Financial Planning, Retirement Issues


How can I retire early?

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

Almost everyone at some time in their lives wonder, how can I retire early? They might be having a tough day at work. Or perhaps they are envious of someone who is retired and the life they are able to leave. When you ask yourself this question, how can I retire early, the next step is critical. If you want to retire early, consumers need to put a plan in place and answer the following questions. Then they must work towards these goals to achieve their objective. Unless you are lucky enough to win the lottery, most of us will just have to work hard to make it happen.

Questions to Help Answer – How can I retire early?

These are the questions that will get you started and help achieve your plans. Work with an expert to ensure that you are considering the right questions and making the correct assumptions.

  • How much should I save
  • How should I invest
  • What will my housing cost in Retirement
  • How much will health care cost
  • Manage your tax liabilities

How much should I save – how much income will you need? What interest rate will you assume? How many years do you have to save towards retirement? What pensions will you receive?

How should I invest – Most experts will tell you focus on blue chip, diverse investments that will protect you from catastrophic losses. The market will go up and down.  Over the long term it should continue to increase providing growth in addition to your savings and help with your retirement goals.

What will my housing cost in Retirement – Will you stay where you are, downsize, move in with the kids or live in a seniors home. Each one of these has different costs and must be factored into your planning.

How much will health care cost – this is a huge assumption with huge impacts. What health coverage will you have? What is your co-pay? How will you afford your medical costs.

Manage your tax liabilities  – taxes are present in life and death. Focus on minimizing your taxes to ensure that more money is left in your pocket.

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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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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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