Author Archives: ernie

Tolerating investment risk in retirement!

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Tolerating investment risk in retirement!Can you tolerate investment swings in your retirement? Do you stay awake at night worrying about your investment nest egg? Do you check the stocks every day to assess the value, the direction, and the changes that are occurring in the market? If you do, you may not be good at tolerating investment risk in retirement very well. The chart on the left illustrates the relationship between risk, return, and the type of investment that can be in someone’s investment portfolio. Of course, many people want a high return. But they may not be able to tolerate the high risk associated with high returns.

Tolerating investment risk in retirement!

What is the impact of swings in the market on your retirement? If the market drops by 10% do your portfolio change by the same amount? Are you invested proportionately too high in one area which if it nose dives will decimate your portfolio? Diversity is a key ingredient in retirement investments, really in any investment package. Regardless of how you invest, never put all of your eggs in one basket.

How can you manage and deal with those investment swings? One of the big tests came in 2008 when the markets dropped by more than 50% and portfolios did the same. Many people sold on the way down and never bought back in because they were too scared. They lost big time because the market has rebounded far beyond where it was pre-2008.

If you really want low-risk and do not want to worry about your investments, money markets, GIC, and cash is the investment to choose. Low income will also be the order of the day. On the other end, speculative stocks can deliver a high return, but also come with high risk. Can you afford to lose it all?

Most investment advisers recommend a balanced approach of high-quality dividend-paying stocks, mutual funds and bonds, GIC, and the Money Market. There will still be some swings, but not to the same extent that the stock market swings. In addition, you will still obtain income from the dividend and interest that you collect from the stocks and bonds, GIC, etc.

The best approach is to complete a risk assessment, work with your adviser, and take an active role in matching your investments and your retirement expenses to your risk tolerance level.

Website Recovery From Google Penguin

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Website Recovery From Google PenguinMany websites were penalized by Google Penguin and other algorithm releases from Google. If you are one of them don’t despair, just get ready to put in some hard work. Be patient as long as you are following the guidelines publicized by Google. Website Recovery From Google Penguin will consume a lot of time. The holy grail of websites is that you must have high-quality content. It must be attractive, informative, and useful to your readers.

This is the first requirement. It is a must-have if you are going to be in this business for any length of time. There are other areas to focus on as well that we will cover in this short article. However, rest assured that this is a complex subject and requires much more discussion. We will focus on what we consider to be the basics of SEO recovery. But do not even bother with these other issues unless you have focused on quality content first.

Website Recovery From Google Penguin

Every time that Google comes out with a new release there are many steps for an SEO website administrator to consider. The first task is to try to asses what the impacts will be on the industry and specifically your website. Many online blogs are dedicated to this subject. It is worthwhile to spend a few hours getting a feel for what the SEO community is suggesting. You may need to adapt your website in order to comply with these changes. This is really the first order of business to avoid your site being indexed and penalized as a result.

Once you feel that all of the steps have been taken to adapt your website to whatever Google has changed in terms of SERP. The next step is to continue optimizing your site to improve the quality of your site. In terms of content, in terms of quality links to other quality sites, and terminate poor quality links where you are able to. You may have to contact other webmasters to request them to remove links so that you can improve your overall link strategy.

Whenever you touch a page, take a few moments to review that page. Update it from the perspective of checking current information to ensure it is accurate and up to date, in grammar, and also spelling. If your company has changed services, products, or policies, for example, this is the time to also make sure that your pages are not only up to date, but they also meet Google’s guidelines for SERP. This is an opportunity to improve your web site every time you touch a page.

 

 

Characteristics of a Retirement Savings Millionaire

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Retirement Savings MillionaireHow much do you need to save every week or month to become a retirement savings millionaire? Most people cannot even dream of saving this much money or ever having a million dollars, yet many consumers do it all of the time because they have focused on managing their money in such a way that they are able to deal with all of their expenses and still save money. In this post we will do a few calculations to show you just how easy it is to become a retirement millionaire and also the major advantage of starting early in life to save for retirement.

Retirement Savings Millionaire – Saving Money

The chart below demonstrates several fundamental rules. The earlier you start saving and the longer you save, the more money you will have for retirement. For example if start at age 20 and save $150 a week, you can easily have one million saved by the time you are 55. Wait until 65 and you have doubled your savings in 10 years. If you wait until you are older, you will have to save more each month in order to match the same numbers e.g. at age 40 you need to save $3500 a month to make that one million mark by the time  you are 55. And if you wait until age 50, can you really save $15,000 a month?

We have assumed a 7% return on average over the life of these savings. The stock market has returned this rate for many years. Although there has been a lot of volatility in that period with some years much higher and some years much lower. But people who consistently save their money and do not touch until retirement can easily meet this goal of one million dollars by the time they are 55 simply by saving $600 a month and becoming a retirement savings millionaire.

