How to Protect Your Retirement Savings From a Crash

"Since the market hit rock bottom about eight years ago, it has been steadily improving, and investors have seen skyrocketing stock prices and annual returns. Unfortunately, those spectacular averages won't last forever, and the investment pros have some pretty pessimistic predictions for the future," according to Katie Brockman writing for The Motley Fool.

"So what can you do to protect your retirement savings in the event that the market crashes?"

1. Check that your investments are aligned with your risk tolerance

2. Don't invest anything you'll need within five years

3. Eliminate as much debt as possible

4. Prepare for the worst

Get the details at: https://www.fool.com/retirement/2017/06/21/how-to-protect-your-retirement-savings-from-a-cras.aspx

 

Treasury Securities—3 Ways to Lend to Uncle Sam PODCAST

Do you know the difference between Treasury bills, notes, and bonds? Listen to a 6 1/2 minute podcast from FINRA to learn about treasury securities. FINRA has lots of other podcasts to inform you about financial affairs. Check out: http://www.finra.org/investors/podcasts/treasury-securities-3-ways-lend-uncle-sam?utm_source=MM&utm_medium=email&utm_campaign=Investor%5FNews%5F062317%5FFINAL
Lots more podcasts at: http://www.finra.org/investors/podcasts

A negative view of reverse mortgages

 

Economist Laurence Kotlikoff offers an alternative to a reverse mortgage for the house-rich and cash-poor senior homeowner. He is not a fan of the Home Equity Conversion Mortgage, or HECM. "An HECM sounds like a great financial product. It lets people 62 and older, many with little if any financial assets, tap into their home equity to get either immediate or monthly cash payments to help pay bills." Kotlikoff objects to the high fees and potentially high variable interest rates that lender charge on HECMs. As an alternative he suggests that a senior homeowner take out a mortgage and use the funds to buy a life-time annuity. If you are considering a HECM, read his opinion at: http://www.seattletimes.com/business/a-reverse-mortgage-sounds-great-but-there-are-risks/

Paid credit card late fees recently?

"Credit card companies usually set small-dollar minimum payments, so there’s really no excuse for incurring fees for late card payments."
"Yet many consumers fail to pay on time. In a new study, British researchers found a no-brainer solution that is highly effective: setting up automatic payments of our credit cards."
"The researchers started out with a different premise: that customers might learn, over time, to prevent maddening late fees after having to pay them numerous times. The researchers roundly rejected this after following nearly 250,000 U.K. credit card holders over two years.  When it comes to late fees, we do not learn from our mistakes."
"What they noticed, however, was a clear distinction between card holders who incur late fees regularly and those who don’t or who stopped incurring the fees.   Setting up autopay 'all but eliminates the likelihood of future [late] fees,' while the probability remains “persistently high” (about one in five) among people who did not, they said."
It's a no-brainer. Set up autopay for your credit cards!
Thanks to the Squared Away Blog: http://squaredawayblog.bc.edu/squared-away/autopay-ends-credit-card-late-fees/

IRA or Tattoo? Tattoo or IRA?

"What's an IRA?" the young person planning to get a tattoo might ask.
A tattoo is forever, following you into retirement. How many future retirees will look at their sagging tattoos and wish they had saved more for retirement?

How much are you spending on tattoos that provide no economic return while claiming you can't afford to contribute to an Individual Retirement Account? When I see people with extensive tattoos my first reaction is: "bet they aren't saving for retirement!" You can start an IRA with as little as $100 to open an account. Check out Schwab mutual fund company's target retirement index funds. http://www.schwab.com/public/schwab/investing/accounts_products/investment/mutual_funds/mutual_fund_portfolio/target_funds

7 Retirement X-Factors for Your Nest Egg

Almost everything you need to know to plan for retirement is available on the blog post by Joseph Hogue, author of the PeerFinance101 blog: 7 Retirement X-Factors for Your Nest Egg. It's never as simple as accumulating X times your salary or other "rules of thumb." Check out: http://peerfinance101.com/retirement-x-factors-how-much-need/

Financial decisionmaking decline in older adults

 A recent study confirms that seniors become more confident in their ability to make financial decisions at the same time that their financial knowledge and decision making skills are declining... an ominous combination.

"Although episodic memory and financial literacy score decline at roughly the same rate after age 60, confidence in financial decision-making ability remains relatively unchanged with age. The percentage of overconfident respondents with high self-assessed ability and low objective literacy scores increases from about 10% in the 60s to higher than 30% among respondents over 85."
The likelihood of being overconfident with one’s financial knowledge increases with age. Each year of age after 60 increases the likelihood of having high confidence and low financial literacy scores by 7 %. Higher levels of education are associated with a much lower likelihood of overconfidence, as are being male and white."
"Recognition of diminished investment skills may increase demand for annuitization or the delegation of important financial decisions to a trusted advisor. However, our study finds that, in aggregate and within all financial decision-making domains, advanced age increases overconfidence in
financial decision-making abilities. The largest marginal effects are within the investment and insurance topic areas."
Similarly, "older drivers generally do not perceive a decline in their driving skills despite a predictable deterioration in sensory ability with advanced age."
Researchers Finke, Huston, and Howe: Old Age and the Decline in Financial Literacy, published in:
Management Science. Abstract available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1948627


Photo © Max Blain | Dreamstime Stock Photos

10 Retirement Mistakes Baby Boomers Are Making

To avoid these mistakes, check out:
http://www.forbes.com/sites/mattcarey/2016/08/16/10-retirement-mistakes-baby-boomers-are-making/#3fbc354e3a1f








Photo © Mary Katherine Wynn | Dreamstime Stock Photos

Deciding when to retire... lots of factors to consider

"If you're in your 50s or 60s, deciding when and how to leave the workforce for good is one of the most important decisions you'll face during the rest of your life. You'll want to consider and balance many factors when making a thoughtful choice. Fortunately, help is available from the Society of Actuaries (SOA), which recently published a brief titled "When Should I Retire?" It's part of the organization's "Managing Retirement Decisions" series" according to Steve Vernon writing for Money Watch." Check out the details at: http://www.cbsnews.com/news/when-should-you-retire/

Photo © Horst Petzold | Dreamstime Stock Photos

5 Steps to take before you retire

1. Make a financial plan that starts with a budget.
2. Determine how much you can safely withdraw from savings.
3. Identify which retirement sources to use when.
4. Set your asset allocation.
5. Figure out how to pay for medical costs.
Get the details from Margaret Price, writing for Investors Business Daily at: http://www.investors.com/etfs-and-funds/retirement/dont-quit-your-job-before-taking-these-5-retirement-steps/    

Understand Key Concepts: Return and Rate of Return

When evaluating investment options or assessing the performance of your current investments, two concepts are key: return and rate of return. In this podcast, we explain both and how to use them to get the most out of your investments. Listen | 4 min. 45 sec. https://www.finra.org/investors/podcasts/key-concepts-return-and-rate-return?utm_source=MM&utm_medium=email&utm_campaign=Investor%5FNews%5F053117%5FFINAL

Medicare Primer

Most people should sign up for Medicare during the three months before their 65th birthday to avoid costly penalties, even if you are still working and covered by health insurance through your employer. Failure to sign up at the right time can result in a financial penalty for the rest of your life (to discourage people from waiting until they really need care and failing to pay monthly premiums). But Medicare part A is free so be sure to sign up. Read the details from The Motley Fool at: https://www.fool.com/retirement/2017/05/22/should-you-enroll-in-medicare.aspx