Retirement Redux or Rewrite the Plan?

January 23, 2012

Never place a period where God has placed a comma.                ~Gracie Allen

This quote really resonates with me  when I begin thinking about the myriad of challenges that my clients (especially women)  face when they seriously begin planning for their retirements. 

Punctuating with a period?  Constantly bombarded with the images of that ‘ideal’ retirement, we’ve all seen pictures of retirees walking in the sun on a beautiful beach, playing golf, boating or traveling to exotic destinations. Of course,  these pictures never show a cloudy sky or a hint of rain.

We all dream of being able to have a sunny  retirement. – And, for sure, keep your ideal retirement dream alive!  But, if you’ve got rain in your retirement financial picture, you don’t need to get stuck by placing a ‘full stop’ on your retirement plans when your financial reality doesn’t match up… 

Time to punctuate with  a comma? I have occasion to welcome clients into my office who are very close to or beyond retirement age who despite their best efforts are falling short of attaining their retirement dreams. Many are really ‘down on themselves’ or ‘beating themselves up’ for  their current gap in retirement assets needed versus what they have actually saved. Oddly enough, I say that this is the perfect time to re-evaluate your situation and move forward to ‘reinvent’ your retirement.

As the new year begins, this certainly is the perfect time to rewrite your very own plan for retirement.  Remember it’s not supposed to be the retirement picture or plan that an advertiser has shown you. -Truthfully, who do you know that  really has that idyllic life?  So,  I’m talking about you, drawing-up a retirement picture or plan that matches your financial reality.

 In the last several years, I’ve read and tweeted  many ideas that may be helpful to those of you who are working on retirement redux or reinventing your retirement plans:

  • Working longer full or part-time doing something you actually enjoy
  • Develop a new computer-based career you can work from the comfort of your home
  • Living  together with other ‘Golden Girls’ or Golden Guys’
  • Retiring in here or in another country that has a retiree-friendly costs and standard of living
  • Move in with a family member

Your picture of your retirement will be as unique as you. Remember it’s not your Mom, Dad’s or an advertiser’s retirement –it’s yours. Take the plunge and reinvent your retirement.

Need more ideas? Give me a call.


Jane Nowak   is a CERTIFIED FINANCIAL PLANNER™  and Certified Divorce Financial Analyst™  who specializes in Women’s Retirement and Divorce Financial Planning for Women. Located in the Smyrna, Marietta, Vinings area of Atlanta, GA,  Jane’s goal is to educate and empower her clients to take control of their daily finances so they can fully fund their retirement dreams and needs. Jane has recently had articles published or has been quoted in articles that have appeared on-line at the NASDAQ, Yahoo Finance, Womenetics.com, Smart Money Chicks, Fox Business News, CreditCards.com, U.S. News and World Report and Financial Planning Association (FPA) websites.

Securities offered through Triad Advisors, Inc. Member, FINRA/SIPC

Just Scratching the Surface -Divorce and Social Security

October 11, 2011

For those of you who are divorced, you may have some Social Security eligibility options that you don’t even know about. Everyone’s case is different. But, in this article, I have touched on some of the most general eligibility rules for those of you who are divorced.

Please read the footnotes too. There are lots of potential disqualifying events. 

Can I claim Social Security benefits based on my ex-spouse’s earnings? 

In many cases, if all 5 requirements below are met, a divorced party can qualify as a dependent for Social Security purposes. As a dependent, you may be entitled to 50 percent[1] of your former spouse’s benefits. 

So,  if your former spouse has reached full retirement age and he/she is still alive, to qualify for one-half of your ex-spouse’s Social Security benefits, all of the following conditions must be met: 

  1. Your ex-spouse is now entitled to receive Social Security retirement or disability benefits
  2. You and your ex-spouse had been married for at least 10 years before the divorce became final
  3. You are not currently married
  4. You are age 62 [2]or older
  5. You aren’t entitled to collect a retirement or disability benefit based on a PIA[3] that equals (or exceeds) one-half of your ex-spouse’s PIA 

Example: Assume John has retired and collects $1000 per month in Social Security benefits. If he was married to Jean for at least 10 years before he divorces her, Jean can collect $500/month (one-half of John’s benefit) when she reaches age 65. Note that Jean will have the option to take the Social Security benefits she earned in her own name. Of course, she’ll choose the higher figure. 

