Retirement Planning: The Basics

Weekly Market Performance – Improving Economic Conditions

Published: Fri, 09 Apr 2021 20:01:02 +0000

Market Blog Friday, April 9, 2021 Index Performance View enlarged chart. U.S. and International Equities The major United States markets were mostly higher this week. The Nasdaq Composite was the best performing index while the Dow Jones Industrial Average gained … Continue reading →

A Goldilocks First Quarter Has Bulls Smiling

Published: Fri, 09 Apr 2021 15:58:13 +0000

Market Blog Friday, April 9, 2021 Stocks have kicked off the year in a strong fashion, and history shows this may give reason to be optimistic for the rest of the year. After a solid—but certainly turbulent—year in 2020, the … Continue reading →

Are We In A Goldilocks Range For Returns? | LPL Daily Market Update

Published: Fri, 09 Apr 2021 14:58:08 +0000

Friday, April 9, 2021 Top Story Was the first quarter the sweet spot for returns? The S&P 500 Index rose 5.8% in the first quarter, and historically this has been in the “Goldilocks” range of returns that isn’t too hot, … Continue reading →

Global Growth Expectations on the Rise

Published: Thu, 08 Apr 2021 15:58:44 +0000

Economic Blog Thursday, April 8, 2021 Before the pandemic we had begun to warm up to international stocks. Valuations relative to the U.S. markets had become increasingly attractive after a long stretch of outperformance by U.S. stocks compared with those … Continue reading →

Global GDP Forecasts On The Rise | LPL Daily Market Update

Published: Thu, 08 Apr 2021 14:58:58 +0000

Thursday, April 8, 2021 Top Story Global GDP forecasts are on the rise, led by the U.S. A look at consensus expectations for economic growth around the world supports our preference for U.S. over developed international equities. Gross domestic product … Continue reading →

LPL Market Signals: Raising Economic and Market Forecasts…Again

Published: Wed, 07 Apr 2021 16:58:56 +0000

Economic Blog Wednesday, April 7, 2021 On the LPL Market Signals podcast, Equity Strategist Jeff Buchbinder and Asset Allocation Strategist Barry Gilbert update forecasts based on how the economy’s recovery from the pandemic, aided by vaccine distribution, massive stimulus, and … Continue reading →

Best Business Conditions of the 21st Century

Published: Wed, 07 Apr 2021 15:58:18 +0000

Economic Blog Wednesday, April 7, 2021 The United States, and the rest of the world, are looking to emerge from the shadow of COVID-19, and business conditions may already have put the pandemic in the rear-view mirror—at least according to … Continue reading →

Record Surge In PMI Surveys | LPL Daily Market Update

Published: Wed, 07 Apr 2021 14:58:43 +0000

Wednesday, April 7, 2021 Top Story Record surge in Purchasing Managers’ Index surveys U.S. businesses are looking to escape from underneath the shadow of COVID-19, and the Institute of Supply Management’s (ISM) Purchasing Managers’ Index (PMI) surveys may be suggesting … Continue reading →

Revisiting Our Treasury Yield Forecast

Published: Tue, 06 Apr 2021 15:58:18 +0000

Market Blog Tuesday, April 6, 2021 Coming into this year, we expected longer-maturity U.S. Treasury yields to rise, consistent with improving economic growth dynamics. That is indeed what we have seen, with the yield on the 10-year Treasury higher by … Continue reading →

Treasury Yield Forecast Changes | LPL Daily Market Update

Published: Tue, 06 Apr 2021 14:58:53 +0000

Tuesday, April 6, 2021 Top Story Raising Economic And Market Forecasts…Again On the LPL Market Signals podcast, Equity Strategist Jeff Buchbinder and Asset Allocation Strategist Barry Gilbert update forecasts based on how the economy’s recovery from the pandemic, aided by … Continue reading →

Raising Forecasts Again: Learn Why | LPL Daily Market Update

Published: Mon, 05 Apr 2021 14:58:22 +0000

Monday, April 5, 2021 Top Story Raising Forecasts…Again LPL Research revises previous forecasts to better reflect the growing optimism of an economy on the rebound in this week’s Weekly Market Commentary, available at 1 p.m. ET. Daily Insights U.S. stocks … Continue reading →

Weekly Market Performance – Markets Steady Into April

Published: Thu, 01 Apr 2021 20:16:37 +0000

Market Blog Thursday, April 1, 2021 Index Performance U.S. and International Equities The major United States and international markets were higher this week. The Nasdaq Composite was the best performing index while the Dow Jones Industrial Average gained a fraction. … Continue reading →

March Market Insights – The Industrials Emerge

Published: Thu, 01 Apr 2021 16:58:52 +0000

Market Blog Friday, April 1, 2021 Index Performance View enlarged chart. U.S. and International Equities This month provided positive results for the U.S. major market indexes. The top performer was the Dow Jones Industrial Average, returning over 7% for the … Continue reading →

