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Financial Commentary

Insight & Market Analysis.

  • The Path to a Better Retirement May Be Working Longer

    The Path to a Better Retirement May Be Working Longer

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    The Path to a Better Retirement May Be Working Longer

    Economic recovery aside, seniors are working longer than the traditional retirement age

    You’ve seen those TV commercials asking consumers how long they think the money they’re saving will last in retirement; and most of them are surprised by the results. Staying in the workforce past the traditional retirement age of 66, according to Social Security, may not be everyone’s cup of tea, but baby boomers who hang on to their jobs for a few more years are reaping the retirement rewards. A 2013 Wells Fargo Commercial Retirement survey revealed one-third of respondents expected to work until “at least 80” to accumulate the retirement savings they felt the needed to last for years to come.1

    Working longer has many benefits including more time to grow your tax-deferred retirement savings account or extend employer health insurance or group life insurance benefits. Another benefit for working seniors is to defer taking their full Social Security benefits until after retirement age (66). Kiplinger.com reports on one of the advantages of deferring Social Security benefits as helping seniors avoid the “earnings test,” which docks your inbound earnings if you claim your benefits early. For example, for every $4 dollars that you earn over the set limits (over $15,480 or $41,400 in the year you reach full retirement age), you lose half of your benefits (e.g., $2). Social Security benefits are increased by a certain percentage, depending on your date of birth, if you delay your retirement beyond full retirement age. The catch is the benefit increase ceases to apply when you reach 70 years old, even if you continue to delay taking your benefits.

    Keeping your current job is one of the best paths to a more fruitful retirement. You hear the Labor Department’s unemployment numbers each month. The unemployment rate has finally dipped below 7 percent but it’s still nowhere near where it has been historically. Leaving a job at an older age could put you at risk for not finding another one. If you decide you can’t stay in your current job any longer, consider moving from full- to part-time or choose to work in one of the fields where seniors are finding work today including elderly caregiving, driving jobs, retail or state/city/county government positions. If you choose to cut down your work time, be cognizant of the fact that your diminished hours could limit your eligibility for health benefits or life insurance.

    Happiness in retirement has different meanings for every American. Many focus on their nest egg, ensuring it’s full enough to last them through old age (and we are living longer these days), and for others, it’s stepping out of the work force to de-stress and enjoy spending more time with family, friends, hobbies or traveling. Whatever path is right for you, our financial professionals are experienced at developing personalized retirement strategies to help meet your long-term financial goals. Give us a call today to learn more.


    These are the views of Cassie Dono, a freelance financial writer and news commentator, not the named Representative or the Broker/Dealer, and should not be construed as investment advice or a recommendation. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If expert assistance is needed in these areas, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor prior to making any investment decisions.

    Citations
    1 https://www.wellsfargo.com/com/focus/annual-retirement-survey

  • Cash Strapped? Top Reasons Why You Are Broke

    Cash Strapped? Top Reasons Why You Are Broke

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    Cash Strapped? Top Reasons Why You Are Broke

    5 explanations why your money isn’t stretching as far as you’d like

    You have a good job and you think you are saving appropriately but your paychecks aren’t stretching as far as you’d like. Instead of wishing for your financial situation to turn around, it’s time to examine your spending habits. The real reason behind being cash strapped is likely you. Here are five explanations why you are broke and tips to help ease your financial woes.

    You’re living a lifestyle you can’t afford
    Your neighbor drives a Porsche and the woman in the house across the street struts Louis Vuitton handbags. If they can have it all, we feel we are entitled to it, too. The problem is this psychology creates a false sense of security and you’ll inevitably “fake it to make it” to keep up with the Joneses. Attempting to maintain a lifestyle that is beyond your means is a surefire way to deplete your hard-earned money and fast. Instead, if you want a new luxury car, consider a used car, or if you want to purchase a new home, practice patience and try saving as much as you can to put down 20 percent or more to keep your monthly mortgage payment low. You’ll live a happier life with more money in the bank.

    You put your entire paycheck into checking
    A checking account is obviously an essential but putting all your money into that account could cause you to overspend and derail your savings plans. It’s easier to pull money out of checking for spontaneous spending. Transferring that money to a savings account is one way to make your money less accessible – and actually make some money for you (little by little). One way to help shovel more dough into a savings account is to set up automatic deposits. The money you don’t see, you won’t miss (or spend) and will be sitting there earning interest for you. Talk with a financial advisor for more money saving tips and ways to grow your hard-earned money.

    You spend on bad habits
    Happy hours, fast food and smoking as regular indulgences could be the reason you are broke. Bad habits are a big financial drain…and that is a fun buzzkill. One of the reasons people struggle with money is likely a result of indulging in bad habits. Give up those habits and you’ll improve not only your health but your wallet will thank you, too. For example, a busy family of four that eats out regularly could spend up to $300 a week on meals. That totals over $15,600 a year. Even being a smoker costs both your money and health. An average pack of cigarettes costs more than $6, and for a pack a day smoker this can add up to $2,200 a year. Your health will suffer and insurance costs will skyrocket – another reason why your wallet is empty. To save your income from your bad habits, consider drinking alcohol in moderation, cook in two to three times a week to cut back on fast food costs and try to quit smoking.

    You make minimum credit card payments
    Are you one of those credit card payers who avoid looking at the total line and instead focuses on the more manageable minimum payment? Many who do this feel the immediate benefit of keeping more money in the bank but haven’t considered the interest implications of only paying the minimum. The monthly minimum is around 2 percent of your balance. If you send in the minimum payment on a card with a $6,000 balance with a 15 percent interest rate, it could take you 30 plus years to pay off and over $8,000 in interest on the original balance. Instead, do what you can to pay off your credit card in one lump sum – or start by doubling your minimum payment. Your bank account may take an immediate hit but you will be saving thousands of dollars over decades. Also, many consumers can simply call their credit card issuer to reduce their interest rate by at least a percent or two.

    You don’t have any financial goals
    One the main reasons people complain about not having any money is because they don’t have a plan to save it. Like any goal, you’re more likely to attain it if you actually set it…and it’s realistic. Maybe your goal is to save for a big trip, a future home or baby on the way. Put your goal in perspective and work toward it in a realistic timeframe. You can write your goal on a piece of paper and tack it to your refrigerator for a daily reminder of what you’re working to achieve, or create a vision board for those who like to visually depict their goal and what’s important to them.

    Our financial professionals have expertise in developing smart personal investment strategies to meet your long-term financial goals. Give us a call today to learn more.


    These are the views of Cassie Piercey, a freelance financial writer and news commentator, not the named Representative or the Broker/Dealer, and should not be construed as investment advice or a recommendation. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If expert assistance is needed in these areas, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor prior to making any investment decisions.