Tag Archives: retirement

debt free

Keen to Learn More About Personal Finance? These Blogs Can Help

Understanding and mastering your personal finances can seem challenging – if not impossible – at times. However, there are now so many bloggers out there who delve deeply into the subject of money that the amount of information available is virtually unlimited.

If you’re keen to learn as much as you can about managing your money and making it work for you, these bloggers will be able to provide you with the additional information you need.

Get Rich Slowly

Initially launched by J.D. Roth back in 2006, this is one of the original personal finance blogs that was created. After accumulating more than $30,000 in debt due to credit card usage, obtaining various personal loans and also dealing with an auto loan, he decided to create a plan that would help eliminate all of his debt once and for all.

The Get Rich Slowly blog contains thousands of posts that are dedicated to improving the financial IQ of its readers and topics include tips for earning, saving and investing your money in various ways.

Mr. Money Mustache

If early retirement is your goal, Mr. Money Mustache’s blog is one that is not to be missed. Pete Adeney and his wife used a plethora of strategies to fully retire by the time they had reached 30, and he started his blog six years later.

Pete’s blog features several details of exactly how he retired so early and became financially independent. Although his focus is mainly on the stock market and index funds, he shares ways to shave your grocery bill and utility bills substantially as well – to the point where he either walks or cycles to most places he goes to.

Adeney is also not known for sugarcoating his words, so if you’re not keen on being labeled a ‘complainy-pants’ (one of his favorite terms for folk who complain about their financial situation, but do nothing to rectify it), you may not enjoy the forthrightness of his content.

Inspired Budget

Started by Allison Baggerly in 2011, Inspired Budget is a blog where she speaks completely from personal experience regarding how her and her husband were drowning in six figures of debt – and then how they managed to repay it in five years.

Allison has provided a number of handy resources that everyone can use, such as budgeting and money-saving tips and motivational debt-free posts. Her Instagram account offers daily tips on repaying debt and budgeting as well. Baggerly said that her main intention for starting the blog was to help women manage their money better and achieve financial freedom.

Spending time reading through the content on these blogs will help you gain a better understanding of the various aspects of personal finance – while also allowing you to improve your own financial situation. If you would like to find out more about improving your finances so that you’ll be able to retire comfortably someday, call our team to schedule an appointment with an advisor today.

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retirement-savings

In Your 50s? Take These Steps to Boost Retirement Savings

Your 50s are a part of your life that should be considered as somewhat of a final sprint to the finishing line where working is concerned. This means that absolutely any money that can be set aside will give your existing savings the extra boost they need to be able to provide for you financially once you retire.

Here are some ways in which you can help save as much as possible for this time in your life:

Consider Becoming a Landlord

Landlords earn what is referred to as residual income each month, meaning that they receive income without physically having to work for it.

Although this option may not suit everyone, individuals who enjoy doing DIY and home maintenance projects can accumulate a substantial amount of savings while still earning an income once they’ve stopped working. This can be done by renting out your family property and downsizing, or alternatively, by buying an additional property outright.

It’s strongly recommended that you save between 25% and 50% of the rental income you receive each month. This will go a long way in helping to cover property taxes and any maintenance costs that arise – and they will.

Downsize wherever Possible

Now that you’ve reached your 50s, chances are that you’ve become an empty nester – or will become one shortly. This will most likely result in you having a lot of space in the family home that will no longer be needed.

Instead of allowing the vacant rooms to gather dust, consider selling and moving into a smaller home that will now be more suitable for you. Over time, this will not only save a lot of money; additional funds obtained from the sale of your larger home can be placed into your retirement account.

Increase your Savings Rate

Although this might seem obvious, a number of individuals don’t know how to increase the amount of money they’re saving weekly or monthly. However, it can be done by trimming areas of your grocery budget by a few dollars, canceling any unused subscriptions you may have forgotten about or reducing the amount of money you spend on those ‘nice to have’ extras such as fast food.

Additionally, you could shop around for more affordable internet service providers or phone services – a saving of as little as $10 to $20 a month could make a huge difference over time.