Expect Inflation to be Contained Long Term—No Foolin’

Published: Thu, 01 Apr 2021 15:59:02 +0000

Economic Blog Thursday, April 1, 2021 It’s tempting to predict runaway 1970s inflation as an April Fools’ Day joke. But at the risk of upsetting our friends in the compliance department, we’ll shoot straight here. With that important disclaimer out … Continue reading →

Straight Talk About Inflation | LPL Daily Market Update

Published: Thu, 01 Apr 2021 14:58:24 +0000

Thursday, April 1, 2021 Top Story Expect contained inflation long term It’s tempting to predict runaway 1970s inflation as an April Fools’ Day joke, but we don’t want to upset our friends in the compliance department, so we shoot straight … Continue reading →

Stocks and Inflation

Published: Wed, 31 Mar 2021 15:58:33 +0000

Market Blog Wednesday, March 31, 2021 As we continue LPL Research’s Inflation Week, today we will examine how stocks have historically done at different inflation levels. For more color on our views on inflation, please read here and here, and … Continue reading →

Gallon-sized Improvement in Employment | LPL Daily Market Update

Published: Wed, 31 Mar 2021 14:58:00 +0000

Wednesday, March 30, 2021 Top Story Gallon-sized Improvement in Employment In the latest LPL Street View, Research Chief Investment Officer, Burt White, makes the case that even though unemployment claims are at their lowest level since the pandemic started, we … Continue reading →

Stocks Love April

Published: Wed, 31 Mar 2021 12:00:00 +0000

Market Blog Wednesday, March 31, 2021 “History doesn’t repeat itself, but it often rhymes.” Mark Twain What more can we say other than few months have been kinder to stocks lately than the month of April. In fact, it was … Continue reading →

LPL Market Signals: Let’s Talk About Inflation

Published: Wed, 31 Mar 2021 06:00:36 +0000

Market Blog Wednesday, March 31, 2021 Is higher inflation on the way? This is the question nearly everyone is asking, and this week the LPL Strategists will explain why the answer is likely no, contrary to what so many expect. … Continue reading →

Bondholders’ Old Foe is Back

Published: Tue, 30 Mar 2021 15:58:02 +0000

Market Blog Tuesday, March 30, 2021 Inflation is coming and, according to certain market-based inflation metrics, markets are expecting sustained inflation rates not seen since the late 2000s, although likely still at manageable levels. Inflation, which captures price increases in … Continue reading →

Is High inflation On The Way? | LPL Daily Market Update

Published: Tue, 30 Mar 2021 14:58:36 +0000

Tuesday, March 30, 2021 Top Story Let’s Talk About Inflation LPL Financial Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder examine inflation concerns and explain why they think any increases in inflation will most likely be fleeting in … Continue reading →

A Humble Victory Lap

Published: Mon, 29 Mar 2021 15:58:50 +0000

Market Blog Monday, March 29, 2021 It has been a little over a year since the S&P 500 Index bottomed on March 23, 2020, and it was certainly an eventful year, to say the least. It’s also been one year … Continue reading →

Inflation Upticks Likely Transitory | LPL Daily Market Update

Published: Mon, 29 Mar 2021 15:00:27 +0000

Monday, March 29, 2021 Top Story Are We on the Brink of an Inflation Crisis? LPL Research explains why any upticks in inflation will ultimately prove transitory in this week’s Weekly Market Commentary, available at 1 p.m. ET. Daily Insights … Continue reading →

Weekly Market Performance – Stocks Mixed While Treasuries Recover

Published: Fri, 26 Mar 2021 19:58:00 +0000

Market Blog Friday, March 26, 2021 Index Performance View enlarged chart. U.S. and International Equities Major United States markets were mixed this week. U.S. small caps (Russell 2000 Index) have been the worst performing index for two straight weeks while … Continue reading →

Is 8% GDP Good for Stocks? | LPL Daily Market Update

Published: Fri, 26 Mar 2021 15:00:27 +0000

Friday, March 26, 2021 Daily Insights US stocks mixed as S&P 500 Index looks to avoid a second straight weekly decline; Nasdaq set to underperform The Federal Reserve announced that banks that clear the next round of stress tests will … Continue reading →

Why Big GDP Prints Aren’t Always Good For Stocks

Published: Fri, 26 Mar 2021 14:00:57 +0000

Market Blog Friday, March 26, 2021 Our friends at Goldman Sachs recently announced a 2021 growth target for Gross Domestic Product (GDP) of 8% (Q4/Q4). Should this happen, it would be the biggest annual increase in GDP since 1951. Of … Continue reading →

