Confidence Wealth & Insurance Solutions No Comments

60% of Nurses Between 45 and 60 Haven’t Prepared For Retirement. But Why?

We hear so much about the woes of Social Security and what will happen to future generations, that we sometimes forget about today’s retirees. Are they going to have enough for retirement today or in five years?

One such survey, by the Center for American Nurses, paints a bleak picture for nurses. The survey states that 60% of nurses, between 45 and 60, have done nothing – not one thing – to get ready for retirement.

At first look, this might be a startling fact.

How can so many nurses – a group that is educated, responsible and logical, ignore the inevitable? But, upon, closer inspection this number isn’t so shocking after all. And here’s why:

The median amount – all families in the United States have saved – is $5,000, according to the Economic Policy Institute.1

This is not much at all… so maybe it’s not odd that nurses haven’t planned either. Or do they have their own reasons – that might be different from other non-saving Americans?

Nurses Assume They Will Work For a Long, Long Time. But They Shouldn’t.

According to the survey results, reasons nurses are not prepared for retirement are similar to Americans in other industries and careers:

  • Lack of Time
  • Lack of Resources (Who Can Help Me? What Do I Do?)
  • And Putting Others Needs First (Paying for kids’ college before funding your own retirement)

But perhaps one of the most telling reasons nurses aren’t getting their ducks in a row is because they assume they’ll be working into retirement age.

Nurses reported they planned on working full-time past 66, while others stated they would work part-time.2

So, instead of imagining tropical vacations and sleeping in, most nurses polled don’t envision retirement as anything more than an abstract concept. Something other people do.

The thing is, nursing is not easy work. It requires physical and mental stamina. As nurses age and younger nurses come on the scene, it will be harder to compete in terms of ability and pay. At some point, nurses must think about their financial future – even if they do hang in the workforce longer than others.

Why Wait?

Waiting to save money for retirement is like waiting to jump on a life boat from a sinking ship. The longer you wait, the further and harder you have to swim to get to the boat. Don’t make it that difficult.

Make a commitment today that you will do these three things:

  • Figure out a good age to retire – at lease within a 5-year range (66-71)
  • Get your budget in order – what are you making vs. spending
  • Meet with a financial advisor – find one who comes with good recommendations and is a fiduciary

You can’t take care of others, if you don’t take care of yourself! Start today, you won’t regret it.

 

 

1http://www.epi.org/publication/retirement-in-america/#charts
2https://www.wiserwomen.org/images/imagefiles/wiserNurseInvestorRptMay2012finalRev.pdf

 

Confidence Wealth & Insurance Solutions 2 Comments

If You Don’t Know What a Fiduciary Is… NOW Is the Time to Find Out

Standards Are On The Rise

If you have money and plan on retiring comfortably then it is imperative that you know what a fiduciary is. The number one reason: it can save you big bucks.

And the Labor Department thinks so, too.

 That’s why come April 10 all financial advisors who give retirement advice will be held to a fiduciary standard.1

In a nutshell, this means that your advisor is legally bound to give you advice that’s in YOUR best interest… not theirs.

According to the Labor Department, this new rule will save people $40 billion over the next decade.2

April 10 Rings in a New Era for Advisors… And Clients

Basically, all of those high commissions will have to be forfeited in favor of helping people secure their retirement investments. Many financial advisors will be forced, like it or not, to put their needs – and wallet, after their clients.

That’s why it’s imperative you ask before you give your hard-earned money to someone who isn’t committed to these ethical standards.

“The Big Dogs Must Be The Best”

Don’t assume just because your advisor works for a mega bank (or is associated with one) he or she actually has your best interests at heart. This is a rookie mistake – and one you definitely don’t want to learn the hard way.

There are many small, respectable, top-notch fiduciary firms that score As across the board in performance, customer relationships and ethical standards. 

Keep this in mind when you start looking for an advisor to build a relationship with.

