Tag Archives: retirement

retirement-pensions-income

Why you should Check your Social Security Earnings Record Regularly

Not nearly enough individuals are aware that they should be checking their Social Security earnings record at least once a year after reaching the age of 50. It’s crucial to check this information to ensure that it doesn’t contain any errors that could have a negative effect on your benefit payments when the time comes to withdraw them. Even the smallest error could have a tremendous impact on your retirement

What is your Social Security Earnings Record?

Your Social Security Earnings Record is a timeline of any income you’ve received during the years that you’ve been working, and the benefits you eventually receive will be based off of the 35 years in which you earned the most money. If one of those years is mistakenly listed as a zero earning year, this will affect your benefit calculations and this will in turn cause you to receive smaller benefit checks than you should. 

A simple error like this could result in you receiving as much as $100 a month less than you’re actually entitled to – and this can make the difference between barely surviving or at least being able to cover your expenses comfortably during retirement. 

When you should Start Checking

In reality, it’s never too early to start checking your Social Security earnings report – so you can even start keeping records as soon as you start earning an income. However, individuals who haven’t yet checked their report should at least start doing so when reaching the age of 50. This will provide enough time to address and correct any errors that may crop up. 

It’s possible to inspect your earnings report online by visiting www.socialsecurity.gov/myaccount. You will need to create an account if you don’t already have one set up and you’ll be able to log in at any time after doing this. 

Keep in mind that a statute of limitations is in place with regards to the amount of time that can pass before any errors on your Social Security earnings report can be amended, and this is currently three years, three months and 15 days. Some exceptions to this ruling include deliberately fraudulent entries, clerical and/or mechanical errors. 

What to do if Errors are Detected

If you discover any incorrect information, you will need to inform the Social Security Administration (SSA) immediately, and the best way to do this is by submitting a form referred to as the, “Request for Correction of Earnings Record.” 

When filling this form out, you will be required to provide relevant evidence with regards to the wages that you’ve earned. Examples of paperwork that you may be asked to provide can include:

  • Wage verification from an SSA-approved business or company
  • Tax return documents
  • Employee-issued or original pay stubs – these will need to include your full name, gross earnings, social security number and the timeframe covered
  • W-2 paperwork
  • Written and or/verbal statement from the relevant employer or company

It’s essential that you respond as promptly as possible to any correspondence that the SSA may send to you regarding errors that have been detected. This will help ensure that they are rectified as quickly as possible. Although an amount of $100 may not seem like a lot right now, it could make all the difference between being able to cover living expenses or not during retirement. 

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retirement challenge

How Retirement is Becoming More Challenging for Older Employees

Over the past few years, it has become more challenging than ever before for employees over the age of 55 to secure positions that are within their normal pay ranges – regardless of how experienced or qualified they may be. Some of the most common remarks these individuals hear include the fact that they are overqualified for the position being applied for or that businesses cannot afford to pay them the wages they are used to earning. 

Forced to Accept Smaller Paychecks

The sad reality is that older employees are usually among the first to be laid off from the very companies where they have invested many years of their working careers. When they are searching for a new job, it often takes several months or even a year or two before they’re able to find any company that will be willing to employ them – but in the meantime, bills still need to be paid regularly. 

Skipped mortgage payments, overdue utility bills and depleted retirement savings cause a number of these experienced and often highly qualified employees to grab at any position that comes available – just so they can continue providing for their families. 

By the time they’ve reached 55, several employees have not only become accustomed to a specific lifestyle; many people forget that these individuals often still have children living at home as well. 

More Older Employees Now than Ever Before

More individuals than ever before that are over 55 are employed these days, and the average jobless rate for them is just over 3% in comparison to almost 4% of the rest of the working population. However, upon finding themselves suddenly jobless, older workers end up remaining unemployed for longer than their younger counterparts. 

Upon reaching 60 and older, employees also have to deal with steadily declining wages – and pay rates continue declining regardless of the amount of experience or education these valuable employees have. 

