Rules Change Once You Retire

Ray’s Take: Retirement is a time when a lot of the old financial rules get flipped on their head. Most people who retire don’t want to go back to work, and even if they did, they may not be afforded the opportunity. Wal-Mart needs only so many greeters. At this point there’s no turning back, and what money you’ve saved will be the lion’s share of what you will need to live off of.

Reaching your target retirement age with a sufficient retirement account is a sign of financial success that is increasingly difficult. Increased longevity has redefined “sufficient.” And, when you retire, your finances and responsibilities dramatically change as you shift from investing in those retirement accounts to depending on them. The sequence of returns affects distributions very differently than contributions.

Whatever the size of your nest egg, retirement will likely mean big changes in your financial life. Sources of income can shift and expenses can change. Sometimes your financial priorities change as you move from saving for retirement to generating income from your hard-earned retirement savings. A market downturn that would have been meaningless during your working years can be devastating in retirement.

Retirement is like driving to your vacation destination knowing that there are no gas stations along the way to “refuel.” When you retire, often nothing is being withheld for state and federal income taxes, so you may be responsible for any quarterly estimated taxes. And most retirees generally have to pay health care and other insurance premiums directly to the insurance companies. Contrary to popular belief, Medicare doesn’t cover everything.

You are the architect of your financial future. Taking the time to think through the “what ifs” of future cash management also means that you get to make the decisions about how you'll be using your financial resources during a retirement that may stretch 30 years or more. Meeting with a financial planner can help you create a plan that will serve you well.

Dana’s Take: “The question isn't at what age I want to retire, it's at what income.” – a class="learn" href="" rel="

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It always comes down to money. Having enough for what we want to do and how we want to live. While we're still working, we always have ways of increasing our income. We can find a second job, get a raise or move to a new company for a larger salary.

But once we pull the trigger on retirement, our options slim down to a big degree. The baby boomer generation will be doing retirement differently than previous generations, but there's still a need for smart retirement planning and a clear understanding of how the money works at the other end of the spectrum.

Don’t let a lack of financial knowledge put a shadow on your golden years.

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Credit Card for Travel – Use Wisely

Ray’s Take As a general rule, credit card debt is considered a bad thing. But, as with any rule of thumb, there are exceptions.

How about a travel credit card? These can be an asset as long as you take care to research them – and use them wisely. They can be a money saver, stretching your travel dollars and enhancing your travel experience, with the right research and planning.

Traveling with cash or traveler’s checks can be a risky hassle. If you think a travel credit card might be the route for you, planning in advance can really help.

Many of the cards offer thousands of travel miles, but the catch is you have to have the cards for a specified period of time and spend a specified amount of money in order to cash in on the travel miles. But by working your advance planning just right, you might get some or all of your airfare free.

Some of these cards allow you to use travel miles for specific hotels or rental car insurance. Others give air miles, free checked baggage or priority seating on airlines. Look at your preferences first and prioritize. If there’s a much better air schedule on a specific airline, it may trump a good deal on the hotel.

If you’re thinking about international travel, research cards that can help with money exchanges. This one is a really smart move since some vendors in other countries charge a fee to convert. Make sure the card you choose has a “no foreign transaction fee” option on it.

Check the interest rates on these types of credit cards. Some tend to run higher when they are rewards-specific cards. If you are paying it off every month, it really doesn’t matter, but that annual fee, or lack of one, does.

In the end, be sure you are making the trip you want to take and not just earning the “points.” Determine your needs and work to get the best option for you so you can have a more relaxed vacation.

Dana’s Take Travel. Who doesn’t love it? Seeing new places and having new experiences are the top items on many happiness lists. It’s a great way to have some family time without the usual distractions of our everyday lives. Travel can also be a time for empty nesters to reconnect.

It’s a great opportunity to learn about our country by traveling to other cities, or to learn about other cultures by traveling to foreign countries. Many psychological studies have revealed that planning a vacation adds to the overall happiness quotient.

Whether you’re planning a grown-up vacation with umbrella drinks and sand or traveling on a cross-country adventure with family, getting away from it all without getting into big debt is a plus for everyone involved.

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Long-Term Care – Not for Everyone

Ray’s Take With people living longer due to advances in medicine and lifestyle changes, chances are that most of us will become disabled for some time before we die and will need some long-term care. The projected numbers are at least seven in 10 Americans over age 65, and the vast majority underestimates the cost. 

Many people operate under the assumption that Medicare will cover costs when, in fact, the program does not pay for ongoing long-term care. Medicare kicks in very little for these costs and only on a short-term basis. Medicaid does not kick in until the assets of an estate are spent down (i.e., you are broke). Most people must pay for these costs out of pocket.

There are really only two ways to deal with these expenses – your investment/retirement portfolio and long-term care insurance. Most people take a look at what long-term care insurance costs and opt for taking their chances without it. Then if that first round of expenses hits, they may wish they had bought the insurance. But it’s usually too late to buy it then. Keeping adequate liquid and conservatively invested assets available is a drag on portfolio returns and difficult to sustain at times. But if you can afford to self-insure then you may have saved you and your estate a lot of money.

Making long-term care insurance part of your overall retirement plan is an option you should consider early if you don’t see another way to cover costs. If passing on an estate to your heirs is a priority then shifting some of the risk to an insurance company also makes sense. The ideal time to start evaluating coverage is around age 55. Those who wait longer face higher premiums and an increased possibility of being denied coverage.

Consulting an estate-planning professional can go a long way toward finding the solution that works best for your individual circumstances. 

Dana’s Take Active aging is the best-case scenario. I’m happy to report that my 83-year-old mother and a friend just returned from touring France in a rental car. If, however, age dovetails with injury or illness, it’s time to examine options. 

Relying on family for long-term care is the one option most experts don’t recommend these days. It looks like a good option, but it can take a huge toll on caregivers. In these days where most families are two-income and kids are participating in multiple activities, the additional burden of caring for elderly family members can be real.

If this is something you are considering, make sure to discuss it with all family members. Look into additional sources of help like adult daycare to potentially ease feelings of being overwhelmed. If the discussion is likely to be difficult, an outside facilitator such as a social worker, religious leader or geriatric care manager might be helpful. 

Care giving can be physically and financially draining, and it may lead to resentment and broken relationships within a family. Make sure you’ve taken into consideration the emotional cost as well as the financial cost before making your decision.

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Emotions of Retirement – Are You Ready?

Ray’s Take: How prepared are you for the emotional side of retirement?

Most of us see retirement planning as a quantitative exercise to be as certain as we can that the financial aspects are in good order. Everything else we tend to see through rose-colored glasses, envisioning it as a time when we are free to do the things we’ve been putting on hold for years. But there’s another side to retirement that few fully think through in advance. 

Let’s assume you have your finances set, you’ve been saving, investing and making sure you have sufficient resources to support you and your family with plenty of margins. So what could possibly be missing?

How about a plan for how you will spend your time? According to a 2015 Ameriprise study, almost seven in 10 retirees experienced some challenges adjusting to their new lifestyle.

Missing day-to-day socialization with colleagues, many of whom have been acquaintances for years, is a big factor. Often our mental picture of who we are may be based on our career. Once we’ve retired, who are we? We spent decades creating our “working” identity. How quickly can we create a new identity? How will you fill those hours previously filled by a work schedule? Having only a vague idea of what we want to do may create a feeling of disorganization.

To combat these and other negative side effects of retirement, start early to visualize who you will be. Begin making gradual lifestyle changes that implement parts of that future self into your life now. Create new social relationships that are unrelated to your career life. Begin learning new skills related to the things you want to do with your time when you have left the corporate world. Take time to explore new interests and find the things that fill you with excitement. 

Transitioning to retirement is a journey. Your vision for retirement should be as detailed as your financial plan.

Dana’s Take: If you haven’t read Richard Leider’s book “The Power of Purpose,” you may not be ready to retire. To find that reason to get up in the morning, Leider suggests taping just two words to the mirror for inspiration: “grow” and “give.” Make sure those two bases are covered before leaving the workforce. 

Have you always wanted to learn to garden, paint, play golf or bake bread? Each day brings a new challenge when we challenge ourselves to grow. If you can build that skill into giving to others, all the better. How? Garden in a community garden, cook dishes for a halfway house, paint a mural for a blighted neighborhood, mentor a golf team for inner-city kids or bake bread for women or men serving time in prison. Get the idea? It’s a win-win all around.

While you may have put a lot of thought and effort into preparing your financial portfolio, how much thought have you given to preparing your psychological portfolio?

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Agreeing on Retirement Issues – Start Early

Ray’s Take Communication is the key to avoiding conflict in any aspect of life. And retirement issues are no exception.

As more baby boomers prepare to retire, they’re increasingly facing complicated negotiations with spouses. Many live in dual-income households. And while each partner may have very specific ideas about when and how to retire, they often avoid discussions about retirement altogether. 

Many money disagreements happen because couples aren’t speaking the same language. You really need to understand what type of financial life will bring you both happiness and fulfillment. I once had a couple tell me that they took each other for better or worse – but not for lunch.

According to a 2013 study from Hearts & Wallets, only 38 percent of couples actively work on their retirement strategy together. It’s important for couples to be on the same page about financial and lifestyle expectations of what life will be like after work. Even if your plans change along the way, it’s good to make plans together early on – especially when it comes to finances. Couples who have very different expectations and avoid talking through them are headed for trouble.

Start by talking about each of your dreams for this next chapter in your lives. Next discuss the age at which you want to not have to work any longer. That doesn’t necessarily mean you have to retire, just when work becomes an option. Will one of you retire first? Work as a team. Even if you don’t agree on all the details, start saving. Building up a nest egg takes time. Money buys more options down the line.

It goes without saying that financial well-being is important in retirement. But so is emotional happiness and personal satisfaction. It’s important that both partners actively participate in the decision-making process. Once you’ve figured out how much you need to be socking away towards retirement and what your goals are, you need to look at what each of you can do to make sure you reach the finish line. Consulting a financial professional can help with getting on track to fulfill your retirement dreams.

Dana’s Take Retirement, like getting married or having children, can reveal, or make worse, any cracks in a relationship. When one or both partners are at work, there is a sense of personal space. When retirement kicks in, after decades of primarily spending nights and weekends together, it can be disconcerting to be with your spouse all day, every day.

Work through different questions and scenarios to gain an understanding of what your spouse wants for life after full-time employment. Coordinate your retirement goals. Discuss new divisions of labor around the house, where you would like to live, places you would like to travel, volunteer opportunities, or perhaps spending time with grandchildren versus providing daycare for grandchildren. Creating a plan together ahead of time will mitigate the inevitable rough spots in the changeover and make retirement the adventure you’ve always dreamed of.

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Carrying Debt Into Retirement

Ray’s Take: In a perfect world, when we retire, our debt should already be “retired.” 

But when it comes to retirement these days, the picture is much different for the baby boomer generation than it was for their parents. According to the Consumer Financial Protection Bureau, older consumers are carrying more debt, including mortgages, credit cards and even student loans, into their retirement years. In 2013, the average household headed by someone age 55 or older had $73,211 in debt, according to the Employee Benefit Research Institute.

Successful retirements have one important characteristic in common – flexibility. Fewer fixed expenses and more discretionary expenses means more flexibility. Debt is by definition a fixed expense, and the more debt you carry, the less able you are to weather problems (yours and your children’s) and to enjoy opportunities.

When it comes to the type of debt you may be carrying into retirement, there is “good” debt, “bad” debt and “worse” debt. 

A mortgage is historically considered a “good” debt. This is one that you can carry all through retirement as long as you have created a plan to handle the payments. But those payments limit travel and other retirement dreams. Your mortgage company really doesn’t care how the stock market is doing. However, it’s not necessary that you leave a fully paid-off home to your heirs. But not having to make that payment every month can add a lot of quality to your sleep every night. 

When it comes to “worse” debt, think about credit cards and other consumer loans. If you can’t get rid of the “worse” debt, you should seriously consider extending your retirement date.

Carrying debt into retirement is not something to accept lightly, but it’s generally not worth pulling retirement assets and paying taxes on withdrawals to get rid of it. 

If you have made your retirement budget and everything has to go perfectly to make it work, it is probably better to work a while longer. Life rarely goes perfectly, and retirement is not the time to figure it out on the fly.

Dana’s Take: Before planning your retirement, make sure to read Dan Buettner’s book “The Blue Zones Solutions.” In it, he describes communities where folks live beyond 100 years with little or no dementia or chronic disease. 

After reading about these cultures’ simple and happy lives, I felt like an idiot for chasing the almighty dollar to buy all kinds of material possessions and corporate food. These people live on mostly wild greens, beans, potatoes, goats’ milk and wine. They commune with family, tend a flock and a garden, cook and party.

