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The Pros and Cons of Retiring at Different Ages

The Pros and Cons of Retiring at Different Ages

While retirement sounds like an absolute dream, getting there can often feel a little stressful. Are you saving enough? How much do you really need? Will the market be favorable when you do? And, the big one: When can you actually retire?

 

Narrowing down the best time, or really the best age, for you to retire comes with a lot of considerations, especially what sort of lifestyle you want to have in retirement. So, we’ve put together this list of the pros and cons of retiring at different ages to help guide you to your ideal retirement window.

Retire Before Age 65

 

Retiring before age 65 is traditionally “early” and is what most of us would like to do. However, the Center for Retirement Research data shows that most Americans retire before or at age 65 with men retiring at an average age of 65 and women at an average age of 62. But is an “early retirement” right for you?

Pros

The two biggest advantages are that you are likely to have more energy and better health at a younger age. Plus, shifting from a full workday to either a part-time job, monetizing a hobby, or finding volunteer opportunities can help make the retirement transition easier.

Cons

Your retirement funds will also have to last longer if you retire early. Leaving behind your career and what are probably your highest earning years early will mean you could be leaving however many years of potential retirement savings (and potentially an employee match) behind. Plus, while you are eligible for Social Security at age 62, your monthly amount will be less if you don’t wait until you are old enough for your full benefit. And, finally, you will need to have a plan for health insurance since you won’t be able to get Medicare until age 65.

Retire Between Ages 66 and 70

 

Sixty-five has been viewed at the age of retirement since Social Security was established. However, as of 2022, Social Security views the full retirement age at 66 for those born between 1943 and 1959 and at the age 66 plus a few months depending on your exact birth year if you were born between 1955 and 1959. For anyone born after 1960, the full retirement age is 67.

Pros

Getting a few more years of savings and investing on top of waiting until you are eligible for both Medicare and your full Social Security benefit can make a huge difference in your finances. Private insurance premiums and prescription co-pays are not cheap after all. Plus, you paid into Social Security all of those years. So even if you have a pension and other retirement savings accounts, waiting just a few more years to get your Social Security benefits will ensure you get the full amount you are eligible for.

Cons

Well, you saw the data above. Most Americans aren’t waiting to age 66 to retire and most don’t want to. So waiting those extra years could feel like you’re back in school waiting for that last month of school to get over.

Retire at Age 70 and Older

 

If you’re in the group of folks who have to wait until 67 to get their full Social Security benefits, waiting just another couple years may not seem too bad. But is there anything to gain or lose?

Pros

Some folks just love their work and feel like they would be lost without it. And that’s OK! So continuing to work longer may be better for you mentally and emotionally if you fall into that category. Plus, if you wait until age 70 or older to start taking your Social Security benefits, your payout will be the highest on top of the extra years of retirement savings and investing. You may never have to worry about having enough money in retirement.

Cons

You will not be able to predict what your energy level or overall health will look like as you get older. Your health could start declining before you retire or after. You could be giving up the opportunities to travel or do other things you enjoy that you always planned to do in retirement if you wait. Even if your nest egg is larger, you could end up not having enough time to use it.

 

Finding the Right Answer

 

There is not really a right or wrong answer to when you should retire. Each person and your unique circumstances can change and so can the financial landscape. Many of our clients even benefit from doing a “test run” on their retirement plan before they actually leave work to see if this changes their perception of their need. Either way, we encourage you to lean on an expert to help guide you to a retirement plan that works best for you.

 

At Platt Wealth Management, we empower our clients to lead their best lives by providing them with the financial expertise they need. We help our families think through their goals, and even dreams they never thought possible. Then, we work together to put in place financial options that give them peace of mind. Schedule a call with our team today to discuss your opportunities.

 

 

 

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

5 Things to Consider about Cognitive Decline and Retirement

5 Things to Consider about Cognitive Decline and Retirement

No one wants to admit when getting older starts affecting them. It can a sore subject that hurts an individual’s sense of pride and confidence in their ability to care for themselves. Think about how many stories you’ve heard of adult children having to have a talk with their elderly parents about no longer driving because their eyesight has significantly deteriorated or how stubborn a grandparent can be about using their cane or walker even though they are clearly in pain and struggling.

