Retirement Answer Man

Seriously, does watching the market and comparing your investment performance to some benchmark help you create a great life??? Of course it doesn't. So stop. Stop worrying about "keeping up with the market" and get down to the important work of creating a great life. INVEST WISELY Segment If you are investing without trying to achieve some greater goal, you're setting yourself up for disappointment.Comparative investing is a losers game. It can:create a never good enough mindsetcause you to over trade and chase investmentsmake you susceptible to product sales pitchescause you to take too much investment risk (for no reason)increase your stresscause you to become disillusioned with investingLast week, I asked a recently retired couple what they wanted. Did they want to keep up with the market or have confidence that they could maintain their lifestyle? You guessed it, they didn't care about the market, they cared about their life. Smart ones, they are. PLAN WELL Segment During working years a lot of our purpose comes from our job, but once we stop working nothing will automatically replace them. Unless we are intentional and planful, retirement can feel like a big let down.John Knowlton, CFP just launched beerandpeanuts.net to help you avoid this big letdown. He's created resources  in 3 areas that research has shown are critical to a healthy retirement:Purpose (a reason to get out of bed)Meaning (what if leisure isn't enough?)Social contact (people to connect with)Listen to our great conversation for key insights into how to create your own fulfilling retirement. Want to Learn to Retire with Confidence? Get ready for a special never before seen event coming in January.  Get Ready for Retirement Plan LIVE. Sign up at rogerwhitney.com for free updates on this special month long event. 

Yeah, there are lots of articles this time of year talking about year-end tasks to complete, but mine are Super Simple ones.  Okay...maybe it's just my way of trying to sound different. Still, these ARE 7 relatively simple  tasks that could make a big difference in your financial life (so indulge me). Invest Wisely   When Should I Rebalance My Portfolio? Today I read an article on market watch titled "The Hidden Truth About Rebalancing Your Portfolio" on marketwatch.  The article discussed a recent study that argues that rebalance can actually increase the risk in your portfolio. In this episode, I discuss my observations on their conclusions and my "best practices" for rebalancing a portfolio during retirement. Plan Well   7 Super Simple Tasks to Complete Before You Rock in the New Year Pay your real estate tax bill, before year-end if you want to deduct it on your 2014 taxes.Get your RMD done. If you are over 70 1/2 or have inherited an IRA you need to do this before year-end to avoid a huge IRS penalty. Click here to learn more.Identify opportunities to harvest tax losses. If you have realized gains for the year, look for current positions with losses that you can use to offset your gains. I discuss a few strategies for doing this.Conduct an annual beneficiary review.  Even if you know the primary beneficiary is correct, you still need to make sure you have contingent beneficiaries. There is a worksheet to do this in the Retirement ToolboxConsider year-end giving. You can give $14,000 to any individual without tax consequence. If you have charitable intent, consider making charitable gifts before yearend.Change your important passwords. Changing your passwords is like locking your door at night. It's just common sense. This is so important and almost no one does it. The holidays are a perfect time to do this. I use a password manager (1Password) to create and track complex passwords. Consider diversifying your tax liabilities. The pressure to save on taxes each year can cause you to save too much in tax-deferred accounts. It's important that you have assets in taxable, tax-deferred and tax-free account. When you retire, you'll have more flexibility to manage your cash flow and tax bracket. If all you do is save in tax-deferred account (like most people), you could end up staying in a high tax bracket during retirement 

