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An Abney Associates Ameriprise Financial
Advisor Grundlagen der Berufsunfähigkeitsversicherung

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An Abney Associates Ameriprise Financial
Advisor Grundlagen der Berufsunfähigkeitsversicherung

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Invalidenversicherung zahlt Vorteile, wenn Sie nicht in der Lage sind, ihren Lebensunterhalt zu verdienen, weil Sie krank oder verletzt sind. Die meisten Behindertenpolitik Zahlen Sie einen Vorteil, der einen Prozentsatz Ihres verdienten Einkommens ersetzt, wenn du nicht arbeiten kannst.

WARUM MÜSSTEN SIE INVALIDENVERSICHERUNG?

Ihre Chancen für länger als drei Monate viel größer als Ihre Chancen sind sterben vorzeitig, mit einer Restlaufzeit von deaktiviert wird Teil zur Medizin, die viele tödliche Krankheiten behandelbar gemacht hat. (Quelle: 1985 Kommissars individuelle Behinderung Tabelle A--die aktuellsten Daten zur Verfügung.) Obwohl dies gute Nachricht ist, erhöht sich Ihre Notwendigkeit, Ihr Einkommen mit Berufsunfähigkeitsversicherung zu schützen.

Überlegen, was könnte passieren, wenn Sie eine Verletzung oder Krankheit gelitten und konnte nicht arbeiten für Tage, Monate, oder sogar Jahre. Wenn man single ist, haben Sie andere Mittel zur Unterstützung? Wenn Sie verheiratet sind, Sie können möglicherweise auf Ihren Ehepartner für Einkommen, sondern Sie wahrscheinlich verlassen haben auch viele finanzielle Verpflichtungen, wie Ihre Kinder zu unterstützen und Ihre Hypothek zu bezahlen. Könnte Ihr Ehepartner Einkommen Ihre ganze Familie unterstützen? Darüber hinaus nicht vergessen Sie, dass Sie nicht in eine gefährliche Position Invaliditätsversicherung brauchen arbeiten müssen. Unfälle passieren nicht nur bei der Arbeit, sondern auch zu Hause, und Krankheit kann jeden treffen.

Wenn Sie ein Geschäft besitzen, kann Berufsunfähigkeitsversicherung schützen Sie in mehrfacher Hinsicht. Zunächst können Sie eine einzelne politische erwerben, die Ihr eigenes Einkommen abzusichern. Sie können auch kaufen Schlüsselperson Versicherung schützen Sie vor den Auswirkungen, die einen wichtigen Mitarbeiter verlieren sich auf Ihr Geschäft hätte sollen. Schließlich können Sie eine Behinderung-Versicherung kaufen, mit denen Sie Ihr Partner Geschäft an zu erwerben, die er oder sie deaktiviert wird.

WAS MÜSSEN SIE ÜBER DIE INVALIDENVERSICHERUNG WISSEN?

Sobald Sie deaktiviert werden und Leistungen beantragen, müssen Sie für eine gewisse Zeit nach dem Auftreten der Behinderung warten, bevor Sie Leistungen erhalten. Wenn Sie sich für Leistungen aus einer privaten Versicherung bewerben, reicht dieser Zeitspanne (bekannt als die Beseitigung Periode) von 30 bis 365 Tage, obwohl die häufigste 90 Tage beträgt. Gruppe Versicherungen durch Ihren Arbeitgeber haben im Allgemeinen eine Wartefrist von höchstens 8 Tage für kurzfristige Maßnahmen, die Leistungen für bis zu sechs Monate, und 90 Tage für langfristige Maßnahmen zu bezahlen, die Leistungen bis zu 65 Jahren bezahlen.

Einkommen-Versicherungspolicen, die Lebensdauer-Abdeckung bieten können Sie private Behinderung erwerben, aber sie sind sehr teuer. Die meisten Menschen kaufen Richtlinien, die Leistungen bis zum Alter von 65 Jahren bezahlen; zwei und fünf Jahren nutzen Perioden sind jedoch auch verfügbar. Da viele Verletzungen oder Krankheiten nicht völlig Sie deaktivieren, bieten viele Richtlinien einen Fahrer, der Sie einen teilweisen nutzen zu zahlen, wenn Sie Teilzeit arbeiten und etwas verdienen können.

