This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Today, I’m talking about a common goal that many parents have when it comes to their adult children - helping them buy their first house. My parents and my in laws both helped us with the down payment on our first home, and looking back, it was an incredible gift that I am very thankful for. Because of the help from our parents, we were able to put a meaningful amount of cash down and keep our mortgage payments very affordable. Then, 5 years later when we sold that house and moved to our current home, we had plenty of equity to transfer over and without that initial down payment, we wouldn’t have been able to buy our current home, that now houses our family of 6 + our dog.

One attractive option for parents looking to help their children buy their first home is an intra-family loan. Basically, the bank of mom or dad or both loans money to a child borrower for the purchase of a house. You have to follow a certain set of guidelines for the loan to qualify and not be deemed a gift instead, but if you do it right, it helps both you and your child in several ways:

• The interest costs paid by the child stay in the family (to be used by the parents)

• Origination and other transaction fees may be avoided; 

• And the biggest benefit in today’s market: the borrowing cost for the child is typically much lower than interest rates from the bank; the rates for these loans are set by AFR or applicable federal rates, which are currently 3.74% as of early March 2023. Compare that to the national average on a 30yr fixed mortgage right now, that recently topped 7% again.

Now obviously the risk of loaning to your child is real those payments could stop if they lose their job or something catastrophic happens, so the risk is higher than owning a diversified bond portfolio, but the interest rate paid to you as a lender is still better than what the parents can earn from a bond portfolio. 

Obviously, you need to have the assets to make an intra family loan pencil out, but if you do have the assets and your child is looking to buy a house, it’s a great strategy to consider with even more appeal when rates are higher. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Today, I’m talking about the opportunity to purchase a 2nd home - whether that’s a rental, a snowbird spot, or a vacation home, a decline in housing prices means an even greater decline for popular vacation or 2nd home destinations. During the global financial crisis in 2008, vacation home sales dropped 30% and prices came down 23% in just one year from 2007 to 2008. 

Obviously we’re not there yet, but you can take steps today if you’re serious about it:

• Start shopping & decide on places you would consider buying and understand what’s happening in the market (corporate buyers are already exiting)

• Story about central OR, Florida, Arizona, South Carolina - seriously considering a move

• Save as much as possible and invest it in 1 year CD or Treasuries or money market where the money will be safe but grow while you wait

• Crunch the numbers and figure out what you can afford, so you’ll know when the values come down to a more reasonable level and when you’re ready to buy…you don’t need to wait until the bottom (we bought our first house in Jan 2009 when prices came down, but didn’t bottom for another couple of years). Fixed rate mortgages are high, but ARMs are cheaper if you can deal with the potential uncertainty that your interest rate will increase

• Be patient - this could take years to fully materialize - market cycles can be long and the last downturn in housing took about 10 years to get back to peak housing levels, so there is no rush and you have time to be prudent.

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

---------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Today, I’m talking about what I think is the biggest opportunity that exists with the current housing and mortgage market - the opportunity to downsize.

• Sell and pay cash with equity and savings, or significantly reduce mortgage - cash is king

• Moving to a more desirable location - Buyers also will have the upper hand in a handful of cities where prices are set to fall or are already on the decline. That includes high-growth cities like Austin, Phoenix, Las Vegas, and even Boise, Idaho, as well as coastal California and the Pacific Northwest, where prices could fall by 10% or more - https://www.investopedia.com/us-housing-faces-ugly-transition-in-2023-7111840 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

----------

>>> Subscribe on Apple Podcasts: httpstr://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Today I’m talking about why I think we’re just at the beginning of price declines in housing.

• Personal savings rate has plummeted to levels not seen in 15 years, dropping to about 3% in 2022 from a peak of over 30% in the early days of the pandemic. After inflation took hold, the checks from the federal government stopped, and post-pandemic life largely resumed to normal, Americans started rapidly depleting those savings. Since 1960, personal savings rates have been well above 5%. The only other time savings rates have been this low were just before the financial crisis in 2008, when they hovered in the 3% range in the years leading up to that. 

• The problem here, is that Americans have no more breathing room in their finances, so it’s a house of cards for many. Homeowners may have equity in their homes, but they don’t have the ability to weather an economic storm like a job loss.

• The housing market has already cooled significantly, and it’s only a matter of time in my opinion - probably later in 2023, that businesses will feel the pain of lower spending by consumers, and higher costs to service their debt, and you’ll see layoffs and job losses accelerate. 

• No income and no savings is a bad combo for housing prices that have already been in decline. 

• In many places, housing prices have cooled, but I would expect a freeze over and more people in a position of needing to sell because of needing to relocate for work, they lost their job, they needed to start paying on their student loans again, and the math just doesn’t work - they can no longer afford the house they bought 

• With inflation being stubborn, interest rates will simply not go down anytime soon and there’s a reckoning coming, because the house of cards that many Americans have built relies on the economy continuing to grow and keeping their job. Both of which are unlikely to continue in this rising interest rate environment. 

• So it seems reasonable then, that bargains in housing are coming. 

• I’ll talk later this week about specific areas where this could benefit you, but especially if you’re looking to buy a 2nd home, looking to downsize, or looking to move to a desirable location that has recently become unaffordable, you can benefit from the downward pressure on house prices that I think will accelerate in 2023. 

• I think in some markets, especially the hottest ones with the eye-popping jump in prices - you’ll see the biggest declines there - possibly 20-30% or more as prices finally come back down to reality. And if you’re house declines in value too - you still benefit unless you’re trying to sell in one of the overheated areas. If you’re house loses 5% in value, you still benefit if your new home has dropped 20% in value

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

Welcome to a new week here on the Retirement Quick Tips podcast! I’m your host Ashley Micciche, co-owner of True North Retirement Advisors, an independent financial advisory practice managing $340 million in client assets. I’m a Chartered Retirement Planning Counselor and I’m using my 15 years of experience as a financial advisor to help you gain clarity and make a plan for the retirement you envision.

