Going Beyond Money to Find Meaning in Retirement Planning

Going Beyond Money to Find Meaning in Retirement Planning

By Joe In October of 2018, I had the opportunity to attend the annual BAM National Conference, a gathering of like-minded professionals who ascribe to the ethical, evidence-based values of the BAM advisor community. One speaker’s talk about everything beyond money in retirement planning was especially eye-opening. Alan Spector is now retired himself, from his position as Director of Worldwide Quality Assurance for the Procter & Gamble Company. He has also done a lot of consulting on management and quality assurance and has written four books. In his experience, people often ask, “Can I afford to retire?” and stop there. But there is so much more to consider. His talk, “Financial Planning: Beyond the Numbers,” shifted the focus of the conversation to what retirement will actually look like. While financial security is often the first concern, it is also important to consider what you need to do to ensure your retirement is fulfilling. For example, if you have a passion for experiencing the world through travel, you will want your financial plan to make it possible to do it in retirement. You assume that it will be a fulfilling experience. The trouble with assuming is that acting on passion in practice is often different from what we envision. It may turn out that travel actually takes you away from what you are more passionate about in practice. Once you start globetrotting, you may realize there are social organizations close to home you miss being more engaged in. Or there are charitable causes in which you long to take a leadership role. What Spector recommends is a concept he calls...
The Unique Retirement Issues Facing Women

The Unique Retirement Issues Facing Women

By Larry Swedroe Women continue to fight unique financial and life headwinds in planning for a secure retirement. Larry Swedroe and Wealth Advisor Katie Keary explore the impact of 12 specific challenges that women face, and offer financially empowering solutions to them. Find it on AdvisorPerspectives.com By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. The opinions expressed by myself and other featured authors are their own and may not accurately reflect those of Lifeguard Wealth. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice. © 2018, Lifeguard Wealth As always, if you have any questions please contact Lifeguard...
The Financial Perils of Old Age

The Financial Perils of Old Age

By Larry Swedroe, Director of Research In planning for retirement, most people—and their advisors—consider issues such as: How much savings will be needed to maintain a desired lifestyle (in other words, what’s your “number”?) Current assets and what rate of return will be needed to achieve the stated retirement goal What allocation to risky assets, such as equities, is required to achieve the needed rate of return What lifestyle adjustments can be made if risks appear? While addressing these issues is important and necessary, the all-too-common unwillingness of the elderly to even discuss the possibility of losing their independence, and the awkwardness of the subject for other family members, unfortunately can lead to a lack of planning for the financial burdens that long-term care can impose. That brings to mind the adage that the failure to plan is to plan to fail. And failing to plan simply ignores the fact that, according to the National Family Caregiver Alliance, the probability of an individual over 65 (there are 35 million Americans in this category and the figure will double over the next 25 years) becoming cognitively impaired or unable to complete at least two “activities of daily living” (which include dressing, bathing and eating) is almost 70%. Alzheimer’s Increasingly Common Raising the importance of the issue is that, today, one in nine people 65 or older has Alzheimer’s, while nearly one in three of those 85 or older (the fastest-growing part of the U.S. population, with 4 million people in this group currently and almost 20 million people expected to be there in 2050) has the disease (with women having...
Is a Million Bucks Enough to Retire?

Is a Million Bucks Enough to Retire?

By Tim Maurer “Wow, those guys must be millionaires!” I can recall uttering those words as a child, driving by the nicest house in our neighborhood—you know, the one with four garages filled with cars from Europe. The innocent presumption, of course, was that our neighbor’s visible affluence was an expression of apparent financial independence, and that $1 million would certainly be enough to qualify as “enough.” Now, as an adult—and especially as a financial planner—I’m more aware of a few million-dollar realities: 1.  Visible affluence doesn’t necessarily equate to actual wealth. Thomas Stanley and William Danko, in their fascinating behavioral finance book, The Millionaire Next Door, surprised many of us with their research suggesting that visible affluence may actually be a sign of lesser net worth, with the average American millionaire exhibiting surprisingly few outward displays of wealth. Big hat, no cattle. 2. A million dollars ain’t what it used to be. In 1984, a million bucks would have felt like about $2.4 million in today’s dollars. But while it’s quite possible that our neighbors were genuinely wealthy—financially independent, even—I doubt they had just barely crossed the seven-digit threshold, comfortably maintaining their apparent standard of living. To do so comfortably would likely take more than a million, even in the ’80s. 3.  Wealth is one of the most relative, misused terms in the world.  Relatively speaking, if you’re reading this article, you’re already among the world’s most wealthy, simply because you have a device capable of reading it. Most of the world’s inhabitants don’t have a car, much less two. But even among those blessed to have enough money to require help managing it, I have clients who...
You’ve Done Well Accumulating Wealth. Are You Prepared to Spend It Down?

You’ve Done Well Accumulating Wealth. Are You Prepared to Spend It Down?

By Joe Delaney We’ve all heard the story of Icarus, who flew on wings of feathers and wax until he got too close to the sun. What happened next was something Sir Isaac Newton would codify into a natural law centuries after Diodorus wrote the iconic tale. What goes up must come down. Think of yourself as Icarus as you are now accumulating wealth. There will inevitably come a point when your wings will give out and you will begin a financial descent. The question is not whether it will happen, but rather, will you make a controlled descent, or fall flat? PREPARE FOR DESCENT When you retire, your accumulation period usually ends and your income will likely dip. We call this the “black out” period. At age 70 ½, your RMD (Required Minimum Distribution) period, or “spend-down period”, begins. This is the age at which the government mandates RMDs so it can finally tax those gains from tax-deferred accounts, such as your IRA, 401k, etc. Will there be enough for you and your spouse? How much will be left for your children? How charitable do you intend to be in these final years? The time to ask those questions is not in your 70s. It’s now. We have found that, while the individuals who come to us with retirement questions are often smart, forward-thinking people, they tend not to be aware of some of the strategies they could be putting in place that will make their spend-down period far more successful. The key is understanding the tax nature of your investments and putting the assets in the right...
Medicare Quiz: Are You Ready to Enroll?

Medicare Quiz: Are You Ready to Enroll?

By Joe Delaney Preparing for retirement is not a single daunting task, it is dozens of daunting tasks! One of the most infamous is signing up for Medicare. Health care coverage is a vital part of any conversation about retirement. Few events threaten your wealth stability more than health problems that are not sufficiently covered by a robust insurance policy. Below is a 12-question quiz about Medicare. Once you know the answers, you’ll be one step closer to being prepared to enter retirement. 1. When and how do you sign up for Medicare? You first become eligible for Medicare at age 65. You can enroll by visiting a Social Security office or going online to www.medicare.gov. 2. How long do you have to enroll when you turn 65? You have a seven-month window to enroll in Medicare. The month you turn 65 is the middle of that window, with three months before and three months after. You will know when you’re nearing the enrollment period because you’ll be flooded with mail, not just from the Social Security Administration but from private insurers offering supplemental plans. 3. Do you enroll when you’re 65 if you’re still working? If you continue working past the age of 65, you can retire at any time, at which point an eight-month window to enroll begins. There are exceptions, however; for example, if the company you work for has fewer than 20 employees, the seven-month enrollment window will begin three months before the month you turn 65 even if you are working. 4. What happens if you miss the enrollment window? The penalty for signing...
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