What Is Your Retirement Income Savings Mix?

According to a recent study by the Center for Retirement Research at Boston College, the following percentages represent how much the average American will need to rely on personal savings to provide income throughout retirement:

  • Low-income households: 25 percent
  • Middle-income households: 32 percent
  • High-income homes: 47 percent

These numbers reflect the contribution of Social Security income. For Americans with less income, government benefits account for a higher percentage of household income. Higher-net households, on the other hand, must contribute a larger share of their savings to maintain their pre-retirement standard of living. As a general rule, Social Security provides 30 percent to 40 percent of household income for the average retiree.

However, it’s important to recognize that each household is different. For example, single women fall into a much direr category. Social Security benefits tend to represent a higher share of household income for elderly unmarried women – 50 percent of whom rely on Social Security for 90 percent or more of their income.

Note, too, that the average elderly unmarried woman does not spend the majority of her adult life as single. Many outlive their husband and subsequently become more dependent on entitlement benefits, especially if much of the family wealth was spent on medical treatment and long-term care for the husband before he died.

Clearly, there are many factors that lead women down a path to impoverished retirement. These include lower pay than men throughout their careers, time off from the workforce to raise children and/or provide care to elderly relatives, not to mention the fact that women tend to live longer than men. There are also other factors that contribute to eventual poverty, such as divorce, loss of spouse or being forced to retire due to poor health.

However, women aren’t the only ones at a disadvantage when it comes to saving for retirement. Low-income workers – including people who clean houses, drive school buses and maintain the lawns of higher income families – have difficulty just making ends meet, let alone saving for retirement. Consider that someone making $7.25 an hour, 40 hours a week for 52 weeks a year earns only $15,080 a year before taxes.

Retiree income generally consists of several different resources, such as a pension, investments and personal savings. However, with fewer employer-sponsored pension plans offered, a greater burden is placed on individual savings and investments. There are two problems with these income sources. First, the current savings rate in America averages 5.5 percent of income, a significant drop from the average 11.9 percent personal savings rate of 50 years ago. Moreover, persistent low interest rates have curbed yields from traditional savings accounts.

Second, IRAs, company 401(k) plans and individual investment portfolios are subject to the volatility of the stock and bond markets. While these securities tend to grow substantially more than bank savings vehicles over a long period, people who have had to curtail investment contributions due to wage stagnation might have missed out on gains from the long-running bull market.

Since so much retirement income must now come from savings, pre-retirees and retirees are looking for ways to maximize their assets. One strategy is to simply work longer in order to save more money and allow investments more time to grow. Recent statistics show that there are more than 35 million Americans age 55 and older in today’s workforce, compared to just below 16 million in the same age range 20 years ago.

Retirees seeking ways to maximize retirement income sources might want to consider maintaining a prudent annual withdrawal rate from their investments, laddering a bond portfolio or purchasing an annuity with some of their savings to generate guaranteed income to last throughout retirement.

Bear in mind that each of these strategies has advantages and drawbacks that can affect a retiree’s long-term financial security. It’s important to work with an experienced financial advisor to tailor a retirement income strategy based on unique financial circumstances.

Professional Services for Automobile Dealerships and Their Owners

We have provided accounting, auditing, tax and consulting services for automobile dealerships and owners across the U.S. for more than 30 years.

Tax

  • IRS Representation
  • Mergers and Acquisitions
  • Sales Tax Issues
  • Payroll Tax Issues
  • Tax Compliance

Accounting and Auditing

  • Financial Statement Audits, Reviews, and Compilations
  • LIFO Inventory Calculations
  • Financial Statement Analysis
  • Internal Controls Reviews
  • Internal Audit Services
  • Financial Projections and Forecasts
  • Inventory Observations
  • Internal Workpaper Reviews

Consulting

  • Network Vulnerability Reviews
  • Information Systems Review
  • Technology Assessments
  • Strategic Technology Planning
  • Disaster Recovery Planning
  • Compliance Reviews (OSHA, Employment Policies and Procedures, Federal and State Regulations)
"Staircase

The Summit 2016

Annually, our firm has the opportunity to come together and spend a day discussing the past year as well as future plans, hopes, and expectations. It's a day where updates are given and voices heard. This year, we had the added bonus of spending our time at the newly-opened Guest House at Graceland, and it was certainly a special treat. Our group was the first to occupy the meeting space, and it was a successful trial run for the location. Take a look at our day!

