This week, I’m talking about your one year from retirement checklist. When you’re one year out from retirement, there are several things you’ll want to do to help ensure that both you and your finances are ready for you to take the leap into retirement. 

Today, I’m talking about the 4th item on your 1 year from retirement checklist - live like you’re retired. 

Here’s what I mean by this: Let’s say that you are exactly 1 year from retirement today. What you’ll want to do for the next 3 months is track your spending. You don’t need to limit or cut back on your spending, but you’ll need to know exactly what’s going out of your wallet every single month. 

Too many people have no idea how much they spend every month, but when you retire, knowing your spending is absolutely critical to understanding if you have the income and the assets to support your lifestyle in retirement. 

So you’ll want to track for the first 3 months. Tracking for a few months will help you average out your expenses to get a more accurate picture of what you actually spend. 

Then, once you have that 3 month average, you can use that to figure out whether or not your income sources and assets can provide the income you’ll need to sustain that spending. 

Most retirees cut back and end up only needing 60-80% of their income once they retire, so you should use this exercise to determine how your expenses will change in retirement. You might spend less on gas and parking if you’re commuting to work, but you might spend more on travel and home improvement projects now that you have the time and you’re retired. 

And then for those last 9 months, keep tracking your spending, cut out what you don’t want or don’t need or can’t afford, and ideally, try to as much as possible live like you’re already retired to see if that lifestyle is sustainable. 

If it’s not, at least you found out if you’ll need to work longer or work part time, before you transitioned into 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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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about your one year from retirement checklist. When you’re one year out from retirement, there are several things you’ll want to do to help ensure that both you and your finances are ready for you to take the leap into retirement. 

Today, I’m talking about calculating the cost of healthcare in retirement. You’ll want to understand your expected healthcare costs in retirement, even if you’re covered by Medicare, and you really need to do this before you retire. 

Health care costs in retirement are a big expense for most retirees, costing an average of about $1000/month for most of my clients. Yet, most people are blindsided by the unexpectedly high cost of healthcare in retirement, and are disappointed to find out that their costs are still substantial, even with Medicare coverage.

Calculating the cost of healthcare is even more important if you plan to retire before age 65. You can expect to pay double or even more for health insurance and health care related expenses if you’ll need to find another health care option prior to Medicare kicking in. 

The good news is, estimating the cost of healthcare is pretty easy. There are a number of free calculators online you can use to estimate costs in your situation. 

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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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about your one year from retirement checklist. When you’re one year out from retirement, there are several things you’ll want to do to help ensure that both you and your finances are ready for you to take the leap into retirement. 

Today, I’m talking about why you should prioritize reducing your expenses over saving more as you get closer to retirement. This tip also applies if you are few years from retirement - not just in your last year. 

In most cases, you’re going to get substantially more benefit by reducing your expenses over saving more in the last years before retirement. 

Maximizing your savings is of utmost importance, especially in your first 10-20 working years, but the impact of saving more wanes as retirement approaches, mostly because your savings just doesn't have as much time to grow and multiply like it did when you were 25, 35, or even 45 years old. 

Instead, you’ll want to focus on knocking out debts and reducing expenses. This means paying off any debts you can before retirement, including your mortgage. Or if that’s not possible, look into a re-fi that could reduce your monthly payments or shorten the life of your mortgage. 

You’ll also want to look at all your other expenses. Are you still paying for your 25 year old son’s cell phone? What about the gym membership you haven’t used since Covid and probably won’t go back to. Maybe you can downsize to 1 car instead of 2. Wherever you can reduce debts and trim expenses before you retire - do it. You need to cut the fat in order to give your money the best chance of sustaining you and your lifestyle 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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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about your one year from retirement checklist. When you’re one year out from retirement, there are several things you’ll want to do to help ensure that both you and your finances are ready for you to take the leap into retirement. 

Today, I’m talking about the most obvious thing you’ll want to do before you retire - and that is determine if you are financially ready for retirement. 

This is the table stakes, because if you don’t do this, nothing else I’m going to talk about this week will matter all that much. You absolutely have to know in your unique situation if your assets and your income sources in retirement will be able to pay for your living expenses, health care, travel, groceries, etc for a 20-30+ year retirement. 

Yet, so few people actually do this, and instead, most just have a vague idea of whether or not they have enough. 

Now hopefully since you’re listening to this podcast, you’re serious about planning for retirement, so if you haven’t already run the numbers on your retirement, you are probably planning to as you get closer to the big day. 

If you’d like me to run the numbers for you to see your chances for a successful retirement, just send me an email at [email protected], and I will send you an easy 2 page worksheet to fill out and send back to me. That’s [email protected]. 

