Category Archives: Retirement

Different Ways To Supplement Your Retirement Income

Posted on by

Retirement is something that most people look forward to. They think that they will have the time to finally do what they want. However, many people underestimate the amount of money that they need to retire. That is why they may need to supplement their income. There are several things that you can do to supplement your retire income.

Rent out Spare Rooms

If you have an extra room in your home, then you may want to rent it out. Renting out spare rooms is an easy way to bring in some extra money. You can use a website like Airbnb and list your room. All you have to do is set the price, the dates that the rooms will be available and the rules that your renters will have to follow.

Delay Social Security

Social Security can be used to supplement your retirement income. You can draw Social Security at the age of 62, but you will not be able to get the full benefits. You can increase your Social Security by eight percent for every year after the age of 65 if you wait until you are 70. That is why if you can delay your Social Security, then you should consider doing so.

Get a Part-Time Job

Many people who are retired get bored with sitting in the house all day. That is why if you want to make money and fight boredom, then you should consider getting a part-time job. Working 20 to 25 hours a week can significantly boost your monthly income.

Freelance

If you do not want to commit to a part-time job, then you should consider freelancing. You can make money by selling your services if you are a freelance. You can make money by writing, designing graphics, editing videos or translating documents.

There is a great demand for freelancers. There are many websites that allow you to sell your services such as Fiverr. You can also create your own website and promote your services.

Pet-Sit

If you love animals, then you can make money by pet-sitting. There are always people who are looking for someone who can pet-sit. Petsitter and Rover are two of the websites that you will be able to use in order to find a pet-sitting job. You may be able to make over $1,000 per month by pet-sitting.

Take Paid Surveys

One of the easiest things that you can do to make extra money is to take paid surveys. Crashcrate and Inboxdollars are some of the websites that will pay you for taking surveys. You will definitely not get rich from doing this. However, it is a great way to supplement your income.

Make and Sell Things on Etsy

If you are an artsy person, then you can make and selling things on Etsy. This will give you a chance to make money from a hobby that you may have been doing for decades. Etsy is one of the most popular arts and crafts sites. It has over 34 million users. It also brings in $2.8 billion per year. Etsy works in a way that is similar to eBay.

Be a Career Coach

You have spent most of your life building your career. You can make money in your retirement years by helping people make the most of their careers. You can give them tips for preparing for an interview and putting together a resume. You can start your own career coaching business. There is also a platform called The Muse that you can use. The Muse will connect you with people who are in need of career advice.

Is Financial Planning Just For The Wealthy? The Answer May Surprise You

Posted on by

A lot of people believed in certain ideas regarding financial planning or wealth management. One of which is that it is only made for the rich. However, in order to prove this theory, you have to assess the reasons as to why financial planning is limited in the first place, which it isn’t.

You’ll be surprised to know that financial planning doesn’t really cost that much. If this is the case, why do people believe that it is only for the rich? To address the elephant in the room, financial planning is for individuals who want to learn how to manage their money well so that they can achieve their dreams and goals in life regardless of their current financial situation.

In fact, certified financial planner Kirsty Scully explained in CapeTalk how financial planning isn’t just for the wealthy, it’s for everyone, including ordinary folks. Scully explains that wealth management can help everyone, not just those with high salaries.

A 2016 Financial Engines report claimed that only 37% of the entire American population with an annual income between $35,000 and $100,000 have a comprehensive financial plan. It is dangerous to think that people who are low or middle-income earners believe that they do not have enough money to warrant having a financial plan.

With that in mind, here are some of the reasons as to why everyone needs a financial plan, regardless of how much they earn:

To Better Prepare Yourself for a Financial Emergency

In life, there are a lot of things that we cannot predict. There are instances that would require you to have an emergency fund at hand. Whether you are the CEO or someone who has an entry-level job, financial planning is done to help you pool the needed money for any unexpected expenses.

Imagine this, the company that you have been working for declared bankruptcy and is needed to let go of some of its employees. Unfortunately, you were one of those employees. What would you do?

Financial planning helps you be more prepared for these kinds of situations. In fact, financial experts have advised individuals that their savings should be equivalent to a year’s worth of daily living expenses. Furthermore, it should easily be accessible, like a bank savings account.

To Reduce the Chances of a Credit Card Debt

According to the 2013 Household Financial Planning Survey and Index, which was completed by the CFP Board of Standards and the Consumer Federation of America, those who have financial plans are less likely to incur a credit card debt. Even when they do, there is a high chance that they have the money to pay it off.

With financial planning, you can eliminate your habit of relying on credit cards. Even with a limited financial plan, you’ll still be able to lower your chance of having debt. In fact, surveys have concluded that 61% of these limited financial planners have no credit card debt at all.

To Protect Your Loved Ones

Another unexpected thing that could happen to all of us is death. If you have some kind of financial planning, then you would have thought about investing in life insurance. This is a great investment as it will help you protect your loved ones in case you die.

In a study conducted by the Financial Engines, it was reported that 67% of middle-income earners have either disability or life insurance. Moreover, 83% of upper-income earners already have these policies in place.

To Earn More

Financial planning is not only for the rich. In fact, those who are low-income earners would greatly benefit from this practice because it can help them earn more. If you have a sound financial plan, as well as a basic understanding of your finances, you can choose the right investments for your savings. As a result, this can generate better progress that accumulates wealth over time.

