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Terry L. Jordan

Nov
09
Trust Basics
Whether you're seeking to manage your own assets, control how your assets are distributed after your death, or plan for incapacity, trusts can help you accomplish your estate planning goals. Their power is in their versatility--many types of trusts exist, each designed for a specific purpose. Although trust law is complex and establishing a trust requires the services of an experienced attorney, mastering the basics isn't hard. What is a trust? A trust is a legal entity that holds assets for the benefit of another. Basically, it's like a container that holds money or property for somebody else. There are three parties in a trust arrangement: The grantor (also called a settlor or trustor): The person(s) who creates and funds the...
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Nov
09
Risk Management and Your Retirement Savings Plan
By investing for retirement through your employer-sponsored plan, you are helping to manage a critically important financial risk: the chance that you will outlive your money. But choosing to participate is just one step in your financial risk management strategy. You also need to manage risk within your account to help it stay on track. Following are steps to consider. Familiarize yourself with the different types of risk All investments, even the most conservative, come with different types of risk. Understanding these risks will help you make educated choices in your retirement savings plan mix. Here are just a few. Market risk: The risk that your investment could lose value due to falling prices caused by outside forces, such...
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Oct
31
Test Your Knowledge of Financial Basics
How well do you understand personal finance? The following brief quiz can help you gauge your knowledge of a few basics. In the answer section, you'll find details to help you learn more. Questions 1. How much should you set aside in liquid, low-risk savings in case of emergencies? a. One to three months worth of expenses b. Three to six months worth of expenses c. Six to 12 months worth of expenses d. It depends 2. Diversification can eliminate risk from your portfolio. a. True b. False 3. Which of the following is a key benefit of a 401(k) plan? a. You can withdraw money at any time for needs such as the purchase of a new car. b. The plan allows you to avoid paying taxes on a portion of your compensation. c....
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Oct
04
Investing as a Couple: Getting to Yes
In a perfect world, both halves of a couple share the same investment goals and agree on the best way to try to reach them. It doesn't always work that way, though; disagreements about money are often a source of friction between couples. You may be risk averse, while your spouse may be comfortable investing more aggressively--or vice versa. How can you bridge that gap? First, define your goals Making good investment decisions is difficult if you don't know what you're investing for. Make sure you're on the same page--or at least reading from the same book--when it comes to financial goal-setting. Knowing where you're headed is the first step toward developing a road map for dealing jointly with investments. In some cases you may...
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Sep
13
Use Your Annuity to Pay for Long-Term Care Insurance
The cost of long-term care can quickly deplete your savings and affect the quality of life for you and your family. Long-term care insurance allows you to share that cost with an insurance company. But premiums for long-term care insurance can be expensive, and cash or income to cover those premiums may not be readily available. One option is to exchange your annuity contract for a long-term care insurance policy. Section 1035 exchange Generally, withdrawals from a nonqualified deferred annuity (premiums paid with after-tax dollars) are considered to come first from earnings, then from your investment (premiums paid) in the contract. The earnings portion of the withdrawal is treated as income to the annuity owner, subject to...
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Sep
07
Getting Help from a Financial Professional
Are you suddenly on your own or forced to assume greater responsibility for your financial future? Unsure about whether you're on the right track with your savings and investments? Finding yourself with new responsibilities, such as the care of a child or an aging parent? Facing other life events, such as marriage, divorce, the sale of a family business, or a career change? Too busy to become a financial expert but needing to make sure your assets are being managed appropriately? Or maybe you simply feel your assets could be invested or protected better than they are now. These are only some of the many circumstances that prompt people to contact someone who can help them address their financial questions and issues. This may be...
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Aug
28
Common Factors Affecting Retirement Income
When it comes to planning for your retirement income, it's easy to overlook some of the common factors that can affect how much you'll have available to spend. If you don't consider how your retirement income can be impacted by investment risk, inflation risk, catastrophic illness or long-term care, and taxes, you may not be able to enjoy the retirement you envision. Investment risk Different types of investments carry with them different risks. Sound retirement income planning involves understanding these risks and how they can influence your available income in retirement. Investment or market risk is the risk that fluctuations in the securities market may result in the reduction and/or depletion of the value of your retirement...
