10 Financial Challenges You’ll Face in the First 10 Years of Retirement

10 Financial Challenges You’ll Face in the First 10 Years of Retirement

Gabrielle Olya  Fri, October 6, 2023

You’ve created a plan, you’ve saved toward your goals and now you’re finally retiring. While you’ll ideally be in for smooth sailing at this point, it is possible that you will encounter some financial storms in your early retirement years.

The best way to weather these storms is to be prepared. Here are 10 financial challenges you’re likely to face in your first 10 years of retirement — and how to move past them.

1. Market Volatility

Even the best-laid plans can get derailed by market volatility.

“Retirees may experience significant market volatility in the first 10 years of retirement,” said Scott Neu, accredited investment fiduciary (AIF), financial advisor at Reinke Gray Wealth Management. “This can impact their retirement savings, especially if they rely heavily on investment income.”

To be able to ride out any volatility in the market, Neu recommends the following: “Diversification, asset allocation and periodic portfolio rebalancing can help mitigate the impact of market fluctuations. Maintaining an emergency fund for short-term expenses can also reduce the need to sell investments during downturns.”

2. Longevity Risk

“People are living longer, which means their retirement savings must last longer,” Neu said. “Outliving their savings is a common concern.”

To mitigate this risk, it’s important to have the proper withdrawal strategy in place.

“Financial advisors recommend a sustainable withdrawal strategy, such as the 4% rule, which ensures retirees don’t deplete their savings too quickly,” Neu said. “Annuities or longevity insurance can also provide guaranteed income for life.”

3. Inflation

Inflation can make it hard to make ends meet during your income-earning years, and it can put even more strain on your finances if you’re living on a fixed income.

“The rising cost of living can erode the purchasing power of retirees’ savings, making it challenging to maintain their desired lifestyle,” Neu said.

https://news.yahoo.com/finance/news/10-financial-challenges-ll-face-120022874.html

13 Steps to Increase Your Financial Resilience

13 Steps to Increase Your Financial Resilience

By Rich Beattie  Published February 17  2023

Are you ready for financial turbulence? Many people are not, even though ups and downs are certain to happen. Before the pandemic, for example, about one-third of American families weren’t financially prepared for the disruption of even a mid-sized financial shock. Preparation against the unknown is an essential part of developing so-called financial resilience—the ability to withstand a job loss, an economic downturn or anything that impacts your income or savings. Being financially resilient doesn’t mean having a lot of money. It’s about being smart and proactive with the money you have, so you can feel more confident that your finances are ready today for whatever happens tomorrow.

1  Crunch the Numbers

Start by tracking how much money is coming in—and exactly where it’s going out. Budgeting doesn’t have to be complicated; you can use apps or even just a notepad. But opening this key window into your finances is the first step away from living paycheck to paycheck and toward financial resiliency.

2  Snip Your Spending

Sure, spending depletes your savings, which decreases your resilience. But it becomes a problem when you regularly spend more than you can afford. The good news: You can most likely find expenses to cut. Comb through your payments, both monthly and day to day: What aren’t you using? What can you do without? Every little bit helps.

3  ​Build Your Emergency Fund

With your baseline established and optimized, it’s time to assess how much you can afford to save for emergencies. You’re planning for the future, so even if you’re only setting aside a little each month, the amount will grow with interest when you use a high yield savings account, CD or money market account.

4  Play the Long Game

Keeping the future in mind will help you stay prepared for what comes next. Look at what you need for medium-term needs, like big purchases, and begin to save for retirement. That may seem a long way off, but starting now will make you that much more resilient down the line.

5  Always Keep Learning

Having a steady income can help you stay resilient in your spending and saving. Lots of factors can disrupt employment, of course, but having transferable, marketable skills will make it easier to find work if you lose your job. Figure out what knowledge you need to reach the next level at your current job or pivot into a new career, then start making it happen.

