The theme this week on the Retirement Quick Tips Podcast is: How Much Is Enough?

Today, I’m talking about the minimum income you need to be happy. A recent study published by Purdue suggests that you need about $105,000 of income in North America have high life satisfaction. In Oregon, where I live and cost of living is about a third higher than the rest of the country, you need about $136,000 to be happy. 

The study suggests that this is an ideal amount and that the law of diminishing returns applies and that more income above this level doesn’t make you happier. Sure you can take nicer vacations and afford a newer car and a bigger house, an important takeaway from this study is that there is an income level that is enough. 

Another study published by Princeton in 2010 found a similar result: there is an increase in happiness alongside annual income up to about $75,000 before it levels off. Adjusted for inflation and the 12 years that have passed, the $105,000 of income today is in that ballpark. 

So while happiness and income and the associated comforts and things that that income can buy goes up as income rises, some research suggests that it levels off at a certain point, which is important to recognize alongside the continued pressure for more more more. 

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

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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 started this podcast because I love helping people just like you gain clarity and make a plan for the retirement you envision. 

The theme this week on the podcast is: How Much Is Enough

There is a Jimmy John’s sandwich shop near my office, and a few weeks ago I was in there waiting for my sandwich order, when I spotted a sign on the wall with the following parable called How Much is Enough:

The American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, “only a little while.”

The American then asked why he didn’t stay out longer and catch more fish?

The Mexican said he had enough to support his family’s immediate needs.

The American then asked, “but what do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life.”

The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats. Eventually, you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise.”

The Mexican fisherman asked, “But, how long will this take?”

To which the American replied, “15-20 years.”

“But what then?”

The American laughed and said that’s the best part. “When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions.”

“Millions?” asked the fisherman, “Then what?”

The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evening, sip wine and play your guitar with your amigos!”

So this week, I’ll talk about the title of this parable: how much is enough. The answer is different for everyone, but I think it’s safe to say that we all want financial security, happiness, and to be able to spend our time and financial resources in a way that is worthwhile. 

That’s it for today. Thanks for listening! Come on back tomorrow...where I’ll talk about how much income you really need to be happy in the United States. 

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

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

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

----------

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

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

This week the theme was:What To Do With A $300,000 Inheritance

In case you missed any episodes, here’s what I covered this week…

• Don’t Make Major Decisions For 6-12 Months
• Avoid Found Money Syndrome
• Realign The Portfolio To You
• Make A Concrete Plan For Inheritance Dollars
• Case Study: I Just Received A $300,000 Inheritance

The most important takeaway from this week is:  

Tomorrow I’m starting a brand new weekly theme: How Much Is Enough? 

Saving for retirement is a lot like one of my favorite books growing up - Goldilocks. Save too much, work too hard for too long and you’re likely to find that the sacrifices were too great and you didn’t enjoy the working years and you didn’t have enough healthy and relaxed years to enjoy your retirement. 

Save too little, and you’re not going to be able to afford to do much else then sit around and watch Fox News and College Football all day.

Save just the right amount, work just long enough to still enjoy the healthy go-go years of retirement and you’ve found yourself a winning combination.

So next week I’ll talk more about how to tell when you’ve hit the baby bear scenario in Goldilocks, where everything is just right.

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

The theme this week on the Retirement Quick Tips Podcast is: What to do with a $300,000 inheritance

Today, I’m going over a case study to help illustrate how to handle a $300,000 inheritance in the real world. 

Here are the details of the case study: 

• Married couple. Receives an inheritance of $300,000 - all in investment accounts. 
• They are in their early 60s and are about 3-4 years away from retirement
• Have about $1million saved for retirement 
• HH income is $200,000 and they’re saving $20,000 annually for retirement
• Kids are out of the house
• Retirement spending projections are about $70,000 per year, including basic spending, health care costs, and a few trips a year, as well as some fun money for eating out and hobbies. 
• They’ll have social security and the wife will have a small pension. Income from their portfolio will cover the rest. 
• They have a mortgage of about $50,000 that will be paid off in 8 more years. No other debt.
• They currently have savings in their bank of about $25,000

Ok, so starting with the inheritance amount relative to their other assets. This is a good place to start. The new money is about 30% of their existing assets for retirement, so it’s a meaningful addition to their current portfolio.

