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Archives for August 2019

Could you retire sooner than you think?

Forbes: 7 Simple Strategies to Retire Early Click Here

“I’m never going to be able to retire.” Have you ever mumbled this to yourself? If you have, you’re not alone. Over 1/3 of all Americans don’t believe they’ll have enough money to live off of in retirement.  Ouch. With all the pessimistic view on retirement, then how in the blue blazes are there outliers that are able to buck the trend and retire in their 30’s? While they may be on the extreme side of retiring early there’s a lot to be learned from them.

So yes, even if you are one of pessimistic souls that believes that you can’t retire early, here are 7 simple early retirement strategies you can implement today:

1.      Know Your “Numbers”

2.      Lower Your Basic Cost of Living

3.      Stay Out of Debt

4.      Don’t Buy a House That Will Own You

5.      Save More Than You Thought You Ever Could

6.      You May Need to Increase Your Income

7.      Make “Balance” Your Investment Guiding Principle

US News: 8 Reasons to Pursue Early Retirement Click Here

Most people retire during their 60s. To retire earlier than that requires planning, discipline and paying close attention to your savings and investments. But the sacrifices and extra effort are worth the trouble. Early retirement planning makes you rethink what brings you happiness and life satisfaction outside of your career and improves your financial footing.

Here are eight reasons to pursue early retirement:

  1. Address the future today (set your retirement goal)
  2. Increase your income
  3. Circumstances may require you to retire early
  4. Improve your relationships
  5. Travel
  6. Prioritize your health
  7. Lower consumption and spending
  8. Failure isn’t a bad outcome – at least you’ll set your goal

WSJ: Let’s See How Ready for Retirement You Really Are Click Here

I have no idea when, or if, markets will settle down. What I do know is that it’s easy to get caught up in issues that are out of our hands: the markets, interest rates, changes in government programs, etc. At their worst, such anxieties can leave people paralyzed. Put another way, you could end up delaying—and delaying—your retirement for a very long time.

So…instead, focus on the parts of your retirement preparations where you have control. 

Pop quiz: If you are, in fact, retiring in 2019, how many of the following steps—for which you’re the boss—have you taken?

  1. Setting a budget
  2. Reducing debt
  3. Timing Social Security
  4. Creating a pension
  5. Managing taxes

Dave Ramsey: How to Retire Early Click Here

How do I retire early?

That’s a question I hear a lot when I’m on the road. Maybe you’re concerned about health issues. Perhaps you want to chase that dream of owning your own business. Or maybe you feel led to do volunteer work. Whatever the reason, the question is the same: What would it take for me to retire at 60? Or even 55 or 50? 

The answer depends on your financial situation, but if you’re serious about learning how to retire early, there are some things you need to do:

  1. Determine what kind of lifestyle you want in retirement.
  2. Create a mock retirement budget.
  3. Evaluate your current financial situation.
  4. Get serious about lifestyle changes.
  5. Pour everything into investing.
  6. Meet regularly with a financial advisor.
  7. Play it smart when you retire early.

The Motley Fool: Want to Retire Early? Handle These 3 Hurdles First Click Here

For many workers, the idea of retiring early is a dream they’ve pursued throughout their careers. Being able to have more time to do the things you want is a goal that nearly everyone has.

However, in order to make early retirement work, it’s important to understand the potential difficulties involved and to address them while there’s still time. In particular, if you want to retire early without ending up in a difficult situation, you’ll want to make sure that you have three key issues dealt with before making a decision you might regret later.

1.      Figure out where your money will come from

2.      Decide how you’ll bridge the healthcare gap

3.      Come up with a strategy for staying active socially

Kiplinger: Worried You’re Never Going to Be Able to Retire? Click Here

Some people spend more time thinking about retirement than others, but most everyone has at least a few ideas about what their life will be like when they don’t have to work anymore. 

Unfortunately for many, hoping and dreaming is about as far as they get in the planning process. They don’t know whether they can really achieve their goals because they haven’t taken the steps necessary to prepare for them.

If that sounds like you, and you’re anywhere close to the age you think you’d like to be when you retire, let me warn you: Your retirement reality could be far different from the lifestyle you’ve imagined. And if it is, it likely will be because you ignored one or more of these five basic threats:

Threat No. 1: Unclear plans.

Threat No. 2: Medical costs.

Threat No. 3: Investing too conservatively.

Threat No. 4: Not knowing how much risk is in your portfolio.

Threat No. 5: Inflation.

