Why You Should Not Panic Sell During A Down Market
  • Our LocationWallingford, CT 06492
  • Office Phone(203) 949-1710
  • Client Login
  • Home
  • Financial Services
    • Fee Based Asset Management
      • Overview
      • Details
    • Risk Management
      • Overview
      • Details
    • Tax Planning & Preparation Services
      • Overview
      • Details
    • Plan Development
      • Overview
      • Details
    • Estate Planning & Distribution
      • Overview
      • Details
  • Your Goals
    • Millennials
    • Generation X
    • Baby Boomer
    • Serious Investor
    • Business Owner
  • Why Choose Us
    • Our Difference
    • Your Benefit
    • In the Media
  • Life Changes
    • Divorce
    • Employment
    • Long Term Care
    • Inheritance or Settlement
    • Marriage & Family
  • The Team
  • Contact
  • Home
  • Financial Services
    • Fee Based Asset Management
      • Overview
      • Details
    • Risk Management
      • Overview
      • Details
    • Tax Planning & Preparation Services
      • Overview
      • Details
    • Plan Development
      • Overview
      • Details
    • Estate Planning & Distribution
      • Overview
      • Details
  • Your Goals
    • Millennials
    • Generation X
    • Baby Boomer
    • Serious Investor
    • Business Owner
  • Why Choose Us
    • Our Difference
    • Your Benefit
    • In the Media
  • Life Changes
    • Divorce
    • Employment
    • Long Term Care
    • Inheritance or Settlement
    • Marriage & Family
  • The Team
  • Contact

  • toomeyinvest
  • Finance
  • January 9, 2023

Why You Should Not Panic Sell During A Down Market

Many Americans are logging into their investment accounts with a sense of dread these days. How much more, you may be thinking, have I lost since the last time I logged in? 

2022 has proven to be the worst year for the stock market since the financial crisis of 2008. The poor performance can be chalked up to a variety of factors, including rising interest rates, economic worries, the war in Ukraine, global inflation, the ongoing COVID-19 pandemic, and more. As of December 20, 2022, the S&P 500 was down by more than 19 percent for the year. It can be hard to look at as it relates to your investment or retirement accounts. 

But experts have a piece of advice for you: don’t panic sell. 

Watching your investment portfolio or your 401(k) plan that you have been building for years take a sudden dive is difficult to watch. You may have an overwhelming urge to sell up and salvage what you can. But in the long run, this can be one of the most damaging actions you can take.

Reasons Not to Panic-Sell

The market will likely come back. History shows us that downturns in the market are ultimately only temporary. In the end, large rebounds return most portfolios to the black in just a few years.

“Sharp, sudden market declines are disconcerting, prompting many investors to reduce their stock holdings, or pull out of the market,” according to analysts with MFS Investment Management. “As history has shown, financial markets have rebounded from market shocks, posting strong long-term gains. All too often, investors that have sold out during a crisis have locked in losses and possibly missed the rebound. Riding out market declines and benefiting from potential rebounds may be a better plan.”

It’s an opportunity to buy. As the saying goes, “When the going gets tough, the tough go shopping.” If you have some cash to spare, now can be a great opportunity to take advantage of undervalued stocks and purchase some, so your portfolio can bounce back better than ever when the market sees the upswing. 

Consider a downturn “economic exercise.” Just as a body that never faces physical challenges will never get strong, economies that experience no turbulence should be viewed suspiciously. In order for continued growth to occur, regular downturns are necessary to find and eliminate market bubbles and adjust to intrinsic market prices.

Warren Buffet once famously said, “Our favorite holding period is forever.” While you may not be prepared to hold your investments forever, be certain that you’re selling for the right reasons and under the right circumstances. In a panic, a mistaken effort to stem more losses is not the right circumstance. 

Seek Professional Advice

To gain the peace of mind that your financial plan can weather future market downturns, it may be beneficial for you to seek the advice of a professional who will be able to create a comprehensive financial plan that’s suited to your tolerance for risk.  