Here’s what I would recommend for this couple: 

• The fact that they have a decent amount in savings and no other debts other than their mortgage is a good start. 
• I would take $50,000 of the inheritance and pay off that mortgage. Since they’re planning to retire in the next few years, before the mortgage is paid off, then it’s going to cut down their retirement expenses in a meaningful way and will give them maximum flexibility for their retirement spending
• Since they’re so close to retirement and based on their desired spending needs in retirement, they don’t have enough assets to afford them the luxury of spending any of the inheritance. So I would invest the remaining $250,000 after the mortgage is paid off. No new cars, no vacation. This is important. This couple needs to grow their investment portfolio as much as possible in the last few years before retirement. If they had more of a cushion where their anticipated retirement spending was a much smaller fraction of their overall nest egg, then I would say they could spend some, but even in that circumstance, I would only spend 5-10% of inheritance assets on something that isn’t necessary.
• Then the portfolio needs to be invested based on their goals, timeline, risk tolerance, etc. and folded into the rest of their portfolio so everything is aligned. I talked about this a couple days ago…

If they had more debt and less in savings, I might use more of the inheritance dollars to knock out some additional debt and boost savings to a healthy level, but in their case, they were already in good shape here to begin with. 

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

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----------

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

The theme this week on the Retirement Quick Tips Podcast is: What to do with a $300,000 inheritance

Today, I’m talking about the importance of making a plan for inheritance dollars. Often you can’t plan for this in advance, since it might make you feel too icky to plan what to do with your inheritance when mom and dad are still alive. Also, you don’t know for certain how much you will receive, which brings me back to a point I made earlier in the week about waiting 6-12 months before you make any major decisions…which of course, allows you ample time to plan. 

When I was in my mid-twenties, one of my former employers was involved in a large class action lawsuit. I had nothing to do with this lawsuit and wasn’t affected by it in any way, but just by filling out some paperwork which took all of 10 minutes, I received a check in the mail for several thousand dollars about 6 months later. 

That was a pretty sweet windfall, especially for someone in their mid-20s with a modest income. I dreamed up all the ways I would spend this unexpected and unearned injection of cash…nice vacation, some new golf clubs, new clothes and shoes. We just bought our first home, and it would have been nice to upgrade to some better countertops. I put it into savings and didn’t spend it right away, but I didn’t have a plan for it either. 

What happened to that money? I don’t remember. I gradually used it for and it dwindled down and it’s long gone. 

Because I didn’t have a plan for these assets, I didn’t do anything meaningful with the money. The same thing can happen with an inheritance.

So how do you plan for an inheritance? You don’t have to plan for this in advance. Since you don’t know the timing or the amount, it’s usually not worth planning on, and counting on an inheritance can be very detrimental to your motivation to save and invest wisely. 

Also, you can’t count on an inheritance. According to statistics, the average inheritance is  significantly lower than the expected inheritance. Much of it could be used for end of life health care and other expenses, parents live to 100 and use up more assets, funeral expenses, etc. 

But again, if you’re waiting 6-12 months after receiving an inheritance to do anything significant, then you’ll have plenty of time to plan thoughtfully then. 

Tomorrow, I’ll bring everything together that I’ve discussed this week in a case study. 

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

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

----------

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

The theme this week on the Retirement Quick Tips Podcast is: What to do with a $300,000 inheritance

Today, I’m talking about taking advantage of step ups to re-align the portfolio for your needs.

The estate tax situation is very favorable in our current time. Under current tax law, assets like IRAs and Roth IRAs are passed along tax free - at least at first - until you have to start taking mandatory distributions from non-Roth accounts, which very often occurs in the first year.

There are high exclusion amounts on estate values, meaning that in most states, estate taxes won’t even be an issue until the estate value exceeds several million dollars. 

Most taxable investment accounts enjoy step ups in cost basis, meaning that on a long held profitable investment, all the capital gains get wiped out as of the date of death, making it easy and free of major tax consequences to sell inherited assets. 

Which brings me to the point of today’s episode: It’s vital that you re-position inherited assets to suit you and your needs and your stage of life. 

Too many people don’t re-allocate assets appropriately. They hold on to houses they shouldn’t, stocks they shouldn’t, a CD or bond portfolio designed for someone in their 80s, not someone in their 50s or 60s. 

There’s a lot of reasons for this. Guilt I think is one. Being overwhelmed and not really knowing what to do is another common reason. Receiving an inheritance is an important time to bring a financial advisor into the picture to help you make sound decisions, rather than ones based on emotions. He or she can help you move forward and re-align inherited assets to fit you and your needs. 

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

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

----------

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

The theme this week on the Retirement Quick Tips Podcast is: What to do with a $300,000 inheritance

Today, I’m talking about how to avoid one of the most common pitfalls when receiving an inheritance, which is known as “found money syndrome”.

Found money syndrome is what Forbes writer Bill Keen says can happen when “you come into money you weren’t expecting to receive: gambling winnings, a family inheritance or, in the most extreme case, winning the lottery.”

We are tempted to treat this money differently because it wasn’t something we worked hard to earn and save on our own. It explains why 70% of heirs burn through their inheritance in 3 years. 

It’s tempting to dream up all the things you can do with this windfall - that dream vacation to Europe, a new car, a new house, etc.  And it’s easy to justify this as a once-in-a-lifetime opportunity that you won’t ever have again. 