6  Network, Network, Network

LINK

https://www.synchronybank.com/blog/financial-resilience/?utm_campaign=29562324&utm_medium=display&utm_source=yahoo&utm_content=361478033_552696373_188612781&sitecode=CB_PG_N_YA_NA_FR_MM_NA_BL563&dclid=CNGEqdW55YEDFbTgKAUdeC8DNQ

5 Questions to Ask When Choosing a Financial Advisor

5 Questions to Ask When Choosing a Financial Advisor

October 2023  SmartAsset

Whether you’re saving for retirement, considering major purchases, planning your estate, or just want a second set of eyes on your investments, hiring a financial advisor who you feel best suits your needs could be key.  A 2022 Northwestern Mutual study found that 62% of U.S. adults admit their financial planning needs improvement. However, only 35% of Americans work with a financial advisor.

The value of working with a financial advisor varies by person. While advisors are legally prohibited from promising returns, research suggests that people who work with a financial advisor feel more at ease about their finances and could potentially end up with about 15% more money to spend in retirement.

Finding a fiduciary shouldn’t be that hard. Thankfully, it isn’t.

Whatever your reasons for seeking financial advice, it’s important to have a list of questions planned to ensure you’re hiring a financial advisor who can help you plan to reach your goals.

5 Questions to Ask When Choosing a Financial Advisor

1. Are You a Fiduciary?

Fiduciaries are financial advisors with a legal obligation to prioritize your interests as they manage your assets or money.

Unlike a broker who may push you into insurance policies or investments to rack up fees and commissions, fiduciaries are bound to recommend options that benefit you, the customer. While conflicts of interest can still exist, any potential conflicts of interest must be disclosed.

2. How Much Experience Do You Have?

In addition to asking about their professional certification, it can also be a good idea to ask a prospective financial advisor about their overall experience.

Generally, the more experience they have the better, especially if your financial situation is complicated. You should consider asking about their education, previous employers and track record of success.

You might also want to consider performing a background check to find out whether they’ve ever been convicted of a crime or been involved in a criminal investigation by a regulatory or trade group.

Don’t be afraid to ask for references from current or previous clients, and be wary of a financial advisor who seems reluctant to provide this information.

3. What Type of Services Do You Offer?

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

5 Ways to Best Prepare Your Family for a Financial Emergency

5 Ways to Best Prepare Your Family for a Financial Emergency

Financial Pilgrimage September 5, 2023

Most Americans don’t have enough money saved for a $400 financial emergency, let alone anything larger than that. Managing your finances can be stressful, but it doesn’t have to be. Planning for unexpected emergencies is key to managing your money and keeping stress levels low. The first step to developing that plan is deciding what types of emergencies you want to prepare for—and then taking steps to ensure you’re ready for them when they happen.

The typical rule of thumb is to save three-to-six months of your monthly expenses for emergencies. This likely looks different depending on your family situation. A couple with no kids will likely be able to spend much less than a family of five.

You’ll want to consider the most critical expenses in an emergency and the nice-to-haves that could be avoided or reduced in a crisis. Below are a few additional ideas to prepare your family for financial emergencies.

Create a Buffer

Most people spend every dollar without setting aside enough for emergencies. Planning for financial trials starts with ensuring your budget has some wiggle room. If you’re already at max spending, look for ways to save on things like insurance, groceries, cell phones, etc. You can also cancel services like your entertainment subscriptions to create a buffer if needed.

Use your buffer to start an emergency fund. Set a goal for how much you want in the fund and set aside some money each month to do it. Once you have your emergency fund in place, the next step is to keep it growing. You can set up an automatic transfer from your checking account into a high-yield savings or money market account every month to build up a healthy buffer.

Your buffer size depends on your income, essential bills, and how long you can live without one income if you are in a two-income home. Some experts suggest saving as much as 20% of your total income to account for major financial emergencies. Saving can take time, but the more you save, the better. If you need to go on social security or social security disability at some point, there are benefits for family members that you can also file for. This added income can help you create a buffer, especially if you still have children at home.

Balance Your Books

Balancing your books is essential to managing your financial situation, particularly if you’re living paycheck to paycheck. It’s important for you to keep track of how much money is coming in and where it’s going out so that you can spot any problems before they become serious.

If you’ve lost track of your finances, take some time right now to review all the accounts in which you have cash savings or investments, such as checking accounts, savings accounts, company stocks, and retirement funds. Write down each account and who holds those assets on behalf of yourself or others. You may also want to keep track of household assets such as cars or real estate property—this information can help determine the amount at risk should something unexpected like losing a job.

https://financialpilgrimage.com/financial-emergency/?expand_article=1

AOC Wants You To Be Rich. Just Not The Way That You Think

AOC Wants You To Be Rich. Just Not The Way That You Think

Notes From the Field By Simon Black  October 4, 2023

When Julius Caesar first crossed the English channel and invaded Great Britain in 55 BC, he thought it was primitive, barbaric, and uncivilized… especially when compared to the splendor of Rome.

But Caesar knew it had potential. He wrote to his colleagues back in Rome that Britannia had vast minerals, timber, and livestock, and that it could provide excellent resources for the Empire.

The Senate concurred. And though it took nearly 100 years, Rome eventually conquered Britannia and made it an imperial province.

Over the next several centuries, the Roman government invested heavily in Britannia and built an incredible civilization there, including roads, engineering works, and major building projects.

Britain became a kind of paradise; in addition to the exceptional Roman works, the weather was also just about perfect. The soil was fertile. And it was sparsely populated.

All of this caught the eye of barbarian tribes on the European continent, who constantly attempted to migrate into Britannia. But Roman legions defended against these incursions for centuries.

By the early 400s, however, the western Roman Empire was essentially finished. Inflation was out of control. The legions were revolting. Civil wars and invasions were commonplace. And the Roman government simply no longer had the resources to provide security for faraway provinces.

So, in 410 AD, the Roman emperor Honorius essentially abandoned Britannia and stopped providing border security.

(Honorius was widely considered incompetent; in fact the ancient historian Procopius describes him as a complete buffoon who may have had a few screws loose.)

With Roman security gone, Germanic barbarian tribes almost immediately began mass crossings over Britannia’s southern border. And, over time, they made the land their own-- by slaughtering many of the local Britons who remained.

The Germanic tribes-- especially the Angles, Saxons, and Jutes-- brought their ‘Anglo-Frisian’ language with them. This language developed rapidly into what linguists call ‘Old English’, and Rome’s abandonment of Britannia is the key reason why modern English is rooted in German.

Personally I’ve always been fascinated by how languages develop-- and English is especially interesting.

When the Vikings invaded Britain and established their own settlements in the mid-800s, their ‘Old Norse’ language mixed with Old English. The influence of Old Norse is still obvious today; dozens of many common words including knife, rotten, sky, and wrong are of Norse origin.

After William the Conqueror invaded England in 1066, the language once again transformed-- this time with heavy French influence.

This is one of the reasons why there are so many synonyms in our modern language; the word ‘ask’ is Germanic in origin. But the word ‘inquire’, which means almost the same thing, is French in origin.

There are so many other examples: motherhood/maternity. Holy/Sacred. Work/Labor.

It’s also fascinating how, as language evolves, words take on different meanings. For example, in the 1300s, the word ‘nice’ used to mean ‘ignorant’ or ‘foolish’. Yet today it has a totally different meaning-- pleasant and kind.

Often times these changes are cultural. There was a time, for example, when it was common to describe a happy, joyous person as ‘gay’. Now it almost exclusively refers to someone’s sexuality.

And sometimes, of course, governments and institutions deliberately adjust the language, often to suit a political agenda. Mao Zedong, Joseph Stalin, Adolf Hitler, and North Korea’s Kim Il Sung all manipulated the definitions and even eradicated words from their languages.

Sadly we see similar Orwellian tactics with the English language today. The word liberal, for example, originally referred to someone who favored individual liberty. Then it was hijacked by people who never saw a tax or regulation they didn’t like.

And the definitions for ‘man’ and ‘woman’ were crystal clear for all of human history until just a few years ago.

The latest, however, is the new definition of the word “rich”.

‘Rich’ is Germanic in origin, similar to the German word reich; 1,000+ years ago it referred to a ruler or powerful person. It started being associated with money in the 1300s.