Experiment in small ways with turning back progress by a couple of centuries and see if it improves your life and health. Retirement may become more affordable with a garden and a goat out back.

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Money and Marriage – Have This Discussion First

Ray’s Take It may not sound very romantic, but financial compatibility really is a key ingredient in building a lasting relationship. According to a survey, the biggest deal breaker in a relationship is overspending, followed closely by debt and financial honesty.

Being financially literate, or understanding all aspects of your financial life, is crucial to becoming confident about money. All too often, we’re embarrassed or uncomfortable to talk about money openly and honestly, even in a marriage. So when couples don’t discuss money prior to marriage, there can be some truly bad surprises after the fact.

Start with the facts and then move to how each of you feels about money. Consider what you want versus what you need. Gradually ease into the stickier topics: who pays for what, long-term saving versus short-term spending, and your comfort level with investing together. Knowing each other’s thoughts on these topics can give you a good starting point for where you may need to discuss differences. Accept that you each come from different backgrounds and differences are normal. 

Topics like debt, student loans, salary, credit scores and saving for the future are good places to expand your talks. 

Schedule recurring money “dates” where you can comfortably have ongoing money conversations together prior to the wedding. Scheduling these talks can help make the conversation easier because no one will feel blindsided and/or defensive.

Start small and commit to improving one aspect of your financial life at a time. Before you know it, the taboo money topics will be a little easier to discuss and manage.

Recognizing financial red flags in a relationship can be a healthy way to secure a financial future, just look within yourself to find a balance that works for both of you. This will lead to much happier days.

A third party, such as a financial adviser, can help with the stress level of the discussions by offering advice on ways to meet in the middle.

Dana’s Take Early in a relationship, if conversations about money don’t flow openly and easily, it may be a red flag to future problems. Sadly, financial control issues in a relationship can escalate into violence. According to The National Network to End Domestic Violence, financial or economic abuse is present in 98 percent of domestic violence cases. 

An abuser isolates his victim from support systems like family and friends, and also from access to financial assets. In fact, the lack of financial resources is a key reason women remain in abusive relationships.

Before budgeting for a wedding, consider enlisting a financial adviser to sort out future plans. If red flags arise in that meeting, it’s not too late to change course. Also, if friends and family are raising concerns about a potential partner, make time to listen. They may see controlling behavior that could signal danger down the road. 

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Target-Date Funds, Questions to Ask

Ray’s take: Target-date funds have become one of the most popular retirement plan investment choices in recent years. A target-date fund is a mutual fund that automatically changes its mix of stocks, bonds and cash based on a date of planned retirement. You just determine your retirement date and choose the one closest to that date.

Simple, yes, but these funds are not necessarily the best choice for everyone.

How much control do you want over the fund? If your answer is anything other than “none,” target-date funds may not be for you. The biggest issue with these funds is that someone else decides how much to invest in stocks and bonds over the life of the fund. If you change your mind about your investment mix a few years down the road, the only way to change the mix is to sell your target-date fund and buy a different one.

All target-date funds have a glide path in that they move to a more conservative allocation as the end date approaches. There are two glide paths available: “at retirement” and “through retirement.” These determine if the investment is all cash or still in the market at the end date of the fund. Some retirees want to have some of their money still invested to continue to grow assets for what is hopefully a long retirement.

Consider distributions carefully. Selling one “share” of a target-date fund sells each underlying asset class proportionately, like it or not. Additionally, take a look at tax efficiency. Target-date funds are considered tax-efficient because of their low turnover. But, if you need to offset gains and losses, you won't be able to do that with target-date funds.

In and of themselves, target date funds can be a good investment for some individuals. If you are one of those who want to take a more hands-on approach, another investment strategy may work better for you.

Dana’s take: Making good decisions about what is best for us as individuals is an important skill to learn. As kids’ brains develop, their decision-making skills improve. Things flow along smoothly in the process … and then the teen years happen.

Teens want to make their own choices. Parents want to still be in charge while also wanting their kids to learn decision-making skills. It’s a tough juggling act.

Taking the time to sit down with your teens to calmly discuss the decision-making process can help everyone involved.

Parents can set a target date of age 25 for their teens’ frontal lobes – and decision-making skills – to fully develop. Practice patience and watch your young adults’ choices improve with time.

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Inflation’s Impact on Your Investments

Ray’s take: Most investors place “safety” or “guarantees” on the list to consider when evaluating any investment. Too many don’t fully consider the risk of going broke safely on that list. That’s what inflation does to you.

There hasn't been a lot of talk in recent years about inflation. But there are signs that it may become a topic of interest in the near future. When it comes to inflation, the burning question “How will inflation affect my investments?” is on the minds of investors.

This is an especially important question for many retirees who are living on fixed incomes.

It's inevitable that you're going to encounter more periods of inflation and market selloffs during your lifetime. But it's also highly likely you'll do a bad job of predicting when these events will occur. People who try to time the market usually miss the mark.

So, how do you protect your investments from inflation? Begin with a review of your investment mix. While you want your portfolio to be well-diversified, over the long run equities tend to provide the best potential for returns that exceed inflation. While past performance is no guarantee of future results, equities historically have provided higher returns than other asset classes.

Few are calling for an imminent return to the high inflation of the 1970s and 1980s, but inflation is likely to make an appearance as the economy continues to improve.

The key is to consider your timeframe, your anticipated income needs, and how much volatility you are willing to accept. Then you can construct a portfolio with the mix of stocks and other investments you can live on and live with.

When you calculate the return on an investment, you'll need to consider not just the interest rate you receive, but also the real rate of return, which is determined by figuring in the effects of taxes and inflation. It’s best to review your portfolio regularly to address any changes that may help you maintain your financial goals. Your financial professional can help you calculate your real rate of return.

Dana’s take: Some costs of living can shoot up, out of sync with the general economy. Having extra money set aside can cushion against unexpected forms of inflation.

For example, a sales representative for hip and knee replacements recently told me that one of his busiest orthopedic surgeons in New York no longer accepts insurance – private or Medicare. The doctor is requiring patients to pay $20,000 to $25,000 for a procedure. If self-payment of medical costs is the wave of the future for those who want the Cadillac of care, that would represent a significant inflation in medical costs.

Just as we save to buy our next car, maybe we should also be saving for our next knee or hip replacement. Having an extra cushion of investments and savings could put more spring in your step some day.

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Promotions and Money: Time to Review

Ray’s Take: Congratulations on your promotion! You just took another step on your career path. Now you should take time to be sure you are on track with your financial plan based on your new situation.

First take a look at your tax withholding. Calculate whether or not you need to adjust your W-4 form based on your new income level. If so, go ahead and submit an updated form to your HR department right away.

Also keep in mind that some job-related expenses could be tax deductible. If your new job means you work from home, wine and dine clients or drive to off-site locations, you may be able to deduct these expenses. Consult a tax expert to assist in this area.

Second, up your retirement plan contributions before lifestyle absorbs all of your increase. If you’re already maxed out, set up a systematic nonqualified investment. Your new position may include vested company shares. These restricted stock units usually vest over time, meaning that you gain ownership of those shares over a period of time. If this is the case, contact your HR department to obtain a vesting schedule. This information can be very important should you leave the company at some point.

If your promotion included a large bonus or profit-sharing check, be sure to pay attention to the date that the payment will be issued. If the payment is issued before the tax filing date, you may be able to use those funds to make an elective deferral contribution to plump up your retirement accounts and possibly reduce taxes.

Sometimes a new position may require longer hours or travel. Evaluate how much additional time your new job may take and calculate any additional costs associated with those longer hours or travel. You may find you will need to pay more in childcare costs or eat out more often. It’s a good idea to include any additional expenses in your budget.

By considering these basic steps, you can take advantage of the additional income associated with getting a promotion. The trick to making your pay raise work for you is to plan properly.

Dana’s Take: When we get a raise it’s human nature to first think about what we can buy instead of how much we can save.

Why is doing the smart thing always the hardest? Frugality has been the watchword for years now. And we’ve all tried to adhere to it. So spending the extra money may seem very tempting. After all, it’s above and beyond what we’ve budgeted for. Right?

A change of salary is the perfect time to sign up for automated savings options at work. Some bigger corporations match employees’ savings – a double bonus.

Take a look at your finances and figure out a way to cover all the bases – save, pay down debt and treat yourself a bit. After all, a raise is cause for celebration.

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Getting Financially Fit

Ray’s Take: Spring has sprung and many are working hard to get physically fit, but how about financial fitness? A lot of the same tools that will keep you physically fit will also work well to keep you financially fit. If you’re often wondering how money slips out of your bank account, consider these tips to help you become lean and mean financially.

Go on a “money diet.” By focusing on where you can cut excess spending, or “fat,” you develop better habits and gain dollars.

Just like with a food diet, every money diet needs a plan. Start with the B-word: budget. Just like with eating plans, different budgets will work best for different people. Set small goals to keep you motivated by small successes, and then build on them. Keeping a spending journal has many of the same benefits as an eating journal.

Try using cash instead of your debit or credit card. Handing over actual money for a purchase can bring home the reality of what is being spent.

Limit trips to places where you know you will spend money like the mall or department stores. Make a list and stick to it at the grocery store and any other place you shop. Remember that cravings pass quickly – just avoid acting on them for a little while.

Like anything else, there will be slip-ups along the way. Instead of beating yourself up over them, adjust your budget in other places to compensate.

Determine what kind of habits you are trying to establish. Some will be easier than others. Bad habits give us short-term payoffs that satisfy the “need-it-now” way of thinking. By learning to make conscious purchasing decisions and focusing on long-term payoffs you can trim the fat from your spending.

Just like with exercise, for effective financial change make it a habit – just repeat, repeat, repeat! Be your own cheerleader and mentally congratulate yourself every time you make a good financial decision. Positive reinforcement can work wonders for habit formation. With each change, you will become more fit.

Dana’s Take: Learning to cook can be a daily money saver with health and social benefits. Up until recently, the fastest way to get me in a bad mood was to say, “What’s for dinner?” Thanks to YouTube, online cooking resources like America’s Test Kitchen, and “The Splendid Table” podcasts, I now look forward to trying a new recipe or cooking technique.

Great chefs are famously frugal, never wasting a single scrap. Chef John Besh of New Orleans has said that his restaurants make asparagus soup from the discarded peelings of asparagus, plus potatoes, onions, broth and olive oil. Not expensive ingredients.

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Downsize Your Expenses, Not Your Home

Ray’s Take Millions of baby boomers are approaching, or have arrived at, retirement. Some may find themselves looking around their large homes where they raised their families and deciding they don’t need all that room anymore. The kids have grown up and moved out (maybe) and the money from a sale could really bulk up their retirement funds. It may also be time to consider a downstairs bedroom and other considerations for the next phase in life.

But downsizing isn’t always simple and may not be financially beneficial. Many baby boomers are getting a lot less than they expected for the homes they have lived in over the years. Transaction costs can be significant, so it’s not unusual to have little cash left over after selling and buying a new home. Sometimes expenses in your new home don’t fall as much as anticipated and may even rise instead. This can be especially true when moving to a retirement community with a pool, tennis court and other amenities.

There are also other considerations when downsizing. Even though there are fewer square feet to heat, mow and pay property taxes on, unless you move to a part of the country with a lower cost of living, the savings might turn out to be fairly minimal overall.

Instead of downsizing your home, think about downsizing other expenses. Trimming discretionary spending each month can go a long way toward making it possible to live out your retirement in your family home. Making small changes can make a big difference over time. Lower the cost of utilities by installing a programmable thermostat and closing off rooms you aren’t using. Reduce the number of times you eat out, travel or play golf. Get rid of your second car if you don’t truly need it.

Take a hard look at everything involved with downsizing before you make the decision to sell. By the time you factor in all transactions and moving costs it could be many years before you are realizing any savings.

Dana’s Take Downsizing the family home can take a big emotional toll. It can be stressful putting your home of many years on the market – and stressful for grown children who may be losing the home they grew up in. And if your family home is the one where yearly gatherings take place, you could lose that tradition. Staying put can also save the energy of paring down years of accumulated keepsakes and possessions.

Having recently seen the astronomical costs of living in a retirement community, staying in the family homestead and bringing in family or helpers may make more sense – financially and emotionally.

While there are both pros and cons to selling your home, make sure you’ve taken into consideration the emotional cost, as well as the financial costs, before making your decision.

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Family Planning – Beyond the Diaper Fund

Ray’s Take: So, you’re planning to start your family. Have you considered the finances involved beyond painting a room and knowing it’s going to take a lot of diapers? Three can certainly live as cheaply as two – as long as one of them doesn’t eat or wear clothes.

