On June 30th, the S&P 500 Index closed at 1,960, a long, long way from the tail end of The Great Recession in March of 2009 when it bottomed out at 677.
Do you remember what the consensus was within the financial media back in 2009?
It certainly wasn’t, “what a great opportunity to buy companies at bargain prices!”
Instead, it was Armageddon. Total chaos!
“This time it really …
Assuming today is just an average day in 2014, 10,000 Americans will turn age 65.
This is extremely significant because the first baby boomers (those born in 1946) began celebrating their 65th birthdays three years ago.
And on average, ten thousand Americans will achieve this milestone each and every day through 2020.
There has never been another statistic like it (in sheer numbers, and as a percentage of …
As has become the norm in our household, we had a front row seat watching my wife Colleen train for and run the Boston Marathon last Monday along with 39,000 other runners.
Fortunately, her training paid off and she had a good day.
Every year while I’m watching, I can’t help but think that there is so much we can all learn by closely observing the Boston …
During periods of turmoil and above average market volatility, I’ve noticed a very distinctive habit that all successful retirees have formed.
That habit is making a clear distinction between which “hat” they’re wearing, and properly managing their “state” to match it.
Let me give you an analogy first.
In life, we all wear many hats. For example, a few of them for me are:
To be …
We’re going to take a short break in the action in order to wish you an emphatic HAPPY ANNIVERSARY!
There’s actually a spectular strategic lesson imbedded in it so it’s not all celebration.
What anniversary are we celebrating you may be asking?
Well, unlike you or I forgetting our wedding anniversaries and getting into hot water with our spouses, if THIS anniversary doesn’t immediately pop …
If you’ve done any reading on the topic of retirement, there’s a term that is used in many circles known as “THE NUMBER”. In other words, “what’s your number”?
What this refers to is the amount of money you need in order to support your lifestyle without working.
In most instances, when I meet someone for the first time, one of the things they want to know …
As we move into a new year together, it’s always a good idea to take an intelligent look at the most recent year for some historical perspective. Especially since it was such a volatile year.
Interestingly, I haven’t heard anyone, in any venue, describe 2013 as volatile.
Interesting because broad domestic equity prices went up roughly 30%. Yet, nobody referred to 2013 as volatile.
Had market prices fallen …
One of the questions I receive quite often is, ‘when we need money from our investments, how do you determine where we should draw it from’?
It’s a very important question and answer that I’d like to share with you because it ties into a year-end tax strategy that I recommend you pay close attention to.
All other variables held constant for a moment, I’m always looking …
Over the last 24 years of coaching individuals and couples to a make a seamless transition to retirement, I’ve witnessed many similarities among those I’ve worked with.
Some of those were good such as the tremendous discipline employed by so many to diligently save and accumulate the necessary resources to be able to stop working and retire if they chose to.
On the flip side, however, I’ve …
I hope you’re appreciating the reporting of the current ‘Apocalypse du Jour’ (i.e. the federal government shutdown) as much as I am.
We now have yet another reason to be scared out of our wits and run for cover. Financial markets can’t possibly withstand yet another crisis!
Or can they?
Before answering that, take a moment to recall this brief list of recent “crises” which, at some point …
Having to deal with the emotional and psychological effects of losing a spouse or parent is always difficult.
Having to also deal with their financial affairs and the tax implications is enough to put you over the edge. The consequences of making a wrong decision are enormous.
Landmines are everywhere, especially when your family inherits your IRA and/or 401(k).
If they’re not informed, almost half of your IRA …
Here’s Wall Street’s Market Watch on Monday, June 24th at 10:18 a.m.:
Headline: “U.S. Stocks Slide on China-Led Global Selloff”
“Monday’s selloff comes after last week’s bruising selloff on Wall Street…European stocks tumbled and Shanghai stocks melted down….”
After quite a run so far this year with very few down days, equity prices cooled off toward the end of last week and now into this …
“The stock market’s at an all-time high. There’s no way it can keep this up. We must be due for a big correction.”
