index, also referred to as the S & P 500 represents the largest 500 companies in the USA. It has been the measuring stick for comparing investment performance.

If John had been investing his $100,000 in a Variable Annuity using the S & P Index, Jackson lets you have a "win-win". If the market goes up, the account will also go up. If the market goes down, the account value stays the same. This would have been particularly valuable in 2008 when the S & P declined by 42.9%. The value in John's account would have been the same. Had John kept his money invested over the last 10 years, he would have $145,825 today. (Source: Jackson Ascender Plus Select Brochure, http://www.jackson.com/)

I will look at Guaranteed Income Options in another segment. I will also look at additional charges for these features (where they apply). Please keep in mind that an annuity is not for everyone. You should consult with your advisor to determine if an annuity is right for you.

For more information, you may contact me at http://www.helpmy401k.us/. You may also follow me on Twitter at http://twitter.com/DeanVoelker .

"OK, Now What?"

2009-06-11T13:34:00.000-07:00

The market has performed much better over the past 3 months. From a low on 3/09/09 to now, the S & P has risen over 34%. This is an encouraging sign for investors.....BUT.....(as a friend of mine might say, "That's a mighty big but you have!")

All kidding aside, the question we all face is - "OK, Now WHAT?" As I talk with clients, attitudes range from "Gloom & Doom" expecting yet another downturn in our roller-coaster ride, to "Cautiously Optimistic". A common quote is "I don't want to lose anymore." (Sound familiar?)

We still have the same issues - we are living longer than we used to. Hallmark sold over 85,000 birthday cards last year for individuals who had reached at least their 100th birthday. The 100+ group is our fastest growing demographic and current life expectancies are 85 for males, 87 for females.

Over that time, being retired for 25 or more years, you WILL see inflation. As certain as death & taxes.

* Do you have enough money to live 25 years or more in retirement?
* Are you prepared to keep up with rapidly rising costs?
* Is your money protected well enough to weather another economic storm?

How can you get growth, income, and protection at the same time? One idea is with a variable annuity. Please meet with your advisor to determine if a variable annuity is right for you. There are several benefits (protections) which annuities offer which are appealing. I'll address these in a future article, but for now lets look at the basics.

According to wikipedia http://en.wikipedia.org/wiki/Annuity_(US_financial_products), an annuity contract is created when an individual gives a life insurance company money which may grow on a tax-deferred basis and then can be distributed back to the owner in several ways.

A variable annuity works much like a mutual fund (or funds). The funds, known as subaccounts, are held and backed by an insurance company. The insurance company can provide protections on your investment for income, death benefit, and in some cases they can even provide a minimum rate of growth. The 'catch' is that you pay for the protection thru annual fees and charges.

Annuities (and insurance) has changed much over the past 10 years. New government regulations has made insurers to become more client friendly, easier to understand, with more benefits to clients.

One way to look at the positive changes in annuities is to think of improvements made in other products. Think of cell phones for example. When they first arrived on the scene in the 1980's, phones were heavy (remember the backpacks!), expensive, with poor reception, and few features. Now think of them today - you can do all kinds of activities on a cell phone, even take pictures, videos, and use the internet - and the phone easily fits into your pocket.

I will be covering more on annuities to come. You may contact me at www.helpmy401k.us. You may also follow me on Twitter at www.twitter.com/DeanVoelker.

Fixing Your 401(k) - Part 7

2009-06-06T07:29:00.000-07:00

Problem #6 - Education

Of all the issues we have been discussing that are plaguing 401(k) plans right now, the biggest is EDUCATION on how it works. Why? Very simple. If proper education was taking place, it would help to solve the other issues, and reduce the liability each employer and plan sponsor currently faces.

Jackson Life did a survey of several passers-by and asked them questions about 401(k)s. (Source Rollover Rx, Jackson National Life Insurance) If you have ever watched Jay Leno do his "Jaywalking" bit on the Tonight Show, you have a pretty good idea of how it went.

Here are a few actual responses when people were asked about education offered by their employers for their 401(k) plans.

"I wasn't aware of any education."
"Don't participate in this. Its on a webinar."
"Information meetings are inconvenient to attend. I'm too busy."
"I think there is on line stuff, but I don't think anyone uses it."
"What can you tell me about it?"

I have personally talked to several clients who tell me that when there are "meetings", the advisor simply hands out his card and runs thru a quick power point presentation, then asks if there are any questions. This is usually met with blank "deer in the headlights" looks.

