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”

Are You Ready for “The Future of Retirement?”

August 23, 2012

In her blog post last week, Linda Robertson wrote about her experience at this year’s ISCEBS Employee Benefits Symposium and in particular, a presentation by former U.S. Comptroller General David Walker about “The Future of Retirement.” Walker spoke about the growing national debt and the impending insolvency of the Social Security, Medicare, and Medicaid programs. He then argued that it will take a combination of both tax increases and benefit cuts to dig our way out of the hole. To the degree that we don’t take these steps, we could see higher inflation by either the government trying to print money to cover the debt and/or investors dumping the U.S. dollar in anticipation of or reaction to a devaluation of the US dollar. So what does this all mean for us? Continue reading “Are You Ready for “The Future of Retirement?””

Should You “Ditch Your Retirement Plan?”

July 19, 2012

I’ve written before about the Early Retirement Extreme concept, in which people save as much as 75% of their after-tax income in order to become financially independent in as little as 5 years. I recently came across a post in Forbes called Why You Need to Ditch Your Retirement Plan that was surprisingly written by another financial planner who argues essentially the opposite: that people should stop worrying about saving for retirement and enjoy life now. That could mean taking a lower paying job that you like more or working fewer hours, even if it means saving less and retiring later. He points out that working longer wouldn’t be so bad if you love what you’re doing. Continue reading “Should You “Ditch Your Retirement Plan?””

Top 4 Ways to Begin Investing for Retirement Today

July 04, 2012

If you haven’t been saving for retirement, putting even a little away on a monthly basis can have a huge impact on your future quality of life – especially if you invest in a tax-advantaged retirement account like your employer’s 401k plan or an IRA. This is because of compound interest: If you don’t have to pay taxes on the interest your account earns, that interest stays invested and earns yet even more interest – and the longer you’re invested, the more money you can make. For example, a mere $50 invested every month for 30 years will turn into almost $75,000 if it earns 8% annually – even though your total investment was only $18,000. Continue reading “Top 4 Ways to Begin Investing for Retirement Today”

One Radical Way to Reduce Your Cost of Living in Retirement

June 15, 2012

I am always looking for interesting ideas and stories about people who choose a different path financially. I haven’t always done things the standard way; I lived on my boat for 3 years, which made people think I was either crazy or cool. Either way, it was definitely out of the realm of the “normal” path. Continue reading “One Radical Way to Reduce Your Cost of Living in Retirement”

What’s Scarier Than Monsters??? Numbers…!

May 18, 2012

When I was growing up, I was surrounded by numbers and I actually liked that. (Yes, I’m admitting that I’m a geek from way back.) My friends and I could tell you the batting average of almost any member of baseball’s Hall Of Fame and the stats of major NFL players, compute a pitcher’s ERA in our heads or talk about the winning percentage of various great teams throughout history. Numbers were fun! Numbers were cool! (To us, at least…) Numbers were all that was right with the world back then…Last week, I read an article about the cost of healthcare during retirement and those numbers scared me! Continue reading “What’s Scarier Than Monsters??? Numbers…!”

You Can Retire at 60!

April 23, 2012

She proved me wrong. When my first appointment of the day for a work site personal financial planning session came in, I was skeptical because the first thing she said was that she wanted to retire in six months and she was sixty years old. I raised an eyebrow and told her, “It’s not easy to retire at sixty – in fact it is really tough. Not many people do it these days.” Continue reading “You Can Retire at 60!”

Your Advisor Told You What?

March 28, 2012

I told you last week about a caller who was still unsure about her financial capacity to retire despite having $1.5 million in her nest egg. The purpose of her call was to get a second opinion on how her retirement nest egg should be invested. A financial advisor wanted her to roll the money over to an IRA and invest it in a moderate balanced portfolio so that she would not run out of money but she wasn’t sure if that was the right thing to do. I’m glad she called because we discovered a few interesting facts during our conversation: Continue reading “Your Advisor Told You What?”

Are You Sure You’re Ready to Retire?

March 21, 2012

Last week I received a call from Ann who could not decide if she was ready to retire. Based on the lifestyle she’d like to have in retirement, she needs about $70,000 a year in income. If she retires right now, she will receive $52,000 in pension benefits, $11,000 in Social Security benefits, 80% of her retiree health benefits paid by the company, and have $1,500,000 in savings. Hmm…sounds pretty good, so why on earth is Ann so torn over making this decision? The truth is there are a lot more things to consider than just finances when it comes to retirement. Continue reading “Are You Sure You’re Ready to Retire?”

7 Ways to Reduce the Single Biggest Expense for Retirees

February 27, 2012

Housing costs and related household expenses make up the single largest spending category for Americans over fifty, a recent study by Employee Benefit Research Institute reports. This has many pre-retirees concerned because for most retirees’, their income declines or is fixed but certainly doesn’t grow. At the same time, expenses just keep on coming. While household expenses eventually decline with age as Americans reach their mid–eighties, health care costs increase substantially for that age group, wiping out any advantage of the cost savings. Continue reading “7 Ways to Reduce the Single Biggest Expense for Retirees”

Rental Property in an IRA?

February 22, 2012

The second week of April is Spring Break for our kids so this year we planned a family vacation to Amelia Island, Florida. We’ve never been there before so after perusing several possible forms of accommodations, we settled on a condominium close to the beach. As expected, the owners of the rental property requested one half of the rent up front and then the remainder at the time of occupancy. What made this particular request a little different was who, or in this case what, we made the check payable to. Usually you make a check out to a person or to a rental management agency but in this instance we made our check payable to the property owner’s individual retirement account (IRA). Huh? Continue reading “Rental Property in an IRA?”

Using Your 401(k) in Retirement

February 09, 2012

We recently received this question on the Ask a Question to a Financial Planner section of our blog:

“I have $35k in bank card debt+$30k in retail credit debt. Bank interest range 13/23%, retail 18/29%. I’m 63, and have $40k in a 401acct where I work. I want to retire this year with two company pensions ($1750/month) and early SS($2400/month, both wife and me). I need to get rid of some monthly payments of debt, where should I use my 401 money toward this goal. All my debt is unsecured, my home is paid off, health is good. I’m ready to go fishing.” Continue reading “Using Your 401(k) in Retirement”