Financial Wellness @ Work

Should You Buy Life Insurance as an Investment?

In response to this article we published on Forbes, we received this question on our Facebook page:

I recently read your article “Should You Use Life Insurance as an Investment?” on Forbes. I wanted to know how this article would apply to me. I just graduated and started my first job that pays pretty well. I don’t have any dependents so I didn’t think about life insurance until I meet with a financial advisor. He said starting insurance young is a better investment where I could keep safe dollars and be more risky in other parts. Would I be better off buying insurance now and benefiting from compound interest or use that money in other investments? Thanks! Read more

Should You Split Up With Your Spouse In Retirement?

Some couples could benefit from a split strategy in retirement but I don’t mean breaking up with your loved one.  The Wall Street Journal‘s MarketWatch blog recently highlighted a split strategy for couples when deciding on the best time to take Social Security benefits. One spouse (the lower income earner) takes benefits as early as possible, which is at age 62.  The other spouse would wait until age 70 to take their own benefit but at their full retirement age (66 to 67 – depending on your year of birth) would claim the spousal benefit based on the lower income earning spouse.  Read more

Student Loan Debt a Major Threat

I read this article about student loan debt resulting in a portion of a man’s Social Security income being garnished. In the article, not only is the garnishment discussed but also discussed is the growing trend of older Americans still having outstanding student loan debt. If that debt is not repaid prior to retirement, Social Security payments may be impacted and the retirement lifestyle that you’re expecting may come up short. It reminded me of a couple of situations I’ve encountered in coaching sessions recently where student loan debt became a central part of the conversation. Read more

In Defense of the Traditional 401(k)

Should you make pre-tax or Roth 401(k) contributions? I recently read this article by Penelope Wang called “The Great Retirement Account You’re Not Using” that argues for Roth contributions. However,  I still think pre-tax contributions make more sense for most people. Here is my response to each of her main arguments:  Read more

What to Do When Your Pension is Terminated

As traditional pension funds continue to go the way of the typewriter all across America, you may find yourself in the position of having to decide what to do with a pension plan that’s being terminated by your employer. Fortunately, that doesn’t mean the money disappears. It just won’t be added to anymore and you have to choose what to do with the money. While this may sound like the kind of thing you’d rather not deal with, these come with an expiration date and a default option that may not be your best choice. So let’s look at the pros and cons of some common options.  Read more

Why Your Social Security Projection is Probably Wrong

When doing retirement planning sessions with people, we often talk about their retirement resources in order to help them plan for the future.  We look at any pension incomes that will come their way.  We look at their savings and investment accounts, their contribution levels and the potential growth of those accounts.   Read more

Be an Owner Rather Than a Loaner in Retirement

One of the most common pieces of investment wisdom is that you should invest more in conservative “loan” investments like cash and bonds and less in more aggressive “own” investments like stocks and real estate as you get closer to retirement. This may have made sense when bonds were paying 6% or more but with long term bonds rates now closer to 3%, this could actually make it harder to retire comfortably or more likely you could run out of money in retirement. Cash is paying less than inflation. Rather than to low-interest bonds and cash, why not shift towards high-yielding dividend stocks and real estate? Here are some advantages of this approach: Read more

Should a Roth IRA Be Part of Your Emergency Safety Net?

Roth IRAs are increasingly becoming one of the most popular savings vehicles for retirement. The most appealing feature of the Roth IRA is that these type of retirement accounts offer tax-free withdrawals of earnings at age 59 ½ as long as the account has been open for at least 5 years. The term “tax-free” is quite appealing in the current economic environment where higher future income tax rates appear to be a real possibility. Millennials and Gen Xers, who may not be in their peak earning years, may be particularly prime candidates to contribute to a Roth IRA. Perhaps that is one reason why the growth in Roth IRAs far outpaces that in traditional IRAs as more account owners are choosing to use after-tax dollars to save for retirement to receive the tax break during retirement.  Read more

What’s Your Magic Number?

By “magic number,” I mean how much money will you need in order to retire comfortably?  Without giving away too much, let me answer briefly.  A WHOLE LOT!!!! Of course, it’s going to be a different number for each of us and there are countless ways to arrive at a number that makes sense for your life  so my goal here is to try to help you figure out a reasonable estimate of what you might need without having to run numbers on a spreadsheet or a website that may or may not be worth the time it takes to prepare the estimate.  I’m not saying it’s going to be super-easy but at least it won’t require much math! Read more

Using Real Estate to Supplement Your Retirement Income (Part II)

Real estate can be a great asset for retirement planning. Last week, I explored a couple of ways you can supplement your retirement income using real estate, namely by owning rental property or investing in REITs.  This week, I’d like to take a look at a few other ways you can use real estate to supplement your income by tapping into the equity you may have in the home you are living in right now. Read more