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Aug
20
Balancing Your Investment Choices with Asset Allocation
A chocolate cake. Pasta. A pancake. They're all very different, but they generally involve flour, eggs, and perhaps a liquid. Depending on how much of each ingredient you use, you can get very different outcomes. The same is true of your investments. Balancing a portfolio means combining various types of investments using a recipe that's appropriate for you. Getting an appropriate mix The combination of investments you choose can be as important as your specific investments. The mix of various asset classes, such as stocks, bonds, and cash alternatives, accounts for most of the ups and downs of a portfolio's returns. There's another reason to think about the mix of investments in your portfolio. Each type of investment has specific...
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Aug
09
Key Estate Planning Documents You Need
There are five estate planning documents you may need, regardless of your age, health, or wealth: Durable power of attorney Advance medical directives Will Letter of instruction Living trust The last document, a living trust, isn't always necessary, but it's included here because it's a vital component of many estate plans. Durable power of attorney A durable power of attorney (DPOA) can help protect your property in the event you become physically unable or mentally incompetent to handle financial matters. If no one is ready to look after your financial affairs when you can't, your property may be wasted, abused, or lost. A DPOA allows you to authorize someone else to act on your behalf, so he or she can do things like...
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Jul
31
Setting and Targeting Investment Goals
Go out into your yard and dig a big hole. Every month, throw $50 into it, but don't take any money out until you're ready to buy a house, send your child to college, or retire. It sounds a little crazy, doesn't it? But that's what investing without setting clear-cut goals is like. If you're lucky, you may end up with enough money to meet your needs, but you have no way to know for sure. How do you set investment goals? Setting investment goals means defining your dreams for the future. When you're setting goals, it's best to be as specific as possible. For instance, you know you want to retire, but when? You know you want to send your child to college, but to an Ivy League school or to the community college down the street?...
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Jul
12
The Tax Benefits of Your Retirement Savings Plan
Taxes can take a big bite out of your total investment returns, so it's encouraging to know that your employer-sponsored retirement savings plan may offer a variety of tax benefits. Depending on the type of plan your employer offers, you may be able to benefit from current tax savings; tax deferral on any investment returns you earn on the road to retirement; and possibly even tax-free income in retirement. Lower your taxes now When you contribute to a traditional retirement savings plan, such as a 401(k) or 403(b), your plan contributions are deducted from your pay before income taxes are assessed. These "pretax contributions" reduce your current taxable income, which in turn reduces the amount of income tax you pay to Uncle Sam...
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Jul
03
I'm about to get married. Should I adjust the asset allocation in my 401k to take my husband's investments into account?
That depends on several factors. Perhaps the first step is to make sure your existing asset allocation is appropriate for your circumstances; if you haven't reviewed it in several years, you should probably take a fresh look at it, whether or not you intend to consider his assets in your investing strategy. Assuming your allocation is appropriate for your current situation, you may want to make sure that any overlap between your accounts doesn't create a portfolio that's too heavily concentrated in a single position. For example, if you have received company stock as part of your compensation plan for many years, you might not have enough diversity in your portfolio; if both of you have worked at the same employer, the problem could be even...
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Jun
13
Planning for Incapacity
What would happen if you were mentally or physically unable to take care of yourself or your day-to-day affairs? You might not be able to make sound decisions about your health or finances. You could lose the ability to pay bills, write checks, make deposits, sell assets, or otherwise conduct your affairs. Unless you're prepared, incapacity could devastate your family, exhaust your savings, and undermine your financial, tax, and estate planning strategies. Planning ahead can ensure that your health-care wishes will be carried out, and that your finances will continue to be competently managed. It could happen to you Incapacity can strike anyone at any time. Advancing age can bring senility, Alzheimer's disease, or other ailments, and...
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May
10
Pay Down Debt or Save for Retirement?
You can use a variety of strategies to pay off debt, many of which can cut not only the amount of time it will take to pay off the debt but also the total interest paid. But like many people, you may be torn between paying off debt and the need to save for retirement. Both are important; both can help give you a more secure future. If you're not sure you can afford to tackle both at the same time, which should you choose? There's no one answer that's right for everyone, but here are some of the factors you should consider when making your decision. Rate of investment return versus interest rate on debt Probably the most common way to decide whether to pay off debt or to make investments is to consider whether you could earn a...
