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Retirement

The New Retirement – “No Rules” Apply

Published January 27, 2017

Our concept of retirement is undergoing a metamorphosis. Demographic, societal, and workplace trends have all converged to offer a stage of life—at mid-life and beyond—that is much more fluid and flexible than we previously thought possible.  When planning for retirement, we are discovering that the “old rules” have been thrown out and that “no rules” apply. 

In other words, our retirement experience has become a matter of personal definition.  Because of increasing longevity and more active lifestyles, many individuals are viewing this time in life as an opportunity to explore their potential. 

Instead of “not working,” retirement has come to mean emancipation, the freedom to choose the activities and pursuits they find the most satisfying and rewarding. 

How to Achieve the Highest Quality of Life in Retirement

Published November 4, 2016

Today’s retirees are finding that retirement requires at least as much psychological and emotional preparation as it does financial preparation. Retirement planning needs to include a thorough assessment of human assets and liabilities along with an assessment of financial assets and liabilities. It is no longer enough for retirees to know how much money they will need to live; they need to know how they will be able to make the most of this new life stage.

By focusing primarily on financial issues, traditional planning reduces retirement to an economic event with its financial objectives marked by a finish line. The dangerous misconception it perpetuates is that, if you hit the finish line, on time and on goal, your planning is done and you’ll have a successful retirement. While it may address the financial goal of creating a sufficient standard of living, it doesn’t address the larger, more important issue of the quality of life.

There is clear evidence that shows the majority of retirees who try to step completely away from work eventually grow despondent, while those who stay engaged and productive, are happier in all aspects of their lives. Many people find the sudden loss of interaction to be especially difficult, and are saddened and disoriented by being separated from “the tribe”.

Will You Outlive Your Income? How to Improve the Odds You Won’t.

Published August 12, 2016

While our extended longevity should be greeted with gratitude for the possibility of enjoying a longer life with our friends and families, many retirees are approaching it with trepidation, wondering if their hard earned assets will be sufficient to fulfill their vision of a good life for the rest of their life – however long it should last. At the critical point when assets are to be converted to income and a spend-down plan is launched, retirees need the assurance that they won’t outlive their income, which, to some is their greatest fear.  

Old Rules of Thumb Have Become Dangerous Assumptions

Unfortunately, the traditional and outdated retirement planning models espoused by the media and the general financial services population only serve to generate more angst among retirees. Not only do many of them still adhere to the old “allocate for your age” asset allocation strategy, they continue to base their spend-down plans on the traditional life expectancy model that requires us to die on time in order for the plan to work. In today’s near-zero-interest rate environment and in the face of life spans that can expand to age 100, these planning assumptions dangerously defy current realities.

Are My Social Security Benefits Taxable?

Published July 7, 2016

The quick answer is “it depends.”  But, for the 33 percent of retirees who now rely more heavily on their Social Security benefits to sustain their lifestyle, the answer takes on even more significance.  Generally, your income from Social Security is not taxable on its own; but when it’s combined with other sources of income for tax reporting purposes, a portion of your Social Security benefits, up to 85 percent, could be includable as taxable income. Unfortunately, over 40 percent of retirees aren’t aware that their benefits could possibly be taxed, and it is always a rude awakening when it happens.

Having an understanding of how Social Security benefits could be taxed might enable you to consider ways to reduce the impact. So the real question becomes, “under what circumstances are my Social Security benefits taxable?

Generally, any income from employment, a pension, IRA withdrawals, interest on savings, even interest on tax exempt bonds is combined along with half of your Social Security income to determine the taxable portion. The only sources of income that are not included are monthly payments from an annuity or withdrawals from a Roth IRA.

Choose Your Social Security Age with Care - It Could Cost you a Bundle

Published August 4, 2014

With more than 10,000 Baby Boomers crossing the retirement threshold every day, the Social Security check writing machine has kicked into overdrive. Following a tumultuous decade in which pre-retirees and retirees saw their 401k plans rocked by two stock market crashes, two recessions and a financial crisis, an increasing number of people are more reliant on Social Security benefits than ever before. And, while the temptation to start taking benefits at the normal Social Security retirement age of 66 (for those born between 1943 -1954), or even earlier at age 62 is great, retirees may be leaving tens of thousands of dollars on the table by not waiting as long as they possibly can to tap Social Security.

Retirement Income Planning Requires Realistic Spending Assumptions

If you have read any literature on retirement planning or have received advice from the financial media, chances are you were presented with the 70% rule, the one that suggests that retirees will need between 70 and 80% of their pre-retirement income in order to maintain their standard of living.

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