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DO YOU SEE THE FOREST FOR THE TREES?
I recently held a lunch-and-learn event and invited a number of people who had attended our past events. These folks weren’t clients, but I wanted to see how we might be able to help
them by inviting them to this educational event. I covered several topics such as tax strategies, Social Security planning , and downside
protection. I also got into estate planning. In short, we ran the gamut of retirement planning topics. At the end of the presentation, I got some intriguing questions. These were questions that got me thinking — are people not seeing the forest for the trees? I got a lot of questions about several topics. Social Security was a common one. People brought up the fact that they didn’t need to plan to receive Social Security benefits. They would simply start taking them at full retirement age and go from there. Is there any reason to not take Social Security at full retirement age? If you’re our client, you probably know the answer. For some people, it may make sense to take Social Security benefits when they reach full retirement age, and for others, it might not make any sense at all. However, the issue is really about planning. Without proper planning, you could be leaving tens of thousands of dollars on the table over the course of your retirement. We believe everyone needs a retirement income plan. We sit down with every client, develop a plan, and then we go over it together every year. When you have these types of sit-downs, we talk about enhancing their income and setting up their income flow to be as tax-efficient as possible. We cover a lot of ground, including the “right time” to take Social Security.
On their own, very few people ever put a plan like this together. They don’t think about holding off on Social Security. They don’t dive into investment strategy or fully understand how to invest or where to invest. It becomes guesswork and that can be frustrating —which comes back to why people ultimately don’t bother with it. As I got more questions from this lunch-and-learn group, I was seeing that most, if not all of them, had no real downside protection either. The market has been going up for the past 10 years. This is the longest it’s ever gone up. Plus, it’s hit record numbers. Going into 2020, not having a downside protection strategy could spell trouble. When the markets crashed in 2008, many people lost a lot of money. Entire portfolios were wiped out because so many people didn’t have downside protection strategies in place. They were coasting. We don’t want our clients to go through this. This is why we created downside protection strategies into their portfolios. If the markets take
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People focus on the fact that they have to pay taxes on their gains and forget about the big picture: The market is constantly fluctuating. On top of that, their portfolio might not be balanced. Having the right mix of investments, over time, can prove far more crucial, than holding onto an investment because you don’t want to pay the tax on it. A well-balanced portfolio has a better chance of surviving a major dip in the market (and potentially a recession) than one that isn’t balanced at all. When these types of issues pop up, it makes me happy to know that we have systems and processes in place to handle them. We’ve put a lot of time and effort getting these systems in place and making sure they work. It’s an effort I’ve very thankful for. As this year comes to a close, I’m also very thankful for our clients as well as our incredibly strong team who is here to help you achieve your goals. We’re excited to see what 2020 has in store. From all of us at Campbell Wealth Management, have the happiest of holidays and a wonderful New Year!
a hit, they may lose some money, but they may potentially avoid significant losses. Our aim is to help them be confident in pursuing their retirement more or less as they planned it. This group also asked questions about estate planning and the documents involved. While they understood that it’s important to have documents in place, such as a will, they seemed less sure about the bigger picture. Having a will in place is one thing, but how you set up your beneficiaries and how various assets, accounts, and insurance policies are distributed, is something else entirely. It goes beyond just naming people and who gets what. I see people make mistakes with the estate planning documents every day — including not keeping those documents updated. The devil is in the details and if you ignore (or forget about) the details, your beneficiaries could end up with a legal battle on their hands. Finally, taxes. Often, when we meet with a potential new client, they may not want to sell a certain investment because they’re concerned about the associated taxes. I remind them that while the market is currently high, they will pay some tax now, or maybe over the next few years, but if they choose to wait, they might not have to pay tax at all. That might sound good until you realize that you don’t pay tax because there are no gains. Many retirees rely on pensions in addition to savings, investments, and Social Security. However, pensions are rapidly becoming a thing of the past, and it’s leaving a lot of retirees and pre-retirees feeling frustrated. In October, General Electric began freezing the pensions of more than 20,000 current salaried employees. The company also offered to buy out over 100,000 former employees who had yet to start receiving their benefits. For current GE employees who are impacted by the freeze (which goes into effect on Dec. 31), they will no longer be accruing pension benefits. As it stands, retirees already receiving pension benefits should see those benefits remain unchanged. However, GE is far from alone in freezing pension benefits. Major companies like DuPont and IBM have done the same. According to the U.S. Department of Labor, the number of pension plans with 100 or more participants has dropped like a rock. At their height, there were nearly 26,000 active plans in 1983. In 2016, that number was around 8,400 — a number that is continuing to trend downward. For many people approaching retirement, this can have serious repercussions. But if your current or former employer initiates a freeze, it’s FROZENOVER The New Reality of Pension Plans?
Kelly Campbell
crucial to follow up and know exactly how you’ll be affected. Most freezes do not impact retirees who are already collecting their pension. Instead, it
prevents newer employees from participating in the pension program.
