The theme for this week is the 4 L’s of retirement. When planning for your retirement, the 4 L’s can be a useful tool to think about and prioritize your retirement goals within the context of 4 seperate, but related factors. These 4 L’s were developed by retirement researcher, Wade Pfau.

The 4 Ls of retirement are longevity, lifestyle, liquidity, and legacy. In the previous episodes this week, we addressed each of the 4 L’s in detail. Today, we’re bringing it all together.

Thinking about your own retirement with the 4 L’s in mind allows you to build a framework that guides you toward prioritizing these 4 goals in your life.

In the show notes of this episode, episode 209, I’ll link to a free worksheet from the creator of the 4 L’s, Wade Pfau: http://download.retirementresearcher.com/hubfs/RIO/Packet%202%20-%20Your%20Retirement%20Income%20Optimization%20Action%20Plan.pdf

If you want to go deeper in exploring the 4 L’s, this multi-page worksheet will help you better understand how to use the 4 L’s to help you achieve your most important goals for your retirement.

That’s it for today. Tomorrow, we’re going to recap the week and I’m going to give you a little preview 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, financial planning, retirement planning, saving money, personal finance, wealth management, retirement income planning, retirement income sources, retirement income, retirement income withdrawal, retirement spending strategies, how long will money last in retirement, do I have enough to retire, retirement lifestyle

The theme for this week is the 4 L’s of retirement. When planning for your retirement, the 4 L’s can be a useful tool to think about and prioritize your retirement goals within the context of 4 seperate, but related factors. These 4 L’s were developed by retirement researcher, Wade Pfau.

The 4 Ls of retirement are longevity, lifestyle, liquidity, and legacy. In the previous episodes this week, we addressed longevity, lifestyle, and liquidity. Today, we’re wrapping up with legacy.

Legacy is all about what happens with your money after you’re gone. The wealthier you are, the more this goal tends to work it’s way into your plan for retirement, but legacy is something that everyone should think about as they plan for retirement.

If you plan well, you’ll likely have money left over when you pass from this world, which means we have to decide who will get what and what additional impact you want to have on your community, church, and other charities that you care about.

I have yet to have a client spend his last dollar on the day he kicked the bucket, so you’ll want to think about the legacy you’ll want to leave behind, and what you want to give while you’re still living.

Maybe you want to work into your retirement spending goals a monthly or annual contribution to charities. It’s important that you think about this and plan for your legacy and giving goals in advance, so you can be tax efficient with your giving. Giving directly from your IRA to satisfy your required minimum distributions in retirement, or setting up a donor-advised fund, can have major tax-saving benefits.

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, financial planning, retirement planning, saving money, personal finance, wealth management, retirement income planning, retirement income sources, retirement income, retirement income withdrawal, retirement spending strategies, how long will money last in retirement, do I have enough to retire, retirement lifestyle

The theme for this week is the 4 L’s of retirement. When planning for your retirement, the 4 L’s can be a useful tool to think about and prioritize your retirement goals within the context of 4 seperate, but related factors. These 4 L’s were developed by retirement researcher, Wade Pfau.

The 4 Ls of retirement are longevity, lifestyle, liquidity, and legacy. In the previous episodes this week, we addressed longevity and lifestyle. Today, we’re focusing on liquidity.

Liquidity is all about maintaining an emergency fund and extra savings that are set aside for emergencies and other curve balls that will inevitably come your way in retirement. This could include supporting elderly parents when you didn’t plan on doing so, a house fire, flood, or lawsuit, or absorbing the impact of an unexpected death or disability.

According to the creator of the concept of the 4 L’s, Wade Pfau, “Such assets [for emergencies] must not be earmarked for other goals, as unexpected contingencies relate to anything falling outside of the planned retirement budget.”

Planning for a successful retirement also includes planning for the unexpected. The challenging part about this is we don’t know anything about what that unexpected looks like. You might have $500,000 of unexpected expenses in retirement, and depending on the size of your nest egg, these unplanned

There are no guarantees in life. And that’s the hardest part of planning for retirement, but that doesn’t mean it’s futile. It just means we have to recognize the real possibility that the unexpected will happen, and we should have enough of a cushion, that’s liquid enough to provide for those emergencies.

