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What Is the SECURE Act and Why Should You Pay Attention

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Last month, the U.S. Congress passed a spending bill that included bipartisan legislation called the SECURE Act (aka Setting Every Community Up for Retirement Enhancement Act of 2019). The Act is focused on increasing the number of people saving for retirement and the amount they are able to save. The President signed the spending bill and the SECURE Act into law on December 20, 2019.

Like most new pieces of legislation, there are new things we don’t know and things we will discover over time. To get us familiar with the law, I’ve put together a round-up of articles on the subject.

What is the SECURE Act and How Could it Affect Your Retirement? I’ve become a fan of Investopedia’s daily electronic newsletter. This article from them shares how SECURE could change our individual retirement accounts (IRAs), 401(k)s, and required minimum distributions (RMDs). 

SECURE Act Alters 401(k) Compliance Landscape. You might not be a human resources professional like me but I often find the best way to learn about subjects is from the point-of-view of the person who has to administer programs related to them. This article from the Society for Human Resource Management (SHRM) explains how 401(k) administration will change.

The SECURE Act. Like the SHRM article above, the National Association of Plan Advisors (NAPA) has put together a resource page on the new law. It includes the actual legislation, news articles, etc. NAPA is an affiliate organization of the American Retirement Association, previously known as the American Society of Pension Actuaries. 

A new law is bringing big changes for retirement savers, especially parents. Michelle Singletary writes a nationally syndicated column focused on personal finance for the Washington Post. This article does a nice job of explaining the highlights of the law as well as some of the downsides to the new legislation. 

5 Things Affluent Retirees Should Do Now that the SECURE Act has Passed. Don’t let the word “affluent” in the title deter you from reading this piece from Kiplinger. Like the Washington Post article, the author provides practical suggestions for anyone who is retirement planning.

At times, retirement can seem so far away that it’s easy to push these articles to the bottom of the reading pile. Retirement planning is an important activity. At some point, we have to start carving out time for it. That way, when it’s time to take action, our learning curve won’t be quite as steep.

What do you think of the SECURE Act? What questions do you have about the new law? 

Retirement Planning: 3 Money Moves to Help Everyone

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garden decorations alligators playing in a beach scene created with extra money

I’m not a financial advisor. I don’t like telling people what to do with their money. It’s a very personal decision. Keith would probably tell you that I spend too much money on shoes. But I did run across an article in Real Simple magazine about money and retirement planning that I thought could apply to anyone and at any point in their retirement journey. The three things the article mentioned were:

Set financial goals (and get a second opinion). First things first. One of the ways we reach our financial goals is by having some. Want to save money? Have a goal. Want to invest money? Have a goal. This doesn’t mean that our goals are etched in stone and won’t change. But having a goal staring us in the face can keep us on track. I remember when Keith and I faced the reality of needing a roof on our house. They’re expensive! So, we set a goal to save a certain amount each month. Some months we saved less and others we saved a bit more. In the end, we met our savings goal. 

The other big step we’ve made to help us with our financial planning was getting outside resources (i.e. accountants and certified financial planners). It’s important to build relationships with people you can trust. That doesn’t mean you have to agree with everything they suggest. Ask questions. Understand the answers. 

Learn more about investments. Accountants and certified financial planners can provide you with some education about the investment market. So can bankers and real estate professionals. Another place you can look for information is educational institutions. Years ago, Keith and I took a university course on financial planning. It wasn’t to become a financial planner. But to learn the basics of how investments work. For example, what’s an annuity and why someone might want to invest in annuities. Or how the stock market and bond market differ. Even if you’re not currently investing in these areas, it does make sense to understand them. Because what happens with the investment market impacts other things.

The next time your employer has a 401(k) meeting, make it a point to attend. Learn more about your options. Ask the representative covering the meeting where you can get some additional information. 

Be mindful about money. My takeaway from this is simple: think about how much money you’re making and how much you’re spending. Keith and I have a monthly financial meeting where we talk about not only our business expenses but our personal spending. We compare our spending habits over time. We talk about conducting experiments to see if we can reduce our expenses, like the time we started grocery shopping at Target versus the local chain and saved ourselves 50% on our food bill. (And that’s not a typo.) Granted, we haven’t totally “cut the cord” yet…but we did get rid of our landline when we moved to Gainesville. Life didn’t come to a screeching halt. I can’t imagine adding it back.

Being mindful about money also includes conversations about credit. How much credit is good to have? What are the best credit cards to hold? What’s our credit rating? It includes pulling our credit report annually – it’s free – and making sure our credit report is accurate. 

You work hard for your money. You want to know that your money is going to work hard for you. That means getting educated about how money can do that over time. All of the little money moves we make can add up to a big result. 

