We chat with Fritz Gilbert, founder of the Retirement Manifesto blog and author of Keys to a Successful Retirement, Staying Happy, Active and Productive in Your Retirement Years.

If you're investing for a great retirement, the state of the world economy can have a big impact on your success. This week, we go around the world updating you on Asia, Europe and the Americas.

Listen to the Audio

In This Episode We Cover

Happy Lab 

“I wish I had stayed in touch with my friends” is #4 on the top 5 list of regrets people have at their death. Make sure you invest in your relationships. Close friends will make your retirement more fulfilling. Don't lose touch with them. 

[bctt tweet="Let's face it. #Friends make life a lot more fun. Keep yours as you grow old." username="@roger_whitney"]

S.M.A.R.T. Sprint  

Stay connected with people you care about. In the next 7 days, call a friend you haven’t spoken to in awhile. I'll admit, I'm not the best at this. It's something I'm working on. 

What’s That Mean??  

Fiduciary is a term we’ve seen in the press a lot lately. If your advisor is a fiduciary it means they are legally required to give advice in the client’s best interest and disclose any conflicts of interest. You may not realize that when you work with an advisor on a commission basis, they don't have a legal duty to recommend investments in your best interest. Here's a great definition from Investopia.

[bctt tweet="Learn why you want your advisor to be a #fiduciary http://bit.ly/1VgLSkH" username="@roger_whitney"]

Hot Topic This Week

Marketwatch.com reported last week that the Department of Labor’s released new rules for Financial Advisors who serve retirement accounts.  The new rules could change the way you work with advisors to create a great retirement.

Practical Planning 

Briana Giuliano, CFA, Senior Strategist Brandywine Global Investment Management and I go around the world to explore current economic conditions in Asia, Europe, and the Americas. We also discuss the potential benefits and risks of investing internationally in bonds and stocks.

Ask a Question

Have a retirement question you need answered? Ask your retirement question below and I'll respond personally.

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Ask anyone and they'll most likely say they want to have a great retirement. But looking at the day to day financial decisions of most people might tell a different story. 

What you do speaks so loud that I cannot hear what you say.

Ralph Waldo Emerson

It's not enough to want a great retirement. You need to decide what it will look like, create a plan to work towards it and execute your plan day by day. In short, you need to live an intention life.

This was the message I heard loud and clear from this week's listener story.

Favorite Quote From This Week's Story

"To this day, when I want something, I think through it and make sure I want it"

Lessons Learned From Ken, Jr.

• Intentional decision making helps you think ahead and avoid rash decisions.
• Don't overthink investing. Patience is a key to success.
• Parent's play a big role in shaping how kids think about money
• Not letting your lifestyle creep up as your income grows is essential to wealth creation

Who is Ken Jr.

• Ken, Jr. was a Corporate computer guy for almost 20 years
• Married 20 years
• No  Kids
• Average age late 40’s
• Both retired

What Does Retirement Means to You?  

“I think mostly the freedom to set my own schedule. To enjoy anything I want to do."

“I do computer consulting on the side.”

“I do volunteer presentations at senior centers on technology.”

“I loved my day job, its just I wanted all of my own schedule."

The truth is, I feel much busier now that I can’t catch up with all the things I saved up wanting to do.”

What Are You Most Excited About Retirement?

“Actually, part of it is the challenge of planning money over time.”

“I just like doing whatever we want to do that week we’ve planned.”

What Are You Most Worried About Retirement?

“The usual three things, investment return income, expenses and inflation and longevity.”

Who Do You Use in Your Life to Help Make Smart Financial Decisions?  

“It’s been on my list to do”. I planned aggressively for retirement 8 years before I retired.”

“I need to…to give me a checkpoint, an alternative view and to help me check in every year or two.”

"Mine wasn’t how to get to retire, it’s how to manage the puzzle into the future.”

What Has Been Your Worst Financial Decision?

“Was not knowing about Total Market Indexes, 20 years ago.”

What has been the Hardest Thing to Deal with Personally in Managing Your Finances?

“It has been the fine tuning and optimizing…”

What Resources Have Had the Most Impact in Your Life?

”My parents led by example. They lived below their means. They lived on one salary.  They tracked their spending every day.”

"My parents taught me patience."

"Clarke Howard"

How Do You Want to Be Remembered?

“As a whole, I just want to be a good, helpful person.”

