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Tips on When to Take Social Security Benefits

The consequences of the onset of Social Security benefits are enormous. Recent reports by Sandra Block, at Kiplinger.com and Viewpoints at Fidelity.com confirm this.

You are eligible for benefits if you’ve worked a minimum of 10 years in positions covered by Social Security. Benefits are based on two main variables: earning in the 35 highest-paid years of your career and the age in which you begin receiving your benefits.

Those 35 years do not have to be consecutive, and if you work past age 65, those earning years, even part-time, will be included if part of your highest 35 years.

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The Biggest Financial Regrets of Americans...And How To Avoid Them

Catey Hill at Marketwatch.com recently reported, “Many Americans are filled with regrets – financial regrets.” In fact, 3 out of 4 harbor regrets, according to a recent survey by Bankrate.com.

Sadly, the biggest regret is not saving enough for retirement early enough. The other regrets in descending order are:

  1. Not saving enough for emergency expenses
  2. Taking on too much student loan debt
  3. Taking on too much credit card debt
  4. Not saving enough for children’s education
  5. Buying a bigger house than they could afford
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Why Retirement Could Launch Your Next Career

According to Chris Farrell, in a recent article at Forbes.com, you can start a business in retirement.

Older workers have decades of experience, a network of contacts, and often more money than younger people to invest in a start-up company. They have lived through years of economic ebbs and flows and are often able to spot needs and market trends due to their years of study.

55-to-64 year olds made up 15% of new entrepreneurs in the 1997 Kauffman Index of Entrepreneurship, but the number jumped to 24% in the 2016 Index.

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Satchel Paige once asked, “How old would you be if you didn’t know how old you was?”

That’s a good question. Age sneaks up on us, and retirement is a chapter in life that many are unprepared for.

People in the world believe retirement is the time in life to withdraw from the demands of work and labor to pursue enjoyment free of obligations, commitments or worries. Fulfilling their desires is a reward for how hard they’ve worked. But, Hugh Welchel, Executive Director of the Institute for Faith, Work and Economics strongly disagrees. Welchel explains that the only thing looking like retirement in the Bible is found in Numbers 8:23-26. Here, God told Moses, that the Levites were allowed to work from 25 until mandatory retirement at the age of 50.

After their temple service, they were expected to mentor the younger men by providing wisdom and leadership gained through their experience. They were available to advise and counsel the younger generation.

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Do you worry about outliving your retirement funds?

If you’re worried, you are not alone. Maurie Backman with the Motley Fool says retirement tops the list of Americans’ financial concerns.

In 2016, 64% of the population admitted fear in not having enough funds to cover living expenses in retirement. An estimated 33% have no retirement savings at all, and those who are relying on Social Security need to realize that it replaces just 40% of the average worker’s pre-retirement income. An Allianz study reveals that 60% of baby boomers fear running out of money in retirement more than dying.

Analyze your living situation. It may be worth downsizing to a smaller home. Less square footage and acreage may ease pressure on the budget and the stress of maintenance. By downsizing, you have the  opportunity to earn money by selling items you no longer need. You also may be able to get by with just one car to further cut your expenses.

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Do you know how much the average American has in their checking account?

While it is difficult to know for sure, one study by bank consulting firm Moebs Services indicates that the average American has $4,436 in their bank account. This is an amount that accounts for averages in people’s checking accounts specifically and was notable a couple of years ago because it represented a significant jump from 2012’s numbers. What’s even more interesting is how much higher that figure is than it was in 2007, just prior to the Great Recession. At that time, the average American only had $788 in their checking accounts.

This points to a change in financial behavior likely due to the scare of the downturn of the economy in 2009.

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What is the number one financial regret of older Americans?

Most Americans are filled with regrets — financial regrets. Fully three in four, in fact, admit they harbor financial regrets, according to a survey of more than 1,000 adults by Bankrate.com. Their biggest regret: not saving for retirement early enough (nearly one in five Americans put this in the No. 1 spot). What’s more, among those age 65 and up, 27% said this was the biggest regret, compared with 17% of those aged 30 to 49."

Those in the younger generation are probably just not old enough to realize they probably have also started saving too late! 

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Most college students focus on the present without any serious thought to what lies ahead 10-20 years from now. But, they should be saving for the future.

Students should save so that they are in the habit later in the workplace.

Giving to the Lord first, then paying themselves should become a way of life even before graduating high school. Learning to delay gratification for a future need is crucial.

In an August article at CheatSheet.com, Eric McWhinnie stated that spending less than you earn and investing the difference is the key to financial independence. I agree! Yet, most people fail to realize the benefit of starting early. In fact, only 27% of respondents in a survey at MoneyRates.com started saving in their 20s. The benefits are undeniable when observing the effects of compounding interest over several decades.

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Do you worry you may outlive your retirement savings?

According to a new Bankrate.com survey, “People who earn more than $75,000 have a greater fear that they’ll run out of money in retirement. Overall, 23% of survey respondents say their top worry is that their savings will run out, but 29% of those in the $75,000-and-up income bracket say the same.”

According to an article at Time.com, “These fears persist despite the fact that about half of high-income Americans say they’re happy with the amount they’re socking away for retirement, compared to the 29% overall who say they’re happy with their current retirement savings. And even among those earning more than $75,000 a year, more than a quarter say just keeping up with basic living expenses is hampering their retirement savings”.

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Are you confused by retirement accounts and investments?

Christine wrote me with this question:

I have worked several different jobs. I have retirement money affiliated with each employer. I am considering consolidating to one new account, but I am confused on who to invest with and what type of account to open? Your suggestions would be greatly appreciated.

Christine, you have a few basic options to consider:

  1. Leave your money in your former employer's plan, if your former employer permits it.
  2. Roll over your money to a new 401(k) plan, if this option is available.
  3. Roll over your money to a Traditional IRA.
  4. Roll over your money to a Roth IRA.
  5. Take a cash distribution.

First, be sure it is to your advantage to move the money from your former employer’s 401(k) plan. It you are allowed the same options and controls over the account as an existing employee, it may be to your benefit to leave the money where it is. Ask a professional financial advisor to help you analyze this option.

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