On this podcast, I cover everything from investing, to retirement spending, to taxes in retirement in just a few minutes each day, so if you’re 5-10 years on either side of retirement, and looking for some daily doses of retirement planning wisdom, stick around this week as I talk about How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates

Most of the media pieces out there bemoan higher interest rates as a negative, and it is of course a huge problem for anyone with variable interest rate debt like credit cards, or anyone trying to tap into their home equity line of credit, buy a car or a house right now and get mortgage at 7%...no thank you. But there’s a great article that came out a few weeks ago that talks about ways to benefit from higher interest rates.

So this week, I’ll talk about how higher interest rates can potentially benefit you in a variety of ways…and in some ways you may not have considered before. 

That’s it for today. Thanks for listening! Come on back tomorrow…where I’ll talk about why further price declines in housing are coming, why I think it’s going to get ugly, and how you can take advantage of a housing market that’s in disarray. 

My name is Ashley Micciche...and this is the Retirement Quick Tips podcast.

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP 

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

01It’s Sunday, which means...it’s recap time here on the Retirement Quick Tips Podcast

This week the theme was:The Single Biggest Threat To Your Retirement

In case you missed any episodes, here’s what we discussed this week…

• How most people perceive their retirement risks all wrong, and what the real risks to your retirement is…topping the list: longevity

• The real problem with longevity risk, and why most people aren’t protected against it

• What to do about it (3 parts)

The most important takeaway from this week is: to recognize that longevity risk is the single biggest threat to your retirement, and to understand ways to mitigate that risk in your own situation to reduce the chance that you’ll run out of money in retirement 

Tomorrow, I’m starting a brand new theme: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates

It may not be the best time to refinance your mortgage, but that doesn’t mean there aren’t opportunities for homeowners in this current higher interest rate environment. So next week, I’ll talk about some opportunities that exist for homeowners today - especially if you’re close to retirement and considering paying off your mortgage, moving, or downsizing. 

Thank you so much for listening this week! If you’re enjoying the podcast, chances are someone else you know who is getting close to retirement could also benefit from checking it out, so please share the show with a friend, a neighbor, your sister, or your boss. Just go to your favorite podcasting app, hit the share icon, then text or email the show link to someone you know who is eyeing retirement. 

Thanks for sharing the love and spreading the word. I hope you have a blessed Sunday. My name is Ashley Micciche, this is the Retirement Quick Tips Podcast.

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: the single biggest threat to your retirement

Today, I’m talking about the last thing you’ll want to do to protect yourself against longevity risk, and that is Have a plan B.

This will mean different things to different people, and it’s something you;ll need to take action on in advance, before you’re 85, broke, and considering moving back in with your children. 

Some options to consider:LTC insurance, a reverse mortgage, keep more cash on hand to reduce portfolio withdrawals during market declines, be willing to practice austerity and cut back. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: the single biggest threat to your retirement

Today, I’m talking about what to do about your own longevity risk, part 2. Yesterday I talked about the most important thing you should do about your longevity risk, which is to simply plan to live at least until your life expectancy, if not longer when making decisions for your retirement. 

So if you’ve done that, then what? The second thing you can do to address your own longevity risk is to stick to a sustainable, tax-efficient (withdrawal order), withdrawal rate (ideally no more than 3-4%) & prioritize portfolio income in retirement (to help you generate the necessary and growing stream of income you’ll need to combat against inflation over a multi-decade retirement.

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: the single biggest threat to your retirement

Today, I’m talking about what you can and should do to mitigate longevity risk in your own situation. This episode is part one of 3 episodes where I’ll cover what you can do to mitigate this single biggest threat to your own retirement. 

Plan to live at least to your life expectancy and make decisions with that assumption - SSI’s calculator: https://www.ssa.gov/oact/population/longevity.html - 60 yo female today has a life expectancy of 86 For men, it’s 83. I usually advise clients to plan on living to be age 90 as a worst case longevity scenario, so you can make decisions with that timeline in mind. Take into account both spouses when married, since the money will need to last for both of you. 

That means you’ll want to decide when to retire based on your life expectancy vs. planning to only live until age 75 or 80. And making social security and pension claiming decisions with that same life expectancy in mind. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.

---------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week’s theme on the Retirement Quick Tips Podcast is: the single biggest threat to your retirement

Today, I’m talking about The Problem With Longevity Risk

Essentially living a long time and spending 25-30 years in retirement vs. only spending 10-15 years in retirement, means you're going to potentially spend down a lot more of your assets.  And since we don’t know our expiration date, it’s a big question mark, that not only is draining on your assets, but also impacts decisions you make about retirement. 

The real problem then with longevity risk, is that when you account for inflation and taxes, most people simply don’t have the assets to support themselves for a 30 year retirement, and if they live too long and spend down their assets, they run out of money before they run out of years.

So the first step in mitigating longevity risk is to not underestimate it’s effects on your money.  Underestimating how long you’ll live impacts decisions - just the SSI decision alone could cost over $500k of income you didn’t collect if you decide to take it at 62 vs. waiting longer and then you end up living to your life expectancy, you permanently reduced your income in retirement which means you also lowered your lifestyle or perhaps needlessly suffered, not being able to go on vacation or afford a plane ticket to see your grandkids, because you simply didn’t have enough money. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.

----------

>>> Subscribe on Apple Podcasts: httpstr://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance