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Retirement Roundup | May 2019

May 6, 2019

Retirement Roundup | May 2019

True North Retirement Advisors retirement roundup

Articles and ideas to help you live a fulfilled and financially secure retirement! 

In this month’s Retirement Roundup, we’ve curated our favorite articles from around the web to help you live a fulfilled and financially secure retirement!

We start off with an article that provides some reassurance if you hate your job and don’t think you’ll be able to last until retirement.

Then, we switch gears to cover six practical ways that you can catch up if your nest egg isn’t where it should be at this point in your life. The key is to discover your gap and take action to close the gap while you still have years left to continue working and saving.

Next, we review a study on the time allocations of retirees, which explores the activities in retirement that produce the most satisfaction. How does your time allocation among various activities influence your level of satisfaction and happiness in retirement?

From there we look at whether investors should be worried about the recent record-setting highs in the stock market. What does the data say about the likelihood for a big drop?

Lastly, we explore simple ways that you can teach your children and grandchildren financial literacy. Today, many children enter adulthood knowing very little about how to manage their money. You can change that with simple and practical money lessons that are easy to work in to your everyday interactions with your loved ones.

Enjoy this month’s installment of the Retirement Roundup!

How to Outlast a Job You Hate Until You Can Retire

(Morey Stettner | MarketWatch)

It’s no secret that many Americans are not happy in their careers. Even if you enjoy work, burnout can often set in later in your working years, which can sour an otherwise satisfying job. But what if you dread each new day at the office, and can’t bear to think about 2 more hours, let alone 2 more years in your current position?

How do you persevere? How do you find a productive way to accept your current situation and move forward? This article offers several helpful strategies to get through those last few months or years in a deeply dissatisfying job:

  • Start by taking charge of your thoughts. Impose a time limit on how often you will stew in anger or self-pity.
  • Fill your mind with pleasing images of retirement, which can divert attention from the daily grind.
  • Look at what positive purpose your work is serving, even if it’s just the positive financial purpose.
  • Explore how you can enrich your work life to make it more tolerable – for example, delegate your least favorite task.
  • Watch your habits. Maintaining healthy habits like exercise and eating well can help combat negativity at work.

Even if you can’t cope until retirement, there’s still hope – but not without trade-offs. Consider switching careers. This may extend your working life three or four more years if your new career is a lower-paid position, but it may be worth it to increase your happiness in the working years that you have left.

Do You Have Enough Saved Up To Enjoy Your Retirement? 6 Catch-Up Tips

(Nancy Gondo | Investor’s Business Daily)

If you’re at risk of running out of money in retirement, you can still remedy the problem if you recognize the problem and take action before your regular paycheck stops.

Here are several practical ways that pre-retirees can catch up if your nest egg isn’t where it needs to be at this point in your life:

  • Calculate how much extra you need to save in order to catch up. Knowing how big your gap is will help you take action to close it.
  • Analyze your credit card statements, utility bills, cable, and cell phone bills. There are hundreds if not thousands of dollars wasted on things you just might not need.
  • Downsize and/or move the home you’ll live in in retirement to a location with lower tax costs and a lower cost of living.
  • Get a part-time job. An extra $1,000 month can make a significant difference for you even if it’s just for the first five years of retirement. It can even help with the process of moving from working a 40 or 50 hour week to not working at all.
  • Be discerning about your purchases and “treats”. Do you need that $7 cup of coffee?
  • Get good advice. A fiduciary advisor who can create a concrete plan for you (like True North 😊) can help pinpoint what you should focus on in those last few working years.

When you’re behind on your savings goals, the ideal time to course correct is several years out, while you still have enough time for your actions to make a difference. Don’t wait until 1-2 years before retirement before calculating if you have enough.

Time Allocations and Self-Reported Happiness of Retirees: An Exploratory Study

(Tao Guo, Ph.D., CFP®; Yuanshan Cheng, Ph.D., CFP®; Philip Gibson, Ph.D., CFP®; and Louis J. Pantuosco, Ph.D. | Journal of Financial Planning)

Which activities in retirement will bring you the most happiness? That’s what this study, published by the Journal of Financial Planning, aimed to discover. The results of the study “revealed that retirees preferred active activities such as socializing, walking, or exercising, as well as those activities that require human capital, such as working or volunteering, compared to passive activities, such as staying at home and watching television.”