Review your Budget Regularly

It’s recommended to check your budget and bank statements each month so you can determine whether you’re still on track for saving enough money. This will also help prevent you from overspending. This is also not the time of your life where you should be making large purchases such as brand new vehicles or other unnecessary items.

Ensuring that you remain on track financially can seem overwhelming at times, especially as you start nearing retirement age. Contact our financial advisors today if you would like to learn more about saving as much as possible for your golden years.

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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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credit-retirement

Preserving your Credit Status Now to Stay Financially Sound After Retirement

It’s no secret that hard work and commitment are required if you want to obtain and keep a high credit score, especially if you’re coming close to retirement. Below are some aspects to consider that will go a long way in helping you to preserve your credit score beyond your golden years.

  1. Don’t Close Long-held Accounts

Keeping a good record on any type of open account over a number of years has a highly positive effect on your overall credit score. If you’re close to retirement age, you may have accounts that were opened several years ago that you might be tempted to close out. However, doing this will have a negative effect on your credit score virtually immediately.

Another way your credit score would be negatively affected is by decreasing the amount of credit you have available to you. A large percentage of your credit score depends on the amount of overall credit you have versus the amount you’re actually using, so decreasing your level of available credit will cause a drastic drop in your score.

  1. Don’t Cosign any Loans

After your kids have moved out, it can be tempting to cosign for them to get their first car or obtain a student loan. However, doing this will increase the level of debt that is showing on your personal credit report. Although this won’t necessarily affect your credit score overall, it can negatively impact your ability to secure a loan in future if your credit to debt ration appears to be too high.

  1. Use Old Accounts Occasionally

When considering your credit score, it’s not good enough to just keep older accounts open – they will have to be used from time to time to prevent creditors from closing them unexpectedly. Using your older accounts every now and then is especially important if you’re currently debt-free, because otherwise the credit bureaus would have nothing to base your score on. Unfortunately, a number of retirees have discovered this too late after being denied loans when they’d not carried debt for several years.

There’s no need to accrue large amounts of debt to keep a credit score active. Just making the occasional purchase and repaying it the following month will usually suffice.

  1. Review Existing Debts before Retirement

A fair percentage of your credit score is based on your ability to repay debt installments on time, and this could become a huge worry if your income decreases drastically after retiring, or if an unexpected medical emergency depletes your savings. Before you stop working, ensure that you’ll still be able to save some money each month and repay all outstanding debts ahead of time wherever possible.

Unexpected events can happen even after you retire, which could result in you needing to apply for a loan. Taking the above measures to protect your credit score now already will help ensure that you’ll be financially prepared for anything that may happen in future. If you would like to find out more about planning for your retirement, contact our advisors today.

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singles-retirement

Can Singles Retire Successfully?

Several singles in their 20s and 30s tend to focus mainly on building their careers and lives that they don’t spare a thought for their retirement. However, the sooner you start planning for your golden years, the less time you’ll need to spend worrying about whether you’ll be able to relax a little after you retire or not.

As a single, there are steps you should take as soon as possible to prepare for this time of your life:

Start Saving as Much as Possible

One of the best steps you can take, as a single is to start saving as much as is allowed in your tax-deferred accounts each year. This may sound like a drastic move, but it’s important to keep in mind that you won’t have financial assistance from a spouse to help cover bills such as a mortgage, utilities and various other expenses.

It’s also crucial that you start building an emergency fund consisting of between three and six months of expenses because, again, you unfortunately don’t have the security of a partner’s savings or income if you are unable to work for an extended period of time for any reason.

Consider Creating a Second Income Stream

If you’ve noticed that you’re struggling to max out your tax-deferred accounts every year or there’s just not enough money to start building your emergency fund, it’s a good idea to think about taking on a second job temporarily – even if it’s part-time.

Taking on a temporary second job could be a financial lifesaver, especially if you have outstanding debts that need to be paid before retiring. After all, you wouldn’t want to be worrying about debt after you’ve stopped working and are living on limited income.

