My Smart Retirement

Are you spending your money in a way that makes you happy? We all know the saying, "money can't buy happiness". However, studies have shown that the way we spend our money really does impact our overall happiness. On today's show, we will be going over some spending principles and their impact on our life. A lot of people win the lottery only to find out they are still unhappy once they are rich. So, what is the secret balance? You can't just throw your money against a wall. 

Buy more experiences and fewer things. 

Buying that new pair of shoes or the latest TV model may make us happy for a little bit, but that feeling is usually fleeting. Spending money on experiences, whether you are traveling or trying a new restaurant with a loved one can be much more valuable to our hearts. Studies have shown we reminisce on experiences rather than things. This is a great way to build our relationships with one another as well. 

Enjoy the small things. 

Sometimes we need to find joy in the small things rather than the big sporadic moments in life. A special dessert, a good book, or some nice flowers. Spending small amounts of money on things that give us delight means we can enjoy these things more often. 

Use our money to help others. 

It seems that whenever people tend to give money away, more money comes back to them. Using your spending power to help a charitable event or to help a neighbor is a great way to build relationships and bonds. Even having enough money to retire and donate your time instead of a monetary gift can be a great way to find happiness. 

Avoid overpriced protections

We've all spent a little too much on an extended warranty that we probably never used or ended up expiring by the time we needed it. A lot of people bought warranties for electronics from Circuit City, only to find them out of business. Reports show that most extended warranties are probably not worth it... However, if you do want to invest in a warranty make sure to check manufacturer offers. It could save you a little bit of money. 

Delayed Gratification 

Perhaps the most important spending principle is learning to embrace delayed gratification. Instead of stopping for takeout, cook. Instead of purchasing a new cell phone model, wait a few weeks to think about it. A great example of this is when people freeze their credit cards and have to wait for them to melt in order to use them. Usually, by the time the ice has melted, they no longer want to buy the item they originally wanted to! Delaying our gratification usually makes the decision to buy something much more fulfilling in the long run. 

At the end of the day, how you spend your money can affect your happiness. Is your money being used to support your values and the things you care about? 

 

Listen to the full episode for more details or skip around to certain topics. 

0:21 - Does spending create happiness?

1:30 – Winning the lottery

4:24 – Money is an opportunity for happiness

6:00 – Buy more experiences

6:39 – We don’t need the most amount

9:15 – The small things

10:21 – Using your money to benefit others

12:01 – Avoid overpriced protections

15:16 – Delayed Gratification

 

For more, visit us online at https://www.flemingfinancialservices.com/

Happy Thanksgiving! As we enter the holiday season, we start to think of traditions more and more often. Maybe you always made cookies with your grandmother or perhaps she told you stories about the Mayflower on Thanksgiving. On today's episode, we are going to talk about the first pilgrims and their voyage. How did they face the unknown with such bravery? What can we learn from these stories today?

There are probably many reasons the first pilgrims decided to come to America. Maybe it was economic or spiritual, or a mix of both. It seemed like a pretty risky move to brave the unknowns. But they were led with a purpose and by passionate men such as Pastor John Robinson, Samuel Fuller, Peter Brown, and John Goodman.

Each of these people had their own story. Many of them left their wives and children at home and sought out to find new land. Later, their families joined them. The pilgrims faced many dangers including the cold and illness. Fuller taught himself to be a physician and spent his life taking care of others. Last year was the 400th anniversary of the Mayflower. We can learn many things from these stories and apply them to our own finances and our own life. We hope you have a great holiday!

 

Listen to the full episode for more details or skip around to certain topics. 

1:24 – The pilgrims

2:54 – Pastor John Robinson

5:20 – How did it come about?

7:02 – Let’s look at the people

10:38 – Samuel Fuller

12:19 – Peter Brown and John Goodman

 

For more, visit us online at https://www.flemingfinancialservices.com/

We have reached the highest inflation rate in 30 years. What can old-time principles teach us about protecting our retirement plan against inflation? How can we protect ourselves? While inflation may seem like a problem for the country's economy, it is also a problem for us personally. On today's episode, we will discuss the inflation rate, wage growth, and how retirement accounts are changing to account for current economic times.

As of October, the annualized inflation rate is 6.2%. However, wage and income percentages are not keeping up. The wage rate growth is only 4.9%. This is a problem for those still working and for retirees. Employees aren't seeing their income keep up with inflation and retirees aren't seeing their savings keep up either. In many ways, inflation is a hidden tax.

