Planning a successful retirement is about more than saving enough money. It also means learning to adjust your habits — financial and otherwise — to your new schedule and lifestyle.
Are you ready? Or at least headed in the right direction? Wherever your current situation is, here are the factors to think about as you move into your post-work years. New Expenses — You’ll no longer need to spend money on commuting costs or your work wardrobe, but you may have other financial priorities, like your golf hobby, visiting family or finally taking that spa vacation. Cost-of-Living Fluctuations — Budget for your basics, like utilities and property taxes, and remember that they could continue to increase as time goes on. Health Care — Consider supplemental health insurance to help cover what Medicare doesn’t. This can help with coinsurance, deductibles or prescription drug costs. Rebalancing Assets — When you have a regular paycheck, it makes more sense to take on a little risk. As you age, you might want to start being more conservative. Schedule a check-in if it’s time to revisit your goals. Taking Care of Your Home — If you intend to live in the same home when you retire, then take a hard look at possible modifications at least three to five years beforehand. A new roof, deck or furnace can cost a pretty penny. Managing Debt — Retirement income and Social Security benefits will be constant, which means your bandwidth to repay debt could be hampered if interest rates rise. Miscellaneous Accounts — Once retired, it’s more important than ever to be mindful of how much you have saved, where or how it’s invested, your checking account balance and any interest you’re paying. Future Plans — It’s important to keep your estate plan and beneficiaries up to date and to map out your budget and intentions for the next several years. Want to discuss your finances in greater detail? Reach out anytime. imagine this: You have two job offers with similar salaries and potential career growth. Which one should you take?
The answer may depend on the other benefits on the table. Many employers offer more than a salary and health insurance. No matter your current situation, make sure you’re aware of a company’s potential perks, and more importantly, make sure you’re taking advantage of them. Here are seven benefits to know: 1. Matching retirement contributions — Many employers will match some portion of your contribution toward your 401(k) or 403(b) plan. This is basically free money, so be sure to take advantage of it. 2. Flexible savings accounts — These accounts allow you to put aside pretax money to pay for qualified expenses such as medication, child care or parking. 3. Group life insurance — You might be offered access to supplemental insurance. The payout varies, but it usually equals one year's salary. 4. Student loan assistance — Today’s typical college graduate accrues thousands of dollars in debt. Knowing this, many employers who want to attract new talent now offer college debt repayment as a benefit. 5. Continuing education and training programs — Both employers and employees benefit when new skills are learned. Check to see if your employer offers a continuing education stipend. 6. Parental leave — A handful of states have passed legislation to require paid family leave. Additionally, more employers are offering paid maternity and paternity leave. 7. Vacation time and gym memberships — Both are linked to increased worker productivity. Be sure to use all your paid time off and check to see if monthly gym memberships are a reimbursable expense. Have questions? Reach out anytime to discuss your long-term goals and to make sure you’re making the most of your earnings. Did you know that money management and financial challenges are one of the biggest sources of stress for many Americans?
Regardless of your net worth, it seems like there’s always something to worry about. While some things can’t be controlled, other stressful triggers can be kept in line with a little bit of thought and planning. Here are six steps that can help you achieve greater financial peace of mind:
Financial wellness is largely a result of preparedness. Reach out today if you want to check in and make sure you’re on track. Money mistakes can happen at any age — whether you’re negotiating your first job offer or planning your retirement. The good news? With a few simple steps, you can gain control of your financial future starting today. Ready to reach your goals? Here’s how to be financially savvy no matter where you are in life: In Your 20s: Start saving. Compound interest means the earlier you begin, the larger your nest egg will be. Steady saving could add hundreds of thousands of dollars to your retirement. Beware of credit cards. If you decide to use a credit card, embrace timely monthly payments so you don’t rack up too much debt. In Your 30s: Avoid overspending. You may want a bigger home or car because it feels like you can afford it, but watch out for lifestyle inflation and try to stick to what you need. Protect yourself. Ensure you have life and health insurance policies to safeguard your family. Manage your retirement savings with an investment plan and create an emergency fund. In Your 40s: Leave your savings alone. It might be tempting to borrow money from your retirement plan, but remember that you’d likely be hit with a 10% early withdrawal penalty. Don’t assume your retirement is set. Take a realistic look at what you’ll receive from Social Security, Medicare and your retirement savings. If the monthly amount isn’t enough, consider ramping up your efforts. In Your 50s and Beyond: Don’t put off estate planning. Consider a health-care proxy, a power of attorney and a will. By thinking ahead, you can save your loved ones time, stress and money. Continue to save. If you get a late start, don’t give up. Even if you put away just 5 to 7% of your paycheck from ages 50 to 66 (the legal retirement age) — you’ll be doing your future self a huge favor. Have questions about your financial future? Reach out to discuss your long-term goal If you keep up with the news, you’ve seen that several companies have had their databases hacked recently. So what can you do if you think your personal data may have been compromised? Here are four key steps to take if you’re notified of a data breach. 1. Change Your Passwords First, you’ll want to change your account password with the hacked company and with any other website where you’ve used the same one. A password manager can help you generate tough-to-crack passwords and store them securely. 2. Sign Up for Free Credit Monitoring One of the biggest risks you face if your Social Security number is stolen is that someone could apply for credit in your name, borrow money and not pay it back. You could be left with a big headache and a damaged credit score if this happens. The breached company usually gives its customers at least a year of free credit monitoring, so be sure to sign up. This is an easy way to keep an eye on any fraudulent accounts that may be opened or applied for under your name. 3. File a Police Report If your identity is stolen, file a report with the local police department. While they may not be able to restore your identity, a police report can be crucial to getting bogus charges removed from your accounts. IdentityTheft.gov is a helpful resource outlining all the steps you need to take. 4. Stay Vigilant While it may take some extra time and effort to protect against hackers and data breaches, it’s well worth it if you can keep your sensitive details a little bit safer. Are you worried about your financial information? Reach out anytime to discuss how you can take the right steps to protect yourself. Have you ever daydreamed about receiving a sudden windfall?
