No savings, No Retirement

There’s no shortage of statistics that one can cite to illustrate Americans money-management shortcomings. From the 18 percent who spend more than they make to the 50 percent who do not have an emergency fund, many Americans are in dire financial straights. Retirement accounts are in even worse shape, with 62 percent of Americans reporting that they have not saved anything yet for their golden years, according to a March 2016 analysis by the Economic Policy Institute, a think tank that studies the needs of low and middle-income workers.

Investment tools such as 401(k) accounts and stocks help investors prepare for retirement, but too many illiquid assets can spell trouble during unexpected life events. This leads people to start asking the question, “Have you ever known anyone who retired comfortably on a 401(k) alone?”

“If we can get our clients saving 15 or 20 percent of their income, even if they’re putting it under their bed or in a pillow, they can potentially have a better retirement than someone … Saving only 3 percent into a 401(k),” said John Paul Caswell, president and managing principal of Iron Horse Financial.

Iron Horse Financial is a Louisiana-based firm that advises investors and business owners all over the U.S. There is no firm minimum to invest. Iron Horse Financial seeks to match clients with one of the firm’s many advisors based on financial philosophy and specialty, as well as personality fit. For JP Caswell, the right fit usually means other business owners like himself.

“As a business owner myself it puts me in a unique position … I enjoy the role of financial advisor as well as a business coach and sounding board,” Caswell said, adding that his entrepreneurial experience assists him in advising clients with advanced strategies to achieve tax savings, increase cash flow, developing succession and exit plan strategies.

JP Caswell and Iron Horse Financial approach planning from both a defensive perspective, such as insurance protection or tax considerations, and an offensive one, meaning wealth building. Instead of starting with a “goal, like others” Iron Horse Financial starts with a client’s legacy. Once you know what someone is passionate about you can confidently build a plan that inspires clients to work towards creating it. That is where being financially organized, setting a budget, and saving, become critical.  A complete financial plan, should consider a client’s charitable and legacy plans at all income levels, he says.

The lack of savings has fueled America’s ever-growing credit card debt problem. According to Experian’s latest State of Credit report, released January 2017, the average American carries $5,551 in credit card debt – a significant amount considering many cards carry 15 or 20 percent annual interest rates. The need to save is often overlooked by many advisors who often point individuals in the wrong product/investment direction, Caswell said.

Case in point, the DOL Fiduciary Rule, 401(k) fee disclosures. A good idea in theory, but the disclosure requirements may do very little for consumers, because it may not address the real problem, which is overestimating the results of having only a 401(k) at retirement.  

“The amount of fees on a 401(k) is not going to be a determining factor in what sort of lifestyle [investors] have in retirement,” Caswell said. “The amount they’re saving overall is what will – people aren’t saving enough, whether it’s in a 401(k) or not.”

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This material was prepared by an independent third party. This material contains the current opinions of the author/presenter but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice.

Iron Horse Financial is an Agency of The Guardian Life Insurance Company of America®  (Guardian), New York, NY.  Securities products and advisory services offered through Park Avenue Securities LLC (PAS), member  SIPC.FINRA,  OSJ: 8485 Bluebonnet Blvd, ph# 225.766.9700.  PAS is an indirect, wholly-owned subsidiary of Guardian. Iron Horse Financial  is not an affiliate or subsidiary of PAS or Guardian 

This material is intended for general public use. By providing this material, IronHorse Financial is not undertaking to provide investment advice for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact a financial professional for guidance and information specific to your individual situation. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.

2017-39916 (Exp.04/19)

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