Why Individuals are Working Longer

People are living a lot longer and staying healthier than ever before, and the rate of standard pension plans is also phasing out quickly. This means that there is less chance of them receiving guaranteed income when the time comes for them to retire – resulting in many older persons wanting to continue working for as long as possible. 

This could fill the large gap in the economy in that the continual labor shortage could be virtually eliminated by hiring older employees. However, not many companies seem willing to hire these valuable employees because they tend to think that productivity rates will decrease when they reach a certain age. However, this is not always the case – there have been many instances where older employees have far outperformed those that are even half their age. 

Employers often forget that older workers possess extensive experience and this can prove to be extremely valuable in a number of situations – especially when younger employees simply don’t possess the knowledge or experience to resolve a specific issue. 

If you would like to find out how you can do everything possible to provide a livable income during your retirement, get in touch with us today.

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Retirement may Last Longer than you Realize

By 2050, it’s estimated that close to 100 million Americans will be over the age of 65 – this is close to double the amount of older folk that are currently around. This will have severe implications on almost everything – from the amount of food that’s available to find skilled labor to allocating sufficient funds to provide a realistic level of healthcare for an aging population. 

A Social Shift has Taken Place

Doctors who were practicing in the 19th Century recommended that as individuals got older, it was necessary for them to slow down so that they could conserve their energy. However, several people started to live a lot longer after 1900, resulting in an increase in senior citizens overall. 

Over time, this caused business, industry, and government agencies to look for ways to justify removing older individuals from the workforce so that younger employees could be accommodated. Even though individuals are now healthier and living to older ages than ever, society, in general, appears to be doing everything possible to write off up to a quarter of the lifespan of anyone who is over the age of 65. 

A Prospective Goldmine for Marketers

A number of lawmakers and have voiced concern with regards to the fact that having higher numbers of senior citizens obtaining public benefits would negatively affect the economy. However, new research has suggested that the number of people that are now living to older ages than ever could actually present the economy with a potential marketing goldmine – in fact, goods and services that have been specifically tailored for the senior market are now worth more than $9 trillion a year. 

Planning Accordingly is Crucial

While several older people do have a definite plan in place with regards to how they would like to spend their golden years, it’s essential to remember that you will need a reasonable amount of money to live on – regardless of what those plans may involve. Continually rising inflation and the overall cost of living means that you will not be able to rely entirely on Social Security benefits upon retirement. 

If you’re fortunate enough to still be in your 20s, 30s or 40s, you may think there’s still ‘more than enough time’ to start saving, investing or setting funds aside that will help you survive during retirement. While time may still be on your side, starting to save money as soon as possible will allow you to set aside a smaller amount each month because of compounding interest

Our experienced and accredited financial planners can provide you with a lot of information about saving and investing in such a way that you’ll be able to enjoy your retirement and not have to worry about finances along the way. If you’d like to establish a savings plan that will cater for your needs during retirement, contact us to set up an appointment with one of our financial planners today. We look forward to helping you secure your financial future.

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new-years

Make those Financial New Year’s Resolutions Now

Regardless of whether you’ve started to put a dedicated financial plan into place or not, it’s possible to get on track with this at virtually any age while you and your spouse are still earning an income. Below are a few financial New Year’s resolutions that you should consider making – and sticking to – when 2021 rolls around. 

  1. Set up an Appointment with a Financial Planner

If you’ve never worked with a financial planner yet, enlisting the help of one who is reputable should be your first priority as soon as the New Year starts – the sooner you can make that first appointment and keep it, the better. 

Getting your financial affairs in order can be daunting, especially if you have no idea where to start. You’ll need the services of a professional, especially where taxes, investing and other forms of saving are concerned. While it may seem like an unnecessary expense at first, you’ll certainly be glad you hired a professional – especially if you’ve never dealt with these aspects before.

  1. Set Up Retirement Savings Accounts

If you don’t have an IRA or 401(k) set up with your employer, now is the time to gather everything you’ll need to do so – your financial planner will be more than happy to assist you here. 

