Investing for Retirement in a Bear Market

January 25th, 2015  |  Published in Retirement  |  1 Comment

Stock market investors have enjoyed a bull market for quite a few years now. History tells us that there will eventually be another bear market. How you handle your retirement investments during a bear market can make a big difference in the return provided by your retirement investments. Selling at the bottom of a bear market could produce a big loss for your retirement portfolio.

I was lucky that I started investing in earned for retirement during the last bear market in 2008. I didn’t get in right at the bottom, the market did go down for a few more months after I started investing. Despite the few months of negative returns, having bought stocks cheap during the bear market helped me get some great returns once the next bull market started.

Now that I have retirement investments though I need to consider what to do when the next bear market hits.  One strategy is to pull out of the market when the bear market starts to avoid further losses. The problem with that strategy is that nobody really knows when a small dip in the market is the beginning of a bear market or just a temporary correction during a bull market.  It is also impossible to know for sure when a bear market has hit bottom. For this strategy to work you need to be very lucky or be able to tell the future.

Another strategy, which is the strategy I might use, is to just stop investing in the market during the bear market. You would put your money into bonds or cash instead. If you use this strategy you need to figure out when to start investing in the market again. If you wait too long to start investing when the bull market resumes then you miss out on a lot of potential returns.  Or you could just stay fully invested in stocks the whole time and therefore ensure that you don’t miss out on the beginning of the bull market. When it comes to investing in a bear market there is no foolproof strategy. Jumping in and out of the market every time there is a small dip though will likely lead to inferior returns.

Three Financial Threats to a Peaceful Retirement

December 12th, 2014  |  Published in Guest Post  |  Comments Off on Three Financial Threats to a Peaceful Retirement

Three Financial Threats to a Peaceful Retirement

After spending all your life in the rat race, retirement is supposed to be the time when you can kick back, relax, and rest on your laurels. Unfortunately, the grim reality for many is that retirement is hardly a time of relaxation. Many retirees have debts that are almost impossible to maintain on a retirement income. As a result, many are reentering the workforce just to make ends meet, when they should be chilling in a condo in Boca Raton.

If you are not sure how much you will spend in retirement there is a calculator at Industry Super. Or take a look below at some common pitfalls to a debt free retirement, and ways to deal with them.

Below are some common pitfalls to a debt-free retirement, and ways to deal with them.

Credit Card Debt

If you have been using credit cards as a source of income, such as borrowing against the card or using your line of credit for living expenses instead of your income, you could end up stuck in the vicious cycle of borrowing and paying but never really catching up.

If you have not retired your best option is to pay down or eliminate as much of the credit card debt as possible so that you can retire with a fairly clean slate.

If you have already retired then you need to focus on getting those credit cards paid off as quickly as possible. If your retirement income is not sufficient to pay all of your bills, especially if you have already taken hits on your credit, you might want to speak to a credit repair company like Lexington Law find out your options for cleaning up your credit report.

Another option is to transfer the credit card balance to another low interest card. If you choose this option you should stop using the card that you transfer the balance from, or at least reserved for emergencies only, and not make any new purchases on the new card because the interest-rate that you get for the balance transfer might not fly to new purchases.


Mortgages are one of the biggest threats to a financially peaceful retirement. While it is true that making mortgage payments does give you certain tax advantages, those advantages are really worth it when you take into account the monthly expense of the mortgage – especially if your retirement income is significantly less than what you were earning when you were working.

If you have not already retired, one solution would be to try to pay off or significantly pay down the mortgage before your retirement. That way you won’t have that extra monthly expense, and if you do have the expense it will only be for short time and it might be easier to budget for it .

If you have already retired, one solution might be to look into a reverse mortgage. With a reverse mortgage you are essentially selling your house to the bank , in return they pay you either in one lump sum, in monthly payments as long as you live in your home , pay all required taxes and fees, and maintain the property. When you move out of the home , the property automatically goes to the bank. The biggest advantage to reverse mortgages that you get to stay at your home without having a hefty monthly mortgage payment. The downside is that if you want to leave the property to your heirs, they will have to pay off the remaining balance.