 

But not all ailments are physical. What about mental atrophy? A recent study shows that 10% of Americans over 65 have dementia and 22% experience mild cognitive impairment. The risk gets worse as you age, research shows, with half of all people in their 80s showing at least some mild cognitive impairment, which likely still allows them to live alone, but can make it difficult to stay on top of all the information required to manage money.

 

Cognitive decline is a risk we don’t often associate with the money side of retirement but is something everyone ought to consider. Here’s why.

 

1. Retirement is Already Complex

 

Navigating the complexities of the stock market and living off your retirement savings, including taxes and sequence of return risk, is already a tenuous balancing act for the majority of DIY investors. Add cognitive decline to keeping up with required minimum distributions (RMDs), balancing a portfolio to avoid overexposure to risk, and remembering important deadlines and you’ve got enough to add stress to even the most experienced investor.

 

2. Missed Bills can be Disastrous

 

Today, keeping up with all of your financial obligations, such as monthly bills and donations, may be a nuisance, but add in cognitive issues and it can be a tall order. Miss the wrong bill, such as a Medicare payment, and you could be dealing with a more serious issue like a gap in health insurance coverage.

 

3. Get Family Involved Early

 

Everyone seems to have a horror story about extended family or a close friend’s family waiting too long to get important paperwork completed and then their loved one is too far gone to be legally able to sign. The headaches and legal work that situation creates can last months, if not years. So, talk to your loved ones now about the different “what if” scenarios that can arise, including cognitive decline, and get a financial power of attorney lined up who has the legal ability to act on your behalf should you need help even with just making sure your bills are paid and any other money management tasks are completed.

 

4. Scammers are Targeting You

 

Your favorite grandson is on the phone and he sounds desperate. He’s in huge trouble and needs you to send $50,000 to him right away. He does sound slightly different, but, hey, who wouldn’t in a time of extreme stress like this? And this is just one way hundreds of thousands of grandparents have been scammed out of money. Having an extra layer of protection, such as a trusted family member as a financial power of attorney, can help safeguard you and your assets from scams and even would-be hackers.

 

5. Lean on the Experts

 

Sometimes, you need an unbiased expert in your corner as another layer of protection and help, especially if your family can be a little overwhelming. Plus, there are plenty of great family relationships that money can complicate. A financial advisor can listen to your concerns and wishes and then help you build a plan to protect your assets in case of cognitive decline. They also will help guide you to the right steps and paperwork that needs to be completed for powers of attorney, insurance coverage, and more to make sure you are taken care of and your wishes are met.

 

Need Help?

 

Retirement should be enjoyable and carefree. Let us help you safeguard your assets and prepare for whatever the stock market or life throws your way.

 

 

 

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Top 3 Reasons You Should Stay Invested During These Volatile Markets

Top 3 Reasons You Should Stay Invested During These Volatile Markets

Investing is one of those endeavors that requires a lot of trust—trust in the long-term return potential of the markets, trust in yourself if you are a DIY investor, or trust in your financial advisor if they manage your investments. Trust is easy to come by in a bull market when everything is looking up. But throw in volatility, and it can be harder to remain disciplined and keep trusting your long-term plan.

 

You know you must remain invested to allow your money to grow, but have moments when you wonder if you’d be better off moving some of it to cash or safer securities.  What should you do?

 

As financial experts, we want to help, so we’ve put together this list of the top three reasons you should stay invested during volatile markets.

 

 

1. Volatility Just Creates Blips

The stock market overall has grown by 3,000 times since 1950, and bear markets have only occurred every fifth year since World War II. So, when you look at the big picture, volatile markets have really just been small blips on a really long climb up.

 

The initial panic at the beginning of the COVID-19 pandemic serves as a good example of what can happen when individual investors make drastic changes during volatile periods. Vanguard research shows that 86% of self-directed investors who got out of the market between February 19, 2020, and May 31, 2020, not only locked in losses but also missed out on the market rebound.

 

While that period saw a 34% fall in the S&P 500, it also saw a subsequent 36% rise. Investing in the stock market traditionally has almost always paid off for those who have stayed patient and disciplined even during periods of extreme volatility.

