Tag Archives: Independent Agents

Making Retirement Money Last to 103: An Expert’s Plan for Himself

Americans worry about affording retirement, but that doesn’t usually translate into hard-core financial planning. Then there’s David Littell, the 61-year-old director of the retirement income planning program at the American College of Financial Services, a nonprofit that educates financial advisers. If anyone ought to have a well-thought-out plan, it’s this guy.

So we asked him what’s in it.

It’s a little intense—this is one well-prepared pre-retiree, and one who knows his insurance products, since the college’s focus has historically been on educating insurance agents.1  While the challenge of ensuring he won’t outlive his money isn’t unique, his attitude may be. “I find this fun,” he said. A sign of how into this stuff he is? Before a follow-up call, he e-mailed a three-page, 1,500-word, bullet-pointed outline of his thinking.

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More American savers skimp on retirement plans

Americans are saving more, just not in their employer-sponsored retirement plans, according to a new analysis by retirement market researcher Hearts & Wallets.

Average annual household savings increased almost a full percentage point to 5.5 percent last year, up from 4.6 percent in 2013, based on Hearts & Wallets’ annual survey of 5,500 U.S. households. (The personal savings rate this May was 5.1 percent, according to the latest release from the Federal Reserve Bank in St. Louis.) But the percentage of household savings that went into employer-sponsored retirements plans like 401(k)s fell 7 percentage points to 22 percent in 2014, and households participating in employer-sponsored plans declined to 56 percent last year from 60 percent in 2013.

“Our research shows that the average saver was more focused on building an emergency fund than saving for retirement last year,” said Laura Varas, co-founder of Hearts & Wallets. The percentage of households that said they set aside money to deal with unexpected expenses grew from 37 percent in 2013 to 45 percent in 2014.

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Retirement fear: Inflation

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When you were a kid, did you fear monsters hiding in your closet or under your bed? You’re no kid anymore and new fears haunt you — such as running out of money in retirement after a lifetime of watching prices go up. You can still plan now to enjoy enough to spend as well as how to spend it.

People do feel slightly better about their golden years’ money these days, according to the latest Employee Benefit Research Institute survey on retirement confidence. More than one out of five workers are now very confident – though almost one in every four express little faith that they’ve saved enough, with future medical expenses being a major concern.

Nagging worry about what’s missing in our retirement plans can be very justified. Additional good news is that you can manage such fears.

You need to consider many risks in your planning process, especially the often-ignored creep of inflation. While a bad price spiral is hardly inevitable, a more muted pace of inflation remains a good bet. Best estimates put the coming years’ overall price jumps at about 2% annually — much as anyone can predict such a figure.

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Afraid of outliving your money? Here’s one solution

If you think saving for retirement is hard, wait until you start thinking about how to make the money last.

It’s a challenge that policymakers are focusing on more intently, especially since features like automatic enrollment are encouraging people to save more.

Some 55 percent of workers in a 2014 survey by the Employee Benefit Research Institute were at least somewhat confident about having enough money for retirement, including 18 percent who were highly confident. That’s an improvement from 2013, when just 13 percent were highly confident their nest egg was big enough. But many of those investors don’t seem to have a handle on how much money they can and should draw down after they stop working.

You can prevent running out of money and not being secure in your, or your clients retirement by being a knowledgable and educated planner. The best way to do that is to learn from someone who is. Just click here.

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Quarter-million-dollar baby: Cost of raising kids

Young girl with magnifying glass and pile of coins

Kids cost HOW much?

Let’s face it: Kids don’t come cheap. But ask any parent and they’ll more than likely say their children were well worth the cost in not only time and treasure but blood, sweat and tears, as well. But have they—or you—actually thought about just how much, in dollars and cents, it actually costs to raise a kid to age 18? Well, the federal government has done the math for you. According to the U.S. Department of Agriculture, middle-income American parents can expect to spend a total of $245,340 to raise a child who was born in 2013 (the latest year for which figures are available).

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Shrinking Social Security advantage for couples

Social Security has more than its share of critics, but over the years it has managed, at least, to provide a special cushion for some women.

Because women in the past were less likely to work and tended to accumulate less in Social Security benefits, married women have disproportionately benefited from the spousal benefit, which entitles them to as much as half of their partner’s Social Security benefit. And because women tend to outlive men, they are more likely than their husbands to receive Social Security survivors benefits.

But that gender gap is closing, according to recently published research from the Center for Retirement Research at Boston College.
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Advisors ease emotional hurdles of retirement!

Smiling senior couple

Retirement is the big financial finish line, but clients often don’t know what they want to do when they get there. Advisors are delving into psychological aspects of retirement planning to help them figure it out.

The need for this became clear to Amy Jo Lauber, certified financial planner and owner of Lauber Financial Planning, 15 years ago when 10 of her clients were offered early retirement packages—and eight were dead within a year of accepting them.

“They had enough money, but they didn’t have enough interests [or] activities to make a new life,” she said.

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State budget balancing is putting pensions at risk

Some 150 state and local pension funds reported assets under $3 trillion to cover the estimated $4.1 trillion needed to pay benefits.

When it comes to the recent improvement in state finances, one retiree’s pain is another one’s gain.

More than five years after the Great Recession tore a giant hole in their budgets, most states have made big progress in stabilizing their finances.

That’s good news for millions of state taxpayers and the millions of investors who hold state-issued municipal bonds—many of whom are retirees that depend on them for a steady stream of safe income.

But the improved fiscal health owes much to a wave of cuts that have whittled away at pension benefits for current and future retirees.

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