Forced To Retire Early? 4 Steps To Secure Your Finances

Forced To Retire Early? 4 Steps To Secure Your Finances

Yaёl Bizouati-Kennedy   Wed, Jun 14, 2023,

While many workers look forward to the day they retire, others who are forced into early retirement — whether because of layoffs, health or other reasons — don’t have the same experience. Most important, they don’t have the same financial cushion to fall back on.

Increasing Iife expectancy and low levels of retirement planning might further complicate the matter.

While the sudden lack in income takes an obvious and enormous toll on these workers, experts outlined several steps to take in that case, which can help alleviate the financial stress and allow for a less arduous and more enjoyable retirement.

Take a Financial Inventory

The first step is to get a benchmark assessment of where your finances are and project what your income and expenses will be so you can put a plan in motion, said Bobbi Rebell, founder of Financial Wellness Strategies and author of “Launching Financial Grownups: Live Your Richest Life by Helping Your (Almost) Adult Kids Be Everyday Money Smart.”

“Don’t forget to calculate retirement savings along with savings and investments that may or may not be labeled as retirement vehicles,” Rebell added. “Note which funds you can access with and without paying taxes and penalties, depending on your age and any other relevant criteria.”

Work With a Financial Advisor To Re-Evaluate Your Retirement Planning

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/forced-retire-early-4-steps-120046904.html

6 Causes of Financial Problems and How You Can Solve Them

6 Causes of Financial Problems and How You Can Solve Them

Nicole Spector  

So many Americans are trapped in debt and underfunded for retirement that one has to ask, “What is going on? Why are so many of us in such financial trouble?”

A lot of it isn’t our fault and is beyond our control, but we do need to get to the root of the money problems that we can control. So, it’s important to understand the causes of financial problems. What are they and how do they manifest? More importantly, how can we solve them?

Let’s figure it out.

Financial Illiteracy

Financial literacy is gravely lacking in our society, and it’s causing big trouble in our financial lives.

“Remaining in the dark about certain financial factors will eventually lead you to be more exposed to countless financial problems,” said Clint Proctor, editor-in-chief of Investor Junkie.

It may not be your fault that you lack financial literacy, but it is your responsibility to resolve it. You might want to hire a financial advisor for intensive one-on-one help, but you can also check out a growing list of books and podcasts to learn more.

Having a Negative Mindset

Seeing the world through rose-colored glasses won’t solely guide you to financial success, but the reverse mindset can outright hurt you.

“Behind a lot of common financial issues is a disabling money mindset,” said Kelley Holland, a financial empowerment coach. “This can manifest as negative self-talk, like, ‘I’m hopeless with money’ or ‘I’ll never be able to retire.’ It can also show up as avoidance: Not opening bills that arrive, failing to track spending, or missing payment deadlines.”

There are a few ways to tackle a negative money mindset including to challenge your beliefs and recognize your own strengths and past achievements.

“Consider whether your belief is accurate — or whether you really have strengths or experiences you can draw on to take charge of your finances,” Holland said. “For example, if you have had success adopting a fitness regimen, you can think about the reminders and motivators you drew on to make that happen.”

Getting Bad Advice From So-Called ‘Experts’

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/6-causes-financial-problems-solve-200052276.html

6 Tips For Finding The Right Financial Advisor

6 Tips For Finding The Right Financial Advisor

James Royal  Wed, Jun 14, 2023,

If you’re not an expert in money matters, choosing a financial advisor to manage your money life can be a tough decision. It’s almost impossible to know every financial arena well because they can be so specialized. Estate planning is completely different from picking the right investments, for example. Managing a portfolio is different from crafting a monthly budget.  If you’re looking for the basics – someone to invest your money, make smart decisions and build a financial plan – one good option could be a robo-advisor.

A top robo-advisor, such as Betterment or Wealthfront, can help you do all of these things based on your goals and risk tolerance, and charge you a modest fee, too. You can get started in minutes online and it’s excellent for building a portfolio.

However, if you’re looking for more advanced advice, say, for estate planning, you’ll want a human advisor. Here’s what you should look for when choosing a human financial advisor, why you need a fiduciary and the traits you should demand to find the right one for your situation.

