older person working

Why Individuals are Retiring Later than Ever Before

These days, reaching the age of 60 or 65 doesn’t automatically mean that an individual will retire from work. In fact, several people are now waiting longer than ever before or in more serious cases, have to continue working indefinitely in order to survive. Below are some reasons why employees are retiring at later ages than previous generations.

Waiting for Larger Social Security Payouts

Although it’s possible to officially retire at the age of 62, individuals who do this will receive smaller payments from Social Security than those who are willing to wait until reaching 65 – or even older. It’s a known fact that those who retire early can receive payments that are as much as 30% lower than those received by older individuals, and there may also be restrictions with regards to other forms of income as well.

Longer Life Expectancies 

Twenty to thirty years ago, a sense of urgency existed for individuals to retire when reaching the age of 65 or even sooner. However, this is not so common anymore because many people are living longer than they did previously – while also enjoying a better quality of health in general. This means that many employees can now easily stop working when reaching the age of 70 or more and still be able to enjoy a decade or two of leisure time.

They want to Remain Active

More individuals than ever are realizing that there are a number of benefits associated with remaining physically and mentally active. For example, several studies have revealed that regular mental stimulation can delay or even prevent the onset of dementia or Alzheimer’s. This means that anyone working in fields where cognitive thinking skills are needed will significantly reduce their risk of developing conditions such as these. 

Exercising the body regularly has many benefits as well, such as reducing the chances of developing conditions like arthritis, heart disease and obesity.

Retirement Accounts have been Lost

Delaying retirement is often an extreme necessity for some individuals. For instance, when markets crashed and the housing crisis occurred a few years ago, several people saw their life savings and/or retirement accounts dwindle away to virtually nothing. Although many of these employees have been working hard since then, chances are that they won’t have enough money to retire unless they are willing to work a few extra years.

Healthcare Benefits are Essential

Senior citizens who are still in good health are often dismayed to discover that their Medicare benefits will not be able to cover all of their health-related expenses. As such, those who require these benefits might have to work a few extra years so that they can make use of the health savings accounts and/or medical plans being provided by their employers. This is especially true in cases where specific medications that require high Medicare co-payments are concerned.

If you think that you may not have enough money to retire or you’d like to learn more about making better investment-related choices, contact our team for assistance today. 

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retirement decluttering

Items you should De-clutter after Retiring

Although most individuals see downsizing as a highly undesirable chore, the truth is that you could find this to be an emotionally and spiritually freeing process – especially if you have recently left the workforce. Having fewer possessions to keep track of will allow you to focus more energy on aspects that are important to you, such as spending more time with family, traveling or even having the ability to move into a smaller home.

Below are some examples of items that can do with being de-cluttered:

Sentimental items

Items such as old greeting cards, ornaments, photos, trophies and any other similar items fall into this category. Although you should hold on to items that are really special to you for any reason, you may not be able to take all of it along with you if you’re moving to a smaller home or retirement facility. 

Consider choosing a few of your most treasured items that mean the most to you and find out if other family members or close friends would be keen to take any of the others over from you. A great way to be able to remember the items you’re parting with is to take pictures of them that can be kept forever.

Old Paperwork

Most individuals are guilty of holding on to far more paperwork than they are required to. Once paperwork is older than seven years, it should be discarded responsibly – shredding these documents is usually a good idea. If there are sentimental items such as old report cards or certificates of achievement, these can also be photographed before discarding them.

Large Items

Large appliances, oversized furniture items and that unused exercise bicycle that has been used to hold everything except an exercising individual over the years should all be downsized at this time. The same can be done with those boxes of items you’ve had in your storage unit or garage and haven’t opened in the past few years – chances are that you’ll never need the items in them again anyway. 

This can also be the ideal time to downsize your household to one vehicle – you’ll then only have to cover the servicing, maintenance and insurance costs of a single vehicle instead of multiple units.

Books

Books take up a lot of space, are quite heavy to move and in many cases have digital alternatives available these days. If you’ve been collecting a lot of books over the years and won’t have the space to take them all with you to your new home, you’ll need to consider selling them or donating them to various charities or schools. 

The only exception you should make is if you have any autographed books. If you enjoy reading, consider joining your local library – they have thousands of books that can not only be borrowed for free – you won’t have to worry about storing them either. 

While de-cluttering your physical possessions is an important part of the downsizing process, don’t forget about de-cluttering your debt as well (if you have any). The fewer expenses you have to cover in retirement, the less you’ll have to stretch your available finances to survive. 

