Retire With Ryan

The last thing on your mind is probably home heating oil while summer is still in full swing. But with cold nights around the corner, now is the time to start preparing for rising heating oil prices! On this episode, I’m taking a look at past pricing for home heating oil, what influences oil rates, and when YOU should restock home heating oil before the winter.

• Historic home heating oil costs [1:51]
• Influences on the price of home heating oil [3:58]
• When is the best time to buy home heating oil? [5:36

Last Halloween, home heating oil prices hit a record high of $5.40 per gallon, and I’ve been keeping my eye on them ever since. Considering they were under $2 per gallon for most of 2020, I was curious to see why there’s been such a spike. Obviously the price of home heating oil is based on supply and demand. I knew the demand was good because the majority of us were quarantined in our homes through winter 2020. 

However, the cost of crude oil is a major factor for home heating costs. Because no one was traveling or driving much during the pandemic, the price of oil collapsed in 2020, and crude oil got down to a historically low $30 per barrel. But post-lockdown, oil has been on an exponential rise. In fact, 2022 saw prices as high as $100 per barrel thanks to the Ukraine War. In 2023, crude oil prices dropped to around $70 per barrel, but a recent surge has seen barrels of crude going for no less than $85. Are more price hikes in store? Should you restock on home heating oil now? Listen to this episode to find out!

• Retirement Readiness Review
• McKinley Oil

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So many 80’s kids fell in love with action movies because of the work of Arnold Schwarzenegger. Myself included! So I was delighted to discover the Netflix documentary Arnold, which details the life and career of the body-builder turned movie star turned California governor. What inspired me about this film was Arnold’s sense of purpose throughout all of his accomplishments. So on this episode, I’m giving you my seven takeaways from the Arnold documentary to help you maintain a better sense of purpose in retirement.

• The legacy of Arnold [2:20]
• Love and retirement [3:22]
• Prioritizing travel in retirement [4:26]
• It’s time to think less [5:12]
• Developing new hobbies in retirement [6:11]
• Organizing your retirement [6:41]
• The benefits of volunteering in retirement [8:08]
• Should I get a part-time job when I retire? [8:58]

One of the things that impressed me most about Arnold’s story is his origin. His father was a soldier in the German army during World War II and dealt with depression and alcoholism when he returned home. Arnold needed to find a sense of purpose outside the house and was welcomed by the gym community. The people he met and the belonging he felt made him obsessed with working out and set him on the path he is walking today. The same can be said for retirement: Community is so important! Whether you're spending time with family or have different social interactions, I think everybody in retirement needs a sense of community.

Travel was something else Arnold was really passionate about. From a young age he wanted to move to America, but it would take him a bit. His first big move was London, where he worked as a gym trainer and won strength competitions. As a retiree, travel should be at the top of your priorities. The first phase of retirement is referred to as the “Go Go” years because that’s when health and energy levels should be at their highest. Take advantage of it while you can!

It wasn’t easy for Arnold to get into the movie business. His poor English made it difficult to get roles, but he had a plan either way. All of his success from multiple Mr. Universe wins allowed him to invest in a substantial real estate portfolio and supplement business that made being a movie star a want instead of a financial need. When it comes to your own retirement, you need to be just as organized as you move into the next phase of life. Get a plan for retirement and stick to it!

Arnold eventually got his big break and was able to work in the industry he had sought after for years. For retirees, working can be a great source of purpose, community, and some extra income. The relationships you make in a part-time job can really enrich your retirement experience. Listen to this episode if you want to live…your best life in retirement!

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With home interest rates recently hitting 20-year highs, you may wonder if now is a good time to purchase your retirement home or a second home? On this episode, I'm going to discuss what you should consider before signing on the dotted line and making such a big commitment.

• The current state of home interest rates [1:38]
• Is NOW a good time to buy? [3:00]
• How do you finance the purchase of a second home? [4:37]
• Things to consider before starting the home-buying process [6:41] 

To understand whether or not now is a good time to buy a second home, we need to look at where home interest rates are at. Currently, these interest rates are the highest they’ve been in 20 years. This means anyone looking to take out a mortgage will pay around 7.6%, as opposed to the roughly 3% rate from three years prior for a 30-year fixed mortgage. While those numbers may seem startling to some, rates around 8% and higher were fairly common in the past.

