Archives for May 2, 2019

LIVING COMFORTABLY during your retirement years doesn’t necessarily mean harsh sacrifices while working or earning seven figures for decades. Retirees who have enough to live well tend to credit years of good financial habits. “It is important to plan properly, know your goal and then initiate the discipline needed to reach your objective,” says Guy Baker, founder and managing director of Wealth Teams Alliance in Irvine, California. Below, six individuals share advice on how to create a financially fulfilling retirement. Steps include:

• Make investing easy.
• Set smart spending habits.
• Be disciplined about saving.
• Look for an employer-sponsored plan.
• Make the most of what you have.
• Overcome setbacks along the way.

Make Investing Easy

Leif Kristjansen worked as a research scientist and wanted to retire early to spend more time with his family. “My savings goal was to save 60% of my income, and it paid off,” Kristjansen says. “Now I spend a lot of time with my kids.” During the years that he set aside money for retirement, Kristjansen, who lives in Toronto, followed an index investing strategy. An index fund is a mutual fund or an exchange-traded fund that is set up to mimic the performance of the market. “It’s simple, meaning you don’t really need to think before moving your money out of your bank savings account,” Kristjansen says. “It takes 15 minutes with an online broker, and you are off to the races.”

Set Smart Spending Habits

As he earned more during his financial career, Bradley Nelson of Lafayette, Indiana, saved the extra cash rather than spending it. “I’m now almost 60 and retired three years ago,” Nelson says. “I haven’t significantly changed my spending habits since I was 30, although I received many raises and promotions since then.” At times he didn’t have as big a house or as nice a car as peers, but he was able to maintain a comfortable lifestyle. “I don’t think spending more would have made me any happier, then or now,” Nelson says. “I now find myself living off the income of my investments rather than having to dip into capital.”

Be Disciplined About Saving

When Pablo Solomon, who lives outside Austin, Texas, married his wife, Beverly, 43 years ago, they put up a poster board divided into 100 squares. “We wanted a visual way to keep track of our savings and to keep us motivated,” Solomon says. “Each square represented $100 saved, and when we put aside $100, we put a gold star in a square.” After filling the chart, the couple agreed to live on one source of income and put any other money into savings and investments. “We tenaciously stuck to this promise even when it was difficult to do so,” says Solomon, a former designer now transitioning into retirement. Over the years the couple held several side businesses, and used the income from these gigs to save for retirement. “We feel blessed that we have met and even surpassed our savings goals and can live as securely and enjoyably as is possible in an ever-changing world.”

Look for an Employer-Sponsored Plan

When Carol Gee of Atlanta entered the Air Force, she kept a goal of working long enough to become eligible for a pension upon retirement. Later in life, she took on a second career as an administrator at a university, a position that included a retirement plan. “I have funds from both my earlier careers,” Gee says. She recommends asking employers about available pensions, 401(k) plans or other retirement benefits. “In seeking new positions, try to choose those where these funds can roll over so the savings can continue,” Gee says.

Make the Most of What You Have

During her years of working as a political consultant, Kelly Hayes-Raitt of Santa Monica, California, focused on functioning within her means. “I lived frugally and avoided debt,” Hayes-Raitt says. When she decided to retire from her political career, she realized her home was a significant asset. “I fixed it up as a vacation rental and embarked on a new lifestyle of full-time travel and housesitting,” Hayes-Raitt says. “I’ve been housesitting for over a decade and have traveled all over the world.”

Overcome Setbacks Along the Way

William Seavey of Cambria, California, spent his working years in journalism and running a number of businesses. But after getting married and divorced, his finances took an unexpected hit. Upon remarrying, he and his new wife evaluated their money situation. “We are both products of divorces, which set us back significantly,” Seavey says. The couple looked for ways to improve their finances and took advantage of the real estate market. They sold properties at a good time and brought in some additional funds. “We pooled the money, paid off the house and started a bed and breakfast,” Seavey says. To prevent future pitfalls, the couple researched ways to build a diversified portfolio, which includes investments in stocks and bonds. “Avoid as much debt as possible, particularly with credit cards, and work toward paying off a mortgage by doubling down on payments,” Seavey says.

The USGA is downsizing.

The association confirmed Wednesday that 63 of its employees, roughly 15 percent of its workforce, were offered “voluntary retirement incentive” plans. According to a USGA spokesperson, the plan was offered to employees who were part of the association’s benefit plan which closed to new participants in 2008 and who were 55 or older.

“As the USGA continues to evolve its organizational structure in an effort to drive greater impact and sustain a strong financial future, we have offered a voluntary retirement incentive plan to a segment of our staff,” the USGA said in a statement provided to GolfChannel.com. “It provides eligible employees with enhanced pension and retiree health benefits, with no obligation to participate.”

The deadline to accept the plan was Tuesday, and although employees still have a window of seven days to decide if they want to participate, sources have told GolfChannel.com that at least 50 have volunteered.

The move is surprising for an organization that appeared flush with cash from a 12-year television deal the USGA signed with Fox Sports in 2013.

