Managing your financial life is not just about money.

Archives for Budgeting

Life Insurance & Legal Documents

This is the 13th article (and last) in a series on retirement.  In this piece I will answer questions 29, 30, 31 and 32 questions that you must answer before retiring. What about life insurance? If you have done well financially in your life, you may well not need any life insurance. If you have not done so well, you may need to have life insurance on one or both spouses to provide financial security. The problem with this situation is that it is pretty expensive to carry life insurance on folks in their sixties or older, and those costs
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Leaving Assets for Children during Retirement

This is the 12th article in a series on retirement. In this piece I will answer questions 26, 27 and 28 of 32 questions that you must answer before retiring. Do I want to leave anything for my kids? The answers to this question run the gamut.  There are those who absolutely want to leave assets to their children.  Then there are those who plan to spend all their assets and leave nothing.  And there are those who would like to leave assets if possible.  The problems arise with folks who absolutely want to leave a legacy to their children. 
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Sequence Risk & Emergency Reserves in Retirement

This is the eleventh article in a series.  In this piece I will answer questions 24 and 25 of 32 questions that you must answer before choosing to retire What do I do about “sequence risk”? There are some things you can’t control in retirement, and “sequence risk” is one of the biggies!  Say that you assumed a 4% per year return from your retirement nest egg to make retirement work.  If you earn 8% per year for the first five years of retirement, you are a happy person and probably contemplating spending more in retirement.  If you average a
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How Big Does My Nest Egg Have To Be To Last For My Lifetime?

This is article number ten in a series. In this piece I will answer questions 21, 22 and 23 of 32 questions you must answer before deciding when to retire, How much income, before and after taxes, will I need from my nest egg? The answer is a process that is just simple math. Take the total guaranteed before tax income in retirement (usually social security and/or a pension) and have your tax preparer do a hypothetical tax return for you for your first full year of retirement.  What is left after federal and state taxes is what you have
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What Expenses Don’t I Know About in Retirement?

This is the ninth article in a series on retirement.  In this piece I will answer questions 17, 18, 19 and 20 of 32 questions everyone must answer before deciding on retirement. What expenses don’t I know about in retirement? I have talked about estimated retirement expenses in question 13.  However, there are some things that require repeating and more explanation. Many folks under-estimate the amount of money that will lavish upon kids and grandkids. If you don’t have grandchildren, you have no clue what is coming and how much it will change your life (and your checkbook).  Talk to
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Healthcare Expenses, Nursing Home Costs, & Adult Children Who Are Still Dependent On You.

This is the eighth article in the series on retirement.  I will address questions 14, 15 and 16 of 32 questions that you must answer before deciding to retire. What do I do about healthcare expenses? What you do is make a really good guess about what they are going to be in retirement and hope that you are correct.  The good news is that just about everyone who turns 65 will qualify for Medicare.  And Medicare is inexpensive.  The bad news is that Medicare does not cover everything, and you will need a supplemental insurance policy to cover the
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What Will My Expenses Be In Retirement?

This is the seventh article in this series on retirement.  I will deal with questions 11, 12, and 13 of 32 questions that you must be able to answer before you retire. What is my income now? You need to know your net, spendable income now when planning for retirement.  Grab a copy of your most recent Federal tax return.  Write down your total gross income on a piece of paper.  Then put the following numbers below your income.  Find your total tax due the IRS.  Next go to your Massachusetts tax return and find your total Massachusetts tax due. 
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Do I chose to work part-time in retirement?

This is article number three in a series on retirement. In this article I answer questions 3 and 4 of 32 questions you need to answer before you retire. I have no idea how many articles will follow this one, but eventually I will address all 32 questions. Do I choose to work part-time in retirement? No, this is not a dumb question.  More and more folks I work with choose to work some for the first few years of retirement.  Some just need to keep active, and those part time earnings get used for fun things, or kids and
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Maybe you need an SMF, or at least the budget

We just finished up the 4th annual Marshfield High School Smart with Money Fair.  One student said to me, “life is expensive, I better get a good job!”  At that point, I was done. It was all worth it. I realized that the budget sheet the students worked with might actually be helpful for adults.  It’s incredibly comprehensive.  The idea was to account for all expenses you have in real life, and I think we did a pretty good job. Hey guess what?  Life IS expensive, and you’d better think about where your money goes when you spend it!  Maybe
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Being a Smart Buyer

From what I understand, the real estate market in some areas is quite competitive these days. In competitive markets, when sellers receive multiple offers, it’s important for buyers to be “attractive.” The most attractive buyer isn’t necessarily the one with the highest offer; it could be the one that doesn’t need a mortgage to purchase. One strategy that buyers can utilize (and realtors may even recommend) to position themselves attractively for a home purchase is to borrow from a retirement plan, purchase the property with cash, then obtain a mortgage after the purchase and put the money back into the
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