SAC Investments

Financial Services Ft. Lauderdale Florida

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Sam Curmaci, President of Investments

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What to Do with Your ESOP: Options Available for Employees

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What to do with your Publix ESOP

If you’ve worked for a long time, you already know about how great the benefits are in this grocery company. Around since 1930, it has become the largest employee-owned grocery chain in America. You’re perhaps one employee who’s worked with them for years and realized how unusually generous their benefits continue being.

One of those is their employee stock ownership plan (ESOP) that’s one of the best available in the country. It’s an investment feature many who’ve worked there prefer because it gives them continual income into their retirement years without having to rely on less dependable financial sources.

If you’ve decided to take this investment benefit, maybe you’re still wondering what to do with your ESOP as you head toward retirement. Your options can vary, though it requires some smart strategy depending on what your age is.

Some prefer to retire early, and others wait until they’re older. In either case, here’s some tips to look at since many myths have developed about your ESOP. It’s time to see what works best for your own financial situation.

Can You Leave Your ESOP  Forever?

We’ve seen some misconceptions develop about how long you can keep your ESOP there. You’ve perhaps heard some tell you it’s possible to leave your ESOP there for life.

This isn’t true, though you can keep it in there for a while if you’ve decided to retire before the age of 62. By March of the year after you turn 62,  you are required to take full distribution of your ESOP.  Packets are sent out in February.

The company sends you the distribution paperwork when the time comes, though this doesn’t end the story on what’s possible with yourESOP. If you’re slightly younger, you have other options available to give you some supplemental income before being required to cash out.

Using the “Diversification Election”

For those just turning 55, you’re at a perfect age to enjoy some additional ESOP benefits from your employer. If you’ve worked at least a decade at the company, you can start to take distributions while still working there. They call this “Diversification Election”, and it increases your income substantially while still being employed.

The downside to this is you get a 10% penalty, plus taxation on your distributions as income. One way to prevent penalties is to roll your ESOP into an IRA within 60 days.

Yet another method is available to avoid tax penalties, but it again depends on what your age is at the time.

Using the Substantially Equal Periodic Payment Arrangement

Otherwise known as SEPP, the Substantially Equal Periodic Arrangement is a system helping you take distributions without a 10% penalty. Still, it’s only applicable to those under 59 1/2 years of age. It’s also known as a 72(t) arrangement in IRS parlance, and it’s worth looking into to help yourself bring more income into your household without subtractions.

How Much of Your ESOP Can You Take Out After Retirement?

You can’t expect to dip into your ESOP after retirement and leave the rest in place. You are required to take the whole thing out if you need some or all of it for a particular financial emergency.

At the time of this distribution, you can take it all as cash or as a stock certificate. Once you take this action, however, you can’t reverse it. Taxes may apply as well, depending on how you use your distribution.

What makes your employer extra good with their ESOP‘s is they don’t force you to sell your stock back to them. They let you benefit, including passing it on to your heirs if you want.

Contact us at S.A.C. Investments to learn more about what you can do with an ESOP and ways you can roll it over to other sources of retirement income.

Join our Grocery Employee Pre-Retirees Group on FB.

The group answers all of your retirement questions.  Feel free to join and or share with co-workers.  https://www.facebook.com/groups/GroceryEmployeePreRetirees/

Sam Curmaci

Tips To Save Even More For Your Retirement

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investing for retirement
The more you can put away for retirement, the more peace of mind you will have when it comes time to transition into that new phase of your life.

Investing for retirement can seem very daunting, especially if you are not sure that you are going to get much from Social Security. Life is so busy and expensive that most people don’t start saving for retirement until they worry that it is too late. However, it is never too late to start saving up for your retirement, though you may worry that you are not putting enough money away. Even a small amount helps.

Here at some tips to help you save even more for your retirement.

  • Start saving for your retirement now. The earlier you start saving, the more money you will have to retire. Even if you are able to just put a few dollars in each month, it will add up. If you haven’t started yet, don’t panic. Instead, just make sure that you are vigilant about putting money away.
  • Figure out how much money you are going to need. You also need to know how much you may end up getting with Social Security, though you want to make sure that you have enough money without it. It never hurts to be more prepared when retirement is concerned. The more money that you can save and invest, the more comfortable your retirement will be.
  • Take advantage of your employer’s retirement fund. You really need to invest money in your company’s retirement fund. First, it is not taxed so you won’t miss as much money. Second, many employers offer to match your investment (to a certain degree), so you have even more money in your account.
  • Cut some expenses now for more money in the future. Are you wasting your money on extra television that you don’t watch? Do you really need to buy a brand new car every few years? Are you a member of a club that you don’t use? Stop wasting money and put that into a retirement account.
  • Make saving for retirement automatic. It can be really helpful if you can set up automatic payments. There are ways to make money come out of your paycheck automatically. If you are unable to do that, see if you can do the same with your bank. They may be able to take a little money out of your account each month to place for retirement.
  • Find a retirement account that makes money. Invest your money wisely. Some retirement accounts will grow over time so, if you don’t mind a little risk, investing your retirement money can pay off in the long haul.
  • Watch your fees. Many accounts, even ones specifically to help you retire, have fees. If you choose accounts with lower fees, you won’t lose as much of your hard earned money.
  • Don’t lose money with penalties. There are many penalties if you use your retirement fund early. Instead, wait until you are fifty nine and a half to start using your retirement money.
  • Get help. Financial advisors are good at making sure that you will have enough money to retire. They can look at the amount of money that you have, where you have it, and where you spend it. Together, you can set retirement goals to make sure that you are going to be ready to retire.

