Posted on November 7, 2011 by Erin
Imagine making $50 million in your career. Now imagine after you retire, you have to take up another 9-5 job because you have lost all of your earnings. Seems almost impossible, right? Think again. It was reported last week that NFL quarterback Mark Burnell did just that. This all happened apparently due to multiple bad investments that he had made over the years. He invested in 9 companies, six of which are already no longer in business. He put money into a high-end real estate company that bottomed out during the start of the housing crisis and he also lost every dime he put into the fast food chain, Whataburger. He’s also facing six different lawsuits and may have to pay almost $25 million towards them.
You do have to feel bad for the guy, but he does provide a good blueprint for how NOT to prepare for retirement.
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Posted on October 5, 2011 by Erin
Everyone knows that once you retire, life is a breeze. Your days and nights are filled with warm weather and lounging around your paradise. At least that’s what the movies show us. Most people are more realistic about their retirement, but what happens when you finally retire and it turns out it’s nothing like you had planned? A great article on the website Market Watch dealt with how to prepare for your REAL retirement.
We all know that the first step in planning for retirement should be your financial plan. You can’t begin to plan your work-free future if you don’t know where you stand financially. But you also need to be realistic about what is going to fill your time. What are your passions and hobbies? Can you see yourself filling the days with these or do you think you may want to take up a part time job? Many people need structure in their lives after having it for the past 40 years. By taking up a part time job or having set social time with friends and family, you can decrease the time spent wondering what to do. And it’s always good to create your “bucket list” and see how many items you can knock off. Retirement is a time for you so make sure you plan to have the most fulfilling retirement you can create for yourself!
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Posted on September 27, 2011 by Erin
So this is it – You have reached your 50’s and you’re currently making more money than you have before in your career. Maybe your kids have left the house and you’re starting to get closer and closer to retirement. This may be when you start spending the money you have worked so hard to earn a little more loosely than before. The temptation is definitely there. But not so fast! Did you know that households that can cut spending by $1,000 a year between the ages of 55 and 65 end up with $13,000 more at retirement? That’s a lot of money when you consider that people are living longer and having to fund a longer retirement than in the past.
Retirement planners have been challenging 50-something’s to cut back on the unnecessary spending and start saving now to help them further down the road. The basic rule is: save more, work longer and live more efficiently. Prominent retirement planning scholar Alice P. Munnell was quoted as saying, “Most who downsize adapt and flourish. Financial planners could help move boomers to action by clarifying their constraints.” In this current economic environment where people are losing value on their homes, are being laid off from their jobs and are losing money from their investments, it only makes sense to save any extra money while you still can to help you in the future.
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Posted on September 22, 2011 by Erin
Do you think Social Security will be around for your children or grandchildren? Senator Tom Carper of Delaware was quoted as saying, “My sons are 21 and 22; neither of them thinks Social Security is around for them. I want to make sure that it is.” But how? Obviously if we knew how to answer this question, it wouldn’t be such a debate! But the U.S. government has come up with one proposal that is gaining steam – increasing the retirement age.
The current retirement age of 66 was originally set because of the way Americans worked in the early 20th century. Many of the jobs were factory and other blue collar jobs that were rough on the body. As time continued and these jobs moved out of the country, Americans made the switch to less physically demanding and more mentally challenging jobs. Because of the switch, more Americans began living longer lives and had the ability to continue with their jobs for a more years than the physically demanding jobs. The most popular plan among lawmakers is increasing the retirement age slowly over time. By year 2050 the proposed retirement age would be 68 and would increase to 69 by year 2075. If this becomes reality, the change would affect those born after 1982. Do you think that an increase to the retirement age is the answer to helping our economy and Social Security?
You can read more about this topic, here.
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Posted on September 21, 2011 by Erin
Sometime it’s the barber, sometimes it’s the nail technician, but it seems that now more than ever, the financial advisor is the public’s new psychologist! In a recent study conducted by Fidelity Investments, it was found that more and more financial advisors are finding themselves having to counsel married couples who are having arguments over retirement planning. One major issue that couples argue over the most is how to budget correctly. Many times one spouse’s opinion differs from their spouse’s when it comes to how much money they need to save. The study also found that men tend to make fast decisions with their money while their wives like to take time to research the options. These types of differences can cause a serious need for heart to heart with someone.
