Now that inauguration day has passed, a new administration takes over in the White House and a new Congress is ready to take up President Biden’s $1.9 trillion plan to stimulate the economy. This plan includes additional stimulus checks in the amount of $1,400 per American, increased unemployment benefits, an increase in the federal minimum wage, state and local government aid and funding for COVID-19 testing and vaccinations. While there is no guarantee that the legislation as written will become law, it’s still a good idea to prepare just in case.

If you’re like most Americans, your retirement concerns are focused around four key areas: paying for healthcare, saving enough money, maintaining an income stream in retirement and having too much debt. To increase your chances of building a sustainable retirement, you can learn more about healthcare expenses in retirement and make plans for how to pay for them as well as getting a handle on how much money you will need in retirement overall and maximizing your savings opportunities while you are still working. You can close any potential gap in your retirement savings by working a few years longer and waiting to claim Social Security until you are at your full retirement age. Finally, consulting with an experienced retirement income planner or credit counselor may help you figure out how to pay off as much of your debt as possible before you retire.

Bank of America Better Money Habits

https://bettermoneyhabits.bankofamerica.com/en/retirement/top-retirement-concerns

With a New Year many people, are setting mental goals right now, which for many includes deciding whether to seek external financial help. However, it’s not always easy to know what to look for in an advisor. In this column, which I contributed to Forbes, I identify three characteristics that are desirable in a financial advisor. First of all, you need an advisor who specializes in your period of life. For example, if you are a pre-retiree, you want to work with an advisor who has expertise in retirement income planning. This is our shows feature article this week.

Secondly, seek an independent advisor. Many advisors who work for big box financial services firms offer cookie-cutter approaches far to often with product recommendations driven by financial incentives. I explain revenue sharing in the show.  Third, hiring a fiduciary-only advisor ensures that you have an advisor who is morally, legally, and ethically required to act in your best interests. Once you’ve filtered your lists of advisors through these three factors, take a look at the five core areas of financial planning that you must address before you retire.  We refer to this as our proprietary system is the  Redefining Wealth Process: income planning, investment planning, tax planning, healthcare planning, and estate planning. The best retirement income planners will offer a process that includes these key areas. They will provide you with a written plan that baselines the income analysis out and they provide portfolio construction from there.

Forbes 

https://www.forbes.com/sites/impactpartners/2020/01/16/do-you-know-how-to-choose-a-financial-advisor/

All too often, it’s easy to put off saving for retirement or under-save because you’re not clear on how you want to spend your retirement. Sure, everyone has generic goals – travel, family, blah, blah, blah.

Or maybe you have plenty saved but aren’t motivated to quit working, or cut back on work, because you’re not clear that retirement presents a better alternative to what you’re doing right now.

The solution to both these problems is to clearly define what you want your retirement to look like – not just on the macro level but also on the micro-level. This means deciding how you want to live in general as well as how you plan to spend your days. When you hone in on specific lifestyle choices, you and your financial advisor can then attach price tags to them, which clarifies your personal and financial goals for retirement.

Bottom line: When you clarify your retirement goals and priorities on a macro and micro level, you set the stage for a rewarding retirement. This planning will help align your costs with your goals and get you excited about the next phase of your life.

Kiplinger article

https://www.kiplinger.com/article/retirement/t047-c032-s014-the-key-to-setting-retirement-goals-details.html

You only get the chance to get retirement right once – that’s why understanding the myriad pieces of the retirement puzzle and how they fit together is critical. It’s impossible to answer questions such as when to claim Social Security, how much to save and how to plan a retirement budget in isolation. Retirement is the ultimate dependent relationship because every aspect of it is related to another aspect – frequently in complex ways that the inexperienced don’t realize. That’s why a consultation with a fiduciary retirement income planner such as LS Wealth is an important step in creating a sustainable retirement plan. This is no time to go it alone because the stakes are so high.

Bottom line: Get a free consultation with an experienced fiduciary retirement income planning firm such as LS Wealth.

Since the 2007-09 financial crisis, the value of money and economics have fundamentally changed as countries issue more and more debt and interest rates go negative. For billionaire investor Warren Buffett, this development has fundamentally changed how he invests. He now believes that inflation will surge in the future because governments are locking themselves in a position where they will never be able to repay their debts.