Another factor to consider before buying a second home is the availability of housing. Those stellar 3% interest rates from a few years ago caused quite the housing boom across the country. There's a short supply of homes to buy because many people have refinanced or purchased a home in the last three to five years at a much lower interest rate. So it’s possible that finding the perfect house in the current market could be quite a chore. 

So is now actually a good time to buy? You’ll have to listen to this episode to find out! But before you do, there are a few questions you should ask yourself to determine your readiness to buy a second home. The first is, do you have enough for the down payment? Buying a second home usually requires a down payment of 10% or more. You also want to shop around for different lenders. Talk to multiple lenders to compare the packages and interest rates they offer.

Another great question is if you have time to apply for a mortgage? The process is tedious and requires a lot of documentation, including pay stubs, tax returns, and investment reports. All in all, the process can take up to 10 hours for simple applications. The more complexities in your situation, the more time it will take to complete the process. Hit play now for more on buying a second home!

• Retirement Readiness Review
• Buying A Second Home, #12

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When people find out that I am a financial advisor, they usually ask me about retirement. Specifically, they want to know the best ways to save in order to secure their financial future. So in this episode, I’m giving you my three favorite ways to save for retirement and the pros and cons of each strategy. 

• The pros and cons of a 401k [1:33]
• The pros and cons of a Roth IRA [8:03]
• The pros and cons of a Health Savings Account [11:32]

One of the biggest pieces of the retirement puzzle is saving. You have to be able to save enough money during your career to sustain you through retirement when you stop working. How you go about it is up to you, but the first place I would start is a traditional 401k. The biggest pro to a 401k is that many employers will match your contributions at 3% or more. You also have the added benefit of payroll deduction, so it’s easy to “set and forget” your way to retirement success.

However, it’s not all sunshine with 401ks. There are some cons you should be aware of. The first is the standard annual contribution limit of $22,500. Also, you are subject to a withdrawal fee if you try to take out money before you turn 59 and a half. Some 401ks can have high fees, and you could be limited on your investment options depending on who your employer goes through. Finally, 401ks have Required Minimum Distributions, which force you to take out a certain amount of money after the age of 73.

My second favorite retirement saving method is using a Roth IRA. This is a great way to invest after-tax money where it can grow tax-deferred. You can also withdraw the money tax-free because it was already taxed when it went in. Depending on the company you work for, Roth IRAs tend to have a large selection of investment options, and there are no Required Minimum Distributions like with a 401k. 

Health Savings Accounts (HSAs) are my third and final retirement savings strategy, and it’s one regular listeners of the podcast should be familiar with. I talk a lot about HSAs because they are the only triple tax-free account out there. You receive a deduction when you put the money in, the money grows tax-deferred. When you take the money out for health-related costs, it's also tax-free! It’s a win all the way around. Listen to this episode for more retirement saving strategy pros and cons!

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2023 is off to a great start for investors! This means now is the perfect time to make sure your asset allocation is optimized for the highest possible returns. On this episode, I’m doing a brief review of asset allocation, diving into why you should know the breakdown of your investments, and exploring the ways you can determine what your current asset allocation is.

• Reviewing the concept of asset allocation [1:15]
• Preparing your asset allocation for 2023 [3:13]
• Four ways to determine your current asset allocation [5:34]

Listeners know how important I believe asset allocation is for your retirement portfolio. If you're new to this concept, let me show you the ropes: Asset allocation is the breakdown of your portfolio between the five main asset classes. These classes are stocks, bonds, cash, real estate, and commodities. The classes break down even further into “safe” and “risky” investments. Cash and bonds are considered safer investments, while stocks, commodities, and real estate are higher risk/higher reward growth-oriented investments. 

When you’re in your 30s and 40s, it’s a good idea to lean on the riskier side in order to build your retirement portfolio with plenty of time to recoup potential losses. However, the closer you get to retirement, the more conservative you want to be. This is why it’s so important to know what your asset allocation is. I’ve had clients believe they are conservative when 95% of their investments are growth-oriented. Do you know how to determine your asset allocation? Listen to this episode to find out!

