Despite the economic downturn, 2020 turned out to be a fantastic year for charitable giving. In this episode, we’ll look at how people chose to give and you’ll learn about the efficiency of giving through donor-advised funds (DAFs).  In the listener questions segment, you’ll learn how to survive a bear market in retirement. We’ll investigate the length of the average bear market and see how you can prepare for the worst in your retirement years.  Outline of This Episode [1:42] 2020 was a banner year for giving [4:48] Planning ahead can help alleviate a hefty tax bill [10:49] What is the average length of recovery from a bear market? [17:04] Look into Guyten’s Guardrails Shwab and Fidelity both showed an increase in giving You would think that with the economic downturn of the last year that people would tighten their bootstraps and cease giving to charities, but it turned out that the opposite was true. The two largest brokerage firms, Schwab and Fidelity, recorded increases in charitable donations.  Donations were made in response to the Covid pandemic and the social justice protests that marked the year. The biggest recipients of these charitable gifts were organizations that provide food and other necessities Donor-advised funds are an important vehicle for charitable giving Fidelity Charitable and Schwab Charitable both use donor-advised funds as a vehicle for charitable giving. Donor-advised funds (DAFs) have become popular since they are simple and make for an easy way to give strategically. These charitable investment accounts allow a donor to make a charitable contribution, receive a tax deduction, and then distribute the money over time. Have you thought of changing the way that you make charitable contributions? What are the benefits of using DAFs? DAFs have become more popular in recent years due to changes in tax laws. The new standard deduction for charitable giving increased to $24,800 for a married couple. By creating a DAF, donors can contribute a lump sum every few years and then administer the funds to the charities they choose over time. Many advisors recommend donor-advised funds as a receptacle for their clients to strategically deduct charitable contributions. Listen in to hear a real-world example of how a DAF can be used.  Planning ahead can create a tax deduction We must all pay our taxes, but we never want to overpay -- no one wants to leave the taxman a tip. If you are charitably minded, a donor-advised fund is an excellent way to implement a multi-year tax strategy and take advantage of the standard deduction. Think about how lump sum giving every few years could change your tax situation. It pays to plan your taxes ahead in retirement. Resources & People Mentioned Investment News article on charitable giving Guyton’s Rules for Withdrawal Rates Guyton’s Guardrails are discussed in - Episode 181, Episode 153, Episode 149, Episode 93 Connect with Benjamin Brandt Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/ Follow Ben on Twitter: https://twitter.com/retiremeasap Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Subscribe to Retirement Starts Today on Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify

Retirement Starts Today Radio

Fidelity & Schwab Donors Set Record for Charitable Giving in Response to Pandemic, Ep #187

If you’ve been working from home over the past year you may wonder why you feel even more exhausted than normal. This could be due to Zoom Fatigue. In this episode, we’ll explore an article from CNBC that references a Stanford study about this phenomenon. In the listener questions segment, I’ll answer questions about RMDs and Roth conversions. Let’s get to the bottom of your exhaustion--press play now.  Outline of This Episode [1:22] Zoom fatigue affects people on a psychological level [3:26] Solutions for Zoom fatigue [6:17] Future tax rates and RMDs [10:44] How to pay for Roth conversions? Why are we so exhausted after video conferencing? Over the past year, many of us have been using Zoom and other video conferencing applications to replace in-person meetings. The constant video conferencing has led to increased fatigue at the end of the day and a researcher with Stanford University wondered why. Jeremy Bailenson researched this issue and recently published a paper about how video conferencing affects people on a psychological level.  4 reasons for Zoom fatigue Jeremy concluded that there are four different contributors to Zoom Fatigue: The extended level of eye contact is unnatural. The screen causes us to look at each other for an extended period of time. In a face-to-face meeting, we wouldn’t be behaving in such a way. Non-verbal signals during video conferences require more effort than in-person meetings. During in-person meetings, our nonverbal cues happen quite naturally and without any effort. However, we have to exaggerate our non-verbal communication in a video chat which requires more thought and increases our cognitive load Watching yourself in the little box on the screen for prolonged periods is unnatural and causes self-critique.  Being forced to sit still in one place for long is exhausting. Since we are on camera we have little room to move around naturally.  Ways to battle Zoom fatigue To alleviate these issues, Bailenson has the following tips: Hide self-view.  Shrink the participant’s video window to make other people a bit smaller.  Spend some time adjusting your setup ahead of an important meeting.  Turn off your camera and take a five-minute audio-only break during a long meeting. Set cultural norms in your workplace that it’s OK to turn off the camera sometimes. Zoom fatigue is a new version of burnout that is important to mitigate. You want to retire when you are ready rather than because you are feeling burnt out due to video conferencing. Try using these tips to help you combat the exhaustion you feel after video conferencing.  Resources & People Mentioned CNBC article - Zoom Fatigue and How to Fix It A 15 question scale for evaluating Zoom fatigue You can participate in the study on Zoom Fatigue Connect with Benjamin Brandt Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/ Follow Ben on Twitter: https://twitter.com/retiremeasap Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Subscribe to Retirement Starts Today on Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify

Why We’re Experiencing Zoom Fatigue and How To Fix It, Ep # 186

You have fraud protection on your bank accounts and your credit cards, but what about your retirement accounts? Today we’ll explore an article from the Wall Street Journal outlining a case of cyber fraud in a 401K account. We’ll also discuss ways for people to safeguard their savings.  In the listener questions segment, I’ll answer a question about buying an RV in retirement and we’ll wrap up this episode with a question from Hal about whether to make Roth conversions or pay off the mortgage. Press play to get started on this episode of Retirement Starts Today.  Outline of This Episode [1:22] Retirement accounts are not offered the same protections as 401K accounts [3:04] Steps you can take to protect yourself from cyber fraud [6:20] John asks whether to get a loan for his RV or use his retirement account [12:36] Hal asks, Roth conversions or pay off the mortgage? Retirement accounts are not offered the same protections as 401K accounts Our retirement headline this week is titled Retirement Planning Gives Bigger Role to Theft Prevention as Risks Lurk Online. This article warns us against cyber fraud of retirement accounts. The laws regarding retirement income were enacted well before the internet, so they don’t address who should be responsible for this type of crime. We often have more money saved in our retirement accounts than in our checking accounts, so this kind of theft can be life-changing.  Retirement account cyberfraud is increasing  Retirement account cyber fraud used to be typically perpetrated by members of one’s own family, but in the past few years, strangers have played a bigger role in committing these types of crimes.  The article highlights one particular case where the account owners were shocked to discover that ⅔ of their retirement savings had been transferred to an unknown account. The couple then had to postpone their retirement indefinitely.  5 steps you can take to protect yourself from cyberfraud If you don’t want to have this happen to you there are steps you can take to protect yourself from cyber fraud.  Have an online account. Even if you prefer paper statements, set up online access since unclaimed online accounts are easier for impersonators to set up and control. Check in regularly. Check your 401K account along with your email and street addresses monthly. You can also sign up for text alerts that notify you of changes or transactions. Make sure to use multifactor authentication which verifies your identity by sending codes to multiple devices. Practice good internet hygiene. Avoid public wi-fi and never click on emails or texts that seek personal information including passwords. Make sure to install software updates regularly. Create good passwords. Choose a unique password and keep them confidential. If you use a third-party service to help you remember your financial passwords understand that could be grounds for denying reimbursement of any stolen funds.  Evaluate the logistics of how you withdraw money from your retirement accounts. Check with your custodian to see what the protocol is for moving money between accounts.  Thieves always want to be ahead of us and the regulators so we have to stay on our toes. Listen in to hear the tips on how you can protect your hard-earned money and retire comfortably. You’ll also hear the answers to 2 relevant listener questions.  Resources & People Mentioned Retirement Planning Gives Bigger Role to Theft Prevention as Risks Lurk Online Retirement Answer Man episode 263 Connect with Benjamin Brandt Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/ Follow Ben on Twitter: https://twitter.com/retiremeasap Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Subscribe to Retirement Starts Today on Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify

How To Protect Yourself and Your Savings From Cyberfraud, Ep # 185 

If you have listened to the news at all lately, you probably know what our Retirement Headlines segment will cover. The American Rescue Plan is all any financial news is talking about these days, so in today’s episode, we’ll explore what you need to know about this recent piece of legislation.  Then in the Listener Questions segment, I answer the question: should having a pension change the way we invest the rest of our portfolio? Press play to find out.  Outline of This Episode [1:22] Eligibility has been expanded in this new round of stimulus checks [5:36] What does this mean for you? [9:22] What wasn’t included in the American Rescue Plan? [12:10] How to invest if you are in line to receive a pension? Eligibility for stimulus checks has changed The American Rescue Plan is all over the news lately, but the article that I am referencing is written by Jeffrey Levine from Kitces.com titled The American Rescue Plan Act Of 2021: Tax Credits, Stimulus Checks, And More That Advisors Need To Know!  The most talked-about part of this tax legislation is, of course, the $1400 stimulus checks which will be soon sent to eligible Americans to provide economic relief from the ongoing pandemic. Not only are the checks more generous, but there are also key eligibility changes from the previous rounds of stimulus checks. Eligibility in this cycle has been expanded from including only children under the age of 17 to include all dependents in the household. However, just because you got a stimulus check last time does not mean you will receive one this time. The income limitations of this package mean that there is a narrower margin of income eligibility. While the beginning of the phaseout starts at the same level of income, $75,000 for individuals and $150,000 for married couples, it phases out much more quickly. The cap for individuals is $80,000 and couples is $160,000. What does this mean for you? If your income is close to that income cap and went down this year then you’ll want to file your taxes as soon as you can. However, if you are one of the lucky few whose income rose in 2020 compared to 2019 and are near or above the phaseout range then hold off on filing your income taxes until after you receive your stimulus payment.  What else is in the stimulus package? The stimulus checks weren’t the only thing included in this $1.9 trillion bill. Another significant change included is a significant increase in the child tax credit. This credit has been increased from $2000 to $3000 and $3600 for children under the age of 6. It is important to note that not everyone with children age 17 and under will qualify to receive the enhanced 2021 child tax credit amount since the phase-out ranges will be at significantly lower income amounts than the standard child tax credit. Listen in to find out what else was included and what wasn’t included in the American Rescue Plan and stick around to hear the listener question. Resources & People Mentioned The American Rescue Plan Act Of 2021 from Kitces.com Connect with Benjamin Brandt Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/ Follow Ben on Twitter: https://twitter.com/retiremeasap Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Subscribe to Retirement Starts Today on Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify

The American Rescue Plan Act Of 2021, Ep # 184 

Enrolling in Medicare can be extremely stressful and confusing. There are so many choices to make, there are different rules to follow, and timelines to be met. Additionally, there is so much information out there that it merely adds to the confusion.  On this episode of Retirement Starts Today, I share with you an article written by Joanne Giardini-Russel from Advisor Perspectives entitled, 5 Tips to De-Stress the Entry into Medicare. If you are starting to dive into the Medicare enrollment process you won’t want to miss these 5 tips.  Make sure to stick around for the listener questions segment to hear a question about enrolling in Medicare as an expat as well as whether you should be doing Roth conversions if your income will decrease. You’ll also learn why it has taken me a year to get around to answering some listener questions! Outline of This Episode [1:32] 5 Tips to lessen the stress of the entry into Medicare [6:14] As an expat would it make sense to buy plans G or N now or wait? [9:43] Should you do Roth conversions now if you will have a decrease in income? [14:33] Why I haven’t been answering some listener questions 5 tips to ease the Medicare enrollment process If you are approaching age 65 you may have noticed all the literature surrounding Medicare that has come in your mail. Rather than help you answer the questions you have about Medicare, they often add to the confusion. The whole process can be overwhelming, but these 5 tips can help you understand what to do to enroll.  Don’t automatically enroll in Medicare at age 65 unless you need or want to. Understand that there are situations where you want to enroll and where you don’t want to enroll in Medicare at 65. This is one of the keys to understanding Medicare. If you do want to enroll in Medicare at age 65 you’ll need to understand all the hoops to jump through. If you are drawing your Social Security benefits before age 65 then you will be automatically enrolled in Medicare parts A and B. Don’t overwhelm yourself with too much information. You can find thousands of Medicare webinars, workshops, and seminars with a simple web search, but overwhelming yourself with too much information isn’t beneficial. You may even fall prey to businesses that are looking only to serve themselves. A good place to start your Medicare research is with the official Medicare and You Handbook directly from Medicare. Understand the 2 paths to Medicare. You’ll want to decide whether to go with a Medigap plan or a Medicare Advantage plan. Learn the differences between the two and think about which one best fits your budget and lifestyle.  Use technology to take advantage of everything that you can access from the comfort of your home.  Secure a good Medicare guide. Contact several different agencies and agents before turning 65. Prepare a list of questions for them and make sure to check their Google reviews. When selecting an agent you’ll want to make sure to choose one who will stick with you over time and provide follow-up support.  Key takeaways about signing up for Medicare Try not to get overwhelmed by the Medicare enrollment process. Begin your research before you turn 65, and spend time finding a good agent or agency who will be there to support you over the long haul. Educate yourself with available government resources so that you can make informed decisions. Check out the Boomer Benefits YouTube channel in April to see me on a 3-part series with Danielle Roberts. Make sure that you are subscribed to the Every Day is Saturday newsletter to receive a direct link when it comes out. Resources & People Mentioned 5 Tips to Destress the Entry into Medicare Medicare and You Handbook Medigap informational video Medicare Advantage informational video Connect with Benjamin Brandt Get the Retire-Ready Toolkit:  http://retirementstartstodayradio.com/ Follow Ben on Twitter:  https://twitter.com/retiremeasap Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Subscribe to Retirement Starts Today on Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify

What to Expect When You're Expecting (to Apply for Medicare), Ep # 183 

How long have you been saving for retirement? Are you hesitant to break into your retirement funds and start living it up once you retire?  This week I share two Retirement Headlines articles. The first is called Right-Sizing Retirement and it comes from the Financial Planning Association. In this article, the authors pose an important question: why save for retirement if you're not going to spend it? We’ll also check out another article from Wharton Magazine entitled The Economics of Living to 100. Is your retirement plan ready for you to live until 100? Listen to this episode to understand how you can best combat the uncertainty that retirement brings. Outline of This Episode [1:42] Right-sizing retirement [6:28] Combat uncertainty with contingency planning [7:22] What if you live until 100? [11:50] There is a need for longevity income [13:39] What is your plan B? Why are Americans underspending in their first 10 years of retirement? David Blanchett and Warren Cormier recently wrote an article for the Financial Planning Association in which they explore the first 10 years of retirement. What they discovered from the RAND Health and Retirement Study is that early retirees tend to underspend. The authors wanted to find the underlying reasons for why we are seeing this trend in America. This research explores the retirement consumption gap and considers both the wealth available to fund retirement and spending before and after retirement. There are 2 types of retirees Retirees can be broken down into 2 main categories: those who have saved enough to cover their levels of pre-retirement spending and those who did not. Interestingly, both of these types of retirees tend to underspend in early retirement but for different reasons. Only 18 percent of households in America have enough wealth to cover their pre-retirement spending during retirement. This tells us that most households will not be able to maintain their pre-retirement lifestyle in retirement because they don’t have enough money.  You may think that only those that don’t have enough saved cut their spending in retirement, however, the data shows that most households that have saved more than enough to fund their lifestyles in retirement also decrease their spending in early retirement. Why don't well-funded households spend more in retirement? Many well-funded households could increase consumption but don’t. So, why does this group of retirees spend less during early retirement? Potential reasons include the desire to leave a legacy, uncertain medical expenses, or an uncertain life expectancy. There also could be psychological or other reasons not easily discerned from survey data. Uncertainty leads to spending less The main reason for this lack of spending in the first 10 years of retirement is uncertainty. Does the uncertainty that retirement brings give you pause to live out your retirement fully?  One way to combat this unpredictability is with contingency planning. If you’re listening to a retirement podcast then you probably have a retirement plan, but do you have a plan B? What will you do if life throws a wrench in your plans? Listen in to hear what you can do to combat the uncertainty that retirement brings. Resources & People Mentioned Right-Sizing Retirement article The Economics of Living to 100 Connect with Benjamin Brandt Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/ Follow Ben on Twitter: https://twitter.com/retiremeasap Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Subscribe to Retirement Starts Today on Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify

Why Save If You’re Not Going To Spend? Ep #182

Have you heard of the Monte Carlo retirement projection analysis? It is being used more and more by advisors and even popular retirement planning websites. Today, in the Retirement Headlines segment, I offer some insight on an article from Kitces.com that argues that using the Monte Carlo projection, a 50%probability of success rate is good enough. Then in the listener questions segment, I answer the question: what should you do if you plan on never retiring? Don’t miss out on my 5 step plan for those that plan on never retiring.  Outline of This Episode [1:32] A 50% probability of success is actually a viable Monte Carlo retirement projection [7:34] Your retirement plan doesn’t have to be carved in stone [11:11] What should you do if you plan on never retiring? [16:00] Steps to follow if you don’t plan to retire What is the Monte Carlo analysis? The Monte Carlo analysis is increasingly becoming the most common method of conducting retirement projections for clients. I use it in my own practice and many online retirement calculators such as Vanguard and Fidelity use it too. This risk management technique was actually developed by an atomic nuclear scientist in 1940 to analyze the impact of risks of a project and had nothing to do with retirement.  Would you be comfortable with a probability of success under 70% for your retirement? You may hear financial advisors discussing a client’s probability of success to describe their retirement portfolio. Reflecting on your grades in school, you probably aren’t comfortable with anything less than 70% since anything below that would be a failing grade. However, in his article, Derek Tharp argues that a probability of under 70% is still realistic for clients who are willing to make some spending adjustments. Your retirement plan doesn’t have to be carved in stone Your retirement isn’t static, it’s a constantly changing dynamic picture that should use a dynamic strategy that fits your unique situation and shifting goals. If you are willing to make the needed adjustments on your path to retirement, then when you hear the news that you have a 50% (or even lower) probability of success, don’t panic, you may actually be in better shape than you may realize as long as adjustments are made. The drawbacks of retirement models The Monte Carlo simulation is a useful planning tool but it has its drawbacks. Like many retirement tools, it doesn’t do a great job of modeling human behavior in retirement. If the markets start dropping most people adjust their spending habits accordingly. Guyton’s Guardrails are a better tool for predicting how people might behave as the markets rise and fall. You can learn more about Guyton’s Guardrails in episodes 153, 149, and 93. Stick around until the end of this episode to hear my 5 step plan for those that never plan to retire. Resources & People Mentioned Why 50% Probability Of Success Is Actually A Viable Monte Carlo Retirement Projection Vanguard Retirement Tools Fidelity Retirement Tools Derek Tharp - Conscious Capital Guyton’s Guardrails are discussed in - Episode 153, Episode 149, Episode 93 Guyton’s Rules for Withdrawal Rates Connect with Benjamin Brandt Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/ Follow Ben on Twitter: https://twitter.com/retiremeasap Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Subscribe to Retirement Starts Today on Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify

Is a 50% Probability of Success Good Enough? Ep #181 

Have you wondered why the markets had such an amazing year in 2020 when the economy was a mess and everyone was stuck at home? You aren’t the only one. That’s why in this episode, we’ll look at a New York Times article that examines this question.  We’ll also answer some listener questions directly from our newsletter readers. Dave asks about dividend investing in retirement and Brian asks about how to pivot away from target-date funds after retiring.  Outline of This Episode [1:22] How data can help us understand the stock market’s response to Covid 19 [7:50] Is it better to reinvest dividends from stock funds and interest from bond funds in retirement? [10:30] Should you maintain your assets in a target-date fund after retirement? Covid brought about even bigger differences between the haves and have nots Recently the New York Times investigated Why Markets Boomed in a Year of Human Misery. This article analyzed the income, spending, and savings levels from March through November of 2020 and during that same time period in 2019. The comparison between these two vastly different years illustrates how policy, markets, and the economy intersect. Ultimately, the article reveals a sharp distinction between the haves and have-nots during the pandemic. Incomes actually increased in 2020 It may be hard to believe, but the study that the article referenced shows that salaries and wages only fell 0.5% during the nine months of the Covid pandemic. This is due to the fact that the millions of people no longer working were disproportionately in lower-paying service jobs while higher-salary jobs were largely unaffected.  Due to the CARES Act, most households received $1200 stimulus checks. That coupled with an expansion in unemployment insurance programs prevented an income collapse. It turned out that Americans’ cumulative after-tax personal income was actually $1.03 trillion higher from March to November of 2020 than in 2019, an increase of more than 8%.  Americans spent less in 2020 than in 2019 While Americans were earning more in 2020 than in 2019 they ended up spending less. Spending on services like restaurants and travel fell by $575 billion, or nearly 8%. Instead, that money went to spending on durable and non-durable goods. Overall, American spending decreased by $535 billion.  Savings have reached record levels Since Americans were earning more and spending less that meant that savings rates increased dramatically. From March through November 2020, personal savings was $1.56 trillion higher than it was in 2019 -- a rise of 173%! Before the pandemic savings rates were at 7% and spiked to 33.7% in April. This was its highest level on record, dating all the way back to 1959.  These findings are quite unexpected during this time of worldwide crisis. If there is a lesson to be learned here it’s that when the world expects the stock market to zig more often than not it will zag. Remember that the next time the world throws us an economic curveball.  Tune in to find out the answers to our listener questions! Resources & People Mentioned New York Times article Connect with Benjamin Brandt Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/ Follow Ben on Twitter: https://twitter.com/retiremeasap Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Subscribe to Retirement Starts Today on Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify

Why Markets Boomed in a Year of Human Misery, Ep #180

Has the Covid-19 pandemic cut into your vacation plans? It seems like everyone’s travel plans have changed over the past year. But what does that mean for employees and companies? Anne Steele and Chip Cutter examine the effects of Covid-19 and vacation taking in a recent Wall Street Journal article that we’ll look at today.  In addition to our Retirement Headline, I’ll answer two listener questions. One is about Medicare before age 65 and the other about investing in bonds. Grab your favorite listening device and join me to help you get retirement ready. Outline of This Episode [1:22] Many people aren’t taking time off right now [6:10] Will Rich’s wife qualify for Medicare after he retires? [10:28] Should we own bonds with these low interest rates? Working too much decreases productivity We have discussed the importance of taking vacations on Retirement Starts Today before. And if you have listened in the past you know that vacations actually increase worker productivity and boost morale. However, this past year, the Covid-19 pandemic has changed most people’s travel plans. Many have decided to postpone taking their vacation days until a time when they can travel more. But with the stress over the pandemic and the changes brought about by working from home, people should be taking time off now more than ever. Companies are becoming increasingly concerned about employee’s lack of vacation time Whether it is because people feel like they can’t or shouldn’t take vacation time right now, companies are becoming increasingly concerned. However, different companies are taking different approaches to the issue. Some are relaxing their vacation policies and allowing the vacation time to roll over while others are forcing their employees to use the time now to try and fend off burnout. Have you used your vacation time over the past year? Vacations are even more important in the lead up to retirement As you approach retirement, it is even more important to take those vacation days. The free time that vacation days offer you an opportunity to explore and practice what you will be doing in retirement. If you have postponed your vacation, consider taking a staycation to practice for retirement. Take this time to explore new hobbies and act out what you would do during your retirement.  In retirement, every day is Saturday! Press play now to listen to the Retirement Headlines segment plus get the answers to our listeners’ questions. Have you signed up for the Every Day Is Saturday newsletter yet? If not, what are you waiting for? Follow this link to get the latest in retirement news in your inbox every Thursday morning.  Resources & People Mentioned Wall Street Journal article - Companies Fret As Vacation Goes Unused Boomer Benefits YouTube video - Medicare Under 65 Connect with Benjamin Brandt Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/ Follow Ben on Twitter: https://twitter.com/retiremeasap Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Subscribe to Retirement Starts Today on Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify

Why Companies Fret as Vacation Days Go Unused, Ep # 179

Has the news about the ups and downs in the market lately got you a bit worried? You aren’t the only one. Many people are even thinking about pulling their money out in case there is a market correction. Does this sound like you? If so, you’ll definitely need to listen to this episode.  When you press play you’ll hear what would happen if you only invested at the market peaks, what to do with an inherited IRA, and what the benefits are of an umbrella insurance policy.  Outline of This Episode [1:25] What if you only invested at market peaks? [5:21] What to do with an inherited IRA? [9:00] The benefits of an umbrella insurance policy What if you only invest at market peaks? Have you ever wondered what would happen if you invested at all the wrong times? Our retirement headline this week is from Ben Carlson who reflects in his widely read 2014 piece, What If You Only Invested at Market Peaks? In his newest article with the same title, Ben introduces a video illustration to turn his story of the world’s worst market timer into a timely cartoon about the rewards of patience and long-term thinking.  Ben responded to the pushback he got from the original article by explaining that while there are risks involved with any investment strategy, the most effective way to combat those risks is with a long-term investment mindset. Long-term thinking will give you the biggest margin of safety when investing.  Are frothy markets making you nervous? The current market volatility has many people looking for an exit strategy. While I share their concern over the rapid growth we have seen over the past several months, this is why we have an investment strategy. Overvalued markets are no reason to deviate from your investment plan.  A properly invested retirement portfolio should already include a contingency plan for a market downturn. If you are worried about the market then now is a good time to consider your investment plan. You may want to dial back your stock exposure back a few percent to help you sleep at night. If you are within a few years of retirement, you should already be close to a retirement income portfolio of about 40-50% in bonds and cash. Are you worried about a market correction? What to do with an inherited IRA One listener writes about her daughter who inherited a 403B account. She would like to know what the best plan is for this unexpected inheritance. She could either take a lump sum or roll the money into an inherited IRA account which must be withdrawn over a 10 year period. The answer to this question depends on her income. If she has a high income then she should spread the money over the 10 year period taking about 1/10 each year. If her income is not too high then taking the money now and paying the taxes on it shouldn’t be too much of a burden tax-wise. What would you do with such an inheritance? Make sure to subscribe to my newsletter If you have any questions for me, want to hear more about retirement planning, or would like to be first in line for free book copies from the authors that I interview, click here to subscribe to my Every Day is Saturday newsletter. This weekly newsletter is delivered every Thursday morning to remind you that every day is Saturday in retirement.  Resources & People Mentioned What If You Only Invested at Market Peaks? by Ben Carlson USA Today article on umbrella insurance Financial Samurai article on umbrella insurance Connect with Benjamin Brandt Get the Retire-Ready Toolkit:  http://retirementstartstodayradio.com/ Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Follow Ben on Twitter: https://twitter.com/retiremeasap Subscribe to Retirement Starts Today on Apple Podcasts

