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The Formula You Are Using To Determine How Much To Save For Retirement Is Broken

If you are trying to figure out how much money you need to save for retirement, there’s an easy rule of thumb that you can use: simply multiply your expected annual expenses in retirement by twenty-five.

For example, if you expect to spend $100,000 annually once you’re retired, you’ll want to have a $2.5 million portfolio saved up. If you’d like to play around with the numbers to estimate your own retirement needs, you can use this simple retirement calculator.

This retirement savings rule of thumb is based on the 1998 landmark study conducted by Carl Hubbard, Philip Cooley and Daniel Walz, in their seminal study known as the Trinity Study. They built on the 1994 work of William Bengen, who originally coined the ‘4% Rule’.

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The Trinity Study evaluated safe retirement withdrawal rates, and found that 4% was sufficient for the majority of retirees. A safe withdrawal rate simply refers to the amount of money that can be taken out of an account and allow you to reasonably expect the portfolio to not fail, or run out of money. In this case, the 4% withdrawal rate refers to the amount of money that will be withdrawn from the balance of the retirement portfolio in the first year of retirement. In subsequent years, the balance withdrawn will simply be an inflation adjusted number based on the total dollar amount withdrawn the year prior.

The Trinity Study has become so well-known, that it has been adopted by hopeful retirees from all walks of life, including those hoping to retire early. The FIRE movement (Financial Independence, Retire Early) is a lifestyle movement with the goal of allowing individuals to retire as early and quickly as possible.

However, one detail that the movement is getting wrong and completely missing, is the fact that the Trinity Study’s 4% rule of thumb was based on a 30 year retirement period. This time horizon was determined to be on the conservative end of retirements by the authors of the study. If you work until you’re 65, having a 30 year retirement seems pretty reasonable. I don’t think many would argue that living until the age of 95 is a short life by any means.

The problem arises due to the FIRE movement seeking a much longer retirement period. If you retire at 45 years old, you may need a portfolio that will survive another 45 to 50 years in order to avoid running out of money. In this case, making a judgement error could end up meaning re-entering the workforce at an advanced age. For this reason, relying on a 4% withdrawal rate is an extremely risky decision if you plan to retire early.

This begs the question of what a more appropriate withdrawal rate is if you plan to retire early. The answer is that it depends. In general, the study found that as the balance between stocks and bonds shifts towards equities, a portfolio is more likely to withstand the test of time. So inherently, your risk tolerance will need to be factored into the equation. If you are comfortable with 75%+ of your portfolio being in stocks (and stomaching the increased risk), you might be safe with a 3% withdrawal rate. If you prefer less volatile investments, a lower rate is more conservative.

This is bad news for a lot of you hoping to retire early.

For one, it would mean having to save an additional $833,000 if you hope to spend $100,000 annually like in the example above. Unless you are an exceptionally high earner, it’ll likely mean having to work for several additional years or having to continue to earn additional income even after retirement.

With the buzz surrounding the gig economy and the seemingly endless ‘side-hustle’ opportunities available, this seems like a surmountable hurdle. The deficit in retirement savings required also highlights the impact of having to save for retirement as efficiently as possible.

This means fully taking advantage of your 401(k), IRA, and other tax-advantaged accounts. It also means evaluating whether it makes sense to refinance your student loans or not. Avoiding credit card interest fees and other forms of high interest debt are a must. In addition, maximizing your earning potential will also help safeguard your nest egg from market turbulence and economic uncertainty.

Just as important, you’ll also want to avoid making costly investment mistakes. One that comes to mind is erroneously viewing your vehicle as a sound investment. Another pitfall is picking individual stocks in lieu of index funds or ETFs. To set yourself up for success, minimizing fees and diversifying your investments is the name of the game.

Does all of this mean that the 4% rule is futile and should be completely ignored? Absolutely not. The authors of the Trinity Study ran simulations to find what the safe withdrawal rate would be for varying time horizons. But at the end of the day, they were just that: simulations. Even if you only had an expected 15 year retirement and used a conservative withdrawal rate, there is always the chance that your portfolio could fail. The same is true in the opposite direction: there’s always the chance that a 4% withdrawal could be sufficient for a 50 year retirement.

The question you have to answer is whether you are comfortable taking that risk. I know I’m not.

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Camilo Maldonado is Co-Founder of The Finance Twins, a personal finance site showing you how to budgetinvestbanksave & refinance your student loans. He also runs Contacts Compare.

Source: The Formula You Are Using To Determine How Much To Save For Retirement Is Broken

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There are many financial gurus out there that tell you how much to save for retirement, but how did they come up with that number? Honestly they are all just using each others guesses, but as financial advisors we need to do better. While others guess that you should save 10, 12,15% for retirement we can actually figure out how much you should save…to the penny! The first thing we want to know is how much income are you looking for in retirement? Typically we say that you should aim to have 75% of your current income replaced for retirement. The reason is that social security and other savings may make up the difference. Today we will calculate how much a 30 year old couple should save for retirement given that they each have income of $50,ooo per year. We will adjust this to account for inflation and make some assumptions about their retirement age and life expectancy. After calculating this along with expected returns we can see that they need to save 11.9% of their income yearly to have 75% of their income in retirement. We love doing this for our clients and if you are considering a place for your retirement investments then we hope you will consider jazzWealth.com We’re an investing service that also helps you keep your dough straight. We’ll manage your retirement investments and, using NestEgg we can help you with every penny! —Ready to subscribe— https://www.youtube.com/jazzwealth?su… For more information visit: www.JazzWealth.com — Instagram @jazzWealth — Facebook https://www.facebook.com/JazzWealth/ — Twitter @jazzWealth Investment related questions 📧 Dustin@JazzWealth.com Business Affairs 📧Carolyn@JazzWealth.com

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What Makes People Truly Happy in Retirement?

