In the wake of the coronavirus pandemic, a new study shows that Americans are becoming increasingly anxious about their finances.
Back in April, Fidelity asked 3,062 retired and working-age Americans about their concerns and what they were doing to shore up their confidence gap. In the survey, 60% of Americans said they were concerned about their finances now. Thirty-eight percent were extremely or very concerned, while over twenty percent were just moderately concerned.
Six in 10 (62%) Americans said they worried about job security, with 43% being extremely or very concerned. 51% of baby boomers said they were worried about their finances over the next 6 months. Meanwhile, 69% of millennials and 68% of Gen Xers also shared that concern. Read More
While times change, the need for quality financial guidance doesn’t. Many financial advisors do things old-school. Nevertheless, with everything happening right now, that might well be changing.
It may not be the most exciting topic around, but working with a virtual financial advisor can be beneficial in many ways.
You don’t have to take time out of your busy schedule to go to an office location. Nor do you have to worry about the logistics of what it would take to make that appointment.
You don’t even have to be in the same city as where your financial professional resides. Virtual advisors use communication methods such as videoconferencing, email, the internet, and (for some) even texting to stay in contact with their clients.
If you aren’t working with a virtual financial professional yet, here’s a look at how it can be beneficial in the short and long run. Read More
Many portfolio strategies today call for strategic mixes of equities and bonds. Lots of research is on the so-called 60/40 portfolio, made up of 60% equity assets and 40% bond assets.
The problem is that bonds are particularly vulnerable to interest rate risk, which is the danger of an asset losing value when interest rates rise. And with interest rates sitting at basically zero percent for the foreseeable future, the only direction they can go is up.
This isn’t to say that bonds don’t have a place in a retirement income strategy. But there is also the flip-side to consider.
Do you really have all options on the table if your advisor leaves annuities out of the conversation? Unlike bonds of any sort, annuities are unique in that life insurers include estimates of people’s expected mortality into their payouts. Read More
After we enjoyed the sweet ride of an 11-year bull market, market volatility is back in style now. Where things will go from here is anyone’s guess. But even more importantly, what about you and your personal outlook?
You can, and there are steps you can take right away. If they make sense, some tools and strategies that you might consider could add more stability, predictability, and certainty to your portfolio.
Here are six ideas that you can put to work right now. Read More
If you really think about it, there is risk in almost everything we do. As journalist and economist Allison Schrager has noted, people often manage risk in their lives and careers in surprising ways.
The description of a book that she wrote on risk management says it well: “Whether we realize it or not, we all take risks large and small every day. Even the most cautious among us cannot opt out–the question is always which risks to take, not whether to take them at all.”
Now, for retirees, one of the major risks to financial security is sequence risk. What is that?
It’s the probability of having losses early in retirement or just before you retire. Financial pundits fondly call this period the “retirement red zone.”
Even a 15% loss can throw a retirement plan off track, especially if you are already taking money from your accounts for income. Then it simply compounds the losses.
It’s a challenging time for retirees, who now are taking a triple-hit. Never-before-seen market swings are reducing the value of their portfolios. The novel coronavirus pandemic is shutting down many workplaces, which means that workers don’t have regular income to save.
Many retirees who are still working were likewise affected. And low interest rates continue to be unfriendly to retirees with fixed-interest holdings.
Meanwhile, Michael Finke, professor of wealth management at The American College of Financial Services, points out another area to keep an eye on: how the pandemic is affecting the probability of success of our retirement plans. Read More
The novel coronavirus pandemic has impacted all of us in some way. Almost overnight, the U.S. was hit hard with record unemployment.
Many household incomes have been abruptly shut off. Several industries have slowed down to a crawl or else been shut off.
Millions of former workers have been forced to dip into their savings accounts in order to pay their monthly bills. Some have even been forced to take distributions from their retirement savings in order to make ends meet.
Of course, there is no question that better days will be ahead at some point. The U.S. economy is strong, and we will emerge all the stronger for it.
Even so, those without the benefit of continuing income from full-time employment or those with a shorter window before retirement may want to take a step back. It’s prudent to take stock of the situation, seeing what they can do to protect themselves. And that can helpful especially if something like this ever happens again.
How can this black-swan event affect seniors and baby boomers nearing retirement? In an April column of the Retirement Income Journal, a former International Monetary Fund official lays out some of the medium-term and long-term possibilities. Read More
Unlike other types of vehicles, annuities are the only financial instrument capable of paying a guaranteed lifetime income. They are the only one on the planet. No individual investor can duplicate what insurance companies can offer you with paying you a guaranteed income stream.
Nor can any other asset class do what annuities do. They have contractual guarantees backing them.
Dollar-for-dollar capital reserve requirements, as well as mortality estimates built into every single payout by the insurance company, makes these income promises quite dependable. In this sense, annuities have a monopoly on lifetime income.
You can choose to receive guaranteed income for a certain timespan. Say you need guaranteed income for just 10 years. Then your guaranteed income can be structured to last for that long. Or you can receive guaranteed income for the rest of your life, regardless of how the markets perform. Read More
For the past few decades, people have been living longer than what Social Security was designed to pay out for. Millions of new retirees are joining the ranks of Social Security benefits recipients, now and in the coming decades.
In time, the outflowing payments to Social Security beneficiaries will start exceeding what Social Security has in reserves. The Social Security Administration will then have a decision to make.
It will have to rely more on the inflows from payroll taxes (and possibly other funding measures) in order to keep up its promised benefits payments to future generations of retirees.
Before the pandemic crisis, Social Security was looking at its reserves being depleted by roughly 2035. But now, over 20 million people have lost their jobs as a result of the spread of the coronavirus.
That is 10% of the U.S. workforce. Payroll taxes that would be pouring into the U.S. Treasury from everyone’s paychecks have lessened considerably. As a result, Social Security has been dipping further into its reserve funds in order to keep up its promises to retirees and other benefits recipients. Read More
With markets in turmoil right now, many retirement savers are looking for ways to protect their money now so they can retire later. And not for just any retirement. They want a comfortable retirement that they can enjoy on their own terms and where they stay retired.
What can you do now to preserve the money you have accumulated and grown for so many years? The answer will be different for every person. It depends largely on their situation, risk tolerance, need for liquidity, and goals.
Many people buy annuities for protection. But what kinds of protection can they provide? The answer depends in large part on the kind of annuity you own.
At the very least, all annuities can protect you against the financial risk of running out of money in retirement. Annuities counter this hazard by paying you a guaranteed income. Your income can last for a certain timespan or for life. This protection is available with fixed-type and variable annuities alike.
However, fixed annuities also protect the contract owner against downfalls tied to market risk, long-term care costs, and financial risks that can derail your legacy wishes. Here’s a rundown of what an annuity can protect you against in your retirement-saving and post-retirement years. Read More
Start a Conversation About Your Retirement What-Ifs
Start a Conversation About Your Retirement What-Ifs
Already working with someone or thinking about getting help? Ask us about what is on your mind. Learn More
What Independent Guidance Does for You
What Independent Guidance
Does for You
See how the crucial differences between independent and captive financial professionals add up. Learn More
Stories from Others Just Like You
Stories from Others
Just Like You
Hear from others who had financial challenges, were looking for answers, and how we helped them find solutions. Learn More
Sign Up for Our Newsletter
Get a monthly email on the latest news, tips, and practical strategies involving your retirement and money.
Among many other topics, learn how you can make your money last for as long as you need it, can protect your wealth against current and evolving risks, can maximize your income, and can stay retired comfortably.
