Many people are ready to make the transition to retirement. They envision living a less stressful, carefree lifestyle. Where they can be adventurers, live next to the ocean, hear the waves crash. Enjoy the warm sunshine, swim in the ocean and gaze at the sunset every day. Is ocean front living a dream or could it be a reality for you? A home may be…
How much can retirees withdraw from their nest egg each year? This is a question that many thought was answered by the 4% rule, first articulated by Bill Bengan in 1994. Bengan is a retired financial planner from Southern California, and he published a book for financial planners based on his historical research, one that he called the Safemax or the maximum safe historical withdrawal…
Whether you’re already retired or thinking about retiring within the next few years, a second act might be on your mind. Have you given thought to what you’ll spend your time on in retirement? Many older adults view retirement as a second chance to explore the dreams they never had a chance to explore during their working years. It’s never too late for your second…
U.S. stocks are cresting to all-time highs, almost daily. These are the times when investors look forward to opening their monthly statement. The anticipation is high, you open the envelope (or electronic statement) and wow, is that right? Shouldn’t the values be higher? Today’s lesson is a phenomenon we are going to call “Statement Shock.” Inevitable questions follow. Rational people apply their problem-solving skills. They…
Applying for financial aid for college is becoming less stressful after President Obama changed the earliest FAFSA filing date from January 1st to October 1st. This means that the FAFSA can be submitted on October 1st for the 2017-2018 academic year, whereas in the past the earliest date to submit it was on January 1st. This is huge for high school seniors. Typically, high-school seniors…
Identity theft is on the rise. The most recent statistics come from 2014, according to the Bureau of Justice Statistics, an estimated 17.6 million Americans were victims of identity theft. That is nearly 7% of US residents. Most victims experienced the misuse of credit cards; those are the most easily rectified. Consumers are only at risk for $50.00 due to fraud on a credit card….
It sure seems like we’ve had our fair share of investment volatility of this century. There have been two major market disruptions; The Dotcom bubble in 2000, where the Nasdaq composite lost 78% of its value, followed by the Great Recession of 2007-2008 with nearly a 50% drop in US Stock prices. There have been many corrections outside of the big two as well. I…
The topic of when to take Social Security receives much attention, for good reason. It may be the single largest resource for many people retiring today. Unfortunately, some of the strategies to maximize benefits were taken away this year. The file and suspend strategy, available to couples, was eliminated as part of the Bipartisan Budget Act of 2015 (hard not to chuckle at the name…
It’s that time of the year again – tax season. It is time to gather all your documents and either prepare your own return or meet with your accountant. Yet you haven’t received your 1099 form, the report that summarizes your financial gains and losses for the previous tax year. Prior to the year 2011 these forms always arrived on a timely basis, often by…
Inflation since 2008 has been very low. The average since 2008 is a paltry 1.48%. The numbers annually are as follows: Year Rate of inflation 2008 .1% 2009 2.7% 2010 1.5% 2011 3.0% 2012 1.7% 2013 1.5% 2014 .8% 2015 .7% 2016 1.4%* Average 1.48% Source: http://www.usinflationcalculator.com/inflation/current-inflation-rates/ *Partial year This is very good news for Retirees. This article will focus on some reasons many don’t…
Not if, but when. Bear Markets are part of investing in the stock market. This is a fact, you must know to be ready for the worst. It helps you prepare mentally. These events should not be a surprise, they should be expected. They are a normal part of investing. If so, you must have a strategy to deal with Bear Markets. Market timing is…
One of the greatest worry’s for anyone who is retired, is running out of money. Of course, if we knew how long we would live it would make the process much less stressful. We could simply spend down our assets so they would run out, when we did. Much has been written about life expectancy gains over the last century. Now with advances in science,…
Many people have heard about reverse mortgages. They are hyped on TV, radio, magazines and many brokers recommend them aggressively. As a financial planners we have considered them as a possible solution for those who are concerned about outliving their resources. The primary issue we saw as a negative was the very high cost. Typically fees to acquire a mortgage were often well over $10,000. …
Perhaps the single most important factor in reducing financial stress is managing cash flow. In their book The Millionaire Next Door, Dr. Thomas Stanley and William Danko explained this financial principal as “I make plenty of money but there is too much month!” This is a common refrain for many people. This is especially true in California where the cost of housing is quite high,…
