It’s Sunday, which means...It’s recap time! 

This week, I talked about how to keep calm in a bear market. A timely topic, since in just a few short weeks, the stock market came tumbling down from it’s all time highs, and everything around the world seems to be shutting down. 

Once the stock market drops 20% from it’s highs, it’s an important threshold, and given the moniker “bear market”. Bear markets typically accompany serious events, like the coronavirus, and more often than not are joined by the equally concerning economic counterpart - a recession. 

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

• What a bear market looks like and what you can expect from a typical bear market
• A letter I wrote to my clients
• An interesting plan for panic
• Is it time to start buying stocks? A strategy that takes courage in the face of fear, but one that historically pays off
• Lastly, yesterday I talked about what to do if you retire during a bear market. A bear market in the earliest years of retirement can spell trouble long-term for making your money last, so I talked about how to make a contingency plan in case this happens to you.

Hopefully after listening to the One Minute Retirement Tip this week, you understand bear markets better than you did at the beginning of the week, and more importantly, how to react to these scary drops in your retirement portfolio. 

If you missed any of these episodes or if you want to revisit any of them, you can find them on iTunes, Spotify, or Google Play by searching for the “One Minute Retirement Tip with Ashley”. 

Tomorrow, we are starting a brand new theme: How to generate income in retirement. This is a timely topic as the interest rate on the 10 year treasury recently plunged to a new record low, hitting under .5% as investors - scared of the Coronavirus and it’s economic shockwaves - piled their money into safe US treasury bonds and drove the rate down. Low interest rates are a little depressing when you’re nearing retirement or in retirement, especially when you are likely to own bonds as a higher percentage of your portfolio. Which begs the question - with rates so low, where can you find income now? I’ll cover that next week. 

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 how to keep calm in a bear market.

Today, I’m talking about what to do if you plan to retire this year and how to handle a recession and a bear market in the early years of retirement. Even if you are still years from retirement, a recession and a bear market can hit anytime, so it’s important to have a back up plan.

One of the most challenging things about planning for retirement with clients is that a recession that hits in the first couple of years of retirement can be devastating and drastically change your plans for retirement. If you think about it, it makes sense, because a nest egg that was just cut by 15, 20, 25% or more right at the beginning of retirement now gives you a smaller amount to live off of. If you’re simultaneously taking money out of your portfolio, you’re drawing down the balance even faster and making the problem worse, so we need to be careful and have a plan B so we can delay retirement or not take money out of your portfolio during a bear market in the early retirement years. 

So let’s talk about a few plan B options. The best plan B option, is continuing to work. It’s ideal for a lot of reasons. By continuing to work, you delay tapping into your retirement funds and your social security benefits for income, allowing both to continue to stabilize and potentially grow. Also, by delaying retirement for 1-3 years, that’s 1-3 less years that you are relying on your portfolio in retirement, and every day, month, and year counts. 

In fact, if you’re behind on saving for retirement, and your health allows you to continue working, a willingness to work longer is one of the best ways to close your retirement gap. It’s way more effective than saving more in the last 5-10 years before retirement. 

If you can’t or you’re unwilling to continue working, you may want to consider cutting back on your spending or taking on a part-time job, so you won’t be exacerbating the negative returns by taking money out of your portfolio as well. 

Lastly, consider building up a stockpile of cash before retirement. If you can build up 12-18 months worth of expenses in cash or short-term bonds that’s earmarked for withdrawals and separate from your retirement portfolio to get you through a tough time, you’ll be able to survive most bear markets without tapping into your retirement portfolio for withdrawals. 

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, I’m talking about how to keep calm in a bear market.

Today, I’m talking about whether or not now is a good time to buy stocks. There is always opportunity, even in down markets, so today I want to talk about a couple of circumstances when you should be adding to stocks during this chaotic time: 

First of all, it’s a good time to buy if you are holding a lot of cash. If you have excess funds in your bank account, beyond what you need for emergencies and a cushion for the unexpected, and you’re currently earning $1.76 in interest a year, now is a great time to pick up some bargains in some great companies that just went on sale. That can be done through individual stocks or by adding to existing high-quality mutual funds or ETFs that you already own. 

Secondly, if you had a low percentage in stocks heading into this bear market, now is a great time to be adding to stocks. LEt’s say you’re 40% in stocks currently, but you should be 50% in stocks. Then I would be jumping in to the stock market to get that mix back it its ideal target. 