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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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

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

This week’s theme is your One Year From Retirement Checklist

When retirement is so close that you can taste it, what are some of the essential things you’ll want to do in your last year of work before you retire? That’s what I’m covering in this week’s tips. 

You’ve spent years saving and investing and working toward a comfortable and secure retirement, so you don’t want to transition into retirement without doing a few essential things. So what should you do in the last year of working before retirement? Stick around each day this week, where I dive deep into a checklist item each day and explain why and how you can get this done before you say sayonara to the working world. 

My goal for this week is that you will have the roadmap of the essential to-dos that will help you secure a comfortable retirement, and avoid one of the biggest retirement blunders of all - not being prepared for retirement and making the leap when you really shouldn’t. 

That’s it for today. But before you go...you probably know someone who is close to retirement and could benefit from listening to this podcast. If so, please share this podcast with them and encourage them to check it out by adding it to their flash briefing in Alexa or subscribing wherever they listen to podcasts!

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

It’s Sunday, which means...It’s recap time! This week, we looked at behavioral finance, which is the study of the influence of psychology on the behavior of investors. You and I aren’t always rational, we have limits to our self-control, and we are all influenced by our biases - these factors influence how we make decisions with our money - for better or for worse. 

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

• How Your Psychology Impacts Your Money Decisions In Retirement
• Why our emotions cause most of us to be terrible at decisions when it comes to money
• Understanding a couple of key behavioral finance concepts that if avoided will help you make better money decisions - namely loss aversion and herd behavior
• And lastly...the secret sauce of making better money decisions - awareness. 

Hopefully after listening to the One Minute Retirement Tip this week, you have that awareness of how your psychology and emotions can get in the way of making good decisions with your money, so you can apply that awareness to help you pause, think more rationally, and avoid some of the money blunders that too many of us fall victim to. 

Tomorrow, we are starting a brand new theme: One Year From Retirement Checklist

When retirement is so close that you can taste it, what are some of the essential things you’ll want to do in your last year of work before you retire? You’ve spent years saving and investing and working toward a comfortable and secure retirement, and you won’t want to transition into retirement without doing a few essential things. So what should you do in the last year of working before retirement? I’ll dive into that topic next week. 

And if you haven’t already, be sure to check out my YouTube channel - True North Retirement, where I cover a wide variety of retirement planning topics - everything from RMD mistakes smart retirees don’t make to understanding non-qualified deferred compensation plans.

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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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about behavioral finance to help you understand how your psychology and biases influence your money decisions. 

Today, I’m talking about the secret sauce to making better decisions with your money... Awareness

What ties all of these behavioral finance concepts together is awareness. Just having a basic understanding of how your biases, emotions, and past experiences influence how you see the world and how you make decisions goes a long way towards minimizing the negative impacts of those decisions on your money. 

When you are more aware of the emotional forces that are acting on you, it’s easier to stop and say “ah, I know what’s causing me to feel that way,” and hence, you’ll be less likely to get lulled into what could be a really bad emotional decision. 

If you’ve ever tried to change something about yourself, you see the positive impact that awareness brings to your decision-making. 

After I had my 2nd child, I was frustrated after my weight loss stalled after about 6 months, with still another 10+ pounds to lose.

So I joined weight watchers, which meant tracking everything I ate and weighing myself regularly. It worked really well - I lost 5 lbs the first month on weight watchers, and I credit most of that success to an awareness of tracking everything I was putting into my body. 

This time around on my 3rd pregnancy, I tracked what I ate with weight watchers for most of my pregnancy, and while I wasn’t trying to lose weight, it did help me stay well within the healthy range for weight gain during this pregnancy, which is really nice, especially here at the end as I am already a week past my due date at this point. 

The same thing is true with your behavior when it comes to your money. So focus on those decisions you’re making every day, week, and month that impact your wallet and retirement, and take steps towards becoming more aware of the emotional and psychological forces that are at work in your decision-making. 

That’s it for today, thanks for listening. Tomorrow, we’re going to recap the week and I’m gonna give you a little taste of next week’s theme.

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

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about behavioral finance to help you understand how your psychology and biases influence your money decisions. 

Today I’m talking about herd behavior. 

CS Lewis summed up herd behavior quite well when he said 'When the whole world is running towards a cliff, he who is running in the opposite direction appears to have lost his mind.”

But sometimes being a good investor requires that you run in the opposite direction. Herd behavior is so common, I don’t have to dig very deep to give you some good examples. If you weren’t buying bitcoin in late 2017, gold in 2011, or profitless tech stocks in the late 1990s, you probably felt like an idiot. If you weren’t flipping houses in 2005, you likewise felt like you had missed the boat. 

