18Apr

How Inflation Silently Robs Your Retirement

BlogApril 18, 2022

Even with careful retirement planning, one risk that is often not planned for well-enough is inflation. Inflation alone can hit retirement assets the hardest. The budget retirees begin with will change easily within the first 5-10 years—even 20 years down the road. It is most likely that inflation, assuming a rate of 3-4%, will cause daily living expenses to double within 20 years. Retirees should plan for this because, according to life expectancy statistics, folks live 20-24 more years.

That said, the following things should be taken into consideration when planning the silent killer of retirement:

  1. With aging comes more health concerns and more medical bills. Given that inflation will increase day-to-day life, it is predicted that health care costs and services will increase, too.
  2. Social Security benefits will increase for retirees. In 2020, benefits went up by 1.6% which was an additional $24 paid out; accounted when considering cost-of-living adjustments. However, the extra money from SS is offset by huge cost increases across the board. For example, medical services and cost go up; as does Medicare costs. SS should only be considered a baseline for retirement funds.
  3. As mentioned, living expenses are predicted to double within 20 years due to inflation. With inflation, spending power for retirement assets could drastically be reduced if not accounted for properly.

Tacking this silent killer and its concerns takes careful planning and risk managing.

With life expectancy, family medical history and personal medical concerns need to be discussed. Family history of heart disease and cancer will affect your life expectancy. This in turn will determine how long your funds will need to last. If your family members are known to pass away early on or live well into their 90s, this will also factor into how long your funds will need to last. Longer life expectancy means a longer time inflation will affect cost and standard of living.

Reviewing medical history in advance will also allow for the retirement budget to account for any major medical expenses that could arise. For example, a history of knee injuries could mean a knee replacement in your early 70s. Your occupational hazards could cause late-life conditions. If you spent your working years in a steel mill, you have a higher risk for COPD. Planning for these major medical expenses in advance will allow for inflation to be accounted for, for the money to be there if necessary. In retirement, folks spend $250,000-300,000 in medical costs alone.

To account for inflation a realistic budget plan should be set. This includes daily expenses, monthly bills, and additional spending such as travel and hobbies. Factoring into this budget, would be those said medical costs, too. Once a budget and cost-of-living expenses are decided, it is important to review how high inflation rates and the historically low interest rates affect other return rates and income during retirement.

Have a strategy addressing inflation in place. Begin with small withdrawal rates and increase as cost-of-living and inflation go up. During retirement, the small withdrawal rates will be a huge part of your income. Larger withdrawal rates will make deplete retirement funds much sooner—potentially running out of money before running out of retirement. If possible, during working years, saving more will go a longer way. Investing your future retirement younger will also help offset inflation. Consider different income sources: Annuities, long-term care policies, life insurance policies.

Creating an income strategy and working with a Retirement Risk Advisor is key to a safe and secure retirement. Discussing options that can reduce inflation and provide the best management for retirement will save you money and time and give you peace of mind.

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12Apr

Market Volatility: Invest Smart, Know the Risks

BlogApril 12, 2022

Investing into the market for retirement funds is a risky business. Retirees often purchase individual stocks or invest in financial products such as mutual funds, exchange-traded funds (ETFs), or even variable annuities. There are other options such as defined contribution plans that invest into stock market and sometimes a company’s stock. 401(k)s are a common option offered by employers with a matching percentage. Having various investments allows for a more diversified portfolio, leading to a better chance at the safe and secure retirement you have always dreamt of.

However, invest smart and know the risks: the financial markets have significant fluctuations. There is a huge chance of majorly reducing retirement funds due to a bad down in the stock market. Therefore, long- and short-term investments are encouraged.

With the roller coaster of the financial markets, timing is everything when it comes to withdrawing from retirement savings & investments. Unfortunately, what may happen with the return of these investments is more negative than anything to the investor. Meaning, more of the account or assets may need to be liquidated to ensure spending power and keep that consistent stream of income. This is called sequence of return risk. An example of this was with the 2008 Recession; where the market declined and many lost their homes, their other investments, their retirements. For those who have awhile to save and plan are able to likely recover loss. Retirees with less time or who need their income soon will have to sell their investment assets while the market is down to reduce further loss and keep that income. A great loss is encountered if assets cannot be recovered.

Diversification of these assets/investments is important. Individual assets, such as the mutual funds and ETFS, may be managed professionally. These funds may have a focus on small to larger companies, even with specific fields or industries in mind. For individually chosen stocks and annuities, consider stock investments. Within these various options, there are performance and choice risks. Investment for retirement funds is a choice that should be taken with research and guidance.