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May
02
Paying the Bills: Potential Sources of Retirement Income
Planning your retirement income is like putting together a puzzle with many different pieces. One of the first steps in the process is to identify all potential income sources and estimate how much you can expect each one to provide. Social Security According to the Social Security Administration (SSA), nearly 9 of 10 people aged 65 or older receive Social Security benefits. However, most retirees also rely on other sources of income. For a rough estimate of the annual benefit to which you would be entitled at various retirement ages, you can use the calculator on the Social Security website, www.ssa.gov. Your Social Security retirement benefit is calculated using a formula that takes into account your 35 highest earnings years....
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Apr
05
Life Insurance at Various Life Stages
Your need for life insurance changes as your life changes. When you're young, you typically have less need for life insurance, but that changes as you take on more responsibility and your family grows. Then, as your responsibilities once again begin to diminish, your need for life insurance may decrease. Let's look at how your life insurance needs change throughout your lifetime. Footloose and fancy-free As a young adult, you become more independent and self-sufficient. You no longer depend on others for your financial well-being. But in most cases, your death would still not create a financial hardship for others. For most young singles, life insurance is not a priority. Some would argue that you should buy life insurance now,...
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Mar
29
Test Your Knowledge of Financial Basics
How well do you understand personal finance? The following brief quiz can help you gauge your knowledge of a few basics. In the answer section, you'll find details to help you learn more. Questions 1. How much should you set aside in liquid, low-risk savings in case of emergencies? a. One to three months worth of expenses b. Three to six months worth of expenses c. Six to 12 months worth of expenses d. It depends 2. Diversification can eliminate risk from your portfolio. a. True b. False 3. Which of the following is a key benefit of a 401(k) plan? a. You can withdraw money at any time for needs such as the purchase of a new car. b. The plan allows you to avoid paying taxes on a portion of your compensation. c....
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Mar
29
Handling Market Volatility
Conventional wisdom says that what goes up must come down. But even if you view market volatility as a normal occurrence, it can be tough to handle when your money is at stake. Though there's no foolproof way to handle the ups and downs of the stock market, the following common-sense tips can help. Don't put your eggs all in one basket Diversifying your investment portfolio is one of the key tools for trying to manage market volatility. Because asset classes often perform differently under different market conditions, spreading your assets across a variety of investments such as stocks, bonds, and cash alternatives has the potential to help reduce your overall risk. Ideally, a decline in one type of asset will be balanced out by a...
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Mar
08
Retirement Plan Considerations at Different Stages of Life
Throughout your career, retirement planning will likely be one of the most important components of your overall financial plan. Whether you have just graduated and taken your first job, are starting a family, are enjoying your peak earning years, or are preparing to retire, your employer-sponsored retirement plan can play a key role in your financial strategies. How should you view and manage your retirement savings plan through various life stages? Following are some points to consider. Just starting out If you are a young adult just starting your first job, chances are you face a number of different challenges. College loans, rent, and car payments all may be competing for your hard-earned yet still entry-level paycheck. How...
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Mar
01
Staying on Track with your Retirement Investments
Investing for your retirement isn't about getting rich quick. More often, it's about having a game plan that you can live with over a long time. You wouldn't expect to be able to play the piano without learning the basics and practicing. Investing for your retirement over the long term also takes a little knowledge and discipline. Though there can be no guarantee that any investment strategy will be successful and all investing involves risk, including the possible loss of principal, there are ways to help yourself build your retirement nest egg. Compounding is your best friend It's the "rolling snowball" effect. Put simply, compounding pays you earnings on your reinvested earnings. Here's how it works: Let's say you invest $100, and...
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Feb
15
Handling Market Volatility
Conventional wisdom says that what goes up must come down. But even if you view market volatility as a normal occurrence, it can be tough to handle when your money is at stake. Though there's no foolproof way to handle the ups and downs of the stock market, the following common-sense tips can help. Don't put your eggs all in one basket Diversifying your investment portfolio is one of the key tools for trying to manage market volatility. Because asset classes often perform differently under different market conditions, spreading your assets across a variety of investments such as stocks, bonds, and cash alternatives has the potential to help reduce your overall risk. Ideally, a decline in one type of asset will be balanced out by a...
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Jan
25
Medicare Prescription Drug Coverage
If you're covered by Medicare, here's some welcome news — Medicare drug coverage can help you handle the rising cost of prescriptions. If you're covered by Original Medicare, some Medicare Cost Plans, Medicare Private Fee-For-Service Plans, or Medicare Medical Savings Account Plans, you can sign up for a Medicare Prescription Drug Plan (Part D) offered in your area by a private company or insurer that has been approved by Medicare. Although prescription drug plans vary, all provide a standard amount of coverage set by Medicare. Every plan offers a broad choice of brand name and generic drugs at local pharmacies or through the mail. However, some plans cover more drugs or offer a wider selection of pharmacies (for a higher premium) than...