Parenting is expensive. Whenever the U.S. Department of Agriculture comes out with the average cost of raising a child, it’s always high. USDA data from 2013 reports approximate costs at $245,340 to raise a child to age 18.

Here are some things to think about ahead of time:

Health Insurance. Make sure you have it and understand what is covered so you don’t get surprised. Just because your office visits are covered under the policy doesn’t mean the hospital where the doctor handles deliveries is covered. What about multiple babies or additional medical needs of baby and/or mom?

Have a plan for future expenses like private schools, sports, dance classes and college. Having a budget for these items will make life much easier along the line. And have a plan for cutting back on current expenses like eating out and entertainment to help with the new budget.

Going overboard with pre-baby buying. Yes, your baby will need things. But using good judgment about how much and what you are buying will keep you from overspending. Your baby doesn’t need a closet full of clothes that will be outgrown in a month. Also consider buying gently used car seats, strollers and clothes rather than new ones.

Just like any other decision that will impact your financial situation, it’s smart to go into it with your eyes wide open. The changes that accompany adding a baby to your family can be stressful, but you can reduce the stress by minimizing the financial factor.

Dana’s Take: We live in a society that touts the latest and greatest of everything, and marketers do a great job playing into the emotional desires of expectant moms. Stick with the basics and invest the savings for your child’s future.

In the early 1900s, babies sometimes slept in a dresser drawer and wore cotton diapers and simple white cotton gowns. Those children developed fully without a playroom full of plastic toys or computerized learning games. Maybe retro is the way to go. With concerns about toxic fumes from carpeting and plastics, going minimalist may even be a healthier choice. Decorating a nursery in all white with wood floors can be easier to clean and works for either gender. 

Not only can we end up buying too much, we can go overboard too soon. Buying six months ahead can lead to clutter that ends up in a yard sale. Sure, your baby needs stuff, but are you listening to your head or your heart? During the first couple of months, babies don’t need bouncers, swings and a bunch of high-tech stuff. They just need your love and attention.

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Retirement Spending – Easy to Underestimate

Ray’s Take: Conventional wisdom from cookie-cutter financial calculators about retirement is to aim for 70 percent of current income in retirement. But, when told about the 70 percent figure, people tend to ignore the implied message that it means a 30 percent cut in lifestyle. As a result, many people underestimate the amount they need.

Behavioral economists refer to this as framed thinking. For example, we have a positive reaction to 80 percent lean ground beef, but if we reverse that and say it’s 20 percent fat, then we have a different reaction. It’s the same for conventional retirement advice. We don’t pay attention to the smaller percent of negative impact, like the effect of that 30 percent cut, and it can lead to underestimating our true financial needs in retirement.

The 70 percent rule can make the savings part of retirement planning fairly easy, but it may not be the best plan for you. For some reason, you may have higher-than-average retirement needs. Maybe you or a spouse has health issues, or you have a dependent who will never be able to live on his or her own. What about health care? The price is rising well above the general inflation rate each year. Are there special needs you should build into your spending plan?

My experience is the real number in retirement is more like 120 percent, at least for the first phase of the journey. It’s amazing how much you can spend when you don’t have to go to work each day. Flexibility breeds expenditures. In itself that’s not bad, but it is if you don’t plan for it.

As with all rules of thumb, conventional wisdom in retirement planning is based on averages. And, of course, no single person is truly average. A financial adviser can help you put a plan in place that will fit your individual needs for retirement.

Dana’s Take: Saving for an early retirement or a comfortable retirement often requires spending less now. That’s difficult because most of us have allowed inertia and our prideful egos to dig us into spending ruts. The spending rut, if continued, can lead to working decades longer to pay for daily, weekly and yearly luxuries. Those habits may include too much house, too much stuff and chasing status brands in cars and vacations.

Ray and I have fallen into some wasteful spending ruts like buying new when the current model still serves us and paying extra for status brands and top-dollar resorts. Do we want to keep punching the clock later in order to throw money around now? Not likely.

Wasteful spending and keeping up with the Joneses could make the difference between sitting behind a desk and relaxing by a lake. Thoughtful choices today will take you to your dreams on time.

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Planning Your Second Act

Ray’s Take When surveyed, many baby boomers say they plan to do some kind of work in retirement. The reality is that we are living longer, healthier lives than our parents and grandparents. When we reach the traditional retirement age, we probably have a lot of years of living (and spending) left. What to do with those years is changing with the retirement of the boomer generation.

Yet, in practice, most of us don’t focus on planning our second act until after the last day of our current career. We’re so busy juggling the demands of our busy present-day lives and getting to retirement that we don’t think about what comes next.

If we want to maximize our options for the future, our second act needs to be on our radar way ahead of time.

Start out by creating a list of things you think you’d like to do after retirement. It might contain money-making ideas or volunteer work or a combination of both. Just getting ideas down on paper will get your plan rolling.

Your second career can be an opportunity to venture down an avenue of interest that you’ve not had time to pursue. In retirement, you may have the freedom to choose what you want to do rather than what you have to do. Consider a second career in a field that has interested you since you were a child.

By taking the time to figure out what it is you want to do for your second act, you can put the groundwork in place before you retire from your current job. Then you will be ready to immerse yourself in your second act right away.

Regardless of whether you’re planning to continue working for mental, physical or financial reasons, it’s important to remember that, like most important things in life, you need a plan.

Dana’s Take What happens after the kids are grown and out of the house? It can be liberating to explore new career options. You can reinvent yourself for the second act, but first prepare yourself for today’s job market.

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Name SearchWatch Service" style="color: #7d0200; text-decoration: underline;">Dan Lyons’ humorous book, “Disrupted: My Misadventure in the Start-Up Bubble,” the author finds himself laid off at age 52 and lands a job at a young tech company. His experience was a nightmare of feeling old, obsolete and rejected.

Before starting over, consider if you wish to update your technical skills. Even if you have to ask your kids or grandchildren, become familiar with cloud computing, drop boxes, current software and social media like LinkedIn.

Prepare yourself and thrive in your second act.

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Re-Evaluate Your Cash Strategy

Ray’s take: When it comes to a cash reserve, the standard advice is three to six months of expenses. Do you think that’s enough? It might not be.

Emergency funds are no longer one-size-fits-all.

Ask yourself two questions to get a better perspective on how much money you should put in an emergency fund.

If you lost your job, how long would it take to get another one? The further up the corporate ladder you have climbed, the longer it might take you to land another comparable position. And how financially secure do you feel right now? Do you lie awake at night wondering if you could financially survive a sudden change in circumstances?

Personalizing your numbers can go a long way toward peace of mind. Calculate the percent of your monthly expenditures, which is fixed (mortgage, car payments, school tuition, etc.) vs. discretionary. Once you’ve run your personal numbers, you’re better equipped to determine how much you need to put aside.

If your fund is too low, or lower than you are comfortable with, make changes to increase your savings. Reducing spending is the quickest way to increase the fund. And remember, your personal and financial circumstances change often – a new baby, an aging parent becoming dependent, or a bigger home brings increased expenses. Because your cash reserve is the first line of protection against financial devastation, you should review it annually to make sure that it fits your current needs.

Just like a standard amount might not be right for you, a standard account may not fit your needs either. A money market mutual fund or regular savings account are the most common places to keep your emergency funds, but in some circumstances alternatives such as treasury bills or short term CDs, could be a better option. Talk with a financial adviser to see what might work best for you.

Dana’s take: In the old days, hanging on to emergency cash was easy. Don’t keep it in your purse or pocket. If you didn’t have it readily available, you couldn’t spend it.

Now that we live in a world of debit and credit cards, it’s harder. We have to make a conscious decision to hold onto cash. Setting a minimum balance for your checking account is one way to assure that liquid funds are always available.

Thinking of making your kids authorized users on your credit card for emergencies? Have a talk with them so that everyone understands what constitutes an “emergency.” Also encourage teens to maintain an emergency fund of their own. Perhaps young drivers could keep the cost of their car insurance deductible in a savings or checking account. Planning for the unexpected is a great habit at any age.

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Financial Planning Is More Than Just Asset Management

Ray’s take: A common confusion when looking for someone to help you make decisions about your financial future is understanding the difference between asset management and financial planning.
The alphabet soup of designations in today’s market can be confusing regarding what, specifically; a particular professional can do for you.

On the surface, it may seem like financial planning and asset management are the same thing, since both deal with investments and other finances. But asset management is the act of creating and maintaining an investment account, while financial planning is the process of developing financial goals and creating a plan of action to achieve them. While investments are definitely a vital part of anyone's financial plan, there is much more to planning than managing assets.

Financial planning is a more complex and integrative process than asset management. Individuals going through the financial planning process develop a plan that will meet short- and long-term financial goals. These goals may cover all things related to personal finance, including budgeting, debt, estate planning, education savings, retirement planning, employee benefits, tax planning, insurance and investments.

A comprehensive meeting with a financial planning professional helps to determine the needs and goals of each individual based on their own set of circumstances. Financial planning may and probably will also include a discussion about portfolio management, but it will be focused on what rate of return needs to be achieved to meet a specific goal or set of goals and what allocation is most appropriate for an investor's risk level.

Every person’s situation is different and there is no absolute right or wrong time to begin using the services of a financial planner. Meeting with a financial planner can give you access to his training and expertise. You can explain your goals and together you and the planner can make investment decisions that will help you achieve those goals.

Dana’s take: Setting goals and having a plan for reaching those goals is a vital part of living the life you want. Without these, you’ll find yourself ping-ponging through life without ever being quite happy.

Kind of like sampling everything on a buffet without ever being satisfied because, deep down, you really wanted a steak.

Most of us have big dreams that seem impossible to accomplish. Having a plan breaks big things into smaller portions that are easier for us to realize as we go along until, ultimately, we achieve the big dream.

Whether the goal is financial or personal, knowing a plan is in place can alleviate worry and stress and free up energy for achieving those goals.

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A Look at the Numbers

Ray’s Take: The economy is in flux and there’s a lot of uncertainty over the direction of the capital markets and interest rates. It’s a familiar refrain by this point. Volatility has increased to a numbing level where perhaps we aren’t paying attention as closely as we should to what’s happening in the financial world around us.

We’re living longer and a lot has been written about the looming retirement crisis in this country – especially for baby boomers.

According to National Association of Personal Financial Advisors (NAPFA), 56 percent of U.S. adults don’t have a budget and 39 percent of U.S. adults have no non-retirement savings. Also per NAPFA, in 1991, only 11 percent of American workers expected to retire after age 65. In 2012, that percentage rose to 37 percent.

According to the Urban Institute April 2013 Retirement Security Data Brief, between 2007 and the time the market bottomed out in 2009, 37 percent of retirement funds had been erased. Much has since been recovered, but those were the numbers. Pensions are making headlines in a bad way, as reduced investment returns and increased longevity are reducing payments. These are only a few numbers highlighting the lack of retirement readiness in America and also the overall poor state of finances nationwide.

The retirement of baby boomers will have the biggest impact on our economy in the coming years. In 2003, 82 percent of boomers were part of the labor force. Ten years later, that number declined to 66 percent, and it has continued to fall ever since. It is too soon to gauge the impact of the millennials in the workforce, but their habits appear different. With all else equal, fewer workers mean less economic growth.

Unfortunately, many people put off retirement planning for any of a variety of understandable reasons. Some worry that it will just be too depressing, and in fact prove that they'll never be able to retire. The need for a financial plan has never been greater.

Dana’s Take: Recent news stories have torched the dream of a secure retirement for many baby boomers. Memphis and Shelby County are denying responsibility for paying retirement benefits to a generation of teachers. Retired Memphis firefighters are struggling to make ends meet now that health insurance costs have multiplied.

Now would be a wise time to consult a financial adviser and ask about these possibilities. What if my retirement benefits don’t pan out as promised? Will I have enough personal savings and investments to maintain my standard of living? Might I need to downsize my lifestyle now to insure a more comfortable life later?

Make sure your assumptions are realistic for the coming years. Happiness can last for decades if we scale back and conserve resources along the way.

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Student Loans: The Next Subprime Disaster?

Ray’s Take: If you Google the words “student loan crisis,” millions of hits should convince you that this is a very hot topic.

According to the most recent Department of Education report released in September 2015, the federal loan default rate stands at 11.8 percent for borrowers who were required to start making payments during the 12 months prior to October 2012. While this is slightly lower than the previous report, it’s still not good. And the rate doesn't include borrowers who have been able to defer payments. Additionally, the most recent graduates will face the highest costs and will be emerging into what continues to be a very poor job market. We have every reason to believe that defaults are not only understated, but they will increase.

