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Joe Lucey

Calculating Retirement

Yogi Berra once said, “You’ve got to be very careful if you don’t know where you are going, because you might not get there.”

When it comes to retirement, plenty of people get there — but it may not be what they expected because they either didn’t plan, or their financial strategy didn’t help keep them on the path to their goals. The difference between a satisfying retirement and one with financial concerns may be correlated with how early and how well you plan.

In some ways, what you may hear about creating a financial strategy for retirement can sound similar to the advice high school graduates receive when applying to colleges: Develop a strategy for your dream retirement, one that you are most likely to achieve, as well as a fallback option or two. And remember that retirement planning is personal, so you’ve got to do what’s right for you.

That means taking into account all the people you’ll need to provide for, your assets, your income and savings rate from now until retirement, your investment goals, your timeline, your tolerance for market risk … there’s a whole spectrum of things to consider. That’s one reason why it’s  important to develop a relationship with a financial advisor who can help not just to develop a financial strategy, but to adapt that financial strategy as your circumstances may change. We can help you with that by creating a financial strategy utilizing both investment and insurance products that can help you work toward your long-term financial goals.

One of the first steps to retirement planning is figuring out how much income you’ll need once you stop earning a paycheck. Based on data gathered by the Bureau of Labor Statistics in 2014, the average retired household spends $40,938 per year.

 

Retirement planning is a complicated process because there are so many unknowns, like not knowing how long you’ll actually live. However, there are many tools available at your fingertips, and we are just a phone call away. Remember, it helps to figure out how much savings you may need to retire, so you can create a well-thought-out financial strategy.

Shared Economy on the Rise

Even if you’re not familiar with the shared economy, you’ve likely heard of one of its many names, such as upcycling, on-demand, peer-to-peer lending or crowdsourcing.

Some shared business models include on demand access to goods and services (Uber,Airbnb), shared products or expertise (Adobe Reader, Wikipedia) and shared information on a collaborative platform (Facebook, Twitter).

Millennials have helped drive the concept of a shared economy over the past decade. Airbnb was conceived by two young adult roommates who rented out a place with air mattresses. What these entrepreneurs saw was demand and plenty of untapped supply.

The majority of shared service users are under age 45, college educated and earn relatively high incomes. However, these services have the potential to help address some of the problems experienced by older generations.

Unfortunately, 44 percent of Americans age 50 and older, and 56 percent of those 65 and older, have never used these types of resources. While millennials have helped drive the concept of a shared economy, it’s an untapped resource for retirees that may help ease some of the challenges they face.

The Science Behind a Lie

One of the prominent media stories that emerged in the 2016 presidential election was the need for constant fact checking among the candidates. While many “untruths” are labeled as lies, often a case can be made that information was cherry picked, taken out of context, incomplete, misconstrued or misinterpreted.

However, that’s not to say that out-and-out lying is uncommon. One researcher asserts that 60 percent of people tell, on average, two to three fibs during a typical 10-minute conversation.

Why so common? A recent study found that dishonesty grows with repetition. Scientists posit that the first time a person tells a lie, he or she tends to feel guilty. That’s (human) nature’s way of curbing an implicitly incorrect behavior. However, over time, the more lies one tells, the less guilty he or she feels, indicating that the brain somehow adapts to this illicit behavior.

Research has demonstrated that lies appear to escalate more when there is an element of self-interest: The more an individual benefits from lying, the more likely he or she is to lie repeatedly. The lies get bigger, and that self-conscious feeling of guilt tends to get suppressed.

Despite its prevalence, we tend to feel guilty when we suspect someone of lying, which is one reason why we’re often duped. Men and women lie with equal regularity, but often for different reasons. Psychologist Robert Feldman says women are more likely to lie to make the person they are talking to feel good, while men lie most often to make themselves look better.

What Are Dividend Stocks?

A dividend stock is one that pays out regular (generally quarterly) dividends to shareholders, which can be taken as cash or reinvested. The dividend represents a certain dollar (or cents) amount paid out per share. These are typically stocks from steady, high-quality companies with a consistent track record for growth such that they can consistently offer dividends to their investors.