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Jan
11
What to do after You've been automatically enrolled in your company's retirement plan
At one time, the only way you could join your company's 401(k) plan, 403(b) plan, or 457(b) plan was to put pen to paper and sign yourself up by filling out the appropriate forms. Now, though, in an effort to help participants increase their retirement savings, some employers have begun enrolling their employees automatically. With automatic enrollment, you don't fill out a form to opt into your company's retirement plan; you only fill out a form to opt out of it. At first glance, automatic enrollment sounds like a no-brainer--without doing anything, you're on your way to saving for retirement. But don't just assume that the investment decisions your employer has made on your behalf are right for you. Instead, take charge of your own...
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Jan
04
Robo Advisors have arrived, but life often calls for a human touch.
After years of development, numerous robo advisors have entered the world of investment management. Still, many investors may not fully understand exactly what robos do, or how they do it. A robo advisor is a digital platform that uses advanced algorithms (based on various financial models and assumptions) to select and manage investments. To keep costs relatively low, portfolios are typically composed of exchange-traded funds (ETFs) and mutual funds that track market indexes. The recommended allocations, available strategies, and various other features can differ significantly from one service to another. To start the process, the investor fills out a standard online questionnaire designed to determine his or her risk tolerance and...
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Dec
21
Taxation of Investments
It's nice to own stocks, bonds, and other investments. Nice, that is, until it's time to fill out your federal income tax return. At that point, you may be left scratching your head. Just how do you report your investments and how are they taxed? Is it ordinary income or a capital gain? To determine how an investment vehicle is taxed in a given year, first ask yourself what went on with the investment that year. Did it generate interest income? If so, the income is probably considered ordinary. Did you sell the investment? If so, a capital gain or loss is probably involved. (Certain investments can generate both ordinary income and capital gain income, but we won't get into that here.) If you receive dividend income, it may be taxed...
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Dec
18
Back to Basics: Diversification and Asset Allocation
When investing, particularly for long-term goals, there are two concepts you will likely hear about over and over again — diversification and asset allocation. Diversification helps limit exposure to loss in any one investment or one type of investment, while asset allocation provides a blueprint to help guide your investment decisions. Understanding how the two work can help you put together a portfolio that targets your specific needs. Diversification: Spreading out risk Diversification refers to the process of investing in a number of different securities to help manage risk. The theory is that if some investments in your portfolio decline in value, others may rise or hold steady. For example, say you wanted to invest in stocks....
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Dec
07
Five Questions about Long-Term Care
1. What is long-term care? Long-term care refers to the ongoing services and support needed by people who have chronic health conditions or disabilities. There are three levels of long-term care: Skilled care: Generally round-the-clock care that's given by professional health care providers such as nurses, therapists, or aides under a doctor's supervision. Intermediate care: Also provided by professional health care providers but on a less frequent basis than skilled care. Custodial care: Personal care that's often given by family caregivers, nurses' aides, or home health workers who provide assistance with what are called "activities of daily living" such as bathing, eating, and dressing. Long-term care is not just provided in...
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Dec
01
Maintaining Your Financial Records: The Importance of Being Organized
An important part of managing your personal finances is keeping your financial records organized. Whether it's a utility bill to show proof of residency or a Social Security card for wage reporting purposes, there may be times when you need to locate a financial record or document--and you'll need to locate it relatively quickly. By taking the time to clear out and organize your financial records, you'll be able to find what you need exactly when you need it. What should you keep? If you tend to keep stuff because you "might need it someday," your desk or home office is probably overflowing with nonessential documents. One of the first steps in determining what records to keep is to ask yourself, "Why do I need to keep this?"...
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Nov
21
10 Years and Counting: Points to Consider as You Approach Retirement
If you're a decade or so away from retirement, you've probably spent at least some time thinking about this major life change. How will you manage the transition? Will you travel, take up a new sport or hobby, or spend more time with friends and family? Should you consider relocating? Will you continue to work in some capacity? Will changes in your income sources affect your standard of living? When you begin to ponder all the issues surrounding the transition, the process can seem downright daunting. However, thinking about a few key points now, while you still have years ahead, can help you focus your efforts and minimize the anxiety that often accompanies the shift. Reassess your living expenses A step you will probably take...