If you have questions, talk to the employer. Don’t leave questions hanging in the air. If your retirement plan included a specific amount of pension money, you may need to adjust your plan to account for any changes to your pension or, at the very least, have a back-up plan should your employer or former employer change the terms of their pension plan. As frustrating as it can be, seeing a reduction in pension benefits is a part of today’s reality. The best many of us can do is plan for that future and do what we can to reduce the negative impact it has on retirement.
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There’s No Expiration Date on Entrepreneurship The Joys of Starting a Business After You ‘Retire’
As a nation, America is getting older. By 2030, 20% of Americans will be 65 or older. With people living longer than ever before and the baby boomers approaching retirement age en masse, older adults will continue to have a massive impact on the American economy at large. Normally, we think of seniors as people who cash in on the hard work they’ve already accomplished. Many young people even worry Social Security will be wiped out by the time they reach retirement age. But who’s to say older adults can’t contribute to the economy? If you’ve ever tried to change jobs late in your career or pick up some part-time work after retirement, you know it’s hard to be hired as a senior. Quartz recently called seniors “the economy’s most underused natural resource.” Until more employers understand the value and potential of older workers, entrepreneurship remains the most viable avenue for seniors wanting to work after their primary career has ended. There are a number of reasons why seniors find creating their own business to be rewarding and why they tend to succeed when they do. Would you like to be a Campbell Wealth Management Ambassador? Would you like access to exclusive CWMAmbassador events?
Unlike younger people, who often become business owners in an attempt to make a fortune, older
entrepreneurs can be content with small, sustainable micro-businesses. They also approach their businesses with a wealth of experience that can’t be purchased. As a result, 70% of ventures founded by older entrepreneurs are still open five years later, more than double the rate of the general population.
With so much potential to be found in senior-run businesses, it’s no surprise that organizations are rushing to empower older adults with the tools they need to succeed. Senior
Planet, a coworking space for seniors with outposts nationwide, teaches classes on skills like website creation in a space that makes older learners feel welcome and comfortable. On top of being an important economic driver, entrepreneurship can be a wonderful way for seniors to generate meaning and value in their lives. It’s never too late to start the business of your dreams.
All you have to do is refer a friend. Do you know someone who: • Wants to be better prepared for retirement? • Is looking for a second opinion regarding their portfolio? • Has gone through a major life event (death of a spouse, retirement, etc.)? Call us at ( 571) 800-6371 and let’s set up an introduction! If they are important to you, they are important to us.
Call Us Today (703) 535-5300 • 3
700 S. Washington St. Suite 220 Alexandria, Virginia 22314 (703) 535-5300 CampbellWealth.com
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CampbellWealth.com (703) 535-5300 330 John Carlyle St., Suite 400 Alexandria, Virginia 22314
Inside
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Do You See the Forest for the Trees? What Can You Do if Your Pension Is Frozen? The Power of Senior Entrepreneurship Toys For Tots Yurts: Glamping at Its Finest
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Securities offered only by duly registered individuals through Madison Avenue Securities, LLC (MAS), member FINRA/SIPC. Advisory services offered only by duly registered individuals through Campbell Wealth Management, LLC (CWM), a Registered Investment Advisor. MAS and CWM are not affiliated entities.
YURT SWEET YURT Glamping in Beautiful Locations
Spruce Hole Yurt, Colorado Nestled in the San Juan Mountains about 10 miles north of New Mexico, this yurt is a snow-lover’s paradise. Skiing, snowshoeing, and hiking trails are plentiful in this backcountry location. At the end of a chilly day, come home to comfy beds, cooking supplies, and decor made to feel like you’re camping —but with sturdy walls to keep out the cold. Falls Brook Yurts, New York For the glampers who truly want to get away, hike just under 1 mile into the woods of the Adirondack Mountains to discover rustic yurts beckoning you to cook over a fire or bundle up with a book. At night, the yurt’s domed skylight offers excellent stargazing. For those keen on winter activities, skiing and snowshoeing trails start right outside the front door. In the summer, enjoy hiking, fishing, and swimming. No matter your style or comfort level, there’s a yurt out there for everyone to enjoy. So find the one that’s perfect for you, then immerse yourself in the great outdoors before relaxing in your little home away from home.
The allure of the great outdoors calls to many, but pitching a tent and cooking over a fire isn’t
for everyone. If that describes you, consider the yurt: a small, permanent structure often outfitted with electricity, plumbing, and other modern
amenities. Expertly nestled in remote locations, they provide comforts of home in the midst of nature. Here are just a few around the United States available for rent. Treebones Resort, California For those new to the glamping scene, this is a great choice for an easy transition. With picturesque views of the Pacific Ocean, the Treebones Resort in Big Sur has an array of spaciously comfortable yurts to choose from. The resort has heated pools, a cozy lodge, and even a sushi bar. About an hour up the coastline, you can find a few shops, restaurants, and art galleries if you decide you’ve gotten your dose of nature for the day.
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