Style Switcher

Predefined Colors

Unexpected Surprises in Retirement – How Retirees Use Their Time

i love surprises however only if they'' re the good shocks do you ever really feel the exact same way in this video clip i'' m mosting likely to share the unexpected reality that doesn'' t need to be a shock in retired life retirees actually they know this yet not to the extent we'' re mosting likely to look at in this video clip and if you'' re not knowledgeable about this and also you don ' t prepare then you might get captured off guard in retirement which we definitely wish to prevent in a few seconds i'' m mosting likely to place up a photo and also this is mosting likely to be truly important because it'' s going to be just one of the keys to living a perfect retirement prior to i do that i'' m dave zoller and also i assist people retire efficiently i run a retirement preparation company called streamline financial and also me and also my team tim as well as luke and sean we'' ve been running this for'i ' ve been running it for the last 13 years and actually it'' s been around for 22 years if you'' re believing about your very own retired life we have a couple of areas open this month for a complimentary planning session so locate the link listed below currently let'' s bring up this image this shows the results of exactly how americans invest their time by age and also there'' s one component of this chart that catches a great deal of retired people unsuspecting once they get right into retirement life so i wish to share it with you so that you'' re prepared currently here ' s the recap of the very first uh the more youthful years of life here it is time spent with household as a child that comes to a head at about 15 years of ages your time spent with your good friends actually peaks around 18 years of ages once again this mores than numerous lots of people that that they'' re polling right here time spent with associates peaks at around three decades old and after that time spent with your children as an adult with your very own kids comes to a head at around 40 years of ages currently here'' s both things that not everybody in their 50s and also 60s considers the first one is essential yet i think that the second one is the one that'' s truly critical to know about as well as just get ready for the very first one is time invested with your partner rises and it comes to a head at around age 70.

so we understood that already that makes good sense however a lot of people wear'' t realize a few of the challenges that come with this i'' ve seen the strongest couples experience this adjustment duration when both of them currently are made with job as well as they'' re at residence together or if one has been home and has this regular and after that the person who retires is available in and also sort of interrupts the routine currently you might not have any worries around this and you'' re truly anticipating investing every waking hr with each other in retirement if that'' s you it may a minimum of be worth paying attention to several of the various other pairs that have experienced this as well as simply you know what are the things that they they deal with the simplest method to do it is either speak with people that you recognize that are a couple of years ahead or register for this network because i'' m mosting likely to be speaking with individuals who are doing exactly what you'' re mosting likely to be doing in retirement so be sure to subscribe and afterwards you won'' t lose out on those video clips currently this is the really essential one this is the 2nd point we recognize that this makes typical sense but not everybody is ready for it then that is time on your own will continue to increase up until you die we see social relationships related to work disappears indicating customers and consumers or the interactions there goes away the co-workers the interactions there goes away other individuals in your area whatever you understand may be other associates whatever it is that kind of vanishes when you retire all others with the exception of your partner decline that peaks are at 70 like we considered and also time on your own remains to boost now introverts viewing this could be like not a problem for me to do this that seems excellent however even autists know that in their 70s the ones that we understand they still need to consider having some they do have some value from other social communications they require they need something they require human interaction exhibitionists i recognize they'' re thinking you know no as they ' re looking at this so just how do you prepare for this action one you did it already you'' re familiar with the truths which is good action two assume have you ever before satisfied someone that'' s in retirement and also they just seem to be doing it appropriate or they may just be loving life can you meet with them on this network i'' ll share some stories as well as i'' ll share some experiences of various other retired people doing it right so subscribe to make sure that you don'' t miss it currently step three ensure that you construct in means during retirement to expand you'' ve listened to that curiosity is the eternal youth with interest you discover as well as learning provides you a sense of progression as well as as well as sort of reaching the following degree progress causes development and we understand as we age our bodies age yet we can still stay psychologically sharp we can still challenge ourselves and also we can still make progression in life one inquiry i'' d like at the end of the day to simply make certain that we'' re accomplishing progression psychologically and physically ask yourself this inquiry what progression did i make today that made today much better than yesterday and after that also at the same time after you create that down or believe regarding it respond to the concern what progression can i make tomorrow that can make tomorrow much better than today those are simply a few ideas about just how this increased time that we have with ourselves in retired life exactly how to best usage it consider it currently to make sure that we'' re ready as well as if you intend to take a look at this chart closer seek the link in the description likewise locate the function in retired life journal that i'' m creating that can be helpful as yourself type of self-reflecting and also considering how you want this following stage to be so thanks for viewing if you liked it please click such switch hopefully you subscribe and afterwards i'' ll see you in the following video clip make sure [ Music] you

