By: Paul A. Pouliot
The U.S. economy is slowly improving and investors are once again looking for places to put their money to work. But while the slow pace of economic growth has stymied some investors, it has also created opportunity for others who know where to look.
Higher-quality, larger-cap stocks may be a good place to start. In the era of hard-won yields, these stocks—particularly those that pay dividends—may be attractive to investors with concerns about inflation. Compared with smaller-cap, higher risk stocks that soared during the “recovery rally,” large caps may also more affordable and less risky in today’s markets.
When looking for a dividend-paying stock, research companies with solid balance sheets and strong free cash flow. Don’t focus solely on current dividend yield; you should evaluate whether that yield is sustainable. Look for companies with a long history of maintaining and increasing their dividend payments.
Dividend investing has been rewarding over time. While past performance is no guarantee of future results, dividend-paying stocks have historically outperformed non-dividend payers, and dividend income has historically represented a significant portion of large-caps’ total return.
Adding dividend growers to your portfolio may also help buffer market volatility. The income from dividends can help insulate your portfolio from a drop in stock price when the markets struggle. Reinvesting dividends can also be a cost-effective way to build your position in that stock.
When searching for dividend payers, stock selection and diversification are critical. So, if you are not confident in your ability to select 20 or 30 companies with strong balance sheets and good cash flows, perhaps you should consider a mutual fund and allow the experts do the work for you. Consider speaking to an advisor about which investments might be appropriate for you.
Paul A. Pouliot CFP®, CHFC®, CASL®
Financial Advisor, An Ameriprise Platinum Financial ServicesSM practice, Ameriprise Financial Services, Inc., 116 South River Road | Bedford, NH 03110, Office: 603.296.0030 | Fax: 603.296.0028
paul.a.pouliot@ampf.com
http://ameripriseadvisors.com/paul.a.pouliot
Disclaimer: This communication is published in the United States for residents of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA only and this advisor is licensed only in the states of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA
This column is for informational purposes only. The information may not be suitable for every situation and should not be relied on without the advice of your tax, legal and/or financial advisors. Neither Ameriprise Financial nor its financial advisors provide tax or legal advice. Consult with qualified tax and legal advisors about your tax and legal situation. This column was prepared by Ameriprise Financial.
© 2011 Ameriprise Financial, Inc. All rights reserved.
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By: Paul A. Pouliot
A financial advisor can offer valuable strategies and guidance to help you grow your savings and meet your financial goals and dreams. It’s important to select a qualified individual who is also a good match — personally and professionally. Here are some tips for finding the right person to help you plan for your financial future.
Ask for a preliminary meeting. Your first meeting should be complimentary and without any obligation on your part. Be wary if you are pressured to write a check or make any decisions at your initial consultation. During the meeting, listen carefully to what the advisor says. Does he or she ask questions to help clarify your financial circumstances and goals? Or are you listening to a canned speech? Be prepared to ask questions to determine how your advisor will work with you, including compensation (more on that later), frequency of meetings and calls and how your progress will be tracked. Look for someone who follows a process but is also flexible and responsive when your needs change.
Understand the compensation model. Advisors may charge a flat fee for services while others charge a percentage of assets under management. Still others may be paid commission on the sale of financial products. It’s not unusual for all three methods to contribute to an advisor’s earnings. It’s important to understand how commissions and fees will affect the growth of your portfolio and to be aware of potential conflicts of interest.
Compatibility matters. Your financial advisor should be someone who makes you feel at ease — enough so that you are comfortable sharing intimate financial details of your life. A successful advisory relationship can last for many years, so look for a person you can trust and with whom you enjoy spending time.
Review experience and training. Look for someone with a depth of knowledge and valuable experience in the field. Your advisor should be able to distill complex financial topics for you in a way that you clearly understand and can relate to your own situation. Some advisors earn designations as part of their ongoing training. For example, a CERTIFIED FINANCIAL PLANNERTM certification indicates completion of training in the financial planning process, with an understanding of insurance, investments, tax strategies and retirement and estate planning. Another designation, Chartered Financial Consultant (ChFC®), indicates the advisor has received training in personalized financial planning processes. Some financial planners also may be trained and experienced as Certified Public Accountants or attorneys.
Consider specialization, as needed. Look for an advisor who has special expertise to meet your specific needs, such as estate planning or succession planning for your business.
Check professional references. Take the time to call each reference. Ask specific questions to get an idea of the advisor’s strengths and weaknesses. If possible, talk to clients and professional associates. Credentials can also be verified by the organizations that award them.
Be a proactive client. Ask for what you need. If you aren’t satisfied with the level of service you receive, take your business elsewhere.