• What Is The Ideal Asset Allocation In Retirement?, #83 
• Morningstar

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Have you ever been tempted to cash out your 401k when changing employment? Is this really a good option? On today’s episode, I’m exploring the 401k cash-out culture in America, why people do it, whether or not you should do it, and retirement-friendly alternatives to cashing out your 401k.

• What’s going on with American retirement plans? [1:33]
• Exploring alternatives to cashing out your 401k [3:45]
• Why are so many people cashing in their 401k? [5:13]
• How employers can help departing employees save for retirement [7:31]
• How YOU should handle your 401k [9:44]

A recent Harvard Business Review study found that 41% of Americans are cashing out their 401ks when they change jobs. And with 30% of Americans changing jobs in 2022 alone, that leaves a lot of people potentially starting from scratch with their retirement savings. According to data from Vanguard in 2021, the median 401k for someone 55 to 65 years of age was $89,716. Believe it or not, that is hardly enough money to retire on. And for many middle-income Americans, this probably wouldn’t last more than five years.

When you cash out your retirement plan, not only do you pay taxes on that money, but there is an extra 10% penalty if you're under age 59 and a half. If you’re not careful, you could wipe out nearly half of your savings between taxes and penalties. Oddly enough, the US is one of the only developed countries that allows such easy access to retirement plans. In many countries, you can't access your retirement funds until retirement, and you must demonstrate a significant financial hardship to access it. 

So why are people cashing out their 401ks in droves? One of the big reasons is that employers will automatically cash out your retirement plan if the balance is less than $1000. It makes sense from an employer and a retirement plan perspective because there are costs associated with maintaining the latter. But this does the exiting employee zero favors! Thankfully, you can deposit that check into another IRA within 60 days and avoid paying income taxes on the withdrawal. Listen to this episode for alternatives to cashing out your 401k!

• Too Many Employees Cash Out Their 401(k)s When Leaving a Job
• 4 Things To Know Before Doing A 401k Rollover, #40

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With 2022 being one of the worst years ever for bonds, many listeners are asking if they should dump their current bond fund and move to something more stable? On this episode, I’m exploring the performance history of bonds, the relationship between bonds and interest rates, and whether you should sell your bonds and invest in a money market fund.

• Exploring the history of bond performance [1:57]
• Understanding the relationship between bonds and interest rates [3:23]
• Should you bail on your bond fund? [5:03]

The Barclays Aggregate Bond Index has been used to track bond performance since 1976. In 2022, the Barclays Index reported a 13% loss making it the worst year for bonds in U.S. history. The second worst was a 2% dip in 1994, but that pales in comparison. Bonds are supposed to protect our money. So how could they experience such a large decline?

The answer lies in the relationship between bonds and interest rates. Just like stocks, bonds trade daily, and much of their value is dictated by interest rates. Bond prices and interest rates have what's known as an inverse relationship. Meaning if interest rates go down, bond prices go up. And vice versa! When interest rates rose a record 7 times in 2022, it caused massive losses to many people invested in bonds. So the big question is, should you get out of your bond fund and into a more stable fund like a money market fund? Listen to this episode to find out!

• Bloomberg US Aggregate Bonds Annual Returns
• Fed's Interest Rate History: The Fed Funds Rate Since 1981
• Schwab Value Advantage Money Fund
• Schwab U.S. Aggregate Bond Index Fund

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As we continue to have higher than usual inflation, those receiving Social Security benefits may wonder about the cost-of-living adjustment (COLA) for 2024. On this episode, we’ll take a look at the history of these Social Security adjustments, how things are shaping up for 2024, and what you need to do to stay ready for retirement.

• Examining the history of COLAs [2:38]
• The COLA forecast for 2024 [5:19]
• Action steps for this year’s COLA [6:59]

In 1975, the Social Security Administration (SSA) started issuing cost-of-living increases for Social Security benefits. These COLAs were designed to compete with inflation and ensure retired Americans had enough resources to live on. In the 48 years since, SSA has only had a zero percent increase 4 times, with the average being 3.78%, and the largest COLA in 1980 with an increase of 14.3%.

