Will Recent Market Fluctuations Affect your Retirement Funds?



Recently, dramatic dips in the stock market have caused many people to worry about their economic future, particularly as it deals with their retirement funds. Are significant drops in the Dow Jones enough to spoil your retirement dreams? Many economists don’t think so, and here is some practical advice they would like you to consider.


Opportunities Related to Stock Market Correction

A stock market correction occurs whenever stocks drop more than ten percent from their peak sales price. Corrections occur quite frequently, but rarely turn into a “bear market”, which happens when stock prices drop more than 20 percent.

According to economic author and Forbes contributor John Wasik, a stock market correction provides the perfect opportunity to save for retirement. You can purchase a greater number of shares without investing a great deal of money, and are better able to fine-tune your plan and diversify your portfolio.

Times when you have little money to put back is also when you can focus most on low-cost funds that have very little costs associated with them. For many, this is an easy way to begin investing toward retirement.


Revamping your Retirement Plan

A stock market correction often serves as a reminder that markets are volatile. Accordingly, many people elect to revamp their retirement plans anytime there is a drastic fluctuation in stocks. Look at your portfolio to determine how much you have invested in stocks, bonds, and other interests.

If your portfolio is very stock heavy and you are close to retirement age, now may be the time to diversify. On the other hand, if you have more than 20 years to go, you have more than enough time to make up any losses you have incurred, and may therefore wish to leave things alone.

Even if you are nearing retirement, a sudden drop in stock prices doesn’t have to spell disaster. Money magazine recommends ramping up your savings, particularly if you are already stashing away less cash than you should be. An added benefit is the fact that you won’t have to worry about unnecessary fees and commissions eating up your earnings.


An Opportunity to Rebalance

U.S. News and World Report advises rebalancing or adjusting your holdings at least semi-annually. You may also need to rebalance whenever certain assets fluctuate by more than five percent. This is something that often occurs following a stock market correction such as the one we saw recently.

Rebalancing keeps your portfolio in line with your desired goals as well as your risk threshold. It also makes you more aware of buying opportunities due to lower market prices. If you are not rebalancing your portfolio on a regular basis, you may be subjecting yourself to unnecessary risk, and may also notice stagnant or little growth over time.

Recent downturns in the stock market are not necessarily cause for alarm, but that doesn’t necessarily mean you should ignore them. Take advantage of the opportunity to reevaluate your retirement plan and invest more and you will be better off for it in the long run.

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Retirement Mistakes you should Really Avoid


Retirement is something you will likely plan for your entire life. Naturally this means you will want to get everything just right, which is why you should avoid making these common mistakes.


#1. Not knowing when to file for Social Security benefits

For most retirees, Social Security benefits will make up the lion’s share of their income. As such, you will want to make sure you are getting the maximum benefits possible. Filing after your Full Retirement Age (FRA) rather than at the earliest age possible will increase your monthly paycheck, but there are other factors such as disability and spousal benefits that will play a role as well.


#2. Failing to strategize IRA or 401(k) withdrawals

Many people work hard and save thousands of dollars, only to see it quickly disappear in the way of tax penalties once they withdraw their funds. To avoid taking a hit, you must develop a withdrawal strategy that will minimize your tax penalty by taking your Required Minimum Distributions (RMDs) into account. Your withdrawal strategy should also account for life changes such as rising health care costs or a reduction in income once you finally stop working.


#3. Not knowing how to continue building income following retirement

Few people will have enough cash or liquid assets to sustain them through retirement. This means that most folks will need to continue generating income during their golden years. For some, this may mean working part time, while others will rely on short-term investments such as stocks, bonds, and CDs. You won’t need to make as much as you did while you were still working, but the amount you generate should at least be enough to pay for gas, groceries, and a few other incidental expenses.


#4. Not having a workable budget for their post-retirement years

Many individuals notice a spike in spending during the first few years of retirement. After all, it’s easy to get carried away with the excitement of being able to do things you had always wanted to do but couldn’t. If you’re not careful, you might just find that your retirement savings are gone during the first five years. Make a budget and stick with it in order to eliminate the temptation to overspend early on.


