Joe Lucey

Value Flight Offerings on the Rise

For travelers jet-setting all over the world, finding airfare at the right price may be the most stressful part of the vacation.

The rise of cheap, no-frills nationwide airline options have provided more than affordable flights — they’ve offered stiff competition to the major airlines. This may partially explain why industry giants like American, Delta and United have begun offering lower rates — with restrictions.

It’s common for companies to offer very few seats at the lowest fares, so they go quick. Those seats also may come with no frills, mirroring the limited luxuries that are available through small regional competitors such as Allegiant, Spirit and Frontier. For example, additional charges for luggage and fees for in-flight snacks and beverages.

A recent airfare analysis revealed basic economy rates from these major airlines run between $30 and $62 below the standard economy ticket on the same airline. However, they are still higher than fares offered by some ultra-low-cost carriers, by as much as $65 to $122 per ticket. Note, too, that larger airlines tend to offer low fares only on select routes and airports, although they are starting to expand to more flights nationwide. They also come with more restrictions than we’re used to from the larger carriers, such as the inability to change or cancel tickets, choose your seats or even store your luggage in the overhead bins. Basic economy fares tend to be the last to board and the last to deplane.

However, if you’re on a budget, it may be worth pursuing these lower fares since larger airlines do offer more flight times, locations, larger aircrafts and tend to be more reliable.

When researching airfares for your next trip, keep these tips in mind:

• If you’re a longtime traveler of a specific airline and a member of its loyalty program, such as an American Airlines AAdvantage member, you may be exempt from certain restrictions imposed by your booking. You may be able to board earlier, for example.
• Also consider you may have overriding perks offered by a travel credit card, such as the option to check a bag for free and receive priority boarding.
• When shopping for basic economy rates, check out the specific airline’s website for booking, as it will provide more accurate information about rates and their limitations. Third-party travel sites may be long on promotional information and short on pertinent details. Be sure to read all the information in the ticket description before making a purchase.
• Airfares change all the time. If you find an affordable rate, it might be better to book it rather than continue shopping. The next time you go back to that site, the fare may have increased.
• Delta’s basic economy tickets were priced lowest eight weeks in advance of departure, and United’s best fares were two weeks in advance. American fares have been known to drop both eight weeks and two weeks out, but fares increased during the intervening weeks.

How to Take Off Without Boarding a Plane

Travel can be good for the soul, especially when daily life causes stress and sadness.

The Centers for Disease Control and Prevention reports that use of antidepressants has increased by almost 400 percent over the past 20 years, with anxiety at an all-time high. For those who feel overwhelmed and in need of a break, packing up and going somewhere can help lift us out of present circumstances.

However, not everyone has the money, time and good health for a vacation. Those who can’t afford a getaway trip still need a way to find an occasional escape. It turns out walks in nature can provide a similarly soothing effect.

According to scientists, the impact nature has on our psyche is biological. A walk through the forest can decrease cortisol levels, blood pressure, heart rate and neural activity in the part of the brain associated with anxiety and depression. Fresh air also helps us improve thinking tasks.

Despite studies showing people feel significantly happier when they are outdoors, we spend less than 5 percent of our waking hours in nature on average. But even those cooped up inside can experience some positive effects of the great outdoors. A study by the University of Michigan discovered that simply looking at pictures of nature can help overstimulated brains chill out.

The following are a few tips to help enhance your travels through nature:

• Change your computer screensaver to images of nature.
• Make a nature walk part of your daily or weekly routine.
• Plan vacations to incorporate beautiful landscape vistas.
• Put your cellphone on mute and keep it buried in your pocket when enjoying the outdoors.
• If you’re considering a relocation or second home, look for areas with convenient proximity to nature where you can spend time benefitting from its biological advantages.

It is widely recognized that America’s economic growth since the 2008 recession has been slower than that of past recoveries. Some economists believe this is due in part to Americans putting more money into savings and spending less. The desire by a large percentage of the population – including baby boomers – to contribute to their savings has trimmed consumer spending, thus impeding higher economic growth.

There is even some concern among research analysts that as more baby boomers retire, money withdrawn from their 401(k) plans could put a drain on returns of remaining investment assets. Historically, balanced portfolios have yielded an average of 8 percent a year. However, more recent estimates project that returns between 2005 and 2050 will average 0.9 percentage points lower.

The reasons behind this potential decline are unclear. In fact, recent research reveals that retirement income withdrawals are probably less of a factor than previously thought. That’s because many retirees, in anticipation of living longer and concerned they might outlive their income, are spending less than the amount of retirement income they regularly receive. According to a Vanguard survey, retirees who hold at least $100,000 in savings actually reinvest about 40 percent of the money they withdraw from 401(k)s, IRAs and other retirement accounts. This means that while they may not be spending it, which influences economic growth, they’re likely not crippling the securities markets, either.

One notable observation is that many retirees find it difficult to make the transition from saving their hard-earned dollars to spending it in their retirement years. Some refer to this phenomenon as “spendaphobia.” Rather than traveling, buying a second home or indulging in other traditional retirement spending patterns, these retirees tend to be frugal.

It’s important to find a balance between wanting to preserve your nest egg and allowing yourself to enjoy some indulgences. One key is to develop a prudent but reasonable spending strategy, with separate contingency accounts and/or insurance products to help pay for large or unexpected expenses like a medical condition, assisted or long-term care, or even buying a new car or replacing the roof on your house. When retirees create a distribution strategy that helps prepare their nest egg for longevity, inflation and market volatility, spendaphobia may be reduced or eliminated. After all, it’s your retirement; you’ve worked hard to get there, so you should enjoy it. We can work with you to help you develop distribution strategies for your retirement income; just give us a call at (952) 460­-3260.

 

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.