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How to Make Your Retirement Savings Last

How to Make Your Retirement Savings Last

Sep 2021

At one time, employees worked until they reached their 60s and passed away not long after retirement. However, as life expectancies have reached the late 70s and early 80s, planning for a long retirement is an integral part of managing financial risk. Consumers must plan for longer golden years.

Set a Budget

When your income is reduced, the best way to combat the difference is to pull back on your spending. You already won’t have the expense of a daily work commute, so look for other ways to cut back as well. Set a monthly budget and stick to it, tracking expenses as you go and asking someone to hold you accountable. Over time, you’ll observe spending trends that will help you make reductions and save even more.

Continue Earning Income

One of the best ways to safeguard your retirement savings is to ease into retirement rather than quitting work cold turkey. This could mean going part time at your current workplace or retiring and starting a small job. Retirement is the perfect time to do what you’ve always wanted to do; if you love books, work in a bookstore; if you’ve always wanted to run your own business, consider becoming part of the sharing economy, driving for a ride-sharing service, or shopping for grocery delivery services.

Move

Retirement is a great time to change your location. Since you no longer need to live within a reasonable commute to a business, the world is wide open. Consider moving to a more remote area or another state where the cost of living is much more affordable, and you’ll be surprised by how far your dollar stretches.

Managing your financial risk means making sure you have enough money in the bank to keep you comfortable during retirement. With a little planning and some cutbacks, you can confidently enjoy your senior years.

Tags: help with budget, retirement planning, retirement

Smart Things to do BEFORE You Retire

Smart Things to do BEFORE You Retire

Sep 2021

A lot of people focus on things to do after they retire, but there are a number of things you should take care of before you hit that milestone. Retirement planning specialists can explain the steps that will help you better prepare for retirement and help make this transition successful.

Establish a Plan:

You need to know how much money you’ll have coming in during your retirement, and then balance that against your expenses. Start by creating a budget, listing all your sources of income, and all your likely expenses. You’ll need to make sure your income covers or exceeds your essential expenses. As part of your plan, create a schedule. You need to know when you’ll apply for Social Security and Medicare and when you’ll receive any pension benefits or distributions from your retirement plans. These rules are complex, so you may want to consult with a retirement planning expert at least a year before you retire.

Consider Your Health:

As part of your plan, you need to factor in any health considerations. A medical emergency or major illness can completely disrupt your retirement. People often assume Medicare covers “everything,” but that’s not true. In addition to Medicare, you will probably want to obtain supplemental medical insurance to protect your family and future from unforeseen medical expenses or accidents. You should also review any wills, powers of attorney, medical powers of attorney, and other estate documents to make sure they still represent your wishes. Finally, start focusing on your personal health NOW. Exercise, eat right, and start doing the things that will support your health in retirement.

Set Goals for Your Future:

What do you want your life to be in retirement? Often, people focus on financial planning but don’t actually think about what they will do after they retire. Strong social networks, family and personal relationships, and new opportunities to learn and grow are important components of a happy and successful retirement. The things you want to do will influence many of your financial decisions, so it’s a good idea to figure out what those goals are before you retire.

Tags: help with budget, retirement, retirement planning

Habits of a Savvy Saving Family

Habits of a Savvy Saving Family

Sep 2021

When people warn you that having kids is expensive, it’s no joke. From diapers to food, braces to sports activities the costs add up quick. For a middle-income family in the U.S. raising a child up until age 18, costs an estimated average of $245,340 (or $304,480, adjusted for projected inflation), according to the 2013 “Cost of Raising a Child” report from the U.S. Department of Agriculture. Of course, this number fluctuates dependent on where you live and your living habits. Saving money as a family may be more complex than budgeting as a single adult, but it can be done successfully and save you loads for retirement, saving accounts, long vacations, and mean more readily available investment capital.

Yet, saving money doesn’t have to mean drastic reductions, rather small, targeted steps as an entire family can mean substantial savings. No matter the size of your family, use these tips to increase your family’s frugality and reduce the constant feeling of financial squeeze:

First and foremost, hold family budgeting meetings. Like any good business that needs a stable budget to be profitable, your family will thrive with a clearly defined and agreed upon budget.Include your spouse and older children (kids feel great about contributing to “adult” decisions), at a regular decided upon time—for example, the first Sunday of the month after dinner. (This helps to establish it as a habit.) Use an organizing tool like a spreadsheet, app, or budgeting binder that can be easily edited. And, you want to focus in on four main topics:

  1. Review past spending and compare this to the set budget. (There are some great budgeting apps like Wally, Mint, and GoodBudget that can help you easily visualize the breakdown of what categories you spend the most on.)
  2. Establish spending for the coming budget period and define in what categories.
  3. Identify any current problems and potential issues with the budget and brainstorm solutions
  4. Define any goals and track progress on current goals like paying off your eldest son’s braces or putting away a certain amount toward college.