Ask anyone and they'll most likely say they want to have a great retirement. But looking at the day to day financial decisions of most people might tell a different story. 

What you do speaks so loud that I cannot hear what you say.

Ralph Waldo Emerson

It's not enough to want a great retirement. You need to decide what it will look like, create a plan to work towards it and execute your plan day by day. In short, you need to live an intention life.

This was the message I heard loud and clear from this week's listener story.

Favorite Quote From This Week's Story

"To this day, when I want something, I think through it and make sure I want it"

Lessons Learned From Ken, Jr.

• Intentional decision making helps you think ahead and avoid rash decisions.
• Don't overthink investing. Patience is a key to success.
• Parent's play a big role in shaping how kids think about money
• Not letting your lifestyle creep up as your income grows is essential to wealth creation

Who is Ken Jr.

• Ken, Jr. was a Corporate computer guy for almost 20 years
• Married 20 years
• No  Kids
• Average age late 40’s
• Both retired

What Does Retirement Means to You?  

“I think mostly the freedom to set my own schedule. To enjoy anything I want to do."

“I do computer consulting on the side.”

“I do volunteer presentations at senior centers on technology.”

“I loved my day job, its just I wanted all of my own schedule."

The truth is, I feel much busier now that I can’t catch up with all the things I saved up wanting to do.”

What Are You Most Excited About Retirement?

“Actually, part of it is the challenge of planning money over time.”

“I just like doing whatever we want to do that week we’ve planned.”

What Are You Most Worried About Retirement?

“The usual three things, investment return income, expenses and inflation and longevity.”

Who Do You Use in Your Life to Help Make Smart Financial Decisions?  

“It’s been on my list to do”. I planned aggressively for retirement 8 years before I retired.”

“I need to…to give me a checkpoint, an alternative view and to help me check in every year or two.”

"Mine wasn’t how to get to retire, it’s how to manage the puzzle into the future.”

What Has Been Your Worst Financial Decision?

“Was not knowing about Total Market Indexes, 20 years ago.”

What has been the Hardest Thing to Deal with Personally in Managing Your Finances?

“It has been the fine tuning and optimizing…”

What Resources Have Had the Most Impact in Your Life?

”My parents led by example. They lived below their means. They lived on one salary.  They tracked their spending every day.”

"My parents taught me patience."

"Clarke Howard"

How Do You Want to Be Remembered?

“As a whole, I just want to be a good, helpful person.”

If you work for a company you're a cog in the machine. You're a replaceable part, easily eliminated or replaced if it suits the needs of the company. Sorry to be so blunt. I'm not trying to hurt your feelings. It's just important you accept this if you're going to thrive in the years ahead.

Marc Miller is the founder of Career Pivot, which helps Baby Boomers design careers they can grow into for the next 30 years. Miller authored the book “Repurpose Your Career: A Practical Guide for Baby Boomers.” You can follow Miller on Twitter or Facebook.

In this episode we discuss:

• What to do when you're offered a buyout
• What is negotiable
• How to evaluate a buyout package
• How to maintain your professional network
• The loss of the "social contract" 
• How to succeed in the freelance economy
• Why everyone is an entrepreneur

Too many people are being too reasonable when setting their retirement goals. STOP! When you start your planning for retirement it is critical that you think big. There's time enough later to be reasonable. Right now, focus on what your ideal life would look like....what would your life be if you could "have it all"? 

I know, thinking big about your future, is much harder than it seems, especially when it comes to retirement. That okay, I'll help you snap out of it.

Dream Up Your Ideal Retirement

In this first step of planning with Bill and Sally, I personally challenge you to suspend our reasonableness. Sit down with your spouse and a glass of your favorite beverage (for these talks, this is mine) and dream big.

Your Action Items for This Week:

(For those of you that signed up to plan along)

1. Listen to this episode. You'll learn what their ideal retirement looks like and some issues they face.
2. Review Bill & Sally's Ideal Retirement Summary (If your not signed to receive it go here).
3. Watch the short video. In it I give quick tips on how to think BIG about your retirement.
4. Complete your own IDEAL retirement worksheet. Start off with your needs, dream a little and jot down some wants and then dream a lot more and add your wishes. DON'T BE REASONABLE, just put down needs, wants and wishes that would truly be meaningful to you.
5. Ask questions. Having trouble dreaming big about your retirement?  Shoot me an e-mail. I’ll do my best to answer your question. Send me an e-mail or go here.