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safe investments

Safe Investment Options to Fund Retirement

Your retirement years are supposed to be the time of your life when you can relax a little and engage in the hobbies and interests you never had much time for while you were working. However, this will only be possible if you have saved enough money to live on well in advance.

While there are no absolute guarantees with any type of investment, the options discussed here tend to be among the safest choices – meaning that you’ll be able to make the most of this time of your life without worrying about finances.

Savings Accounts and/or CDs

When interest rates are attractive, these two options can be an excellent way for you to start investing money safely for your retirement. However, you’ll need to keep in mind that you won’t be able to rely solely on the interest from these two sources because they tend to attract rates of between 2% and 3% at most. This means that for every $100,000 that has been invested, you’ll only earn between $2,000 and $3,000 per year – and there are broker fees to consider as well.

Bonds

When you buy bonds, it means that someone else owes you a sum of money and they will be paying you interest on it. 

When these investment tools are used alongside a well-diversified portfolio, safer options such as government or federal bonds and those issued by other reputable corporations can enable you to earn a decent amount of income once you’ve retired.

Immediate Fixed Annuities

If a little more predictability is what you’re looking for with regards to investing, consider the option of an immediate fixed annuity. 

Immediate fixed annuities involve having a contract drawn up at the time of purchase that will guarantee you of a specific amount of income over a predetermined amount of time. In most cases, you will also start receiving an income from these annuities virtually immediately or from one month after they have been purchased. You’ll receive monthly payments with this form of investment. 

Age is a Crucial Factor to Consider

When you’re searching for some of the safer investment options for retirement, you’ll need to take your current age into consideration. If you’re in your mid to late 40s or older, it’s strongly recommended that you focus mainly on investments that are lower risk because you may not have enough time to recoup losses if they occur. If you’re still young, say in your 20s or 30s, you still have a little time on your side to take a few bigger risks on the stock market. 

Some other reliable forms of income you can use to supplement retirement income include rental payments from property you may own, home equity and real estate investment trusts (REITS). If you’re not sure where to start with regards to ensuring that you’ll have enough money to live on during your retirement, get in contact with our team today. We look forward to assisting you. 

 

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double savings efforts

Is it Possible to Double your Savings Efforts?

Regardless of whether you’re building an emergency fund, paying for your child’s college tuition or trying to save for that much needed vacation trip, putting funds into dedicated accounts can be quite challenging at times. Many individuals have stated that they simply cannot seem to save enough money, no matter how hard they try. However, the tips below could help you to double the amount of money you’re currently saving.

  1. Give up One Luxury Item or Service

These days, most individuals have at least a few luxury items or services that they think they cannot do without such as a daily coffee or a meal out with the family each week. Although there is absolutely nothing wrong with the occasional treat, it’s crucial to keep in mind that even the smallest amounts of money that are spent in this way will add up over time. 

For instance, a $40 fast food meal once a week will add up to around $160 per month, or a whopping $1,920 over the course of a year. Putting an amount of money like this into an emergency savings account or an IRA will yield extremely positive results over time. It’s not necessary to give up all of life’s little extras – after all, what would life be without the occasional treat? However, sacrificing one thing can make the world of difference to your finances.

  1. Take Advantage of your Company’s 401(k) Benefit

If you’re fortunate enough to work for a company that offers a 401(k) benefit and you don’t take advantage of it, you will be missing out on a tremendous amount of money over time. 

Your employer will usually provide you with a matching contribution up to a predetermined amount, so you should ideally be contributing the same amount from each of your paychecks. This is by far the easiest way to double the amount of funds that you’re currently saving and another benefit to this form of saving is that these funds are deducted from your earnings before taxes – saving you even more over the long term. 

  1. Don’t Put All your Eggs in One Basket

Although there’s nothing wrong with being more on the conservative side when investing your hard earned cash, you should ensure that your funds are invested in a number of different ways – diversification is essential if you’d like to see your investments grow as much as possible. 

When diversification is approached correctly with a knowledgeable financial advisor, it provides your funds with the opportunity to double, triple or even quadruple over time. A good combination of funds can include your 401(k), a regular IRA and the purchase of shares in companies that are performing well – potential returns on a portfolio like this are virtually limitless. 

Over time, you may also want to think about investing in property to further diversify your portfolio. 