Another option would be to sell your current home and downsizing to a property with a smaller mortgage, or you can try to refinance your current property to lower monthly payment. Of course both options mean that you will essentially extend the life of the mortgage. It can lower your monthly expenses, but you’re also still in the same boat of having a mortgage that you have to pay when that money could be better used elsewhere.

If you’re concerned about your mortgage, you should speak with a financial advisor can go over these options as well as find other options to reduce your monthly expenses.

Your Children’s Debts

This includes any student loan payments that you’re helping them make, any loans that you may have cosigned, and any other financial assistance you may be giving them. This is not to suggest that you should completely cut them off , but you may need to work with them to reduce the a lot of money that you are giving them each month.

For example, if you have cosigned on a car loan and they have stayed current on the payments and have a decent credit rating, it might be time for them to refinance and put the loan and their names alone.

If your children are still in the stage where they are having financial difficulties of their own, you may need to work with the financial counselor to find a solution that works for everybody.

What Is A Living Benefits Life Insurance Rider?

December 9th, 2014  |  Published in General  |  Comments Off on What Is A Living Benefits Life Insurance Rider?

Having life insurance is the peace of mind every family needs to have. A family member can ensure their dependents do not have to take on their financial burdens and can have enough money to sustain and get their lives in order.

As we progress with new healthcare technologies to sustain our lives during certain critical illnesses, this does increase current medical expenses. Insurance companies have realized this and understand the needs that consumers have for more insurance products and services. That’s why many life insurance plans have an add-on policy called “riders.”

Understanding What a Rider Provides

A rider is an add-on policy to add additional benefits and protection to a life insurance policy. An owner can in essence create the best plan to cover their family’s needs. Some must be requested while others are automatically included. If there is an additional cost, it’s quite low.

What is a Living Benefits Rider?

A Living Benefits Rider (LBR) or Accelerated Payout Rider is an additional benefit that the policy owner can collect while they are living if they have been diagnosed with a terminal illness. It’s meant to help the insured live as comfortable a life as possible until their last day. An owner would have access to the cash value in the event of a chronic illness or terminal illness.

How Can a Living Benefits Rider Help?

Having a critical illness, there are treatments, prescriptions, in-home care, and hospitalization expenses to cover. The insured may not be able to work and help cover mortgage, utility, and other home expenses. The LBR will pay out, and a person can use the money however they see fit. So if they want to take their family on vacation, this is also acceptable.

How Much Can I Get with the Rider?

Every life insurance provider handles their LBR differently. In general, you can expect to receive 25% to 95% of the death benefit. The actual payment will depend upon your policy’s face value, your contract terms, and the state you reside in.

If you were to access your life insurance funds via a policy surrender or a policy loan, you would get approved for funds based on your cash value. The Living Benefits Rider is different in that you will get approved for funds based on your policy’s face value. So in most situations, the LBR will provide you with the most funding.


How to Save Money Eating Out

October 3rd, 2014  |  Published in General  |  Comments Off on How to Save Money Eating Out

Eating out is a convenience, but it is also expensive. When you have a family to feed, you need to look for the best deals to save the most money and make sure everyone has enough to eat.  For busy families, eating out is sometimes a better option just to save time and get everyone in bed at the right time. Below are some tips for saving money while eating out. You may feel some of these tips are common sense but you’d be surprised how much people spend on things they don’t need.

Use Groupon

Groupon has local deals with a variety of restaurants in each area. These deals are generally at least 50-percent less than what you would pay without the discount. You can find deals on everything from pizza shops to dessert places. Groupon sends daily emails to let you know what is available that day.

Look for Restaurant Specific Coupons

Some local restaurants, and even fast food locations, send coupons regularly in junk mail and Sunday newspapers. Some deals are also posted on their individual websites and/or social media. In order to take advantage of these discounts and meal packages, be sure to look through the advertisements as they come in.