With the stock market’s solid run to an all-time high recently, this is the comment I hear the most lately which is undoubtedly due to what everyone hears in the press who continues to be angry at their inability to explain it.
The underlying …
Last week, we identified what everyone must think through way before ever discussing long term care insurance with an agent.
Now, let’s move on to the second critical thought process that must take place before you enter the long term care conversation.
Let’s begin by recapping what we know so far about our case study involving John and Mary:
We know that John and Mary are …
One of the questions I receive all the time, predominantly from new Relaxing Retirement members, is “should we pay off our existing mortgage”?
That’s a really good question which has no cut and dried answer to it. My answer always involves asking a lot of questions, so I thought I’d share those with you today in the hope of helping you arrive at a good answer …
While dissecting The Relaxing Retirement Formula™ over the last few weeks, and sharing the first three Principles and Guidelines to follow to help you answer the question of where to position your investments to produce the long term rate of return you need to earn while experiencing less volatility and paying less taxes to the government, I’ve focused on what TO DO …
We’re getting there!
Over the last few weeks, I’ve exposed you to the first steps in The Relaxing Retirement Formula™ which were all developed to help you determine your level of Retirement Bucket™ Dependence (the amount you need to withdraw from your investments each year, over and above social security and pensions, in order to live exactly the way you want).
You’ve done this by getting crystal …
As we begin the new year together, it’s a the perfect time to integrate and install each step in The Relaxing Retirement Formula™ so you can continue to maintain the financial confidence you need to live exactly the way you want without worrying about money.
Before we do that, however, I’d like to share a conversation I recently had which I believe will be very instructive, …
As I write this, there is still no agreement between the President and Congress over a budget deal for 2013.
Gee, now there’s a surprise! Who could’ve predicted this??
Okay, humor and politics aside, no matter what agreement they reach, there are steps you can and should be taking right now to prepare yourself for one key area of the budget where you still retain some control: …
Last month, I revealed an incredible statistic reported by DALBAR, Inc., a Boston based research firm.
They revealed the fact that while the S&P 500 Stock Market index earned 7.81% per year over the last 20 years, the average investor who invested in the stock market earned only 3.49%!
Go ahead and re-read that last sentence to let it sink in!
This means that that average investor …
Earlier this month, I shared the grim and disturbing findings revealed in DALBAR’s annual report.
To refresh your memory, here’s what the report revealed for last year, i.e. 2011:
The S&P 500 Stock Market Index earned 2.12% (including dividends reinvested) in 2011
Warning: This article contains graphic descriptions that might be unsettling.
The smell of Fall is in the air. There’s nothing like it.
The sun is bright, and the brown, orange, and yellow leaves are falling.
It’s 3:30 on a Saturday afternoon and you’re driving home from your granddaughter’s soccer game so proud of her for scoring the winning goal.
There’s nothing quite like the screams of an excited group …
As we roll through this election season, taxes have taken center stage.
While very little consensus has been reached on income and capital gains tax rates, there has been progress on estate taxes since the 2010 election.
To refresh your memory, estate taxes are levied at your death on your assets above a certain amount. In other words, even after a lifetime of paying dozens of taxes, …
If you’ve ever had the unfortunate job of settling an estate for a family member or friend who didn’t have a proper plan in place, then you know just how awful it is.
Unnecessary delays, never ending trips back and forth to the attorney’s office and, of course, fees.
Whenever this subject comes up with a new Relaxing Retirement member, it always lights a fire.
I’ve yet to …
Previously, we laid the groundwork in answering the question, “Should we buy or lease our next new car?”
As promised, let’s now analyze the pros and cons of buying vs. leasing a new $30,000 car.
For the sake of our discussion today, there are two important points to make:
All money that you spend to purchase and maintain a …
As we head into the fall season, it’s a great time to do a little “Top 6% Club Check-Up” to see which club you choose to belong to.
Note that I said “choose”. I did this very intentionally because it is a choice. Your personal results are not pre-determined. Studies continue to show that your results are significantly influenced by what you do and …
Labor Day means many different things to many different people.
