We’ve all heard of the 4% rule, but did you know that the creator’s recommendation for it has changed over the years?
I recently discovered an article from ThinkAdvisor.com that included an interview with the father of the 4% rule, Bill Bengen. In the retirement headlines segment, we’ll take a close look at the article and learn directly from Mr. Bengen’s perspective and then I’ll offer my own. Don’t miss out on this glimpse into the mind of the creator of the 4% rule.
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Are you planning on enjoying an active retirement? If so, it may cost you more than you think.
On this episode of Retirement Starts Today, I interview Thatcher Taylor, the financial advisor behind ProPathFinancial.com. Thatcher and I discuss how to prepare financially and mentally for an active retirement.
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If you are looking to ease into retirement by transitioning into a part-time role first, you won’t want to miss this episode of Retirement Starts Today. In the retirement headlines segment, we’ll explore an article by Anne Tergesen at the Wall Street Journal which outlines topics to consider when phasing out your retirement before retiring fully.
Make sure to stick around for the listener questions segment to hear a question from Scott about how to evaluate COLA options on a pension. Press play to start planning your amazing retirement.
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If you have received an inherited IRA or think you will in the future you won’t want to miss this episode. In the retirement headlines segment, we’ll take a look at the proposed changes in regulations regarding inherited RMDs based on the Secure Act of 2020.
In the listener questions segment, we’ll hear from Jim who has a question about rebalancing retirement income buckets. Make sure to stick around until the end so that you understand the best way to manage your buckets in retirement.
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How much thought have you given to your future self? This week’s retirement headline explores the concept of nurturing your future self now so that you can increase your health, happiness, and financial security.
Over in our listener questions segment, I’ll answer a question from an anonymous listener about increasing their spending in retirement. They are looking for advice on whether they can afford to substantially increase their spending this year. Listen in to hear the Retirement Starts Today version of Suze Orman’s “Can I Afford It.”
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If you are heading into retirement you probably have a bucket list that you want to work on. While just about everyone has heard of a bucket list, not many are familiar with the concept of reverse bucket lists.
On this episode of Retirement Starts Today, we’ll explore this concept by referring to an article from Jeff Stein at Inc.com. You’ll learn how a reverse bucket list could help you manage your wants versus your needs.
Stick around for the listener questions segment to hear which assets to look at when doing a Roth conversion. You’ll also hear a question from Paul about the logistics of retirement withdrawals.
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Do you wish you could have more freedom at work yet still earn a paycheck? Remote work and flexible scheduling may help you ease into retirement rather than plunging in all at once.
In our retirement headline segment today, we’ll explore an article from the Wall Street Journal that discusses a new phenomenon that is a direct result of the Covid-19 pandemic.
Additionally, I’ll answer Frank’s question about using the bucket time segmentation strategy in retirement. Listen in to hear details about what those buckets might look like and how to time withdrawals from each bucket.
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When people begin retirement planning they usually have 3 main questions. We cover the questions about what to do about healthcare before Medicare and should I pay off my house regularly on this show. However, the third question, what do I do if I still have kids at home, is not one we regularly address. That is why I’m excited to have Bobbi Rebell, author of the new book, Launching Financial Grown Ups on the show today.
Bobbi is here to discuss the growing phenomenon of adult kids living with their parents and how that can impact your retirement plan. You won’t want to miss this episode if your kids are not completely launched. Listen in to hear Bobbi’s fantastic advice for creating an exit strategy to get your children off the payroll.
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Have you been hesitant to retire this year because of all that is going on in the world? On this episode of Retirement Starts Today, we’ll explore a retirement headline from Maurie Backman at The Motley Fool called 3 Reasons Why 2022 May Be a Bad Year to Retire, but then you’ll hear my rebuttal to each of her 3 arguments.
If you have been on the fence about whether you should take the plunge and retire now, you won’t want to miss this episode. Make sure to stick around until the end of the episode to hear an anonymous question about how to be certain that you won’t owe interest and penalties on a Roth conversion.
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With the news that January’s inflation rate was a staggering 7.5%--the highest level in 40 years–everyone has inflation on their minds lately. Many retirees are reassessing how they can protect their nest eggs.
