06/26/17

If you build it, they’ll stay; Boomers remodel their homes

By Joyce Rosenberg, April 5, 2017, AP.com

The small businesses that dominate the home remodeling industry are expecting robust growth in the next few years, thanks partly to baby boomers who want to remain in their homes.

Home remodelers say they’ve had a pickup in projects from boomers who are in or approaching retirement and are seeking to modify their houses. It’s a trend known as “aging in place,” an alternative to moving to smaller quarters or a warmer climate. Many of these homeowners are hoping to make their surroundings easier to manage and safer in case they have health problems.

They’re replacing bathtubs with walk-in showers, installing safety rails, widening doorways and building ramps — features known as “universal design” since they can be used by anyone, regardless of physical ability. Boomers are also redoing their kitchens and sprucing up other areas — since they’re staying put, they want to enjoy their surroundings.

Zach Tyson estimates that 30 to 40 percent of his revenue is now coming from boomer renovations, up from 15 to 20 percent five years ago. Most of the projects come from homeowners who are healthy and mobile now, but want to be prepared if illness or injury hits.

Besides making bathrooms safer, they’re enlarging rooms so wheelchairs or walkers can be used more easily, and also to give the rooms a more open feel. “It’s trending up, for sure,” says Tyson, co-owner of Tyson Construction in Destrehan, Louisiana.

The oldest of the 76.4 million boomers, the U.S. generation born after World War II, are turning 71 this year. As more of them retire and make decisions about where they want to live, there will be a great need for accessible housing, according to a report released in February by Harvard University’s Joint Center for Housing Studies.

“A large share of these households live in older homes in the Northeast and Midwest, where the housing stocks have few if any universal design features,” the study said.

The report predicts home improvement spending by homeowners 65 and older will account for nearly a third of the total amount of remodeling dollars by 2025, more than twice the portion that group spent in 1995-2005. Owners age 55 and over already account for just over half of all home improvement spending.”The boomer activity seems to be driving the market,” says Abbe Will, a research analyst at the Harvard center.

That’s a change from the past, when older homeowners generally handled maintenance, repairs and landscaping but tended not to renovate. And some of the boomer-driven remodeling is coming from younger homeowners who expect their parents might later come to live with them and want to be ready, Tyson says.

The requests Tiffany and Bryan Peters get from boomer customers include replacing traditional turning doorknobs with lever handles that can be pushed down. Homeowners want motion-sensor light switches and faucets, and non-slip flooring.

In bathrooms, they’re replacing fixtures with models that are designed for people with disabilities — showers than can accommodate wheelchairs, and toilets at the same height as wheelchairs, Tiffany Peters says.”We’ve definitely experienced an increase in requests for aging-in-place work,” says Peters, who with her husband owns a Handyman Connection franchise business in Winchester, Virginia. “We get several requests a month.”

Home remodeling companies began seeing an increase in boomer spending about 18 months ago and expect it to contribute to their growth in the next few years, says Fred Ulreich, CEO of the National Association of the Remodeling Industry, a trade group.

“We see this as something that is dramatically affecting the marketplace,” Ulreich says.

Boomers typically live in homes that are several decades old, prime targets for remodeling, Ulreich says. Unless they move to a brand-new home that’s designed for aging in place, their decision is likely to mean remodeling.

Sal Ferro says boomers are his biggest group of customers, but he’s not getting many requests for aging-in-place projects. It’s more renovations to make their homes more enjoyable.”They’re finally getting the projects done that they always wanted. They’re getting that kitchen or bathroom,” says Ferro, owner of Alure Home Improvements, based in East Meadow, New York.

Some remodeling companies are specifically marketing to boomers, sending salespeople to trade expos and events those customers are likely to attend.

Miracle Method, a franchise business that refinishes kitchens and bathrooms, has increased its outreach to boomers, says Erin Gilliam, the company’s marketing manager. Franchise owners say much of the 11 percent growth in the franchise’s overall business in the past year was driven by boomers, she says.