Take a staycation

When every one of your kids’ friends are bragging about their upcoming spring break trips to Disneyland, the beach in Florida, or skiing in the Rocky Mountains, it’s hard to tell your kids that they’re staying home for their week off. But, that’s precisely what you should do. There is plenty to be explored in your own community and nearby metro areas. Take some days off of work and between free museum days, outdoor activities like hiking or bike riding, and movie theater matinees, a staycation will still be filled with memories and quality time together.

Embrace energy efficiency.

We all know turning off the lights after you leave the room, using energy-smart appliances, and taking shorter baths/showers is good for the environment. But, it’s also good for your monthly bills. Even if you don’t have the resources right now to install new, appliances that use less water and energy, the entire family can still conserve energy and thus, money. Make it a game to turn off the TV when done watching, unplug electronics, and turn the faucet off when brushing teeth. Start with a couple energy-saving techniques and then add a new one to focus on every couple of weeks.

Meal plan like a boss.

After a long day at work for you and school for the kids, the easiest diner option—a pizza, fast food, Chinese takeout—can feel like the perfect, simple solution. But it’s going to end up costing you more in the long run in both money and nutrition. Meal planning may feel time consuming at first, but after a few weeks you’ll have it down to a science. Over the weekend—Sunday perhaps—plan out what your family’s going to eat for the week. Make meals ahead and stick them in the freezer or do some shopping to get ingredients for the week, or at least the first few meals of the week in advance. Buy in bulk whenever possible. Luckily there are some apps to help with this process like Plan to Eat, Cook Smarts, and even Pinterest could be used to your advantage.

It’s okay to say ‘no.’

Anyone with children will tell you a trip to any store—grocery, drug store, mall—is incomplete without multiple asks of “Can I get this?” followed by a temper tantrum. Or, things like sugared cereal and toys are just placed in the cart when your back is turned. All of these little extra add-ons can add up over the course of the month with little to show except a kid sometimes amped up on candy with another stuffed animal in the toy box. Once your kids are old enough to understand, have them help you make a list of what you’re going to buy and then check it off while shopping. If they fuss about something explain it’s not on the list and so it’s not the time purchase it…unless they can and want to do so with their allowance.

Find the free.

Check your community’s calendars of free things to do. Often times you’ll find free story times, music, and outdoor activities—especially for the kids. Oh, and don’t forget the kids eat free or half priced nights at different restaurants. Throw one of these events together with some time at the park and you have yourself a fun-filled, free, child-friendly day!

Plan your purchases

It may seem like commonsense, but most things from winter coats and cable knit sweaters to outdoor grills and inflatable pools are sold seasonally. That means you can usually find the best discounted price on many items right after the season for the use has passed. Buy Halloween costumes for the next year right after Halloween this year. Same goes for holiday décor and swimsuits.

Do date night on the down low.

your partner. That doesn’t always have to mean dinner at a restaurant and a movie, concert or theater performance. While those things are fun, see if family or trusted friends will take the kids for a bit while you and your love have a cozy night in making a nice meal and watching a new movie on the Netflix queue.

Resources

  1. http://www.huffingtonpost.com/2014/08/18/cost-of-raising-a-child_n_5688179.html
  2. http://money.usnews.com/money/personal-finance/slideshows/12-habits-of-phenomenally-frugal-families
  3. http://money.usnews.com/money/personal-finance/slideshows/12-habits-of-phenomenally-frugal-families
  4. http://www.busybudgeter.com/family-budget-meeting-step-step-guide/
  5. https://www.policygenius.com/blog/smart-financially-savvy-mom/
  6. http://shalommama.com/money-saving-tips
  7. http://www.goodfinancialcents.com/simple-money-saving-tips-for-families/

tags: help with budget, retirement

Help with My Budget and Spending

Help with My Budget and Spending

Sep 2021

Saving for retirement is very important, but many people feel that they can’t spare the money to participate in a retirement plan or even create a basic savings account. Retirement plan consultants suggest that the first step is to create a budget. Once you figure out where your money is going, you can look for ways to save more.

Track your spending -

There are a number of ways to create a budget, but one of the easiest ways to get started is to simply record everything you spend. A notebook works just fine, but you can also use your phone or other device. The key is that it needs to be portable, and you need to note every time you spend money, even on cups of coffee or snacks. Many people find this to be an eye-opening experience, since they don’t realize how much spending they actually do. It’s becoming much easier to swipe a card or even use digital payments, so you don’t always have the sensation of handing away your money.

Once you’ve collected at least a month’s worth of information, you can start creating your budget. At this point a spreadsheet or an online budgeting program could be very helpful. Ideally, you should be able to divide your expenses into three categories:

Fixed Expenses -

These are regular payments you make every month, like house or car payments, or electric and utility bills. Make sure you include any subscriptions, like moving streaming services or gym memberships

Flexible Expenses -

These are expenses that vary from month to month, like entertainment,gasoline, groceries, hobbies, or other bills that change every month. Some of these are necessities, like groceries or gas, but you can still control how much you spend on food(groceries versus dining out, for example) or gas (by sharing rides, walking, or biking instead).