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Nov
09
Social Security claiming strategies for married couples
Prepared for: Save New Client Subtitle: Social Security Claiming Strategies for Married Couples Deciding when to begin receiving Social Security benefits is a major financial issue for anyone approaching retirement because the age at which you apply for benefits will affect the amount you'll receive. If you're married, this decision can be especially complicated because you and your spouse will need to plan together, taking into account the Social Security benefits you may each be entitled to. For example, married couples may qualify for retirement benefits based on their own earnings records, and/or for spousal benefits based on their spouse's earnings record. In addition, a surviving spouse may qualify for widow or widower's...
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Nov
06
Will Social Security retire before you do?
People have traditionally seen Social Security benefits as the foundation of their retirement planning programs. The Social Security contributions deducted from workers' paychecks have, in effect, served as a government-enforced retirement savings plan. However, the Social Security system is under increasing strain. Better health care and longer life spans have resulted in an increasing number of people drawing Social Security benefits. As the baby boom generation (those born between 1946 and 1964) retires, even greater demands are being placed on the system. In 1950, there were 16.5 active workers to support each person receiving Social Security benefits. In 2015, there were only 2.8 workers supporting each Social Security beneficiary....
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Oct
26
What are my options of I inherit an IRA or an employer retirement savings plan account?
If you don't want the money, you can always disclaim (refuse to accept) the inherited IRA or plan funds. But if you're like most people, you will want the money. Your first thought may be to take a lump-sum distribution, but that's usually not the best idea. Although a lump sum provides you with cash to meet expenses or invest elsewhere, it can also result in a huge income tax bill (in most cases, due all in one year). A lump-sum distribution also removes the funds from a tax-deferred environment. Fortunately, you probably have other alternatives. If you are the designated beneficiary (i.e., you are named as beneficiary in the IRA or plan documents), you can take distributions over your remaining life expectancy, which spreads the income...
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Oct
20
Life Insurance Riders that Pay for Long-Term Care
Life insurance has many uses, including income replacement, business continuation, and estate preservation. Long-term care insurance provides financial protection against the potentially high cost of long-term care. If you find yourself in need of both types of insurance, a life insurance policy that combines a death benefit with a long-term care benefit may appeal to you. Here's how it works Some life insurance issuers offer life insurance with a long-term care rider available for an additional charge. If you buy this type of policy, you can pay the premium in a single lump sum or by making periodic payments. In any case, the policy provides you with a death benefit that you can also use to pay for long-term care related expenses,...
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Oct
11
Should you pay off your mortgage or invest?
Owning a home outright is a dream that many Americans share. Having a mortgage can be a huge burden, and paying it off may be the first item on your financial to-do list. But competing with the desire to own your home free and clear is your need to invest for retirement, your child's college education, or some other goal. Putting extra cash toward one of these goals may mean sacrificing another. So how do you choose? Evaluating the opportunity cost Deciding between prepaying your mortgage and investing your extra cash isn't easy, because each option has advantages and disadvantages. But you can start by weighing what you'll gain financially by choosing one option against what you'll give up. In economic terms, this is known as...
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Sep
27
Elven ways to help yourself stay sane in a crazy market
Keeping your cool can be hard to do when the market goes on one of its periodic roller-coaster rides. It's useful to have strategies in place that prepare you both financially and psychologically to handle market volatility. Here are 11 ways to help keep yourself from making hasty decisions that could have a long-term impact on your ability to achieve your financial goals. 1. Have a game plan Having predetermined guidelines that recognize the potential for turbulent times can help prevent emotion from dictating your decisions. For example, you might take a core-and-satellite approach, combining the use of buy-and-hold principles for the bulk of your portfolio with tactical investing based on a shorter-term market outlook. You also can...
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Sep
20
Leaving a Legacy
You've worked hard over the years to accumulate wealth, and you probably find it comforting to know that after your death the assets you leave behind will continue to be a source of support for your family, friends, and the causes that are important to you. But to ensure that your legacy reaches your heirs as you intend, you must make the proper arrangements now. There are four basic ways to leave a legacy: (1) by will, (2) by trust, (3) by beneficiary designation, and (4) by joint ownership arrangements. Wills A will is the cornerstone of any estate plan. You should have a will no matter how much your estate is worth, and even if you've implemented other estate planning strategies. You can leave property by will in two ways: making...