As mentioned, there is always risk with investing—especially for your dream retirement. The following are some great strategies to limit the risks.

Diversify. Hold various investments across the classes (i.e. hold bonds and stocks). The more spread out and full the investments are better at loss absorption your portfolio is. For example, loss in individual stocks can be offset by holding stocks in 15+ companies and balancing the funds throughout these. If you were to hold the same amount over 5 companies/stocks, you are exposed to a greater risk if one of those companies crashes versus if you have the funds spread over 15 or more. Even considering fixed income investments is great! These will not yield as much return, however.

Long term is best. With investments, time is typically on your side. Especially in the case of recovering losses. It is rare you will see recovery happen overnight—it takes years. Those near or in retirement will want to monitor their investments closely because if a major loss occurs, you may be better off selling. Top experts suggest relying on income-generating policies while moving funds from the stock market throughout your retirement years.

Roll with the pooled. Like carpooling to an event, a pooled investment is smaller contributions from individual to make a larger investment fund. Some examples are mutual funds and target-date funds. Oftentimes these are done with financial experts and there may be fees involved.

Remember fees. Higher fees do not necessarily mean a higher yield on investments. They reduce the overall return, so monitoring and understanding them is important for your financial wellbeing. 401(k)s and other defined contribution plans may have fees; sometimes a fee may be charged if using a financial advisor for advice and portfolio management.

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14Mar

International Living During Retirement

BlogMarch 14, 2022

After having a taste of the working life and some traveling, retirees often consider living on foreign soil. Panama and Costa Rica are the two most sought out locations for retiring outside the U.S. If you are thinking settling aboard is in your future, the following are items you should consider before moving out of the country.

Preparation

            First and foremost: simplify your financial life where possible. Condense assets and prepare to do a lot of online banking. Make sure you have online access setup for your accounts and investments that will remain U.S-based.          

            If you can, find a community of American retirees wherever you are planning to settle. Those with experience retiring in the area are your best resource. This can be done by online social groups (i.e. Facebook) or by researching.

            Prepare to spend before you even get on the plane. While living expenses may be less per month in some areas, you may have to put several months’ rent down for a home. This could be up to $5,000. That does not consider travel there and moving belongings which could easily be another $5,000.

Credit History & Banking  

            What has been a determining factor throughout life for interest rates, mortgage, car payments? You guessed it! Credit score! The credit history you have built for decades will not likely transfer with you when moving aboard. If you can before, build up a credit history there—cell plan, lease, etc. It is recommended keeping a credit card or two from the U.S. active. This way you can use these for online shopping, travel expenses. This will keep your American credit score active.

            Unfortunately, it may be easier to build a credit history overseas than get a bank account within the country you settle. This goes for getting a credit card there, too. Why? The Foreign Account Tax Compliance Act (FATCA) was enforced beginning summer of 2014. This law requires foreign banks to report any accounts of U.S. citizens. Because of FATCA, extra fees are charged if foreign banks work with Americans. Many turn Americans away. In addition, U.S. citizens must file a Foreign Bank & Financial Account report for accountability.

            With the foreign banking laws, other laws have been put in place called “anti-laundering rules.” These rules require providing proof of funds when depositing between U.S. and a foreign account. For example, if you have a large lump sum deposited into your foreign bank account from a house or business sale, you will need to provide documentation of this sale for the money to be properly deposited.

            Another matter to consider is the exchange rate for currency. If you are using an ATM for your U.S. account, what you pull and receive will be based on that day’s exchange rate. The rate may change frequently and there will be fees associated depending on what account you are withdrawing from. Before moving out of the country, find cards that have small or no fees for foreign transactions and withdrawals.

Investments & Social Security

            Top advisors recommend keeping most investments within the U.S. This allows for better reporting and efficiency fund management. Having investments in the world stock markets are riskier, with an additional risk when it comes to the currency rate. By keeping investment assets U.S-based, funds are easily be distributed and oftentimes uninterrupted. Doublecheck that an international address will not a problem. Some agencies have policies that require an American address. Retirees that have moved out of the country have reported that policies have been paid out or closed due to this; this led to tax issues and messing up the three-bucket system. Research into your policies before moving.

            Unlike the issues that investments may have overseas, social security benefits are still paid out. The funds are directly deposited into bank account. The only downside is that Medicare is not given when living aboard.

