MAKING CENTS: Planning your rewarding retirement

Perhaps this is your year – the year you finally get to spend your time exactly how you want, and maybe slow down or call it quits from work. Whether now or later, these are some of the

matters that you may want consider now.

Not working will free up a lot of time, and you need to think about exactly what you will do with it. This sounds trivial, but many become bored pretty quickly if they haven’t developed a good vision about what their ideal day, week and month look like.

When you started work many moons ago, the vision for the retirement years were referred to as golden; sitting on the front porch with lemonade while waiting for the grand kids to visit. Today, many envision an active lifestyle, full of travel and activity.

After envisioning the lifestyle you want, you need to understand the cost of that lifestyle.

A financial forecast will help you see the economic consequences of how you want to spend your time, and guide your actions.

Start by taking a close look at the benefits that you’ll no longer have. Most get concerned with the costly health insurance premiums, but that isn’t the only benefit that you may need to replace. There may be group life insurance or group long term care insurance, Find out if any of these benefits are portable, allowing you to continue coverage on your own dime.

If retirement involves deferred compensation or some lump sum cash receipt such as from the sale of a business or accumulated bonuses, vacation or sick time, plan the most tax efficient way possible to collect. You may have options on the timing and stretch payment over more than one tax year.

Design your income stream. Start with social security and build from there.

Not getting a paycheck often causes stress for even the wealthiest of retirees. Do not rely on any rules of thumb regarding how much income that you think you’ll need. Make it your rule based on your vision for your future.

MAKING CENTS: Selling a home not easy in any market

Now that the real estate market is heated up locally, many people are seriously considering putting their house on the market.  

image source: boston.curbed.com

While this may be a good time to do so, consider these important factors before you get swept up in the hysteria of a hot seller’s market.

First is to answer the question of where to go. It’s one thing to get your price, but you may be surprised at what you find when searching for a new home. Inventory is tight, banks are still not lending too liberally and rental rates have soared

Have an attorney review the real estate listing agreement. It may be a moot point if your house sells quickly, but if the house if priced wrong and sits for longer than the original listing period, many of the standard forms that realtors use contain an automatic renewal provision. I’d get the auto renewal stricken and sign a listing agreement for no longer than 90 days.

Pricing the home is always a tough decision. Contrary to the stories we’ve all heard about homes selling for above asking price at the open house, this only happens when a house is fairly priced. In a rising market, do not get greedy. If you get your full price or more in one day, it would be fair to say that you priced the home properly. Avoid the agent who gives you a dream number. If it sounds too good to be true… you know the rest of that line.

Carefully evaluate any fix up or home repairs that you feel are necessary. Bring these topics into the discussions with any prospective realtors and evaluate the responses you receive.

Don’t rush into the sale. Making sure that the home shows well is always a significant part of the selling process. If the interior furnishings are appealing, and you clear out the clutter in the spare room(s), basement, shed and garage, your home will show well. If you want to move quickly, select a professional who can be open and blunt with you about what needs to be done to clear out and stage the home, and get started immediately.

As a courtesy, consider alerting your neighbors about the plans to sell.

John P. Napolitano is CEO of U.S. Wealth Management in Braintree, Mass., and 2012 president of the Financial Planning Association of Massachusetts. He may be reached at jnap@uswealthmanagement.com or on Facebook as JohnPNapolitano and US Wealth

John Napolitano is a registered principal with and securities offered through LPL Financial. Member FINRA/SIPC. He can be reached at 781-849-9200.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through U.S. Financial Advisors, a registered investment advisor and separate entity from LPL Financial. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with resident of the following states: AL, AR, AZ, CA, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, NC, ND, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WV. USFA, and U.S. Insurance Brokers, LLC are wholly-owned subsidiaries of U.S. Wealth Management. U.S. Wealth Management companies are not affiliated with LPL Financial.

The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.

MAKING CENTS: Joint ownership can create problems

Having more than one owner for just about anything may be appropriate for some married couples, but for non-married people, joint ownership often creates more problems than it’s worth.

‘Joint tenants in common’ is a term that means each individual owner has an undivided ownership interest in the property, whether it is a baseball card collection, a bank account or real estate. So if you are a joint tenant in common in a two-family house, you can sell your half whenever you want to whomever you want. When you die, that half of the property will pass to whoever is so appointed according to your will.

The other type of joint ownership is called 'joint tenants with rights of survivorship'. It is an ownership interest that is somewhat limited in terms of the rights of the owners. For example, if you own a two-family house with your brother as joint tenants in common, and one of you passes away, the decedent’s half of the property goes to the surviving owner – regardless of what your will says.