On this episode of Retirement Starts Today, we’ll explore a WSJ headline, “There’s No Perfect Way to Inflation-Proof Your Investments,” by Anne Tergesen. If you have been wondering how you can best use your investments to hedge against inflation in retirement, don’t miss out on this episode to hear the pros and cons of several different options. Make sure to listen to the end to hear how long you might have to hold on to gold so that it keeps pace with inflation. (Spoiler alert–it’s a lot longer than you think!)
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Many people begin retirement with the question: what’s next? That question can plant the idea of starting a second chapter whether it be a new business, a side hustle, a passion project, or a consulting business. The question then becomes, how to get started?
Gabe Nelson, the host of the Solopreneur Money podcast, is here to discuss how you can start a business in retirement. In this episode, you’ll learn tips on how to get started, how to decide what to charge, how long it should take to become profitable, and so much more.
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Tax season is here. This yearly duty is something that a good portion of citizens put off until the last minute, with some even requesting an extension to file later. However, today I have 8 reasons for you to consider filing your taxes early. Listen in to discover why you might want to bite the bullet and file your tax return early this year.
This is a great list to encourage people to get started on their taxes. I’ve had my thoughts on tax planning for a while now that I’m cohosting the Retirement Tax Podcast with Steven Jarvis. Check it out if you are interested in tax planning strategies in retirement.
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You may be worried about money in retirement, but are you worried that you won’t spend enough of it? Today’s retirement headline comes from Neil Templin over at Barrons.com and it examines how people’s core spending and saving habits from their working years continue in their retirement years.
Listen to this episode to hear the author’s suggestion for how to rectify this issue and whether or not I agree with him.
Why do people continue to save in retirement when they are expected to be spending? Retirees Aren’t Spending Enough of Their Nest Eggs, Here’s Why, an article written by Neil Templin, examines the reasons why some people don’t plan to spend down their assets in retirement. These retirees' portfolios remain the same or sometimes even grow at a time of life when they should be diminishing. The author looks into why this phenomenon is happening.
One study even revealed that ¾ of participants had seen their assets remain the same or grow in retirement. There are numerous reasons why this could happen.
The robust stock market over the past ten years could contribute to a steady or growing portfolio. However, even with strong returns, some people may not feel comfortable enough to loosen their purse strings and spend their savings in retirement. Templin lists these reasons for reluctant spending habits in retirement:
It is difficult to change the core values that people have about spending. Saving is a habit developed over time and retirees are discovering that they can’t simply flick a switch and turn it off.
The author next examines research on retirees with pensions. The research showed that those who received more than half of their income in regular payments spent much more in retirement than those who received less than half of their income regularly.
The article concludes that creating a pension-style income or regular paycheck by using annuities could be a solution for retirees who are reluctant to spend in retirement.
My concern with purchasing annuities to solve this problem is that this solution eliminates the freedom to choose. With a flexible spending strategy, retirees can spend confidently. They understand that when the market doesn’t behave ideally that there is always a plan b to fall back on. This flexible spending strategy relies on education and knowledge to give retirees the peace of mind they need to spend confidently. Listen in to hear how Guyton’s Guardrails could inspire confidence in your retirement spending strategy.
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Do you know where you’ll live when you retire? Deciding where to live in retirement is one of the biggest retirement decisions that you’ll make. There are so many factors to consider that it can be overwhelming with the myriad choices.
On this episode of Retirement Starts Today, we’ll explore a headline from J.D. Roth at GetRichSlowly.org that reveals a new tool from The New York Times which helps people find places to live that suit their lifestyles.
You’ll also hear the answer to Frank’s question about the inflexibility of safe withdrawal rules for those who choose to delay taking Social Security.
If you have been considering moving in retirement, don’t miss out on this episode to discover how this fun tool could help you narrow down your choices.
Today’s retirement headline, A Useful New Tool to Help You Pick a Place to Live, comes from J.D. Roth’s blog GetRichSlowly.org. In the article, the author explores a new interactive tool from The New York Times that could help you decide where to live based on your lifestyle choices.
The interactive quiz uses 35 different factors which can help you narrow down the 17,000 cities and towns across the country they have to choose from. These factors include choices like population density, climate, racial diversity, political affiliation, the average cost of living, and many more. Users can even emphasize which qualities matter most to them.
