Retirement Planning Archives – Page 2 of 3

Retirement Planning Bot: A Unique Solution for Unique Times

May 27, 2020 by Keith Lauby 1 Comment

wall art bot representing a retirement planning bot

We’ve all seen the terms recently – unique, unprecedented, even surreal or seismic. Whatever you call these pandemic times, most of us can agree that they often require equally anomalous ways of dealing with them. Depending on how close you are to retirement, that could apply to your retirement planning too.

I was excited to see that Michelle Singletary, personal finance columnist for The Washington Post, has introduced a retirement planning bot to “see us through the coronavirus pandemic and beyond”.

If you aren’t familiar with bots, they are software applications which are programmed to complete certain tasks. In this case, the bot collects information about your financial situation and retirement plans and makes recommendations relative to both. I had the opportunity to run through the bot program and see first-hand some of their suggestions.

The good news is that this is all completely anonymous. While they ask specific questions about your finances, they don’t know who you are, and they don’t save any of your information. Along the way, you can hear advice and commentary recorded by Michelle. I’ll be candid: I didn’t always find them helpful, but I thought they were good reminders and could offer a little effective guidance, particularly for some people who may be early in their planning.

On the downside, the program doesn’t factor whether you’re planning as an individual or a couple. That can make a huge difference when they ask for retirement or bank account balances and earnings. The bot also doesn’t ask your expected retirement age. It just makes the assumption that you will retire as soon as you reach the age for full Social Security benefits.

The best thing about this particular retirement planning bot is that it provided a step-by-step guide with as much hand holding as you can expect from a robot program. And there is a little encouragement along the way provided you are doing something to fund your retirement. They even have some FAQs at the end.

A couple important things to focus on:

This is not a replacement for your professional financial advisor. A single source of information is rarely enough for something as important as retirement planning.

You may not agree with the assessment of your financial situation and your retirement plans. That’s okay. It doesn’t mean you are doing a bad job of funding your retirement.

I think the best way to view this tool can be found in their own description:

“We may not be able to capture everything about your financial situation, but it’s a place to start”.

Many people are very concerned about their financial situation right now regardless of when they plan to retire. This retirement planning bot may help relieve some of the stress as you think of future plans. Who knows? You may just be better off than you think. And, if not, you could get some ideas on how to get back on track.

Image captured by Sharlyn Lauby while exploring the streets of Fort Lauderdale, FL

Job Seekers: The 7 Skills You Need For Your Search

May 20, 2020 by Sharlyn Lauby Leave a Comment

Job security is on people’s minds today. We’re all seeing the same news about unemployment rates at historic highs. Whether you’re one of the job seekers currently looking for a new opportunity or not, it does make sense to always be thinking about your career and what options you have.

One of the most important aspects to consider is how you would go about a job search. Let me dish out some tough love here . . . a job search in today’s technology driven world may require a unique approach. Here are a few skills for job seekers to consider:

Goal Management. Careers are about goals. It might be to work for a certain company or in a specific field. You could have a goal to achieve a particular job title (like vice president). We also have career goals surrounding compensation, benefits, and perks. Or maybe the goal is to learn something like “graduate from the Culinary Institute of America” (also known as the CIA). Once we achieve one career goal, then we set another one.

Organization. We achieve our goals through planning and preparation. It’s possible that, to achieve some of the goals mentioned in #1 (goal management), job seekers need to save money, schedule time off from work, or take some classes. This could involve doing some research. For example, if one of your goals is to obtain HR certification, then you might need to research the requirements, ask your boss for reimbursements, schedule time to study, etc. All of this takes organization.

Prioritization. I wish I could say that once we set a goal, that’s it. But it’s simply not true. Fortunately, and unfortunately, we have other opportunities present themselves. Some of them won’t sway us from our goals. Others could be so tempting that we need to evaluate them alongside our existing goals. Understanding priorities is incredibly important in figuring out which path to pursue. No one wants to miss out on a once in a lifetime opportunity because they didn’t have their priorities established.