Image captured by Sharlyn Lauby while exploring Duval Street in Key West, FL

Spend Safely: Stanford Study on Retirement Planning Strategies

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If only we had a nickel for every article about financing retirement . . . well, let’s just say our retirement would be complete! Retirement planning strategies can vary widely for one important reason – everyone is different. What works well for you might not work at all for me. So, the best we can do is gather information, examine our own situation, and make educated decisions that will benefit us when we retire.

That’s why I was happy to come across the “Viability of the Spend Safely in Retirement Strategy” report on aging and retirement, published last month by the Society of Actuaries’ Committee on Post Retirement Needs and Risks. Don’t let the name of the report scare you away . . . my takeaway from the 80-page report can be broken down into two key areas:

  1. Optimize your Social Security benefits.
  2. Use the IRS Required Minimum Distribution (RMD) rules to generate a retirement “paycheck”.

First, a little background. The study was conducted by Stanford University, where they analyzed 292 possible retirement planning strategies, using eight different metrics to measure how a particular strategy might meet retirement income goals. The results of the study were published in 2017 with the goal of providing a framework for helping people approaching retirement age make important life decisions.

The first key point about optimizing Social Security benefits is pretty straightforward, and you probably know it already – hold off claiming Social Security payments as long as possible. You can draw payments as early as age 62, but there are financial advantages to waiting until the IRS mandated age of 70. That being said, I have been seeing quite a few articles lately extoling the virtues of claiming as early as possible, so do your research to determine what strategy works best for you.

Once you reach the Required Minimum Distribution (RMD) age, that’s when key point number two kicks in and you need to claim your Social Security payment. In addition, the Stanford report suggests that you also start collecting that retirement “paycheck” from your individual retirement account (IRA) or 401(K) account. How much you want to withdraw changes as you age, so make sure you know your IRS requirements. The report recommends at a rate of 3.65% of the total. Remember, you are only required to make the withdrawal – you don’t have to spend it. You have the option to pay income tax on the withdrawal and reinvest all or part of the after-tax proceeds, depending on your financial situation.

My takeaway from this report was that if we plan our financial strategy using this model, then we can use the time between age 62 and 70 to ease into phased retirement. This is what unretirement is all about! Talk with your employer to work out flexible scheduling and develop a plan to transition into a limited work arrangement. Employers are looking for ways to keep senior talent engaged so it could be a win for everyone. Or you could try a limited work arrangement in a field you’ve always loved.

The full report is not a difficult read so check it out if you can. There is a great section that points out the primary advantages and disadvantage of this strategy. And it’s important to remember that most investments are always subject to risks as well as bonuses depending on market fluctuations. I like that the study is the culmination of analyzing 292 retirement planning strategies. That can make it a good foundation for safe spending in your retirement.

Visit the Social Security Administration In Your Community

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lunchbox for retirement fund tips in addition to Social Security benefits at lunch counter

There is an official day for nearly everything and today is no exception – August 14 is Social Security Day. 

As a human resources professional, I attend a few conferences each year. One of them is the Society for Human Resource Management (SHRM) annual conference. This year’s event was in Las Vegas which is still one of my favorite places to visit! 

Almost every conference has an expo hall of sorts and, before the event, I like to plan out my expo hall strategy. One of the organizations that I try to visit whenever they are present is the Social Security Administration (SSA). 

Now I know what some of you might be thinking. Really? Social Security? They probably have a dinky little booth tucked way back in the expo hall and they’re not giving away any good swag. And all of that would be true. But the reason I visit SSA booth is because it’s like visiting the Social Security offices without an incredibly long wait. And the people working the booth are super nice and accommodating. 

I’m not saying that visiting the local offices are a waste of time, but let’s face it, none of us want to do it. We only go there when we have to. Or, we just take care of everything online. Visiting the Social Security booth at a conference is different because I can have a proactive and helpful conversation with them.

For example, this year, I was able to pick up three small booklets on:

Retirement Benefits

Understanding Social Security Benefits

How Work Affects Your Social Security Benefits

I also received information about my Social Security online account and what I can find online about my benefits.

Would I have driven across town and waited in an office to pick these things up? We all know the answer is “no”. But I quickly and easily got them at a conference. And I was able to review them at my leisure. 

So, the next time you’re at a conference or community event and see a government agency like Social Security exhibiting, go up and chat with them. Take the information they have to offer. Then, read it! This will make you more educated about the benefits you’re going to be eligible for at some point. 

Planning, Goals and The One Question to Ask for Retirement

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Sign I Am Powerful in planning for retirement

Many years ago, I was interviewing for my very first management position. As I remember, the conversation went something like this:

Hiring manager: What would you say is your biggest weakness?

Me: I don’t do very much in the way of goal setting.

Hiring manager: So, what is your process for getting things done?

Me: I sort of think about what needs to get done then work towards accomplishing that.

Me: Oh, I guess I do some goal setting after all.

True story.