You'd think that with all the great information and tools available today that making smart money choices would be easy. The fact is, it's harder than ever before. We live in a world designed to get us to "buy now" or "avoid that". These messages are designed by savvy marketers to get us to take action. Take action, when most of the time, doing nothing is the best course to take. Recently I fell pray to one of these "buy now" messages and made a really poor money choice. Two weeks ago, I was in Charlotte working on a project when a e-mail arrived announcing the closing of registration for a $2,000 training program. It was a program I really wanted to take (I'm a sucker for learning) but I'd already determined I didn't have the time or the budget this year. The e-mail offer included extra valuable resources if I registered before the deadline. I fell for it. In the middle of my meeting, while focused on the task at hand, I clicked on the link and bought it. What a sucker. Later that night, as I was driving home from the airport literally pulled over on the freeway and requested a refund. In this episode, I outline 3 habits that will help you (and me!!!) make smarter money choices. They are simple and organized around the acronym R.A.W. Think R.A.W. Plan Well Segment “We no longer live life. We consume it.” Vicki RobinThe next time you feel the pull of a marketing message remember R.A.W.Remember to review your 1 year financial priorities every week. this will keep your "why" top of mind.Avoid marketing messages. Don't browse in stores or online, unsubscribe from sales e-mails. Work your plan. Have a plan for how you make money decisions and stick to it. It can save you.Invest Wisely Segment Economist Paul Samuelson reminds us, “investing should be more like watching paint dry or grass grow. If you want excitement, take $800 and go to Las Vegas” or Wall Street."The next time you feel the urge to react to market news remember, R.A.W.Remember why you are investing. Your purpose for investing should drive your decisions.Avoid market messages. Financial media does not help you invest wisely. Avoid it.Work your investment plan.  Have an investment plan based on facts and stick to it. It can save youWant Free Checklists to Help You Make Smarter Money Choices? Click Here

Working towards retirement can feel like rafting a river full of dangerous rapids. As you flow down the river of your life, your constantly having to navigate events that threaten to turn your life upside down. Unemployment, death, divorce, college costs, healthcare, recessions, corrections, inflation and countless others can put you on the rocks. This week, I discuss how to "self rescue" if the rapids of life put you into the water.INVEST WISELY  The Folklore of Finance: Beliefs That Contribute to Investors’ FailureLast week I read article in the New York Times discussing the release of a study by the State Street Center for Applied Research. It's titled:The Folklore of Finance: Beliefs That Contribute to Investors’ FailureThe 2 year study tried to answer the question: "What does true investment success look like?"Interestingly, according to the article, instead,  they found "that the way individual and professional investors made investment decisions was so skewed that achieving both high returns and long-term objectives was nearly impossible."In the Podcast I discuss some of their findings, includingOverconfident in abilitiesUnable to stay focused on long term objectivesShort term noiseInvestors want to invest with a long time horizon yet react to short-term swings that derail the strategyCome to distrust their advisorsFocus on the noiseFocus on short term resultsA Culture of “beating the markets”The study found that financial services firms spent 60 percent of their capital expenditures on resources to help generate short-term high performance. 60 Percent!! As a veteran of a major financial firm, I can attest that the value proposition of most major firs is that they can predict markets and guide you through them. I've always found this funny...having a value proposition based on predicting the future.Better, I think, to accept the uncertainties of the world, have a prudent process and focus having lots of little conversations so you can adjust as life unfolds. PLAN WELL   How to Ride the Rapids Towards Retirement If you've every been on  a rafting trip you're probably familiar with the term "self rescue". How to self rescue is a talk given by your rafting guide before you venture onto the river. The Guide makes it very clear. If you get thrown into the what, do NOT wait to be rescued. It is YOUR responsibility to rescue yourself.Self rescue involve 4 steps that you can use to rescue your financial future:Get to the SurfaceStabilize your cash flowSelf assess your financial health (skills, assets, debts)Clearly define your 1 year objectiveTake a deep breath (you may be pulled down again)Build some cash reservescreate margin in your cash flow (increase income/cut expenses)Float down riverTake a little time to reflect.Set clear 1, 3, and 5 years objectivesIdentify initial action stepsStart to SwimLearn from others Seek out fellow travelers that you can emulateLearn from online resources and booksFind a guide to help you navigate the rapidsBeing thrown into the rapids by life can be scary. It's okay. You can self rescue. I know you can. What Rapid Are You Most Afraid of? Tweet to @roger_whitney

