Save Social Security for Later, When You Need It Most

Save Social Security for Later, When You Need It Most

By: Tim Maurer I think we’ve been looking at Social Security retirement benefits all wrong. In the long-running debate about when to take Social Security — as early as age 62 or as late as age 70 — the focus has been on timing your claim to get the most money, in total, out of the social safety net. This is a circular argument that will never be fully decided until the Social Security recipient in question dies. So let’s shift the focus from the question “How do we get the most out of Social Security?” to “How do we get Social Security when we need it most?” Simply put, you’re more likely to run out of money at the end of retirement than at the beginning. Behavioral science explains why we are all so prone to preferring money today over tomorrow. It’s called “hyperbolic discounting,” and behavioral economists plead that we meaningfully overvalue money now, unfairly discounting money later. But the risk of making less money in your early retirement years is dwarfed in comparison to the risks of longevity and inflation in the latter stages of retirement. And the probability you will outlive your money meaningfully decreases if you wait to take Social Security. Prove it! Let me show you through an example that, while hypothetical, is no doubt close to reality for many. We’ll consider three couples, the Earlies, the Fullers and the Laters. Each couple: Retires with $1 million in tax-deferred retirement savings. Has an identical 50 percent equity, 50 percent fixed-income portfolio. Has a pretax retirement income need of $90,000 per year. Will supplement...
4 Steps to Free Time and Space for What Matters

4 Steps to Free Time and Space for What Matters

By: Jennifer Goldman A critical and often overlooked step in transforming your business and work environment is elimination. With finite time and resources, we can best focus on what adds value to our business by eliminating the items that no longer do. In an operational business context, elimination refers to: Removing duplicate or unnecessary steps in your operations practices. This includes tasks that are inefficient, ineffective or repetitive. Eliminating waste through excess inventory, duplicate files or “green” business practices Automation of the work through the use of technology and integrations Streamlining your internal processes and workspace has immediate effects on productivity, morale and ultimately, profitability. Unburdened from time-sucking tasks, outdated software and clutter, staff have the energy to focus on what matters most – your clients. Step 1: Identifying Inefficiencies, Bottlenecks and Waste Changes in technology and business needs frequently render tasks and procedures unnecessary, yet employees fail to notice due to habit or “how it’s always been done.” Encourage your staff to get out their magnifying glasses once a year to uncover roadblocks and inefficiencies. Have them document each stage in your current processes, asking them to review and evaluate with the following critical questions: Is each step in the process necessary? Can some of the steps be automated to free up time? Is this step a bottleneck? Are we waiting too long for this step to complete and why? Step 2: Turn Data into Action Your CRM is a great place to run reports that get to the heart of any challenges. For example, running a sales progress report on all of your active prospects will reveal...
How to Solve Four Common, but Sticky, Money Issues

How to Solve Four Common, but Sticky, Money Issues

By: Manisha Thakor “MY ROOMMATE SUCKS WITH BILLS. SHE DOESN’T ALWAYS PAY ON TIME … OR AT ALL.” If your roommate is trustworthy but flaky, try a joint bank account, says Manisha Thakor, the director of wealth strategies for women at investment advisory firm Buckingham. Make sure the only thing you can do is deposit money from your paychecks and transfer money to a vendor, ideally on an automated basis. Or you could divvy up the bills so your credit isn’t tied to utilities she flakes on, suggests Stuart Smith, a partner at ML&R Wealth Management. Most important, set a semi-regular date to talk through house issues. “MY HUSBAND MAKES BIG DECISIONS — LIKE BUYING A CAR! — WITHOUT ME.” This kind of independent decision making can understandably set off a partner — it comes across as selfish. The solution? A financial three-way. Set up three buckets — Yours, Mine, and Ours — “being exceptionally clear what constitutes a joint expense in Ours and the limit above which you must consult each other before spending from that bucket,” says Thakor. Don’t forget to discuss savings! Make your savings amount a line item in the budget you build as a couple, and aim to save roughly equal percentages of your income. “I BORROWED MONEY FROM MY FRIEND, AND NOW SHE’S HOLDING IT OVER MY HEAD.” When someone loans you money as opposed to gifting it, they feel entitled to some control over it, a 2013 study reported. “Fights happen when the lender gets frustrated or feels disrespected,” Thakor warns. Your friend might be in a bind herself. Talk about creating...
Financial Amnesia: How to Protect Yourself from Yourself

Financial Amnesia: How to Protect Yourself from Yourself

By: Joe Delaney Imagine you awake in a strange place and can’t remember how you got there. Worse, as an alarm is sounding in your ears and smoke surrounds you, you realize you can’t even remember who you are. You look around, frantic. You see things that strike you as familiar, but all you can think about is the alarm, so loud, so insistent. Your instincts tell you where there’s smoke, there’s fire. You run from the room, down the stairs, toward the front door. As you reach out your hand to open it you notice a large, red box hanging from a hook exactly at eye level. The face of the box is a window that reads: “In case of emergency, break glass.” You see a little hammer on the side. Without a clue why you’re doing it, you pick up the hammer and obey the command. Behind the shattered pane you discover a folded note. You open the note and instantly recognize your own handwriting. Alarm still blaring, you read: “There is a smoke machine in the basement. Sometimes it goes off by itself and sets off the smoke detectors. DON’T LEAVE THE HOUSE. If you don’t shut the machine off, it could start a real fire. Thanks.” Is this a joke? That’s definitely your handwriting, but why would you have a smoke machine? Every instinct says to run. What do you do? “WHERE THERE’S SMOKE, THERE’S FIRE” – RECOGNIZING RECENCY BIAS The scenario above is an extreme example of a common habit among human beings: we have a tendency to believe that what is happening now...
The Five Obstacles Standing Between You and What You Want

The Five Obstacles Standing Between You and What You Want

By: Amita Patel Here’s a secret most coaches and therapists won’t admit: We know within the first 10 minutes of meeting you whether you’ll achieve your goals. What?! How’s that possible?! While I can’t see the future, I do see the same 5 challenges hold people back from achieving their full potential. Not surprisingly, there are 5 traits that propel people forward. Coincidence? I think not. Whether in our personal or professional lives, we’ve all been guilty of self-sabotage (myself included!) Thankfully, you can spot and stop the obstacles getting in your way, replacing them with behaviors that serve you instead: Obstacle #1: You don’t accept responsibility for EVERYTHING. Whether it’s other people, the past, or the outcome of the presidential election, there are many things we can’t control. There are times when life simply sucks. And when that happens, those who bounce back focus on opportunity instead of blame. They don’t wait for an answer or apology because they know that solving any situation requires owning it in its entirely. Bluntly put, if you feel shitty, it’s YOUR problem, not theirs. The good news is that the fix is also up to you. Whether it’s stating your truth, leaving, getting help, or anything else, you’re in charge of how you feel. This is by far the most challenging obstacle on the list. But once you’ve mastered it, it’ll lead to the biggest results. Shift It: Accept that no matter your situation, change is up to you. Obstacle #2: Your thoughts and actions bring you down. For any outcome, there’s a specific way of thinking and acting that will get you what you...
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