 

 

2. There is No Good Time to Time the Market

We get it. When the market continues to go wild after many months, the temptation to try to time the market grows, whether you are more motivated by wanting to limit losses or taking advantage of buying low while you can.

 

Unfortunately, what happens the majority of the time when investors give into that temptation is that you end up selling low and re-buying at higher prices for an overall big net loss.

 

Remember all of the cliche sayings:

  • Time in the market always beats timing the market.
  • Investing is a marathon; not a sprint.
  • Play the long game.
  • Stay the course.
  • Keep your eye on the prize.

 

These are all cliches for a reason, because they are all true.

 

 

3. You Have a Diversified Portfolio for a Reason

Whether the market is currently fluctuating like crazy or not, going completely all-in on one kind of investment is super risky. That is why your portfolio is diversified and balanced to your unique risk level and time horizon at all times. This means you have a mix of investments that won’t all behave the same way when the market declines and your investments make sense for how close to retirement you are and how well your nerves can handle fluctuations.

 

Better yet, you should have an advisor to manage your portfolio if you don’t already. According to a study by Russell Investments, a financial advisor can increase your returns by 3.75%, and another study by Ramsey Solutions says that 44% of investors who partner with an advisor have $100,000 or more saved for retirement versus just 9% who do it by themselves.

 

An advisor can also help keep you on track and away from emotional investing decisions when FOMO and panic start to set in during incredibly volatile markets.

 

 

Schedule a Complimentary Consultation Call

At Platt Wealth Management, we empower our clients to lead their best lives by providing them with the financial expertise they need. This includes supporting you (not just your portfolio) through volatile markets. Of course, we are always working to reposition your portfolio to capture the upside in any market, but we are here to help put your mind at ease and guide you when the financial markets aren’t on the upward trend.

 

If you are a current client and are concerned about today’s market conditions, we encourage you to reach out. We are always here to answer your questions.

 

If you are not a current client but are looking for a financial advisory firm that puts you and your money first, we’d love the chance to chat. Simply schedule your complimentary introductory phone call here or call the office directly at 619-255-9554.

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

How to Test Run Your Retirement Plan (for Greater Success and Fulfillment Later in Life)

How to Test Run Your Retirement Plan (for Greater Success and Fulfillment Later in Life)

Sometimes long vacations can seem like a test run for retirement. Long walks on the beach. Endless rounds of golf. All the umbrella drinks you want. But there’s more to retirement than just all the cliches of tropical relaxation.

 

You are going to have plenty of regular days at home. But what will those look like? And how will you feel about being retired and on a “fixed” income? Are you confident in your current retirement plan to keep you not only financially comfortable but also enjoying life all the way to the end?

 

Here are three ways to test run your retirement plan for greater success and fulfillment later in life:

 

1. Start Thinking Like a Spender

No, we don’t mean to start spending frivolously.  We mean to start wrapping your mind around the idea that you will be moving from a saving mindset to a spending one. Because you will have chosen to invest wisely with the help of a trusted financial advisor, you will likely be receiving an income from your assets. But, for many folks, it can be a mental mind twister to no longer have a paycheck coming in (even if you owned your own business).

 

Some recent research from BlackRock and the Employee Benefit Research Institute showed that even after 17-18 years of retirement, retirees across all levels of wealth had 80% of their pre-retirement savings remaining. And that was even more likely for high-net worth individuals, who have assets worth more than $1 million.

 

You’re going to have to trust yourself and trust your retirement plan that you have enough to support the retirement lifestyle you want for the rest of your life. And enjoy it!

 

 2. Start Figuring Out Your Budget

  

A budget can really help you get into the right “spending versus saving” mindset. Now, a lot of folks think a budget means that you are limiting your spending, but a budget simply means telling your money where to go. And by figuring out a budget now, you will already have a game plan come retirement. No one wants to be the person who runs out of money, but you also don’t want to be the person who has millions just sitting in the background while you watch your life pass your by. It’s your money. You should leverage it to help you meet your goals, but also to make sure you live a fulfilling final chapter.

 

Once you have your budget all written out or put into a spreadsheet or app  — whatever works best for you (and your spouse) — take it for a test drive. See how it works for you for a month or so. You can make the necessary adjustments now so you’re ready once retirement comes along. You may uncover that you need more or less than you anticipated and can work with your financial advisor to make modifications as needed.