 Challenging Questions of the Week

1. How should Bill and Sally address their personality differences?
2. How have you dealt with a similar issue?
3. What other potential issues do you see in their ideal retirement?

Send me an e-mail or go here to give my your answers.

It's Not Too Late to Get All the Free Resources to Plan Too 

Just Click Here

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 mindset
• cause you to over trade and chase investments
• make you susceptible to product sales pitches
• cause you to take too much investment risk (for no reason)
• increase your stress
• cause you to become disillusioned with investing

Last 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

1. Pay your real estate tax bill, before year-end if you want to deduct it on your 2014 taxes.
2. 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.
3. 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.
4. 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 Toolbox
5. Consider 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.
6. 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. 
7. 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 Robin

The 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 you

Want Free Checklists to Help You Make Smarter Money Choices?

Click Here

Taxes suck. They erode away your income, savings and investments. One strategy to maximize your retirement savings is to convert your IRA to a ROTH IRA. ROTH IRAs are a powerful tool to help you do this but there are lots tax and planning issues to consider first.

That's why I turned to Ed Slott, America's IRA expert. He is a nationally recognized IRA-distribution expert, a professional speaker, and the creator of several public television specials, including the most recent, Ed Slott’s Retirement Rescue!

Investing Corner--The Importance of Dividends

When most people thing of making money in equities, they think of buying low and selling high. That's a great strategy, but it's only part of the story. This week I explore the importance dividends can have in any investment portfolio.

I discuss these 5 reasons dividend can be a benefit to any portfolio:

1. How dividends have comprised over 50% of the total return of the S&P 500 index
2. The favorable tax treatment dividends can receive
3. How dividends can be a good hedge against inflation
4. Why dividends can help you control risk in your portfolio
5. What are the attributes of most companies that pay dividends

Retirement Tip of the Week

During my conversation with Ed Slott, we cover:

1. Best places to save for retirement
2. The benefit of contributing to a ROTH IRA
3. Ed's "Forever Tax to Never Tax" strategy using a ROTH IRA
4. The importance of understanding the ROTH IRA conversion rules
5. When it doesn't make sense to use a ROTH IRA
6. How to use ROTH IRAs as an estate planning vehicle
7. The types of people that should consider converting to a ROTH IRA
8. The order to draw from your taxable, IRA & ROTH IRA accounts during retirement
9. The benefits of drawing from your IRA in order to delay Social Security during retirement
10. Biggest mistakes people make with IRAs

Have you considered converting to a ROTH IRA?  

If you have a question, ask me at rogerwhitney.com

Setting retirement goals can be a big waste of time.

In my 23 years of advising individuals and families, I've rarely found someone that had clear retirement goals.  Guess what?  They were still able to live a great life and retire comfortably.

In this episode I'll explore the problems with setting retirement goals and offer a better way to plan.

Retirement Tip of the Week

How to Prepare for the Unthinkable: a House Fire

Recently someone close to me went out for a movie and returned to find their home burnt to the ground. They lost everything, including their dog.  In a few short hours they had no home, no clothes, no furniture, no family photos, no records, no nothing.

This is the type of thing that can never happen to us, right? It's the type of thing that happens to "other" people. Think again.

Here are some simple tips to help you prepare for this unthinkable crisis.

Complete a Video Inventory

• Work room to room
• Narrate, describing items (brands, models, amounts)
• Specifically document valuables (jewelry and artwork)
• Don't forget the garage
• Keep copy of video outside the home
• Update annually

Back Up Important Documents

• Tax returns
• Photos
• Contracts
• Estate plan
• Financial information
• Keep back up offsite (loved one's safe or safe deposit box)
• Update Annually

Understand Your Home Fire Coverage

• Full replacement cost coverage
• Market value coverage
• Personal property coverage
• Valuables rider for expensive items such as Jewelry, etc.

After the Fire

• contact insurance agent immediately
• Ask for advance on your claim to cover short-term costs
• Secure your property
• File claim right away
• Keep track of all living expenses (with receipts)
• Don't stop paying your homeowners insurance premium
• Don't close your claim out too fast
• Get grief counseling

Feature Presentation: Screw Retirement Goals, Here's a Better Way

Retirement Goals. In my experience, few people set them and even fewer stick to them over the long-term. Retirement goals are something we are told we need to have so we can plan for them. Traditional planning forces them upon you and then shows you all the saving and sacrificing you'll have to do to achieve them.   No wonder nobody plans.

