Wise Money Retirement

One of the primary goals of retirement planning is to figure out how to use your retirement assets in the best way to generate the income you’ll need after you stop working. But to do this, it is important to have a pretty good idea as to the amount of income you’ll actually need. Estimating this is not a simple matter because there are so many things to consider. How much income will you need to pay your bills and essential living expenses? What amount do you want to spend for travel, pursuing hobbies and living your retirement dreams? How might your needs for income change over time as you age? What rate of inflation should you assume in your planning? These and other factors mean that the exact amount of income you’ll want to try to plan for is not static. Instead, it’s fluid and ever-changing. Therefore, establishing accurate future income targets is a complex, but necessary component to sound retirement income planning. A good financial advisor will typically spend hours, with the help of sophisticated computer programs to narrow all of this down to realistic lifetime income objectives. Once this is done, the planning job shifts to figuring out the best way to marshal all retirement assets so that they can produce this required income.   But there are many so-called professionals out there who will tell you that it’s easy to cut through all this clutter and complexity by instead using a simple retirement rule of thumb. The advice is… “You’ll need 70 to 80 percent of the income you made in your final years of employment in order to live a comfortable retirement.”  Well, that’s easy enough.  Or is it?

There is a very definite and unbreakable connection between risk and reward. Choose a financial instrument that helps provide greater potential returns, and you inevitably increase the degree that your money will be subject to investment loss. If instead you chose safety and protection over growth, expect the compromise of lower rates of return. Many retirees become frustrated as they search for the “perfect” investment that breaks this rigid risk and reward connection. Any time you hear of people getting taken advantage of and becoming the targets of fraud and financial abuse, it is typically because they wanted to believe there is some magical way to get high returns with no risk. Unfortunately, such excellence does not exist in the world of investing. And the more a person searches for this false perfection and refuses to recognize the unyielding relationship between risk and reward, the harder it will be to achieve retirement security.

4 Steps to a Better Retirement Plan Do you have your retirement date set, or have you already retired? And how about your financial plan…. Do you have things squared away? Or are you still working on putting all the pieces together? Creating a financial plan for retirement can be a tough job. There are a lot of moving parts and a ton of uncertainty that you’ll have to consider. We want to help you with some easy tips that you can follow to create a better retirement plan. These 4 areas of retirement planning are all areas that we see a certain level of misunderstanding. When we consult with clients and prospective clients each and every week, and in our daily discussions with retirees and pre-retirees, these are the areas that we see people simply get it wrong. So, today on the show we have identified 4 steps for you to take to make sure you create a better, more confident, financial plan! You still need a paycheck during retirement to live comfortably. Some people will have Social Security and/or a pension. But most people won’t have enough of a paycheck to keep the same standard of living. And that group of people will be forced to take the supplemental income they need from their retirement savings nest egg. To understand your budget and income needs make sure your money is aligned with your objectives, and what your monthly income “shortfall” may be. Once you understand your shortfall and how much income your retirement savings nest egg needs to generate. Then create an effective income withdrawal and investment strategy. This is the monthly paycheck that you need still after your Social Security check and/or pension check comes in. If you still don’t have enough monthly income after those income sources arrive because your budget calls for more, than you have a shortfall.

