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Archives for April 2017

Sensory Overload

It was Aristotle who first suggested that humans are driven by five senses: eyesight, hearing, taste, touch and smell. However, neuroscientists say we have between 22 and 33 senses, including:

  • Equilibrioception – our sense of balance
  • Proprioception – controlling body parts without looking, which is how we can type without looking at the keyboard or walk around without looking at our feet.
  • Thermoception – feeling whether the environment around us is cold or hot
  • Chronoception – sensing the passage of time

What’s interesting is that our senses tell us more about our environs when they work together. For example, we may see a coffee cup, but it’s not until we pick it up that we get the sensation of it as a three-dimensional object. Furthermore, that sense of feel can tell us whether the liquid inside the cup is hot or cold; its weight tells us whether the cup is full or empty.

Our senses are so strong that they can instinctively influence our daily lives — even our financial decisions. For example, we may see something at a shop or on TV and get a gnawing, pervasive drive to own that item. All sense of discipline or prudence may go out the window, replaced by something far more aesthetically gratifying. It’s not just sight. Wonderful smells coming from a restaurant can cause you to abandon all plans for cooking at home tonight, even if that means the meat you left out to thaw will go bad.

However, there are ways we can attempt to control our senses and even use them to our advantage. For example, practice “selective hearing.” Try filtering the advice you hear on the local news or a financial news channel. You could also utilize the advice of a trusted financial advisor who has taken the time to understand your particular financial goals and situation.

When it comes to impulse buying, perhaps you can replace a frivolous item with a symbolic one. For example, you may be tempted to buy a new cellphone or a pair of shoes that you really don’t need. In the moment, these products can be more satisfying than paying off a credit card because they are tangible items you can touch. To counter this tangible reward, find a symbol of your financial goal that you can see and/or touch on a daily basis — even if it’s just a picture torn out of a magazine and stuck to your refrigerator — such as the house of your dreams, a picture of your credit card, a cap and gown, a sailboat or the Eiffel Tower.

Physical and visual reminders can help you stay on track to meet your goals and offset temptations that may steer you wayward.

Global Trade: Problems and Potential Solutions

Global trade and investment have increased dramatically over the past 30 years. On one hand, importing lower-cost goods from other countries has saved Americans money. On the other, it has cost American jobs.

How many jobs? About 6 million from the manufacturing sector alone between 1999 and 2011, according to the Bureau of Labor Statistics. However, while outsourced jobs to China explains 44 percent of the decline in U.S. jobs from 1990 to 2007, automation and more efficient processes have also played a role.

Some experts claim innovation, automation and new technology are responsible for up to 80 percent of manufacturing job losses over the past two decades. There are also economists who believe global trade is crucial to American prosperity and disagree with Donald Trump’s plans to implement tariffs or cut down trade with countries like China and Mexico.

Thanks to the digital revolution, smaller companies have the capacity to compete on a global level, but comparatively few are doing so. It is estimated that fewer than 1 percent of the nearly 30 million U.S. companies registered to sell abroad actually engage in global sales. This means more U.S. firms have the potential to expand growth and productivity to global markets.

Digitization makes it easier for small startups to reach global customers; consider how eBay and Amazon got their start.

Global expansion advocates say the U.S. government could play a role in connecting individual cities and smaller companies with foreign investors. It also could introduce more policies and funding to help job losses with reinvestment in affected communities.

In one of his first acts as president, Trump signed an executive order to withdraw the U.S. from the 12-nation Trans-Pacific Partnership trade pact. This withdrawal gives China — not a participant in the TPP — the opportunity to forge leadership in Asian trade agreements. The president has indicated that he is interested in negotiating individual trade deals with TPP countries in order to procure better terms for the U.S.

Some analysts believe the U.S. should renegotiate agreements to lower tariffs and other regulatory barriers to encourage various nations to specialize in certain exports in which they have operational expertise.

Presently, the U.S. imports about $500 billion more than it exports. However, the U.S. remains the world’s largest economy and, despite the loss of manufacturing jobs to other countries, its share of global gross domestic product has remained relatively consistent over the past 36 years, ranging from 26 percent in 1980 to 25 percent in 2016.

Infrastructure Could Bridge Political Divide

Is it a secret that American politics are contentious, divided and rocky? Yet, one topic has the potential to bring both sides to the table: Infrastructure.

The Republicans and Democrats may not agree on the details; after all, infrastructure spending necessitates funding. Conservatives worry about additional taxes or increasing government debt, while liberals oppose legislation that could provide tax breaks to equity investors who would promote investment in infrastructure.

Yet, our collective need is top-of-mind: Democrats have recently lamented the lack of infrastructure spending, with left-leaning publications like ThinkProgress calling out specific areas of improvement. And they may get their wish, with the help of an unlikely ally — President Donald Trump intends to lead the charge on national infrastructure spending, specifically with his “America’s Infrastructure First” policy. His plan supports investments in roads, bridges, tunnels, airports, railroads, ports and waterways, pipelines, clean water, a modern and reliable electricity grid, telecommunications and security infrastructure. 

We, along with the rest of the nation, must sit back and wait to see what will happen. Will funding reflect a Democrat-centric view, with an increased spending plan? Will it instead reflect Republican planning, finding a way to create infrastructure revenues through crediting strategies? Either way, we’re here to help you; let us review your financial strategy and see if you are positioned to take advantage of whatever opportunities rise from the political ash.