What if one or both of us has remarried?  

If your ex-spouse gets remarried and you don’t, your Social Security entitlement will be unaffected. If your ex-spouse is married to a second spouse for at least 10 years and then they get a divorce, you and that second spouse will each be entitled to collect an amount equal to one-half of the former spouse’s benefits (assuming that you each meet the requirements set forth above).

If you’re the one who remarries, you would then look to your current spouse’s PIA in computing your dependent Social Security benefit. However, if you worked for a sufficient period of time, you may be entitled to a larger benefit amount computed based on your own earnings record.[4] 

I know that many of you may think that understanding Social Security eligibility is easy. But, if the number of footnotes for this short article is any clue, you’ve already guessed that determining Social Security eligibility is neither easy nor straightforward. There are many qualifying events and specific guidelines that will be used to determine eligibility including: the age of recipients,  the number of  years you were married, number of years you’ve been divorced, if there are children, the ages of the children, if the ‘wage earner’ is alive or deceased etc. 

So, always check directly with the Social Security Administration to see what benefits you may be entitled to. And, take the time to understand the advantages and disadvantages (penalties) of each option that you may have.

 Jane Nowak is a CERTIFIED FINANCIAL PLANNER™ specializing in , Women’s Retirement,  Financial Planning for Women and AT&T Retirement Plans. Located in the Smyrna, Marietta, Vinings area of Atlanta, GA, Jane’s goal is to educate and help her clients to take control of their daily finances so they can fully fund their retirement dreams and needs. Jane has recently been quoted in articles or published  on-line at the: NASDAQ, Yahoo Finance, Womenetics.com, Smart Money Chicks, Fox Business News, CreditCards.com, U.S. News and World Report and Financial Planning Association (FPA) websites. She can also be found on Facebook and on Twitter as @MoneyGal2020.

 Securities offered through Triad Advisors, Inc. Member, FINRA/SIPC

 

 
 

[1] Note: That this entitlement doesn’t reduce your ex-spouse’s benefits by one-half; rather, this merely establishes the amount of money you may collect. For basic information about the Social Security program and for detailed treatment of Social Security rules, see Social Security.

[2] Note: If you’re age 62 or older and you’ve been divorced for at least two years, you can receive Social Security benefits immediately (based on your former spouse’s earnings) regardless of whether that spouse has chosen to retire or has submitted an application for Social Security benefits. This, of course, is assuming that the other four requirements listed above have been satisfied. However, if you choose to receive benefits at age 62 instead of your normal retirement age, the benefit that you would have received at your normal retirement age will be reduced by at least 25 percent (assuming you don’t have a dependent child who’s entitled to benefits on the deceased spouse’s Social Security record). In other words, if you choose to receive reduced benefits at age 62, you will not be entitled to collect full benefits when you reach your full retirement age.  Jane’s comment: Be aware of the penalty!

[3] The “primary insurance amount” (PIA) is the benefit (before rounding down to next lower whole dollar) a person would receive if he/she elects to begin receiving retirement benefits at his/her normal retirement age. At this age, the benefit is neither reduced for early retirement nor increased for delayed retirement.

[4] Portions of this text were excerpted from material provided by Forfield Advisor


Why is Financial Planning Important for You?

October 6, 2011

October is the time to add some  Financial Planning to your life! The Georgia Chapter of the Financial Planning Association as well as FPA Chapters across the nation have named October 3rd through the 9th as Financial Planning week.

So Why all the Hubbub around Financial Planning?

There are many studies[i] that have been done over the last several years about Americans who have a financial plan and those who don’t. And as self-serving as it many sound, those Americans surveyed who have a financial plan and work with financial planners have many common characteristics. Americans who work with a financial planner:

  • Feel more confident about their financial futures
  • Have a clear financial direction
  • Are more likely to know how much they need to save for retirement
  • Feel ready to deal with market ups and down
  • Are more optimistic about their financial futures
  • Are able to save more than average

Having been a financial planning client for many years before I decided to make Financial Planning my encore career, I can honestly say that I enjoyed many of the above advantages. A consistent relationship with a financial planner did give me confidence, peace of mind and an annual review of my financial situation and investment direction.