Share an Entrée

Consider going to a restaurant that offers large portions. Pasta houses and pizza parlors are the ideal option for this. Most have salads that come with the meals, so that is ideal. Order an extra salad and split the entrée. This saves nearly 50-percent. Also consider water instead of a regular beverage, since those beverages are highly overpriced as it is.

Go out on Kids Eat Free Nights Only

Many franchises and even some local establishments offer kids eat free night. You’ll receive their meals free for ordering adult entrees. This is the way that most families on a budget are able to afford going out to eat. It’s a special treat. The restaurants usually offer these nights on their slowest of the week to help get business through the door. It isn’t really a financial loss to them since the cost of the adult meals often covers the small portions that children consume.

Saving money on eating out helps you to take a break from the kitchen and enjoy some family time. Using discounts does lower the restaurant’s profit but keep in mind, they only offer coupons that they can afford to offer. They still make a profit. Most restaurants have a food cost of 30-percent or less as 20-percent is average. Plan your meals around the nights when you can afford to eat out and take advantage of the discounts available whenever possible.

A Pre Retirement Checklist

September 18th, 2014  |  Published in Retirement  |  Comments Off on A Pre Retirement Checklist

Retiring is a big step for many people. Usually, there is a whirlwind of confusion, chaos and concern before retirement, followed by a slight breeze of boredom and longing. In order to keep everything under control, here is a list of 20 things to do before retirement, in order to make the time after retirement less overwhelming.

– Prepare an updated balance sheet of income and expense.
– Use up your company paid vacation.
– Get rid of debt.
– Make a list of things you’d like to do – a “bucket list.”
– Play a small prank on your boss and co-workers.
– Get your car inspected for any upcoming services.
– If you have a will, make sure it is updated.
– If you don’t have a will, get one, and then make sure it stays updated.
– Home inspection – check and replace any worn out items like doorknobs, faucets, light fixtures, etc.
– Begin the paperwork to file for social security.
– Make sure you have transitional insurance in place, and are applying for other forms of insurance.
– Consider moving to a smaller home or apartment for the sake of ease in maintanence.
– Consider moving to a single story home for ease of movement in the future.
– Assess life insurance needs.
– Play another prank on your boss or co-workers (this is just getting to be too much fun.)
– Talk to your financial advisor about making changes to your portfolio to help support your needs and wants after retirement.
– Check into long-term care insurance.
– Assign a power of attorney in the event of an emergency.
– Have an attorney draw up an advanced medical directive to make sure everyone knows your health care and end of life wishes.
– Play a practical joke on your boss – AND coworkers just to have a good laugh.

Now that you have all of that out of the way, you can sit back, relax, and enjoy the rest of your retirement celebrations. Don’t forget to count down the number of days on a large, easy-to-read wall hanging that can be seen clear across the room. On your last day, run around making funny faces, playing practical jokes, and generally having a grand time.

Mix a bit of silliness in with the serious business of preparing to retire. Pay attention to your current investments as well as your estate and any insurance you wish to keep after retiring. Also, make sure your basic needs are covered and you have some wiggle room in your finances for at least three months after you retire.

This extra cushion will allow you to get settled into your new life, finding your “groove” so to speak, and start taking advantage of all the things you were planning on doing. Plus, you will have time to reminisce on those practical jokes you played on your boss and coworkers. Retirement is a fun time and should be enjoyed. Just make sure you have all of the work done before you go off and play.

How Many Installment Loans Should I Have

August 14th, 2014  |  Published in Guest Post  |  Comments Off on How Many Installment Loans Should I Have

Installment loans are a typical part of every adult’s life. Even if there is enough cash to go around, to pay upfront for everything you need in life, installment loans still happen. These do help to build credit but at the same time, can be detrimental to your credit score should you default on the loan. These types of loans do have interest attached to them, which varies depending on your credit score at the time of the loan being taken out.

Traditional Installment Loans

Any time that you purchase a home, vehicle or take out an equity loan, these are installment loans. Even a quick cash title loan is an installment loan. This means that based upon your credit score and your income level, a creditor can extend a loan in a specific amount of money to be paid off over time.