What to look for in a financial advisor

Finding the right financial advisor can take a lot of weight off your shoulders, but giving someone access to one of the most sensitive parts of your life can be emotionally challenging.

As you hunt for a financial advisor, you’re actually hiring an expert to work for you. It’s a job interview, so it’s important to pay close attention to all the answers the advisor gives. And watch out for the “advisor” that a financial company provides to you for free. These advisors are usually riddled with conflicts of interest – they’re more salespeople than advisors. That’s why it’s critical that you have an advisor who works only in your best interest.

If you’re looking for an advisor who can truly provide real value to you, it’s important to research a number of potential options, not simply pick the first name that advertises to you.

“Speak to friends and family to see who they would recommend and why,” says Bill Van Sant, managing director at Girard, a wealth management firm in the Philadelphia area.

“Ultimately, you need to feel confident in the advisor’s competency, objectivity, and their responsiveness to your needs,” says Van Sant. “The advisor-client relationship, like many relationships, is built on trust and communication, so doing the proper due diligence in choosing an advisor should provide long-term benefits and peace of mind for all parties.”

Here are six tips to help you choose a trustworthy financial advisor you can rely on.

1. Find a real fiduciary

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/choose-financial-advisor-6-tips-203650563.html

5 Ways To Achieve Lifelong Financial Wellness

5 Ways To Achieve Lifelong Financial Wellness

Karen Bennett  Tue, Jun 13, 2023, BankRate

Problems such as lingering high inflation, increased borrowing rates and the threat of a recession have many Americans worried about their finances. In fact, more than half (52 percent) say money has a negative impact on their mental health, according to Bankrate’s financial wellness survey.

Financial wellness is the ability to manage your money in a healthy way, which involves living within your means, setting financial goals and taking the necessary steps to meet them. Financial wellness can enable you to weather things like a job loss or an unplanned large expense. It provides the peace of mind that leads to reduced stress, a healthier mindset and better sleep.

Here we’ll go over why financial wellness is so important and then share some simple ways you can become more financially healthy.

Benefits of practicing financial wellness

Covering unplanned expenses

Money in a savings account can help you cover expenses that can arise suddenly — such as a car repair or an emergency room visit — without having to go into debt. However, only 43 percent of U.S. adults would pay for an unexpected expense from their savings, Bankrate’s latest emergency savings report found. Experts recommend having an emergency fund that can cover at least three months’ worth of living expenses. A high-yield savings account provides easy access to your money, making it a good place for your emergency fund.

Bouncing back after a job loss

When you have a healthy nest egg in a savings account, you’ll be able to weather a sudden job loss or decrease in income more easily. Having several months’ worth of living expenses gives you more freedom to conduct a thorough job search instead of feeling the need to take the first job opportunity that comes your way.

Having a high credit score

Paying your bills on time and not carrying high debt contributes to a good credit score. Those with a high credit score often receive lower interest rates on credit cards, higher credit card limits, lower mortgage interest rates and lower insurance premiums.

Reducing your need to borrow

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/5-ways-achieve-lifelong-financial-160610504.html

What Does It Take To Be Rich

What Does It Take To Be Rich

Americans were asked what it takes to be rich. Here's what they said.

Aimee Picchi    Tue, Jun 13, 2023,

Americans have a specific number in mind about how much it takes to be perceived as wealthy, and it's a sizable chunk of change: an average of $2.2 million in assets.

That may seem like a pie-in-the-sky number, especially given that the median net worth of the typical family stood at about $122,000 in 2019, according to the most recent data from the Federal Reserve's Survey of Consumer Finances.

Yet the $2.2 million figure reflects a dip from a recent peak in 2020, when Americans said they'd need $2.6 million to be considered rich, according Charles Schwab. For seven consecutive years, the financial services firm has surveyed people about their views on wealth. This year's survey polled 1,000 Americans between 21 and 75 years old about their views on money.

Important yardstick

Wealth can be an important yardstick because families with greater resources can tap their assets to buy a home, start a business, invest or help their children go to college — all steps that can, in turn, lead to more financial security. But the pandemic may have caused some Americans to reassess their views on money, with the result that some may have lowered their threshold for being rich, said Rob Williams, managing director at the Schwab Center for Financial Research.