Gilliam’s husband, Gabriel, sees the trend in the franchise he owns in Salt Lake City. He estimates that revenue from boomers has risen between 10 and 20 percent, and the growth is prompting him to hire more workers. He has five staffers now, having added one per month the past three months, and expects to reach 10 in the next year.

“I’m hiring as quickly as I can,” he says.

 To Your Successful Retirement!

Michael Ginsberg, JD, CFP® 

06/12/17

Prepare Now For These 3 Retirement Risks

By Jim Sandager, April 10, 2017, DesmoinesRegister.com

Navigating retirement is difficult. What makes retirement planning so challenging is that there are so many unknowns that you need to prepare for, including the length of retirement, your spending needs and the performance of your portfolio.

These myriad of unknowns produce specific risks that can jeopardize your financial future. Fortunately, the chances these risks sabotage your retirement can be lessened with a bit of proactive planning. Today, I want to focus on three risks that can jeopardize your ability to sustainably spend in retirement, and what you can do today to prepare for them.

Sequence Risk

If your retirement happens to last 20+ years, there’s a good chance you’ll experience a market downturn at some point. Sequence risk is the risk that there’s a market downturn early in retirement rather than later in retirement. Imagine you’re retiring with $500,000 in savings and need to withdraw $100,000 living expenses after the first year and $0 after the second year. If the markets have a great first year and return 50%, you’d have $650,000 after your spending needs. If the markets drop 33% the second year, you’d wind up with $435,500.

Now let’s flip those results and assume a 33% drop after the first year and then a 50% gain the second year. In this scenario, you’d have $352,500 remaining. In other words, because you were unlucky to retire in a bear market, you have about $80,000 less than the person retiring in a bull market. That’s why you need to have an adequate amount of money in less volatile investments to weather a rocky market.

Longevity Risk

No one knows how long retirement will last. Because of this uncertainty, it’s better to take a more conservative approach and plan for a retirement that could last into your mid-90s (or maybe even longer!). As we continue to live longer and longer, it’s important to continue to have a portion of your portfolio allocated in stocks. Historically, equities have been great at outpacing inflation, and it’s these long-term gains that will be critical in preserving your savings and spending power throughout retirement.

Risk of Unexpected Expenses

Unexpected expenses may not be unique to retirement, but how they impact you is. When you retire, your income is relatively fixed. Every time you need to increase the amount you’re withdrawing in order to pay for a large unanticipated expense further endangers your long-term financial security. When thinking about your retirement spending plan, make sure you have an outlet to tap into so that it doesn’t wreak too much havoc on your overall financial plan.

There are key retirement risks outside of the realm of spending that you need to be ready for (I’ll touch on those in my next column). That said, preparing for these spending risks is a fundamental tenet of financial planning. Having a plan to better ensure sustainable spending is a key to accomplishing the goals you have for your retirement.

To Your Successful Retirement!

Michael Ginsberg, JD, CFP® 

05/30/17

Try Mental Accounting To Make Your Retirement Dreams Come True

By Robert Powell, April 5, 2017, USA Today

You might not know what it’s called, but odds are high you do it – you craft systems that enable you to make countless decisions about money without breaking into a sweat. Or at least so writes Diane Garnick, the chief income strategist at TIAA and the author of a just-published white paper, Income Insights: Mental Accounting in Retirement.

According to her paper, this system – more formally referred to as mental accounting in the world of behavioral finance – “is an economic concept that suggests people code, categorize and evaluate activities based on a variety of subjective criteria, ignoring that funds are transferable.”

Others share that point of view. “Mental accounting is essentially the household equivalent of financial accounting, but it is often done without conscious thought,” says Richard Thaler, a professor at the University of Chicago Booth School of Business and author of Misbehaving: The Making of Behavioral Economics. “A primary insight is that people treat various mental ‘buckets’ of money as non-fungible, meaning that there are implicit rules against taking money from one account – the children’s college savings account – and spending it on something else, like a new TV.

And this system, according to Garnick’s paper, holds the possibility of delivering tremendous benefits. “With the right architecture, it can save us precious time, economize our thinking and increase our self-control,” wrote Garnick, who is also a board member at CFA Institute Research Foundation.

