This week’s theme is: Early retirement offers - what should you do if this happens to you?

What many people often don’t consider when they retire earlier than planned is how an early retirement will impact your money. Many people just think about the salary they’d be giving up, but it’s actually a lot more complex than that. 

Today, I’m talking about how taking an early retirement offer can impact your money - namely, how it will affect your health insurance, your social security, and your retirement savings.

Health insurance - is health insurance coverage included in your early retirement offer? If not, how will you pay for health insurance? Most private plans cost at least $900-$1,200/month. You’ll need to find an affordable way to get health insurance until your costs go down at 65 once you’re covered by Medicare. 

Social security - An early retirement might force you to take social security earlier than you planned. Not only is your lifetime benefit permanently reduced, but you’re also giving up what are likely to be your highest earning years when calculating your benefit. 

Social security lifetime income is dramatically different for someone who lives to their life expectancy if they start drawing social security at 62 vs. your full retirement age. It’s likely to reduce your income by $100,000 or more. 

Plus, you’re later working years are usually also your highest working years. Social security benefits are calculated based on your highest working quarters, so you’re also going to get less if you stop working, unless you’ve already maxed out your benefit. 

Bottom line is that early retirement has expensive consequences for your social security. 

Lastly, your retirement savings. Not only are you giving up the ability to save more in your last working years, you are also going to need to make your retirement portfolio last longer in retirement, since your total years spent in retirement will now be greater. 

You’d be surprised how much of an impact retiring just 6 months or 1 year early can make, so be sure to understand the multifaceted ways an early retirement offer can and will impact your money in retirement. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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This week’s theme is: Early retirement offers - what should you do if this happens to you?

Today, I’m talking about what happens if you don't accept your early retirement offer. As I talked about yesterday, you may decide that you simply can’t afford to accept your early retirement offer. 

If you can’t afford to accept an early retirement offer, you’re in a tough spot, especially if you’re in your late 50s or early 60s. You could of course continue working for your employer even if you don’t accept the early retirement offer. 

But if you’re being offered the early retirement offer you’ll want to try to better understand why the company is offering the early retirement and how likely it is that you’ll be laid off later anyways, perhaps with a much less attractive severance or offer that’s in front of you now. 

What’s the company’s financial picture look like? If you work for a large publicly traded company, you’ll have access to this data. If you work for a private company, you may only have access to some information or in some cases, you’re only intel is the water cooler talk. 

What’s the growth trajectory of the industry? Are you working in a growing industry or an industry that will suffer for years to come after this pandemic? Or are you working in a dying industry where your company and probably all of your competitors won’t be in business in 5 years. 

The hard reality when you’re faced with an early retirement offer  is that it is harder to find work the closer you are to retirement, yet a wrong choice about retiring too early could create decades worth of financial problems because you just don’t have enough money to make it work. 

So be sure to ask yourself: If I don’t accept my early retirement offer, will I just get laid off later anyways and get offered a worse package than what’s in front of me now?

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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This week’s theme is: Early retirement offers - what should you do if this happens to you?

Today, I’m talking about the most important question you should ask yourself if you are faced with an early retirement offer - can you afford to take the early retirement offer? 

If you’re 62 and you planned to work 3 more years, can you afford to retire now? Maybe you can and that’s great - it makes the decision a little bit easier and allows you to consider other factors as well. But some of us simply can’t afford to take the early retirement offer. 

Or maybe you could afford it if you worked part time. Or you could afford it if your health insurance continues until Medicare kicks in. Or maybe you could afford it if you were able to negotiate a better early retirement offer - many people don’t realize that early retirement offers are often negotiable. Whatever the retirement offer, the very first question to ask yourself is - can I afford to take this? 

If you can’t afford to take it, what happens if you don’t take it and then get laid off later anyways. I’ll talk about addressing that problem tomorrow. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Welcome to a new week and a new theme here on the One Minute Retirement Tip! 

This week’s theme is early retirement offers - should you accept?

[Story about DM - layoff in early 60s]

Takeaway - if you’re unlucky enough to be near retirement during a downturn in the economy, your industry, or your company, you could be face with an early retirement offer. Deciding whether or not to accept the offer is not an easy decision to make - there are multiple things to consider from a financial standpoint to simply answering the question if you do accept the offer: what next? 

With many companies struggling due to the pandemic, I’ve had several clients accelerate their retirement plans or fear that their early retirement would be forced upon them as the companies they work for limp along and look for ways to cut costs.

And with payroll most often being the biggest line item cost for businesses, you may find yourself in the position of being offered an early retirement. 

So this week,  I’ll help you consider what to do if that happens to you...

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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It’s Sunday, which means...It’s recap time! This week’s theme was what do I do with my inheritance money? 