"My interpretation is that we are looking at what money will do for us a little bit more in terms of lifestyle rather than dollar amount," Williams said. "We have all been through a lot of stress, and money is important, but increasingly, it's about what money can do for us."

The survey respondents were also more likely to say experiences and relationships made them feel wealthier than actual money. For instance, about 7 in 10 said having a healthy work-life balance made them feel richer than maximizing their earnings.

About half of those surveyed said they already felt wealthy, even though their average net worth is about $560,000, or about one-quarter of what the respondents said marks the threshold for being rich in America. That gap may seem like a "paradox," but people are often aspirational when they think about wealth, Williams noted.

"There is a disconnect, and that is part of being human," he said.

Retirement gap

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/americans-were-asked-takes-rich-130100967.html

Why You Should Have More Than One Savings Account Right Now

Why You Should Have More Than One Savings Account Right Now

By MICHAEL BROMBERG Published June 13, 2023

One of the many consequences of the Federal Reserve's aggressive series of interest rate hikes since March 2022 has been a sharp increase in the yield you can earn in your savings deposits. Today, the top high-yield savings accounts pay an annual percentage yield (APY) of 5% or more, while rates on the top money market accounts are as high as 5.25%.

If you currently have a single account that does not match these payouts, it may be time to consider opening a new one or a secondary account—even if that means turning to a new bank or credit union.

Benefits of Multiple Savings Accounts

The current high-rate environment represents an ideal opportunity to reevaluate your savings plan. If you've been stashing your savings deposits in the same account for at least a few years, it's worth checking that the current APY you're earning is competitive with today's top rates.

Opening multiple accounts could be one way to ensure that you're maximizing the potential of your savings by earning the top yield. The flexibility of having more than one account can also help you manage fluctuations in interest rates, which could be important when the Fed eventually pauses its hikes and rates begin to move lower.

In addition, by splitting your savings into more than one account, you boost the amount that can be covered by the Federal Deposit Insurance Corporation (FDIC). The FDIC guarantees your deposits up to $250,000 per individual per institution, so opening several accounts can multiply the deposits that you're entitled to have insured.

Holding your savings in multiple accounts can also be a way to help you stay on track to meet specific goals. For instance, if you're saving for a down payment on a house, you could open an account where you set aside money specifically for that purpose. This could help you avoid the temptation of spending these funds on other things.

To continue reading, please go to the original article here:

https://www.investopedia.com/why-have-multiple-savings-accounts-now-7510818?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral

Top 10 Most Common Financial Mistakes

Top 10 Most Common Financial Mistakes

By EMILY NORRIS

Here we'll take a look at some of the most common financial mistakes that often lead people to major economic hardship. Even if you're already facing financial difficulties, steering clear of these mistakes could be the key to survival.

1. Excessive and Frivolous Spending

Great fortunes are often lost one dollar at a time. It may not seem like a big deal when you pick up that double-mocha cappuccino or have dinner out or order that pay-per-view movie, but every little item adds up.

Just $25 per week spent on dining out costs you $1,300 per year, which could go toward an extra credit card or auto payment or several extra payments. If you're enduring financial hardship, avoiding this mistake really matters—after all, if you're only a few dollars away from foreclosure or bankruptcy, every dollar will count more than ever.

2. Never-Ending Payments

Ask yourself if you really need items that keep you paying every month, year after year. Things like cable television, music services, or high-end gym memberships can force you to pay unceasingly but leave you owning nothing. When money is tight, or you just want to save more, creating a leaner lifestyle can go a long way to fattening your savings and cushioning yourself from financial hardship.

3. Living on Borrowed Money

Using credit cards to buy essentials has become somewhat commonplace. But even if an ever-increasing number of consumers are willing to pay double-digit interest rates on gasoline, groceries, and a host of other items that are gone long before the bill is paid in full, it's not wise financial advice to do so. Credit card interest rates make the price of the charged items a great deal more expensive. In some cases, using credit can also mean you'll spend more than you earn.