Age to Start Savings Amount to Save Each Month Avg Interest Rate Save to 55, then Retire Save to 65 Then Retire
 20  $100  7%  $176,560

 $363,901
 20  $600  7%  $1,005,982  $2,079,397
 40  $3500  7%  $1,058,177  $2,661,887
 50  $15,000  7%  $1,036,535 $4,525,982

 

High Housing Cost Makes it Difficult to Retire

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High Housing Cost Makes it Difficult to RetireYour home is paid off and yet you are wondering if the high housing cost makes it difficult to retire. When you retire some costs will decrease such as work related costs. However there is a good chance that other leisure-related costs will go up since you have more time on your hands. Then of course there are the taxes, utilities and general upkeep on your home. They will increase by some amount every year. Depending on your pension and  other income, your expenses could increase faster than your income. For many people this represents a significant problem and may push them out of their homes! In this situation, high housing cost makes it difficult to retire.

High Housing Cost Makes it Difficult to Retire

There are several options however it is important to analyze your costs. How much they will increase year over year as well as your income. Once you have these numbers you can decide on the appropriate alternative to select.

  • You plan to retire and stay in your home
  • Should you down size
  • Sell and Rent

Each of these scenarios should be assessed after assessing the following:

Regular operating costs for things like utilities, heat, electricity, and other regular monthly and annual fees that are part of maintaining a home. Some may have HOA fees, while others will hire lawn maintenance. All of these regular fees should be included.

Maintenance Costs

Maintenance costs whether you like it or not occur every year. Small things such as leaking faucet repairs, window repairs, maintenance of lawnmowers, etc. While they should not be large amounts they never the less add up over the year.

Housing repairs such as roof replacement, driveway repairs, major appliance repairs, or replacement including furnace and air conditioning.  These are big-ticket items and need to be budgeted for if you plan to stay in your home. Even if you move, these also could be issues that you need to deal with if you purchase a home that is not brand new.

If you do decide to move, take into account everything associated with the move which could include real estate fees, legal fees, bank fees, land transfer taxes, moving costs, decoration costs, updates, and repairs to the home you move to. Even if you move to a brand new home there will be landscaping, for example, window coverings, and decoration costs.  Discuss all of these items with your spouse to make sure that you are agreed on what needs to be completed associated with moving.

Confirm your cash flow in retirement based on the analysis you complete for the above scenarios that reflect your personal situation and then make up your mind regarding which one makes the most sense for your situation.

Website Ranking, SERP’s, Google Updates and more

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Website RankingIt used to be that you could just develop a website, upload it to your server, and presto you were live and even ranking well in the Search Engine Results Pages or SERP. Unfortunately, this dream is long past with many webmasters scratching their heads regarding what to do next in regards to developing content and managing ranking on the SERP results. With Google updates coming on a regular basis, it is really difficult to know what will be hit and what will be enhanced. For example, Penguin 3.0 impacted thousands of websites that had less than optimum linking strategies. If you had bad links if you had links to sites that were unrelated and on and on, then you were probably impacted by Google’s penguin.

To make matters worse, those webmasters who spent thousands of hours cleaning up the links have not seen a resurgence in their ranking since Penguin has not been rerun and is not part of the regular algorithm update. It is not part of the normal Google search engine refreshes.

Website Ranking – What to Do

If you are building a new site, stick to basics with high-quality information and content. Link to other sites that are legit sites that also have quality information and respect. Before approving links to your site, ask yourself if they are similar in content and quality as well. But beyond everything focus on content to make sure that it is something that your visitors will want to read.

An existing site may have more issues to deal with. Clean up your linking strategy and unlink to any questionable sites. If you find links to your site that are also questionable, request that they also unlink. Clean up your content so that it is clean, grammatically correct, and has value for your clients. Even with all of this work you may have to wait a while until Google decides to rerun the Penguin algorithm. If your site might be considered spammy, clean this up as well.

Website Ranking – Next Big Thing

No one knows except Google what the next big change will be. The only recommendation that we can make is that your site is pristine. This includes content, links, and the spam index.

For example, never link to a site that you would not spend time on. Don’t link to a site that does not somehow relate to your content. To the extent that you can, only allow sites to link to you that also are of high quality. It should have content on the same subject as you. Sites that are in direct competition with you may also be avoided in terms of inbound and outbound linking.

Follow the blogs and the chat rooms, you may pick up some hints, however, if you follow a quality strategy, you should be ok!

for more ideas and changing trends with regards to managing SEO, click here.