For some, it marks the end of Summer. This is the predominant meaning for those going back to school!
For others, it represents the national holiday created over 100 years ago to celebrate the achievements of American workers….and, thus a day OFF from work!
Does Labor Day have any significance for you, or is it “just another day” …
Let’s continue our discussion from earlier this month about our new Relaxing Retirement members, Ron and Rita (names changed to protect their identity).
I’d like to expand on the second major factor they need to consider when deciding if they should begin collecting social security now while they’re age 63 vs. waiting until they’re 66 and have reached social security’s definition of “Full Retirement Age” (FRA).
As many of you know, last Fall, we received a very sad phone call from Susan, a young woman who was calling on behalf of her mom, Jane. Jane, age 64, was referred to us by her best friend (a Relaxing Retirement member).
The reason for the call was Jane’s husband Charlie had recently passed away after suffering a massive heart attack at the young age …
As I mentioned recently, I began working with new Relaxing Retirement members (Ron and Rita) who had a host of questions surrounding social security.
Since they were both age 63, one of their first questions was, “should we start collecting social security now, or wait until age 66?”
As I explained to Ron and Rita, there are 2 major factors to consider before collecting social security benefits …
You’ve paid off your mortgage.
You’ve paid off the last of the college loans.
You’ve paid for the last of the kids’ weddings (well, you hope so)!
You’ve saved and done all the necessary planning to put yourself in the position to stop working if you want to.
The kids are now all out on their own and independently supporting themselves.
Well, not so fast with the last one!
You’ve taken the steps you need to take.
You’ve determined the amount of income you’re going to need to withdraw from your Retirement Bucket™ (accumulated investments) each year to supplement your social security and pension income.
You’ve calculated the investment rate of return you now ‘must’ earn to produce that supplemental income each year and still keep pace with inflation.
You’ve even carefully crafted your investment allocation to …
I recently had a great conversation with my daughter Caroline (age 12) and my son Michael (age 10) that I’d like to share with you.
I asked them a few questions that I suggest you ask anyone you have a relationship with. I promise that it will be a fantastic conversation starter!
Here’s how our conversation started:
Take a look around you for a minute and tell me …
37 years ago, you purchased the home you raised your family in.
It’s been a great home. You know every inch of it, and you’ve taken miraculous care of it over the years.
The memories of your three children being born and taking their very first steps here will be etched in your mind forever.
But, now they’re all grown up and have families of their own.
You’ve been …
Another tax season is coming to a close! That’s good news for all of us.
I recognize that I’m a little different, but one of the tasks I really enjoy is reviewing your tax returns each year.
A tax return tells me so much about your financial affairs, and it provides a terrific opportunity to save money not just now, but for many years in the future.
While dissecting The Relaxing Retirement Formula™ over the last few weeks, and sharing the first three Principles and Guidelines to follow to help you answer the question of where to position your investments to produce the long term rate of return you need to earn while experiencing less volatility and paying less taxes to the government, I’ve focused on what TO DO as opposed to …
As we discussed last month, investing during your retirement years is drastically different than in your ‘working’ years when your spending needs were supported by income from work.
It all starts with knowing the rate of return you must earn in order to have your retirement savings provide the lifestyle you want without running out of money.
Once you’ve calculated the rate of return you must earn, …
If you pick up a copy of the January issue of Money magazine, or Kiplinger’s, or even Fortune, you’ll see all the winners in the mutual fund game in 2011.
Every January, each of these magazines ranks the highest returning funds in various asset categories over the prior year.
Champagne pours at the companies at the top of the list because they know what’s next.
What’s next is …
We’re getting there!
Over the last few weeks, I’ve exposed you to the first steps in The Relaxing Retirement Formula™ which were all developed to help you determine your level of Retirement Bucket™ Dependence (the investments you’ve built up over your lifetime).
You’ve done this by getting crystal clear on all of your income sources, and what it costs you to support the exact lifestyle you want.