4. Buying a New Car

To continue reading, please go to the original article here:

https://www.investopedia.com/personal-finance/most-common-financial-mistakes/

What Happens to Your Bank Account After Death?

What Happens to Your Bank Account After Death?

Investopedia   Tue, June 13, 2023 By RAE HARTLEY BECK

After you die, several things can happen to your bank account, depending on your account type, how you’ve set up your account before your passing, and whether you’ve set up a will or trust.

Learn the common ways you can set up your account to make things as simple as possible after your passing and what will happen if you don’t set up anything beforehand.

Name Bank Account Beneficiaries

The easiest way to pass your bank account on to your heirs after your passing is to make sure you name payable-on-death (POD) or transfer-on-death (TOD) beneficiaries on your accounts. This ensures that they will not have to go through probate, which can take months. If you want money to go to your survivors in the simplest, quickest, and least stressful way possible, then you want to avoid probate as much as possible.

Once you have named a payable-on-death beneficiary, they will not have direct access to your money until you pass. You retain the ability to change the named payable-on-death beneficiary at any time. This option is frequently referred to as a “poor man’s trust” since it essentially acts as a trust that easily transfers money to the person you designate.

Additionally, you don’t have to set up a costly trust through a lawyer and potentially pay fees anytime you want to make changes.

If you have listed someone as a POD beneficiary on your account, then after your passing, all they will need to do to access the funds in the accounts is show a valid government ID and a copy of your death certificate.

 It is common practice for a bank to freeze an account upon notification of the account holder's death to prevent fraud. Therefore, it's important to have a payable on death (POD) beneficiary designated to ensure your money can be accessed by your loved ones if you pass away.

Have a Will

To continue reading, please go to the original article here:

https://www.investopedia.com/what-happens-to-your-bank-account-after-death-5217555?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral  

What Do Grown Children Really Owe Their Loving Parents?

What Do Grown Children Really Owe Their Loving Parents?

by Patrick A. Coleman Updated: May 23, 2023 Originally Published: Jan. 29, 2019

Children once owed parents labor and a legacy. Today, intergenerational debt is harder (and more emotionally taxing) to calculate.

Wondering what we owe our parents, whether emotionally or financially, is a modern philosophical luxury. Historically, children provided an early return on investment, working family farms, picking up industrial jobs, or, at the minimum, helping to raise other children. But much is given and little is expected from most children raised in 21st-century America.

For the most part, we do not ask kids to marry into alliances or assume titles or even, sadly, take over family businesses. This likely constitutes progress, but it confuses the ledger. Where the calculation of what was owed used to be a fairly simple, pay-it-forward list of social norms, modern arithmetic has become complicated, specifically for grown children, who are expected to live independent lives but also to demonstrate some fealty to their forebears.

With more independence and fewer expectations, what we owe our parents or our children’s grandparents is now calculated in man-hours and long-term investments. Do we owe them a call? Do we owe them Thanksgiving? Do we owe them weekends? Do we owe them end of life care? Do we owe them financial support? Do we owe them grandchildren?

Or do we owe them nothing?

The answers to this endless litany of questions seem to arise ad hoc, influenced by different ethnic, economic, and interpersonal experiences. We all find our own way. But, now, researchers and psychologists seem to have found some consistency in how people arrive at their answers that speak to a broader, emerging understanding of what is owed. Americans seem to believe that parents, by dint of being parents, deserve a relationship.

The question often becomes what kind of relationship. Modern philosophers have attempted to solve the conundrum by classifying four theories of what they call filial obligation: Debt Theory, Friendship Theory, Gratitude Theory and Special Goods Theory.

Debt Theory posits a simple if sometimes emotionally fraught transaction where children provide caring for parents only to the extent that they were cared for as a child. Friendship Theory suggests adult children only owe parents the same amount of care that they would owe a very good and close friend.

Gratitude Theory suggests that children care for parents because they are motivated by gratitude for selfless and benevolent child-rearing. Finally, Special Goods Theory suggests that children are obligated to offer only what they can uniquely offer — love or specific care in most cases — in direct exchange for what the parent has or currently offers (think: inheritance), but unlike in Debt Theory, this transaction is constant and open-ended.

