Financial Planning Advice
For Prime Retirement Years

The first rule of financial planning is "the sooner the better." Yet, there are provisions by which investors beginning their golden years can "catch up" on retirement plans.
     That and many other topics are discussed when clients speak with Manager John Tranchida and staff of Van Dyk Financial Services in Manahawkin.
     "The government has done a lot of things recently that will allow people to catch up," Tranchida explained. "You may hear the term 'catch-up provisions' with retirement plans, with 401(k)s, Simple IRAs, regular IRAs and other plans, for those who are 50 or above.
     "They're offering these catch-up provisions because they realize so many people start so late to get to this point; and let's face it, we're in a state that's not cheap to live - it's tough to get started.
     "One of the things I always tell people is, try to pay yourself first," he advises those before they reach retirement. "Try to put 10 percent away. It's difficult to do, but if you make a habit of treating yourself as a bill, so to speak, it makes it easier for you to put money away."
     The government's allowable catch-up provision applies to people age 50 at the beginning of the taxable year. "They allow you to put anywhere from another $500 to $4,000 away for retirement without being taxed," he said. "It's fully deductl'ble and fully deferred." The allowable amount depends upon the type of retirement plan and other factors. Space doesn't permit listing all the details here, so see your financial advisor.
     Seniors can also be advised how to integrate insurance costs in financial planning. Long-term care insurance is becoming a more popular consideration. With premiums that are more affordable the younger a person begins paying into the plan, such insurance helps cover costs of a nursing home or in-home care when it is needed.
     Van Dyk Financial Services has an in-house long-term care specialist. Based in Monmouth County, Charles Levinsohn has arranged long-term care plans for large firms and for individuals. A friend and associate of Tranchida's for the past 10 years, Levinsohn is available for Van Dyk clients in Southern Ocean County.
     "I introduce the subject with my clients, and if it gets technical and they have a lot of other questions, I bring him in, Tranchida said. Or right from the start, I may say Chuck's the guy you want to talk to."
     Speaking in more general terms, the overall financial planning process is "a discussion," Tranchida described: "Where do you want to be, where are you now, are you on target, what's it going to take to get you there?"
     The first order of business is to make sure money is set aside for emergencies, to avoid running to credit cards or a second mortgage if the roof needs repair.
     Then, "what we try to do with seniors and anyone, for that matter, is try and make sure they're maximizing their tax-favorable avenues," Tranchida said.
     For those clients still employed, "we want to make sure they're maximizing their retirement plans through work. Even though it doesn't make us any money, it's the right thing to do.

 Once you maximize your 40l(k) at work, then talk to us and maybe you can add a Roth IRA on top of that if you qualify financially. (A Roth IRA gives no deduction up front but earnings grow tax-free.)
     If your employer does not offer a retirement plan, there are solo 40l(k)s; all kinds of things we can be doing," he said. "Once you're done with the deductions, we want to make sure you're taking advantage of all the deferral options, and then we can talk about other monies."
     One other specific topic that has arisen many times is curbing the costs of moving from one investment plan to another by allocating assets wisely.
     "A lot of seniors get involved with moving plans that may or may not perform in a given year. They may get frustrated with it, leave it, and then go to something else. Or in the next year, they earned 20 percent but they heard their neighbor earned 40, so they take it out. All they're doing is incurring charges, and they're not necessarily earning money. What we try to do is develop a strategy of what we call all-weather portfolios, so when things are good, you're taking advantage of the market doing well. When things are bad, you're not getting beat up.”
     Tranchida can be contacted at 597-3240.

Real Estate Specialists Cater to Seniors
     Van Dyk Financial Services is an arm of The Van Dyk Group, one of the area's firms that offer specialized services for the growing senior population. The Van Dyk Group, established in 1946, offers real estate, insurance, financial services and mortgage services under one roof.
     When seniors are interested in relocating to one of the variety of senior communities that have been built in Southern Ocean County, real estate specialists have been trained to help place them in the right community that meets their needs, said Van Dyk Advertising Manager Tim Wallace. Senior communities today present many options, from clubhouses to pools and golf courses, to the more serene lifestyle.
     “The whole concept of a retirement home has really changed over the last five years," said Jerry Thompson, Van Dyk marketing director. "They're more upscale. We've gone from the two-bedroom to the three- and four-bedroom, three-thousand and four-thousand square-foot homes."
     Seniors are relocating to Southern Ocean County to enjoy the amenities and services.
     "We do have a lot of services available to seniors. We are known as the senior county in the Northeast," said Thompson. "But also, culturally, where we're located, we are central to New York for shows, and Philadelphia and Atlantic City. We are located at a proximity where everything is still a little bit at a distance - you don't have the craziness and hubbub of cities, but you have the access to the attractions. And right here, we offer one of the lowest crime rates in the country. The school districts have night courses for seniors, and the municipalities have recreation departments with activities for seniors." -M.S.

Reprinted from Prime Times. Spring. 2005. with permission of The SandPaper, Inc.