Retirement Planning: The Basics

Why Stocks Want President Trump To Win

Published: Wed, 21 Oct 2020 15:59:41 +0000

Market Blog Now that we have your attention with that eye-grabbing title, there’s definitely something to the idea that stocks perform better the year after a sitting president wins reelection. “Think about it—usually when a president wins reelection, it means … Continue reading →

Market Update: Wed, Oct 21, 2020 | LPL Financial Research

Published: Wed, 21 Oct 2020 14:59:01 +0000

Daily Insights Markets opened slightly lower. US equities are flat this morning following Tuesday’s solid session. Optimism over stimulus talk progress prevails, even though Senate approval may be a big hurdle to completing a deal. Improving earnings results so far … Continue reading →

Treasury Return Expectations Historically Low

Published: Tue, 20 Oct 2020 15:59:08 +0000

Market Blog The 10-year US Treasury yield, at 0.77% as of October 19, is still near historical lows set earlier this year. Historically, 10-year Treasury performance for the next 10 years has tended to track the Treasury yield at the … Continue reading →

Market Update: Tue, Oct 20, 2020 | LPL Financial Research

Published: Tue, 20 Oct 2020 14:58:30 +0000

Daily Insights US equities look to rebound from Monday’s selloff. The S&P 500 Index opened higher this morning after lack of progress on stimulus talks contributed to broad-based losses Monday. Investors may start looking ahead to a post-election stimulus package, … Continue reading →

Market Update: Mon, Oct 19, 2020 | LPL Financial Research

Published: Mon, 19 Oct 2020 14:58:15 +0000

Daily Insights Stocks opened higher. Reports over the weekend suggested the White House may be able strike a stimulus deal with the US House Democrats before the election, but the odds are still long, and early 2021 appears more likely. … Continue reading →

Weekly Market Performance – October 16, 2020 – Markets Higher Amid Positive Retail Sales

Published: Fri, 16 Oct 2020 20:00:21 +0000

Market Blog Index Performance S&P 500 Index: 0.2% Dow Jones Industrial Average: 0.1% Nasdaq Composite: 0.8% US and International Equities Markets generally finished higher this week, the third straight weekly gain for the S&P 500 Index and capped off by … Continue reading →

5 Charts We Are Watching

Published: Fri, 16 Oct 2020 15:58:23 +0000

Market Blog There are many charts that caught our attention this week, and today we share the top 5 charts we’re watching. The S&P 500 Index recently had a four-week losing streak and fell nearly 10% along the way, while … Continue reading →

Market Update: Fri, Oct 16, 2020 | LPL Financial Research

Published: Fri, 16 Oct 2020 14:59:55 +0000

Daily Insights Markets opened higher. US equities opened higher, bucking the trend from Thursday’s mixed trading. The bulls are taking the lead this morning, brushing aside the resurgence of COVID-19 cases in Europe. House Speaker Nancy Pelosi and US Treasury … Continue reading →

COVID Surge Stalling Europe’s Recovery

Published: Thu, 15 Oct 2020 15:56:57 +0000

Economic Blog We continue to monitor real-time COVID-19 and economic data to provide insight into how the pandemic is affecting economies around the world. Traditional economic data sometimes can be too slow to pick up the changes that are occurring. … Continue reading →

Market Update: Thu, Oct 15, 2020 | LPL Financial Research

Published: Thu, 15 Oct 2020 14:58:33 +0000

Daily Insights Stocks opened sharply lower. Stocks opened sharply lower in the face of dimming hopes of a pre-election stimulus package, rising jobless claims, and surging COVID-19 cases, particularly in Europe. Concerns that renewed restrictions would slow Europe’s economic recovery and … Continue reading →

The Market’s Mixed Election Signals

Published: Wed, 14 Oct 2020 15:58:51 +0000

Market Blog With Election Day just under a month away and voting already taking place in many states, it is still anyone’s guess who will win on November 3. With all of the noise surrounding the election, we prefer to … Continue reading →

Market Update: Wed, Oct 14, 2020 | LPL Financial Research

Published: Wed, 14 Oct 2020 14:58:17 +0000

Daily Insights Markets mixed overnight. S&P 500 Index opened little changed after taking a breather yesterday amid noisy headlines around fiscal stimulus and vaccine trials. Asian markets finished mixed with South Korea, China, and Australia trading lower, while European stocks … Continue reading →

Under-the-Radar Signal That Rates May Head Higher

Published: Tue, 13 Oct 2020 17:27:16 +0000

Market Blog The 10-year Treasury yield has stayed in a narrow range since April 2020, helped by a supportive Federal Reserve and ongoing concerns about the COVID-19 pandemic. As shown in LPL’s Chart of the Day, the 10-year Treasury yield … Continue reading →

