I want to put you to the test. It’s time to take a hard look at your financial life and figure out what habits you need to change.

Remember, sitting on a pile of cash does not equal a successful retirement. Here’s where most people go wrong:

You Have No Idea What You’re Doing.

This can be hard to admit. Put yourself to the test, do you resonate with any of these?

1. You are constantly stressed and don’t know if your money is working for you.
2. You don’t know your numbers, have a budget, or understand your cash flow.
3. You don’t have a plan. Or maybe you did put together a financial plan at one point, but that old binder has become a decoration on your bookshelf. Plans need to be updated as life changes.

You Make Bad Choices.

Bad choices come in all shapes and sizes and can be extremely detrimental to your financial health and future. Here are a few examples:

1. Bad investments. Think of it this way: the turtle always wins. Chasing the next winner seldom works.
2. Life happens and how you react impulsively to your needs and wants can make your budget hurt you in the long run.
3. Reacting Emotionally. This is simply an effect of not having a plan or budget in place to give you peace of mind.

Your Plan Is Not Working for You.

Most people tend to stand in their own way.

As a famous boxer once said, “Everyone has a plan until they get punched in the mouth.” Or to paraphrase a former US president, “Plans are of no particular value, but planning is indispensable.”

It’s not enough to have a plan on paper. You need something that can adapt to unforeseen circumstances. And you need someone who can help you to update the plan and carry it out. That is what a financial advocate can do for you.

You can do better. Hope is not a strategy.

It’s time to master your money and take back control. If you effectively manage your finances to make your money work for you, you can enjoy life today and in the future.

Remember it’s not about how much money you make, it’s about how much of it you actually keep.

The post What If $1,000,000 Is Not Enough? appeared first on AWM.

This is especially true in 2020 with the COVID-19 pandemic leaving many Americans unemployed or uncertain about their job security.

What is early retirement?

Some people choose to retire early because they can afford it. Others might not have a choice. In 2020 alone, many of our clients were confronted with layoffs, severance packages, or concerns about health issues.

What should I do?

You might not have a choice. Your employer may simply eliminate your position or even the entire department. If you do have a say in the matter, here is the process you should follow:

1. 1. Educate yourself.

Understand all your options and their consequences. Ask questions and take notes. Learn the implications and consequences of choosing one option over the other. You need to have all the facts when making a decision.

Most of the time, decisions about retirement are permanent. If you accept a severance package, chances are your employer will not hire you back.

1. 2. Work with a Fiduciary Financial Advisor.

Find an experienced professional and talk through your options. They might recommend a hybrid approach you haven’t thought of. They can even brainstorm questions to ask before challenges arise.

A Fiduciary Advisor might also help you plan for outside factors like Social Security and health care costs. Unfortunately, rising health care premiums and taxes can leave you with less income to spend.

Remember, it’s not about how much you make.  Rather, it’s about how much you keep after all expenses and taxes are paid.

It’s important to work with someone who is experienced and can help you find the right option for you and your family.

1. 3. Put your plan into motion.

It can be scary to take the leap, but if you’ve done your due diligence and follow your plan, you will have peace of mind knowing you’re protecting your family. Your plan is like a roadmap, giving you a clear picture of where you’re going.

Don’t forget to check-up on your plan too. Life changes quickly and can impact the success of your retirement.

Try to stay positive.

These are trying times and you might be forced into a decision you didn’t want to make.

Having a solid plan in place will not only ease the stress and anxiety of retiring early, but it will also help you make wise decisions during uncertain times.

You deserve to enjoy your retirement. After all, you’ve earned it.
 

Let’s Get Started

The post Help! I’m being forced into early retirement. appeared first on AWM.

That’s a fair question, but also a complicated one.

Many of you might be able to relate to this situation: your kids come to you with a question.  They are not really seeking you to answer with your wisdom.  Rather, the way they ask tips you off that they actually are seeking your affirmation or approval for their decision or behavior (even if they know better).

