Financial Planning, Retirement Issues


Best Way to Avoid Boredom in Retirement

April 21st, 2017 ernie Posted in Retirement | No Comments »

Many people find they do not have enough hours in the day during retirement. While others are looking for help. They want to find the best way to avoid boredom in retirement. With so many people retiring these days, many are struggling, especially after the first year. They spend the first year travelling, completing projects around the house and visiting friends they have not seen for several years. They just did not have time when they were working. Suddenly they have all of this free time and they make the most of it. But what happens after the first year when all of the projects are completed? The budget has been max’d out and your friends are also traveling. Now what do you do?

Best Way to Avoid Boredom in Retirement

There are three important elements that consumers need to consider to avoid boredom in retirement. They are:

  • Sufficient budget
  • Good health
  • A purpose to your life

Having only one or two of these is really not sufficient. In fact having a purpose in life is probably the most important of them all. If you do not have a reason for getting up in the morning, it does not matter how healthy you are or how much money you have. You can survive on less money and varying degrees of health. Having a purpose in life is what keeps you going, challenges you and makes life interesting.

Everyone is different. Your purpose in life will be different from everyone you know. Whether it is a second career, pursuing hobbies, looking after the grand kids or volunteering it is something that you look forward too each day. Find what works for you. Try different things until you have that interest in life that makes you get up in the morning looking forward to the day.

 

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Big problem for new retirees

April 7th, 2017 ernie Posted in Uncategorized | No Comments »

problem for new retireesInitially your really busy catching up on all of the things you have been ignoring or delaying until your retirement. You knew that there would be time for these things once you finished work so you put them off. Many retirees find themselves very busy during the first few months or even the first year, but then something happens. It is the typical Big problem for new retirees. Initially they enjoy sleeping in, they get to travel on their schedule and there is a lot less stress in their lives. This new found freedom is actually pretty nice. But over time they run out of things to do around the house. Travel budgets get depleted and while it is nice to sleep in, you have the rest of the day to fill!

Many people suddenly find themselves missing the social interaction they had with people at work. They miss the fulfillment, achievement, and recognition they got from doing their jobs. They try to keep busy, but keeping busy is just not fulfilling any longer. Now what do they do for the rest of their retirement years?

Big problem for new retirees – Boredom

The B word comes into their vocabulary. They are bored and do not know what to do with their time. There three things you need to enjoy retirement. You need your health, you need a good financial plan that matches your lifestyle plans and you need the most important thing, a purpose in life.

For some consumers finding a purpose in life means looking after the grand kids. For others it means returning to the work force in a new career. Many start hobbies which turn into jobs. The most important element that these thing s must have is that they look forward to getting up in the morning and pursuing their purpose.

Everyone has something different. Each person needs to find out what works for them. Their purpose could change over time as well. They might start out on a hobby which leads to other things that they find more interesting. Whatever it is, try many alternatives until you find the one that works for your personal situation at your time of life.

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Financial Independence in Retirement 

March 21st, 2017 ernie Posted in Financial Independence | No Comments »

Financial Independence in Retirement Much was made of the slogan freedom 55. At the time it signified that a person could retire at 55, living the quality of life they wanted on the savings they had accumulated. Unfortunately many people lost a lot of money during the recessions in 2000 and 2008/09. Freedom 55 has been set aside for the time being. We all want to have financial independence in retirement. More importantly, we want to be financially independent at a certain point in our lives so that we can make our own decisions about work vs retirement.

In fact wouldn’t it be nice at age 45 to have sufficient income to allow you to make a decision about continuing to work, changing jobs or travel for awhile without worrying about money. There is a way to do this and it is just simple mathematics.

Financial Independence in Retirement

All consumers need to do is invest 10% of their incomes regardless of how much you make in a diversified group of stocks. They need to be blue chip stocks and they need to pay dividends. They should have an excellent record of paying dividends and increasing their dividends. While it is slow and boring, it is like the race of the tortoise and the hare. The tortoise won because he kept going and finished the race while the hare fooled around and did not focus on the race.

As your income increases so should your savings commitment. As your savings grows, there will come a time when the dividend income is larger than the money you add to the account every year from your salary.

If you begin later in life, you will have to save more to achieve the same result. You might have to work longer as well. But this approach will clearly ensure you are financially independent at some future point in your life.

Remember save 10%, don’t touch it, invest in blue chips only, diversify, reinvest the dividends and watch your savings grow!

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How to Feel Richer in Retirement 

March 7th, 2017 ernie Posted in Financial Independence | No Comments »

Feel Richer in RetirementMany couples have no idea if they will have enough money when they retire. They worry and want to feel richer in retirement, but do not know what to do. They have not taken the time to assess their situation in terms of income, expenses and savings to really know if they will be comfortable or not. This is really the only way to know if you have saved sufficiently and will have enough pension income. Once they set up a budget and assess their financial situation, they can stop worrying. But there are always ways to feel richer in retirement no matter what your income is. Here are a few steps to take.

