Managing your financial life is not just about money.

Archives for Retirement

Affordable Care Act Open Enrollment

Affordable Care Act Open Enrollment Began November 1st Know anyone that doesn’t have access to health insurance through their employer or the federal government via Medicare, Medicaid, etc.?  The open enrollment period for health insurance plans purchased on healthcare exchanges set up by the Affordable Care Act (commonly referred to as Obamacare) began on November 1, 2017.  The enrollment period will run through December 15, 2017 in all states, and longer in a small number of others. For our local clients, here is a list of the surrounding the states that are exceptions to the December 15th deadline: Massachusetts: January
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Lump Sum (Investment) vs. Pension (Insurance)

Most workers have a voluntary, contributory retirement plan option available to them at their place of work. The worker contributes money from his/her paycheck, the employer may also contribute funds to this account via some kind of match. The funds are invested. The money belongs to the employee and goes with him/her in retirement, or upon a job change. Common plans are named 401k, 403b and 457. Some workers may also have what we call a “defined benefit pension plan” available to them.  In some cases (municipal employees) money is mandatorily taken from their paycheck for this pension.  In other
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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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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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Using (or not!) Home Equity in Retirement

This is the sixth article in the series. In this piece I will answer questions 9 and 10 of 32 very important questions people need to answer before retiring. Do I plan to use equity in my home for retirement? This is a tricky and delicate question.  In our practice, when developing a retirement scenario for a client, we start with the assumption that you will not use the equity in the home for retirement needs.  That is another way of saying that hopefully you can leave the house to the kids.  Lots of times, that scenario does not work. 
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Maintaining Property in Retirement

This is the fifth article in the series. In this piece I will answer questions 7 and 8 of 32 very important questions people need to answer before retiring. If I am living in my retirement home, how much do I have to spend to get it ready for retirement? If you are going to be living in your existing home forever, then you want it to be just right. That will cost money, and probably more than you are thinking. Updating kitchens and bathrooms come to mind. A first floor bedroom is probably a good idea.  The yard, the
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How long will I live?

This is the fourth article in the series. In this piece I will answer questions 5 and 6 of 32 very important questions people need to answer before retiring. How long will I live? Crafting a retirement plan would be a whole lot easier if you knew the answer to this question.  The answer depends upon your age, your health, your genes, your socio-economic status, luck, and probably a few other factors that I can’t think of right now. The answer is who knows? But, when it comes to retirement planning, you have to make a guess. The Social Security
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