Also, many people who receive an inheritance are up to their eyeballs in debt, so inheritance funds end up getting used to pay off credit card or other debts, but unfortunately, that often puts a bandaid on the problem, and the debt is likely to return at a future date. 

So if you understand found money syndrome and are determined to use your inheritance funds wisely, what’s next? 

Well actually, you should use it to pay off debt if you have debt. Especially if that is high interest credit card debt, or medical debt, or even car loans and a mortgage. Using an inheritance to rid yourself of ongoing monthly payments and those debts is often a wise choice. 

If you don’t have 3-6 months savings, I would add to your liquid savings, and then invest the rest. 

If and only if you are already on track for a comfortable retirement, would I ever recommend using inheritance funds for spending on anything fancy or fun. And even then I hesitate to recommend that any of it be used for spending now. 

Several years ago, I had a client who passed away. She died with right around $300,000 that her only daughter inherited from her. She and her husband who predeceased her were never wealthy. They lived a very modest lifestyle with modest income. But they were prudent and good savers, and made it to the end of their lives with plenty left over to pass on to their daughter. 

Unfortunately, the daughter burned through the money that took a lifetime to save in about 18 months. She bought a new house, a new car, and kept calling every few months with a new reason why she needed to take money out of her account. 

It was sad to watch and angered me that her parents worked so hard for so many years and she spent it all in less that 2 years, living a lifestyle she couldn’t afford, and very likely lost it all later on since her income couldn’t support upkeep and the ongoing expenses of her new house, car, and other toys. 

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

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----------

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

The theme this week on the Retirement Quick Tips Podcast is: What to do with a $300,000 inheritance

Today, I’m talking about waiting to make any major decisions for at least 6-12 months. For those of you who have received an inheritance, you know that it can sometimes be a lengthy process. For an estate going through the probate process, it can usually take about 9 months to complete. 

On the one hand it’s good because you won’t have instant access to inheritance dollars in this case. However, in the case of inheriting assets from a trust or an IRA, the estate is settled much quicker meaning that you’ll receive the inheritance much much sooner. 

Regardless of how long you’ll need to wait before you have access to inheritance assets, it’s important that you wait several months before making any major decisions. Why? 

There are several reasons why you would want to wait. 

1. You’re likely going through a period of grieving and so is the rest of your family. It’s never a good idea to make major financial decisions in a state of emotional turmoil or grief. Waiting 6-12 months allows time for the grieving process and to have a clearer head. 
2. Unfortunately, there can also be disagreements with other heirs. Too many people die without having their estate planning ducks in a row. This creates ambiguity and confusion, and can lead to some nasty arguments and resentments. Waiting to 
3. Many inheritances involve deciding what to do with a house and other property. Not only that but there is often 30 years worth of stuff in the house that needs to be dealt with, and this just takes time. 
4. Uncle Sam could come a knocking, so you want to have paid any estate taxes before you start making big changes or big financial decisions, since the tax bill may surprise you, and not in a good way. 
5. And perhaps most importantly, taking 6-12 months allows you to be more careful, thoughtful, and actually make a plan for how you will save, spend, and invest the inheritance.

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

----------

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>>> 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 started this podcast because I love helping people just like you gain clarity and make a plan for the retirement you envision. 

The theme this week on the podcast is: What To Do With A $300,000 Inheritance

According to Federal Reserve data, the average inheritance is around $295,000, and because most parents pass away sometime in 80s and very often end up passing wealth to their children who are in their late 50s or early 60s, it’s a relevant topic for many of you listening who may have recently received or are likely to receive an inheritance sometime in the next few years. 

The goal here, especially if you receive a meaningful inheritance that will make a difference for you financially and change how you live your retirement, is to make smart decisions and avoid big mistakes.

After all, 70% of those who receive an inheritance burn through it within 3 years. No no no! We can’t have that! 

So this week, I’ll talk about how to make smart decisions with your inheritance and use your inheritance funds wisely so that it can last for years to come. 

That’s it for today. Thanks for listening! Come on back tomorrow...

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

----------

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

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

----------

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

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

This week the theme was: Know Thyself

In case you missed any episodes, here’s what I covered this week…

The most important takeaway from this week is: Thinking through some important questions about how you’ll spend your resources in retirement - both your time and money, will help you live a more intentional retirement that is meaningful and fulfilling.

I hope that these questions I posed to you this week will erase any FOMO you might have in retirement, since it will help you live your retirement with more purpose and guide future decisions you’ll make. 

Tomorrow I’m starting a brand new weekly theme: What to do with a $300,000 inheritance. According to Federal Reserve data, the average inheritance is around $295,000. Obviously many people receive much less than that, and some receive much more. While less than 1% of you will receive an inheritance of $1,000,000 or more, if your parents are still alive, chances are you’ll receive something when they pass, so it’s important to make a smart plan for what to with that inheritance before you’re faced with the stress of making decisions in the real world.

So next week, I’ll talk through some important considerations when dealing with an inheritance.

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