Tips for those who need help, part 2 l Insightful Investing
Last updated 7/17/2019 at Noon
Last month, I started a two-part series on how to catch up if you have found yourself behind where you envisioned.
Hitting roadblocks and speed bumps is part of living. The only constant I have seen in life is everybody faces struggles of some kind at some time or another.
This month, we add to the list of things you can do to try to make things better for you and your family. And since we are on the subject, the next tip is "never give up!"
The world is full of advice, and this may be the best advice ever given.
Winston Churchill said, "If you are going through hell, keep going." A friend of mine paraphrased a great by saying, "If you are going through the valley of death, don't set up camp."
I think my favorite quote is by Calvin Coolidge, who said, "Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘Press On!’ has solved and always will solve the problems of the human race."
Take action right now
Live in the moment and be rewarded for the effort you take. Outcomes are not predictable; actions are. You control your activity. Save a little more money today, not tomorrow. Live within your means today. And if you don't know what the numbers are, get some help today, not tomorrow. If you keep taking wise steps, before you know it, you will have walked out the shadows and into the light. Spending less than you earn is a fundamental building block. I said it even though it seems so simple.
Here are two ideas you could take action on right now: There are apps you can install on your smart phone to round up all your purchases to an even dollar amount and place the spare change into an account for yourself.
Much like the "coin jar" that sits on my office desk. I don't like a pocket full of coins clanging around. I hardly use cash anymore, and some apps can capture the "coins" if you round up. Many stores are doing this when you purchase products and round up to give to their "charity."
Why not do this for yourself? The other idea is to have an automatic deduction from your checking account straight into an investment account where you purchase shares of an index fund. With all the low-cost investment platforms and investment choices, this is a no-brainer.
If you are over the age of 50, use the "Catch Up" provisions in 401(k), IRA's and other retirement accounts. This provision allows you to save more money in retirement accounts than someone younger than 50 years old.
For example, if a 40-year-old wanted to max out their IRA account, they could contribute a maximum of $5,500. Somebody over the age of 50 could save a maximum of $6,500. This applies to all retirement accounts depending on your age and eligibility, so make sure to check with your advisors before making a decision.
Make a smart Social Security decision
There are three ages you need to know about; your full retirement age, eligible age and age 70.
Social Security claiming strategies are complex, and you should take great care in making this decision. This column will not go into the complexities of the choices available. I will tell you what I am planning to do.
I am planning on taking mine when I am 70 for two reasons; one is there is longevity in my life, and I am planning on working for at least 10 to 15 more years. My full retirement age is next May.
If I wait another four years, I will receive an 8 percent higher benefit each year I wait, for a total benefit 32 percent higher than at my "full retirement age" for the rest of my life.
If something happens to me, my wife would have the choice of my benefit or her benefit whichever is greater, and all the COLA adjustments would apply to the higher amount. There are many variables to this decision, make sure to have your homework done beforehand.
Don’t get caught flat-footed
Finally, if you find yourself behind the proverbial "eight ball," don't get caught flat-footed by not anticipating the care of elderly family members.
Have a hard conversation with your loved ones about their plans if something happens to them.
Long-term care for aging parents can be a bank crushing experience if you or they are unprepared. These can be tough conversations to have.
It is better to have a direct conversation instead of holding assumptions that may not or may not be accurate.
I have personal experience in this area; it can be shocking if you are not ready.
OK, that is all for now.
Jeffrey Moormeier of JG Moormeier Financial is a Mukilteo-based financial advisor affiliated with KMS Financial Services, Inc. an SEC registered investment adviser. His column does not represent the opinions of KMS, nor is it an official prediction or recommendation of any kind. The opinions expressed in this column are generalizations. For advise catered to your specific financial circumstances, contact Jeff directly at firstname.lastname@example.org or 425-931-8898.