"Staircase
When in Graceland (or the Guest House at Graceland), put on your Elvis shades and pose on the famous staircase.

"Elvis
Elvis trivia contest winners

"Mayor
A big thanks to Mayor Jim Strickland for being our keynote speaker and spreading positive news about our city. You make us proud to be Memphians!

""
After a cocktail reception, we ended the day in style.

Year-End Year-Round Tax Planning Guide

Year-end tax planning may be a little easier for 2016. For the first time in several years, taxpayers won't have to wait for Congrassional action on late-year “extenders” legislation to know whether certain popular tax breaks are still available to them. The Protecting Americans from Tax Hikes (PATH) Act of 2015 made some of those provisions permanent and extended others for several years.

This 2016 Year-End Tax Planning Guide highlights various PATH Act provisions, along with other potential opportunities for lowering individual and business taxes. As always, it's best to start planning as early as possible because many strategies will be effective only if they're implemented before year-end.

However, before you act on any of the information presented in the guide, you'll want to obtain professional advice. The federal tax law remains highly complex, and your tax planning should be done within the context of your specific situation. For more information, please contact our office at (901) 682-2431.

"Students

Accelerate Leadership 2016

On March 31, RBG welcomed 20 college students to our inaugural leadership conference, Accelerate Leadership. Students from several Southeastern schools, including the University of Memphis, Mississippi State University, and the University of Mississippi, were given the opportunity to explore Memphis and meet our firm.

The students met on the first day at the Madison Hotel, a boutique luxury hotel in downtown Memphis. From there, they went to the Memphis Convention & Visitors Bureau where they listened to CVB CEO and President Kevin Kane talk about the virtues of living and working in the Bluff City.

"Students

After the talk, the students boarded a tour bus, helmed by a funny, talented guide from Backbeat Tours. Called the Memphis Mojo Tour, the tour focused on Memphis's rich music history and took the passengers by Sun Studio, Beale Street, Stax Studio, Cotton Row, St. Jude Children's Research Hospital, The Lorraine Motel, and other famous Memphis landmarks.

""

""

After the tour, the students returned to the Madison Hotel where they had some time to relax before a dinner with firm employees.

The next day, the students came to the RBG headquarters in East Memphis for a networking breakfast. After the breakfast, they were taken on an office tour and heard opening remarks from Managing Partner John Griesbeck and Bank of Fayette County President and CEO McCall Wilson.

""

The students received career advice and information from a panel of RBG employees and Chief Operating Office Leslie Bouldin. They ended the day after lunch with RBG accountants.

For more information about Accelerate Leadership or attending the conference, please email lbouldin@rbgcpa.com 

100 Days of Service

As mentioned in a previous blog post, we are celebrating our 100th anniversary. We started as a small accounting firm called Shannon Reynolds & Bone. A few years later, George Griesbeck joined the firm, and it became Reynolds, Bone & Griesbeck.

From our beginnings off of Cotton Row in downtown Memphis to our current headquarters in the heart of East Memphis, our firm has weathered two world wars and the Great Depression. Today, we grow and thrive because of our talented employees, dedicated clients, and the Memphis community.

Our Managing Partner, John Griesbeck, the grandson of George, says the Mid-South has been good to RBG over the past century, so in honor of this milestone, we are proud to give back to our community by completing service acts for 100 days during the summer of this year.

“Over the last 100 years, this community has made our firm what it is today,” said
Griesbeck. “Our founders were among the first certified public accountants in the state of Tennessee and we would not be the success we are today without the trust and support of the businesses in this community. So the best way we could think to celebrate our success was to simply give back.”

We gave our clients and employees a voice in deciding which acts of service were most meaningful in our communities and asked them to select the organizations where we would dedicate our time. Some of the organizations selected include:

  • St. Jude Children‚Äôs Research Hospital
  • Wolf River Conservancy – Cycle the Greenway
  • Mid-South Food Bank
  • Church Health Center
  • MIFA Meals on Wheels
  • YWCA
  • Lifeblood
  • LeBonheur Children‚Äôs Hospital
  • Humane Society of Memphis and Shelby County

We look forward to our 100 Days of Service and will keep our blog and social media accounts updated with pictures and accounts of our service projects.