After exploring a few options, users can compare their favorite choices in an easy-to-read table. Although the tool, isn’t the end all be all in deciding where to live, it may be able to accurately narrow down some areas for you to consider.
Since the tool comes from the New York Times, it is behind a paywall you may be blocked if you have already read your free articles for the month. If you haven’t, spend some time exploring the variables to see which places look good to you.
Many retirees choose to buy a second home in retirement, and I work with several clients that have considered this option. When purchasing a home in retirement, it is important to remember a few rules.
Oftentimes, people don’t realize that after leaving their career behind it can be very challenging to get a mortgage. Since qualifying for a mortgage depends on income rather than assets, many recent retirees discover that they may not qualify for a mortgage even when they have the assets to purchase the home outright.
One way to prevent this issue is by massaging your portfolio income to a level that the bank would approve to secure the loan. After closing on the mortgage, then you can reset your portfolio withdrawals back to normal.
If you are considering purchasing a second home or moving to a new area in retirement, don’t be afraid to rent first. By renting for several months in the city you would like to move to, you’ll be able to explore the town and understand where the desirable (and undesirable) areas are. Renting first could save you from a mistake that could cost hundreds of thousands of dollars.
Learn more about moving in retirement and how using Guyton’s Guardrails could help you set up flexible, safe withdrawal rates in retirement on this episode of Retirement Starts Today.
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On this episode of Retirement Starts Today, we’ll examine an article by Darius Foroux that asks, Are You Saving Too Much Money? After the retirement headlines segment, I’ll answer a question from CJ about using a donor-advised fund to offset the last year of high income before retirement. Get ready to ask challenge yourself and explore your financial decisions as you press play.
Today is the most important day that you have to live. If you are saving too much money you may not be able to enjoy today to its fullest. There are people that save up to 70% of their income while planning an early retirement, but this type of habitual frugality can get in the way of enjoying life in the present. Although saving a high percentage of your salary could give you confidence about your future, it can be difficult to unwind that practiced frugality to truly enjoy life.
If you’re constantly asking yourself on a daily basis how much things cost, you might be saving too much. Try not to calculate your spending down to the penny. Instead, be more conscious of how you spend your money. The is a balance between spending your entire paycheck and over saving is fluid and complex, so it is important to analyze your situation to understand the best saving situation for you.
There are several factors to consider when analyzing your savings patterns:
Understanding the answers to these questions can help you recognize whether you are saving too much.
So, how do we balance living in the present and making the most of our lives today while, at the same time, being responsible stewards for our future selves? A good place to start is by coming up with a financial strategy that incorporates your values. Once you do that, you can use the free tools available on the internet to help you determine how much you need to save.
Self-reflection is important to understand whether you are truly living your best life now or if you are waiting for some arbitrary future date to pursue happiness. Are you living your best life now? If not, what are you waiting for?
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Tax scams are as old as taxes themselves, so are you doing everything you can do to avoid them? In this episode of Retirement Starts Today, we’ll explore what the IRS labels, ‘the dirty dozen’ tax scams. You’ll learn who is targeted by the various scams and then you’ll discover what you should do to protect yourself from scammers. Make sure to stick around until the end of this episode to hear what you should avoid doing so that you don’t fall prey to tax scammers.
Every year the IRS publishes its list of the 'dirty dozen’ tax scams that citizens should be on the lookout for. This year’s list comes directly from the IRS website in an article called Americans Urged to Watch Out for Tax Scams During the Pandemic. The article breaks up the 12 types of schemes into 4 categories based on who carries them out or whom they affect.
The scams can be described as pandemic-related scams, personal information cons, ruses that focus on unsuspecting victims like seniors and immigrants, and schemes that persuade taxpayers into performing unscrupulous actions. The IRS urges everyone to stay aware of scams and scammers, especially during tax season.
This first category of the dirty dozen is related to the pandemic-related stimulus payments from the government which are still under threat from identity thieves.
Look for these warning signs to spot identity theft scams. Any text messages, random incoming phone calls, or emails inquiring about bank account information or requesting recipients to click a link should be considered suspicious and deleted without opening. Remember that the IRS will never initiate contact with taxpayers by phone, email, text, or social media asking for a Social Security number or other personal or financial information related to economic impact payments.