Why You’re Not Prepared for Retirement: Research

Forbes: Why You Might Not Be as Prepared for Retirement as You Think Click Here

Are you worried about retirement? If so, you’re not alone. According to our research, only 22% of employees reported being on track last year and the actual state of retirement preparedness may even be worse. That’s because many people use retirement calculators to estimate whether they’re on track, but even the best calculator is subject to the universal rule of computer programs – garbage in, garbage out.

Here are some of the most common mistakes I see people make when it comes to calculating whether they’re on track …

  1. Not personalizing retirement spending needs
  2. Trusting your Social Security statement
  3. Counting on a pension that might not be there
  4. Relying on working in retirement
  5. Assuming an average life expectancy
  6. Planning to retire at 65.
  7. Overestimating investment returns
  8. Confusing investment returns with income

The Motley Fool: 3 Signs You’re Not Ready for Retirement Click Here

You may be mentally and emotionally ready to retire, but if you’re not financially ready, your retirement may not be the relaxing time you’d hoped for. Being truly ready to retire means having a thorough grasp of how much money you need and the savings to back it up. Here are three signs that you’re not quite there yet.

1.      You don’t have a retirement plan

2.      You have a lot of debt

3.      You don’t know when you should take Social Security

Medium: Why 78% of Americans Are Not Prepared for Retirement Click Here

Many Americans have very little saved for the retirement. The 2018 Planning & Progress Study gathered data in an online survey from over 2000 Americans over the age of 18. In that survey, 78 percent of respondents said they were “extremely” or “somewhat” concerned about affording a comfortable retirement and nearly 66 percent said there was some likelihood of outliving retirement savings.

Additionally, the report found that, * 21 percent of Americans have no retirement savings at all, * 33 percent of baby boomers have between $0 and $25,000 of retirement savings, * 75 percent of Americans reported a lack of confidence in receiving Social Security benefits, and * 46 percent admitted to taking no steps to prepare for the likelihood they could outlive their retirement.

There are a number of reasons that Americans are not prioritizing retirement planning. From not having finances organized to daily budgetary constraints, there is always a reason to put off retirement planning. A recent phenomenon known as “The Sandwich Generation”, where adults age 40 through 50 are caring for children and aging parents, has caused an immense financial strain. In fact, 15 percent of people between the ages of 40 and 50 are financially supporting aging parents and their children, making retirement planning extremely difficult.

However, retirement planning is essential for a financially secure future and not being financially prepared can have dire consequences. Aside from being living comfortably in retirement, not planning for retirement puts a strain on government resources.

The Balance: Tips to Prepare for Retirement Success Click Here

The retirement planning process takes time and effort. At times it may seem like an overwhelming task. But what you do today can help you achieve your retirement goals and allow you to maintain the lifestyle you want in your later years.

Here are some tips to make reaching those retirement goals feel a little more manageable.

Tip 1: Focus on the things you can do and decide to take action today

  • Create a plan and put it in writing
  • Implement your plan
  • Track your progress

Tip 2: Protect yourself and your loved ones

  • Your life
  • Your health
  • Your assets

Tip 3: Take a look at all of your retirement saving options

  • Employer-sponsored retirement plans (401k, 403b, etc).
  • Check out IRAs
  • Consider HSAs.


Tip 4: Focus on your overall financial well-being

  • Increase your knowledge
  • Increase your income
  • Find ways to reduce your spending
  • Refinance and consolidate debts
  • Eliminate extra fees and charges.
  • Search for ways to reduce your taxes

MarketWatch: The 7 Elements of a Successful Retirement Click Here

  1. Start with well-defined goals, and revisit them at least annually.
  2. Many people get great satisfaction from work
  3. Another aspect of retirement is lifetime learning
  4. Budgeting is more than setting a top-line spending number based on a pre-arranged percentage
  5. Let’s consider income
  6. Take the time to go through your employment history and discover what benefits you may have forgotten
  7. Invest for your whole life

Kiplinger: If You Want to Retire Comfortably, It Isn’t all About Investing Click Here

A lot of people — maybe even most people — can be successful DIYers through the early years of their investing life. Unless you’re a high earner, have a high net worth or have some other special planning needs, you probably can figure out how much you want to contribute and how to allocate your assets. (If you can’t or don’t want to, you should, by all means, seek professional guidance — even if it’s only on specific occasions, or to tap into some good investing advice.) 

However, I’m going to warn you: When you’re ready to wrap up the accumulation phase and move on to preservation and distribution, things could get a little trickier. OK, a lot trickier. Using a DIY approach may not be the best choice as the focus shifts from making and saving as much money as you can to living off that money for decades in retirement. 

You need a comprehensive financial plan that includes …

  1. A solid income plan
  2. An investment plan
  3. A tax-efficient plan
  4. A healthcare plan
  5. A legacy plan

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!