Thursday, May 26, 2016

5 things to avoid when establishing a life insurance policy

Life insurance is a necessary step in your financial planning to ensure that your loved ones and family will be taken care of in the event of your death.  You can make mistakes that can cause possible issues for your family.  Our experienced St Louis financial planning team at Bogetto & Associates can help you navigate putting together the right life insurance policy for your situation and help you avoid these 5 mistakes:

1) Only naming a primary beneficiary, or not being specific enough

Most often, the spouse is named as the primary beneficiary.  You need to remember that you may be involved in a situation where you and your spouse both lose your lives.   If you have children, then you should consider including them on the policy as well.  Be specific when naming your children as policy beneficiaries...include their full names, social security numbers, and if you have a percentage of the policy going to each child.  If you do not name a beneficiary, then the benefit will typically go into your estate, leading to possible probate issues.

2) Naming a minor child as a beneficiary

Life insurance companies will not pay proceeds of the policy directly to a minor child.  Create a trust to avoid this issue and name the trust as the beneficiary of the policy.  You can also name a reliable adult as the beneficiary, or name an adult custodian for the life insurance proceeds.  If you don't take this into account, the court can appoint a guardian to handle the proceeds until the child reaches 18 or 21 depending upon the state.  This can be a costly process.

3) Not thinking about possible probate

Many people rely on a written will to express their wishes and pass their assets to their family and others.  Probate however, does not allow the policy proceeds to pass directly to the people that you want to receive it.  The will must go through probate and this can be a lengthy (and expensive) process.  By establishing a trust, you can possibly avoid these issues and get the proceeds to your family quicker.

4) Taxes, taxes, taxes

Many times, life insurance death benefits are generally tax-free.  An exception is if the policy holder is the owner of the policy, but another is the named insured.  You can name a beneficiary of the policy, but this is considered a taxable gift.  

For example, mom may be the policy owner on the life of dad for the benefit of their children. In this situation, mom is effectively creating a gift of the insurance proceeds to her children/beneficiaries. As the donor, mom may be subject to gift tax. Consult financial professionals like the team at Bogetto & Associates for advice on the best way to structure the policy. Bogetto & Associates does not provide legal or tax advice. These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

5) Disqualifying a beneficiary from Government Benefits

A less common mistake that people can make is to disqualify their beneficiary from government benefits they may be receiving for disabilities or other circumstances.  Government benefits are often tied to the financial circumstances of the individual and receiving proceeds from a life insurance policy may disqualify them from needed help.  In addition, there is a possibility that some proceeds may have to be reimbursed to the government for benefits paid.  Again, consulting a financial professional and an estate attorney can help you clarify any issues that may exist with your life insurance policy.

Bogetto & Associates can help!

Let our St Louis financial advisers help you with your life insurance needs.  We can help you setup the right policy, and help you avoid any beneficiary mistakes.  We will listen to your questions and provide you with any advice you need.  Life insurance is very important for your piece of mind and your family's financial future...let Bogetto & Associates help!


Financial Health...For Now & Tomorrow

Contact us Today

Telephone - 314-858-1602

10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127

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Securities offered through First Heartland Capital, IncMember FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Bogetto & Associates does not provide legal or tax advice.  These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.

Friday, May 20, 2016

7 Tips for how Millennials can save for retirement

Unlike some older generations, Millennials (people born in 1979 or later) have some unique challenges when planning for their retirement.  These challenges can be overcome however, and with careful financial planning, this generation can achieve their financial goals.  Bogetto & Associates can help and we have many years of experience helping younger people work toward their goals. Here is some information that Millennials can consider when planning for their financial future.

