Run the numbers. There is a rule of thumb for retirees suggesting that retirement income has a target of 70-80% of the household’s end salary, though this can certainly vary. So, years before leaving work, sit down (perhaps with the financial professional you know and trust) and take a look at your household’s monthly expenses.
The closer your household gets to retirement, the more exact you will want to be about your income needs. You first want to look for changing expenses: housing costs that might decrease or increase, health care costs, certain taxes, travel expenses, and so on. Next, look at your probable income sources: Social Security, your assorted retirement savings accounts, your portfolio.
Mistakes happen, even for people who have some life experience under their belt. That said, your retirement strategy is one area of life where you want to avoid having some fundamental misconceptions. These errors and suppositions are worth examining, as you do not want to succumb to them. See if you notice any of these behaviors or assumptions creeping into your financial life.
Ever heard the term “strategic investing”? How about “tactical investing”? At a glance, you might assume that both these phrases describe the same investment approach.
While both approaches involve the periodic adjustment of a portfolio and holding portfolio assets in varied investment classes, they differ in one key respect. Strategic investing is fundamentally passive; tactical investing is fundamentally active. An old saying expresses the opinion that strategic investing is about time in the market, while tactical investing is about timing the market. There is some truth to that.
What changed for you in 2018? Did you start a new job or leave a job behind? Did you retire? Did you start a family? If notable changes occurred in your personal or professional life, then you will want to review your finances before this year ends and 2019 begins.
Even if your 2018 has been relatively uneventful, the end of the year is still a good time to get cracking and see where you can plan to save some taxes and/or build a little more wealth.
Volatility will always be around on Wall Street, and as you invest for the long term, you must learn to tolerate it. Rocky moments, fortunately, are not the norm.
Keeping your accounts current, lowering your credit usage, and fixing errors on your credit report can have maximum and immediate impact on your credit score.
Your credit score makes your financial world go round. It is the standardized way that the financial world determines if you are a financially responsible person. The more responsible they determine you are, the less risky you seem and, as a result, the less interest you will typically have to pay and vice versa.
What is the benefit of a solid credit score?
There are many. For starters, lower interest rates on personal loans, mortgages, credit cards, and insurance policy rates. In addition, it can eliminate the need for security deposits and even help you get that job that you’ve been aiming for.
The dust hasn’t yet settled, but a few things about the new tax law seem clear. Employees may have noticed a difference in their paychecks, and some projections put the average worker’s additional spendable income at about $2,000 per year.
What they will do with that income remains to be seen. While many will be tempted to improve their standard of living through purchases, you may be able to encourage them to take a longer view. As the increase in take-home pay is beginning to kick in, now could be the perfect time to point out reasons to increase retirement savings. Better yet, it might be the right time to amend the plan to allow for automatic increases in deferral amounts.
You can’t always envision what will happen in your “second act.”
Just as few weathercasters can accurately forecast a month’s worth of temperatures and storms, many retirees find their futures unfolding differently than they assumed. Your assumptions may be tested as well.
You may retire sooner than you anticipate. A majority of pre-retirees polled in the 2016 Transamerica Retirement Survey believed they would still be working at age 65, and you may be similarly confident. Unforeseen events might surprise you, though. A health challenge, a layoff, or the need to care for a loved one may lead you to retire earlier. The average retirement age in America is not 65, but 63. If you retire at 63, you can claim Social Security but you will likely be ineligible for Medicare. 
You may need less money as you age. This is because retirees generally spend less than pre-retirees. Government Accountability Office data shows that Americans spend the most from age 45-49. On average, people aged 65-69 spend 20% less than that. Those 80 and older spend 46% less. 
You and your significant other could need more “me time.” When a couple retires together, a relationship may change – to the point where spouses are together nearly the whole day. Some couples like that; others don’t. 
Living on less income will become your norm. That means you may have less money for discretionary spending – shopping, eating out, and splurging – than you once did. Earning significant income in retirement may be a challenge, and earning too much may result in your Social Security benefits being taxed.
As retirement draws near, a review of your retirement plan is vital.
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This material was prepared for LMC Financial Services and does not necessarily represent the views of the presenting party, nor their affiliates.
This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.
If you are like many investors, researching, selecting, monitoring, and adjusting your investments and asset allocation within your retirement plan can be a time-consuming burden. One possible strategy to consider may be a target-date fund. 
A target-date fund takes much of the decision making out of which asset classes to own, at which percentage weights, given your estimated retirement date. As that “target” date approaches, the manager of a target-date fund automatically adjusts your allocations to reduce your market risk.
Here are some basic facts about target date funds that you should know before you buy:
In general, women need more and save less money for retirement than do men. Overall, women accumulate less money for retirement than men, yet because they have a longer lifespan, the need for savings is greater. And because men die earlier, women may live out the end of life in a single income household.
The reasons women save less may be that they go in and out of the workforce to care for a family, work part time, and work in jobs that are more flexible and often, therefore, pay less. A study (Planning and Financial Literacy: How Do Women Fare?, Annamaria Lusardi And Olivia S. Mitchell, National Bureau Of Economic Research, January 2008) found there is also a difference in financial knowledge between the sexes, which can result in a too-conservative approach to investing.
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