Retirement Planning Education

Editor’s Note: This is Part 1 of a series on the worst financial crisies in U.S. economic history. Stay tuned for Part 2 coming up in a short time!

When the economy is tooling along and we find ourselves facing only an occasional hiccup in our money matters that falls short of expectations, it’s easy to feel complacent about the future. Surely life tomorrow will be a lot like it was today.

Except, as anyone who owned a home, a retirement account, or an investment account in 2008 knows all too painfully, our situations can change in a ‘heartbeat.’ And, in turn, they can affect our future outlooks.

To make sure we are all diligent about protecting our financial futures so that we can achieve the retirement we envision, here are 10 valuable reminders.

These historical lessons reinforce the importance of having a financial plan – so you can trudge on ahead or reset your course as needed. They aren’t necessarily typical of what might happen in our lifetimes, but they do show the value in being financially prepared.

As you think about the future, consider working with an experienced financial professional, who acts in your best interest, and who can help you make any such determinations. That includes the whens and ifs of any changes that might be right for you. And keep an eye out for part 2 of our series, coming next week. Read More

Woulda. Coulda. Shoulda.

That is how a surprising number of retirees feel about their tax planning. In a recent study by Nationwide Retirement Institute, staggering proportions of retired Americans wished they had done more to prepare for their sometimes-surprising tax bills.

Over the course of the “Retirement Income and Tax Planning Consumer Survey,” researchers asked people in different life stages about their preparedness for paying taxes in retirement.

The survey was revealing. An estimated 60% of future retirees, 70% of recent retirees, and 75% of those retired for more than 10 years said they are only “somewhat knowledgeable” or “not at all knowledgeable” about tax planning in retirement.

That’s right. Three of every four people retired for at least a decade still admit to feeling less than certain about planning for taxes in retirement. Read More

You may not realize it, but Uncle Sam becomes your partner in your retirement.

Back in 2010, Lincoln Financial Group sponsored a survey of affluent retirees that shows how big of an effect taxes may have. The survey gathered data from people ages 62 through 75 with annual household incomes greater than $100,000.

Of all retirement spending areas, the study found that federal income taxes were the retirees’ largest expense. “They are greater than many individuals planned for prior to retirement—and a growing source of concern,” the survey reported.

If you don’t want everyone’s least favorite uncle to be the “majority owner” of your retirement income, it’s important to take steps to maximize the tax efficiency of your retirement income plan. Read More

If you think choosing when to start claiming Social Security benefits can be confusing, you’re right. But did you know there is even more to consider when deciding when to start collecting those benefits?

If you are approaching or planning for retirement, you need a Medicare enrollment strategy that synchronizes with your Social Security claiming strategy in order to:

• Reduce your risk of losing benefits,
• Prevent you from incurring penalties, and
• Maximize your benefits from both programs for the rest of your life.

Medicare and Social Security are programs that “talk to each other.” Missed deadlines or poorly-timed benefit claims could mean as much as thousands of dollars of lost income. 

What we don’t know can hurt us. So, here’s a quick look at why you must verify deadlines and information for each program so everything is done right. Read More

Chances are you know the concept of asset allocation. As Forbes contributor Mitch Tuchman puts it, asset allocation is the “collection of investments you own,” depending on your risk tolerance and your desire for potential investment returns.

In the investing world, it is a strategy of apportioning assets to achieve a strategic balance of potential risks and returns that is right for an individual investor.

What Does That Have to Do with Retirement Planning?

That’s all good and fun, you may say. But what does that have to do with retirement planning?

Well, from a planning standpoint, plenty. It is the same question of deciding how to allocate a retirement portfolio.

But in this case, decisions revolve around striking a balance between managing potential risks and achieving desired retirement outcomes, like income certainty, wealth protection, or other goals. In financial lexicon, this strategy is known as “diversification.”