Inflation affects us differently. Whether you are a couple in your 40s with children or a retiree enjoying their retirement in a new home, what you are spending money on looks different. Some things we have to purchase though. Always remember the consumer index report may not be an appropriate benchmark for your situation. If you are in the retirement red zone, the 5 years before retirement and the 5 years after retirement, inflation and market changes will impact you more dramatically. It's always a good idea to look at your unique plan with an advisor.

What is the government doing to help? New policies are coming out that are allowing higher contribution limits to certain retirement accounts. Unfortunately, not all retirement accounts are treated equally when it comes to these policies. Currently, those with a 401(K) can contribute $19,500 a year into that account. In 2022, this limit will be raised to $20,500. In contrast, IRAs are still limited to $6,000 a year or $7,000 a year if you are older than 50. As you can see an IRA has significantly more limitations and these accounts are often utilized by self-employed workers and small companies. If you are making your own Roth contributions as a single person your income limit will be $144,000 a year. The marriage penalty limits married couples to an income limit of $214,00 a year. Inflation is affecting many of our lives. From the gas, we buy to get to work to our retirement accounts. Make sure you have a strategy against inflation in your retirement plan.

 

Listen to the full episode for more details or skip around to certain topics. 

1:34 – Buying things with inflation

3:30 – Inflation’s impact on us

5:36 – Inflation going above wage rate

9:46 – When will this problem be solved?

14:34 – Retirement account contributions in 2022

18:51 – Marriage penalty re-instated

19:44 – Write off IRA contribution  

 

For more, visit us online at https://www.flemingfinancialservices.com/

Last week we discussed Social Security earning limits. Whether you want to work a few hours a week or continue with your current career it's important to understand how this impacts your Social Security. You've been paying into this program. You want to make sure you have a strategic Social Security plan. After our discussion last week, we had some listener questions come in. So we are going to answer some of these "Yes...but..." questions and clear some things up about the nuances of Social Security. 

"What if I work in the year I reach full retirement age?" 

The full retirement age is 66 or 67, depending on the year you were born. If you are younger than your full retirement age the earnings limit is $18,960 a year. If you are at full retirement age your earnings limit is $50,520. Now, if you are working leading up to your 66th or 67th birthday the lower earnings limit only applies to the months before your birthday. 

"What if my spouse retires and I continue working?" 

A lot of people decide to do this. This can be a great decision for couples and it's important to understand your spousal benefit options. If one spouse retires and one continues to work, the earnings of the working spouse don't count towards the retired spouse's earnings limit. It's going to be person to person. 

"Why does the government take 20% of my 401(k) withdrawals?" 

It's the law, it's the way it is. Sometimes there isn't a why to our questions, it's just a rule we have to follow. Now there are ways to mitigate this or prepare for this in your plan. You can roll your 401(k) over to an IRA. Your money stays tax-deferred. Then you won't have that 20% tax deduction when you pull out. However, you need to keep in mind that this is still a tax-deferred account and when you reach the age of 72 you will have to start taking required minimum distributions and you'll pay taxes on these distributions. Whether you decide to roll over your 401(k) or not will be specific to your situation. Maybe you are still working and your company is matching what you put in. Or maybe you are fully retired. Whatever your situation is, it's best to meet with a financial advisor that can customize your strategy and plan. 

 

Listen to the full episode for more details or skip around to certain topics. 

1:19 – New phone story

3:03 – Quick review on Social Security

5:09 – Working in the year you reach full retirement age

6:21 – What if my spouse retires and I continue working?

9:08 – Should I wait to start Social Security or start sooner?

11:28 – Doing things differently than someone else

12:56 – Why does the government take 20% of my 401(k) withdrawals?

14:23 – Can I get out of paying the 20% in tax?

15:25 – Should I move my 401(k) to an IRA?

 

For more, visit us online at http://flemingfinancialservices.com 

We have paid into Social Security our whole working lives. However, maximizing your Social Security strategy can be confusing to navigate. We want to make sure you are strategically planning your retirement income. On today's show, we will be answering some questions about Social Security. Since retirees are one of the largest groups of small business owners and entrepreneurs earning limits are important to be aware of. We will be discussing earning limits, pension impacts on those earning limits, and how divorce impacts Social Security eligibility.

What is the earning limit for those eligible to take Social Security? Well, it depends on a few factors like your age and when you file. The full retirement age is 66 to 67 depending on when you were born.

If you are attempting to take Social Security before full retirement age your earning limit is $1,580 a month or $18,960 a year. If your earnings are more than this the Social Security office takes $1 from your benefits for every $2 you earn above the annual limit.

Now, if you are full retirement age your annual limit is $50,520. They will take $1 for every $3 you earn above this limit. These limits are also adjusted for inflation and may change by the time you are in retirement.