The right time to take a look at your savings and investment portfolio is right now. If you’re unsure of how to get started with making the right investment choices, contact our team for assistance today.

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singles planning retirement

How Singles can Plan for Retirement

Several younger individuals are usually so focused on climbing the career ladder and coping with life in general that they don’t give much thought to their golden years – especially if they’re not yet in a committed relationship. However, the sooner a plan is set in place for your retirement, the less you’ll have to stress about whether you’ll have enough to live on during this time or not. 

  1. Start Saving as much as you can

If you’re still single, you should start saving as much as you are permitted to each year in any tax-deferred accounts you may already have. This may sound impossible or seem highly inconvenient right now, but the truth is that you won’t have financial assistance of any sort from a partner to cover expenses such as rent or mortgage payments and other essentials.

You should also start right away with building an emergency fund that consists of between three and six months worth of expenses because once again, you won’t have the security of a partner’s income if you happen to become ill or injured in such a way that you cannot work for a while. 

  1. Think about a Second Income Stream

If you’re currently finding it difficult to max out the tax deferred savings options that are available to you or you don’t have enough funds to start an emergency fund, you may have to consider the option of taking on a second job – even temporarily. 

A second form of income can be a literal lifesaver, especially if you are in the process of repaying any type of consumer debt or student loans. After all, you certainly don’t want to reach retirement age and still have various forms of debt to repay on a severely limited income. 

  1. Ensure that your Finances are Protected

Singles are also far more prone to financial ruin if they are suddenly not able to work anymore for whatever reason. For instance, if you become ill in your 30s or 40s, you would have to have some form of financial backup in place so that you can continue meeting your needs well into retirement. 

When you purchase any type of disability protection policy, it’s crucial to check that it will in fact cover you for as long as you need it to – a number of cheaper policy options will only pay out for a limited period of time. As such, it’s strongly recommended that you enlist the help of a qualified and reputable financial advisor before signing on the dotted line. 

If you’re still single, planning for your retirement shouldn’t be a stressful process, especially when taking the advice above into consideration. If you spend and invest wisely while you’re still working, you’ll be able to relax and at least spend time doing some of the things you enjoy most after retiring. To learn more about how to invest wisely for your retirement years, contact our friendly team for assistance today. 

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Money Saving Apps

5 Apps that can Help you Save More Money

When it comes to saving for retirement, a number of individuals claim that they either don’t have the time to plan for this part of their lives or that they need some form of assistance to get started. If you find that you’re someone who is also putting off saving and making every excuse imaginable, you may be able to get started quickly and easily by using any one (or more) of the apps mentioned below. 

  1. Acorn

One of the main reasons why so many individuals don’t invest money is because they don’t completely understand how the process works or they feel anxious about taking that first step. 

This app works by rounding up your spending to the closest dollar and putting the leftover change into an investment of sorts. Getting started with Acorn is easy – all you have to do is link a checking account and credit card and the app will do the rest for you. Several individuals have stated that they enjoy this form of investment because it’s easy to work with and literally only a few pennies at a time are being invested. 

  1. Simple

This app comes with a fee-free debit card that is directly linked to a dedicated checking account and it has the ability to perform a range of budgeting functions on your behalf. It will subtract any incoming bills, allowing you to set various financial goals and keep you up to date regarding whether you’re on your way to achieving them or not. 

Simple also lets you know how much money you have left for investing, ensuring that you don’t end up spending funds that have been put aside for emergency use. 

  1. Stash

Stash allows you to get started on your investment journey without the need to have a lot of money available. In fact, you’re able to invest amounts of as little as $5 and a short questionnaire not only helps determine an investment-related risk level that you’re comfortable with; it provides you with various investment options to choose from at the same time. 

This app allows you to be in total control of your investment so that you can make choices that you’re comfortable with along the way. 

  1. Digit

This app links directly to your chosen bank account and you receive regular text messages about how your balance is changing. In addition, it informs you of any frivolous spending habits you have but may not realize.

Another feature of Digit is that it will provide you with realistic recommendations with regards to the amount of money you could be saving and if desired, you can even set the app up in such a way that it automatically transfers a predetermined amount of money into a dedicated savings account daily, weekly or monthly. 

If you’re brand new to investing or you would like to find out more about the options that are available to help grow your money as much as possible, speak to our team today. 

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earn-money-retirement

Fun Ways for Retirees to Continue Earning Money

Several individuals look forward to the day when they will no longer have to spend most of their waking hours at the office anymore. However, many of them don’t realize that their dreams of retirement could involve seemingly endless days of boredom because of no longer having a regular schedule.

