Retirement Viewpoints
The 515 Hamilton Group at Morgan Stanley
January, 2017
9 Retirement Mistakes to Avoid
While this is not a complete list, below are nine retirement
mistakes you will probably want to avoid:
Wealth Management
515 W Hamilton St., 7th Floor
Allentown, PA 18101
•••
Philip Segal RICP®, ChFC®, CLU®
Vice President
Senior Portfolio Manger
[email protected]
NMLS: 1270161
Phone: 610-391-6331/ 610-433-4200
Duane Peoples
Financial Advisor
[email protected]
NMLS: 1462320
Phone: 610-398-5404/ 800-433-4200
Patricia Peoples ChFC®, CLU®
CERTIFIED FINANCIAL PLANNER™
Vice President
Financial Advisor
[email protected]
NMLS: 1285326
Phone: 610-398-6505/ 800-433-4200
Our website:
http://www.morganstanleyfa.com/515h
amiltongroup/index.htm
Federal Courthouse, next to the old County Courthouse, and
1) Contributing
toofrom
muchthe
to an
IRA.
In 2017 the maximum IRA
diagonally
across
Post
Office.
contributions are $5500 if you are under age 50 and $6500 if you
areAlso
age 50
older.
The penalty for
excess
contribution
inorthe
neighborhood
areanthe
Allentown
Art is 6%
of the and
excess
year until it
is withdrawn.
Museum
theper
Allentown
Symphony.
The back of our
building faces the Allentown Arts Park, The Baum School
Notand
taking
a Requiredof
Minimum
Distribution
(RMD)
by year
of2)Art,
a sculpture
Leonardo
Da Vinci's
horse.
st
endsare
(April
of the following
year forhoused
your first
Nearby
the1Liberty
Bell Museum
inRMD.)
Zion'sThe
penalty
for not
fashion
is 50%
of what
United
Church
ofwithdrawing
Christ and in
thea timely
new PPL
Center
which
youthe
should
have withdrawn
and you
still must
the
houses
Allentown
Phantoms
hockey
teammake
and the
withdrawal.
Lehigh
Valley Steel Hawks indoor football team.
3) Making
60 dayof
rollover
in a 12places
month period.
All ofmore
this,than
plusone
dozens
restaurants
us in the
Such
a
rule
violation
may
result
in
a
penalty
for
early
withdrawal
middle of one of the biggest urban development projects in
(if you're under 59 ½) and a penalty for over contributing to the
the country.
receiving account.
Each of your financial advisors will retain their direct
4) Combining
of plans
403b,
phone
numbers,RMDs
whilefrom
ourdifferent
toll freetypes
number
will(IRA,
be 800-433and withdrawing
one. IRAs can be combined for
4200401k)
and our
fax numberfrom
will just
be 610-395-0694.
RMD withdrawals,
but they
cannot
be combined
We welcome
you to visit
us at
our new
locationwith 401k or
403b plans for meeting required distributions. Mistakes like this
can lead to penalties for not meeting RMDs from some accounts
Seminars and Educational Programs
From time to time our group offers educational programs and seminars.
Attached is an invitation and details about our upcoming programs in
January. For more details about other offerings in the coming months we'll
be sending invitations by email or US mail. Of course, you can always call
us about planned programs or make suggestions on topics you would like
us to cover.
The 515 Hamilton Group at Morgan Stanley
Page 1
Retirement Viewpoints
9 Retirement Mistakes…
5) Using the wrong method for calculating your RMD. While IRS tables for RMDs for
people over age 70 ½ are based on 2 lives, there is a separate set of tables if your spouse
i 10 or more years younger than you. Such a method can give you a lower RMD. There
isn't a penalty for withdrawing too much, but you may end up leaving your spouse less
in your IRA if you die.
6) Not naming the right beneficiary or none at all in your IRA, 401k, etc. If you named
the wrong beneficiary, such as an ex-spouse, that person will receive your retirement
funds, even if you didn't want them to. Without a named beneficiary your IRA may be
paid to your estate or to the default beneficiaries in your plan documents. For example,
at Morgan Stanley, the IRA default beneficiaries are your spouse first, then your
children (natural and legally adopted), and then your parents. If none of these apply,
then to your estate. Different plan trustees may use different rules. When should you
consider updating your beneficiaries? Whenever there is a change in your family
circumstances, such as a divorce, a marriage, an adoption, or a death.
7) Not naming contingent beneficiaries. This mistake can lead to similar problems as
those above if your primary beneficiary dies before you. Properly used, contingent
beneficiary designations can also determine who receives the benefits that might have
gone to a deceased relative or child.
8) Making ineligible investments. Among the investments that are restricted from use
in IRAs are: collectibles, coins (except American Eagle gold, silver, and platinum
coins), life insurance (this restriction was added in the 1980s), or investments in your
home or business.
9) Borrowing money from your IRA or using it as collateral for a loan. However, you
may be able to borrow from a 401k if the plan documents provide for this benefit.
However, there are limits on how much you can borrow and you may have to repay a
401k loan if you leave or lose your job. (If you don't repay the loan, it will be
considered a taxable event subject to income taxes and possible early withdrawal
penalties.)
Sources: IRS Publications 590 A and B, IRS 401K Resource Guide, IRS One-Rolloverper-Year Rules, Morgan Stanley : Understanding Required Minimum Distributions
(CRC 1563445), Morgan Stanley IRA Beneficiary Designation Form, Cannon Financial
Institute Concepts for Professionals.
The 515 Hamilton Group at Morgan Stanley
Page 2
Retirement Viewpoints
2016 Performance Data
Index
Value as of 12/30/2016
Month to Date
Quarter to Date
Year to Date
Dow Jones Industrial Average
19762.60
3.4%
8.7%
16.5%
S&P 500 Index
2238.83
2.0
3.8
12.0
NASDAQ Composite
5383.12
1.2
1.7
7.7
S&P Discretionary
647.82
0.1
2.3
6.0
S&P Energy
554.50
1.9
7.3
27.4
S&P Financials
386.53
3.9
21.1
22.7
S&P Health Care
796.91
0.7
-4.0
-2.7
S&P Industrials
538.07
0.5
7.2
18.8
S&P Info Tech
807.95
1.6
1.2
13.8
S&P Materials
312.16
0.1
4.7
16.7
S&P Staples
531.79
3.2
-2.0
5.4
S&P Telecom
176.61
8.1
4.8
23.5
S&P Utilities
246.83
4.9
0.1
16.3
FTSE 100
8817.82
4.1
-0.7
-0.2
MSCI EAFE
1684.00
3.4
-0.6
0.9
MSCI Emerging Markets
862.27
0.1
-4.3
11.3
MSCI Europe
129.20
5.3
-0.2
0.2
MSCI Pacific
2349.05
0.5
-0.9
4.8
Japan Nikkei 225
163.87
2.3
1.2
5.8
Gold (Spot)
1152.27
-1.8
-12.4
8.6
Source: Bloomberg, FactSet, Morgan Stanley & Co Research
515 Hamilton Group at Morgan Stanley
Page 3
Retirement Viewpoints
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Stanley or its affiliates. All opinions are subject to change without notice. Neither the information
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Morgan Stanley Smith Barney LLC, Member SIPC
1675964
515 Hamilton Group at Morgan Stanley
Page 4