Despite the means of infrastructure spending, few disagree that it could improve American lives in ways ranging from roads and bridges to education and health care. Likely, it would generate new jobs in construction, steel manufacturing and other sectors, which in turn could generate new tax revenues to offset increases in government debt. It is also possible that higher public spending could allow for increased revenues and share price performance among America’s corporations. This, in turn, would bode well for investors.

Some in Congress have put forth a recommendation for infrastructure spending to be supplemented by public-private partnerships, advocating for tax credits for private investors who would select which projects they want to fund. Critics have voiced concern that  this could lead to the development of high-return investment-based projects rather than allowing adequate attention for those with greater need. Despite this drawback, incoming Transportation Secretary Elaine Chao has indicated support for private investment from equity firms, pension funds and endowments.

Others suggest that engineers might be the best-qualified people to determine where government infrastructure dollars should spent rather than politicians or private investors. This is based on the premise that a focus on repair and maintenance of bridges, dams, levees, airports and roads would produce the highest economic returns for Americans than new infrastructure projects.

Regardless of the hows, whats and whens of infrastructure spending, here’s hoping that our elected officials will be able to find some middle ground on which to build.

 

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives.  The information contained in this material is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

When Should You Retire?

About half of Americans retire between the ages of 61 and 65. Among today’s retired households, a traditional pension or retirement plan appears to be one of the differences between a high- and low-income lifestyle. That’s because among the 41 percent of retirees whose annual income is less than $25,000, only 21 percent receive income from a pension or retirement plan. Of those who receive $50,000 or more, 80 percent enjoy this form of income stream.

For many people contemplating retirement, the question isn’t, “When should I retire?” but rather, “When can I retire?” The answer may be whenever you can afford it. This means that your combined retirement income sources should provide enough for you (and your spouse) to live on for up to 30 years, depending on health and the family gene pool.

The percentage of retirees who claim Social Security before full retirement age has declined recently. That is seen as generally good news because the longer you wait to begin receiving benefits, the more you’ll get. In fact, monthly payouts increase by as much as 6.5 percent to 8 percent a year between ages 62 and 70.

 

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

Budget Travel Ideas

With the increasing cost of health care and constraints of a fixed income, many retirees nix vacations for lower-cost visits with family. However, there are plenty of destinations that can be affordable to visit on a budget. The following are a few ideas for this summer and the rest of 2017.

  • Wine tasting in Sonoma, California – Take a bus tour, open-air Jeep, bike ride or even a cable car to tour wineries in California’s Sonoma Valley. Tours may include cave explorations, wildlife sanctuaries, barrel and VIP tastings and a gourmet picnic lunch.
  • The Big Island, Hawaii – Offers unique sights ranging from volcanic landscapes to rainforests with rare, colorful birds to a beach with green sand replete with semiprecious peridots. Lodging is less expensive starting in May through the summer months, and authentic Hawaiian food is available at any number of family-run restaurants.
  • Madison County, Iowa – You may have seen the movie, but if you haven’t visited the six famous covered bridges of Madison County, they offer a quiet glimpse into the beauty and laid-back lifestyle of middle America. Enjoy quaint parks, historic town squares, hometown fairs and festivals, local wineries, and learn crafts of yesteryear such as quilting and glass fusion.
  • Lake Champlain, Vermont – Charter a sailing trip, visit beautiful lighthouses and experience the charm of auld New England villages. You’ll find bed and breakfast options up and down the coast to help you escape the summer heat.
  • Savannah, Georgia – Within the walk-friendly historic district, you’ll find an array of park bench squares, museums, low-country restaurants, plus upbeat nightlife options on River Street. Check out the authentic Pirate’s House Restaurant, join the daily lunch line for Mrs. Wilkes Dining Room and take a short drive to check out the peaceful beachfront vistas at Tybee Island on Savannah’s coastline.

Live Long or Prosper? How Retirees can do Both.

Some retirees underspend throughout their golden years, sacrificing quality of life to assure they don’t outlive their income. Others resist their desire to be philanthropic because of concerns that donations could leave them short on money down the road.

A market downturn during the early years of retirement can be one of the biggest risks of running out of money. This may seem incongruous, since the earlier a downturn happens, the more time a portfolio has to recover. However, early loss of principal combined with steady withdrawals can lead to a challenging financial situation.

One common form of financial stability used to come in through a company pension plan. When combined with Social Security benefits, pensions gave retirees an idea of how much they could spend each month for the rest of their life.

Social Security is expected to be in good shape for the next 15+ years, but pensions are quickly becoming a thing of the past. If you don’t have or expect a pension when you retire, consider learning how you can create a steady and reliable income stream using an annuity from an insurance company. Annuities can help enhance quality of life throughout retirement by providing a similar sense of financial confidence that pensions once offered.

 

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

Danielle Christensen

Paraplanner

Danielle is dedicated to serving clients to achieve their retirement goals. As a Paraplanner, Danielle helps the advisors with the administrative side of preparing and documenting meetings. She is a graduate of the College of St. Benedict, with a degree in Business Administration and began working with Secured Retirement in May of 2023.

Danielle is a lifelong Minnesotan and currently resides in Farmington with her boyfriend and their senior rescue pittie/American Bulldog mix, Tukka.  In her free time, Danielle enjoys attending concerts and traveling. She is also an avid fan of the Minnesota Wild and loves to be at as many games as possible during the season!