Investors who reinvest their dividends have the potential to accumulate wealth more quickly, as reinvested dividends go toward buying more shares of the same stock. If stock prices rise over time, the more shares held means a greater total return.

Because dividend stocks provide additional growth opportunity through reinvestment, they are quite popular among investors and account for a large part of the stock market. According to a one study, from 1930 to 2012, dividends represented almost 42 percent of the total return of the S&P 500 index. Only 6 percent of dividend-paying firms lost money in at least one year between 1972 and 2011.

When an investor retires, he or she can start using dividend payouts as a supplemental form of retirement income without having to sell shares in the stock. Because dividends are prone to increase over time, they may also offer a long-term inflation hedge.

Another benefit is that qualified dividends are taxed at the current capital gains rate of 15 percent for individuals who earn less than $415,050 a year (20 percent for those who make above that amount; zero for individuals who earn less than $37,650 a year).

Note, however, that as with any investment, dividend stocks are subject to risk, including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Also, dividend payouts can be reduced or eliminated altogether, and are paid at the discretion of the board of directors and are therefore not guaranteed.

It’s important to consider any investment within the context of your own goals, risk tolerance, investment timeline and the composition of your overall portfolio. You should speak with a qualified financial advisor and tax advisor before making any decisions about your personal situation. 

December 2nd Corporate Event at Second Harvest Heartland

Our team had a wonderful time volunteering at Second Harvest Heartland on December 2nd.  We closed shop and headed over to help sort and repack food for working adults, children, and seniors who are struggling with putting a meal on the table.  

Second Harvest Heartland clients come from rural, urban and suburban areas, of every age and background. They find creative solutions to connect the full resources of our community with our hungry neighbors. There is more than enough food available to feed everyone!

We had fun sorting and repackaging crisp rice cereal from a bulk portion into smaller one-pound

Every day Second Harvest Heartland needs more than 300 volunteers to help get food to people in need. And we were glad to pitch in!

5 Quick Tips To Save You Money And Time Before The End Of 2016

With holiday shopping and festive menu planning, it is easy to lose track of things that are less exciting – like taxes and money management. Knowing that, I have compiled a short checklist of 5 things that, if done now, can save you considerable money before the year is over. The best part is they are quick to do, so you will be back to celebrating in no time!

  1. Get yourself organized. As year-end statements  and tax forms begin to show up in the mail, file them into a tax binder or folder. You might keep that folder next to where you usually sort mail to make this easy. Having your documents in one place can go a long way towards managing the cost of tax preparation.
  1. Make an additional contribution to your retirement plan. If you have a traditional (non-Roth) retirement plan or a traditional IRA and are under 70½, you can save money on taxes by making a qualified contribution. The contribution will decrease your taxable income, and you get the benefit of boosting your nest egg! I know that holiday budgets can be tight, but the benefits of investing in your peace of mind will last longer than your Christmas tree.
  1. Look into tax loss harvesting. If you can use a reduction in your taxable income this year, consider selling some underperforming stocks before December 31. Capital losses in excess of your gains of up to $3,000 can be used to offset your taxable income, and any excess can be rolled forward to 2017.
  1. Keep track of your holiday budget. With the excitement of the season, it is easy to lose sight of your spending. Remember that the best predictor of your retirement success is your ability to save. Use a formal budget to manage how much you spend on gifts, holiday parties, shopping for the holiday table and eating out. A holiday does not have to break the bank to be memorable.
  1. Criminals don’t take a Christmas break! Identity theft is a threat year-round, but especially so during the holidays. Now is a good time to request your free credit report. I recommend using www.AnnualCreditReport.com – it’s one of the few outlets that is truly free (no credit card required). Be sure to monitor the activity on your credit cards and bank statements a little more closely. Don’t let crooks go holiday-shopping on your dime!

Finally, remember that the best way to avoid wasting money and time is to make sure you have the right strategy in place for your retirement. Don’t leave your security and peace of mind to chance!

Call us today at 952-460-3260 or click here to set up your free 60-Minute One On One Retirement Readiness Lab™ With A Certified Financial Planner Professional.

We are here to help through the holidays and into 2017!

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!