According to various reports, the television rights deal is worth $93 million per year and the association reported $214 million in total revenue in 2017 according to tax forms.

Every department at the USGA will be impacted by the retirement incentive plan according to a USGA spokesperson.

Though retirement might seem like a relaxing, laid-back period of life, the reality is that it can be extremely stressful, especially from a financial perspective. But while some of that boils down to senior living costs coming in higher than expected, it’s also a matter of insufficient planning — and saving.

Older Americans are especially guilty of the latter, and a new survey from investment firm Franklin Templeton further drives home this point. An alarming 66% of pre-retirees admit they’re behind on savings, even though setting funds aside for the future is supposedly a top goal for many older workers. Throw in the fact that 46% of current retirees say they should’ve saved more, and it’s no wonder so many seniors wind up overwhelmingly stressed during their golden years.

If you’re nearing retirement with an inadequate amount of savings to your name, there aresteps you can take to catch up or compensate. Here are a few to start with.

1. Work longer

If you’re behind on retirement savings, one of the most efficient fixes for that problem is to extend your career. Doing so will serve a number of purposes. First, the longer you work, the longer you’ll avoid tapping your existing savings, thereby helping that money last longer. Next, working a few extra years will give you an added opportunity to save more money, especially if you’re able to ramp up your retirement plan contributions. Workers 50 and over can currently set aside up to $7,000 a year in an IRA, or $25,000 a year in a 401(k). Swing the latter for three years, and you’ll be sitting on an extra $75,000 for retirement purposes (or more, when you factor in some modest investment gains).

Finally, working longer might also help you boost your Social Security benefits. If you’re able to delay benefits past your full retirement age (either 66, 67, or somewhere in between, depending on the year you were born), you’ll boost them by 8% a year up until age 70. Not only that, but those benefits are calculated based on your 35 highest-paid working years. If your income is greater now than it was years ago, working longer will allow you to replace some lower-earning years in that formula with higher numbers, thereby bringing your benefits up.

2. Get a second job

When you work full-time, chances are the last thing you want to do with your spare time is work some more. But if you’re low on retirement savings with a limited catch-up window, getting a side hustle is a reasonable solution, and if you go that route, you’ll be in good company. Of the 44 million Americans who work a second gig, 14% do so for the express purpose of funding a retirement plan. Furthermore, that side job doesn’t have to be something you hate. You can try monetizing a hobby you already spend time on (think crafting, baking, or photography), or dabble in something new that you’ve always wanted to try.

Another great thing about getting a second job later in life? You’ll have the option to carry it with you into retirement if you need a means of supplementing your income.

3. Adjust your expectations

Maybe your dream retirement involves holding onto your large but costly-to-maintain house, traveling a lot, and dining out often. There’s nothing wrong with that vision if your savings can support it, but if they can’t, then you may need to rethink what retirement will look like for you. Downsizing to a smaller, less expensive home, for example, is a good way to stretch your savings when they’re limited. The same holds true for mostly dining at home instead of at restaurants, and focusing less on travel and more on free entertainment.

This isn’t to say that you won’t experience some element of disappointment in having to change up your vision. But if your savings really can’t suffice in paying for your dream retirement, then you may have no choice but to come up with a backup plan.

Approaching retirement with limited savings is an uncomfortable position to be in, to say the least. But if that’s your reality, take steps to catch up and also work around it. Otherwise, you may find that retirement is nothing more than a prolonged period of stress.

Apple shares gained almost 5% Wednesday, following the release of its earnings report Tuesday, with the company’s current share price hovering around $210.

If you invested in Apple 10 years ago, that decision would have paid off. According to CNBC calculations, a $1,000 investment made on May 1, 2009, would be worth more than $13,000 as of midday May 1, 2019, for a total return of more than 1,200%.

Over the same period, the S&P 500 returned just over 300%.

And, thanks to trade-ins, lower prices on iPhones, and improved trade talks between the United States and China, some analysts seemed optimistic about the company’s stock overall.

“We believe Apple has locked up strong share of the premium tier market and will continue to dominate high-end smartphones sales and capture the vast majority of smartphone profits for the next several years,” according to financial services firm Canaccord Genuity.

Still, while Apple’s stock has ticked up recently and done mostly well over the years, any individual stock can over- or underperform and past returns do not predict future results. And even though the company reported earnings of $2.46 per share for its most recent quarter, beating estimates by 10 cents a share, it saw its second consecutive overall quarterly revenue decline.

Apple is looking outside of smartphones to increase sales. Chief Executive Officer Tim Cook underlined two growing businesses during his call with analysts: Apple Services, which includes things like Apple Music and iCloud, and Apple Wearables, which includes AirPods and the Apple Watch.

“It was our best quarter ever for services, with revenue reaching $11.5 billion,” Cook said. Services revenue was up 16% from $9.19 billion in sales from a year earlier.

If you’re looking to get into investing, seasoned investors such as Warren Buffett suggest you start with index funds, which hold every stock in an index, meaning they’re automatically diversified and tend to be low cost. Plus, because they fluctuate with the market, they’re typically less risky than picking individual stocks.