Paul A. Pouliot CFP®, CHFC®, CASL®
Senior Financial Advisor, An Ameriprise Platinum Financial ServicesSM practice, Ameriprise Financial Services, Inc., 116 South River Road | Bedford, NH 03110, Office: 603.296.0030 | Fax: 603.296.0028
paul.a.pouliot@ampf.com
http://www.ameripriseadvisors.com/paul.a.pouliot
Disclaimer: This communication is published in the United States for residents of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA only and this advisor is licensed only in the states of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients. Ameriprise Financial does not provide tax or legal advice. Consult your tax advisor or attorney.
© 2010 Ameriprise Financial, Inc. All rights reserved.
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Are you dreaming of a leisurely retirement enjoying a second cup of morning coffee, or is a sunrise round of golf more your speed? Either way, you’ll need to know the facts so you can guide your retirement dreams with realism.
Historically the road to retirement hasn’t been smooth for many women. In fact, the Social Security Administration (SSA) reports that 17 percent of all elderly, single women live in poverty. With today’s longer life spans, this figure has the potential to rise. By recognizing the following myths for what they are, you can take control of your financial future and help improve this startling statistic.
Myth #1 – Social Security will take care of me in retirement.
The reality is that Social Security income probably won’t be enough. At the start of 2011, the average monthly retirement benefit reported is $1,177. SSA data also shows that women’s benefits are almost a third lower than men’s. Not only do women earn less than men during their working years, they also take more time away from work than their male counterparts (U.S. Department of Labor). Add the uncertain future of Social Security to these statistics, and you can see why it’s more important than ever to plan for additional income sources when determining your retirement income target.
A benefits estimator is available on the Social Security Administration’s website (www.ssa.gov). Use it to get an estimate of future benefits depending on when you plan to retire.
Myth #2 – I won’t need nearly as much to live on when I retire.
The assumption sounds reasonable when you consider the costs associated with raising children and commuting to work each day. On the other hand, if you want to spend your leisure time traveling, it will come with a cost. It’s probably safe to assume that you’ll have higher health care costs—and potentially long-term care costs—in your later years, as well.
A rule of thumb that many financial professionals use is that you’ll need 60 to 80 percent of your current income in retirement (adjusted for inflation) to maintain your current lifestyle. Of course, it depends on how you plan to spend your time once you are no longer working.
It might be a good idea to test your planned budget for a few months before you retire. That way if your income and expenses seem unrealistic, consider postponing retirement or looking for ways to decrease your expenses.
Myth #3 – My 401(k) contributions will fund my retirement without my involvement.
It’s true that a 401(k) is a smart way to save for retirement with before-tax dollars. Since many employers offer a matching feature, you may have an opportunity for instant return on your invested dollars.
The good news is that many women are contributing to their employer-sponsored plans. In fact SSA data suggests that in 2008, 51 percent of women employed full-time participated in their plan through work.
Unfortunately, a common misconception is that you can sit back and the plan will manage itself. Fact is, you might get even more benefit from your plan by taking an active role in your investment selection. If you have several years until retirement, choosing too conservative investments may cause you to fall short of the dollars you need. On the other hand, if retirement is approaching, you may need to move aggressive investments to the more conservative side. The most important thing to remember is to review your choices regularly to make sure your investment selection is still in line with your goals.
If decisions like these seem daunting, you don’t have to make them alone. By establishing a relationship with professionals who can help you at critical times, you can face your unique financial challenges with reality and eager anticipation of your retirement dream.
Paul A. Pouliot CFP®, CHFC®, CASL®, Financial Advisor, An Ameriprise Platinum Financial ServicesSM practice, Ameriprise Financial Services, Inc.
116 South River Road | Bedford, NH 03110
Office: 603.296.0030 | Fax: 603.296.0028
paul.a.pouliot@ampf.com
http://www.ameripriseadvisors.com/paul.a.pouliot
Disclaimer: This communication is published in the United States for residents of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA only and this advisor is licensed only in the states of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.
© 2011 Ameriprise Financial, Inc. All rights reserved.
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How are financial advisers compensated?
When it comes to compensation, advisors fall into four categories:
• Salary based--You pay the company for which the
advisor works, and the company pays its advisors a
salary
• Fee based--You pay a fee based on an hourly rate (for
specific advice or a financial plan), or based on a
percentage of your assets and/or income
• Commission based--The advisor receives a
commission from a third party for any products you
may purchase
• Commission and fee based--The advisor receives both
commissions and fees
You'll need to decide which type of compensation structure works best for you, based on your own personal circumstances.
When is it time to consult a financial advisor?
