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LifeStage Series: Newlyweds

Posted on Nov 25, 2019 in Confidence

The first step is to make sure you are on the same financial page and have a common vision. Hopefully you have already had some fruitful discussions about mutual goals as well as expectations regarding spending/saving before walking down the aisle, but if not then I would encourage you to have these discussions as early in the marriage as possible. Check in with each other and see how you have individually progressed on your goals prior to marriage such as starting an emergency fund, budgeting process, identifying short term saving goals and contributing to a retirement plan. I would suggest that you try to merge these individual goals and processes as much as possible so you can begin working as a team on your mutual financial goals. Once you have had the common vision discussion, the next step in any newlyweds’ financial life should be to identify who is going to take ownership regarding the various aspects of your finances. I think it is important to clearly establish who is going to oversee paying bills, maintaining the budget, and oversee investments and insurance. Be flexible though and willing to switch up roles as life dictates over the years. The final step to strongly consider as newlyweds is the whole aspect of risk protection. It is not too early to start thinking about the possibility of adding some additional life and/or disability insurance to protect either spouse in the event of untimely death. This should be especially considered as it seems like more and more young people are getting married later in life now and often already have significant debts from either owning a house or obtaining a college degree. You should also consider drafting a new will or updating one already created as well making sure your have updated beneficiary designations. Money discussions aren’t always easy for newlyweds. But, as with any marriage issue, it’s best to approach them with an open mind and as a team. The more thoughtfully you work together on money matters, the more financial harmony you’ll maintain in your life...

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FAQ Series: When Should I Take Social Security?

Posted on Nov 12, 2019 in Confidence

Seems like every retirement conversation we have of late includes the question of whether it makes sense to defer taking Social Security. Of course, given how long people are now living in retirement, sometimes it is us that is raising the question, and it is definitely something we think people should at least give some thought to as they prepare for that phase of life First, the basics: for each year that you choose to delay taking your full Social Security retirement benefit, your monthly benefit is increased by 8%, up until Age 70. After Age 70, there is no benefit to defer. The deferral benefit can be magnified by the fact that, once started, yearly benefits are inflation-adjusted throughout your life. [Also note that Age 65 is still the point at which you are eligible to begin Medicare no matter what you decide on your Social Security retirement benefit.] There are tools out there that allow us to run some projections, given a variety of assumptions and scenarios, so that is a great place to start. Here are some of the things that, in the end, seem to drive the decision as to whether to defer after full retirement age: How long do you anticipate living in retirement? Difficult question, I know, but typically family history and recent health conditions play into this assessment. Do you have investment accounts and/or other retirement income that will cover your cost of living during the time you are deferring? An analysis should be done of (1) how much your required monthly income will be; (2) how much will be covered by other income sources, such as pensions; and (3) which other accounts you could most easily use and whether or not they are positioned appropriately. Does the security of turning on a guaranteed income source (Social Security) now provide you with more comfort/peace of mind and thus allow you to continue to grow your other assets at higher rates of return? Many of the discussions we have center around the tradeoff between having a solid, base income stream now while allowing other assets to grow/stay invested more aggressively versus having a...

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