Market Update: Tue, Oct 13, 2020 | LPL Financial Research

Published: Tue, 13 Oct 2020 14:58:09 +0000

Daily Insights Stocks open slightly lower as earnings season begins. Once launched by Alcoa, the unofficial start to earnings season now begins with several financial firms reporting. The S&P 500 Index opened slightly weaker Tuesday morning following four straight up … Continue reading →

Market Update: Mon, Oct 12, 2020 | LPL Financial Research

Published: Mon, 12 Oct 2020 14:58:42 +0000

Daily Insights Stocks add to last week’s solid gains. While most attribute the recent bump up in stocks to stimulus and position jockeying ahead of Election Day, earnings season has quietly snuck up on us and will be a big … Continue reading →

Weekly Market Performance – October 9, 2020 – Markets Optimistic For Stimulus Measures

Published: Fri, 09 Oct 2020 20:03:07 +0000

Market Blog Index Performance S&P 500 Index: 3.7% Dow Jones Industrial Average: 3.3 % Nasdaq Composite: 4.6% US and International Equities The S&P 500 Index posted its best week in more than three months, boosted by renewed stimulus talks and … Continue reading →

LPL Market Signals: Special Pre-Election Preview

Published: Fri, 09 Oct 2020 15:58:14 +0000

Market Blog In the recent LPL Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick, Equity Strategist Jeff Buchbinder and Asset Allocation Strategist Barry Gilbert discussed the upcoming election, looking at it from all different angles, and more, including: … Continue reading →

Market Update: Fri, Oct 9, 2020 | LPL Financial Research

Published: Fri, 09 Oct 2020 14:58:48 +0000

Daily Insights Markets move higher. US equity markets opened in the green following Thursday’s positive session. Renewed stimulus talks, with targeted business-aid hopes, are influencing today’s action. Asian markets were mixed, with China’s stock market higher after their holiday, while … Continue reading →

Follow The Bouncing Stimulus Ball

Published: Thu, 08 Oct 2020 15:59:41 +0000

Economics Blog Stimulus talks in Washington, DC, are getting a lot of attention from investors—and for good reason. The midpoint of the two offers—roughly $1.6 trillion from the White House and $2.2 trillion from US House Democrats—is about 9% of … Continue reading →

Market Update: Thu, Oct 8, 2020 | LPL Financial Research

Published: Thu, 08 Oct 2020 14:58:15 +0000

Daily Insights Stocks opened higher. Sentiment is getting a lift this morning from speculation that piecemeal stimulus, if not more, may be forthcoming as Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi are slated to talk again today. Markets also … Continue reading →

LPL Market Signals: The 4th Quarter That Will Be

Published: Wed, 07 Oct 2020 16:59:13 +0000

Market Blog In the recent LPL Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder discussed recent market volatility, the president contracting COVID-19, and more, including: COVID-19 in the White House The latest on … Continue reading →

Market Update: Wed, Oct 7, 2020 | LPL Financial Research

Published: Wed, 07 Oct 2020 14:58:10 +0000

Daily Insights S&P 500 opens higher on better stimulus tone. Markets moved to a risk-off stance Tuesday after President Donald Trump halted stimulus negotiations. The S&P 500 Index finished the day down 1.4%, but the broad US index moved higher … Continue reading →

What Worked In Q3

Published: Wed, 07 Oct 2020 14:58:04 +0000

Market Blog Stocks fared well during the third quarter despite September’s weakness, with the S&P 500 Index returning about 9%. The quarterly gain brought the return through the first nine months of the year to 5.6%. Here we peel back … Continue reading →

Fixed Income Excels in the Third Quarter

Published: Tue, 06 Oct 2020 16:01:18 +0000

Market Blog The third quarter was characterized by the carry-over of economic momentum from the second quarter, as states continued to lift restrictions to reopen their economies. Perhaps it was no surprise that some of the hardest hit and most … Continue reading →

Market Update: Tue, Oct 6, 2020 | LPL Financial Research

Published: Tue, 06 Oct 2020 15:05:32 +0000

Daily Insights S&P 500 opens near flat following Monday rally. The MSCI Asia Pacific Index climbed overnight, although China’s markets were closed for a holiday. Most major European indexes are showing modest gains midday. Federal Reserve Chair Jerome Powell will … Continue reading →

September Market Insights

Published: Tue, 06 Oct 2020 14:09:49 +0000

Market Blog Index Performance View expanded table. View expanded table. View expanded table. US and International Equities The S&P 500 Index gave back some gains in September after a strong five-month run, with most sectors finishing in the red. The … Continue reading →

Market Update: Mon, Oct 5, 2020 | LPL Financial Research

Published: Mon, 05 Oct 2020 15:07:36 +0000

Daily Insights Stocks open solidly higher on President Trump’s improving health. Today the S&P 500 Index will try to start another winning streak coming off its first positive week in the last five. Reports that President Donald Trump may leave … Continue reading →

