The changing financial climate in has led many to wonder how rising interest rates will impact their retirement plans. The Federal Reserve recently raised interest rates for the third time since the 2008 financial crisis. Officials indicate, though, that the March 15 rate hike will likely not be the only one of 2017. In fact, Fed leaders suggest two more interest rate increases are likely by the end of the year. While the news of increasing interest rates is unwelcomed by most, Baby Boomers stand to benefit from the financial change, according to Bob Johnson, CEO of the American College of Financial Services and author of Invest with the Fed. “Most Baby Boomers who are likely to be retired or preparing to retire will benefit as interest rates rise. Older Baby Boomers have had a terrible time to try to build wealth with safe assets,” predicts Johnson. “Rising interest rates are going to increase returns on safe investments that are popular with retirees, [including CDs and money market accounts].” Insulate Yourself From Rising Interest RatesThe March Bulletin released by AARP titled, “Adapting to Rising Interest Rates,” zones in on the effects of rising interest rates for the older generation. Eileen Ambrose, senior money editor at AARP, explained to FOX Business that there’s a lot of weight on where seniors’ retirement money is invested. “It’s a good idea when entering a period of rising rates to make sure your portfolio has the appropriate mix of stocks, bonds and cash,” advises Ambrose. “Stocks help you keep up with inflation, while bonds can offer stability.” The effects of rising interest rates go beyond the retirement savings of seniors. Ambrose warns nearly anyone holding a credit card balance could soon see a hike in interest fees because the majority of credit cards carry a variable rate. When the Federal Reserve increases its rate, banks usually follow suit by raising credit cards rates. Ambrose says it may take a billing cycle or two to notice the difference. The senior money editor also advises to stick with short-term bond and bond funds during a period of rising interest rates as they are not as prone to change as long-term bonds. However, conservative savers may see a greater return on their money in certain accounts. “If the Fed continues to raise rates as indicated, these conservative investors should start seeing an increase in what they earn on savings accounts and certificates of deposit toward year end,” Ambrose says. “And many will be happy with that. Savers, though, should stick with CDs that will mature in a year or less.” Ambrose says as interest rates rise, the best way for seniors to protect themselves is to pay down credit card debt before another hike is put into place. If the balance is too large to pay down, find a card with a specialty transfer offer with zero interest. If you ever wonder how rising interest rates or any other issues might affect your future, Foguth Financial is here to answer every question and help you build a plan to take the uncertainties out of your retirement picture. Financial PlanningWe know retirement planning and investing in a secure future can get overwhelming. That is why Foguth Financial is here to point you in the right direction on your retirement freedom path. Let us work with you to craft a personalized plan you can feel great about and leave the worry behind. The post How Will Rising Interest Rates Effect My Retirement? appeared first on Foguth Financial Group. from http://www.foguthfinancial.com/rising-interest-rates-effect-retirement/
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Michael Foguth with Foguth Financial sits down with CHASE about Preparing to buy a home: myths and truths. When it comes to purchasing a home, people have many misconceptions, says Craig Garcia, president of Capital Partners Mortgage. “The homebuying process is harder than you think,” says Garcia, who is based in Florida. “But the more prepared you can be, the better experience you will have.” To help make sure your homebuying experience is positive, study these real estate and mortgage myths and truths: There are many programs for first-time homebuyers, especially from the Federal Housing Administration (FHA) and Veterans Affairs (VA). So speak to your mortgage banker about some programs.
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The post Michael Foguth: Preparing To Buy A Home: Myths And Truths appeared first on Foguth Financial Group. from http://www.foguthfinancial.com/preparing-to-buy-a-home-myths-and-truths/ Michael Foguth with Foguth Financial sits down with ABC12’s Mark Bullion to talk tips on saving money.