 

Because most people have one shot at getting their retirement right (i.e. they don’t have unlimited funds for expensive mistakes), it’s crucial to ask tough questions before you decide on a financial advisor.

The Department of Labor put together a thorough list of questions they recommend posing to a prospective advisor. You are trusting this person with more than money – but with peace of mind, as well.

Questions to ask a prospective advisor, according to the (Department of Labor)3

  1. Do you consider yourself a fiduciary?
    • If not, why not?
  2. Are you willing to act as a fiduciary with a duty to act solely on my behalf?
  3. Are you willing to disclose to me any conflicts of interest that may interfere with your acting solely on my behalf?
  4. Are you willing to put this commitment in writing?
  5. How are you compensated?
  6. Do you earn fees or commissions based on the number of products that I buy or the size of my investment?
  7. Will you earn a higher fee or other type of compensation if I invest in certain products you recommend or will you receive fees for services related to specific investment products?
  8. Will you provide a list of the fees and commissions you receive either directly from me or from other sources in writing?
  9. Are you a licensed or registered investment adviser?
  10. Are you registered with the State, U.S. Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), or the Certified Financial Planner Board of Standards, Inc. (CFP Board)?
    • For how long?
  11. What is your experience?
  12. Who supervises you, or, are you a sole practitioner?
    • If a sole practitioner, do you have professional liability insurance?
  13. Have you (or your firm) ever been disciplined?
    • If so, for what?

 

1http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2015/03/19/is-your-financial-advisor-a-fiduciary
2http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/articles/2016-04-27/what-will-the-new-fiduciary-rule-mean-for-you
3https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/fsfiduciaryoutreachconsumers.pdf

Confidence Wealth & Insurance Solutions No Comments

How to Save and Plan in Your 20s, 30s, 40s and 50s

Your Quick Guide to Getting Money Wise At Every Age

Each period in life comes with its own, unique set of priorities, challenges and benefits. When you’re young, you don’t have much money to save – but you do have time. The reverse is true as you get older: you’re making more money, but you have fewer years to build up your nest egg.

The key is to balance your needs, throughout your life, with healthy savings habits. Let’s take a look at the common issues we face in each decade and how we can handle those things, while still strategically saving for our future.

20s

As you transition from high school and college into the workforce, the top-of-mind worries tend to be finding an apartment, a reliable car and a fun place to meet people on the weekends. It’s usually not retirement. Thinking of retiring – just as you start working – is like planning your summer wardrobe in the dead of winter… it’s not going to happen.

But, there are two compelling words that might inspire you to start saving now: compound interest. If you’re not familiar with this concept, then get ready to be impressed.

Here’s how it works: If you save $3000 in 2017 and earn 3 percent interest, you’ll have $3090.00. If that money continues to earn interest at that rate, in 2018, you will earn interest on your original investment — $3000 – plus on your extra $90. This keeps happening over and over, year after year. You are earning interest on interest on interest.
If you add $3000 to this account each year – with a steady rate of 3 percent, you will have $235,989.89 in 40 years. That’s almost $116,000 in interest.
GET A HEAD-START ON SAVING!

So, if you haven’t begun saving yet, start now. For people early in their careers and not making much money, you can start small. There are two benefits of this:

  1. You’re still saving – and every little bit counts!
  2. By committing to saving and your financial future, you’re creating a very valuable habit.

30s

By the time many people reach their 30s, their big priority is buying a house. According to Zillow, the average age of first-time homebuyers is 33.1

Because houses require large down payments and come with a ton of smaller – but multiple – little expenses (fix the leaky sink, buy homeowner’s insurance, replace the roof), most people at this age are not putting retirement at the top of their list of stuff to spend money on.

Couple this with having a family, paying for child care and health insurance – and saving for retirement suddenly sounds like a luxury expense.

Hope is not lost. You can pay your bills and still think about the future. It just might take a little discipline and planning. Here are three things you should do in your 30s.