How to Feel Richer in Retirement

Always ask for discounts – there is nothing wrong in asking for discounts. Many places offer 10% off for seniors or even as much as half price. That’s a pretty good deal when two people can eat for the price of one.

Stay healthy – and avoid expensive medication, trips to the doctor and worse. Exercise, eat well and not only will you feel better, there will be more money in your pocket.

Look for supplemental income – if you are short of money, get a part time job. Many seniors work a couple of days a week. They like the extra income as well as the social aspect of being around people.

Work longer – once you have completed your assessment, you may find that you need to work longer. That’s ok for many people. Again they enjoy the social aspect and they can build their savings even further.

Save early – start as soon as you get your first job. Set aside 10%, invest it well and forget about it. Amazingly you will have sufficient savings and income by the time your 50 to retire or do something different than your current career. It will be your choice.

Invest well – forget the quick rich schemes. Most people lose money. Focus on blue chip stocks that not only pay dividends, but increase them on a regular basis as well. You will be amazed at how fast your savings will grow.

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How Couples Sabotage their Retirement Plans

February 21st, 2017 ernie Posted in Retirement Saving | No Comments »

How Couples Sabotage their Retirement PlansThere are lots of ways that couples sabotage their retirement plans. When they do they have to resort to solutions that are brought out in the picture. some have to down size, some have to move in with their kids. Many have to cut back on their lifestyle drastically. They even need to keep working well past their retirement years just to maintain the standard of living they like to have. There are lots of reasons why this sort of thing occurs, however we are going to focus on how couples sabotage their retirement plans in this post.

How Couples Sabotage their Retirement Plans

There are lots or reasons, however most can be narrowed down into three main categories. The first one being one of the most important.

Lack of Communication – do both partners have the same objectives about retirement? Travel, annual vacation, spending time with the grand kids? What do you want to do in retirement and does your spouse agree? These are just a few of the items that many couples just do not talk about these things and receive a surprise. Set some joint goals now and begin to make plans on how you will achieve them.

Savings in the Wrong Account – Are you placing your savings in the right account? do you obtain the appropriate tax advantages which help save even more funds? A regular savings account is to easy to access, generates too little income and is taxable. Consider a retirement account that protects your gains and income from the tax man.

Not Matching Savings with Dreams – planning for a new car, saving for travel, matching your retirement income with your retirement plans? These are just a few of the ideas that need to be considered. Develop a plan around when you want to retire, how much money you will need saved and when you will achieve this goal.

A financial advisor can help you with all of these questions. You may need to spend a few sessions with them as you develop your plan and make adjustments based on the reality of your situation.

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Retirement or Independence

February 7th, 2017 ernie Posted in Financial Independence | No Comments »

Retirement or IndependenceGone are the days when consumers expected to retire at age 65! Many are working far past this age to make ends meet. Many are forced to retire due to health issues or layoffs at work. They are all struggling to live their lives and have enough money to even put food on the table.If you are 55 to 70 and reading this post it is probably too late to benefit from the concepts expressed further in this post. You will need to keep working and learn to live on what you can earn and what you have managed to save. Younger consumers still have time to reach financial Retirement or Independence and make their own decisions regarding when or if they retire.

Retirement or Independence

Fundamentally, consumers should aim for financial independence by the time they are 45 or 50. This means they have sufficient funds  to live on comfortably for the rest of their lives. It does not mean they need to retire or will retire.

They might be perfectly happy doing the jobs they are doing. They may decide to pursue their dreams whatever that might be. The point is that they have the freedom to make these decisions and not worry about saving enough money for the time when they stop working. How do they do that?

Start saving and investing as soon as you begin working. Invest a minimum of 10% of your income, manage it and reinvest the dividend and interest income. Let it grow and if you do a good job at saving and managing you will reach financial independence by the time you are 45 or 50.

By all means keep working if that is what you need to do. The important thing is you can decide what your next career or life style will be without worrying about earning money.

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How do I know if I have enough Money to Retire

January 21st, 2017 ernie Posted in Financial Planning | No Comments »

how do i know if i have enough money to retireHow do i know if i have enough money to retire? This is the big question that many people ask themselves as they near retirement. Should I work a few more years? Or can I retire now? What quality of life will I have in retirement with the money I have? There are so many questions that we all have and it all comes down to money for many people. But there is much more to it than just money. Sure you need to have sufficient savings to allow you to live comfortably. You also need to have friends, family and things to do. Your activities will need to be interesting, perhaps challenging and give you something to look forward to every day. But let’s get back to the main question, how do I know if I have enough money to retire?

How do I know if I have enough Money to Retire

Start with developing a budget. You will need to know how much savings you will have when you retire and how much income that it will generate from interest, dividend and mutual fund payments. Next you need to calculate your income from private company pensions and government pensions. When will you receive these pensions?

Your expenses are next. Add up all of your regular monthly and annual expenses for everything that you have. Utilities, food, rent, taxes, clothing entertainment etc. Compare your annual income with your annual expenses to get the first indication whether you will have enough in retirement.