How so? Well, to understand ‘how so’ requires a bit of background. Prior to retirement, people routinely allocate some portion of their money to many buckets, and often over commit ourselves — 25% to housing, 25% to food, 25% to loans, and of course, another 50% to entertainment. “We don’t necessarily make the best decisions, but if we make a mistake we have time on our side,” Garnick wrote.

In an email, Garnick noted that mental accounting enables people to immediately discover which retirement goals they will be able to achieve. “This framework enables a 30-year-old to quickly see if they are saving enough to enjoy hobbies in retirement or if they will be just scraping by, ” she wrote. “The insight offered by mental accounting can be powerful since it gives people time to adjust their savings to meet their needs.”

Mental accounting in retirement

But come retirement, your mental accounting requires a change in mindset, wrote Garnick. Among other things, you no longer have time on your side should you make a mistake with your money.

So, rather than allocate some funds to many buckets all at once, Garnick proposes fully funding one bucket before moving on to the next. “This framework offers transparency into the age-old question of how much guaranteed lifetime income each household needs while simultaneously offering savers insight into which goals they are on track to meet,” she wrote.

For instance, instead of allocating 25% to housing, allocate a portion of your retirement income to funding necessities (housing, transportation, personal items, entertainment and taxes), then fund health care expenses, then emergencies, then fun or what some call discretionary, and lastly bequest.

And this change in mindset won’t be easy. “I think the most difficult aspect of mental accounting and retirement savings is when households switch over from saving up for retirement to spending down,” says Thaler. “This requires an entirely new mindset. Most of our lives we live on a budget: Spend less then you earn, and put some aside for later. Then they are confronted with the much more difficult task of taking a pile of money and making it last over an uncertain lifetime. Hard!”

Would a budget be better than mental accounting?

On the surface, it might seem a budget would be better than mental accounting. But that’s not necessarily the case. “While creating a detailed budget is ideal, many of us don’t invest the time necessary to start one, let alone maintain it with all of life’s unexpected expenses,” wrote Garnick. “Mental accounting provides a framework that enables people to make decisions at the margin without placing their economic future at risk.”

The four-box approach

To be fair, mental accounting resembles what some call the four-box strategy whereby you use guaranteed sources of income (such as Social Security, a traditional defined benefit plan, a guaranteed lifetime income annuity) to fund essential expenses, including recurring health care expenses, and risky assets (your retirement accounts) to fund discretionary expenses and bequests.

And that approach has merit too. “When it comes to retirement there are two kinds of people in the world,” wrote Garnick. Those with old-fashioned pension plans and those in the YOYO generation, which stands for ‘you’re on your own.’”

And both kinds of people, Garnick said, can be well served by securing guaranteed income that covers their necessities. This includes social security, a pension if you have one, and guaranteed lifetime income for the YOYO generation.

As for matching risky assets with discretionary expenses an expert said it’s a good strategy too. “If (investors) treat retirement accounts as long-term investments that should remain untouched, they are more likely to reach their financial objectives,” said Victor Ricciardi, a finance professor at Goucher College and co-editor Investor Behavior: The Psychology of Financial Planning and Investing.

To Your Successful Retirement!

Michael Ginsberg, JD, CFP®

05/15/17

7 Reasons to Work Part Time in Retirement

By Emily Brandon, April 10, 2017, US News & World Report

The financial benefits of a part-time job in retirement are obvious. You bring in some extra income, which gives your savings more time to grow. But many retirees also continue to work for the mental stimulation and social perks. Here’s a look at some of the benefits of getting a part-time job in retirement:

Social opportunities. If you do most of your socializing with colleagues at work, you might find retirement to be isolating. Retirees seldom get invited out to lunch to chat about the latest project or to company gatherings. A part-time job will give you new co-workers, customers or clients to chat with. You might decide to go out for drinks after work or get an invitation to the holiday party. “Some of the hazards of retirement, such as a lack of socialization, are really mitigated if you continue to work,” says Dr. Michael Roizen, the Cleveland Clinic’s chief wellness officer and co-author of “AgeproofLiving Longer Without Running Out of Money or Breaking a Hip.” “The people who don’t retire or who come back to work part-time live longer and live healthier with less disability.”