At Toomey Investment Management, Inc. (TIMI), our business model is designed to treat all of our clients equally and fairly. We realized long ago that the financial industry dedicated many resources to capturing money from prospective clients, but much less on service and accountability for existing clients. At Wallingford, Connecticut-based TIMI, we listen carefully, keep in touch, and return your calls and communications quickly, so you can count on us. We will work effectively to optimize your financial situation and solve your problems. Call us at 203-949-1710 or contact us for more information.

Read More
  • toomeyinvest
  • Retirement
  • January 9, 2023

Is an Annuity Right for You?

Annuity Written On Yellow Sheet And Piggy Bank With Money.

Americans today are living longer than previous generations. That’s the good news. The challenge is coming in saving for retirement and ensuring those savings last a lifetime. 

Meeting the challenges of retirement savings has always been a difficult prospect, but in today’s volatile economic environment and a reduction in the income provided by employer-sponsored pensions, the challenges are steep and require more knowledge and initiative. 

In most cases, pensions have been replaced by defined contribution plans, such as 401(k)s and individual retirement accounts (IRAs). This means that employees and investors must bear most of the responsibility for building their own retirement portfolios. Because of the nature of 401ks and IRAs, these savings are much more exposed to the whims of global financial markets, leaving savers with more uncertainty.  

Increasingly, financial advisors are recommending annuities to help alleviate retirement savings uncertainties and replace the guaranteed income that a pension would supply. 

Different Types of Annuities

There are different ways to invest in annuities based on the purchaser’s needs. Investors can purchase a fixed annuity in which the payments are spelled out exactly ahead of time in the contract. Alternatively, investors can purchase a variable annuity that will invest funds in the market. While there is more potential for growth with a variable annuity, there is also more risk since it’s essentially based on an investment portfolio and subject to market whims. 

Before you choose an annuity, it’s a good idea to consult with a financial investment management advisor to determine what type and configuration are right for you. Regardless of which type of annuity you choose, the power of tax deferral means you can build up your retirement savings more quickly, leaving you with more money to do work for you. 

What Are the Benefits of Annuities?

With an annuity contract, investors are essentially buying a stream of payments that will be made to them over time to protect against the risk of outliving their income. There are many different annuity types, allowing investors to find one that ideally fits their lifestyle and retirement plans. There are benefits available that guarantee income, as well as locking in death benefits for loved ones. 

Because annuities are tax-deferred, annuity holders don’t pay taxes until they withdraw their money. Deferred annuities take advantage of this deferred tax paradigm by putting off tax payments until retirees begin receiving income distributions. The growth that happens in the tax-free interim can significantly build a retirement portfolio. 

As an example of how this tax-deferred process can work, consider the purchase of a $100,000 annuity compounded at a five percent annual rate for 20 years. Tax-free, this money would grow to $265,330. If the investor withdrew that money in a lump sum and paid a 32 percent tax rate on it, they would come out with $212,424. However, if the saver put the $100,000 into a taxable investment account, they would realize only $149,765 in that time.

What Are the Drawbacks of Annuities?

After going through the Rolodex of great benefits annuities may offer, many people find themselves asking the age-old question: what’s the catch? Any time you see guarantees with an insurance-related product, there is almost always a caveat or trade-off that needs to be considered in the decision-making process.

Limited investment options are a theme in many index and variable annuities. Are there any contracts with more investment flexibility than others? Absolutely. But every annuity limits contract holders to a list of funds/crediting strategies, and in some cases, dictates account allocations and caps returns on a particular index. This can often result in muted returns that the investor would not otherwise be subject to in a taxable brokerage account. 

Many annuities come with a base M&E (mortality risk and expense) charge, sometimes coupled with living and/or death benefits — guaranteeing payments during life, or locking in death benefits for heirs – that almost always come with additional expense. In fact, it would not be abnormal to see some annuity contracts costing over 3% in annual fees. While some investors are happy to pay such an expense for security and peace of mind, others may opt to forgo the insurance benefit because they believe they emulate the same benefits in the market without the expense.

Is An Annuity Right for Me?

Although all portfolios should be tailored on a case-by-case basis, annuities should be recommended with elevated care. Not only are annuities often expensive, but it is not uncommon for contracts to come with multi-year surrender charges that may prevent contract holders from accessing their money without penalty. These are some of the reasons that annuities have gained a less-than-stellar reputation.  With that said, when an investor has been made aware of the pros, cons, and mechanics of an annuity, it can play an invaluable role in the confidence of their retirement income plan. 

Consult a Financial Advisor

At Toomey Investment Management, Inc. (TIMI), our business model is designed to treat all our clients equally and fairly. We realized long ago that the financial industry dedicated many resources to capturing money from prospective clients but much less to service and accountability for existing clients. At Wallingford, Connecticut-based TIMI, we listen carefully, keep in touch, and return your calls and communications quickly, so you can count on us. We will work effectively to optimize your retirement savings options and solve your problems. Call us at 203-949-1710 or visit our website for more information. 

Read More
  • toomeyinvest
  • Insurance
  • January 9, 2023

What Is Life Insurance?

If you’ve never carried life insurance, you may be wondering whether you need it. While you’re young and single and have no dependents and no mortgage, it’s not unusual to skip purchasing a life insurance policy. Many workers get small policies through their employers. 

But if your circumstances have changed – you have a spouse or a partner, or a child, you have taken on a mortgage or started a small business – you will probably want to purchase a policy to protect your loved ones and their inheritance. 

At its most basic, life insurance is a contract between an insurance policyholder (you) and an insurance company. In the contract, you promise to pay a pre-set monthly premium for a certain amount of coverage, and the insurer promises to pay a designated beneficiary a sum of money in the event of your death. In some cases, you can receive funds before your death (in the event of a terminal illness). Once the payment is made, your beneficiaries (the people you name in the policy such as a spouse or children), can use the funds for whatever they wish. 

What Are the Basic Types of Life Insurance?

There are three common types of life insurance: term life insurance, whole life insurance, and universal life insurance. There are also many variations of each of these policy types and almost limitless riders available, but here is a general description of how they function and differ from one another. 

Term life insurance. A term life policy is one that lasts for a specified period, such as five or 10 years. Life insurance coverage ends when that set period expires, and payouts are possible only if the insured person’s death occurs during that specified period. It is possible, in some cases, to carry the term for longer than the set period of time, but premiums may greatly increase. Because roughly 2% of term insurance policies actually pay out, they are almost always the cheapest way to obtain a straightforward death benefit. 

Whole life insurance. As the name implies, whole life insurance offers coverage for the insured person’s lifetime as long as the insured person’s premium payments are in good standing. Unlike term life, these policies can build cash value like an investment. If you reach your later years when there are no minor children to care for or no mortgage to pay off, you can often get back a portion of the money you paid into the policy. In some cases, you can even borrow against this money in the form of policy loans. The downside is that premiums tend to be higher than for term life policies. 

Universal life insurance. Universal life insurance guarantees a death benefit, and the premiums remain level, or unchanged. Unlike whole life insurance which has fixed premiums over the life of the policy, Universal Life can offer flexible premiums. As long as the cost of insurance is paid for, either through the policy cash value, or premium payments, the policy will remain in force. However, policyholders must remain cognizant of premium payments, as the cost of insurance increases as you age, and accessing/reducing the cash value may result in policy lapse. 

What Type of Life Insurance is Right for You?

There’s no easy answer to this, as everyone’s circumstances differ. It will depend on your age, your health, your obligations, your lifestyle, and your budget. It’s a good idea to consult with a firm like Toomey Investment Management that will independently broker out your options to find the policy that is the best fit for you and your family. 

At Toomey Investment Management, Inc. (TIMI), our business model is designed to treat all of our clients equally and fairly. We realized long ago that the financial industry dedicated many resources to capturing money from prospective clients but much less on service and accountability for existing clients. At Wallingford, Connecticut-based TIMI, we listen carefully, keep in touch, and return your calls and communications quickly, so you can count on us. We will work effectively to optimize your life insurance options and solve your problems. Call us at 203-949-1710 or visit our website for more information. 

 

Read More
  • toomeyinvest
  • Wealth
  • October 24, 2022

How to Build Wealth: Strategies You Can Start Now

If the idea of building your wealth seems overwhelming and complicated, this is a post you need to read. The reality is that it doesn’t have to be at all and it’s something that’s within reach for anyone.

In simplest terms, wealth is your assets minus your debts. So, to build wealth, you need to focus on increasing your assets and reducing your debts. It really is that simple.

To get there, there are several things you can start doing right now to build wealth so you can live the life you want.

The Self-Subscription

It’s amazing how many subscription services there are in 2022. Data shows that U.S. users pay for four streaming services on average and 7% of Americans have six or more! And that’s before we account for all the other residual monthly costs we have. What if, instead of those 3 or 4 monthly service subscriptions, we subscribed to our own investment accounts? Simply put, if it wasn’t for retirement plans at work that automatically defer some of our salaries for us, the retirement crisis in this country would actually be far worse. Treating your investments as a monthly bill that your credit score depends on may be the first step to true financial freedom.

Live More Modestly

All too often, people have income increases and as a result, they immediately increase their spending. So even though you’re making plenty of money, you end up with little or no savings. Don’t fall into that trap. Spend less than you earn and make building wealth a top priority.

Live modestly and always pay attention to where your money is going. Make a list of everything you spend money on for an entire month, and then look for areas where you can cut back. You might have no idea how much you spend on things you don’t need until you see it all right in front of you.

Debt Control

The best way to get into a better financial situation is to have a handle on your debts. Although a number of financial personalities have championed paying off all debts, we think debt is one of the most important tools you can use to enhance your long-term wealth. If your secured debt (collateralized) is low interest, paying this over time will free up cash assets to invest elsewhere while earning a higher rate of return than the money you’d be saving by eliminating your cheap debt. Utilizing a healthy credit score to advantageously borrow cheap money is a far cry from the high-interest unsecured debt people should avoid at all costs. Little tricks like these shine a bright light on the many ways to utilize debt instead of eliminating almost all of it completely.

Make Your Money Work for You

Once you have funds available to invest, you can let your money grow over time thanks to compound growth. If your employer sponsors a retirement plan, take advantage of it. If the company provides matching contributions, allocate enough of your own money to get the full match. You should also be investing in taxable, and tax-free accounts to ensure maximum withdrawal flexibility later in life. Accounts like these will enable you to invest in accounts that allow access to your investments prior to age 59 ½ without having to pay penalties or ordinary income taxes. Having a diversified tax strategy is just as important as having a diversified portfolio.

Get Professional Help with Wealth Building

At Toomey Investment Management, we focus on keeping our portfolio costs low, as well as helping our clients understand how the investment process works. We have designed a series of models that we use to choose the right investments for each client’s goals. Contact us today to discuss how we can help you build wealth for the future.

Read More
  • toomeyinvest
  • Finance
  • August 25, 2022

Do I Need a Financial Fiduciary?

If you’re taking the initiative in your financial planning, you may have heard that you need a financial fiduciary. A fiduciary is a professional or a company that is required by law to act in your best financial interests. The fiduciary might be a financial advisor, a lawyer, or even a real estate agent. This person can manage your assets, such as investment portfolios or other accounts, as well as real estate. Because this person is required by law to manage your assets in your own best interests, they have a duty of care to your finances and must disclose if the management of your assets benefits them.

Isn’t My Financial Advisor a Fiduciary?

Many people assume that just because they have a financial advisor, this person is automatically a fiduciary. This isn’t necessarily true. Not all financial advisors are completely independent like Registered Investment Advisors (RIAs) and even though they may have advanced planning credentials, they may be limited by the firm at which they are employed.