And if you’re a worry wart like me, and are extra cautious, you might give the liquidity goal priority over the others, but stashing plenty of cash and buying more insurance, like life insurance, long-term care insurance, or additional earthquake insurance, to help shoulder the burden of those expected curve balls.

That’s it for today. Thanks for listening!

Before you continue on with your day, won’t you please take a moment to leave a review for the One Minute Retirement Tip in Amazon? If you’re getting any value from these tips, it’s a great way to share the love. In a recent review, Baloolayla writes: “Easy to comprehend. Not an annoying voice. Stupid simple which is just want I need!” Thanks Baloolayla. I’m glad I don’t annoy you and you’re benefiting from these tips. And thank you to those of you who have already taken the time to write a review.

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

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, retirement income planning, retirement income sources, retirement income, retirement income withdrawal, retirement spending strategies, how long will money last in retirement, do I have enough to retire, retirement lifestyle

The theme for this week is the 4 L’s of retirement. When planning for your retirement, the 4 L’s can be a useful tool to think about and prioritize your retirement goals within the context of 4 seperate, but related factors. These 4 L’s were developed by retirement researcher, Wade Pfau.

The 4 Ls of retirement are longevity, lifestyle, liquidity, and legacy. Today, we’re focusing on lifestyle.

Now that we’ve addressed your basic needs with the longevity spending goal, and are confident that you won’t run out of money in retirement, we get to the fun part!

Lifestyle goals in retirement are all about how you want to live your life, and they tend to be more discretionary in nature.

What are your travel plans? Maybe you want to spend $10,000 a year on travel during the first 10 years of retirement, then $5,000/year after that. Great! We can add this goal to the plan and see if it pencils out.

Lifestyle goals should address both ongoing and one-time or periodic purchases. For example, you might have a daughter getting married at some point down the road and you’ll want to pitch in for her wedding. Or you may have a long-overdue kitchen remodel that you’d like to complete once you’re retired and you have the time. Since these goals all cost money, we need to identify them and plan for them in the lifestyle section of your plan for retirement.

You’ll also want to address your regular monthly spending needs like a golf club membership or getting your nails done. While these aren’t essential spending categories - well, actually I beg to differ. As an addicted golfer who likes to get her nails done, I could make a pretty compelling argument for the non-discretionary nature of these 2 spending categories...but I digress.

To summarize, the lifestyle retirement goals are all about maintaining your desired lifestyle in retirement. What do you want to do? How do you want to spend your time and money? And most importantly, can your income sources and your retirement portfolio support those lifestyle goals.

That’s it for today! Thanks for listening. Tomorrow we’re going to talk about the 3rd L - liquidity.

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

----------

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, retirement income planning, retirement income sources, retirement income, retirement income withdrawal, retirement spending strategies, how long will money last in retirement, do I have enough to retire, retirement lifestyle

The theme for this week is the 4 L’s of retirement. When planning for your retirement, the 4 L’s can be a useful tool to think about and prioritize your retirement goals within the context of 4 seperate, but related factors. These 4 L’s were developed by retirement researcher, Wade Pfau.

The 4 Ls of retirement are longevity, lifestyle, liquidity, and legacy. Today, we’re focusing on longevity.

Longevity goals are all about making sure that your basic needs are covered in retirement, so you don’t run out of money or become a financial burden to others. It’s possible and even likely, that you’ll spend 30+ years in retirement, so you need to make your money last.

Thinking about your retirement in terms of longevity addresses that concern. Do you have enough in assets to cover your basic needs for 30+ years in retirement. Will you be able to pay for housing, health care, and basic living expenses with your retirement nest egg?

Will your portfolio and other sources of income adequately address your longevity needs and your basic living needs in retirement?

It’s also very important to consider how your portfolio and how it’s invested will be able to go the distance for you in retirement. It’s critical that you can keep up with inflation, which will take a significant toll over a 30+ year retirement. And that usually means having a portfolio that can continue to grow for you while providing for your basic living needs.

If you’re most concerned with providing for your basic needs in retirement and not running out of money, then the longevity goal will likely take priority in your plan for retirement and your spending decisions.