As found on YouTube

Florida Retirement

Read More

Pay This Off Before You Retire – Retirement Planning Tips

in this video we'' ll take a look at what costs you need to think of removing before retiring and also a few mistakes that senior citizens make when it comes to expenses in retirement there'' s a few things that you may want to bid farewell to prior to you bid farewell to that wage or that work revenue we ' re going to cover this in 3 parts it ' s mosting likely to'resemble this initial we ' ll discuss needs and desires and after that what i ' d phone call freeway burglary and after that additionally what to ear mark in retired life we ' ve seen that the retirees that can obtain rid of these expenditures prior to retiring have a little extra breathing space and they feel better concerning their retirement due to the fact that when you ' re preparation for retired life we usually think of truly 2 kinds of expenses it ' s the demands which are the basics the absolute must-haves to simply live you referred to as you consider my maslow'' s hierarchy of requirements those things at the base layer and'after that there ' s the wants which are the the good to have things yet after that there are various other kinds of costs that truly don ' t suit that group of needs or wants those are the points that we need to be finished with before retired life as well as incidentally i'' m dave zoller as well as me as well as my team we run enhance economic it'' s a wealth administration company focused on retirement planning and also we'' ve been assisting people personally for 13 years and simplifies been around for 22 years and we created this network to share what'' s dealing with our customers so that you can benefit as well so if you'' re near to retired life make certain to subscribe due to the fact that i share one new video weekly to make your retirement a little bit much better i also put some complimentary sources in the summary below like my preferred diy retirement planner if you'' re more of a do-it-yourselfer so allow'' s obtain into the checklist and after that as you ' re enjoying if i leave something out please share it in the comments listed below i'' d love to listen to from you and after that also i'' ll try to reply back to depending upon just how lots of comments i get so the initial two you will probably agree with however you may not be considering the other ones as well as i desire to reveal you means to prepare and just ensure that your retired life is a bit smoother by utilizing our retirement planning software application the first one which you currently know is to settle high interest debt which i in some cases take freeway break-in it'' s when those rates of interest are just so high and also they ' re charging individuals it simply appears unfair right that high rate of interest financial debt i'' m describing is normally credit score card debt and also often it'' s pupil financing financial obligation and you'' d be stunned at the number of individuals that in their initial year of retired life they still have a large monthly settlement in the direction of credit rating card settlements or trainee financing financial obligation and this must be the number one thing that we must concentrate on to actually lower prior to we state goodbye to that work earnings or that wage since if you retire with charge card debt and after that you buckle down about paying it off in retired life then that indicates you'' ve got this larger amount that you got to take from investments which can modify your retirement prepares i helped a woman recently who'' s not a customer but she was looking at her strategy and she wanted some aid as well as she had concerning 20k of charge card debt she likewise had more than a million dollars and her routine expenses including on this 20k of a swelling sum cost to her strategy it really made fairly an influence and also once we took a look at that together it gave her the motivation to work a bit extra and also additional hard to obtain this financial debt payment to zero or get the bank card financial obligation down to absolutely no before retiring due to the fact that she'' d have a higher assurance and it would simply increase her confidence as she was going into retirement that assurance it'' s crucial right i ' m sure you ' re feeling the exact same method i really intend to share a little bit much more regarding just how to accomplish this before you retire and throughout retirement and i share that at the end of this video clip so stay tuned the following ones are expenses that you can either pay early or at the very least you desire to set aside these in your retired life plan as well as i'' ll reveal you what i mean when i say allocate that just indicates setting apart funds for specific functions and also either not consisting of those funds in your retirement strategy or including them however a minimum of revealing the specifics within the plan and i'' ll show you some photos coming up of a retirement plan and just how to do this primary point to allocate is any kind of big travel expenditures that you'' re eagerly anticipating that very first year of retirement or really the initial couple of years of retirement a great deal of individuals start retired life as well as they'' ll truly have a large special trip that they ' ve constantly intended to take or a location that they'' ve constantly wished to most likely to as well as great deals of times that vacation it'' s mosting likely to cost even more than the common getaway that you might handle a regular year it'' s actually that cap to uh ending job and after that actually doing a larger than regular trip some customers select to take among those european uh river cruises that are pretty popular as well as they can cost 10 to 20k or more as well as understanding that this is a bigger than typical expenditure or a round figure expense coming soon right into retirement you can either pay that ahead of time like really much of the cruise areas make you do or you can at least earmark it in the plan and ensure that everything collaborate with everything as well as i'' ll throw it in there as an instance turning up quickly below'' s an example of a retirement that'' s based upon annual expenses going up annually 3 percent routine rising cost of living rate and also then over on the left side we can include some expenditures that are larger and also irregular you recognize not the normal yearly costs however things we can allocate to make sure that we can see the impact of on the strategy before actually investing the money and doing it this means we can add some comfort to your retired life plan as well as your confidence as you'' re cash therefore you can simply really feel that it'' s a great choice and also feel excellent about that getaway or whatever it may be a few other bigger than regular single costs we'' ve seen belong to your adult youngsters if you have them whether it'' s last university expenses or perhaps a wedding that you intend to assist with or future gifts possibly in the direction of a house acquisition or something like that for those you'' re not truly able to pay those prior to you retire because we wear'' t recognize when they ' re mosting likely to happen so earmarking them is the following finest action and setting funds apart to make certain that these prospective expenses that you could have in the future are prepared and also readily available prepared to release when needed one error that we'' ve seen some senior citizens make obtaining close to retirement is not factoring in these single costs and afterwards obtaining caught a little unsuspecting when it'' s time to spend for them particularly if we'' re in a market like we are now now you could be thinking one huge expenditure that i did not point out and also prior to i share that one if you enjoyed enjoying this video clip thus far and you located it useful please click the like switch so this can hopefully spread out to other individuals that resemble you as well as could locate it practical also so that one large expenditure that you could be considering that i didn'' t mention yet is paying off your entire home mortgage before you retire and also this is a huge one for numerous people as you'' ve listened to prior to behind every economic decision there'' s additionally a psychological one as well and lots of people they feel extremely highly or maybe adamant on on being debt-free in retirement as well as that'' s an actually fellow feeling for for lots of people for others relying on their economic decision it really a home loan might actually make good sense in retired life some people see it as a fixed expenditure which doesn'' t rise with inflation it in fact gets more affordable as whatever else increases with inflation and also as one dollar can get much less as well as much less in time which is generally what what rising cost of living is it might be at really eye-catching rates of interest also and also some people intend to have a little bit more flexibility in their pension by keeping some funds available in their non-retirement accounts versus utilizing that cash to repay the home loan the more crucial point to to consider when choosing whether this makes feeling whether to pay it off or not is try to determine first simply the psychological sensation or convenience with financial obligation you know on your own and after that likewise your spouse if you'' re wed and after that tip 2 is draw up both scenarios what does it appear like that strategy that we'' re simply checking out over here what does it look like if you settle debt early or put on'' t repay the home loan at all appearance at the distinction see which one'' s alright great deals of times it comes down to the strength of the emotional feeling around financial debt for one individual in the relationship or if it'' s simply you after that'it ' s simply whatever you prefer when we'' re thinking about repaying costs or allocating points in retired life obtain assist from a financial specialist a cfp could be an excellent area to begin however i'' d like to hear from you what did i not state as we'' re thinking of these various expenses in retirement i'' d love to hear your thoughts concerning these expenditures and also specifically the thoughts on home mortgage having a home loan in retired life as well as i wish to share one more video clip regarding just how raising comfort and also ensuring that you get both parts required for a successful retired life the unfortunate thing is that in this market the financial industry most of the time they concentrate on something however here'' s a video to see that ' ll aid you consider and also prepare for both sides of retired life so ideally i'' ll see you there as well as if you place ' t currently subscribe and afterwards i'' ll see you in future video clips make sure you

