Category Archives: Retirement Planning

By David Kopyc

Retirement planning is a critical aspect of ensuring financial security in later years. While individuals often focus on personal savings, investments, and pensions, the broader economy plays a pivotal role in shaping their retirement plans. Economic factors such as inflation, interest rates, stock market performance, and governmental policies profoundly influence how much individuals can save and how effectively they can manage their retirement funds.

Inflation is one of the most insidious economic factors affecting retirement planning. It represents the rate at which the general level of prices for goods and services rises, eroding purchasing power. For retirees, especially those relying on fixed income sources like pensions or Social Security, high inflation can severely diminish their standard of living. 

When planning for retirement, individuals must consider the expected inflation rate over their retirement years. For example, if inflation averages 3% annually, a retirement nest egg needs to grow at a rate that at least matches inflation to maintain its real value. Investors often seek assets that tend to outpace inflation, such as stocks or real estate, but these come with their own risks. As a result, a sound retirement strategy must include a diversified investment portfolio that considers inflation risk.

Interest rates, determined largely by the economic environment and actions of central banks, directly influence the cost of borrowing and the return on savings. Low interest rates may seem appealing for borrowers; however, they can negatively affect savers and retirees who depend on interest yield from fixed-income investments for support. 

When interest rates are low, the returns on savings accounts, bonds, and similar instruments decrease. This scenario forces retirees to seek riskier investments to secure adequate returns, which can increase the likelihood of losses during market downturns. Conversely, higher interest rates can benefit retirees; they encourage savings, increase yields on fixed income, and stabilize the economy. Therefore, understanding interest rate trends is essential for effective retirement planning.

By Matthew Burnell, CFP®, MBA

A question that is often asked to me in my line of work is what is a financial advisor? A financial advisor is a broad title and can go by many names, often depending on what a particular firm likes to use or may have meaning depending on the types of clients one works with or a specialty they may possess. A few names that can be interchangeable include financial planner, registered representative, financial consultant, wealth advisor, wealth manager, investment advisor representative, etc.

For this article we will use the term financial advisor. As Financial Advisors, one primary responsibility of ours is to understand the financial goals of our clients which can include businesses, organizations and/or individuals, and use that understanding to help develop a plan to reach those goals. This is often established early in the relationship and updated as needed. During this process, educating clients on the steps being taken to reach these goals is important.

The exact duties that we as financial advisors perform will vary from client to client and will depend on what, if any, area of finance the advisor specializes in. However, most financial advisors will perform some combination of the tasks below.

Investment management: Offer advice on or directly invest in assets based on the client’s risk tolerance and goals. Assets can include stocks, bonds, mutual funds, exchange-traded funds, annuities, real estate, private equity and many other options. While we may handle the investment needs of our clients, we like to educate our clients as to how any of the investments meet their goals.

Taxation: Depending on the advisor, they may prepare tax returns, create tax plans and scenarios, educate or answer questions for specific individuals needs which can cover anything from the tax implications associated with actions taken in their portfolios to tax planning on the sale of a business that works into investable assets. As an example, our Wealth Management practice and tax practice allow us to coordinate our tax and financial planning for clients.

By Christine Graf

Certified public accountant Brian Stidd has opened his own firm at 11 South Street in Glens Falls. Prior to opening Stidd CPA, PLLC, the Siena College graduate worked for Whittemore, Dowen & Ricciardelli LLP in Queensbury. He has almost 20 years of experience working in public accounting and the private sector. 

“I have an entrepreneurial spirit and always wanted to open my business,” said Stidd. “I enjoy working with clients, and I also enjoy the technology piece of the business.”

Stidd specializes in business and individual tax planning, advisory and preparation, and general business accounting and advisory. He also provides outsourced accounting services to small businesses that don’t have accountants on staff.

“A lot of small businesses need more than just bookkeeping but aren’t quite ready for or in need of a CFO for hire,” he said. “My clients have anywhere from $100,000 in revenue to $2 million-$3 million in revenue.”

BY DAVE KOPYC

Eventually in life we must face the reality of building out our own personal retirement plan for the golden years. We live in a society today where most of us will not have a pension benefit from our employer and we will have to take our life’s savings to create a paycheck once we lose the employer’s weekly or biweekly payment we receive in our working years.