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Sep
07
When I die, what will happen to my retirement plan benefits?
In general, your retirement plan benefits pass to the beneficiaries you designate on the plan beneficiary designation form. It is generally recommended that you designate beneficiaries, the percentage of the total that each will receive, and any backup beneficiaries on the plan beneficiary form. However, if you are married or have been married, your spouse or former spouse may have certain rights in your retirement benefits. If you have a large taxable estate (generally, over $5,490,000 in 2017), your retirement benefits could be subject to estate tax or generation-skipping transfer (GST) tax at your death. The GST tax may apply if you transfer your retirement benefits to someone who is two or more generations younger than you, such as...
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Aug
31
Decisions, Decisions: Choosing Among Retirement Plan Contribution Types
If your employer-sponsored 401(k) or 403(b) plan offers pre-tax, Roth, and/or non-Roth after-tax contributions, which should you choose? How do you know which one might be appropriate for your needs? Start by understanding the features of each. Pre-tax: For those who want lower taxes now With pre-tax contributions, the money is deducted from your paycheck before taxes, which helps reduce your taxable income and the amount of taxes you pay now. Consider the following example, which is hypothetical and has been simplified for illustrative purposes. Frank earns $2,000 every two weeks before taxes. If he contributes nothing to his retirement plan on a pre-tax basis, the amount of his pay that will be subject to income taxes will be the...
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Aug
24
Changing jobs? Know your 401k options
If you've lost your job, or are changing jobs, you may be wondering what to do with your 401(k) plan account. It's important to understand your options. What will I be entitled to? If you leave your job (voluntarily or involuntarily), you'll be entitled to a distribution of your vested balance. Your vested balance always includes your own contributions (pretax, after-tax, and Roth) and typically any investment earnings on those amounts. It also includes employer contributions (and earnings) that have satisfied your plan's vesting schedule. In general, you must be 100% vested in your employer's contributions after 3 years of service ("cliff vesting"), or you must vest gradually, 20% per year until you're fully vested after 6 years...
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Aug
17
Should I buy a home or continue renting?
Most people face this question at some time in their lives. Buying a home is part of the American dream. It's also one of the biggest financial investments you'll ever make. One of the main advantages of buying a home is that you build equity in your property. For example, if you paid rent at $1,000 per month for 10 years, you would have spent $120,000 on rent and have nothing to show for it. However, if you had purchased your home and made $1,000-per-month mortgage payments for 10 years, you would have paid off a sizable portion of your mortgage. And if you decided to sell your home, you might make a profit. Before buying a house, remember that your lending institution will want proof that you have money saved for the down payment...
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Aug
08
Deciding When to Retire: When Timing Becomes Critical
FINRA® Letter Prepared for: Save New Client Subtitle: Deciding When to Retire: When Timing Becomes Critical Deciding when to retire may not be one decision but a series of decisions and calculations. For example, you'll need to estimate not only your anticipated expenses, but also what sources of retirement income you'll have and how long you'll need your retirement savings to last. You'll need to take into account your life expectancy and health as well as when you want to start receiving Social Security or pension benefits, and when you'll start to tap your retirement savings. Each of these factors may affect the others as part of an overall retirement income plan. Thinking about early retirement? Retiring early means fewer...
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Aug
03
My husband is about to receive his pension. We've heard of "pension maximization". What is it?
If your husband is participating in a traditional pension plan (also known as a defined benefit plan), his benefits must normally be paid in the form of a "qualified joint and survivor annuity" (QJSA). A QJSA is an annuity that pays a dollar amount (usually monthly) to your husband while he is alive, with at least 50% of that amount continuing to you after his death, if you survive him. However, if you consent in writing, your husband can waive the QJSA and elect instead to receive a single-life annuity. With a single-life annuity, payments are made over your husband's lifetime but stop upon his death. For example, if your husband receives just one payment after retirement and then dies, the single-life annuity would end and the plan...
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Jul
26
How do I get disability benefits from Social Security?
Getting Social Security disability benefits is a two-step process. First, the Social Security Administration (SSA) determines whether you are eligible to receive benefits. This determination is based on the number of years you have worked and paid Social Security taxes. Second, you apply for disability benefits by furnishing information about your claim, including the names, addresses, and telephone numbers of physicians, hospitals, and clinics that have treated you for your disability. You will also be asked to provide a copy of your most recent W-2 form (or tax return if you're self-employed), as well as your Social Security number and proof of your age. If your claim is approved, don't expect to get your disability benefits right...