  1. First, take advantage of employer-sponsored retirement plans, like 401ks. When you use pre-tax money to fund your account, you get to make interest off that money – so it’s kind of like turbo-charging your savings. Sure, you’ll have to pay taxes on your 401k when you withdraw money from it (after you turn 59 ½), but you don’t have to pay back the money you made off of those taxes.
  1. Second, now’s the time to pay off debt. Get rid of high-interest loans and credit card bills first. Next, pay off student loans and any low-interest loans. By getting rid of debt, you’ll free up money you can use to invest in your 401k or IRA.
  1. Finally, pay yourself first. Before you fund your kids’ college accounts, splurge on a vacation or buy a new car – set aside money for retirement. Your future self will thank you.

40s

With about two decades of work experience – and hopefully some retirement savings in the bank, you are probably making more money now than ever before. This is a great time to set some retirement goals. You might want to create an age target and set up a strategy to make sure you’re on course to meet that goal.

If you’re lucky enough to have disposable income, now’s the time to dispose of it in a 401k or IRA account.

If you make enough money to max out your 401k for the year – which is $18,0002, you can invest additional money in a tax deductible or Roth IRA.

  • Set up a time to talk with a professional. Make sure you choose one who is certified, a fiduciary and comes with high recommendations.

Explain your goals and make sure he or she is willing to take an active role in achieving those goals. What that means is you probably don’t want someone who forgets about you until you call them five years later.

50s

Hoorah! You are at the home stretch. This can be an exciting – or very scary – time, depending on how you have managed your finances. If you haven’t done a great job so far, don’t worry – you still have time to avert disaster.

If you have paid off your house, try not to accrue any more debt. Don’t be tempted by a second mortgage to help you finance a kitchen remodel. Your house should be sacred as you near retirement. A paid-off house is doubly blessed as you don’t have to worry about big monthly mortgage payments – or where you’re going to live should you run low on money.

Clearly, you want to sock away as much as you can – so keep your eye on the prize, and cut out any unnecessary spending.

For those who have done a good job saving, be sure to meet with a professional at least once a year. If you need help or are looking for a second opinion, we can help with that. Why? We believe that as you near retirement, you should adjust your savings to decrease your exposure to the market.

When you’re in your 20s you can afford taking risks because you have time to recover. In your 50s, however, we believe that you should protect your principal and be more conservative with your money.

Now that you have a guide for handling your money at every age, pass it on. Share this information with your friends, children, parents and spouses. Getting money confident begins with knowledge and ends with good habits that put ideas into action.

 

1http://zillow.mediaroom.com/2015-08-17-Todays-First-Time-Homebuyers-Older-More-Often-Single
2https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits

 

Confidence Wealth & Insurance Solutions No Comments

Money Confidence for Nurses: Take Control in 5 Easy Steps

When it comes to being tough, smart and capable, female nurses (and women, in general) have proven they can be all three–and then some. Women are more likely than men to have a college degree1, women outlive men2  and women bring less credit card debt into relationships3.

But despite these powerful tendencies, women get tripped up when it comes to retirement planning.

Nurses Can Tackle Medical Emergencies, So Why Not Finances?

According to a recent survey “Money FIT Nurses Study” by Fidelity Investments, more than half of nurses lack the confidence to make financial decisions4. Given that about 90 percent of nurses are women5, it’s safe to assume that the people without financial grit are mostly female.

Women aren’t scared of money – in fact, 80 percent of household-buying decisions are made by women.6

Women are savvy with getting deals, they price compare, clip coupons and frequent discount websites to save a few dollars. So why do so many women – and nurses, in particular, have a hard time dealing with their financial future?

A Big Problem, With Even Bigger Consequences

The bottom line: there’s no one-size-fits-all answer. For some women, financial decisions might be left to their husbands, while others blindly trust their financial advisers – often too scared to ask questions or be proactive with their money.