The Right Advisor At The Right Firm

Guaranteeing the trustworthiness of a financial advisor is often the responsibility of the investor. When choosing an advisor, it’s important to look for advisors with advanced credentials such as Certified Financial Planners, Chartered Financial Consultants etc., but we would argue that it’s even more important to inquire about the structure of the firm you’re partnering with. Advisors can, for instance, pass tests and acquire some of the industry’s best credentials, but work for a company that only offers one line of products and services. It’s extremely important to understand that you’re not just partnering with an advisor, but the firm he or she operates under. Knowing if your advisor can solicit a number of different broker dealers, insurance brokers, and investment custodians in structuring your financial plan could mean the difference between decent results, and great results.

For greater peace of mind, it’s important that you are able to trust your financial advisor explicitly and trust that they are making investment decisions that are in your best interest (instead of their own). To get the best possible performance from your financial planning, look for a professional firm with fiduciary responsibility that can customize a plan for you, your assets, and your lifestyle.

Choose Toomey Invest Management in Wallingford, CT

Toomey Investment Management, Inc. (TIMI) is an independent RIA, and we believe our business model enhances our ability to enhance our client experience. We realized long ago that the financial industry dedicated many resources to capture money from prospective clients but much less to service and accountability for existing clients. At Wallingford, Connecticut-based TIMI, we listen carefully, keep in touch, and return your calls and communications quickly, so you can count on us. We will work effectively to optimize your financial situation and solve your problems. Call us at 203-949-1710 or visit our website for more information.

Read More
  • toomeyinvest
  • Retirement
  • July 13, 2022

Have You Checked the Beneficiary Designation of Your Retirement and Other Accounts?

It’s a common mistake to believe that because you have a will, you don’t need to name beneficiaries for your other financial accounts such as IRAs and other retirement accounts, life insurance policies, and annuities. After all, your chosen heirs will get them in the end, right?

Not necessarily. It’s worth checking to see who is currently named as the beneficiaries of these accounts. You may have designated them so long ago that you’ve forgotten. But it’s important to note that even if you have a will, beneficiary designation on the account overrides a will. So you might just be leaving your IRA to an ex-spouse or family member who has passed away, or only your older children and not your younger ones.

Despite the wording of your will, the individual named as a beneficiary of your accounts will receive that money, even if the designation was made years or decades ago. Your will only covers the distribution of your assets included in the probate estate.

Take A Few Moments to Check the Beneficiary Designation

Aside from the fact that your beneficiary designation may be out of date, it’s possible that you never actually named a beneficiary. This means that after you pass away, your estate will become the beneficiary. Unfortunately, at that point, the money will become subject to the long and expensive probate process, which may leave your heirs waiting a long time to inherit.

It’s also important to name contingency beneficiaries to your accounts. This means that if your first beneficiary were to die before you (or at the same time as you in, say, an accident) the money would then pass on to the contingency beneficiary or beneficiaries. If you have children, this is a good way to ensure that the money will go to them if you and your spouse were to die at the same time.

Examine the Wording of Your Beneficiary Designation

You may have nebulous language in your beneficiary designation that leaves benefits for your “children.” If you don’t name them specifically, the inheritance issue could become murky, particularly if you have a blended family. Be sure to name each beneficiary specifically to avoid complexities and family arguments, and to understand what the term “per stirpes” means. It’s also worth designating contingent beneficiaries for each of your children in case they were to predecease you. Also, avoid designating one child as a beneficiary under the assumption that he or she will share the money with their siblings. The designated beneficiary has no legal obligation to do so.

Seek Professional Advice

Good estate planning helps protect your family and your beneficiaries. Look for a financial services firm that will stress-test your estate to make sure you’re addressing all aspects of your death benefits. The end result is an evolving plan that helps protect your family and friends.

At Toomey Investment Management, Inc., we are a dual registered, Independent RIA. This means that we retain the independence and flexibility to associate with a number of broker-dealers/custodians to can offer a range of products or services. We believe our business model best enables our comprehensive and objective approach as financial fiduciaries.  If you feel like we would be a great match for you and your family, please call us at 203-949-1710 or visit our website for more information.

