Things You Need to Know About Social Security: Will It Be There?

September 24, 2014

When I facilitate a workshop or webcast on retirement planning, I like to poll my audience to see which areas of retirement planning they would prefer to spend more time talking about. The audience generally ranks saving and investing for retirement as their top two choices but depending on who is in the audience, Social Security may rank as third. Even when it doesn’t, I find it amusing that a government benefit that some are skeptical will even be there by the time they retire ends up being the topic that generates the most questions. I guess it’s because it’s a source of retirement income that many are familiar with yet so few truly understand. Continue reading “Things You Need to Know About Social Security: Will It Be There?”

The Three Most Useless Things a Financial Columnist Tells You

September 11, 2014

I often like to question much of the conventional wisdom of the financial services industry so I was intrigued when I saw this article titled “The four most useless things financial advisors tell you” by Howard Gold. Instead, I found myself questioning most of the conclusions in the article itself as pretty useless (with one exception). Let’s take a look at each of these “four most useless things:” Continue reading “The Three Most Useless Things a Financial Columnist Tells You”

Should You Split Up With Your Spouse In Retirement?

August 19, 2014

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. Continue reading “Should You Split Up With Your Spouse In Retirement?”

Why Your Social Security Projection is Probably Wrong

June 27, 2014

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.  Continue reading “Why Your Social Security Projection is Probably Wrong”

When Should You Take Social Security?

May 09, 2014

A question that I get very frequently is “When is the best time to take my Social Security benefits?”  The real answer can only be determined if we know a few minor details. So, if you know these things, we can make a precise calculation. Otherwise, we have to make an educated guess.  Continue reading “When Should You Take Social Security?”

Lessons From Detroit

December 06, 2013

Recently, a judge allowed the City of Detroit to remain in bankruptcy court which will allow the city to try to find a solution for an $18 billion debt problem. As a part of the solution, the pension benefits for a lot of retirees and current workers may be significantly reduced. The city is in serious financial trouble and without some sort of drastic measures, it might never recover.  Continue reading “Lessons From Detroit”

All Things Come to An End

September 27, 2013

It is with great sadness that I share this story about the end of production for the VW Bus.  I bet you didn’t know they were still being manufactured.  They are, until December 31st, in Brazil.  I will admit to being a huge fan of VWs.  I’ve owned several VW Bugs , a VW Thing, and my brother has owned a VW Bus or two along the way.  Continue reading “All Things Come to An End”

How Much Will You Really Get From Social Security?

September 23, 2013

Will Social Security be around when we need it the most…and if so when should we take it and how will it be taxed? These days, those are some of the biggest retirement planning concerns among anyone that’s not currently retired. It’s no secret that Social Security is in need of some significant changes to strengthen the ability of future generations to receive Social Security benefits. The reality is that without any changes to the system only 75-80% of projected benefits would be able to be paid.  Continue reading “How Much Will You Really Get From Social Security?”

The 3 Most Important Words in Financial Planning

September 05, 2013

According to this article, the three most important words when it comes to investing are the “margin of safety.” The article discusses how inaccurate people tend to be at making predictions about things like the economy, industry trends, and business growth. Since this unpredictability can wreak havoc on investment plans, many of the top investment experts recommend investing with a margin of safety, which is “simply the distance between your predictions coming true and needing those predictions to come true. You can still try to predict the future, but a margin of safety gives you room for error to be wrong.” In other words, rather than pick the investment that needs to grow at 10% per year to payoff, pick the one that could grow at 10% but would still be a good investment if it only grew at 5% with anything else being gravy on top. Continue reading “The 3 Most Important Words in Financial Planning”

Will Social Security Be Around For Your Retirement?

July 15, 2013

A few weeks ago, I wrote about the importance of completing a mid-year financial checkup. One of the activities that I completed as part our family’s recent financial checkup was the activity of running a basic retirement planning calculator (yes I do occasionally try to actually follow my own advice).  I used both a basic retirement plan estimator and ESPLannerBASIC.  Continue reading “Will Social Security Be Around For Your Retirement?”

How Is Your Retirement Income Taxed?

May 15, 2013

Last month I took a phone call from a gentleman who is in the process of preparing for retirement. He has done a good job saving and now that he is getting ready to take distributions from his retirement accounts, he is concerned about taxes. We are often lead to believe that taxes will be less in retirement and for many taxpayers, that will be true not because of a change in the way things are taxed but rather because many retirees will be able to enjoy retirement on less income.  Income sources are taxed no differently in retirement than they are while we are working.  Sure, we receive an additional deduction once we turn 65, but the primary difference between our working and retired years is not how our sources of income are taxed, but the “sources” of income themselves. Continue reading “How Is Your Retirement Income Taxed?”

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?”

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”

My 10 Favorite Web Sites to Grow and Protect Wealth

November 22, 2012

This week, several of the planners are discussing our favorite financial resources. In writing this, I realized how difficult it is to pick just one. So here are some of the sites that I most often like to share with people (all free of course): Continue reading “My 10 Favorite Web Sites to Grow and Protect Wealth”

Don’t Overestimate Your Life Expectancy

November 14, 2012

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”

Don’t Underestimate Your Life Expectancy

November 07, 2012

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”

Taking Back Control of Your Retirement Income

October 24, 2012

One of the key issues debated this presidential election season has been Social Security. Regardless of who’s in the White House come January, Social Security is not enough to cover more than the most basic living needs. With the average monthly Social Security benefit of $1,230 only increasing by 1.7 percent next year, this fact isn’t going to change anytime soon. For some, a government or corporate pension may provide additional, regular income.  The majority of Americans, however, will have to maximize what they themselves have set aside in their retirement plans to sustain their standard of living throughout retirement. Continue reading “Taking Back Control of Your Retirement Income”

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?”

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?””

Are Your Employees Falling for These Social Security Myths?

July 17, 2012

Last week I hit the road to conduct retirement planning sessions for a couple of mid-sized companies up in New England, and many of the attendees had some serious concerns about the future of Social Security. I heard younger workers complaining that Social Security is a Ponzi scheme and older workers expressing their confidence that any fixes to Social Security probably won’t hurt their own benefits since past changes have been gradually phased in over time.  Not surprisingly, many of the misconceptions that were being voiced to me are on the list of The Top Ten Myths About Social Security by Morningstar columnist Mark Miller. Continue reading “Are Your Employees Falling for These Social Security Myths?”