Recently a mentor of mine, Michael Hyatt, wrote a great blog about the problem with the traditional concept of retirement (Why Retirement is a Dirty Word). I agree with him.

If retirement and retirement goals are outdated concepts than how do you plan for the future?

In this episode, I'll explore some of the problems with setting retirement goals and show you a more productive way to plan for the the future.

I discuss:

• The problem with traditional retirement goal setting
• Why we don't stick with retirement goals
• How you might be limiting your future
• How you might be limiting your current life
• The importance of priorities
• How to turn your financial priorities into actions
• How to negotiate with yourself
• How to live a more balanced life

QUESTION:  Do you have retirement goals?

• If so, are they meaningful?

• If not, Why?

Let me know via Twitter Tweet to @roger_whitney

If you chose to invest in real estate as part of your retirement plan, you better understand what you're signing up for. 

Most "educational" classes, workshops etc. focus on all the benefits of real estate and gloss over the realities of doing it. Buying, owning and operating rental properties is hard work.  This week, I talk with Philip Wetzel about the real work that goes into investing directly in real estate.

Retirement Tip of the Week

3 lessons from Jim Collins' books Good to Great and Great By Choice that you can use to make smarter financial decisions. 

Two of my favorite business books are Great By Choice and Good to Great. Last week, I had the pleasure of hearing the lead author of each, Jim Collins, speak. It was awesome.  The lessons learned from his research on what made companies great can easily be applied in managing your financial life. Here are 3 that you should start using today...

• First who, than what
• Confront the brutal facts (yet never lose faith)
• Fire bullets, then cannonballs

Feature Presentation: What You Should Know Before Investing in Real Estate

Investing in real estate can be a good thing-as long it fits your situation, you truly understand the risks and work involved and stay diversified.

There are plenty of workshops, classes, seminars, infomercials systems, etc. out there to "teach" you how you should do it. Unfortunately, they are typically strong on the benefits and light on all the work needed to position yourself for success.  In this episode, I start to give you the rest of the story.

Some of the topics we cover are:

• Why you need to run it like a business
• How to do your homework before you buy your first home
• Why passive real estate investing is not really passive
• The difference between flipping house and real estate investing
• The importance of having cash reserves
• The advantages of being a handyman
• The advantages and dangers of using leverage
• Why you need to put 20% down when you buy a property
• The importance of finding quality tenants
• How management companies work

My financial records are a mess. Are yours?

In this episode, I'll outline the framework I'm going to use to get my recording keeping in order. 

Could you find that important docuement if you needed to?

If not, listen and we can get organized together.

In the Retirement Tip of the Week, I'll give you a framework for lending money to friends or family so you can help out without ruining the relationship.

Is the stock market correction here?  In the last week of July the S&P 500 index lost 2.7%. The worst weekly loss in over two years. It didn't take long for the sensationalist headlines to pop up. Here are two of my favorites.

Warning: That plunge in stocks is just the beginning

MarketWatch.com

3 market warning signs predict 20% stock tumble

Insight: When these indicators flash together, it’s time to sell

MarketWatch.com

Strategies to Help You Handle Market Corrections

I'm all about investing wisely for retirement. If you are a trader, market timer, trend follower, etc. you might want to click away. For the rest of you, here are my suggestions to help you invest wisely and sleep better at night.

1. Have a Plan

Sounds simple but most people don't. They invest based on intuition, emotion and trust rather than facts, process and purpose.  Your plan doesn't have to be elaborate it just needs to be clear and actionable. It should include:

• Goal for investment assets
• Investment timeframe
• Risk/reward target
• Target investment allocation
• Rebalancing policy
• Communication and evaluation schedule

2. Have adequate cash reserves

More than anything, this may the most practical strategy to weather market corrections. One of the biggest mistakes you can make is  to sell an investment at the wrong time because you need the money.