Frothy Markets - Beware or Prepare? Ep # 178 

Are you setting yourself up for a single-ply retirement? Do you find yourself trying to save money out of habit rather than necessity? Listen to the retirement headlines segment to find out why this may not be the best idea in retirement.  In the listener questions segment, I actually have a listener answer. I asked the subscribers of my Every Day is Saturday newsletter what they were doing to combat Zoom fatigue and Ann replied with a detailed answer. After that, we’ll analyze Social Security claiming strategies and discuss retirement rebalancing strategies.  Outline of This Episode [2:02] What might it feel like to be frugal by choice rather than by default? [5:46] What is your strategy to step away from Zoom calls and recharge your batteries? [8:48] Social Security claiming strategy [11:42] When is the right time to rebalance? How would it feel to be frugal by choice rather than by default? Do you find yourself making money-saving decisions out of habit? Are you like Tim Ferriss and who still buys single-ply toilet paper after all his success? Oftentimes our frugality stems from our upbringing rather than from necessity. To kick the default frugality habit, it helps to look at your formative years. Did your parents instill this habit in you or does your frugality serve a purpose? There is a time and a place for frugality, however, automatic frugality isn’t always the smartest choice. If you are automatically frugal how do you decide where to trim and where to spend? If you are the type of person who is thrifty by default, these decisions can be tough until you realize that survival level spending habits aren’t always the smartest choices.  How do you evolve from scarcity-based decision making to outcome-based decision making? One way to analyze whether your frugality is automatic or purposeful is to define your spending habits. Create an inventory of your spending. What indulgences did you make that were worthy last year? Which extravagances would you repeat? In what areas can you spend money to create more joy in your life? Learn to build a higher-quality life and become frugal by choice rather than by default by listening to this episode of Retirement Starts Today.  What is your strategy to step away from work and recharge your batteries? Over the past year, many of us have become very familiar with working from home. Although working from home allows us more flexibility, studies show we are working more than ever. With so much time spent in front of a screen, we can burn out quickly.  Ann enjoyed the freedom of taking 3 day weekends last year. She has learned to slow down, enjoy her time off, and practice self-care. She also learned to stand up for herself and be intentional about how she takes her vacation time. What can you learn from Ann? Take time now before you retire to enjoy life If you describe yourself as a workaholic, then now is the time to consider what to do in your downtime. If you want to make the most out of your retirement, you’ll need to become comfortable with having free time. What are you doing to practice self-care and make the most of your downtime? Listen in to hear all of this plus the effects that claiming Social Security early or late could have on the total benefits between spouses and how to balance your portfolio in retirement.  Resources & People Mentioned Tim Ferriss BOOK - The 4 Hour Work Week by Tim Ferriss BOOK - The 4 Hour Body by Tim Ferriss BOOK - Tool of Titans by Tim Ferriss Connect with Benjamin Brandt In retirement, Every Day Is Saturday, even Thursday! Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/ Follow Ben on Twitter:https://twitter.com/retiremeasap Subscribe to Retirement Starts Today on Apple Podcasts,Stitcher,TuneIn,Podbean,Player FM,iHeart, orSpotify  