Be alert to mailbox theft by checking your mail frequently and reporting suspected mail losses to the post office. It is also important to remember that IRS.gov is the agency’s official website for payments, refunds, or other tax information.
Stay vigilant about receiving receipts of unemployment benefits that you did not actually receive since this could be a sign of identity theft. This is yet another way that identity thieves try to steal stimulus payments. Taxpayers should look out for a form called 1099-G which reports unemployment compensation that they did not receive.
If you do receive this form, the IRS urges you to contact the appropriate state agency for a corrected form. If a corrected form cannot be obtained in time for taxpayers to file a timely tax return, they should complete their return claiming only the unemployment compensation and other income they actually received.
This year the IRS made its IP PIN program available to all taxpayers. In the past, this program was only available to victims of identity theft. The IP PIN will help prevent fraudulent filings from identity thieves by serving as a key to unlock a taxpayer’s tax account. In addition to the IP PIN, the IRS is further working to reduce fraud by strengthening tax software password protocols, asking for driver's license numbers as a way to prove identity, limiting the number of tax refunds going to bank accounts, and making personal information from tax transcripts.
It is important to stay one step ahead of scammers so that you can protect yourself from fraud. Remember that the IRS will never ask you for your personal information via phone, text, or email.
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Do you have gold as a part of your investment portfolio? Several years ago there were loads of infomercials about investing in gold, but after today’s retirement headline you may want to think twice about complicated investment strategies.
Don’t miss out on this real-world cautionary tale which provides an example of how and why owners of IRAs with assets invested in nontraditional means need to follow strict guidelines. Press play to listen.
If you have been wondering how you can submit your own listener question, make sure to head on over to my website RetirementStartsTodayRadio.com and simply click the ask a question button.
Another way to submit a question is by responding to my weekly Every Day Is Saturday newsletter which is delivered every Thursday morning. By joining the newsletter not only will you be reminded that in retirement every day is Saturday (even Thursday mornings), you’ll also get links to articles and resources that were mentioned on the show.
How’s this for a headline? A Couple Stored a Gold IRA at Home. They Owe the IRS More Than $300,000. Today’s retirement headline was written by Laura Sanders at WSJ. The article discusses a scheme that was promoted years back when ads extolled the benefits of using IRA assets to buy silver and gold coins to store at home or in a safe deposit box. However, the IRS has made it clear that there are strict rules that must be adhered to regarding IRA investments, and the couple failed to follow those rules.
Many people don’t realize that retirement investment accounts don’t have to invest the assets in typical securities like stocks, mutual funds, and ETFs. The law actually gives retirement plan investors many options on how they invest funds, as long as it’s not in collectibles such as artwork. Retirement accounts can hold investments in real estate, litigation funding, deeds of trust, and even cryptocurrency. One thing to watch out for with these kinds of alternatives is if your investment asset isn't liquid you could be in for some trouble around the time of your 72nd birthday when RMDs start.
The article emphasizes that savers who have decided to invest in alternative assets must follow strict rules so that they are not considered self-dealing. Investors who do not follow the rules closely are risking financial catastrophe. Listen in and click through to the article to hear the details of the case so that you can understand how to avoid this type of costly situation.
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You may have noticed how the spirit of giving changed your mood this holiday season. That is because giving can actually increase your happiness. This week’s retirement headline from BigThink.com is titled How Generosity Changes Your Brain, and it discusses recent research on how giving to others promotes happiness. On this episode of Retirement Starts Today, you’ll learn how acting on your generosity creates numerous psychological and physiological benefits in your body.
If one of your goals for 2022 is to be more generous or even if you simply want to reflect on the acts of gift-giving that you experienced over the holiday season, don’t miss the retirement headline segment. Then make sure to stick around until the end of the episode to hear my favorite retirement resources.
Can spending your money maximize your happiness? We’ve all been told that money can’t buy happiness. However, new research suggests that the opposite is actually true: spending money can bring joy.
Rather than buying things to increase happiness, researchers have found that sharing wealth with others is what creates long-lasting contentment. New research has been able to scientifically measure the ways that giving can improve joy. Giving actually releases neurochemicals like oxytocin and endorphins in your brain that are known to increase happiness. Have you noticed this phenomenon whenever you give to others?