#5. Having higher living expenses even after downsizing

Downsizing is supposed to help you reduce monthly expenses. However, many retirees wind up paying more in utilities, property taxes, transportation, and food because they do not consider the cost of living in their new location. Consider all these factors, particularly if you are moving from one state to another. That way, you can avoid the costs associated with moving back because your new area is far too expensive.

When it comes to retirement, there is no “one size fits all” approach. Even so, nearly everyone can benefit from avoiding the common retirement mistakes listed above. Review your retirement plan today to ensure you have all the bases covered-you’ll be glad you did so once you finally stop working.

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Is Boston’s Hometown Hero (The Gronk) Planning a Hollywood Run after Football Retirement?


Ron Gronkowski, tight end for the New England Patriots, has had a pretty impressive football career thus far. Since playing for the University of Arizona, he has set a single-season records for touchdowns and receiving yards for a tight end, and was the first tight end to head the NFL in receiving touchdowns. He has also played in two Super Bowl championships. Rumor has it that now Gronkowski may give up football in favor of an acting career. Although no definite decision has been made, here is what we know so far.


Urged by Action Superstars

A Massachusetts newspaper The Eagle Tribune first broke this story shortly after this year’s Super Bowl.  Reporter Bill Burt claimed that Hollywood superstars Sylvester Stallone and Dwayne “The Rock” Johnson had both told Gronkowski he had great potential as an action film star.

When asked about this, Gronkowski did not deny he had spoken with the actors, claiming that “I’m definitely going to look at my future for sure.” He stated he was not ready to make a commitment yet, but was planning to “sit down, reflect on the season, (and) talk to my teammates.” Meanwhile, Gronkowski refused to commit to another season with the New England Patriots, leaving many to speculate that he was indeed pondering an acting career.


Football Injuries Taking a Toll

One reason the 28-year-old tight end may be considering early retirement is injuries. Injuries have spanned much of Gronkowski’s football career, beginning during the 2013 season. That year, he was forced to sit out much of the season due to multiple forearm injuries.

During the 2016 season, Gronkowski played only eight games. Multiple injuries were to blame, ranging from a pulmonary contusion to a hamstring injury. He also suffered a herniated disk that eventually led to him having back surgery.

The current season has been no better. In January, he received a concussion, which knocked him out of the AFC championship game. Earlier in the season, he was forced to sit out one game due to a thigh contusion. Aside from his injuries, Gronkowski was also benched one game this season due to a suspension.


NFL Contract Details

Gronkowski is expected to earn between $8 and $9 million during the 2018 football season. However, many believe he could easily make that much or more if his films were successful. The tight end’s contract has an opt-out clause, so he is essentially free to pursue either career at this point.


No Stranger to Acting

Acting would not necessarily be an entirely new career for The Gronk. According to IMDB, Gronkowski already has 12 acting credits to his name. Most famously, he has appeared on the Fox television series Family Guy, as well as in the movie Entourage playing himself.

Will Rob Gronkowski appear on the big screen or on the football field next season? That is a question that no one (not even Gronkowski himself) is quite sure about at the moment. Regardless of his decision, fans are likely to be delighted either way.

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Is an IRA Good for Retirement?



Individual Retirement Accounts (IRAs) have been around since the 1970s, and are one of the most widely used methods of saving for retirement. They are also one of the most effective, providing you utilize the following information to help you maximize their benefits.


What are IRAs?