New challenges. After the initial thrill of sleeping in and relaxing wears off, you might want to try something new in retirement. A job can provide mental challenges that keep your mind active and your brain working properly. Writing a report, making a sale or learning how to use a new technology all take mental effort and provide stimulating new challenges for your retirement years. “Try to think of the things that you feel good about or passionate about or have an interest in,” says Sally Balch Hurme, author of “Get the Most Out of Retirement.” “Leaving your regular job allows you to explore something new.”

Physical activity. Without a job to go to, you might find yourself watching increasing amounts of TV. At a minimum, most jobs require you to get dressed and drive to your workplace. Some jobs require standing, lifting and other forms of physical activity. “The people who work are more physically active,” Roizen says. They are less likely to develop chronic diseases if they are still physically active in retirement.”

An identity. The first thing you are asked when you meet someone new is often, “What do you do?” Most people answer this question with their job title. Retirees often lack a simple answer. Your job typically says something about the role you play in your community. A part-time job can give you a sense of purpose and an opportunity to feel useful to someone else. “You can build on your past experiences, your past skills and your past colleagues to look for that part-time job, or you can create your own new part-time job based on your interests,” Hurme says. “Your enthusiasm for the topic or the area will put you ahead in becoming a successful employee.”

Extra income. Some people need to work in retirement to pay for basic necessities, while others earn a paycheck in order to improve their retirement lifestyle. A retirement job might make it possible to eat at nicer restaurants, take on more ambitious travel plans or spoil your grandchildren. A paycheck allows you to withdraw less from your savings every month, which gives your nest egg more time to grow and can help your savings last longer. “People don’t realize how much they can affect their prospects by retiring later,” says Steven Sass, a research economist for the Center for Retirement Research at Boston College. “You need less money and you have more in your 401(k) and from Social Security.”

Health insurance. Some part-time jobs come with health insurance, which can be particularly important for people who retire before age 65 and are too young to qualify for Medicare. If you can find a part-time job that provides health coverage, you might be able to retire at a younger age than you otherwise would. Just make sure you take care to enroll in Medicare when you turn 65 or leave the job providing the health benefits.

Set your own schedule. Working 40 or more hours per week with a limited amount of vacation time makes it difficult to fit in all the other things you want to do. A part-time job boosts your leisure time, but also maintains your connection to the workplace. You might be able to work half days, a few days per week or for only part of the year. The rest of the time you are free to pursue hobbies, relaxation or travel. Work is less stressful when you aren’t required to be there quite so much.

To Your Successful Retirement!

Michael Ginsberg, JD, CFP®

05/1/17

The 7 Elements of a Successful Retirement

By Nick Ventura, April 12, 2017, Marketwatch.com

Start with well-defined goals, and revisit them at least annually. The closer you get to retirement, the more often you should sit down and think about your overall retirement strategy. In Ernie Zelinski’s “How to Retire Wild, Happy and Free,” the author makes the argument that setting your retirement goals expands far beyond managing your finances. Retirement planning should encompass all areas of your lifestyle, from where you live and where you travel to how you spend your day and what truly are your income requirements. Cookie cutter percentages and rules of thumb serve merely as benchmarks. Successful retirement planning requires flexibility and the willingness to look at all aspects of your life.

Many people get great satisfaction from work. So, if you are retired, and you like to work, pick something you like to do and gain emotional satisfaction from that activity. This includes working for charitable causes, hobbies, family involvement, etc. These “jobs” may or may not come with financial remuneration. But that’s not the point; many people derive emotional satisfaction and self-worth from working.

Another aspect of retirement is lifetime learning. Staying relevant in today’s technology economy requires a willingness to learn and adapt. Consider this: most medical professionals would agree that 20% to 30% of medical knowledge becomes outdated after just three years. Keeping current on technology and medicine will certainly enhance your retirement success.