WO KÖNNEN SIE BEHINDERUNG VERSICHERUNG?

In der Regel Invalidenversicherung kann in zwei Arten aufgeteilt werden: private Versicherung (Einzel- oder Gruppenarbeiten-Richtlinien von einer Versicherungsgesellschaft erworben), und Regierung (Sozialversicherung Zustand oder Bund).

Private Berufsunfähigkeitsversicherung bezieht sich auf die Invalidenversicherung, die Sie durch eine Versicherung kaufen. Viele Arten von privaten Berufsunfähigkeitsversicherung vorhanden, einschließlich der individuellen Behinderung Einkommenspolitik, Gruppenrichtlinien, Verband Gruppenrichtlinien und Fahrer mit Lebensversicherungen verbunden. Abhängig von der Politik ausgewählt bieten private Behindertenpolitik in der Regel umfassendere Vorteile versicherte als Sozialversicherung. Individuell-prozentige Behinderung Einkommenspolitik können die meisten Abdeckung (bei einer höheren Kosten), gefolgt von Gruppenrichtlinien, die von einem Arbeitgeber oder Verband angeboten anbieten. Wenden Sie sich an Ihren Arbeitgeber oder Berufsverband zu sehen, ob Sie zur Teilnahme an eines Gruppe-Plans in Frage kommen. Ist dies nicht der Fall, wenden Sie sich an Ihren Versicherungsmakler in einzelne Abdeckung zu suchen.

Workers' Compensation und soziale Sicherheit sind zwei bekannte Regierung Behinderung Versicherungsprogramme. Darüber hinaus haben die fünf Staaten (Kalifornien, Hawaii, New Jersey, New York und Rhode Island) obligatorische Behinderung Versicherungsprogramme, die Leistungen bei Erwerbsunfähigkeit für die Bewohner bieten. Wenn Sie ein Zivildienst-Arbeiter, eine militärische Erkennungsmarken oder anderen Bundes-, Zustand oder lokale Regierung-Mitarbeiter sind, werden viele Behinderung Programme zugunsten der Sie eingerichtet. Im Allgemeinen jedoch Regierung Behinderung Versicherungsprogramme sollen begrenzte Vorteile unter restriktiven Bedingungen zu bieten, und Sie sollten nicht auf sie verlassen (wie viele Menschen fälschlicherweise) als Ihre Hauptquelle der Einnahmen Wenn Sie deaktiviert sind.

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An Abney
Associates Ameriprise Financial Advisor: Understanding risk

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An Abney
Associates Ameriprise Financial Advisor: Understanding risk

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Few terms in personal finance are as important, or used as frequently, as “risk.” Nevertheless, few terms are as imprecisely defined. Generally, when financialadvisors or the media talk about investment risk, their focus is on the historical price volatility of the asset or investment under discussion.

Advisors label as aggressive or risky an investment that has been prone to wild price gyrations in the past. The presumed uncertainty and unpredictability of this investment’s future performance is perceived as risk. Assets characterized by prices that historically have moved within a narrower range of peaks and valleys are considered more conservative. Unfortunately, this explanation is seldom offered, so it is often not clear that the volatility yardstick is being used to measure risk.

Before exploring risk in more formal terms, a few observations are worthwhile. On a practical level, we can say that risk is the chance that your investment will provide lower returns than expected or even a loss of your entire investment. You probably also are concerned about the chance of not meeting your investment goals. After all, you are investing now so you can do something later (for example, pay for college or retire comfortably). Every investment carries some degree of risk, including the possible loss of principal, and there can be no guarantee that any investment strategy will be successful. That’s why it makes sense to understand the kinds of risk as well as the extent of risk that you choose to take, and to learn ways to manage it.

WHAT YOU PROBABLY ALREADY KNOW ABOUT RISK

Even though you might never have thought about the subject, you’re probably already familiar with many kinds of risk from life experiences. For example, it makes sense that a scandal or lawsuit that involves a particular company will likely cause a drop in the price of that company’s stock, at least temporarily. If one car company hits a home run with a new model, that might be bad news for competing automakers. In contrast, an overall economic slowdown and stock market decline might hurt most companies and their stock prices, not just in one industry.

However, there are many different types of risk to be aware of. Volatility is a good place to begin as we examine the elements of risk in more detail.

WHAT MAKES VOLATILITY RISKY?