For nurses, taking care of financial business can be tricky. Many nurses report not having the time to devote to retirement planning. After all, who wants to sit down in front of a spreadsheet filled with numbers on a day off? Not many people.

But, if you devote some time to understanding your finances, you can change the outcome of your retirement drastically. In short, it’s worth the challenge, because the reward is huge.

Let’s take a look at how you can get a grip on your retirement investments in 5 easy steps.

STEP 1: SET A RETIREMENT AGE GOAL

The first step in retirement planning is knowing when you can retire. The operative word here is “can” because some people may need to work longer due to limited financial resources.

  • The earlier you begin saving for your retirement, the better off you’ll be.

As you get closer to retirement age, adjust your exposure to risk.

  • If you have more than 30 years until retirement, then you can afford to gamble with riskier retirement vehicles – since you have the time to grow your money.
  • Those who are nearing retirement want to focus on safer instruments so that they won’t have a disruptive impact on your savings. 

STEP 2: MAKE A BUDGET

A thoughtful budget is your spending blueprint for retirement. Here’s where you’ll figure out how much money you need for:

  • Fixed expenses (mortgage, health insurance, car payment, loans)
  • Variable expenses (food, gas, entertainment).

Your fixed expenses usually don’t fluctuate from month to month, whereas variable expenses can change.

TIP: Be practical with your budget – don’t underestimate your spending, otherwise you might find yourself in a pickle after you retire.

STEP 3: UNDERSTAND YOUR RATES OF RETURN

If you want to live off your retirement savings, then you have to understand rates of return. Seriously. Although the sound of “rates of return” is enough to put you in a deep sleep, it’s important to get a basic idea of what this means.

  • In today’s market, a reasonable rate of return for a 30-year Treasury bond is just 3 percent. This means if you have $1 million invested in bonds, your yield will be about $30,000 per year. 7

STEP 4: SEEK HELP FROM A RETIREMENT INCOME PROFESSIONAL

Now that you’re equipped with the building blocks of your retirement plan, it’s time to talk to a pro. A retirement income professional will help you come up with a sound strategy for executing your retirement plan. Like any other profession, not all are created equal. Some will be proactive and invested in your financial health, while others will operate on autopilot. You don’t want the latter.

What to watch out for in a financial advisor:
  • If an advisor promises sky-high returns, a red flag should raise.
  • Is your financial advisor a fiduciary? It means he or she has pledged to operate to the highest ethical standards. Much like the nurse’s “Nightingale Pledge,” fiduciaries have a “duty to care” about their clients’ investments, which includes monitoring their financial situation along with investments.
  • Finally, you can find out if your adviser has had any rulings against him or her through a simple SEC search. This will take just a few minutes and can save you a lot of time and headache down the road. 

STEP 5: DO A YEARLY CHECK-UP

Like your patients, you’ll want to make sure your investments are on track each year. As you get older, it’s smart to check on the following:

  • Asset allocations: Are they still on target for your retirement goals?
  • Risk analysis: As the seasons change, so does your risk tolerance level. It’s important to assess your risk tolerance yearly, and shape your retirement income strategy accordingly.
  • Ensure your beneficiaries are up to date

Keeping track of your retirement accounts is part of your financial health. Even if you have a great financial advisor, ultimately the responsibility is on you to make sure everything is running smoothly and heading toward your goal: a happy and healthy retirement!

 

 

1http://blogs.census.gov/2015/10/07/women-now-at-the-head-of-the-class-lead-men-in-college-attainment/?cid=RS23
2http://www.bbc.com/future/story/20151001-why-women-live-longer-than-men
3https://www.nerdwallet.com/blog/credit-cards/debt-and-relationships/
4https://www.fidelity.com/about-fidelity/individual-investing/more-than-half-of-nurses-lack-confidence-in-making-financial-decisions
5http://nurse.org/articles/161/Male-Nurses-And-The-Profession/
6https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/empowering-women.pdf
7http://money.cnn.com/data/bonds/

Confidence Wealth & Insurance Solutions No Comments

Retirement Planning for Nurses: By the Numbers

As nurses are earning more than ever before, they’re also working past retirement age. Here we explore why nurses are facing a financially shaky future and how they can change their course.