Is the Bull market over? Are rising interest rates going to hurt bonds? What about the volatility in the Chinese stock market? Markets seem so shaky! Many people are worrying if they should do something with their investments. What should they do? I have some bad news, no one knows the answers. Timing markets (reacting to short-term developments) does not work. It has never worked…
Many employers provide or share the cost of health insurance, for their employees. This is a wonderful benefit. Since many receive it as part of their benefits package they often are not knowledgeable about plan provisions, costs and benefits. For people contemplating retirement, prior to age 65, the cost of health care and insurance can be a big obstacle. This process also continues once they…
Last blog we shared some ideas about how boomers may be able to retire on less money than many experts suggest. One of the topics we mentioned was lowering the cost of housing. We will explore that topic in more detail today. Many people are facing the challenge of retirement. Unfortunately the rules of the game changed mid- course. Longer life expectancy, fewer pensions, layoffs…
Much has been written about the inadequate level of saving by Baby Boomers in America. Not a day goes by when you don’t see an article on the difficult road faced by aging boomers, who have not saved enough for retirement As a certified financial planner who works with people approaching retirement I am familiar with the challenges. I also am aware of some excellent…
One of the most challenging aspects of investing is evaluating investment performance. There is a never ending cornucopia of information about the stock market and the various investment products that are available. People spend a good deal of time comparing their investments to benchmarks such as the S&P 500, the price of gold, or the performance of other investors such as family members or co-workers…
However, while tax-deferred growth can be a good deal, paying taxes on the way out may be a bad deal in some circumstances. Recently, we came across that very circumstance. What differentiated this client was his plans for retirement. That is, he had some very big plans – both in terms of cost and scale . . .
Oil is on sale! With such low prices, our client Marcus Junius Brutus the Younger has decided that now is the time to buy. But, wait a second – how exactly does one invest in oil?
Many company officers and other highly-compensated executives receive a whole host of employer retirement benefits, including not only a 401(k) plan and a pension plan, but a non-qualified deferred compensation (NQDC) plan as well. Like 401(k) plans, NQDC plans offer tax-deferred growth. However, NQDC plans are much riskier than a 401(k) plan, in that a creditor may be able to seize the assets . . .
Today’s post is inspired by Charlemagne, who writes in to ask about a sudden drop in value of one of his investments. Concerned about his holding Super-short Duration Debentures mutual fund (ticker: SSDD), Charlemagne writes in to say . . .
To iron out his retirement plan, Temüjin meets with a financial advisor. Temüjin’s plan is ambitious, with a travel itinerary spanning from China to Bulgaria. Undoubtedly, such a vacation will be expensive. To help save for this coming expense, Temüjin’s financial advisor suggests . . .
With financial planning, not only do you map out your dreams. Even better, you create a plan for making those dreams a reality. Have you always wanted to visit South America? Let’s set a time to make that happen! Is your fantasy a patio balcony, where you can read, enjoy a glass of wine, and watch the sunset every evening? We’ll figure . . .
Meet Marcus. Marcus has poured tens of thousands of dollars into his whole life insurance policy. He’s sick of paying the expensive premiums – only to see the value of his policy decline! So, what’s Marcus to do – should he stop paying into the life insurance policy despite the risk of facing a massive tax bill? To find the answer as to whether (and how) Marcus should get out of his whole life insurance, first count how much money has . . .
A client expresses concern over his growing debt. The fact that the wealthy individual even has debt is puzzling. Despite holding several million dollars in stocks and bonds, as well as rental properties, the client’s income is limited. In fact, the client is so short on cash that he is forced to borrow money to cover his living expenses. Why does this happen? Why is a person with ample wealth forced to borrow money? The answer has to do with the type of . . .
This week’s blog post is inspired by Mark, who asks, “How much stock should I hold in my portfolio to get an investment return of 30% a year?” The answer isn’t what you think it may be, because investment returns fluctuate from year to year, with averages around . . .
Can I interest you in a car that has a built-in dishwasher? It’s just like a regular car, but unwieldy to drive, and more expensive to purchase and maintain. The automobile-dishwasher has huge downsides but, just think of the upside: you can do your dishes while driving your car! If you’re not sure what I’m talking about, just think about what’s it like when you purchase anything but . . .
Considering how much risk (a lot) is required for a given return (a little), there may be better investment opportunities available. This is especially important for clients in retirement – where risk management is paramount to investment return.