5 Steps to Maximizing Your IRA

When it comes to planning for retirement, the more you save today, the better prepared you’ll be tomorrow. That’s why we are sharing five easy steps to take right now that could make all the difference in reaching your goals.

1. Maximize your annual IRA contributions. For 2013, the maximum amount you can contribute to a Traditional IRA or a Roth IRA is $5,500. Individuals ages 50 and older can make an additional catch-up contribution of $1,000—for a total contribution of $6,500.
2. Invest on a regular basis. Making regular monthly contributions to a brokerage account or a 401(k) can add up over time. A $250 monthly contribution could potentially grow to $127,601¹ after 20 years, assuming an average annual rate of return of 7 percent.
3. Set up automatic investments. Establishing a periodic investment plan¹ is easy to do and helps put your retirement savings on autopilot. Set up direct deposit to put a portion of your paycheck into your IRA.
4. Consolidate IRAs. If you have multiple IRAs at several financial institutions, consider transferring them into a single account. You’ll have a more complete look at your financial picture, and it will be easier to manage those assets. You’ll also reduce the number of statements and tax forms you receive, and potentially reduce fees.
5. Roll over 401(k) accounts from former employers. If you’ve changed jobs or plan to retire, why leave your 401(k) plan behind? Although there may be good reasons for keeping an old 401(k) plan intact, moving it to a Rollover IRA has its advantages. For one, you’ll have better control over the management of those assets and more flexibility to access those dollars.

¹ Periodic investment plans and dollar cost averaging do not assure a profit or protect against losses in declining markets. Such plans involve continuous investment regardless of market conditions. Markets will fluctuate, and clients must consider their ability to continue investing during periods of low price levels. The above hypothetical example illustrates the potential value of regular monthly investments and assumes an average annual rate of return of 7 percent. The end value doesn’t reflect taxes or fees. Earnings and pretax contributions from Traditional IRAs are subject to taxes when withdrawn. IRA distributions taken before age 59½ may also be subject to a 10-percent penalty. Earnings distributed from Roth IRAs are free from income tax, provided certain requirements are met.

Weekly Market Summary

Little movement is expected in the Treasury market to start off the week, as investors wait for notes from the Federal Open Market Committee (FOMC) meeting this Tuesday and Wednesday. The 10-year Treasury stood at 2.12 percent early Monday morning.

Given volatility in the markets and a slowing economy, many expect Federal Reserve Chairman Ben Bernanke to confirm a continued commitment to quantitative easing. Read more now .

Get Ready for Changes in How You Purchase Health Insurance

Read our Navigator newsletter.

The Affordable Care Act, having been ruled constitutional by the Supreme Court, is picking up speed and momentum like a huge boulder rolling down a mountain. The ACA will land on your doorstep Jan. 1, 2014, accompanied by thousands of pages of regulations from a variety of federal agencies, including Health and Human Services, IRS, Department of Labor, Center for Medicare Services, and even Homeland Security.

Although we are still waiting for pricing and plan designs to be revealed, this edition of our Navigator newsletter will help you start thinking about your options.

For almost 150 years, Allen Insurance and Financial has been helping our clients with insurance and financial issues, and we're committed to helping you navigate the complexities of this massive new law.

In this newsletter, Dan Wyman and Sherree Craig discuss how the ACA will impact individuals, small groups, and larger organizations. Dan is Allen's group benefits department manager, as well as a broker, consultant and attorney focusing on group benefits. Sherree is Allen's large group health insurance guru and account manager.

Read our Navigator newsletter.

Lindsey Eaton Joins Our Camden Office Staff

Lindsey Eaton of Hope has joined Allen Insurance and Financial as a scanning associate in the company's Camden office.

A Camden native and graduate of Camden Hills Regional High School, Lindsey is new to the insurance industry and is studying for her Maine property & casualty license as part of the Allen Insurance and Financial in-house education program.

As a scanning associate, Lindsey plays a key role in Allen's paperless office system. She also supports members of the administrative staff and reception in the Camden office.

"I enjoy the variety of tasks my job requires," she said. "And I enjoy being part of the front desk team. I am people-person -- I love interaction with others."

Outside of work, Lindsey enjoys spending time with her young daughter, family and friends.

Stay Well Protected on a Motorcycle

By Ben Williams, Allen Insurance and Financial

There's more to staying well protected on a motorcycle than just hanging a small bell from your frame.

Med Pay. Motorcycle liability insurance in Maine includes coverage for medical bills due to injuries you and your passenger incur while riding.  Whether you tip your bike while practicing safe riding techniques in a parking lot or you hit wet leaves, you have at least $2,000 per person for the ambulance and treatment.  You can buy coverage of up to $10,000 per person.  If your injuries require you to file a claim with your health insurance, the medical payments coverage on your motorcycle policy should be able to be applied against your health insurance deductible. 

Liability coverage.  You may think you could not do much damage to someone else if you are at fault in a motorcycle accident, but there is a good reason to buy as much liability coverage as you can afford.  In Maine, the limit of coverage you have, which will pay someone else if you injure them, is the same limit that will pay your medical bills if you are hit by a driver who has no insurance or has an amount that is insufficient to cover your medical bills.  This is called uninsured and under-insured motorist coverage, and you will see it listed as UIM on many insurance policies. 

For example: Assume you have $500,000 in liability coverage.  You should also have $500,000 in UIM.  They only way you wouldn't is if you signed a form specifically requesting lower coverage.   Let's say a driver hits your bike, causing you $130,000 in medical expenses, but that driver has the state minimum limit of $50,000 in liability coverage.  Because your insurance is greater than the insurance of the person who hit you, your insurance will pay up to your limit of coverage.  In this case, your insurance is more than adequate to cover the extra $80,000.

Another thing to note: Your motorcycle insurance is not like an HMO with treatment exclusions.  So if your doctor says you need chiropractic care, deep tissue massage or a wheel chair ramp into your house following the collision, your motorcycle policy will likely cover it.  

On a motorcycle policy, you may have the option to include passenger liability protection.  This means your liability coverage will extend to your passenger, even if they are related to you.  Without this, your passenger only has Med Pay coverage protecting them.

If you purchase accessory coverage for your motorcycle to compensate you for damage to saddle bags and chrome bling, you should also have the option to include safety riding apparel as accessories.  That means your helmet, gloves, leather or cordura jacket and rain suit can be replaced following an accident.  Always keep receipts and pictures of upgrades to your bike and of your riding gear so you are properly compensated in the event of a claim.

If you are riding a classic bike and want full coverage, it will likely be written for an agreed value.  That means it doesn't suffer any depreciation like a newer bike might.  Some agreed value policies don't sell separate accessory coverage, and the value of the accessories should be included in the bike's agreed value.

Other things you may want to add to your policy are roadside assistance/ towing , trip interruption coverage, disappearing deductibles, coverage for a trailer used to haul your bike, and for brand new bikes, guaranteed replacement cost.

Be sure to let your agent know if you have a motorcycle endorsement on your license, how many years of experience you have, whether you have completed a rider safety course, and if you belong to any riding associations such as HOG or BMW MOA.

Ben Williams is a personal insurance agent for Allen Insurance and Financial. He has loved motorcycles since he was a boy and encourages riders of all ages to be safe and smart on the road and to feel free to call their  agent with any question about their motorcycle insurance.