Suppose that you had invested $10,000 in each of two mutual funds 20 years ago, and that both funds produced average annual returns of 10 percent. Imagine further that one of these hypothetical funds, Steady Freddy, returned exactly 10 percent every single year. The annual return of the second fund, Jekyll & Hyde, alternated–5 percent one year, 15 percent the next, 5 percent again in the third year, and so on. What would these two investments be worth at the end of the 20 years?

It seems obvious that if the average annual returns of two investments are identical, their final values will be, too. But this is a case where intuition is wrong. If you plot the 20-year investment returns in this example on a graph, you’ll see that Steady Freddy’s final value is over $2,000 more than that from the variable returns of Jekyll & Hyde. The shortfall gets much worse if you widen the annual variations (e.g., plus-or-minus 15 percent, instead of plus-or-minus 5 percent). This example illustrates one of the effects of investment price volatility: Short-term fluctuations in returns are a drag on long-term growth. (Note: This is a hypothetical example and does not reflect the performance of any specific investment. This example assumes the reinvestment of all earnings and does not consider taxes or transaction costs.)

Although past performance is no guarantee of future results, historically the negative effect of short-term price fluctuations has been reduced by holding investments over longer periods. But counting on a longer holding period means that some additional planning is called for. You should not invest funds that will soon be needed into a volatile investment. Otherwise, you might be forced to sell the investment to raise cash at a time when the investment is at a loss.

OTHER TYPES OF RISK

Here are a few of the many different types of risk:

• Market risk: This refers to the possibility that an investment will lose value because of a general decline in financial markets, due to one or more economic, political, or other factors.

• Inflation risk: Sometimes known as purchasing power risk, this refers to the possibility that prices will rise in the economy as a whole, so your ability to purchase goods and services would decline. For instance, your investment might yield a 6 percent return, but if the inflation rate rises to double digits, the invested dollars that you got back would buy less than the same dollars today. Inflation risk is often overlooked by fixed income investors who shun the volatility of the stock market completely.

• Interest rate risk: This relates to increases or decreases in prevailing interest rates and the resulting price fluctuation of an investment, particularly bonds. There is an inverse relationship between bond prices and interest rates. As interest rates rise, the price of bonds falls; as interest rates fall, bond prices tend to rise. If you need to sell your bond before it matures and your principal is returned, you run the risk of loss of principal if interest rates are higher than when you purchased the bond.

• Reinvestment rate risk: This refers to the possibility that funds might have to be reinvested at a lower rate of return than that offered by the original investment. For example, a five-year, 3.75 percent bond might mature at a time when an equivalent new bond pays just 3 percent. Such differences can in turn affect the yield of a bond fund.

• Default risk (credit risk): This refers to the risk that a bond issuer will not be able to pay its bondholders interest or repay principal.

• Liquidity risk: This refers to how easily your investments can be converted to cash. Occasionally (and more precisely), the foregoing definition is modified to mean how easily your investments can be converted to cash without significant loss of principal.

• Political risk: This refers to the possibility that new legislation or changes in foreign governments will adversely affect companies you invest in or financial markets overseas.

• Currency risk (for those making international investments): This refers to the possibility that the fluctuating rates of exchange between U.S. and foreign currencies will negatively affect the value of your foreign investment, as measured in U.S. dollars.

THE RELATIONSHIP BETWEEN RISK AND REWARD

In general, the more risk you’re willing to take on (whatever type and however defined), the higher your potential returns, as well as potential losses. This proposition is probably familiar and makes sense to most of us. It is simply a fact of life–no sensible person would make a higher-risk, rather than lower-risk, investment without the prospect of receiving a higher return. That is the tradeoff. Your goal is to maximize returns without taking on an inappropriate level or type of risk.

UNDERSTANDING YOUR OWN TOLERANCE FOR RISK

The concept of risk tolerance is twofold. First, it refers to your personal desire to assume risk and your comfort level with doing so. This assumes that risk is relative to your own personality and feelings about taking chances. If you find that you can’t sleep at night because you’re worrying about your investments, you may have assumed too much risk. Second, your risk tolerance is affected by your financial ability to cope with the possibility of loss, which is influenced by your age, stage in life, how soon you’ll need the money, your investment objectives, and your financial goals. If you’re investing for retirement and you’re 35 years old, you may be able to endure more risk than someone who is 10 years into retirement, because you have a longer time frame before you will need the money. With 30 years to build a nest egg, your investments have more time to ride out short-term fluctuations in hopes of a greater long-term return.