With interest rates on savings accounts near 0%, it is tempting to put all your money "to work". Don't. Cash reserves give you the flexibility to weather uncertain times in your life as well as the markets. (in episode #17 I discuss cash reserves). Here are the basics of cash reserves

Emergency fund (3 months to 2 years living expenses) + Expected expenses within the next 12 months=Less emotional decisions

3. Have at Least a 3 Year Investment Timeframe

Anything under a three year time frame is speculating not investing. Investing wisely requires time.

4. Be Well Diversified

Every time I say this I feel like the teacher in the Peanuts cartoons...Blah, Blah, Blah. Diversification and asset allocation help you avoid the trap of trying to pick winners and losers. They position you to participate in the economic growth of the world. That is the point of investing.  The more you try to game the system, the more likely you'll miss out (Here is a recent episode on investing mistakes).

One thing you can do right now is make sure your allocation is rebalanced back to the target you should have set in the beginning. Over the last 4 years, the stock markets have done quite well. If you haven't rebalanced to your target you probably have a lot more equities than you originally intended. This could mean you have more volatility than you bargained for. Studies have shown that rebalancing your portfolio regularly helps you achieve better results. Rebalancing Feels bad, but works good.

5. Understand Market Corrections are Healthy for the Markets and Your Portfolio

You've heard it said that investing is like gambling. In a sense that's true. If you invest based on intuition, emotions and the advice of the financial press, you're just one of the suckers walking into the casino. If, however, you invest based on history, research, process and prudence you are more likely to have the odds of the casino over the long-term. That is investing wisely.

Retirement Tip of the Week

Try it Before You Buy it

You need to be very careful when you are in the Retirement Nesting stage of life. Retirement Nesting occurs during the 3 years prior to retirement and the 2 years after you retire. This is the time of retirement lifestyle dreams. AND a time when you are susceptible to marketers selling the retirement dream.

The Retirement Nesting stage is a danger zone for poor financial decisions. Don't fall for the emotional urges to buy an R.V., vacation lot, condo or big toy. They can be great but you need to be certain, very certain, that it is something you will truly use. Just recently, I had to help a gentleman unload a beach condo he purchased on a whim 5 years ago. He lost over $100k on the deal (and only used once). Don't be that guy.

Here are some tips to avoid the same mistake:

• Do LOTS of research over  a 12 month period before you buy
• Always pay cash.
• Rent the object of your desire for the first 2 years to see how much you actually use it. It is easy to rent anything anywhere nowadays.
• Test drive vacation homes, R.V.s and resorts over the first 5 years of you retirement. It can be great fun and save  you from making a costly mistake.

Resources Discussed

• A Field Guide to Market Corrections
• Vacation Rentals By Owner (VRBO)
• Episode on the Importance of Cash Reserves
• Common Investment Mistakes

In this episode, I'll show you how to come to terms with your worry and the uncertainty about retirement.

"I worry"

I talk to a lot of people about retirement. Not only clients but most everyone I meet over age 50.  I'll always ask them what their #1 thought is on retirement. I've learned a lot from this exercise. The most important thing I've learned is that people worry about retirement....alot!.

They worry about:

• all the uncertainty
• living without a paycheck
• inflation
• running out of money
• maintaining my standard of living
• my health and healthcare costs
• being a burden to my children
• long-term care costs
• losing money in the markets
• the economy
• my country

In this episode, I'll show you how to come to terms with your worry and the uncertainty about retirement. Once you've done that, you'll be free to build a system to manage through the uncertainty in your life. I discuss:

• Market uncertainty
• Economic uncertainty
• Uncertainty in your life

How to begin to manage it by:

• Scheduling "little conversations"
• Using checklists
• Making lots of little adjustments as your life unfolds during retirement

Building this structure is really what this blog, the Retirement Answer Library and podcast is all about. 

Retirement Tip of the Week

The importance of tax diversity on your balance sheet as you near retirement. If you're within 5 years from retirement, why it may make sense to significantly lower the amount you save in your 401(k) retirement plan. 

Resources Discussed

• The Retirement Answer Library
• Tax Deferred vs. Taxable Savings Calculator

Enjoy the Podcast?

A big THANK YOU to Dean for sending me your kind note, thanking me for the podcast and Retirement Answer Library. So glad it's been helpful to you. It really means the world to me.

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“How do I understand Social Security and Medicare?”  This is a question I hear most often from people planning for retirement. It's understandable. Social Security and Medicare benefits will play a big part in your retirement. 