The problem is that many retirees do not actually spend their time in ways that are meaningful to them, thus creating a gap. This gap “indicates an area that could lead to a reduction in happiness during retirement.”

So how can retirees better focus their energy and time in retirement, and spend that time on activities that are meaningful? For respondents in the study, time spent socializing and walk/exercise brought the highest feelings of happiness, while television watching received one of the lowest ratings for happiness.

The takeaway from this study for retirees is that it’s important to be mindful of the different activities that you engage in each day, and how the time allocation among those various activities influences your level of satisfaction and happiness in retirement.

Is This Record-Setting Stock Market Setting Up Investors For A Fall?

(Ray Martin | CBS News)

The Dow Jones Industrial Average reached nearly 27,000 in April. When the market keeps climbing to new heights, it’s natural for investors to worry. But is this record-setting stock market setting up investors for a fall? Perhaps not.

Several market and economic signals point to continued growth. According to the article, “The P/E ratio for S&P 500 based on forward, or estimated, earnings for the next 12 months, is about 16.99. The historical range for the forward P/E ratio is about 15.5 to 17. So by this measure, stock prices are in the high end of their range.” However, stocks are not over-priced by this important indicator.

While most stock market and economic indicators currently point to continued growth, “red-flashing [i.e. negative] indicators are the debt-to-earnings ratio (showing signs of distress on corporate balance sheets) and the yield curve’s flattening (when short-term interest rates are nearly the same as long-term interest rates).

While some signs of weakness exist, growth indicators in the stock market and the economy show no signs of a serious slowdown in the near-term.

4 Ways to Share Your Money Smarts with Kids

(Ric Edelman | Kiplinger)

Financial literacy among Americans needs serious improvement, and unfortunately, kids are not learning about financial skills in school either. Only 17 states require that high schools teach personal finance, so it’s up to parents and grandparents to teach the important financial skills that kid’s need to be successful and responsible adults. The good news is that teaching money skills to kids doesn’t have to be complicated.

Financial lessons for your kids and grandkids can be worked in fairly easy in your everyday life.  Here are four practical ways to help your children and grandchildren learn important money lessons:

  • Read to your children about money. Lots of books exist for children of all ages to help them learn about money.
  • When preparing your tax return, talk about the role of taxes in society.
  • During the holidays, talk about giving to charity and those in need.
  • Trips to the grocery store or mall can lead to natural discussions about spending, credit cards, delayed gratification and the need to make choices.

Most importantly, just get started. Small, simple lessons taught over the years will go a long way toward helping your children and grandchildren become financially savvy adults.

THANKS FOR READING!

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Ashley Micciche of True North Retirement Advisors

Disclosure: 

The views outlined in this newsletter are those of True North Retirement Advisors (TNRA) and should not be construed as individualized or personalized investment advice or tax advice. TNRA are not licensed tax consultants, please contact your CPA for advice on your specific tax situation. Any economic and/or performance information cited is historical and not indicative of future results. Economic forecasts set forth may not develop as predicted.

Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for a given client or portfolio.

Investing in stocks includes numerous specific risks including the fluctuation of dividend, loss of entire principal and potential illiquidity of the investment in a declining market. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond and bond mutual fund values and yields will decline as interest rates rise and bonds are subject to availability and change in price.

Any questions regarding the applicability of any specific issue discussed above should be addressed with TNRA. All information, including that used to compile charts and/or tables, is obtained from sources believed to be reliable, but TNRA has not verified its accuracy and does not guarantee its reliability.

Moreover, you should not assume that any discussion or information contained in the newsletter serves as the receipt of, or as a substitute for, personalized investment advice from TNRA or from any other investment professional. To the extent that you have any questions regarding the applicability of any specific issue discussed above to your individual situation, you are encouraged to consult with TNRA or the professional advisor of your choosing. All information, including that used to compile charts, is obtained from sources believed to be reliable, but TNRA has not verified its accuracy and does not guarantee its reliability.

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Ashley M. Micciche, CEO

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