Budgeting is more than setting a top-line spending number based on a pre-arranged percentage. Often times, we work from the bottom up, exploring what a client actually spends, instead of what they think they spend. It is not uncommon for individuals to drastically underestimate their spending on non-essential items. How much is your cell phone bill? Cable bill? Groceries? Starbucks?! We encourage clients to look at these as recurring payments. Not $140 a month, but $1,680 a year. Big difference, right? Getting as granular as possible is liberating when planning your retirement income.

While many planners suggest that a client will need two-thirds of their working salary to live comfortably in retirement, our experience shows that they may need anywhere from 50% to 150%. That’s a big range. Only by taking the time to define your goals, and the expenses that accompany them, can we put an accurate “spend” and “income” figure on a retirement portfolio. Even the best crafted budget has to be flexible. Emergencies happen. Grandkids happen. Sadly, health concerns happen. For both positive and negative circumstances, budgets can, and will, expand and contract. Build contingencies into your budget and income plan for a successful retirement.

Let’s consider income. Retirement income can come from many sources. Social security, pensions, retirement accounts, annuities, dividends, even earned income. As financial planners, we often hear stories from clients who “forgot” that they had earned an pension from an employer that they had left decades ago.

Take the time to go through your employment history and discover what benefits you may have forgotten. The impact could be meaningful from a cash-flow perspective. Inheritances can also create retirement income. Again, we often see clients receive an inheritance and immediately spend it. We’d rather go with the gift that keeps on giving – by investing the inheritance along the same lines of a retirement asset and creating a lifetime income stream.

Invest for your whole life. Just as your budget is not going to be static during your retirement years, the idea that your investment portfolio should never change is obsolete as well. We live in a world of massive disruption and change. Years ago, retirees would abide by the rule taking 100%, subtracting their age, giving them the “appropriate” allocation to the equity market (blue chips only!). Today’s world does not permit such simplicity of thought.

This philosophy created an asset allocation for retirees that was heavily dependent upon the fixed income markets. Risk in today’s fixed income markets is considerably less predictable. When creating income in a portfolio, investors should examine many different sources of income. Is it time for fixed or variable rate income sources? Are dividend producing stocks inexpensive or overvalued? Is real estate a proper asset to produce income? In finding these answers, a successful retirement income stream can become multifaceted and flexible.

Some investors have opted for “all-in-one” strategies, where a glide path mutual fund encompasses their entire retirement portfolio composition. These funds become gradually more conservative the closer an investor gets to retirement. Some funds manage “to” the retirement date, while others manage “through” the retirement date. If you own one of these vehicles, do you know what the fund is designed to accomplish? These funds use historical data to project out into the future the ideal asset allocation. We don’t know what the future holds, and advocate investments that have the ability to be flexible.

Successful retirement comes down flexibility. Flexibility of goals. Flexibility of income streams. Flexibility of spending. Flexibility of retirement investments. Flexibility of the overall plan. As you design your retirement plan, take the time to build in flexibility. It will help build peace of mind, and lead to a more successful retirement.

To Your Successful Retirement!

Michael Ginsberg, JD, CFP®

04/17/17

Worried you’ll run out of money in retirement? Then don’t make these rookie mistakes

By Katie Young & Sharon Epperson, April 13, 2017, CNBC.com

Being newly retired is definitely a reason to celebrate — and spend — some of the hard-earned money you’ve saved over the years.

Yet with Americans living longer, experts say you need to plan for a retirement that could last 30 years or more. Add in ever-rising medical costs, mostly stagnant Social Security checks and all of a sudden that pile of cash doesn’t look so big.

The issue of outliving your money is a real threat. To avoid having that happen don’t make these classic new-retiree mistakes.

Spending too much too soon

Making the transition from earning money to spending money when you first stop working is tricky. Especially if you’re healthy and eager to enjoy all that new free time.

“We get this all the time, where recently retired clients will do a trip to Europe or Asia, then spend four weeks in the Caribbean, saying, ‘When we get older we’ll slow down,’” said Chris Schaefer, who leads MV Financial’s Retirement Plan Practice Group, Bethesda, Maryland. “They’re eating so much of principal in early retirement that they don’t have enough to last.”