In my effort to think like a manager, I had made the mistake of thinking that goal setting was only that thing you did during your annual performance review (or around New Year’s). The hiring manager either took pity on me or was impressed that I had that epiphany, so he immediately asked me how soon I was available.

Fast forward to today. Sharlyn and I are working on an ongoing project when we discover that the company we had contracted with had made a sizeable error. For a few minutes, we discussed a number of different ways to address the matter. Then, at the same time, we both said, “What do we ultimately want to come out of this?”

That’s the question that identifies the goal and helps formulate the plan to accomplish it. Goals come in all shapes and sizes. When you realize that, planning and goal setting becomes much more manageable – regardless of the size  and scope of the project. And that is very powerful!

Once we know the result we’re looking for, is it possible to apply this thinking to something like our unretirement?

The BHAG – Business guru Jim Collins wrote about the Big Hairy Audacious Goal, which is the huge goal that we are planning to accomplish. For Sharlyn and I, it’s probably the same as everyone – having enough money for a comfortable retirement.

Plan Goals – In planning for retirement, there are several goals that help us accomplish the BHAG. Reducing expenses is a great example. So, we identified one of our large annual expenses – groceries – and put together a plan to reduce that expense. The plan goal was to lower grocery spending and we ended up cutting that expense in half.

Micro Goals – Some may call these short-term goals. In our example, there were many ways to cut grocery costs. Especially since, for us at that time, going to the grocery store was just walking up and down the aisles picking up anything we liked. One very effective solution was to plan our meals so all we purchased was what we needed for each meal.

While this was a very effective and helpful (and enlightening!) exercise, it’s no surprise that cutting grocery costs alone didn’t provide enough extra money for our BHAG of a comfortable retirement. But it was an important step in the overall planning process. And every step of the way, we ask ourselves what we want to accomplish because accomplishing all of those micro goals will add up toward the BHAG. 

Oh, did I get the job? No. But that got me started on planning for the next opportunity.  

Your 5 Day Plan to Use Instagram in Unretirement

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We have been showcasing the use of social media sites to help with marketing in your encore career. Whether your goal is to work as a freelancer or you plan to extend corporate work, social media can play a significant role. Demonstrating your skills with these platforms could make you a more marketable employee. So far, we’ve talked about Facebook, LinkedIn and Twitter. If you haven’t check them out, you can find them here:

Your 5 Day Plan to Using Facebook

Your 5 Day Plan to Using LinkedIn

Your 5 Day Plan to Using Twitter

You might be wondering why you should pay attention to Instagram if you’re already using one or all of the social channels we’ve already covered. You will see as we explore Instagram, there are some very unique aspects to this medium. As such, there are many users who spend hours on their accounts – – far more than any other site. So, as any fisherman or marketer will tell you, you need to be where your audience is!

What is Instagram?

Instagram is a free photo and video sharing app where subscribers can upload graphics and share them with their followers. Instagram launched in 2010 and quickly grew in popularity with more the 1 billion registered users as of May 2019. They were acquired by Facebook in 2012 and are arguably the most popular social media site in operation.

The reason for the popularity? Images! The main focus of Instagram is visual, and this has attracted a huge amount of creativity. It allows users to get a glimpse of the lives of their favorite celebrities and engage with beloved brands at the same time they enjoy vacation and children photos from friends and family. 

You can sign up for Instagram easily and, like all other social sites, it’s free to create an account. 

Your 5 Day Plan to Learning Instagram

DAY 1 – Download the Instagram App. The whole idea behind Instagram is to quickly and easily share images and video you capture with your mobile devise. For that reason, it’s easier to use the mobile app which is available for iOS or Android.

DAY 2 – Start Following. Like most social sites, you have a feed that will showcase the people and brands you follow. At the bottom of your screen you will see a magnifying glass so click on that. Here you can enter names of people you know and follow elsewhere or topics you find engaging – like retirement. Just like with Twitter, hashtags will bring users with similar interests together. If you find an image you like, click on it to launch a window with all the posts within the hashtag. From here, you can immediately follow them simply by clicking “Follow” or click on their user name to see everything they’ve shared. After a short while, clicking on the magnifying glass will give you recommendations on people and brands to follow based on your interests and likes.

Day 3 – Engage, engage, engage. Social media is all about engagement and Instagram is no different. Now that you have people, brands and hashtags to follow, you are bound to find photos and videos you really like. If so, go ahead and click on the “heart” under the image. That will tell the person – and Instagram – that you like it. You can also post a comment by clicking on the “word balloon” or you can “heart” other peoples’ comments. Pay attention to the hashtags that your followers share. If you like their content, chances are good that their hashtags will lead you to others who share similar – but different – images.