Many Americans Say: It’s All in Their Head

Tongue in cheek, I’m talking about American’s financial plans. A recent survey sponsored by the CFP® Board showed that, 86% of the survey respondents agreed with the idea that everyone should have a financial plan.  And, 79% said they have a plan in place. However, less than half of the respondents have a formal plan in place––46% said they just have a plan in their head, and 11% just have notes and ideas.[ii]

Folks,  unless you have already met your financial goals,  having ideas in your head about your financial plan, just won’t cut it. Many of the formal written plans that I do for middle-income clients have more than 10 pages of information and two pages of recommendations. How can anyone keep all that detailed information in their head?

After having said that having a formal financial plan is important,  I think the survey respondents were simply trying to save face. It is clear to me that they really have no financial plan.  And, if you haven’t heard me say this before, ’If you fail to plan, you plan to fail.’

I know most folks are just plain overwhelmed by just the thought of doing a financial plan. But, I do urge you to give yourself the gift of a financial plan and a long-term relationship with a trusted financial advisor. That way you can work on reaching your financial dreams and goals year over year, one step at a time.

How do I choose a Financial Planner?

Here are two  sources that I trust will give you good advice on what questions to ask, what to consider and how to choose a financial planner.

Choosing a Financial Planner – FPA.net

CPF Board -How to Choose a Planner

Celebrating  Your Very  Own Financial Planning Month

Take at least one step forward with your own financial planning by doing one or more of the activities below taken from The FPA of Georgia’s article titled 20 Ways to Celebrate Financial Planning Week [iii]:

  • Balance your checkbook
  • Start a savings account for a child, vacation or a gift for yourself
  • Help teach your children how to save and spend wisely
  • Get your estate in order: Create or revise your will and other estate-planning documents
  • Call your financial planner and share your appreciation for their service
  • Pay off a credit card
  • Establish an emergency fund
  • Evaluate your employee benefits and begin planning for open enrollment
  • Develop your holiday spending budget
  • Plan for year-end tax strategies
  • Purchase a session with a financial planner for a relative, friend or colleague
  • Give a relative, friend or colleague a subscription to a personal finance magazine
  • Invite a financial planner to speak at your workplace
  • Review your insurance coverage
  • Write down your financial goals and revisit them periodically
  • Start using personal finance software to help you better understand your money
  • Look up three financial terms that have baffled you and resolve to understand them
  • Talk to a relative about their plans for long-term care
  • Talk to your relatives about your plans for long-term care

If you have thought about working with a financial planner, now is always the best time to move forward.  And, begin today by completing one or more of the suggested ways for you to celebrate Financial Planning week.

As always I welcome your comments and suggestions for future articles.

 Jane Nowak  is a CERTIFIED FINANCIAL PLANNER™ specializes in AT&T Retirement Plans, Women’s Retirement and Financial Planning for Women. Located in the Smyrna, Marietta, Vinings area of Atlanta, GA, Jane’s goal is to educate and empower her clients to take control of their daily finances so they can fully fund their retirement dreams and needs. Jane has recently had articles quoted and published on-line at the NASDAQ, Yahoo Finance, Womenetics.com, Smart Money Chicks, Fox Business News, CreditCards.com, U.S. News and World Report and Financial Planning Association (FPA) websites.

Securities offered through Triad Advisors, Inc. Member, FINRA/SIPC

                                                                                                                                                 


[i] Surveys by ING and Ameriprise Financial

[ii] The findings from the survey of 1,011 adults, conducted earlier this month by Certified Financial Planner Board of Standards Inc. in tandem with KRC Research

[iii] FPA of Georgia  20 Ways to Celebrate Financial Planning Week http://www.fpanet.org/WhatisFinancialPlanning/FinancialPlanningWeek


Social Security Pays a Lifetime Bonus -If You Delay Benefits

September 29, 2011

The Very Wonderful Magical Math of a Delayed Retirement   

Retirement credit? Good heavens! I call it a bonus. Do you know how much of a bonus that you get if you delay receiving Social Security past your normal retirement date? 

