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LEARNING CENTER

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Living well tomorrow starts with the wealth and health habits we form today.

Whether you’re just starting out, need a few reminders on how to stay on course, or could use some advanced tips on how to make your retirement investments work for you, this is a great place to start. Here we'll offer budget and health basics, a primer on investing, and downloadable resources you can complete on your own, or share with your financial professional.

Choose where you are on your journey below to get started.


Just starting out

It starts with a paycheck. When you create a savings account, set up an emergency fund, and develop smart physical and financial strategies, you have a better chance of keeping your budget in a happy place.

As you find firm financial footing, consider ways that might help you protect against the unexpected and increase your wealth potential.

Let’s talk about the unexpected

Building healthy fitness and finance habits today can help you bounce back from setbacks that much faster. Setting aside enough money to cover at least four to six months of expenses can help make it a little easier to ride out a job loss, unexpected medical diagnosis, roof leak, or frustrating car repair.

Building a budget might start to alleviate financial stress you may be feeling. You can spend confidently knowing you’ve made room in your budget so you don’t have to second-guess your purchases. It can also help you avoid credit blunders and improve your credit score, which is essential for gaining access to lower interest rates when you borrow for a car or a home. Credit scores can also affect your car insurance rate, application processes for home rental, or even a job.

To start, examine your essential (needs) and discretionary (wants) expenses. Essential items can include housing, a vehicle (plus fuel and insurance), food, and retirement contributions. Discretionary expenses can include concerts, dining out, travel, and gifts.

It’s easy to make your retirement contributions automatic if you have access to a plan through your job. Most employers deduct retirement plan contributions directly from your paycheck  in most cases before taxes — so you won’t have to make space in your budget. Sometimes employers match your contribution, so you can get the most out of automatic contributions when you contribute as much as (or more than) the match.

Have a Transamerica retirement account through your employer?

Whether or not you have access to a retirement plan through your work, there are still options for you. Consider an individual retirement account (IRA). These are even accessible if you have a plan at work if you want to boost your retirement investment potential!

Can you predict the future? Neither can we. Workplace benefits such as accident insurance can go a long way – and cost you less per month than some designer T-shirts – so you don’t have to foot the bill when the unexpected occurs.

If your family relies on you, term life insurance can help your loved ones maintain their lifestyle if something happens to you. Accident or medical expense insurance can cover the costs that your major medical insurance doesn’t.

Accidents happen, and the high deductibles associated with many of today’s major medical plans could leave you footing the bill. Thankfully, Transamerica’s employee benefits can help fill gaps in your major insurance, providing cash payments that may help cover deductibles and other medical expenses. Dependable protection — it’s no accident.

Start saving at the earliest possible date. Don’t make excuses that you can’t afford it.

- 2017 Aegon Retirement Readiness Survey

Get smart with investing basics

No one expects you to become a day-trader. We’re not going to get into the nitty-gritty details of Wall Street and financial markets. But it’s possible to pick up the basics so you can begin to make informed decisions, plus know what questions to ask.

How would an individual who is seeking to invest in a wide selection of stocks and bonds find the time and expertise to research, allocate, weigh and manage this kind of portfolio? Mutual funds are one of today's most popular answers to that dilemma.

A mutual fund is a collection of stocks, bonds or other investment securities that is professionally managed. In this case, the manager is essentially pooling money from a group of investors, creating a portfolio and managing it on their behalf. Each investor owns shares, which represent a portion of the holdings of the fund. When an investor buys a fund, their money is used to purchase new shares. Each fund has a dictated objective, which is outlined in the fund prospectus, and the manager will continue to buy and sell stocks and securities according to the intended objective.

Part of the popularity behind mutual funds is due to their strengths and advantages:

1. Professional management: Mutual funds give retail investors the opportunity to have a professional manage their money. This is helpful when time and expertise is lacking.

2. Accessibility: Mutual funds allow retail investors to access investments they might not be able to on their own.

3. Simplicity: Purchasing a mutual fund is relatively easy, and many do not require a large minimum investment. There are literally thousands of mutual funds out there.

4. Diversification: Mutual funds, by definition, spread your investment across many assets, which may include hundreds of companies. In theory, this also spreads out your risk as well.

5. Transparency: Mutual fund holdings are available to the public.

6. Track record: Funds maintain performance results and they are professionally audited to ensure accuracy.

7. Liquidity: You can request that your shares of a mutual fund be liquidated at any time.

8. Government oversight: Mutual funds are registered with the Securities and Exchange Commission (SEC) and subject to SEC regulation.