Does a pension and investment payout count as earnings by the Social Security office? They consider these streams of income very differently. Pensions and investments go on your tax return. Combined with 50% of your Social Security income, these forms of income will determine your tax bracket and therefore your Social Security payments.

Some divorcees worry about Social Security benefits after their separation. If you were a stay-at-home parent you are still eligible for some benefits after your divorce. You can qualify for 50% of your ex-spouses Social Security with no effect on them if you are still single at the time you apply. If they pass away before you do, you can apply for 100% of their benefits. This can be confusing to navigate so don't hesitate to give us a call and we can help you develop a maximized plan!

 

Listen to the full episode for more details or skip around to certain topics. 

1:11 – Halloween story

3:21 – Am I earning too much to start Social Security?

7:00 – What does substantial self-employment services mean?

9:15 – What happens if I am above the earning limit?

10:52 – What about a pension and investments?

16:20 – How does a divorce impact Social Security?

 

For more, visit us online at http://flemingfinancialservices.com 

A rose by another name is just as sweet... You've probably heard this saying or a variation of it before. The names we assign things can make our perception of them different, we hold different values towards them. On today's show, we will be discussing the importance of names and values, inflation, and how we can rebrand our retirement plans.

Inflation is everywhere in the news these days. The S&P is continuing to hit all-time highs. The cost of living continues to rise. Our perception of these things is often influenced by what we hear from others but they have real impacts on our retirement plans. We keep hearing that this round of inflation is "transitory" but that isn't really true. There has been a 34% increase in money pumped into the economy over the last 18 months.

What about inflation rates? It's hard to know when the Federal Reserve will raise them. It may be in July of next year or they may wait until after the midterm elections. Whenever they decide to raise them it's likely to only be a quarter of a percent.

So, what are names? What values do we hold in them? We think of rising gas prices when we think of inflation. One example of name importance is the ValuJet crash. In 1996 their jet sadly crashed in the everglades with 110 passengers on board. Afterward, the company had a hard time selling tickets. They combined and rebranded their company with AirTran. After the rebranding they became a successful airline, eventually selling to Southwest.

We see this in today's world as well. Did you know Google's real name is Alphabet? Or that Facebook is planning to change its name? These are examples of the power of names. So, when we think of our retirement plan it may be best to rebrand our approach. Instead of setting a budget let's create a spending plan. Rethinking parts of your plan can give you a fresh vision and help your plan grow.

 

Listen to the full episode for more details or skip around to certain topics. 

1:01- Halloween Story

2:16 – Last quarter of the year

3:27 – S&P all-time high and inflation

5:42 – Increased money supply

8:00 – Inflation rates

10:00 – If you can dream it

15:54 – Names and rebranding

 

For more, visit us online at http://flemingfinancialservices.com 

There are many phases of change we go through in life. Retirement is one of them. Changing for Good: A Revolutionary Six-Stage Program by John C. Norcross details the 6 stages of change. On today's show, we will be discussing the first 3 stages: pre-contemplation, contemplation, and preparation. These are the mental and emotional hurdles we must go through when we make a change. Learning about the way we transition is an important tool in navigating retirement.

The pre-contemplation phase could also be called the denial stage. At this point, you probably don't even recognize there is an issue that needs to be addressed. We see this with couples a lot, one spouse wants to lock down on their retirement planning while the other doesn't see the financial problems that need to be focused on. Usually, spouses are on different phases of change and they must work as a team to make things happen. 

After getting past pre-contemplation, we move on to contemplation. Here you understand there is a problem that needs to be looked into. Maybe you are spending too much on takeout or perhaps you are still supporting your adult children. In many cases, this can cause issues in your own retirement. You may not be ready to make adjustments, but you are thinking about the problem and that is leading you down the path of change. You are contemplating how these financial issues are affecting your future and your goals. 

The last mental phase is the preparation phase. Now you fully understand that something needs to change. Do you want to retire early? At this stage, you are making a plan to accomplish this goal. You start saving more and structuring your plan to support early retirement. This can be an emotional part of the change, making small easy attainable goals can help keep you on track. 

So how do you know where you are? Have you acknowledged a problem that needs to be addressed? Do you realize what needs to take place? It's important to ask yourself these questions and do some self-reflection. You'll want to be emotionally prepared to make the financial decisions you need to. If we want to see changes in our life, we must make changes within ourselves. 

 

Listen to the full episode for more details or skip around to certain topics. 

1:16 – A new tree

2:40 – First 3 stages of change

6:22 – Precontemplation

8:30 – Contemplation

10:06 – Preparation

11:46 – What can we ask ourselves?

16:12 – Can you do this?