15 facts about Millennials' Retirement Readiness

In 2014, the Transamerica Center for Retirement Studies conducted a Survey of more than 1000 Millennials who were currently employed and the survey found some very interesting information:

  • Seventy percent of Millennials are already saving for retirement and started saving at the unprecedented young age of 22 (median).
  • Three out of four (76 percent) are discussing saving, investing, and planning for retirement with family and friends. Eighteen percent of Millennials “frequently” talk about it.
  • Two-thirds of Millennials expect their primary source of income in retirement to be self-funded through retirement accounts (48 percent) or other savings and investments (18 percent).
  • Four out of five (81 percent) are concerned that Social Security will not be there for them when they are ready to retire.
  • Many (41 percent) expect that they will need to financially support aging parents and/or other family members when they are retired. Another 23 percent of Millennials are “not sure.”
  • Sixty percent of Millennials plan to retire at age 65 or sooner, including 26 percent who plan to retire at age 65 and 34 percent who plan to do so even sooner.
  • Fifty percent of Millennials plan to work in retirement and, of those, nearly half (47 percent) plan to do so for reasons of enjoyment or staying involved.
  • Three out of four (76 percent) say that retirement benefits offered by a prospective employer will be a major factor in their decision on whether to accept a future job offer.

  • Among Millennials who participate in a 401(k) or similar plan and are offered a company match, their contribution rate is 10 percent (median) of annual pay.
  • The majority (62 percent) who are participating in a 401(k) or similar plan are using some form of professionally managed account such as a target date fund, strategic allocation fund, and/or managed account service.
  • Seventy-one percent of Millennials participating in a 401(k) or similar plan find mobile apps for managing their retirement accounts to be helpful.
  • Fifty-two percent of Millennials who provided an estimate of their retirement savings needs say they “guessed” what that figure should be. Just one in 10 have used a retirement calculator or worksheet.
  • Three in five (61 percent) want some level of advice when saving and investing for retirement, yet only 32 percent who are saving actually use a professional financial advisor.
  • Two-thirds (68 percent) of Millennials are “very” or “somewhat” confident that they will be able to someday fully retire with a comfortable lifestyle.
  • Despite the confidence-shaking events of the Great Recession, Millennials’ household retirement savings dramatically increased from $9,000 in 2007 to $32,000 in 2014 (estimated medians).

7 Tips for how Millennials can save for Retirement

This study went on to present 7 ways that Millennials can save for retirement. 

Start Now!

In order to reach your retirement goals, now is the time to start saving.  Be consistent, avoid loans if possible and resist any early withdrawals from retirement accounts.  Start a budget and keep to it!

Look at retirement benefits as part of your total compensation

If you are looking for a job, consider whether an employer is providing any retirement benefits. When comparing job offers, ensure you know about all retirement benefits being offered, and if there is not a current plan, consider asking for one.

Participate in employer-sponsored retirement plans if available

If you employer does offer a sponsored retirement plan, take advantage of it!  Take full advantage of any matching contributions and put away as much as you can. 

Write down your Strategy

Calculate the retirement savings you need (this can be complicated) and write it down.  Have a well defined strategy and stick to it.  You need to plan for living expenses, healthcare needs, what government benefits you expect, and long-term health care.  Have a backup plan and re-look at your strategy periodically.

Get Educated

Education about financial planning is key.  Whether you are doing research yourself, or relying on a Financial Adviser firm like Bogetto & Associates, knowledge will help you make informed decisions. Learn about Social Security and other government benefits.

Get Help if needed

See advice from a financial professional.  Often an employer will have a company-sponsored financial adviser, but if they do not, seek out a reputable company like Bogetto & Associates.

Be Proactive

The job market is ever changing and often at a very fast pace.  Be proactive about keeping job skills up-to-date, take advantage of continuing education opportunities, and stay current on trends and marketplace needs.

Let Bogetto & Associates help you

Millennials may have entered the work force the Great Recession (2007-2009), they have been through the tragic events of 9/11, and have seen the effects of the collapse of the real estate market.  Millennials also know about rapid technological advances and developments, and are comfortable with technology.  However, many Millennials have left college with massive student debt, and may find it difficult to find any money to save.  At Bogetto & Associates, we listen and work hard with every client to find ways to work toward their financial goals.  If you are a Millennial, we are the firm to contact.  Let us help you.

Financial Health...For Now & Tomorrow

Contact us Today

Telephone - 314-858-1602

10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127

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Securities offered through First Heartland Capital, IncMember FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Friday, May 13, 2016

Saving vs Investing - what is the difference?

