Five Questions to Ask Your Financial Advisor When Planning Your Retirement

Are you getting ready to talk to your financial advisor about retirement? If so, there are probably loads of questions running around in your head. Retirement planning is complicated. That’s why financial advisors are needed. Their important job is educating you and creating a retirement plan you can count on. Your important job is to to know and understand everything that plays into your retirement. You can do that by asking your financial advisor the following five questions:

Am I on the Right Track with My Retirement Savings?

Keeping track of your retirement savings is the most important part of retirement planning. If you don’t have enough money, you can’t retire. You should always ask your financial advisor if your retirement savings are on the right track. You should also ask where your savings are going and how much money you’re making off compound interests, stocks, and other investments they might be making for you.

Will Debt Get in the Way of my Retirement?

Debt can certainly get in the way of your retirement and it’s something you want to ask your financial advisor about. If you do have too much debt, you can search for ways to reduce it. The best thing to do is ask now rather than later, as later might be too late and you’ll have to push back retirement.

When Should I Take Social Security?

Knowing when to begin taking Social Security is a big part of a sound retirement plan. Ask your financial advisor when is the best time to take Social Security. Know that you can receive substantial financial benefits if you delay Social Security. In contrast, you’ll have to pay a penalty if you take Social Security too early.

How Much of my Current Income Can I Replace in Retirement?

You’ve probably spent years or even decades with a fixed income. Ask your financial advisor if this will change during retirement. A change in income is a big deal and you should be prepared for it. Your financial advisor should be able to give you an idea of how much will be coming in when you retire.

When Will I be Eligible for Medicare?

Health costs are a huge part of all financial plans. Unfortunately, they’re substantial in our country. Medicare was created to help you pay for health costs during your retirement. You should ask your financial advisor when you’re eligible for it. When you are, you should make arrangements to begin receiving it in place of your private insurance plan.
The above mentioned questions were created to help you get the most out of your appointment with your trusted financial advisor. They cover all aspects of your retirement: savings, debt, social security, income, and health. It’s important that you understand where your money is and what it’s doing. It’s also important to understand the timeline associated with your retirement plan. Ask these questions to your financial advisor and go into as much or as little depth as you want to ensure you’re properly prepared for retirement.

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Five Common Retirement Myths

Five Common Retirement Myths

One thing you never want to mess around with is your retirement. It’s important that you find a financial company that can provide you with a sound investment plan you can trust. Personal relationships are important, as you should only put your retirement money into the hands of someone who has your best interests at heart. Do your own research to find out what retirement will be like. Also, be aware of the five common retirement myths:

Planning Can Wait

Planning for retirement never can wait. Compound interest is what drives retirement accounts. The key concept with compound interest is that it accumulates over time. When you start investing money early, compound interest can be the strong backbone of your retirement account. You don’t have to put loads of money in, just enough to get going. Any a little bit counts with compound interest.

Work Will Always Be There

Unfortunately, the dream that you’ll be able to work for as long as you like isn’t a reality. Statistical evidence proves that people are having a hard time staying at their jobs past the age of 65. While this is a hard reality to accept, it’s one that you must if you want to be prepared for retirement.

Medicare is All You’ll Need

Medicare was created help pay for medical expenses during retirement and it does, but only to a certain extent. There are two important Medicare parts: Part A and Part B. Part A covers all inpatient services, and hospice and nursing facility costs. Part B covers outpatient services. What most people don’t realize is that Part B doesn’t always cover all types of care. A 20% co-payment is often required under the terms of Plan B. In today’s expensive medical world, a 20% co-payment can be a lot money, especially if you weren’t planning for it.

Taxes Will Be Lower

A common retirement myth is that you will pay less in taxes when you retire. While this can sometimes be true, it isn’t always necessarily the case. If you wind up making the same amount of income in retirement as you did when you were working, you’ll stay within the same tax bracket and pay the same amount of taxes. Also, after retirement you might not be eligible for certain tax breaks that lowered the amount you were taxed. Additionally, taxes are always at the risk of increasing. The bottom line is: your taxes in retirement might be lower, but it’s best not to count on it.

Social Security Will Be Enough

Social Security will contribute to your retirement, but it will never be enough to sustain it. Even the maximum Social Security amount will put you right at an amount that you could only possibly hope to squeak by on. It’s recommended that you invest and save with the idea that social security won’t be enough.

With the information provided in this article, you now have a better understanding of some of the myths associated with retirement. Use this knowledge to your advantage by being prepare. Remember, it’s never too early to start planning for retirement and any little bit you invest now will help you later.