If you're working towards retirement you know that investing wisely is a key part of reaching your goals. The problem is, investing means putting your money at risk. That's stressful. As a result, many of us tell ourselves lies or believe "trues" that can be dangerous to our financial future. In this episode, I'll discuss 7 lies we tell ourselves about investing and how to avoid them. INVEST WISELY The 7 Lies We Tell Ourselves About Investing There is too much uncertainty right now to invest I'm not wrong, the market is Thinking the current trend will continue I just need to hold a losing investment until I get back to even Past performance can predict future results I just need to find an investment guru Investing alone will make me wealthy How to Avoid Them Come to peace with the fact that the future is unknowable Educate yourself about how investment markets work Use a sound process for investing Diligently monitor and adjust your plan as your life unfolds PLAN WELL Last month I conducted my 1st annual listener survey. A big thank you to all that participated. Here are some interesting facts about you: 100% of you are male (do ladies not take surveys!!!) 73% of you are over 50 (makes sense) 73% of you have been married over 20 years (great job!!) On average you have 3 children 42% of you say you never plan on retiring (I'm with you on this) Top retirement concerns include Investing and the economy Healthcare costs Running out of money Top retirement goals include Spending time with spouse Spending time with family Travel Some of your top questions you need answered are: What's the best way to invest for income? When is a will sufficient (without a trust)? When should I start social security? How do I create passive income? What is the right portfolio mix during the different stages of retirement? Will the popularity of index investing cause more investment bubbles? In future episodes, I'll work to answer each one of these questions. What is the #1 Thing You Struggle with As You Work Towards Retirement? Tell me in the form below and I'll try to help.

I'm convinced that the most stressful part of planning for and living in retirement is that we don't know how to balance living well today, while not sacrificing tomorrow. As a result, most of us live out of balance.  Some of us are so worried about tomorrow that they sacrifice their current life in order to be "prudent". Others "live for the day", assuming without a thought for their future.  both are wrong. In this episode, I talk about my #1 retirement planning tool to help other find this delicate balance. Invest Wisely--Investing Potholes in November and December If you're planning on making large investments in your taxable accounts be careful. In December, most pooled investments, like mutual funds, distribute to shareholders the capital gains and dividends they've accumulated throughout the year. If you buy one of these products in a taxable account before this distribution, you could have a tax liability for capital gains that were realized before you even owned the fund. In this episode, I discuss how this works and some things you can do to avoid a potential nasty tax surprise. Plan Well--My #1 Retirement Planning Tool to Help People Find Balance Can I afford to retire a year earlier?Do I need to change my spending plan after this market correction?Can I save less now and still retire comfortably?Do I need to take so much investment risk?These are some of the frustrating questions that people struggle with every day as they plan for retirement. About 16 years ago, I discovered a tool to help me help people answer these questions and confidently live a more balanced life.It's called Monte Carlo engine. Today, I've integrated it into my Plan Well process to help other make smarter financial decisions and find some balance between living well today without sacrificing their tomorrow.Like most tools, some are better than others and much of it's usefulness is dependent upon the skill of the user.In this episode, I use a planning example to demonstrate how I use it and some of it's advantages and drawback. Note: Normally just read these show notes, it's best to listen to this one. Just click on the audio play at the bottom of this post. Here is the Fact Set for John Smith Age 55Retirement goal 60Investment assets $2,000,000Retirement lifestyle goal, $100,000 annual Retirement lifestyle goal #2, $70,000 RV at age 60Life expectancy, age 90Target Portfolio, balanced IITo see the full report that I discuss, click here. How Not to Use It It's not a one time evaluation tool (you can't set it and forget it)It does not determine or predict resultsIt can't overcome bad inputs or assumptionsHow to Use It As a important part of your annual financial reviewAs a tool to help you prioritize competing goalsAs a tool to help you evaluate tradeoffs between competing priorities Spending/SavingWorking/RetiringRisk/RewardCollege/RetirementGiving/InvestingAs compass to help evaluate and correct course as your life unfoldsAs a guide an warning system to help you know when your plan may be unsustainableTo provide more color on the long-term impact of today's financial choicesThere is no tool that will solve for all the uncertainty in your life or the world.  The best we can do is acknowledge what we don't know (can't know) and use a sound compass to help guide our life's journey.  "He who is enslaved to his compass, will enjoy the freedom of the seas" Ken Davis Are You Confident in Your Compass?

