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Listen to Johnson Brunetti's Money Wisdom with Joel Johnson CFP®, host of Better Money Television program and Forbes Contributor. Gain true financial wisdom and advice aimed at educating you about all of your financial options when it comes to retirement so you can make the best decisions for you and your family. Get information and education that can bring you peace of mind with your savings and retirement. Whether it’s your 401k account, IRA, or an underperforming asset, Joel Johnson can answer your questions and make you more aware of issues that may affect you.

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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 disguise?
  • 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 Planning

  • 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 risk.
  • 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!