Retirement Savings, Financial Planning, Wealth Management, Hershey, Camp Hill, Carlisle PA

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Comprehensive Financial Planning

Financial-Holistic planning can be a life-long process that assists you and your family in taking control of your financial future. We can help you set your financial goals, develop and implement financial strategies, and review your progress on a regular basis.

Develop a financial plan:

Most people find that managing their finances is a challenge. We face many opportunities, obstacles, and hazards along the way. We struggle with anxiety relating to our personal financial circumstances. Further, many families are too busy dealing with the challenges of day-to-day life to think about the next month; let alone retirement, which may be twenty years or more into the future.

By developing a financial plan, you and your family:

You will have a better understanding of your current financial situation. Determine attainable retirement, education, insurance, and other financial goals.

Review goals, funding strategies, and alternatives where goals have to be compromised. Have the necessary financial resources set aside to fund your goals as they occur. Reduce the effect of unexpected events, such as disability, premature death, etc.

Retirement planning is an integral part of your overall financial plan. Strategies should be designed to suit your goals and comfort level as well as to take advantage of tax reduction opportunities. For any financial plan to be effective, it is necessary to implement these strategies and to review your goals and progress periodically.

The amount you will need in retirement depends on the age you plan to retire, your desired retirement lifestyle, how long you expect to live and the rate of return you expect to earn on your investments. Social Security and employer-sponsored pension plans will probably provide a smaller percentage of what you will need than they did for your parents. The most important aspect of planning your future needs is estimating how much you will have to save each year to produce the income you need to maintain your standard of living after you stop working.

Pre-Retirement Considerations:

To optimize your retirement income potential, one or more of these strategies may need to be applied:

Invest to seek a higher rate of return on investments.

In a retirement plan, assets that have the potential for significant growth over the long term should be considered. It is important that your investment choices be consistent with the level of risk that you are willing to assume. In addition, financial planning must always take inflation into account. If you disregard inflation, you may end up investing too conservatively. Together we can determine a suitable mix of investments that seeks to help meet your objectives, time frame and risk tolerance.

Save more.

It is hard to motivate yourself to save for retirement because it generally requires spending less money now. You will have a much better chance of achieving your retirement goals if you maintain (or even reduce) today's standard of living and save as much as you can. Retirement planners generally suggest committing 10% to 15% of your gross earnings, or earnings before tax, to savings for retirement.

Spend less during retirement.

Many retirement experts estimate that you need between 70% and 80% of your pre-retirement income to maintain your standard of living during retirement. This may or may not be appropriate for you, as everyone's goals are different. Some of your expenses will increase and others will decrease. For instance, you may spend less on business clothing and lunches, but more on vacations. Also, consider the differences in your living expense for early and later phases of retirement. For example, you'll likely spend more on travel when you're 65 than when you are 85.

Retire at a later age.

The effect of retiring later is two-fold. Not only will you have contributed to your retirement plan for more years, but also your salary is also typically higher at the end of your career. Retiring early means losing retirement plan contributions based on those later, higher income amounts. This normally results in a smaller pension. Another effect on retiring early is being retired longer, and being dependent on your investments for a greater number of years.

At KCA Wealth Management we can assist in determining whether assets retirement income should be in your name or the name of a trust or other entity. Structuring your investments ahead of time can have a significant effect on the net amount of funds available for your estate after taxes.

There are a number of options available for retirement planning. This list contains a few of the more common:

  • Roth IRA (Individual Retirement Account)
  • Traditional IRA, Spousal IRA, Nondeductible IRA
  • 403(b) TSA
  • SEP – Employee
  • SEP – Self Employed
  • Defined Benefit
  • Profit Sharing

Many Americans realize the importance of saving for retirement, but knowing exactly how much they need to save is another issue altogether. With all the information available about retirement, it is sometimes difficult to decipher what is appropriate for your specific situation.

One rule of thumb is that retirees will need approximately 80% of their pre-retirement salaries to maintain their lifestyles in retirement. However, depending on your own situation and the type of retirement you hope to have, that number may be higher or lower.

Fortunately, there are several factors that can help you work towards a retirement savings goal.

Retirement Age.

The first factor to consider is the age at which you expect to retire. In reality, many people anticipate that they will retire later than they actually do; unexpected issues, such as health problems or workplace changes (downsizing, etc.), tend to stand in their way. Of course, the earlier you retire, the more money you will need to last throughout retirement. It's important to prepare for unanticipated occurrences that could force you into an early retirement.

Life Expectancy.

Although you can't know what the duration of your life will be, there are a few factors that may give you a hint.

You should take into account your family history—how long your relatives have lived and diseases that are common in your family—as well as your own past and present health issues. Also consider that life spans are becoming longer with recent medical developments. More people will be living to age 100, or perhaps even longer. When calculating how much you need to save, you need to factor in the number of years you will spend in retirement.