Strategic Roth IRA Conversion How would you like to switch your retirement savings to an account that grows tax-free?  You can make tax-free withdrawals from the account. And you can leave a tax-free inheritance to your heirs.  Right now, there are no restrictions on converting to this tax-free oasis. So, if you're considering a Roth IRA conversion you are going to want to think taxes. Like most people, your taxable income is fixed and tied directly to your paychecks. However, the day you retire those paychecks end.  But,  the degree of control you may have over your tax may improve.  Now you can  manage the amount of income you will have to report to Uncle Sam.  You'll have control other things that determine your taxable income. It’s pretty much up to you as to how much money you withdraw each year from your retirement accounts. How to Decide? You decide if you want to start your Social Security benefits as early as age 62, or delay those benefits, and any associated taxes they might trigger. It’s entirely up to you as to when you might sell any stocks in your brokerage account, taxed at lower capital gains tax rate, if you want more income.  Best of all, if you have some money in a Roth IRA, by now you may have fulfilled the requirements allowing you to take withdrawals … entirely free from income taxes. Any income that is tax-free will surely bring a tear to Uncle Sam’s eye. Don’t have a Roth IRA?  It may not be too late. In fact, those first five or so years after you stop working may be a great opportunity to convert some of the money in your taxable retirement accounts to a tax-free Roth. One very important thing to consider is that you’ll have to pay tax on the money you convert. There’s no free lunch here. Every tax dollar you are forced to pay now because of any conversion will certainly be painful, but just remember that paying this tax today could save you or your heirs many more tax dollars in the future. However, the day you retire and those paychecks end, the degree of control you may have over your taxes might improve dramatically. It’s a great time for some advance planning because now you can better manage the amount of income you will have to report to Uncle Sam each time April 15th rolls around. You have control other many things that determine your taxable income. It’s pretty much up to you as to how much money you withdraw each year from your retirement accounts. You decide if you want to start your Social Security benefits as early as age 62, or delay those benefits, and any associated taxes they might trigger. It’s entirely up to you as to when you might sell any stocks in your brokerage account, taxed at lower capital gains tax rate, if you want more income.  Best of all, if you have some money in a Roth IRA, by now you may have fulfilled the requirements allowing you to take withdrawals … entirely free from income taxes. Any income that is tax-free will surely bring a tear to Uncle Sam’s eye.   Don’t have a Roth IRA?  It may not be too late. In fact, those first five or so years after you stop working may be a great opportunity to convert some of the money in your taxable retirement accounts to a tax-free Roth.

Don't Out Live Your Money With These Helpful Tips A common question people ask is, “Do I have enough to money to retire?” The subtext is, “Could I run out of money before I die?” It's only natural for a pre-retiree or someone who has just recently retired to wonder if they will make it through. I’ve never met anyone who told me that they wanted to become a burden to their children later in life. Or that they wanted to run out of money and live in poverty in the final days that they have left. If you want to make it all the way through retirement, make sure you develop a plan longevity risks. Today, we want to discuss some tips that could help you make sure you wont out live your money.  One of people's biggest fears is that they will run out of money before they die. It’s really a normal fear, and for good reason. There are several risks that make the possibility that you will go through your entire life savings too quickly a reality. We have 4 tips to help people not out live their money. #1 - Be careful following the 4 Percent withdrawal rule This tip involves spending  money you have saved a lifetime for. Many retirees today might use Social Security and pensions supplemented with regular withdrawals from their savings. A strategy that many financial advisors tend to follow is called the “4 Percent withdrawal” rule. It was created over 20 years ago and says do not take out more than 4 percent of your saving out. However, the 4 Percent assumes that 50-75% of your savings are invested in stocks. Inflation could be higher than the 3 percent historical norm. Market performance could be poor.  You could also live longer than you thought you would, or you planned for.

Social Security Millionaire When it comes to maximizing Social Security retirement benefits, Americans do a horrible job. It’s been reported that only about 4% of retirees make the optimal Social Security claiming decision. That means most people planning to retire will end up losing roughly $2.1 trillion dollars. When people decide to stop working they will have to know how long their savings will last them during retirement. The best way to address this by  maximizing Social Security benefits. Famed economist Laurence Kotlikoff  proved that millions of ordinary Americans can increase their total Social Security income  – a typical example shows a single retiree collecting $131,951 more in lifetime income by optimizing benefits. Married couples might expect even more. So why don’t more people take advantage of the opportunities they have coming?  It's shameful, considering millions of Americans’ rely on it for future retirement security. Retirement can be such a great time in a person’s life. But when most people think about it, it’s hard not to be somewhat apprehensive when you face the reality of how you will get by for all those years without a paycheck. Maybe you’re one of those people who have stashed away millions of dollars in your IRA or 401(k). Or, maybe you are like many people who face retirement regretting that they had not saved more. Regardless of your circumstance, the good news is that with proper planning it is easy to live like a millionaire… or at least a Social Security “millionaire”. Here is what I mean. Now, Social Security is such a valuable retirement tool that by increasing these benefits you could find yourself a more secure. If you are married and both you and your spouse use the right strategies, according to the Wealth Enhancement Group, you can easily collect a million dollars in benefits over your lifetime.  But, by making the mistakes that most people make, you could literally leave hundreds of thousands of dollars on the table.