REDUCING RISK THROUGH DIVERSIFICATION

Don’t put all your eggs in one basket. You can potentially help offset the risk of any one investment by spreading your money among several asset classes. Diversification strategies take advantage of the fact that forces in the markets do not normally influence all types or classes of investment assets at the same time or in the same way (though there are often short-term exceptions). Swings in overall portfolio return can potentially be moderated by diversifying your investments among assets that are not highly correlated–i.e., assets whose values may behave very differently from one another. In a slowing economy, for example, stock prices might be going down or sideways, but if interest rates are falling at the same time, the price of bonds likely would rise. Diversification cannot guarantee a profit or ensure against a potential loss, but it can help you manage the level and types of risk you face.

In addition to diversifying among asset classes, you can diversify within an asset class. For example, the stocks of large, well-established companies may behave somewhat differently than stocks of small companies that are growing rapidly but that also may be more volatile. A bond investor can diversify among Treasury securities, more risky corporate securities, and municipal bonds, to name a few. Diversifying within an asset class helps reduce the impact on your portfolio of any one particular type of stock, bond, or mutual fund.

EVALUATING RISK: WHERE TO FIND INFORMATION ABOUT INVESTMENTS

You should become fully informed about an investment product before making a decision. There are numerous sources of information. In addition to the information available from the company offering an investment–for example, the prospectus of a mutual fund–you can find information in third-party business and financial publications and websites, as well as annual and other periodic financial reports. The Securities and Exchange Commission (SEC) also can supply information.

Third-party business and financial publications can provide credit ratings, news stories, and financial information about a company. For mutual funds, third-party sources provide information such as ratings, financial analysis, and comparative performance relative to peers.

Note: Before investing in a mutual fund, carefully consider its investment objectives, risks, fees and expenses, which can be found in the prospectus available from the fund; read it and consider it carefully before investing.

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Abney Associates Financial
Advisory: Confidence key to emerging markets

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Abney Associates Financial
Advisory: Confidence key to emerging markets

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At the beginning of the year, there were three potential areas of asset allocation that very few global portfolio managers wanted to consider seriously. As I travelled around the United States and elsewhere in the world, almost none of our clients wanted to hear about Japan, commodities or emerging markets, Ameriprise Financial Abney Associates Team.

So far they have been wrong about commodities, which are a part of my radical asset allocation and have broken out of their trading range and headed higher. The standard of living continues to improve in the developing world, and one of the first things consumers do when their income increases is start to eat better. This means more meat and poultry where grains are used for feed as well as more consumption of grains by individuals. As a result of continuing growth in the developing world and flat to uneven agricultural production because of variable weather, prices for corn, wheat and soybeans have risen.

As for the other two areas of investor disinterest – Japan and emerging markets (both also in my radical asset allocation) – performance this year has been poor. Japan has been hurt by the increase in its sales tax to 8 per cent from 5 per cent in April as well as concern about a weakening Chinese economy.

During March, I travelled to Chile and Colombia in Latin America. In April, I flew to Sydney and Melbourne and Kuala Lumpur, Singapore, Hong Kong, Beijing, Seoul and Tokyo. I talked to our clients and knowledgeable observers in these areas. While each region faces challenges, I believe the emerging markets generally present opportunities but it is unclear when investors will start to appreciate them.

Emerging markets have suffered for two reasons. The first is the belief that continued Federal Reserve tapering will cause interest rates in the US to rise and the dollar to strengthen. This would be bad for those whose assets are in emerging market currencies. As a result there has been selling of equities in Asia and Latin America by local and global investors in spite of the fact that growth in those areas is considerably above that in the developed world.

The Russia/Ukraine situation has also had a broad influence in the emerging markets because it has highlighted the second reason for investor concern, the issue of political risk. The governments in many of these countries have only a tenuous hold on the power to influence the future course of economic growth. While Ukraine was never an area of investor interest, Russia’s action there caused concern throughout the developing world.

