Avoid Running out of Money during Retirement

Are you ready for retirement on top of billsMany people wonder how much money they’ll need to have in order to retire comfortably. Unfortunately, there isn’t a magic number because there are so many different factors that must be taken into account. One of the sad truths about retirement is that you never know how long it is going to last. You can plan for when it is going to start, and you can estimate your life expectancy based on average lifespan and family history, but you have no real way of determining how long your retirement will be. So, the question then arises: how do you avoid running out of money during retirement?

The first thing to realize is that it’s never too late and it’s never too early to protect your future.

If you qualify for Social Security, you’ll never completely run out of money (unless Washington manages to drain the program). However, lowering your standard of living to what you can get from Social Security isn’t an appealing idea for most people. Saving for your retirement and planning through your retirement can help you maintain your standard of living.

Still, there are a lot of factors that you will need to consider when planning for your retirement in order to live comfortably through your retirement. You must account for taxes, spending, and inflation at the very least. Let’s take a closer look at how those factors affect your retirement savings.

Accounting for Taxes

Many people get an amount in their head that they want to have saved when they retire, but they forget to account for taxes. In order to avoid running out of money during your retirement, you’ll either need to save enough to cover the taxes that will apply to your savings or learn how to build a tax-free retirement plan.

Accounting for Spending

Your standard of living is generally about how much you spend. Finding ways to decrease your spending in retirement without decreasing your standard of living is the trick. One of the best ways to do this is to go into retirement debt-free and owning your house outright. If you can accomplish this, the equity in your home can also be used in extreme emergencies if needed.

Accounting for Inflation

Inflation averages about 3% per year, but health care costs can sometimes have a higher rate of inflation that you should also be aware of. You’ll also want to remember that the older you get, the more likely you are to need additional medical care on top of medical cost inflation.

Chuck Oliver, the creator of The Hidden Wealth System, wants to help you live comfortably in your retirement. The Hidden Wealth System is designed to educate our clients on how to increase their retirement income with little or no tax and with no market risk and and learn how to establish a tax-advantaged income for the rest of their lives. Contact us today to learn more.

 

Business Owners Are Not Saving Enough for Retirement

Piggy Bank with no money

As a responsible business owner, you have a lot on your plate:

  • You make sure that your employees, vendors, and creditors are paid what they are owed.
  • You work an extraordinary number of hours running your business.
  • You work diligently to make sure that your entire operation is running smoothly.

Unfortunately, all of this means that you have little time and resources left over to plan or fund your retirement.

Many business owners have at least some expectation of either making their business so profitable that they will be able to live off of the earnings without the long hours or of selling their business and funding their retirement off of the proceeds. The hard truth is: neither of these situations is particularly likely to happen. If your business does become successful enough that you are able to sit back and not work, congratulations! But you’re in the minority.

As for planning to sell your business to fund your retirement, that may not work either. Of the 1.2 million businesses that go up for sale in any given year, only about 25% of them actually result in completed sales. And of that 25%, even fewer are sold for their true value. That means that you have a less than 1 in 4 chance of actually being able to retire on the proceeds of selling your business.

You’re a business owner, so you’ve got to be comfortable with taking calculated risks, but do those odds sound promising to you? What you need to do is make up for lost time and money. You need to learn how to use alternative retirement vehicles that will support the amount you need to finance your future income needs.

You had to think outside of the box to establish a successful business; now it’s time to think outside the box about your retirement. Chuck Oliver and his team at The Hidden Wealth System utilize a plan that can help you increase your retirement income by 50% or more with little or no tax and no market risk. You can also learn how to establish a tax-advantaged income for the rest of your life, one that can transfer tax-free to future generations. Contact us today to learn more!

4 Ways to Reduce Your Cost of Living for Retirement

Older couple planning their retirementGenerally speaking, most people will be living on less money in their retirement years than they are accustomed to. Even if you have saved enough money to maintain your income level, aging bodies require more upkeep and rising healthcare costs can drastically cut into your monthly budget in your twilight years. In order to help you retire with the money you’ll need to live through your retirement, Chuck Oliver created The Hidden Wealth System. Today we wanted to discuss four ways that you can prepare for retirement by reducing your cost of living.

1. Eliminate Your Debts

One of the easiest ways to improve your monthly budget and reduce your cost of living is to eliminate as much debt as possible before you retire. House payments, car payments, and especially credit card payments eat away at your monthly budget. Even if you’re trying to live on less income, eliminating your regular monthly debt payments can drastically increase the amount of money you have to spend on other things.