Dependence is not exactly an inviting term! Who wants to be ‘dependent’ on anything or anybody?
However, if you want to develop true financial independence, and be in a position to make rational decisions about your future based on fact, then you have to first determine your level of Retirement Bucket™ Dependence.
In a previous blog, we discussed two couples, both age 65. As a refresher, here’s …
There’s a direct link between your level of confidence on a day to day basis and the quality of your life.
When you’re in a state of fear and unrest, how easy is it to relax and enjoy yourself?
Not very easy at all.
Specific to money, which is the means with which we all support our desired lifestyle, developing and maintaining supreme financial confidence is more necessary …
I have two very important stories I’d like to share with you today.
I strongly recommend that you settle in for a few minutes to read them because I think this article is as important as any I’ve shared with you this year.
The first is an Associated Press story that was recently released:
BOOMER BUST—Poll: Anxiety About Retirement Grows
By Jennifer Kerr—Associated Press
Wednesday, Nov. 9, 2011— So much …
As we move through December, it’s a great time to see if you can benefit from “year-end harvesting” before it’s too late.
By harvesting, I mean utilizing any unused capital losses that you’ve realized in prior years, and potentially this year, to save yourself a bundle in taxes.
As painful as realizing a capital loss is, the great news is you can recover a significant portion of …
In honor of Thanksgiving and the start of the holiday season, we’re going to take a sabbatical from our usual financial strategies so I can share a terrific story with you that I know you’ll want to share with your family today.
A few years ago, Relaxing Retirement member Bob Weston shared this with me and I really liked it.
The Mayonnaise Jar and …
Last month, I shared the story of Gary and Barbara and the good and bad news I had to share with them.
The good news of them having enough financial resources to comfortably retire right now was, unfortunately, overshadowed by the bad news.
And, that bad news as that if they continued to invest the same way they had, their financial resources would run out in 7 …
Well, it’s now official. We’re dealing with a bear market.
As you’ve heard me say before, after experiencing markets like this with our Relaxing Retirement members over the last 22 years, I know just how troubling all of this bad news is to deal with, especially when you’re at the stage in your life where you’re dependent on the money you’ve saved to support you, as …
After outlining some of the pros and cons of annuities last month, the question then becomes “given those pros and cons, when should we consider using an annuity?”
Before addressing situations which I believe are an inappropriate uses of annuities, I thought I’d provide you with a couple examples of situations where annuities might be appropriate for you.
To review, annuitizing means turning your savings into monthly …
Different economic cycles lead to various financial products being marketed very aggressively.
Gold is a great example of that. Every time the Fed mentions loosening up the money supply, we can count on the “gold folks” to put their marketing in high gear.
Another great example of this is annuities.
Whenever the stock market experiences periods of higher than average volatility, annuities become a hot topic of conversation. …
All of our discussions lately about trusts, estate taxes, and probate have lead to a host of questions about “gifting”, so I thought I’d dedicate an entire article to answering all the questions I’ve received.
What is considered a “gift”?
This may sound like a ridiculously simplistic question, but from a federal estate and gift tax perspective, the definition is very clear.
A gift occurs when …
As the final days of 2010 were counted down, you may recall that Congress and the President enacted the 2010 Tax Relief Act.
While not much changed on the income and capital gains tax front, a lot changed on the federal estate tax front!
In one fell swoop, it made estate planning for most of our Relaxing Retirement members much simpler.
To refresh your memory, estate taxes are …
Last month, we talked about the tax consequences awaiting your family when they inherit your IRA.
To revisit our story for a moment, we were talking about Bill and Sally who have been married for 40 years. They have 3 children who are all out of college and in the workforce.
After Bill retired, he rolled over his 401(k) and pension plan to an IRA where he …
The first half of 2011 is now in the books, and last month we celebrated our nation’s Independence Day.
Before we dive into a quick “Independence Check-Up” that I have for you, let’s take a giant step back from the race for a moment and acknowledge just how fortunate we all are to be living in this day and age. And, most importantly, in the United …
It’s a bright “blue skied” morning. You’re driving home from the grocery store with a car full of food for the dinner you’re preparing for your friends tonight.