That’s it for today, Thanks for listening!

Tomorrow, come on back, because I’m going to cover the 2nd L - Lifestyle.

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

----------

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, retirement income planning, retirement income sources, retirement income, retirement income withdrawal, retirement spending strategies, how long will money last in retirement, do I have enough to retire

The theme for this week is the 4 L’s of retirement. The 4 L’s are longevity, lifestyle, liquidity, and legacy. This concept was developed by the well-known industry author and retirement researcher, Wade Pfau.

When planning for your retirement, the 4 L’s can be a useful tool to think about and prioritize your retirement goals within the context of 4 seperate, but related factors.

The purpose of the 4 L’s is to help you understand the how the various factors - longevity, lifestyle, liquidity, and legacy influence your decisions about how you spend and how you invest your money in retirement.

My hope is that you’ll come away from this week’s tips better able to think about your own retirement goals as they relate to these 4 Ls.

So each day this week, I’ll dive into detail about each of these, and at the end of the week, I’ll share with you how you can bring it all together with a free worksheet from Wade Pfau and his team.

That’s it for today. Thanks for listening! Tomorrow we’re going to dive in by talking about the first L - longevity.

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

----------

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, retirement income planning, retirement income sources, retirement income, retirement income withdrawal, retirement spending strategies

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

The theme for this week was: How to Pick the Right Investments in Your 401k.

Hopefully after listening to the tips this week, you are more confident and knowledgeable to make smart decisions about setting up and maintaining your 401k portfolio.

Here’s what we covered this week:

• When you may want to pick the target date fund
• 3 scenarios when you may want to customize your 401k investment strategy
• How and when to use model portfolios in your 401k and a couple points of caution if you pick that route
• The mistake that too many 401k investors make when picking funds
• And lastly, how to research funds in your 401k so you can pick the right ones for you.

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

Tomorrow, come on back, because we’re starting a brand new theme: The 4 L’s of Retirement… The 4 L’s are an incredibly useful way to think about your income needs and spending goals in retirement. The 4 L’s are longevity, lifestyle, liquidity, and legacy. Next week, we’ll talk about each of the in more detail to help you think holistically about your own spending needs and wants in retirement.

That’s it for this week! 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, financial planning, retirement planning, saving money, personal finance, wealth management, 401k, 401k plan, Roth 401k, 401k investing, 401k investment strategy, smart 401k investing

The theme for this week is how to pick the right investments in your 401k plan. Regardless of whether or not you go with the autopilot target date fund option in your 401k or customize your investment strategy, it’s a good idea to do a little homework on the fund or funds you select for your 401k.

Today, I’m going to share with you how to go about doing that, so you don’t make the common mistake of picking the fund that have the best performance. As I talked about on Thursday of this week, that’s a terrible idea. You can drive just by looking through your rear-view mirror. The same is true for investing. You can’t just look to the past returns to find the best investments.

In my opinion, the best, objective online resource for mutual funds and ETFs is Morningstar. So here’s how you can use Morningstar to research funds in your 401k.

Find the ticker symbol for the fund that you want to research. This is a 5 letter symbol that’s like a social security number for funds. It’s important that you research with fund symbols and not the name of a fund, since most mutual funds can have 5 or more different share classes for a given fund, so you want to be researching the right fund, which means you need that 5 letter ticker symbol.

Type that 5 letter ticker symbol into google. Usually the 2nd or 3rd result is morningstar - click on that and you can find a wealth of information about that fund for free. You’ll want to research performance over long periods of time vs. peers. Take a look at the fees, how long the manager has been with the fund, the % of stocks, bonds, and cash in the fund. If it’s a bond fund, do a little more digging to find out about the credit quality, and the duration of the bonds in the fund.

If this is all Greek to you, that’s okay. It just indicates that you may want to just go with the target-date option or have your financial advisor help you pick the right mix of funds in your plan.

Morningstar has a lot of information, which is great, but there is a little bit of a learning curve in finding what you’re looking for. But it’s worth it.  This is your retirement we’re talking about here, and a little research and knowledge about what you’re investing in will go a long way.

