Make a Difference With Your Money

At some point during their lifetime, most people wonder whether they’ve done enough – if they’ve made a positive impact, says Jeff Bucher, a financial advisor who helps working-class Americans plan their golden years.

“For most people, I think that concern increases as they get closer to retirement – they wonder what their earning years have bought for themselves and the people they care about, which may extend to their greater community,” says Bucher, who, through his firm, Citizen Advisory Group, (www.citizenadvisory.com), has contributed to the local Boys & Girls Club, the Make-A-Wish Foundation and to development of an Olympic training center for wrestling at Ohio State University, his alma mater, where he earned a wrestling scholarship.

“You don’t have to be super-wealthy to make a significant contribution to others. The smarter you are with the wealth you do have, however, the more of an impact you’ll be able to have,” says Bucher.

If you want to make a difference with your money, you’re better off having your financial affairs in order. Bucher offers a few suggestions:

• Now is the time to design a  lifetime income plan. Simply attaining a minimum figure in savings  probably won’t work; such figures do not account for family emergencies, inflation, etc. Social Security does not cover what it used to, and its future  is uncertain at best. You need to establish a laddered, inflation-adjusted  income using safe and dependable accounts that will provide a check every month. This should be informed by a plan that maps out your lifetime income  needs to ensure that you do not outlive your money. For example, if you need  $3,000 a month now, at a 4 percent inflation rate you will need $3,649.96 in five years. In 10 years you will need almost $4,500 per month.

• Consider holding off on  retirement. Many people are understandably eager to retire as early  as possible; others fear Social Security benefits will vanish, so they want to  get what they can as quickly as possible – at age 62. But if you’re counting  on those benefits as part of your income, you should wait until you’re  eligible for the full amount. That’s age 66 if you were born from 1943 to  1954, and age 67 if you were born in 1960 and later. If you’re in the older  group, retiring at 62 cuts your benefits by a quarter; for the younger group  it’s nearly a third. “Chances are, you’ll be better off mentally and  physically if you wait anyway,” Bucher says. “Many studies show that people  live longer and are more vital the longer they remain employed.”

• Know when to transfer  investments out of tax-deferred plans. If you’re working for a  company that provides a match for 401k contributions, by all means, contribute  up to the maximum match. “That’s free money – you’d be crazy not to take  advantage,” Bucher says. But anything beyond that should be invested in  something that’s more tax efficient: Roth IRA, municipal bonds, life insurance  or real estate. No one expects taxes will go down – they’ll be going up. Uncle  Sam already has a lien on your IRA or 401(k); don’t let his lien, the taxes  you’ll owe, continue to grow. Go ahead and pay now. Your future retired self  will be glad you did.

Jeff Bucher is president of Citizen Advisory Group (www.citizenadvisory.com), and is an investment advisor with AlphaStar Capital Management, an SEC Registered Investment Advisor. He has a life and health insurance license with the state of Ohio. His membership affiliations include the exclusive Ed Slott's Master Elite IRA Advisor Group, National Association of Insurance and Financial Advisors, the National Association of Fixed Annuities and the Forum 400. He has earned Top of the Table honors through the Million Dollar Round Table. Bucher is a former wrestler at The Ohio State University, where he earned an athletic scholarship and honed his leadership skills en route to earning four varsity letters.