But even still, the word rich for centuries has been typically associated with tremendous, almost unimaginable wealth.

When I was a kid and watched Scrooge McDuck swimming in an indoor pool filled when gold coins, I thought, “man, that guy is rich”.

Leave it to Rep. Alexandria Ocasio-Cortez to change that definition.

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

https://www.sovereignman.com/international-diversification-strategies/aoc-wants-you-to-be-rich-just-not-the-way-that-you-think-148232/

10 Frugal Money Habits That You Need To Embrace

10 Frugal Money Habits That You Need To Embrace

Angela Mae  Tue, October 3, 2023

The word “frugal” often has negative connotations attached to it. Some people hear the term and associate it with being cheap or stingy, but that’s not the case at all. Being frugal can actually be a very positive thing in your life, especially if you’re trying to change your spending and savings habits for the better.

That doesn’t mean it’s easy to adopt a more frugal lifestyle or money mindset. Certain frugal money habits, no matter how beneficial they might be for your present and future, can be tricky to implement in your day-to-day life.

Some frugal habits can take time, patience and consistency to truly adopt, while others are relatively simple. In both cases, switching to a more frugal lifestyle is often more than worth doing.

That said, here are some specific frugal money habits that might be hard to create at first, but that are actually rather worth it.

Buy Food Strategically

Groceries are an essential expense, but it’s easy to go overboard and splurge on things you don’t need. Most grocery stores are designed to encourage impulse buying, especially when you first walk in or are nearing the checkout line. But if you’re trying to cut down on spending, one of the first things you should consider is your grocery bill.

One way to reduce unnecessary expenditures on groceries is to shop with a list and only buy the things that are on that list — no exceptions.

“One of the areas that many people have been struggling with saving on is groceries [as] the cost has gone up a lot over the past few years,” said Kendall Meade, certified financial planner at SoFi. “Have a grocery list (and plan it around the sales that week or month).”

While you’re at it, do some weekly or biweekly meal planning so that you know what to put on that list. You can also check your cupboards or refrigerator to see what you already have and plan your meals around that.

“Meal plan to ensure no food goes to waste (people also might be hesitant to implement this one because it does take some work on the front end but may actually save you time overall,” Meade said. You can also shop at discount grocery stores such as Sam’s Club, Aldi, Lidl or Costco to save on groceries.

Another way to save money on groceries is to buy in bulk — but only if you know you’re going to be able to use whatever you get.

https://www.yahoo.com/finance/news/10-frugal-money-habits-embrace-110020643.html

What Are the Tax Consequences of Being Added to a Deed?

What Are the Tax Consequences of Being Added to a Deed?

Patrick Villanova, CEPF®   Tue, October 3, 2023

Adding another person to a real estate deed can have specific tax implications for both parties.

Property deeds are not just pieces of paper – they hold the power to impact your fiscal situation considerably. Property deeds are legal documents that provide proof of ownership. When you extend ownership rights by adding someone to your property deed, there are tax implications and potential risks associated with the transaction.

What Are the Tax Consequences of Being Added to a Deed?

A person may be added to a property deed as a result of inheritance, marriage or partnership. It's crucial to understand that adding someone to a deed typically involves a transfer of ownership interest in the property. With that transfer comes potential tax consequences.

However, when you’re added to a property deed, you may be eligible for certain property tax exemptions or deductions, especially if the property qualifies as your primary residence. These exemptions can vary by location and are worth exploring with your local tax authorities.

But there can also be capital gains tax consequences when the property is eventually sold. The tax treatment depends on factors such as the duration of ownership and changes in the property’s value. It’s essential to keep detailed records of the property’s cost basis and any improvements made to calculate capital gains accurately.

How to Transfer Ownership of a Property

Transferring ownership of a property is a significant legal and financial transaction that requires careful consideration and adherence to specific procedures.

One of the initial steps is conducting a title search. This confirms the current owner and checks for any existing liens or encumbrances on the property. Clearing any outstanding issues is vital to ensure a smooth transfer.