What makes people happy in retirement? That’s the question Michael Finke has been researching for many years now. He’s the chief academic officer of the American College of Financial Services, and was one of 16 experts who spoke on at TheStreet’s Retirement, Taxes, and Income Strategies symposium held recently in New York.

And he now has the answer.

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But first a little background. Finke has been researching the question of what makes people happy in retirement because he wants to know to what extent does what people do with their money make them happy in retirement. “Is it better if they have a lump sum? Is it better if they have a pension, or some kind of annuitized income?”

And what he found was this: There seems to be three pillars of happiness in retirement. The first pillar is money, which he says is good news for those of who are actually saving for retirement. “You are happier if you have more money,” Finke said. “So money is a pillar.”

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And it shouldn’t be any surprise, he said, that health is also a pillar of happiness. “You can have all the money in the world, but if you’re not healthy, you’re not actually gonna enjoy your retirement,” Finke said.

But most of his newest research is on social well-being. For instance, the extent to which you have good relationships with your spouse is is one of the strongest predictors of happiness in retirement. “So make sure you invest in that as much as you’re investing in your 401(k),” Finke said.

The other predictors of happiness in retirement are, according to Finke, friendships and the depth of friendships and the number of friendships that you have with other people. “And even when we look at spending, what we see is that social spending is what really makes people happy,” he said.

Spending money on all sorts of other stuff that we think might make us happy in retirement doesn’t really make us that happy. “It is social spending that makes us happy,” Finke said.

So that’s the foundation of his research in life satisfaction in retirement. “You have to have all three of those if you’re going to be satisfied, and all of them are an investment,” said Finke.

What is an investment in retirement? According to Finke, an investment is anything that requires a sacrifice during your working years in order to build value. “When you save for retirement, it means that you’re living a little bit less well,” he said. “You’re setting money aside that you could have spent today, and you’re (going to) spend that money in retirement.”

Health is an investment, too, said Finke who recalled his early days as a food consumption researcher. “The whole reason I got into finance was because I took a doctoral class in investments because I wanted to understand investments theory, but my theory was that the same thing that motivated people to save money for retirement is the thing that motivated them to engage in healthy behaviors like eating better or exercising, and so that’s an investment in your future as well,” he said.

Relationships are an investment as well and it takes ongoing investment and time and resources to be able to maintain those friendships “so that you can actually draw from them in retirement,” said Finke.

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And if you haven’t made those investments — and men are especially bad at making investments in friendships — you’re not going to be as happy in retirement, he said.

Women, by contrast, invest more. “Women have more deep relationships than men do by the time they get to retirement,” he said. And that, said Finke, actually creates a big issue because very often women have friends outside of the relationship, and they want to spend time maintaining that investment with their friends.

A man’s social circle, by contrast, is at work. “And by the time they retire, they’re relying more on their spouse,” Finke said. “In an opposite-sex couple, they’re relying on their spouse for that, to spend time with them, to go on vacation with them and have lunch with them, and sometimes that creates a bit of friction in retirement.”

Finke also noted that married retirees, in general, are happier, but the happiest group is women who are newly divorced between the ages of 60 and 65. “That’s the happiest group,” he said.

By:

Source: What Makes People Truly Happy in Retirement? – TheStreet

Got questions about money, retirement and/or investments? Email Robert.Powell@TheStreet.com.

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Great Places To Follow Your Passions In Retirement In 2019

Want to be happy in retirement? Then cultivate relationships and spend more money on leisure activities—at least that’s what new academic research (as well as common sense) suggests.

To help you with the leisure part, Forbes presents its 2019 list of 25 great places to pursue seven retirement passions: arts, fine dining, lifelong learning, volunteering, outdoor activities on water, outdoor activities on land and (in its own category) golf.

Most are recommended for multiple passions and two—Seattle and Austin, Texas—excel in all seven categories. Our picks are spread across 21 states in all four continental time zones.

While our flagship Best Places To Retire list highlights locations that offer the best retirement value for the buck, our passions list doesn’t disqualify places simply because they’ve got high costs or taxes. Athens, Georgia, our most affordable passions pick, has a median home price of just $178,000, while San Francisco, our most expensive, has a median home price of $1.36 million. Although high costs (or high taxes) won’t keep a city from making this new list, we do take into account such practical quality of life factors as air quality, crime, doctor availability and how walkable and bikeable a city is. You can read more about our selection method here.

Legend:

  • Arts 🎨
  • Fine dining 🍴
  • Lifelong learning 🎓
  • Volunteering ❤️
  • Outdoor activities on water ⛵
  • Outdoor activities on land 🍁
  • Golf ⛳

Annapolis, Maryland

PASSIONS: ❤️ ⛵

Great for volunteering and outdoor water activities

POPULATION: 39,000

MEDIAN HOME PRICE: $428,000

Water on three sides, good air quality and a moderate climate make this charming historic Chesapeake Bay city an ideal spot for those who love boating, fishing or a waterfront view. For the newbie, the city offers lots of recreational boating schools and chartering opportunities. There’s a high rate of local volunteerism and the downtown area, which doubles as Maryland’s state capital (and was the U.S. capital for a year starting in 1783) is very walkable. Doctors per capita are at the national average. Elevation is 40 feet. On the downside, cost of living is 41% above the national average and the crime rate is above the national average. Taxes are on the high side, too; while Social Security benefits are exempt from tax, the top state/local income tax rate is 8.31% and the state has both an estate and inheritance tax.