The Sandwich Generation

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Sandwich GenerationEver heard of The Sandwich Generation? We will all go through it eventually unless we are extremely unlucky. This is the situation where you are raising your own family and also have elderly parents who need a great deal of help to manage their finances, their home, and, in some cases, even their health. We are pulled in both directions, and it can become quite busy and stressful; however, would you want it any other way? For example, you might not have kids and miss out entirely on that side of life. Your parents could already be gone, and you will miss them. Regardless of the stage that you are at, take the time to enjoy both your own family and your parents. By including them, you will get to enjoy many different aspects of family life that you would otherwise miss.

There are some things that can be done to help make life easier for both parties. It is really up to you regarding how you manage your life and that of your family. Make the most of it while you can.

The Sandwich Generation – Finances

At some point, you may have to be approved as a proxy for your parents so that you can pay their bills and manage their day-to-day expenses. You may have to see the bank where all of the accounts are held and have your parents give you the authority to do this. Many people are nervous about taking this approach since money is involved; however, at some point, there is no choice. A living will is another good thing to consider. A living will spell out how health issues are to be dealt with and how money and bill payments are to be handled. It is all very legal and should be set up using a lawyer.

The Sandwich Generation – Health

As our health begins to fail, we can do less and less physically. Most people want to be independent; however, if someone is willing to help, take advantage of the assistance so that you can focus on the things that can be looked after by yourself. If you are a child or caregiver, remember that the senior person most likely has a lot of pride and does not want to admit that they can no longer look after themselves. Be positive about things and make suggestions about what you can do to help; let the person consider it, and pitch in whenever you can.

The Sandwich Generation – List of Helpful Activities

  • Day-to-day managing finances
  • Daily chores
  • Home maintenance
  • Outdoor lawn care and maintenance
  • Paying bills
  • Buying groceries
  • Cooking meals
  • Daily hygiene

 

 

Don’t count on a pension to stay afloat in retirement

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Don't count on a pension to stay afloat in retirementYour 40 years old. You have worked for the same company for the past 20 years. There is an expectation to retire with a full pension around 55 or 60 years of age. Is this a good assumption to make? Can you depend on your company to do the right thing when the economy gets difficult? The sad reality is that layoffs, down sizing, right sizing or whatever you want to call it are a reality for many consumers. Don’t count on a pension to stay afloat in retirement.

When it happens at age 40 or older it can be difficult to recover the same wage level and also prepare for retirement when you have to use some of your savings to get by while you look for a job.This is the reality for many Americans and the answer is that you have to assume that it will happen and plan for it and not count on a pension to stay afloat in retirement. If you are one of the fortunate few that do not get laid off or otherwise lose your job, then the plans you put in place are a huge bonus towards your retirement and will allow you to do far more than you ever planned in retirement.

Don’t count on a pension to stay afloat in retirement

This is a conservative assumption to make for many consumers who have good jobs now, however, if you are one of the lucky ones and do get a pension when you retire, then you will be better off anyway since you will have both your pension and savings to rely on and enjoy during retirement years.

If you have not started saving now, start immediately. With the interest and dividends reinvested your retirement savings can add up quickly making you more comfortable as you approach retirement years. Even just knowing that you have the savings you need will give you the confidence to retire early and enjoy life, start a new career, or whatever turns your crank and not worry about having to count on a pension to stay afloat in retirement.

Counting on a pension

Here are five rules that will help you on your way to prepare for retirement with or without a pension:

  • Pay off credit card balances each month
  • Retire off your mortgage before you retire
  • Pay off other debt before you retire
  • Never miss a payment on a loan, utility payment or any other kind of payment
  • Put away at least 10% a year towards retirement
  • Live within your income level and do all of the above

If you can follow these rules throughout your life, you will be in excellent shape regardless of whether you receive a pension or not. The best part, you don’t need to count on a pension to stay afloat in retirement, you have independence from your job and you have the freedom to live your life in the manner you wish even if you do get laid off.

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Improve Customer Satisfaction – WebSite Health

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Improve Customer SatisfactionOur last post discussed web site speed i.e. the time it takes to load a page once the reader clicks on a link to your site. There are added aspects to consider. For example, if your site uses a contact form.  Some templates come with a built-in contact form. While others will need a plugin to add this feature. Test the contact form for speed of response, for ease of use, and results in terms of customers and readers filling in the form. Remember to respond to them immediately.

Even if it is an automated response it is better than nothing at all. You will need to follow up within 24 hours with a real response. Otherwise, you risk getting bad comments on various boards, etc. This includes those people who post comments on various topics. Respond to them, even the negative ones. Other readers will gauge your response and decide if they wish to contact you after reading how you handle even the negative responses.

Improve Customer Satisfaction – Digital Books

If it applies a digital book might be the answer to retain loyal customers and keep them coming back. For example, we have not done this yet on our site, we are just getting started, but stay tuned we will have one sometime in the future. We also blog consistently talking about various topics that are of interest to our readers and to small business owners who are looking for information about building, maintaining, and operating a web site.

