Tag Archives: 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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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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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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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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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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Retirement Tips

Keen to Retire Earlier than Planned? Keep these Points in Mind

Most Americans dream of being able to retire early in a convenient and comfortable living environment, surrounded by those that they care about the most. However, with so many changes that have taken place over the past few years, retirement can seem further away than ever before for many people – and some may now even think that they’ll never be able to retire because of the lack of income after doing so. 

If you intend retiring earlier than usual with a decently sized nest egg, you’ll need to keep the advice below in mind:

Establish a Plan

Several working Americans completely forget to even think about retirement. Although you may have already set up your 401(k), you may not be taking full advantage of retirement savings options that are available to you. 

These days, several online retirement tools are available to help you determine where you are with your current savings plan, as well as how far you still have to go until you reach your goal of being financially comfortable during this time of your life. 

Start by establishing goals and familiarizing yourself with your company’s retirement plans and policies as soon as possible – you may find that they’re willing to make matching contributions, which technically equates to free money towards your retirement goals. 

If you’re feeling overwhelmed at the idea of trying to set up a financial plan for your retirement, don’t hesitate to et in touch with a professional advisor for assistance.

Consider your Position in Life

The approach you take towards planning for your retirement will largely depend on your current age, income, assets you own and the age you want to be when you stop working. For instance, if you’re in your 20s or 30s and want to retire at 55, you’ll need to make aggressive contributions towards a good retirement plan. 

If you’re closer to retirement age, it’s still not too late to start working on funding your retirement> making small adjustments such as directing funds into your IRA or reducing unnecessary expenses can have a tremendous impact on retirement savings – far more than you realize.

Think Positively about your Retirement

While it may seem scary to think about the time that you’ll no longer be working, retirement will be your ultimate goal if you intend relaxing and being as comfortable as possible during this part of your life. 

You should also be thinking of retirement as your end goal instead of something unknown. While it may be the time for you to reduce living expenses, it should also be the time of your life where you no longer have to stress over a job or income.

Don’t allow daily life and an overfull schedule let you forget about putting a practical retirement plan into place. Although determining what your expenses will be during retirement is a relatively simple process, you’re welcome to get in touch with one of our financial advisors if you require assistance in this regard. 

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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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How Impulse Spending will Derail your Retirement Plans

Regardless of how frugal a person may be, no one is totally immune to making impulse purchases from time to time. However, the more you give in to this, the more harm it will have on your finances – especially your retirement plans. 

Impulse spending is one of the most common barriers to achieving financial independence, so it’s crucial that you develop a strategy to help you overcome the compulsion to spend in this manner. Below are some tips to help overcome impulse buying.

  1. Calculate an Item’s Value in Time

Most impulse purchases are led by emotions, meaning that engaging the logical part of your brain will be the best way to stop it. An effective way to do this is to stop and think about the amount of time you would have to invest in order to earn what that specific item costs. 

For instance, if you earn $20 an hour after taxes and the item you want costs $300, you’ll have to work for 15 hours in order to afford it. Now, is that impulse purchase really worth 15 hours of your time? 

  1. Don’t Purchase Items that Cannot be Returned

In many cases, the most tempting purchases are those that cannot be returned if you change your mind – such as that final clearance item you’ve seen online or in-store and think the bargain is too good to pass up. There are usually good reasons for items going on clearance – they may not perform as advertised or in the case of clothing items, the fit may not be quite right. 

Most individuals have experienced the awful feeling of regretting a purchase that can’t be returned – at least buying an item that can be returned allows you to undo the damage to your finances once you realize you no longer want it. 

  1. Stop Shopping for Entertainment

If going to your local mall is your idea of entertainment, you’ll need to rethink how to spend your free time so that your financial situation can improve. 

When you put yourself into an area of temptation such as a mall, there’s a strong chance that you’ll make impulse purchases, so stay away wherever possible. Also, refrain from hanging out with friends or family members who shop for fun.

  1. Watch your Savings Grow

Once you stop giving in to impulse shopping, you’ll start seeing just how much money will be saved over time – funds that can be put towards your retirement or other investment accounts. Over time, this could amount to a few thousand dollars – which will have grown quite nicely by the time you reach retirement age.

Although it’s often tempting to spoil yourself with that little impulse purchase, this form of shopping becomes problematic when it starts affecting your finances. If you would like to find out more about how your savings can be put to work and grow as much as possible, get in touch with our financial advisors today. 

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