These payments are setup on a monthly basis and have a minimum amount due. Paying the minimum only does help to show that regular payments are being made, but it doesn’t help speed up repayment. Consider paying more than the minimum amount due to pay down the loan faster. In terms of how many to have, a house payment and a car payment are sufficient. Some consumers can handle an equity loan, mortgage and vehicle payment.

Revolving Credit Installment Loans

Revolving credit is another name for a credit card. These are a type of installment loan that gets consumers into a lot of trouble.  In regards to this type of installment loan, one, perhaps two is beyond sufficient. The more plastic you have in your wallet, the more debt you accumulate. This type of credit replenishes itself as long as you are able to continue paying on the cards, there really are no limits on the number of credit cards that you can have. It is important to not cross your own financial thresholds.

Installment loans are created in a variety of ways. The more you have, the thinner your household budget gets. Keep installment loans to a minimum where possible, outside of the necessary mortgage and car payment loan types. Living outside of your means is a recipe for financial disaster. It is up to you to be keeping track of what payments are going out and what each totals. Paying on time or early is a must. Only borrow what you can comfortably pay back is the general rule.

Rolling Over a 401k or IRA to a Betterment IRA

March 13th, 2014  |  Published in Investing  |  Comments Off on Rolling Over a 401k or IRA to a Betterment IRA

If you are thinking about rolling over your old 401k to a Betterment IRA to take advantage of their low investment fees the process is pretty simple. They use the direct rollover method to transfer the old 401k to the IRA. For a 401k the first thing you need to do is create an IRA at Betterment if you do not already have an IRA at Betterment.  After you have created your IRA you just need to click on the “Rollover money from an IRA/401k” tab under the gear button on the IRA summary page. Once you click on that you will be prompted to answer a couple of questions and then you will be sent an email with further personalized instructions.

If you want to rollover an existing IRA into your Betterment IRA the process is different, but still pretty simple.  For IRA rollovers, Betterment uses the indirect rollover process rather than the direct rollover process they use for the 401k.  The first thing you need to do is ask your current IRA provider for an early distribution with no withholding.  That way no tax will be withheld from the distribution.  The next thing you need to do is deposit the money from the early distribution in your Betterment IRA within 60 days in order to avoid tax penalties.  To do that you log in, go to the transfer tab, and select “IRA rollover” as the contribution type.  Note that a traditional IRA can only be transferred to a traditional IRA and a Roth IRA can only be transferred to a Roth IRA.  If you have used the indirect rollover process in the previous 12 months you may not be able to use it again to make the transfer to Betterment.  There are a few other special situations to be aware of that you can read about at Betterment before transferring your IRA.

If you would like to open an account with Betterment, be it an IRA account or just a normal investment account, please consider using my referral link.  You will get a $25 bonus for using my link and I’ll get $10 to boot. That is a win-win. Let me know in the comments if you have any questions about Betterment.

Betterment Referral Link

Buying a New Life: How Much Do I Need to Retire?

December 19th, 2013  |  Published in early retirement  |  Comments Off on Buying a New Life: How Much Do I Need to Retire?

If you’re not counting down the days until you can retire, you’re surely counting down the dollars. Most people spend the majority of their working lives stacking one dollar atop the next, hoping that their efforts will one day guarantee them a stable future in which they do not have to wake up before 10 a.m.. Yes, retirement is the distant goal of many a worker, but few people know exactly how much money they will need before they can finally punch out of work for the last time.

The reason there is so little information in the way of hard numbers is that there are too many variables for a rigid formula to apply to everyone. Everyone’s needs and lifestyle are different, and often the further you are from your actual retirement, the harder it can be to predict a concrete goal. Spending does typically decrease after retirement, so you should be able to live on approximately the same amount you currently do if not slightly less. You can click on this link to find out more.

However, the unknown is a constant hindrance to extrapolation. Factors such as health and financial commitments made on the road to retirement have a marked effect on the target amount. For instance, you may need much less income to finance your day to day activities after retirement, but a move to a nursing home or an unexpected maintenance expense on your home, property or hobbies could quickly drain your retirement stash and negate your years of careful planning. You could also live for days or decades after you retire, so a definite answer to your question is difficult if not impossible to come by.