A 401(k) and/or IRA are among the best and easiest ways to start saving for your retirement, and the sooner these are set up, the better. Keep in mind that contributions to these accounts are pre-tax, so you probably won’t notice the small deduction being made from your wages at the time. However, you’ll certainly notice the lump sum of money that has accumulated by the time you’re ready to retire though.

  1. Pay Debts Off

One of your ultimate goals should be to remain free from consumer debt as far as possible. 

Many individuals don’t prioritize repaying consumer debts because they think they’ll still have a good few years left to do so. However, the quicker consumer debts are repaid, the more money you’ll save on interest and finance charges as the years go by – money that can rather be put into some form of savings instead.

  1. Look for Ways to Save Extra Cash

After setting up retirement, savings and/or investment accounts, many individuals quickly discover that they aren’t setting aside as much money as they’d hoped. If you find that this applies to you, it’s time to start looking for practical ways to trim your budget or increase your income as soon as possible. 

Some options for cutting spending can include switching to more affordable internet service providers, cell service companies and even eliminating physical newspaper subscription services – many news sites offer greatly reduced options for viewing their content online instead. 

While everyone dreams of becoming financially secure, this will only happen if you take the necessary steps to start saving and investing as soon as possible. If you’d like to learn more about making your money work for you, contact us today. 

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adult kids retirement

Don’t Let Adult Kids Destroy your Retirement

Research has revealed that nearly 70% of parents older than 50 have provided their adult kids with some form of financial assistance over the past few years, with amounts for this assistance totaling an average of just over $7,000 per year. If invested or saved in a tax-deferred account that provides an annual return of just 6%, this could amount to as much as $100,000 extra that these parents could have saved for their retirement years. 

Here are a few practical ways in which parents can offer help and support to their kids:

Ensure that they Trim their Budgets

If there’s a genuine reason for your adult kids to not be fully supporting themselves financially yet, lending a hand to cover aspects such as utility bills or rent is quite acceptable – for example, if your adult kids are doing everything they can, but still aren’t able to make ends meet due to a low paying job.

Funding a lavish lifestyle, paying rent on a costly apartment or condo or enabling your adult kids to pay for fancy restaurant meals will not help them learn to support themselves over time.

Establish a Practical System

More than 65% of parents have provided financial assistance to their adult kids at some point to help cover the cost of a utility bill or an unexpected emergency expense. However, an alternative approach is also recommended.

Start by determining ahead of time how much your adult child will require to supplement his or her existing income and then set up automatic transfers to them totaling the amount needed. After a few months, it’s recommended that you review this arrangement and consider reducing the amount systematically until you reach a mutually agreed upon timeline for stopping your financial support. 

Establishing an arrangement like this will mimic the situation of receiving a steady paycheck. However, there may still be instances where genuine emergencies will arise, such as dealing with unexpected vehicle repairs. If cases like this occur, don’t feel bad about stepping in and providing your adult child with the amount of financial assistance you can comfortably afford. 

Become your Child’s Financial Advisor instead of their Provider

When it’s time to stop providing your adult child with financial help, it doesn’t mean that you should stop giving them appropriate financial advice. Information you should provide them with can involve teaching them how to budget effectively, how to choose the right healthcare plan to suit their finances and how to opt into the best 401(k) plan to prepare for retirement. 

Another option you can use to provide adult kids with financial guidance and advice is to introduce them to the numerous budgeting apps that are available these days, such as Mint and Digit. It’s also recommended that they be informed about the various financial blogs that can be accessed, as this will provide them with valuable information regarding financial responsibility and security. 

If you would like to learn more about securing your retirement nest egg and preventing it from being eroded by your adult kids over time, contact our financial advisors today. 

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working and retirement

Getting into the Right Retirement Mindset throughout your Career

While most individuals in their early and late 20s think that their retirement years will take ‘forever’ to arrive, the truth is that this time of your life will arrive far sooner than you realize. The main secret to creating a good-sized retirement account is to start saving as quickly as possible after you start working. 

Getting into the right mindset regarding retirement savings and taking the appropriate action will help ensure that you get to enjoy this time of your life without worrying about money – regardless of how old you currently are. 

