Campbell Wealth Management - September 2018

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CampbellWealth.com • (703) 535-5300 • 700 S. Washington St., Suite 220, Alexandria, Virginia 22314

Giving Back Through the APPALACHIA SERVICE PROJECT

As you may have heard, there are a few improvements coming to Campbell Wealth Management and your client experience! Last month, I detailed a few of those upgrades. One of the biggest upgrades you can expect is the implementation of Black Diamond, a portfolio management platform. It will be an online portal where you can see everything related to your portfolio and investments. This upgrade, along with others we will be rolling out in the coming months, represents our continued commitment to deliver the best client experience possible. We want to put more resources into creating that ultimate experience, and we’re excited to make it more enjoyable, efficient, and convenient for you. Look for much more information soon. On a personal note, I wanted to share an experience I had over the summer. For the third year in a row, my 16-year-old son, Carter, and I participated in the Appalachia Service Project, or ASP. Along with 49 other people frommy sister-in-law’s church, River Road Presbyterian, we headed out to Logan County, West Virginia. When we arrived, we divided into smaller groups of two adults and four kids. From there, we went to our service project, a home owned by a husband and wife. The home was built in the 1930s, in the heyday of coal mining in the area. Back then, the home was owned by the local mine, built to house one of the mine managers and his family. The house itself was probably about 600 square feet, occupying a 20-by- 30-foot space —not a lot of room for the couple and their many kittens and puppies. But the home had been in the husband’s family for a long time; he had inherited the home from his father. Unfortunately, the home had fallen into disrepair. The roof was leaking, causing a lot of damage in the ceiling as well as on the floor. As part of the service project, it was up to our team to repair the damage and restore the home to a fully livable condition.

First, we fixed the leak in the roof. With that repaired, we moved to the floor, which was the most challenging part of the week. The carpet was wet, and the floor underneath was damaged. We had to pull it all out, first the top level of the floor, and then the second.

Once the damaged flooring and surrounding wood was removed, we began to install new wood, including oriented strand board (OSB). This installation process turned into a great teaching opportunity for the kids. They learned how to use circular saws, nail guns, and just about every other tool we had on-site. After the OSB was in place, we put in a new vinyl floor that was made to look like natural wood grain. It looked great and came together exceptionally well. All in all, the team was able to finish the project within the week. On our last Friday together, the group gathered to talk about what had inspired us over the course of the week, sharing our “God moments.” For me, my moment came when I realized that whenever it rained, the couple who owned the home had to place buckets under the leak to collect the water. They couldn’t leave their home unattended. It was a constant battle with the weather. I also thought about those of us who live in dry, safe homes. We have good roofs over our heads and solid floors under our feet. It’s something to be thankful for, and I walked away feeling blessed that we were able to share this with a family who hadn’t known what it was like to live in a dry, comfortable home for a long time. Kelly Campbell

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IRAMisconceptions

Ask yourself how much money you want saved for retirement. The answer is usually “enough to live comfortably.” When planning out retirement far in advance, inflation also becomes a factor to consider. It’s not uncommon for inflation, not to mention taxes, to negatively impact your principal and lower your real rate of return. Myth: If you already have a retirement plan 4 Common Questions Answered

There are a number of misconceptions about IRAs (individual retirement accounts) still out there. These misconceptions can lead to people avoiding IRAs or similar types of retirement accounts. Let’s take a look at a few of those misconceptions and clear the air. Myth: If you’re taking Social Security benefits,

or you plan on using themwhen you’re retired, you don’t need an IRA. Relying on Social Security alone is often a mistake. Unless you expect to change your lifestyle, you can expect a significant drop in income. On average, Social Security pays roughly 40 percent of retirees’ preretirement income, a number which is dropping. For many this change can represent a large financial burden, one that is unsustainable unless you have other savings and investments available to supplement Social Security.

through your employer, it's neither practical nor possible to open an independent IRA. It is both practical and possible to open an IRA alongside a pension plan or 401(k). It’s never a bad idea to have more than one retirement plan in place. If

you do have a 401(k), keep in mind that if you open a traditional IRA, the 401(k) may affect your ability to take a tax deduction on traditional IRA contributions. Myth: If you’re younger and have limited work experience and income, it’s not possible to open an IRA. Anyone making an earned income, regardless of age, can open a new IRA. If you’re older, you can continue to contribute to a Roth IRA, provided you have the earned income to do so.

Myth: If you have an IRACD, you’ll have a secure retirement. Possibly, but understand that, because CDs are reliable and secure, the rate of return is lower than a riskier investment, such as a mutual fund.

3 STEPS TORETIREMENT The Road Map Every 55-Year-Old Should Follow

KnowYour Portfolio. The stock market is a tempting gamble for those looking to jump-start their nest eggs. However, investments with the highest returns also come with significant risk. The last thing anyone wants is to end up losing their principal right before retirement. That’s why most financial planners recommend investment strategies that growmore conservative as you age. If you are thinking about investing—or have been doing so for some time— it’s a good idea to check in regularly with your portfolio and ensure that you are comfortable with the amount of risk you are incurring. Settle Your Debts. Debts, especially ones with high interest rates, can chew through your retirement savings. If you can’t get it all paid off before retirement, consider moving your credit card debt and other loan balances to accounts with a lower rate to ensure you are paying as little in interest as possible. These tips provide a general road map to a more stable retirement. Your own goals and financial situationmay provide unique challenges and opportunities on the path to your post-work life. To understand your best options, reach out to a trusted financial advisor.