Buffett’s moves signal that he believes the stock market is grossly overvalued. Trading frequently in bubble territory IPOs and tech stocks is an unwise move that is likely to backfire.

Bottom line: Work with an experienced fiduciary financial professional who can craft a pre-retirement and retirement portfolio designed to avoid costly market declines.

Medium.com

https://medium.com/the-ascent/warren-buffetts-recent-explanation-of-how-money-now-works-is-the-most-important-in-history-2e45461a5969

With the stock market’s strongest month in 43 years in the record books, stocks face an uncertain future. Current valuations are high by historic standards. That being said, with interest rates at historic lows and economic optimism on the upswing due to COVID-19 vaccines, many investors still find the market attractive. Valuations remain around 22 times corporate earnings, a premium that is closed to what was reached during the tech stock bubble 20 years ago.

Arguments against the market continuing its winning streak include current high valuations, corporate profits and profit margins that are still in recovery mode, and negative sentiment on the part of institutional, retail, and foreign investors. On the other hand, industry segments outside of the hard-hit oil, airline, and hotel industries are performing well despite the constraints of the virus.

Bottom line: In a situation like this where the picture is muddled, LS Wealth believes in establishing tactical positions that can benefit from either a rising or declining market. A buy-and-hold position isn’t sustainable over the long term because there is too much potential for a devastating market decline. Optimizing your portfolio with tactical management can ensure that you limit downside risk while maximizing your potential to profit in rising markets.

Forbes
https://www.google.com/amp/s/www.forbes.com/sites/chuckjones/2020/11/30/the-stock-markets-have-a-steep-hill-to-climb-in-2021/amp/

Whether the United States has a divided or united government in 2021-2023 depends on two run-off Senate races that will occur in Georgia on Jan. 5, 2021. Currently, Republicans control the U.S. Senate 50-48 seats. Should the Democrats win both run-off elections, they will control the Senate due to the ability of Vice-President Elect Kamala Harris to break a tie. However, if the Republicans win at least one of these races, they will remain in control of the Senate. Divided government with the Republicans in control of the Senate and the Democrats in control of the House of Representatives and the White House means that it is more likely that the Trump tax cuts enacted in 2017 will remain. These lower individual rates are more beneficial to many high-income taxpayers who may experience higher rates and fewer deductions if President-elect Biden’s tax policies are adopted by a unified Congress and White House.

https://www.forbes.com/sites/davidkudla/2020/11/20/why-the-2020-senate-race-may-impact-your-tax-strategy/?sh=1947a63848d9

As terrible as the pandemic has been, there are a few silver linings. One of those is an enhanced ability to plan for retirement. When America was locked down in the Spring, we all had extra time on our hands. As a pre-retiree, this experience likely gave you an increased understanding of the different ways that you can fill your free time – a great dress rehearsal for retirement. If you’re partnered or married, pandemic restrictions have also given you more tools to figure out how to best manage additional one on one time with your partner, an important part of retirement. As you’ve had to do without many of the activities you are accustomed to engaging in, the pandemic has provided the opportunity to focus on what’s really important – what you need versus what you want. This is great from the budgetary point of view, because it helps you see how your spending will change in retirement. Because the pandemic was so unexpected, it has also likely given you an appreciation for the value of an emergency fund. You may want to consider the other ways that the pandemic has offered you to create a more sustainable plan for the rest of your working years and your retirement.

What do your real estate holdings and life insurance have in common? More than you might think. What this article lacks in the way of substance, it overcomes with an interesting parallel. For many people, their main savings vehicle is their family home, which is real estate. For clients I work with insurance and real estate have been an intricate component tax-savvy accumulation.

We know when you make a leveraged real estate purchase, such as a rental property, it may be years or even decades before you build enough equity to generate a net return on investment. At the same time, when I begin making premium payments to my Index Universal Life policies, it will be at least a decade before I can begin utilizing my cash on a tax-advantaged basis. The longer I wait, the bigger the net return will be. 

While I am a fan of both these strategies for sources of retirement income, this can be dangerous advice if utilized in a vacuum. Real estate investing isn’t for the lazy or faint of heart, and cash value life insurance isn’t something everyone can qualify for, especially those who have yet to make their traditional retirement contributions.

https://www.forbes.com/sites/forbesfinancecouncil/2020/10/23/rethinking-the-traditional-retirement-planning-approach-two-alternative-strategies/

Forbes.com