  1. Your 20s

This is the time to take full advantage of any 401(k) matching programs your company may be offering, and if you enroll in a program like this before reaching the age of 25, it will significantly reduce the amount of money you’ll need to save on your own than if you waited until reaching your 30s and older. 

Studies have revealed that if you’re able to increase your income by just $5,000 per year in your 20s, it could enable you to accumulate an additional $500,000 during your working life. Just saving 10% of this additional income would see your retirement account grow by a minimum of $50,000. 

  1. Your 30s

One of the best things you can do to prepare financially for your retirement during this time of your life is to stop accruing consumer debt. Wherever possible, pay cash for anything you purchase and direct any bonuses, tax refunds or overtime income towards getting debt repaid as quickly as possible. 

Although there is nothing wrong with splurging on a treat occasionally, money should only be spent if it won’t cause you to go into deeper debt. 

  1. Your 40s

This is the time to make sure that you become as indispensable as possible to your employer, and one of the best ways to do this is to improve your existing skillset. Consider taking additional training courses that will help you to perform better in the workplace – this could even lead to you being given unexpected raises over time, which could then be invested as well. 

  1. Your 50s

At this time in your career, you should consider catching up on retirement savings wherever possible – especially if you weren’t able to contribute to any dedicated plans earlier in your career. By now, the vast majority of your debt should also have been cleared – including your mortgage and any student loans that may have still been looming. 

The extra cash that would previously have been used to repay the debt should now be channeled into your retirement accounts wherever possible. In addition to a 401(k), you should set up a Roth account – this will enable you to save a larger, tax-free amount of money towards your retirement every year. 

The main aspect that will ensure a comfortable retirement is to make it as easy as possible to save money throughout your working life. Sticking to a realistic budget and not spending frivolously on unnecessary items will allow you to retire without having to worry about finances. If you’d like to learn more about saving towards your retirement, contact us today.

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Stress Free Retirement

Ensure your Retirement is as Financially Stress-free as Possible

A number of individuals simply don’t give much thought to retirement – until such time as they realize that they will be entering this time of their lives within just a few years. However, if the right amount of planning and thought is put in early enough, your golden years could end up being some of the most enjoyable and financially stress-free times of your life. The tips below will help you get started on this important journey.

  1. Get as Much Debt as Possible Paid Off Now

Most people who retire will not have as much disposable income available to last from one month to the next. As such, now is the time to eliminate as much of your debt as possible.

Repaying as much debt as possible won’t only save on interest and bank charges; it will allow you to free up more of your current income so that you’ll be able to get by easier once you’re no longer working. Another advantage of repaying debt while you’re still employed is that you won’t have to worry about struggling to repay it when you’re living on a lower income. 

  1. Save as Much Money as Possible 

Regardless of whether you’re in your 20s and just starting out in your career or you’re closer to retirement age, saving for your future is essential. A number of surveys undertaken over the years have revealed that as much as three-quarters of employees have less than $30,000 set aside in savings towards retirement – definitely not enough to survive on. 

The sooner you start saving, the less you’ll have to set aside each month for this time of your life – thanks to the wonder of compounding interest. If you’re still in your 20s, you’ll usually be able to save between 10% and 15% of current income. However, if you only start savings in your 40s, you’ll have to sacrifice as much as 50% of your current income so that you can survive your golden years. 

  1. Spend Carefully

Although your retirement is supposed to be about enjoying yourself, it doesn’t mean that you should go and spend frivolously on costly vacations or other unnecessary items – unless you’re 100% confident that you can afford to. 

If you’ll still be paying off your mortgage after retiring, it’s crucial to ensure that you won’t be paying a penny more than 20% of your retirement income each month on it. Whenever spending money after retirement, don’t be afraid to ask if any senior citizen discounts are available – it never hurts to ask. In some cases, you could have as much as 50% shaved off the original price of an item or service. 

Planning ahead for your retirement years will help ensure that you’ll be able to enjoy yourself as much as you can without constantly having to worry about finances. If you’d like to ensure that you’ll be able to retire as financially comfortable as possible, contact our investors today.

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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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