Other problems with joint ownership include asset protection and flexibility. Your brother – that wonderful, huggable bear of a guy – is involved in some sort of financial difficulty or litigation. Should he lose, or receive outstanding judgments from creditors, any asset that he owns is subject to the claims of those creditors. That may include your two-family house.

A similar unfortunate situation could develop if one of the owners is suddenly unable to pay his share of the mortgage or the cost of upkeep. The mortgage holder doesn’t care that you paid your half; he needs the whole payment and considers you equally delinquent.

The solution: avoid owning property jointly with anyone but your spouse. I suggest establishing a limited-liability company, partnership or corporation to own the property, with each person owning a share of the new entity.

Be aware that such an entity is not, by itself, the holy grail of protection; you must have a legal agreement behind the entity that spells out the duties, obligations, rights and remedies of the owners. Hiring a qualified attorney could give you the best ounce of protection you’ve ever paid for.

John P. Napolitano is CEO of U.S. Wealth Management in Braintree, Mass., and 2012 president of the Financial Planning Association of Massachusetts. He may be reached at jnap@uswealthmanagement.com or on Facebook as JohnPNapolitano and US Wealth

John Napolitano is a registered principal with and securities offered through LPL Financial. Member FINRA/SIPC. He can be reached at 781-849-9200.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through U.S. Financial Advisors, a registered investment advisor and separate entity from LPL Financial. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with resident of the following states: AL, AR, AZ, CA, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, NC, ND, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WV. USFA, and U.S. Insurance Brokers, LLC are wholly-owned subsidiaries of U.S. Wealth Management. U.S. Wealth Management companies are not affiliated with LPL Financial.

The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.

MAKING CENTS: Make risk assessment your first step

Many say that an analysis of risk should be the first step of the financial planning process after you’ve compiled your financial statements and enumerated your dreams, goals and objectives. The reason for starting with risk is because the occurrence of an unplanned risk may prevent your best laid plans from ever having a chance to become reality.

Perhaps the first risk would be to your income.

Perhaps you’ve received a pink slip or two in your life, and if you have, you understand

better than anyone the value of having some cash stashed aside for your rainy day fund. How large your rainy day fund should be depends, but somewhere between 3 and 12 months of living expenses is recommended for many.

For those of us working now, what type of disability income protection insurance do you have? Many have this coverage in the form of group coverage from an employer, but along with the pink slip comes the loss if group disability coverage in most cases.

Retirees also should look to their income sources, and learn about ways that you may increase, stabilize or protect your income.

Now we turn to protecting your health. Beyond basic health insurance, which everyone should have, you may look to coverage for catastrophic injury or illness and then on to life insurance. For catastrophic health care, long term care insurance is the best way to protect yourself. As baby boomers age and care for their parents, long term care coverage seems to make sense. Other factors such as low interest rates on the insurance company’s investments and the lack of cancellations from policy holders are amongst the factors contributing to skyrocketing LTC insurance costs.

For life insurance, your most important factor is the amount of coverage needed. Start with knowing how much protection your family needs and then see if your coverage is adequate in amount. Beyond the amount of coverage, is your life insurance the right type? Do you need term or permanent coverage? You then need to evaluate your holdings against what you need and search for the type of product that fits the time frame, health and underwriting facts of your life and goals.

Lastly, a thorough evaluation of the protection in place for your stuff and general liability is mandatory. This may mean your home, business, car, valuables, toys or rental properties. Unfortunately, this is the area most frequently overlooked by financial planners

Don’t think that this part of your financial plan is easy or all set. Get professional guidance to make sure that your down side is covered before you start counting on living your dream.

John P. Napolitano is CEO of U.S. Wealth Management in Braintree, Mass., and 2012 president of the Financial Planning Association of Massachusetts. He may be reached at jnap@uswealthmanagement.com or on Facebook as JohnPNapolitano and US Wealth

John Napolitano is a registered principal with and securities offered through LPL Financial. Member FINRA/SIPC. He can be reached at 781-849-9200.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through U.S. Financial Advisors, a registered investment advisor and separate entity from LPL Financial. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with resident of the following states: AL, AR, AZ, CA, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MN, NC, ND, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WV. USFA, and U.S. Insurance Brokers, LLC are wholly-owned subsidiaries of U.S. Wealth Management. U.S. Wealth Management companies are not affiliated with LPL Financial.

The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. We make no representation as to the completeness or accuracy of information provided at these web sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.