One of the most important elements of retirement planning is analyzing a host of unknown variables including our predicted life expectancy, our future expenses, and the income we will need to cover those expenses without sacrificing our quality of life. More often than not, retirement income is generated from multiple different sources such as pension plans, IRAs, and investment income, to name a few. It’s likely you’ve also imagined social security benefits funding a portion of your retirement. After all, we spend our entire working lives paying into the program with the expectation of receiving future benefits.
As the cost of college tuition and fees continues to skyrocket, so too does the consumer debt incurred to fund post secondary education. According to Forbes, student loans make up the second highest category of consumer debt, only behind mortgages and ahead of credit card and auto loans. With 44 million borrowers owing in excess of $1.5 trillion in U.S. student debt alone, it’s no stretch to say that countless Americans are caught in a student debt crisis that shows no sign of improving.
Have you ever heard someone say that experience is the best teacher? How about “there are no mistakes, just lessons”?
We’d like to take a slightly different tack on these age-old maxims. Experience isn’t the best teacher, but someone else’s experience can be. Learning from other people’s mistakes can save us a lot of grief.
After years of investing your time and energy into building a successful business, you’ve decided it’s time to move onto the next chapter of your life. Whether you are heading into retirement or simply want to focus on a new business venture, having a well thought out transition plan in place can help to maximize your profit, mitigate post-sale taxes, and secure the financial future you desire.
Since selling a business can be a complex endeavor, we’ve put together a checklist to help you make the planning process go as smoothly as possible.
Financial Considerations for Managing Life After the Loss of Your Spouse
Whether the passing is sudden or somewhat expected, losing a husband at any age is traumatic and can raise many questions and worries about the future. The term “widow” conjures up thoughts of loneliness, yet thousands of women suddenly find themselves facing this reality every year. It is a major transition in life, and too often important decisions and responsibilities are set on hold or sometimes forgotten altogether.
So often, as women, we dedicate our lives to taking care of those we love—our spouses, our children, our parents, or our grandchildren—and neglect to take time to inventory our own well-being, especially regarding finances.
The recent tax reform, officially known as the Tax Cuts and Jobs Act (TCJA) of 2017, was the biggest change in the tax code in over 30 years. The overhaul covered both individual and corporate income taxes. Most will see their tax bill decline when they file, but a few folks may see a sharper bite.
Let’s touch on some of the changes at a high level.
As 2019 approaches, and with US stocks outperforming non-US stocks in recent years, some investors have again turned their attention towards the role that global diversification plays in their portfolios.
For the five-year period ending October 31, 2018, the S&P 500 Index had an annualized return of 11.34% while the MSCI World ex USA Index returned 1.86%, and the MSCI Emerging Markets Index returned 0.78%. As US stocks have outperformed international and emerging markets stocks over the last several years, some investors might be reconsidering the benefits of investing outside the US.
Most people don’t plan on working forever, so we all know it is imperative to lay the groundwork for our financial future. Maybe you already have a diversified portfolio that you have been building over the course of your working life. The challenge many retirees face is figuring out how to generate a predictable income from the wealth they have built over the course of their lifetime. No one wants to have to live a lower quality of life—you want to be able to maintain your current lifestyle throughout retirement. This process is known as “building a retirement paycheck.”
Everyone will approach retirement with different goals, needs, resources and risk tolerance levels. It is important to take a detailed and honest inventory of each of these factors to determine how much money you will need to “pay yourself” each month or year of retirement.
You've conquered your professional goals, and now it's finally time to settle into some well-deserved downtime, dedicated entirely to you. But before you can plan your retirement party and start making travel plans, you have to make sure all your affairs are in order.
In other words: You're ready to start seriously thinking about retiring in the next few years, but you're unsure if you're financially prepared to do so. You're not alone. A recent study conducted by the Boston College Center for Retirement Research found that 40 percent of working-age Americans have an unrealistic understanding of their progress toward secure retirement.
Life happens quickly, bringing a continuous mix of opportunities, uncertainty and even potential peril. The British saying from World War II Keep Calm and Carry On gives us insight into how a population kept themselves together when faced with grave and prolonged uncertainty. Now in the 21st century we need a new version of this motto, Keep Calm and Carry Very Little. We also need a skill set to put the motto into action. At Northstar, we talk about How to Thrive While Life Happens.