Here’s what I covered in each episode this week:

• How To Waste Your Inheritance where I talk about some of the biggest mistakes made when you have a windfall inheritance
• Then I talked about Why The First 6 Months After Receiving An Inheritance Is Critical and why you shouldn’t make any big spending decisions in that first 6 months for a variety of reasons. 
• Next we looked at a hypothetical scenario of what to do with $1 million inheritance 
• Finally, we wrapped up by talking about 3 smart ways to use your inheritance and planning for your own wealth transfer wisely to the next generation

Hopefully after listening to the One Minute Retirement Tip podcast this week you have a better idea of how to wisely spend, save, and invest any future potential inheritance you might receive. The average inheritance received in 2016 was about $295,000, and it’s likely that most of you listening will receive some inheritance. Most of us prefer not to think about our parents dying, but that means that we also put off thinking about our potential inheritance. Until the day comes when you’re forced to deal with it. So I tried to help prepare you this week how to handle an inheritance wisely. 

Tomorrow, we are starting a brand new theme: early retirement offers - should you accept?

With many companies struggling due to the pandemic, I’ve had several clients accelerate their retirement plans or fear that their early retirement would be forced upon them as the companies they work for limp along and look for ways to cut costs.

But what if you’re offered an early retirement? Should you accept it? I’ll help you consider what to do if that happens to you next week. 

Also, be sure to check out my YouTube channel - True North Retirement, where I post a new livestream every Monday. Each week’s livestream is a deeper dive into the theme for the week, so if you want to hear more from this week’s topic head on over to True North Retirement on YouTube and subscribe. 

That’s it for this week! Thanks for listening and I hope you have a blessed Sunday! 

My name is Ashley Micciche and this is the “One Minute Retirement Tip”.

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This week’s theme is: What Do I Do With Inheritance Money?

Today, I’m talking about planning for your own wealth transfer. 

If you listened to all of the podcast episodes this week, then you know that the inheritance statistics are pretty grim. Many Americans waste their inheritance by making poor spending and investing decisions and the money is often gone 2,5, or 10 years down the road. 

With that in mind, I encourage you to be thoughtful about your own wealth transfer. If you manage your money well in this life, you’ll likely have something to pass along to your children. And that something may be a substantial amount. 

Many parents place no restrictions on wealth transfer to their children, and as a result, when children inherit money - even in their 40s, 50s and beyond it can have some really bad outcomes. 

Wealth transfer to children should only happen when addiction is not a concern, the child is a good steward of their own money, ideally you’ve tested them already with lifetime gifts and paid attention to how they use the money, their incentive to work isn’t compromised, and the inheritance won’t be squandered to fuel a few short years of a luxurious lifestyle. 

If I’m being honest, seeing how many people handle money, especially inherited money - responsible management of an inheritance is an exception, not the rule. 

So I encourage you to plan well for your own wealth transfer and make sure that your children are well-equipped to handle it. And if they’re not, then have the courage to explore alternative solutions via trusts, restrictions, or giving away most of your wealth to organizations and the causes you care about most. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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This week’s theme is: What Do I Do With Inheritance Money?

Today, I’m talking about 3 smart ways to use your inheritance.

The first smart way to use your inheritance is to spend money on something meaningful to you and consistent with your values Of course, you’ll want to do this within the confines of spending, gifting, or donating no more than 10% of your inheritance, which is what I covered yesterday. 

[jewelry - meh...] - so if I bought a pair of diamond stud earrings or a fancy new ring, that wouldn’t be a gift used with my inheritance would be likely to bring me joy. On the other hand, there are many travel-related things I would like to experience with my husband, and based on our past travel experiences, it would bring joy to allocate some of my spending in their area - not just because of the fun involved in the trip itself, but also the lasting memories created. 

Make a wish list and discuss your plans with your spouse and your children. If you make the decision to be prudent with your spending, you may not be able to do all the things you ever dreamed of with your inheritance. And that’s ok. In fact, it’s probably better that way. So given the limited resources available, it’s a good idea to make a wish list. Let that percolate. Talk about it with your spouse and your children. Whether it be a one-time spend or an annual budget to do something with the funds, it’s important to make your wish list and really consider it. You may find after talking to your family and mulling it over for a month or 2 that your priorities change or something more appealing takes it’s place. 

Lastly, the smartest use for your inheritance is to invest for future growth. If you’re 50 and you receive an inheritance of $1,000,000 it’s not unreasonable for that $1million to be worth $4 million dollars by the time you’re 70 if you don’t touch in and invest it wisely. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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This week’s theme is: What Do I Do With Inheritance Money?

Today, I’m asking an important question to help you begin to think about the best way for your in your situation to allocate future inheritance dollars. What would you do with $1 million?

Most of us don’t daydream too much about our future inheritance, because it also leads to thinking about the death of our parents. Personally, I think it’s best not to count on an inheritance at all, even if you think it will be sizable. It’s not something you can plan for since you don’t know when the windfall will occur, and you may end up receiving a lot less than you anticipated. 