Ashland, Oregon

PASSIONS: 🎨 🎓 🍁

Great for arts, lifelong learning and outdoor land activities

POPULATION: 21,000

MEDIAN HOME PRICE: $462,000

Located 285 miles south of Portland, this cultural outpost offers art galleries and the nine-month a year Oregon Shakespeare Festival, all set amid scenic mountains and forests. Southern Oregon University hosts an Osher Lifelong Learning Institute and allows free auditing of regular college classes. The highly walkable downtown (elevation: 1,950 feet) is set in a moderate climate with little snow, good air quality, a low serious crime rate and a high number of doctors per capita. Nature trails are just outside town. But the cost of living is 40% above the national average and Oregon makes up for its lack of a sales tax with an income tax rate that hits 9% at just $50,000 of income (with Social Security excluded). There is also a state estate tax.

Athens, Georgia

PASSIONS: 🎨 🎓 🍁

Great for arts, lifelong learning and outdoor land activities

POPULATION: 127,000

MEDIAN HOME PRICE: $178,000

This affordable college town, just 70 miles east of Atlanta, has a vibrant arts scene. The  University of Georgia hosts an Osher Lifelong Learning Institute, plus offers seniors free admission to regular classes. Mild terrain and climate (the nation’s first garden club was founded here in 1891) and good air quality are all conducive to warm-weather outdoor activities at an elevation of 600 feet. The ratio of doctors per capita is sufficient. Cost of living is 7% below the national average and the serious crime rate is low. Georgia doesn’t tax estates or Social Security benefits and offers a generous additional break for other retirement income. Top state income rate is 5.75%. One notable downside: Not very walkable.

Austin, Texas

Passions: 🎨 🍴 🎓 ❤️ ⛵ 🍁 ⛳

Great for arts, fine dining, lifelong learning, volunteering, outdoor water and land activities and golf

POPULATION: 950,000

MEDIAN HOME PRICE: $369,000

Sunny capital of Texas offers scores of dining and entertainment venues (including the annual SXSW festival), plus learning opportunities at the University of Texas, all surrounded by dozens of golf courses. The city boasts a high number of physicians per capita, good air quality, a good economy and a high rate of volunteering. The impressive state capitol building is higher than the one in Washington, D.C. At an elevation of 300 feet, the city is very bikeable and somewhat walkable. While there is no state income or estate/inheritance taxe, the cost of living is 30% above the national average and the serious crime rate is slightly above the national average.

Bend, Oregon

PASSIONS: ⛵ 🍁

Great for outdoor water and land activities

POPULATION: 98,000

MEDIAN HOME PRICE: $440,000

Lots of snow guarantees vibrant downhill and cross-country skiing in this scenic “Outdoor Playground of the West” 160 miles southeast of Portland. Other outdoor pursuits at an elevation of 3,600 feet around the north-flowing Deschutes River include fishing, tubing, hiking, rock climbing, bicycling and paragliding. Besides good air quality, a low serious crime rate and a high number of doctors per capita, the area boasts a strong economy. But Oregon makes up for its lack of a sales tax with an income tax rate that reaches 9% on just $50,000 of taxable income (which excludes Social Security). There’s also a state estate tax. The town itself is not very walkable. Cost of living is 34% above the national average.

Boise, Idaho

PASSIONS: 🎓 ❤️ 🍁

Great for lifelong learning, outdoor land activities and volunteering

POPULATION: 227,000

MEDIAN HOME PRICE: $299,000

The surprisingly mild climate in Idaho’s capital city, nicknamed “City of Trees,” is conducive to outdoor land activities, while Boise State University hosts an Osher Lifelong Learning Institute and offers free auditing of regular classes for seniors. Other pluses include a high level of volunteerism, a high number of physicians per capita, a low serious crime rate, good air quality and a good economy. With an elevation of 2,700 feet, the city is very bikeable, though not as walkable. Cost of living is only 7% above the national average. There is no state income tax on Social Security earnings, nor a state estate/inheritance tax. Idaho’s income tax rate for married couples is 6.925% on taxable income above $23,000.

Boston, Massachusetts

PASSIONS: 🎨 🍴 🎓 ❤️ ⛵ 🍁

Great for arts, fine dining, lifelong learning, volunteering and outdoor water and land activities

POPULATION: 685,000

MEDIAN HOME PRICE: $604,000

This buzzy historic coastal state capital city of 685,000 offers a wealth of cultural. and educational activities. Not too surprising, considering there are more than 50 area colleges. Boston has good air quality, abundant doctors per capita, and a good economy. At an elevation of 140 feet, the city, named for an English town, is both highly walkable and bikeable. The top state income tax rate is only 5% and there’s no state income tax on Social Security earnings. On the negative side, there’s a state estate tax and a higher than average serious crime rate. But the big downside is the cost of living: 82% above the national average.

Boulder, Colorado

PASSIONS: 🎨 🎓 ❤️ 🍁

Great for arts, lifelong learning, volunteering and outdoor land activities

POPULATION: 107,000

MEDIAN HOME PRICE: $742,000

This city, 30 miles northwest of Denver, is at the center of a huge recreational open space abutting the Rockies at 5,400 feet of elevation, which can be enjoyed in 10 months of annual sunshine. It’s also the home the University of Colorado, which allows seniors to audit courses for free. Boulder is a walkable and bikeable city with a low serious crime rate, good air quality, abundant doctors and a strong economy. Volunteering is a way of life here. While there is no state estate/inheritance tax, the state income tax (a flat 4.63%) does hit Social Security benefits. One big downside is the cost of living: 87% above the national average.

