My Smart Retirement

Are you spending your money in a way that makes you happy? We all know the saying, "money can't buy happiness". However, studies have shown that the way we spend our money really does impact our overall happiness. On today's show, we will be going over some spending principles and their impact on our life. A lot of people win the lottery only to find out they are still unhappy once they are rich. So, what is the secret balance? You can't just throw your money against a wall.  Buy more experiences and fewer things.  Buying that new pair of shoes or the latest TV model may make us happy for a little bit, but that feeling is usually fleeting. Spending money on experiences, whether you are traveling or trying a new restaurant with a loved one can be much more valuable to our hearts. Studies have shown we reminisce on experiences rather than things. This is a great way to build our relationships with one another as well.  Enjoy the small things.  Sometimes we need to find joy in the small things rather than the bi

Happy Thanksgiving! As we enter the holiday season, we start to think of traditions more and more often. Maybe you always made cookies with your grandmother or perhaps she told you stories about the Mayflower on Thanksgiving. On today's episode, we are going to talk about the first pilgrims and their voyage. How did they face the unknown with such bravery? What can we learn from these stories today? There are probably many reasons the first pilgrims decided to come to America. Maybe it was economic or spiritual, or a mix of both. It seemed like a pretty risky move to brave the unknowns. But they were led with a purpose and by passionate men such as Pastor John Robinson, Samuel Fuller, Peter Brown, and John Goodman. Each of these people had their own story. Many of them left their wives and children at home and sought out to find new land. Later, their families joined them. The pilgrims faced many dangers including the cold and illness. Fuller taught himself to be a physician and spent his life taking care of

We have reached the highest inflation rate in 30 years. What can old-time principles teach us about protecting our retirement plan against inflation? How can we protect ourselves? While inflation may seem like a problem for the country's economy, it is also a problem for us personally. On today's episode, we will discuss the inflation rate, wage growth, and how retirement accounts are changing to account for current economic times. As of October, the annualized inflation rate is 6.2%. However, wage and income percentages are not keeping up. The wage rate growth is only 4.9%. This is a problem for those still working and for retirees. Employees aren't seeing their income keep up with inflation and retirees aren't seeing their savings keep up either. In many ways, inflation is a hidden tax. Inflation affects us differently. Whether you are a couple in your 40s with children or a retiree enjoying their retirement in a new home, what you are spending money on looks different. Some things we have to purchase thoug

Last week we discussed Social Security earning limits. Whether you want to work a few hours a week or continue with your current career it's important to understand how this impacts your Social Security. You've been paying into this program. You want to make sure you have a strategic Social Security plan. After our discussion last week, we had some listener questions come in. So we are going to answer some of these "Yes...but..." questions and clear some things up about the nuances of Social Security.  "What if I work in the year I reach full retirement age?"  The full retirement age is 66 or 67, depending on the year you were born. If you are younger than your full retirement age the earnings limit is $18,960 a year. If you are at full retirement age your earnings limit is $50,520. Now, if you are working leading up to your 66th or 67th birthday the lower earnings limit only applies to the months before your birthday.  "What if my spouse retires and I continue working?"  A lot of people decide to do this. Th

We have paid into Social Security our whole working lives. However, maximizing your Social Security strategy can be confusing to navigate. We want to make sure you are strategically planning your retirement income. On today's show, we will be answering some questions about Social Security. Since retirees are one of the largest groups of small business owners and entrepreneurs earning limits are important to be aware of. We will be discussing earning limits, pension impacts on those earning limits, and how divorce impacts Social Security eligibility. What is the earning limit for those eligible to take Social Security? Well, it depends on a few factors like your age and when you file. The full retirement age is 66 to 67 depending on when you were born. If you are attempting to take Social Security before full retirement age your earning limit is $1,580 a month or $18,960 a year. If your earnings are more than this the Social Security office takes $1 from your benefits for every $2 you earn above the annual lim

A rose by another name is just as sweet... You've probably heard this saying or a variation of it before. The names we assign things can make our perception of them different, we hold different values towards them. On today's show, we will be discussing the importance of names and values, inflation, and how we can rebrand our retirement plans. Inflation is everywhere in the news these days. The S&P is continuing to hit all-time highs. The cost of living continues to rise. Our perception of these things is often influenced by what we hear from others but they have real impacts on our retirement plans. We keep hearing that this round of inflation is "transitory" but that isn't really true. There has been a 34% increase in money pumped into the economy over the last 18 months. What about inflation rates? It's hard to know when the Federal Reserve will raise them. It may be in July of next year or they may wait until after the midterm elections. Whenever they decide to raise them it's likely to only be a quar