KOREAN UNIFICATION

At this point, I do not believe Putin will move further toward strong military action, although there is much informed opinion on the other side. The new presence in Ukraine of armed gunmen in unmarked uniforms occupying government buildings replicates the situation in Crimea prior to the referendum. If Putin moves to take over eastern Ukraine, I think it would be a strategic mistake for him. The response from the West would be a strong, and the sanctions already imposed have had a negative impact on Russia.

He would be much better off waiting until later or moving very slowly now. Some of Putin’s closest advisors are for cooling the situation down but Russia’s leader is both ambitious and unpredictable. One would be wrong to be complacent about the situation. Ukraine has revived concerns about political instability in the developing world hurting emerging market equities across the board.

During my trip I had an email exchange with my former Morgan Stanley colleague Steve Roach, who was in Asia discussing his book on the rebalancing of the Chinese economy. He and I have been in a dialogue over the last few months about how much the Chinese economy will slow down if the consumer segment becomes the dominant driver of growth rather than credit-driven spending on state-owned enterprises and infrastructure.

Roach believes the economy may not weaken as much as I fear because the service sector is becoming more important and each service sector percentage point of growth generates 30 per cent more jobs than a point of growth in the manufacturing sector. He thinks growth will moderate very gradually and a considerable number of new jobs will still be created each year, reducing the likelihood of social unrest.

One investor I discussed this with pointed out that it may be true that a percentage point of service sector growth produces more jobs than one in manufacturing, but many pay low wages and may not do a lot to increase the importance of the consumer in the economy.

CHINA’S POLLUTION PROBLEM

Several discussions in Beijing yielded insights worth passing on. One investor was concerned about similarities between China now and Japan in the 1980s. During the 1980s numerous books were written about how Japan was doing everything right, with robotics increasing productivity, very strong export growth and soaring real estate values. Japanese technology and consumer electronics stocks were US sharemarket favorites back then. Suddenly it was all over and the Nikkei 225 declined 75 per cent, and today it is trading at 35 per cent of its peak level.

I pointed out some significant differences. China has a population 10 times that of Japan. Its per capita income is one-tenth of that of the US, and by improving its standard of living, China can hope to see its economy grow for a long time, especially if it is successful in shifting the components of growth toward the consumer. Also, China has a centralised government structure that can make decisions quickly and implement them without delay. This is in sharp contrast to the Japanese Diet, where the legislative process can drag on endlessly in a manner similar to the US Congress.

What China must do is deal with its enormous pollution problem. My eyes burned and my throat was sore while I was in Beijing. It was worse on this trip than in previous years. There are reports that 280 million people do not have access to safe drinking water, resulting in high cancer rates. Ground pollution from industrial waste is also a serious problem. The pollution condition must be faced if China expects to have an increasingly important role in the world economy and geopolitics.

Another investor asked me what I would do to get Chinese consumers to spend more. I told him that improving the social safety net would help. The Chinese save for the after-school education of their children, healthcare and their retirement. If the government played a greater role in providing services in these areas, perhaps the Chinese would spend more time at the malls.

That change is not likely to come quickly. Some investors are also concerned that the economy is slowing because of a lack of both domestic and export demand, which could reduce job creation, causing problems for the authoritarian government. Most Chinese would want to have a lot of cash on hand if that happened.

WIDE-RANGING GEOPOLITICAL CONCERNS

Everywhere I went in Asia, investors were sceptical about their home markets, but Japan was extreme in this respect. Perhaps it was because the Nikkei 225 had a difficult first quarter and is down 14 per cent in yen and 11 per cent in dollars so far this year. In the longer term, the ageing population will cause the work force to peak in the next few years and this would make growth difficult. The country has initiated a guest worker program to mitigate this.

Prime Minister Shinzo Abe’s first two arrows, fiscal and monetary expansion, have produced growth of 1.5 per cent and inflation approaching 2 per cent, achieving two of his objectives. The third arrow, regulatory reform and sustainable growth, requires legislative action and that will be harder to achieve.

Investors wondered why my asset allocation had a 5 per cent position in Japan in the face of all of these problems. My response was Japan was clearly out of favour, few institutions held positions, the economy was finally growing and recent data was quite positive. Finally, there were a number of reasonably valued stocks available. I thought the risk of a further decline was low and there was an opportunity to make money from these levels if and when investors turned constructive.

While monetary growth and bank loans have slowed recently, and this may have dampened the enthusiasm of some investors, I believe there is no chance that Prime Minister Abe will let the country slip back into a deflationary recession and another round of stimulus is ahead if it is needed.