Is your soul on fire? Too many of us live in a prison within our mind. We are trapped by our past choices, not realizing that today, right now, we can start a new journey.  If you feel stuck, you can create a new life. You can ignite your soul and live your own hero's journey. Invest Wisely  You'll Never Get the Average One of the biggest roadblocks to setting good expectations about investing is focusing on average returns. We financial planners are the biggest abusers of this. No one get's average returns. By focusing on them, we set unrealistic expectations on what the experience will actually be.Look at the returns of the S&P 500 stock index over the last 15 years. How often did it hit it's average return?  In this episode I discuss this and how to develop a better understanding of what to expect (and not expect) from your investment assets. Plan Well     How to Live an Intentional Life with Kary OberbrunnerKary Oberbrunner is like you or I. He went to school, got a job, got married and lived a normal life, until something happened inside him. His soul ignited. Today, he is living a more intentional life and is on a mission to help you ignite your soul and do the same.Kary's message really resonates with me. Much of my life, I was blind to the choices I had. I felt imprisoned by my past decisions. I think many of us feel this way. We're not. Our prison is in our mind. If we break free from our past self, we can create the life we desire.Kary and I discuss:The roadmap from Day Job to Dream JobHow to get unstuck from your past stuck selfHow day jobs are killing peopleWhy it's so hard to leave a day jobHow to go from prison, to plan, to payoffHow to design your storyWhy it's important to go through your own hero's journeyHow to change your life in a half hour a dayDream Job Boot Camp Take the assessment and let's compare results on twitter Tweet to @roger_whitney

You don't like to lose money. Nobody does. That's one reason it is so hard to stick to a long-term investment plan when we feel like we're getting punched in the face by the markets. Just like a boxer, it's natural to want step back and protect ourselves. This natural reaction, however, has caused most investors to underperform the very assets they invest in.  In this episode, I discuss 7 steps to help you fight through a normal market correction. Invest Wisely: 7 Steps to Fighting Through a Market Correction A 2014 Dalbar Study once again showed that average investors drastically underperform the very assets they invest in. Over the last 10 years the average investors, investing in a mix of stocks and bonds, had an average annual return of 2.6%. Over that same period, the S&P 500 had an average return of 7.4% and fixed income averaged 4.6%.One of the biggest contributors to this is our natural reaction to run from pain.  It's a strong instinct that I struggle with during every market downturn.In this episode, I introduce 7 steps you can take to help fight through a market correction so you can invest wisely for retirement.STOP listening to financial media and market "experts." They only magnify your fearLearn the nature of the markets you invest in. Develop a clear understanding of how they workDetermine your appetite and need for market risk. How much volatility can you stomach? How much market risk do you need to achieve your goals?Set a portfolio allocation that fits your needs.Rebalance it religiously to manage your risk and potential return goalsMaintain enough cash reserves. This will help your long-term assets be focused on long-term objectivesRevisit steps 1 thru 7 religiously to adjust as your life unfold.Not sure how?  Find someone to help.Investing wisely is easy to understand.  The hard part is sticking to a well thought out plan when you get punched in the face by a market correction. Plan Well: Budgets That Work With Jim Munchbach Recently I had the pleasure of talking with Jim Munchbach from imakeyourmoneycount.com about how to find a budget that works for you. Jim is a Certified Financial Planner, State Farm agent and instructor of Introduction to Personal Finance at the University of Houston.Here are some of the topics we cover:Why it's important to track your spendingFinding the truth about your financial behaviorA budget that works, if you hate to budgetHow a budget helps you create free cash flow in order to saveThe value in learning to track your spendingIt's not the tool that is important, its the goalHow to manager your cash flow like a businessThe law of spending and savingRetirement Toolbox:  Retirement Planning Worksheet This worksheet may help you determine if your current retirement savings effort is on course or if you need to chart a new direction to help reach the retirement destination that you desire. To help you, I’ve added a new worksheet to the Retirement Toolbox titled Retirement Planning Worksheet. Click Here to Access 

