This week, we’re playing “would you rather” - retirement edition. We all have limited resources and with those limitations in mind, you’ll definitely need to make trade-offs in retirement. By thinking about these conundrums ahead of time, you’ll be equipping yourself to make thoughtful and smart decisions when the time comes. 

Today’s “would you rather” question is: Would you rather leave your child an inheritance of $10 million or leave your child with nothing but the memories? 

Many parents who pass wealth to their children, seldom think about the consequences of what that inheritance will do to their children. If you have inherited wealth or know someone who does, it can be a blessing, but just as often I find it can be a curse. 

Money is powerful, and sudden wealth through inheritance or even winning the lottery can be problematic. You’ve probably heard the startling statistic that found that a third of lottery winners declare bankruptcy after winning the lottery. This leads a lot of people to scratch their heads, but to me, it makes perfect sense. Unearned wealth magnifies existing temptations and can produce new ones - addictions, gambling, frivolous spending on luxuries, etc. 

Unearned wealth very often makes people unproductive, and robs them of sound judgement and initiative. It has the power to create ugly side effects like greed, entitled attitudes, and it very often destroys incentives to work. 

While there’s no right or wrong answer to how much inheritance is too much, the sad reality is that few people think about the consequences of transferring wealth of any size to their children, yet it’s so vital to be thoughtful about how and how much wealth you transfer to your children, and should be done only when you’re confident that your children can handle the wealth responsibly. 

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, we’re playing “would you rather” - retirement edition. We all have limited resources and with those limitations in mind, you’ll definitely need to make trade-offs in retirement. By thinking about these conundrums ahead of time, you’ll be equipping yourself to make thoughtful and smart decisions when the time comes. 

Today’s “would you rather” question is: Would you rather die in 10 years with no regrets or die in 40 years with a lot of regrets? 

Oh, boy this one is deep and gets to the heart of long life vs. quality of life. Personally, I would rather die tomorrow with no regrets then die at any age with a lot of regrets. But regrets are inevitable, I think, if most of us take the time to examine our lives and take a good look in the mirror at the self-centered and broken creatures we are. 

Bronnie Ware, an Australian palliative care nurse, wrote a book called The Top Five Regrets of the Dying. In the book she goes into detail about the common regrets she witnessed most often among her dying patients. Here they are: 

1. I wish I hadn't worked so hard.
2. I wish I'd had the courage to express my feelings.
3. I wish I had stayed in touch with my friends.
4. I wish that I had let myself be happier.
5. And the most common regret of all - I wish I'd had the courage to live a life true to myself, not the life others expected of me. 

What would your top regret be if you died today? It takes a lot of courage, thoughtfulness, and intention to live a fulfilling and meaningful life, and it is my sincere hope that you don’t have to choose between living 10 more years with no regrets vs. living 40 more years with a lot of regrets, but rather, that you live a long life with few to no regrets. 

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, we’re playing “would you rather” - retirement edition. We all have limited resources and with those limitations in mind, you’ll definitely need to make trade-offs in retirement. By thinking about these conundrums ahead of time, you’ll be equipping yourself to make thoughtful and smart decisions when the time comes. 

Today’s “would you rather” question is: would you rather work longer and build more wealth or retire sooner but live on less income? As you might imagine, this is a very common trade-off that many of us face. If you’ve reached retirement age and are still in good health, you enjoy your work and could see yourself working another 5-10 years, that’s great. 

The bottom line here is that no one should enter retirement without the financial means to live comfortably - however you define that. Now that may very well mean that you retire earlier and make some sacrifices so you can sustainably live on less, and that’s okay. 

However, many people I talk with who are trying to decide what to do about working longer vs. living on less income need to be aware of a couple of traps: 

• First of all, if your motivation for retiring early is because you hate your job, your boss, your co-workers - basically trying to escape where you are right now, that is not a good reason to retire early, but instead maybe it’s an opportunity to consider other employment options or part-time work if you can afford to work less. Many people are so dissatisfied in their work that they would rather put a sharp stick in their eye than work one more day in their living hell, but don’t let your desperation cloud your judgement in making a good, rational decision that is going to have long-term ramifications for you.
• Ok, the other pitfall that I see people fall into with the decision to retire earlier and live on less is that they put themselves in a position of being constantly strapped for cash. The income you draw from your portfolio might support your monthly needs, but when people retire with just barely enough, there aren't any additional safety nets with cash savings or a larger nest egg that can support the new car you’re going to need in 3 years, or the new roof that’s due in 10 years, or the nursing home stay in 20 years that’s going to cost double what you’re drawing from your portfolio in the early years of retirement. 