In this episode we begin to unwrap both and begin to build a framework for you make decisions about your Social Security and Medicare benefits. I say we “begin” intentionally. These are BIG subjects. In future episodes, we’ll continue to improve your understanding of your Social Security and Medicare.

Announcements

• If you enjoy the podcast, I would consider it a great favor if you subscribed in iTunes and leave a review. This helps others discover the show. 
• Last week I announced my Retirement 2.0 project. This is an initiative to redesign the retirement planning process to serve you better.  To help, go here and share your thoughts on retirement.

Retirement Tip of the Week

I suggest you visit and explore our government's Social Security website. It is an easy to navigate, useful resource to help you manage your Social Security benefits. YES, I just said “useful” and “government” in the same sentence. They did a great job designing the site.

 You can easily:

• Apply for benefits,
• Check the status of an application
• Set up direct deposit
• Estimate your Social Security
• Estimate your spouse’s benefit
• Sign up for your Social Security benefit
• Set up direct deposit
• Access their Retirement Toolkit (a great PDF document that outlines key dates for Social Security and Medicare)

Unwrapping Medicare: The Basics

This week I talk with Misty Kimbrough, a local insurance expert about the basics of Medicare. She outlines the basic parts of Medicare and the 3 most common missteps people make when planning medicare benefits for retirement.

Part A “major medical” coverage covering health care costs at hospitals 

Part B Covers the costs of health care outside of a hospital. Doctor visits, outpatient procedures, x-lab test and related services

Medicare Supplements (Medigap)

Part C Medicare Advantage Plan

Part D Prescription Drug Plan

3 Common Medicare Missteps 

Resources Discussed

• Social Security website
• Medicare website
• Medicare Plan Finder
• Retirement Answer Library
• Red Apple Insurance

I Hate Keeping a Monthly Budget.

Yes, I know that keeping a monthly budget is personal finance 101.  Over the years I've tried, repeatedly, to track every expense in a monthly budget. Each time I failed after a few months. It's just too much work. I have better things to do than be a part-time bookkeeper. 

Do You Hate to Keep a Monthly Budget?

Tracking all your expenses is easier than ever. Programs like Quicken and Mint have powerful accounting tools in simple to use packages. Still...most of us don't track monthly expenses or keep monthly budget for one simple reason; We have better things to do than being a part-time bookkeeper. 

In this episode, I walk you through my budget system which gets you 80% of the benefits of detailed budgeting, without all the work. In just four easy steps you can take control of your spending and capture the excess income as savings. 

I Call It the Cash Flow Bucket System.

The advantages of the Cash Flow Bucket System:

1. You don’t waste time tracking every transaction.

2. You have less stress deciding how to spend money each month.

3. You don’t spend money just because it’s there.

4. You easily capture (save) excess income as savings.

5. You can make smarter decisions on allocating savings.

6. You maintain flexibility for unexpected expenses.

Try It and Stop Feeling Guilty About Not Keeping a Monthly Budget

I've added a worksheet to the Retirement Answer Library to walk you through the process. It's free, just sign up here.

The Retirement Tip of the Week

I give you Sammy's 5 secrets to living a happier retirement. These are worth listening to!

Want a great gift for a graduating high school or college senior?

Jon Chevreau’s book, Findependence Day, is a great gift that teaches important financial lessons within an interesting fictional story of a young couple walking through life.

We discuss:

• The definition of financial independence
• Life energy and the cost of spending
• The war against consumerism
• Why it’s harder to save than it used to be
• The danger of paying too much attention to financial media
• The call to action of “Freedom Not Stuff”
• The secret costs of moving homes

Are Your Password Safe?

Last week a client of ours had his e-mail hacked. The hacker then requested a wire from the client's account. Our security measures prevented it (Thankfully).  The story should make you seriously consider being more diligent about using strong passwords.  I explain how I manage my passwords.

Want access to the free Retirement Answer Library?  

This week we introduced this great resource to help you find the answer to your retirement questions. 

The Library includes worksheets and checklists to help you plan for and live in retirement. Each month new resources are added based on client and reader questions. Together we can build a library to Plan Well and Invest Wisely for retirement.

Gain Access Here

Resources Discussed

• The Retirement Answer Library
• Money Sense Magazine
• Findependence Day
• 1Password

In Honor of Those That Serve

A big thank you this week to Frank Gustafon of One Bold Move for his service and for leaving a review of the podcast in iTunes. Frank is a Marine and has a great podcast for Service Members.