Single-Ply Retirement, Ep #177

I figured that you all may be a bit sick of hearing the news lately which is why this week’s episode will focus only on listener questions without the Retirement Headlines segment. I’ve got 2 listener questions that will pique your interest. Chris asks about long term care insurance. What is the difference between hybrid and traditional policies and when can someone self insure? And Janet wants to know about the tax benefits of life insurance to fund your retirement. Don’t miss the answers to these complex questions, press play now! Outline of This Episode [1:22] Chris has a long-term care insurance question [8:33] Consider your home equity as a quasi-long-term care policy [10:09] Janet is curious as to how life insurance could be used as a tax strategy Do you even need long term care coverage? The question of how to pay for long term care comes up when creating every retirement plan. It is extremely difficult to plan for long-term care due to the myriad unknowns. Will you even need coverage? This question can be difficult to answer since the duration and level of long-term care varies from person to person. This is why we look at the statistics. A person turning 65 today has a 70% chance of needing some sort of long-term care service in their life. And 20% of people will need it for longer than 5 years.  How much does long-term care cost? Since 70% of people end up needing long-term care service, it is prudent to be prepared. But how much money will you need? The average stay for a nursing home resident is 28 months and the average stay for assisted living is 27 months. When you consider that nursing homes cost $225 per day for a semi-private room and assisted living costs half that, and you take the average length of stay you can round the total cost to $200,000. To self insure or purchase long-term care insurance  Now that we have analyzed the 3 parameters surrounding the issue of long-term care -- the likelihood of needing long-term care, the length of stay, and the cost -- we can analyze how to cover this cost. There are a couple of different ways to tackle this problem. You could self insure or purchase one of the many types of long-term care insurance policies. Long-term care insurance may give you peace of mind, but is it worth the cost? Self-insuring may be easier than you think if you can handle the market risk. Listen in to hear an option for self-insuring that you may not have thought of before. Can life insurance be used as a tax strategy? The shakier the stock market feels, the more we’ll hear about alternative investing strategies. Janet was curious about how life insurance could be used as a tax-saving strategy since all of her assets are in tax-deferred accounts. What she is referring to is overfunding a life insurance policy and living off the proceeds tax-free for decades. Does that sound too good to be true? If so, it probably is. Listen in to hear why life insurance is not as special as it sounds, you’ll want to hear how this strategy could backfire on you and ruin your retirement. If you have a question that you’d like answered on the show you can ask in one of two ways. The easiest way to ask me a question is to simply reply to the Every Day Is Saturday newsletter. The second way is to visit the Retirement Starts Today website and click the Ask a Question tab. Resources & People Mentioned LongTermCare.gov Kiplinger’s article Vanguard article Connect with Benjamin Brandt Get the Retire-Ready Toolkit: http://retirementstartstodayradio.com/ Ask me a question: https://retirementstartstodayradio.com/ask-a-question/ Follow Ben on Twitter: https://twitter.com/retiremeasap Subscribe to Retirement Starts Today on Apple Podcasts, Stitcher, TuneIn, Podbean, Player FM, iHeart, or Spotify

Life Insurance Isn’t Special, Ep #176 

I’m feeling optimistic this year and I want to continue to spread that optimism. That’s why I want to focus several shows on travel. Most people’s travel plans were foiled by covid in 2020, so 2021 will be the year of the vacation! We’ll be interviewing experts and discussing the mental and physical health benefits of travel. We get started on that road today with a Retirement Headline from Harvard Business Review.  Outline of This Episode [1:52] Let’s explore the relationship between well-being and time away from the office [5:02] What should Seth’s mom do with her $500,000 portfolio? Are fewer vacation days negatively impacting your work? You have probably heard that without recovery periods, your ability to perform tasks effectively diminishes significantly. However, this is in direct conflict with the common practice of powering through work without a break.  The Harvard Business Review performed a study with the US Travel Association to help understand the relationship between wellbeing and taking time away from work.  They discovered that there has been a significant decline in vacation days over the past 2 decades. In 1996, Americans averaged 21.1 vacation days per year and in 2016 that number fell to 16.1 vacation days per year.  Is technology helping or hindering your time? Although productivity has increased due to technology, our inability to unplug has offset those gains. In fact, our inability to step away from technology has even led to bad vacations. According to the article, poorly planned vacations do not improve energy levels or reduce stress, effectively eliminating the time away. Learn what you can do to make the most of your vacation time by listening to this episode of Retirement Starts Today.  How to double your chances of getting a raise People who took fewer than 10 of their vacation days per year had a 34.6% likelihood of receiving a raise or bonus over a three-year period of time. Whereas, people who took more than 10 of their vacation days had a 65.4% chance of receiving a raise or bonus. So, double your chances for a raise and take a vacation!  What would you do with an extra $500,000 laying around? Seth’s mom insists that she doesn’t need the money in her $500,000 401K until it’s time to start taking RMDs. He wants to help her understand what she should do with the money.  My first question is why doesn’t she need it? Many people are worried about having enough money to last the rest of their lives. Is she underspending to make her money last longer? After understanding her reasons, there are a few things she can do.  Long term tax planning is key here. You may be surprised to learn that sometimes it is better to pay more in taxes now to help save on your lifetime tax bill. Listen in to learn how long-term tax planning can affect retirement planning.  Resources & People Mentioned Harvard Business Review article Smart Asset Tax Calculator Schwab Annuity Calculator Connect with Benjamin Brandt Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/ Follow Ben on Twitter:https://twitter.com/retiremeasap Subscribe to Retirement Starts Today on Apple Podcasts,Stitcher,TuneIn,Podbean,Player FM,iHeart, or Spotify