Again, you need to make the decision that’s right for you, but the risk of retiring early and living on less offers more risk, less options and less flexibility, so if you’re leaning in that direction, be sure that you run the numbers, make sure you have enough cushion for emergencies, the occasional big expenses, and the inevitable curve balls of life. 

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, we’re playing “would you rather” - retirement edition. We all have limited resources and with those limitations in mind, you’ll definitely need to make trade-offs in retirement. By thinking about these conundrums ahead of time, you’ll be equipping yourself to make thoughtful and smart decisions when the time comes. 

Today’s “would you rather” question is: Would you rather take twice as many vacations or dine out twice as often? 

Ah, the dilemma of how to spend your discretionary income and your free time in retirement. What is more valuable, fulfilling, and fun - more travel or more eating out? 

This is a personal decision obviously that is going to be different for everyone, but like many other lifestyle choices in retirement, it’s one that needs to be carefully considered, since most of us just don’t have the means to do whatever we want, when we want. When it comes to how we spend money, it’s vital to our life satisfaction that we spend it in a way that is consistent with what we value. 

Personally, I enjoy travelling and visiting new places, but I would have to go with eating out twice as much over travelling twice as much. Many of you listening probably think I’m nuts and would choose travel over eating out, and that’s why it’s so important to be thoughtful about the choices you make in how you allocate your discretionary funds in retirement, ensuring that where you spend your money is contributing to your happiness and fulfillment, and your not just flushing your money down the drain by spending it on things that don’t actually matter to you all that much. 

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, we’re playing “would you rather” - retirement edition. We all have limited resources and with those limitations in mind, you’ll definitely need to make trade-offs in retirement. By thinking about these conundrums ahead of time, you’ll be equipping yourself to make thoughtful and smart decisions when the time comes. 

Today’s “would you rather” question is: would you rather sacrifice your kid’s college or sacrifice your retirement? This is a common one that comes up often with my clients. Many of my clients delay retirement because they can’t afford to retire until after their youngest graduates from college and is off the parental payroll. 

While this is understandable and there isn’t anything wrong with delaying retirement to support your college-age children, I often see parents taking the financial support of children to the point where it seriously compromises or even destroys their own chances for secure retirement. 

Being a parent myself, I understand how making personal sacrifices to set your kids up for success comes with the territory, however, we must be careful when it comes to sacrificing our own retirement security for the sake of our children. While it’s not wise for kids to graduate college saddled with debt, a wise person once told me: You can get a loan for college, but you can’t get a loan for retirement. 

This is sound advice. And it’s advice that parents of college-bound or college-age students tend to ignore. Financial support for college and to able-bodied adult children should only be provided to the extent that it doesn’t sacrifice your retirement security. 

Some of you may disagree with that or think that you’re being selfish if you do that, but think about this: If you’re a burden to your children later in life because you ran out of money before you ran out of days, that’s likely going to be a much bigger cross to bear for your child than paying off student loans or going to community college for 2 years to reduce the cost of college. 

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, we’re going to play a fun game of “would you rather” - retirement edition. You’re probably familiar with this game, usually played at parties or with friends or as an icebreaker at that awkward corporate retreat. It goes something like this: Would you rather be an average person in the present day or the king of a large country 2500 years ago?

I like this one...honestly I think I would rather be an average person today, because there was no indoor plumbing 2500 years ago and it seems to me that royalty back then were constantly being beheaded, exiled, or captured in battle, so I’m definitely going with average person today where I’m a lot less likely to have someone poison my drink.

You get the idea...so when it comes to choices about retirement, unless you are a king or a queen, we all have limited resources and we often need to make decisions about tradeoffs in retirement, so this week, I’ll help you explore some of the more common trade-offs that you’ll face in retirement through a fun game of would you rather...Like, would you rather work longer so you can save more and grow your retirement nest egg, or retire now but have less income to spend in retirement. We’ll explore this question and others like it this week. 