Student loan debt loads are a problem and a big one. Not only do they create a significant drag on short-term economic activity, but they stunt our long-term growth as well. And the situation is deteriorating.

Because of this debt, millions of young Americans are not buying houses or cars, starting businesses or families, or otherwise contributing to rebuilding the economy.

Also, it's not just former students who are struggling with student debt. Parents are struggling, too. Loans that parents have taken out to help their children have climbed 75 percent since the 2005-2006 school year. Parents who took out loans for children or co-signed loans will find those loans more difficult to pay as they stop working and their incomes decline in retirement.

The fact that “free education” or “loan forgiveness” has been lobbed into the political arena emphasizes how serious this problem has become. Will student loan debt become the next subprime disaster? The problem is real; it’s just more subtle and insidious than a financial market boom and bust. What will happen from here remains to be seen.

Dana’s Take: We all know that a college degree can mean a higher income over the course of life. But now we’re seeing our children graduate with degrees, both undergraduate and graduate, and yet are unable to find salaried employment. The debt that came with that college degree is now the ball-and-chain holding back our kids from realizing their dreams.

Before borrowing to pay private or out-of-state tuition, research the Academic Common Market available through the Southern Regional Education Board at In-state tuition is offered for out-of-state students in 15 participating southern states.

Also, look into honors colleges offered within state universities. Of the 50 Rhodes Scholars in the world, one is attending UT Chattanooga’s honors college. Academic rigor doesn’t always require an Ivy League price tag.

Minimize college debt to maximize freedom and peace of mind for your family.

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Financial Advice is Not a Luxury

Ray’s Take: There’s an old saying that if you don't know where you're going, it's difficult to get there. That is never truer than with your financial goals.

Financial goals give you something to strive for and help you course correct along the path. They also help you focus on the purpose of your efforts. The accumulation of money will do very little for your happiness unless you have a carefully constructed and regularly reviewed plan for what you’re going to do with it.

The happiness comes from the opportunities money makes available so that you can do the things that you want to do. If you have no idea what these things are, no amount of money will make you satisfied. The clear statement of goals and priorities acts as a roadmap in the midst of the chaos of life, temptations, distractions and capital market volatility.

The strategies are basic – spend less than you earn, save and invest the rest. It’s the “invest the rest” part where a professional financial planner can be your best asset. He or she can also help you know when you are there.

Professional financial planning goes far beyond investing. Making quality financial decisions requires a commitment to learning and research. And, while the Internet has a large store of information that makes it feasible for individuals to independently manage their finances, the magnitude of investment skills and information needed can be overwhelming. The financial world is filled with foreign concepts, an alphabet soup of regulatory agencies with their own language, and legal rules that can easily confuse those who aren’t familiar with them.

Your financial future is too important to put on the back burner. Working with a qualified and credentialed financial adviser allows you to objectively and logically plan for your financial future, and a financial adviser can help you understand risks, guide you through a maze of retirement options and improve your overall investment results.

Dana’s Take: Because of all the economic issues in recent years, we have gravitated toward being a generation of DIY-ers. That’s not a bad thing, but the even the best DIY-ers know that you have to understand what is involved in your project. And when to call in a professional.

In our hectic schedules with a myriad of responsibilities, we often simply do not have the time or interest in devising, implementing and regularly monitoring a financial plan. We should always have at least basic knowledge and understanding of anything that involves our money and/or our future. But when it comes to building the finances necessary to send our kids to college and have a great retirement for ourselves, calling in a professional may be the best decision you can make.

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Should Parents Be In The Home Loan Business?

Ray’s Take: Owning our own home is still a big part of the American dream. Achieving that dream has changed a bit since the Great Recession when significantly tighter standards were put in place.

There’s a new way to obtain a mortgage. According the Wall Street Journal, “In some cases, rather than turning to a bank, families are setting up their own loans with grandparents or parents becoming the lender.”

If parents decide to go the route of an “intra-family” loan, as these type loans are known, there are some rules that must be followed to avoid problems. When properly structured and well-documented, they can be a useful planning tool. One in which would be homeowners get into their dream home, lenders receive a small but steady interest rate, and borrowers gain access to interest rates that are lower than commercial rates and with better terms than a bank might offer.

The Internal Revenue Service allows borrowers who are related to pay a very attractive, low interest rate, known as the Applicable Federal Rate. This is the minimum interest rate that may be charged on intra-family loans. Another advantage of these transactions is that the total interest expense over the life of the loan stays within the family instead of being paid to a bank.

Lenders should carefully consider “forgiving” interest and principal. Loan forgiveness is a gift in the eyes of the IRS. Additionally, the lender needs to be aware that the interest received is taxable. Be sure to structure any loan of this type so that it can’t be misconstrued as a gift which could trigger the federal gift tax or use of unified credit.

If you decide to go this route, work with an attorney to draft an agreement that covers all aspects of interest and taxes.

Dana’s Take: My children are too young to want a house, so I would say that lending an adult child money to buy a house would harm both the child and the relationship. I would add that a parent’s job is to foster independence, not dependence, and that an entitled young adult is not a pretty thing.

However, if I imagine the day my newly engaged child is turned down by lenders due to a tight credit market, I can see new justifications for helping this child (and my future grandchildren) with a loan or a gift.

Acting as a bank and expecting monthly payments could certainly cause a rift. Better to consult your financial adviser and, if you can afford it, gift what you can. If not, an equally valuable gift is to allow your child to find his own way and earn that sense of competence.

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Assisting Elderly Parents With Finances

Ray’s Take Millions of elderly Americans suffer from dementia, Alzheimer’s disease and other disabilities that make them unable to make decisions about their finances. If this happens to your parent, it could mean that you will need to step up and take control for them.

Accepting the role reversal as your parents get older can be a bit of a challenge. You are still their child, but now they are in need of assistance in handling financial matters – which they may consider none of your business. It is essential to create an atmosphere in which you are able to assist them without making them feel as though they somehow became the child in the relationship.

The most important aspect of helping elderly parents is communication. Keep a dialogue going. Explain to them that you want to help them, and then keep them informed by telling them what you are doing as you are doing it.

It’s also important to have communication with other family members so that there are no misunderstandings about activities taking place. This should prevent hard feelings and has everyone comfortable with decisions being made.

You need to ask a lot of questions about finances. Where are financial documents kept? Is there a financial adviser who can assist if your parent becomes incapacitated? What are their significant assets? Keep a list of insurance policies, retirement plans, properties, bank and investment accounts, etc. Be sure to have as much detail as possible about each asset on your list, including policy number, phone number to call, beneficiaries, etc. You don’t want to have to do research or dig around for information in the middle of an emergency.

You may feel uncomfortable asking your parents about their finances. But you are doing them no favors keeping the critical data a secret.

Dana’s Take It’s hard to see our parents age and lose their ability to be independent. And to make matters worse, as they feel their independence slipping away, they may become very fierce in protecting it. Even to the point that they become angry with their adult kids who are only trying to do what is best.

Their anger reflects their grieving, not a lack of appreciation or love for family members. It’s not unusual for people, as they age and lose control over their lives in ways both big and small, to lash out at the person, or persons, who they know won’t leave them.

Take the high road in these situations no matter how hard it is.

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Money is Emotional

Ray’s Take You know yourself better than anyone else. You know what motivates you. You know what frightens you. But it is probably something very different for your friends.

A lot of personal finance books will tell you the best way to handle your finances from an unemotional perspective; this advice is worthless if it doesn’t work with your personality. You are not a robot and shouldn’t make important decisions like one.

We need to consider our financial decisions through both the filter of numbers and emotions.

Do some honest introspection. Find what’s most important to you. Retire at an early age? Big house and fancy car? Money for our kids’ college education or helping them get a start in life? Adopt the methods that will help you get to your financial goals the quickest, leveraging your personal habits to do so.

With all that being said, you still want to avoid emotional decisions that take you in the wrong direction. Consider whether your decisions are based on some outside influence like anger or sadness that can lead to decisions that don’t match up with your long-term plan. Are you allowing short-term issues to impact your long-term plans? Also consider whether or not you are choosing based on something that worked well for a friend.

For most people, money is never about just money. When handled correctly, it’s a tool to accomplish some of life’s goals. Think about it – isn’t financial security just a feeling? Doing something – even if it is a longer process – is almost always better than the choice of doing nothing because the method others are using doesn’t work well for your personality. Find what works for you and find a professional adviser to assist you with it.

Dana’s Take In many ways money defines who we are; our lives are planned around money and what it can provide for us. For example, it affects the type of house we choose, the clothing we wear, the schools our kids attend, vacations and our retirement plans.

Defining ourselves based on financial means, however, can be a shaky foundation for identity. When finances reverse, will our value as a person fall with our dollar worth?

Would your friends stand by you in the event of a financial reset? If not, maybe it’s time to diversify your friendships around less material pursuits. Church or faith friendships, childhood friends and friendships based around hobbies and activities may hold steady despite financial circumstances.

Is it really a friendship if toys and things are the price of admission?

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Don’t Panic Over The Market Drop

Ray’s take: The stock market has had one of the worst starts of the year ever, and the roller coaster shows no sign of letting up. Market naysayers have stolen the spotlight and are further inciting panic with their rhetoric.

Should you sell everything and get out now before it gets worse? Unfortunately, it’s not unusual for investors to panic and sell out amidst a market downturn. Memories of the 2008 bear market are still pretty painful.

No one has a crystal ball, but history suggests that it is a bad plan to follow the herd as it runs off the cliff. When it comes to investing, our greatest enemy is not the market, but ourselves. If you’re a long-term investor, what matters most is not what happens next week, month or even year. What matters most is what happens over your relevant time horizon, and if you are in the stock market that should be 10 years or more.

America’s economy is still in relatively good shape, and keeping a portion of your portfolio in stocks should pay off. It’s how you grow your money and beat inflation over time. It doesn’t mean you make money every year, but the up years outweigh the down years. Right now, the U.S. economy is growing and the Fed is being very cautious.

Holding fast in turbulent times is difficult, but usually the best course of action. Even if you do “get out” before a downturn, picking a re-entry point is extraordinarily difficult. Having a carefully created plan that includes asset allocation and a time horizon is your best bet. The allocation should be one you can live on (achieve your goals) and live with (avoiding panic in down markets).

Since March 2009, we’ve had unusually low volatility and generally up trending markets. That is not typical. We should not expect asset class returns without some “tests” along the way.

As behavioral finance experts and financial planners alike will attest, corrections and bear markets are part of the journey, and they don’t mean you should change your investment plan.

Dana’s take: If you've looked at the stock market at all this year, you know it's cringe-worthy.

It can be really easy to let your emotions drive your investment decisions, especially during periods when the market is dropping like a lead balloon. The best way to calm those fears is to widen your scope. Are you looking at the last six months or the last six years?

Most investors make their money over a long period of time through a lot of ups and downs. We’ve all heard of Warren Buffet – The Oracle of Omaha. It took him a long time to get rich. Do you really think you can make money any faster than the Oracle of Omaha?

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Debt After Death

Ray’s Take You can’t take it with you. Debt, that is. And most debt does not get passed to a spouse or other heirs. But debt collectors may try to get the money from family members anyway. For this reason, it’s good to know what happens to various forms of debt that may be left behind when a loved one dies.

Your home is probably the first item to come to mind – if it’s not already paid off. If you are the co-owner or inherited the home, then you can make the payments and the home will be yours.

Credit card debt is probably one that comes to mind, too. Be wary of joint accounts as the liability is joint as well. If you are not a co-signer on the credit card application, you are probably in the clear. Although, if you are listed as an authorized user, the credit card company may try to insist that you pay.

What about the car? If your name is not on the loan, you have a choice. If you want to keep the car, you can make payments on it. If you don’t want to keep it, or can’t afford to keep it, the vehicle can be repossessed without impacting your own credit.

Student loan debt can be tricky depending on whether the loan was a Federal loan or a private loan. Federal loans can generally be forgiven, private loans will require the co-signer to pay in full.

While you may not be on the hook for the debt, your loved one’s estate might be. And creditors may file a claim in probate court to collect. You should be aware that some items are exempt from probate, such as jointly owned real estate, retirement accounts and life insurance policies.

While these are some common debts that may be left behind, there are few guaranteed rules. It’s best to be aware of all debt that you may become responsible for in the event someone dies so that you won’t be blindsided financially as well as emotionally.

Dana’s Take When, tragically, a parent loses an adult child, the young adult leaves behind a lifetime of memories. More likely than not, the adult child may hold a student loan or other debt.