Financial Protection is Essential

As a single, you’re at more risk of financial ruin if you suddenly become disabled or too ill to work. For instance, If you had to find yourself in this situation in your 40s, you’d need to have some form of financial safeguard in place to be able to look after yourself through to your 70s or even 80s in some cases.

When purchasing any form of disability protection, it’s crucial to confirm that payouts will actually cover you for as long as is necessary because several of the cheaper policies in this category will often only pay out for a limited period of time. As such, it’s strongly recommended that you work alongside a qualified financial advisor when searching for this type of financial protection.

If you’re single, planning for your golden years need not be an overwhelming process – especially if you decide to take the above-mentioned steps as soon as possible. Spending wisely and investing appropriately while you’re still working will go a long way in helping to ensure that you’ll be able to enjoy retirement as much as you should.

Get in touch with our team of qualified and experienced financial advisors today to learn more about retiring successfully as a single.

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retirement-tips

Advantages of Downsizing before Retirement

Have you reached the stage of your life where you’re starting to think about or even look forward to retirement? If so, one of the best things you can do for yourself is to start downsizing your home and other aspects beforehand.

Here are just a few great reasons why:

Get Ahead with the De-cluttering Process

Part of the downsizing process is to determine which of your possessions you still need and which ones you no longer use or want. Although it may sometimes be difficult to let go of some items, doing so will allow you to be far more organized and keep your available space for the items you need and treasure the most.

De-cluttering will allow you to need less living space once you stop working, which leads to the next advantage.

Less Maintenance to Worry about

Your golden years are not the time where you should be worrying about how you’ll cover the cost of large home maintenance bills, a heavy mortgage and high utility accounts. Downsizing before you retire will allow you to determine just how much you’ll save on these essential expenses by moving into a smaller property, regardless of whether it’s in a dedicated retirement facility or not.

Fewer Monthly Bills

If your downsizing journey leads you to move into a dedicated senior living community, chances are that you’ll only be presented with a single monthly bill for the majority of your expenses. You’ll no longer have to worry about the added burden of yard maintenance bills or even property taxes because these are usually included in your monthly payment already.

Make Relocation Far Easier

After de-cluttering and keeping fewer possessions, you’ll find it easier to relocate than before – and possibly also have more choices regarding where you want to move to. For instance, if you’ve always wanted to move town or even to a different state, having fewer possessions and monthly commitments will make the process a lot easier for you. When searching, look for places that offer a low cost of living, decent healthcare and amenities that you’ll be able to take advantage of.

Focus on Enjoyable Activities

Downsizing before you officially retire will allow you to focus more on activities that you enjoy, such as hobbies, or even spending more quality time with your family if they’ll be living nearby. These days, retirement communities normally offer several different activities for residents to enjoy – with many of them being free or at very low cost.

Enjoy a Fresh Start

Instead of viewing your journey as just downsizing, think of it as an opportunity to enjoy a fresh start in life. Have you wanted to write a novel or engage in a new project, but not had enough time while you were working? Now will be the ideal time to tackle those goals because a lot of other responsibilities will now have been delegated elsewhere.

If you want to ensure that you’ll enjoy a financially comfortable retirement after downsizing, contact our professional advisors today.

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inflation

What to Do when Inflation Deflates your Retirement Plans

Inflation has been quite rampant over the past few months with little to no end in sight, which is causing many older employees and recent retirees to worry about whether they can continue to afford covering their daily expenses. Although Social Security is designed to provide cost of living adjustments every so often, these still often fall short.

How Inflation Affects Retirement

It’s crucial to remember that inflation has a significant impact on anyone who is seeking out a traditional retirement as well as those individuals who are keen to retire early. 

Inflation is classified as the general increase in the price of goods and services over a period of time, and while this has averaged out at around 2% per year previously, this percentage has increased substantially over the past year or two. This means the cost of everything from groceries to gas, medical care and housing will continue rising for the foreseeable future. 

Minimizing Financial Losses

Below are some steps that can be taken to help ensure that you don’t go broke after retiring:

Trim Regular Expenses wherever Possible

If your budget is already tight, any further price increases will make it almost impossible to survive from month to month. Pricing for services such as phone contracts, home internet and insurance can often be negotiated, especially if you inform your current provider that you’re considering switching to another company. 