Lead like a Marine is a weekly podcast focused on helping Marines and other Service Members translate their leadership skills and abilities as they transition back into the civilian job market.  We interview those who “have been there and done that”.  Great stories of successful transition into the civilian marketplace.

If you enjoy the podcast and are so moved, I sure would appreciate a honest review in iTunes. It would help us build the Plan Well community which helps everyone make smarter financial decisions

Happy Memorial Day Friends

Johns Hopkins University's Center for Innovative Care and Legg Mason recently issued a study titled "Aging and It's Financial Implications: Planning for Housing.

Kathleen Pritchard, Managing Director with Legg Mason, talks with host Roger Whitney about the importance of planning ahead for housing during retirement

There are three typical phases during retirement. The:

• Go Go Years--when you are healthy and active (60s & 70s)
• Slow Go Years--when you slow down due to health issues (70s & 80s)
• No Go Years--the late retirement years (80s & beyond)

By planning ahead for each of these phases, you can make smarter financial decisons and maintain control over your lifestyle choices.

There are five basic housing options for retirees:

1. Aging in place
2. 55+ independent living communities
3. Continued care retirement communities (CCRCs)
4. Assisted living facilities
5. Skilled nursing facilities

You can find due diligence worksheets to help you find the option that is right for you at rogerwhitney.com/worksheets

Walt Disney World is the classic family vacation. 

If you’re planning on visiting Walt Disney World, you’re going to love this week’s  PLAN WELL INVEST WISELY podcast. I speak with Lou Mangello, an internationally recognized expert on the Walt Disney World Resort.

Lou is a former attorney from New Jersey who has made his lifelong passion (Walt Disney World) his full time career. His website wdwradio.com is an amazing resource for all things Disney. 

In this episode we discuss:

• His book, 102 Ways to Save Money for and at Walt Disney World
• How to safe money on your Disney World vacation
• The best and worse times to visit Walt Disney World
• When Walt Disney World is busiest
• When it costs less to go to Walt Disney World
• How to begin planning your Walt Disney vacation
• How to maximize your time and still have fun
• Discount ticket sources
• The advantages of the Disney annual pass
• How to get discounts on food and lodging
• Things to consider when buying your ticket package  (to park hop or not?)
• Whether to stay on or off property
• Simple strategies to save money on food and drinks at Disney
• Saving on Souvenirs
• What to pack to make your day at Disney World comfortable

Resources Discussed

• wdwradio.com
• The book, 102 Ways to Save Money for and at WaltDisney World
• Disney Authorized Vacation Planner
• Mouse Fan Travel

For a TON of resources to help plan your trip to Walt Disney World visit wdwradio.com

How to pay for college is one of the most frequent questions I get from parents.

This week I interviewed Celest Horton from How to Pay For College HQ to learn about the great resources to help parents pay for college.

Celest knows it's possible to pay for college without student loans (she did it). Each week, on her How to Pay for College HQ podcast she interviews industry experts to help listeners learn what is necessary to plan, prepare and pay for college without the assistance of loans.

In this episode we discuss:

• The need for your teenager to be engaged in the process of selecting a college and applying for aide
• The importance of your teenager to show a "demonstrated interest" in schools they want to go to so they can improve their chances of receiving merit aide. They can do this by following a school on social media and intreating with the admissions department.
• How a high school senior could graduate with 1 or 2 years of college credit by taking duel purpose classes in high school to earn college credit.
• What the FAFSA form is and why its important to complete in January each year.
• The importance of researching potential college's average SAT scores, tuition and how generous they are with merit aide.

Resources Discussed

• Scholarshipopportunity.org Online resource for scholarship opportunities to help pay for college
• College Navigator Online resources to research average tuition, SAT and aide for colleges
• College Data Online resources to research average tuition, SAT and aide for colleges

Visit How to Pay for College HQ to receive the free report : Top 5 Things Every Parent Should Know To Pay for College Without Loans

In this Plan Well Invest Wisely podcast, Roger Whitney interviews Lauren Gaggioli, founder of Higher Test Prep Scores. They discuss the importance of the SAT and how to help your child select the right school for them.