That’s it for today. Before you go, though, if you haven’t already left a review in Amazon or iTunes for the One Minute Retirement Tip, can I ask a favor of you to go do that right now? It just takes a few seconds and it helps to spread the word, and helps other people find this podcast. 

In a recent 5-star review Chris writes: “Have your kids listen in and discuss with them. They will thank you later”.

Thank you Chris, and thank you all for listening today. My name is Ashley Micciche and I look forward to spending a couple minutes with you again tomorrow. 

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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 

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

• Removal of the age cap on IRA contributions
• RMD age increasing to age 72 and what you might want to do about it
• How the SECURE Act just blew up the rules for inherited IRAs - there was so much to digest in that one that I split it over 2 days
• And lastly, yesterday I talked about how certain part-time workers will now be eligible for your 401k plan at work.

Hopefully, after listening to the One Minute Retirement Tip this week, you have a better understanding of the SECURE Act and how it will impact the financial planning & estate planning choices that you make as you plan for and transition into retirement.

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: “Would you rather”...We all have limited resources and we often need to make decisions about tradeoffs in retirement, so next week I’ll help you explore some of the more common trade-offs in retirement through a fun game of would you rather...Like, would you rather work longer so you can save more and grow your retirement nest egg, or retire now but live on less in retirement. We’ll explore this question and others like it 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, SECURE Act, 401k limits 2020, Roth 401k, Roth IRA, Roth IRA conversion, IRA conversion, RMD rules, new RMD age, rmd age 72, rmd rules 2020, inherited IRA, stretch IRA, inherited 401k

This week, I’m talking about the SECURE Act. It’s a massive, 1,773 page piece of bi-partisan legislation that was just signed into law in December 2019, and it brings sweeping changes to the rules around your retirement.

Today, I’m talking about how the SECURE Act has changed the rules for part-time workers in 401k plans. Previously, if you worked less that 1,000 hours (roughly less than 20 hours/week) and your employer has a 401k plan, they didn’t have to include you in the plan. 

Under the new rules, people who have either worked at least 1,000 hours in one year, or three consecutive years of at least 500 hours in each year, will be able to participate in retirement plans. 

In other words, now you just have to work 10 hours with your employer, and be an employee for the last 3 years to be eligible to save in the 401k. 

Here’s why this matters for you...people who work part-time often struggle to save enough for retirement, and even when they can afford to save, they are locked out of their employer’s plan because they were working less than 20 hours a week. Well now with the weekly requirement cut in half, a lot more people will have access to retirement plans. 

I see this being a big boon for a couple of specific groups of people: 

• 1 is part-time workers who are married, and whose spouse makes enough income to support the family. A part time worker can now save $19,500 in 2020 in the 401k plan or up to $26,000 if your over 50 years old.  
• With lots of retired folks working part-time in retirement, having access to a 401k plan will allow you to save a lot more, and boost your nest egg, assuming you don’t need all that income from your part-time job to fund your current living expenses in retirement. 

That’s it for today, but before you go, would I be correct in saying that your retirement is perhaps the most important financial decision you’ll ever make? There are quite a few irreversible decisions tied to your retirement - everything from your retirement date to your social security filing decision will have major long-term consequences.

You want to get it right. Well, so do I. For the last 12 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. 

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, SECURE Act, 401k limits 2020, Roth 401k, Roth IRA, Roth IRA conversion, IRA conversion, RMD rules, new RMD age, rmd age 72, rmd rules 2020, inherited IRA, stretch IRA, inherited 401k

This week, I’m talking about the SECURE Act. It’s a massive, 1,773 page piece of bi-partisan legislation that was just signed into law in December 2019, and it brings sweeping changes to the rules around your retirement.

Today is a continuation from yesterday’s tip, where I introduced you to the massive tax law change to inherited IRAs. if you inherit an IRA from your parents, you only have 10 years to fully cash out the IRA. That’s a problem if you inherit a large IRA balance, because you’ll likely be forced to cash out that IRA in your peak earning years, report every dollar you pull out of the IRA as income, and pay the taxes. 