Next, both parties must agree on the terms of the transfer. This includes the sale price, the timeline for the transfer and any contingencies, such as inspections or repairs.

To formalize the agreement, a deed is prepared. This legal document transfers ownership from the current owner (the seller) to the new owner (the buyer). It must be signed in the presence of a notary public and then filed with the appropriate government authority.

Before the transfer is complete, property taxes and any outstanding dues must be settled. Additionally, homeowners’ association fees, if applicable, should be addressed.

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

https://news.yahoo.com/finance/news/tax-consequences-being-added-deed-122138537.html

7 Mental Money Traps That Keep You Poor

7 Mental Money Traps That Keep You Poor

Crystal Mayer   Thu, September 28, 2023

A recent study shows that over 60% of Americans are living paycheck to paycheck. If you are like one of the millions of people struggling to find financial stability, you might be stuck in the wrong mindset. Avoiding certain mental money traps can help you adjust your spending and start saving for your future.

Creating a budget and sticking to it can help you achieve your financial goals, but you will also need to rethink how you spend money. Prioritizing your spending can help ensure that you have money left over each month to invest. If you are tired of seeing a miniscule balance in your checking account, reconsider these 7 mental money traps that keep you poor.

You Need To Spend Money To Make Money

You have likely heard the old adage, “you need to spend money to make money.” While this may be true for startup businesses, it isn’t a good mindset for most people.

Many people feel that they need to live a specific lifestyle, spending well more than they make to give the perception that they are wealthier than they are. Overspending will only leave you frustrated and won’t help you make money.

Almost all money experts agree that the key to wealth is investing. If you want to stop living paycheck to paycheck, take a look at your non-essential spending and start investing. Even small investments can pay off significantly over time.

Retirement Is Far Away

Many young people fall into the trap of thinking that retirement is far away so they don’t need to worry about it. Unfortunately, waiting to start saving for retirement can cost you big. Fidelity Investments recommends that you have at least 1x your salary saved by the time you are 30 and 3x your salary by the time you are 40.

The longer you wait, the less likely you will have the money you need when you retire. The good news is that even if you haven’t started saving, you can start now. The best way to go about it is by meeting with a financial advisor. Make sure you are also taking full advantage of your company’s 401(k) matching if they offer it.

You’ll Be Happy If You Buy Something

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

https://finance.yahoo.com/news/7-mental-money-traps-keep-120044792.html

Robert Kiyosaki Shares 7 Steps To Reach Your Financial Goals

Robert Kiyosaki Shares 7 Steps To Reach Your Financial Goals

Heather Taylor   Wed, September 27, 2023

Did you know it only takes seven total steps to reach your financial goals? According to personal finance expert Robert Kiyosaki, it’s true, and he recently outlined all seven steps in an article on his Rich Dad blog.

Before you can start making your financial goals happen, Kiyosaki said you’ll need a few things. A support structure of friends, financial experts, brokers, mentors and teachers should all accompany you on this journey. You must also be true to yourself and who you are, creating a plan that fits you and your values and determining your “why.”

This reason should not necessarily be to just make a lot of money either. Your “why” should be the reason for pursuing your dream. If you know your “why” for beginning this journey, follow these seven steps to successfully reach your financial goals.

1. Know Your Destination

What goals do you want to achieve? What does your dream life look like? What do you need to get there? Kiyosaki recommends making big, bold statements about the financial goals you’re setting for yourself.

2. Create a Plan

Once you know where you want to end up, Kiyosaki said the next step is to create a plan. This plan should always be written down, shared with a friend or mentor so they can help keep you accountable, and may be revised as needed.

3. Break Big Goals Down Into Smaller Ones

Some of your financial goals may be intimidating, especially if you have never set them before. The best way you can set yourself up for success is by taking this big goal and breaking it down into smaller goals.

These smaller goals should be easier to manage and achieve. For example, if your big goal is to pay off your student loan debt, some of your smaller goals might include working to pay off outstanding loans by using the debt snowball or debt avalanche method. As you accomplish each of the smaller goals, you can cross them off of the list and feel satisfied knowing you’re on your way to achieving your big goal.