Future Health-Care Needs.

Another factor to consider is the cost of health care. Health-care costs have been rising much faster than general inflation, and fewer employers are offering health benefits to retirees. Long-term care is another consideration. These costs could severely dip into your savings and even result in your filing for bankruptcy if the need for care is prolonged.

Factoring in higher costs for health care during retirement is vital, and you might want to consider purchasing long-term-care insurance to help protect your assets.


Another important consideration is your desired retirement lifestyle. Do you want to travel? Are you planning to be involved in philanthropic endeavors? Will you have an expensive country club membership? Are there any hobbies you would like to pursue? The answers to these questions can help you decide what additional costs your retirement will require.

Many baby boomers expect that they will work part-time in retirement. However, if this is your intention and you find that working longer becomes impossible, you will still need the appropriate funds to support your retirement lifestyle.


If you think you have accounted for every possibility when constructing a savings goal but forget this vital component, your savings could be far from sufficient. Inflation has the potential to lower the value of your savings from year to year, significantly reducing your purchasing power over time. It is important for your savings to keep pace with or exceed inflation.

Social Security.

Many retirees believe that they can rely on their future Social Security benefits. However, this may not be true for you. The Social Security system is under increasing strain as more baby boomers are retiring and fewer workers are available to pay their benefits. And the reality is that Social Security currently provides only 20% of the total income of Americans aged 65 and older with at least $44,000 in annual household income.1 That leaves 80% to be covered in other ways.

Wealth Preservation and Transition through Effective Income and Estate Planning:

Growing, Protecting and Transitioning Estate.

KCA Wealth Management, and our staff are committed to the overall financial well-being and success of our clients. Creation of financial well-being can involve a number of separate strategies. Commonly, strategies are sought to be implemented in three phases:

  • Wealth Accumulation
  • Wealth Preservation
  • Wealth Transition/Transfer

Although Wealth Accumulation and Preservation is the primary focus for KCA Wealth Management, we recognize the importance of an overall integrated plan designed to take into account Wealth Transition (wealth transfer) to family members, charities, or other unique areas of interest for our clients.

Because we are not legally licensed in this area we are committed to working with estate, trust and income tax planning professionals to assist us in developing individualized financial transfer strategies. To further this commitment, we have close working relationships with several prominent groups of estate and tax planning lawyers.

We highly suggest and stand ready to assist with the development and incorporation of several of the following basic to more complex strategies:

Last Will and Testament– This document directs the disposition of assets owned individually by you at the time of your death. Failure to have a Last Will and Testament in place will likely result in those individually-owned assets passing to unintended beneficiaries under state law. This document also appoints a guardian and conservator for your minor children after your death.

Simple Will– The most common form of will is the simple will, also known as an "I Love You Will". Here, all assets owned by the first spouse pass free of income and estate taxes to the surviving spouse using the unlimited marital deduction (UMD). However, on the death of the second spouse, a much smaller family estate may pass on to heirs due to estate taxes. Depending on the size of an estate, the federal estate tax can amount to as much as 40%.

Living Will– A living will allows you to state your wishes about certain types of medical care and life prolonging procedures. The document only takes effect if you cannot communicate your own health care decisions. The benefit of a living will is that you do not put your family in the position of having to make difficult decisions and you also ensure your health care wishes are carried out.

Durable Power of Attorney for Health Care– A Durable power of attorney for health care is a document that lets you appoint another person to make medical decisions on your behalf if you become unable to make those decisions yourself. This document may resolve any potential conflicts over your medical treatment, and helps ensure your wishes are respected. Unlike a living will, this document covers a broad range of health care decisions.

Durable Power of Attorney for Finances– A durable power of attorney is a document that allows you to appoint another person or persons to manage your affairs and make financial decisions on your behalf if you become incapacitated. It is important to include a durability provision to have these powers continue if you become incapacitated or mentally incompetent; otherwise, its powers will cease. A general power of attorney may give your chosen attorney extensive powers over your affairs, or you may consider a special power of attorney limited to specifically defined tasks.

Revocable Living Trust– This technique allows a person to transfer assets to a trust to avoid the unnecessary expenses tied to probate courts upon death. This type of trust can be changed at any time and income earned from the investment of assets in the trust is generally reported on the individual income tax return of the person who established the trust. Variations of this type of trust can also be utilized to reduce both probate and estate taxes at death while, at the same time, providing for assets to be held for the benefit of the surviving spouse.

Re-titling of Assets– After creating and implementing an overall estate plan, it is necessary to re-title the assets, which is a premiere service offered through KCA Wealth Management, Your KCA Wealth Management, professional will oversee and facilitate the process of updating titles in compliance with the client's financial and estate plan. When the proper follow through is not complete, failure to properly own assets results in adverse estate and income tax consequences. Most importantly, through our management, we help ensure the proper execution of our client's intents and wishes.