If you’re still fit and healthy and want to keep your body and mind active after retiring from your 40 hour a week position, the ideas below can help you get started with alleviating the boredom and earning a little cash on the side at the same time.

Sell any Unique Skills you may have

If you’re naturally good at something such as playing a musical instrument, sewing or gardening, you could use this knowledge to your advantage and earn a little cash while doing so. 

Giving sewing lessons or even performing basic clothing alterations is not something that everyone can do, and using your gardening expertise can involve teaching others how to grow food and other plants or you can even sell cuttings from existing plants.

These days, many parents are willing to pay excellent hourly rates for their children to enjoy private music lessons as well.

Drive for Uber or Lyft

These two companies are among the fastest growing in the world at the moment because they enable individuals to take advantage of ride sharing. As such, you can earn quite a decent chunk of cash by transporting passengers to various destinations in and around your city. 

Not only will you be able to earn a little spending money while collecting and dropping passengers off; anyone who works for these companies can sometimes obtain excellent deals on different products and services like phone plans, vehicle maintenance, gas and even health insurance in some cases.

Consider Starting a Blog

Once you’ve retired, you’ll have an excellent opportunity to share your expertise and knowledge with other individuals, and the best way in which you can do this is to set up a blog. 

If you were working in any form of customer service field, you could use your blog to share anecdotes or even provide information regarding how you used to deal with and resolve specific situations or problems. Money can be earned on your blog through the placement of relevant advertising once you’ve built up a decently sized reader base. If your blog attracts a number of readers, you may even be provided with opportunities to review some fantastic products over time. 

Although the point of going on retirement is to spend some time doing the things you truly enjoy, the reality is that many retirees underestimate the amount of money they will need to live on as well as the number of hours in each day that will need to be filled. 

While the above-mentioned ideas may not seem spectacular, they can provide you with a basic starting point regarding keeping yourself busy and happy during your golden years. 

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retirement-expenses

Expenses that could Diminish Totally after Retiring

Many individuals stress about being able to save enough money for retirement, which is understandable – especially as living costs continue to escalate at such alarming rates. Although the cost of many items will increase further over time, the good news is that there are a few expenses that could diminish or even disappear totally once you’re no longer putting in 40 hour weeks at the office.

Some Forms of Tax

While you’re receiving paychecks, you’re having just over 6% of your earnings deducted for Social Security and approximately 1.5% to support Medicare, which amounts to a chunk of almost 8%. Once your paychecks come to an end though, so will your contributions to these two sources. However, keep in mind that taxes will need to be paid on any Social Security benefit payments you receive.

Transport Expenses

The cost of driving or taking public transport to and from the office certainly adds up over time. Families where both parents have their own vehicles have to cover the cost of gas, maintenance, licensing and insurance for them. Research has revealed that it can cot as much as $10,000 per year to own a vehicle.

Once you’ve retired, chances are that you’ll be able to get by with just one vehicle, meaning that the costs mentioned above could be reduced substantially.

Eating Out

Most working families have extremely busy schedules, resulting in a number of meals being eaten at restaurants or fast food outlets because it’s easier than spending a lot of time preparing food at home. Average American families spend between $200 and $300 per month on fast food and restaurant meals per month. 

When you no longer have to go to the office every day, you may find that you’ll enjoy taking your time to prepare tasty meals at home – which will save hundreds of dollars over the course of a year.

Clothing

Dressing the part when working in the corporate world is often quite costly, especially if formal attire is required. In addition, dry cleaning can also set you back a few hundred dollars per year. After retiring though, you’ll be able to dress more comfortably – and of course more affordably because you’ll no longer be compelled to purchase specific types of clothing.

Retirement Account Contributions

After stopping work, you won’t have to continue contributing to your retirement accounts any longer either. All the years of saving wherever possible will finally pay off and you’ll be able to truly enjoy your golden years.

While you’ll now be able to hold on to more of the money that’s now coming in, it’s crucial that you continue to budget accordingly. This will help ensure that you’re able to continue covering the cost of living without going short anywhere. 

Although it’s stressful ensuring that you’re saving enough for retirement, it’s a comfort to know that some of your expenses will reduce or even disappear during this time of your life. If you would like to learn more about saving for retirement in the best way possible, contact us today. 