4. Accomplish One Goal-Oriented Task Each Day

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

https://finance.yahoo.com/news/robert-kiyosaki-shares-7-steps-200007988.html

10 Financial Challenges You’ll Face in the First 10 Years of Retirement

10 Financial Challenges You’ll Face in the First 10 Years of Retirement

Gabrielle Olya   Wed, September 27, 2023

You’ve created a plan, you’ve saved toward your goals and now you’re finally retiring. While you’ll ideally be in for smooth sailing at this point, it is possible that you will encounter some financial storms in your early retirement years.

The best way to weather these storms is to be prepared. Here are 10 financial challenges you’re likely to face in your first 10 years of retirement — and how to move past them.

1. Market Volatility

Even the best-laid plans can get derailed by market volatility.

“Retirees may experience significant market volatility in the first 10 years of retirement,” said Scott Neu, accredited investment fiduciary (AIF), financial advisor at Reinke Gray Wealth Management. “This can impact their retirement savings, especially if they rely heavily on investment income.”

To be able to ride out any volatility in the market, Neu recommends the following: “Diversification, asset allocation and periodic portfolio rebalancing can help mitigate the impact of market fluctuations. Maintaining an emergency fund for short-term expenses can also reduce the need to sell investments during downturns.”

2. Longevity Risk

“People are living longer, which means their retirement savings must last longer,” Neu said. “Outliving their savings is a common concern.”

To mitigate this risk, it’s important to have the proper withdrawal strategy in place.

 “Financial advisors recommend a sustainable withdrawal strategy, such as the 4% rule, which ensures retirees don’t deplete their savings too quickly,” Neu said. “Annuities or longevity insurance can also provide guaranteed income for life.”

3. Inflation

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

https://news.yahoo.com/finance/10-financial-challenges-ll-face-120022874.html

12 Expenses That Drain Your Savings Without You Realizing It

12 Expenses That Drain Your Savings Without You Realizing It

Nicole Spector  Tue, September 26, 2023

Building up a nest egg can be terribly challenging in a society where the majority is forced to live paycheck to paycheck. But we all need to save for emergency expenses, as well as for our retirement. Sometimes, despite our best efforts, we get set back on our savings journey. This can happen without us even being completely aware of it.

Here’s a look at 12 expenses that can drain your savings without you realizing it and how to take back control so that you can keep building up your nest egg.

Utility Bills — Especially When Not Using Energy-Efficient Devices

Utility bills can not only eat into your spending money, they can eat into your savings. One way to lessen the damage is to use energy-efficient devices in your home.

“I recently reviewed my utility spending and was shocked to discover that I could save around $175 each year by making a few simple adjustments, like using LED lights and switching to a programmable thermostat that reduces heating during the night,” said Nathan Brunner, CEO at Salarship.

Data Usage

We’re pretty much all addicted to our smartphones, which means we’re consuming tons of pricey data. Have you ever looked into how much you’re spending on data usage per month? You could be nibbling away at your savings without even knowing it.

“Excessive data usage is an underrated expense that drains your funds without you even realizing it,” said Akash Karia, a keynote speaker, high performance coach and author. “It’s often overlooked, but when added together, it ends up being a substantial amount and a significant expense, especially if you are not keeping track of your usage.”

You can effectively lower data usage by limiting streaming and online gaming and being disciplined with data-sucking apps.

“Cut down on data devouring apps like Instagram, TikTok and Netflix, and whenever you have the chance, make sure you connect to a Wi-Fi network,” Karia said.

Subscription Services

Ours is a nation obsessed with subscription services. Eighty-three percent of consumers use at least one subscription based video-on-demand service, as of September 2023, according to Statista — up 10 percentage points in five years. If you’re using a few of these services, you may be slowly but surely depleting your savings.

“Individually, they may cost only $10 to $20 per month, but collectively, you might be shelling out hundreds annually without realizing it,” said Ankit Prakash, founder at Sprout24. “Software-as-a-Service (SaaS) is a silent drain on [your] funds.”

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

https://news.yahoo.com/finance/news/12-expenses-drain-savings-without-130034891.html