It's natural to fear a market correction. Losing money (even if on paper) sucks. News reports, act as if market corrections are bad.  That's not true. The economy and the markets don't function well without corrections.   Just as there are benefits to a forest fire, a market correction is an essential element of a strong economy and market. Invest Wisely  4 Benefits of a Forest Fire and Market Correction Are we headed for a market correction? Last week the S&P 500 was down 3.4%. It's been over 34 months since we've had a correction in the S&P 500 of over 10%. Normally we experience one every 18 months. I've always likened market corrections to forest fires. Both cause some short term pain but are essential to the long-term health of the forest (or market).  I've used this analogy for years. Sure enough, if you read the Benefits of Fire from the California Department of Forestry and Fire Protection, the 4 benefits of forest fires parallel to the benefits of a market correction.In this podcast I explore these 4 benefits of forest fires and market corrections:Cleans the Forest Floor "Fire clears the weaker trees and debris and returns health to the forest"Provides for More Habitat "When fire removes a thick stand of shrubs, the water supply is increased. With fewer plants absorbing water, streams are fuller, benefiting other types of plants and animals."Kills Disease "Fire kills diseases and insects that prey on trees and provides valuable nutrients that enrich the soil. Fire kills pests and keeps the forest healthy."Provide Room for New Generations  "Without fire, these trees and plants would eventually succumb to old age with no new generations to carry on their legacy."Plan Well   Kim Blanton From the Center for Retirement Research at Boston College Recently I had the pleasure of talking about the retirement landscape with Kim Blanton. Kim works with the Center for Retirement Research at Boston College and writes their Squared Away Blog. Her Blog is about financial fehavior as it relates to working, saving and retiring. Kim and I discuss the changing landscape of retirement and how we can plan for it.How retirement is changingThe impacts of being responsible for your own retirement savingsMore than half of Americans are on track to have their standard of living decrease during retirementThe benefits of working longerThe benefits of taking Social Security laterRetirement: a Good State of MindThe danger of consumerism during retirementStark Differences in U.S. Cost of LivingHow to better plan for retirementRetirement Toolbox: Retiring to a Different State If your family is considering retiring to a different state, there are some important planning items to consider. To help you, I’ve added a new worksheet to the Retirement Toolbox titled Retiring to a Different State.  www.rogerwhitney.com 

Medicare eligibility starts at at 65. If you're blessed to be able leave your career earlier, you'll need to evaluate your healthcare options until then. This week I talk with health insurance guru, Misty Kimbrough about your healthcare options before age 65. Invest Wisely     3 things you can do to ignore the voices in your head I'm starting to hear voices in my head. Maybe you are too. They're asking "Should I move to the sidelines? Should I wait to invest?"  Certainly we've heard these voices on our beloved financial media outlets. Over the last 3 weeks or so, equity markets have had some big down days and it's making people nervous.Don't base your investment strategy off of intuition, regardless of how well reasoned you think it is. The fact is professional investors struggle with timing markets. Even those that have great "market calls" can't do it consistently enough to be of much use to you or I.Stop chasing rainbows. Turn off all financial that peddles predictions, forecasts, etc. Don't fall for the siren sound of predicting the future. It's hard to tune out. We all want certainty. We crave it. It's uncomfortable to sit with not knowing. You must though if you are going to focus on the things you can controlRevisit your cash reserves. Having enough cash so your long-term investments can be long-term. Selling at the wrong time because you need the money can be a disastrous to your portfolio.. Initially target 3 months lifestyle expenses and increase it if your income is less certain. For retirees, we target 18 months of expected lifestyle expenses.Rebalance your portfolio. If you haven't rebalanced your portfolio to your target risk/return profile, do it. Part of investing wisely is consistently rebalancing to your targeted risk/return profile.Plan Well     Health Insurance Options Before Age 65 This week I talk again with Misty Kimbrough from Red Apple Insurance. She and I discuss the insurance landscape if you've been blessed to retire early. We discuss:How COBRA coverage worksInsurance options before you're eligible for MedicareIndividual insurance plans (Bronze, Silver & Gold)How to structure your individual policyShould you go on your spouse's planInsurance add on options.Retirement Answers     How Do I Choose Long Term Care Insurance This week I added a 2 page fact sheet to give you the basics on long term care insurance. You can access it for free by clicking the cool button below