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Jul
19
Should I be investing more aggressively?
There's no way to know the answer to that without reviewing your individual circumstances and financial goals. However, if you are investing too conservatively, it can have a profound effect on your long-term financial security. That's particularly true for women. According to a U.S. Department of Labor study ("Women and Retirement Savings," October 2008), women often start saving later, save less, and invest more conservatively than men, which decreases their chances of having enough income in retirement. How you should be investing depends on many factors, such as: 1) How able are you to tolerate risk? 2) How soon do you hope to achieve your financial goals? 3) How much will you need to save for important goals such as retirement? 4)...
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Jul
12
I can choose a single life annuity for my pension or a joint and survivor annuity that makes payments to my spouse when I die. Which is better?
It depends on your circumstances. If you're not married, the single life annuity is clearly the best choice (and may be your only option). You'll receive the maximum payout from your pension during your life, and all benefits will cease when you die. This option may even make sense if you're married (assuming that you have other ways to take care of your surviving spouse, such as investments or retirement plan assets), and the difference between the higher-paying single life annuity and the joint and survivor annuity is very great. (The joint and survivor annuity benefits paid to you during your life will be smaller than if you elected a single life annuity, because they are payable as long as either person is alive.) One common...
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Jul
05
Can I deduct premiums paid for long-term care insurance (LTCI)?
It depends on several factors. Your LTCI contract must be a qualified one, you must itemize deductions on Schedule A of IRS Form 1040, and the total of your medical expenses (including your LTCI deduction) must exceed 10 percent of your adjusted gross income (AGI). Qualified LTCI premiums are deductible as medical expenses (subject to the 10 percent of AGI floor) within certain limits, based on your age. Note: Prior to 2013, the threshold to deduct medical expenses was 7.5 percent of adjusted gross income. The threshold remains 7.5 percent until 2017 for those age 65 or older. If you bought your policy before January 1, 1997, and it met the requirements of the state in which it was issued, it is automatically considered a qualified...
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Jun
21
Will Social Security be around for me?
With the news full of reports about Social Security's uncertain future, you might wonder whether you will ever benefit from the Social Security taxes you pay. Although this popular social insurance program faces financial challenges, and some reform is certainly likely, Social Security is not only likely to be there for you in the future, it's there for you right now. Social Security is not just for retirees. The program also provides valuable protection to younger people. For example, if you become disabled at any age and can no longer work, you may be eligible to receive Social Security disability benefits. If you have a family, your spouse and children may also be eligible to receive certain types of benefits based on your earnings...
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Jun
14
How much money should I save for retirement?
Generally speaking, as much as possible. You need to build a fund that you'll be able to draw on for much of your retirement income. Believe it or not, this may be possible if you start early and make smart choices. Contribute as much as you can to tax-advantaged savings vehicles (e.g., 401(k)s, IRAs, annuities). Then round out your retirement portfolio with other investments (e.g., stocks, bonds, mutual funds). As you're planning and saving, keep in mind that you may have 30 or more years of retirement to fund. So, you probably need an even bigger nest egg than you think. Before investing in a mutual fund, carefully consider its investment objectives, risks, fees, and expenses, which are contained in the prospectus available from the...
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Jun
07
I don't know much about investing. Should I let my husband make the decisions?
Even if your husband is a financial expert, it's a good idea to at least understand investing basics. For one thing, because women on average tend to live longer than men, the odds are extremely high that you could be responsible for making your own financial decisions at some point. If you suddenly had to make all the decisions yourself--and many women have found themselves in that position--you'd benefit from knowing enough to protect yourself from fraud and/or communicate effectively with a financial professional. Also, even if your spouse is more knowledgeable about finances than you are, understanding enough to consider the pros and cons involved in an individual financial decision can often produce a better outcome; it forces both...
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Jun
01
Will my children receive money from Social Security when I die?
Maybe. It depends on how old your children are, and how long you've worked in a job where you've paid Social Security taxes. To be eligible for Social Security benefits when you die, your children must be age 18 or under (19 if still in high school), and unmarried. However, if an unmarried child is disabled and was disabled before age 22, he or she can qualify for benefits based on your record at any age; benefits for a disabled child may end, though, if your child marries or is no longer considered disabled. In addition, you must have earned the required number of Social Security credits (generally 40, depending on your age at the time of your death). You earn credits by working in a job where you pay Social Security taxes on your...