To Aid in Reaching Bigger Financial Goals

Every individual dreams of having their own house, buying their first car, or possessing the ability to pay for their children’s college education. Do note that these big financial goals are far more challenging as compared to saving enough money for a trip over the summer.

With that being said, a financial plan can help guide you in achieving these goals. It will spell out how much money is needed to realize this goal, what are the necessary steps to ensure that this money is not spent on other things, and everything else in between.

To Keep Track of Your Expenses

One of the primary pillars of financial planning includes tracking your monthly expenses. If you have experienced an almost drained bank account, not knowing where the money has gone, then it is about time that you start creating a financial plan for yourself.

To avoid instances of a drained bank account, you’re going to need a household budget that provides you with an accurate list of all the things you spend on – from rent to utilities, from groceries to dining out, from transportation to entertainment, and so much more.

Having these figures laid out in front of you will ease the process of comparing them with how much money you actually earn and how much money you should be spending on each item on the list.

To Form Good Money Habits

When it comes to financial planning, you are not only protecting yourself from unexpected financial challenges. It also trains you to form good money habits. Eventually, you’ll be able to pinpoint certain routines that are unnecessary.

You’ll be able to gain a deeper understanding of your finances. Furthermore, you’ll be able to give structure to any of your unclear intentions. Most importantly, you’ll be able to avoid overspending.

Those who have developed good money habits feel good about themselves. There is also less anxiety felt because your goals in life are backed up by sound financial practices that can help you prepare for the future.

Final Thoughts

In the end, financial planning helps you understand where your money is going and if it is going in the right direction. With this practice, you’ll be able to understand the basics of investing, which in turn, allows you to build a healthy relationship with your wealth.

Planning for a Comfortable Retirement

Posted on by

Planning your retirement is a long-term process. You want to make sure you plan ahead so that you are able to retire in comfort. Taking the time to plan before you start reaching retirement age will help you avoid uncomfortable financial challenges as you get older.

How Much Do You Need?

The amount of money you need in retirement depends on your lifestyle and your plans after retirement. If you plan to maintain a similar lifestyle, then you want enough income from your retirement accounts to cover the costs of your lifestyle.

A general rule of thumb for your retirement income is roughly 70 percent of your current income. That will allow you to manage any bills and costs associated with your normal activities. It may also allow you to enjoy more travel and other activities if you have paid off your home and do not have any debts by the time you reach retirement.

Start Saving Early

The foundation of planning for retirement is when you start saving your money. You want to start saving at a young age to increase the chances of reaching your retirement goals. Start a 401(k) plan through your employer or set up an IRA to put aside funds for your retirement.

In most cases, you want to save 10 to 20 percent of your income. By putting the money into a retirement account and investing the funds, you have a lower risk of harming your long-term plans.

Keep Money Aside in Cash

A big drain on your long-term retirement plans is taking money out of your retirement accounts. There are two problems with taking out the money before you reach retirement age: you will pay fees on the funds you take out and you spend the money on items in your life.

Avoid the risk by keeping money aside in cash. Build up a fund for emergencies and unexpected problems. You want to have enough in a basic savings account that you can access in an emergency to cover roughly six months of your living expenses. By having a reasonable rainy day fund, you will not face financial problems when an emergency occurs or when unexpected expenses arise. You will have the funds set aside to avoid borrowing from your retirement accounts.

Rebalance Your Portfolio

Rebalancing a portfolio means you look at your investments each year and check that it is still appropriate for your needs. As you get older, you will want to shift the balance of your portfolio to reduce your risks and still make a reasonable return on your investments.

It also allows you to adjust for any significant changes based on market conditions. If one investment increased significantly, then you may have more of a single investment than you want. A diverse portfolio reduces your risk and helps you stay on track to meet your retirement goals.

Focus On Your Risk Tolerance

Risk tolerance refers to the amount of risk you feel comfortable with in your investments. It is important to invest the money in your 401(k), IRA or any other retirement account. The investment helps your money grow and keeps up with inflation. The problem is that you may not feel comfortable with a high risk portfolio.

The ideal portfolio focuses on your goals without taking on more risk than you feel comfortable handling each year. A high risk portfolio means you have more stocks and will make a higher potential return. The downside is that you also have a risk for large losses. A lower risk portfolio includes bonds and other investment classes to reduce your risk and reduce the potential for large losses. You want a balance of equity, bonds and other investments to help maintain your long-term goals.

Plan for Decades

Retirement does not look the same in modern life. Advances in medicine and treatment mean you will live longer than previous generations when you are ready to retire. That may mean you have 30 years or more after you retire.

You want to plan for a long-term retirement so that you age with dignity and grace. Plan to live a long life and make sure you have enough to handle the increasing medical costs as you get older. Do not assume that you will only need enough funds for 10 to 15 years. Expect to live at least 30 to 40 years after retirement to ensure that you have enough to retire with dignity.

Planning for a comfortable retirement is a process. It takes time and you will want to make sure you have the right strategy to reach your goals. By starting the process early and putting money into retirement accounts each year, you will reach your goals and have enough to feel comfortable for your life after retirement.