That’s it for today. Tomorrow, we’re going to recap the week and I’m going to give you a little preview 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, financial planning, retirement planning, saving money, personal finance, wealth management, 401k, 401k plan, Roth 401k, 401k investing, 401k investment strategy, smart 401k investing, morningstar

The theme for this week is how to pick the right investments in your 401k plan. So far this week, we’ve talked about target date funds and when you may want to customize your 401k investment strategy, and today I want to continue with a 3rd investment strategy option that’s available in many 401k plans - the model portfolio.

Model portfolios are usually designed around the amount of risk you’re comfortable taking. Usually you answer a few questions and then a recommendation is made for a model strategy that you can pick from - across the spectrum of conservative, moderate, and aggressive.

It’s a bit more customized than the target date funds, and yet you’re not completely on your own when it comes to picking funds and designing your investment strategy. So in theory, it’s a great approach to investing in your 401k, but I have a couple words of caution if you go with the model portfolio option in your 401k:

First of all, we all like to think we know ourselves well, but most of us aren’t very self-aware, especially when it comes to knowing our temperaments when it comes to investing. Younger people should be in aggressive model portfolios, but if you answer the questions a certain way, you might be recommended the conservative portfolio, which is a terrible choice for the younger person who is 30+ years from retirement. So know thyself well if you go with this approach.

The other point of caution with selecting a model portfolio is that you can’t set it and forget it. Many people (maybe most people - at least in my experience) pick funds when they sign up for the 401k plan and never bother to make any changes, ever again. If you pick a model portfolio, and you work at the same place for 10 or 20 years and never adjust the portfolio that you’re invested in, that could lead to a lot more risk than you should be taking with your investments. So when you pick a model portfolio, be sure to still review your 401k at least annually and decide if you need to adjust which model you’re in as you get closer to 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, financial planning, retirement planning, saving money, personal finance, wealth management, 401k, 401k plan, Roth 401k, 401k investing, 401k investment strategy, smart 401k investing, asset allocation model portfolio, portfolio risk management, asset allocation funds, portfolio risk formula

Today is a very monumental episode of the One Minute Retirement Tip - Episode 200! I can’t believe it’s already been 200 episodes, but that’s what happens when you do these daily. My goal with these tips is to bring my ideas and experience with helping clients navigate to a successful retirement to each one of you. Thank you to all of you who are listening today and here with me for this milestone episode.

Some of you have also emailed me and left me reviews, and your feedback let’s me know that these tips are helping you on your own path to retirement, which fuels me in continuing to crank out these daily tips!

So before I jump in to today’s tip, I have a request: Would you take a minute to leave an honest review for the One Minute Retirement Tip in Amazon? Amazon uses reviews as social proof that this flash briefing is useful, so it’s the best way for you to spread the word if you’re getting any value from these tips on retirement. Thanks in advance if you leave a review. I do a little happy dance every time I read a new review.

Ok, so yesterday, I talked about when you may want to customize your 401k investment lineup. Today, I want to go a little deeper in helping you think about how to go about doing that, because many people make one, huge mistake when customizing their investment lineup…

You chase performance. You get that one page printout of all the investment offerings in your plan, look at the performance numbers, then pick the best performing fund of the lot.

Bad idea. If you’re going to customize your investment lineup, you can’t pick the funds of the best performing of the bunch - that will lead you far off track.

The place to start is deciding on your ideal mix of stocks and bonds. Let’s say that you want to be 60% in the stock market and 40% in bonds. Great. Once you’ve built the foundation, now we can start working on the siding, and putting the roof on. That’s where we start filling in other categories - like large cap stocks, international, small cap, etc.

When you are trying to pick the best funds for you, performance is that last place you’ll want to screen for when picking the right fund. Start with your asset allocation and then fill in the funds that fit those asset classes from there, only looking at performance when you’re comparing two like-kind funds.

If what I just said is Greek to you, that’s a clear sign that you should probably just stick with the target date funds if those are offered in your plan. And that’s ok. That’s what I talked about in Tuesday’s episode, and that’s why target-date funds are usually the better choice unless you have a strong desire to customize your own investment strategy.

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, financial planning, retirement planning, saving money, personal finance, wealth management, 401k, 401k plan, Roth 401k, 401k investing, 401k investment strategy, smart 401k investing