Category Archives: Planning for Your Financial Future & Retirement

Habits That Can Work Against Wealth Creation

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Are You Undercutting Your Efforts to Build Wealth?

Good money habits can help you as you save and invest for the future. Bad habits can leave you treading water financially. Let’s review three bad money habits to avoid.

1. Not saving enough. Instead of paying themselves first, some families pay others first. Dollars they could save and invest are instead spent on consumer goods and services they don’t truly need. Money that could be saved and invested for tomorrow is spent today. Are there areas in your life where you could cut costs?

2. Carrying too much debt. Every effort should be made to reduce the size of credit card bills, student loans, and other consumer debt that risks siphoning money away from the pursuit of your long-range financial objectives.

3. Investing too conservatively. Historically, equity investments offer the potential for double-digit returns when the markets perform well. Fixed-income investments are frequently dependent on interest rates – when interest rates are low, their value is greater. When interest rates increase, these investments are subject to increased loss in value. Accepting some risk may give an investor a chance for greater reward.

Are these habits slowing your wealth-building momentum? Why not see where you stand today and gauge the potential positive impact that can come from paying yourself first and adjusting the way you invest? Call or email the financial professionals in the First Financial Investment & Retirement Center at 732-312-1534, mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

 Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

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Considerations When Purchasing Life Insurance

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Discussing life insurance can be a sensitive topic — after all, talking about death is never comfortable. But life insurance is an important financial product, especially if you support others or have substantial assets that you wish to transfer to future generations.

Choosing a life insurance plan is anything but straightforward, though. There are many types of insurance and features for you to consider. Here’s a quick overview of the most popular types.

The most popular type is term insurance, which often is the least expensive. These policies are written for a specific period of time — one to 30 years, for instance. You can renew them once the term expires, but the price may increase. If you wish to lock in the premium, you’ll select what’s called a level term policy.

A declining balance term insurance policy is used to protect your mortgage principal, and its benefits are paid only if you die during the policy’s term, which aligns with your mortgage amortization. Once you pay off your mortgage, the policy expires and has no value – unless you choose to renew it.

Whole life features permanent protection with a savings element. You can lock in a premium rate, and part of the premium accrues a cash value. As the savings amount increases, you can even borrow up to 90% of the policy’s cash value tax-free.

Next is universal life, which is like whole life but potentially accrues higher savings. You can change the premium amount and withdraw cash, and even possibly change the face value of the policy. These can offer a guaranteed return on cash value, too.

A variable life policy generally features a fixed premium and a flexible cash value policy. In fact, you can invest the cash in a variety of investment types. However, keep in mind that the cash value and death benefit can fluctuate, based on the performance of your investments.

Finally, universal variable life is considered an “aggressive” policy. While similar to variable life, there is no guarantee beyond the original face value death benefit. As such, they are more common with wealthy buyers who can withstand the risks.

For questions about navigating the many complexities of life insurance, including recommended coverage amounts, consult your financial professional. You can also email the financial professionals in the First Financial Investment & Retirement Center at mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com.

 Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

The cost and availability of Life Insurance depend on many factors such as age, health and amount of insurance purchased. In addition to premiums, there are contract limitations, fees, exclusions, reductions of benefits, and charges associated with policy. And if a policy is surrendered prematurely, there may be surrender charges and income tax implications.

Variable Universal Life Insurance/Variable Life Insurance policies are subject to substantial fees and charges.

Both loans and withdrawals from a permanent life insurance policy may be subject to penalties and fees and, along with any accrued loan interest, will reduce the policy’s account value and death benefit. Withdrawals are taxed only to the extent that they exceed the policy owner’s cost basis in the policy and usually loans are free from current Federal taxation. A policy loan could result in tax consequences if the policy lapses or is surrendered while a loan is outstanding.

Policy values will fluctuate and are subject to market risk and to possible loss of principal.

Any life insurance guarantees are contingent upon the claims-paying ability of the issuing company.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

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Protecting the Financial Future of Your Family with a Will

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Parents may not like to dwell upon their untimely deaths, but creating a will now will help ensure your family’s finances in the future.

A will is a legal document that specifies how to distribute your assets and investment accounts to your family and others should you unexpectedly die. Check out our short video, When do you need a will? If you have any questions after watching the video, complete the online form and our Financial Advisor will reach out to you. It’s important to understand what a will can do as you plan for your family’s future.