It's important to consider all the risks of any investment. Including loss of principal, investors should also be aware of the following:

1. Fees

Mutual funds have lots of expenses, and most of them are passed on to the investors in the form of fees or sales charges. Fees vary widely from fund to fund.

2. Taxes

Some mutual funds pass on capital gains to investors, which is a taxable situation. Not all mutual funds make these kinds of distributions in the same way, however, so it is important to find out before you purchase them.

3. Professional management

Managers are not created equal. Therefore, not all will perform up to expectations. And they still get paid even if the fund under performs.

You can learn more about sales charges and fees with the following guide on choosing a share class.

Investing for your retirement calls for a long-term approach. The money you put away today is planting the seeds for your retirement in the years to come. In today’s world, we get new information so quickly, it can be hard to keep that long-term perspective.

This might help you see the long-term picture. The stock market will always have ups and downs, but history has shown that over decades, the market will generally trend upward over time. Retirement planning means investing for the long-haul, with less focus on occasional dips or peaks.

While the markets historically have grown over the long-term, inflation also rises throughout the years. Twenty dollars today doesn’t go as far as it did 20 years ago, and that trend is likely to continue. Just about everything will probably be more expensive when you retire, but saving and investing can be a way to help us stay one step ahead of inflation.

What does risk mean in terms of investing for retirement? How much risk are you comfortable with?

When you’re younger – in your 20s, 30s, and into your 40s – it’s common to invest more aggressively, with the idea being that you have time to potentially make up for any market dips. An aggressive portfolio would include more stocks, and fewer bonds or cash.

As retirement approaches in your 50s and 60s, it’s typical to become more conservative and to replace some of those stocks with bonds and cash, which are generally considered less volatile. That’s because we’re now trying to protect our investments heading into retirement.

That’s the general philosophy, but risk is a deeply personal thing. If having a lot of your retirement investments in stocks is going to keep you awake at night, a portfolio heavily weighted with stocks may not be for you.

Please note, investments are subject to market risk, including the loss of principle. Past performance is no guarantee of future results.

Many reports today show that Millennials are taking a more conservative approach to investing than professionals recommend. This shouldn’t come as a surprise, considering the lingering effects of the “Great Recession,” which has caused Millennials to be more wary of investing than previous generations. The problem here is that playing it too safe for too long may not enable you to reach your retirement income goal. If you’re young but nervous about risk, there are still investment strategies you can pursue.

But in general, a properly diversified investment strategy may help reduce the overall risk of your portfolio while still pursuing growth.

And please remember, all investments involve risk, including loss of principal, and there is no guarantee of profits. You should carefully consider your objectives, risk tolerance, and time horizon before investing. There is no assurance that any investment will meet its stated objective.

In simple terms, diversification is a technique that mixes different kinds of investments in your portfolio, such as stocks, bonds, and cash. An appropriate diversification strategy can help decrease the risk of putting too many eggs in one basket.

Think of diversification as a well-balanced meal with cash, bonds, and stocks as your carbohydrates, proteins, and fats. An investment in just one of these asset classes doesn’t provide a balanced mix, depriving your portfolio of essential vitamins and nutrients needed for healthy growth.

Don’t forget: Diversification does not assure or guarantee better performance, cannot eliminate the risk of losses, and does not protect against an overall declining market.

Equities

Stocks are also known as equities. They allow you to buy shares of an individual company. In essence, you become an owner of that company, albeit a very small owner. These are the riskiest of the three investments, since their value tends to fluctuate more from day to day – but they also have the potential for the highest returns.

Fixed-income investments

Next, we have bonds, or fixed-income investments. With bonds, you essentially loan money to companies or governments. In exchange for your investment, the entity pays you interest for a pre-determined number of years. At the end of the term, the bond will mature and (provided the entity can cover its debts), you’ll receive your initial money back, plus interest. While bonds are generally considered more conservative then stocks, they can be impacted by inflation and interest rate changes.

Cash equivalents

The third kind of security is cash or cash equivalents. All three types of securities can be included in mutual funds. Instead of worrying about which individual stocks to own, or what bonds to purchase, you can invest in multiple companies and bond types through mutual funds.