Retirement seems so far away but it is really important to start saving now. See what you can cut out (and won’t really miss) and start saving. Join your company’s retirement fund so that your employer will help you retire too! Get help if you are not financial savvy. An advisor is worth it to make sure that you have a bright future.

Contact us for your financial needs. We will help you invest for your retirement so that you can live comfortably in the future.

Sam Curmaci

 

Seven Reasons Financial Planning Is So Important

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financial planning
Consulting with an experience financial planner can help you prepare for your future.

They say that money isn’t everything but we all know that some days, money is everything. This is especially true when you are low on cash. That is when you have bills to pay and unexpected things pop up. You also need money to retire, though you may not be putting money away like you should. You may want to hire a financial planner to help you with your finances because it is really important to plan your finances.

Here are some reasons why financial planning is so important.

  • Understand your income. People get their paychecks yet they don’t really think about the money that they make. They are not prepared when tax season comes around and they owe a lot of money because they didn’t get enough money withheld. This is also true with business owners. They need to plan to hold a percentage of their earning so that they are prepared to pay taxes quarterly.
  • Set a budget. To live financially responsible, you need a budget. You need to know how much money you get each month (or week). You need to plan out where you are going to spend your money. Things like electric, groceries, and other expenses are necessary, though you should also plan for some fun expenses.
  • Take care of your family. Part of financial planning is making sure that, if something would happen to you, your family is going to be well taken care of. You want to make sure that you have insurance policies all set up so that your children will be able to live like they are used to.
  • Start saving money. A savings account is important. Many people call it a “rainy day” fund because it can be used in the event of an emergency so that a setback won’t ruin you financially. You should try to have a few months of expenses saved away, in the event that you lose your job or are hurt in an accident.
  • Making smart investments. It is important to put money away as investments so that you can keep earning more money. Financial advisors are great at helping to make your money work for you, though you can decide if you want to use high risk stocks or accounts that are safer.
  • Plan for your retirement. Many people are not able to retire when they would like to, because they don’t have the funds to do so. You need to make sure that you are saving money regularly so that you will be able to retire when you want to. You need to have enough so that you can live comfortably, without working.
  • Become financially responsible. Many people try to be smart with their money, though without knowing much about money, theymay not be doing everything that they can do to have a comfortable life. Once you learn about money coming in, budgeting, saving, investing, and more, you will know that you are doing everything that you can to be financially responsible.

Once you have a financial plan in place, you should do everything that you can to stay on track. A financial planner will help to make sure that you are spending your money smartly. They are also great at making your money work for you so that you can live comfortably now and when you retire. They will also make sure that your family is going to be well taken care of. Once you are financially responsible, youwill be amazed at how many people have no idea where their money is going.

Contact us for help with your finances. It is our goal to ensure that you have enough money to live comfortably and to retire in the future.

Sam Curmaci

 

What To Do For Retirement Before It’s Too Late

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investing-for-retirement
Retirement should be relaxing and enjoyable, but if you’re not prepared, money might be tighter than you think.

Everyone looks forward to retirement. It is a time when you can pursue what makes you truly happy, and spend a lot of quality time with your family and friends. According to the United States Department of Labor, less than half of the workers in this country have actually crunched the numbers to see how much money they would need to save before they can comfortably retire. On top of the fact that most people aren’t actively planning, the average American will spend at least 20 years in retirement.

Make a Plan and Stick To It

Meet with a financial advisor and create a retirement strategy for saving your earnings. Be strict with yourself. Do not break your plan even for one week. The earlier you start, the better off you will be when it is time for you to retire. The United States Department of Labor estimates that you will need around 70 percent of your preretirement earnings once you retire to maintain your current lifestyle.