In many cases, a specific life event or a perceived need may prompt you to seek professional financial planning
guidance. Such events or needs might include:
• Getting married or divorced
• Having a baby or adopting a child
• Paying for your child's college education
• Buying or selling a family business
• Changing jobs or careers
• Planning for your retirement
• Developing an estate plan
• Coping with the death of your spouse
• Receiving an inheritance or a financial windfall
In these situations, a financial professional can help you make objective, rather than emotional, decisions.
However, you don't have to wait until an event occurs before you consult a financial advisor. A financial advisor can help you develop an overall strategy for approaching your financial goals that not only anticipates what you'll need to do to reach them, but that remains flexible enough to accommodate your evolving financial needs.
Paul A. Pouliot CFP®, CHFC®, CASL®, Financial Advisor, An Ameriprise Platinum Financial ServicesSM practice, Ameriprise Financial Services, Inc.
116 South River Road | Bedford, NH 03110
Office: 603.296.0030 | Fax: 603.296.0028
paul.a.pouliot@ampf.com
http://www.ameripriseadvisors.com/paul.a.pouliot
Disclaimer: This communication is published in the United States for residents of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA only and this advisor is licensed only in the states of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.
© 2011 Ameriprise Financial, Inc. All rights reserved.
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By: Paul A. Pouliot
Tax season is here. If you’re one of the thousands of American who overpaid your annual tax obligation, you can look forward to a refund from the federal government. The average federal tax refund is nearly $3000, according to the Internal Revenue Service.[1] That’s a significant chunk of change. What will you do with your refund check?
Before you get the urge to splurge, think carefully about how you spend your windfall. If you must, give yourself a little “mad money” as a reward for your hard work, but take the bulk of your refund and apply it to something constructive. Here are a few suggestions to get you started.
Build your safety net. Your tax refund can help you establish financial reserves for a rainy day. The recommendation is to have six months to one year of salary set aside in an easily accessible account, such as a savings or Money Market account, to cover unexpected expenses or to replace interrupted income.
Pay down debt. It may take credit to build credit, but it’s vitally important to keep debt to a manageable portion of your overall financial picture. If you carry a balance on revolving credit card debt, consider applying your refund to reduce or eliminate what you owe. High interest rates have a way of snowballing over time, especially if don’t pay more than the minimum due each month.
Save for retirement. Someday you’ll want to retire or at least cut back on your work schedule. You’ll need multiple sources of income the day your regular paycheck stops. Why not fund an IRA with your tax surplus? You’ll multiply your tax advantages if you place your money in a traditional IRA, since your contributions will be tax deductible as long as you do not exceed allowable annual maximums.
Protect your investments. If you’re a homeowner, it’s important to maintain the value of your investment. Consider making repairs and improvements that will increase the value of your home and also make living in it more enjoyable.
Make the world a better place. If you’re feeling charitable, you may choose to donate some or all of your refund to a worthy cause. Giving to charity is an honorable thing to do and can also provide tax advantages. By making a donation to a qualified charity, you may be able to receive a tax deduction, if you itemize your deductions.
File as early as possible. The fastest way to receive your refund is to file electronically and also to request direct deposit. Your refund will be issued about three weeks later and deposited directly in your account. Be wary of businesses that offer to advance you your tax refund. You will pay dearly for this service.
Seek financial planning help. If, year after year, your tax refund is large, consider adjusting your deductions or estimated payments to reduce the amount of overpayment. You’re better off keeping the money in your bank account than giving the government a short-term, interest-free loan. Consult a financial advisor for more ideas on how you can put your money to work and create a more secure future for yourself.
[1] http://www.irs.gov/pub/irs-soi/10taxstatscard.pdf
Paul A. Pouliot CFP®, CHFC®, CASL®
Financial Advisor, An Ameriprise Platinum Financial ServicesSM practice, Ameriprise Financial Services, Inc., 116 South River Road | Bedford, NH 03110
Office: 603.296.0030 | Fax: 603.296.0028
paul.a.pouliot@ampf.com
http://www.ameripriseadvisors.com/paul.a.pouliot
Disclaimer: This communication is published in the United States for residents of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA only and this advisor is licensed only in the states of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA
Ameriprise Financial does not provide tax or legal advice. Consult your tax advisor or attorney.
Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.
© 2011 Ameriprise Financial, Inc. All rights reserved.
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It’s spring at last. The birds are singing and the smell of barbeque fills the air. As you perform such springtime rituals as garage and basement cleaning, why not take some time to spruce up your finances? Review these important items now so you can relax and enjoy the budding season knowing that your financial house is in order.
1. Your budget. There’s a good chance that your cash flow needs will vary during the summer months. Not only does summer travel come into play, but you may also need additional funds for child care while the kids are away from school. This review may also reveal opportunities to trim expenses and increase savings goals.
