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Women and Retirement Perceptions

Irene Smith is a Certified Divorce Financial Analyst™, Certified Financial Planner® and Certified Public Accountant with Smith Financial Management. Earlier in July, we hosted one of her fantastic seminars, A Woman’s Journey To Financial Independence. On August 16th, we will be hosting another of her seminars, Wine Tasting and Real Estate. The event is free, but space is limited. Please RSVP no later than August 10 if you wish to attend. Click here for more information.

WOMEN & RETIREMENT PERCEPTIONS: Will the reality of retirement live up to expectations?

Presented by Irene Smith

In January 2011, Merrill Lynch released the results of a survey asking baby boomers with $250,000+ in investable assets about their retirement hopes. There were some interesting across-the-board findings – 70% of those polled expected to work at least part-time, and 84% felt their retirements would be more comfortable and dynamic than those of their parents. Yet it was the collective response of women in the 1,000-investor study that drew the most attention.1,2

Women envision a very active retirement. Volunteering and travel registered as major priorities for women, more so than for men: 64% of women said they wanted to get more involved in their communities, 62% planned to devote more time to philanthropy, and 86% planned to travel when retired. Additionally, 14% of the women surveyed said that they wanted to start a business after their careers ended.2

Women are more concerned than men about running out of money. While 52% of male respondents were unsure that their retirement assets would last a lifetime, 63% of women polled were worried about outliving their money. Additionally, 70% of the women surveyed said they worried about rising healthcare costs.2

Will reality prove disappointing? Too many women approach retirement unprepared, with too little saved or invested. You can cite two major reasons for that.

1. The multiyear absence of some women from the workplace (which can coincide with peak earning years, lessening the rate of retirement plan contributions)
2. A notable earnings gap (full-time working women earn 78 cents for every dollar men earn, which may reflect everything from gender inequality in career paths to wage discrimination).3

Another factor may be conservative investing. While you can take on too much risk in your portfolio and pay the price, there may also be a cost for assuming too little risk – your portfolio may not be able to produce returns that keep up with inflation. The federal Consumer Price Index from June 2011 shows annualized inflation at 3.6%.4

How are you investing and saving to pursue your retirement dream? Is there a strategy in place with realistic objectives? A chat with a financial professional may lead to the discovery of creative new ways to pursue your retirement ambitions.

Securities, advisory services and insurance products are offered through Investment Centers of America, Inc. (ICA), member FINRA/SIPC and a Registered Investment Advisor, and affiliated insurance agencies. ICA and Smith Financial Management are separate companies.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

Citations.
1 – reuters.com/article/2011/01/31/us-retirement-study-idUSTRE70U3E820110131 [1/31/11]
2 – mediaroom.bankofamerica.com/phoenix.zhtml?c=234503&p=irol-newsArticle&ID=1521693&highlight [1/31/11]
3 – civilrights.org/archives/2009/04/291-equal-pay-day.html [4/29/09]
4 – online.wsj.com/article/SB10001424052702304521304576447641965268196.html [7/15/11]

A Woman’s Financial Reality

Irene Smith is a Certified Divorce Financial Analyst™, Certified Financial Planner® and Certified Public Accountant with Smith Financial Management. We are proud to be hosting three of Irene’s excellent financial seminars this summer. For more information about Irene’s seminars, visit our events page at TheLawCollaborative.com/events.htm. These seminars are free but space is limited. Please RSVP if you wish to attend.

A WOMAN’S FINANCIAL REALITY: Your financial future is up to you … and no one else.
Presented by Irene Smith

Will this be your future? Did you know that Social Security income represents two-thirds of income for women 65 and older? Did you know that without Social Security, an estimated 58% of widows aged 65 and older would live in poverty? 1

These findings are from a 2010 U.S. Congress Joint Economic Committee report. As Rep. Carolyn Maloney (D-NY) put it, “Social Security is literally a lifeline for most elderly women.”

That lifeline is barely adequate. With inflation and other economic pressures, a mature woman relying on SSI may eventually have to choose between food or medicine, or rent or car repair, or contend with other stressful money dilemmas.

When these women were younger, did they envision such a meager future ahead of them? Probably not. More than a few probably wish they had understood money matters better or actively invested for retirement.

How much do you know about personal finance? The more knowledge you have, the more action you can take to define and pursue your financial goals and build retirement savings. You can also respond to a few financial realities common to women’s lives.

