When to Retire? How About 40?

April 25, 2013

I recently saw this clip of the Today Show that discussed one man’s goal of retiring before 40, a topic I’ve written about before. He’s 30 years old, earns $50k a year, and has accumulated $100k of savings over the last 3 years. His goal is to save 60-70% of his net income to retire at age 35 with a $400k nest egg to cover his $15k of annual expenses. To do that, he’s moved to Florida to avoid state income taxes and be able to live without a car (he points out that waiting for the bus is much easier in warmer weather) and has decided not to have children. Is his plan feasible? Continue reading “When to Retire? How About 40?”

What Happens When You Inherit an IRA?

April 08, 2013

Last week, I received a difficult but important question from a good friend who wanted to know what to do when an IRA account is inherited from a loved one. His mother is in the final stages of a long battle with cancer and the need for hospice care had prompted my friend and his family to start the emotional process of making sure her estate plan is in order. Unfortunately, most families wait until it’s too late to have these difficult talks but in this case, my friend’s question was driven by the difficult ordeal his family experienced following the sudden death of his father about five years ago. They didn’t want to get blindsided this time around but weren’t sure about what tax laws and potential surprises were waiting for them. Continue reading “What Happens When You Inherit an IRA?”

How Much Do You Really Need to Retire?

March 28, 2013

I recently answered a question from a blog reader and received the following message:

“Thanks VERY much! In the past few years, I have paid $500 to two separate financial planners to get this kind of advice, to no avail. In a few minutes you provided me more useful information than they provided. They have been helpful telling me how much I CAN invest with them, where, and how much that investment will grow to – but they haven’t, can’t or won’t tell me how much I SHOULD be saving now to get to a recommended savings target – so that I have enough to retire, but also am not unnecessarily saving too much now rather than enjoying it while my family is young, all together (before kids get big and move out) and all healthy (and capable of enjoying it).” Continue reading “How Much Do You Really Need to Retire?”

7 Retirement Planning Blog Posts That Can Help You Retire on Time

March 25, 2013

Almost three years ago, we launched this financial wellness blog and I was pleased to be one of the financial planners chosen to share bits of wisdom and personal finance tips with you. Since then, I’ve written on everything from saving money by couponing to more advanced topics such as taxes and estate planning. My goal was to share tips on anything and everything that could help you with your personal finances, reduce financial stress and improve your financial wellness and hopefully keep you entertained a bit along the way. Continue reading “7 Retirement Planning Blog Posts That Can Help You Retire on Time”

5 Potential Changes That Could Affect Your Retirement

February 07, 2013

The more I think about the funding shortfalls with Social Security and Medicare, the disappearance of traditional defined benefit pension plans, and the lack of Americans’ saving for retirement, the more I realize that there will likely be some major changes in the future of retirement and retirement planning. Everyone talks about entitlement reforms like raising the Social Security retirement age and reducing Medicare benefits. But here are 5 other possible changes affecting retirement that you may not have heard as much about and some things you can to prepare: Continue reading “5 Potential Changes That Could Affect Your Retirement”

Three Common Retirement Questions You Need To Ask

January 28, 2013

Do you want to retire this year? Next year? Do you want to retire sometime soon? Continue reading “Three Common Retirement Questions You Need To Ask”

Retire Before 65: It May Pay To Wait

January 14, 2013

Retiring before 65 can be a challenge even for the folks that have their financial ducks in a row. Last week, an employee called into our financial helpline and asked me what he should be considering to retire early. He was 62 and wanted to retire in a year but he didn’t know of anyone in his professional or social circles that was retiring early and could give him advice. No one he knew was retiring before 65. Continue reading “Retire Before 65: It May Pay To Wait”

How Much Retirement Income Can You Really Get From Your Portfolio?

January 10, 2013

As a rule of thumb, financial planners generally say that you can safely withdraw about 4% of the value of your nest egg as income in retirement and increase it by inflation each year. That number was based on the “Trinity study” that looked at the outcomes of various withdrawal rates from 1926-2009 as well as additional research by financial planner and author William Bengen. However, I recently came across this interesting blog post that points out a few shortcomings of the study: Continue reading “How Much Retirement Income Can You Really Get From Your Portfolio?”