What to Do with $500,000 I Don’t Need? Ep #175

Would you want to raise your standard of living for half of what you live on now? Tim Leffel did, which is why he chose to uproot his family from their life in Nashville to move to a small city in Mexico. Tim is the author of the book A Better Life for Half the Price and he joins me today to discuss the pros and cons of living abroad. Don’t miss the opportunity to learn how you can save money by living abroad. Tim is an expert in the subject and has written extensively about this topic. Listen in to hear this interview.  Outline of This Episode [1:22] What made Tim decide to live in Mexico? [5:06] Why did he rent before buying? [7:08] What are examples of how he saves money by living in Mexico? [10:45] Do you need to know Spanish before moving to Mexico? [13:55] Why would people not want to move abroad? Why did Tim choose to move to Mexico? Tim and his wife have traveled extensively and even lived in Seoul, Korea, and Istanbul, Turkey when they were young. When they had their daughter they knew that they didn’t want to live in the far flung reaches of the world but they still wanted the experience of living abroad.  Mexico was close by and easy to travel to, plus they liked the culture and the food which made it an easy choice to settle on. They chose to live in the central Mexican town of Guanajuato which is a mid-sized city of 200,000 with pleasant weather all year round.  It makes sense to rent first before purchasing abroad Tim chose to rent for a year first before taking the plunge and purchasing a home. He remarks that buying a house abroad is not like it seems on those popular house hunting TV shows.  There is a lot you need to think about when buying a home abroad. The zoning laws aren’t the same as in the U.S. and it can be hard for a foreigner to understand what things are worth without living there first. Tim recommends putting in the time and effort to truly understand the market value before purchasing a home.  What are examples of how he saves money by living in Mexico? It’s no secret that living in Mexico is less expensive than living in the U.S. Rent in the United States can easily cost $2000. In Mexico, you can find a house to rent for a fraction of that. Healthcare expenses are notoriously high in the U.S. and in Mexico, Americans are shocked to find how easy it is to pay for those expenses out of pocket. Tim finds that his total monthly expenses in Mexico are roughly equivalent to what he paid in rent in the U.S. Not everything is cheaper in Mexico though, listen in to hear about what costs more in Mexico. Do you need to know the language first? You would think that you need to be fluent in the language before moving abroad, but there are some places in Mexico where you can get by being monolingual. Tim still doesn’t consider himself fluent, although he is learning the language. Since his daughter went to school in Mexico, she had the opportunity to become fluent. Would you want to learn the language before moving abroad? Connect with Tim Leffel CheapLivingAbroad.com CheapestDestinationsBlog.com TimLeffel.com BOOK -A Better Life for Half the Price by Tim Leffel Connect with Benjamin Brandt Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/ Follow Ben on Twitter:https://twitter.com/retiremeasap Subscribe to Retirement Starts Today on Apple Podcasts,Stitcher,TuneIn,Podbean,Player FM,iHeart, or Spotify

Could Living Abroad Save You Money? with Tim Leffel, Ep # 174 

I’m thrilled to be back sharing the latest retirement headlines with you after my short holiday break. The biggest news on the retirement radar this week is that the 2nd Coronavirus stimulus package has passed. Together, we’ll take a look at the most relevant parts. Then I’ll answer the question: do you need a Roth IRA even if you make more than the income limits allow for? Let’s start preparing for tomorrow by learning today. Press play now.  Outline of This Episode [1:22] What will the Coronavirus stimulus package bring for us? [7:19] Health expenses are now deductible after 7.5% AGI [9:07] Standard deduction + $600 if you are married filing jointly in 2021 [10:45] Unemployment benefits have been extended [13:09] Does Janet need a Roth IRA? Will you be cashing a $600 stimulus check? The 2nd Coronavirus stimulus package has recently been passed and rather than have you read this 5500 page piece of legislation, I’ll cover the highlights that most pertain to you. Jeff Levine, @CPAPlanner on Twitter was a great source to help me understand the most important information in this bill.  Perhaps the biggest news out of the stimulus package is that new stimulus checks are heading our way. These checks aren’t structured exactly the same as the last ones. The checks are $600 for each person in your household if your income falls under a certain amount. Find out the income limitations by listening to the details here.  If you subscribe to the Every Day is Saturday newsletter this week, we’ll have a link to a calculator that can help you calculate the amount you’ll receive.  Health expenses are now deductible after 7.5% Another change brought about by the Coronavirus stimulus package is that healthcare expenses are deductible after 7.5% of your income. This number often bounces back and forth between 10% and 7.5% of your adjusted gross income (AGI). This means that your healthcare expenses must be 7.5% of your income to be deductible and even then it only counts for the amount that is over 7.5% of your income.  Unemployment benefits have been extended If you found yourself unemployed, like many this year, there’s good news. The stimulus package added federal unemployment benefits for another 11 weeks. This means that $300 per week will be added to your state’s traditional unemployment benefit.  These weren’t the only changes in the bill. You can learn more about how the latest Coronavirus stimulus bill could affect you by listening to this episode of Retirement Starts Today Radio. Do you really need a Roth IRA? Janet’s financial advisor told her that since she is over the income limitations to save in a Roth IRA that she doesn’t need to open one. However, Janet is a few years away from retiring and she is worried about retiring without one.  In my opinion, everyone could use a Roth IRA eventually. If your current income doesn’t allow for it, you can always fund a Roth IRA with a Roth conversion. Listen in to hear how you can fund your Roth most effectively while filling up your tax bracket.  Resources & People Mentioned Jeff Levine on Twitter @CPAPlanner Nerd’s Eye View Blog by Michael Kitces Connect with Benjamin Brandt Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/ Follow Ben on Twitter:https://twitter.com/retiremeasap Subscribe to Retirement Starts Today on Apple Podcasts,Stitcher,TuneIn,Podbean,Player FM,iHeart, or Spotify

What You Need to Know About Coronavirus Stimulus Package 2.0, Ep # 173 

Benjamin Brandt wants to teach you how to retire! Listen in as Benjamin Brandt CFP©, RICP© answers the questions on the minds of the modern retiree, often joined by the top experts in the retirement planning industry. Do you enjoy Dave Ramsey and Freakonomics? Check out Retirement Starts Today Podcast. Ask Benjamin a question here: http://retirementstartstodayradio.com/ask-a-question/

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