Now is also the time to thoroughly peruse bank statements to ensure that you aren’t paying for any unused memberships or services that you may have canceled a while ago.

Change Grocery Shopping Habits

If you’ve noticed an increase in the cost of groceries and you haven’t been adding anything extra to your cart, it’s time to make a few changes. These can include switching from fresh to frozen produce, consuming smaller portions of meat products, using dried beans and lentils instead of canned or even trying alternative brands that may be more cost-effective.

Don’t Delay Large Purchases

Although this may sound counterintuitive, pricing of appliances and other household items is also increasing alarmingly. As such, you should not delay purchasing these items if you already have the funds set aside to pay for them – chances are that they could cost as much as 30% more in a few months’ time.

Work with a Reputable Financial Advisor

Another crucial step to take when protecting your retirement funds against inflation is to work closely with a reputable financial advisor. These specialists are trained to follow the markets, which allows them to make the appropriate decisions to ensure that your money can grow as much as possible. 

When searching for an investment advisor, ensure that they are suitably qualified, registered and experienced – failure to do so could result in disastrous consequences for your financial future. If you would like to find out more about securing your retirement savings against higher than average inflation rates, get in touch with our team today.

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couch potato

Don’t Become a Couch Potato After Retirement

Just because you’ll be retiring from your daily job and commute, it doesn’t mean that you should spend the rest of your life sitting around doing nothing. In fact, research has confirmed that retirees who remain active will experience higher levels of satisfaction and better health than those who laze their days away in front of the TV or computer. 

If you’re looking for ways to keep busy or new activities to try after stopping work, the list below will help you get started:

Take a Hike

Spending time out in nature has been proven to be one of the best ways to de-stress and rejuvenate the body and soul. As such, this activity will make you feel better physically and emotionally. 

The good news is that it isn’t necessary to go on an overnight hike or multiple-day camping trip to enjoy these benefits – even a short hike of a few miles will be highly beneficial. It will also provide you with an opportunity to take a break from technology, which is something everyone needs from time to time.

Foster a Pet

Many retirees are hesitant to outright adopt a pet because they worry about what will happen if they’re no longer able to care for it. However, many animal shelters now offer the option of fostering a pet as well. This entails having the shelter or rescue organization cover the cost of the animal’s food and care, while the pet in question provides companionship.

Fostering a pet will help keep you physically active, especially if regular walking is required – which will benefit your health as well as that of the pet.

Join a Book Club

After retiring, it’s just as important to keep your mind active as your body. A 2016 study in the Social Science and Medicine Journal revealed that spending an hour or two reading each day can help increase a senior’s lifespan substantially as well – even more good reason to curl up on the couch with your favorite book at least a few times a week.

Learn a New Language

Learning a new language is an excellent way to ensure that your mind remains active after you’re no longer part of the workforce because it will help keep your memory and concentration skills sharp as you get older. A number of free and online options are now available for anyone who wants to learn new languages, such as Babbel and Duolingo.

Do Volunteer Work

This is by far one of the most popular ways for seniors to keep busy once they’re no longer working. Most volunteers report that getting actively involved in causes that are important to them provides a sense of fulfillment, which in turn helps make them happier. 

Keeping physically and mentally active during your golden years will not only help keep you fit and healthy; you’ll also be able to fill your days with a number of social activities that are enjoyable.

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Managing Depression After Retirement

Depression is one of the most prevalent mental health conditions among older adults, and a commonly made mistake in planning for retirement is not thinking about the significant emotional adjustment that takes place during this time. 

Symptoms of depression can include disturbed sleep, general sadness and a loss of interest in activities that a person used to enjoy, and these can last anywhere from weeks to a number of years – depending on whether satisfaction of life is eventually achieved or not and if an affected person has decided to seek treatment.

