Category Archives: Retirement Planning

Financial Doing: Because if it’s just Financial Planning, it will never happen!

Posted on

I have a theory that just about everyone has important financial To-Do items sitting on their To-Do list.  However, those financial To-Dos often just sit there because there isn’t a looming deadline to make them seem urgent (“Save for college and retirement?  Oh that’s so far away!”).  You can read more about my philosophy in      It’s on your To-Do. Let’s get it To-Done!

Let’s say you decide to address those To-Do items so you create a financial plan.  Well a plan will not help you if you do not implement it!  So let’s take you from Financial Planning to Financial Doing!  For those of you who have taken the step of creating a plan, I would like to give you some easy things to do so that you can get some momentum going on your path to Financial Doing!

Here are some quick things you can do and knock off of your To-Do list…

Social Security

If you are under 60 years old, the government does not mail you a Social Security Benefits statement any more.  Learn how easy it is to pull up a copy of your statement online in my blog post Full Social Security Statements Now Available Online.

Annual Credit Report

You know you should get your free copy of your credit report each year, but with so many advertisements you aren’t sure where to go.  I clear up the confusion in my blog post Annual Credit Report: Where to go to get your free credit report.

Lost Money

This one is just a “no brainer”; it takes only a few seconds to check to see if you have lost money.  One in ten Missouri residents does.  Are you one of them?  Missouri Unclaimed Property: Are you due some money?

Take the first step today to change your Financial Planning to Financial Doing, I promise, it will feel great to finally start attacking the To-Dos!

Full Social Security Statements Now Available Online

Posted on

As of Tuesday you can now get your full Social Security Statement online.  It includes your lifetime earnings history and estimates of disability benefits you could receive should you become disabled.  It also lists benefits your family could receive if something were to happen to you.  It provides much more information that was previously available online.

Last year the government stopped mailing the statements, which saved $70 million dollars.  Statements will be mailed again, but only to individuals who are over 60.

Getting the online Social Security Statement is very easy; I got mine in about six minutes.  Go to   https://www.ssa.gov/myaccount/  and click on the button that says “Sign In or Create an Account.”

You will need to:

* set up an account by creating a log in id and password

* set up a few questions and answers in case you forget your password

* put in your basic information such as name, address, phone number, date of birth

* answer multiple choice questions to verify your identity, (for example; who is the lender on your mortgage, what is the make and model of your car, etc.)

When your statement pops up you can print it or save it as a PDF.

Keep your login id and password in a secure place, you will want to review your Social Security statement on an annual basis to make sure that the earnings information is correct and use the retirement benefit estimate figures when doing your retirement planning.

Retirement Planning: Easy Access to Your Social Security Retirement Benefit Estimates

Posted on

You haven’t lost it – you didn’t get it!  Your Social Security retirement benefit estimate statement has not been mailed to you because the government is trying to save money.

But you can still get the information.  Just go to https://www.ssa.gov/benefits/retirement/estimator.html and click on the button in the center of the page that says Estimate Your Retirement Benefits. 

You will need very basic information such as name, date of birth, social security number, mother’s maiden name, and the state in which you were born.

Your Retirement Benefit Estimate will come up; it will give you the estimated benefit amount for:

1) early retirement at age 62

2) at your Full Retirement Age, which depends upon your date of birth

3) delay starting benefits until age 70

Click on the Save/Print button at the bottom.

It is very easy to do; it took me 3 minutes and 53 seconds from start to printout in my hand.

Social Security income is one factor of many when collecting data for the retirement planning process.   If your situation has some complexity due to divorce, remarriage, etc., and you are nearing retirement, I encourage you to make an appointment with the St. Louis Social Security office to get your specific retirement benefit payments.

Retirement Planning: Inflation and the Jetson’s car

Posted on

When I teach retirement income planning classes I love to ask attendees to jot down how much they paid for their first house, then I ask them to write down how much they paid for their last car. While I don’t ask them to share these numbers with the class, it does start a lot of discussion. And laughter. What usually comes out of this exercise is the fact that most of the retired folks in the room paid more for their last car than they did for their first home!