You may need to make some adjustments. This could include working longer to save more money. It could also include reducing your expenses. Perhaps you will need to eat out less. Maybe reduce your utilities or downsize to a smaller less expensive home. You also may need to make adjustments to accommodate the objectives you have with regards to travel, etc.

Work with an expert to gain help with this process to answer the question and plan your future retirement.

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Are You on track to a secure retirement

December 21st, 2016 ernie Posted in Retirement Planning | No Comments »

Are You on track to a secure retirementThe question, are you on track to a secure retirement is a common one that many people have. They may be nearing retirement or their company is about to provide a special retirement plan. They wonder if they should take it and whether they will be OK financially in retirement. Whether you are retired about to retire or have a few years yet to work it is never too late to assess whether you will be comfortable in retirement.

Are you on track to a secure retirement

One of the best ways to answer this question is to build a retirement budget. First you should identify where your income is going to come from. Your income may include company pensions, government pensions, income from investments, and other miscellaneous income that is on a recurring basis.

Next you must consider all of your expenses. Your expenses will include all of the regular monthly expenses such as heat, Hydro or electricity, utilities such as cable TV, telephone etc. You should also include your taxes and mortgage payment if you have one. Your home is going to need maintenance over the years and you should budget an amount each year for maintenance of your home. The same applies to your car and whether you have a car payment or car maintenance, insurance etc. this should be part of your budget.

Once you have totaled up all of your income and expenses you will have some idea as to whether you will have sufficient money during your retirement.You may find that your expenses are going to be greater than your income. You will either have to work longer or cut your expenses. You may also decide that you will increase your savings if you have time.

Another area that we did not mention is all of your expenses associated with your free time. You now have a great deal of free time to pursue hobbies, travel and even go back to work. Depending on what you decide he may need to budget for this activity.

A good plan developed early, reviewed regularly and adjusted as needed will help to ensure a secure retirement.

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How much do I need to save to retire a millionaire

November 21st, 2016 ernie Posted in Pension Plans | No Comments »

How much do I need to save to retire a millionaireEveryone sometime in their lives asks the following question? How much do I need to save to retire a millionaire? The answer is not that hard to come up with. It really depends how old you are and how much you have already saved for retirement. Consumers who start early and stick to it, have an advantage. Their savings work for them and their investment income continues to build towards their retirement objective. In the following paragraphs we will give you some examples. You decide where you are and whether you can meet the objective of having a million dollars by the time you retire.

How much do I need to save to retire a millionaire

Assuming a 10% average annual rate of return which is the historical average of the S&P 500. Assume you are going to 40  years, a 25-year-old could build a $1 million retirement nest egg by saving just $175 a month in their investment accounts. Their total contributions over those 40 years would amount to less than 10% of that total, just $84,000. All the rest would come from the income from your investments.

If you are 35-years old and starting from scratch, your monthly contributions would have to be more than twice as great as a 25-year-old’s. Saving $470 each month in your retirement investment accounts over the next 30 years will yield $1 million, assuming the average 10% annual rate of return. Your total contribution over the years would be $169,000.

At 45, if you’re starting from scratch, then your monthly payments will need to be significantly higher. To reach $1 million by age 65 with 10% annual growth, you’ll need to contribute $1,330 a month. Your total contribution will be about $319,000.

As you can see it pays to start early! During your 40’s and 50’s it can be your prime earning time where you make the most money. However what if you get laid off or there is a health issue. Or perhaps you don’t like your boss. Would you not like to have the flexibility to make your own decision regarding when you retire. Start saving now!

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Your 5 Point Mid Year Financial Checklist

October 21st, 2016 ernie Posted in Financial Planning | No Comments »

Your 5 Point Mid Year Financial ChecklistMany consumers are pretty much focused on their current life challenges. Thinking ahead about retirement, emergencies etc are just not on their radar. Until, of course, something happens to make them realize that retirement is near or there is some kind of emergency. The most important step you can take is to develop a savings plan or strategy. That gets you to where you should be from a financial perspective by a specified age. If you can do that and implement this strategy you will be better off than most consumers. Once you have this strategy invest your savings accordingly. It is now time to complete your 5 point mid year financial checklist which we out line below.

Your 5 Point Mid Year Financial Checklist

Check your Budget – If you do not have a budget, develop one and review it. Make adjustments as needed to balance your budget. If you need to cut back to avoid building further debt, then do it.

Review your Retirement Contributions – What is the status of your contributions, are you meeting them and are the investments performing?

Review your Retirement Targets – consider how much you have saved, the number of years left to work and your retirement targets. Does something need to be adjusted? Review these changes with your family to make sure they are on board.

Adjust your Investment Strategy – review the returns, the level of diversity and your long-term goals. If you are over weighted in one area should you make adjustments? Take into account the cost of balancing your stocks and fees that you may need to incur.

Review your Investments – Diversity, long-term growth, investment income etc need to be reviewed and how each of your investments meets these goals.

 

 

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