I decided to probe a little more deeply.  I wanted to gain a better insight as to what this family was thinking.

It became apparent that they did not seek my professional opinion.  Instead, they were seeking my approval –  to sympathize with the decisions they had already made long ago.

Even all of my best advice would never change their mind. They had already made their plans and wanted to go places. They worked hard and saved a long time for this moment.

So, what’s the answer?

The answer is different for every family.

You know the saying, in real estate it’s all about location.  In retirement, it’s all about budget.

Here are just a few of the many factors to consider:

• When should you take Social Security?
• How much savings could you afford to spend down?
• What if you need assisted living?
• What will your taxes look like?

After we talked and wrote out real numbers, we decided a hybrid approach would work best. My client needed a plan to generate income while chipping away at their debt.

One of the greatest investments a family can make is designing a measurable and achievable Financial Plan.

Retirement will change your life.

The truth is that retirement is one of the biggest decisions you will ever make. Having a plan for this stage of your life is the key to finding success.

I want to see as many people as possible avoid harmful mistakes and make the best possible decisions for their family.

I can’t say it enough. Find a true fiduciary financial planner to work with. You will most likely need a hybrid approach that is tailored to your family’s needs and goals.

My new client’s answer was complicated. For them, a little bit of both options ended up being best.

So, what’s your answer?

Let’s find out!

The post Which is Better: Savings or No Debt? appeared first on AWM.

Unfortunately, one in three families will not have enough money to maintain their lifestyle throughout retirement.

Through these conversations, I’ve been able to narrow down three major pitfalls that many savers make before retirement.

1. They have no plan.

Life gets busy. It’s so easy to put off planning for retirement. Tomorrow is a convenient excuse.

There’s a shocking statistic from AARP: only 23% of Americans have some sort of retirement plan.

Many people spend upwards of 30+ years in retirement. Having a strategic plan is the only way to successfully enjoy retirement with confidence.

2. They didn’t save enough.

This relates closely to #1. Without a plan, how can you know if you’ve saved enough?

There are so many factors that need to be considered. Things like inflation, health care expenses, taxes, the unexpected (like COVID-19), and much more.

If you’re not sure how much you need to enjoy a successful retirement, I strongly encourage you to seek out expert advice and start planning today. Retirement will come faster than you think.

3. They mismanaged their investments.

I see this every single day. And it boils down to three things:

People often invest their savings poorly. Whether it’s holding too much of one position or investing in unreliable holdings, I see people putting their retirement nest egg at risk and even losing a large portion of their assets.

Secondly, budgeting. I’ve known families that make several hundred thousand dollars in annual income, but have nothing in savings and too much in debt. It’s so important to follow a measurable and achievable budget.

Lastly, I think some people are too quick to gift their money to the next generation. Not only might you need those resources for your living expenses, but think about the lost potential returns and future income you might be giving away prematurely.

So, what does your future look like?  Do you know?

It is time to invest in yourself and reap the rewards of your labor.

Keep more of your income and pay less in taxes.

Let’s Talk

The post Why Do So Many People Fail in Retirement? appeared first on AWM.

Sounds scary?  According to Carfax, that is exactly what you get when you buy a brand new car![1]

“The minute a person drives a new car off the lot, it loses approximately 10 percent of its value.”

But wait, there’s more: “On average, a new car will lose 60 percent of its total value over the first five years of its life.”

Given the average new car price is $36,270 according to Kelley Blue Book, that is a sizable investment for all but the most affluent![2]

Our advice? It doesn’t matter if you’re already retired or if you are thinking of taking that next step: we encourage everyone to think twice before spending a big part of your nest egg.

Retirement might be the biggest decision a family or individual can make. Any mistakes you make early on could potentially create a difficult path for you, with often irreversible consequences.  On the flip side, wise decisions you make beforehand potentially could make retirement enjoyable and full of great accomplishments along with the possibility of leaving a positive legacy for your loved ones.