Don’t know what your ideal mix of stocks and bonds is? Starting with your age is a great way to figure out an appropriate mix. We have an age-based asset allocation cheat sheet that we use with our clients in determining the right mix of stocks and bonds for each of them, and you can get your copy by emailing me at [email protected]. That’s a-s-h-l-e-y-m @ truenorthra.com. 

So don’t be afraid to add to stocks during this time, especially if you have lots of cash or if you are low in stocks to begin with. It’s a strategy that takes courage, but one that tends to pay off, since you are doing what every investor tries to do, but seldom achieves - buying low. 

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 how to keep calm in a bear market.

Today, I’m talking about a plan of action for when you’re feeling panicked. Back in 2008, when I was still cutting my teeth as a new advisor, I remember well those panicked days when the Dow would drop big or some new devastating news would come across the headlines. Being inexperienced, I was often shell-shocked during this time and didn’t quite know how to keep clients from panic-selling, since this was new territory for me as well. 

But one day, I was talking to one of my clients who badly wanted out and wanted to sell. Like today, the stock market had already dropped significantly, and the last thing they should have done at that moment was sell into the teeth of the death spiral that was the stock market in 2008. 

After running out of reasons of why they should sell, it dawned on me. I said “look, I don’t want to sell today. It’s a mistake. Why don’t we do this. If you still want to sell just as badly a week from today as you do today, call me, and we’ll talk again. I won’t argue with you if you decide a week from today that you still want to sell”. 

The client didn’t call back a week later. Concerned over how they were doing I called back a couple weeks later, and even though there was still blood in the streets, they had come to their senses and no longer wanted to abandon their long-term strategy. 

I thought, hmmm...maybe I’ve stumbled onto something here. It was my last resort with clients who were panicky, and as a result I only had a handful of clients who liquidated in the teeth of the 2008 recession. Almost all of my clients stayed the course, stuck to their long-term investment strategy and were happy that they did. 

So “wait-a-week” is a plan that I’ve used since, even though I stumbled upon it on accident. A week of contemplation before taking action allows some time to think rationally and weigh the risks and consequences of your decision, and so if you’re thinking of making a rash decision, I would encourage you to practice patience and wait before acting. 

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 how to keep calm in a bear market.

Today, I want to share with you an email I sent to clients on March 10th, a day after the 11 year anniversary of the start of the bull market, and 2 days before the biggest one-day drop since Black Monday in 1987. The email summarizes my view on this pandemic and it’s impact on the economy and stock market, and my goal with this email was to encourage clients to stay the course and not let fear and panic drive their investment decisions, so I hope it’s helpful for you as well: 

“Dear Clients:

With the current stock market reacting so strongly to the Coronavirus, I’ve been trying to reach out to many of our clients over the last couple weeks, but its challenging to get in touch with everyone, so I wanted to provide you an update via email. If you’re especially nervous, please let me know and I will be sure to give you a call within the next week so we can talk one-on-one.

Now that the S&P 500 and other major averages are down nearly 20%, we’re very close to this current downturn turning into a full-blown bear market (which is defined as a drop of 20% or more from the top). This current correction, brought on by fears of lasting global economic damage from the Coronavirus, is the seventh one since March 2009, so it’s not unusual or even surprising that this is happening.

What is unusual are the wild swings in the stock market since this Coronavirus correction started. According to Bespoke Investment Group, the incredibly wild swings we’ve seen in the stock market recently have only occurred a few other times since the S&P 500’s inception in 1928. Aside from the multiple occurrences during the Great Depression era and a brief period around the Crash of ’87, it’s since only happened in late 2008 during the depths of the Great Recession/Financial Crisis and again in August 2011 when U.S. debt was downgraded.

It remains to be seen whether this current downturn will be temporary or the beginning of the next recession and bear market, and because there are still so many unknowns, the stock market has been reacting very manic-depressive to the daily news cycle.

Liz Ann Sonders, Chief Investment Strategist at Charles Schwab said today: “Economists don’t quite know what to do with gross domestic product forecasts, and analysts and strategists don’t know quite what to do with earnings estimates.” The good news is that the economy was on a solid foundation heading into the current Coronavirus crisis, so the lasting impact of the current downturn depends on how quickly the pandemic can be contained. 

