What's your savings ratio?

As much as all of us at Ensphere Marketing Group appreciate the likes, we are in the business of helping our clients grow and manage their money in a cost-effective, tax-efficient manner. We have a short survey for you to complete that will help us assess whether we can help you improve your long-term money management processes.

1) Write down your total savings, including your retirement money. As an example, if you have $300,000 total savings, with only $15,000 outside of retirement plans, you have 95% of your savings in your government sponsored lock up plans. What if you needed a new car? If your savings were 2/3 in retirement plans and 1/3 in after-tax savings, you could easily borrow the money from yourself, amortize the loan over 4-5 years, repay yourself, and do it again many times in the future.

2) The story most of you have swallowed is that you need the tax deduction NOW! We can review your current finances, determine if this program makes sense for your family, present a plan and show you how to implement your own “Freedom Account.”

3) I have included a short video for your review. Watch it, and send me your comments.

4) Send us your ratio of after-tax savings to retirement savings, along with your comments.

5) Click here to enjoy the video.

For more insider tips and videos, remember to visit www.enspheremg.com.

Mike Giffin, Ensphere Marketing Group

Americans' Ill-Advised Saving Structure

Most Americans have no emergency fund.

When I got into this business in 1973, we advised our family clients to save one to one-and-a-half years' worth of income for emergencies. Back then, 70+% of Americans had some sort of a pension plan. Back then, it was called a defined-benefit pension plan. Your benefit was a formula based upon highest-earnings years, number of years with the company, and you and your spouse’s life expectancy. How the payout worked is based upon an actuarial formula. It is not, as my good friend and “Financial Entertainer” Dave Ramsey, radio host, calls a bet with the company on how long you will live. The options are all very fair, if you understand how they work. The details are for another blog.

When we don’t have a saving structure, when an emergency happens, and they always do, we tend to put the cost on a credit card or borrow from our 401(k). The emergency then usually lasts longer that expected. We now have a debt, an additional bill we have to deal with. If that debt is minor, such as a new roof, furnace, or small medical bill, recovery is manageable.

If, however, that debt is helping our three children with the bloated Cost of College and related expenses, this debt can destroy the family finances and permanently alter the best-laid retirement plans. These costs, as our clients will tell you, can easily be two or three hundred thousand dollars.

Helping families with how to handle these financial matters is why Ensphere College Planning Services was formed over 10 years ago. Even if you don’t have students attending college, you need to learn how to properly save money after-tax.

I have attached a Saving and Investment pyramid for your use. Read it, understand it, and try to emulate it in the future. More will be written on this subject in the weeks ahead.

For more ideas, insider tips, and videos, visit our site at www.enspheremg.com.

Mike Giffin, Ensphere Marketing Group

The Beneficiary Tree: Answering Questions About Retirement Plans and Beneficiaries

For everyone who follows my blog stories, this one may be a bit confusing. I need to say, before I leave you with this chart, we do understand what needs to be done and will be happy to answer any questions you have about your own retirement plans and their beneficiaries.

One overriding principle most successful clients fail to realize was pointed out to me a month ago by one of my clients who has always had real insight into his own planning issues. He said he was talking to some of his employees when one of them said how much money he had in his retirement plans.

Rich properly pointed out to his friend, “You know Bill, you have to pay federal, state, and local taxes on all of that money.” I do?

Yes, you do ... and your spouse, children and grandchildren also have to pay taxes on ALL that money in your retirement plans after you die. How they take the funds is also extremely important. It is one of the most inefficient ways to pass on your legacy.

For ideas on how to use the above chart, how to more effectively pass assets to your family members, and other great estate planning ideas, stay tuned to our site at www.enspheremg.com.

We look forward to continuing to serving your needs. Remember to make sure your beneficiary designations are up-to-date. Children under 18 cannot take receipt of cash.

Send me your questions.

Mike Giffin, Ensphere Marketing Group

"What advice do you have for the folks planning to retire?"

As most of the readers of our site understand, I have been in the financial services business for 42 years. It means I’ve seen some really good advice over the years and a lot of really bad advice, driven equally by greed and ignorance. I have met planners who are sure they predicted the ’87 crash, 2001 bust, and of course they moved all of their clients to cash at the end of ’07. None of these claims are actually true. I know many CFP’s who are wonderful people, but in 2008 questioned their training and if they were in the right profession.

It’s human nature: when it becomes the darkest, folks tend to run for the hills.

A recent Dalbar study that I read said over the last 15 years, the average investor's actual return was 2.1% per year. Why, you ask, when you have been told the market will return 10-12% per year? People tend to buy high and sell low. Explaining this phenomena would take the rest of the week. As we continue this journey, I will fill you in on why this happens.

I have coined this phrase, “When the mailman tells you to buy gold, sell gold.” If you understand, you are light years ahead of your fellow investor.

Here it comes, the topic I started the latest blog with. What is my answer when our clients ask, “What advice do you have for the folks planning to retire?”

Hold on, here it comes ... “DON'T.”

Mike, are you nuts, what do you mean, “DON'T?”

I mean in its simplest sense, take the pressure off you and your loved one now, and do not look at retirement as a date certain, or a traumatic event you must prepare for in its entirety. It is another phase of this wonderful gift we call human life.

Spend your 60’s and 70’s planning more time to enjoy your favorite pursuits, with your families, as a mentor. Share your knowledge, and continue to work.

Actually, most of us in this phase will and need to earn at least some income. Have you ever noticed how many of those who love their career, their profession, really completely retire? They DON'T. And for that matter, neither should you. I can promise you my senior clients in their 80’s, 90’s, and older echo this exact advice. Take the pressure off, ease into that thing called retirement, take 20-30 years to get there ... what's the hurry? It’s your life. 

For more videos and insider secrets, go to our site at www.enspheremg.com or contact Chris directly.

Mike Giffin, Ensphere Marketing Group

P.S. Special treat this week. Click here to enjoy a unique and wonderful version of the Star-Spangled Banner.