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Entrepreneurs Still At Risk 
Dear Friend,Catherine Head Shot

The subject of retirement comes up a lot in my business. Everyone wants to know when they can retire, and if they have enough savings to do so.

 

Despite all the information available to us through the media, statistics show that individuals are still not putting away enough money for their golden years.

 

Entrepreneurs are often most at risk, not only because they have to set up their own plans, but because they have to conscientiously fund them.  Many believe (erroneously) that if they start saving money for retirement, they will run short on funds to run their business.

 

In talking to my younger clients, I always stress that the single most important thing they can do with their money is to save it for retirement.

 

Please feel free to call me if you would like to review your retirement options, and make sure you are maximizing your savings and lowering your tax liabilities.

 

Happy Friday!

 

Warm regards,

 

 Signature

Catherine Maniscalco Avery

 

The backbone of CAIM is to employ a classic long term investment strategy including dividend paying stocks. CAIM is an independent, women owned investment management firm specializing in managing investment portfolios for women and baby boomers.

203.966.2712  p
203.966.5697  f 



May 16 2014|  Issue No. 52
In This Issue
Entrepreneurs Still At Risk
Market Update Q1
Dividend Champs Q1
Quick Links
Find Out More
Call me at 203.966.2712
or visit www.caimllc.com.

 


Entrepreneurs Still At Risk 

                                                                                                                       

In a 2009 CAIM newsletter called: "Entrepreneurs At Risk," we highlighted the fact that too many entrepreneurs fail to adequately save for retirement.  

  

Headlines at that time blared some scary stats:  "Almost 19 million people are running micro-businesses in the U.S. but one in three have nothing saved for retirement." The Clark Howard Show 2005. And: "Only 6 percent of those who work by themselves have a 401(k) plan.  Meanwhile, more than half of all business owners polled (55 percent) said they never plan to retire, and a shocking number, 62 percent, have no exit plan at all."  AllBusiness.com 2007     

 

More than 8 years later entrepreneurs are still at risk, according to sources like CNBC.com, who ran the recent headline:  "Small-Business Owners Neglect Retirement Savings" and noted:
"Sixty percent of small business owners surveyed by American Express say they're not on track to save the money they need for retirement. Seventy-three percent said they're worried about their ability to save for the lifestyle they want in retirement."

 

One reason entrepreneurs may be reluctant to save money for their retirement is because of an erroneous belief.   They think that if they save, but need access to that money, they will not be able to touch it.  So instead of investing, they hold onto any cash and/or plow it back into the business.   While randomly pulling out money whenever you need it is obviously not a good idea, to not save for the above stated reason is really doing yourself a disservice.  

 

The fact is, if you open retirement investment accounts, there are a number of ways to access these funds, penalty-free, should an emergency arise.    Here are a few options from a 2012 online article: "9 Penalty-Free IRA Withdrawals":

 

1. Un-reimbursed Medical Expenses: If you do not have health insurance or your medical expenses are more than your insurance will cover for the year, you may be able to take penalty-free distributions from your IRA to cover these expenses.

 

2. Disability: If a physician determines that, because of a mental or physical disability, you are unable to engage in any gainful employment, you are allowed to take penalty-free distributions from your IRA.

 

3. Higher-Education Expenses:If you need to pay expenses for higher education for you, your spouse or your children or grandchildren - you may be able to take penalty-free distributions to do so.

 

4. Home Purchases: If you are purchasing, building or rebuilding a first home, the IRS allows you a penalty-free distribution of up to $10,000 to use toward your expenses, including closing costs.

 

The article does add the caveat that even though amounts distributed for the above reasons are exempt from the early-distribution penalty, they may still be subject to federal and state tax.  So check with your tax professional to determine what amounts may be taxable.

 

The most important advice, when it comes to your future security, is to make sure you save for retirement before anything else.

 

 

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Market Update 1st Quarter 2014


Holding its ground.  That's the best way to describe the 1st quarter.   After a year of great returns, the market has been...Read more >>
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Dividend Champs 1st Quarter 2014
 
There is no doubt that 2013 was a remarkable year for stocks.  Investment professionals like myself are still amazed at ... Read more >> 
 
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Disclaimer: NO CONTENT PUBLISHED AS PART OF THE CAIM LLC NEWSLETTER CONSTITUTES A RECOMMENDATION THAT ANY PARTICULAR INVESTMENT, SECURITY, PORTFOLIO OF SECURITIES, TRANSACTION OR INVESTMENT STRATEGY IS SUITABLE FOR ANY SPECIFIC PERSON.  TO THE EXTENT ANY OF THE CONTENT PUBLISHED AS PART OF THE BLOG MAY BE DEEMED TO BE INVESTMENT ADVICE, SUCH INFORMATION IS IMPERSONAL AND MAY NOT NECESSARILY MEET THE OBJECTIVES OR NEEDS OF ANY SPECIFIC INDIVIDUAL OR ACCOUNT, OR BE SUITABLE ADVICE FOR ANY PARTICULAR READER.  EACH READER AGREES AND ACKNOWLEDGES THAT ANY SPECIFIC ADVICE OR INVESTMENT DISCUSSED IN THE BLOG MUST BE INDEPENDENTLY EVALUATED BY THE READER AND HIS OR HER ADVISER IN VIEW OF THE READER'S INVESTMENT NEEDS AND OBJECTIVES.
 
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