Retirement Roundup | June 2019 | The Favorites Edition

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 are looking back at our favorite Retirement Roundup articles over the last year to help you live a fulfilled and financially secure retirement!

We start off with an article about how Oprah turned sound investment advice from Warren Buffett into a $400 million investment gain in just under 3 years! Nice work, Oprah.

Then, we switch gears to some practical advice on how to cut out cable from your life, a popular choice for many these days!

Next, we discuss impulsive spending and what you can do to avoid it. We’ve all been in that situation and have regretted it later. We look at 5 helpful tricks that can help curb your impulses!

We follow up with a closer look in to the retirement age and why that magic finish line is becoming more and more arbitrary.

Keeping with the topic of retirement, we look at a better rule-of-thumb to help you understand whether or not you’re on track for retirement, based on your age and your income. *Hint: The higher your income, the more you’ll need to save to fend for yourself in retirement.

Lastly, we look at how you can stretch your retirement with a powerful tax-saving strategy involving the Roth IRA.

Enjoy this month’s installment of the Retirement Roundup!


(Emily Canal, inc.com)

One of the pillars of good investing is understanding a business before you invest. It may seem obvious, but many people let trends, market movements, and other non-fundamental criteria influence their investment decisions.

But really grasping a business and understanding its inner workings is a big contributor to Warren Buffett’s massively successful investment track record. Buffet has invested in Gillette razors, Coca-Cola, and other easy-to-understand businesses. This discipline to stick with what he knows (not what’s trendy) has been critical to his success.

Oprah Winfrey took that advice to heart in 2015, when she bought Weight Watchers stock for $7/share after trying the program herself. Oprah backed up the truck by investing $43 million in the stock and joined the Board. When the stock hit $100/share earlier this month, Oprah’s stake was worth nearly 10x her original investment.

She made nearly $400 million on her investment in just under 3 years! Nice work, Oprah.

The point here is that it’s critical to understand a business before you invest in it (or hire someone who understands it, like us ????).


(Derek Lakin, Highya)

If I wouldn’t be in the doghouse with my husband (forever!) I would have cut out cable years ago, way before it became the cool thing to do. I prefer quiet and a good book, and I never seem to find anything good on TV.  But I digress.  The national average for cable is $101.  That’s over $36,000 that you’ll pay for cable over the next 30 years (assuming cable rates stay the same….hahaha, yeah right!).

The must-haves when cutting cable: strong internet connection, streaming hardware, and a streaming service.

Step 1 – Maximize your internet speed.  “Pro tip: Depending on the location of your router, if you’re looking to maximize your existing bandwidth, you could purchase a signal booster or Wi-Fi extender, which can often be found for less than $40.”

Step 2 – Choose your streaming hardware.  Writing for Popular Science, David Nield points out, “Perhaps the most important choice you need to make is your preferred software: Just like phones and laptops, streaming devices have their own operating systems. So you should choose a platform that fits two criteria: It must play your favorite content and work well with the devices you already own.”

Step 3 – Choose your streaming service.  Lots of options here too! Netflix, Amazon, Hulu, YouTube TV, HBO Now, and many others.  “If you frequently enjoy content from a variety of premium cable networks, you’ll probably have to sign up for more than one streaming service to regain access after cutting the cord.”  It may be useful to take inventory of your TV must-haves, so you’re not left with buyer’s remorse when the sports programming is skimpy or you can no longer watch your favorite cooking show on your new streaming service provider.

So, how much money will you save by cutting out cable? The article analyzes a couple scenarios and explains some unexpected expenses associated with cutting the cord, to help you make an informed decision.


(Daniel Packer, sweatingthebigstuff.com)

Impulse spending is an issue for many of us. Just this morning, after dropping my kids off at their grandma’s house, I was in a good mood and I was feeling like a little treat – a matcha green tea latte.

It didn’t take much convincing. 10 minutes and $5 later, my impulse was satisfied (for now).

Sometimes it’s so hard to suppress our impulses, but there are 5 techniques Daniel Packer presents in his blog post that can help:

  1. Use cash. Studies show that we spend less (a lot less!) when we pay for something with cash. Dave Ramsey is a huge advocate for paying in cash via an envelope system and rightly so – it works.
  2. Make a list. This is a strategy that works extremely well for me. Whenever I go shopping, I bring a list. I tell myself that I can only buy one thing that is not on my list. Unless I’m at Target. Then no strategy will work. I’m not leaving there with less than 12 things that I don’t need and never intended to buy.
  3. Sleep on it. Ahhh, the ultimate antidote to impulse purchases. Tell your impulse: “Be quiet. I’m gonna deal with you tomorrow.” This is a great one for online purchases. Go ahead, put it in your cart. Then wait a few days or a week and see if you still really want it. Personally, I love this strategy and I use it all the time. I had a pair of flip flops in my Amazon “saved for later” cart for over a year. I finally deleted them because I realized I didn’t want them as much as I originally thought.
  4. Compare costs with your real wage. According to Packer, “You probably know how much money you make in an hour. Don’t forget that number when it comes time to shop.”
  5. Remember your goals. Impulse buying provides very short-lived pleasure. But saving for a longer-term or bigger goal – like retirement or that bucket list vacation – is much more satisfying. Awareness of longer-term goals can help reduce impulse responses.


(Christopher Robbins, Financial Advisor Magazine)

In a bold statement, speaker, author, & advisor coach, Mitch Anthony says: “Retirement is a social construct that no longer fits the age we live in. It’s an artificial finish line imposed upon our lives and based on age, and I can document this: The chief cornerstone of all retirement policy is nothing less than ageism.

Does society expect 60-somethings to retire to a lifestyle of lower productivity and fade into the background? Many Americans are rejecting the idea that they should retire at the arbitrary age of 62 or 64 or 68.

Anthony further encourages pre-retirees: “Get to the place financially where you can do what you want, with whom you choose, at the pace that’s comfortable to you—that’s a whole lot better than retiring.”

The key, for many, is to try to find the right balance between work and leisure in “retirement”. If you have questions about balancing and planning for a non-traditional retirement, we can help. At True North, we have the tools and expertise to help you design a life plan that will work on paper and in real life!


(Paul Katzeff | Investor’s Business Daily)

For many years, a common rule of thumb that has been helpful for Americans to better understand whether or not they’re saving enough for retirement is a multiple of annual income, based on your age.

The rule-of-thumb was popularized by a Fidelity Investments study, which suggested that by age 40, your nest egg should be triple the size of your income. It should be quadruple by 45. At 55, it should be seven times. And by age 60, it should be equal to your salary times eight.

And by retirement at age 67, it should be 10 times bigger than your final working salary. So, if you made $100,000 in your last working year, you would need a retirement portfolio of $1,000,000 to confidently transition into retirement.

Since then, more nuanced guidelines have been published by J.P. Morgan that expand that rule-of-thumb guidance based on your income. For example, at age 65, you’ll need 5.6x your income to be on track for retirement if you make $50,000/year; 8.4x if you make $75,000/year; and 14.2x if you make $300,000/year.

So why do Americans with higher incomes need to save so much more for retirement compared to their middle-class counterparts?

According to the article: “The more you earn, the more you’ll have to fend for yourself in retirement. Social Security covers a smaller amount of your likely retirement income – and likely living expenses – the higher your income is during retirement.”

For Americans earning $50,000/year, social security will replace about 35% of your pre-retirement income. But for Americans making $300,000/year, social security will only replace 11% of your pre-retirement income.

The takeaway from this article and the more detailed numbers from J.P. Morgan is that it’s important to understand how your age and your income will determine how much is enough for retirement.

Here’s a helpful chart to help you discover if you’re on track or not, based on your age and income:


(Gail MarksJarvis | Reuters)

A retiree profiled in Reuters, Bill Reichenstein (age 66), retired a few months ago. He plans to convert money from his Traditional IRA and 401k accounts to a Roth each year between now and when he turns 70 years old.

Reichenstein will pay income tax on the amount that he converts to a Roth, but that money will grow tax-free once it’s inside the Roth. According to the article: “Reichenstein figured out that the conversions will give him more than a couple hundred thousand dollars more than he would have had for retirement because of those tax savings.”

The strategy avoids taxes on RMDs on the amount converted, since Roth IRAs do not have RMD requirements, making this a powerful tax-saving strategy if you can handle the tax bite on those conversions.

Rather than doing one big conversion into a Roth which can be quite costly, converting over a number of years, like Reichenstein plans to do, can help to spread out the taxes on converted amounts over a period of several years.

The ideal window for Roth conversions is when you are retired, but before you start social security. Your income will likely be lower, which could reduce the taxes owed on amounts converted to a Roth.

This strategy requires that you a) understand your tax situation to determine if gradual Roth conversions make sense for you, and b) plan ahead to maximize the number of years to make Roth conversions.

Here at True North, we can help you determine if a Roth conversion strategy makes sense for you. Contact us at 503-387-6869 or email ashleym@truenorthra.com if you would like some help running the numbers on a multi-year Roth conversion strategy.


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Ashley Micciche of True North Retirement Advisors


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.

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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.

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