Member Advantage Articles

Retirement in Sight – April 2018

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What That First Year of Retirement May Teach You When any plan is followed through, there are lessons to be learned, refinements to be made. That certainly holds true for retirement plans. The initial year of retirement may prompt you to revise your monthly budget, your investment approach, and your lifestyle expectations. In fact, a shift in the investment markets might lead to revisions in all three areas. In addition, you will want to track real-world spending and see how it corresponds to your initial estimate. (Review your monthly bank…

Retirement in Sight – March 2018

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What Will $50,000 Be Worth in 25 Years? If you are on the verge of retiring, this question is well worth asking. You cannot know what the exact answer will be; you can, however, anticipate that it will be worth less. Inflation will exact a slow, but significant, toll on your retirement savings. Historically, consumer prices have risen about 2-3% per year. Your retirement fund should be growing at least that much annually; if not, your income and savings could effectively remain at current levels, while the goods and services…

How Retirement Spending Changes With Time

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Once away from work, your cost of living may rise before it falls. March 23, 2018 New retirees sometimes worry that they are spending too much, too soon. Should they scale back? Are they at risk of outliving their money? This concern is legitimate. Many households “live it up” and spend more than they anticipate as retirement starts to unfold. In ten or twenty years, though, they may not spend nearly as much.1 The initial stage of retirement can be expensive. Looking at mere data, it may not seem that…

Catching Up on Retirement Saving

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If you are starting at or near 50, consider these ideas. March 23, 2018 Do you fear you are saving for retirement too late? Plan to address that anxiety with some positive financial moves. If you have little saved for retirement at age 50 (or thereabouts), there is still much you can do to generate a fund for your future and to sustain your retirement prospects.  Contribute and play catch-up. This year’s standard contribution limit for an IRA (Roth or traditional) is $5,500; common employer-sponsored retirement plans have a 2018…

Retirement in Sight – February 2018

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After 55, Double-Check Your Preparations for Retirement When you enter your mid-fifties, your retirement plan enters its countdown phase. This is the time to examine key aspects of your retirement strategy. As you near retirement age, you want to evaluate your risk exposure. If a market downturn leads to a couple of years of investment losses starting when you are 60, your portfolio may have only a few years (or less) to recover by the time you retire. It may be time to shift from your longtime investment approach to…

Keeping This Correction in Perspective

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After 20 months of relative calm, this volatility needs to be taken in stride. February 13, 2018 Are you upset by what is happening on Wall Street? It may help to see this pullback within a big-picture context. Corrections have become so rare as of late that when one occurs, emotion threatens to influence investment decisions. So far, February has been a rough month for equities. At the close on February 8, the Dow Jones Industrial Average was officially in correction territory after a slide occurred, which included two 1,000-point…

Tax Deductions Gone in 2018

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What standbys did tax reforms eliminate? January 29, 2018 Are the days of itemizing over? Not quite, but now that H.R. 1 (popularly called the Tax Cuts & Jobs Act) is the law, all kinds of itemized federal tax deductions have vanished. Early drafts of H.R. 1 left only two itemized deductions in the Internal Revenue Code – one for home loan interest, the other for charitable donations. The final bill left many more standing, but plenty of others fell. Here is a partial list of the itemized deductions unavailable…

The Major Retirement Planning Mistakes

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Why are they made again and again? January 29, 2018 Much has been written about the classic financial mistakes that plague start-ups, family businesses, corporations, and charities. Aside from these blunders, there are also some classic financial missteps that plague retirees. Calling them “mistakes” may be a bit harsh, as not all of them represent errors in judgment. Yet whether they result from ignorance or fate, we need to be aware of them as we plan for and enter retirement. Leaving work too early. As Social Security benefits rise about…

Retirement in Sight – January 2018

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3 Important Retiree Tax Considerations After you retire, your tax situation will change. Recognizing that oncoming change is crucial. Some ideas that may seem smart from a pre-retiree standpoint might be ill-advised once you have transitioned into retirement. Other retiree tax concerns may not yet be on your mind. For example, tax-loss harvesting can be handy when your capital losses outdo your capital gains – when that occurs, you can use up to $3,000 of losses annually to offset ordinary income. You can also carry forward losses exceeding $3,000 to…