If you inherit a large IRA worth $1 million or more, you could be looking at a 6-figure bump to your income every year for 10 years and a lot bigger tax bill than you expected as a result. 

Now, there are a few things you can do about this to try to reduce the tax bite, but they need to be done by the account owner and not the beneficiary, because by the time beneficiaries inherit the IRA, it’s already too late to do much about it. So if you have parents with large IRA or 401k balances, be sure that you talk with them about this. And if you have a large IRA or 401k balance, here’s what you can do to minimize the impact of taxes on inherited IRAs for your children.

Adjustments to beneficiaries like leaving taxable accounts to higher income earning children and assign IRA assets to children in lower tax brackets is one strategy. Taking advantage of Roth conversions is another option. In fact, this rule change just made Roth IRAs and 401ks  much more attractive, since those distributions won’t be taxed for beneficiaries of inherited IRAs. So consider not just conversions, but contributing more to your Roth IRA or Roth 401k if you have access to one or both of those. 

The change to the rules with inherited IRAs also changes the conventional advice on the order in which you may want to spend down your assets in retirement. Maybe you want to spend more from your IRAs while living so your beneficiaries receive more of the taxable assets that will receive a step-up in cost basis and will likely not be subject to such harsh taxation.

The bottom line here is not that you fully understand which strategy to employ, but that you do understand that if you have a large IRA or 401k balance, you better be talking to your attorney, financial advisor, and tax advisor about how this change impacts you and if it makes sense for you to make any changes to your estate or beneficiaries, or whether or not you should look at converting more IRA dollars to Roth or changing how you pull money out of your investments for income 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, SECURE Act, 401k limits 2020, Roth 401k, Roth IRA, Roth IRA conversion, IRA conversion, RMD rules, new RMD age, rmd age 72, rmd rules 2020, inherited IRA, stretch IRA, inherited 401k

This week, I’m talking about the SECURE Act. It’s a massive, 1,773 page piece of bi-partisan legislation that was just signed into law in December 2019, and it brings sweeping changes to the rules around your retirement.

Today, I’m talking about the biggest bomb buried in the SECURE Act - the new 10-year deadline for inherited IRAs. This one change in the SECURE Act is going to bring in an estimated $15.7 billion in revenue over the next 10 years to the Treasury in additional taxes, so listen up, because this one change may create some serious tax consequences for you (if you inherit an IRA) or for your children if you plan on transferring your IRA balance to them when you die. 

Under the old rules, most of the time, if you inherited an IRA from Mom or dad, you could spread out the distributions over your remaining life and importantly, since those distributions are taxable, you could spread out the taxes for maybe 30, 40 years or more. 

But now, if you inherit an IRA from your parents, you only have 10 years to fully cash out the IRA. Here’s why that’s a problem. 

Let’s say that you’re an only child and you dad died 5 years ago. When he died, his IRA account was transferred to mom. She only took out the minimum amount every year, and since they both were good savers and made smart investment decisions, when mom died this January, you inherited a $1,000,000 IRA. You also happen to be in your mid-50s and you’re in your peak earning years. You make good money and already pay a lot in taxes every year. 

Well guess what, that $1,000,000 IRA must be cashed out fully in the next 10 years, which means that even if you stick it under the mattress and it doesn’t grow, and take out an equal amount each year, you just increased your taxable income by $100,000 each year for the next 10 years. Depending on your current tax rate and state taxes, you could be handing over as much as 50% of Mom and Dad’s IRA back to Uncle Sam. 

Now remember, under the old rules, you had the rest of your life to take the money out and spread out the taxes. So it’s a punishing change that’s going to bring in a lot of revenue to the government which will pretty much pay for all of the other benefits of the SECURE Act. 

This is such a massive change, that tomorrow I’m continuing with part 2 of how the SECURE Act just blew up the rules for inherited IRAs. 

Before you get all depressed about all the taxes you’ll be paying when you inherit mom or dad’s IRA, there are a few strategies at your disposal if you’re the IRA account owner that you may want to consider, and I’ll be talking about what those are 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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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, SECURE Act, 401k limits 2020, Roth 401k, Roth IRA, Roth IRA conversion, IRA conversion, RMD rules, new RMD age, rmd age 72, rmd rules 2020, inherited IRA, stretch IRA, inherited 401k