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Will Brexit Hurt Your Retirement Funds?

brexit great britain eu exit

The recent Brexit vote has left many people across the world reeling for various reasons. While some are concerned about how it could affect their ability to move throughout Europe, many others are worried that this move could have an impact on their retirement funds – even though it has been suggested that the negotiations and actual process of Britain leaving the EU could take up to two years to process from start to finish.

A Potential Worse-case Scenario for Financial Markets

According to an article published on USAToday.com, the Brexit is already delivering a bearish blow to what are regarded as risk assets – such as stocks. These have already plunged in Asia and the trend looks set to continue elsewhere in the world for a while as well. Axel Merk, chief investment officer at Merk Investments said before the vote took place, “The market is looking for an excuse, or trigger, to sell and might well get one. The market believes a potential Brexit is a very serious thing for risk assets.”

Director of international portfolio management at RiverFront Investment Group, Chris Konstantinos, said before the vote took place that the impact on the market would be “negative everywhere, but acutely felt in the U.K.” where the largest proportion of economic uncertainty and damage would be experienced.

US Economy Could be Affected

An article published on CNN Politics mentioned that there is the potential for Brexit to harm the U.S. economy – especially if there is a significantly negative market reaction that is experienced as a result thereof. Chairwoman of the Federal Reserve, Janet Yellen said recently that the Brexit vote “could have consequences for economic and financial conditions in global financial markets. It if does so, it could have consequences in turn for the U.S. economic outlook.” She further mentioned that the risk associated with Brexit had a direct effect on the Fed’s recent decision to not increase interest rates.

How this Could Affect your Retirement

As with any other major world event that takes place, there is the potential for your retirement investment to be affected, particularly if you have mainly invested in the stock market or used other offshore savings and investment options. This is a prime example of why you should ensure that your retirement investment portfolio is as diversified as possible – in other words, do not keep all of your eggs in one basket so to speak. If possible, make use of a combination of investment strategies – and don’t discount the more ‘boring’ options such as regular savings accounts, government bonds or even CDs.

There is nothing wrong with being concerned about how events such as Brexit will affect your retirement nest egg. In fact, if you are worried, it shows that you are taking this time of your life seriously and you want to be as financially prepared as possible for it. If you would like to find out more about how you can diversify your retirement income or you would like to make your first investment, contact our advisors here at Dream Bridge today.

 

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What We Can All Learn From Baby Boomers on Safe Retirement

couple at a market

Anyone who was born between 1946 and 1964 is classified as being part of the baby boomer generation. Although the oldest members of this generation will be turning 69 this year, a shockingly high proportion of them have not planned nearly well enough for their retirement. Take a look at the information below to see what the next generation can learn with regards to safe retirement.

Don’t Rely on Social Security

Many baby boomers failed to implement any type of savings or investment plans for their retirement years because they firmly believed that they would be able to rely solely on Social Security payouts upon stopping work. However, what many of them don’t realize is that Social Security will only be replacing up to 40% of their pre-retirement income at the time that they stopped working.

This means that currently, the average retired person will only be able to collect a meager $1,341 a month in this manner – definitely not enough to live comfortably on. In addition, it is estimated that the Social Security Trust Fund will be depleted by 2029, which could result in retiree benefits from this program being cut by as much as 30% the following year.

Take Advantage of Workplace Savings Plans

On average, baby boomers usually expect to retire with as little as $127,000 in savings, which is nowhere near enough to live on – especially when you take into consideration that financial expert recommendations are that no more than 4% is withdrawn from any retirement fund per year. This would effectively translate into roughly $5,000 per year to actually live on.

Although a large number of workplaces offer a range of retirement savings plan options, up to 20% of baby boomers have not seen the need to contribute to plans such as 401(k) options. Not only is this putting their retirement at risk; it is in effect throwing away free money because many employers who offer these plans will put in a matching contribution up to a predetermined % of the employee contribution.

Take Lifestyle Changes into Consideration

Nowadays, many baby boomer retirees don’t want to just check into a retirement village and while away their final years. Many of them see this as a time to learn a new hobby or pursue an interest that they may not have had time to enjoy while working, such as traveling, taking up a sport or even becoming snow birds. While this is a good idea in theory, many boomers simply cannot afford to live this way because they did not make the right financial preparations ahead of time. If you would like to pursue a more active lifestyle, it is essential to start saving as early as possible so that you can make your retirement years as enjoyable as possible.

If you would like your retirement years to be as financially stress-free as possible, it is imperative that you speak with the right investment professionals. Contact us at Dream Bridge today to find out which investment options will be most suitable for you.

 

 

 

 

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