Networking. Speaking of opportunities, you’re not going to get them if you don’t network. I know virtual networking can be hard, but job seekers have to find ways to stay connected. It’s one of the big pluses of social media. Having a network is critical for career development. Your network can help you find new job opportunities. It can also serve as an informal board of advisors. So, being able to build positive trusting relationships is the cornerstone of your future career.

Curiosity. It’s possible that we will miss out on building relationships with interesting people and being a part of exiting opportunities if we’re not curious. I totally agree that there’s no rule that says we must say “yes” to every request but listening can be very beneficial. It can present us with options we never thought of AND it can confirm that the goals we’re currently pursing are the right ones. Understanding our priorities (see #2) can help job seekers constantly re-evaluate the new options being presented.

Risk-Awareness. At first, I had labeled this paragraph Risk-Aversion, but then I changed it. Because it’s not always about taking fewer risks. Sometimes our careers will require us to make bold moves – maybe a relocation or an extra assignment. It’s about understanding the risks associated with the decision and being okay with them. It could also involve having a Plan B (see #1 – goal management) available in case you have to make a change in plans.

Communication. Of course, you knew communication had to be on the list, which is why I made it last. All of the skills we’ve discussed involve having excellent communication skills – both verbal and written. You might want to journal your goals to remain focused. Or chat with a family member or mentor about the risk and rewards associated with a new opportunity. Either way, being able to communicate clearly AND being able to truly listen to feedback and guidance from others will be valuable.

While this list of skills might impress an employer during an interview, that’s really not what it’s for. It’s designed to be a reminder that, whether you’re currently an employee or one of the job seekers, you need to have some ownership of your search. And these are the skills that will help you be good at it.

The High Cost of Financial Exploitation and Tips to Prevent it

April 29, 2020 by Sharlyn Lauby Leave a Comment

Las Vegas slot machine early retirement and tips to prevent financial exploitation

AARP recently offered a webinar on “The Costs of Financial Exploitation & Tips to Prevent It”. It was a very interesting and eye-opening listen. One in five individuals fall victim to some form of financial exploitation. The average loss is $120,000, which for many can be their entire savings. And while you might say to yourself, “I’m smart and alert. I’m not going to let some stranger scam me out of my money.”, the research shows that it’s often not the strangers we have to worry about. It’s family and friends.

I’m not bringing this up to scare you or to make you suspect of anyone. But AARP’s philosophy of “If you can spot a scam, you can stop a scam.” Is a good one. AARP mentioned during the webinar that being aware of scams makes a person 80% less likely to engage in one and if a person does start to engage, it makes them 40% less likely to be a victim. So, talking about scams, fraud, and financial exploitation is an important topic.

Many of us are well aware of the Social Security Administration scams going on. But we’re already hearing about scams associated with the stimulus checks that we’re scheduled to receive. That’s right, we don’t even know when we’re going to get these checks and there are already scams in place to get them from us.

The webinar pointed out five actions to look out for when it comes to financial exploitation. These might be actions that you want to discuss with family members or ask someone to review with you (so you stay alert as well).

Pay attention to withdrawals, loans, and overall transactions. It simply makes good financial sense to have regular reviews of your expenditures. This can also be a time to take note of anything unusual in your spending and address it. This isn’t about a lack of trust. It’s about making sure that our financial affairs are in order.

Have two power of attorneys for checks and balances. It’s always recommended to have a power of attorney in estate planning. But I can see where it might make sense to have two. This can create checks and balances on financial decisions. It will take some conversations to figure out who those two people are – the last thing anyone wants to do is create friction. But it’s worth consideration.

Ask your financial institution if they participate in the BankSafe program. The AARP BankSafe Initiative provides training to employees at financial institutions to help them spot potential signs of financial exploitation. Researchers have found this type of training gives employees greater confidence in recognizing and reporting cases resulting in 12 times more money being protected per employee.

Learn about third party requests for money. During these difficult times, it can be wonderful to give to organizations and individuals who need assistance. I’m not saying to stop. But it’s important to take a moment and do our homework about where we’re sending our money.