It’s good to educate yourself about what would happen to any debt you co-signed on for your child. You may co-sign on a student loan, a car or a credit card to help them out financially and to ease them into the transition from home to independence.

We never want to think about our kids dying or becoming incapacitated, but if we are going to co-sign on any kind of debt we need to be informed about what might happen in a worst-case scenario so that our own finances won’t be impacted negatively on top of such a devastating event.

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Investment, Consumption and Financial Planning

Ray’s Take Investment and consumption are two sides of the same coin, but sometimes there can be a blurry line between the two. Sometimes our intense desire for something can make it difficult to see which side your expenditure falls on.

One way to think about which one you are dealing with is to know that spending that most likely increases your overall wealth is an investment, while spending that does not increase your overall wealth is consumption.

An example of a common expenditure that feels like an investment but may actually be consumption is a new kitchen. Will that kitchen remodel actually increase the value of your house or is it more about the pleasure you will get from it? If you have an outdated kitchen and upgrade to more modern countertops, cabinets and floors, you may actually be increasing the resale value of your house. But if the new kitchen is a professional chef’s dream, it might be consumption instead. Neither one is wrong, but it’s important to understand which one you are dealing with.

What about commodity speculation or a hot tip on an initial public offering stock? Investment or consumption? Yes, it could take off and make you rich, but statistically that’s less likely to happen. However, if you have the money and enjoy the risk, have fun, but at least in Vegas you get dinner and a show.

Those old standard investments we have heard about for years are the ones that are more likely investments. Stocks, bonds, mutual funds. These traditionally increase in value over time rather than depreciate. But over short periods of time they too can go down, so your time horizon matters a great deal.

As consumers, it’s important to fully understand the difference between consumption and investment, and apply this to every single purchase that you make. This will enable you to make the most of your disposable income, and commit as much money as possible towards improving your quality of life and accumulating long-term wealth.

Dana’s Take Reading the local news about unfunded retirement plans and post-retirement health insurance costs, makes saving for retirement seem a little more worthwhile. Like the wise tortoise who raced the hare, being consistent and looking at the long term work out better than being fast or not worrying about where your living expenses will come from down the road.

It’s not the fun way. It doesn’t sound very exciting. But being diligent and planning well make for a much better later life. It’s OK, and to an extent necessary to your mental health, to spend some along the way on things that will enhance your life experiences and make memories that are far more valuable than things. Just be sure you understand the long-term impact of that expenditure.

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Tackling Debt Confusion

Ray’s Take If we’re honest, we should admit that debt is only incurred when we want something that we haven’t saved for. That said, there are two types of debt – good debt and bad debt. And it’s important that you know not only the difference between them, but how they affect your lifestyle and financial plans. This gives you confidence to know when it’s prudent to go ahead and borrow money.

The basic definition of debt is simply an amount of money borrowed by one party from another. Looking at this definition, debt sounds neither good nor bad. But, a closer look provides a more detailed way of viewing indebtedness.

Good debt eventually pays you back in some way. Use it to purchase things that appreciate in value. A home mortgage can be good debt. A college education can be good debt if the degree is the gateway to a job that will lead to higher income.

Bad debt would be any debts incurred to purchase depreciating assets. In other words, if it won’t go up in value or generate income, you shouldn’t go into debt to buy it. A prime example of this type debt is a new car. It depreciates in value the minute it’s driven off the lot. Paying cash is a much better way to go.

The Consumer Financial Protection Bureau says that high interest consumer debt is the worst type of debt. The most infamous way to get into this type debt is with credit cards. It’s easy to hand over that card without thinking through the long-term impact.

There is certainly an argument to be made that no debt is good debt. Unfortunately, few people can afford to pay cash for everything they purchase. A good motto would be “everything in moderation”. When used the right way, debt can assist in building wealth.

Consult a financial professional to assist you with building wealth and also making a plan to be as completely debt-free as possible before you retire.

Dana’s Take I think everyone would agree that a college degree is a requisite listed in many of the job openings out there these days. A college education can be an important part of your child’s future.

It’s important to have a discussion with your child about what kind of degree is best suited to advance his or her future. Sometimes it’s a hard conversation if they want to obtain a degree in a field that will not translate well to the everyday work world. Spending money on a college degree that is in an impractical area is not a good investment. Have the discussion early in their high school, or even junior high school, years so that all of you are on the same page.

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Financial Steps for Executors

Ray’s Take The death of a spouse is high on the list of the most stressful events in life. But, as bad as the emotional trauma can be, the financial fallout can be equally traumatic – and can last much longer. Most spouses name each other as their executor, which makes sense. But the job is not an easy one, and few are fully prepared for the responsibility.

There is a sequence of things to do which should be followed in order. Gather important documents such as last will and testament, investment and retirement account information, bank account information, multiple copies of the death certificate and any other documents pertaining to finances. Next, meet with each of your professional advisers. This will generally be your attorney, financial adviser and accountant. These experts will be able to give you guidance about various financial issues.

Probate the will. This will start the process on any items covered by the will. Probate is not a bad thing. It is a process to ensure that the deceased wishes as expressed by their will are followed. If all is in order, it shouldn’t take too long. If there are complications or someone decides to challenge, be prepared for a long process that can take an extended period of time to clean up.

Contact the life insurance company, if there is a policy in place. Your agent will guide you through the benefit process. If there was an employer-based policy, contact the HR department to determine the process of collecting.

Re-title joint accounts and update beneficiaries. Contact the appropriate financial institutions or brokerage firms – they will help you through the process of re-titling these assets.

Contact organizations where your spouse may have had memberships that are billed automatically (like a gym or country club) to cancel these memberships and the automated payments.

Once these items are settled, sit down with your financial adviser to review your new financial landscape and make a plan.

Nothing can ease the emotional loss of a loved one, but good advance planning can make the financial impact easier.

Dana’s Take Knowing what to do when a loved one dies will help you get through the formalities of this devastating time so you can properly grieve your loss. It seems unfair that during this extremely difficult time, you have to continue on and take care of business that has to do with death and getting everything settled. You’re emotionally exhausted and it’s an effort to just get through the day.

It may be comforting to keep in mind that your loved one felt you were the best choice to make sure their final wishes were carried out in the way they wanted them to be. It’s a small comfort but may help you to keep focused.

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Things to Consider Before You Invest

Ray’s Take The great recession of 2007-2009 and its associated bear market seem like a long time ago. The relatively small setback of 2015 seems very tame in the context of the gains since March of 2009. This is a good time to take a few steps back and review investment goals and expectations.

We all need to invest for our financial future. But there are some important things to consider before putting wealth at risk, so that we accomplish our goals without exposing ourselves to risks that we didn’t consider.

Liquidity is the term for how fast we can get our money back from the place where we invested it. Not necessarily all of it … or even at a profit. Sometimes we invest more than we can actually afford to and need to get some back. Stocks, bonds and mutual funds are all forms of investment that are liquid investments that carry risk or not getting back all of your money. CDs, on the other hand, are much less risky, but can be less liquid too, depending on the length of time on the CD.

How about the return on your investment? What is your goal for returns? Bonds typically pay a fixed interest, while stocks and other equity investments go up and down with the market.

What kind of earnings can you expect? Are you looking for interest, growth or maybe dividends?

What is your risk tolerance? There is usually a trade-off between risk and reward. But you should never take more risk than you can stand without panicking.

Diversification is important. As we noted already, markets do things other than go up, and you want to be prepared as much as possible for the vagaries of the market. If you are well-diversified, you can ride the market roller coaster with a little less stress. Trying to time the markets or jump from one investment type to another mid-stream will usually lead to disaster.

Dana’s Take A couple’s finances can turn into a game of chicken. Both members know that their finances are not sound, but neither wants to be the one to sacrifice his or her pet splurges, so both keep their mouths shut. This game can go on until both players lose.

Retaining a certified financial planner can help both members of a couple remain accountable for their financial futures. An experienced CFP looks at the couple’s long-term goals and compares that to current behavior and choices. He or she then helps steer both members to choices that will benefit both in the long run and keep them on track to realize their goals.

Facing up to financial realities can lead to a long-term win for the marriage and family.

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Equity Crowdfunding: What’s It All About?

Ray’s Take A new avenue for investing is garnering some media attention. It’s called equity crowdfunding, and it’s a vehicle for small entrepreneurs to expand their businesses.

Investopia defines equity crowdfunding as the use of small amounts of capital from a large number of individuals to finance a new business venture.

Sites like Kickstarter and Indiegogo have been around for a while, but only high income/high net worth individuals called “accredited investors” were allowed to make these types of investments. This changed in 2015.

The Securities and Exchange Commission recently approved a set of rules to allow the “everyman” investor to participate. The amount of money backers are allowed to invest depends on their income. Those with an annual income or net worth of less than $100,000 will be allowed to invest up to $2,000 in a 12-month period, or 5 percent of the lesser of their income or net worth, whichever is greater. Those with an income and net worth of more than $100,000 will be permitted to invest up to 10 percent of the lesser of their annual income or net worth. Previously, equity crowdfunding had been legal only for accredited investors, or those who met required levels of assets and income.

Equity crowdfunding regulations for intrastate investing have been passed in 47 states and are on the dockets in the remaining ones.

Even though a lot of legislation has happened to protect investors, don’t think that equity crowdfunding is a sure thing. These are still small startup businesses that may or may not succeed. Shares purchased this way will be a very high risk, and there are rules for how long you have to hold them before you can sell. As with any “latest thing,” this has its champions and its detractors.

If you have the money to risk, it can be fun … but then again, so can Vegas. You may be the next Warren Buffet, but until you know for sure, don’t invest more than you can afford to lose.

Dana’s Take It seems like there is a never-ending list of the latest must-haves. And it can be tough, both time-wise and financially, to keep up with it all.

I saw something recently that said, “My goal for 2016 is to be absolutely happy. No matter how that may look to others.” I took that to mean that what makes me happy might look out of style with the mainstream. And that’s OK. Being an individual can be a good thing.

Many of us spend so much time chasing after the latest and greatest that we forget to relax and see what makes us unique in the world. And to realize that what makes us unique could lead to the next thing everyone else is after. Take time to slow down and get to know you.

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Are You Part of a Sandwich?

Ray’s Take Being a member of the sandwich generation – adults who simultaneously care for children and aging parents – is becoming an increasingly familiar challenge.

It’s tough trying to make financial decisions to take care of loved ones today that may have a negative impact on your own future.

The number of people who find themselves sandwiched between generations continues to grow. The baby boomer generation is aging and is expected to live longer than ever before. Children are now living at home longer due to the challenging economy over the past several years, making jobs hard to find.

And, to top it off, this type of financial pressure often occurs during the peak years of your career when demands are highest for your attention and time at work.

It’s imperative to have a plan on how to handle all the added financial and emotional strains.

Prioritization is important. Remember first that the best gift you can give your parents, children and grandchildren is make sure you provide for your own independence. Other decisions might be saving later for college to help with expenses needing to be directed at parents right now. Cutting down on luxuries like an expensive vacation or a new car every year can free up funds to put toward your children’s future.

Hone your budget. Now that you have additional responsibilities, it’s time to take a long, hard look at your current budget. Making a plan and sticking to it is critical to keeping yourself on track. My bank only lets me spend a dollar once.

Sit down with siblings to make a plan for caring for parents that includes everyone. Where your parents will live, who will contribute monetarily and how much. Consider using an elder care attorney. Working through a plan in advance can help limit stress to the extended family in the future.

Remember to take care of yourself, mentally and physically. You can’t help anyone if you don’t.

Dana’s Take Many of life’s big changes can lead to stress.

One of the top types of routine stress is the kind related to the pressure of work, family and other daily responsibilities. Health changes from this type of stress are the hardest to detect and over time may lead to serious health problem like heart disease, high blood pressure and depression.

The way we handle all of the things life throws at us impacts not only ourselves, but those around us as well. We all want to give our kids a happy childhood and our parents a well-earned rest in their golden years. Self-care is not selfish. It’s the best way to create a loving and happy atmosphere for everyone.

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Back to Basics: Investing 101

Ray’s Take Learning how to invest your money is one of life’s more important lessons. You don’t need to be Warren Buffet to start investing. But you do need to have a basic understanding of investment and investment terms along with the confidence to make a plan.

Investment advice from friends, even those who are well off, may not be the best advice for your circumstances. Everyone has different goals and different risk tolerances, and the more you know about investing, the better prepared you are to make decisions that will help you achieve your own goals.

A basic financial goal would be to spend less money than you earn, invest the difference and one day have enough income from investments to live comfortably in retirement. From there, you make more specific decisions to get you to your personal goal.