The team at Bogetto & Associates have been providing financial advice in St Louis since 1990.  We really enjoy meeting with our clients to listen to their financial goals and helping them towards achieving those goals.  Often, when we meet with our clients, they have questions about financial planning and what certain terms mean.  One question we often get is about "saving" versus "investing."  Here are the differences between these two financial concepts:


The level of risk between saving money versus investing money is a large difference.  When you save money, you typically are going to be putting it into a savings account, a certificate of deposit (CD), or in a money market account.  The very nice thing about putting money into a savings account, CD, or money market account at a bank is that it will be insured by the Federal Deposit Insurance Corporation (FDIC).  If anything happens to the bank, your money will be insured to at least the $250,000 level and sometimes higher.

Investing on the other hand will involve higher risk.  You are investing your money towards the future of an entity such as a corporation, a commodity, or a market sector for example,
and you are "betting" that you will get a return on your investment.  The potential for a higher return is there, but the potential to lose some (or all) of your return is also a possibility.  This is where sound financial advice is critical and Bogetto and Associates can help you look at your investment options.

Access to your money

The ability to quickly access your money is another difference between saving and investing.  When you save money in a bank account, CD, or money market certificate, you can get access to your money relatively quickly.  Saving money is typically done to reach short term goals such as vacations, buying merchandise, or for emergencies.  Most financial advisers recommend having a six month emergency fund available in case you lose your job or have a medical issue.  

When you invest, gaining access to your money quickly can be harder.  This is particularly true if you are investing in retirement accounts such as an Individual Retirement Account (IRA) or similar.  You can access your money if needed, but there may be large penalties for withdrawing money from these accounts early.  Again, check with your financial adviser to see what your options are.

Advantage of doing both saving and investing

Saving and investing should be a combined strategy of your financial planning.  Making sure you have enough money on hand to handle any of life's emergencies for you and your family is extremely important, but thinking of the long term financial "big picture" is equally as important.  If you invest wisely, your return on your investment can potentially be larger than the interest you would receive on a savings account.  By taking a close look at your individual financial position, you can make good decisions on what money is available to put into savings, and what can be invested.  

Bogetto & Associates can help

Contact us and we can help you look at your current financial status and provide advice on ways that you can both save and invest.  We have been helping with financial planning in St Louis for many years and we listen to each and every client.

Financial Health...For Now & Tomorrow

Contact us Today

Telephone - 314-858-1602

10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127

Follow Us

Securities offered through First Heartland Capital, IncMember FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.  

Friday, May 6, 2016

Understanding Social Security

At Bogetto and Associates, we understand how important retirement planning is for you and your families piece of mind.  We have several financial strategies and planning tools to help you work toward achieving your retirement goals, and social security income may be part of that strategy.  It's important to understand how Social Security works and what you can expect when you become eligible for Social Security benefits.  Here is some information directly from the Social Security Administration's website to help you understand this complex system (

Social Security reaches almost every family, and at some point, touches the lives of nearly all Americans. Social Security helps older Americans, workers who become disabled, and families in which a spouse or parent dies.

Today, about 168 million people work and pay Social Security taxes and about 60 million people receive monthly Social Security benefits. Most beneficiaries are retirees and their families — about 42 million people. But Social Security was never meant to be the only source of income for people when they retire. Social Security replaces about 40 percent of an average wage earner’s income after retiring, and most financial advisers say retirees will need 70 percent or more of pre-retirement earnings to live comfortably. 

To have a comfortable retirement, Americans need more than Social Security. They also need private pensions, savings, and investments.  The current Social Security system works like this: when you work, you pay taxes into Social Security. Social Security then pays benefits to:

• People who already have retired; 
• People who are disabled; 
• Survivors of workers who have died
• Dependents of beneficiaries. 

The money you pay in taxes isn’t held in a personal account for you to use when you get benefits. Social Security uses your taxes to pay people who are getting benefits right now. Any unused money goes to the Social Security trust funds, not a personal account with your name on it.