Chandler, Arizona

Passions: ❤️ 🍁 ⛳

Great for volunteering, outdoor land activities and golf

POPULATION: 235,000

MEDIAN HOME PRICE: $317,000

This Phoenix suburb, named for Arizona’s first veterinary surgeon, offers myriad outdoor activities, including 185 golf courses in the region. There’s a low serious crime rate, a good economy and a high rate of volunteering. With an elevation of 1,200 feet, the city is very bikeable, although not all that walkable. There is no state income tax on Social Security earnings and no state estate/inheritance. The sate income tax rate tops out at just 4.54% on a married couple’s taxable income above $317,900. On the downside, the number of doctors per capita is below the national average and the air quality is poor. Cost of living is 23% above the national average.

Chapel Hill, North Carolina

PASSIONS: 🎨 🍴 🎓 🍁

Great for arts, fine dining, lifelong learning and outdoor land activities

POPULATION: 60,000

MEDIAN HOME PRICE: $376,000

The home of the University of North Carolina, which offers free auditing of classes for senior citizens, this college town has been called America’s “foodiest small town” for its range of culinary options. It also has a high number of physicians per capita, good air quality, a low serious crime rate, a strong economy—and quirky blue fire trucks. There’s no North Carolina income tax on Social Security benefits and no state estate/inheritance tax. The state income tax rate is a flat 5.499%. At an elevation of 500 feet, the city is somewhat bikeable, but not very walkable. Cost of living is 30% above national average.

Charleston, South Carolina

PASSIONS: 🎨 🍴 ⛵ ⛳

Great for arts, fine dining, outdoor water activities and golf

POPULATION: 130,000

MEDIAN HOME PRICE: $322,000

This historic coastal city brims with activities, both indoors and out. (The first game of golf in the U.S. took place here.)  Pluses include a high number of doctors per capita, good air quality and a good economy. There’s no state estate/inheritance tax, no state income tax on Social Security benefits and there are additional tax breaks on pension income. But the state income tax rate tops out at an above average 7% on taxable income of just $14,860. At an elevation of 20 feet, the city is somewhat bikeable, but not very walkable. Cost of living is 22% above national average.

Dallas, Texas

PASSIONS: 🍴 ❤️ ⛳

Great for fine dining, volunteering and golf

POPULATION: 1.34 million

MEDIAN HOME PRICE: $217,000

Scores of public golf courses plus fine dining (far beyond the nation’s first drive-in restaurant, which opened here in 1921) and what is said to be the nation’s largest arts district distinguish the Big D. At an elevation of 430 feet, the city is somewhat walkable and bikeable and has an adequate number of physicians per capita and support for volunteering. Atop of a strong economy, there is no state taxation of income, estates or inheritances. Cost of living is only 8% higher than the national average. On the downside, the serious crime rate is above the national average and the air quality is poor.

Fayetteville, Arkansas

PASSIONS: 🎓

Great for lifelong learning

POPULATION: 85,000

MEDIAN HOME PRICE: $219,000

The University of Arkansas offers free tuition to senior citizens at its flagship campus in this Ozarks city 200 miles northwest of Little Rock. Besides a cost of living 1% below the national average, other pluses include good air quality, adequate number of physicians per capita and a good economy. At an elevation of 1,400 feet, the city (originally named Washington) is somewhat bikeable, although not that walkable. There is no state estate/inheritance tax and there’s no state income tax on Social Security benefits, plus there’s a small additional break for pension income. But the state income tax reaches 6.9% on a married-couple’s income above $35,099. The serious crime rate is above national average.

Las Vegas, Nevada

PASSIONS: 🎨 🍴 ⛵ 🍁 ⛳

Great for arts, fine dining, outdoor water and land activities and golf

POPULATION: 2 million (Las Vegas Valley)

MEDIAN HOME PRICE: $277,000

World-class entertainment centered around the hotels and casinos, famous chefs, and nearby water and land activities, including golf, grace this exploding desert valley. (In 1900, the population was just 18.) While summers are hot and dry, the other nine months are quite pleasant, and sun is year-round. At an elevation of 2,000 feet, the area is somewhat walkable and bikeable. A good economy is bolstered by no state income or estate/inheritance tax. Downsides include poor air quality, low ratio of physicians per capita and a high serious crime rate. Cost of living is 18% above the national average.

Los Angeles, California

PASSIONS: 🎨 🍴 🎓 ⛵ 🍁 ⛳

Great for arts, fine dining, lifelong learning, outdoor water and land activities and golf

POPULATION: 4 million

MEDIAN HOME PRICE: $686,000

The City of Angels has multiple colleges and universities offering reduced-price programs for senior citizens, world-class restaurants, numerous performance venues, a wide range of outdoor activities and many golf courses. Pluses include 28 days a year of sun, sufficient physicians per capita and a strong economy. Despites its reputation as car dependent and congested, the city, with an elevation of 300 feet, is both very walkable and bikeable (despites safety concerns for bikers). There is no state tax on Social Security benefits, estates or inheritances. But the state income tax hits a hefty 9.3% on taxable income above $150,000 per couple and goes up to 12.3% for the very wealthy. Among the drawbacks: poor air quality (although better than it used to be) and a serious crime rate above national average. Cost of living is 95% above national average.

New York, New York

PASSIONS: 🎨 🍴 🎓 ⛵ ⛳

Great for arts, fine dining, lifelong learning, outdoor water activities and golf

POPULATION: 8.6 million

MEDIAN HOME PRICE: $682,000

Dozens of colleges, fabulous arts and dining, and even golf courses accessible via subway can be found in the country’s largest city. Pluses include a high number of physicians per capita, good air quality and a strong economy. With an elevation of 30 feet, the Big Apple is very walkable and bikeable, despite concerns about bicyclist safety. There is no state income tax on Social Security benefits, plus there are additional state tax breaks on pension income. But there is a state estate tax, the combined state and city income tax rate can reach a whopping 12.696% and the cost of living is 109% above national average.