There is never a shortage of people out there who will brag about their massive wins, but you almost never hear about the other side...when that person was dead wrong, bet everything on a hunch, and then lost it all. 

If you’re not careful, herd behavior can cause you to make some bad decisions - like buying some hot stock when it’s way overpriced, or jumping into an investment opportunity without investigating whether or not it makes sense for you. When the stock market was down 30% in March and people at work are bragging about how they moved to cash right before Covid hit, it takes discipline to stay invested and ride things out. 

To avoid falling victim to herd behavior and making poor decisions as a result, it’s important to remember that the masses are often wrong - very often. I talked about this at length earlier this week, when we looked at the dismal long-term returns of the average investor. 

Your retirement is perhaps the most important financial decision you’ll ever make. You want to get it right. Well, so do I. For the last 13 years, I’ve been helping clients just like you make the transition into retirement. If you want to talk one-on-one with me about whether or not you can retire, head on over to truenorthra.com, where you can book a 15 minute call with me, at a time that’s convenient for you. The call is confidential, free, and I promise to help guide you on whatever is weighing most on your mind right now regarding your retirement. So head on over to truenorthra.com and book a call today. 

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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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about behavioral finance to help you understand how your psychology and biases influence your money decisions. 

Today, I’m talking about one of the most important concepts in behavioral finance - loss aversion. Loss aversion is a bias that most of us share. It states that we often feel more extreme and negative feelings over losses vs. the positive feelings we feel about gains. 

Using gambling as an example, you’re actually still likely to feel the pain of loss even when you come out ahead. If you win $1000 and then lose $900 in the next hand, it feels like a net loss even though you are actually ahead by $100. 

Loss aversion is a problem because the pain of loss can drive us into emotional and bad decisions. If your portfolio drops by 10% or 20%, you may be tempted to panic and sell, because the pain is too great.

I had a handful of clients call me this past March when the fear and uncertainty of Covid was at its peak. The stock market was in freefall, millions of Americans were projected to die, and the economy around the world had just come to a complete stop. And the pain of loss and fear over future losses was just too much to stomach any more. 

Conversely, when you see your portfolio is up 10%, 20% or 30% like it probably has been since March if you stayed invested, you’re much more likely to react like “meh, that’s nice”. 

In order to overcome the loss aversion problem, the first step is to recognize that you’re wired to experience losses in a much more extreme way compared to how you’re wired to experience gains. Just understand that you and I and everyone else is prone to feel worse about losses than we feel good about gains is an important first step. 

A second and important next step, especially if you have made decisions in the past based on your own loss aversion, is just to find ways to avoid the temptation to feel bad in the first place. For your retirement portfolio, this means tracking your portfolio value less often. If you look at your portfolio everyday, you’ll see losses all the time. If on the other hand you only look at your portfolio balance a few times a year, you’re much more likely to see a gain and not expose yourself to the pain of loss and fall victim to the behavioral finance blunder of loss aversion. 

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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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about behavioral finance to help you understand how your psychology and biases influence your money decisions. 

Today, I’m talking about why most of you listening are pretty terrible at making decisions with your money. I don’t say that to insult you. It’s just the reality...

If you are even remotely like the average investor, and statistically speaking, you are...then you are a terrible investor. Why? Because you get in and out of the stock market at all the wrong times. 

The research company, Dalbar, has been analyzing investor behavior for the last 25 years and here’s what they found: 

During the 20-year period from 1998-2018, the stock market made a 5.6% average annual return. Pretty good when you consider that that return include the bursting of the tech bubble in the early 2000s, and the worst recession and stock market drop since the Great Depression in 2008-2009. Stocks still made 5.6% a year. Over that same 20-year time period bonds made 4.5% a year. Do you want to know what the average investor made? 

1.9%. 1.9%! Not even enough to keep pace with inflation. Behavioral finance concepts, specifically what I discussed yesterday, which is that we make most of our decisions based on our strongest internal feeling - that’s why most investors don’t have the kind of returns that are necessary for growing wealth over time. 

Investors make emotional decisions based primarily on fear and greed, and getting in and out of the market at all the wrong times. 

You don’t even need to go back more than a few months to see this in action. Many investors and a few of my own clients were so frightened about the impact of the pandemic on their portfolio that they had to go to cash. It’s hard to stay invested and keep the long-term view in focus when predictions are dire and the Dow is dropping by 1000+ points day after day. 

The point of today’s tip is that behavioral finance matters big time for your retirement, because if you only make 1.9% a year on your investment portfolio, that’s not going to provide the kind of life and lifestyle in retirement that you’re hoping for! 

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