Yet at the same time, it’s also a worthy exercise to put yourself in the shoes of your future self and think about how you would spend, save, and invest your inheritance. 

When you make decisions in advance or at least set some guidelines for yourself, you’ll be better prepared to handle the inheritance when the time comes. 

So with that in mind, here’s how I would advise the vast majority of people to handle an inheritance: 

#1 - Pay off debt 1st. If you have expensive credit card debt, I would start there. If you have car loans I would also consider paying those off as well depending on the size of your inheritance. The goal here is to use the funds to get out of debt, except for your house. 

Next, you can earmark some for spend, gifting, and donating, but the most I would recommend is 10% - realistically, that should be lower for most people. Then use the rest to save and invest for the long-term and for retirement. 

Going back to the $1,000,000 example, lets see what that looks like: 

• Let’s say I have $5,000 in unpaid medical bills and $25,000 left on my car loan. Those are my only debts. So I would use $30,000 to wipe out those debts first. 
• Next, I have a maximum of 10% that I can spend, gift, or donate - which leads me to $100,000. Perhaps my house needs a new roof and my kitchen is 15 years overdue for a remodel - I might spend $50,000 on those 2 things, donate $20,000 and earmark the rest of a $15,000/year vacation budget over the next 2 years. You can see that it’s pretty easy to spend $130,000 on making debt problems and a leaky roof go away among other things - perhaps some deferred upgrades on your house and some deferred vacation spending. 
• With $130,000 spent, you’re going to want to use the remaining $870,000 to keep enough cash for emergencies, then save and invest the rest for the long-term and your own retirement. 

Now if you already have millions and you don’t need this inheritance at all, it may be best to earmark this money for other things. But for most Americans, any inheritance received is money that will help ensure better financial security down the road, which makes prudent decision making essential. 

The most important point here is that the spending and gifting must be constrained with boundaries, so the inheritance isn’t continually used like a piggy bank to fund a lifestyle you can’t afford until the money runs out. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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This week’s theme is: What Do I Do With Inheritance Money?

Today, I’m talking about why the first 6 months after receiving an inheritance is critical. Too many people who receive an inheritance quickly get to work spending it. Buying that car you’ve always wanted. Finally remodeling the kitchen, etc. 

But if you’re going to spend a portion of your inheritance, it’s best to wait 6 months before touching that money. Leave it in the bank, tie it up in a CD for 6 months before you make any decisions about spending. 

If you’re going to save and invest your inheritance, then it’s not necessary to wait as long as you have good, objective advice that’s in your best interest for a competent financial advisor. You’ll also need to consult with your tax advisor about investment decisions after receiving an inheritance, because you’ll want to avoid any tax missteps after receiving an inheritance.  

The other important reason why a 6 month waiting period on spending is critical is because chances are that this will also be a very emotional time, filled with grief. Most people will inherit from their parents and when faced with the difficult decisions of being an executor or dealing with your parent’s house or possessions, it’s also a very stressful time.

So it’s best to not let your foggy judgement during your grieving period lead you into some damaging decisions when it comes to managing your inheritance. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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This week’s theme is: What Do I Do With Inheritance Money?

Today, I’m talking about how to waste your inheritance. Yesterday, I talked about how 20% of Americans who receive an inheritance will end up spending it all. And a great many of those I imagine will be worse off financially because they got themselves into houses they couldn’t afford and lifestyle changes they couldn’t sustain, and as a result, end up losing more than what they gained in the inheritance. 

Studies show that most of us only end up saving and investing about ½ of our inheritance. 

So with these dismal stats in mind, let me share with you some reliable ways to waste your inheritance:

1. Sacrificing your retirement and long-term financial security for short-term pleasures. If you receive an inheritance in your 50s and 60s like many Americans do, that could be the key to financial security in retirement, and make up for a lack of savings on your part. However, it’s very tempting to spend your inheritance on luxury vacations or a beach house, and you miss out on the opportunity to make the money last and continue to provide for your needs years into the future. 
2. Spending without a plan in place. I’ll actually talk more about this in a couple days when I’ll be asking you what you would do with a $1,000,000 windfall today. But a big mistake that people make when they receive an inheritance is that they just start spending. They think that a little here and and little there won’t add up, but it does. Having a plan and earmarking specific funds for specific purposes is key to not wasting an inheritance and then wondering where it all went
3. Listening to the advice of friends and family, or worse, no one at all. People who know that you received an inheritance may be eager to help you spend your inheritance or try to get you to invest in something that isn’t prudent. And many people who aren’t used to managing their money won’t know what to do with a large sum all at once. But objective and unbiased advice is key. Don’t take investment advice from your hunting buddy or your brother-in-law. Instead, seek out the council of a competent tax advisor and a financial advisor who will put your needs first and help you make a plan for the long-term so you don’t squander your inheritance. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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