Taxes

            Living aboard comes with a double taxation price tag. Depending on the laws and other regulations, you will have to file taxes for the United States and wherever you have settled. This is heavily dependent on your financial situation. Luckily, there are some tax breaks you may qualify for living on foreign soil: Foreign earned income exclusion and foreign tax credit.

            First, as of 2021, the foreign earned income exclusion permits $108,700 per individual. A married couple filing together potentially could exclude $217,400. This income exclusion does not apply to retirees who have zero income from working—401(k) and IRA distributions are not earned income. Secondly, the foreign tax credit allows qualified foreign taxes paid to offset U.S. tax liability. The credit is what American retirees rely on the most when living aboard due to itemization.

            Remember, if maintaining a U.S. address, state and local taxes may still be owed. Make sure when you are filing and claiming deductions and credits that you have converted the dollar correctly so no errors may result in major consequences.

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08Mar

Combatting the Blues in Retirement

BlogMarch 8, 2022

From working years to the freedom years, retirement is a major life change. An era of structure is met with no given structure. This life change is a major transition for many retirees, and it is important to not only prepare your financial portfolio but take steps to tend to your mental health just the same. When 20% of retirees report “retirement blues” it is important to understand why and how to combat it. Mental health should always be taken seriously.

            The loss of structure from the pre-retirement years is reportedly the biggest factor into retirement related depression, loneliness, and anxiety. Having a career or a major role in raising the family provided a sense of identity, and when retired most folks lose that sense of identity. The daily routine and social interactions of coworkers and employees becomes obsolete. The extra time at home becomes an adjustment for everyone living in the household, too. The extra tension puts strain on relationships, making the transition into a comfortable retirement harder. And for retirement to be enjoyable it is important to speak up and take action to prevent the onset of mental health concerns.

            Easing these feelings can be done in a variety of ways. One suggestion is staying active socially and physically. Discovering new and even old hobbies would be a fabulous start! Get into cooking more, gardening, or sewing; take up photography or painting. Become more involved with family. Go to lunch with siblings, cousins, or children. Take grandkids out to the movies. Increase your involvement in your community or neighborhood: join or start a book club, volunteer as a dog walker for a local shelter; join a committee or run for a political position within your town!

Moreover, consider working part-time instead of retiring fully; or work part-time in a complete career change! Keeping at the “work life” routine may provide the crutch for not losing your identity. If you wish to not return to the traditional work style, consider turning a hobby into a side hustle or new business. This way you are staying active and can turn a passion into an extra stream of income.

Staying physically active is important, too, for mental health. If you are able, stroll your neighborhood and explore your local parks and trails. Get a gym membership or take fitness classes. Not only is the exercise good for your body, but it is also good for your mentality. If you cannot, consider a car ride through the park or a trip to the store. Getting fresh air and stepping out of your home is great!

Lastly, while all the above activities and recommendations may help, it is not a cure for the retirement blues—depression, anxiety, or loneliness. Do not be afraid to speak to your doctor or see a therapist. Evaluate what is important to you and what you want from your retirement years.

Finding what gives you purpose and ignites your soul is what will lead to a happy retirement!

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01Mar

Tips and Tricks for Your Retirement Trips

BlogMarch 1, 2022

It is part of the American dream to travel especially as retirement approaches. All throughout the working years, weeklong trips or weekend gateways were simply a taste. In retirement, 60% of folks make traveling a priority, but the high costs of it and health concerns hinder many retirees from taking those trips. The Baby Boomer generation alone plans 1-5 trips annually within the first several years of their retirement, with a focus oftentimes on international destinations.

The wanderlust for overseas travel comes with a high price tag. In 2013, an international 4-5-day trip averaged $3,300. As of 2021, the average cost for a similar trip was $4,500. In comparison, a domestic trip of the same length costs $630-800. International costs approximately 550% more than domestic.

To get more bang for your buck, retirees should consider Airbnb rentals. Room and cabin rentals through Airbnb are 21% less inexpensive than the traditional hotel room. Many retirees or those approaching retirement have started a second stream of income by advertising a spare room for rent through Airbnb—helping to offset their own travels. Others have become Uber or Lyft drivers on the weekends and in the evenings. Uber alone has reported that a quarter of their employees are 50+ in age.