As you enter your neighborhood, your cell phone rings and you reach down to pick it up. It’s one of your friends who will be at your home tonight.
The radio is a little loud and you can’t quite …
Earlier this month, we identified what everyone must think about way before ever thinking about long term care insurance.
Now, let’s move on to the second critical thought process that must take place before you enter the long term care discussion.
Let’s begin by recapping what we know so far about our case study involving Bob and Kathy:
● We know that Bob and Kathy are …
One of the responsibilities that we tackle for all of our members in The Relaxing Retirement Coaching Program™ is managing risk.
You can’t avoid all risks completely, so I view it as evaluating and then “managing” them.
When you were younger and raising a family, the financial risk your family faced if you were no longer here was much more real for you.
If your paycheck wasn’t there …
Relaxing Retirement member Cliff Straw recently brought this announcement to my attention, and I wanted to share this update with all of you who are Massachusetts residents.
In the past, you’ve heard me recommend filing for Homestead protection on your primary residence. For some of you, that coverage just got a lot better and simpler.
There are three major changes in the law that I want to …
In an article last month, we answered the often asked question: “should we pay off our mortgage”?
I received a lot of comments about that article, and many of them centered around the long held belief that carrying ANY mortgage into retirement is bad!
Or, even worse, that you can’t retire if you still have a mortgage.
I have a few general thoughts on those comments, and then …
One of the questions I receive all the time, predominantly from new Relaxing Retirement members, is “should we pay off our mortgage”?
That’s a really good question that has no cut and dried answer to it. My answer always involves asking a lot of questions, so I thought I’d share those with you today in the hope of helping you arrive at a good answer in …
Income taxes…payroll taxes…sales taxes…property taxes…estate taxes… gasoline taxes…excise taxes…capital gains taxes…
There is certainly no shortage of ways that you are taxed. Your “patriotism” (translation: support of government functions) should never be called into question.
However, the good news is that not all of the money you receive is subject to income taxes.
As I do every year around tax filing time, I’ve recently received a lot of …
You’ve determined just how dependent you are on your Retirement Bucket™ (your investments). And, you’ve forecasted out how dependent you are each year going forward (at least the next ten years).
You’ve determined the investment rate of return you must earn in order to have your Retirement Bucket™ remain intact for the rest of your life, despite your withdrawals and inflation.
You’ve begun to tackle the …
While dissecting The Relaxing Retirement Equation™ over the last few weeks, and sharing the first three principles and guidelines to follow to help you answer the question of where to position your investments to produce the long term rate of return you need to earn while experiencing less volatility and paying less taxes to the government, I’ve focused on what TO DO as …
If you pick up a recent copy of Money magazine, or Kiplinger’s, or even Fortune, you’ll see all the “winners” in the mutual fund game in 2010.
Every January, each of these magazines ranks the highest returning funds in various asset categories over the prior year.
Champagne pours at the companies at the top of the list because they know what’s next.
What’s next is a drastic increase …
Over the last few weeks, I’ve exposed you to the first steps in The Relaxing Retirement Equation™ which were all developed to help you determine your level of dependence on your Retirement Bucket™ (the investments you’ve built up over your lifetime) by getting crystal clear on all of your income sources, and what it costs you to support the exact lifestyle you want.
This is THE …
We’ve begun walking through the first step in The Relaxing Retirement Equation™, which is to determine your level of dependence on your Retirement Bucket™ (after receiving social security and any pensions). And, then, how that level of dependence ultimately drives where you position your hard earned savings at this unique stage in your life.
Let’s continue that today and get back to our case study of …
As we shift gears into 2011, take a moment to reflect on the improvements that took place in your life in 2010. Get out your pencil and a pad of paper and take stock of the following:
Projects. Did you complete any major projects? (Home improvement, business, etc.)
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Listen to Retirement Coach Jack Phelps, ChFC answer your questions on
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