Screen your phone calls. AARP continues to bring up this point. Phone calls are an easy way to scam people. The best way to avoid a scam phone call is to let it go to voicemail. If it’s a legit call, they will leave a message. Let your family and friends know that you won’t answer spontaneous phone messages. Recommend they send a text or some other type of message, so you don’t have to deal with scam calls.

PLUS! in addition to scams about stimulus checks, another popular scam right now involves the U.S. Census. Individuals posing as census workers collect information that can be used in identity theft. If you’re concerned about this, check out the video “5 Ways to Avoid a Census Scam” and share it with others.

Talking about money is always a sensitive topic and no one wants to admit that they might have fallen victim to a scam. That’s why taking a preventative approach to financial exploitation is so important. Start the conversations early and get used to having open and honest conversations with people you trust.

Using Social Media in Unretirement: 5 Day Plans

April 22, 2020 by Keith Lauby Leave a Comment

using social media on a phone while traveling in unretirement

When we have a little spare time – or when spare time is abundant – many people look for opportunities to better themselves. That’s smart because new skills can often open doors. Whether you plan to work during retirement or you just enjoy learning new things, successfully navigating social media platforms may bring both satisfaction and opportunities.

Communication skills have always been a desirable workplace competency. It factors heavily in productivity, leadership and, of course, marketing. In today’s modern workplace, that includes online communication. Social media is particularly valued because of the vast number of users. For that reason, I’ve written short 5 day learning guides for Facebook, LinkedIn, Twitter and Instagram.

Your 5 Day Plan to Using Facebook

Many of us are already using Facebook which can be a valuable business tool without disrupting our personal space. Businesses and groups are plentiful, so there are work related things I just prefer to read on Facebook. Best of all, Facebook is very helpful in offering notifications and reminders to keep you on top of important customer interactions.

Your 5 Day Plan to Using LinkedIn

LinkedIn is another social platform where most of us can already be found. And whether you are looking for a career opportunity or just want to network, the business application of LinkedIn is second to none. LinkedIn is great about helping you optimize your profile and connect with others who share your work interests.

Your 5 Day Plan to Using Twitter

Twitter describes itself as an online news and social networking site. Over the years, Twitter has made several changes to become more business friendly. Today it’s easy to have conversations with your Twitter contacts or even Tweet Chats with larger groups who share common interests. You can quickly grow an audience on Twitter.

Your 5 Day Plan to Using Instagram

Instagram has rapidly risen to the top of the social media ecosystem where 80% of users follow at least one business brand. Instagram grows brand recognition through the power of visuals with graphic images, videos and stories. Following hashtags will help connect you with a global audience that shares your interests.

There are a few other popular social platforms like YouTube, Pinterest and TikTok that you can explore. But I wanted to give you some basics here to help you build a solid foundation.

By now we know that social media isn’t just some fad. It continues to grow as a communication medium, connecting business and personal brands with a vast global network. Whatever your goals, you can scale your social media activity up or down. Right now, we’re really experiencing the value of connection. Learn how to carry that forward into your own unretirement.

Retirement Savings Boost Due to Relaxed Rules

April 1, 2020 by Keith Lauby 1 Comment

We don’t write a lot about retirement finances – preferring to leave that to the experts. But there are some recent changes worth knowing about regardless of when you plan to retire. And it’s definitely something you should know if retirement is a relatively short time in your future.

Of course, I’m referring to the Coronavirus Aid, Relief, and Economic Security Act or the Coronavirus Relief Bill as it’s commonly called. Just signed into law, this new measure is designed to stimulate the economy and offer economic aid to those negatively impacted by this global pandemic.

The most visible benefit of the new bill is a direct, one-time payment to most adults. The actual amounts of each stimulus check depends on age and reported income so be sure to read up on the details. Best of all, the bill includes language that allows Americans receiving Social Security to obtain a stimulus payment as longs as they received a Social Security benefit statement (SSA-1099).

The aid package provides three provisions that can benefit your retirement financing.

