With the City of Philadelphia finally returning back to work and beginning to recover from a glorious Super Bowl Championship the market has started to return as well. It’s incredible to see over time the drastic changes in the sports world from training techniques, protective equipment, all the way to technology used to prepare for these events. Similar to most aspects of life in this sense that everything is constantly evolving and very rarely is something that was the best option 10,20,30 years ago still viewed as the best option today. The financial world as far as planning for your own financial freedom is no outlier in this sense.
The scariest thing to hear being in the financial services industry is a kid fresh out of college or in his early 30’s planning for his future the same way his parents did. While the life knowledge and experiences they have had can be used as great learning tools, the world of planning is drastically evolving. For example. Let’s say your parents are 50-60+ years of age. If you took a vote in a room of how many adults have pensions most likely 75-80% of them would raise their hands and that would supplement at least half of their retirement planning and their own investments or 401(k) would cover the other half. Very little planning had to be done to make sure they were properly prepared after the end of their working years. Nowadays, if you asked a room of 20,30,40 year old’s how many of them have pensions I’d be shocked if more than 2-3 of them actually did. The new wave of planning is night and day different from that of elder generations. So, while your parent’s advice can always be taken as food for thought it is important to realize that times are changing and the cards you are dealt are not the same deck of cards that their generation was dealt.
The other aspect that no one speaks about is taxation in various investment and retirement accounts. This is a critical aspect of the planning realm that rarely is education offered about. Certain accounts you can pay taxes now and can come to you tax free upon withdrawals, other’s you can differ taxes and then pay upon withdrawal. Obviously I don’t have crystal ball to tell you whether taxes are going to be higher or lower in years to come, but I’d say most likely you will be in a higher household income tax bracket than you are today at time of retirement. So I’ll leave it up to you if you think it’s smarter to pay taxes now on your money or in 20,30,40 years. If you have any questions about any of this or would like to discuss your own potential options please feel free to reach out! My contact information is listed below.
|Casey O’Donnell, MBA
Financial Services Professional
|MassMutual Greater Philadelphia
2 Bala Plaza, Suite 901
Bala Cynwyd, PA 19004
Philadelphia Business Journal Best Places to Work: 2007- 2016 | Philly.com Top Work Places: 2010 – 2013 & 2015 – 2017
Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001, and its affiliated U.S. insurance companies. Local sales agencies are not subsidiaries of MassMutual or its affiliated companies.
Casey O’Donnell is a Registered Representative of and offers securities through MML Investors Services, LLC. Member SIPC. Supervisory Office: 2 Bala Plaza, Suite 901, Bala Cynwyd, PA 19004 (610) 660-9922.