2. Your credit standing. Did you know that you are entitled to one free credit report annually from each of the three major credit bureaus? Spring is a good time to request yours from Equifax (equifax.com), Experian (experian.com) and TransUnion (transunion.com). You can also get copies at no cost from annualcreditreport.com. By reviewing the reports carefully you can find anything from old accounts that should be closed to outright identity theft.
3. Your financial records. Spring is an excellent time to sort through old statements, pay stubs, bills and other records that you no longer need. Be sure to keep up to six years of records to support your tax deductions, since that’s how long the IRS has to audit you.
4. Your protection needs. While de-cluttering and filing paperwork, take time to review life, homeowner, auto and disability policies to make sure you are still satisfied with your level of coverage. If you’ve experienced any life changing events like divorce or the birth of a child, your needs have changed and it’s time for an insurance and beneficiary review.
5. Your estate plan. Estate planning is not just for the wealthy. While tax reduction and gifting strategies come into play for those with considerable assets, everyone needs the most basic estate plan. If you haven’t already done so, make sure you have an up-to-date will, health care directive and basic powers-of-attorney.
6. Your benefits. Even though fall is traditionally open enrollment time, spring is a good time to make sure the benefits you’ve elected are being maximized. If you are covered by a health savings plan, make sure you are using the investment component to your advantage.
7. Your investment and savings plans. There’s no better time for an annual review to help make sure you are on track to reach your financial goals. The process can help keep tabs on your net worth, cash flow and portfolio value. It’s also a good way to determine if your portfolio has strayed from your intended asset allocation and rebalance if necessary.
Most importantly, don’t let your financial house cleaning overwhelm you. Tackle items one at a time and consult your financial advisor for help along the way.
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Paul A. Pouliot CFP®, CHFC®, CASL®
Financial Advisor, An Ameriprise Platinum Financial ServicesSM practice. Ameriprise Financial Services, Inc.
116 South River Road | Bedford, NH 03110, Office: 603.296.0030 | Fax: 603.296.0028
paul.a.pouliot@ampf.com
http://www.ameripriseadvisors.com/paul.a.pouliot
Disclaimer: This communication is published in the United States for residents of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA only and this advisor is licensed only in the states of AZ, CT, FL, GA, ID, KY, MA, ME, NH, RI, TN, VT and WA
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By: Paul A. Pouliot
In the midst of grief and sorrow, a newly bereaved spouse has decisions to make and responsibilities to manage. Here’s a short list of financial considerations for widows and widowers.
Get organized. As the surviving spouse, you’ll need a number of documents in order to finalize your partner’s financial affairs. When you receive your spouse’s death certificate, be sure to make several copies as you will need to provide it as proof of death when closing or changing ownership of accounts. You will also need your spouse’s Social Security number, your marriage certificate, life insurance policies, bank accounts, creditors and a copy of your spouse’s will or estate plan. Gather these documents and any associated paperwork and set up folders so you can more easily keep track of everything.
Settle the estate. If your spouse has a will, it will determine the distribution of property. When there is no will, then probate court will decide who gets what. The laws regarding community and separate property (typically property owned by the spouse prior to marriage and/or inheritance) vary by state. The larger the estate, usually the more complicated the settlement. Consult an attorney who specializes in estate laws for complex cases.
Transfer ownership or close accounts. You’ll need to notify banks, loan companies and other creditors of your spouse’s death by producing a death certificate and providing other identification. If your spouse owned an IRA, you’ll need to determine whether it makes sense to roll over the assets into your own IRA or keep them where they are. If you are named a beneficiary on a life insurance policy or annuity, you may have choices as to how you receive those assets. Consult a financial advisor to learn more about your options.
Pay the bills. It can be difficult to face a task as mundane as paying bills when you’re experiencing a personal tragedy. If you are unable to pay some of your bills immediately, contact your creditors and explain your situation. Ignoring bills will lead to late fees and may damage your credit rating.
File taxes. As a surviving spouse, you are responsible for filing taxes for your deceased husband or wife. You need to file in order to receive a refund if taxes were overpaid during the year or to pay up if taxes are owed. Failure to file may result in penalties or even a lien on the estate. The IRS provides instructions on how to file on behalf of a decedent. When in doubt, consult a tax professional.
Sort out finances. If you’re newly widowed, don’t face your financial decisions alone. This is the time to engage a financial advisor, if you haven’t done so already. Your advisor can help you look at your overall financial picture and determine next steps. In addition to helping you manage immediate financial tasks such as rolling over a retirement account, an advisor can also help you address pressing concerns about your future, including creating and sustaining your income as a single person.
Paul A. Pouliot CFP®, CHFC®, CASL®
Financial Advisor
An Ameriprise Platinum Financial ServicesSM practice
http://www.ameripriseadvisors.com/paul.a.pouliot
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