Read More
  • toomeyinvest
  • Trust
  • July 13, 2022

The Benefits of Creating a Trust for Your Estate

It’s not a pleasant thought to imagine one’s own death, but it also shouldn’t keep adults from estate planning. A study conducted by Caring.com and highlighted by the AARP found that fully 60 percent of Americans don’t have a trust or any other form of estate planning in place.

Why?

Many respondents found that it was “too soon” to plan. Others believe that estate planning is only for the wealthy and assume their families will inherit their assets when they pass away. Others simply don’t want to think about the prospect of their own death. The study asked more than 1,000 respondents whether they had estate-planning documents in case of their death

Whatever the reason for a lack of estate planning, it’s an egregious oversight, and could leave your heirs with a mess on their hands. The good news is that older Americans have gotten the message.

“While most U.S. adults aged 18 and over have not done the needful, 81 percent of those age 72 or older and 58 percent of boomers (ages 53-71) do, in fact, have estate-planning documents,” according to the AARP article.

Retirement planning experts recommend that even younger people should be thinking about setting up a trust.

What is a Trust?

A trust works in a very similar manner to a will. It’s essentially a contract that legally identifies your wishes for distributing your money, property, and other assets after your death. It differs from a will, however, in the way it holds the assets for your estate. When you set up a trust, you designate a trustee who will oversee the transfer of all your assets to your identified beneficiaries. One of the most important differences between a trust and a will is that, unlike a will, a trust is not subject to legal probate before assets can be distributed.

In addition, trusts aren’t for after death: many people who set up a trust designate themselves as trustees so they can manage their own affairs during their lives. They also name a successor trustee who can take over the estate when they are no longer capable, either through death or disability.

Why Should Younger People Engage in Estate Planning?

While it may seem like a worry for the future, it’s important for younger people to engage in estate planning, especially if they have children, to ensure that they’ll be cared for by people designated by the parents who can use their assets for the benefits of the children. Unfortunately, the same Caring.com study found that 78 percent of millennials (ages 26 to 41) and 64 percent of Generation Xers (ages 42 to 57) do not have a will. In the event of an untimely death, this lack of estate planning could leave children and families with difficult and expensive legal woes.

Seek Professional Advice

To further discuss the benefits of creating a trust and/or a will or to collaborate with your attorney, look for a financial services firm that will customize a plan for you, your assets, and your lifestyle to make sure you’re protecting your family and friends.

At Toomey Investment Management, Inc. (TIMI), our business model is designed to treat all of our clients equally and fairly. We realized long ago that the financial industry dedicated many resources to capturing money from prospective clients but much less on service and accountability for existing clients. At Wallingford, Connecticut-based TIMI, we listen carefully, keep in touch, and return your calls and communications quickly, so you can count on us. We will work effectively to optimize your financial situation and solve your problems. Call us at 203-949-1710 or visit our website for more information.

Read More
  • toomeyinvest
  • Finance
  • April 21, 2022

Choosing a Financial Advisor That’s Right for You

We all need help managing our personal affairs. We need help in our homes, for repair or maintenance projects, on our vehicles, and during tax season. And like many DIY-minded individuals, some choose to manage their own financial affairs. While it may seem like a money-saving move, research by the National Financial Education Council has found that a lack of personal finance expertise actually costs the average American $1,200 each year.

Are Financial Advisors Only for the Rich?

A common misconception is that only people with vast wealth are served by hiring professionals to manage their personal finances. In truth, the right advisor can offer invaluable help to people of more modest means. The traditional fee structure for financial advice is often flexible in order to accommodate those who are not “wealthy.” If you have achieved a level of financial success, but you know you could be doing more, hiring an advisor could be the necessary step that leads to reaching, and potentially exceeding your goals.

Can’t I Just Google It?

As with anything you search for on the web, it is almost never a shortage of information, but the application and implementation of said information. Sure, you can learn a certain amount online through, for example, articles such as this, or even TED Talks and YouTube videos. The problem with the internet is that there may be too much information – some not relevant to your situation. None of this information you dig up will be customized for your individual needs, Dave Grant, founder and financial planner for Retirement Matters, Inc. told The Street.

