Your Advisor's Thoughts

Do You Believe It?

Last week while on the phone, I was caught off guard by the question, “Have you started setting your goals for 2012 yet?” Believe it or not, it is the goal setting time of year again! It seems like just yesterday that we were swimming with our grandchildren, persevering through one of the hottest summers in Philadelphia’s history.

I realized some time ago that, “Failure to plan is planning to fail.” This means if you have no intentionality in life, no plan or final destination, you are surely going to obtain what you set out to accomplish: not much.

My first activity in goal setting is to review each goal I set for 2011, celebrate the goals I attained, evaluate the cause for missing any goals, and re-group if necessary. Preparing for 2012, I evaluate the direction I am currently going and determine if I am on track to my destination. I then begin determining spiritual, physical, time management, and financial goals. It is always my desire to improve over the past. The goals I set need to be attainable, yet not set so low that I am underachieving.

Here is your wakeup call! Finish 2011 well. Start now to think about how you are going to better yourself, as you start planning for 2012. It’s coming faster than you think - and it will be here before you know it!

Anticipating 2012…

Phil

This is a guest blog by Philip M. Giambri, the founder and owner of “Your Best Interest” Financial Services, Inc.

Securities offered through Trustmont Financial Group (TFG) Inc. Member FINRA/SIPC. Advisory services offered through Trustmont Advisory Group (TAG) Inc. 200 Brush Run Road, Greensburg, PA 15601 724-468-5665

Neither “Your Best Interest” Financial Services, Inc. nor 401kPRO are affiliated with TFG or TAG.

Does Your 401(k) Contain Treats or Tricks?

The Treats - The GOOD Things:

401(k) plans are among the most successful investment instruments ever created to help American workers accumulate wealth. A majority of employers have generous matching programs available. For many of our retired clients, their social security checks are augmented by withdrawing retirement funds to provide for a desired standard of living.

The Tricks - The BAD Things:

The very legislation that provides for 401(k) plans is arguably the most complicated section of IRC code that exists. The simple fact that the law is complicated forces the plans to be complex and this often results in very high internal costs. Many participants believe that their plans are free, but this could not be further from the truth! The worst offending plan I have analyzed had 5.8% internal fees. A majority of plans commonly have over 3%. To put this in real terms, assuming a $150,000 account balance, this amounts to $8,700 in fees. When compounded over 10 years at 8% this is equates to $126,000 in potential retirement savings lost to fees.

In addition, 401(k) plans are legally permitted to be stretched by your beneficiaries. However many employers prohibit stretching simply because of the costs that can be incurred, and consequently your beneficiaries will not enjoy the full advantages of your savings.

The good news is that in many cases, the "Treats" of a plan do outweigh the "Tricks"… but it can be difficult to ascertain unless you know the important questions to ask your company Benefits Manager. Often even these employee fiduciary managers are unaware of the hidden costs that lurk within retirement plans, and this can make planning even more frightening! At “Your Best Interest” Financial Services, Inc., our 401(k)PRO service provides a complimentary analysis which will examine any plan for your employer to determine how tricky the "Tricks" are, and identify methods to maximize the benefits to employees.

If you are currently in a situation where you do not have a 401(k) or 403(b) plan, it is often advantageous to move your existing savings to an IRA to reduce costs, and allow stretching. A note of caution though: there are 3 caveats to moving your retirement plan to an IRA. Stay tuned for future information on this.

The bottom line, no matter your current situation, is that you need to work with someone who has vast experience and specialized knowledge in this area. If you have questions about your 401(k) plan and its costs and benefits, please contact us for an appointment to review your individual situation.

Stay tuned… and happy October!

Greg

Securities offered through Trustmont Financial Group (TFG) Inc. Member FINRA/SIPC Advisory services offered through Trustmont Advisory Group (TAG) Inc., 200 Brush Run Road, Greensburg, PA 15601 724-468-5665 Neither “Your Best Interest” Financial Services, Inc. nor 401kPRO are affiliated with TFG or TAG