Here are some of the topics Lauren and I covered:

• The importance of taking college preparatory tests such as ACT, SAT, PSAT.
• Determining which test(s) to take when choosing a college.
• The advantages of taking both ACT and SAT tests.
• Motivating students to take responsibility in preparing for college.
• Why some students should consider taking an intentional "gap" year between high school and college.
• With their parents' help, students should examine themselves (passions, strengths, personality) to discover which college may be a best fit for them.
• Various kinds of financial aid, including need-based and merit-based.
• Why students should diversify their college options.

To learn much more about ACT, PSAT and SAT test prep, listen to Lauren's free podcast called The College Checklist.

Lauren is offering a FREE video on her website at Higher Test Prep Scores.

It's spring and the desire to spend time outside with the family is blooming. Before you allow that budding desire to lead you to buy an RV, boat or other recreational item make sure you closely look at the potential pitfalls of ownership.

In this episode, host Roger Whitney tells his story of how he did everything wrong when he purchased an RV. He also outlines 10 things you should consider before you purchase your RV.

This is the REST of the story not told in the RV brochures and outdoor shows that are springing up this time of year.

Have a retirement or personal finance question? Ask Roger here and he'll answer personally.

How do you find the right financial advisor for you and your family?

In this special mid-week edition, host Roger Whitney gives you a framework for how to interview a financial advisor candidate and 15 questions you should ask to help choose the right financial advisor for you.

In this episode he covers:

1. Why it is important to interview multiple financial advisors
2. What to look for in a financial advisor
3. Pre-work you can do before you meet the financial advisor
4. 15 questions to ask to help you find the right financial advisor for you and your family

For a Trusted Advisor worksheet to use in your interview process go to rogerwhitney.com/worksheets

This Week, Roger Whitney introduces a new service YOU ASK I ANSWER, where you can ask your retirement planning questions and receive a response.

Then he begins to answer the question, will I have enough money to maintain my lifestyle during retirement?

The first step to answering this question is to determine what your retirement lifestyle will be. You do this by breaking your retirement lifestyle into three buckets:

• Retirement Essentials. Those retirement expenses needed to maintain your household (housing, utilities, food, insurance, etc.)
• Retirement Lifestyle. Those retirement expenses for things that enrich your life (travel, entertainment, home improvements, hobbies, etc.)
• Retirement Dreams/Legacy. Those special things that you would like to accomplish (major travel, gifting, purchasing a second home, etc.)

Breaking your retirement lifestyle into these three buckets gives you the flexibility to adjust your retirement lifestyle each year based on how your retirement unfolds.

Once you do this, you need to consider how you will spend during retirement. For example inflation. Consider what your personal inflation rate is based on your spending habits.

Also consider closely whether you want to spend more earlier in retirement with the understanding that you will lower spending in later years. In essence, buy yourself more lifestyle now, while you are younger and healthier. 

Once you've completed this step you are well on your way to determining how much money you will need to maintain your lifestyle in retirement. 

In future podcasts, he'll address the next steps in this process.

This episode is based on Roger Whitney's new report INVEST in Your Health: 72 Tips to Living a Healthier Retirement. You can download the report for free at rogerwhitney.com

Investing in your healh may be the best investment you can make to living well in retirement. The quality of your health has major financial implications to your financial wellbeing in retirement.

In this episode we outline the financial benefits of investing in your health and the six areas of your health that you should invest in. 

• Physical
• Intellectual
• Emotional
• Social
• Spiritual
• Occupational

In episode 2 Roger Whitney talks about the importance tracking your net worth, how you can use it to make smarter financial decisions  and  rethinking your perspective about the purpose of investing.

PLAN WELL Segment

Your net worth statement is an essential tool for making smarter decisions. Your net worth statement:

• gives you your entire financial picture in one place
• equals the sum of all of your financial decisions over time
• allows you to identify risk and opportunities in your financial life
• is a much better tool to track your financial progress over time than your investment accounts

You should update your new worth statement every six months and use as part of your process for making big financial decisions.


INVEST WISELY Segment

Over the last 25 years investing has been about "creating wealth."This has led to many people investing too aggressively.

Historically, the creation of wealth came from hard work, enterprise, creativity, disciplined spending and savings. The purpose of investing was to preserve and grow the wealth WE created. This perspective is important for you to consider.

It:

• keeps the focus on the true driver of wealth creation.....YOU
• may allow you to invest less aggressively
• positions you better to invest more consistently over time