Schaefer suggests that working with a financial planner to create a withdrawal strategy for your retirement accounts is key. He says a good starting point is taking out no more than 4 percent of your total nest egg a year.

Overspending on the house

Wanting to be debt free is an admirable goal and one that works for many retirees. However, if you haven’t paid off the mortgage yet, rushing to do so may not be your best move.

As long as you have the cash flow to comfortably make the payments, Schaefer says don’t sacrifice your retirement savings by using a big chunk to pay it down. Instead keep it invested where it should continue to grow.

Plus having a mortgage offers tax benefits you can still claim as a retiree.

Overspending on the kids

Once you retire it’s time to let the 35-year-olds take care of themselves.

“Over the last 10 years we’ve seen this more and more with millennials not able to get out on their own,” Schaefer said.

So, if you’re paying rent for your adult children, or their cellphone bill, car payments or other recurring costs, it’s time to sit down with them and tell them it’s over.

Making smart decisions early on will help stretch your money further so you can retire well.

To Your Successful Retirement!

Michael Ginsberg, JD, CFP® 

04/10/17

Start a Strategic Plan for ‘Working Retirement’

By Jerry Osteryoung, Feb. 2, 2017, “Helping Small Businesses”

Retiring is not a subject people normally discuss over dinner. It is particularly difficult for entrepreneurs and executives, many of whom do not accept the notion that their organizations can exist without them. This is because, in their minds, the fact that their organizations can do without them means their contributions must not have been significant. If they stay in the business and do not retire, however, they feel their value cannot be questioned.

I have heard many entrepreneurs say they are reluctant to retire and let their children take over because their kids just do not have the requisite experience. Of course, what they really fear is that if they leave, they will no longer be important.

In my experience, it is a small group of folks who are able to retire from their businesses, walk away without looking back or having any regrets and enjoy a prosperous retirement. Unfortunately, they are less than 5 percent of the cases I have seen. People who struggle with the retirement process fall into two groups.

First, there are those who retire with no planning or thought and expect to have a magnificent retirement. Then there are those who are fearful of retirement and do everything they can to not only avoid talking about it, but also avoid starting it. A “working retirement” is the solution for both these groups.

When we are working, we are producing something of value, but working in your company is not the only way to contribute. It has taken me a long time to figure this out, but I really believe if you approach retirement like any other challenge you face running your business, you can deal with just about anything.

When I say “working retirement” I mean you work at retirement the same way you worked at your job or vocation. You must develop a plan of the things you want to do when you retire, and there are a few things I believe are key to retiring well. Firstly, I recommend doing something to help others in retirement. Contributing something of value to someone else really makes you feel good. I can personally attest to how fulfilling that is.

I have been teaching a course about starting a business at Gadsden Correctional Facility for about six years now. These women are so appreciative of the knowledge I am sharing with them that it makes me feel great to do it. A second critical element your working retirement should include is doing something for your body to ensure you stay healthy. From walking to climbing mountains, there are so many ways to do this.

Team activities – ensuring you have plenty of social interaction – are also important in a working retirement. When you retire, you lose those working relationships that were such a big part of your daily life. It is vital your retirement plan includes interactions with people. For me, getting out with friends and walking in nature are so uplifting for many different reasons.

Finally, it is vital in a working retirement that you find a way to continue doing some work in your area of expertise. Not everyone will be able to do this, but if you can, it will give you a sense of worth – and some money too. Most importantly, it will show you that you still have value.

When you boil it down, I think planning for retirement is just like running your organization in that you need to have goals and objectives and strategies for accomplishing them. Essentially, you need a strategic plan for retirement. Now go out and start considering your “working retirement” plan. You can do this!

To Your Successful Retirement!

Michael Ginsberg, JD, CFP®

03/20/17

How Not To Retire

By The New Zealand Herald, Feb. 3, 2017

Election years are always interesting because the topic of retirement age comes to the fore. We all have a vested interest in who receives what and when. When I think about the retirement age, I often recall a conversation with a client who employed a “re-potting strategy” throughout his life. While he would be at retirement age now, I doubt he has considered retiring.

