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retirement planning

What Happens when Both Spouses Can’t Retire at the Same Time?

In cases where you and your spouse are close in age and approaching retirement at the same time, you may be wondering what to do if you cannot both retire together. However, several financial experts have agreed that in most cases, it’s actually recommended that retirement be staggered instead.

Below are a few basic guidelines for situations where one spouse isn’t able to retire right away:

Consider the Advantages

Staggering your retirement has a number of benefits, which is why it’s the recommended course of action to take. For instance, you and your spouse can stop working at a point in your career that works best, which enables you to both benefit as much as possible from pension or retirement packages. It will also allow you to evaluate and adjust your finances to accommodate the upcoming second retirement – regardless of whether it happens in a few months or even a year or two from now.

One of the main aspects to deal with is that of deciding which spouse will stop working first, and there are some points to consider here:

  • Health Conditions – If one spouse has a health issue that may worsen if they continue working, then it would make sense for them to retire first
  • Income – If you still rely heavily on earned income to make ends meet, it would be best for the spouse who earns the most to continue working for the time being
  • Retirement Benefits – If you or your spouse can increase retirement benefits by waiting a little longer to stop working, this is a crucial aspect to think about. The extra funds could make a huge difference to your budget after retiring
  • Job Security – It’s essential for both spouses to consider their job security. This could help prevent either one from being laid off soon after the other has retired
  • Health Insurance – If you and your spouse are covered under a single insurance plan, and if it provides good benefits, the spouse with the insurance may want to wait to retire

Preventing Resentment

If one spouse retires right away and the other still has to work for a few more years, it may cause the working spouse to experience feelings of jealousy. However, this should instead be considered as an opportunity to obtain the help you need – for instance, the retired spouse can now assist with housework and running errands during the day so you can spend quality time together at night.

When one spouse stops working before or after the other, it provides a great opportunity to implement budget updates that you may already have discussed. Even though one of you is still working, it may be possible to start living on your planned retirement budget. This will allow you to see whether your proposed budget is realistic and you’ll be able to save a little just before full retirement as well.

If you are keen to retire, but aren’t sure how to determine whether you’ll have enough to live on once you and your spouse stop working, get in touch with our advisors today.

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retirement planning

Is it Possible to ‘Catch Up’ with Retirement Planning?

Are you in your 40s or 50s, concerned and thinking that it may be too late for you to start planning for your retirement? Although you may be getting a later than average start, this shouldn’t deter you from setting up a practical retirement plan. After all, starting late is better than not starting at all. 

Information on Forbes revealed that a mere 18% of American employees that are 55 or older have said that they’re highly confident that they’ll have enough money saved to retire comfortably. Just under 50% noted that they were ‘somewhat confident’ that they’d be able to afford to retire. 

If you’re concerned about not having a retirement plan yet, the tips below can help get you started with planning for this part of your life:

Reevaluate Any Existing Plans you may have

If you already have somewhat of a plan in place for how you’re going to afford retirement, now is the time to reevaluate it – especially if you haven’t paid much attention to it over the past few years. 

Start off by estimating your projected spending during retirement. How much will you need to live on each month? If you aren’t sure where to start or how to calculate the amount you’ll need to live on, it’s recommended to contact a reputable financial advisor for assistance.

Kids Moved Out? Start Saving Even More

After your kids have moved out of the house, you should be able to reallocate the funds you were spending on their needs towards your retirement savings. If you’re fortunate enough to still be earning the same as you were when your kids lived at home, you’ll find that it will be possible to save quite a large chunk of money from here on out.

Cut Spending wherever Possible before Retirement

As they enter their retirement years, a number of Americans adjust their lifestyles accordingly. For some, it may be aspects as simple as opting for cheaper cable, phone and internet plans – while others may have to consider more drastic measures like moving to cheaper cost of living areas. Anything that you intend changing during retirement can in fact be changed now, which will allow you to live more comfortably during your golden years.