The secret to our success

This is a big year for RBG, as 2016 marks the 100th anniversary of our business. In a time when small businesses do not always thrive, we've been able to grow because we've invested our time and energy into our most important resource – our people.

Our firm has, on average, a 95 percent annual retention rate among associates. In a day where workers regularly hop from company to company, people stay at RBG. We asked our employees what they enjoy about working for RBG. The answers were consistent – the firm’s overall culture, flexibility, professional training – but the big reason echoed by employees: RBG treats everyone the same, whether you are a partner, a manager, or a staff member.

“One of the things that is unique, especially in this industry, is that employees here have a say,” said Senior Audit Manager Nathan Stevens, an employee since 2007. “We have access and communication with the partners and can facilitate change and ideas. Public accounting is an old industry and a lot of firms still have a rigid structure with most things driven from the top; but RBG is open to hearing what their employees have to say and even works to encourage feedback.”

Rebecca Jacobs, a current tax senior and employee since 2009, appreciates that partners want to hear from the firm’s young professionals, as evidenced through the establishment of the firm's Young Professionals Group. “It is very unusual to have 50-60 year old partners listening to 25 and 30 year old associates and making them part of the decision making process.”

“Our commitment to both clients and employees is based upon our guiding principles and core values. This is the same foundation which has guided us as a top Memphis accounting firm for the past century,” said John Griesbeck, Managing Partner. “We have an unparalleled team in place, and we give them every opportunity to expand their knowledge and skills to continue to reach new levels of expertise.”

Our associates receive more than 50 hours of professional development training each year to improve tactical and leadership skills, as well as continuous internal coaching and mentoring.

We have also made it a point to give employees the flexibility they need to have a
successful career and personal life, even in the 1980s and 1990s, when it was not something on most company’s radars.

For instance, when Tax Manager David Love, who has been with the firm since 1970, had a stroke 20 years ago, we made sure he was taken care of and not rushed back to the office. We let him work part-time, gave him flexibility and treated him like family. Or, when Client Accounting Senior Kim Crawford, with the firm since 1992, started working here, her kids were young and she needed to have a schedule that allowed her time to take care of them. Crawford said RBG was more than willing to create the most comfortable working situation for her.

What’s most obvious after 100 years is that this employee focus doesn't just benefit our employees, it also benefits our clients. We've consistently maintained a high client retention rate, and we feel that we owe our success to our talented employees.

RBG supports Camp CPA

Camp CPA is a program developed and presented by the Beta Alpha Psi (BAP) chapter at the University of Memphis for students at East High School.  The program provided relevant information on career paths in the forensic, audit and tax areas of accounting.  Students were able to learn about various areas of accounting along with potential compensation from intern to partner. 

Ali Sinkular, audit partner at RBG, along with Jeree Wheat and Jenna Lea Presley engaged with the students in a Ponzi scheme demonstration using cookies.¬† Jenna Lea played the part of the “fraudster” with Jeree acting as the bookkeeper and Ali artfully played the role of the auditor.¬† The interactive nature of the presentation allowed the students to understand through this real-life example how a fraud such as a Ponzi scheme can happen.

By providing support like this to Camp CPA, RBG is proud to assist BAP in educating high school students and empowering them to pursue a future in a profession such as accounting.  The desire of BAP members to impact Memphis through service provides a great opportunity for RBG to partner with them through our ongoing community involvement.

Have Questions? We’re Here All Year!

Many clients see their CPAs at tax time, when the main focus is on completing and filing their tax return. As a result, they may not take the opportunity to ask questions about long-term tax planning or about other important financial concerns. The good news is that we are available to you all year. We have a full- time, year-round staff of experts with extensive expertise in a broad range of financial areas. We’re ready when you are to take some time reviewing your financial situation, helping you understand your options and make the best decisions. We’re also here in an emergency to help address unexpected financial concerns. So, give us a call to discuss your important financial issues whenever they arise.