Fund managers create different funds for different tastes. One fund could focus on big, established companies, while another one focuses on low-risk bonds. Whatever the choice, the fund manager determines the investment strategy and decides what goes into the fund. You then purchase shares of the overall fund, giving you access to many different stocks, bonds, and/or cash equivalents.

Say you've invested in a mix of equities that suits your goals. The market could experience a period of growth - or decline - and all of a sudden the balance of equities you once felt comfortable with is now askew. Time to rebalance.

The same could apply if your goals and needs change. If your risk tolerance changes, you'll probably want to rebalance so you're exposed to the types of investments that fit your needs. Always monitor your investments to make sure your mix stays in a balance you’re comfortable with.

Healthy on the inside, happy in the wallet

Did you know healthy daily habits can be smart, even for your bottom line?
Your personal wealth + health coach

Introducing the all-new app from Transamerica, designed to help you visualize and track your wealth + health goals. The Transamerica app can help you track your fitness and finances and offer guidance so you can set out on your path toward a wealthier, healthier future.

Transamerica App screenshot

Well into my career

Where did the time go?

You’re in your prime earning years, but expenses tend to rise, too. Bigger house, more expensive vacations, and, if you have them, kids need financial support with sports and college expenses. You might even be a caregiver for an older relative.

Like a fine-tuned machine

You’re well into your working career, and you’ve learned a lot. Sometimes it can be helpful to get another perspective on ways you can optimize your budget, get enough physical exercise, cover your family with appropriate insurance, and fine-tune your spending habits to help set yourself up for a bright future.

Consider this a refresher on ways you can leverage your momentum to propel yourself toward the next decade and beyond.

Even if you don’t have access to an employer-sponsored retirement plan like a 401(k), there are still options.

In 2018, you can contribute up to $5,500 to an individual retirement account (IRA). And if you're 50 or older, you can contribute another $1,000 in "catch-up" contributions.

A term life insurance policy can help provide protection for loved ones at a competitive cost. Add living benefits and it can help cover expenses related to a qualifying chronic, critical, or terminal illness and offer death benefit protection.
Mutual funds offer professional management and a range of investment objectives. You can choose to increase time in the market instead of timing the market.
 
That said, choosing the right investments for mid-term goals can be more complex than any other time period. The challenge is striking an effective balance between preserving your assets while still achieving growth.
 
You might want to consider balancing your mid-term portfolio with a mix of high-quality fixed-income investments with modest growth investments. Balanced funds, growth and income funds, or equity income funds that invest in well-established companies that pay high dividends might be appropriate. Here are some possible strategies designed for goals that are three to 10 years in the future.
 
Three to four years away
You might limit your stock to less than 30% of your portfolio.
 
Eight or nine years away
You might invest 60% or more in a stock fund. Your tolerance for risk comes into play.
 
Before investing, consider the investment objectives, risks, including possible loss of principal and charges, and expenses.
What does risk mean in terms of investing for retirement? How much risk are you comfortable with?
 
When you’re younger – in your 20s, 30s, and into your 40s – it’s common to invest more aggressively, with the idea being that you have time to potentially make up for any market dips. An aggressive portfolio would include more stocks, and fewer bonds or cash.
 
As retirement approaches in your 50s and 60s, it’s typical to become more conservative and to replace some of those stocks with bonds and cash, which are generally considered less volatile. That’s because we’re now trying to protect our investments heading into retirement.
 
That’s the general philosophy, but risk is a deeply personal thing. If having a lot of your retirement investments in stocks is going to keep you awake at night, a portfolio heavily weighted with stocks may not be for you.
Unexpected costs

When asked, "What concerns you most about your financial future," 1 in 5 said that an unexpected personal or family health crisis could significantly eat into savings. It was the most popular answer.




“Transamerica Wealth and Health Survey,” Luntz Global Partners, 2016

You’ve got goals. We’ll help guide you.

Join the conversation and share your wealth and health ideas. Find knowledge and inspiration from peers and professionals alike.
Good health has its benefits

How much is your health worth?

On average, a day’s worth of healthy meals costs only $1.50 more than the least healthy ones.1 Up to half of all premature deaths in the U.S. are due to preventable factors like diet, tobacco use, and physical inactivity.2



1 “Eating healthy vs. unhealthy diet costs about $1.50 more per day,” Harvard School of Public Health, 2013

2 “Up to Half of U.S. Premature Deaths Are Preventable; Behavioral Factors Key,” Population Reference Bureau, 2015

Need to talk?