LPL Street View: Stocks and the Election Don’t Mix

Published: Mon, 05 Oct 2020 15:01:51 +0000

Market Blog As concern over the upcoming election continues to build, one of the questions we’re getting is whether investors should sell ahead of the election for fear the party they don’t want to win takes over the White House. … Continue reading →

Weekly Market Performance – A Volatile Start For October

Published: Fri, 02 Oct 2020 20:04:54 +0000

Market Blog Index Performance S&P 500 Index: 1.8% Dow Jones Industrial Average: 1.9% Nasdaq Composite: 1.5% US and International Equities As news concerning President Trump affected Friday’s markets, the S&P 500 Index still managed to end the week higher. Energy has … Continue reading →

Trump COVID FAQs

Published: Fri, 02 Oct 2020 17:57:59 +0000

Market Blog First and foremost, we wish President Donald Trump and First Lady Melania Trump a swift and full recovery. This October surprise raises the already high level of political uncertainty markets are dealing with as Election Day approaches. As … Continue reading →

Market Update: Fri, Oct 2, 2020 | LPL Financial Research

Published: Fri, 02 Oct 2020 15:01:51 +0000

Daily Insights President Donald Trump and First Lady Melania Trump test positive for COVID-19. First, we wish the President and the First Lady a swift and full recovery. This October surprise raises the already high level of political uncertainty that … Continue reading →

September Economic Data Roundup

Published: Thu, 01 Oct 2020 18:08:17 +0000

Economic Blog With the election drawing near, politicians, pundits, and especially voters will be paying even closer attention to the state of the US economy. It’s been a wild ride since the outbreak of COVID-19 around the world, and with … Continue reading →

October And The Fourth Quarter In Six Charts

Published: Thu, 01 Oct 2020 16:23:08 +0000

Market Blog “October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.” Mark Twain After a historic 60% rally, stocks pulled back … Continue reading →

Market Update: Thurs, Oct 1, 2020 | LPL Financial Research

Published: Thu, 01 Oct 2020 15:00:15 +0000

Daily Insights Stimulus hopes give stocks a lift. Stocks ended a down month with solid gains on Wednesday, the fourth gain in five sessions. Markets are looking to add to those gains this morning to kick off October (and the … Continue reading →

LPL Market Signals: An Object In Motion Stays In Motion

Published: Wed, 30 Sep 2020 17:58:27 +0000

Market Blog In the recent LPL Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder discussed recent equity weakness and why it isn’t a major warning, along with COVID-19 worries and more, including: Recent … Continue reading →

Three Market Takeaways from the First Presidential Debate

Published: Wed, 30 Sep 2020 16:32:12 +0000

The first presidential debate is now in the books, with two more (maybe) ahead and a vice presidential debate on October 7. The debate was raucus, occasionally uncouth, and more than a little surreal for viewers at home. But did … Continue reading →

Market Update: Wed, Sept 30, 2020 | LPL Financial Research

Published: Wed, 30 Sep 2020 15:05:55 +0000

Daily Insights Stocks opened higher. US equities reversed earlier losses following a contentious US presidential debate Tuesday night that raised more questions of a potentially contested election. On the flipside, House Speaker Nancy Pelosi noted positive discussions with US Treasury … Continue reading →

How Corporate Bond Spreads Respond to Equity Market Volatility

Published: Tue, 29 Sep 2020 16:00:03 +0000

Market Blog An old Wall Street adage says bond markets are smarter than equity markets, so when stocks encounter volatility, investors often look to the bond market for clues about the potential severity of equity market weakness. The option-adjusted spread … Continue reading →

Market Update: Tues, Sept 29, 2020 | LPL Financial Research

Published: Tue, 29 Sep 2020 14:58:36 +0000

Daily Insights S&P 500 Index opens near flat after gains in four out of the last five sessions. US stocks saw broad gains Monday with a cyclical tilt as value stocks, led by energy and financials, kept pace with growth; … Continue reading →

How Stocks Do Around The First Debate

Published: Tue, 29 Sep 2020 13:58:16 +0000

Market Blog The first presidential debate is tonight, September 29, with millions of people expected to tune in to see how each candidate handles the pressure. With tensions heightened amid an election that may be much closer than the polls … Continue reading →

You may have a very idealistic vision of retirement—doing all of the things that you never seem to have time to do now.

But how do you pursue that vision? Social Security benefits may not provide enough income for your retirement years. And unfortunately, few employers today offer a traditional company pension plan that guarantees you a specific income at retirement. On top of that, people are living longer and must find ways to fund those additional years of retirement. Such eye-opening facts mean that today, sound retirement planning is critical.

But there's good news: Retirement planning is easier than it used to be, thanks to the many tools and resources available. Here are some basic steps to get you started.