There are many phases of change we go through in life. Retirement is one of them. Changing for Good: A Revolutionary Six-Stage Program by John C. Norcross details the 6 stages of change. On today's show, we will be discussing the first 3 stages: pre-contemplation, contemplation, and preparation. These are the mental and emotional hurdles we must go through when we make a change. Learning about the way we transition is an important tool in navigating retirement. The pre-contemplation phase could also be called the denial stage. At this point, you probably don't even recognize there is an issue that needs to be addressed. We see this with couples a lot, one spouse wants to lock down on their retirement planning while the other doesn't see the financial problems that need to be focused on. Usually, spouses are on different phases of change and they must work as a team to make things happen.  After getting past pre-contemplation, we move on to contemplation. Here you understand there is a problem that needs to be

Sometimes we need to think outside the box when we are working on our retirement plan. There are many ways to fill your income stream, some more traditional than others. Today, we discuss a few unexpected ways you could be making income in retirement. Once you retire you have a lot more time on your hands. You’ll be able to invest more into hobbies you’ve had before or learn new ones. One client of ours had been an avid gardener for years. After retirement, she was able to perfect her growing skills. She found herself making some extra spending money by selling her produce. Investing in a Healthcare Savings Account is sometimes overlooked by people. However, saving in this type of account can come in handy once you are in retirement. HSAs are pretty liberal with what they allow you to spend the money on, but your taxes will be affected depending on where you use the money. If you use it for healthcare, it is tax-free. If it's for another expense you can expect to pay some taxes on the distribution. Having thi

We talk a lot about preparing for retirement. But what about those of us that don't want to retire, at least not yet? Today, we are going to discuss why people wait to retire and what impacts their decision. Some people really love their careers and they've worked hard to get to their current positions. But do you have a plan if things were to change? Could you retire quickly if you needed to? Companies, health, and circumstances can all change. We want to make sure if things do shift, you have a contingency plan. The fear of boredom, once we retire, is something many of us go through. What will we do with all that free time? Instead of working full time for the foreseeable future think about transitioning to shorter hours. Look into part-time work as a way to spend a few hours a week being social and making some extra cash. You'll want to assess your quality of life at your current job and see if it can be any better. Are you scared you don't have enough money to retire? A lot of us have an idea of how much

Unfortunately, there are a lot of things out there that we shouldn't trust: some people's advice, scams, gas station sushi. The list goes on. So today, we are going to be discussing a few financial items that you may want to look out for and whether you can trust them.  Don't always trust what is on paper.  This can be a difficult thing to change. It can be exciting when an advisor shows us a document with our account goals and predictions on it. But in a situation like this, you should really be focusing on your overall plan with your advisor. At the end of the day, the plan will be how you will reach those exciting numbers.  Don't trust that you are done with fees.   Perhaps you have the idea that you paid fees when you first invested. Or maybe someone told you that you won't have to pay additional fees on an investment. Everything in investing has some type of fee. But don't think of them as burdensome. By investing, you are contributing to the overall growth of your portfolio.  Don't trust money scams. Th

Last week, on September 17th, we celebrated Constitution Day. As we reflected upon the constitution and its foundational importance to the success of our country, we began to think of the foundational importance of planning for our retirement lifestyle. On today's episode, we will be discussing our retirement lifestyle choices. After we are done working we will have a lot more free time on our hands. With more time comes more freedom to make changes that we have always dreamt about. We will discuss some ideas we have heard from clients over the years and hope that some may inspire you on your foundational planning journey. Perhaps you are looking for a bit of adventure after retirement like a couple of our clients who have been avid marlin fishers. As they reached retirement this is something they wanted to do more often. Similarly, the RV lifestyle has become very popular within the past few years. Some people even continue this into their 80s! Other ideas include the 'two-house solution' and the 'front porc

Retirement is a crossroads in life and we must choose a path to take. With this decision comes many questions. As the famous poem by Robert Frost details, a crossroads is a time to reflect and think over our decisions. Today, we are going to discuss three big questions that may come up when it comes to retirement and which path you should be taking. Our first question is about taking in income while also withdrawing from Social Security.  A common reason that this happens is when someone decides to retire from the corporate world and start their own business. In this situation, you will want to make sure you are setting yourself up successfully when it comes to the taxes you will have to pay. Another question a lot of our clients ask is whether there is a way around minimum distributions on our IRAs. 70 used to be the minimum distribution age, but it has now gone up to 72. Unfortunately, there are not many ways you can avoid meeting the minimum distribution without being penalized. Although if there is a mark