The average woman spends 12 years out of the working world. So finds WISER, the non-profit formally called Women’s Institute for a Secure Retirement. Typically some of this absence is for parenting, some of it for caregiving. This means the average woman has 12 fewer years to pour steady money into that 401(k), 403(b) or IRA.2

Women live longer. According to the latest estimates from the Centers for Disease Control and Prevention, female life expectancy is at roughly 80.5 years versus about 75.5 years for males. The reality unnoticed in these numbers is that many women will live on their own for a decade or more after being divorced or widowed.3

Women face an earnings gap. On the whole, women do not earn as much as men. In 2009, the Government Accountability Office noted that women earn $0.78 for every $1 that men earn. Some people question this statistic, arguing that it reflects gender inequality in career paths rather than distinct salary discrimination. Regardless, the gap exists – and it is even more pronounced for women of color.4

At work, many women are worth more than the salaries they receive. Some women are reluctant to negotiate a better salary for themselves. Will it upset the equilibrium at the office? Will it be seen as too aggressive? The answers here are probably “no” and “no”. It takes confidence (and it may take a little research) to affirm your professional worth in front of your boss – and it should be done.

A rich spouse does not equal a retirement strategy. It is nice to have a spouse whose wealth allows you freedom from financial worries. Yet even if you are blessed with a rich and attractive mate, there is no telling where that mate (and that money) might end up someday but for fate.

How do you plan to arrange a comfortable future for yourself? If you don’t want to end up dependent on Social Security, then see that you have the financial education that will let you make major money decisions with confidence. Study fundamentals of investing and read up on the basics of retirement and estate strategizing. Follow up by meeting with a financial representative who can help you put a strategy into action.

Irene Smith may be reached at 818 884 4888 or Irene.smith@investmentcenters.com.
www.smithfinancialmanagement.com

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

Citations.
1 – thehill.com/blogs/on-the-money/801-economy/126543-changes-to-social-security-could-negatively-affect-women [10/29/10]
2 – mainstreet.com/article/retirement/women-still-far-behind-retirement-plans [4/25/11]
3 – nytimes.com/2011/03/17/health/17brfs-ART-AMERICANLIFE_BRF.html [3/17/11]
4 – civilrights.org/archives/2009/04/291-equal-pay-day.html [4/29/09]
5 – montoyaregistry.com/Financial-Market.aspx?financial-market=money-and-happiness&category=29 [6/5/11]

It All Adds Up, Know Your CDFA – Irene Smith, CPA, CDFA

Certified Divorce Financial Analyst (CDFA) Irene Smith speaks with Ron and Robert regarding the financial matters all divorcing couples must know. A CFDA is a new designation for assisting couples in divorce. A CDFA is a member of the Institute for Divorce Financial Analysts who specialize in the financial issues surrounding divorce. The role of the CDFA includes acting as an advisor to one party’s divorce lawyer, or as a mediator for both parties. A CDFA uses his or her knowledge of tax law, asset distribution, and short- and long-term financial planning to achieve an equitable settlement.  CDFAs are also helpful in reducing the costs of divorce.

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Roth IRA Conversion Strategies

Today we will hear from Irene Smith, a Certified Divorce Financial Analyst and an affiliate of The Law Collaborative. Irene is a member of the Institute of Divorce Financial Analysts and the Los Angeles Collaborative Family Law Association. She served on the board of the American Women Society of Certified Public Accounts – Los Angeles Chapter, and was the scholarship committee chairperson for the Chapter. She is a frequent speaker on the subjects of financial planning, risk management and financial fitness strategies for women. She holds the designations of Certified Divorce Financial Analyst™, Certified Financial Planner® and Certified Public Accountant. You can visit Irene’s website at www.SmithFinancialManagement.com.

Sincerely,
Ron and Robert

Roth IRA Conversion Strategies

Traditional IRAs offer some great advantages, such as tax-deductible contributions and tax-deferred growth. However, with tax-free growth of earnings, tax-free qualified withdrawals and no required minimum distributions for original account owners, Roth IRAs offer remarkable benefits.

Beginning in 2010, the modified adjusted gross income limit for ROTH IRA conversions no longer applies. To help relieve tax liabilities on IRA conversions, investors who convert in 2010 have the unique opportunity to pay the taxes on conversion with their 2010 income tax return or elect to pay the taxes over the following two years, 2011 and 2012.

If no withdrawal is needed from a retirement account, Roth IRA conversion can transform the account from a retirement vehicle to a wealth transfer tool. Since there are no required minimum distributions (RMD) with Roth IRAs, the account can continue to grow tax free throughout your retirement. Eventually, you can pass it on to your beneficiaries, giving them growth potential and tax-free access to this portion of their inheritance. They will need to take RMDs, but the RMDs will be income tax-free.

Another strategy may apply if you have experienced a loss in the value of your qualified retirement plan or traditional IRA. You could convert the account to a Roth IRA while the markets are down, and pay taxes with non-retirement funds. As the markets recover, the recovered investment loss and any additional investment growth would be tax free, as would any qualified distributions you choose to take in retirement.

Now is the time to talk to your tax and financial advisor to formulate a game plan.

Irene Smith

To contact Irene, email her at Irene.Smith@InvestmentCenters.com

How much support can I get?

