Consider investment strategy at each season of your life

  • Written by Scott Johnson

Scott-Johnson---Head  Fall is almost officially here — and if you’re like most people, you’re probably wondering how summer went by so fast. Those trips to the lake or the beach are fading in memory now, giving way to helping kids with homework, raking leaves and the other rites of autumn. And just as your day-to-day tasks change with the seasons, so, too, will your money management and investment activities at different phases of your life.
  Here’s how these scenarios might look:
  Phase one: Planning for possibilities — When you’re young and you’re starting out in the working world, your most immediate financial concerns may be to pay off student loans and then, possibly, save for a down payment on a house. To address both these goals, you’ll need to budget carefully. And yet, even at this stage of your life, you should start thinking about saving for retirement — because time is your biggest ally. Consequently, if you work for an employer who offers a retirement plan, such as a 401(k), contribute what you can afford. At the very least, put in enough to earn your company’s matching contribution, if one is offered.You may also want to open an Individual Retirement Account (IRA).

  Phase two: Gearing up for other goals — As you move through life, and possibly begin a family, you’ll likely develop other financial goals, such as helping your children pay for college. You may want to consider investing in a tax-advantaged college savings vehicle, such as a 529 plan. Also, it’s important to have enough life insurance to protect your young family.

  Phase three: Ramping up for retirement — When you reach the mid-to-later stages of your working life, you may find you have more financial resources available, as your earnings may have increased significantly, your children have grown and your mortgage may even be paid off. If you are not already doing so, “max out,” if possible, on your 401(k) and IRA. And if you still have money available to invest, you may want to look for other tax-advantaged retirement vehicles.
  Phase four: Reaping the rewards — Now it’s time to enjoy the results of your lifetime of hard work and your many years of saving and investing. You may have to tap into your retirement accounts, so you’ll need to choose a sustainable annual withdrawal rate. The amount you withdraw each year from your IRA and 401(k) depends on a variety of factors: how much you’ve saved, the lifestyle you’ve chosen, your estimated longevity, how much you have available from other sources, and so on.
  Phase five: Examining your estate plans — During your retirement years, if not sooner, you’ll want to review your estate plans so that you can leave the legacy you desire. If you have a need to create or update your legal documents, such as a living trust and durable power of attorney, you should consider consulting a qualified estate-planning attorney.

  You’ll need to make the appropriate financial and investment decisions at many different times over the years. This may sound daunting, but with diligence and discipline, you can discover the paths to take as you move through the seasons of your life.

Scott Johnson, CFP, is a financial advisor with Edward Jones, 8146 W. 111th St., Palos Hills, 974-1965. Edward Jones does not provide legal advice. This article was written by Edward Jones for use by your local Edward Jones financial advisor.

What’s your retirement ‘contingency plan’?

Scott-Johnson---Head  You probably have thought about what you’d like to do during your retirement years. But all your plans probably depend, to at least some extent, on your financial situation. What happens if you reach the age at which you wish to retire and you just don’t have the money you thought you’d have?

  If this occurs, it’s time for “Plan B.” What does that look like? Here are a couple of possibilities:
  • Continue working. If you like your job, you may not mind working an extra year or so. You’ll be bringing in more income and contributing more to your 401(k) or other retirement account — and, perhaps almost as importantly, you may be able to avoid tapping into these retirement accounts, thus giving them more time to potentially grow. (However, once you turn 70½, you’ll need to begin taking withdrawals from your 401(k) and a traditional IRA.) But if you are really not enamored with the idea of working any longer, you might find that even the ability to “beef up” your retirement plans for another couple of years isn’t much consolation.
  • Adjust your retirement lifestyle. It’s pretty simple: If you don’t save as much as you had planned for retirement, you probably can’t do all the things you wanted to do as a retiree. For example, you may not be able to travel as much, or pursue your hobbies to the extent you’d like.
  Clearly, you’d like to avoid these “retirement contingency plans.” To do so, though, you’ll need to take steps well before you retire. And the most important move you can make may be to contribute as much as you can possibly afford to your IRA and your 401(k) or other employer-sponsored retirement plan.
  During the last several years before you wish to retire, you may be in a strong position to “max out” on these plans because, at this stage of your life, your income may be at its highest point, your children may be grown and you may even have “retired” your mortgage. If you still have money left with which to invest, you may want to look at other tax-advantaged vehicles that can be used for retirement.