Pinehurst, North Carolina

PASSIONS:

Great for golf

POPULATION: 13,000

MEDIAN HOME PRICE: $281,000

Some 40 golf courses, led by famous century-old Pinehurst Resort, plus golf schools surround this scenic village 90 miles east of Charlotte. Pluses include an extremely low serious crime rate, above-average rate of doctors per capita and good air quality. At an elevation of 600 feet, the town, originally named Tuftstown, is somewhat walkable and bikeable. There are no state taxes on Social Security earnings, estates or inheritances. The state income tax rate is a flat 5.499% and the cost of living is 11% above the national average.

Portland, Maine

PASSIONS: 🍴 ⛵ 🍁

Great for fine dining and outdoor water and land activities

POPULATION: 67,000

MEDIAN HOME PRICE: $314,000

This coastal city offers a wide variety of water and land recreation, including boating, kayaking, rafting, cross-country skiing, hiking and bicycling. There’s a good restaurant scene, a low serious crime rate, a high ratio of doctors per capita and good air quality. The city—named after an island in the English Channel—has an elevation of 60 feet and is very walkable and bikeable.  There is no state income tax on Social Security earnings, but there is a state estate tax. The state income tax rate reaches 7.15% at taxable income above $103,400 for a couple. The

Portland, Oregon

PASSIONS: 🎨 🍴 🎓 ❤️ 🍁 ⛳

Great for arts, fine dining, lifelong learning, volunteering, outdoor land activities and golf

POPULATION: 648,000

MEDIAN HOME PRICE: $426,000

City affords wide range of pursuits, including free senior citizen auditing of classes at Portland State University. Pluses include a high ratio of physicians per capita, good air quality, a high rate of volunteering and a good economy. At an elevation of 50 feet the city—named after Portland, Maine—is highly walkable and bikeable. The state makes up for its lack of a sales tax with an income tax rate that hits 9% on just $50,000 of income (with Social Security excluded). There is also a state estate tax. Cost of living is 48% above the national average.

Salt Lake City, Utah

PASSIONS: 🎓 ❤️ ⛵ 🍁

Great for lifelong learning, volunteering and outdoor water and land activities

POPULATION: 201,000

MEDIAN HOME PRICE: $402,000

Mountains, lakes and rivers create a choice of outdoor activities, including skiing, bird watching and fishing around this state capital city. Indoors, the University of Utah offers courses a wide range of courses for seniors in concert with the Osher Lifelong Learning Institute. The city has a high rate of volunteering, a high rank on the Milken Institute list of best cities for successful aging and a strong economy. At an elevation of 4,300 feet, it is very walkable and bikeable. There is no state estate tax, but the state income, levied at a flat 4.95% rate, hits Social Security benefits. The cost of living is 27% above the national average.

San Francisco, California

PASSIONS: 🎨 🍴 🎓 ⛵

Great for arts, fine dining, lifelong learning and outdoor water activities

POPULATION: 860,000

MEDIAN HOME PRICE: $1.36 million

Surrounded by water, this scenic city is a mecca of culture and food, with 57 Michelin starred restaurants (compared to 76 in 10 times more populous New York). Opportunities for senior learning are offered at an Osher Lifelong Learning Institute at San Francisco State and at other venues. There’s a high ratio of doctors per capita, good air quality and a strong economy. Despite the famed hills, the city, with an elevation of 50 feet, is very walkable and bikeable, with both trails and protected bike lanes. There is no state estate/inheritance tax and no income tax on Social Security benefits, but the state income tax rate is a hefty 9.3% on income above $150,000 per couple and goes up to 12.3% for the very wealthy. The serious crime rate is above the national average, but the biggest downside is the cost of living: a stunning 205% above the national average.

Santa Fe, New Mexico

PASSIONS: 🎨 🍴 🍁

Great for arts, fine dining and outdoor land activities

POPULATION: 84,000

MEDIAN HOME PRICE: $397,000

Scores of art galleries, fine restaurants and museums, plus world-class skiing, distinguish this scenic state capital mountain town (elevation 7,200 feet), 60 miles north of Albuquerque. Somewhat walkable and bikeable, the city has a high number of doctors per capita, good air quality and a low serious crime rate. There is no state estate tax, but the state income tax does hit Social Security benefits. The state income tax rate is 4.9% on taxable income of married couples above $24,000. The cost of living is 21% above national average.

Sarasota, Florida

PASSIONS: 🎨 🍴 🎓 ❤️ ⛵ 🍁 ⛳

Great for arts, fine dining, lifelong learning, volunteering, outdoor water and land activities and golf

POPULATION: 57,000

MEDIAN HOME PRICE: $261,000

Nearby beaches, fishing, boating, a big arts/cultural scene and 30 golf courses dominate this Gulf Coast city 60 miles south of Tampa. With an elevation of 16 feet, the area is very walkable and bikeable, with good air quality, a strong economy and an adequate number of physicians per capita. The cost of living is only 9% above national average. There is no state income or estate tax. One downside: a serious crime rate above the national average.

Seattle, Washington

PASSIONS: 🎨 🍴 🎓 ❤️ ⛵ 🍁 ⛳

Great for arts, fine dining, lifelong learning, volunteering, outdoor water and land activities and golf

POPULATION: 725,000

MEDIAN HOME PRICE: $730,000

Still-booming Puget Sound city offers all the passions, including an Osher Lifelong Learning Institute at the University of Washington. At an elevation up to 500 feet, the city is extremely walkable, bikeable and even boatable, with good mass transit. Other pluses include good air quality, a high ratio of doctors per capita, a very strong economy, and a good volunteering culture. There is no state income, estate or inheritance tax. But the cost of living is a whopping 104% above the national average and the serious crime rate is also higher than average.