Convert Monthly Installments to Savings

Have you recently paid the last installment on your car or mortgage? If so, don’t consider these amounts as extra spending money. Instead, transfer them directly into your retirement savings each month – and watch your portfolio start growing.

Take Advantage of Company Retirement and 401(k) Plans

When last did you transfer contributions to your company retirement fund or 401(k)? If these options are available, you should be taking full advantage of them because this will provide you with some extra cushioning in your retirement budget. Many companies make matching contributions to plans like these, so you shouldn’t let the opportunity of this free money go to waste. 

If you want to start making up for lost time with your retirement investing and aren’t sure how to begin, contact our financial advisors for assistance today. 

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retirement planning

What is the Right Time to Start Retirement Planning?

A commonly asked question when it comes to retirement is, “When is the right time for me to start planning for my retirement?” If you’ve only recently started climbing the career ladder, you may be thinking that you’ll still have a lot of time before you need to start preparing. However, if it’s one thing financial experts agree on, retirement planning should always start sooner rather than later.

Your 20s 

The concept of saving for retirement can seem virtually impossible when you’re still in your 20s because you may have just recently started a career and not be earning a decent wage yet – or you may still be struggling to repay student loan debt and think you don’t have enough cash left over to still invest for retirement. Alternatively, you may have other goals at this time of your life, such as starting a family – causing you to push retirement planning further away than you should. 

Below are just a few benefits you’d be able to enjoy if you start saving towards retirement in your 20s:

Take Advantage of Compounding Interest

Every year, your money will earn interest in two ways – on the money you’ve saved and on any interest earnings that you received in previous years. This means that the earlier you start saving, longer you’ll be able to take advantage of two forms of interest being earned towards retirement.

Enjoy Tax Savings

By placing your retirement funds into an IRA or Roth account, you’ll be able to take advantage of tax deduction of up to $5,500 for each year that you make these contributions.

You won’t have to Catch Up on Contributions at a Later Stage

Individuals who don’t make any contributions towards retirement savings during their 20s and 30s usually only realize how far behind they’ve fallen when they reach their 40s or 50s. By the time this happens, they will have to contribute a far higher portion of their earnings each month to ensure that they’ll actually have enough to live on when they’re no longer working.

Develop Healthy Savings Habits

If you make it a priority as early on as possible to start saving for retirement – and any other emergencies that may arise from time to time – you’ll develop good spending habits that will help prevent you from needing to borrow money if times get difficult. 

The Case for Starting to Save Later in Life

If you’ve waited until your late 40s or even 50s to start thinking about saving for retirement, you may be thinking that it’s too late to do anything about it. However, there are several reasons to get started, even if you intend to retire in the next five to 10 years. 

  • Most individuals reach their highest earning potential at this time of their lives
  • Several employer 401 (k) plans allow employees over 50 to contribute more money than younger employees

In short, it’s never too late to start saving towards retirement. If you would like to find out how to get started, contact us today to schedule an appointment with one of our financial advisors. 

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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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Why you should Hire a Financial Adviser to Help with Retirement Planning

Financial advisers possess extensive knowledge when it comes to helping individuals to prepare for and achieve their long-term financial goals. They also have the ability to provide you with much-needed guidance when it comes to planning for major life events along the way such as purchasing a home and ensuring that you’ll be able to retire comfortably. Below are a few reasons why it makes sense to work with an accredited financial adviser. 

 

The Economy can – and will – Change

You may intend retiring with a lump sum of $500,000 in the bank. While this may be a fairly reasonable goal to achieve for many working folk, it’s important to take the fluctuating economy into consideration. For instance, a dozen eggs and a gallon of milk may cost you $6 today, but how much will these essential set you back by the time you retire? 

Your savings may not stretch as much as you had planned, resulting in financial difficulties during retirement. A financial adviser can help you to plan ahead so that your savings accounts and investments take inflation into account. 