Financial Goals

These are expenses that are important for your future. Paying down credit card bills or saving for a down payment on a home are two examples. You should definitely establish an emergency fund for unexpected expenses, like car or home repairs, and start saving for retirement.

Start making changes -

Once you’ve established your baseline budget, you can start looking for ways to trim your flexible and fixed expenses, and use those funds for your financial goals. Can you pack a lunch more often instead of eating out? Can you make your own coffee instead of buying a cup each day? And remember, fixed expenses aren’t always “fixed” – can you eliminate some subscriptions, reduce your utility bills, or make other changes to free up money?

Paying down high-interest debt and establishing an emergency fund are key goals, but remember that you also need to save for retirement. If your employer offers a tax-advantaged retirement plan, like a 401(k), you’ll want to take full advantage of it as soon as possible. Starting now gives your money more time to grow through compounding, and will help put you on the road to a successful retirement.

12 Strategies You Should Know to Build an Emergency Fund

12 Strategies You Should Know to Build an Emergency Fund

Sep 2021

When it comes to preparing for a rainy day, the best time to act is now. Establishing a 3-month or $10,000 emergency fund is a critical pillar to your financial wellness - and it will help you sleep a whole lot better at night.

But how can you find room for this essential line item in an already tight budget? Here are 12 tips to help get you there.

  1. Set a target date to reach your goal. This can help bolster your motivation, especially if you need to cut back a little on your expenses (see #3). Remember it’s only temporary!
  2. Decide where your fund will reside. Consider a conservative option such as an FDIC insured savings account. This is not the place where you want to take on any significant risk - liquidity is the primary goal.
  3. Put your monthly budget on a diet. Trim the fat wherever you can. Cut down (or out) your latte habit until you’ve reached your goal. Dine out less, carpool to work, suspend some streaming services and do whatever else it takes to free up necessary cash.
  4. Eliminate a couple of big expenses. If you don’t want to feel the pinch on a daily basis, plan a staycation instead of pricey travel and bank the difference. Or, hold off on home improvement projects to make sure you can actually keep making the mortgage payments should disaster strike.
  5. Sell some stuff. If you’ve been looking to do a little decluttering anyway, now would be a great time to do some online selling or have a huge garage sale. You might be able to make a sizeable dent in funding your reserve and liberate some extra space in your attic and closets along the way.
  6. Leverage found money. Use an annual bonus, gifts or a tax refund to prepare for disaster. It may be easier and faster than trying to reign in your budget from every direction.
  7. Generate some extra income. If you have more room in your schedule than in your budget, take on a side hustle by doing some freelance work on Fiverr, or try Ubering your way to disaster preparedness.
  8. Renegotiate your debt. If you’re carrying a lot of revolving debt at a higher rate, ask your creditors if they would be willing to lower the interest rate. Or consider using a zero-interest credit card balance transfer promotion and sock away what you used to pay in interest charges.
  9. Pay yourself first. Until the emergency fund is in place, make setting aside whatever you can toward this goal a top priority, along with necessary expenses and timely debt payments. Making the payment an automatic transfer from your paycheck into a savings account is a great way to keep yourself honest.
  10. Confirm insurance coverage. If there’s an emergency, your emergency fund is only one potential resource at your disposal. Review your disability and homeowner’s coverage, medical plans, car insurance, and long-term care plan, and consider obtaining an umbrella policy for an extra layer of protection.
  11. Don’t stop once you’re done. After you’ve reached your emergency funding goal, contribute as much as you can on a regular basis to a well-diversified retirement plan. The government has increased the contribution rate for 401(k) plans to $18,500/year starting in 2018. Workers over 50 can make an additional “catch up” contribution up to $6000 for a total of $24,500 annually(2). And this does not include funds received as a company match. If you’ve already adjusted to a leaner budget, this may be the easiest time to supercharge your retirement savings so you can pursue your goal of enjoying your golden years in style.
  12. Reevaluate your emergency needs annually. Remember, as your expenses increase over time, your emergency fund will need to adjust accordingly. So, each year take a fresh look at what it will take to weather the storm and add to your fund as necessary. And most importantly, resist any temptation to tap your emergency fund in any situation other than a crisis. After all, you can’t put a price tag on peace of mind.

We encourage you to set up an appointment to discuss your emergency fund and all your retirement needs with your 401k advisor today - your financial future just may depend on it.

Tags: budget, emergency fund, save

1. https://www.bankrate.com/banking/savings/financial-security-0118/

2. https://www.irs.gov/retirement-plans/401k-plan-catch-up-contribution-eligibility

NFPR-2019-71 ACR#324824 08/19


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