If you’ve been feeling depressed after stopping work and you’re unsure why, there are a few steps you can take to help address and alleviate it:

Determine why you’re Feeling Down

Several aspects can cause you to feel depressed after retirement. For example, you may think that you no longer have a sense of purpose because you’re no longer going to work each day. Alternatively, you may not be spending as much time with family and friends as you’d initially anticipated – causing you to second-guess your decision to retire. 

Spend time thinking about what could be causing you to feel depressed – it could be one or more aspects. If you’re struggling to determine the cause, consider journaling daily to track your thoughts. This will allow you to look for potential patterns or trends that may recur.

Identify Activities that you Enjoy

Along with devoting time to activities and/or hobbies you enjoy that may have been neglected during your working years, consider engaging in something new from time to time. Some ideas here include:

  • Volunteering with a charity you feel strongly about
  • Enroll in continuing education classes at a local college or even online
  • Join a senior citizen’s recreational group or sports club
  • Take up part-time employment

When deciding which activities to get involved in, consider what you need the most. Do you want to make new friends? Are you keen to feel useful somehow? Would you like to earn a little extra spending money? Would you like to engage in a little of each? The choice is yours.

Connect with Other Retirees who are Struggling to Adjust

If you’re feeling depressed after retiring, remember that you aren’t alone. There may very well be someone else in your existing social circle or network that is also struggling to adjust to the new normal of not going to work every day. 

Connecting with these people will help you support each other while dealing with the emotional and mental challenges you’re facing during your golden years. If you struggle to meet new people face to face, consider searching for retiree support groups online – these can often be just as beneficial as physical groups and activities. 

Figuring out what is most important to you during retirement and eliminating activities that may be causing you to feel depressed will go a long way in helping you to get the most out of this time of your life. Talking with a financial advisor can also help alleviate some of the financial worries you may be experiencing during retirement as well. 

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retirement

Are Social Security Benefits Sufficient to Support Retirees?

Although retirement is often referred to as the golden years, several elderly Americans certainly wouldn’t describe this time of their lives in that way.

In fact, research undertaken by the Center for Social and Demographic Research on Aging at the University of Massachusetts in Boston revealed that up to 50% of Americans over the age of 65 who live on their own and around 25% of those in two-person households simply don’t have enough money to cover even the most basic of essential each month anymore. 

Measuring Costs with the Elder Index

The Elder Index measures the basic costs that most households have to cover and how well they’re able to afford them. These costs include housing, food, transportation, health care and other basic essentials and don’t take extras into account such as vacations, eating out or entertainment. 

Amounts for the Elder Index vary according to an individual or couple’s actual situation. For those who don’t have to pay a mortgage anymore, the Elder Index is just over $21,000 per year for an individual and just under $32,000 for a couple. 

The estimates also increase for anyone who’s still renting to around $25,500 for singles and just over $36,000 for couples. Costs for seniors who still carry mortgages rise to around $32,000 for singles and a little over $42,000 for couples. This means that up to half of senior citizens simply cannot afford to cover their basic living expenses from month to month anymore. 

Determining Social Security Benefit Amounts

As of January 2022, Social Security Administration has noted that beneficiaries would be receiving a 5.9% increase in payout amounts. This is one of the largest cost of living adjustments that have ever been made to this benefit. 

The average monthly Social Security benefit for eligible single seniors will be around $1,565 per month and approximately $3,187 per month for retired couples where both spouses qualify. This equates to around $18,780 and $38,244 per year respectively, which is not nearly enough for recipients to cover basic expenses, let alone any unexpected emergencies that may crop up. 

Although Medicare benefits are available to seniors, these may not always cover all medical expenses after retiring either. 

Additional Savings are Crucial

Although it may have been possible to live exclusively on Social Security benefits a few decades ago, this is no longer the case – even for seniors who relocate to cheaper cost of living areas. As such, it’s crucial for everyone who is still working to contribute as much as they can comfortably afford towards some form of savings or retirement plans such as an IRA or 401(k).

Even small amounts saved over the course of 20 to 30 years will make a significant difference to a senior’s budget when the time comes to stop working – thanks to the power of compounding interest. If you would like ot learn more about setting aside funds towards your golden years that will allow you to do more than merely get by each month, contact our financial advisors today. 

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