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We are pleased to provide you with additional financial information to assist you with your financial well-being. Please check this page every Wednesday for our updates.

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Beware of Costly Surprises in Retirement - Your Income

Preparing now for unexpected costs can help keep your retirement plan and budget on track.

Achieving a successful retirement requires not only planning for what you hope will go right, but also preparing for what may go wrong.  While it is no secret that retirement includes a number of unknowns, you certainly do not want to be caught off guard.  With so many financial and lifestyle decisions to be made, planning now for some of the surprises that may lie ahead can help you feel more confident that your financial future will be comfortable.

Your Income

What costs $1 today could more than double in price in 25 years and many retirements last at least that long.  Please consider working with one of our advisors to plan your retirement income stream, and keep in mind that experiencing the tragedy of losing a spouse may also mean facing the financial hardship of losing their income stream as well.  Run hypothetical scenarios and talk about how you can help your money last as long as you will need it to, while keeping up with inflation.  This could mean investing for growth, even if you thought you would be more conservative during this period of your life.

Beware of Costly Surprises in Retirement - Your Home

Preparing now for unexpected costs can help keep your retirement plan and budget on track.

Achieving a successful retirement requires not only planning for what you hope will go right, but also preparing for what may go wrong.  While it is no secret that retirement includes a number of unknowns, you certainly do not want to be caught off guard.  With so many financial and lifestyle decisions to be made, planning now for some surprises that may lie ahead can help you feel more confident that your financial future will be comfortable.

Your Home

Many people believe that paying off their mortgage will reduce their housing costs.  However, whether downsizing or staying in your current home, there will still be ongoing maintenance expenses to consider.  In fact, major home repairs and upgrades are the number one spending shock for retirees.  Additionally, downsizing ushers in moving costs, and staying put could trigger renovations to account for changes in health or mobility.  Finally, if you are considering purchasing a second home, keep in mind that getting a mortgage can be difficult without current income.

 

Beware of Costly Surprises in Retirement - Your Taxes

Achieving a successful retirement requires not only planning for what you hope will go right but also preparing for what may go wrong.  While it is no secret that retirement includes a number of unknowns, you certainly do not want to be caught off guard.  With so many financial and lifestyle decisions to be made, planning now for some of the surprises that may lie ahead can help you feel more confident that your financial future will be comfortable.

Your Taxes

It is crucial to understand how different types of income can affect the way your earnings are taxed, especially if you decide to take consulting or part-time work in retirement.  Taxes can also change according to state of residence and marital status, so understanding their implications is wise.  Additionally, you may have to pay taxes on your Social Security benefits once you start receiving them.  Talk to a tax professional to understand your obligations.

Beware of Costly Surprises in Retirement

Preparing now for unexpected costs can help keep your retirement plan and budget on track.

Achieving a successful retirement requires not only planning for what you hope will go right, but also preparing for what may go wrong.  While it is no secret that retirement includes a number of unknowns, you certainly do not want to be caught off guard.  With so many financial and lifestyle decisions to be made, planning now for some of the surprises that may lie ahead can help you feel more confident that your financial future will be comfortable.

Consider these to-dos as you plan for the unexpected:

  • Meet with your advisor to discuss different scenarios that could affect your retirement budget, and stress-test your plan against unexpected shocks.
  • Talk to your tax professional to gain a deeper understanding of how different types of income are taxed.
  • Speak with family to manage expectations about your ability to help provide future financial support.  

 

Commit to Change – Focus on New Habits 

  • Start a part-time business around a hobby you love.  Do you love to bake, paint, build or garden? There may be a little extra income in doing the things you love.
  • Instead of spending time on the phone or in front of the TV, volunteer at your favorite charity, or assist a friend, neighbor or family member with a project they may be struggling with. Sometimes we benefit more by doing for others.
  • Have a garage sale…it really works. Not only do you gain a little extra cash…you have cleared out unused items cluttering your home and garage.
  • Talk to others about ways to save. They may offer tips on how to save on items and receive discounts you were not aware of.
  • Keep educating yourself on financial wellness.

 Speak with an Old Fort banker about establishing a commitment to save.

Commit to Change – Take a Closer Look at Your Finances

  • Review your monthly statements to ensure they are accurate. Do you have automatic monthly charges you no longer use or want? Would you save time and late fees if you scheduled automatic bill payments?
  • Review your credit card interest rates. Transfer high interest credit card balance to a lower interest rate card and commit to paying it off. Be sure to read the fine print regarding late payments.
  • Review your insurance rates. Are you getting the best rate and do you have the coverage you need?
  • Are you an impulse shopper? Start a “ten- minute rule”. Ask yourself if you really NEED the item. Set it aside and walk away, continue to shop, if you feel you still need it…walk back and get it. 

Speak with and Old Fort banker about your financial needs, we care about you and your financial well-being.

 

Tips for Millennials to Begin Good Savings Habits 

  1. Save for Emergencies. Unexpected expense such as parking tickets, flat tires or medical bills will pop up, and you want to have money set aside when they do.
  2. Manage Your Money. Start putting a small amount in your savings account each pay period. Use credit cards sparingly and always pay-off the balance immediately or over a short period of time.
  3. Take Advantage of Company 401(k) Retirement Plans. Set up payroll contributions into your retirement plan. Employers may even match your contributions, learn more about your retirement plan. If your employer does not offer retirement savings, you may be able to open a Roth or Traditional IRA. 

The sooner you start saving and investing the better…speak with an Old Fort banker about starting a savings plan today.

Can You Cover an Unexpected Expense of $400?

If not, you are not alone…approximately 46 percent of adult Americans said they would not have enough funds available to cover a $400 emergency expense without borrowing. 

Speak with an Old Fort banker to establish your “Emergency Fund.”

Review Your Insurance Policies

  • Home improvements: Create a list of your home improvements especially those to safeguard your home. Notify your insurance agent to see if any of these improvements qualify for a discount.
  • Review your car insurance: Do you need to drop a vehicle from coverage, remove a driver no longer living at home? Are discounts available for student drivers with good grades or for installing a car alarm?
  • Deductibles: Adjusting your deductible may be a cost savings…consider your situation to see if it makes sense.

 Parents…Teach Your Children to Save

 Below are a few tips to help get you started.

  • Set the example of a responsible money manager by paying bills on time, being a conscientious spender and an active saver. Children tend to emulate their parents’ personal finance habits.
  • Talk openly about money with your children. Communicate values and experiences with money.  Encourage them to ask questions, and be prepared to answer them…even the tough ones.
  • Explain the differences between needs and wants, the value of saving and budgeting and the consequences of not doing so.
  • Open a savings account for your children and take them with you to make deposits so they can learn hands-on in their money management.
  • Let friends and family know about your child’s savings goal. They will be more likely to give cash for special occasions, which means more trips to the bank.
  • Put the literacy in financial literacy. Encourage your children to read books that cover various money concepts. Not only will they become strong readers, but they will be smart money managers, too.

 Speak with an Old Fort banker regarding our children’s savings options.

 

  

 

 

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