In addition to giving money and gifts to others, giving the gift of time increases happiness as well. During the working years, donating time can be a challenge with all the other commitments that people have. This issue disappears in retirement.
Volunteering can even improve health. Science shows that generosity can increase longevity. Researchers found that retirees who volunteer were less likely to die over the course of a 5-year study. The results of the study showed that volunteering boosted people’s overall well-being. Regular volunteering is even more beneficial to health than giving financially. Do you have plans to make volunteering a regular part of your retirement?
Making a habit of generosity is a great way to improve your happiness and health in retirement. Whether you choose to give financially or donate your time, the results will benefit you.
Now that you know that giving can increase your joy, you can find ways to maximize that happiness. One way to ensure that you are optimizing your giving is by giving consciously rather than setting up an automated gift to charity each month.
If you do automate your giving, looking at your bank statements each month to see how much you spend on yourself and comparing that with your spending on others can also increase your contentment.
Have you thought of giving your time or money in retirement? Volunteering or donating money in retirement can also give you a renewed purpose. Think about ways that you could increase giving in ways that align with your values. Listen in to hear my favorite volunteer opportunity.
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Would you want to raise your standard of living for half of what you live on now? Tim Leffel did, which is why he chose to uproot his family from their life in Nashville to move to a small city in Mexico. Tim is the author of the book A Better Life for Half the Price and he joins me today to discuss the pros and cons of living abroad.
Don’t miss the opportunity to learn how you can save money by living abroad. Tim is an expert in the subject and has written extensively about this topic. Listen in to hear this interview.
Tim and his wife have traveled extensively and even lived in Seoul, Korea, and Istanbul, Turkey when they were young. When they had their daughter they knew that they didn’t want to live in the far flung reaches of the world but they still wanted the experience of living abroad.
Mexico was close by and easy to travel to, plus they liked the culture and the food which made it an easy choice to settle on. They chose to live in the central Mexican town of Guanajuato which is a mid-sized city of 200,000 with pleasant weather all year round.
Tim chose to rent for a year first before taking the plunge and purchasing a home. He remarks that buying a house abroad is not like it seems on those popular house hunting TV shows.
There is a lot you need to think about when buying a home abroad. The zoning laws aren’t the same as in the U.S. and it can be hard for a foreigner to understand what things are worth without living there first. Tim recommends putting in the time and effort to truly understand the market value before purchasing a home.
It’s no secret that living in Mexico is less expensive than living in the U.S. Rent in the United States can easily cost $2000. In Mexico, you can find a house to rent for a fraction of that.
Healthcare expenses are notoriously high in the U.S. and in Mexico, Americans are shocked to find how easy it is to pay for those expenses out of pocket.
Tim finds that his total monthly expenses in Mexico are roughly equivalent to what he paid in rent in the U.S. Not everything is cheaper in Mexico though, listen in to hear about what costs more in Mexico.
You would think that you need to be fluent in the language before moving abroad, but there are some places in Mexico where you can get by being monolingual.
Tim still doesn’t consider himself fluent, although he is learning the language. Since his daughter went to school in Mexico, she had the opportunity to become fluent. Would you want to learn the language before moving abroad?
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Despite the economic downturn, 2020 turned out to be a fantastic year for charitable giving. In this episode, we’ll look at how people chose to give and you’ll learn about the efficiency of giving through donor-advised funds (DAFs).
In the listener questions segment, you’ll learn how to survive a bear market in retirement. We’ll investigate the length of the average bear market and see how you can prepare for the worst in your retirement years.
You would think that with the economic downturn of the last year that people would tighten their bootstraps and cease giving to charities, but it turned out that the opposite was true. The two largest brokerage firms, Schwab and Fidelity, recorded increases in charitable donations.
Donations were made in response to the Covid pandemic and the social justice protests that marked the year. The biggest recipients of these charitable gifts were organizations that provide food and other necessities
Fidelity Charitable and Schwab Charitable both use donor-advised funds as a vehicle for charitable giving. Donor-advised funds (DAFs) have become popular since they are simple and make for an easy way to give strategically. These charitable investment accounts allow a donor to make a charitable contribution, receive a tax deduction, and then distribute the money over time. Have you thought of changing the way that you make charitable contributions?
DAFs have become more popular in recent years due to changes in tax laws. The new standard deduction for charitable giving increased to $24,800 for a married couple. By creating a DAF, donors can contribute a lump sum every few years and then administer the funds to the charities they choose over time. Many advisors recommend donor-advised funds as a receptacle for their clients to strategically deduct charitable contributions. Listen in to hear a real-world example of how a DAF can be used.
We must all pay our taxes, but we never want to overpay -- no one wants to leave the taxman a tip. If you are charitably minded, a donor-advised fund is an excellent way to implement a multi-year tax strategy and take advantage of the standard deduction. Think about how lump sum giving every few years could change your tax situation. It pays to plan your taxes ahead in retirement.
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We’ve all been sitting at home for the past year and now everyone is getting the travel bug. That’s why today we’re kicking off the Summer Travel Series with an interview with Lee Huffman. Lee hosts a podcast called We Travel There and he writes a frugal travel blog at BaldThoughts.com. I’ve been curious about the world of travel hacking, so I have plenty of questions for Lee about using travel points, how to find the best travel resources, and, of course, where to travel. Check out this interview to help you plan your summer vacation.
The pandemic has left many of us homebound for over a year, so now that many people are fully vaccinated, everyone is ready to get on the road again. The big question is: how should we get started?
Lee recommends using the travel credits that you may have accrued from canceled vacations over the pandemic. Those credits and vouchers may have expiration dates, so be sure to check the fine print to ensure that you don’t lose out.
He also suggests getting your summer trips booked ASAP. The sooner you book, the sooner you’ll be able to find reward availability and lower prices. The more people begin traveling the higher the prices will rise.
Travel within the U.S. is on the rise, but people are also itching to travel internationally. Since the vaccine rollout has been different in each country, it is important to carefully investigate the specific travel rules for the country you wish to go to. Each country has its own pandemic rules and regulations. Some countries require negative Covid tests upon arrival and others may require you to be fully vaccinated. It is also important to remember that if you travel internationally, you will need a negative Covid test to enter the U.S. again, regardless of your vaccination status. Listen in to hear how many hotels in Mexico are helping travelers with this requirement.
You can earn travel points and rewards even when you are not traveling by using a credit card. Lee recommends the Capital One Venture Rewards card to get started. You can get cash back or earn extra miles with each purchase that you make. Listen in to hear how you can get started with the Capital One Venture rewards program to start traveling this summer.
Lee compares saving miles and points with saving for retirement. He states that the two best days to start saving your miles are 10 years ago and today. He also mentions the importance of using your miles periodically. You don’t want them to become devalued over the years.
There are more ways you can earn travel miles than just making purchases. There are apps that you can use like Dosh to help you earn extra miles on each transaction.
If you have had a travel rewards card for years but find it difficult to use, you won’t want to miss this interview with Lee Huffman as he explains how you can best use your hard-earned miles. He not only mentions how to use your miles, but he also includes fantastic resources that you can check out to help you find availability so that you can actually use the points that you have accrued.
Make sure to check out Lee’s podcast, We Travel There, to get inspiration for your next travel destination. He interviews locals to help his listeners understand how to get there, where to go, what to do, how to get around, and where to stay.
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What is the number one travel goal for people approaching retirement? Disney! People young and old alike love to go to Disney. In my 15 years of retirement planning, I have discovered that a multi-generational trip to Disney is at the top of most people’s bucket lists. That is why I have brought the world’s foremost expert on Disney travel, Lou Mongello, on to Retirement Starts Today for an interview. Lou and I discuss all things Disney: the must-see attractions, when to go, how to plan, and what is so special about Disney.
Since Disney is the number one bucket list item for many people there must be something extra special about it. When I ask Lou why it is so special, he is unable to quantify this phenomenon. He chalks it up to the way Disney makes us feel. If you have been, you know what he means.
One way that Disney is able to give us those warm fuzzy feelings is with its customer service. Disney’s level of service is unparalleled. They always go beyond expectations which is why everyone remembers Disney with such fondness. No other place in the world enjoys such a level of brand loyalty.
There is so much to do at Disney. In Orlando, there are not only the 4 main theme parks but there are water parks and resorts to enjoy as well. It can be challenging to figure out what to do when there is so much to choose from.