It’s easy to become overly confident with your retirement plan. You've been working on it for many years! But there are gaps in nearly every financial plan that can blindside us if we’re not careful. On today's episode, Nancy goes in-depth on some of the common gaps she sees in planning for retirement and how we can address them now. We know that gaps are going to happen, but if we mind them now and plan accordingly, we will be able to have a better financial future. After we retire, we will have a lot more responsibility when it comes to our income and insurance. We need to know how we are going to compensate for the paycheck we are no longer receiving. This can mean having savings we dip into until we are ready to pull from Social Security or simply starting Social Security payments right away. In addition, we have to account for adjustments we may see between our employer's healthcare and Medicare. Insurance is one of the biggest factors in deciding a retirement age. By calculating these differences, we ca

Every year we face new challenges to our financial plan, but it seems the past year brought us more than we’re used to. The pandemic changed a lot around our country, and it’s definitely impacted the economy. On this episode of My Smart Retirement, we want to identify some of the key challenges that are facing investors right now so that you know what to be focusing on within your retirement plan. To help us do this, we asked Michael Sorrentino, CFA, to join the show to give us his insight on the economy. Sorrentino serves as the Chief Investment Officer for Darwin Asset Management and often appears as a guest on financial shows so he can really speak to what’s happening right now. To understand how we’ve gotten to this point, we’ll begin by discussing the Fed’s decision to increase the supply of money due to the fear of liquidity drying up. That money was sent out to people in the form of stimulus checks but most people didn’t have the ability to spend it because of the pandemic. Now we’re seeing this signif

We were recently out spending time with some friends over a meal when the fortune cookies came out. As we all cracked them open to see what piece of wisdom awaited us, it got us thinking about financial fortunes. Who’s to say that you can’t take that message of inspiration and apply it to your financial plan, right? So that’s what we decided to do on this episode of the podcast. We’re going to run through a few of the quotes from inside that crunchy cookie and apply them to real-life scenarios that we encounter with clients. Accept something you cannot change and you will feel better. The first thing that immediately comes to mind are taxes. It’s a frustrating topic when you start thinking about how much money you are paying and will have to pay in taxes over your lifetime, but there’s nothing you can do about the laws. What you can do, however, is start taking action to limit your tax obligations in retirement. We do this through a variety of tax planning strategies and it can save you significant amounts th

As we move through life every day, we devote our attention to things that seem important in that moment. In doing so, we overlook many of the things that protect us in the event of an emergency. Hopefully if the time ever comes when you need your smoke alarm to work or your airbags to deploy, everything is working properly. The same is true when it comes to financial planning. Much of the work we do is making sure you are taken care of when life throws us those unexpected events. That’s what we want to talk about on this episode of the podcast. By bringing attention to these things that don’t matter until they do, we hope that it pushes you to action. You’ll want to go through each of these items with your advisor to make sure everything is updated and accurate. The list we’ll run through includes: Legal documents Long-term care Life insurance Lifetime income streams If any of those haven’t been accounted for and you’re approaching or in retirement, make it a priority to get with your advisor. We’ll explain

Spending habits determine much of the success you have during your working career and then into retirement. That’s why budgeting is always one of the first steps towards retirement. But being a responsible spender is much easier said than done. Otherwise retirement planning and managing finances would be a breeze. So how should you spend your money? Of course there’s never going to be a cookie-cutter approach that works for everyone because you will always know what’s best for yourself and your family but following the guidance we provide our clients will help you financially over time. In this episode of the podcast, we’ll share eight different principles to bolster your life satisfactions from spending the money you’ve earned in manner that will make you feel as happy and content as possible. You might know about most or all of these things we discuss but it’s will still serve as a good reminder of what’s important.   Spending often determines how successful your retirement ends up being. That’s why we deve

Building a retirement plan requires a mix of ingredients that a financial advisor can help you create, but it’s not all about assets and accounts. There’s much more to life than wealth and that becomes more and more clear in retirement. That’s why we wanted to share a few circumstances with people we know who were both entering retirement or already in retirement and had questions for us. The circumstances are a little different but they have that common missing ingredient that many people don’t factor in, and that’s the feeling of accomplishment. Getting that sense of an unexpected letdown is real when you stop working. All of a sudden your days have different meaning and often lack purpose. That’s why you want to have a plan for this second life and how you’ll spend your time. The friendship and fellowship is important, but that sense of accomplishment really helps us find happiness. Until we feel like we’re achieving something, then people won’t be completely happy. It’s a feeling we have as humans that we