How to have a "Tax Wise" Retirement Today, we are talking about taxes and how they can lead to some surprises after retirement. This can be especially scary for anyone nearing retirement. Being “tax-wise” is no longer a concern for only the wealthy. Most fear that increased tax rates are looming on the horizon. That's why it's important understand tax diversification.  . Lots of people believe  their personal tax bracket will be lower after they retire. However, it can surprise you that your income, after taxes, is less than you expect. Even, perhaps less than what you need. From a risk management perspective, you'll need to diversify to deduce your exposure to the risk.  Creating a tax-wise strategy starts with understanding tax diversification  The "One-Trick-Pony" Approach When looking at different retirement income sources there are a variety of financial vehicles. While a variety could result in “tax-wise” income strategies, most people aren’t tax-diversified. Which is why the “One-Trick-Pony Approach” has been coined. Most people reach retirement with 95% or more total savings in a 401(k) or IRA. That is where the “one-trick pony approach” to retirement savings comes into play. This is the case because we are  “rewarded” with the postponed taxes. Don't forget that these taxes are only postponed. When you retire, 100 percent of this money will be subject to taxation. Traditional retirement planning has dictated that it is OK to postpone taxes.  This is because you will probably be in a lower tax bracket after you retire. Tax diversification starts by considering how investment accounts are taxed. Then create many income streams with a tax-efficient withdrawal strategy. To understand this, it's important to look that most contracts can be in one of three categories.  It might be easier to think of these categories as buckets that you might use to hold your retirement assets.

3 Essential Elements to a Successful Retirement Plan If you are recently retired, it’s time to shift your thinking when it comes to how and why you invest your dollars. You may be looking for the essential elements to a successful retirement plan. You've moved from “paycheck” mode into “distribution” mode. But, you might not realize it right away. However, when you've gone from adding to your portfolio to taking from it regularly, it’s normal to have some hesitancy when it comes to transitioning your investments with this new phase of your life. Now it’s time to shift that mentality into keeping as much of your money while you spend it. Three essential elements to a successful retirement plan come to mind. Everyone in retirement needs at least these three things in their plan. Safety, Liquidity, and Growth Potential. That is, focus on the safety of their dollars, growth potential of their investments, and having liquid access to their money. Safety  You will be hard pressed to find anyone who would say that they don’t want their money safe. That they don’t want any growth out of their assets.  They don’t want liquid access to their money. Everyone wants those three things, and they are even more important to have during retirement. So, let’s start with the first pillar which is Safety. Safety and having “safe” money investments is a pivotal part of a complete financial portfolio in retirement. You can read textbooks and do your own research. It can be understood that retirees should be take less risk and protect themselves when investing. Fundamentally, it takes longer to re-coup losses in retirement. This is because you won’t be making regular contributions to your accounts like while you were working. . Having a portion of your investment portfolio invested or positioned in a safe or principal protected way should give you a lot of confidence about your financial future and allow you to worry less about your life in retirement. But don’t overdo it, because safe money simply doesn’t grow as much as money you are willing to take risk with

Could Your Financial Behaviors Wreck Your retirement? In recent years, there has been a huge push in the field of “behavioral finance.” That is, what types of behaviors do people that can affect one’s portfolio. That’s what we are going to talk about on the today’s show. We're going to discuss if it's possible that your financial behaviors could affect your retirement.  To dive in deeper we’ve outlined 4  biases people tend to run into! More specifically, the bad behaviors that could impact your financial life. Believe it or not, science has shown there are certain human emotions and behaviors, we all exhibit, that hurt our chances of financial success. A Closer Look: Odds are that you have probably never heard of its application until right now. These problems and emotions that investors face are very real, and they can be very impactful to your financial future if you ignore them. Most people do not process information solely on objectives and statistical numbers, so the financial planning process can be subjective. And therein lies the entire problem. Money is emotional, the entire idea of it. I mean think about it. You’ve worked a lifetime to accumulate what you have. You spent long, hard hours to save it. You made sacrifices. Went through some tough times. When it comes to positioning your money into investments and making the final decisions on that, it’s hard to set your emotional tie to your money aside and make a rational decision. Let’s go over a few examples of behavioral biases and behavioral finance issues that you may be able to avoid simply by having a slight understanding and awareness that they are indeed there! We want to avoid making some of these simple behavioral mistakes. We would be happy to help you develop a game plan to avoid these emotional and behavioral pitfalls.