Modern arithmetic has become complicated, specifically for grown children, who are expected to live independent lives but also to demonstrate some fealty to their forebears.

At the heart of all of these theories of familial obligation is some kind of emotional relationship. Whether it’s a feeling of closeness or obligation, this implies that these are not straight economic transactions. Transactions and economic reasoning may underpin parent-child relationships, but logic doesn’t crowd out emotion.

An interesting way to consider how emotional and economic reason can tangle is provided by the empirical economists Gary Becker and Nigel Tomes who created an economic model of wealth transmission based on the idea of capital investment.

To continue reading, please go to the original article here:

https://www.fatherly.com/life/what-grown-children-owe-parents-friendship-and-phone-call

Would You Honestly Hire The Federal Reserve To Manage Your Finances?

Would You Honestly Hire The Federal Reserve To Manage Your Finances?

June 12, 2023  By Simon Black Sovereign Man

On August 4, 1964, two US Navy destroyers were conducting intelligence patrols in the Gulf of Tonkin off the coast of Vietnam, when the task force commander grabbed the radio and reported that they were under attack by three North Vietnamese torpedo boats.

The news traveled very quickly all the way to the Pentagon, and Defense Secretary Robert McNamara briefed President Lyndon Johnson on the situation.

They demanded retaliation. And only a few days later, Congress passed the Gulf of Tonkin Resolution… which essentially authorized full blown military conflict in Vietnam.

The only problem, of course, is that the supposed August 4th attack in the Gulf of Tonkin never actually happened.

McNamara himself admitted decades later that the attack was made up, and a declassified report from the National Security Agency showed that there weren’t even any North Vietnamese patrol boats in the area.

Despite the complete fabrication, however, the US went on to engage in a long and costly war. And the man who headed up the effort was a four star general named William Westmoreland, a career officer who had been described by his Pentagon bosses as “the best we have, without question.”

Westmoreland aggressively expanded the war, increasing the number of American troops on the ground by nearly 50x. And he was constantly on TV telling the American public how great the war effort was going and predicted victory by 1967.

At first, everyone believed him. The government still had credibility back then, so few people questioned the commanding general’s assurance that the war was going well.

Westmoreland himself became wildly popular; Time magazine made him the “Man of the Year” in 1965, and his name was even thrown around as a potential candidate for US President.

Little by little, though, it became clear that the war in Vietnam was NOT going as well as Westmoreland had claimed. And in 1968 when the North Vietnamese launched a ferocious assault known as the Tet Offensive, it was obvious that America was losing.

People were shocked; Westmoreland had over 500,000 troops, vastly superior weapons technology, and nearly infinite financial resources at his disposal. And yet he still couldn’t win.

America’s reputation for invincibility was tarnished. The consequences for the US economy were devastating. Social chaos at home was rising-- in large part because of the failed war effort.

And the government’s credibility would never recover… also in large part to Westmoreland’s fabricated claims of success.

You’d think that a guy whose leadership had caused so much damage would have been fired swiftly. But Westmoreland not only kept his job… he was actually PROMOTED to Chief of Staff of the Army.

Sadly this is a common theme in government: failure is rarely punished. It is often rewarded.

The pandemic is a great example. There were so many colossal policy failures at every level of government, resulting in trillions of dollars of debt, supply chain dysfunction, a broken labor market, severe educational losses, a mental health crisis, and much more.

And yet there have been practically zero investigations, zero apologies, zero public inquiries. Most of the key architects of the worst policy ideas got to keep their jobs or retire with distinction on their own terms. Everyone else is still suffering the consequences.

The same can be said for the Federal Reserve and its handling of inflation.

Remember, as America’s central bank, the Federal Reserve was responsible for slashing interest rates to zero and flooding the US economy with a tidal wave of money in 2020 and 2021-- a time when the government was literally paying people to stay home and NOT work.

Even a high school economics student with a basic grasp of supply and demand could have seen inflation coming: when you pay people to NOT work, supply falls. When you give people free money, demand rises. Falling supply and rising demand mean higher prices. Duh.

I was one of the many people who predicted inflation as far back as April 2020.

Yet the Fed completely failed to anticipate it.