Traverse City, Michigan

PASSIONS: 🎨 🍴 ⛵ ⛳

Great for arts, fine dining, outdoor water activities and golf.

POPULATION: 16,000

MEDIAN HOME PRICE: $255,000

Frontage on Lake Michigan, the famed Interlochen Center for the Arts, 50 area golf courses and a reputation as a top foodie town all make his city, 250 miles northwest of Detroit, a top passions choice. There’s good air quality, above-average doctors per capita and a decent economy. At an elevation of 600 feet the city—center of the nation’s largest area for growing tart cherries—is very walkable and bikeable. Cost of living is only 2% above national average.  There’s no state estate or inheritance tax and no tax on Social Security benefits, plus additional breaks for pension income. The state income tax rate is a flat 4.25%. One downside: The serious crime rate is above the national average.

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A journalist for nearly five decades, I’ve written for Forbes since 1987. I’ve covered personal finance, taxes, retirement, nonprofits, scandals and other topics that interest me. I also am the author of a novel, OFFSIDE: A Mystery. Email me at: wbarrett.forbes@gmail.com .

Source: Great Places To Follow Your Passions In Retirement In 2019

The World’s Retirement Havens – Top 10 Best Places To Retire In The World For 2018. ============= ► Subscribe for latest video ! ► https://goo.gl/lOasu9 ► Follow me on Twitter: https://goo.gl/srKHao ► Facebook: https://goo.gl/yB9XvG ============= Today, retiring abroad is about launching a new life in a new country, starting over someplace sunny and exotic with white-sand beaches or Old World culture. But there is no one way to determine the best place to retire for every person. And with a seemingly endless amount of choices, how will you ever find the right one for you. International Living’s most recent Annual Global Retirement Index 2018 compares 24 countries that give you the maximum return for your money and promise to deliver a better quality of life. Overall, the Index is based on ratings in 12 categories: buying and investing, renting, benefits and discounts, visas and residence, cost of living, fitting in, entertainment and amenities, healthcare, healthy lifestyle, development, climate, and governance. Here are the 10 retirement destinations in the world for 2018: 1. Costa Rica – The World’s Best Retirement Haven 2. Mexico – Convenient, Exotic, First-World Living 3. Panama – Friendly, Welcoming, and Great Benefits 4. Ecuador – Diverse, Unhurried, and Metropolitan 5. Malaysia – Easy, English-Speaking, and First World. 6. Colombia – Sophisticated and Affordable 7. Portugal – Europe’s Best Retirement Haven 8. Nicaragua – Best Bang-for-Your Buck in Latin America 9. Spain – Romance, History, and Charming Villages 10. Peru – Low Cost Living, Vibrant, and Diverse. Thanks for watching this video. I hope it’s useful for you. (This article is an opinion based on facts and is meant as infotainment) ============= If you have any issue with the content used in my channel or you find something that belongs to you, please contact: ►Business email: truthseekerdailys@gmail.com Music by: Nicolai Heidlas (https://soundcloud.com/nicolai-heidlas) Title: 50 New Cities

60 Seconds: Yes, You Need a Will. Like Now. – TheStreet

Image result for the will testament

From Aretha Franklin to Prince, so many famous, wealthy people have died without having a will.

It’s nuts. Their heirs may have to spend an exorbitant amount of time fighting the courts – and each other – to determine who gets what.

Download Now: To be a profitable investor you first need to know the rules. Get Jim Cramer’s 25 Rules for Investing Special Report

You can’t take your assets with you. Get it? Everyone should have a will – and you don’t need to be famous or wealthy to need one.

Give me 60 seconds and I’ll tell you why.

Granted people often are uncomfortable talking about their mortality.  And rockstars Amy Winehouse and Kirk Cobain, who both died at 27, probably presumed they were way too young to even need one.  But they had millions at their death.

Not Just for the Rich and Famous

Regardless of your age, net worth or level of fame, you are doing your heirs a HUGE favor by taking care of everything now, says Robert Westley, CPA/PFS member of the American Institute of CPAs Personal Financial Specialist, PFS, Credential Committee.”

(Unless, of course, you enjoy watching your heirs fight over your stuff rather than resting in peace.)

So start making a list of everything you have — include investment accounts, artwork, even those vintage cars in the garage.

And if you have young kids, don’t forget to pick their guardians. You don’t want your chronically unemployed brother to end up with them.

Creating a will doesn’t have to be a complicated process. You just need a few key documents and you most likely can get what you need from sites like Quicken WillMaker or LegalZoom.

If you have substantial wealth, then you probably are going to need an estate plan, maybe even a trust, and an attorney to help carry out your wishes.

Beneficiaries Override Your Will

Big note here: A bunch of your assets are not even controlled by your will.  Anything with a beneficiary designation – like your 401(k), IRA or insurance policies – is dictated by those designations, says Westley.

They override your will. So if in your will you state that you want your kids to inherit your IRA but your ex-spouse’s name is still listed as the beneficiary because you forgot to update it, guess who’s coming in on a windfall?

So check all that now.

And drop the excuses. This is not just for old rich people.  We all know that you can get hit by a bus while you are walking on the street or even reading this.

You Need to Revisit

And finally this is not a one-and-done, says Westley.

“Many individuals assume that once they’ve completed their estate plan and will there is no need to revisit it. The reality is, estate documents are static, while an individual’s life is dynamic and ever-changing,” he says.

People die, get divorced, buy new stuff, sell old stuff.  So your will needs to be revisited, often.

