Sep 14, 2018
Joel gives a brief update about what is going on with the recent trade tariffs, and the importance of focusing on things you can control and having a plan in place. We also talk about how retirement today is different than it used to be, and things to watch out for if getting a divorce.
Main Questions Asked:
What are some of the changes in modern retirement planning?
How do I create a portfolio that acts like a pension and why do I need to?
Is all the information at our fingertips of benefit?
How can I survive a divorce without making financial mistakes?
Key Lessons Learned:
Ways That Retirement Planning Now Isn't What It Used To Be
- Social Security is the only retirement income stream that some people are going to have. Pensions are rarer. You should create a close to guaranteed stream of income.
- Life expectancies are longer, so we have a lot more years of retirement to refund. We need to make sure that you get raises every year and have contingencies for long-term care.
- You can’t ladder CDs and live off interest in this environment. Typically, inflation is higher than the interest rate on CDs. Even if they were in parity you would have to pay taxes, so you end up going backwards.
- Is all the information at our fingertips a benefit? Information is great if you’re a stock trader, but as human beings we have the tendency to want to change things. We need to stick with the plan and not let emotions rule.
- Volatility in the market today seems to be a lot more pronounced. It does feel that way, but part of it is all the information we get. It’s important to have a plan, because the information is more in-your-face.
Financial Mistakes That People Make During a Divorce
- Forsaking other financial assets to keep the house. Don’t just default to taking the house look at it in the context of your entire financial picture. Talk to somebody and create a plan to divide the assets.
- Ignoring the tax implications of retirement funds. It’s important to understand that you are in partners with the IRS when you get an IRA.
- Your advisor also needs to understand life insurance. Cash value insurance is not the same as term.
- Rolling your spouse's retirement account directly into an IRA upon getting a divorce. There is a one-time opportunity for divorcement spouses under 591/2 to withdraw money without paying the 10% penalty. The assets should be allocated under qualified domestic relations order.
- Allowing emotions to cloud decision making. It is important to get advice and not let emotions cloud your decisions.
Links To Resources Mentioned
Money Map Retirement Review
1-800-757-0436
Thank you for listening!