What should you invest in? The most common investments are stock and bonds. Stocks are equity investments which mean you own some portion of the company. Bonds are debt investments, which means the issuer is indebted to you and pays you interest. These two investment types are held in most portfolios, sometimes as a mutual fund, which is a mix of the two managed by a company.

Should you invest or use that money to pay off debt? That depends on a number of factors. How much debt do you have? What is the interest rate on the debt? In the long term, would it be better to pay down the debt, or do a combination of paying down the debt and investing a smaller amount? As a general rule, if your expected return is greater than your interest cost, then you are better off investing.

There are no inherently good or bad investments. It all depends on the plan and the investor. A financial planning professional can help you to look at all your options and make the best decisions for you.

Dana’s Take Taking financial tips from a friend risks financial ruin plus the loss of the friendship. A couple I know was convinced by a trusted friend of a scheme to stop paying the mortgage yet remain in their home. Following his advice, they paid lawyers in a neighboring city a sum every month to handle this procedure. For four years the couple remained in their home, mortgage-free – until the notice arrived that their home had been sold at auction. They lost 15 years of equity plus the many improvements they had added.

The odd thing is that they could afford to pay the mortgage from savings alone. They were simply convinced by a good friend of a way to outsmart the bank.

Separate your friendships from your finances and both will remain golden.

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Resolutions Not to Make in 2016

Ray’s Take New Year’s Eve is traditionally a time to make resolutions about what we will do in the coming year. But, since investing is one of those topics that don’t come easy to a lot of people, let’s do something different. Make resolutions of what you will not do.

Resolve not to check your retirement accounts with every headline in the financial news. Don’t download that phone app that allows you to check your bank account balance any time of the day or night either. Review your portfolio once a year with a professional and make decisions made with a calm mind, then go live your life!

Resolve not to act on “hot” stocks. Last year’s winners are just that – last year. Keep these two things in mind: Past performance is no indication of future potential. Buying the hot stock once everyone knows it’s hot flies in the face of this advice.

Resolve not to read or watch more stock market news. In general, stock market news is about as useful as celebrity news. Watching or reading more of it will not make you a more astute investor. And it could lead you to make rash decisions instead of sticking with your long-term goals.

Resolve not to put off increasing the balance of, or starting, an emergency fund. You can shoot for big amount regularly, but if that’s not feasible right now, put away something regularly. The habit matters more than the amount. It all adds up and you may find your account has become substantial without feeling the crunch.

And on the subject to an emergency account, resolve not to pay off debt using your savings. Getting out of debt is a great plan – and with your savings accounts making low interest, your debt is costing you. However, while withdrawing funds may be easy, it can be very hard to pay yourself back.

Try out these relatively easy not resolutions and see where they may lead you in the New Year.

Dana’s Take New Year’s Eve is the Academy Awards night of resolutions. Why choose that one evening to decide to make big changes in our lives about eating better, saving more and exercising more?

Because, let’s face it, nobody makes a resolution to spend more money, eat more fast food or exercise less.

Decisions to make our lives better should be ongoing. After all, each day is the first day of the rest of your life. We should be making decisions that affect our lives in ways both big and small on a regular basis so that they become ingrained in a way that grows us toward our goals in a gradual and long-lasting way.

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Protect Your Retirement From The Unexpected

Ray’s Take We plan carefully during our years in the workforce to create a solid income for our retirement. But how can we protect that plan after we retire and have less flexibility and increased vulnerability to unexpected events? We want to avoid finding ourselves in the position of having to go back to work.

It’s important to prepare for setbacks and have contingency plans in place before you retire. Here are some things to consider.

Rebalance your portfolio. If you haven’t been an active investor over the years, it’s time to review where, exactly, your money is invested. Continuing a higher-risk portfolio that worked well for you during the accumulation phase could spell disaster in retirement. We know stock market corrections can and do happen, which is why you should diversify away as much of the risk as possible.

Carefully consider your exposure to long-term health risks. This is not the garden variety health issues that go with every life. We are talking about if one of you suffers a debilitating event and you aren’t able to provide care at home. Many people believe Medicare will save the day without realizing that there are some pretty strict limitations involved. The ideal is to be self-insured, but this may not be realistic for everyone, and long-term care insurance should at least be considered. Be sure to pay special attention to the clauses regarding pre-existing conditions; coverage limits, like max cost per day in a nursing home; and waiting/elimination periods.

Consider the financial repercussions upon the death of a spouse. Some retirement assets pass on to the surviving spouse, but not all. Traditional pensions may be generous while the former worker is alive, but that typically changes or ends when they pass away. The same is usually true with Social Security. Consider life insurance to cover any gaps.

Meeting with a financial professional can help you make the best plan for protecting your retirement.

Dana’s Take In Justin Timberlake’s #1 song “Mirrors,” he sings to his beloved, “I’m looking right at the other half of me.” Indeed, a life partner can seem like half of one’s self. In the event that that other half unexpectedly dies, the grief can seem overwhelming.

Transitioning through the loss of a spouse can require a lot of support. Have you and your mate discussed supports in the event that one of you unexpectedly passes away? Have you retained an estate attorney, financial planner or accountant to help the surviving spouse settle the estate and sort out life insurance and other benefits? Do you already have a clergy member in mind or counselor to help your mate with emotional struggles?

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Prepare for Debt Surprises

Ray’s Take Conventional wisdom says that the money in your emergency fund should be set aside for unexpected expenses. By definition, an emergency is unexpected. But sometimes it is more difficult to maintain that fund.

Since the Great Recession, we’ve seen a trend toward more frugal spending, which has reduced debt burdens. But it has also helped keep interest rates really low, which makes it difficult to maintain that emergency fund. It’s more difficult to keep that cash when it only seems to earn pennies and we are tempted to “repurpose” those funds elsewhere.

That leaves us at a big disadvantage when unforeseen emergencies occur.

Your home will need major repairs from time to time, like a new roof or air conditioner. How about a transmission replacement in your car? Even if you maintain it regularly, major breakdowns occur. Unreimbursed medical expenses are another emergency. Year in and year out, Americans in every demographic name unexpected doctor’s bills as their number one surprise expense.

Without a sufficient emergency fund, we go into debt with a loan of some type or credit card balance, which creates a pool of debt we didn’t plan for and now have to pay the piper accordingly. According to, the average credit card interest rate these days is more than 16 percent. That’s a lot of extra money to pay.

There should not be surprises, as there will always be something; and that’s why you should maintain an emergency fund even when interest rates are near zero. You keep it not to make money, you keep it so you are not at the mercy of the money lenders when an inevitable expense occurs.

Dana’s Take Life is full of surprises, many of them unpleasant. So when you suddenly have more money going out than you anticipate, it can be hard to figure out how to pay those bills that pop up out of “nowhere.”

By definition, “unexpected” means you didn’t know it was coming, so how do you plan for it?

Imagine if your city and country didn’t plan for the unexpected. What if we had no fire department, no S.W.A.T. teams and no emergency rooms, because everybody just hoped things would work out? Would you feel secure in such a world?

Reflect for a moment on whether you may be crossing your fingers and hoping for the best. Just like the unprepared city or country, you could end up in a mess.

Having a plan in place to cover emergencies will give you a cushion to deal with surprise expenses. Remember, the way we deal with these situations is what determines whether we grow and become stronger, or are beaten by them.

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It’s a Balancing Act

Ray’s Take Work-life balance is something we’ve talked a lot about in recent years. It feels as if we all have to work harder and longer to get what we want in life. It’s hard to say if whether we’re earning less or wanting more. So how do you balance the work part with the life part? defines work-life balance as the achievement of equality between time spent working and your personal life. That seems pretty obvious – and simple. But somehow, it’s become complicated.

First, we should understand that it doesn’t mean 50-50 all the time. Sometimes work will get more and sometimes life will get more. But it seems like work gets more time on average. Here are just a few ways to give more to the life part of the balance.

Let go of fear. The fear of not getting everything done today. Give it your all for a prescribed number of hours and then … let go. Rest and come back to it tomorrow. Time spent “sharpening your axe” through rest and relaxation is an investment.

Schedule personal time. Things like exercise and date nights with a spouse can easily fall by the wayside if they aren’t purposefully scheduled. They’re just as important as any meeting.

Set some boundaries. If colleagues think it’s OK to call you at 10 p.m. if they need something, they will. Setting firm boundaries around when you are – and aren’t – available will help you relax when you’re off the clock and avoid burnout, while also helping to avoid unmet expectations.

Having a great work-life balance can contribute to good health, both mental and physical, and help you to avoid unexpected expenses due to health issues and bad money decisions made by a fatigued mind.

Dana’s Take Have you seen the commercial about the young man getting in the elevator while his co-workers look on in astonishment and the voice-over says, “When did it become an act of courage to leave the office on time”?

In 2010, a study on “The Importance of Family Dinners” was published by Columbia University’s National Center on Addiction and Substance Abuse. In their findings, researchers discovered that teens who actually sit down to have dinner with their families on a regular basis were twice as likely to receive higher grades in school within the A and B range, and also three times more likely to say they had a great relationship with their parents.

So, on the way home, pick up a rotisserie chicken, a pouch of microwave rice & a can of mandarin oranges, and be the home-dining hero. Throw all the cellphones in a basket, say grace and enjoy one of the great pleasures of life.

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Avoiding the Scammers

Ray’s Take It is an unfortunate fact that retirees only make up 15 percent of the population, and yet they are the victims of almost one-third of all reported scams. Identity theft in particular is on the rise as the elderly often have a good credit rating and little or no debt. Make no mistake; falling prey to an identity thief can be a financial disaster in addition to being an emotional one.

There’s nothing you can do to guarantee you won’t get taken, but there are many things – some of them very simple – that can reduce the risk.

First – be skeptical. Scam artists are very good at making things look legitimate. Something that sounds too good to be true usually is. A quick internet search or phone call to the company may be all it takes to reveal a scam that has been reported by others.

Be proactive in protecting your personal information. Legitimate companies will not ask you for personal information via a phone call or an email with a link for you to click on. Those who need your account numbers, PINs or passwords already have them.

Take your time when thinking over a purchase. Any urgency on the part of the seller is a red flag. If they’re really offering a bargain, they shouldn’t have to high-pressure you into buying on the spot.

Get it in writing. Contrary to what many believe, verbal promises don’t count. The only thing that matters is what’s in writing. Most sales contracts specifically state that verbal promises are not binding. That’s why you need to read, understand and agree to the terms before you sign any contract.

There are commercial services offering protection and insurance in the matter. While it might offer a bit of peace of mind, the best bet is to reduce the risk on your own.

Dana’s Take While the elderly are a growing section of the population being targeted by scammers, there’s another one with a high growth rate: individuals, mostly women, using online dating services.

With the holidays upon us, many people feel lonely and lost without a significant other in their lives and sometimes turn to online dating services. They’ve been growing in popularity and some people have even met their soul mates. But everyone should be aware that this is an arena where scammers take advantage of the unwary. And because the individuals are embarrassed by how they were taken in, they don’t report the crime.

Know the signs of these scammers. The FBI posts information each year of things to watch for and recommends using only established and reputable sites. Being alert and informed can save you from even greater heartache.

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Planning Ahead for the Rate Hike

Ray’s take: So far, the Federal Reserve has not raised rates. It may be a while and it may be slow, but sooner or later rates will go up. Before they do, it could be a good idea for you to review how the rate hike will affect you personally.

When the rate hike happens, life will get a little better for savers and a little harder for borrowers. An interest rate hike will impact anyone who has a home mortgage, car loan, student loan and savings accounts.

For those who have an adjustable rate mortgage, the time to review, and possibly refinance, is before a rate hike happens to take advantage of the lower fixed rates currently available. For those planning to buy, doing so before a rate hike will mean a lower interest rate on your mortgage.

When it comes to credit card rates, your current APR could quickly increase by 2 percent or more, and the longer you hold off paying your debt, the more problematic it can be. Now, while rates are low, if you have outstanding credit card debt, work toward paying it down.

If you’re thinking of going back to school and need a loan, sooner would be better than later. Rates on student loans will also go up once the Federal Reserve raises rate.

It will be good news for savers. Ever since the financial crisis, people who put their money in the bank have gained next to nothing. With interest rates so low, savers have been getting the short end of the stick. But, that will change for the better once the Fed raises interest rates.

Regardless of which area you fall into on rate hikes, being proactive now can save you headaches and money in the future.

Dana’s take: Shakespeare said, “Never a borrower or lender be,” but in today’s world it’s pretty impossible not to be one or both of those things.

We borrow for a home, a car, and, using a credit card, for consumer goods. There’s a perception out there about “good” debt and “bad” debt.