We’re here to help you with these topics, and more.

Retirement is approaching

The next step awaits.

The prospect of retirement – whatever that means to you – is on the horizon. You may feel the need to make up for lost time or reassess how much income you will need as your lifestyle shifts.

Plus, when it comes to health, what are the things your doctor thinks you should know as you get older?

Assess your health with your doctor. Do you have any risk factors that may cause you to consider additional health coverage over time?

Create a retirement strategy
From health care to lifestyle, income, and your legacy, this checklist is a great place to start. Download this worksheet to start developing your retirement strategy. You can even share it with your financial professional to jump start an important conversation.
How will I know when I can afford to retire?

Up until now, your goal has likely been saving for retirement. Now that it’s time to really get ready to retire, the first step is to determine how much you can sustainably spend in retirement and how long you will need it to last.

It’s important to consider all of your potential sources for retirement income, including any employer-sponsored plans you may participate in, Social Security, and any pension benefits that may be applicable.

In this cheat sheet, we'll guide you on some important things to consider.

Resources you can use now

We provide a variety of tools and services to help you get ready for a successful transition to – and through – retirement, covering topics such as lifestyle, investments, health care, legacy, and income.

Learn about five key areas of retirement

We believe there are five key areas that will define your life in retirement. We can help you understand how each could affect your plans and how to prepare now.

Retirement budget worksheet

Determine what your annual living expenses are now—and what they could be in retirement.

Personal document locator

Keep track of your important records, papers, and primary contacts - all in one place.

Field guide to Social Security

Use it to learn key questions, pros and cons of filing early (or later) and use it to ask your financial professional questions that can get you moving in the right direction.

Avoid the penalty flags

Were you thinking of taking a withdrawal from a retirement account? In some cases, you could face an extra 10% penalty on withdrawals. But, there are circumstances where the penalties can be avoided. Check out this list before you request a withdrawal.

Now could be the time to act

This is a pivotal time when you have some special opportunities to make the most of your retirement strategy. Not all of them may be right for you, but here's a quick list of what could be available. You can use it to start an informed conversation with a financial professional.
When you have certain retirement investment accounts, the government sets limits on how much you can contribute each year. In the year you turn 50, these limits rise. For individual retirement accounts (IRAs), this amount increases from $5,500 to $6,500 in 2018. For most employer-sponsored plans, the contribution limit increases from $18,500 to $24,500 in 2018.
 
Got questions on IRA contributions, how much you can contribute, and how your spouse’s situation can affect you? Check out the IRS IRA FAQs.
 
The IRS also has some helpful information on 401(k) and Profit-Sharing Plan Contribution Limits.
An IRA rollover is often promoted as a straightforward transaction that can help simplify retirement planning.
 
But rollovers have pros and cons that can affect your long-term path toward retirement. You can use this handy checklist to dive into the nuances. Discuss this possibility and share the checklist with your financial professional before you take the leap.
If estimated Social Security income won’t meet retirement needs, you can consider a variable or fixed-index annuity as a part of your income strategy. An annuity with optional living benefits purchased prior to retirement may offer you years of guaranteed income.
 
As with any financial strategy, be sure to talk to your financial professional to determine if an annuity would be a smart option for you. All guarantees, including optional benefits, are backed by the claims-paying ability of the issuing insurance company.
Pensions aren’t unheard of, but there could be a lot of questions about how these work. These days many employers combine these retirement benefits with a defined contribution plan, too, such as a 401(k) or 403(b). Your retirement income from a pension is generally based on your salary, years of service, plus some other pretty complex equations.
 
Fortunately, the closer you are to your retirement years, the easier it should be to understand what you can expect to receive as retirement income from this type of plan.
 
How will your pension payment complement your Social Security checks? Have you got additional retirement investment or savings accounts?
 
Start by contacting your human resources department to begin the process of estimating your retirement income. The sooner the better – if there is a gap between your anticipated expenses and income, you’ll want to know right away.
An experienced transition team at your side

Our retirement counselors can help you with the complexities that arise with an approaching retirement. These counselors are here for you, with insights on how to create a retirement income strategy, optimize Social Security, or which healthcare options may be available.

If you're thinking about retiring in the next two years or so, give us a call at 866-616-4191 Monday through Friday, 9 a.m. to 6:30 p.m. ET.

Register for a live webinar to get ready for retirement, learn about health care in retirement, and how to maximize Social Security.