 

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Break These Bad Credit Card Habits

Bad credit card habits not only cause chaos with your credit score; over time, they will result in you accumulating more debt than you can afford to comfortably repay. Your long-term financial plans can also be derailed completely, which is why it’s essential that you eliminate these bad habits right away.

Failing to Inspect Credit Card Statements

While it may seem like nothing short of the most boring chore on earth to check your credit card statements thoroughly, the truth is that perusing each line item on them can help prevent any fraudulent purchases from being added without your knowledge. 

If you notice any charges that you haven’t made, you’ll need to notify your credit card provider immediately so that the necessary actions can be taken to reverse them. Another aspect you should always check is your credit limit – over time, your bank can change this without notifying you and this can result in some hefty fees being charged if you exceed your limit.

Only Paying Minimum Amounts

Credit card companies provide a convenient feature in that they only require you to repay a small amount of your outstanding balance each month. While this may seem handy, you will not ever be able to repay your card in full if only minimum require amounts are being applied. In addition, you’ll be paying hefty amounts of interest on the outstanding balance.

When the time comes to make repayments, always ensure that you pay as much as you possibly can against the outstanding balance. Over time, you’ll save thousands of dollars in interest.

Withdrawing Cash

Taking out a cash advance is most likely the costliest type of credit card transaction. Not only will you pay a higher interest rate on the amount you’ve withdrawn; the grace period for interest being charged with normal transactions is usually voided and an additional cash advance fee will normally be charged as well.

Purchasing Unnecessary items

This is another bad habit that should be stopped immediately because it results in you accumulating debt that you might not be able to repay at a later stage. 

If there are items you want, but cannot afford to pay for in full, it’s best to save up instead of placing these purchases on a credit card. You will feel a tremendous sense of satisfaction in knowing that you own the item from the start instead of only truly owning it after repaying your credit card balance.

Making Late Payments

These days, it’s possible to schedule payments so that they are sent to your credit card provider on time each month – meaning that there is literally no excuse for making late payments anymore. 

Late payments not only affect your credit score; over time, additional penalty fees and interest will be applied to your credit card as well. Again, this will result in you wasting money on unnecessary late payment fees. 

Exercising good credit card habits such as never carrying a balance until such time as interest is charged and ensuring that repayments are always made on time will go a long way in helping to build an excellent credit score – while allowing you to keep more of your hard earned cash because of not paying interest. 

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5 Things you should Never Waste Money On

When saving to build your emergency fund, retirement account or even that vacation you’ve been dreaming about, you’ll have to be prepared to make a few lifestyle and financial adjustments along the way. Below are some products and services that you should never even consider spending your hard earned money on.

Brand New Cars, trucks or SUVs

As soon as a new vehicle is driven off the showroom floor, it loses as much as 30% of its value immediately. Instead of purchasing a brand new vehicle, consider searching for those that are between one and five years old. This will prevent you from losing a sizeable chunk of your hard earned cash, while still being able to obtain a vehicle in good condition.

Lending Money to Friends and Family

If you’re fortunate enough to have a little extra cash on hand from time to time, chances are that you’ve been approached by friends or family members with regards to lending them money. Although it may be tempting to provide them with financial assistance, you not only stand an extremely strong chance of never getting those funds back; you could find yourself going short in your own budget at a later stage.

Interest on Store and Credit Cards

Many working people consider it normal to be carrying permanent balances on store and credit cards. This results in you having less money to spend each month because of the installments that need to be paid on these cards, and over time, you will end up paying up to three times the original price of any items you purchased with these cards in the form of interest and finance charges. Rather save up for any large purchases, as this will save you thousands of dollars over time.

Paying Full Price for Anything

These days, a number of companies are willing to provide some form of discount on their products and services. However, these special offers may not always be known to the general public – which is why you should always ask whether any discounts or specials would be applicable when making a purchase. This strategy usually works best when purchasing items like appliances or even vacation packages. As the saying goes, “If you don’t ask, you don’t get.”

Anything that Seems too Good to be True

Each year, thousands of hardworking individuals end up being scammed out of their money by conmen who promise to provide them with ‘double returns on their investments’ and other similar schemes. This can seem like a financial lifeline for anyone who is desperate to ensure that they have enough money saved to cover emergencies or other essential expenses. 

As such, you should only ever work with registered and licensed financial advisors or brokers when looking to invest your money.

If you would like to learn more about how you can reduce your expenses or invest more money for future use, get in touch with our advisors today. 

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