Boring Stuff AKA Fine Print about the Credit for Delayed Retirement  

Born in 1943 or after? Eligible for Social Security benefits? For every month that you delay receiving Social Security benefits past your normal retirement age you will increase your retirement paycheck by .00667 =2/3 of 1% per month! 

Why am I so excited? That itsy bitsy .00667 per month benefit doesn’t sound like much. But, the .00667 increase per month equals 8% per year!! And, you can delay taking Social Security retirement benefits up to the maximum age of 70. 

Note that because the normal retirement age will be increasing to age 67, eventually, retirees will only be able to receive a delayed retirement credit for three years instead of four or five.  

Translation of Your Social Security Delayed Retirement Math

 Chart data is for example only. The Full Monthly Retirement benefit shown may or may not show your actual benefit! Check with SSA.gov for more information. 

Actual Retire-ment Age Social Security Normal Retire-ment Age Full Monthly Retire-ment Benefit at age 66/67 Actual Benefit Amount at age 70 Dollar Amount per Mo. Difference % Amount per Mo. Differ-ence Annual Dollar Differ-ence for life
66[1] 70 $1200 $1584 +$384 +32% +$4608
672 70 $1200 $1488 +$288 +24% +$3456

 [1] At age 70 with a retirement age of 66, your credit is an increase of your monthly benefit by 32%. (That is: .00667 x 48 months for ages 66-70. You increase every dollar you earn by waiting until retirement age 70, you get $1.32 cents. So, in dollar terms, what an annual salary of $14,400 is increased to $19,008 per year, for life. 

 [2]At age 70 with a retirement age of 67, your credit is an increase of your monthly benefit by 24%.(That is: .00667 x 36 months for ages 67-70. You increase every dollar you earn by waiting until retirement age 70, you get $1.24 cents. So, in dollar terms, what an annual salary of $14,400 is increased to $17,856 per year, for life. 

Jane Nowak  is a CERTIFIED FINANCIAL PLANNER™ specializes in AT&T Retirement Plans, Women’s Retirement and Financial Planning for Women. Located in the Smyrna, Marietta, Vinings area of Atlanta, GA, Jane’s goal is to educate and empower her clients to take control of their daily finances so they can fully fund their retirement dreams and needs. Jane has recently had articles quoted and published on-line at the NASDAQ, Yahoo Finance, Womenetics.com, Smart Money Chicks, Fox Business News, CreditCards.com, U.S. News and World Report and Financial Planning Association (FPA) websites.

Securities offered through Triad Advisors, Inc. Member, FINRA/SIPC

    

 

 

 


Paying for your kids’ college vs. your

September 12, 2011

Paying for your kids’ college vs. your own retirement @USAToday
http://ow.ly/6khq1 NEVER use #401K or #IRA to pay for college for your kids


Ways to Get Women on the Right Financial Track

December 10, 2010

from: 6 Financial Dangers Women Face and Ways How to Get on Track

Thanks to richwebnews for the quick summary of six financial dangers that women face. This article also gives we women some ideas on to do or consider doing to give ourselves a better financial future.

This is a good article that is short and to the point. Richwebnews  stresses the need for women to get financial education and to have a financial plan.

However, when considering when to take Social Security benefits or whether to purchase an annuity, always, always, always get advice from a  financial professional who is a fiduciary.

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com, SmartMoneyChicks.com.  Follow Jane on Twitter at: http://twitter.com/moneygal2020


Financial Fact:Women Won’t Ask For Directions

September 22, 2010

It seems to me that we ladies should stop snickering about the men in our lives who refuse to ask for directions when driving. While not being able to ask for directions is a decided blind spot for many men, we women do not have much room to talk. After all, on a far more serious note, most of us will not ask for directions when planning for our financial futures. We are far more content to ask our friends and family members for financial advice before we would ever ask a financial planner for financial advice! Right?

I think that getting lost in the car is far more benign than getting lost on your personal financial journey. Most women don’t have a minute to lose when working to establish a firm financial future. When it comes to finances, men are much more than willing to ask for directions from a financial advisor.  Why aren’t we women able to ask for financial directions?

Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020


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