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May
23
Is student loan interest deductible?
You may be able to deduct all or part of the student loan interest you've paid during the year, assuming you meet the requirements. You may be able to deduct up to $2,500 each year from your gross income if you've paid interest on a qualified education loan for qualified higher education expenses during the year. To be eligible for the deduction, your modified adjusted gross income (MAGI) must fall below a threshold figure. For 2017, the deduction begins to phase out as your MAGI exceeds $65,000 if you're single or $135,000 if you're married and file jointly. It phases out completely when your MAGI exceeds $80,000 ($165,000 for married persons filing jointly). These amounts are indexed for inflation. No deduction is allowed if your filing...
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May
16
How aggressive should I be when I invest for retirement?
It depends. The right answer in your case will depend on a number of key factors. These include, among others, your income and assets, your attitude toward risk, whether you have access to an employer-sponsored plan at work, the age at which you plan to retire, and your projected expenses during retirement. But it's possible to lay down some guidelines that may be of help to you. The conventional wisdom has traditionally been that you should invest aggressively when you're young and then move gradually toward a more conservative approach. By the time you retired, you would probably end up with a portfolio made up mostly of high-grade bonds and other low-risk investments. However, the retirement landscape has changed dramatically in the...
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Apr
18
Are Life Insurance Proceeds Income Taxable?
In general, life insurance proceeds paid to you because of the death of the insured are not subject to federal income tax. To qualify for such favorable tax treatment, the life insurance contract must meet certain IRS requirements. However, proceeds may be taxable in limited cases. For instance, if you receive the insurance proceeds in installments and interest is paid, the interest portion of the payment generated after the insured's death is treated as taxable income. This is taxed at your ordinary income rate. The part of the installment payment that is classified as investment in the contract is not taxable, however. If a life insurance policy is sold or otherwise transferred for valuable consideration before the insured's death,...
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Apr
03
Estimating Your Retirement Income Needs
You know how important it is to plan for your retirement, but where do you begin? One of your first steps should be to estimate how much income you'll need to fund your retirement. That's not as easy as it sounds, because retirement planning is not an exact science. Your specific needs depend on your goals and many other factors. Use your current income as a starting point It's common to discuss desired annual retirement income as a percentage of your current income. Depending on who you're talking to, that percentage could be anywhere from 60 to 90 percent, or even more. The appeal of this approach lies in its simplicity, and the fact that there's a fairly common-sense analysis underlying it: Your current income sustains your present...
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Mar
27
I Receive Disability Insurance Payments, Are They Taxable?
Federal income taxation of disability insurance benefits depends on what type of benefits you receive, whether the premiums were paid with pretax or after-tax dollars, and who paid the premiums (you or your employer). The disability proceeds are taxable to you if your employer paid all of the disability premiums for you and did not include the amount in your gross income, or if your employer paid you directly while you were disabled. If you paid all of the premiums with after-tax income, or if your employer made the contributions and included the amounts in your gross income, any disability insurance benefits paid to you are exempt from tax. If your employer pays part of each premium and you pay the balance with after-tax dollars, you...
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May
19
Investing as a Couple: Getting to Yes
Tags: couples; women
Coming to a general agreement on what your priorities are and roughly when you hope to achieve each one can greatly simplify the process of deciding how to invest. Making sure both spouses know how and (equally important) why their savings are invested in a certain way can help minimize marital blowback if investment choices don't work out as anticipated. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. In a perfect world, both halves of a couple share the same investment goals and agree on the best way to try to reach them. It doesn't always work that way, though; disagreements about money are often a source of friction...
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Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Terry L. Jordan is a Investment Advisor Representative who is a Michigan resident. An Investment Advisor Representative may only discuss/and or transact securities business with residents of the following states: Michigan, Arizona, Florida, Indiana, and Washington.

Securities and advisory services offered through Woodbury Financial Services, Inc., Member FINRA, SIPC. Insurance offered through Jordan Financial & Associates which is not affiliated with Woodbury Financial Services, Inc. 



This communication is strictly intended for individuals residing in the state(s) of AZ, FL, ID, IN, MI and WA. No offers may be made or accepted from any resident outside the specific states referenced.
 


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