Most people would agree that “good” debt is a home loan.

There would probably be some disagreement about a car loan being “good” debt or “bad” debt. Everyone needs transportation, but not everyone would agree that getting a car loan is good debt.

Then there is credit card debt, which a large number of people have, but it’s perceived as being “bad” debt because it’s mostly for consumer goods that we could actually live without.

While borrowing is a part of our modern lifestyle, it’s always a good idea to think long and hard before going into debt. While MasterCard may tell you that borrowing for an object or experience is “priceless,” the peace of mind of living debt-free is truly priceless.

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Taxable vs. Non-Taxable Retirement Income

Ray’s Take The taxable status of an investment account refers to whether any income earned in the account is taxable at the time of earning, or possibly not at all.

A good example would be a 401(k) or IRA. These accounts are considered tax-deferred because earned interest, dividends or capital gain distributions are not taxed until money is withdrawn – there is a payday someday. Other accounts, such as a cash account, high-interest savings accounts or non-qualified mutual fund accounts would be taxable in the year interest money is earned.

It’s important to understand the differences in these types of accounts and how they affect your income stream both before and after you retire.

Since contributions are deductible and the earnings in standard retirement accounts like 401(k)s and IRAs are tax-deferred, why would you put money into a non-retirement account that is taxable in the same year? Lots of reasons, starting with your having maxed out the annual deferral amount allowed but still need to save more for retirement. Or perhaps you need some investments that you can access before 59 and a half that can grow more than bank interest rates.

A general rule of thumb is that retirement accounts should hold equity assets that pay dividends and have high turnover and fixed income with higher returns. Non-retirement accounts would hold growth equities with low turnover, fixed income with lower returns and any municipal bonds. But unless you have a crystal ball, it’s a good idea to cover more than a few bases in both accounts.

You should keep in mind that this only considers one part of portfolio allocation and any decision will also have to take into consideration other variables such as risk tolerance or liquidity. As always, these decisions should be made in the context of a comprehensive financial plan.

Dana’s Take Recently, I heard of a family friend and physician who served time in prison for using farm property to hide income and avoid paying taxes. Prison time is a steep price to pay for not giving Uncle Sam his share.

When I was young and foolish, I got off with a lighter sentence. I withdrew money from my retirement account to buy a car. Why not use that money to buy a car? I wouldn’t need it for such a long time. A few years later, a letter from the IRS arrived with the answer to that question. It outlined all the fines and interest I would be paying for dipping into my retirement account prematurely. And, to top it off, the car turned out to be a lemon.

Taxes are the price we pay for living the good life. As my father used to say, “There’s no such thing as a free ride.” Tend to your taxes or the IRS will do it for you – with penalties and interest

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Give Your Retirement A Raise

Ray’s Take People used to not worry very much about their retirement. They tended to work for the same company all their lives, and at 65 they got a watch and a pension.

They learned how to live on their monthly check and didn’t know or care what the Dow Jones Averages were. Life expectancy was shorter then as well. But those scenarios have changed.

Further, many people change jobs every few years, so being fully vested in a 401(k) takes longer. Another fixture in retirement planning is Social Security. There again the rules are changing with retirement dates being pushed out further and threats of “means testing” on the horizon.

You can’t completely rely on your employer or the government for your retirement. That means it’s up to you to make it happen. Rather than being scary, this should be empowering.

It all starts with a plan, and there are really only three variables: when you want to be independent, how much money you want then, and how much risk you can stomach along the way. Run the numbers and start saving. Make a firm commitment on how you will handle extras such as a raise, bonus, or inheritance. Spend a little, but save more. Then review your plan.

At many workplaces, you can set up your payroll to automatically have all, or a percentage of, your annual raise automatically added to your retirement account. This is a great way to increase your retirement savings without any change to your current lifestyle. Automatic savings is always good. And, after all, you’ve been living comfortably on the income you received prior to your raise.

Adding small percentages to your retirement funding on a regular basis will make a big difference when retirement day rolls around.

Dana’s Take I think we all get excited when we know a raise or a bonus is coming. We spend time thinking about what we’re going to do with that new money, and, as a general rule, it doesn’t include adding it to savings or a retirement account.

We earned that extra money and now we want to reap the fruits of that reward in a material way.

But, as adults, we know the younger we are when we begin retirement investing, the more money we’ll have when it’s time to retire and many of us start investing too late to take full advantage of the time we have.

Sounds pretty schizophrenic, doesn’t it? We’re only human and that’s how the brain works. We know we should save or invest that money, but the spending it is so much more attractive!

Kids learn by example and this is an opportunity where you can teach by example. Sometimes, taking the high road is the best way.

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Distribution Diversification – The Flip Side of the Coin

Ray’s Take We talk a lot about saving for retirement and the importance of diversifying your portfolio. As a result, you’ve diversified the assets in your portfolio and you’ve saved regularly and often, and invested in a balanced mix of stocks, bonds and other assets. And because of those smart moves, you’ve reduced risk and improved your odds of enjoying a great retirement.

But you’re not done yet.

Now we’re going to take a look at the other end of the spectrum – the time when you retire and start withdrawing from those accounts you worked so hard to create – and at distribution diversification for the best results from your accounts.

Distribution diversification is asset allocation’s lesser-known sibling. But it’s equally important and less forgiving of errors. The sequence of returns during the accumulation phase is not nearly as important as during the distribution phase. And unfortunately, the capital markets really don’t care about when you retire. You don’t want to find yourself in retirement receiving a bill and wanting to write, “Please send this when the market is higher.” While most asset classes do regress to the mean over time, you may not necessarily have the time to let them!

While you probably still need growth during your retirement, there’s a greater need for some assets that you can count on to remain stable. That’s particularly frustrating during this time of unusually low interest rates. The interplay of shifting, hard-to-predict factors such as future tax rates, life expectancy and investment returns all combine to make for a confusing array of decisions to make. A financial planner or tax expert can assist you with determining the consequences of distributions and help you feel more secure in your retirement.

Dana’s Take What’s your goal for retirement? Do you want to spend your time doing volunteer work? Or maybe you want to relax on a beach and watch the sunset. Or maybe it’s somewhere in the middle.

Whatever your goal is, you have to take steps to make it a reality. Tenacious as we may be, we all have our breaking points. It’s the moment we feel the potential reward just doesn’t justify all the effort we’re putting into it.

Before you throw in the towel, take a breath and ask yourself why you wanted to pursue this particular goal – and what’s changed to make you think it’s over.

Ask yourself how many sacrifices you’ve made. Are you really willing to chalk it all up as a loss because you’re not feeling confident at this point? Could you tweak the job or project to make it a better fit?

If there’s still some doubt about quitting – keep working toward that dream that fills you with passion.

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Traits That Lead to Better Finances

Ray’s Take Saving money isn’t all about whether or not you know how to score the bargain of the century every time. It has more to do with your habits and attitude toward money. Understanding the impact of personal traits on finances is essential for building wealth.

In the book “The Millionaire Next Door,” by Thomas J. Stanley and William D. Danko, they explain that many millionaires have very frugal ways. They also warn that many people who earn high incomes are not rich.

Here are a few of the personal traits that can lead to better finances:

• Patience is one of the most important traits when it comes to saving money. It’s often the difference between creating savings and being in debt. Having the patience to wait until you find the right deal is a cornerstone of good finances. Drive your car longer. Wait until you can pay cash instead of buying one on credit.

• Satisfaction. When you are satisfied with your life and what you have instead of trying to “keep up with the Joneses” or buying into the commercial hype that you must have the latest thing, your finances will be in much better shape.

• Being organized can ensure that the many issues pertaining to your finances are addressed. It means not paying late fees, not buying two (or more) of things, knowing deadlines that affect your finances. Have a place for all your financial paperwork and a schedule for reviewing and paying.

• Discipline is important when it comes to saving money for specific, long-term goals every month. Personal finance isn’t a way to get rich quick, it’s a way to set goals and stick to them in the face of crosscurrents and temptations until they come to fruition.

• Reflectiveness. It’s important to be able to look at your financial decisions and reflect on their results. You are going to make financial mistakes. Everyone does. The key is to learn from those mistakes so you don’t make them again, or recognize if you keep repeating them.

Dana’s Take “The Life-Changing Magic of Tidying Up,” by Marie Kondo, is a book that can change your thinking about purchasing more stuff. Ms. Kondo is a professional organizer who recommends piling up all of your clothes, books or knickknacks in a big pile and deciding if each piece “sparks joy” in your life. Anything that doesn’t spark joy heads to Goodwill.

Next, she folds each saved clothing item to stand up on its edge and lines up everything, neatly, in a drawer.

Ms. Kondo’s philosophy recommends clearing out clutter to free up space for more mental clarity and happiness.

New habits of acquiring less and appreciating more can rock your financial world in a good way.

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Things You Should Invest In

Ray’s Take It’s important to save where you can, but it’s just as critical to spend where you should.

Given the market volatility in the past decade, many have focused on spending less and saving more, being more frugal and thinking things through before making purchases. But there are some exceptions, times when you should spend money. Because, in the long run, you’ve invested not only in yourself, but also in lowering future costs.

Your health is a place where it’s important to invest. Preventive measures, even if they cost extra, are important. Exercise and a solid sleep schedule are important pieces of good health. Additionally, you need to quickly address any health issues that come up so they don’t turn into something major later. I firmly believe that given the direction in America’s health care system, investing in one’s health may prove more valuable than investing in your 401k.

Investing in good health also means investing in quality food. Food tends to be one of the few budget items that can be juggled to save money here and there. The problem is that people often choose to buy poorer quality food, which isn’t as healthy. The food you eat will determine your energy level and resistance to colds and illnesses. Invest in fresh, seasonal vegetables and quality meats.

Relaxing. While it seems counterintuitive to spend money on relaxation when money is already tight, stress can lead to health problems, strain relationships and affect decision-making skills. For example, a gym membership may seem like a luxury item, but, as long as you actually use it, exercise is a known stress reliever. Perhaps gardening is your stress relief. Whatever your activity may be, find a way to work in into the budget.

Repairs and Maintenance. While these may seem off subject with the other items we’ve listed, taking care of things before they break down means less money spent down the road to pay for replacements that will cost far more.

Dana’s Take The Beatles were right when they sang, “I get by with a little help from my friends.” When building a healthier lifestyle, the support of a friend, spouse or adult child can make that change a lot more fun. I recently hurt my foot and, sadly, couldn’t go on walks. My friend dragged me to her swimming group at the local YMCA. I’m still struggling to figure out freestyle, but it is honestly fun.

Reach out to a friend or join a group when you’re trying to add more health to your life. The YMCA is a good place to start. Fitness trainers also offer group classes like boot camp or strength training.

Community building is an added bonus of joining an exercise class. Invest in wellness because healthier and happier go hand-in-hand.

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Home… Free?

Ray’s Take Wikipedia defines a mortgage-burning party as a 20th-century American custom that is the ritual burning of a paid-off mortgage document by homeowners often including a party in which extended family and friends are invited to celebrate.

We don’t see many “mortgage burning” parties these days. It used to be the epitome of the American Dream. Not only to buy a home, but to own it outright.

That picture has changed somewhat and now so many have refinanced and extended that final payoff. Additionally we are a much more mobile society than in the past and staying in one place for the length of the mortgage is considerably less common. Unfortunately, the lack of seeing those around us reach that goal seems to make many less concerned about ever getting there themselves.

And even when you do reach that payoff date, do you really “own” your home at all?

Taxes tend to rise over time so that even though you own your home free and clear, you are paying higher and higher costs to keep it.

The source of rising taxes is generally growth or development or in some cases financial challenges at the state and local level. Part of the revenue collected from property taxes is used to fund the public school system, library, fire department, pensions and retiree health insurance, and other essential services. So, when those expenses go up and/or states cut their funding in those areas, the money’s got to come from somewhere – and that usually means homeowners.

Then there is insurance. Paying off your mortgage doesn’t make your rates go down. Replacement costs tend to rise over time, and so do your rates. Nicer homes, perhaps a few separately insured items, only add to the number.

Repair and maintenance don’t stop with the mortgage, and can sometimes increase as we get older and can do less ourselves.

Dana’s Take With the number of homes owned free and clear dropping, what makes up the components of the American Dream today? If you Google it, you’ll find a wide variety of opinions on the subject.

It used to be that if you worked hard and saved you could provide a good life for you and your spouse and a better one for your children.

An analysis by USA Today in July 2014 showed that living the American Dream today costs the average family of four about $130,000 a year. According to the U.S. Census Bureau, only 16 million U.S. households – around 1 in 8 – earned that much in 2013.