There is something for everyone at Disney. Lou recommends the classics from Magic Kingdom in addition to some of the newer attractions. Grandma and the littles are sure to enjoy It’s a Small World and the Jungle Cruise. The Haunted Mansion is another Magic Kingdom classic. At Hollywood Studios, the Tower of Terror and Rock n Roller Coaster are fun for the thrill-seekers in the family. And Frozen and Toy Story are hits with the kids. The Animal Kingdom safari also brings joy to the entire family.
When planning your Disney vacation it is you’ll need to consider when to go. This will depend on your family’s schedule, but there is more to consider. Disney has different travel seasons. The peak season includes major holidays and summer. The off-peak times are the rest of the year. During the off-peak times, you can find values on food and lodging prices.
One tip to use while planning your Disney vacation is to use a Disney travel agency. Many don’t realize that Disney agents are free to the consumer since they get paid by Disney. When planning your Disney vacation make sure to take advantage of these experts. They can help you make the most of your holiday.
There is no bad age to go to Disney. There is so much to do that appeals to every age group. That is what makes Disney such a great multigenerational vacation getaway. Not only is there something for everyone, but there is a wide variety of accommodations and food choices. You can customize your vacation to your family’s specific wishes. The most important thing to do is plan ahead. Much like financial planning, planning before you go to Disney will ensure that you get the most out of your family holiday.
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Since travel is on many soon-to-be retirees' must-do lists I have created this summer travel series with various travel experts. Danielle Desir from the Thought Card podcast joins me today to discuss how to travel to any destination on a budget. Recognized by Flight Network as one of the best travel hackers in the world, Danielle has figured out how to travel to bucket-list destinations on a dime. Are you ready to learn how to plan your next big trip on any budget? Listen in to discover how.
Many people think that if they are on a budget they can only travel to budget-friendly places, but Danielle Desir takes a different approach. As a travel hacker, Danielle has learned how to make travel to bucket-list destinations more affordable. She describes using an abundance mentality as a way to make affordable travel work. She recommends getting creative when planning, “take what you have and make it work.”
The first step in becoming a financially savvy traveler is to identify what you value in travel. Is it important to you to be comfortable on a flight? Do you like to eat out and try the best local cuisine? Do you want to see everything you can in one location? Do you prefer luxury accommodations?
Once you have identified what the most important aspects of travel are to you then you will understand where you can be flexible in your spending. If eating out isn’t important to you then you can save money by packing a sack lunch each day. If a fancy hotel room isn’t important then you could save money by staying in a hostel or an inexpensive Airbnb or motel.
Understanding what you value in travel will help you save money and ensure that you have an amazing time on your trip.
Another way to save money is to gamify your planning experience. By making a game of saving money you can compete with yourself to see how much money you can save each time you travel. You can cut costs in a variety of ways by looking for inexpensive accommodation, saving on flights, or by using travel points. Gamifying your travel costs allows you to get creative and save more.
When traveling with your significant other it is important to take into account what they value as well. Make sure to communicate with them so that you are both on the same page. They may value different things about travel so it is important not to skimp in the areas that matter to them.
You should also be understanding of your partner's travel experience. There may be one partner that is more travel savvy than the other. That means that the travel-savvy partner needs to be patient and explain the importance of the things that you do to save money when traveling.
It is also important to remember that traveling in retirement will be much different than traveling for work. You are out there to have fun. Listen to this episode with travel expert Danielle Desir to hear how you can travel to any destination affordably.
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Now is a great time to start financial and tax planning for the next year. To do so, you must first look at any changes that were made to tax laws. We’ll do that by exploring 2 articles from Forbes and CNBC which take a closer look at any imminent changes to the tax code.
Then we’ll dive into the main segment with an article from Investment News which claims that fewer retirees are claiming Social Security at age 62. Listen in to hear if there will be any tax and retirement planning changes that affect you and to hear why fewer people are claiming Social Security early.
Despite all the news media clamoring that there might be significant tax changes in 2022, there haven’t been many changes. According to an article from Forbes, marginal tax rates will rise slightly. The standard deduction will rise to $12,950 for individuals and $25,900 for married couples filing jointly. Capital gains rates remain unchanged for the next year, however, the brackets moved slightly to keep pace with inflation. Unfortunately, the charitable deduction that was available to nonitemizers in 2021 did not carry over to 2022. The SALT tax cap could possibly increase from $10,000 to a significantly higher number, but as of this recording, it is not yet official.