Lifetime Gifts– The transfer of assets to children or other beneficiaries during the donor's lifetime is a technique to reduce estate taxes at death. However, this technique should be used thoughtfully in order to take into consideration the possible income tax consequences of making gifts.

Irrevocable Trusts– These documents are vehicles for passing assets in an estate tax and income tax efficient manner. These documents include life insurance trusts, charitable trusts, special need trusts, grantor retained annuity trusts, qualified personal residence trusts, among others.

Business Transition– Simple and complex planning techniques are utilized to pass businesses to intended recipients including children. Mechanisms include shareholder/operating agreements, family limited partnerships, and lifetime gifts.

Taxes and other estate expenses– If your estate is significant, the taxes paid on transfers both during your lifetime and at death may be significant. In addition to the various taxes due, additional fees and expenses should be considered:

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  • Federal estate (death) tax
  • Gift Tax
  • Generation Skipping Transfer Taxes (GSTT)
  • Income Tax
  • State Death Tax
  • Attorney's Fees
  • Personal Representative (executor) fees
  • Probate fees
  • Final expenses (burial, for example)

These items are likely the largest expenses your estate will have to pay. Proper planning can minimize the amount of taxes and expense that need to be paid, and allow you to transfer more of your assets according to your wishes.

Minimizing estate shrinkage– All of the taxes and expenses noted above must be paid before your estate can be distributed to your beneficiaries, meaning that the value of your estate can shrink considerably before it reaches your beneficiaries. Estate planning can reduce the amount of this shrinkage through the use of a number of techniques, including a property drafted will, trusts, and various gifting strategies.

Qualified plans– The value of any qualified retirement plans (including 401(k)s, 403(b)s, and IRAs) at the death of the plan owner are included in the owner's gross estate. In addition, the beneficiaries of the plans are also subject to income tax on any distributions. The income in the hands of the beneficiaries is referred to as Income in Respect of Decedent (IRD). All distributions from qualified plans in a particular year are aggregated to determine the amount subject to tax.

However, if the federal estate tax was in effect at the time of death, for income tax purposes the beneficiary is entitled to deduct a proportionate amount of any federal estate taxes attributable to the inclusion of the qualified plan assets in the plan owners' gross estate. Calculating and comparing the federal estate tax payable with and without the qualified plan assets in the gross estate determines this deduction.

Generation skipping transfers– Each person has a $5,250,000 generation skipping transfer tax exemption in 2013, which may be used during life or at death. Any time a gift to a "skip person" is made in excess of the annual gift tax exclusion, the generation skipping transfer tax (GSTT) applies in addition to federal estate and gift taxes. A skip person is defined as a recipient two or more generations below the transferor.

Even the most successful lifetime financial results can be decimated by poor (or no) income tax and estate planning. We strongly urge you to develop and frequently update your overall financial plan.

How Can I Insure My Future?

Insurance – The selection of the appropriate mix and amount of insurance is essential of every plan. This includes not only life insurance which is necessary to meet liquidity, future income, and wealth transfer needs, but also disability income insurance, disability buy-out insurance and long term care insurance.

Long ago, we figured out there is strength in numbers. For hundreds of years, people have been joining forces against all kinds of calamities — including financial troubles.

The concept of insurance is simply that if enough people can pool their money to form a large enough fund, then together we can handle practically any financial disaster. Your motivation for contributing to this fund is your own eligibility to draw from it if the disaster happens to be yours.

For Insurance, KCA Wealth Management, can also assist you with:

Life Insurance— a contract between you and a life insurance company that specifies that the insurer will provide either a stated sum or periodic income to your designated beneficiaries upon your death.

Health Insurance— a contract that compensates the insured for expenses of loss incurred for medical reasons, as through illness or hospitalization.

Long Term Care— a variety of services that include medical and non-medical care to people who have a chronic illness or disability.

Individual & Group Disability— coverage for employees that will protect their income should they become disabled and unable to work.

How much insurance do you need? Don't insure yourself against misfortunes you can pay for yourself. Why gamble all that money that misfortunes will happen? If they don't, you're way ahead. If they do, it will usually cost you less in actual costs than the insurance premiums you would have paid.

What kind of policy is appropriate? Broader may be better. Cover as many misfortunes as possible with a single policy. Carefully examine policies that exclude coverage in certain areas. These are called policy exclusions.

Whom should I buy it from? You may save by buying multiple policies from the same agent. Shop carefully. Only buy what you need. KCA Wealth Management, representatives are independent brokers for multiple carriers and represent you the client.

Contact KCA Wealth Management

Office: (717) 774-7080 Fax: (717) 920-7645

Main Office: 3806 Market Street, Suite 1, Camp Hill, PA 17011

Hershey Office: 1132 East Chocolate Avenue, Hershey, PA 17033

Carlisle Office: 26 State Street, Suite 103, Carlisle, PA 17013

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