Put simple, IRAs are a mechanism used to save toward retirement. More than just a savings account, they can include such things as mutual funds, bonds, or stocks, and are sometimes referred to as “Individual Retirement Arrangements.” There are many types of IRAs, including:

  • Traditional-One of the most common types of IRA, a traditional account allows you to deduct contributions on your tax return, provided your Adjusted Gross Income (AGI) is less than $73,000.
  • Roth-A plan that is similar to a traditional IRA, but does not allow for annual deductions. Instead, your distributions will be tax free at retirement. In addition, there are no capital gains fees associated with a Roth IRA.
  • Simplified Employee Pension (SEP)-Designed for self-employed individuals, a SEP plan makes it possible for small business owners to offer employee plans. With a SEP plan, business owners make contributions on behalf of their workers, who are taxed when they withdraw the money at retirement.
  • Savings Incentive Match Plan for Employees (SIMPLE)-This type is similar to a SEP plan, but employees are allowed to make contributions to their own accounts.


IRA Benefits

Having one or more IRA accounts can help you better plan for retirement by:

  • Reducing your tax burden (either now or after you retire).
  • Allowing you to withdraw funds beginning at age 59 ½, in which case you could delay retirement and draw more Social Security benefits.
  • Can be used for estate planning.
  • Providing up to $10,000 to use as a down payment on your first home.


IRA Basics

When it comes to IRAs, you are not limited to only one type of account. In other words, you may have as many Individual Retirement Accounts as you choose, so long as your maximum contribution among all of them does not exceed $5,500 annually. If you are age 50 or older, you are authorized an additional “catch up” contribution of $1,000 per year.

The maximum contribution raises from time to time based on inflation. Retirement planners generally recommend upping your contribution whenever the maximum limit has increased. Keep in mind that with a traditional IRA, you will be subject to Required Minimum Distributions (RMDs) at age 70 ½, and can no longer contribute.

Although each type of IRA is slightly different, they all provide great flexibility, making them suitable for a variety of needs. For example, you may move money between accounts (something that is easier to do when you have multiple accounts with the same broker) or invest in more than one type of stock or mutual fund.


IRAS-A Flexible and Beneficial Retirement Tool

Individual Retirement Accounts provide many benefits when it comes to retirement. If you have not yet opened an account, it’s time to take advantage of this valuable tool and help secure your future.

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Different Stages of Retirement



Through the years, you have no doubt went through a number of “stages” in your career. Even so, you may be unprepared for the different phases involved in retirement. Being aware of them will help you better plan for retirement and avoid coming up short. Here’s what you need to know about the various stages and what you can expect to spend during each.


Stage One: Early Retirement Years (Honeymoon Phase)

The early retirement stage is generally when people are the most active. Excitement over reaching this milestone spurs many to experience things they had always dreamed of doing, but didn’t have time for while they were working. Since younger retirees are also in better health, there is a tendency to become very active during this time.

During the first ten years of retirement, your active lifestyle could result in a spending increase, particularly if you do a great deal of traveling. It’s imperative to manage funds carefully if you are to have enough money left over for the more expensive stages that follow. Plan on a modest cost of living increase of no more than two percent each year.


Stage 2: Beginning to Slow Down

The second stage of retirement hits around ten years or so after retirement. At that time, individuals have often grown weary of traveling or leisure activities. The aging process may also begin taking its toll, causing people to slow down considerably. Seniors in this stage may still be active, but travel or participate in strenuous recreation less often.

Growing health concerns may become apparent during this stage, forcing retirees to spend more money on medical care than before. Even after giving up travel and recreation, a number of seniors will notice a cost of living increase ranging from around three to five percent annually.


Final Stage: Nearing Life’s End

The final stage of retirement occurs when people are near the end of their lifespan. It’s difficult to determine at what age this final stage will arrive; however, it is usually noted as a time when individuals slow down considerably and become increasingly frail. During this stage, seniors may show little interest in things they once enjoyed, and may even avoid going out of their home as often.

During this last stage, many retirees will begin downsizing and will see their monthly expenses decrease as a result. However, rising health care costs (including the price of home health care or an assisted living facility) can make the cost of living especially high. Individuals will need a cost of living increase of around five percent annually in order to remain financially comfortable.

Of course, the above information is only a guide. After all, no one can really be sure how long he or she will live or what type of circumstances will arise following retirement. Begin planning now to ensure you are well prepared for whatever situation you are face with once you stop working. It’s never too early or too late to consider retirement planning.

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