As found on YouTube

Florida Retirement

Read More

The 4% Rule for Retirement (FIRE)

If you have spent any time researching retirement planning online, you have heard of the 4% rule. If you haven’t heard of it, the 4% rule suggests that if you spend 4% of your assets in your initial year of retirement, and then adjust for inflation each year going forward, you will be unlikely to run out of money. To put some numbers to it, if you wanted to retire and spend $40,000 per year, adjusted for inflation, from your portfolio, you would need to retire with one million dollars to adhere to the four percent rule. This rule is alternatively described as the requirement to have 25 years worth of spending in your portfolio to afford retirement. 1/25 equals 4% – it’s the same rule. While it is simple and elegant, the 4% rule is probably not the best way to plan for retirement, especially if you plan on retiring early. I’m Ben Felix, Associate Portfolio Manager at PWL Capital. In this episode of Common Sense Investing, I’m going to tell you why the 4% rule is not a rule to live by.

The 4% rule originated in William Bengen’s October 1994 study, published in the Journal of Financial Planning. Bengen was a financial planner. He wanted to find a realistic safe withdrawal rate to recommend to his retired clients. Bengan’s breakthrough in determining a safe withdrawal rate came from modelling spending over 30-year periods in US market history rather than the common practice of simply using average historical returns. Using data for a hypothetical portfolio consisting of 50% S&P 500 index and 50% intermediate-term US government bonds he looked at rolling 30-year periods starting in 1926, ending with 1992. So, 1926 – 1955, followed by 1927 – 1956 etc., ending with 1963 – 1992. The maximum safe withdrawal rate in the worst 30-year period ended up being just over 4%. From this simple but innovative analysis, the 4% rule was born. More recently Bengen has adjusted his spending rule to 4.5% based on the inclusion of small cap stocks in the hypothetical historical portfolio.