If you’re age 55 or older, it’s time to get serious about planning for your retirement. In fact, most industry experts recommend far longer lead times of 20 years or more! But don’t be discouraged! Even if

you’re a late planner, there are steps you can take to ensure you get the most out of your retirement. Here are the three most important steps you need to take to secure your future. Get Your Finances in Order. The first place to start when preparing for retirement is your own checkbook. By gauging your overall financial readiness, you can identify whether your spending and lifestyle habits are in need of a course correction. You’ll need to consider all of your finances as well as your income tax rate, the rate of return on your savings, and any benefit plans you may have from your employer. If your financial readiness falls short of the income you expect to live off of in your retirement, it’s time to make some adjustments. Cutting back on day-to-day expenses, working a second job, and increasing your contributions to salary deferral programs are all great ways of boosting your readiness ahead of retirement.

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3 COMMONMONEY MISTAKES YOUMAY BE MAKING

Keeping Up With the Joneses

Thankfully, with the internet and community financial literacy classes, developing “money education” is easier than

This is something far too many people try to do — and fail at. They want to keep up with the lifestyles of their neighbors, acquaintances, family, and friends. People will splurge on homes, cars, RVs, and other items they can’t really afford. They overspend just to maintain the same lifestyle as their peers. To compensate, some people will dip into retirement savings or sell off good investments and take the penalties that come with it. Then, when they do finally retire, they realize the magnitude of their mistakes. Keeping up with the Joneses comes at a huge cost with a ripple effect that can last for the rest of your life.

ever. When you have questions about your finances, chances are that there are resources available to answer your most pressing questions, either by phone or internet.

Being Too Stingy

Even after saving for a lifetime, some people will go into retirement and not spend anything on themselves outside of typical living expenses. It can be a challenge to shift your mindset from “save” to “spend” in retirement. As a result, people don’t live the retirement they once dreamed of. They don’t travel or buy a new car when they can safely afford to do so. Avoiding common financial mistakes requires proper planning and a conscious effort to make a shift in mindset. The people who do so, though, are often happier in the long run.

Not Being Fully Educated on Money

Some people go decades without realizing where their money goes each month. Then there are others who don’t know how to save. In many cases, this lack of education can be traced back to their youth. They may not have been taught financial literacy at school, or they may not have learned about it from their parents.

SUDOKU

Upcoming Events

SOCIAL SECURITY WORKSHOP Paul Spring's Retirement Community, Alexandria, VA Monday, Sept. 10 at 1:30 p.m. INCOME PLANNING: SOCIAL SECURITY AND TAX PLANNING UNDER NEW LEGISLATION

Historic Blenheim, Fairfax, VA Thursday, Sept. 13 at 11 a.m. 60–70 ½ - SOCIAL SECURITY AND RMDs

Historic Blenheim, Fairfax, VA Wednesday, Sept. 19 at 6:30 p.m. To register for any of the upcoming events, please email us at seminars@campbellwealth.com or call Carol at (571) 800-6373. Make sure to check out our website to see more upcoming events: CampbellWealth.com/educational-resources/upcoming-events

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Inside

Another Summer With the Appalachia Service Project Common IRA Questions Answered Jump-Start Your Path to Retirement Are You Guilty of These Financial Bad Habits? Have You Heard About Mauritius?

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A Secret Island of Adventure MARVELOUS MAURITIUS

Walk Through History More than a tropical escape, Mauritius is an island full of history and culture, so there are plenty of opportunities to learn about the island’s layered past. You can visit one of the historical rummeries or explore Mauritius’ two UNESCOWorld Heritage Sites. You can also check out Aapravasi Ghat, the Immigration Depot, and Le Mourne Brabant. Taste the Memories A day spent playing on an island is always better with great food. Influenced by its French, Creole, Indian, and Chinese heritage, Mauritius offers a vast menu of delicious dishes to try, from curry to dim sum. And the rich soil and bountiful ocean provide more than enough fresh fruit and seafood to go around. Despite its amazing vacation potential, Mauritius is all but unheard of to people in the United States. This means travelers can find amazing five-star resorts at unbeatable prices! With this in mind, isn’t it time you got to know the island of Mauritius?

Just over 1,000 miles off the southeastern coast of Africa in the Indian Ocean lies the small island of Mauritius. The island is often overlooked by the rest of the world. Most people are more likely to have heard of the island’s most famous extinct

occupant, the dodo bird, than the island itself. This is shocking when you discover how much fun there is to be had in this tropical wonderland. Adventure Awaits Looking for fun in the sun? Start your trip to Mauritius with a hike up the lush Lion Mountain, or take time to snap a photo of the Seven Coloured Earths, where volcanic soil has created sand dunes of seven distinct colors. And what’s a trip to an island without the beach? Beautiful coral reefs surround Mauritius, keeping sharks away from the pristine beaches. Island guests and locals can fearlessly scuba dive around the brilliant reefs, swim with dolphins, kite surf, and find lots of other ways to enjoy the warm ocean waters.

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