You can delay taking your Required Minimum Distribution (RMD) for most defined contribution plans when you reach the applicable age as indicated in the SECURE Act. This new law suspends those RMDs for all of 2020. It’s particularly good news since cashing out securities in a depressed market is not ideal. Of course, withdrawals are still allowed if you really need to make them.

The bill allows you to borrow more against the money you have already saved in your contribution plans. Typically, you could borrow up to $50,000 or 50% of your vested account balance, whichever is less. This new measure will double that and allow you to borrow up to $100,000 against your existing savings.

The Coronavirus Relief Bill allows struggling savers to take hardship distributions of up to $100,000 from retirement plans and individual retirement accounts in 2020 without the 10% early withdrawal penalty if you are under age 59 ½. Smart investors know that this early withdrawal is never ideal – but it is available if needed.

Planning your finances for retirement is not easy even in the best of times. As global economies struggle to deal with the outcome of this pandemic, many workers are rethinking their retirement plans. The hope, of course, is that recovery will be quick. These relief measures are expected to help those who need it the most.

Qualifications directly related to COVID-19 may apply so, before taking any actions, we recommend that you discuss them with your financial professional.

If you are looking for additional resources to help you during these difficult times, AARP has a few great articles including regular updates as significant events happen. Caregivers can find information on taking care of a sick relative or friend. Best of all, they include some great tips on how older adults can reduce their risk of illness. Stay safe out there!

Image captured by Sharlyn Lauby while exploring the streets of Havana, Cuba

Financial Scams: 6 Ways to Protect Yourself and Your Loved Ones

March 25, 2020 by Sharlyn Lauby 1 Comment

wall art protect your heart like from financial scams

More than 1.4 million fraud reports were filed in 2018 according to the Federal Trade Commission (FTC). In those reports, 25% of people said they lost money and the total amount of losses reported was approximately $1.48 billion.

I recently listened in on the AARP webinar “How to Protect Your Loved Ones from Fraud”. Don’t let the fact that AARP hosted this event lead you to believe that seniors are only people susceptible to financial scams. In the FTC report mentioned above, younger people reported losing money more often than older people. The bottom-line is financial fraud can happen to anyone.

During the webinar, the speakers shared several practical takeaways about protecting against financial scams that we could all use.

Stay current with the news. Last year’s scams might not be this year’s scams. A good case in point is the phone call scam that’s supposed to be from the Social Security Administration. This scam is so prevalent that the Social Security Administration is issuing warnings about it. Both the FTC and AARP have fraud alert resources on their website so you can stay informed about the latest tactics from scammers.
Heighten your awareness about financial scammers. During the AARP webinar, they discussed the psyche of a scammer and reminded us that scammers are looking for individuals who are vulnerable, trusting, and are perceived to have wealth or valuable items. This doesn’t mean we can’t be nice. It does mean we need to pay attention to the world around us.
Screen your phone calls. Protecting ourselves from financial scams would be easy if they identified themselves on our phone’s caller ID. Unfortunately, they do not. It’s sad to say but it could be in our best interests to send calls to voicemail if we don’t recognize the caller. If you choose to do that, let close friends and family know this is your standard operating procedure so they don’t worry if you don’t answer right away.
Practice good technology usage. Today’s technology advances are wonderful but that doesn’t mean we should abandon the principles of good technology usage. For instance, having strong passwords for our accounts – especially ones where we have financial information stored – is essential. Also, making sure that the software on our devices is up to date. Outdated software could expose devices to malware or security breaches, which can lead to identity theft.
Research the credentials of financial advisors. It can make a lot of good financial sense to tap into the expertise of bankers, accountants, and financial advisors. Sharing your financial status with others is sensitive and personal. Knowing that your financial advisors are bound by a professional code of ethics is key. Individuals in the financial services industry should be prepared to discuss with you their experience and credentials.
Monitor your credit report. Don’t forget that the Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies to provide you with a FREE copy of your credit report every twelve months. Other organizations use this information to evaluate your credit, insurance, employment, and housing. Even if you’re not planning to make a major purchase, make sure the information is accurate.