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The post Michael Foguth’s Tips For Financial Success WJRT ABC 12 appeared first on Foguth Financial Group. from http://www.foguthfinancial.com/tips-for-financial-success/ The idea of being as wealthy as Warren Buffet will likely only be a dream for the vast majority of us, and when you consider that in 2016 alone his company’s stock price rose 23%, one can only hope to have a percentage of his investing intelligence. So if Buffet’s success is the Gold Cup of the stock market industry, how do the rest of us even begin to jump in the race? The answer is often hidden in priceless nuggets of information within Buffet’s annual reports. The most recently released report saves the most important advice until page 21. After you sift through the rewarding results obtained by the companies Berkshire owns stakes in, you’ll find tucked away for the stock market junkies advice to live by, and that is, for the majority of us, that active fund investment management is a losing bet. While it took a report from 2017 to highlight this point, it’s clear that Buffet has taken this stance against active investment management for a long time. In 2005, Buffet made a bet with an investment manager. “Active investment management by professionals – in aggregate – would over a period of years underperform the returns achieved by rank amateurs who simply sat still. I explained that the massive fees levied by a variety of “helpers” would leave their clients – again in aggregate – worse off than if the amateurs simply invested in an unmanaged low cost index fund.” For more than a decade, Buffet has been winning the bet. When he introduced the wager, Buffet used hedge funds as an example for active management. This investment strategy known as funds-of-funds is used mainly by the extremely wealthy, and is a way for investors to mandate a 2% management fee on top of the 20% they’ll take from the profits. There aren’t many managers whose work justifies that type of payment. An article from The New York Times in February noted Buffet’s win in the bet, saying, “Since then, a standard S & P index fund overseen by Vanguard is up 85 percent, easily outpacing the hedge funds’ return of 22 percent. Annually, the gap is just as wide: 7 percent for the index fund and 2.2 percent for the hedge funds. So how did Buffet know that (in most cases) the overly-paid hedge-fund whizzes would eventually come in second to a cheap index fund? The unjustifiable fees. “I’m certain that in almost all cases the managers at both levels were honest and intelligent people. But the results for their investors were dismal — really dismal,” Buffet writes in his annual letter. “And, alas, the huge fixed fees charged by all of the funds and funds-of-funds involved — fees that were totally unwarranted by performance — were such that their managers were showered with compensation over the nine years that have passed.” Another sign of Buffet’s accuracy in his prediction is that the S&P 500 outperformed hedge funds eight of the past nine years. In the one year that hedge fund won (2008) the margin of victory was not exactly a blowout – hedge funds lost 30% while the S&P reported a loss of 37%. To put Buffet’s advice into action, purchase the lowest-cost index funds for major stocks and bonds through your retirement and investment vessels and then let them sit. Financial PlanningWe know retirement planning and investing in a secure future can get overwhelming. That is why Foguth Financial is here to point you in the right direction on your retirement freedom path. Let us work with you to craft a personalized plan you can feel great about and leave the worry behind. The post Hidden Advice From Warren Buffet Everyone Should Follow appeared first on Foguth Financial Group. from http://www.foguthfinancial.com/hidden-advice-warren-buffet-everyone-follow/ There’s a 50% likelihood that you will end up retiring sooner than you think. A study conducted by the Transamerica Center for Retirement Studies (TCRS) notes that half of current retirees report that they retired before they’d planned. Whether due to declining health, unexpected unemployment, or a career plateau, more workers are finding that retirement is coming sooner than later – which means that the money set aside in retirement savings is likely not enough. In fact, the same study reveals that while roughly half of us leave the work force before planned, only 25% of workers have a Plan B for filling the shortcomings of retirement savings. Understanding this trend can help you clearly see the need for a backup plan to your 401(k). The key to retiring successfully and ensuring that your retirement savings will be enough to allow you to live comfortably is creating a backup plan in case you’re forced into early retirement. There are five steps to take to be prepared and create a strong safety net for the unforeseen. Keep Learning, Stay ConnectedStaying with one company or even in one career path for an extended period of time can lend itself to becoming fixed in how you do daily tasks. Stay up to date with how you industry is evolving. Be aware of continued education classes or specialty training that comes available. Keeping