Outside of travel costs and funds, safety and health are amongst the highest concerns for retirees. General unknowns of the travel destination contribute to this. It is reported that 31% of American retirees are terrified that health concerns will hinder travel plans and enjoyment. In addition, 15% worry about insurance coverage. Domestically, most retirees can rely on Medicaid; however, when aboard, Medicaid covers no medical or health services and supplies. In lieu of traveling, many retirees concerned with health and safety focus on local trips and dedicate more time with friends and family during their retirement.

When it comes to these fears with traveling, optimizing travel budget and time is key. It is important to plan: do research on the destination beforehand for tourist sites and other must-sees; getting costs will help with budgeting. Consider extending the trip for a longer period. Oftentimes, staying longer is more cost effective. To enjoy and take in the culture and scene, consider soft travel—have no hard leave date, give yourself a range of days to leave during. This may save on flight and other travel costs.

Think untraditional: ever consider an RV or camping (or glamping)? Long-term, these means of lodging are domestically and internationally budget-friendlier in comparison to the traditional hotel stays. An RV or camper serve a dual purpose of lodging and transportation!

Hostels are also cost-effective means of lodging. While these are most common over in Europe, in the United States, hostels are most commonly on the west coast; there are some in the southern states. If city visiting, use an Airbnb booking; longer stays typically come with discounts. For example, booking four nights would cost almost the same as three nights. Do not be afraid to shop around for availability and options. One host may offer a better discount than another. Another untraditional means of travel is a train.  Instead of renting a car or paying for a taxi service, a train—especially internationally—costs much less.

Lastly, flights are the most common means of transportation and the most expensive aspect in a travel budget. To save money on flights, use a credit card with a travel rewards system. Being able to track and save those means discounts and better prices for other trips. If doing a domestic trip, consider some of the untraditional ways to save and plan. Look into round-the-world flights. These include a set number of flights and miles but allow for more flexibility to multiple places over a longer period. If seeing as many places as possible is what matters most, a great option is retirement cruises. Oceania offers a half-year cruise to stops in countries. Most retirement cruises go for a longer time and oftentimes have all-inclusive deals.

When it comes to traveling during retirement, be mindful of health concerns and travel costs. Save where you can and opt for local or stay-at-home trips if aboard travel is risky.

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22Feb

Does My Retirement Need an Emergency Fund?

BlogFebruary 22, 2022

Saving emergency funds is not something you are unfamiliar with. During the working years, everyone encourages six months of living expenses put aside. This advice does not stop in retirement. You may experience many of the same potential emergencies that require access to that savings. However, in addition, during retirement, you are solely responsible for providing your own paycheck.

What emergencies may happen during retirement?

Much like your working years, you may run into those events where you need to tap into your rainy-day fund—house repairs, car breaks down. You may even help family members who run into unexpected financial needs. Building up your emergency fund provides ease if the unexpected does occur.

Another unforeseen emergency expense may be surprise medical bills. Health care costs are rising and having money set aside should you need to cover these costs will greatly impact your wellbeing down the road.

The golden rule emergency funds before and during retirement: have saved 6 months of living expenses.

Can I invest my emergency funds?

While the answer is yes, you need to make sure that all you have saved is protected. Your first option would be a traditional savings account. Easily accessible, the only downside is that your money earns next to nothing with interest.

Some folks may consider a CD, but you must be careful with early withdrawal penalties if you need the money before its maturity date. You may even designate your emergency funds to another retirement account such as an IRA. However, tax-deferred accounts such as an IRA or 401(k) are not like withdrawing from a savings account. If you pull from one of these as emergency money, it will add to your taxable income. And if you are under a certain age, you may be penalized for early withdrawal.

Can a reverse mortgage serve as an emergency fund?

If you or your spouse are over 62 years of age, using the equity on your home is an option. You may take monthly payments or only a lump sum of what is needed. Make sure what you are using it for is an emergency.

How can I reduce the need to use my emergency funds?

While having the funds handy is highly encouraged, a certain way to reduce the need to use your emergency funds significantly is evaluating the unforeseen expense. Can the car repairs be covered under your insurance? Is the roof of your home leaking, and will your home insurance cover any of it? Carrying insurance on certain things like the car and home will help with those unexpected events.

It is still very important to keep in mind the need for at least six months of living expenses to be set aside.

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08Feb

Keeping Your CPA Status in Retirement

BlogFebruary 8, 2022

As your retirement nears, you may be ready to also retire your CPA status. But keeping your credentials after retirement may open doors you haven’t thought of. Maintaining your CPA status after retirement allows for a host of opportunities.