 

Unexpected Events Occur

You may be in your 30s at the moment, with a good-sized 401(k) account and fantastic job that you love. While everything may be going according to plan at the moment, what would happen if you were suddenly unemployed and you needed money urgently? Dipping into your 401(k) will not only set you back with penalty fees and additional taxes; you will be robbing yourself of potential interest that could have been earned on those funds as well. A financial adviser will assist you with allocating your funds in such a way that you’ll be able to deal with unexpected life events without compromising your retirement savings. 

 

You may be Wasting Money

Several individuals earn more than enough to be able to save and invest towards retirement, but seem to experience difficulties in finding the money to contribute to an IRA or other type of investment plan. Financial advisers specialize in the area of budgeting, meaning that they will be able to help determine how your money is being spent and whether any cutbacks can be made. 

For example, you may be spending too much money on takeout, cable channels and other subscriptions. While these may only add up to a few hundred dollars a month, this will certainly add up substantially if it’s invested over a period of 30 to 40 years and not spent immediately. 

 

Your Health could Deteriorate

Although most individuals are healthy when they begin their retirement savings strategies, unexpected illness could derail everything. Your financial adviser will be able to work with you to help allocate funds to cater for potential situations like these. 

Although many people think they know enough to plan for their retirement without having to pay an adviser, the truth is that circumstances can change completely unexpectedly. Having an accredited financial adviser on your side could make all the difference between being able to meet your financial needs or rely on Social Security during your golden years. 

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Feel Like You’re Behind in Retirement Planning?

 

 

Are you afraid that it’s too late to start planning for retirement? You might think that if you’re in your 40s or 50s, it’s too late for retirement, but that shouldn’t discourage you from making moves toward a retirement plan today. As Morris Armstrong, a professional financial planner says, “You have to start somewhere.”

Although you might be starting later than other individuals on retirement planning. According to an article on Forbes.com, “Only 18% of American workers 55 or older say they’re ‘very’ confident they’ll have enough money for a comfortable retirement, and another 49% are ‘somewhat’ confident,” based on the Employee Benefit Research Institute’s 2017 Retirement Confidence Survey.

If you’re worried about your retirement plan, many Americans are in the same boat as you, so here are a few things you can do to get started on. It’s never too late to be planning for your future.

 

Reevaluate Your Plan

Do you already have a plan in place for what you’re going to do during retirement? Perhaps, your plan is outdated, or you haven’t actually made the contributions you were expecting to. Start by estimating you projected spending during retirement. How much money are you going to need on a monthly basis? Consider the areas where you’d draw income from and how much they will impact your retirement. If you’re not sure where to start, be sure to consult a professional financial planner!

 

Empty Nest? Time to Save!

As the kids enter adulthood and become more independent, you can reallocate the funds spent on your children into your retirement savings. If you are still making the same income that you were when you were funding your children’s livelihoods and education, you’ll notice that you can save a large amount of money.

 

Retire Spending Before Retiring

Many Americans adjust their lifestyles once they enter retirement. It might be as simple as opting for a basic cable plan and greater limitations on your phone plan. Anything you plan on changing during retirement can be changed now, so you can have a more comfortable retirement.

 

Turn Old Payments into Savings

Just finished paying off a car? School loans? Your home? Don’t look at the extra money you have at the end of the month as pocket change! Put it into your retirement savings. Since you were making the payments before, you won’t miss the money, but the retired you will thank you in the future.

 

Take Advantage of 401ks and Company Retirement Plans

When was the last time you contributed to your 401k? If you have money going into an external savings account, you might want to consider redistributing it to your 401k or a retirement plan offered by your work. This way you save on taxes and have a cushion to land on during your retirement. If you’re unsure about your company’s retirement plan, read up! Many companies contribute to their employees’ retirement plans, so don’t let this money go to waste.

Retirement can be a scary thing if you don’t feel prepared. Remember that you should never give up on saving for retirement!

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