In discussions with Asian investors, I addressed their geopolitical concerns, which focused on Russia and Ukraine, Israel and Palestine, the Iran nuclear threat and, particularly, the disputes between Japan and China over islands and fishing rights in the South China Sea. The thrust of their questions was whether the world is on the brink of armed conflict in a number of different places and this would destabilise the markets.

My views on Russia/Ukraine were described earlier. Regarding Iran, I think the sanctions are working and I probably would have demanded that Iran dismantle its centrifuges before offering any relief, but that may have been diplomatically impossible. Now we have to hope that Iran is serious about reducing its nuclear effort; we should have the answer to that in a few months.

Everyone I talk to who is close to the situation is sceptical and reluctant to trust the Iranian government’s commitment, but the people of Iran feel they have been repressed for too long. They want the sanctions lifted so they can participate in the economic opportunity that should emanate from their vast oil resources. The new government in Iran appears ready to respond to the demands of its constituents.

REASONABLE VALUATIONS

The Israel/Palestine conflict seems unresolvable. Neither a one-state nor a two-state solution appears possible. The Arab world refuses to acknowledge Israel’s right to exist and Israel refuses to reduce the settlements in territory it feels is legitimately part of Israel. Even US Secretary of State John Kerry is frustrated by his inability to make progress there.

As for the South China Sea, which is so important to that region, I am hopeful that a diplomatic solution can be reached. China is very proud of its military progress, but is more concerned with the growth of its economy and not anxious to be distracted by armed conflict with anyone at this time, in my opinion. Perhaps I am naïve in thinking hostilities are not going to take place in any of the major trouble spots in the near term, but over the past decade I think everyone has learned how little has been gained by going to war.

Investors were concerned that the recent sharp decline in the technology, social media and biotechnology stocks signaled the end of the bull market or even the bursting of a bubble in equity prices that began with the market’s rise in 2009. After all, they reasoned, stocks have been rising for most of the past five years and that is the usual duration of a positive cycle. I pointed out that valuations were still reasonable at 16 times forward operating earnings and the US economy was expected to pick up momentum after the brutal weather of the first quarter.

The present multiple of the market is about equal to the long-term median. The previous bull market that ended in 2007 reached a multiple in excess of 20 times and the frothy dot.com market which ended in 1999 had a peak multiple in excess of 30 times.

I still believe the US economy will move toward real growth of 3 per cent and the S&P 500 will turn in a strong performance before year-end. The stocks that have been hit hardest are the big winners of the past year where investors did not want to see their profits melt away. This has been true of the exchange-traded funds of the favoured sectors where selling has been particularly furious, resulting in sharp liquidation of the underlying stocks.

Asian investors were focused on the tapering by the Federal Reserve, which has hurt the emerging markets and many wonder if it will continue. My response was that it will as long as the US economy is growing above 2 per cent, but it might be suspended for a while if the pace falters. As for Europe, there was concern about deflation, but I said that it looked like growth in the euro zone would be 1 per cent in 2014 and that diminished the deflation threat.

The mood in Asia was clearly subdued even though the economies there seem to be doing reasonably well. The International Monetary Fund estimates world growth for 2014 at 3.6 per cent, the US at 2.8 per cent, the euro zone at 1.2 per cent and emerging markets at 4.8 per cent. With the developing world growing so much faster than its mature brethren, you would think there would be opportunities there.

What is needed is renewed confidence on the part of local investors and a willingness to put money into their home market. Right now they are pulling money out. One attitudinal difference between Asian investors I talked with and their American counterparts is their fear that a geopolitical event will send equities tumbling everywhere. American investors are more complacent. I certainly hope the Asians are wrong.

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Ameriprise Financial Abney Associates
Team: Estimating your retirement income needs

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Ameriprise Financial Abney Associates
Team: Estimating your retirement income needs

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You know how important it is to plan for your retirement, but where do you begin? One of your first steps should be to estimate how much income you'll need to fund your retirement, Abney Associates Team A financial advisory practice of Ameriprise Financial Services, Inc.. That's not as easy as it sounds, because retirement planning is not an exact science. Your specific needs depend on your goals and many other factors.

