Stash your cash
I read an article last week that got me thinking. The article reminded the reader about the fact that whether you are approaching retirement age or are decades away, you need to be thinking about what they called “the safest places to stash your cash”. Too many times retirees are left empty-handed because they put all of their savings into a risky investment or failed to ensure that they had the risk tolerance to absorb market volatility. Call us for some ideas and options you may not have considered. We’re always here to help.
Growth for Beneficiaries
Life insurance can be complicated. There are several different types of life insurance, and finding the right type for your needs is important. Term life insurance, where coverage expires after a certain number of years, is one type, meanwhile, permanent insurance, like whole and universal life insurance policies, keep coverage in place no matter how long you live, and can even build cash value. We like insurance where the funds you’ve paid in can grow and you have the ability to pass that growth on to beneficiaries income-tax free. Call us, we can tell you more. We’re always here to help.
Our future selves
I read an article last week about the benefits of thinking about yourself in future terms. The idea being that many of us feel little connection to the person we will be years from now, and that leads to a shortsighted behavior that actually hurts us in the long run. It is an interesting hypothesis. In one study the article referenced, a group of 50,000 retirement account holders were shown an algorithm created image of themselves in the future, and that led to a 16% increase in the number who chose to make additional deposits into their retirement account. These ideas are all food for thought. Are we holding back on retirement savings because we haven’t yet identified with who we will be in retirement? Call us. We are always here to brainstorm about things that can be done to increase your retirement savings, especially in ways that can then provide you with an income you can’t outlive.
What does it actually mean?
We often hear the phrase “The market is up” or “The market is down” and we think we have either made money [or lost out on making money] or we have lost money. The problem is the phrase is rarely connected to anything that has real meaning to us personally. Why is that? Because ‘up’ and ‘down’ are relative only when compared to what we own, and what we paid for it. So when a stock broker tells us ‘you’re doing great, the market is up’, is he telling us we have made money or that we have made up some of the losses we previously incurred and that the market is up only as compared to the day before? It’s important to understand what is meant by phrases that imply positivity. That’s why we try to stick to products that don’t imply, but that give assurances. Call us, we’re here to tell you what we know and help you sort through what your financial situation really is, and what you can count on versus what you hope will be the case.
Most vulnerable
There has been an uptick in what regulators call Romance Fraud schemes and studies have been done to try to pinpoint when seniors are most vulnerable. Not surprisingly it is between twelve and twenty-four months after losing a loved one, moving or becoming less mobile and less able to get out and about to visit friends. We all need to pay attention to these situations especially as society promotes a greater use of the internet to ‘stay connected’. Friends and family don’t cost us money to maintain those relationships, strangers or impersonators do. Please pay attention, and if you’d like a non-judgmental chat about what is going on in your life, call us. We’re always here to help.
You cannot have your cake and eat it too
Perhaps there is more truth to this saying than we want to admit. This year has been tumultuous, with markets declining and interest rates increasing. Were we all soothsayers we would be rich beyond our dreams. But we aren’t and it is disingenuous to think about the money we ‘could have made’ when interest rates increase, and to forget what we ‘could have lost’ had we chosen to keep our money in products where the principal can and does decline. If we are being honest with ourselves, the idea of risk vs. reward necessitates an examination of both sides of that equation. We must balance the sure things we can count on against other options that could – but only when the risk is not realized – reap more money. As a Senior you must decide if you are a risk taker, or if you want something you can count on. That is a personal decision. If you become envious of those who are making more money than you are, but forget that usually means they can loose more money than you can also, then perhaps you are willing to take more risk. If you are confident in staying the course, and planning ahead with something you can count on then you are less of a risk taker. But you can’t have it both ways. We’re here to help you think out the impact on you of being more or less of a risk taker. Call us. We’re always here to help.
Getting it Right
Sometimes it is best to start with the basics. If you are planning for retirement are you contributing enough to your 401(k) to get your company’s full employee match? Think of it as free money. Have you paid off high-interest rate debt you may be carrying. Eliminating a monthly credit card or auto loan with a high interest payment may enable you to save more money then you think. Do you have an emergency fund of money set aside? This is important as with an emergency reserve, you won’t have to dip into your retirement savings if you need cash in a hurry. Once you’ve handled debts and created an emergency reserve you can then make it an achievable goal to save for retirement and to put your money where it can hopefully create an income for you when you are in fact no longer working. Call us, that’s where we come in. We have ideas for products that can protect your principal from market losses while providing you in retirement an income you can’t outlive. We’re always here to help.
Refresher
From time to time it is a good idea to review the basics. This week’s article does just that. Take a look and see if you agree that it does a good job of discussing the many types of annuities, the nature of the underlying investment, the primary purpose of an annuity, the nature of the payout commitment, the tax status and the premium payment. Call us if you have any questions. We’re always here to help.
Adjustments
While inflation has certainly been in the news lately, one topic that doesn’t seem to be discussed all that often is private pensions, unlike Social Security payments, typically don’t offer a cost-of-living adjustment that keeps pace with inflation rates. While State and local government pensions do typically offer increases, that sometimes causes those who are in the private sector to assume their pension does the same. This difference means that those receiving private sector pensions may need to focus more on their future income stream in order not to get too much behind the inflation eight ball. Call us, we can help you crunch the numbers and try to determine what kind of deficit you should look to make up. We’re always here to help.
Some things never change
“On the surface, retirement planning hasn’t changed all that much over the years. You work, you save and then you retire. But while the mechanics may be the same, today’s savers are facing some challenges that previous generations didn’t have to worry about.” Those challenges are things we have often spoken about, a longer life expectancy probably being the most important. If you are living longer during a time when you are most likely not working, the obvious question is how do you have that guaranteed amount of money you used to be able to count on in a paycheck from your employer? Call us. We have some ideas you may not know of. We’re always here to help.