Our advice during this current volatility is still the same. For most of our clients, the best advice we can give you is to do nothing. The likelihood is that your asset allocation (i.e. your stock and bond mix) is aligned for your age, and your investment portfolio is positioned to handle a downturn.

But what if the economy sours and the stock market continues its decline? We have been through this before and we do not intend to sit on the sidelines. For many of our clients, that means we plan to take advantage of the downturn to “buy low” and add to stocks. This strategy takes courage, but it’s worked exceptionally well in previous recessions and bear markets.

So for now, we are in a wait-and-see mode. Above all, we want you to remember that panic-selling is not an investment strategy. Patience is usually rewarded, and this time around is unlikely to be any different.”

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 how to keep calm in a bear market. A very important topic, especially considering that acting on our fearful and greedy human tendencies can result in a reduction of annual returns of 1.5% or more. That may seem small, but that’s the annual impact, so when you multiply that over a lifetime of investing, you could be reducing your total assets by 6 or even 7 figures. 

And that’s why it’s so important that you can keep a cool head in both good times and in bad, but especially in bad times when anxiety, stress, and uncertainty can all lead to panicky decisions. 

Today, I’m talking about the reality of the bear market. What a typical one looks like and what the really bad ones looks like - to help paint a picture of what you can expect from these down markets. 

First of all, let’s define a bear market and make sure we’re all on the same page. A strong, growing stock market is referred to as a bull market. Think of an aggressive, unstoppable, charging bull. A Bear market on the other hand, is defined as a drop of more than 20% from the highs. The stock market officially becomes a bear market once it hits this 20% threshold. Think of a bear as a sleepy, stumbling, bumbling, angry bear and you’ll remember what the terms mean. 

On average, bear markets have lasted 14 months in the period since World War II. The S&P 500 index has fallen an average of 33% during bear markets in that time. Interestingly enough, with this bear market, it’s been swift. As of March 12th, the Dow was already down 29% from its Feb. 12 record high, while the S&P 500 and Nasdaq are 27% from their Feb. 19 peaks.

This is the fastest entry into a bear market from the market peak since the Great Depression, which is astonishing. 

The worst bear market we had since the Great Depression was the last one from 2007-2009, when the stock market lost ½ of it’s value. It was both longer and deeper than usual, with the stock market taking about 18 months to bottom out. The drivers of that drop were fundamentally scarier than the coronavirus, and it’s hard to imagine that this bear market will be that bad. 

So hopefully that gives you a better understanding of bear markets, and if you’re like me, you take some comfort that we are already approaching the historical norms in terms of the depth of the drop. 

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! 

Well, the stock market once again derailed my plans this week. I was going to discuss the FAANG stocks this week (which is an acronym for facebook, apple, amazon, netflix, and google), but as I prepare my talking points for this week, the stock market just had it’s worst day since 1987. So this week, I’m going to talk about a much more timely topic - how to keep calm in a bear market! 

It’s official. The bull market that started during the depths of the financial crisis in March of 2009 is now officially over. The stock market is down more than 20% from the highs, which is a very important threshold because a 20% drop officially marks the start of a bear market. 

So if you haven’t already panicked and sold everything in your 401k and locked in your losses, this week’s tips are for you. It’s rough out there right now, so my goal this week is to help you put this current situation in perspective with your long-term plans for retirement and give you some guidance on where you go from here. 

I hope you’ll tune in each day, because I’m cramming in my best advice on how to keep calm and carry on in the midst of the Coronavirus chaos. 

That’s it for today, but before you go...

If you haven’t already left a review for the One Minute Retirement Tip, please consider leaving an honest review in Amazon or iTunes. I read them all, so feel free to leave any feedback or topic suggestions there too. 

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, I talked about the growing trend of gray divorce. 

In each episode this week, I unpacked this upswing in divorce rates among pre-retirees and retirees and what a gray divorce could mean for your retirement plan. 

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

• The growing trend of gray divorce
• Why Americans are divorcing later in life at higher rates
• The troubling and disproportionate impact of gray divorce on women
• 5 ways a gray divorce can impact your finances in retirement
• Calculating the impact of divorce on your retirement

Hopefully after listening to the One Minute Retirement Tip this week, you better understand the impact of gray divorce. I fear that few people realize how devastating a gray divorce can be for your retirement, and my hope is that by shedding light on this topic, I have helped you better understand the complex, difficult, and emotional decision of divorce, especially from the point of view of your finances. 