Education must be done on an INDIVIDUAL BASIS. Everyone's situation is different.
John, the 49 year old manager is in a different spot from Brandon, the 24 year old sales rep, who is new to 401(k) investing - although Brandon needs to know he is in a great place to get started now. Kim, the 35 year old customer service rep, may be thinking about borrowing against her plan, and Sue, the 42 year old customer service manager, is new to the company and wants to know how much she should invest, and what funds to pick.

How can you address individual situations in a "webinar" or "power point"?

A survey done by The Spectrum Group (www.spectrem.com - Source Jackson Life, Rollover Rx) tells us that 85% of employees want professional advice, however only 37% of employers offer any real contact with an advisor. That is not good for the employees, or the employer/sponsors, who are exposing their companies to liability and potential lawsuits. http://accounting.smartpros.com/x40690.xml

So what should you be doing?

Let's review the Problems I've covered so far.

Problem Current Situation Solution
Participation We don't participate & Start participating in your plan don't contribute enough. and max it out.

Portability Too many cash out when Roll the old 401(k) to the plan with
changing jobs. your new job, or to an IRA.

Loans Heavy tax consequences Set up an savings fund of 3-6 mos
and penalties. expenses. Don't borrow on 401(k)

Investments We try to 'advise' ourselves. Diversify. Get professional advice.
Its your money, your future.

Education Not enough advice by Find an advisor you can work with.
employers.

Here are 3 key questions you & your advisor should be asking.

1. Do I have enough money to live through at least 25 years or more in retirement?
How can I make my money last for the rest of my life?

2. Will my savings & income keep up with rapidly rising costs?

3. How can my savings be protected against declines in the stock market?

Let me end with this quote from one of my favorite songs.
"Working so hard to make it easy......got to turn....turn this thing around - Right Now!
Its your tomorrow. Right Now! Its everything." (Van Halen - Right Now)

Bet you never thought you'd see a Van Halen reference in an article on retirement!

Get started on your plan - Right Now! Meet with your advisor today and get started on Improving Your Financial Health. For more information, please contact me at http://www.helpmy401k.us. You can also follow me on Twitter - http://www.twitter.com/DeanVoelker

Fixing Your 401(k) - Part 6

2009-06-03T08:50:00.000-07:00

Problem #5 - Investments (Company Stock)

Do you own stock in your own company? Companies have always encouraged employees to think like an owner. By owning stock, you are a part owner of your own company. There is nothing wrong with that idea, and if you work for a large company which issues stock, that may be an option available to you in your 401(k) plan.

But how much should you own? Not more than 5-10% of the company in your 401(k). There are just too many "Murphys" out there. http://www.murphys-laws.com/murphy/murphy-true.html

Mutual funds are much more recommended as a way to spread your money out so it can grow.
“Money, you should pardon the expression, is a little bit like manure. It doesn’t do any
good unless it’s spread around, encouraging young things to grow.” Barbra Streisand

One of the worst examples of company stock going sour in a 401(k) is Enron. Enron has been a running joke since 2002 for their collapse due to fraudulent business & accounting practices.
Many of their workers lost their life savings when Enron filed bankruptcy and their stock was rendered worthless. http://www.albionmonitor.com/0202a/enrontimeline.html

Enron's 401(k) plan was enormous - over $1 Billion in total assets, of which $600 Million was in Enron stock - That is 60%! Enron offered a matching plan of up to 6% of an employee's base pay - but paid the match in STOCK, not cash. When the stock plummeted from over $90 per share to less than a $1.00 in 16 months, their employees lost their life savings and any chance at retiring the way they had planned.
http://encarta.msn.com/media_701610605___1___6/the_fall_of_enron_stock.html

Please meet with your advisor if you have more than 10% of your 401(k) or portfolio in company stock. For more information, or to contact me, please visit http://www.helpmy401k.us. You can also follow me on Twitter at http://www.twitter.com/DeanVoelker

Fixing Your 401(k) - Part 5

2009-06-01T09:50:00.000-07:00

Problem #5 - Investments

If you have been following me on this blog lately, you might think that I'm against the idea of 401(k) plans. Not so! Let me state this clearly. I LOVE 401(k) plans as a source of saving for retirement. EVERYONE should be participating in a 401(k).

However, there are many potential hazards that you must be aware of in your 401(k) plans.
So my purpose here has been acting as a 'caddy' and letting you know where the bunkers & water hazards are at so we can avoid them. And I certainly want you all to finish the 'course'.

Today, we will look at the problem which most investors find it easiest to point fingers at -
Investments.

How many investment choices are offered in your plan? And how do you choose which ones are right for you? How long do you stay with invesments in your plan before you look for
"greener grass"?