Do you max out your 401K? I’m always shocked when I realize how few people actually maximize their savings. Only 8.5% of workers save the maximum allotted amount.
Even though the vast majority of people do not max out their 401Ks, savers will have the opportunity to save even more next year. The employee contribution limit for tax-deferred retirement savings plans will increase to $20,500 which is up $1,000 from 2021. On the other hand, Roth IRA limits will remain unchanged at $6,000.
So despite the dramatic headlines in the financial media earlier this year, very little has changed for tax and retirement planning from 2021 to 2022. We’ll keep you posted if anything new arises.
If you are curious about the effects of the baby boom consider this: the number of men who turned 62 has more than doubled between the years of 1997 and 2019. This shocking number makes it easy to be fooled by the number of people who claim Social Security early since the number of people who claim Social Security has risen, but when you look at the percentage of people who claim early the statistics have declined greatly. According to a study at Boston College by the Center for Retirement Research (CRR), the percentage of 62-year-olds who claim Social Security early at age 62 has decreased in the past 20 years.
Although we won’t have hard data for another year, it looks like some older workers who lost their jobs may have turned to Social Security to help make ends meet. Early evidence shows that the effects of Covid have not pushed large numbers of people into early retirement. This could be because those most affected cannot afford to stop working.
I’m encouraged that folks are waiting to collect Social Security and in doing so growing the guaranteed income portion of their retirement income. Hopefully, this is due to retirees actively making the decision to defer, rather than deferring because they are having to work longer. Whether it is planned or unplanned, deferring will result in a larger benefit for those retirees.
This is our last original episode of 2021 so that I can spend more time over the holidays with my family. We’ll close out the year with a list of my favorite episodes from 2021. Enjoy the holiday season, and we’ll meet again in 2022!
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Have you ever filled out a questionnaire at your financial advisor’s office? If you have, it was probably a risk tolerance questionnaire. I have my own opinions about them, but you’ll have to wait until the end of this episode to hear what it is.
On this episode of Retirement Starts Today, we’ll explore an article from AdvisorPerspectives.com written by Dr. Wade Pfau and Alex Murguia which argues that risk tolerance questionnaires (RTQs) don’t work. You’ll hear new retirement slang and acronyms as well as a discussion of retirement income sourcing.
Dr. Pfau has also developed his own tool to use that can help you select the best deaccumulation approach. Don’t forget to stick around until the end to hear my thoughts.
RTQs are a tool that help financial advisors identify the amount of volatility that clients can handle in their investment portfolios. These tools generally consist of 9 questions and they are designed to establish a baseline so that the advisor can rank the investor on a scale of 1-5 from conservative to aggressive. These documents are especially helpful for advisors to stay compliant as they choose portfolio recommendations.
RTQs work best in the accumulation stage of people’s lives, but when it comes to retirement they fall flat. In retirement, a person must shift their way of thinking from accumulation to decumulation and this can be a challenging adjustment in mindset. Viewpoints on funding daily expenses inevitably change when one is completely dependent on living off one’s investment capital without the luxury of human capital to cushion the blows of a bear market.
In addition to a change in mindset, there are unavoidable spending shocks that arise in retirement. This means that retirees need to consider how much of their assets they need to keep on hand for these unexpected events and market downturns.
Not only are there the everyday expenses that come along, but retirement brings on further risks. There is constantly the risk of outliving your money and becoming a burden to others since no one knows their own longevity. Another retirement risk is lifestyle risk. To maintain a comfortable lifestyle in retirement it is important to ensure enough discretionary income to fully enjoy retirement.
RTQs work better for people in the accumulation stage of life because they weren’t designed to handle the broader questions that retirement brings. They can play a small role in helping to decide asset allocation, however, they cannot be used in place of a retirement plan.
It is important to come up with a retirement income strategy based on goals first. By beginning a retirement plan with a questionnaire you end up boxing yourself into a strategy that may not be in alignment with your ultimate retirement goals. Listen in to hear why I think RTQs are a poor excuse for proper retirement planning.
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