 

3. Start Planning a Routine

Aside from the money aspects, you also need to consider your time. It makes sense that all you can think of now is how great it’ll be not to have a plan. No meetings, no deadlines, no responsibilities. Woohoo! But, throwing routine completely out the window can be a huge change to you mentally and physically. Just think about the first few weeks of the pandemic when we were all asked to stay inside. It was certainly strange for many of us!

 

Often, mental health can be a touchy subject for some, but you do need to consider what a change in routine will do to yours. Remember that you will have had a schedule from the time you started school in kindergarten or preschool all the way through your working career. That’s a long time! And mental health can especially be a struggle for newbie retirees. Even before the COVID-19 pandemic caused depression and anxiety to skyrocket in adults of all ages, one in 10 (11%) older adults — those age 65 and older — reported depression or anxiety on the 2018 Medicare Current Beneficiary Survey. Consider printing out a calendar and writing up a model week of how you think you may spend your time, including when you will take care of non-negotiable responsibilities, your physical health, socialization, and household responsibilities to protect your mental health in this new stage of life. 

 

Still Need Some Help Preparing for Retirement?

 

Don’t have a retirement plan yet? Not confident in your current plan? Or simply need a retirement plan check-up? No matter where you are in your retirement planning journey, our team can help. Simply schedule an appointment with one of our trusted advisors to discuss your opportunities today.

 

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

How to Take Advantage of the Inflation Reduction Act

How to Take Advantage of the Inflation Reduction Act

Have you considered switching to a more energy-efficient vehicle or perhaps adding solar panels to your home? How about a new water heater? With inflation on the rise, you may have been holding off on some of these larger purchases, but the government incentives passed with the Inflation Reduction Act may just cause you to reconsider.  

 

Following politics, especially in today’s divided times, isn’t everyone’s favorite pastime, so you may not be keenly aware of the opportunities made available by the passage of the Inflation Reduction Act.  Changes to Medicare and the Affordable Care Act seem to grab the most spotlight, but you would be remiss to ignore the other main components of the legislation: energy and climate. Starting in 2023, several tax credits will be available for Americans who switch to greener energy sources.

 

For a more in-depth look, here are three ways you can take advantage of the Inflation Reduction Act (IRA):

1. Electric Vehicles

Many Americans have started considering moving to an electric vehicle after gas prices hit record numbers. If you’re one of them, the time to buy may be now. The IRA adds incentive by offering tax credits up to $7,500 on a new electric vehicle and up to $4,000 on a used one placed into service after Dec. 31, 2022.

 

Even if you weren’t already thinking about getting an electric vehicle, you may want to change your mind. It seems the writing is on the wall for gas-powered cars, as California just banned the sale of new gas-powered cars by 2035 and even Ford is shifting to electric vehicle production. And you have time. The tax credit runs through December 2032.

2. Home Efficiency Updates

Homeowners looking to upgrade their home(s) may want to take advantage of the two tax credits and two rebate programs available for certain upgrades.

 

Installing energy-efficient insulation or exterior doors and windows are worth a 30% tax credit up to $1,200 per year. If you update or install heat pumps, heat pump water heaters, or biomass stoves and boilers, the cap increases to $2,000. There is also a 30% tax credit for installing solar panels or other renewable energy sources like wind, geothermal, and biomass fuel. To be eligible, projects have to be finished after Jan. 1, 2023 and before 2034, and, like all tax credits, the savings can only be realized once you file your income tax return.

 

In addition, the IRA established rebate programs that offer either up to $8,000 or up to $14,000 but you have to make 150% or less than your area’s median income, which is established by the U.S. Department of Housing and Urban Development. The HOMES Rebate Program covers upgrades that increase your home’s overall efficiency via upgrades, such as solar panels or new windows. The High-Efficiency Electric Home Rebate Act (HEEHRA) offers rebates for switching to electric appliances and doing other electric retrofitting like:

  • Electric stoves, cooktops, ranges, ovens, and clothes dryers
  • Electric wiring
  • Heat pump water heater
  • Heat pump for space heating and cooling
  • Insulation, air sealing, and ventilation

3. Prescription Drugs

Of course, the health care portions of the bill could help as well. For those old enough to be on Medicare, the IRA puts a $2,000 per year cap on out-of-pocket prescription drugs. This won’t take effect until 2025, so even those about to retire should keep their eyes open for ways to save, especially if you are diabetic. The IRA caps insulin costs at $35 a month.

