fbpx

Retirement Assumptions: What’s Your Legacy Goal?

When you are building out your long term retirement plan, a financial advisor will often have to make many different types of assumptions. I have authored numerous articles around this topic. You need to consider market downside risk, interest rate risk, inflation risk, liquidity risk, tax risk, sequencing risk, and several others. Often, one major mistake made around the discussion regarding building a quality retirement plan is actually having the end in mind. What do you want your legacy to be when you pass on? This is a crucial conversation to have at the onset of your overall comprehensive financial plan. Consider this for a moment. If you tell your financial advisor nothing, he or she will likely build out your retirement plan analysis by using a ‘death age’. From the conversations you have with your planner or from some default number in the financial planning software, you will arrive a set age usually in the 85 to 90 range. ...

Read More →

Could Stamps Be A “Forever” Investment?

There is a reason you want the Your Smart Money Moves blog by your side.   Over three and half years ago, I wrote you a blog about buying forever stamps.  Did you take advantage of my advice?  With any overall financial plan, the one silent killer people often leave out is inflation.     Especially when it comes to the actual cost of buying your basic staples like groceries, gas, and utilities. While there has been a substantial increase in business being done on the internet, the United States Postal Service (USPS) will raise prices effective January 26th, 2014 to 49 cents for the first ounce of a first class stamp.   This would essentially be a 6.5% increase.   Bulk mail is also going up by 6% and with a raise to 33 cents, postcard will be up 10% versus 3 ½ years ago. How can you make a smart financial decision?   Load up on Forever stamps! Issued in 2007, the first forever ...

Read More →

I Need A Pension Plan

We know that for years that planning for retirement was a three legged stool.   Pension plans, social security, and then whatever personal savings and investment plans you could muster up over the course of your lifetime.   With a great deal of uncertainty looming over social security and pension plans dwindling away from large corporations, I continue to stress to people that retirement planning feels more like a pogo stick than it does a stool. Product companies understand that the greatest way to attract customer is figure out how to fill a void in the marketplace.   As investors struggle to figure out the best way to plan for retirement, a fairly new type of fixed product has been gaining traction called a Deferred Income Annuity (DIA).   A deferred income annuity is a newer type of annuity that is essentially a mixture of a single premium immediate annuity and a single premium deferred annuity. With a DIA, the idea behind the vehicle ...

Read More →

Is Your Retirement Plan Full Of Swiss Cheese

Last year, I did a piece on retirement planning assumptions.    As I continue to see more and more plans done by other financial advisory firms, I become more concerned about consumers.    Most projections that are done in business or in your personal household need to carry assumptions.   These are the variables in the equation that allow to make a reasonable assessment about what needs to be done when you are trying to achieve your goals.  When you last did your projections for retirement through the tools offered from your 401(k) plan or the nifty 35 page book your financial advisor put together, are you sure the assumptions that were made were explained to you clearly?  You may have left feeling great about yourself only to realize now that your plan is full of gigantic Swiss cheese like holes.   Here are ten assumptions you need to consider within your plan.  I highly recommend as a smart money move you use conservative ...

Read More →

The Words We Don’t Want To Hear: “You May Need To Save More”

I really think over the next five years the whole notion of retirement planning is going to change.   The X and Y generation don’t think about retirement the way their parents or grandparents did.   Since so many more people are staying active during their golden years, the next couple of generations will be thinking more about making work option than pulling themselves over to the retirement shelf.    What still holds true for most us is that since companies don’t really often pensions anymore, it’s up to you to figure out how you can save enough money to do what you want when you want irrespective of cost.    No matter what you calculate your ‘work’ optional number to be you should remember that you only have four options should you start falling short of hitting those numbers.  Here are your four choices: Extend your time frame  – If you planned for your ‘retirement’ goal to be at the age of 60, ...

Read More →

Is An Equity Indexed Annuity A Good Idea?

With all of the ups and downs in the stock market, many investors have been asking this question, “Is there a way to make money in the stock market and still have a way not to lose my principal is the market goes down?”    While investment companies have scrambled to find different investment solutions to help the baby boomers with this particular issue, the sales of a product called an equity indexed annuity have been booming.  An equity-indexed annuity is an annuity that earns interest that is linked to a stock or other equity index. One of the most commonly used indices is the Standard & Poor’s 500 Composite Stock Price Index (the S&P 500).   It can be a very complex choice on whether to purchase one of these products in your portfolio. Note: (all information below was taken directly from www.finra.org) What is an Annuity? An annuity is a contract between you and an insurance company in which the ...

Read More →

Is Multi Level Marketing A Good Business?

I can still remember being in my freshman year at Boston College when someone called upon me to share in the money making opportunity of a lifetime called the ‘money tree’.     It sounded like a great idea because you could really help people help other people make money.   Essentially, the person recruiting you asked you to give them $50, and then your job was to recruit 10 people who gave you $50.   You get to be in the club once you give your recruiter the $50.  It went something like that, but what I remember most is that it seemed like a good idea that all I had to do was give $50, and then simply recruit a few others to make $500.   The hard part of actually having to recruit people to give you the $50 is where the rubber meets the road in these types of schemes. Multi level marketing has been around for a long time.   Amway ...

Read More →