So, while the old definition of the American Dream is shifting, so too is the number of people who can afford to live it.

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Autopilot For Faster Accumulation

Ray’s Take Out-of-sight, out-of-mind saving and investing is a great way to increase your money.

Automatic money transfers can be your best friend when it comes to investing and saving. By setting up an “autopilot” for your investment and saving accounts, you don’t touch, or see, the money. It goes directly into your savings and investment vehicles. This is a great way to pay yourself first (PYF) with no effort beyond setting up the money transfer from your paycheck.

You can set up “subaccounts” labeled with each goal you are saving for and have money automatically deposited in these subaccounts. If you’re saving for a home, a new car or a big vacation, this can be a great way to watch your savings grow and the only “work” you had to do was the initial set up for transfers. Transfers into your retirement vehicles can be set up the same way to make sure you always contribute to your future self. Further, market volatility often makes it hard to “pull the trigger” on investing. Automatic investing takes the emotion out of it.

Another vehicle for autopilot savings is called “rounding up.” Some banks offer this service. When you use your debit card, the amount is automatically rounded up to the next dollar amount and the “change” is deposited into your savings account. Most personal finance programs have savings goal functions which are well suited for this, but they require the B word – budget. Many resist budgeting, largely from a “control” standpoint. After all, they earned the money in the first place. But I’ve never seen a successful plan without some level of budgeting.

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Name SearchWatch Service'>Charles Schwab, all of this is important because for every five years you put off saving and investing, you may need to double your monthly amount to achieve the same results. The earlier you create this habit the better your long-term results.

Want to know the secret to retiring well? Disciplined. Regular. Saving.

Dana’s Take Generally, being selfish is considered a bad thing. But in the case of paying yourself first, selfishness can be an asset.

It can be hard to get in the mindset of saving all the time, every time. It can be as appealing as starting a diet. And there’s a joke about always starting your diet on the same day of the week. Tomorrow.

Don’t let this be your savings mantra.

Creating good saving and investing habits, and sticking to them, means you will be able to take care of yourself down the road. The person who is most likely to take care of you in your old age is you.

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Fed Rate And Your Retirement

Ray’s Take After the biggest buildup to a meeting of the Federal Reserve in 10 years, they decided to do – nothing. The Federal Reserve left the federal funds rate right where it’s been since 2008, which is just above zero. Anyone who has an (theoretically) interest-bearing checking or savings account knows that already. Despite the inaction, the Fed still claims that rates are going up, someday.

But what is the Federal Funds rate? And why should you care?

The Federal Reserve sets this rate and they use the Fed funds rate as a tool to control U.S. economic growth. That makes it the most important interest rate in the world.

Banks use this rate to determine the interest rate on short-term interest products such as savings accounts, credit cards and adjustable-rate mortgages. Longer-term interest rates are affected more indirectly. The Fed can’t control longer-term rates; the markets do that.

When interest rates change, they affect your 401(k), and other investment vehicles, by changing the landscape of bonds (debt) versus stocks (equity) products.

If you hold a bond to maturity, a rise in rates won’t have an effect on the coupon payment received, or the principal received when that bond matures. However, the bond will probably fall in value when rates rise and if you need to liquidate the bond prior to maturity. You may lose money on your theoretically safe investment.

When it comes to stocks, it’s a bit more complicated. Some companies can profit from higher rates, some will not. But in our current world economy there are more factors that just the Fed rate that impacts stock returns such as relative currency valuations. But those levels are impacted by interest rates.

By raising or lowering the Fed funds rate, the Fed can influence how fast or slow the economy will grow or contract. However, it usually takes many months to see the full effect of any changes they make.

Unless you have a crystal ball, a well-diversified portfolio is the best defense against market movements.

Dana’s Take As a kid, I loved a roller coaster ride. The anticipation as the car slowly rose higher and higher, followed by the white-knuckle grip of the safety bar on the heart-stopping descent and the sideways jerk of a curve was exhilarating.

As an adult, and talking about finances rather than a child’s amusement, a roller coaster ride is not so fun. But, unfortunately, bumpy rides are par for the course these days. And losing money is no joking matter.

Staying positive and calm in an ever-changing market can be difficult to pull off. But in the long run, it can be one of your most powerful tools if you feel like you have made the best plan prior to hopping on for the ride.

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‘Set It and Forget It’ Investing

Ray’s Take: Creating a retirement plan is a very personal thing because no one but you knows what you want for your future. But a plan is a must-have for everyone, and there are numerous ways to create a retirement plan as individual as you are.

One school of thought regarding investing is called “set it and forget it.” Versions of this approach use Index Funds or ETF’s. These funds are types of investments with a portfolio built to match or track a specific index, such as the S&P 500 or many others.

The portfolios don’t change over time. Sometimes this can be good because it keeps you from chasing after trends that blow up. But leaving your portfolio alone for long periods of time can lead to problems. As you age, your portfolio should adjust with you.

There is also an issue with index funds that they must buy more of stocks that go up and sell ones that go down. Sounds like buy high and sell low.

There are “set it and forget it”-style funds that deal with this. These funds are targeted to change over time from higher risk to lower risk as you approach your targeted retirement date and are called, appropriately, Target Date Funds. As you get closer to your target retirement date, the fund adjusts its allocation from higher risk investments like stocks to more conservative investments like bonds. They can also provide automatic asset reallocation and rebalancing.

These funds generally offer a low-maintenance, one-size-fits-all plan. But it pays to be aware of the details of the plan. Because, sometimes, one size doesn’t fit all. There are many funds out there with different options regarding the retirement path, and some may not be a good fit for you.

While target date funds can be a good way to go for those who want to “set it and forget it,” there is still some work involved in choosing the one that will get you down the road to the future you envision. These funds tend to work much better during the accumulation phase of investing than the distribution phase.

Dana’s Take: Have you ever spoken with friends whose adult children are pursuing careers as financial advisers? I’m sometimes curious when those young people didn’t study economics, finance or accounting. Perhaps they are hired for their appealing personalities or the prestige of their social circles, rather than their wealth of knowledge or experience managing money.

In a climate of diminishing returns, proceed with caution in committing resources to advisers with limited experience weathering market cycles. While they may be willing to promise exceptional returns, they may not comprehend the consequences for your financial future until it’s too late.

As Warren Buffett said, “It's only when the tide goes out that you learn who's been swimming naked.”

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Planning for Lifestyle Creep

Ray’s take: Investopia defines lifestyle creep as a situation where people's lifestyle or standard of living improves as their discretionary income rises either through an increase in income or decrease in costs.

As lifestyle creep occurs and more money is spent on lifestyle, former luxuries are now considered necessities. It’s not necessarily a bad thing – in many ways it’s the American Dream. But you need to be sure your financial plan keeps up.

When considering your retirement years and the funds you will need to support your lifestyle during retirement, take a look at your expenses now, especially if you are within five to 10 years of retirement. Lifestyle creep can be slow.

Over the years, as your income rose, you bought a new car rather than a used one. You hired a lawn service rather than taking care of it yourself. The cumulative result of all these little things over the course of your career, and the accompanying income increases, is that it’s hard to go backward.

As most people near retirement, they have been at their peak earnings for a while and, many times, mortgages have been paid off and children are grown and out of the home. As a result of these decreases in cost, there may have been a surplus of money available and that money may have been absorbed into lifestyle and grown accustomed to.

At this point, the odds of a substantial income increase are less and there’s less room for growth to bridge the gap between the funds put away already and funds available to put away in the next few years in the face of rapidly approaching retirement.

Since the goal in retirement is to maintain the lifestyle enjoyed in the last few years before retirement, it is vital to take an honest look at your current lifestyle and ask yourself the hard questions to determine if lifestyle creep is affecting your ability to retire in the way that you want.

Dana’s take: Parents don’t realize they can create spending junkies at a tender age. Look at kids’ birthday parties to see how lifestyle creep grows like Godzilla into the 20s and beyond. Scary? You bet. Girls’ birthday parties include spa days, hair and makeup makeovers (including hair extensions) and even shopping sprees.

Later in their lives, Ray gets calls from college graduates with good salaries who can’t make ends meet. Why? Their lifestyle creep started before high school. And worse, kids’ champagne tastes can create debt problems and marriage problems in their adult years.

Allow teens to take after-school jobs and foot the bill for extras. Those habits will give them a better feel for the cost of living for when they head out on their own. Give the gift of financial independence by staying watchful of lifestyle creep.

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Investing in a Low-Return Environment

Ray’s take: In these days of lower returns on investments, the markets and interest rates in particular haven’t been providing as much of a helping hand as in the past. So, in order to achieve your goals, you may need to do more of the “heavy lifting” yourself. This means reviewing your accounts regularly to determine if you’re saving enough to meet your financial goals.

By reviewing regularly, you can see if projections using your current mix point to a shortfall in your retirement plan. If so, you can then determine what steps you need to take to make a save.

Employing a combination of steps may help you salvage your plan without taking drastic measures. Reviewing your plan is a first step in helping to increase your returns. Some other measures that can help avoid problems are:

Asset allocation. It’s worthwhile to explore different ways to enhance yields you earn from your portfolio, but it should be accomplished by building a diversified mix of assets that are suitable for your risk tolerance. Dialing more risk into the portfolio may well achieve a greater return – eventually. But the price is usually a bumpier ride along the way.

Costs and fees. Low returns magnify the impact of higher investing expenses, including portfolio turnover.

Taxable vs. tax deferred. Lower returns mean that taxes take a bigger bite of your portfolio's value, on a percentage basis. Tax efficiency can help, but it too comes at a price.

Inflation. Explicit inflation protection is important for retirees who have a healthy share of their portfolios staked in fixed-rate investments like bonds and cash.

Planning for retirement is complicated, so it’s important for you to do your homework to make sure you understand all of your options. Meeting with a financial professional can help you define your goals and risk tolerance to help you prepare for a retirement based on your individual goals.

Dana’s take: When the news tells us daily that the world stock markets are falling, what does that mean for retirement portfolios? Make an appointment with your financial adviser to discuss income and expenses and retirement timelines. The sooner you address the possibilities, the sooner you can create a plan.

For those whose lives have seemed predictable, the market’s volatility could infuse some change into the status quo. My brother-in-law recently called his post-retirement career “the afterlife.” Perhaps your afterlife will involve downsizing and visiting all the national parks. Maybe a declining retirement portfolio will spur you to add a daily wellness routine, like walking or tai chi, to your afterlife to save on health care expenses.

Hearing that the market is plummeting can sound like the sky is falling. Instead, it could mean that a new chapter in your life is dawning. Embrace the new reality. A smaller portfolio doesn’t have to mean a smaller life.

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Making the Money Last

Ray’s Take: Are you ready to live to age 95 or beyond? According to the Society of Actuaries, for an upper-middle-class couple, there is a 43 percent chance that one or both will reach at least age 95.

That’s a real eye opener to many of us. Living longer is a good thing. But increased longevity also means the end of retirement as we have known it. To afford a longer life at a comfortable financial level means we need to rethink savings and withdrawal methods; and possibly defer retirement well beyond the traditional age 65. After all, that number was selected in the 1930s when not many lived passed age 70.

It will take a larger amount of money to pay for 30 years of being fully retired rather than the shorter timeframes planned for in the past. This seems like an obvious statement, but it merits real consideration. According to the Department of Labor, fewer than 50 percent of Americans have calculated how much they need to save for retirement. And their tools are based on the average 20 years of retirement.

Having sources of lifetime income is one way to prepare. Immediate annuities, Social Security and pension plans (for those who have still have them coming) are a few ways to create a lifetime income stream. Other ways may include life insurance payouts that will create an income stream for a surviving spouse. Laddered CDs or bonds can create a portion of an income stream. Increased expected return through increased risk (read: more stocks) is usually in the mix. Tax considerations also need to be taken into account.

A financial expert can assist you with creating a plan that will help you to reach that goal. But make no mistake that the odds are you will live longer than you think. And being old and broke is something you want to avoid.

Dana’s Take: If I have a 43 percent chance of living to 95 (yikes), I need to be thinking about where I want to live. Is my home suited for mobility concerns? If not, sooner may be better than later for planning a move to a one-story home or accessible apartment or condominium.

Could I adapt my current home for mobility concerns? Families who already have grab bars installed in the bathroom and a roll-in shower are ready for a recovery from a broken bone or back surgery now or in the distant future.

Finally, could I create private living quarters for a live-in assistant? A mini-apartment within a home seems like a great idea. Most helpers, whether employed or family, would like to have a separate bedroom, bath and kitchen. Invite a designer to propose ideas (and don’t tell your teenagers).

Suiting your home for the long run could add years of enjoyment to your favorite place.

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