Keen on Retirement

'Tis the season here at Keen Wealth!

While folks are wrapping up their holiday shopping and party plans, we're helping clients put a bow on their 2018 finances. This time of year I'm always moved and inspired by how many of our clients are looking outside of themselves, using the assets they've worked so hard for to improve our community and help those in need.

On today's show, we discuss how charitable giving factors into your year-end tax planning preparation. A little forethought and some guidance from a financial professional can help you maximize your generosity – which could make a big difference in another person's life this holiday season. According to experts, giving could give your own health and happiness a big boost as we head into the new year.

As we discussed earlier this year, 2018 marks the 40th anniversary of the IRA and the 20th anniversary of the Roth IRA. For decades, Americans have been using these investment accounts to take control of their retirement planning and provide their families with favorable wealth building vehicles. The Roth in particular has become extremely popular thanks to its tax-free accumulation. And, as more and more seniors are working in retirement, the ability to keep making contributions for as long as you're earning income is attractive as well.

Both the traditional and the Roth IRA have been around long enough now that many of our clients at Keen Wealth are coming to us with questions about how to bequeath these assets or provide an inheritance to their families. Inheriting assets can have a big impact on year-end tax prep, so we thought it would be a good idea to devote today's episode to this topic. If you have inherited an IRA, or believe you may soon, you still have a few weeks to think about the following key points.

Health care was on the minds of many voters during the mid-term elections, and I suspect this will continue to be a hot-button issue. Thanks to advances in medicine, technology, and standards of living, people are living longer and more active lives. However, with increased life expectancy comes higher health care costs and higher insurance premiums that you'll have to account for longer into your retirement – especially if you're a woman. Nevertheless, most of us are going to reach a point where we just cannot take care of our basic needs without a little additional help.

On today's show, we're giving our listeners an important overview of long-term care: who needs it, for how long, what Medicare does and doesn't cover, and how to make sure your financial plan keeps you safe and comfortable throughout the later stages of your retirement.

"Are we going to be OK?"

I know some folks are asking themselves and their fiduciary advisors that question after a turbulent month for the markets. We've discussed both current and historical reasons for October's volatility – which again, I have to stress, was perfectly normal and no cause for panic. But I understand that technical and theoretical analysis are cold comfort right now if you're retired and depending on your investments to support you for the rest of your life.

So on today's show, we're going to move from the high-level view of the economy down to the trenches here at Keen Wealth. These are the strategies we use for both our working and retired clients during volatile times.

Last week I tried to provide some calm perspective on the recent fluctuations in the markets. Again, in summary: the corrections we're experiencing right now are perfectly normal, and not nearly as scary as some of the headlines would have you believe.

One of the main factors that's contributing to this volatile October is the pace and expected duration of the Federal Reserve's current rising interest rate cycle. As you probably read, President Trump wasn't very happy with the Fed, and a lot of folks on Wall Street weren't either. So why the rate increase? If our economy is on track for yet another positive year, why did the Fed make an adjustment that tends to spook investors and slow things down?

On today's show, we're following up on last week's news to break down how changing interest rates affect the economy and various investment vehicles. Hopefully this discussion will help folks understand what the Fed's move really says about where the US economy is as 2018 draws to a close.

As much as we caution investors against making knee-jerk reactions to the news, your investments and your long-term planning don't exist in a vacuum either. That's why when I attend conferences like the Barron's Top Independent Advisors Summit or the Schwab Impact Conference, I like to come back with a report that I think will be beneficial to my clients and listeners. It's just another way that we at Keen Wealth try to give the folks we work with a comprehensive financial-planning experience.

Matt Wilson and I recently travelled to Washington, D.C. for a series of briefings organized by my friends at CEO Coaching International. And yes, on the one hand, it seems like the tumult in Washington and the coming midterm elections could have serious implications for things like tax planning, estate planning, and even health care. But I also came away from these discussions feeling a bit more hopeful about our country's politics than I have in quite some time, and I remain bullish on our economic outlook for the rest of the year.

On today's show, I invited CEO Coaching International's Chris Larkins to give his own perspective on what we learned in D.C. In addition to being a successful entrepreneur and CEO coach, Chris has a comprehensive political background. His expertise helps us cut through the noise that's been clogging our TVs and social media streams and delivers solid, practical insights on the state of our politics and economy.

I suspect that a month or two from now, your inbox and social media feeds will be full of year-end tax-planning checklists and advice articles. But one of our mantras at Keen Wealth is, "get out ahead of issues as early as we can." So on today's show, we help our listeners get a jump on year-end tax planning. If you put off addressing these important items, you're not just wasting time. You could be losing money.

The US economy has experienced some incredible gains over the last 40 years. Our GDP (the size of our economy) has tripled. The S&P 500, when you include reinvested dividends, has risen more than 9,000%. Since the 1980s, average household income in the U.S. has risen by one-third after inflation.

Couple all that tremendous economic growth with the huge advancements we've made in health care and technology, and it goes without saying that people are much, much happier today than they were a few decades ago. Right?

Wrong!

According to many surveys and studies, the overall happiness of people in the US has flatlined even as we've seen so much improvement in our standard of living and quality of life. The level of financial satisfaction people report has actually dipped a bit, despite the stock market's long-term upward trajectory.

To be sure, media scare tactics and the 24/7 financial news cycle keep folks more on edge about their money than they need to be. But the data also shows that increased return on investment, in and of itself, doesn't make people happier or their lives more fulfilling.

On today's show, we discuss a new way to think about what your money is really for: improving Return on Life. We also debut a brand-new assessment tool on our homepage, the ROL Index, that you can take. Give it a try – I think the results are going to surprise you!

The number one question we get from clients and friends at Keen Wealth is, "How much money do I need to retire?" But that's not the question we help our clients answer when we're working on their financial plans. Contrary to all the late-night TV and internet ads, there's not some magic number to hit, no secret formula for combined savings, assets and investments that's going to guarantee a secure retirement.

So, on today's show, we work through our preferred version of our most common question, which is: "How much do you need to live on in retirement?" We also apply this question and our checklist-driven process to one listener's scenario for an insightful example of what having enough to live on in retirement can look like.

"I know I should probably make a will, but I'm not going to be around, so really, what do I care?"

Sound familiar?

Way too many folks hear this voice in their head whenever the subject of estate planning comes up. They don't realize that an estate plan isn't just a matter of deciding who gets what once we've passed. Most of us are going to need help handling our affairs at some point in our lives, whether due to the realities of old age or a serious incapacitation. Your estate plan protects your assets and your wishes in the event that you aren't able to speak for yourself anymore. It can offer you safety and peace of mind now, and a blueprint for a lasting legacy once you're gone.

On today's show, we discuss the essential steps everyone needs to take to create an estate plan, and how your estate fits in with your big picture financial planning as well.