Sizzlin’ Summer Series: PART 3


Sizzlin’ Summer Series: PART 3

What does Summer remind you of? Maybe it’s the feeling of jumping into a cool pool after a day in the summer heat, or maybe it’s the sound of the ice cream truck as you are bolting out the door with whatever change you could get your hands on. From lazy days in air conditioning to random road trips and more; summer is full of memories, and more importantly, financial choices.

In Part 3 and the final installation of ‘SIZZLIN SUMMER SERIES’, we will go into the top 3 financial choices you should research before making a decision:

  1. 401(K) and 401(k) Roth:

Up until recently, most companies would only offer a traditional 401(k) to employees; however, a Roth 401(k) has become a regular option as well. The difference comes down to one simple, yet complex word: taxes. A traditional 401(k) is taxed when you pull the money out. Opposite of traditional; a Roth 401(k) is taxed now, so you don’t have to pay taxes when you retire. So which one is best? It all depends on your tax bracket and current tax rate. For instance, tax rates are the lowest they have ever been in the last 100 years, so it would make sense to roll over to a Roth 401(k).

Key Point: A 401(k) is a vital part of any retirement portfolio. When looking at the 2 types, consider your current tax bracket, how your income will change in the coming years, and tax rate predictions.

  1. Variable Annuity and Fixed Index Annuity:

In short, an annuity is a fixed sum of money paid to someone, typically for the rest of their life on an annual basis. While guaranteed income is a great addition to any retirement plan, its crucial to know the two types of annuities and how they differ. A Fixed Index Annuity (FIA) typically provides a set amount of money annually in exchange for a lump purchase payment. An FIA is the safest annuity type as it offers no market downturn and a guaranteed rate of interest. On the contrary, a Variable Annuity provides irregular payments based on investment funds designed by the insurance company. In addition, it directly correlates with the market, so any downside in the market will reflect in a loss in return.

An FIA is the most commonly used Annuity type. It offers guaranteed upside potential with no downside risk. A Variable Annuity has the opportunity to earn much more return in less time than an FIA but usually carries an aggressive risk.

  1. Risk and Reward

Learning to ride a bike and creating an investment strategy have one key trait in common, balance. Whereas a bike requires hand-eye coordination and practice, a proper investment portfolio requires constant attention and updates. This is because life is always changing. Whether a career change or starting a family, finances need to say in tune with your current goals. While someone who is younger with a time horizon of 5+ years may choose a riskier portfolio, another, an older couple may choose a safer portfolio with little to no downside risk.

Key Point: A successful investment strategy does not require a balance beam or seesaw to work properly. What it does require are consistent checks and adjustments to make sure your portfolio is in the best spot.

A financial plan has a lot of moving parts and just like a car, requires upkeep and maintenance to keep things rolling smoothly. Regardless of where you are on your financial journey, chat with a financial professional today to see how you can achieve your retirement goals.

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This is general information it is not intended for specfic financial guidance. Before you make any decisions regarding your personal financial situation, you should consult a financial professional. 

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In conclusion Behn Financial Group specializes in providing guidance for those who are making financial choices to ensure a better retirement.  We offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!