USE YOUR CURRENT INCOME AS A STARTING POINT

It's common to discuss desired annual retirement income as a percentage of your current income. Depending on who you're talking to, that percentage could be anywhere from 60 to 90 percent, or even more.

The problem with this approach is that it doesn't account for your specific situation. If you intend to travel extensively in retirement, for example, you might easily need 100 percent (or more) of your current income to get by.

PROJECT YOUR RETIREMENT EXPENSES

Your annual income during retirement should be enough (or more than enough) to meet your retirement expenses. That's why estimating those expenses is a big piece of the retirement planning puzzle. But you may have a hard time identifying all of your expenses and projecting how much you'll be spending in each area, especially if retirement is still far off. To help you get started, here are some common retirement expenses:

-  Food and clothing

-  Housing: Rent or mortgage payments, property taxes, homeowners insurance, property upkeep and repairs

-  Utilities: Gas, electric, water, telephone, cable TV

-  Transportation: Car payments, auto insurance, gas, maintenance and repairs, public transportation

-  Insurance: Medical, dental, life, disability, long-term care

-  Health-care costs not covered by insurance: Deductibles, co-payments, prescription drugs

-  Taxes: Federal and state income tax, capital gains tax

-  Debts: Personal loans, business loans, credit card payments

-  Education: Children's or grandchildren's college expenses

-  Gifts: Charitable and personal

-  Savings and investments: Contributions to IRAs, annuities, and other investment accounts

-  Recreation: Travel, dining out, hobbies, leisure activities

-  Care for yourself, your parents, or others: Costs for a nursing home, home health aide, or other type of assisted living

-  Miscellaneous: Personal grooming, pets, club memberships

Don't forget that the cost of living will go up over time. The average annual rate of inflation over the past 20 years has been approximately 2.4 percent. (Source: Consumer price index (CPI-U) data published by the U.S. Department of Labor, 2012.) And keep in mind that your retirement expenses may change from year to year. For example, you may pay off your home mortgage or your children's education early in retirement. Other expenses, such as health care and insurance, may increase as you age. To protect against these variables, build a comfortable cushion into your estimates (it's always best to be conservative). Finally, have a financial professional help you with your estimates to make sure they're as accurate and realistic as possible.

DECIDE WHEN YOU'LL RETIRE

Financial Advisory Abney Associates to determine your total retirement needs, you can't just estimate how much annual income you need. You also have to estimate how long you'll be retired. Why? The longer your retirement, the more years of income you'll need to fund it. The length of your retirement will depend partly on when you plan to retire. This important decision typically revolves around your personal goals and financial situation. For example, you may see yourself retiring at 50 to get the most out of your retirement. Maybe a booming stock market or a generous early retirement package will make that possible. Although it's great to have the flexibility to choose when you'll retire, it's important to remember that retiring at 50 will end up costing you a lot more than retiring at 65.

ESTIMATE YOUR LIFE EXPECTANCY

The age at which you retire isn't the only factor that determines how long you'll be retired. The other important factor is your lifespan. We all hope to live to an old age, but a longer life means that you'll have even more years of retirement to fund. You may even run the risk of outliving your savings and other income sources. To guard against that risk, you'll need to estimate your life expectancy. You can use government statistics, life insurance tables, or a life expectancy calculator to get a reasonable estimate of how long you'll live. Experts base these estimates on your age, gender, race, health, lifestyle, occupation, and family history. But remember, these are just estimates. There's no way to predict how long you'll actually live, but with life expectancies on the rise, it's probably best to assume you'll live longer than you expect.

IDENTIFY YOUR SOURCES OF RETIREMENT INCOME

Once you have an idea of your retirement income needs, your next step is to assess how prepared you are to meet those needs. In other words, what sources of retirement income will be available to you? Your employer may offer a traditional pension that will pay you monthly benefits. In addition, you can likely count on Social Security to provide a portion of your retirement income. To get an estimate of your Social Security benefits, visit the Social Security Administration website (www.ssa.gov) and order a copy of your statement. Additional sources of retirement income may include a 401(k) or other retirement plan, IRAs, annuities, and other investments. The amount of income you receive from those sources will depend on the amount you invest, the rate of investment return, and other factors. Finally, if you plan to work during retirement, your job earnings will be another source of income.