17:50 – Will you do this?

21:33 – Where these stories go

 

For more, visit us online at http://flemingfinancialservices.com 

Sometimes we need to think outside the box when we are working on our retirement plan. There are many ways to fill your income stream, some more traditional than others. Today, we discuss a few unexpected ways you could be making income in retirement.

Once you retire you have a lot more time on your hands. You’ll be able to invest more into hobbies you’ve had before or learn new ones. One client of ours had been an avid gardener for years. After retirement, she was able to perfect her growing skills. She found herself making some extra spending money by selling her produce.

Investing in a Healthcare Savings Account is sometimes overlooked by people. However, saving in this type of account can come in handy once you are in retirement. HSAs are pretty liberal with what they allow you to spend the money on, but your taxes will be affected depending on where you use the money. If you use it for healthcare, it is tax-free. If it's for another expense you can expect to pay some taxes on the distribution. Having this extra account can be really helpful if there is an unexpected health crisis and it can protect the rest of your retirement savings.

Have you thought about renting property or getting a part-time job? In the past few years, people have been building small cottages or studios on their property to rent out. With the market rough for renters, this can be a great way to earn some extra cash. A lot of people also go back to work part-time. You’ve spent your whole working life developing certain skills that can be used in a wide variety of jobs that are low stress. This is also a great way to be social and have a routine during retirement! Speak with your advisor to learn other ways you can find unexpected income streams.

 

Listen to the full episode for more details or skip around to certain topics. 

1:03 – Things unexpected

2:58 – Making money from hobbies

6:22 – Health savings account

11:26 – Renting property

12:35 – Part-time job

14:44 – Retirement navigator

 

For more, visit us online at http://flemingfinancialservices.com 

We talk a lot about preparing for retirement. But what about those of us that don't want to retire, at least not yet? Today, we are going to discuss why people wait to retire and what impacts their decision.

Some people really love their careers and they've worked hard to get to their current positions. But do you have a plan if things were to change? Could you retire quickly if you needed to? Companies, health, and circumstances can all change. We want to make sure if things do shift, you have a contingency plan.

The fear of boredom, once we retire, is something many of us go through. What will we do with all that free time? Instead of working full time for the foreseeable future think about transitioning to shorter hours. Look into part-time work as a way to spend a few hours a week being social and making some extra cash. You'll want to assess your quality of life at your current job and see if it can be any better.

Are you scared you don't have enough money to retire? A lot of us have an idea of how much money we need to retire, a magic number. Many of us are scared we will never get there and will continue to work to reach that goal. However, you need to re-evaluate your plan and see what your money can do for you.

How can you utilize what you currently have to retire sooner? Once people meet with an advisor and get a good retirement plan assessment, they are often surprised to be in a better position than they thought. We don't want you to continue working simply out of worry.

Listen to the full episode for more details or skip around to certain topics. 

0:34 – The people not ready to retire

3:26 – When things change

5:40 – I will be bored if I retire

9:30 – I don’t have enough money

11:51 – Not confident in your plan?

 

For more, visit us online at http://flemingfinancialservices.com 

Unfortunately, there are a lot of things out there that we shouldn't trust: some people's advice, scams, gas station sushi. The list goes on. So today, we are going to be discussing a few financial items that you may want to look out for and whether you can trust them. 

Don't always trust what is on paper. 

This can be a difficult thing to change. It can be exciting when an advisor shows us a document with our account goals and predictions on it. But in a situation like this, you should really be focusing on your overall plan with your advisor. At the end of the day, the plan will be how you will reach those exciting numbers. 

Don't trust that you are done with fees.  

Perhaps you have the idea that you paid fees when you first invested. Or maybe someone told you that you won't have to pay additional fees on an investment. Everything in investing has some type of fee. But don't think of them as burdensome. By investing, you are contributing to the overall growth of your portfolio. 

Don't trust money scams.

This one might seem obvious, but they can sometimes be tricky to spot. You will want to stay wise to the internet to safeguard yourself against evolving scams. If something feels suspicious, it probably is. 

Don't always trust the stock market. 

The stock market changes every day and it is nearly impossible to predict and time. Just because the market was down today does not mean that it will be down tomorrow. No one can really know before it happens. Your best strategy is to make sure all of your eggs are not in one basket. The market always has a lot of potential for growth. 

Listen to the full episode for more details on financial things you shouldn't trust.

0:20 – Story about trust

2:03 – What are some things we can’t trust?

2:52 – Timing the market

5:09 – Being told there are no fees

6:02 – Money scams

7:55 – Can we trust the stock market

For more, visit us online at http://flemingfinancialservices.com