Sep 21, 2018
Learn how you can improve your finances according to what is
going on in your life and what you can aspire to when it comes to
retirement and finances.
Main Questions Asked:
How can I set my finances up to have a great retirement?
How can I improve my finances now?
What do I need to be thinking about if I'm between jobs?
Key Lessons Learned:
- Is now the time to pursue a new career? First, you should ask
if you need to work more. If you do then maybe it is time to change
careers. Do you want to explore a new career path or do you want to
stay within the same field?
- Can you work for yourself? Do you have a skill that other
people may not have? Is a shift in your job a blessing in
- What about health insurance? In my book, Forced to
Retire, I talk about the seven things that you need to answer
for yourself to get your financial house in order. If you have been
forced to retire, health insurance is a big one. You have an option
called COBRA, but that may not be the best option for you. The
exchanges may be more affordable.
- What do you do with your 401(k)? Is this a good time for a
401(k) rollover? If you have a 401(k), the company is the client,
not you. If you want to be the client, you need to roll the money
over into an IRA. This gives you more flexibility, control, and the
ability to convert it into a Roth IRA.
- If we get a severance, how do we handle it? Can you take it in
a lump sum or a monthly installment? Monthly installments are
better for budgeting and tax purposes. If you don't need the money,
can you leave it in the bank? I'm a huge fan of having cash on
hand. It's a position of strength.
- Is this an opportunity for some type of tax planning? Anytime
there's a shift in income, it is an opportunity for tax planning.
You may have tax implications to think about.
Rules of Thumb That May Be Helpful for Retirement
- The rule of 100. Rules are starting points for discussion. They
should be a catalyst. Take 100 and subtract your age, the number
left over is the percentage of your money that should be at
- The 75% rule. Once you retire, you are going to need 75% as
much income as you had while you were working. This is one rule
that should really be ignored completely. Most people want more
income during retirement, because they are going to do more things.
Other people may need even less. You need to figure this out with a
good solid plan specific to your situation.
- The 4% rule. Add up the total of all your investments and then
take 4% of that out a year. This rule isn't very scientific and you
are taking a lot of risk if you use it. You need a customized
income retirement plan.
- The rule of five. This means, on average, we experience a bear
market about every five years. We are way overdue. We haven't had a
really bad market since 2008.
Links To Resources Mentioned
Money Map Retirement Review
Forced to Retire
Thank you for listening!