Contribute to Employer 401(k) Plans

These plans are perfect for retirement. They don’t get taxed until they are cashed, so they grow in an account for years. Also, depending on your plan your employer may have to match your contributions to your account, so that you are putting back double. Despite these great plans in 2012 over 30 percent of private industry workers with access to 401(k) plans did not contribute to them. Do not let these opportunities pass you by.

Other Investment Options

Younger people tend to go for higher risk and higher reward investments. If they lose a lot of money they still have time to recover their losses before retiring. Conversely, older people tend to invest in lower risk investments that have steady returns. Let’s explore some more of these types of investment options that offer investors low risk and a steady return.

-Annuities – These investments are insurance products that provide the holder with a steady source of income. They pay out either monthly, quarterly, or in one annual lump-sum every year of your retirement.

-Bonds – These investments are debt securities. In this case you are lending money, generally to a corporation or government, in the exchange of interest payments and the future repayment of the bond’s face value. These types of investments are very stable and consistent, perfect for retirement and a steady source of income.

-Direct Reinvestment Plans – These plans are beneficial because they allow the investor the option to reinvest their cash dividends in more shares or fractions of shares on the date payment is due. This is a great way to grow wealth and manage your current stock options.

Meet with A Financial Advisor and Create an Investment Plan

This is a very important step in ensuring you will be comfortable in retirement, and it is never to late to meet with an advisor. Granted if you invest while you are young and hire an advisor to manage and grow your investments, by the time you retire you should have a nice chunk of change, however, it is never too late to meet with a financial advisor. Obviously, you need to find the right advisor for your needs, and formulate the best possible plan for the long-term with them.

Retirement should be enjoyed to the fullest, you’ve worked hard now it is time to relax. It is never too early or too late in the game to be thinking and planning ways to invest your income in ways that will be more beneficial to your future retirement. Famous playwright and American icon Tennessee Williams said, “You can be young without money, but you can’t be old without it.” Contact us for more information on investments and retirement.

Sam Curmaci

Reasons to Start Financial Planning Today

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financial planning
Start financial planning early on to begin organizing and growing your wealth portfolio.

If you go strictly by what you read or watch on the news, then you know that the present economy is volatile. It goes up and down based on world events and domestic markets, but, all in all, it can’t be predicted. It’s hard to know where to invest your money, especially if you’re just about to retire and you want to live on your dividends for a long time. The basic reality is that your Social Security check every month is only a drop in the bucket. With your impending lump-sum distribution from your retirement plan or the estimated payments that you will receive from structured annuities, you still need financial planning. Fortunately, there’s good news for people in your shoes. Here, we look at a recent report on the outlook for retiring high-earners:

Forbes.com’s Andrew Biggs did a comparison of the median disposable income of U.S. retirees 65 and older with the median disposable incomes of counterparts in other developed countries. He found that the U.S. average income was $26,250, which places our retirees at #3 (behind retirees in Luxembourg and Norway). The reason for our high level of retiree disposable income compared to other countries is that we have low income taxes.

Biggs also noted that two-thirds of U.S. retirees pay no taxes on their retirement and payroll income. While you are in a higher income bracket perhaps than the median retirees discussed above, you know that your proposed income stacks up well. Now, you can sleep better at night. But, what do you do with that income? How do you make it grow?

Structure Your Investments Based on Current and Future Trends

The age-old advice still holds true. Don’t put all of your retirement eggs in one basket. Build a portfolio of retirement investments, even if that means moving your money around. It means that you don’t have to keep your money invested in the same mutual funds and other portfolio options you chose in your last job. Once you reach that official retirement age with your employer, the question is not really about which rollover to take. It’s about restructuring. You want a combination of high-yield, medium-yield, and low-yield investments, and your strategy should account for the risks associated with each investment type.

Consider Taking a Few Risks

While some high earners pursue a diverse investment strategy, recognizing that investments like capital bonds for government building projects pay off over the long run, they are afraid to take the biggest risks. At the retirement age, it is understandable that you don’t want to lose your retirement savings because you are foolish. Maybe you will start small and risk a small percentage of extra income. Tech startup investments are an example because they can generate double-digit returns (i.e. Instagram), but that isn’t always the case.

Go Tech: Portfolios With Angel Investments

Your portfolio could include some angel investments, for example, if you want to capitalize on tech. A recent Forbes report found the following: “On average, if executed strategically, venture investors should aim to achieve 10x returns on individual investments, but across a portfolio, an internal rate of return (IRR) of 25%.”

You Need Some Expert Guidance

I am here to help you understand how you can restructure your retirement income to include a range of sensible investments. We can build in the acceptable levels of risk for portions of your portfolio based on your needs. It’s never too late to adjust your financial planning strategy and to take advantage of new trends in the market, especially with double-digit returns possible. These can always be adjusted in the future.

For information on investing retirement wealth, please contact us today.

Sam Curmaci

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