your skills sharp and showing you are constantly willing to learn and adapt to changing environments will help shield you against being phased out of your job. While you attend the trainings, make connections. Continue to network – never assuming your job is “safe.” The connections you make could end up keeping you in the work force longer. Write The PlanHaving your retirement plan all tucked away in the dark corners of your mind isn’t safekeeping. Calculate the numbers and develop a written plan for your retirement savings. How much do you need to have in your retirement accounts to live comfortably? What expenses could you quickly eliminate if you were to unexpectedly lose a portion or all of your income? The TCRS survey found that only 16% of respondents had a written retirement plan. Know it. Write it. Stick with it. Evaluate Insurance CoverageMake sure you understand the fine print to your insurance coverage – medical, short and long term disability, life, and long-term care. If you were to enter retirement prematurely, know which of your insurance plans could help supplement your income. Sit down with your human resource director to get a full understanding of the benefits offered to your through work, and explore the insurance marketplace outside of your place of employment as well. Involve FamilyPerhaps one of the most difficult realities of early retirement is not being able to financially support someone who has depended on you in the past. Have an open conversation with loved ones who may count on you to help them cover bills, unexpected expenses, or living costs. A sudden cut in your income will not allow you to fund anyone else’s bank account. Having that conversation before you’re in a position of quitting work earlier than you planned will make the talk easier if you have to have it at all. Be Proactive With Your Health One of the top causes of people entering into early retirement is deteriorating health. Be proactive when it comes to your mind and body. Get regular health screenings, annual exams, and work toward a healthy lifestyle. Staying active and considering your employer’s wellness program will help prolong your work life. Retirement Planning Being prepared will allow you to enjoy your retirement, and having an extra nest egg from your savings in the Plan B retirement account may give you an extra vacation or two when you choose that it’s time to leave the workforce. Financial planning on your own can be stressful. Let us help guide you as you map out the retirement you’ve always dreamed off. Set up a free consultation today! The post 5 steps to create a retirement ‘Plan B’ appeared first on Foguth Financial Group. from http://www.foguthfinancial.com/5-steps-to-create-a-retirement-plan-b/ Perhaps a certain percentage of your check is moved into your 401(k) each pay period, or you set back a portion of your income into a Roth IRA. As you enter the final decade of your expected work life, it’s time to partner with a retirement expert to make sure your plan is still on track, and you’ll be able to retire comfortably. If you’re not ready to partner with a retirement planner or investor, below is a retirement planning checklist you can walk through yourself to ensure you’ll be able to retire as planned and live comfortably. Know When You Can RetireHow long will you need to work to ensure you have enough in retirement savings before leaving the work force? To find that answer, you need to understand how much you should have set aside for your retirement years. Financial experts agree that you’ll likely spend 75 to 85 percent of your current salary each year of your retirement. For example, a 40-year-old worker making $80,000 a year, wishing to retire at age 67, should have $2.2 million in retirement. You can use this retirement savings calculator to help estimate how much you need in the nest egg. Include Medical CostsWhen you retire, you’ll likely not have a mortgage payment, but other costs will be similar to what you’re currently paying. One expense that you’ll need to factor into your monthly cost is medical care. Ideally you’ll be in superb health, but as we age, so do our bodies. Your health insurance costs, medication, doctor visits, or the need for specialty treatment should be factored into how much money you’ll need during retirement. The Employee Benefit Research Institute reported in 2015 that a woman retiring at age 65 will need approximately $140,000 to cover medical expenses in retirement, while a man will need about $124,000. However, these amounts exclude long-term care costs. Social Security PaymentsWhen factoring your needed retirement savings total, include your predicted Social Security benefits. For workers born after 1960, full retirement age is 67. Under certain circumstances, you may be able to start collecting Social Security at age 62, but generally waiting until full retirement age is ideal. Keep in mind, if you start collecting Social Security payments early, your benefits will be reduced by about 6% each year. If you start collecting before full retirement age, that reduction in benefits is permanent. This guide from the Social Security Administration shows the average Social Security payment to