For some of you that are reading this article it will send a chill up your spine with anxiety to think that this daunting task can be handled with great concern and respect for you, the individual that is receiving the payment and it is specific to you and your individual needs. The cookie cutter approach where you are grouped into an investment or specific type of investment program can cause you to lose some of the personal touch that you may have had during your accumulation years.

Retirement income distribution is probably the most important decision you will make in your pre- and post-retirement years. There have been many different strategies and concepts to accomplish retirement income in my 42 years of being in the financial services industry, and every strategy has pros and cons and should be specific to you and your family – no matter what the strategy may be. It is critical that 100 percent of your hard-earned assets do not go into any investment program. Diversification is your friend and low cost and flexibility follow closely behind.

By Eric Scaringe

Recently, the office of the Illinois state treasurer was tasked with handling one of the most bizarre and complicated unclaimed estate cases ever recorded in U.S. history. 

Chicago resident Joseph Stancak passed away in 2016, secretly leaving behind $11 million in his estate. Fast forward to October 2022, 119 of Stancak’s relatives have now received a portion of his wealth more than five years later.

With no siblings, children of his own, or nephews and nieces, his lineage had to be traced by going all the way back to his parents before coming back to these relatives who are located in multiple states and even countries. That is a life-changing amount of money, and there is not much information on how he accumulated the wealth, but there is an important lesson to be learned here.

The best time to begin estate planning is as soon as possible. It basically starts with going through “what if” scenarios, some financial housekeeping and then bringing in professionals to finalize the process. 

The biggest error you can make is thinking that estate planning is only for those worth tens of millions of dollars and doesn’t apply to your family.  Anyone with assets owned in their own names may be subjecting their heirs to a long and expensive probate court process to simply inherit their assets.

By Rick Schwerd

The end of the year is always a good time to take stock of your investments and look ahead. Last year at this time, it was easy to be bullish on the stock market. Vaccine distribution was just starting, the country was continuing to reopen and unprecedented stimulus was being injected into the economy.

As we head into 2022, there is still a lot to be positive about, such as robust company earnings and a very healthy consumer base. However, concerns about the Omicron variant, global supply chain issues, labor shortages and inflation are tempering enthusiasm.  

Stock markets had another good year. The Standard and Poor’s (S&P) 500, an index of 500 of the largest companies in the U.S., is up approximately 20 percent year-to-date, as of early December. Small-cap stocks, mid-cap stocks and most international markets have also shown strong gains this year. As expected, short-term interest rates have remained near zero as the Federal Reserve continues its accommodative fiscal policy. Intermediate and long-term rates have risen as the economy has improved, but in a measured way.

As we look forward, there is plenty to be positive about. The U.S. consumer is doing very well, which is vital since consumer spending accounts for nearly 70 percent of our Gross Domestic Product (GDP). The unemployment rate has fallen from 6.7 percent at the start of the year to 4.2 percent in November. Wages and salaries are up approximately 10 percent year-over-year. U.S. consumers have accumulated more than $2 trillion in excess savings and consumer net worth has surged about 30 percent since the start of the pandemic. These factors provide confidence that strong retail sales of goods and services will continue into 2022.  

By Christine Graf

According to the Federal Reserve, only 36 percent of Americans are adequately saving for retirement.  The National Institute on Retirement Security estimates that almost 40 million U.S. households have no retirement savings.

Certified Financial Planner Mark Wells, co-founder of Three Buckets Wealth Management, recommends that everyone have three to five months of living expenses in their savings accounts. A private wealth advisory practice of Ameriprise Financial Services, Three Buckets has offices in Glens Falls, Latham, and Tucson, Arizona.

“If you don’t have disability insurance through your employer, it should be closer to six months of living expenses,” said Wells.

He recommends making maximum contributions to employer matched 401K programs in order to take advantage of “free money.” He also recommends Roth IRA’s to many of his clients including recent college graduates who are in lower tax brackets than they will be later in their careers.

“What we have been doing with a lot of our clients is a Roth conversion which is essentially realizing the tax or converting pre-tax assets like a 401K or IRA to a Roth IRA so that you realize the tax in that year. But that amount going forward is tax free, and the earnings are also tax free. It’s tax free to the owner of the account but also tax free to the beneficiary when they receive it down the road. In your early years when income is lower than it will be in the future, making a Roth contribution is a wise idea.”