6 Common Retirement Misconceptions Planning for major life events can be very exciting, but it can also be very stressful. These types of events should require some deep thought and a thorough planning process. Some people enjoy the planning process and take the time to do so, while others do not spend as much time preparing. It is important to plan properly in order to be successful. Today, we want to discuss the importance of retirement planning, and how to avoid the common misconceptions many people make while planning for retirement. Misconceptions are common in every area of life, and especially when it comes to retirement. Your golden years should be the best years of your life, so we want to clear the air and make sure you understand the next phase of your life. People tend to assume things when it comes to different areas of life. It’s a part of life, and it will always be a part of how people think. However, assumptions and misconceptions can be damaging if you make them towards important decisions in your life before fully understanding each position.  Savings Strategy  Many individuals believe that all or most of their savings should be in qualified plans. What exactly is a qualified plan? Simply put, a qualified plan is one where your contributions are not taxed until you withdraw money from the plan. These can be very appealing because they allow your money to grow on a tax-deferred basis. Examples of qualified accounts include traditional IRAs, 401(k)s and other defined benefit plans. These are commonly the largest nest egg that pre-retirees build as they are working. This makes sense because most of the time, you are taking a portion out of each paycheck and putting it towards a retirement account and, hopefully, you are receiving a company match. So naturally, many people believe that all or most of their retirement savings should belong in a qualified plan. We are here to explain why this is not necessarily the case.

What To Know About Inflation And Retirement  Today’s topic is one that has been in the headlines for quite some time now. It seems inflation is on everyone’s mind, and rightfully so. Since the pandemic hit and stimulus spending began stacking up, there have been discussions of how these bills could impact retirees and their retirement savings. But how do we cope? We know there is risk that comes with investing in the stock market. We also know there could be fees when money sits in the bank and other accounts. To combat this risk, some people have a “mattress fund” or a coffee can in the backyard to keep their money from going anywhere. But inflation affects every single dollar you save, no matter where it’s invested. So, what's the relationship between inflation and retirement? Well, inflation is when the value of a currency is falling, and consequently, the cost of goods and services is rising. We have no control over it. However, it has a big impact on our finances, yet people do not think much of it as they prepare for retirement. We are living in very uncertain times, and the government has promised to spend $6 trillion in COVID-19 relief. Whenever the government is spending that much, inflation is likely to rise, which means now is the time to make sure your retirement accounts for inflation. So, today we want to go over the relationship between inflation and retirement and a  plan for the possible blow of inflation.

Retirement Success Secrets You'll Want To Know! Today is a big show because… we’re telling secrets! Retirement success secrets! For real though, we are going over some keys to retirement planning that you may not know about. And our goal with the show today is simple. If you are retiring soon, we want you to be as confident as you can be in your position. We don’t want you to be constantly worrying that you might not have enough money, or that the next market cycle might derail your plan, or that you can’t spend confidently. We want you to spend your retirement worrying less about your money and more about your life. And in order to do just that, you need to have the best plan that you can. If you are listening to this show then you are likely searching for an upper edge. What for exactly? Maybe with investments, or the market, or your own personal financial plan. Or maybe you are simply trying to learn some key information that you didn’t know before with hopes that said information will help you have a better chance at success when it comes to your retirement. Retirement is a pretty big deal after all, and it makes sense to double or even triple check your plan. So, what is it that you don’t already know that you should know? Are there any unknowns left out there that could impact your retirement life and your chances at success? Today’s show uncovers some financial planning topics and keys that might give you the upper hand.