A survey done by Watson Wyatt in January 2008, (Watson Wyatt is the trusted business partner to the world’s leading organizations on people and financial issues)
http://www.watsonwyatt.com/us/pubs/insider/showarticle.asp?ArticleID=18489
gives us this information.

* 30% of all participants have NO equity (stock mutual funds) in their plans.
* 20% of investors at least 45 and older have stopped contributing.
* Too many people are invested heavily in their company stock, some who have at least
50% or more of their plans in company stock.
(Company stock is an issue I will look at in further detail in my next article.)

Dave Ramsey likes to ask this question - If you were CFO of your own finances, would you fire you? Well, the reality is that YES YOU ARE the CFO of your finances & retirement savings!

"Investors Behaving Badly: An Analysis of Investor Trading Patterns in Mutual Funds" is a 2001 article that shows people are holding their funds for shorter and shorter time periods, as short as 2.9 years, and probably even less time these days after all of the challenges recently.
http://spwfe.fpanet.org:10005/public/Unclassified%20Records/FPA%20Journal%20November%202001%20-%20Investors%20Behaving%20Badly_%20An%20Analysis%20of%20Investor%20Trading%20Patt.pdf

This is like moving your boat all around the pond in search of the 'perfect' fishing spot. It usually just scares the fish! This also explains why people finally give up and put everything into "safe" money market funds, because as one gentleman puts it. "At least I'm not losing nothing."

Wayne Gretzky said (during his playing days), "I skate to where the puck is going, not where it has been." How do we know where the 'puck' is going? We don't. That would mean market timing, and as Warren Buffett would say, "I'm not smart enough for that."

How many funds should an employer's plan offer? Anywhere from about 12 - 20 is a good range. Your personal plan should meet these objectives.
* Look for funds which have 10 year (or longer) histories. Established funds give a much
clearer long term picture of what to expect.
* Pay attention to fund expenses. The higher the expenses, the more it can hurt your return.
* Treat the plan as if you are at a "buffet". The plan offers a menu of choices, and it is best to
have somthing from all of the food groups. Just as you wouldn't eat only the fried chicken,
you also need fixed income, dividend paying funds (large companies), medium sized
companies, small companies, and international.
* Meet with an advisor to help you find the mix you should have and how much to put in.
Many good advisors (including myself) offer to do this at no charge to you. Let him or her
help you put a roadmap together which will help you get to (and through) retirement
safely.

Next we will examine the issue of company stock in 401(k) plans. For more information or to contact me, please visit http://www.helpmy401k.us/. You can also follow me on Twitter at
http://twitter.com/DeanVoelker

Fixing Your 401(k) - Part 4

2009-05-29T11:39:00.000-07:00

Problem #3 - Loans

"Brother, Can You Spare A Dime?" (Bing Crosby 1932)
http://www.youtube.com/watch?v=eih67rlGNhU

There has been a popular myth lately that it is OK to borrow against your 401(k) plan. The most common thing I hear from those I talk with is "I'm paying myself interest!"

If you believe that, I've got some GM stock for you that you should buy!

All kidding aside, this could be the worst idea ever with regards to retirement savings plans. Dave Ramsey, nationally syndicated financial expert, has some thoughts on this as well.
"Never, ever borrow on your retirement." Dave says in response to this question. http://www.daveramsey.com/etc/askdave/index.cfm?event=dspAskDave&intContentItemId=7802

Yet, almost 1 in 5 401(k) plans (18%) have a loan against it. This is according to Transamaerica for Retirement Studies in their annual survey. www.transamerica.org
http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=3838

Reality is NOT "paying yourself interest", but rather paying credit card interest to borrow your own money. OUCH!

What are the Tax Consequences on a 401(k) Loan?

When you borrow, you have 2 options -
1. Pay it back.
2. Don't pay it back.

Of these, the best of course is to pay it back. However, did you know that when you do, you face DOUBLE TAXATION? You are paying interest with after-tax dollars that will be taxed AGAIN
at withdrawal.

What about not paying it back? Well, obviously your investment takes a hit & you could be taxed up to 35%, and face the early withdrawal penalty of 10% if you are younger than 59 1/2. If you leave the company, the loan is automatically listed as a withdrawal, so it is "repaid".
Again, you are paying interest, not to yourself, but to a lender on your own money.

What does this mean to your investment? It lowers the balance, certainly. How much depends on how many times the loan is taken, what amount, investments, payback and several other factors.

Please don't "Spare a Dime" from your 401(k). You will need this money later!!
For more information, please contact me, Dean Voelker, at www.helpmy401k.us