Recently, my 10-year old son Ethan asked me what I would do if I ever won the lottery. What a great question. How we answer this question says a lot about how we feel about money and what we value most. After pondering the question for a moment, here is what I would do. Continue reading “If I Won the Lottery”
Now that Christmas is over and we’re approaching the New Year, you may start thinking about New Year’s resolutions and many of those probably involve financial goals. But we all have a limited amount of cash flow to work with. Which of those goals should you prioritize first? Continue reading “Setting Financial Priorities for the New Year”
What a great weekend. As a family, we drove to Bethlehem (North Carolina) on Saturday night to see a live nativity, but what made this trip even more noteworthy was something that happened on the ride home. As we were driving home, I took a detour to check on the status of my boat at the repair shop. (Basically, I just wanted to make sure it was still there.) After putting my mind at ease, we turned around, and I was about to make a left turn back toward the main road when something caught our eye. Continue reading “Don’t Let Your Focus on Today Keep You From Planning for Tomorrow”
One of the questions I commonly get from people is about what information to bring to a financial planning consultation. In my own meetings with employees, some people come with spreadsheets or even thick binders of information while many bring nothing at all. In both cases, they often have no idea what information is relevant and useful in making financial decisions. Whether you work with a planner or manage everything on your own, here is some information that you’ll want to have at your fingertips: Continue reading “What Your Financial Planner Needs to Know About You”
At Financial Finesse, we are expanding more into financial planning for high-income executives, which is surprisingly an underserved population for unbiased financial guidance. Many high net worth individuals have access to financial advice but not necessarily from an unbiased source. I recently had the opportunity to work with a group of senior executives with much higher incomes and account balances than the employees that we typically talk with. Now, you may expect that those in the top income tax brackets would have significantly different financial problems than the rest of us and to some extent you would be right. They’re generally able to cover their expenses so they usually aren’t struggling with debt or cash management problems. But other than that, many of their problems are the same ones typically facing other people at the same stage of life. They just have more digits in their numbers. Here are their three biggest financial issues: Continue reading “Are the Rich Really That Different?”
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”
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”
I recently received a question from someone who was using our risk tolerance profile and asset allocation worksheet and noticed that the worksheet’s guidelines were to have 0% in stocks since his time horizon was less than 5 years away while his target date retirement fund had 40% in stocks. While there are differences between the asset allocations of various models and target date funds, that gap was pretty stark. So who was right? Continue reading “Why You May Be Wrong About Your Retirement Time Horizon”
Longevity risk is the chance of living longer than expected, but what happens when we are expected to live shorter than planned? Most don’t see this as a risk simply because passing away with money on the table does not seem as dangerous as living beyond what’s there, but there may be some things you will want to consider if in fact you ARE expected to live shorter than planned. Continue reading “Don’t Overestimate Your Life Expectancy”
My father-in-law is as tough as nails. For as long as I’ve known him, he has never been afraid to get his hands dirty. Whether it’s working on a tractor, a truck, or just a home maintenance project, he likes to keep himself busy. To show for it, my father-in-law is pushing age 90, and if he keeps it up, he’ll likely live well into his 100’s. Continue reading “Don’t Underestimate Your Life Expectancy”
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”
We all know it’s a good idea to check the smoke detectors once a month to make sure they are working properly, but let’s be honest; how many of us actually do? If you’re like me, you probably don’t even know the smoke detector is there until you burn the toast. It’s not that we don’t care about safety (although I do like to live on the edge). Most likely it’s simply because it’s out of sight and therefore out of mind. Continue reading “Check Your “Financial” Smoke Detector”
I actually get this question quite a bit on our financial helpline and in our worksite financial planning sessions, not so much that someone got an inheritance (though I did get that last week), but many people simply want to know how they should allocate their assets in their own 401(k). The question doesn’t have a quick and easy answer and answering involves asking a series of questions first because investing starts with you – the investor. Obviously, an aggressive investor is going to have a very different investment mix than a conservative investor. A fifty year old may have a very different investment mix than a twenty year old no matter what the current economic outlook. Here are some questions I always start with: Continue reading “What to Do With $100,000 in Today’s Economy”
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”
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”
Although October is usually the month employees are focusing on their health insurance options for next year, it’s good to redirect their attention to a decision that has a much longer term impact then what type of health coverage they’ll have for 2013, and that is how much they are contributing towards their retirement. It’s not a fund ticker symbol or license plate number, but what NS4RW stands for is National Save For Retirement Week, created by Senate Resolution 555 that calls for the week of October 21, 2012 to highlight 3 goals: Continue reading “Does Your Plan Include NS4RW?”
People often ask me what to do with $10,000 or $100,000 because they have saved those assets in their 401(k) and want to make sure they are invested appropriately for their retirement. I can’t recall anyone ever asking me what to do with $100, but that question may actually be the key to financial security and building wealth. Continue reading “What to Do with $100”
I’ve just come off of a 3 week road trip, where I zig-zagged across the western half of the U.S., speaking to a variety of workforces on planning for retirement. One common question I heard again and again from many of the mid-career employees was “how much should I have saved up so far?” towards their retirement nest egg. Similar to my journey as I traveled from one workplace location to another, I knew what the final destination was on the map, but it was just as important to know how many miles I had driven and how many more miles to go, so I would know when I had to stop for gas or take a pit stop. Continue reading “How Much Should Employees Have Saved Up For Retirement So Far?”
What should I call my husband’s ex-wife’s mother? My mother-ex-law? Or perhaps mother-in-law once removed? Continue reading “The Tale of the Lost Pension”
A topic that comes up all the time in my conversations with people looking for guidance is the usefulness of paying off a mortgage vs. keeping it. This article talks about three homeowners who developed plans to pay off their mortgages in order to reach goals that are important to them. One wanted to have his mortgage paid off prior to retiring so that his cost of living in retirement was very manageable. It’s easier to retire comfortably if your biggest cash outflow item (for nearly everyone I talk to their mortgage or rent payment is by far their largest monthly obligation) disappears. Imagine how little you would need to live on if you didn’t have to pay rent or a mortgage! Another homeowner wanted to pay off the mortgage prior to their children going to college so that their monthly income could be used to fund education for the kids and the kids wouldn’t be saddled with massive student loan debt upon graduation. The last one wanted to aggressively pay additional principal on their mortgage in a bigger house while they had kids at home and after the kids were gone, they downsized and used the equity in the big house to fully pay for a much smaller, empty nest house. These homeowners all had goals and reached them. Continue reading “Should You Pay Your Mortgage Off Early?”