The Big Winner of the Past Year: Commodities

Published: Thu, 25 Mar 2021 15:58:47 +0000

Market Blog Thursday, March 25, 2021 It has been just over a year since the S&P 500 Index bottomed on March 23, 2020, and while global stock markets have provided historic returns since the low, the biggest winners come from … Continue reading →

Commodities the Biggest Winners Since the Low | LPL Daily Market Update

Published: Thu, 25 Mar 2021 14:59:11 +0000

Thursday, March 25, 2021 Top Story Commodities the biggest winners since the low. While stock markets have posted solid returns since the S&P 500 Index bottomed in March 2020, commodity markets have been on an absolute tear as economy activity … Continue reading →

LPL Market Signals: The Bull Market Turns One

Published: Wed, 24 Mar 2021 17:24:45 +0000

Market Blog Wednesday, March 24, 2021 A year ago this week the stock market bottomed and thus ended one of the most vicious bear markets of all-time. In our recent Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick … Continue reading →

High Frequency Data: One Year After Lockdown

Published: Wed, 24 Mar 2021 15:59:32 +0000

Economic Blog Wednesday, March 24, 2021 It has now been a little over a year since the first COVID-19 restrictions and lockdowns were implemented in the United States, with California having implemented the first stay-at-home order on March 19, 2020. … Continue reading →

High Frequency Data One Year After Lockdown | LPL Daily Market Update

Published: Wed, 24 Mar 2021 15:03:47 +0000

Wednesday, March 24, 2021 Top Story High frequency data one year after lockdown. It’s been a little over a year since the first COVID-19 restrictions were implemented in the United States, when California put in place the first stay-at-home orders … Continue reading →

Corporate Credit Markets Have Sold Off This Year. A Harbinger of Things to Come?

Published: Tue, 23 Mar 2021 15:59:47 +0000

Market Blog Tuesday, March 23, 2023 While most market participants have been (rightly) focusing on the sell-off in the Treasury markets this year, U.S. corporate credit markets have sold off as well. Corporate credit markets, as defined by the Bloomberg … Continue reading →

The Bull Market Turns One | LPL Daily Market Update

Published: Tue, 23 Mar 2021 15:00:06 +0000

Tuesday, March 23, 2021 Top Story The Bull Market Turns One On the LPL Market Signals podcast, Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder consider what could be in store for stocks in year two of the … Continue reading →

Bull Market-Year Two | Daily Market Update

Published: Mon, 22 Mar 2021 15:00:22 +0000

Monday, March 22, 2021 Top Story The Second Year Of The Bull Market Begins LPL Research discuss the end of the bear market and the trends of a bull market in year two in this week’s Weekly Market Commentary, available … Continue reading →

Weekly Market Performance – Markets Reverse Course

Published: Fri, 19 Mar 2021 20:10:29 +0000

Market Blog Friday, March 19, 2021 Index Performance View enlarged chart. U.S. and International Equities All major United States markets declined this week. U.S. small caps (Russell 2000 Index) were last week’s best performing index. This week, they reversed course … Continue reading →

Leading Indicators Remain Stubbornly Tepid

Published: Fri, 19 Mar 2021 16:00:42 +0000

Economic Blog Friday, March 19, 2021 In almost every direction we turn, we see optimism mounting over a mid-2021 economic reacceleration. Unfortunately, it seems we will have to wait at least another month for that optimism to make their way … Continue reading →

The Day After | Daily Market Update

Published: Fri, 19 Mar 2021 15:18:18 +0000

Friday, March 19, 2021 Top Story The day after Yields soared, with the 10-year yield closing at 1.72%, its highest level in 14 months, with the 10-year on pace to be up eight consecutive weeks. Worries that the Federal Reserve … Continue reading →

LPL Market Signals: 4 Things That Really Matter For Stocks in 2021

Published: Thu, 18 Mar 2021 17:04:08 +0000

Market Blog Thursday, March 18, 2021 March is here and with it comes some Madness! In our recent Market Signals video, LPL Financial Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder discuss four things that matter the most … Continue reading →

Solid Global Growth Outlook but Multi-Speed

Published: Thu, 18 Mar 2021 15:59:43 +0000

Economic Blog Thursday, March 18, 2021 Last week we reviewed updated global economic growth forecasts from the Organisation for Economic Co-operation and Development (OECD), highlighting the significant increase in their gross domestic product (GDP) forecast for the United States this … Continue reading →

No Surprises From The Fed | Daily Market Update

Published: Thu, 18 Mar 2021 15:00:25 +0000

Thursday, March 18, 2021 Top Story The Federal Reserve (Fed) wrapped up its two-day meeting There were no surprises as the Fed upgraded growth and inflation expectations. Monetary policy was left unchanged with the Fed funds target rate remaining at … 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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