If I told you that your basement was filling up with water, what would you do? Would you shrug your shoulders and say no big deal as long as it’s out of sight? Or would you leap into action, find the source of the problem, and stop the water from flowing? I’m sure everyone would choose the latter. We all know the problems water damage can cause, but many times we don’t notice a small leak until it becomes a much bigger problem. The same holds true when it comes to your finances, but unfortunately, many people don’t notice they’ve had financial leakage until it’s already wreaked havoc on their portfolio. So, what can you do to help watch out for small leaks in your retirement plan?
Well, one of the best things you can do is to schedule your complimentary, no-obligation financial review. Just like a leak in your house’s plumbing could leave you swimming through your living room, leakage in your retirement accounts can devastate your finances if you’re not careful. We help our clients align their actions with their intentions to help them be better prepared for a financial future that they can be confident in. Too often, people have to face leakage simply because they don’t know what it is, and how to avoid it. That’s where a qualified financial professional comes into play because leakage can be a major problem if it isn’t dealt with before retirement, or at the same instance that the leak occurs.
Financial leakage can happen many different ways, from not keeping up with inflation to outspending your retirement plan. Either way, the long-term effect is the same. If your retirement account is leaking, then you could be at risk of running out of money prematurely. For example, it’s common for people to tap into their retirement account before age 59½ simply because they believed they needed to for whatever reason at that particular time. However, the leakage that occurs here is a 10% early withdrawal penalty in addition to the income tax on the amount withdrawn. Imagine what would’ve happened if people knew the risks of withdrawing from their retirement account prematurely. That money would have continued to grow as it would’ve been in the account longer, rather than being claimed as a penalty by the government.
Ultimately, the best way to handle financial leakage is probably to not let it happen at all. We help people navigate through many different financial issues so you’re not alone if you are suffering with financial leakage in your portfolio. The first step is to schedule a complimentary review so we can discuss your personal situation. Once we come up with a strategy to address those issues, we can move on to longer-term planning on how we can create a plan to help you achieve your retirement goals. So, keep an eye out for small leaks before they turn into something bigger, especially when it comes to the security of your retirement.
Securities and advisory services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/ SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA. RAA is not affiliated with Lone Beacon
Neither the named representative nor the named Broker/Dealer or Investment Advisor gives tax or legal advice.
Fixed index annuities are designed to meet long-term needs for retirement income. Early withdrawals may result in loss of principal and credited interest due to surrender charges. Distributions may be subject to ordinary income tax and, if taken prior to age 59 ½, an additional 10% federal tax. An income rider or benefit (sometimes called Guaranteed Lifetime Withdrawal Benefits, or GLWB) is an additional feature available with some annuities and generally optional and come with additional cost. Income benefits are designed to provide income options above and beyond the standard annuitization or free withdrawal features in annuities. All contract gains beyond the CAP rate are surrendered to the insurance company to pay for the expense of the product.
The views expressed are not necessarily the opinion of Royal Alliance Associates Inc, and should not be construed directly or indirectly, as an offer to buy or sell any securities mentioned herein. Individual circumstances vary. Investing is subject to risks including loss of principal invested. No strategy can assure a profit against loss.