Planning for retirement can be a stressful and intense moment in many people’s lives. When the planning involves two people instead of one, tension can quickly arise. It only makes sense for financial advisors to find themselves resolving conflicts and possibly saving a relationship!
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Posted on September 16, 2011 by Erin
We’ve talked a lot about taking advantage of a 401k plan recently, but how do you know if the plan you have is a good plan? On a simple level, all 401k’s are good in principle because money is automatically taken out of your paycheck towards your future. It’s not overly simple to access the money and a lot of the times, you can pretend that money never really existed in the first place. But there are things that can make a 401 better than the next. For example, don’t get caught up into plan where information is hard to come by. Transparency is what you need and it needs to be easy to find. Many plans come with an internet site with a username and password that allows you to login at anytime and see your account’s activity. Diversification is another must have when looking at 401k’s. The old saying, “Don’t put all your eggs in one basket,” may have been referring to your investments! Also, make sure you are aware of all the fees associated with your 401k plan. Another saying, “there’s no such thing as a free lunch” can ring true here also. Plan fees, investment fees and service fees are generally the most common, but your employer will hopefully have done some good research and will have found you the best deal. You can read more about the best 401k features here.
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Posted on September 15, 2011 by Erin
A few years ago, having large gaps in your employment history may have been frowned upon. These days, it’s not unusual for many people to have large gaps of time in between jobs. Though most people are concerned about the appearance of gaps, the most serious implication long term unemployment can have is the daunting task of having to play catch up to your retirement savings.
Young savers in their 20s and 30s who have a gap in their retirement savings take a hit on their final retirement account because they miss out on the compounded returns. Luckily for them, there is time to make up for lost money. Adding a higher percentage to monthly 401K contributions or contributing any on hand money into a separate retirement plan like a Traditional or Roth IRA can help.
As people get older, the gaps in time become less damaging to their final retirement savings, but the contributions that are made need to be larger in amount and in a smaller amount of time. The key to all of this is to plan ahead for the unexpected. Create a rainy day fund that is specifically for emergencies. Avoid pulling money out of any account that is meant for retirement. You never know what tomorrow will bring, so plan today to help yourself out in the future.
Read more about what you can do to catch in retirement savings.
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Posted on September 14, 2011 by Erin
In a study that was released by AARP, it was found that the majority of boomer women focus on their personal finances more than their health when they plan for the future. Women tend to center their lives around their work and their loved ones more than themselves so this study may not come as a surprise. However, it was found that the majority of the older women in the study had put a financial plan in place and discussed it over with loved ones. Younger boomer women age 55 and under however, were more likely to report that they had yet to start conversations regarding their financial future because they felt they had plenty of time to begin.
Of course, it is never too early to begin planning and discussing financial plans. Women on average live five years longer than men, and by 75, two-thirds of women are single. Maintaining a balance between staying healthy and planning for a secure financial future is crucial. You can’t have one without the other!
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Posted on September 8, 2011 by Erin
One of the most confusing to understand yet potentially one of the best ways to invest your money is in an Annuity. An annuity is like a pension that you buy for yourself. You purchase monthly income for a specific period of time for as long as you live. This sounds great, but not all annuities are created the same. Attempting to figure out which annuity is right for you can be a daunting and confusing task. Not all annuity products are the right thing for certain retirees and attempting to chose between fixed and variable annuity or even where to purchase an annuity can be downright frustrating.
One of the blogs we like to keep up with over here at NewRetirement is Tom’s Blog. He is the founder of Annuity Digest and writes a blog that deals with questions on annuities as well as other financial topics. When thinking about purchasing an annuity, you can never have too much information!
Check out our Pro’s and Con’s of Annuities list.
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Posted on August 16, 2011 by Erin
Do you feel like everyone is retiring later these days? If you do, you’re right. Recently, the Center for Retirement Research at Boston College, released a brief that found that since the mid-1990s the average retirement age has increased by two years for both men and women.
Why is this happening? Several factors come in to play such as unstable financial markets, changes in pensions and Social Security, declining retirement health insurance and the fact that people live longer lives now. If you live to be 90 and you retire when you’re 60, you will have to prepare to finance 30 years of retirement. That’s almost as long as you spent in the workforce!
When do you plan on retiring? Is it early? Is it later than you had hoped? Is it ever?
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Forty-two percent of people over the age of 65 will require long term care. Protect yourself with Long Term Care insurance
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