Need Help?

We know that you’re used to us handling your investments and helping you with the most efficient tax strategies, but all major money decisions affect your financial plan—even if it’s just making some home or vehicle upgrades.  That’s why we want you to be aware of these incentives. They won’t last long, and we’d like you to take advantage if you wish. At Platt Wealth Management, we’re always here to help, even for life’s simpler decisions, like these.

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Reinventing Yourself in Retirement

Reinventing Yourself in Retirement

Typically, when you start thinking about or talking about retirement, the main topic of conversation is about money. But the whole idea of retirement is to get to enjoy the rest of your years however you want!

 

Before and during your working years, you likely had to make many sacrifices and answer to your parents, bosses, or anyone who wasn’t yourself. But now you get to become and/or celebrate the version of yourself you always wanted to be without any burdens or expectations.

 

So, even as your financial advisors, we are going to tell you to forget all of those questions about finances, RMDs, and Medicare. And instead, ask: How do you want to spend the rest of your life? And here are five tips for reinventing yourself in retirement to get you started:

 

 Determine Your Passions

 

What are you passionate about? These can be hobbies or causes or something as simple as only drinking really good wine. But don’t pigeonhole yourself. What you are passionate about does not have to be the same as what you’ve always done.

 

Try to remember that you are under no obligations in retirement. You don’t have to impress anyone. So, what do you really care about? Once you have made that list, you then know what to refer back to when it comes to the rest of the tips.

 

Consider Your Goals

 

You’re not working anymore, but that doesn’t mean you can’t set any goals. We’re not talking about some big strategy; just whatever you want to accomplish while taking your passions into consideration. This helps set a list of priorities and even an order to those priorities.

 

For example, if traveling is a passion, then setting a goal of visiting all of the destinations on your bucket list by a certain date would be a good idea. None of us know how long our health will last, so putting anything more physical toward the top of your priority list is a good strategy.

 

Whatever your goals, just make them your own and ignore any naysayers.

 

Find Your Place

 

Where do you see yourself spending your retirement? Where should you be in order to be able to pursue your passions and accomplish your goals? That location could be right where you are and in a house that is paid off and can fit your whole family at Christmas. But it also could be somewhere entirely new.

 

Don’t be afraid to change location in whatever way that makes sense to you. Maybe you are a lifelong suburbanite who has always longed for a beach house or city apartment. Maybe you wish to spend the rest of your life with a family who currently lives on the other side of the country. Or maybe you love your current house’s location but hate the kitchen. Your surroundings make a big difference in your day-to-day happiness. Find the right place for you to spend retirement.

 

Establish Your Boundaries

 

Life and retirement are too short to spend with people who don’t bring you joy. You are under no obligation to spend time with people you don’t like. No more people from work you tolerate just because they’re your co-worker. You don’t need to impress anyone. And just because you’ve been friends with people for years, doesn’t mean you have to spend your well-deserved time and money in retirement to see those people if you don’t like them.

 

But you also can set expectations for other people. If you expect your children to spend at least one holiday per year with you, then talk to them about it and how important it is to you. Setting boundaries can be hard, but more often than not, they help create a healthier mental and emotional environment for yourself and those you care about.

Push Your Agenda

 

You will likely have at least one living parent and at least one adult child when you retire. You’ve done a lot of caregiving in your lifetime. It can be easy to continue that role in retirement when you seemingly have more time but don’t forget to prioritize yourself and what you want.

 

And be sure to dream big. What would you change about the world around you? What would things be like if you were in charge? Because you are now! Don’t be afraid to push your agenda and reinvent yourself and your world. You’ve earned it!

 

Need Retirement Help?

 

Want to have the freedom to reinvent yourself in retirement? Our expert financial advisors can help establish a retirement plan to give you the peace of mind you need to spend the rest of your years however you’d like. Contact us today for a complimentary Discovery Call.

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

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