Retirement Planning

Balancing risk in your portfolio is a fundamental at all ages, but it’s particularly important the closer that you are to retirement. As the old saying goes, even the best-laid plans can go to waste.

Market risk and its unpredictable timing aren’t the same for everyone. Should your investment holdings take a hit in your late-career years, it could very much throw your retirement plans off-kilter.

Up until this point, you may have adopted an investment strategy that had growth and wealth accumulation as your top goals. But these priorities tend to change as you get closer to retirement. Read More

There are only two sure things in this life, and they are death and taxes. Taxes affect us at every turn financially, and investments are no exception.

The taxation of your assets can have a substantial impact on how much money you end up with. As any financial advisor will tell you, it’s not what you make that matters, it’s what you get to keep.

Increase Your Nest Egg with Tax Deferral

With that in mind, there are ways to increase the stockpile of savings that you have for your post-career lifestyle. ‘Tax-me-later’ vehicles can increase the amount of money that you have in retirement. In financial circles, this sort of vehicle is known as a tax-deferred asset.

In other words, it’s an asset where you don’t pay taxes on your money until you start making withdrawals from there. When you do withdraw money from this asset, you will pay income taxes on the withdrawn amount. Read More

Retirement is a major event after many years of work. It marks the time when you end your career and begin the next chapter of your life.

But sometimes retirees discover that they haven’t prepared as much as they could have for this transition. Just on the financial side, there are many pieces to set in place.

Those focal points range from ensuring you have enough retirement income to knowing what your post-career goals are and being ready for unexpected financial challenges.

You have worked hard to reach this point. Now it’s your turn to make the most of this point and enjoy the things that you may have delayed or put off during your working years.

Here are 11 steps that you can take to help ensure that you are ready for the big day when it finally comes. You can use these steps as a starting guideline for putting your retirement planning in order and being ready to enjoy your post-career lifestyle. Read More

When you think of the word “risk,” you may get a mental picture of such activities as skydiving, race car driving, rodeos, or other similar activities that have uncertain outcomes. For investments, the word “risk” may make you think of losing your life savings on a high-risk venture such as an oil and gas drilling partnership.

But the reality is that there are many different types of investment risk. All investments carry their own types of risk. It’s important to note that no investment exists without any type of risk. Read More

Everyone faces challenges to some extent when moving into retirement. Even those with the best-laid plans can still have some financial hiccups. And with everything that has happened in recent years, millions of Americans are wondering what it all might mean for their financial futures.

Take, for example, a 2020 workplace wellness survey put out by the Employee Benefit Research Institute. In the study, 1,028 workers of ages 21-64 said that they worried about their finances and retirement savings.

Two-thirds of employees felt stressed when they thought about their financial future. Almost half were concerned with their household financial well-being, with saving for retirement and having funds for an emergency being the top stressors. Read More

Financial planning for retirement, or “post-retirement planning,” doesn’t end once you retire. Even if you have accumulated enough money for a secure retirement, your plan will require ongoing checkups to confirm that everything is going smoothly.

You will have to continue to make changes and adjust your plan as time goes on. Retirement can last as long as one-third of someone’s lifetime, as medicine, wellness, and technology have seen tremendous progress in recent decades.

In other words, having an ongoing plan for this phase of life is quite crucial. You may also experience more changes in retirement than you have previously, as your abilities and health evolve over time.

Your retirement planning strategies will need to be reviewed and updated on an ongoing basis. Conducting annual reviews of your financial plan, at a minimum, and making changes as necessary is a solid course of action. 

Here are some ‘moving targets’ that are likely to change in your retirement years. Read More

If you talk to people who have been retired for at least 15 years or more, they will often talk about the major ‘stealth’ expenses that can arise after you stop working, such as a medical condition or major home repair.

Statistics show that one in five retirees and one in four retired widows will get hit with at least four major financial shocks after they stop working. These numbers could be fairly eye-opening for most pre-retirees. Or, at least, they can make them take a second look at their retirement plans.

The numbers also reflect that 28% of retirees and 13% of widows haven’t experienced any financial shocks yet. But they are the exception and not the rule. It’s prudent to think about any and all ‘surprises’ that can happen during your retirement years.

Not only does proactive planning give you a longer window for anticipating “stealth expenses” and setting reserves in place for them. It can also help you reduce the impact of these risks when you have to deal with them.

For example, you might take a tax hit from having to make a sudden withdrawal from your portfolio to cover an unanticipated health scare.

Here’s a look at some surprise expenses in retirement that may come your way — and how you can prepare for them. Read More

Turn on the TV or radio, and chances are you might hear of volatility hitting equity markets at some time or another. But what you might not hear as much about is the risk facing CDs, bonds, Treasury securities, and other fixed-interest holdings: interest rate risk.

What is interest rate risk? It’s a particularly important topic for retirees. After all, many retirement portfolio strategies use fixed-interest holdings to generate stable retirement income or to smooth out volatility in a portfolio.

These fixed-income assets also tend to be the place where millions of Americans protect their money. Or they may park cash there for short-term to medium-term goals. So, long story short, interest rate risk can have implications for millions of people

So, how should we define interest rate risk — and how might affect you? Let’s get into it. Read More

With record numbers of baby boomers retiring, many new trends are coming into the retirement landscape. Among boomers, there is one growing trend of “solo agers,” or those who retired without marrying anyone or having any children. According to the American Society on Aging, around 20% of boomers fit this trend.

If you are a solo ager, here are some questions to ask when planning for your retirement. How you answer these questions can be crucial in helping you enjoy a comfortable and financially confident retired lifestyle. 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