MAKE UP ANY INCOME SHORTFALL

If you're lucky, your expected income sources will be more than enough to fund even a lengthy retirement. But what if it looks like you'll come up short? Don't panic--there are probably steps that you can take to bridge the gap. A financial professional can help you figure out the best ways to do that, but here are a few suggestions:

-  Try to cut current expenses so you'll have more money to save for retirement

-  Shift your assets to investments that have the potential to substantially outpace inflation (but keep in mind that investments that offer higher potential returns may involve greater risk of loss)

-  Lower your expectations for retirement so you won't need as much money (no beach house on the Riviera, for example)

-  Work part-time during retirement for extra income

-  Consider delaying your retirement for a few years (or longer)

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Financial Advisory Abney Associates:
Merging your money when you marry

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Financial Advisory Abney Associates:
Merging your money when you marry

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Getting married is exciting, but it brings many challenges. One such challenge that you and your spouse will have to face is how to merge your finances. Planning carefully and communicating clearly are important, because the financial decisions that you make now can have a lasting impact on your future.

DISCUSS YOUR FINANCIAL GOALS

The first step in mapping out your financial future together is to discuss your financial goals. Start by making a list of your short-term goals (e.g., paying off wedding debt, new car, vacation) and long-term goals (e.g., having children, your children's college education, retirement). Then, determine which goals are most important to you. Once you've identified the goals that are a priority, you can focus your energy on achieving them.

PREPARE A BUDGET

Next, you should prepare a budget that lists all of your income and expenses over a certain time period (e.g., monthly, annually). You can designate one spouse to be in charge of managing the budget, or you can take turns keeping records and paying the bills. If both you and your spouse are going to be involved, make sure that you develop a record-keeping system that both of you understand. And remember to keep your records in a joint filing system so that both of you can easily locate important documents.

BANK ACCOUNTS--SEPARATE OR JOINT?

At some point, you and your spouse will have to decide whether to combine your bank accounts or keep them separate. Maintaining a joint account does have advantages, such as easier record keeping and lower maintenance fees. However, it's sometimes more difficult to keep track of how much money is in a joint account when two individuals have access to it. Of course, you could avoid this problem by making sure that you tell each other every time you write a check or withdraw funds from the account Abney Associates Team A financial advisory practice of Ameriprise Financial Services, Inc.. Or, you could always decide to maintain separate accounts.

CREDIT CARDS

If you're thinking about adding your name to your spouse's credit card accounts, think again. When you and your spouse have joint credit, both of you will become responsible for 100 percent of the credit card debt. In addition, if one of you has poor credit, it will negatively impact the credit rating of the other.

If you or your spouse does not qualify for a card because of poor credit, and you are willing to give your spouse account privileges anyway, you can make your spouse an authorized user of your credit card. An authorized user is not a joint cardholder and is therefore not liable for any amounts charged to the account. Also, the account activity won't show up on the authorized user's credit record. But remember, you remain responsible for the account.

INSURANCE

If you and your spouse have separate health insurance coverage, you'll want to do a cost/benefit analysis of each plan to see if you should continue to keep your health coverage separate. For example, if your spouse's health plan has a higher deductible and/or co-payments or fewer benefits than those offered by your plan, he or she may want to join your health plan instead. You'll also want to compare the rate for one family plan against the cost of two single plans.

It's a good idea to examine your auto insurance coverage, too. If you and your spouse own separate cars, you may have different auto insurance carriers. Consider pooling your auto insurance policies with one company; many insurance companies will give you a discount if you insure more than one car with them. If one of you has a poor driving record, however, make sure that changing companies won't mean paying a higher premium.

EMPLOYER-SPONSORED RETIREMENT PLANS

If both you and your spouse participate in an employer-sponsored retirement plan, you should be aware of each plan's characteristics. Review each plan together carefully and determine which plan provides the best benefits. If you can afford it, you should each participate to the maximum in your own plan. If your current cash flow is limited, you can make one plan the focus of your retirement strategy. Here are some helpful tips:

-  If both plans match contributions, determine which plan offers the best match and take full advantage of it.

-  Compare the vesting schedules for the employer's matching contributions.

-  Compare the investment options offered by each plan--the more options you have, the more likely you are to find an investment mix that suits your needs.

-  Find out whether the plans offer loans--if you plan to use any of your contributions for certain expenses (e.g., your children's college education, a down payment on a house), you may want to participate in the plan that has a loan provision.

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