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The Importance of Tax-Advantaged Savings Plans

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Tax-Advantaged
Image: investopedia.com

Financial advisor Barry M. Kornfeld is a respected presence in the Boca Raton, Florida, retirement planning sphere and offers a safer alternative with at least 6% annual yield Co-Lending Opportunities (CLOs). Barry M. Kornfeld works with clients in maximizing their post-retirement income and has extensive knowledge of tax-advantaged savings plans.

The importance of tax-advantaged savings has to do in part with the limitations inherent in Social Security in providing a sustainable retirement income. With traditional brokerage accounts taxed on a yearly basis, all gains realized are liable for capital gains taxes. By contrast, 401(k)s and IRAs are not subject to annual taxation, with taxes assessed only when withdrawals begin. With both types of savings accounts, penalty-free withdrawals may begin at age 59 1/2 and required minimum withdrawals begin at age 70 1/2.

The benefit of not paying taxes on these earnings during one’s working years can be immense, as the full amount of money is continuously put to use in generating interest. Roth accounts are particularly advantageous in this regard, as they go beyond tax-deferred status by creating completely tax-free earnings, with no required minimum distributions.

Co-Lending Opportunities – Stable, 6% Yield Nine-Month Notes

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Co-Lending
Image: ftaxgroup.us

Serving the needs of clients in Boca Raton, Florida, and in many states across the US, financial advisor Barry M. Kornfeld has specialized knowledge of Co-Lending Opportunities (CLOs), which are also known as first position commercial mortgage notes (FPCMs). Emphasizing their status as a safer alternative within a diversified portfolio, Barry M. Kornfeld engages with retirees in accessing these fixed-term nine month notes that provide a fixed return of at least 6% per annum on principal. Interest is paid monthly.

What makes CLOs attractive to many is the security and the higher returns they offer within a simple, short-term framework. Lenders receive interest on a monthly basis that is usually paid directly into their bank accounts via direct deposit. In addition to the ongoing cash flow provided by these payments, lenders receive the principal back in full once the loan term has been completed.

CLO attributes as fixed income alternatives include a minimum loan amount of $25,000. The secured bridge loans and their 6% yielding notes are ideal for those seeking to maximize returns within a properly allocated retirement portfolio emphasizing security of principal.

A Few Simple Basics to Remember When Planning for Retirement

 

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First Financial Tax Group
Image: fftaxgroup.us

As a principal of First Financial Tax Group, based in Boca Raton, Florida, experienced financial advisor Barry M. Kornfeld works to provide his clients with high-quality products that meet multiple strategic goals. The firm’s core offerings include Co-Lending Opportunities (CLOs), formerly known as first position commercial mortgage notes. Barry Kornfeld’s clients have appreciated this particular financial vehicle’s ability to generate at least a 6 percent annual yield, that is paid out monthly, while also protecting their principal with first lien status on high value commercial real estate. By joining together with others, or Co-Lending, Kornfeld’s clients are able to participate, with a minimum of just $25,000, in large value transactions typically only available to large, institutional lenders.

Many people consult a financial professional as they look toward retirement. Expert consensus centers on a few core pieces of advice for those approaching retirement age:

Realize that retirement planning is complex. It involves capital gains, taxes, and a wide range of potential savings and income-generating products, some subject to taxation and others tax-sheltered. A qualified financial professional can provide much-needed guidance. Kornfeld’s firm, First Financial Tax Group also offers complete tax preparation services, by a licensed accountant, to those 50 and older, for just $69, which is often a substantial savings versus what many have been paying in years past for the same exact service.

Remember that income from retirement needs to make allowances for inflation, as the buying power of the same yearly fixed income decreases each time inflation rises. Here is a tangible example of this point in action. In today’s environment, CLO’s with at least a 6% annual yield, far exceed the 1% – 2% inflation rate that is widely reported by government statistics. Given their short maturity of 1 year or less, clients have the opportunity to either redeem for cash and pursue other opportunities, or renew into another CLO, with the then current yield offered for another short term maturity.

Draft a plan, and update it annually. The plan should cover how much you need to save each year as you proceed toward retirement, and it should specify the rate of return needed to meet your financial goals in retirement.

Understand that it is never too early or too late to begin saving for retirement. While younger workers need to make constructive use of their advantage of time, those 50 and older can still begin taking positive steps that will produce practical benefits. Many clients who are already retired, would like to preserve principal, while using that principal to generate a dependable monthly income. Kornfeld adds, “So how do 6% CLO’s look, given that reasonable goal? It’s up to each potential client to learn about their options. No one will do it for them.”