When it comes to retirement planning, diversification is arguably an essential part of a successful retirement strategy. But why? Read More

Women are taking a greater role in household money matters, according to a new report by Allianz Life. But despite this, many women face the prospect of an underfunded retirement.

In the study, 51% of women said they are the “chief financial officer” of their household. When it came to managing finances, 53% said they hold “a great deal of responsibility” or “all of it.”

Nevertheless, signs indicate that women face unique challenges on the retirement planning front. Rising life expectancy, lower lifetime earnings, and reduced savings all contribute to a significant retirement income gender gap, reports Prudential Research.

Sure, these challenges may seem considerable. But the good news is you can do many things to strengthen your retirement security and financial confidence.

Confident decisions start with being well-informed. So, as you plan for your retirement, it’s important to understand the challenges facing you and other women today. Here’s a quick look at some common issues that will likely come your way. Read More

Virtually everyone understands that money doesn’t grow on trees. But what about planning for retirement? If recent research gives any indication, many Americans may be coming up short. In the 2017 Retirement Income Literacy Quiz – courtesy of The American College for Financial Services and the New York Life Center for Retirement Income – most quiz-takers received barely-failing or below-failing grades.

To measure retirement literacy, the test comes with two options: a six-item questionnaire on key retirement planning areas, and a more comprehensive test with 38 questions. With retirement literacy and retirement planning success being closely linked, you may want to check out the six-question quiz yourself to gauge your own retirement readiness.

So, what exactly did these questions ask? And how did Americans fare in their retirement knowledge? Let’s delve into the data now. Read More

Like everything else we do, saving for retirement involves risk analysis. We might not think about getting in the car to go to the grocery store, or even booking our dream vacation to hike the Inca Trail in Peru, as particularly risky decisions. But there are still elements of risk involved in every choice we make.

Your risk tolerance will help to you maximize and protect your retirement savings when you make sound choices. As you save and near retirement, your risk tolerance should change, adapting to your financial and income needs. In order to manage your retirement planning effectively, you need to understand your risk tolerance, grasp your financial needs in retirement, and make effective decisions about your savings and asset allocation.

Overall, you should be ready for a “smooth” financial transition into retirement – when you stop earning a full-time salary or business income, and start drawing on the savings you accumulated over many years. Working with a financial professional will help you meet your retirement income and financial goals, like the independent financial professionals at SafeMoney.com.

Let’s go into more detail about risk tolerance and why it’s so important. Read More

You’ve heard it before: the best laid plans of mice and men often go astray. Through all stages of our personal and financial lives, we know there will inevitably be twists and turns. The market goes up, the market goes down. But there are safer routes than others for our money. While there’s no foolproof Waze app for retirement savings and investment, there are directions we can take—and avoid!

First, Let’s Look at Your Withdrawal Rate.

Two key players in the viability of your financial plan for retirement are the size of your retirement nest egg and the pace at which you plan to spend it. This is your withdrawal rate. After putting in the time and consideration to determine the magic number for your retirement and your intended rate to spend it down, you may have reservations about your actual investment portfolio and whether it will perform as expected to sustain you over time.

Since no one can say how long you will live, our lens of The Rule of 100 helps add perspective to this all-important strategy of making sure your retirement income will last. Read More

The stock market has been surging to new highs. For the first time ever, the Dow Jones exceeded 20,000 in January. Then on the heels of President Trump’s first address to Congress, it charged ahead yet again. The Dow posted a 300-point jump, closing at over 21,000 on Wednesday, March 1. These gains come at a time when market volatility has also been on the decline. In early February the CBOE Volatility Index – more commonly known as the “investor fear index” – showed investor concerns on the decline.

However, even as the market goes up many people still worry about their investments. What will the market do next? Do they own too many stocks? When the market goes down, will it be just be a spill, a correction, or a crash? For that matter, do they have too much money in other risky, market-based investments?

For people close to retirement, this brings up an important question. Should you stay with your current portfolio allocation mix, or is it time to move into a safer strategy? Read More