Therefore, the amount you need for your retirement is less of a number and more of a formula. Since we have already established that your current salary is enough for you to live on, it should serve as a base for your calculations. Ideally, you should save at least the equivalent of a full year’s salary every three years to keep on track for retirement.

For example, a 30 year old worker earning an average of $50,000/yr with a target retirement age of 65 can save well over $600,000 just in principal using this strategy if he starts right now. This type of gradual process allows room for potential changes in pay rate and employer while still maintaining a workable strategy that will ensure you do not outlive your savings.

A growing concern is the availability of Social Security for distant retirees. While the system initially supplemented the pensions, savings and other income of retired senior citizens, the program is rapidly exhausting its funding and its future is highly uncertain.

While previous generations of retirees could factor Social Security income into their retirement strategy, younger workers will likely not be so lucky and have to fund their retirement without outside assistance, greatly increasing the amount necessary to retire.

Personal choice is another determining factor in the required sum of a viable retirement fund. Some choose to lead quiet, homebound lives after retiring from the working world while some dedicate their golden years to adventure and expensive leisure. Obviously, you will need to save more if you plan on traveling the world after you retire as opposed to spending your retirement years knitting.

Nailing down a definite goal for your retirement savings can be an intimidating prospect. The uncertain and constantly changing nature of life makes peering decades into the future an inexact science at best. However, there are some guidelines and best practices than can help you get at least some idea of how much you will need to retire comfortably.

Can Investing be the Key to an Early Retirement?

December 19th, 2013  |  Published in early retirement  |  Comments Off on Can Investing be the Key to an Early Retirement?

An early retirement is something that we all crave. Saving for an early retirement, however, is much harder than you’d originally imagine and with the cost of living rising, it is becoming harder than ever to secure an early retirement that will see you through the rest of your life. For this reason, many people have started to look for alternate ways of investing their money and transforming their savings.

The financial crash back in 2008 made people completely reconsider how they would save money for their retirement. Beforehand, when it was generally assumed that starting a savings account and contributing regularly was the best way, the landscape has now changed. With thousands losing all of their saving and thousands more losing at least part of them, people have left banks because they offer little to no interest. Now is the perfect time to move your savings elsewhere and reinvest to gain an early retirement.

Why Do You Need a Retirement Nest?

Before you start investing your money and coming up with alternative investment strategies, you need to fully understand the reasons why you’re creating a nest egg.

  1. To keep up with the rate of inflation.

  2. Retirement nests allow you to balance the uncertainty of the future by utilising your income to protect you against any sudden costs that may arise.

  3. You can use it to plan your estate and your will just in case the worst case scenario arises.

As a direct result of the financial crash and the speculative nature of pension pots, people like to diversify their assets to protect them and hopefully maximise their income so that they can retire early. Due to this, currency markets have become much more popular with investors as they look towards new opportunities.

Could Forex Markets Help You Retire Early?

Forex markets give you a greater degree of control over your finances than you’d imagine. By diversifying your asset portfolio and investing strategically, you have a great opportunity to minimise your losses and maximise any gains. Spreading risk and diversifying your asset portfolio is key to successful retirement planning and the more effectively you do it, the greater your chances of retiring early. So, exactly why has forex become so popular with people seeking an early retirement?

  • Hedging: You can split your assets between bonds and equities. When you convert assets into the local currency, this makes it easier to turn a profit.

  • Leverage: Most forex brokers allow you to trade on the margin. Depending on your account type, you only place a fraction of the trade but you gain the maximum possible profit (or losses).

  • Anywhere, Any Time: The size and scale of forex markets means that you can trade from anywhere in the world 24 hours a day, 5 days a week. As well as this, mobile trading apps and trading robots have made trading easier than ever.

To conclude, alternative investing strategies such as forex trading have become prominent after the 2008 financial crisis. Because bank accounts are relatively stagnant, alternate investment strategies have become essential for people seeking an early retirement.