4,011,911 Professionally Active Nurses in the US Today1

There are more than 4 million working nurses in the United States today. That’s almost twice the amount of lawyers and doctors combined. On the front line of patient care, nurses are expected to be compassionate, strong, smart and in control every second they’re on the clock. Lives depend on their abilities.

Average Salary of Registered Nurses: $71,0002

But what happens when it’s time to retire? Who is watching out for their well-being and security?

The answer is not black and white. While many nurses have access to retirement products through their employers – like 401ks and pensions, they don’t always have the time to understand them.

56% of Nurses Report Not Being Confident in Investing Their Money3

An eye-opening report by Fidelity showed that 56 percent of 356 nurses surveyed claimed they lacked confidence when it came to investing their money because they didn’t have the time to learn about it.

Although it seems like a no-brainer to make time for your future financial security, this is easier said than done.

Imagine, for a moment, going on your twelfth straight day of working 10-hour shifts. You have to be alert and on your feet. You’re dealing with sick, hurt and suffering people. You get home late, eat whatever’s around, go to bed and repeat. By the time you have a day off, your laundry is piled up, you have unanswered mail and your spouse barely recognizes you. The last thing you want to do is pore over a bunch of numbers that won’t matter to you for a few more years. This is the life of so many nurses.

The big problem with this, however, is that nurses are pushing back retirement at a higher rate than ever before. Today, 74 percent of nurses are working at age 62 and 24 percent are still working at 69. The median age for retirement, according to a recent Gallup poll, is 66.

Likelihood Of Divorce: 33%4

Compound the problem of busy schedules with other problems, like divorce – the divorce rate for nurses is 33 percent – and it creates a dismal picture for a financially secure future.

How Can Nurses Secure Their Future?

The future does not have to be so bleak. Nurses can enjoy a fulfilling, financially secure retirement – but they must take an active role in their investments and savings.

Four Key Steps In Smart Retirement Planning:

  1. SET RETIREMENT GOALS

Before you do anything, figure out when you would LIKE to retire and how you want to spend your retirement. You have worked hard, you deserve a secure retirement at an age that suits you. In order to get this, you need a strategy – which begins with a goal.

Once you have your retirement age settled and how you want to spend your retirement – i.e. do you want to travel, shop and spend money or will you be happy living more modestly, go on to step #2.

  1. MAKE TIME TO REVIEW AND UNDERSTAND RETIREMENT OPTIONS

This might mean setting up a 401k through your employer or digging deeper into what you already have saved – which brings us to number 2.

  1. TALK TO A RETIREMENT INCOME PROFESSIONAL

Get professional feedback on where you are with your retirement savings and next steps for meeting your goal (your retirement age).

  1. SCHEDULE A YEARLY CHECK-UP

Just like you get your annual medical check-up, you need to get a retirement check-up. Meet with your retirement income professional every 12 months to make sure you’re on the right trajectory to hit your target.

As you near retirement age, you want to reduce exposure to risk and secure your nest egg. A retirement income advisor will make sure this is happening. A bad one won’t even notice if it is or isn’t – meaning, your investments are on autopilot. Be proactive and stay on top of your retirement savings.

1http://kff.org/other/state-indicator/total-registered-nurses/?currentTimeframe=0
2https://www.bls.gov/ooh/healthcare/registered-nurses.htm#tab-5
3https://www.fidelity.com/about-fidelity/individual-investing/more-than-half-of-nurses-lack-confidence-in-making-financial-decisions
4http://www.bmj.com/content/350/bmj.h706