Start planning ahead for your someday.
Retirement looks different for everybody. Some people pursue hobbies while others enjoy volunteering their time. The common factor in every retirement plan is money.
As a SouthPoint Financial Credit Union member, you have access to investment representatives, through/with SouthPoint Investment Services who can help you craft a plan and work toward your long-term goals. It all starts with a complimentary consultation and portfolio review where you’ll learn about your options.
Your investment representative has access to a long list of options to help meet your needs.
Individual Retirement Accounts
An individual retirement account (IRA) is a tool used by individuals to build retirement savings. There are several types of IRAs: Traditional, Roth, SIMPLE and SEP IRAs. IRAs can consist of a range of investments including stocks, bonds or mutual funds. Contributions to IRAs are tax deferred. Some accounts allow contributions to be deducted from current income.
Some IRA’s have contribution limitations and tax consequences for early withdrawals. For complete details, consult your tax advisor or attorney.
A fixed annuity contract allows for tax-deferred growth. In exchange for a lump sum payment, the annuity earns a fixed interest rate. The insurance company that issues the contract guarantees both the initial payment and interest rate. Fixed annuities can provide a guaranteed income payout, for either a specified term or for life. The guarantee comes from the insurance company not the credit union.
Although it is possible to have guaranteed income for life with a fixed income, there is no assurance that this income will keep up with inflation. There is a surrender charge imposed generally during the first 5 to 7 years or during the rate guarantee period.
Money Market Funds
A money market fund’s portfolio is composed of short-term (or less than one year) securities representing high-quality, liquid debt instruments. While considered relatively stable, they are not guaranteed. While less likely to decline in value, you can lost money.
Variable annuities can play an important role in retirement planning. Talk with a registered financial professional for details and learn if a variable annuity contract is right for you. There is a surrender charge imposed generally during the first 5 to 7 years that you own the contract. Withdrawals prior to age 59 ½ may result in a 10% IRS tax penalty, in addition to any ordinary income tax. The guarantee of the annuity is backed by the financial strength of the underlying insurance company. Investment sub-account values will fluctuate with changes in market conditions.
A group of investments put together in one fund. An investment professional manager assembles the investments under a particular theme, for instance real estate, and offers shares to investors. The advantage to investors is that there isn’t the burden of having to choose individual investments. Values change when the pooled investments rise and fall over time.
The disadvantage is that funds are less liquid, carry no guarantee and can lose principal. Mutual funds are sold by prospectus. It discusses the fees, expenses, risks and other important factors to consider before investing.
Investing in mutual funds is subject to risk and loss of principal. There is no assurance or certainty that any investment strategy will be successful in meeting its objectives.
Life insurance protects against financial loss from a premature death. The beneficiary receives “death benefit” proceeds, thus becoming safeguarded from financial impacts of the insured’s death. The death benefit is paid by a life insurance company, in consideration for premium payments made by the insured.
All payments are backed by the insurance company, not the credit union.
The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable by having the policy approved. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.
There are several categories of investments that offer the potential for individual tax savings. For instance, investing in a Roth IRA or Traditional IRA allows same year income tax deductions and deferred tax payment on earnings if withdrawn at retirement. Another example would be municipal bonds which generally offer tax free income depending where you live. If a bond isn’t held until maturity, value can be lost. Other investments such as annuities offer tax deferred earnings.
Long-term Care Insurance (LTCI)
Coverage that funds nursing-home or home-health care (for individuals over age 65), or with a chronic/disabling condition requiring constant supervision. LTCI offers more flexibility and options than public assistance programs.
Disability insurance addresses the risks of working and active life through both short term and long-term products which will provide income for the incapacitated individual.
Employer Retirement Plans
Retirement plan established by an employer for its employees’ benefit. Retirement plans give employers tax benefits for contributions they make for employees. Qualified plans typically allow employees to defer some of their income into the plan, too. This lowers employees’ present income-tax liability by reducing taxable income. Contributions to a plan and any earnings are taxed when withdrawn at retirement. (Early withdrawals also carry a tax penalty.) Qualified retirement plans help employers attract and retain good employees.
Distributions from traditional IRA’s and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty.
Managed Asset Accounts
An option for investors is to have all of their investable assets consolidated into a portfolio that is regularly attended to by a professional investment manager who strives to manage risk. Like other investments, the value of managed accounts varies over time and principal can be lost. Generally, an annual fee based on the value of the account is assessed for this type of investing.
Financial Advisor Bob Skillings**
706 North German St
New Ulm, MN 56073