January 31, 2019

Quick and easy retirement calculator

Writing for The Squared Away Blog, one of my favorites, author Kim Blanton describes a new online tool from Vanguard to help near retirees and retirees figure out how long their savings will last. She explains the tool and reviews some of the limitations of online calculators. Read her blog:
https://squaredawayblog.bc.edu/squared-away/how-long-will-retirement-savings-last/
Keep in mind that the tool is designed to estimate how long personal savings will last and does not take into consideration any pensions or Social Security income. So when they ask how much do you spend each year, take these other sources of income into consideration.
Another factor is estimating how long you might live. The biggest risk for most retirees is living too long, the "longevity risk." Unless you have reason to expect a shorter than average life span, figure on living to 90 or 100. Yes, really!
remember, none of this is set in stone and during retirement, you need to make annual adjustments to spending depending on investment returns and other factors. 
Go directly to the calculator:
https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf

So you think you're a good judge of financial advice?

The vast majority of financial advisers do not take advantage of their clients. BUT... "About 7 percent of U.S. advisers have misconduct records in civil or regulatory proceedings." And previous studies have shown it is easy to cover up these bad records.
Squared Away Blog's author Kim Blanton explains the study:
"A new study finds that various things can trip people up and make them trust an adviser who is giving out bad advice. These influences included a good first impression of the adviser. And one way for an adviser to make a good first impression is by initially confirming the client’s own views on investing before introducing poor advice."
Why give bad advice? Advisers who are not fiduciaries may have an incentive to recommend costly products that pay them a high commission or qualify them for bonuses or other incentives like trips to Hawaii.
"The subject of this study – judging the quality of financial advice – is important at a time workers are carrying a heavy load of responsibilities for managing their 401(k) accounts, and the accounts are becoming more critical to their retirement outlook."
Read the summary of the study and its conclusions at: https://squaredawayblog.bc.edu/squared-away/are-we-able-to-judge-financial-advisers/
And heed Kim's conclusion after reading the academic study: "Left to their own devices, the public’s financial acumen is generally poor, and a good adviser will steer them toward sound decisions. But this research indicates that investors can get into trouble if they aren’t able to detect when they’re getting bad advice."
So be skeptical, educate yourself (using this blog), and get a second opinion, just like you would before major surgery.

January 26, 2019

Trump shutdown over for 3 weeks: What to do without paycheck?

FINRA offers tips on what to do when you can't make ends meet due to job loss or being forced to work without pay (what used to be considered illegal).

Job Interrupted—A To-Do List for Tough Times

"Many of us can identify with the plight of the furloughed federal worker. That's because we have experienced economically stressful times at one or more points in our working life—and may again.
At its most disruptive, your job is lost—and so is your income. Less extreme, but anxiety-laden all the same, is when hours are cut, salary reduced, business opportunities curtailed or paychecks withheld. The situation is the same in all cases: You must live with less.
Here is a short to-do list to get you through situations in which employment is interrupted and income curtailed."

1. Take control of your finances.
2. Manage bills and debt wisely.
3. Borrow with care.
4. Find out quickly if you qualify for unemployment insurance (UI) benefits.
5. Protect yourself from financial fraud and job-search scams.
 

 

January 6, 2019

Mistakes to avoid when claiming Social Security Retirement Benefits

This is one of the best articles I've read about factors to consider when claiming SS retirement benefits. It is critical to focus on SS as longevity insurance and recognize that each individual and each couple is different. There is NO one size fits all answer to when to claim SS. Although targeted at CPAs, this article is readily accessible to anyone contemplating retirement and when to claim SS. Retiring and claiming benefits are two separate decisions and don't necessarily need to take place at the same time.
Take the time to read:

Top seven mistakes when claiming Social Security benefits

By Paula S. McMillan, CPA/PFS, CGMA
December 1, 2018
https://www.thetaxadviser.com/issues/2018/dec/seven-mistakes-claiming-social-security-benefits.html?utm_source=mnl:a
dv&utm_medium=email&utm_campaign=03Dec2018

Do you have a child with special needs?

"Clients who have a child with special needs face 'a special set of financial considerations,' writes Brooke Hawley, a financial adviser and mother of a child living with special needs. The most important thing to do, according to Hawley, is set up a special needs trust in the child's name."
Check out this excellent article: https://www.wealthmanagement.com/client-relations/speaking-experience-financial-planning-special-needs-families
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