So get on it, and for more tips, follow me @tracybyrnes.

Source: 60 Seconds: Yes, You Need a Will. Like Now. – TheStreet

How Does Sequence Of Returns Risk Impact Your Retirement?

For many investors, a long bull market like the one we’re in is leading to some frayed nerves.

When will there be a downturn? The “when” question is especially relevant to investors nearing or at retirement age. While it’s true that returns have historically evened out — for the 93-year period between 1926 to 2018, large cap stocks have gained a 10% compounded rate of return — what happens if your retirement happens to occur during a year the market suffers a loss over 20%?

After all, if this sort of downturn occurs in your twenties or thirties, it’s a setback, but time and earnings potential are on your side, explains Roger G. Ibbotson, Chairman and CIO at Zebra Capital Management and professor in the practice emeritus of finance at the Yale School of Management. If the same downturn occurs during retirement, would your portfolio be able to weather the downturn?

Implementing safeguards against this possibility can protect your portfolio from sequence of returns risk — the potential that years of bad returns early in your retirement could deplete your retirement savings for the future. Ibbotson advises that conservative withdrawals in early retirement, several streams of cash flow and a diverse portfolio including bonds and annuities can all be tools to help ensure your retirement savings won’t freefall even if the market does.

Scroll down for a guide to sequence of returns risk and how to protect your portfolio from a potential market downturn.

Consider De-risking Before Retirement, Even In A Bull Market

While some camps stay true to a buy-and-hold strategy, Ibbotson recommends de-risking your portfolio as you approach retirement, regardless of how the market is performing. According to Ibbotson, “twenty-percent proofing” your portfolio — or safeguarding your portfolio from historic losses in early retirement — can help ensure your retirement savings are able to survive a substantial market dip.

“When you’re young, you’re in what’s called an accumulation phase,” explains Ibbotson. You have high human capital (the value of future earnings, like income) but low financial capital (investments in stocks and bonds). Early on in your career, when you’re primarily dependent on human capital, you can afford to take more risk with your financial capital. But as you evolve toward the “pre-retirement phase,” when you might not be earning a steady income and are more reliant on the financial capital you’ve grown over time, it may be a good idea to de-risk your portfolio.

Rethink A Standard Annual Withdrawal

While a retirement plan based on a standard yearly withdrawal rate can give you a good ballpark of your returns and cash-flow expectations, this model doesn’t account for large market fluctuations at a key moment: early in retirement, when you begin taking withdrawals. Even if the market eventually evened out to an average that’s not far from your expected return, being dependent on those withdrawals through a bear market could hurt your savings for decades to come because so much of your portfolio would have been depleted by market losses in early retirement.

Of course, you may be required to take required minimum distributions (RMDs), and you may also depend on retirement withdrawals to fund your expenses. But following the popular 4% rule of thumb — plan on withdrawing 4% of your retirement savings each year — in early retirement could leave your money vulnerable during a bear market, Ibbotson argues. “Since you can’t predict when a downswing will occur, it’s best to be conservative during early retirement, when you don’t have the luxury of time and human capital potential to make up the difference,” he says.

Consider Alternate Retirement Income Streams To Ride Out A Market Downturn

In addition to de-risking your portfolio, it may be smart to consider alternate income streams that won’t make you overly dependent on portfolio withdrawals in early retirement, says Ibbotson. “There’s a longevity risk to consider as well, which means that you may need money to last for thirty plus years,” he says.

Some ways to mitigate longevity risk — and put yourself in a stronger position to ride out a potential bear market — include working into retirement to provide a source of cash flow (which may also eliminate the need to take out RMDs on your 401(k)), making sure you’re maximizing Social Security benefits or downshifting and earmarking that money as funds for your early retirement, giving your nest egg more time to grow. Depending on your circumstances, a HELOC or second mortgage taken in early retirement can also help safeguard your retirement savings, says Ibbotson. Even lowering your withdrawal rate slightly in the first years of retirement can protect your savings from a market downturn during those early years.

Consider “Laddering” Bonds And Annuities

While bonds may have lower rates of return than stocks, their low risk and guaranteed principal return can be one way to de-risk your portfolio. One strategy to consider is called a bond ladder, says Ibbotson. This is a set of bonds purchased specifically to mature in different years, so instead of investing in a single $100,000 bond, you might invest in ten $10,000 bonds. One might mature in one year, another in three, another in five and so on, diversifying cash flow and protecting against market dips.

The same is true for annuities. Annuities can be purchased over a period of years and purchased from an array of insurance companies, which can minimize the risks of market fluctuations or the underperformance of one insurer. Annuities can be purchased as a fixed, variable or hybrid product, with aspects of both fixed and variable annuities. One popular example of a hybrid annuity product is a fixed-indexed annuity (FIA). Fixed annuities guarantee both an interest rate — around 2.5 to 3.5% as of publication date — as well as the principal. Variable annuities are typically riskier, as neither the interest nor the principal is guaranteed. Meanwhile, a product such as an FIA guarantees a stated return on the investment along with an investment return based on market performance. As the annuity reaches the annuitization stage, this money can then be used as income.

Keep Plans Flexible

Strategy exists so you can change course if necessary. Having several options for how to weather a stock market slump can help ensure you won’t run out of savings. As with any retirement planning options, speaking with a financial advisor can help you navigate the best course of action for you, your money and your retirement goals.

This content was brought to you by Impact PartnersVoice. Certain opinions expressed herein are those of Professor Roger Ibbotson and/or others acting in an academic and/or research-related capacity and not as a representative or on behalf of Zebra Capital Management, LLC (“Zebra Capital”). Roger Ibbotson is Professor in the Practice Emeritus of Finance at the Yale School of Management and the Chairman and Chief Investment Officer of Zebra Capital.  

