Why SWA?

Put the SWA advantage to work for you.

Learn More

Video

Concerned about market volatility?

Watch Now

Contact Us

Send us an email or call us today.

Email Us

C.H. Robinson

We specialize in working with C.H. Robinson employees across the U.S.

Learn More

Print

Retirement Savings Rates

Written by Summit Wealth on .

I recently read that the US personal savings rate increased to 3.60% in November 2012, up from 3.40% in October but well below the long-term average of 6.91%.

I also recently read about a study conducted by PBS.org that states that 40% of all workers are currently not saving for retirement.  Given the struggles the US is having with the Social Security System, this 40% figure is certainly a huge concern.  Who will take care of these folks when they cannot take care of themselves?

One strategy I suggested to a client recently was to encourage their children to begin saving for retirement by offering to match their savings (50 cents on the dollar, up to a certain maximum) by making contributions to a Roth IRA for them.  By doing this, your children learn the power of saving at a young age and see how adding a matching contribution to that savings rate can really add up quickly.  Try this with your kids (or nieces and nephews) for a few years and you’ll likely be amazed at the results.

Print

Social Security Decisions Require Thought and Calculations

Written by Summit Wealth on .

Deciding when to begin collecting your Social Security benefits can be a difficult decision.  Many want to begin collecting benefits ASAP as they feel this strategy is the way to ensure they receive the most benefits as quickly as possible.  Others that anticipate a lengthy retirement want to wait to begin collecting benefits as they’ve been told this is the best way to maximize benefits over the long haul.

I’ve read that married couples have 567 options for deciding when and how to file for their Social Security benefits while single people have 9 options.  We help our clients to review and narrow those options by making some assumptions about life expectancy and discussing other financial goals. We counsel clients on the potentially best strategies to consider.  The decision you make could cost you tens of thousands of dollars over your life time so be sure to work with someone that can provide you the advice you need.

Print

Darts Pick the Readers’ Top Stocks

Written by Summit Wealth on .

While reading the newspaper recently, I found that for the 48th Sunday Journal Investment Dartboard Contest someone throwing darts at a listing of stocks was able to outperform specific stock picks of Wall Street Journal readers for the six months ended 12/31/12.  The readers’ picks lost about 11% while the stocks chosen by darts thrown at stock pages gained 7.2%.

The results of this contest seem to confirm the Dalbar Study finding that the average investor achieved an annual return of 3.49% for the 20 years ended 12/31/10 while the S&P 500 returned 7.81% per year during the same time frame.  Much of the significant underperformance of investors can be attributed to emotional investing and attempting to time the markets (something no one has been able to perfect, to my knowledge).

We feel it’s all about a low-cost, broadly-diversified, passive investment approach and methodically investing over time.  This is why DFA is such a great fit for our client portfolios.  Reduce your risk and take what the market has to offer (in terms of returns) over time–a winning long-term combination!

Print

Are you on track for financial independence?

Written by Summit Wealth on .

According to a recent report by the Commerce Department, nearly 67% of Americans between the ages of 45 and 60 say they plan to delay retirement.  This percentage is a steep increase from just two years ago, when the Commerce Department found that 42% of those polled expected to delay retirement. 

Why the large increase?  This rise was driven by financial losses, layoffs and income stagnation sustained during the last few years.  These are issues many of us faced or are still dealing with.

Based on the above statistics, two out of every three of your friends, family members and co-workers (in this age group) need to reassess their financial game plan and make adjustments that can have a positive impact.  This may be easier said than done since we have a tendency to get very comfortable in our spending habits.  However, it certainly doesn’t have to mean working longer as there are trade-offs that one can consider that don’t involve more time at work.

For example, re-examining one’s household budget and discovering some belt-tightening opportunities is an excellent way to trim discretionary spending and increase contributions towards retirement.  Another is to take a “trial run” and begin living as if you were in retirement.  You may be surprised at what you actually need to live on.

If you know people struggling with their financial independence, please send them our way.  We’d be glad to help.

Print

How are Baby Boomers Reworking Their Retirement (Financial Independence)?

Written by Summit Wealth on .

I just read an article by Mark Miller that seems to confirm some thoughts we’ve been having about how Baby Boomers are rethinking retirement / financial independence.  Here are some of the high points of that article:

They are leaving the U.S.:  21% of boomers polled say they are interested in retiring abroad where they can reduce lifestyle needs and enjoy warmer climates.

They are starting new companies:  21% of new U.S. businesses started in 2011 were launched by entrepreneurs age 55 to 64 (up 14% from 2007).  Entrepreneurs age 45 to 54 accounted for another 28% of the 2011 startups.  Add them together and boomers started almost 50% of all new businesses in 2011.

They are borrowing more:  40% of homeowners over age 65 had mortgage debt in 2010, compared with only 18% in 1992.  One of the reasons is the extremely low interest rates available.  No sense paying down / off a 3% mortgage if you can earn 6% to 9% in a broadly diversified, balanced investment portfolio over time.

They are outliving their expectations:  Life expectancy for men has jumped an average of almost 2 years in each of the last 5 decades to 75.7 years in 2010.  For women, life expectancy has risen by 1.5 years on average to 80.8 years.  For a couple with above- average health, there’s a 60% chance one of them will live to age 90.

They are providing financial support:  58% of boomers are providing financial assistance to aging parents while 93% of those polled say they have given their children financial assistance as well.

They aren’t running to Florida:  Boomers aren’t embracing the Florida / Arizona retirement homes as they once were.  The reason they’re not relocating?  The pull of being near their children & grandchildren.

How are you rethinking your eventual financial independence?  We will have more discussion on this topic in our next blog.

North Metro: 763.355.5873
227 East River Parkway
Champlin, MN 55316-5873

South Metro: 612.987.9112
5871 Crossandra Street SE
Prior Lake, MN 55372-3337

West Metro: 763.639.3425
322 Greenhill Lane
Long Lake, MN 55356

This email address is being protected from spambots. You need JavaScript enabled to view it.