His strategy has been to “re-pot” every 7-8 years. He retires one aspect of his life and embarks enthusiastically on a different path. For him, re-potting involved making a significant change in his life to refresh and gain a new perspective. His re-potting journey before I met him had extended to a new country, a new career, new friends and associates, a new wife and a new house. He had plenty of ideas to pursue in the years ahead to ensure sufficient re-potting opportunities to keep him interested and interesting.

He was about as far away from the traditional idea of retirement as I could imagine. But, as we are all living longer, retirement for many will simply be a change of some aspects of life but not others. The traditional approach to retirement is relatively straightforward. You save and invest as much as you can for as long as you can, starting as early as possible to accumulate enough retirement savings so you don’t need to work anymore.

For those who can’t save enough, the Government pension provides a retirement safety net. For everyone else, the more and faster they save, the earlier they can retire and the more leisure time can be enjoyed. At retirement, work ends and leisure begins…or so the theory goes.

However, a growing body of research finds the traditional retirement journey is less and less common. Fewer people actually want a retirement of all leisure and no work. Retirement is regarded as boring for many!

Apparently only half of today’s retirees (in the US) state they never intend to work again and only 30 per cent of pre-retirees intend to give up work indefinitely in retirement. Instead, whether it’s part-time work or starting a business, an encore career or some other path, retirement is less about not working at all and more about finding a different kind of engagement. Re-potting, you might call it.

Retirement for some might be semi-retirement, with a period of working part-time and potentially continuing to earn. For others, it might be a series of “temporary retirements” or sabbaticals in between periods of work. The significance of these changes is that it might not take nearly as much to retire as commonly assumed.

Some retirement lifestyles might simply need some savings to provide a buffer for the transitions between work. Some people might be able to retire earlier with a small pot of retirement savings, since that pot will be replenished at odd intervals with earnings from part-time or periodic employment.

If we’re not all going to retire according to the modelling – and I’ve never bought the concept that suddenly golf courses and cruise boats are going to be teeming with retirees – then the argument about the retirement age becomes easier.

A retirement age band, offering flexibility to those who wish to retire earlier and later, could be palatable for many. But it is election year, so who knows how the debate will unfold?

To Your Successful Retirement!

Michael Ginsberg, JD, CFP® 

03/14/17

5 Ways to Mark the Occasion of Your Retirement

By Emily Brandon, Feb. 6, 2017, US News & World Report

Accumulating enough money to retire is an achievement that deserves to be celebrated. You can finally take a long-awaited trip around the world, or invite your colleagues and family members to join you for a retirement party. Or maybe you want to retreat from the working world in a little cabin by a lake where no one will bother you. Here’s how to commemorate your retirement…

Plan a party. Break out the champagne and invite all your colleagues, clients and customers to join you for a party. The party theme might center around your retirement plans, such as a luau for a retiree about to take off for Hawaii or a nautical-themed party for someone who is planning to set sail on her boat. Sometimes the type of work the retiree performed also plays a role in the party, with references to things you bought or sold on the job. “This is not a time for an airing of the grievances,” cautions Jeffrey Seglin, director of the Harvard Kennedy School Communications Program and author of “The Simple Art of Business Etiquette: How to Rise to the Top by Playing Nice.” “Celebrating how much you have liked working with the people could be the focus.” Introverts might prefer a smaller gathering with the colleagues they worked closely with or a dinner with family and friends.

Take a trip. You’re no longer limited by your vacation days. You can take off on a world tour, drive across the country in a recreational vehicle and linger in a given place as long as it holds your interest. Retirees can also use travel deals for flying midweek or on short notice. “You can actually take advantage of those last-minute airfares online that you could not do while you were working because you had to go to a meeting,” Seglin says. “You could leave on a Tuesday to go to Iceland.” Traveling at off-peak times might also mean smaller crowds and more personal attention. Many hotels, buses, trains, tourist attractions, museums and entertainment venues provide senior or AARP discounts.