My big takeaway from the AARP webinar was that these activities are things I should be doing anyway. We should stay current with the news. We should use technology, including our phones, in a safe and secure way. And we should check out the credentials of the people we work with.

Consider this article to be a reminder of the things you should be doing to protect yourself from possible financial scams and fraud. Maybe you want to share this list with a loved one, so they remember to do these things as well. It’s easy to get settled into a routine and not be as diligent with keeping your software up to date. Or you ran the free credit report a few years ago but haven’t done it lately. Well, now’s the time to get back on track. No one wants to be the victim of a financial scam or fraud.

Image captured by Sharlyn Lauby while exploring the streets of Las Vegas, NV

7 Reasons to Learn About Medicare Early in Your Career

March 4, 2020 by Sharlyn Lauby 2 Comments

sunset on the beach in Waikiki thinking about the answer to Medicare problems

Last year, I wrote an article about the importance of understanding Social Security early in life. Social Security is complex and it’s going to take a while to understand all of the nuances of the program. In addition, whether it’s an election year or not, Social Security is a program that is being talked about by both Democrats and Republicans. If you have an opinion about Social Security (and you should) then you will want to pay attention to what the candidates have to say and make sure your legislators know your views.

A program that is often included in the same sentence with Social Security is Medicare. It’s a national health insurance program started in 1966. Medicare primarily provides Americans over age 65 with health insurance but it does also provide benefits to some younger people with disabilities.

Medicare has four parts. Here’s a really high level overview: Part A covers hospital services. Part B covers doctors services. Part C is an alternative to Parts A & B called Medicare Advantage. And Part D covers prescription drugs. I’m sure you can already see how this is going to get complicated.

AARP recently held a webinar series called “Making Sense of Medicare” that I thought was very interesting. In fairness to them, it by no means answered everything you might want to know about Medicare. But it did provide a good foundation that you can build upon. Here are a few of my takeaways from the webinar:

Like Social Security, Medicare is age driven. The enrollment window for Medicare begins three months before you turn age 65 to 3 months after. You can sign up online or at a Social Security office. There are consequences if you don’t sign up within your enrollment window.
Unlike Social Security, Medicare involves making a decision. When you sign up for Social Security, that’s it…you sign up. Medicare involves making a decision: Do you want the Original plan or the Advantage plan? There are pros and cons to each. Good news though, neither plan has a pre-existing condition clause.
The Original Plan offers more choices. Under the Original plan, you can choose any doctor. For some people, that is a very important consideration. It also means that your costs could be a bit higher. But having the freedom of choice could be worth it. Oh, and there’s no dental or vision. Individuals who choose the Original Plan often make up the difference by purchasing Medicare supplemental coverage.
With the Advantage plan, you could have lower out of pocket costs because you’re working within the Medicare network of doctors, hospitals, etc. This could be frustrating because you have to find doctors and providers who will take your coverage. But the savings might be worth it.
Obviously, the decision about whether to go with the Original plan or the Advantage plan is entirely yours. Everyone’s medical and financial situation is different. The good news is resources are available. AARP has a Medicare Resource Center on their website. There’s also the State Health Insurance Assistance Program (SHIP), a network on free, one-on-one counseling and assistance, designed to help people navigate the complexities of Medicare.
Keep in mind that while Medicare could be years away for you, it’s possible you have a parent or loved one that is close to Medicare age and they might be looking for resources. The AARP Resource page and SHIP could be a way that you can help them.
You will want to plan on reevaluating your coverages every year. The good news is that once you make a decision, it is possible to change your coverage. Granted, there might be consequences, but it could be worth it. If you’re in the corporate world, then you’re familiar with the term “open enrollment”. Well, guess what? Medicare has open enrollment too. When you sign up for Medicare, plan on participating in open enrollment for the rest of your life.

Health insurance has never been an easy subject and it doesn’t look like it will get any easier when we retire. That’s why it’s important to spend time learning about Medicare now. So, when it comes time to make health insurance decisions, we can make the best ones possible for ourselves and our families.

Image captured by Sharlyn Lauby during sunset at the Halekulani Hotel on Waikiki Beach in Honolulu, HI