Then, when inflation started becoming a problem in early 2021, they failed to even acknowledge it.

Then when they finally acknowledged inflation, they failed to properly diagnose it… and instead labeled it as “transitory” (meaning that it would resolve itself and go away on its own).

Then, even after they stopped pretending that inflation was “transitory”, they failed to take any action to do anything about it while there was still time.

Then, once they finally did take action by aggressively raising interest rates at the fastest pace in decades, they failed to anticipate any negative consequences from doing that.

We’ve discussed before that one of the most important (and immediate) consequences of interest rate hikes is that banks tend to suffer heavy losses on their loan and bond portfolios.

And yet, just THREE DAYS before a wave of bank failures swept across the US financial system a few months ago, the chairman of the Federal Reserve insisted that everything was just fine.

Silicon Valley Bank went bust 72 hours later. And the Fed failed to see it coming.

This is especially problematic given that the Fed is one of the top regulators in the US banking system. One of the Fed’s key roles, in fact, is to supervise and monitor US banks for signs of problems.

Silicon Valley Bank’s problems didn’t pop up overnight; SVB had been reporting its losses to the Fed for several months prior to the bank’s collapse.

Yet the Fed STILL failed to anticipate any problems in the financial system.

It’s been three months since that debacle. US inflation is still way too high.

The underlying problem that caused the bank failures to begin with (major bond losses due to high interest rates) hasn’t gone away. In fact the FDIC recently estimated that banks’ unrealized losses now amount to more than $1 trillion.

Debt levels have gone sky high. The dollar is at serious risk of being replaced as the global reserve currency. And there’s more risk in the US financial system than there’s been in years.

So in short, the Fed failed to anticipate any problems. They haven’t solved any problems. And they’ve managed to create more problems.

But not one of them has been fired. And when the Fed meets tomorrow to decide what do with interest rates, the core leadership team will be largely the same people who have been consistently wrong for the past few years.

Ask yourself a serious question: would you really hire those people to manage your finances? Because if you hold 100% of your savings in US dollars, that’s essentially what you’re doing.

If your answers is “no”, then you may want to strongly consider owning some real assets… and especially gold.

Simon Black, Founder   Sovereign Man 

https://www.sovereignman.com/trends/would-you-honestly-hire-the-federal-reserve-to-manage-your-finances-147678/

Protecting Yourself Against Fraud

Protecting Yourself Against Fraud

Russ Wiles, Arizona Republic  Sun, June 11, 2023

Protecting Yourself Against Fraud, scams and identity theft is hard. These tips can help

Criminals aren't taking time off for the summer, and neither should you when it comes to protecting financial accounts. Keeping your guard up against fraud, scams and identity theft is a full-time pursuit.

The threats extend from divulging too much personal information to having your tax refund stolen. Here are some of the problems and some tips that can help:

Few good reasons to reveal your Social Security number

If a gym asked for your email password to sign you up for a membership, you likely would decline. But if the company asked for your Social Security number, you might provide it.

“From gym memberships to job applications, we treat this nine-digit number as a standard piece of information to hand out willingly,” said Raj Ananthanpillai, founder and CEO of Trua, an identification screening and verification company. “The odds are that you are trusting too many people with it.”

Ananthanpillai argues that consumers should divulge Social Security numbers much more carefully, partly because they can end up in data breaches. You should use your number only for purposes directly related to employment income, reporting/paying taxes and opening bank and other financial accounts, he said.

“For literally everyone else, I want you to ask them what the purpose is, ask them whom they will share it with (and) ask them how long it will be stored on their servers.”

Ananthanpillai’s company, Trua, collects vital information from customers, stores it and confirms identities when needed without revealing the underlying information. He acknowledges that it isn't always easy to decline requests for a Social Security number, but he suggests first asking if you can provide other, less-sensitive identifiers.

 “I’m not promising you that you will be able to avoid sharing your SSN, nor am I promising you that you will make a ton of friends in this process, but you will become a better advocate for yourself,” he said in a statement.

Even the threat of fraud can delay your tax refund

 To continue reading, please go to the original article here:

https://www.yahoo.com/news/protecting-yourself-against-fraud-scams-143026432.html