Improve Customer Satisfaction – Test after Every change

Operating a blog or a web site involves changing content, upgrading plugins, and themes all of the time. As these elements change, they sometimes stop working the way they should and the only way to find this out is to always test after making a change to confirm that everything is still working the way it should. Set up a regular testing methodology to ensure that the content is being delivered the way you wish and the plugins are doing what they are supposed to. Fix any negative test results immediately to minimize the impact on your customers.

Check the Time it Takes Web Pages to Load

We thought it is important to emphasize web page load speed one more time. There are many locations along the path between the server where your website is hosted and the user or person loading your page. There are a multitude of hops that have routers processing yours and millions of other bits of data. If one of those routers is overloaded or running a bit slow, your page will not load quickly. Same thing if your server is overloaded.

The first thing to do is to run a test called Tracert. Basically it will check the response time for all hops between your website and your location. If there are locations including your server that are responding slowly, it will be shown. You can then decide if any action should be taken and where to focus your efforts!

For more topics on customer satisfaction, click here.

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Retirees Staying in Their Homes

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Retirees Staying in Their HomesIn a survey of 4,000 Baby Boomer households conducted by the non-profit Demand Institute, 63% of Boomers plan to stay in their current home once they retire. This is a huge number and is driven by a number of financial and emotional issues that we will all face one day. With more retirees staying in their homes, what does this mean for families?

The real question is when is the right time to stay and the right time to find something smaller, perhaps less expensive, and easier to maintain? This is a tough question for many people since there is often a lot of emotional attachment to the home. After all, it may be the home where you raised your kids, you have lived in it all your life or you may just like the neighborhood and the people who are your close neighbors. it could also just be sentimental reasons that keep 63% of people who are retiring staying in their homes.

Retirees Staying in Their Homes – Considerations

The most obvious question is whether you can afford to stay where you are. There is a general day to expenses for utilities and care of the lawns etc. Then there are repairs that are needed from time to time and as we get older, we can usually do less and less which means that either it costs more to hire help or the house gets that run-down look, and the value of the home declines.

Health is another issue that affects your ability to continue with maintenance. Health costs may also dictate that the house needs to be sold to cover the cost of health treatment unless you have lots of savings to live on.

Moving is not inexpensive. There is the cost of legal and real estate fees. The actual cost of moving and doing upgrades the costs can add up very quickly. In some markets, that condo you are looking at just might be more expensive than the house you are selling.

For many seniors, it is just simpler to stay in place. Spend the money that would have gone to cover moving costs on maintaining your home. It becomes a very personal decision based on the situation, finances, emotional ties, and many other personal issues. Try to work through them one by one. Remember that no decision or delaying a decision is actually a decision to maintain the status quo!

Plan for Healthy and Unhealthy Retirement Years

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Plan for Healthy and Unhealthy Retirement YearsAnyone thinking about retirement in the next few years needs to plan. Plan for Healthy Retirement Years and unhealthy ahead of them. You may be healthy now, plan to golf every day or pursue some other activity that you have always wanted to do. If you are healthy now, there is a really good chance that you will be able to do just that. But there comes a time when our health changes. We may need to change our lifestyle. As a result, we need to be prepared to pay for the kind of support we may require.

Baby boomers are retiring in droves.. Many plan to lead healthy active lives for many years to come. However not planning for the unhealthy years may leave them in a situation that prevents them from enjoying a high quality of life.  The transition to retirement is filled with many issues. For more information on this topic, click here.

What Steps Should You Consider

What are some of the steps that baby boomers can take to plan for retirement years? When is the best time to put these steps into action and who should you talk to?

The answer is to take the action immediately when you still can and are of sound mind. Involve your family in the decisions. Make sure that they are informed of your intentions and desires. Typically this is done through what is called a living will. This is a document prepared by you and your lawyer. It provides instructions to your caregivers while you are still. A living will covers who should look after your finances. More importantly, make decisions about your health care. A power or attorney or living will is a legal document. It should be given to your family or at least the person you designate as the person who will look after you when you cannot.

You may also include specific instructions about health care, your financial situation and what is to be done with your home, car, etc while you are incapacitated. Take into account the availability of the person you appoint. a Family member who is thousands of miles away vs. one that is living in the same town seems more practical. Do they have the right attitude and are they sufficiently mature to handle the decisions that are needed?

Plan Retirement Years – Power of Attorney

There is no sense in appointing someone who is of the same age or older than you are. Someone who is younger and has a higher probability of being available when needed is probably a better choice than your older brother or sister or an older attorney.

Finally, baby boomers need to also plan financially for the time frame when they may have higher health-related bills. Work with a financial adviser to ensure that you are positioned for both the healthy years as well as the unhealthy years. Plan for Healthy Retirement Years as well as years where you may need support.