2. Downsize Your Home

In addition to paying off your home, you may want to consider downsizing your home right around retirement time. You no longer need the extra rooms or to live near a good school district, so downsizing just makes sense. Selling your large home and buying a smaller, less expensive home or condo can allow you to take the extra money and pad your nest egg. Also, if you make the move to a smaller home, you have fewer rooms to heat and cool, which can save you money on your utility bills, and if your new home sits on a smaller lot, you can also have less yard work that needs to be taken care of.

3. Consider Moving

While you’re looking for your new home, you may want to consider moving to a location with a lower cost of living. Many smaller cities have lower housing prices and more affordable amenities, making them ideal for retirement living. You’re no longer tied to your job, so you don’t have to worry about living within easy commuting distance. Look for places with great healthcare facilities as well as affordable housing and recreation.

4. Sell a Vehicle

Without the necessity of a daily commute, many retired couples can get along quite well with only one vehicle. Making the decision to sell an extra vehicle can have several benefits for the soon to be or newly retired. The money from the sell can add to your nest egg, but you also reduce your monthly expenses by eliminating the fuel, maintenance, and insurance costs associated with the extra vehicle.


As you plan your retirement, we hope you’ll consider using these four tips to reduce your future cost of living and make your life a little easier. Start today to work toward a better retirement.

Student Loan Debt Is Negatively Impacting Retirement Savings

Dangers of student loansStudent loan debt is an increasing burden on many Americans, and it’s having a huge impact on their lives from graduation to the grave. Recently, a survey conducted by American Student Assistance® (ASA) highlighted some of the negative effects that mounting student loan debt is having, including:

  • 27% said it is difficult to buy daily necessities because of their student loans;
  • 63% said that it has affected their ability to make larger purchases like a car;
  • 75% said that their debt has affected their decision or ability to purchase a home; and
  • 73% said that they have put off retirement savings or other investments.

These postponements frequently turn into very real, very tangible shortcomings in retirement. One study found that $53,000 in student loan debt, which is the average for a household with two adults, turns into a diminished ability to build up retirement savings to the tune of $134,000.2 Obviously, the higher the debt, the bigger the problem can become.

These shortcomings aren’t lost on the student debtors either. A staggering 80% of people aged 30-54 don’t think they’ll have enough money to be able to retire when the time comes. It’s not difficult to see how the accrual of these debts can affect your ability to save. Yes, investing in your education increases your ability to earn, but you also need to make sure that you are focusing on your future at least as much as you focus on your present.

It’s a vicious cycle: many debtors feel that they can’t afford to pay on their debt and save for their retirement, but the longer they put off investing in their retirement, the harder it becomes to save enough to secure a strong financial footing. However, you should always remember that it’s never too late and it’s never too early to start protecting your future.

Chuck Oliver and his team at The Hidden Wealth System want to help you learn how to use the same model that banks use to keep people in debt to get yourself out of debt. You can learn how to get to zero the quickest way possible without changing your budget. This can generally be accomplished by addressing the order of how and what you pay. Start today to Secure Your Retirement!

Sources:

1 http://www.asa.org/site/assets/files/2205/life_delayed.pdf

2 http://usstudentloanconsolidation.org/student-loan-debt-2/5-ways-student-loan-debt-affecting-senior-citizens/

 

Avoiding the Retirement Crisis

My name is Chuck Oliver, a wealth architect and best-selling author, and I want to talk to you about the retirement crisis. The retirement crisis is very real. According to a 2013 study by the National Institute of Retirement Security, “The average working household has virtually no retirement savings.” In fact, the study found that 45% of working-age households (25 to 64) do not have any retirement account assets, and the median retirement account balance for these households is only $3,000. Additionally, four out of five of these households has less than one time their annual income in retirement savings. It’s not just younger adults either. Near-retirement households (55 to 64) were found to have a median retirement account balance of only $12,000, and over 63% of them were found to have less than one time their annual income in retirement savings.

So how do you avoid the retirement crisis? The short answer is that you educate yourself and start saving now. I’m here to tell you that the earlier you start saving, the better it will be for you in the long run. Let’s look at some simplified numbers to illustrate this point. These illustrations won’t include taxes, interest, etc., just simple savings numbers.

Saving Example 1

Retirement budget

Saving Example 2

Budget for retirement

Obviously, everybody’s savings goals for retirement are different, but as these charts illustrate, the earlier you start saving, the easier it is to reach your savings goals. It’s also important to learn the difference between planning to retirement and planning through retirement. You don’t just want to plan to reach retirement; you should plan to be able to enjoy it and live the retired life you’ve always dreamed of.

You should start by setting a goal (with or without a financial advisor) and figuring out the best way to pursue it. While it may seem like you have to deprive yourself of things today for some nebulous future, I believe that doing with less now will allow you to have a much better future when it comes. And it’s coming faster than you think!