  But while it’s important to put in as much as possible to your retirement accounts, you need to do more than that — you also must put the money in the right investments within these accounts. Your exact investment mix should be based on your individual risk tolerance and time horizon, but, as a general rule, these investments must provide you with the growth potential you’ll need to accumulate sufficient resources for retirement.
  Of course, as you know, investments move up and down. You can’t prevent this, but you’ll certainly want to reduce the effects of volatility as much as possible when you enter retirement. Consequently, during your final working years, you may need to adjust your retirement accounts by shifting some of your assets (though certainly not all) from growth-oriented vehicles to income-producing ones.
  It’s a good idea to have contingency plans in place for virtually every endeavor in life — and paying for your retirement years is no different. But if you can make the right moves to avoid the contingency plans in the first place, then so much the better.

Scott Johnson, CFP, is a financial advisor with Edward Jones, 8146 W. 111th St., Palos Hills, 974-1965. Edward Jones does not provide legal advice. This article was written by Edward Jones for use by your local Edward Jones financial advisor.

Five years later, officials to revive Chicago Ridge/Worth Chamber

  • Written by Bob Rakow


  Bill Ritter remembers the final days of the former Chicago Ridge/Worth Chamber of Commerce.

  “It just kind of fell apart. You couldn’t Page-3-2-COL---CHAMBERChicago Ridge Village Clerk George Schleyer (left), Bill Ritter, owner of Metal Masters Auto Body, and Worth Village Clerk Bonnie Price believe local businesses would thrive as a result of a new chamber of commerce. Ritter was a leader of the previous chamber, which folded in 2008. Photo by Bob Rakowget people to come out (to meetings),” said Ritter, owner of Metal Masters Auto Body in Chicago Ridge.
  That was 2008 when businesses were battling a down economy and keeping the chamber thriving was no simple task.
  Five years later, Ritter is one of several business owners in the adjoining communities eager to resurrect the chamber.
  And they’re not alone. Chicago Ridge Village Clerk George Schleyer and Bonnie Price, the clerk in Worth, are throwing their full support behind the plan.
  “It is a valuable resource,” said Price, who sent a letter to all Worth business owners notifying them of plans for a new chamber. Ritter made Chicago Ridge business owners aware of the plan, and both he and Price have received positive feedback.
  But Price said it’s important to do more than discuss the possibilities of forming a new chamber.
  “You have to move forward,” she said. “It’s a valuable resource.”
  The first meeting for the new group will be held at 6:30 p.m. Sept. 19 at the Chicago Ridge Senior Center, which is inside Chicago Ridge Village Hall, 10455 S. Ridgeland Ave.
  Selecting officers and board members is on the agenda for the initial meeting, Schleyer said.
  Ritter said he expects to face the same challenges that confronted him when he was involved in the previous chamber of commerce.
  The amount of time officers and directors must commit to the chamber is the “biggest challenge,” he said. Additionally, encouraging people to attend meetings and get involved can be a struggle.
  Schleyer said 50 members would be a good start, although not all members have to be active, he said.
  Schleyer said a chamber of commerce offers several benefits including networking and a platform for sharing common problems and solutions.
  “People feel there’s a need for this,” he said. “It’s (about) way more than luncheons and speakers. I know how important it is. I believe a strong business community strengthens the whole community.”
  Price said Worth is home to numerous small businesses whose owners work “12 to 15 hours a day.” An active chamber would help those busy proprietors network and market their companies.
  “We want to help the businesses help promote themselves,” Schleyer said.
  The chamber plans to host a monthly meeting as well as annual events such as a golf outing and business expo, but Schleyer envisions more.
  For example, he wants the chamber to work with landlords to fill vacant storefronts, which are noticeable in both Worth and Chicago Ridge.