Inflation takes quite a toll on the wallet. We notice this happening as the price of items rise and rise over the years; milk, gas, property taxes and, as in the example above, cars.

If you set up house at the age of 22 and retire at the age of 65 that is a span of 43 years. That gives you 43 years to earn income and invest for the future.

If you retire at the age of 65 how long do you want to plan for in retirement? Do you plan for 90 years old? 95? 100? Depending on your age, gender, health, and longevity in your family, retirement can last 25, 30, 35 or more years!

And if you plan on retiring early, you might be retired for as many years as you worked!

Let’s say you finish college at 22 and work until you are 62; you worked 40 years. If you live to 102, you would be retired for 40 years.

If you think inflation is a challenge while you are in your earning years, imagine what it is like during retirement when you are tapping into the portfolio that you created for retirement.

Here is some food for thought. Let’s take the car example from above and see what type of impact inflation has on car prices during your retirement years.

Last year and the first two months of this year, the Toyota Camry was the best-selling car in America. The 2012 Toyota Camry LE model has a base MSRP of $22,500 in today’s dollars. Not the least expensive model, the L, but not the more expensive models, SE or XLE, either.

Let’s use an example of a 55 year old who is thinking of replacing their car every seven years in retirement. If the car sells for $22,500 now and inflates at 3% a year, they want to know what a Toyota Camry LE would cost at the following ages:

At 65 years old a 2022 Toyota Camry LE is estimated to be $30,238
At 72 years old a 2029 Toyota Camry LE is estimated to be $37,189
At 79 years old a 2035 Toyota Camry LE is estimated to be $45,738
At 86 years old let’s assume they are still driving, not as much as they used to, and mostly during the day, but their family insists that they have a reliable car, so they relent and end up spending $ 56,252 on the 2043 Toyota Camry LE.

If they maintain the car well and don’t put a lot of miles on it, they could look to knock off a quarter to a third of the price with a trade in if they are trading in every seven years.

What if your tastes run more toward Lexus than Camry? Let’s look at this example with the 2012 Lexus GS (again not the most expensive model, nor the least expensive) with a base MSRP of $46,900 in today’s dollars.

Let’s use the same example of a 55 year old who is thinking of replacing their car every seven years in retirement. If the car sells for $46,900 now and inflates at 3% a year, they want to know what a Lexus GS would cost at the following ages:

At 65 years old a 2022 Lexus GS is estimated to be $63,030
At 72 years old a 2029 Lexus GS is estimated to be$77,519
At 79 years old a 2035 Lexus GS is estimated to be $95,338
And at 86, in this example as well, they listen to their family and buy a new car so they have a reliable car, making the family feel better. They end up spending $ 117,254 on the 2043 Lexus GS . The good news is, the year is 2043, so it is the Jetson’s edition so it can fly.

In discussing future plans with families, I find that car replacement during retirement years is the most frequently forgotten item when individuals plan on their own. But having read this, you know to factor it in. Many people make the mistake when planning of assuming that they can keep the same car throughout retirement. Keep in mind that you may be retired for almost as many years as you were working. Think about how many cars you owned while working and consider if it would be realistic to have one car for a period approximately as long as that. You will possibly be driving more in the early years of retirement, because retired people are the busiest people I know. They have been putting off all the things they wanted to do; now they get to do them! But the amount of driving does slow down significantly in the later years for most, but not for everyone. Also, consider if you have more than one driver, you may be replacing more than one car in retirement. Forewarned is forearmed! If you haven’t already, be sure to account for car replacement and the inflation of the car prices in your retirement projections.

Michele Clark in the news: Money Magazine

Posted on

Money Magazine recently offered money makeovers to five families across the nation in an article titled “Five Families, Five Fixes”.  An O’Fallon, Missouri semi-retired couple had asked to participate and Money Magazine selected me to prepare a financial plan for this couple.  They are a terrific couple and I helped them with questions that many new retirees face. Each family has a story written about them.  The story about the couple that I helped is “Laid off and making the retirement savings last.”   See the Money Magazine article here.