Part Two of the discussion launched in last month’s newsletter, the calculation of parental Child Custody time, begins with an important first step: determine the average weekly time that your child spends in your care. Use the information from last month to calculate the specific hours. There are 168 hours in each week, 7 days at 24 hours each. There are 52 weeks in each year. 168 x 52 = 8736. Next, add holidays, and those Mondays or Fridays that extend your weeks or weekends (such as Memorial Day). Then calculate vacation time, birthdays, and special days like Mother’s Day or Father’s Day.  Don’t forget to account for school closure days and other such events. Total these figures and you should have an accurate estimation of your time/custody percentage. Be certain of your numbers, since miscalculation may cost you additional negotiation, litigation and/or child support payments. If in doubt, review the calculations with your attorney or the paralegal in charge of your case.

Summer is officially here, and with it our next Second Saturday Divorce Workshop, which will take place on July 10th at our Woodland Hills Office. California Certified Family Law Specialist, Ronald Supancic, of The Law Collaborative, will address the legal issues in divorce. Irene Smith, Certified Divorce Financial Analyst, will discuss the financial issues associated with divorce. Christine Campisi, Court Mediator, will speak regarding childrens issues in divorce situations. This workshop is beneficial to anyone contemplating divorce, or curious about their options. Pre-registration is $45, or $50 at the door. Breakfast will be served. Please call our office at (888) 852-9961, for registration and additional information, or email IG@TheLawCollaborative.com.

Visit Ron and Robert on Divorce on iTunes for additional information.

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Be our friend on Facebook: www.Facebook.com/TheLawCollaborative

And please, if you have any questions, give us a call. We are here to serve you. (888) TLC (852) – 9961

Save the Date…

The Second Saturday Divorce Workshop for Women is an excellent way for women who are contemplating divorce or who are in the process of divorce to take control of their lives, learn about their rights, and protect themselves in court.  Speaking at the event will be attorney Robert Borsky, Certified Divorce Financial Analyst Irene Smith and licensed marriage and family therapist Rosalinda O’Neill.

About Robert Borsky
Robert Borsky has been practicing law since 1981. He limited his practice to Family Law from 1984 through 2001, taking occasional special cases referred by Judges. During this time, he spent four years on the exclusive Gang Intervention Task Force, representing juveniles. From 2001 to 2006, Robert also practiced insurance defense and Workers’ Compensation Law while maintaining his family law practice. Robert Borsky has served as a mediator, arbitrator and Judge pro tem for the Los Angeles Superior Court since 1986. He is a member of the Los Angeles, Beverly Hills, and San Fernando Valley Bar Associations. Robert served as President of the Long Beach Bar Association, Family Law Section, 1994-1995 session, and is a past Co-Chair of the California State Child Custody Committee. As an advisor to the Superior Court, he received the first ‘Judge William McFadden Award,’ for his contribution in assembling the first Master List of qualified Child Custody Evaluators, Protocols and Evaluator Retainers. Robert taught college level courses at USC Law School from 1990 to 1998, and has been a guest speaker at State Bar functions, and local County and City functions. Robert has spoken frequently on local radio stations, and has written numerous articles for the bench and bar. Click here to read more about Robert Borsky.

About Irene Smith
Irene Smith holds the designations of Certified Divorce Financial Analyst™, Certified Financial Planner® and Certified Public Accountant. Irene obtained her Bachelor of Science degree in Accounting from California State University, Northridge and her MBA degree in Finance from the Wharton School at the University of Pennsylvania. Before starting her financial planning practice in 2001, Irene had an extensive corporate career and developed expertise in the fields of taxation, finance and real estate. After experiencing the impact divorces had on the lives of her family and friends, she decided to obtain additional training as a Certified Divorce Financial Analyst (CDFA) to help divorcing individuals make better informed financial decisions. As a CDFA, Irene analyzes the financial issues of a divorce and informs clients about the long-term effect of financial decisions made today. She can help clients avoid the common pitfalls of divorce by evaluating the tax implications of dividing property and the financial impact of various settlement options.  Click here to read more about Irene Smith.

About Rosalinda O’Neill
Rosalinda O”Neill holds a bachelor’s degree in finance from the University of Miami and a master’s in counseling psychology from Loyola Marymount University in Los Angeles. She is a California Licensed Marriage Family Therapist with expertise in addiction, conflict resolution, partner dynamics, relationship, trauma and achieving success. Rosalinda has over 30 years of high level corporate experience. Rosalinda is President and founder of CEO LifeMentor®, Inc since 1984. She is a member of the Physicians’ Diversion Evaluation Committee of the Medical Board of California. Her non-profit leadership involvement includes Rotary International and Rotary Club of Beverly Hills, City of Hope Board of Governors and the American Heart Association, Ventura Division.  Click here to read more about Rosalinda O’Neill.

What experts are involved in the collaborative process?

Ron Supancic answers that very question in this short informational video.