Relax. You can turn off your alarm clock. There’s no reason to hurry in the morning. Pour yourself a second cup of coffee and read the paper. Now that you don’t have a job with deadlines, you don’t need to rush to get everything done. Having no set schedule can take some adjustment, but also gives you the freedom to do what you want to do. Go ahead and enjoy a two-hour lunch with a friend. You no longer have a pressing meeting to rush back to work for. “A lot of people do want to plan a trip right when they retire, but then they relax and kick back for a little bit,” says Keith Deane, a certified financial planner for Deane Retirement Strategies in New Orleans, Louisiana. “Some people will relax for two or three months or two or three years.”

Reflect. You probably accomplished a lot during your career. “If you had a career where you were constantly building it and thinking about your next opportunity, stopping work may be a big deal,” says Barbara Pachter, a career coach specializing in business etiquette and author of “The Communication Clinic: 99 Proven Cures for the Most Common Business Mistakes.” “If you were a senior vice president someplace and all of a sudden you are retired, you have no positional power.” Retirement can be a time to reflect on what you have done in your life. You could collect and caption pictures in a photo album, or write down your thoughts in a memoir. Perhaps you would like to pass on your skills to a young person through a tutoring or mentoring program. You might want to share your own childhood memories with your grandchildren. Think about how you would like to be remembered and start telling your story.

Plan your next chapter. Many retirees need to relax after several decades of work, but a time will come when sitting around the house starts to get a little boring and you are ready for your next project. This might mean accepting a volunteer position with a local charity or taking a college class in a subject that interests you. “You could take a course at a local community college with people who are younger and see the world in a different way,” Seglin says. “Most people retiring now can do an online course. If MIT is offering something and you live in Kansas, you don’t need to travel to Cambridge to take the course.” Maybe you will want to take on a part-time job to bring in some extra income and to have a place to go to be among people every day. “You could take care of the grandchildren. Working parents are very grateful for that,” Pachter says. “The flip side of that is your daughter might expect you to be available every time she calls.” Some retirees spend their days engaged in hobbies, such as working in the garden or playing regular rounds of golf. Taking on a new project will bring a sense of purpose to your retirement years.

To Your Successful Retirement!

Michael Ginsberg, JD, CFP®

03/6/17

Why Retirement Savings are at an All-Time High

By Paul Davidson, Feb 2, 2017, USA Today

Americans are again socking away money for retirement at record levels. Fidelity Investment’s average 401(k) balance hit an all-time high of $92,500 at the end of last year, up 4,300 from a year ago and above the previous high of $92,100 in early 2015. Fidelity, one of the nation’s largest investment firms, cited both increasing contributions and rising stock prices.

The average contribution rate reached 8.4% in the fourth quarter, highest since the second quarter of 2008. And more than one in four of Fidelity’s 401(K) customers stepped up their savings rate last year, the most ever. “This shows people are taking the right steps towards reaching their retirement savings goals,” says Kevin Barry, Fidelity’s president of workplace investing.

People with retirement plans outside of work are also ratcheting up their contributions. The average balance in Fidelity’s Individual Retirement Accounts (IRA) was $93,700 at the end of 2016, up $3,600 from a year earlier. Nearly 500,000 IRA accounts were added last year, bringing the total on the firm’s platform to a record 8.5 million.

National data reflect similar trends. Total 401(k) plan assets in the U.S. hit a record $4.8 trillion in the third quarter and total IRA assets reached a record $7.8 trillion, according to the Investment Company Institute.

Many Americans scaled back their contributions to retirement accounts during and after the 2008 financial crisis and recession. With the 4.7% unemployment rate near prerecession and stocks at all-time highs, workers are again putting away large sums for their golden years.

An Ipsos/USA Today survey in mid-January found that 65% of 45- to 65-year-olds are very or somewhat likely to put at least $100 toward retirement over the next six months.

Americans are also less likely to borrow from their 401(k)s to pay living expenses. The share of Fidelity account holders with an outstanding 401(k) loan fell to 21% in the fourth quarter, lowest since late 2009.

To Your Successful Retirement!

Michael Ginsberg, JD, CFP®