Page 14 | The Roanoke Star-Sentinel | 8/17/12- 8/23/12
Valley Business
To Roll Over, Or Not To Roll Over: That Is The Question
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If you are lucky enough to work for a company that offers a pension, you may be faced with a major decision at retirement: to roll over or not to roll over. In other words, should you take a lump sum distribution at retirement or receive a monthly check during retirement? The choice you make can affect how you live in retirement, and what you can leave your heirs. While pension plans, or defined-benefit plans, are meant to provide a certain amount of security in the form of monthly cash distributions, because retirees have no say in how pension plan money is invested, they have no opportunity to increase their monthly cash distribution. One way to exercise more control and perhaps increase the value of your pension plan distribution is to take a lump sum distribution at retirement and roll it into an IRA. An IRA offers you greater flexibility for accessing and investing the money. Assets in a rollover IRA may be invested in mutual funds, individual stocks and bonds, and other investments that align with your financial, wealth transfer and retirement goals and your investment risk tolerance. Because IRAs are tax-deferred, taxes are only paid when you take a distribution from the IRA, which allows investment earnings to grow free of tax until you take a distribution. Before rolling over your pension to an IRA, the following should be considered: 1. IRAs are not guaranteed, if you invest aggressively or inappropriately or the market fails to perform as you expect it to, you run the risk of reducing the value of your pension or perhaps outliving your assets, and 2. a rollover to an IRA from a qualified plan is protected from the claims of creditors in bankruptcy. Here are some additional factors to consider: Your company’s future If you stay in your company’s pension and select the lifetime income option, the maximum annual benefit insured by the Pension Benefit Guaranty Corporation in the event your company goes bankrupt is $55,840. Your health Pensions are meant to provide retirees with income for the rest of their lives. However, if the pension holder passes away, depending on the annuity option chosen, the surviving spouse typically receives a reduced benefit of at least half of the amount the plan
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holder would have received. Once the surviving spouse dies, any remaining pension benefit remains with the pension plan. With an IRA, you can elect a beneficiary to receive the IRA upon your death, such as another family member or a charity, assuming there are still assets left in the account. Minimum distributions If you were to roll your pension into an IRA, you would be required to take minimum distributions from your account, and pay taxes on them, once you reach age 70½. Such requirements might not be an issue if you planned to begin withdrawing assets before you reach 70. But if you retire later in life and want to begin drawing down your funds after 70½, the requirement may cause you to incur tax on distributions before you want to. Inflation Typically, fixed monthly pension payouts will not keep pace with inflation. Some pension benefits have a cost of living adjustment built in, but most do not. So if you’re concerned about the declining value of your assets due to inflation, the lump sum option might be more suitable for you. So is an IRA rollover right for you? The most important thing is to review your pension options in the context of your overall financial picture. Do you have other substantial sources of retirement income? Are they enough to fund your lifestyle, or will you need the pension income to do so? How important is leaving assets to your heirs or charity? A qualified financial professional can help you identify your objectives, determine the costs associated with them, and decide whether a monthly check or rollover IRA is more appropriate given your circumstances. Neither UBS Financial Services Inc. nor any of its employees provide legal or tax advice. You should consult with your personal legal or tax advisor regarding your personal circumstances. Financial Planning services are provided in our capacity as a registered investment adviser Michael B. Kemp Meridian Wealth Management, UBS Financial Services Inc. 540-855-3349 / e-mail: mike.kemp@ubs.com
Breaking Bad Reviews: How to Protect Your Small Business Online
Tech Experts Offer 4-Step ‘Reputation Marketing’ Solution It happens all the time: The hard-working crew at a small business loses customers thanks to the sour grapes of one person. It could be a disgruntled employee, an angry customer or even a competitor, says V. Michael Santoro, coauthor with John S. Rizzo of Niche Dominance: Creating Order Out of Your Digital Marketing Chaos (www.NicheDominance. com). “Anyone can post a bad review online and hurt your business,â€? says Santoro, who is a managing partner with Rizzo of Globe On-Demand, an internet technology company. “Unfortunately, most business owners are not even aware that these bad reviews are out there.â€? Seventy-two percent of buyers trust reviews as much as personal recommendations, and 70 percent trust consumer opinions posted online, according to a recent Nielsen Global Trust in Advertising Survey. “A bad review published in a newspaper, or broadcast on radio or TV, is short-lived, but a bad review posted online can live indefinitely,â€? says Rizzo. “With consumers now researching an average of 10 reviews before making a buying decision, and 70 percent trusting a business that has a minimum of six reviews posted, business owners need to be proactive in developing their online reputation. You need several positive reviews.â€? Online searches have been streamlined, combining reviews with maps, pay-per-click advertising, local business directories and Facebook Fan pages, Santoro says. As damaging as bad reviews can be, positive reviews can be equally constructive, he says. Rizzo and Santoro offer an Internet marketing strategy called “reputation marketing,â€? described in the following steps: • Develop a 5-Star Reputation: Begin by having your happy customers post great reviews about your business. Strive to have at least 10. Have each post to one of the following:
Google Plus Local, Yelp, CitySearch, SuperPages, YP.com, your Facebook Fan page, etc. This needs to be a continuous process. Proactively ask your customers to post reviews. • Market Your Reputation: Once reviews are posted, use a well-designed online marketing strategy to drive targeted traffic to your website. Ensure that your website can convert this traffic into customers. Additionally, showcase these third-party reviews on your website. • Manage Your Reputation: Regularly check that the reviews being posted are positive. You can use Google Alerts for your business name; however, you will need to check the local directories, too, since they’re not picked up by Google Alerts. By building up the positive reviews, you can counter a poor one by sheer volume. You should also quickly post a reply to a negative review if they occur. Always be professional and indicate what action you have taken to remedy the situation. • Create a Reputation Marketing Culture: Train your staff to proactively ask customers for reviews and to deal immediately with any customer who appears unhappy. A positive culture will encourage customers to post positive reviews about your business. John S. Rizzo & V. Michael Santoro John S. Rizzo obtained his bachelor’s in business administration and spent three years as a consultant for Amazon.com’s publishing group. He has assisted several businesses with digital marketing strategy and has served in leadership positions for multiple initiatives for the Charleston, S.C.-Area Chamber of Commerce. V. Michael Santoro has more than 10 years in the digital marketing field. His prior experience includes international senior marketing positions in technology fields. He has a master’s degree from Central Connecticut State University and an undergraduate degree from the University of New Haven. Santoro was an adjunct professor with the computer science department of Western Connecticut State University.
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