If you ever want to offer services such as tax preparation, accounting, or consulting—even only occasionally—keeping your credentials open keeps those doors open also.

Even if you do not plan to offer services, maintaining the status for a little while after you retire may benefit you should you change your mind. You won’t have to reinstate it later! If you must reinstate, you will have to catch up on CPE credits or even retake the CPA exam.

Moreover, keeping your status active may present itself beneficial in your retirement if a friend or family member decides to run a business. You would benefit greatly, too, if you started your own business!

Now, why is being a tax preparer a great option after retirement?

  • You have the credentials as a CPA and the work history for it. This makes you highly qualified and already sought after.
  • Work seasonally and flexibly. You are already likely already familiar with these types of things. Working with taxes permits only working a few months a year while enjoying the rest of the year for your retirement activities.
  • You are your own boss. Thus, you can take on as much work as you wish, work when you wish.
  • Since you possess the education and credentials as a CPA, you will have a leg up on new tax preparers. In this day, you can easily take advantage of the virtual and digital means of running your tax-preparation work. Should you want to start up your own tax prep business, the cost is essentially minimal for you: professional tax software!
  • Extra income! Supplementing your retirement helps financially and may be a great opportunity to invest a little more.

Even if you are unsure of keeping your CPA status in retirement, maintain your credentials for a little while after retirement. You never know what may arise!

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31Jan

Best Part-Time Jobs for Retirees

BlogJanuary 31, 2022

Retirement is whatever you want to make it! Which means you may want to continue working and bringing some extra income in. Working part-time keeps that income stream, keeps a routine, keeps you active, and can be fun all at the same time!

A part-time retirement gig, much like your retirement, can be whatever you want it to be. Considering your options is the best place to start. Not sure what to consider? Here are some of the best part-time jobs for retirees.

Continue with what you were doing before retirement. Much like semi-retirement, phase out of your career by staying on part-time. You stay doing what you knew for much of your working years and helps secure your retirement. Moreover, this does not mean you have to stay or return to your previous employer. You could offer freelance services or become a consultant!

Turn a hobby/skill into a class. During your working years you have mastered and obtained a lot of skills. Offer classes or workshops to teach others these! If you sew or woodwork or play an instrument, you can always teach these, too. There are many adults and even children who would become great students! This could be done on a group or individual basis.

Ever consider passive income? This may appeal if you desire an income stream that is easy to maintain and does not require too much extra work. Rent a room out of your house on Airbnb or invest in real estate.

Become a pet sitter or walker! While their family is on vacation or at work, pets could stay with you. Boarding at your home or even just a daily pet daycare could convert your love for furry family members into an income stream. If hosting pets is not something you want to do, but want to stay active, consider becoming a walker. Midday or evening walks for a pup especially will keep you moving and will create income while helping to exercise a pet.

Retail, retail, retail. Is there a bookstore or boutique you frequent? Typically, retail settings offer decent pay, a set schedule, and you get to turn something you enjoy into income.

Another gig you can consider is substitute teaching. While requirements vary state to state, subbing offers flexibility and pay. Plus helping children and teenagers learn can be a very rewarding job!

Turn a social activity into income! Working as event staff at the local theatre or concert hall is a great way to create that income and enjoy plays and concerts. Even as part-time, you may be offered staff discounts for certain events!

Travel and work! Traveling during retirement is oftentimes a top priority. So why not take trips and make money, too? Cruises are always looking to hire folks, and it may lead to a fun time! You could teach classes on the boat or work in the gift shop.

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25Jan

Getting Your Retirement Budget Right

BlogJanuary 25, 2022

Configuring retirement expenses can be a daunting, overwhelming task especially when you are unsure how to approach it. It can be more stressful when you are 10+ years away from retirement still! But to have a secure, successful retirement, it is important to plan; getting a budget together sooner rather than later is a great step in the right direction. Preparing and predicting now will set your retirement off on sturdier grounds.

Use past spending history to help predict how you wish to continue your lifestyle during retirement. Breaking it down into categories, consider some of the following:

-Housing (mortgage, insurance, property tax, utilities)

– Insurances (house, auto, life)

-Transportation (bus pass, car payment, fuel)

-Family (education, holiday/birthday gifts)

-Food (groceries, dining out)

-Entertainment (streaming subscriptions, hobbies, travel)

So…How do you tackle this task? Here are a few tips.