You need a will to work your will. Dying intestate (without a will) turns important decisions over to a state probate court judge who will follow standard procedures to distribute your wealth. A will allows you to name your beneficiaries and the amount they inherit, which might be very different from what the state considers to be standard.

Your will can specify a guardian for your children. In today’s society, many parents are single with no obvious candidate to assume guardianship of your children should you suddenly die. You can designate a guardian in your will rather than leaving the decision to the state. Naming a guardian protects your children from state custody and ensures a trusted person looks after your children’s future.

Use your will to establish trusts when you die. Your will can be used to create trusts that start upon your death. Using trusts, you can address specific concerns – such as caring for a special needs child, managing your investment portfolio, or preventing a child from misusing a bequest setup for college expenses. You can fund your trusts from various sources – such as life insurance policies, and set the conditions for distributing the money.

Plan payments for debt and taxes. Your will can lay out how to repay any remaining debt and taxes. You also can use your will to make charitable gifts and thereby reduce the size of your estate. In some cases, this will lower or eliminate the burden of estate and/or inheritance taxes upon your family.

Setting up a will is worth your time. When you consider the advantages provided by a will, the effort going into creating one is a small price to pay. Contact the First Financial Investment & Retirement Center by calling 732.312.1534 and together we can review your financial portfolio. We can answer any questions you may have about your finances before you meet with a qualified attorney to create your will.

You can also email the financial professionals in the Investment & Retirement Center at mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

 Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

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Managing a Budget During Retirement

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Very few people can retire without the stress of worrying about money. If you’re like most people, you’ll face a critical task when you reach retirement to make sure that your assets are able to support you through your lifetime.

Cash flow is king here. Quite simply, you must have enough income to pay for your living expenses. This is no easy task, especially as people are living longer today than ever before.

To help keep you on track and get you to a positive cash flow, there are a few key steps to keep in mind.

First, make a plan. You want to get a clear picture of your financial situation, which includes your projected income and expenses. Start by creating a detailed net worth statement, which will give you a comprehensive overview of your assets, debt, and cash on hand.

Next, assemble an accurate budget that itemizes your income and expenses. If you anticipate any major lifestyle changes after retirement, make these notations. Include your anticipated income during retirement, such as Social Security, pension, and other income streams. Include all of your expenses, prorating them on a monthly basis. When you finish creating your statement, look for any cash flow issues that might arise, and then find areas that will help you improve your income/expense balance.

Revisit your planning tool regularly and readjust the figures if your actual income and expenses change. As you monitor your finances, there are several items that could impact your cash flow in profound ways, including interest rates, tax rates, healthcare costs, and life events. Continually assess and revise your plan as necessary to account for their impact.

By developing and monitoring a budget during retirement, you minimize the possibility of cash flow issues that could otherwise constrain your lifestyle expectations.

For help in planning carefully, look to your financial professional for assistance.

Contact First Financial’s Investment & Retirement Center by calling 732.312.1534 to speak with professionals who can help steer your finances in the right direction.  You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

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Making Sense of Medicare

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Medicare is confusing, with a ton of rules and dates, inclusions, exclusions, and exceptions. But for those who are 65 years of age or who meet certain qualifying conditions, it’s essential to understand its key parts to maximize their benefits and features.

Let’s start with how it’s structured. Medicare includes four parts: A, B, C, and D.

Parts A and B are called Original Medicare. Part A covers hospital stays and Part B covers doctor visits.

In a bit more detail, Part A pays for hospital stays and follow-up costs associated with those stays. It also covers various outpatient medical services, such as home healthcare and physical therapy.

Part B pays for doctor visits and other medical care administered on an outpatient basis. It may also include the costs of medical equipment/devices and tests.

Original Medicare doesn’t pay all of your medical costs. If you elect Original Medicare — that’s Parts A and B — you should still expect to pay out-of-pocket costs, including copayments and deductibles. Additionally, prescription drugs, vision care, dental care, and hearing services are not covered by Original Medicare, so you may want to consider other options for covering those services.

For instance, you can purchase Medicare supplement insurance and a standalone Medicare Part D plan that helps pay for prescription drugs. Otherwise, you can purchase a Medicare Advantage Part C plan.