In order to maximize your potential for success in retirement, consider these few critical decisions:

1. When will you take Social Security?
2. Should you pay off debt prior to pulling the trigger on retirement?
3. How will you devise a sustainable strategy for generating income?

My goal, as a financial coach, is to help our clients live purposeful, fruitful lives. As my clients approach the crossroads of life decisions, my role is to assist them to navigate through potential choices and consequences.  My greatest delight is to see my clients fully understand their options and make the best choices for their future.

Schedule appointment

[1] “Car Depreciation: 5 Things to Consider”, CarFax on https://www.carfax.com/blog/car-depreciation  accessed on May 25, 2018.

[2] “Press Releases: Average New-Car Prices Rise Nearly 4 Percent For January 2018 On Shifting Sales Mix, According to Kelley Blue Book”, Kelley Blue Book, February 1, 2018 on https://mediaroom.kbb.com/2018-02-01-Average-New-Car-Prices-Rise-Nearly-4-Percent-For-January-2018-On-Shifting-Sales-Mix-According-To-Kelley-Blue-Book  accessed on May 25, 2018.

The post 5 Ways to Mess Up Your Retirement: Buy a Brand New Car! appeared first on AWM.

Unfortunately, most of your neighbors do not understand this critical concept. Industry website creditcards.com reports that 3 in 4 parents still subsidize the spending of their adult children.[1]

You should not take comfort from repeating the mistakes of the crowd.

When you give your adult children free handouts, you might actually be harming them. Here’s how: 

1. 1. You reinforce irresponsible behavior. When your children’s spending exceeds income, that’s bad behavior. We all need to learn to live within what we earn (unless you want to go deep into debt like many of your neighbors).[2]  Do not subsidize their excess spending.
   2. You transfer this misbehavior to your grandchildren. Imagine if your children passed these destructive habits to your grandchildren! According to the Center for Retirement Research at Boston College, this is precisely what can happen.[3]  Spoiling grandchildren now can tarnish your legacy of the values they live out later.
   3. You ruin your children’s budgets. The reality is that most parents consider gifts to children as one-time in nature. However, many adult children might forget that fact. Their spending adjusts to permanent levels, despite the fact that your gifting is not permanent.
   4. You deprive your children of joy. Adult children who truly love their parents desire for their parents to be happy. While money cannot buy you happiness, being poor does appear to go along with emotional problems, according to debt.org.[4]
   5. You might endanger the future financial well-being of your children. Adult children often fail to consider one very important risk: the risk that they themselves might have to support their parents in their old age.  This risk rises when their parents’ health grows worse. Parents can serve their children best by taking care of themselves first through responsibly enjoying their wealth for their own benefit. They might lessen the risk of children having to support their parents financially later on. Wise parents who successfully raised their adult children to be independent should take pride in that success. Such parents often enjoy better health.

Healthy parents ought to make their children happier, too.

Parents ought to live out the purpose for their lives first. Prudent financial planning can empower you to do this, perhaps with some room (on occasion) to spoil grandchildren.

We would be pleased to help you empower your family to live with purpose.

Schedule appointment

[1] Brady Porche, “Poll: 3 in 4 parents with adult kids help them pay debts, living expenses” on https://www.creditcards.com/credit-card-news/pay-adult-childrens-debt-poll.php  accessed on June 13, 2018.
[2] Tae Kim, “Total US household debt soars to record about $13 trillion” on https://www.cnbc.com/2018/02/13/total-us-household-debt-soars-to-record-above-13-trillion.html  accessed on June 13, 2018.
[3] “Parents Pass (Bad) Money Habits to Kids”, Center for Retirement Research at Boston College on http://squaredawayblog.bc.edu/squared-away/parents-pass-bad-money-habits-to-kids/  accessed on June 13, 2018.
[4] https://www.debt.org/advice/emotional-effects/  accessed on June 13, 2018.

The post 5 Ways You Can Ruin the Financial Future of Your Adult Children appeared first on AWM.