  1. Think in yearly increments. 1 or even 5 years.

Often monthly budgeting is thought of. However, when planning for a retirement it is best to look at the trends of bills and spending over the years. Track back if you can—to the best of your ability—and see how your spending was. Moving forward, think in annual spending. Round up when doing so for wiggle room and accounting for future inflation or taxes. Keep current with the economic and market trends and flux. While these are always evolving, the present always impacts the future, right? Public policies and economic impact do predict for future—your retirement.

  • Consider ‘stages’ of retirement when budgeting.

There are four different ‘stages’ of retirement and each will have specific needs that must be met.

Stage 1 – The Transition. This first stage is not quite retirement, but the chapter before. This is the few years leading up to full retirement. During this time most either are transitioning from their full-time working years—be it training someone to fill your position, semi-retirement, or working part-time in a different field. Most times, spending stays roughly the same.

Stage 2 – The Early Years. The first several years of your retirement are focused on leisure and enjoyment of the self-imposed unemployment. Typically, spending during this time increases as retirees travel more or spend more time with family or partaking in hobbies. Throughout all income brackets, a 30% increase has been observed during these early retirement years.

Stage 3 – The Late Years. While during this later years of retirement overall spending decreases, medical and health expenses tend to increase due to older age and medical complications. Most importantly, planning to have medical, health, and long-term care insurance situated will make these years easier.

Stage 4 – End of Life. Research shows that dying is expensive. Long-term care and medical costs hit a peak during these final years for many retirees. Especially if long-term care is needed, costs for end of life could be near the hundreds of thousands. Much like the Late Years, having long-term care or life insurance in advance for this stage of retirement will help with your retirement budget.

  • Management of the Core 3:

Retirement budgeting has three core factors: housing, transportation, and medical. On average, most people, retired or not, spend most of their monthly income in these three categories. According to a survey done by the Bureau of Labor, those aged 65+, spend 40% of their budget on housing, 16% on transportation, and 14% on medical and healthcare.

Budgeting for housing and transportation should be done annually. Monthly payments, maintenance, set budget for gas, always leaving room for an emergency. If able, put money to the side monthly to build a larger fund, should something happen.

Healthcare and medical costs alone are, sadly, not always the easiest to predict. According to research done in 2019, out of pocket expenses totaled $280,00+ for retired couples during retirement. Yearly this amount will increase due to inflation and life expectancy increasing. Factor in premiums for medical, eye, and dental, planning and saving for those larger medical and healthcare bills may be expected, will lessen the hit to your budget later.

  • One Hit Wonders of Expenses

Somethings to consider during retirement are items that may come due at once where monthly payments may not be permitted. These may include:

-Child’s wedding

-Travel

-Second home

-Helping your own elderly parents

-Education (yourself or a child)

While the price tag may vary on these, researching into average expenses of weddings in your state or yearly tuition for a university will allow you to prepare for these One Hit Wonders.

  • Is Your Mortgage Paid Off?

Mortgage is a huge factor in retirement budgets. If you have paid off your mortgage, congratulations! That is a huge expense paid off that will impact you positively down the road. It is a major feat to pay off a debt! If you are close to paying off your mortgage, consider contributing more towards your monthly payment. This will allow you to pay it off sooner and help you with your retirement.

Another consideration for your housing is size. A popular choice for retirees is downsizing to cut back on extra, unused space and cut down on expenses. There are various options, too, such as retirement communities that help transition should you have a long-term care event. For retirement housing there are many options, but what should be done is what is best for your financial and physical wellbeing.

  • The Unexpected and Wants v. Needs

As previously discussed, there are unforeseen costs that may arise—i.e., medical services or home repairs. One thing you can predict about the unpredictability is that it may happen. And having emergency funds available is how these unexpected budget hitters do not take you by surprise—or as much of a surprise. The best solution for emergency funds is having 3-6 months of living expenses placed in an account.

Moreover, what will help with budgeting and saving for your emergency fund is considering wants versus needs. Detail your budget for specifics you know will need paid such as: food, housing, utilities. Wants may include expensive hobbies, traveling. Deciphering what is needed and what is wanted will help tremendously with getting your retirement budget prepared.

  • The Best for Last: Create a Retirement Plan

Tackling a budget and a plan for retirement is the best thing you can do for your future. It allows you to set expectations for your retirement and know how you need to fund it. Having the best plan laid out will even reduce and potentially eliminate risks you will face. The more detailed and personalized your plan is, the better off you will be.

Unsure where to begin with a retirement plan? Meet with one of our certified Retirement Risk Advisors to create and discuss a plan with you!

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