In retirement

High five! This is your time.

Hopefully your hard work has paid off and you’re ready for the next step on your journey. We’re here to help with some of the more complicated questions you may have about making your assets last – and provide some encouraging words along the way.

Leisure time can change over time

Retirement, for most, won't be all leisure. However, it's interesting to note how longer life spans can lead to more than just a single "retirement" stage toward the end of our lives.

You could experience up to four separate stages in retirement, according to findings by a recent Merrill Lynch and Age Wave study. Where are you? Where will you want to be? And how will your retirement strategy get you there?


The milestones of retirement: ages 62 to 70½

Wishing you the best of wealth + health on the road ahead! You've got some key milestone birthdays to remember and reference materials to help as you approach some important financial opportunities.
The month following your 62nd birthday is the month in which you first become eligible to collect Social Security retirement (individual and/or spousal) benefits. Unless you’re disabled, the individual benefit at age 62 will be about 75% of the full retirement benefit. If eligible, a reduced spousal benefit may also be available. Social Security generally recommends applying for benefits three months prior to the month in which you would like them to start.
 
Keep in mind, any benefits collected prior to Full Retirement Age are subject to the earnings limit and earned income may reduce benefits.

The month in which you turn 65 is the month you become eligible for Medicare. Anyone not collecting Social Security should enroll in Part A three months prior to your 65th birthday to avoid a gap in health insurance coverage. Most people will be eligible for premium-free Part A coverage.

Unless covered by an employer-sponsored health plan, you must also enroll in Medicare Part B to avoid future penalties.

If you continue to work, you can check with your employer’s plan to see how it integrates with Medicare and whether or not you are eligible to opt-out of Part B.

If you turn 66 before January 1, 2021, Full Retirement Age for Social Security is your 66th birthday.

Assuming you have not received a retirement or disability benefit yet, in the month following your 66th birthday, you are eligible to collect your full retirement benefit. If eligible, a full spousal benefit may be available in place of your benefit, if it is a greater amount.

Social Security generally recommends applying for benefits three months prior to the month you would like them to start.

The year in which you turn 70½ is referred to as the “first distribution year” and required minimum distributions (RMDs) from qualified accounts must begin. The IRS allows the first RMD to be postponed until April 1 of the year following the “first distribution year.” Subsequent RMDs are due by year end of each year.

Postponing the first RMD results in the need to take both the first and second RMDs in the same tax year.

Making your assets last

Retirement is roughly a two-phase process:

1. Accumulation – The aim is to grow your financial assets by investing regularly according to a plan designed to meet your needs.

2. Payout – You begin to tap into your accumulated financial assets to fund your retirement lifestyle or to pay for other spending priorities.

Tips for making your assets last longer

Once you move into the payout phase, making your assets last as long as they’re needed requires careful planning. This is especially true considering increased life expectancies. Today, many retirements can easily last 20 to 30 years or longer.
Should you move to a more conservative mix of investments in retirement? Since retirements can last for many years, should you consider investing at least a portion of your portfolio in assets geared toward long-term growth? Talk to your financial professional about what is best for your individual circumstances.
Consider everything you’re likely to spend money on during retirement, including monthly fixed or variable living expenses, travel and recreation, health care, charitable contributions, even gifts. Draw up a realistic budget based on your spending plan – and stick to it.
In addition to retirement savings, be sure to include Social Security benefits and pension income in your planning, as well. Visit ssa.gov for information about estimating your Social Security benefits. For information about pension income for which you may be eligible, check with your employer’s plan administrator.
Many of today’s retirees continue to work at part-time jobs or even start new businesses. Of course, any income you earn means that more of your retirement savings can remain invested.
It’s also important to consider the costs of long-term care, which can be substantial. Even a short nursing home stay could deplete your assets significantly, keeping you from generating steady, predictable income over time.
Receiving income from your retirement assets may trigger tax consequences. Consult a qualified tax professional for guidance on your particular situation.

Do you have healthcare insurance? Don’t forget to keep your policy up to date.

Preparing for end of life

Although difficult and sensitive, understanding how to prepare for the loss of capacity, or loss of a loved one, can make these events a bit easier.

Taking on the challenges with passion and purpose

Guide to guardianship, powers of attorney, and advanced healthcare directives.

Finding solace after losing a loved one

Checklist to help lighten the burden at this emotional time.

Need to talk?

We’re here to help you with these topics, and more.