specific groups of people. Pay Off DebtIf you enter retirement before paying off large debts, such as your mortgage, or a vacation home, it doesn’t mean that your retirement years can’t be enjoyable. Make a plan for how you will spend money, including mortgage payments, so you don’t overspend – leaving you with more retirement years than cash to live. Other debts – personal loans, credit cards, and auto loans – should be paid off before you retire, as they offer no special tax incentives. Follow The PlanStay active in your retirement plan. Don’t assume that because money is taken from your paycheck every two weeks, that your retirement savings is growing as it should. Review your numbers regularly to make sure your money is just as you expect at different points in your life. Checking on your money periodically means you’ll have time to catch problems and start saving more if needed, rather than waiting until you’ve entered retirement to discover you don’t have enough put back. Financial Retirement ServicesYou plan, you scrimp, you save for your retirement and still you wonder, “Will it be enough?” We can help you answer that question. Call us! The post Your Retirement Planning Checklist To Live Comfortably appeared first on Foguth Financial Group. from http://www.foguthfinancial.com/your-retirement-planning-checklist-to-live-comfortably/ With Republicans controlling both the Senate and the House in Washington, threats of Social Security and Medicare benefits being slashed has some concerned. John Mulvaney, former South Carolina Congressman, was selected to run the Office of Management and Budget. Mulvaney’s move to “reform” Social Security is often referred to as his synonym for cutting benefits. Marketplace’s senior economics contributor Chris Farrell says that with Republicans controlling of both houses of Congress, the idea of cuts to Social Security and Medicare is “within grasp.” Part of Mulvaney’s plan presented during his testimony was to raise the retirement age for those receiving Social Security benefits – ultimately reducing the payments received by American workers – as well as means-testing Medicare. This idea supports the theory that Medicare recipients should cover their premiums based on income. So some Medicare recipients would pay the average of 25% of their premium, while others could pay up to 80%, if their income makes them financially capable. Farrell notes that President Trump has stood by his belief that there’s no reason to slash Social Security. The president believes that most recipients are satisfied with their Social Security income and they have earned the money. For that reason, Farrell says despite Mulvaney or Speaker of the House Paul Ryan’s plans for the future of Social Security, Trump will maintain his position and not approve a cut. Paul Ryan does have some authority in his position, but Farrell says it’s simply not enough to change Medicare, which Ryan has been determined to do. Ryan backs the “premium support” Medicare theory – providing a fixed-dollar subsidy seniors would use to pay for Medicare insurance. Critics believe the premium support plan would shift the majority of heath care costs onto seniors rather than tax payers. Farrell says those who are pleased with the current Medicare system may not have much to worry about. He predicts that President Trump is in tune with the needs of the working class and recognizes that a drastic change to Medicare isn’t needed. The conversation on restructuring Medicare is one that hasn’t found much ground outside of Washington D.C., and Farrell says for that reason, there likely won’t be a huge upheaval. Mulvaney’s demand for “fundamental changes” with Social Security and Medicare are still a very real fear for some Americans. The Democrats vow to resist any change to either system, but Mulvaney’s advantage is having President Trump’s ear. As the next four years unfold, we’ll see if the president sticks to his campaign promises or if Mulvaney will be able to sway him in another direction. Social SecurityDo you have additional questions? Do you want to know how this might affect you? Call us. Set up a free consultation today. The post How Social Security Will Change Under President Trump appeared first on Foguth Financial Group. from http://www.foguthfinancial.com/how-social-security-will-change-under-president-trump/ Foguth Financial Group President Michael Foguth joined Detroit’s WMYD-TV 20 to discuss effective ways to pay off debt.
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The post Michael Foguth’s Effective Way To Pay Off Debt Detroit’s WMYD-TV 7 Detroit appeared first on Foguth Financial Group. from http://www.foguthfinancial.com/michael-foguth-effective-ways-to-pay-down-debt-wmyd/ Foguth Financial Group President Michael Foguth joined Flint’s ABC 12 to discuss ways to pay down debt.
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ABOUT USAt Foguth Financial, retirement planning is their specialty. From Social Security income planning to asset management, the Foguth Financial Group team takes a bird’s eye view of their client needs and goals in retirement to ensure that safety and growth are two foundations of every plan. ArchivesNo Archives Categories |