5 Ways to Avoid Running Out of Money In Retirement Here’s the thing: We’re all living longer than any generation before us, and those numbers are only rising. With medical advancements and technological achievements, our life expectancy has increased over the years where some can expect to spend potentially three to four decades in retirement. That’s about as long as you’ve spent working to get to retirement. But it begs the question: How will I know if I’ve saved enough for retirement if I don’t even know how long may I live? What will I do if I just run out of money at the age of 87? It’s not like you can go back to work, nor should you! In today’s show, we’ll discuss five ways to avoid running out of money in retirement, and keep those mistakes from happening. Outliving your income is a real challenge for today’s retirees. You need to help protect your income while growing it to ensure you’ll always have enough to last throughout your retirement. Every decision you make along the road to retirement can impact the decisions that follow. That’s why it’s so important to make good and prudent decisions early, and to avoid making bad ones. So, let’s start shining a spotlight on five common ways retirees can run out of money in retirement and how to avoid each of them.

Retirement Strategies vs Retirement Tools There is a theory that has been going around the financial industry lately. And the theory is the idea of asking yourself a question: “When it comes to your money and your investments, are you focusing your decision-making process on the retirement tools, or are you focusing on a retirement strategy?” They may seem like the same thing to you. But they actually aren’t. Think about a contractor. He has a tool belt that is full of tools. But not every job he takes requires him to use every tool. And your retirement strategy is no different. So, today we’re going to help you understand the difference between retirement tools and retirement strategies. Hopefully how to go about developing the strategy that will help you and your family.  Let's first, discuss ways to differentiate between retirement tools and retirement strategies. You can think of retirement tools as all the different investment products and financial products that you can choose to invest money in. And you can think of retirement strategies as the concepts and theories that you can devise that will help you figure out exactly which retirement tools might be the best tools to help you accomplish the goals and objectives that you have for your situation.

A Retirement Budget Your Can Create Today’s show is all about living comfortably while retired. You know, when you leave the workforce and enter retirement, you are going from “paycheck” mode to “NO paycheck” mode. That can be a huge adjustment for most people. One of the most important things is making sure that you have the right monthly income budget. So, let's walk through  exactly why it’s so important to have a  monthly retirement budget, and how to create one. It's a common question, “Do I have enough to retire?” And it’s a good question if you want to retire in the near future. The problem is that you're often lead to believe that you need to focus on how much you have saved for retirement. This focus, however, ignores what you actually need to live comfortably. So, let's try to change that focus. Let's go over, the importance of having a solid retirement income budget. What is the best way to plan for your retirement budget? Let us help you determine just that!

Why Retirement Income Sources so Important? Today, we are going to talk about possible income sources in retirement. We'll also discuss why a properly diversified  income plan important. Now, we believe success in retirement is tied to your retirement income. Think, do you have a paycheck in retirement that you can rely on, like a pension?  If the answer is no, then you need to develop a regular paycheck to receive in retirement. But, what’s the best way to do it?  That's why we're talking about creating income sources that will continue during retirement. In reality, diversifying your income sources is probably in your best interests. Most of you have heard of the term “diversification.” It’s used very loosely across the industry, and in a nutshell, it's talking about making sure that you don’t have too much of your money invested in a single spot. We want to give you a roadmap for the different vehicles that you can use today to generate retirement income, how each one works, and the risks involved, The bottom line is this, it is very easy to focus on wealth and how much you have saved. In fact, most of the marketing focuses primarily on rate of return-based decision making. After all, when you were working all those years and trying to put money away it was easy to take more aggressive risk approach with your investments. But there are a few key factors that go away when you enter retirement, and these factors change almost all of the rules for you:

When it comes to a well funded retirement you need a strategy that build your assets at the same time it helps to protect them against taxes, inflation, and the general costs of living. Roland goes over the different ways these can cut into your carefully accumulated savings.

You know, there is a key element of investing that NO ONE seems to be talking about, and how that element plays a BIG role in investing successfully. Roland and Lindsay discuss how identifying this element in your plan is crucial to helping invest successfully.

When trying to grow your overall wealth, investing is arguably one of the best ways to reach those goals. At Roland Financial we passionately believe that women should be investing, and this episode talks about why we believe that.

Sure, you’ve heard of dividend paying stocks and possibly that they can create passive income, but, how? Roland dives into this topic to help you understand how these can become another stream of income for you especially during retirement