Part C, called Medicare Advantage, is an option offered by private insurance companies. It generally provides all of the coverage in Original Medicare and adds — usually — Part D prescription drug coverage, along with dental, vision, and hearing services. While Part C covers many items not addressed in Original Medicare, it may restrict your choice of medical providers and treatment options.

Part D is standalone prescription drug insurance. Most Part D plans require that you pay a premium, and you must sign up for coverage at age 65 or else be subject to penalties if you sign up for it later.

While Original Medicare is the same across the U.S., Parts C and D plans vary according to state, region, and county. Make sure you understand what’s available where you reside to maximize your coverage and benefits. Coverage, costs, deductibles, premiums, copays, and coinsurance vary by plan, so it’s important that you confirm these prior to selecting a plan.

Keep in mind that your choices aren’t permanent. As your healthcare needs change, you can change your plan, too, at least once each year during Open Enrollment from October 15 to December 7.

For more information, speak with a financial professional or visit the Medicare website, at Medicare.gov

Contact First Financial’s Investment & Retirement Center by calling 732.312.1534 to speak with professionals who can help steer your finances in the right direction. You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

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Financial Traps to Avoid

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There’s a reason why even athletes, entertainers, and business people with seven-figure (and higher) incomes suddenly find themselves filing for bankruptcy. Money mismanagement can eat through even the biggest bankrolls. Here are some specific threats to financial stability that people can avoid to help effectively manage their wealth.

No Budget

A survey by Debt.com revealed that 90.24% of respondents believed everyone should have a budget (though only 85.6% of the respondents said they used one). Half of the survey respondents said they’re living paycheck to paycheck, which may help explain why they consider budgeting to be so important. Budgeting does not have to mean skipping coffee and driving a jalopy for the rest of your life. It does mean paying close attention to how much money comes in and where it all goes. Use your financial goals to guide you in steering your money in the right direction.

Too Much Debt

If you have a lot of debt to pay off, a budget is even more important. It helps reduce the likelihood of relying on more credit to fill the gaps. A budget also helps you to collect all those extra dollars and cents that you could put toward paying more than the bare minimum on debt. When paying off debt, start with the higher-interest accounts first and work your way through to save money.

No Protection

Insurance can be expensive, but going without insurance can be even more so. Renters, homeowners, auto, health, disability, and life insurance policies are the main ones you should consider. If you have a business — especially if it is your main or only source of income — getting business insurance can protect your livelihood in the event of a mishap with a client or customer.

No Retirement Planning

A survey by Clever estimated that nearly 30% of Americans have nothing saved for retirement. The survey also revealed that retirees who have saved have, on average, only $191,659 saved for retirement, which is far less than the $514,800 recommended by experts. Because of this, Americans continue to hold stressful, low-paying jobs well into their retirement years. It is never too early to start planning for retirement, no matter how small your contributions are. Remember to take advantage of matched contributions from employers whenever possible.

Too Much Risk

There is no investment that is 100% without risk. If there were, the returns on that investment would be negligible. Even so, taking on too much risk at the wrong time can lead to big financial problems. Taking on high levels of risk is appropriate for young people who have more time to recover and is not advised for people nearing retirement.

Shady Investments

Even worse is when risky investments turn out to be fraudulent or shady. In fact, the more risk-free an investment sounds, the more you should do some digging. This holds true whether the business or individual you plan to invest in is a stranger or your brother. People who miscalculate or fail to do enough research can cause you just as much financial damage as fraudsters.

Poor Tax Management

No matter how much or how little money you make, tax management is a great way to help keep money in your pockets. This is especially important after a large windfall, such as an inheritance. For instance, if you inherit an Individual Retirement Account (IRA) and choose to cash out, you may lose a portion of this in taxes. Divorce is another time of life when tax management is key.

Mismanaged Assets

Stocks are often traded frequently, making them active investments, but you still need to ensure your portfolio stays balanced. Similarly, if you have a home, keeping up with repairs and improvements maintains and grows its value. Unmanaged assets also pose a problem, such as when people allow large sums of money to sit in accounts with low to no interest rates and high fees.

For some people, money management is a talent and financial literacy is almost an inborn skill. Many other people, however, could use a little help making financial decisions.  Contact First Financial’s Investment & Retirement Center by calling 732.312.1534 to speak with professionals who can help steer your finances in the right direction.  You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

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