At some point many of us will receive an insurance payout, a significant tax refund or a bonus for a job well-done. Though it would be tempting to put the whole amount toward a luxurious vacation or a new car, it’s important to think about your long-term financial goals, too. You can still have a little fun, but if you really want to make the most of a windfall, here’s what to keep in mind.
Have questions? Get in touch to discuss your financial goals and plans. Have you ever wanted to talk about money with a friend or partner, then decided against it? It can be uncomfortable to share how much you earn, how much you’ve saved or how much you owe.
You might feel ashamed of your credit card balance or feel awkward that you seem to earn more than your friends. But should you reconsider your approach to talking about money? Can sharing more sometimes be a good thing? Sharing With Your Partner or Spouse In a serious relationship, it’s wise to discuss your attitudes toward saving and spending and to reveal your assets and liabilities. Openness and honesty about money are important because your individual financial behaviors can strongly affect your partner and your future together. Transparency With Your Friends You may not want to reveal your exact salary to your friends, but it’s probably smart to share enough information to prevent finances from hurting your relationship. No one wants to go broke trying to keep up with their higher-earning, higher-spending friends. Tip: When making plans, offer different cost options: “Would you like to go out for cocktails, cook at my place, grab a coffee or go for a walk?” Being Open with Your Financial Advisor If there’s one person you should consider sharing every aspect of your finances with, it’s a trusted financial advisor. Professionals who are required to provide unbiased advice in your best interest can help you the most when they know all the details, and of course we’ll keep things confidential. Have questions? Reach out whenever you need a review of your finances or help with a financial decision. Has anyone ever made an unfair assumption about your money habits? Was that assumption based on how old you are?
People often look for patterns and trends when it comes to spending and saving, but in reality, your financial approach probably isn’t based on age or decade alone. What do you think? Do these common beliefs hold true, or are they just myths? 1. “The silent generation is stingy.” Born in the 20s, 30s and 40s, this generation grew up with financial stress caused by the Great Depression, wartime rations and career limitations for women. One effect of this group’s resulting prudence, however? Widespread homeownership. 2. “Baby boomers pinch pennies.” Thanks perhaps to their parents, 55% of boomers described themselves as frugal in a 2019 survey, compared to 40% of Gen Xers and 33% of millennials. But can you call them too frugal as they approach retirement with long life expectancies and rising health care costs? 3. “Gen Xers are big spenders.” Even if they are, many are overcoming it. Gen Xers are beginning to reach their peak earning years and tend to have high 401(k) participation rates, potentially putting them in a better place than ever. 4. “Millennials are entitled.” That’s also debatable. Maybe they’ve just learned from their generation’s financial challenges, such as graduating during the Great Recession and dealing with student loan debt, by saving for emergencies and being financially cautious. 5. “Gen Zers are unfocused.” The youngest generation, born in the mid-1990s and beyond, grew up with fast internet, fast devices and on-demand content. They value their time and money and are wise not to waste it when options abound. The Takeaway When it comes down to it, responsibility unites us. Every generation worries about meeting basic needs, providing for loved ones and saving for the future. Need some help organizing and understanding your finances? Reach out for clarity and assistance anytime. When was the last time you checked your portfolio’s asset allocation? If your answer is “never” or “I can’t remember,” then it may be time to rebalance.
Maintaining the right balance of stocks and bonds across all your accounts is important when it comes to managing risk, and rebalancing every year or so helps you do that. Here’s what to know if you want to stay on track and reach your long-term goals: What is rebalancing? Rebalancing your portfolio means selling investments in an asset class that is overrepresented in your portfolio and buying investments in an asset class that is underrepresented in your portfolio. For example, if you have 90% stocks and 10% bonds but want to start taking on less risk, you’ll probably want to adjust. When should you rebalance? 1. A common strategy is to rebalance annually. 2. Another is to rebalance as needed: If you’re approaching retirement, for example, you may want to adjust your asset allocation to reduce your risk. 3. If you just got a huge raise, you’ll probably want to make sure your funds are working to their best potential. Is there a wrong time to rebalance? If a market change, good or bad, has you worked up, it’s probably best to resist the urge to buy or sell immediately. Remember, you can reach out anytime for input on whether the change you want to make is in line with your future plans. Feeling uncertain about your rebalancing strategy? It’s important to regularly check in with your portfolio and make adjustments as needed. But it’s okay if you’re not sure when or how to make those adjustments on your own. Wondering if your portfolio is still structured in a way that fits your needs? Let’s discuss your goals and questions today. |
AuthorCutting Edge Wealth Advisors, Licensed agents of the largest insurance company in the world, AIG, Fidelity & Guarantee and several other reputable firms, is an insurance, benefits, and retirement advisory firm with agents spread across the country. We specialize in making sure the retirements and financial stability of families and businesses are secure through the use of strategic life insurance planning, and utilization of state of the art insurance technology. Archives
November 2019
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