“While this may work, many solutions are generic and don’t take into consideration personal situations that only an advisor can design around,” he said.

The Information Changes a Lot

While you may think you have a current handle on your finances, understand that it’s an ever-changing landscape. Tax codes change, as do health insurance regulations, rules surrounding retirement accounts and college savings plans, and estate planning regulations. What worked for you at 30 probably isn’t going to work for you at 50. With a DIY approach, you may not be uncovering the most relevant and up-to-date information regarding your financial planning, which can lead to expensive mistakes.

Where Do I Start with An Advisor?

For starters, you need to outline your financial goals so you know where to turn for the most appropriate help. Are you a millennial achieving a high level of success for the first time in your career? Maybe you’re a Baby Boomer on the brink of retirement and you want to make sure you are on top of all the moving pieces life now presents. Every household presents different circumstances. That’s why it is important you do not hold back when you meet with an advisor. The more information you provide, the more detailed your advisors’ presentation will be.

Are All Advisors the Same? 

It is important for consumers to understand that advisory firms have different business models. There are firms that operate under the broker-dealer model, captive firms that offer solutions from one line of products, independent RIA/Hybrid RIA models, etc. This may have an impact on the products and services an advisor can offer, so be sure to inquire about the advisor and the firm you’re engaging with.

At Toomey Investment Management, Inc., we are a dual registered, Independent RIA. This means that we retain the independence and flexibility to associate with a number of broker-dealers/custodians to can offer a range of products or services. We believe our business model best enables our comprehensive and objective approach as financial fiduciaries.  If you feel like we would be a great match for you and your family, please call us at 203-949-1710 or visit our website for more information.

Read More
  • toomeyinvest
  • Retirement
  • April 21, 2022

Should Millennials Be Planning for Retirement? Yes…Unequivocally

If you’re one of the 72 million millennials in the U.S., chances are you’re still in the early stages of your career. You may not have even found your niche yet, since you have long decades for crafting a path to career development. The thought of retirement may not even have crossed your mind yet…but it should.

Why Plan for Retirement Early?

While final retirement may be the date you finally stop working (and for millennials, the earliest that might come is the 2060s), retirement itself is actually a multi-decade process. Preparing for it now is imperative in ensuring that your money lasts the duration of your life — this is particularly urgent for a generation that is expected to live longer than its Baby Boomer parents.

Let’s take a look at some of the biggest considerations millennials should be visiting in their plans for the future.

Take Care to Build Your Credit Rating

Now is the time to be building a strong credit rating, not when you’re 55. If you have never taken out a loan or opened a credit card in the past, your credit rating may be minimal, or even non-existent. If you don’t already have an active credit card, think about getting one. Just be sure not to get in over your head…pay your credit card bill in full every month, if possible.

If you do already have a working credit card, consider using a reporting service to notify the credit reporting companies of your payments for things like rent and utilities, which can help you build more credit history.

Have “Good Debt”

It’s a myth that having no debt will lead to the best credit. This doesn’t mean, of course, that you should get yourself into unsecured debt to raise your score. Some types of debt are better than others when it comes to building a credit history. These “good debts” include mortgages, car loans, home equity lines of credit, general-purpose and secured credit cards, and personal loans.

Self-Subscription

Even if you have debt, it’s a good idea to always be investing. As long as you have earned income, you should be contributing a percentage (usually 10%) of your salary to the markets. If invested correctly over many years, compound interest will make your sacrifice well worth it when it comes time to retire. Millennials have no hesitation in consuming monthly subscription services (Prime, Netflix, HelloFresh, etc.), but they seldom have a monthly “subscription” to increase their net worth! If you haven’t started your self-subscription, it’s time to find room in the budget.

Take Advantage of Your Employer’s Retirement Fund

If you’re lucky enough to be working for a company that offers an employer-sponsored retirement plan, now is the time to be contributing to it, even if you can’t contribute the maximum. It’s this early “nest egg” that will grow exponentially in value to be there for you when you finally reach your retirement years.