While the 4% (and the 4.5% rule) may have basis in historical US data, there are substantial problems with these rules in general, and specifically in the case of a retirement period longer than 30 years. In his 2017 book How Much Can I Spend in Retirement, Wade Pfau, Ph.D, CFA, looked at 30-year safe withdrawal rates in both US and non-US markets using the Dimson-Marsh-Staunton Global Returns Dataset, and assuming a portfolio of 50% stocks and 50% bills. He found that the US at 3.9%, Canada at 4.0%, New Zealand at 3.8%, and Denmark at 3.7% were the only countries in the dataset that would have historically supported something close to the 4% rule. The aggregate global portfolio of stocks and bills had a much lower 30-year safe withdrawal rate of 3.5%. Considering returns other that US historical returns is important, but, in my opinion, one of the most important assumptions to be aware of in the 4% rule is the 30-year retirement period used by Bengen. People are living longer, and many of the bloggers citing the 4% rule are focused on FIRE, financial independence retire early.

In Bengen’s study the 4% rule with a 50% stock 50% bond portfolio was shown to have a 0% chance of failure over 30-year historical periods in the US. That chance of failure increases to around 15% over 40-year periods, and closer to 30% over 50-year periods. FIRE likely means a retirement period longer than 30 years. Modelling longer time periods using historical sampling becomes problematic because we have data for a limited number of historical 50-year periods.

One way to address this issue is with Monte Carlo simulation. Monte Carlo is a technique where an unlimited number of sample data sets can be simulated to model uncertainty without relying on historical periods. Even with Monte Carlo simulation, there is an obvious risk to using historical data to build expectations about the future. The world today is different than it was in the past. Interest rates are low, and stock prices are high. While it may be reasonable to expect relative outcomes to persist, such as stocks outperforming bonds, small stocks outperforming large stocks, and value stocks outperforming growth stocks, the magnitude of future returns are unknown and unknowable. To address this for financial planning, PWL Capital uses a combination of equilibrium cost of capital and current market conditions to build an estimate for expected future returns for use in financial planning. This process is outlined in the 2016 paper Great Expectations.

Using the December 2017 PWL Capital expected returns for a 50% stock 50% bond portfolio we are able to model the safe withdrawal rate for varying durations of retirement using Monte Carlo simulation. We will assume that a 95% success rate over 1,000 trials is sufficient to be called a safe withdrawal rate. For a 30-year retirement period, our Monte Carlo simulation gives us a 3.5% safe withdrawal rate. Pretty close to the original 4% rule, and spot on with Wade Pfau’s global revision of Bengen’s analysis. Now let’s say a 40-year old wants to retire today and assume life until age 95. That’s a 55-year retirement period. The safe withdrawal rate? 2.2%. I think that this is such an important message. The 4% rule falls apart over longer retirement periods. So far we have talked about spending a consistent inflation adjusted amount each year in retirement. One way to increase the amount that you can spend overall is allowing for variable spending. In general this means spending more when markets are good, and spending less when markets are bad. The result is more spending overall with a lower probability of running out of money. The catch is that you have to live with a variable income or have the ability to generate additional income from, say, working, to fill in the gaps when markets are not doing well.

We also need to talk about fees. Fees reduce returns. Fees may be negligible if you are using low-cost ETFs, but they become extremely important if you are using high-fee mutual funds, or if you are paying for financial advice. The safe withdrawal rate in the worst 30-year period in the US drops to 3.56% with a 1% fee, making the 4% rule the more like the 3.5% rule after a 1% fee.

Adding a 1% fee to the Monte Carlo simulation reduces the safe withdrawal rates by around 0.50% on average. In both cases this is a meaningful reduction in spending. Of course, fees need to be considered alongside the value being received in exchange for the fee. This value should be heavily tied to behavioural coaching and financial decision making. There have been two well-known attempts to quantify the value of financial advice, one by Vanguard and one by Morningstar. Vanguard estimated that between building a customized investment plan, minimizing risks and tax impacts, and behavioural coaching, good financial advice can add an average of 3% per year to returns. Morningstar looked at withdrawal strategies, asset allocation, tax efficiency, liability relative optimization, annuity allocation, and timing of social security (CPP in Canada), to arrive at a value-add of 2.34% per year.

PWL Capital’s Raymond Kerzerho has also written on this topic, finding an estimated value-add of just over 3% per year. Based on these analyses, one could argue that paying 1% for good financial advice could even increase your safe withdrawal rate. I would not go that far, but the point is that while fees are a consideration, they may be worthwhile in exchange for good advice.

As found on Youtube

Read More