Annuities have limitations. They are long-term vehicles designed for retirement purposes. They are not intended to replace emergency funds, be used as income for day-to-day expenses or fund short-term savings goals. All guarantees and protections are subject to the claims-paying ability of the insurer. You should read the contract for complete details.

This material is not a recommendation to buy, sell, hold or roll over any asset, adopt a financial strategy or purchase an annuity policy. It does not take into account the specific objectives, tax and financial conditions or particular needs of any specific person. You should work with a financial professional to discuss your specific situation. 

The content herein includes the results of academic research conducted by Professor Ibbotson and others outside of the services provided by Zebra Capital and which may have been funded, in whole or in part, by parties unaffiliated with Zebra Capital. The results of that research should not be considered as having any relevant or material financial bearing on the services provided by Zebra Capital.

Zebra Capital is entitled to receive certain compensation in consideration for, among other things, the granting of certain license rights and/or sub-licensing rights of certain of its intellectual and other property rights to one or more third parties for the creation, sponsorship, compilation, maintenance and calculation, among other things, of one or more indices to which certain fixed indexed annuities make reference.

Revolutionizing retirement for baby boomers with relevant tips, tricks, and strategies for a new age in retirement preparation.

 

Source: How Does Sequence Of Returns Risk Impact Your Retire

ment?

You’d Be Better Off Just Blowing Your Money: Why Retirement Planning Is Doomed

Between interest rates and poor financial planning, the comfy retirement you may have dreamed of is most likely to remain a dream.

I know this is a bold, and possibly controversial title, but retirement planning is broken and leaving people broke.

The destructive narrative is, “work hard, save money in a retirement plan, wait and it will all work out in the long run.”

The reality is, without the ingredients of responsibility and accountability, there is no easy solution for retirement. Meaning, if we just work hard and set money aside, we are putting money into a market we have no control over.

The institutions are winning though. Taking fees along the way. Convincing us to separate ourselves from our hard earned money, encouraging us to take it out of the business we know and put it into investments we don’t.

Low interest rates are great for those borrowing money, but terrible for those wanting to take income from a retirement plan. Those low interest rates are not providing enough cash flow, so that even if you’re a millionaire on paper, you still may be living like a pauper. For example, if you could find 4% interest in a fixed income account, that is only 40,000 dollars a year per million in your retirement account. Oh, and that income is taxable if it isn’t coming from a Roth IRA.

The concept of retirement has robbed the public of the responsibility and accountability required with personal finance. It has become too easy to hand money over to so-called experts due to the busyness of business, kids, hobbies, and other obligations competing for our time.

The reality is, we have more opportunity for time now than ever. For thousands of years people were limited and constrained with the monumental duty of providing for their family by having to hunt, farm or provide shelter with less technology, efficiency and access to resources. We have become addicted to saying yes to things less important than financial stability and freedom…..

Source: https://www.forbes.com/sites/garrettgunderson/2019/07/16/youd-be-better-off-just-blowing-your-money-why-retirement-planning-is-doomed/#18c0d351302d

Boomers’ Retirement Reality Requires Careful Planning

Work longer or reduce your standard of living – or do some combination of the two. These are the hard choices facing most working boomers as they transition out of the workforce and into retirement. The fact is, most boomer workers haven’t accumulated sufficient savings to retire full-time at age 65 and meet the goals that financial advisors commonly express for retirement income, according to a recent report from the Stanford Center on Longevity (SCL). This report analyzes boomers’ assets, debts, and the amounts they’re saving for retirement. Let’s take a look.

Source: Boomers’ Retirement Reality Requires Careful Planning

How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions – Gary Rivlin

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Kentucky’s willingness to gamble massively on high-risk alternative investments for its pensions has made the state an easy mark for Wall Street hucksters. In April 2008, a longtime investment adviser named Chris Tobe was appointed to the board of trustees that oversees the Kentucky Retirement Systems, the pension fund that provides for the state’s firefighters, police, and other government employees. Within a year, his fellow trustees named Tobe to the six-person committee that oversees its investments……

Read more: https://theintercept.com/2018/10/21/kentucky-pensions-crisis-hedge-funds/

 

 

 

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Retirement Savings By Age: How Does Your 401K Balance Stack Up – Personal Capital

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401ks are one of the most common investment vehicles that Americans use to save for retirement. The 401k is an employer-sponsored plan that allows you to save for retirement in a tax-sheltered way (up to $18,500 per year in 2018, with a $6,000 catch-up contribution limit) to help maximize your retirement dollars. According to a Personal Capital-sponsored study conducted by ORC International, a majority of Americans (63%) with full-time or part-time employment participate in an employer-sponsored retirement program, yet just 21% max it out…..

Read more: https://www.forbes.com/sites/personalcapital/2018/10/16/retirement-savings-by-age-how-does-your-401k-balance-stack-up/#1d3009f047c1

 

 

 

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Think Again If You Plan To Work Longer – Teresa Ghilarducci

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When 52% of older workers are pushed out of their jobs, working longer is not their choice. The stark truth is that a significant share of older workers  — age 55-64 — are not anywhere near being on track to afford retirement. The median retirement account balance for older workers is only $15,000. Even the highest income workers — those earning over $200,000 per year who are in the top ten percent of the income distribution — do not have enough money to retire and maintain their standard of living. Their median account balance is under a year’s salary at $200,000 and 15% of the highest earners have no retirement plan except Social Security…….

Read more: https://www.forbes.com/sites/teresaghilarducci/2018/10/08/think-again-if-you-plan-to-work-past-65/#8602bc95f97b

 

 

 

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