If you can’t contribute the maximum amount to your 401k plan, at least be sure to contribute to the point where your employer matches your contribution. This extra amount will supercharge your retirement funds for future growth. If your employer doesn’t offer a 401k plan, consider some do-it-yourself planning by opening an individual retirement account (IRA). One side benefit of these types of retirement accounts is that they lower your taxable income.

Seek Professional Advice

If you’re serious about building the right foundation for your distant retirement, seek the advice of a professional who will be able to guide you to make the most of the resources you have.

At Toomey Investment Management, Inc. (TIMI), our business model is designed to treat all of our clients equally and fairly. We realized long ago that the financial industry dedicated many resources to capturing money from prospective clients but much less to service and accountability for existing clients.  We will work effectively to optimize your financial situation and solve your problems. Call us at 203-949-1710 or visit our website for more information.

Read More
  • toomeyinvest
  • Social Security
  • February 4, 2022

Social Security Tips for Couples

There’s so much that goes into planning for retirement and ensuring you have stability in those later years so you can enjoy them free of financial worry. What’s especially unique about planning for retirement is that no one’s situation will be the same. In terms of social security benefits, it’s worth taking the time to work with a trusted adviser who can help you make those important decisions early, so you can retire with confidence.

The thing that’s great about social security is that it’s inflation-protected. So, as the cost of living increases, so will the benefits you can receive when you collect. But it’s not as easy as working until you’re in your 60’s and then receiving the maximum benefit.

There are many factors to consider and these can change based on your marital status. Here are a few key social security tips for couples in 2022.

Understand Spousal Benefits

Whether you are married or single can play a significant role in how you claim social security benefits. It’s important to understand the rules of spousal benefits and how claiming at just the right time and with a strategic plan in place could change your benefit outcome. If you’re single, only your specified benefit initiation date must be considered. Longtime domestic partners are not considered married couples. However, when you are legally married you have a few options to consider. These are based on each person’s claim date and benefit amount and will mean choosing whether or not you should claim based on your own work record, or electing up to 50% of your spouse’s benefit amount.

Married couples should be working together and coordinating their election options when it comes to social security benefits.

Should You Work Past 62?

Another big question that comes about when you are starting to plan for retirement is at what age you will retire. Again, so many different factors can play into this decision. Things like long life expectancy and health can make it easier to delay claiming benefits. Every year past age 62 and up until 70 years old, there is an increase in the amount of benefits you can receive. Of course, this isn’t an option for everyone and the concern of outliving your benefits is also on the table. It’s important to have an open conversation with your spouse and to speak with a professional to guide you through the process.

Planning for Survivor Benefits

The one topic no one really likes to talk about but is essential in this decision-making process is how death may impact the benefit of the surviving spouse. If your wish is to provide the maximum benefit for your wife or husband after you pass then delaying when you start claiming social security can provide them with a higher benefit.Ready to start working on your retirement planning? At Toomey Investment Management, Inc. we want to help you and your family. We work to effectively optimize your financial world.

Read More

Recent Posts

  • Why You Should Not Panic Sell During A Down Market
  • Is an Annuity Right for You?
  • What Is Life Insurance?
  • How to Build Wealth: Strategies You Can Start Now
  • Do I Need a Financial Fiduciary?

Categories

  • Corporate
  • Estate
  • Finance
  • Insurance
  • Investment
  • Medicaid
  • Retirement
  • Social Security
  • Taxes
  • Trust
  • Uncategorized
  • Wealth

Posts navigation

1 2 … 4 »

Business Continuity
Privacy Policy
*5 Star Professional Award Criteria
Form CRS
ADV Part II
Regulation BI Disclosure

Toomey Investment Management, Inc. Discover the Difference

© 2014 - 2022 Toomey Invest | Website by Wallfrog | All Rights Reserved. Securities Offered through Leigh Baldwin & Co., LLC. Member FINRA/SIPC Check us out on FINRA Broker Check