Day 4 – Post a Photo. By now, you should be pretty comfortable getting around the app. You found some people to engage with and you want them to interact with you. It’s time to post a photo! Once you have a subject, take 2 – 3 photos at different angles. At the bottom of the Instagram app is a plus sign – clicking on that will bring up your camera roll where you can choose the best image to share. Click on the image then click “Next”. This will take you to an editing screen where you can quickly edit the shot before posting. Or you can quickly apply a “filter” which applies a preprogrammed set of attributes to your image. For now, just keep it normal and click “Next” again. In this screen, you can say something about the image (don’t forget hashtags), tag people, and add location information before sharing. 

Day 5 – Set Audience Goals. To be really successful at something, we need to have goals. As you can see with Instagram, like most social channels, success is centered around growing your audience. And growing an audience takes more following, posting and engaging. You can make your goal to follow 5 new people every day and follow one new hashtag every week. Set aside 20 minutes every morning to like images and share comments. And don’t forget to snap some photos and share them as well. Remember, there aren’t any shortcuts for this so just schedule the time. Before you know it, you will have a fun and engaging audience!

BONUS! Repost for Instagram. You may have noticed that Instagram differs from most social platforms in that they don’t easily allow you to share other people’s images. The idea behind Instagram is to informally let others get to know “the real you” through pictures. So, they want you to share YOUR pictures. Fortunately, enterprising app developers have created independent apps that will allow you to repost what other people share. Just look for them wherever you download your mobile apps.

Instagram has set itself apart from other social platforms by creating a unique and exciting ecosystem and remaining true to their brand. That should be a lesson for all of us! Another thing to know is that 80% of Instagram users follow a business brand. That shows the power of Instagram in brand marketing. Just think what it can do for your personal brand in Unretirement!

Encore Careers – Part Two: Figuring Out What to Pursue

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In the first post in this series about encore careers, we talked about what an encore career is and why you might want to start thinking about one as part of your unretirement journey. As a quick refresher, encore careers are jobs or careers that happen later in life. They often fulfill different needs than the jobs we have early in our career. So, an encore career might be something that aligns with a passion you’ve had over the years or possibly just something to get out of the house and make a few bucks. 

Once you decide that you want to pursue an encore career, the next logical step in the process is to figure out what you want to do. Remember when you were in high school and everyone started asking, “What are you going to do when you graduate?” Well, think of this similarly but the question becomes, “What are you going to do when you retire?”

I would suggest that the first step toward figuring out your encore career is to take inventory of your knowledge, skills, and abilities (KSAs). Even if you change jobs and industries in your encore career, you’re going to want to choose something that you’re good at. So, think about the skills you’ve collected. 

It might even make some sense to prepare an “unretirement” resume. Instead of saying to yourself, “I don’t need to maintain a resume anymore. I’m going to retire in a few years.” Maybe it’s even more important now. Use your resume as a way to discover and showcase your encore career skills. In addition, take a moment to ask yourself, “Of all my skills, which ones have a mastered as a result of being older.” There a reason you should do this that will become more apparent as you read on.

Now, some career coaches might tell you that ideal encore careers for older people are in the areas of people management and coaching. Let me dish out some tough love here. Your age, your desire to become a coach, and your skills in communication, empathy, and listening are three different things. I’m not saying that older people can’t become coaches – they certainly can. And I’m not saying that older people don’t have the skills to become coaches – they might. But making the assumption that because you’re 50 or 60 automatically makes you a people person…sorry, no. 

Your encore career should be something that you’re interested in, that fulfills a need for you, and that you’re good at. You might say, “I’ve spent my entire career coaching employees and the last thing I want to do in my retirement is coach employees. I want to take care of animals because they don’t talk back.” And to that I say, good for you. 

Another option might be simply tweaking the job you have right now. Maybe you’d like to do the same thing you’re doing right now just less. Or maybe your current job has two primary functions and you’d like to focus on one of them. It makes me think of a marketing manager who is responsible for marketing, public relations, and social media. Maybe for an encore career they want to focus solely on social media.  

After you conduct your skills assessment, hopefully, this will point you in a direction. It might shed some light on skills you want to acquire before you retire. This allows you to put a plan in place to gain experience and knowledge over time. You can do things at your pace and within your budget. It also gives you time to think about how you’re going to transition into your encore career. Will you be able to just change jobs? Or is there an interim job that will make the transition easier? 

There’s one other thing to consider. As you think about your work experience and skills, along with where you want to go with an encore career, consider how you would answer the question, “Why do you want to take a job where you’re overqualified?” While companies might not come right out and say it, you know that there will be recruiters and hiring managers thinking this. As you’re planning your encore career, plan an explanation for your encore career.  This will demonstrate to prospective employers (including your current one) that you’re focused, planful, and detail-oriented. 

Encore careers can be a wonderful, fulfilling part of your unretirement journey. Start thinking about it early and put a plan in place to get there. 

Image captured by Sharlyn Lauby while exploring the island of Maui, HI