Your Social Security taxes 

Social Security taxes that you and other workers pay into the system are used to pay Social Security benefits. You pay Social Security taxes based on your earnings, up to a certain amount. In 2016, that amount is $118,500. 

Where your Social Security tax dollars go 

When you work, 85 cents of every Social Security tax dollar you pay goes to a trust fund that pays monthly benefits to current retirees and their families and to surviving spouses and children of workers who have died. The other 15 cents goes to a trust fund that pays benefits to people with disabilities and their families. From these trust funds, Social Security also pays the costs of managing the Social Security programs. The entire amount of taxes you pay for Medicare goes to a trust fund that pays for some of the costs of hospital and related care of all Medicare beneficiaries. The Centers for Medicare & Medicaid Services, not the Social Security Administration, manages Medicare.

How you become eligible for Social Security 

As you work and pay taxes, you earn Social Security “credits.” In 2016, you earn one credit for each $1,260 in earnings — up to a maximum of four credits a year. The amount of money needed to earn one credit usually goes up every year. Most people need 40 credits (10 years of work) to qualify for benefits. Younger people need fewer credits to be eligible for disability benefits or for their family members to be eligible for survivors benefits when the worker dies.

Retirement benefits 

Choosing when to retire is one of the most important decisions you’ll make in your lifetime. If you choose to retire when you reach your full retirement age, you’ll receive your full benefit amount. Your benefit amount if you retire before reaching full retirement age may decrease. 

Full retirement age 

If you were born from 1943 to 1960, the age at which full retirement benefits are payable increases gradually to age 67. If your birth year is 1948 or earlier, you already are eligible for your full Social Security benefit. Here is more info on finding your full retirement age:

Year of birth is 1943 - 1954       Retirement age = 66
Year of birth is 1955                  Retirement age = 66 and 2 months
Year of birth is 1956                  Retirement age = 66 and 4 months
Year of birth is 1957                  Retirement age = 66 and 6 months
Year of birth is 1958                  Retirement age = 66 and 8 months
Year of birth is 1959                  Retirement age = 66 and 10 months
Year of birth is 1960 or later      Retirement age = 66

Delayed retirement 

If you choose to delay receiving benefits beyond your full retirement age, you will increase your benefit a certain percentage, depending on the year of your birth. Social Security will add the increase automatically each month from the time you reach full retirement age, until you start taking benefits or reach age 70, whichever comes first. For more information on delayed retirement credits, go to

Early retirement 

You may start receiving benefits as early as age 62 but Social Security will reduce your benefits if you start early. Your benefits will be reduced about one-half of 1 percent for each month you start your Social Security before your full retirement age. For example, if your full retirement age is 66, and you sign up for Social Security when you’re 62, you would only get 75 percent of your full benefit.

Can I still work and get benefits? 

You can continue to work and still receive retirement benefits. Your earnings in (or after) the month you reach full retirement age won’t reduce your Social Security benefits. In fact, working beyond full retirement age can increase your benefits. Your benefits will be reduced, however, if your earnings exceed certain limits for the months before you reach your full retirement age. 

If you work, but start receiving benefits before full retirement age, their is a deduction of $1 in benefits for each $2 in earnings you have above the annual limit. In 2016, the limit is $15,720. In the year you reach your full retirement age, your benefits will be reduced $1 for every $3 you earn over a different annual limit ($41,880 in 2016) until the month you reach full retirement age. Once you reach full retirement age, you can keep working, and your Social Security benefits will not be reduced, no matter how much you earn.


Contact Bogetto & Associates for your retirement planning

There is much more that you can learn about your Social Security benefits such as how your benefits will be taxed, family benefits, disability benefits, benefits for widow and widowers and much more.  If you need a trusted financial adviser to help you understand your benefits, then please contact us.  We can help explain how Social Security is just one tool for retirement and give you options to work towards your retirement financial goals...Now and for Tomorrow!

Financial Health...For Now & Tomorrow

Contact us Today

Telephone - 314-858-1602

10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127

Follow Us

Securities offered through First Heartland Capital, IncMember FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.