Social Security COLAs are determined by changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, also known as the CPI-W. By taking the third quarter CPI-W of the current year and dividing it by the third quarter CPI-W from the prior year, the SSA uses that percentage increase to quantify the cost of living adjustment for the following year. So what will this year’s COLA bring? While we still have a little bit to go in quarter three, the picture is gaining clarity. Listen to this episode for my analysis and tips to stay ready for retirement!

• Cost-Of-Living Adjustments

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With rising energy costs nationwide, listeners are begging for some money saving tips to beat the summer heat! On this episode, I’m sharing three ways to lower your electric bill this summer that will save you hundreds, possibly thousands of dollars in utility costs.

• Examining rising energy costs [1:39]
• Could a new energy supplier save you money? [3:10]
• Taking advantage of a home energy audit [10:02]
• Saving money with smart thermostats [11:50]

Temperatures during the summer are hot enough. We don’t need a painful electric bill to add insult to injury. Yet, the price of natural gas rising 24% last year has contributed to a national increase in electricity costs for consumers that use it. If you’re anything like me, you’re clamoring to find ways to bring your bill down without melting or bursting into flames. Thankfully, there are quite a few ways to keep your house and your bank account cool.

My go-to tip is to check if you live in a state with a deregulated energy market like Connecticut. 26 states use this two-component system on their electric bills, and the first component is known as the delivery rate. This is considered the regulated portion of the bill that consumers have little control over, and is based on location. The second potion is the supplier rate which quantifies your cost per kilowatt hour of electricity. This is the rate you want to shop around for! Consult your electric bill to determine your current costs, and use a resource like Connecticut's energizect.com to evaluate which providers in your area have the best supplier rate.

Another way you can potentially utilize your state resources is by requesting a home energy audit. For a $50 inspection fee, Connecticut residents can have an inspector examine their home for possible pitfalls such as air leaks, insufficient insulation, and inefficient appliances. They also provide professional insight on how to fix these issues! You could save a ton on your utility bill by implementing these upgrades and making your home more energy efficient.

A really simple energy-efficient upgrade is installing a smart thermostat. They only cost around $150-$250 per unit, and are fully programmable. They learn your heating and cooling habits to use the most efficient amount of energy possible. Ultimately lowering your monthly bill. Additionally, if you leave the house for an extended period and forget to set your thermostat accordingly, it’s easy to adjust the temperature from afar, saving you from a costly spike in your electric bill. Some electric companies will even allow you to pair these devices with your service for additional savings. Listen to this episode for more energy-saving insights!

• 5 Ways to Lower Your Electric Bill, #126
• Energize CT 

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A little over six years ago, I chose TD Ameritrade as my broker after considerable research into TD, Charles Schwab, and Fidelity. So when Charles Schwab announced their purchase of TD three years ago, I started preparing. Finally, the merger is upon us! And on this episode, I’m helping TD Ameritrade clients everywhere get ready for the move.

• Understanding the merger timeline [1:38]
• What you need to do before the merger occurs [3:27]

TD Ameritrade clients have a quickly approaching decision to make: Stay where they’re at and become Schwab, or find another broker. Personally, I’m recommending my clients stick with Schwab. I’ve been using and testing their platform for the last year, and there really isn’t much difference between them and the soon-to-be-defunct TD Ameritrade. If you want to continue doing business with Schwab, there’s nothing you have to do to make the change. This is what’s known as a negative consent transaction. Unless you decide not to go through with the transfer, all of your assets and brokerage accounts currently held with TD Ameritrade Institutional will automatically move over to Schwab.

That being said, there are a few dates those going through the merger should be aware of. On Friday, September 1st at 8:30pm Eastern, access to TD’s Advisor Client will cease, and all accounts on TD Ameritrade will be transitioned to Schwab's platform over the next few days. By Tuesday, September 5th you will be able to access the Schwab Alliance Client Portal and manage your accounts directly through Schwab. The only thing you need to do as a newly minted Schwab client is create a profile through their client portal. Listen to this episode for more on the merger!

• TD Advisor Client
• Schwab Alliance Client Portal 

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