What Do You Do With Your Tax Refund In 2018?

Often, my clients ask me, “How will I know if I’m ready to retire?” It sounds like a simple question, but the answer is anything but. There are so many factors to consider, questions to answer, scenarios to prepare for, that it can all seem very overwhelming. To make things manageable, though, let’s start off with a dream.

We know that retirement can be expensive. In fact, according to a survey conducted by the Wall Street Journal, participants would need 130% of their salary in retirement to live their ideal retirement life.1 You see, most of us spend money during our free time, and as one of my advisors says, retirement is basically six Saturday’s and a Sunday. If your retirement is filled with lazy days reading in your backyard, your expenses will probably be limited. However, if you plan on traveling, tackling home improvement projects or long-ignored hobbies, all of these come with additional expenses. Additionally, things you may have been able to earn in relation to your job, such as airfare and hotel points for frequent travelers, are no longer as easily accessible once you turn off your wage-earner card.

Therefore, the first step on your checklist is to visualize your retirement. If you’re not sure where to start, simply look at what you do in your current free time and determine if that’s something you would like to do more of when you retire. Not only does this help in your financial planning, but it helps you determine what you want the next chapter of your life to be. It is unfortunately common for retirees to experience depression related to a lack of purpose or identity when they enter retirement with an undeveloped vision of their next chapter. Therefore, the more details you can determine, the better the planning process will go.

For people who are married, things become a bit more multi-faceted to plan. You’re not only figuring out how to occupy your free time, but your spouse is also doing the same, and the two of you need to figure out how you plan to spend your shared time together. Without this planned out, you end up with a lot of togetherness, which can be quite an adjustment to most couples. Not only can differences in your retirement vision impact your relationship, but it can also impact your finances. Take advantage of monthly financial date nights well before retirement begins and solidify your retirement vision.

Perhaps you’ve finalized that retirement vision and discovered you won’t have a lot of expenses. You will most likely have those expenses for a long time though. People live much longer now, on average into their mid-eighties.2 It would be great to assume that those years will be spent in good health, but the likelihood is that your medical expenses will go up. According to the Fidelity Retiree Health Care Cost Estimate, the average couple will need about $280,000 for medical expenses in retirement.3 Even if you stay away from long-term care needs or expensive treatments, annual premiums and out of pocket costs like doctor visits and medications typically cost about $5,000 annually.4 There may be certain elements you may not be able to foresee, but you should still try to plan for as much as possible.

Once you’ve determined what your vision for retirement is, you need to determine how much you’ll need to live that lifestyle. You need to be sure that the income you’ll be receiving will fund that vision. Just to be sure, once that number is determined, try living on that budget for about six months. If you find out that you’re struggling, some adjustments will need to be made, whether that’s working longer or altering the retirement vision. Practicing your retirement lifestyle isn’t merely relegated to your budget. If you typically work 50 to 60 hours a week, start cutting back. Maybe take on fewer projects. Prepare as much as you can for this life adjustment. You’ve worked really hard to get to retirement. Be sure to put in the extra work to make it the retirement of your dreams. Retirement is a massive decision. I urge you not to take it lightly. There is a reason that the five years before and after retirement are considered dangerous. Certain things like pensions, pay-outs and in some cases, social security can’t be undone. The best way to make an informed decision on what’s best for you is to meet with an Advisor who can run the scenarios for you. If you choose to push retirement off, your investments can continue to grow. In the end, you will be putting the proper steps in place to make your retirement dream a reality.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

1. https://www.wsj.com/articles/how-much-money-will-you-really-spend-in-retirement-probably-a-lot-more-than-you-think-1536026820
2. https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs

There are so many passwords that people need to remember these days. You have your online passwords, your wi-fi passwords, the passwords you use at work, and more. It can be enough to drive you crazy. By the time you think of yet another original password, you have forgotten the last one. It can be a little easier, however, if you follow the following Dos and Don’ts. DON’T use a password that is easy to guess. That means no password 123 or admin 2018. Don’t use something anyone could figure out, like your birthday, dog’s name, or your address. DO choose a password that only you could figure out, such as the embarrassing moment you never told anyone about or the name of the fish you overfed as a child.

DON’T share your password. Unless it is an account that you and your spouse share, there is no reason to give your account information to someone else. Remind your kids of this too. Many kids give their passwords to friends, which can lead to trouble down the line.

DO make sure your password has a combination of uppercase letters, lowercase letters, numbers, and special characters. Each website will have their own rules about what is required. Make sure it is at least six characters long, too, because length can contribute to the security of the password. For example, sTE”vE218 is a lot harder to crack then STEVE218. The trickier you can be the better.

DO use underscores or spaces. If the system will allow you to, this is a great choice. Not many people who are trying to guess a password will consider spaces or underscores. Trying to decide where you inserted them is even harder.

DON’T use the same password for multiple accounts. If someone is trying to steal your information and they figure out one password, you don’t want them to have the keys to your kingdom. It is much smarter to have a different password for each site to protect your assets.

DON’T make your password so difficult that you cannot remember it. If you notice a spider outside the window as you set your new work password and you make your password SPIDER875, there is a good chance that you will not remember it the next day. While the password has to be hard for other people to guess, it should be easy for you to remember.

DO have a password to protect your passwords. If you have all of your passwords saved to your computer and you are the only one that uses your computer, you can add a second layer of protection. Choose the option to have a password on your laptop. Then you can allow Google to save your passwords for each site you visit, but no one can access them because your laptop itself is password protected.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.