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Retirement Planning Blog

on 13 July, 2016

How Will You Pay for Retirement

It’s not unusual for retirees to have multiple sources of income. According to the Social Security Administration, people age 65 and older receive a majority of their income from four sources. These source-points cover a wide range of income needs, from monthly living costs to healthcare spending and other retirement expenses.

If you’re in or near the “retirement red zone” (a period of 10 years before retirement and the first 10 years in retirement), now is a critical time. Decisions made now – and decisions which are neglected – will have a significant impact on the rest of a retirement lifetime, no matter how long it lasts. It’s a stage at which to figure out how you will pay for all of your retirement years.

With that said, here’s a look at how people age 65 and older are paying for retirement, and some ways to maximize retirement income.

on 08 June, 2016

3 Retirement Pitfalls You Should Avoid

You’ve worked hard for many years. Upon retirement, most people would like to live on their own terms. Maintaining a comfortable lifestyle requires you to take the proper steps to secure it. That includes avoiding common errors which could put your retirement finances at jeopardy.

With precautions in order, retirees will be more prepared to enjoy a secure – and hopefully financially confident – future. Having said that, let’s cover a few pitfalls which could do a number on your financial security.

Common Retirement Pitfalls to Avoid

on 07 July, 2016

How can the 2016 Election Affect Your Retirement

Given the effects of Brexit last week, it’s worth considering how the upcoming U.S. election might impact your retirement. From market volatility to public policy changes, a number of factors can be influential. Let’s look at a few possibilities in detail.

Market Volatility Tied to Uncertainty

Elections bring uncertainty, which is conducive to market volatility. Analysis from Merrill Lynch Global Research reports the S&P 500 index has declined an average of 2.8% since 1928 in elections years like 2016. In other words, it’s when the incumbent president isn’t seeking reelection.

On the other hand, data shows the S&P 500 has gone up in 13 of the 16 election years since World War II. Market analysts say this election year isn’t likely to differ too much from prior election seasons. However, elections do heighten people’s emotions, and both the Republican and Democratic presidential presumptive nominees have been getting record unfavorable ratings.

People with equities in their retirement portfolios, or who rely upon stock market earnings for retirement income, may experience some ups-and-downs.

on 01 June, 2016

5 Retirement Mistakes You Cant Afford to Make

According to a survey from the Employee Benefit Research Institute, just 21% of American workers are "very confident" they'll have enough money for retirement. After many years of hard work, most people would like a comfortable retirement lifestyle. But this doesn't just come together by itself.

Financial independence in retirement takes diligence, and it begins with creating a suitable retirement income plan. Then once you have this "retirement roadmap," it's a matter of sticking to it. Of course that involves taking action when you need to, like filing for Social Security at the right time or signing up for Medicare on deadline.

on 30 June, 2016

What Happened to Your Money Lessons from Brexit

Last Friday brought news with truly global implications: British citizens voting to leave the European Union. The results of “Brexit,” or a referendum on whether the United Kingdom should stay a member of the EU, were surprising for many. By a margin of almost 52% to 48%, UK voters signaled their desire for departure.

In response, British Pound Sterling fell over 10% against the U.S. dollar overnight. Since then, the stock market has been in a flurry. To highlight recent market activity, as noted in stories from CNBC, Reuters, and MarketWatch:

  • Brexit and future eco-political possibilities provoked investor panic
  • The CBOE Volatility Index, an index measuring fear in financial markets, rose 49% to 25.76, its highest level since February 2011
  • There was massive investor selloffs, as a result
  • U.S. stocks plunged more than 3% on Friday, leaving the market in the red so far for 2016
  • On Friday, the S&P 500 fell 3.2% -- it lost all its gains in 2016 and its worst decline since August 2015
  • The Dow Jones Industrial Average lost 610 points on Friday, its 8th largest point loss ever
  • With a 4.5% decline on Friday, the NADSAQ was down nearly 6% year-to-date on Friday
  • Financial-sector stocks dropped 5.4%, the worst losses since August 2011 (a trend accentuated by London being a global financial center)


on 25 May, 2016

The Growing Impact of Retirement Healthcare Costs

Last week we discussed the concept of “risk capacity” and its role in retirement financial security. Aside from retirement asset allocation, another part of income planning is accounting for expenses. Living expenses, long-term care costs, and healthcare expenses are three primary retirement cost drivers. It’s important to plan ahead and to have a strategic combination of volatile and conservative financial vehicles to meet these needs.

Just healthcare needs alone can impose a significant cost burden on your retirement lifestyle. In fact, research firm HealthView Services reports they’re one of the fastest-growing segments of retirement spending. Ensuring they aren’t neglected is a critical step. Otherwise they can be financially draining and greatly impact your standard of living in retirement.

What’s Going on with Healthcare?

in Annuity
on 23 June, 2016

Consumer Interest in Guaranteed Lifetime Income Options Increasing

According to various sources, the consumer “craving” for guaranteed income options is on the rise. One area in which it is growing is workplace retirement plans.

Prudential Retirement reports that 78% of employer plan participants who say they’re familiar with guaranteed lifetime income options believe it’s “very important” to include them in workplace savings plans. Furthermore, 77% of plan participants indicated they would choose a guaranteed lifetime income option, if available.

on 18 May, 2016

Whats Your Risk Capacity Why It Matters

Last week we discussed the value of having a guaranteed retirement income source. Annuities offer some strong advantages with their contractual guarantees, but they’re only one part of the financial picture. Overall, a portfolio could have many assets: stocks, bonds, mutual funds, annuities, CDs, or even other financial instruments.

This brings up the question of portfolio allocation. Is there a paradigm which you should follow? Ultimately, we would say it varies among individuals. Your portfolio should be allocated to reflect your current situation, your needs, your goals, your risk tolerance, and your risk capacity. Of course there are some well-known general guidelines, like the Rule of 100 and portfolio diversification.

on 15 June, 2016

Are You Generating Enough Income in Retirement

Do you have a dependable level of income for retirement? According to a new study, many seniors aren’t generating the retirement income they need. BankRate.com reports seniors in 47 states and the District of Columbia aren’t replacing enough of the income they earned in their working years.

The study found that at best, seniors are living off 60% of the income they had in their pre-retirement years. Financial experts believe retirees need at least 70% of their pre-retirement income. BankRate.com reports the national average to be 60.27%.

Why Does It Matter?

on 11 May, 2016

Retirement Security with Guaranteed Income

Last week we covered how financial literacy could affect quality of life. Having strong financial knowledge puts you in a position to make well-informed decisions about your future. It also brings peace of mind – people establish control over their money and prepare themselves for a financially secure retirement.

Unfortunately, over the last several years retirement confidence has been negative. It’s in no small part due to events like the 2008 recession or the recent stock market correction. The Employee Benefit Research Institute reports in 2015, just 37% of workers said they’re “very confident” about having enough retirement money.

Changing Priorities in Retirement

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