How to Find an Extra $2 Million in Your Coat Pocket

December 21, 2012

A few things happened today and somehow when I pieced them together, it all made sense (to me, at least). As I was putting my coat on this COLD morning (for the first time in nearly a year), I found a $20 bill in the pocket. Talk about a great way to get your day started!!! I was thinking that it was going to be a good day. Continue reading “How to Find an Extra $2 Million in Your Coat Pocket”

Can This Retirement Be Saved? Case Study Age 40

December 17, 2012

When I was a kid, I used to love to read the Redbook magazines my mother had lying around the house. My favorite column was “Can this marriage be saved?” since it gave the wife’s point of view, the husband’s point of view and then finally the therapist’s point of view of the marriage and what could be done to improve it. I realize I am like that therapist now but for finances. Continue reading “Can This Retirement Be Saved? Case Study Age 40”

Should You Do a Roth Conversion to Protect Yourself From the Fiscal Cliff?

December 13, 2012

If you’re like many Americans, you may be worried that an ability of the politicians in Washington to cut a deal could lead us over the so-called “fiscal cliff,” in which the Bush tax cuts would expire for everyone. While you can’t do much about the taxes on your income, you can at least protect your retirement accounts from higher tax rates in the future by converting them into tax-free Roth accounts by the end of the year. (In addition, many employers are allowing employees to convert pre-tax money in their current retirement plans into Roth accounts.) This conversion would allow you to pay taxes on the money at today’s relatively low rates and avoid the higher future rates. But does it make sense for you? Continue reading “Should You Do a Roth Conversion to Protect Yourself From the Fiscal Cliff?”

The Retirement Flight Path

November 27, 2012

Were you one of the millions of travelers heading to the airport this past weekend to get home from your Thanksgiving trip? Luckily, despite a predicted increase in the number of holiday travelers this year, travelers returning home after the long Thanksgiving weekend found generally good weather, few airport delays and even manageable conditions on the nation’s highways, according to the Associated Press. Continue reading “The Retirement Flight Path”

Save 1% More for Retirement in 2013

November 19, 2012

A wise Italian once said, “Perfect is the enemy of good,” meaning when we insist on perfection the results are often no improvement at all. When the goal is so high up on the pedestal and seems so unachievable, we simply give up. I’ve certainly experienced this phenomenon personally and seen it manifest with the many individuals and families I have worked with over the years as a financial planner. Building an emergency fund with six months of expenses, saving 10- 12 % of income for retirement, funding children’s college educations, and making extra payments on a mortgage are just a few of the financial goals people have. Each of these goals needs to be funded while at the same time, other expenses are increasing such as health insurance and household bills. Continue reading “Save 1% More for Retirement in 2013”

8 Ways to Build and Protect Your Retirement Savings Today

November 05, 2012

In terms of building wealth, we don’t have a level playing field. Two seemingly identical college graduates starting out with the same salary may have a very different wealth building experience if one has $100,000 in student loans and the other has none. A pharmacology major or engineering student may immediately find a well paying job even in today’s economy while journalism majors may have more of a challenge finding a job in his or her field. Continue reading “8 Ways to Build and Protect Your Retirement Savings Today”

Beware of Reverse Mortgages

October 19, 2012

One of the hidden nightmares of the financial crisis over the last few years is coming back into the news again. And, I’m hoping that it won’t stay hidden forever. I’m talking about reverse mortgages. Continue reading “Beware of Reverse Mortgages”

Protecting Your Retirement From Inflation

October 18, 2012

Are you worried about rising inflation and how it could impact your retirement planning? With the Federal Reserve announcing QE3 (printing more money) and our rising federal debt and entitlement obligations (may need to print more money in the future), you’re not alone. Many economists are warning about the dangers of inflation in our future. Continue reading “Protecting Your Retirement From Inflation”

What Could a Romney Presidency Mean For Your Wallet?

September 06, 2012

Now that Mitt Romney is officially the Republican nominee, polls are showing a tight race between him and President Obama. Given the state of the economy and Obama’s relatively low approval ratings, Romney has a fairly decent chance of being sworn in as our next President in January. Regardless of how you feel about this possibility, you may be wondering what a Romney presidency could mean for you and your wallet. Continue reading “What Could a Romney Presidency Mean For Your Wallet?”

7 Reasons NOT To Roll Your Retirement Plan into an IRA

August 30, 2012

Do you have a retirement plan from a former employer? Last week, I received two separate questions about what to do with a 401(k) from a previous job. Both times the person asking the question was thinking about moving it and both times they decided to leave it where it is after reviewing the pros and cons. Continue reading “7 Reasons NOT To Roll Your Retirement Plan into an IRA”