If you missed any of these episodes or if you want to revisit any of them, you can find them on iTunes, Spotify, or Google Play by searching for the “One Minute Retirement Tip with Ashley”. 

Tomorrow, we are starting a brand new theme: Are FAANG stocks a good investment? FAANG (F-A-A-N-G) is an acronym referring to the stocks of the five most popular powerhouse American tech companies - Facebook, Amazon, Apple, Netflix and Google. You’d be quite happy with your returns over the last several years if you invested in these stocks. The results of these 5 stocks and tech companies in general continue to return impressive results, so next week, I’ll talk about whether or not the FAANG stocks are a good investment. 

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’s topic is gray divorce. Gray divorce refers to the skyrocketing trend of divorce rates among those aged 50 and older. In fact, over the last 25 years while divorce rates have dropped for the younger generations, the divorce rate has doubled for Americans over 50 and tripled for Americans over 65.

Today, I’m continuing yesterday’s discussion by talking about how you can calculate the impact of divorce on your retirement. So yesterday, I talked about the 5 ways that divorce impacts your finances in retirement, namely, assets being split, reduced social security income, reduced income in other areas, and changes to how you plan for long-term care and your estate plan.

But how do we actually calculate the costs of these changes? I should mention that it’s important to consider the financial blow of a gray divorce before you make any final decisions. Because divorce is a very emotional decision fueled by factors that often have nothing to do with finances, I suspect that few couples consider how gray divorce can destroy both of their finances. But hopefully if you run the numbers on how a gray divorce will impact you and your spouse, you might consider one more round of counseling before calling it quits. 

There are 4 main areas that you’ll want to consider as you run the numbers on your retirement solo vs. staying married. You’ll want to determine what your assets would be post-divorce. How your income would change both now and in the future, and how your expenses would change. It’s important to note that housing expenses may change, and you could have certain expenses that go down, but others that go up. Lastly, you’ll want to consider how lifestyle choices will change. Would a divorce change which state you live in or change your travel plans. 

There are other considerations as well, but these are the major factors. So take the guesswork out of retirement planning solo vs. married and be sure to run the numbers on your retirement before you decide to call it quits. 

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 gray divorce. Gray divorce refers to the skyrocketing trend of divorce rates among those aged 50 and older. In fact, over the last 25 years, the divorce rate has doubled for Americans over 50 and tripled for Americans over 65. 

Yesterday I talked about how gray divorce is especially hard on women, with an estimated drop in standard of living by 45% and a post divorce poverty rate of 27%. 

Today, I’m talking about 5 ways divorce will impact your finances in retirement. I touched on a couple of these briefly yesterday, but today I want to dive deeper into each of these. 

The most obvious way that a gray divorce will impact your finances in retirement is the asset split. If you as a couple had $1 million dollars and you were set for retirement, but get divorced 2 years before you planned to retire, you’re likely going to need to go back to the drawing board on your retirement plans and make some major adjustments to your retirement lifestyle. If you opt to keep the house and take less of the financial assets, it’s an even bigger dilema. You may have to work longer or drastically reduce your spending in retirement, or both, to help ensure you won’t run out of money. 

The second way that gray divorce impacts your finances in retirement is social security. For many of you listening, social security makes up a big portion of your retirement income each month. If that’s cut in half or ⅔ or more because you divorced and you made less money than your spouse, it can be problematic.

The third way a gray divorce can impact your finances in retirement is lower income. Whether that’s through lower assets in your retirement portfolio or social security like I just mentioned, or maybe you have a spouse who is still working full time or part-time, no matter what your circumstances, you can expect that your income will be lower, usually substantially so. And because kids are grown up and out of the house, continued spousal support could be a lot less as well. 

The fourth and probably rarely considered way that gray divorce impacts your finances is long-term care. There’s a high likelihood that you’ll need some kind of long-term care at some point in your life, usually later in life. This could be as little as help around the house with everyday chores and activities to suffering from altzheimers and needing 24/7 help in a memory care facility. When you’re married and the other spouse is healthy, they can usually help shoulder the burden and reduce the need to pay for outside help. When you’re on your own, you’re on your own for long-term care, so it’s important to consider how you’ll cover the cost if you’re divorced and you’ll need long-term care. 

Lastly, gray divorce impacts your finances in retirement because of the changes it necessitates to estate planning. If you get divorced, you’ll probably want to reconsider your beneficiaries and it will likely adjust how you deal with your estate. 

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