Determine your retirement income needs

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. The problem, however, is that it doesn't account for your specific situation. To determine your specific needs, you may want to estimate your annual retirement expenses.

Use your current expenses as a starting point, but note that your expenses may change dramatically by the time you retire. If you're nearing retirement, the gap between your current expenses and your retirement expenses may be small. If retirement is many years away, the gap may be significant, and projecting your future expenses may be more difficult.

Remember to take inflation into account. The average annual rate of inflation over the past 20 years has been approximately 2.5 percent. (Source: Consumer price index (CPI-U) data published by the U.S. Department of Labor, 2013.) And keep in mind that your annual expenses may fluctuate throughout retirement. For instance, if you own a home and are paying a mortgage, your expenses will drop if the mortgage is paid off by the time you retire. Other expenses, such as health-related expenses, may increase in your later retirement years. A realistic estimate of your expenses will tell you about how much yearly income you'll need to live comfortably.

Calculate the gap

Once you have estimated your retirement income needs, take stock of your estimated future assets and income. These may come from Social Security, a retirement plan at work, a part-time job, and other sources. If estimates show that your future assets and income will fall short of what you need, the rest will have to come from additional personal retirement savings.

Figure out how much you'll need to save

By the time you retire, you'll need a nest egg that will provide you with enough income to fill the gap left by your other income sources. But exactly how much is enough? The following questions may help you find the answer:

At what age do you plan to retire? The younger you retire, the longer your retirement will be, and the more money you'll need to carry you through it.
What is your life expectancy? The longer you live, the more years of retirement you'll have to fund.
What rate of growth can you expect from your savings now and during retirement? Be conservative when projecting rates of return.
Do you expect to dip into your principal? If so, you may deplete your savings faster than if you just live off investment earnings. Build in a cushion to guard against these risks.

Build your retirement fund: Save, save, save

When you know roughly how much money you'll need, your next goal is to save that amount. First, you'll have to map out a savings plan that works for you. Assume a conservative rate of return (e.g., 5 to 6 percent), and then determine approximately how much you'll need to save every year between now and your retirement to reach your goal.

The next step is to put your savings plan into action. It's never too early to get started (ideally, begin saving in your 20s). To the extent possible, you may want to arrange to have certain amounts taken directly from your paycheck and automatically invested in accounts of your choice (e.g., 401(k) plans, payroll deduction savings). This arrangement reduces the risk of impulsive or unwise spending that will threaten your savings plan--out of sight, out of mind. If possible, save more than you think you'll need to provide a cushion.

Understand your investment options

You need to understand the types of investments that are available, and decide which ones are right for you. If you don't have the time, energy, or inclination to do this yourself, hire a financial professional. He or she will explain the options that are available to you, and will assist you in selecting investments that are appropriate for your goals, risk tolerance, and time horizon. Note that many investments may involve the risk of loss of principal.

Use the right savings tools

The following are among the most common retirement savings tools, but others are also available.

Employer-sponsored retirement plans that allow employee deferrals (like 401(k), 403(b), SIMPLE, and 457(b) plans) are powerful savings tools. Your contributions come out of your salary as pretax contributions (reducing your current taxable income) and any investment earnings are tax deferred until withdrawn. These plans often include employer-matching contributions and should be your first choice when it comes to saving for retirement. 401(k), 403(b) and 457(b) plans can also allow after-tax Roth contributions. While Roth contributions don't offer an immediate tax benefit, qualified distributions from your Roth account are federal income tax free.

IRAs, like employer-sponsored retirement plans, feature tax deferral of earnings. If you are eligible, traditional IRAs may enable you to lower your current taxable income through deductible contributions. Withdrawals, however, are taxable as ordinary income (unless you've made nondeductible contributions, in which case a portion of the withdrawals will not be taxable).

Roth IRAs don't permit tax-deductible contributions but allow you to make completely tax-free withdrawals under certain conditions. With both types, you can typically choose from a wide range of investments to fund your IRA.

Annuities are contracts issued by insurance companies. Annuities are generally funded with after-tax dollars, but their earnings are tax deferred (you pay tax on the portion of distributions that represents earnings). There is generally no annual limit on contributions to an annuity. A typical annuity provides income payments beginning at some future time, usually retirement. The payments may last for your life, for the joint life of you and a beneficiary, or for a specified number of years (guarantees are subject to the claims-paying ability of the issuing insurance company). Annuities may be subject to certain charges and expenses, including mortality charges, surrender charges, administrative fees, and other charges.

Note: In addition to any income taxes owed, a 10 percent premature distribution penalty tax may apply to taxable distributions made from employer-sponsored retirement plans, IRAs, and annuities prior to age 59½ (prior to age 55 for employer-sponsored retirement plans in some circumstances).

Contact a VyStar Investment Services Financial Advisor today by phone (904) 908-2495 or email VISMarketing@vystarcu.org.

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