Archive for August, 2015

The Generational Retirement Divide Between Millennials and Baby Boomers

Thursday, August 13th, 2015

CaptureIt’s an unfortunate reality today that most millennials expect Social Security to be completely dried up well before they retire. Most know that they’re practically on their own when it concerns their retirement. One big issue millennials are facing is that they’re not saving as much as they could, the full percentage allowed by law, and while there are several varying factors as to why that is, one major one is that, according to a survey done at Harvard University, more than two-in-five (42%) Millennials between 18- and 29- years olds report that they, or someone in their household has student loan debt.

Student debt aside, there are just simply some things that millennials are doing a little more efficiently than their parents before them. With government safety nets failing the American people, we’ve learned that we need to adapt, and evolve the way that we’re preparing for retirement.

Types of Investments

What millennials want to invest in is rather different than what previous generations have chosen to invest in. They want variety, they want tech, they want futuristic, they want to be green. In an article from The Street, they talk about how millennials’ distrust for Wall Street is illustrated by how few members of this generation have invested in stocks. Only 26% of millennials invest in equities, according to a March 2015 Bankrate survey.

The types of investments that have grown the last few years definitely reflect that sentiment, and are expected to only keep expanding further away from the traditional stocks and bonds. Some of the most popular investments include:

  • Microfunds/loans
  • Energy
  • Crowdfunding
  • Tech startups

Saving Habits

Seventy percent of Millennials are already saving for retirement and started saving at the unprecedented young age of around 22. Seventy six percent are discussing saving, investing, and planning for retirement with family and friends. And eighteen percent of Millennials describe themselves as frequently talk about it. Two-thirds of millennials expect their primary source of income in retirement to be self-funded through retirement accounts, or other savings and investments.
To say that the millennial generation is ill-prepared is only to vastly underestimate them.

Learning from Past Generations

One major advantage that millennials have is being able to witness what most definitely does not work, and what financial decisions should be made when. A recent Wells Fargo study finds that an impressive 80 percent of Millennials feel that the Great Recession taught them to save for the future in order to weather tomorrow’s economic turmoil.

Another point that has been coming across loud and clear to the millennial generation is that starting to save early is key to a successful retirement. And we mean aggressive saving.
The importance of portfolio diversification is a lesson that the younger generation takes seriously to heart, because some boomers didn’t establish a proper allocation of investments into non-correlated asset classes. Instead, many boomers were oblivious to risk or focused on chasing returns from the hottest funds.

When Traditional Routes Fail

For most of our parents, pensions were what they depended on for being retirement ready. Until recently, a pension seemed almost as good as money in the bank. Companies who offered pensions would set aside money for their employees’ retirement. But, unfortunately, it has become obvious that most pensions plans are falling short. We all prefer to spend more today and deal with the future when it comes. In short, pension plans have done this by promising generous benefits without a clear plan to pay for them, resulting in heavy dependence on them by employees, with little savings outside of the pension plan.

A 401k and other defined contribution plans can also be an unreliable sole retirement plan. They require employees to decide, individually, to set aside money for retirement, and to invest it wisely, as rookies (as most of us are) over the course of 30 or so years. The bad news is that research suggests that people are remarkably bad at both. Resulting in about 20% of eligible employees not participating in their 401k plan.

Your Parents, and Their Retirement: How You Can Help

Monday, August 10th, 2015

parents retirementWe all relied on our parents when we were young. They were there to help us with homework, taught us how to drive, and did their very best to get us all off on the right foot in the world. What’s rather unexpected, is that in turn, our parents will come to rely on us as they enter their senior years. And most of us are not prepared for that.

What I want to make clear is that your parents don’t have to reach a certain before you start helping them plan. You yourself can be just entering your 30’s, and you can approach the topic over Sunday dinner with your folks only to realize that they’re poorly prepared. And that’s where you can step in.
In the world of retirement, the sooner the better.

Get Informed and Involved

It’s never too late to start. Start today, and start off right. Get educated together, but realize where your own limitations are. There’s just simply going to be some information that goes over your head, and the best day to remedy this is to talk to professionals. Do you know what percent of your parents income is going into their 401k? Should you open a self-directed IRA, and if so, what can you, or should you invest in? These are all complicated questions with even more complicated answers, so you need an expert on your side.

Ask the Right Questions

Be prepared for everything. The last thing you want to do is seek out professional help, and either not ask any questions, or ask the wrong questions. Both are unacceptable, so let’s get you prepared! Let’s make sure that you know what’s going on at all times, and have all the information you need.

  • How much money will I need a month to live off of comfortably?
  • Do I currently have enough saved up?
  • What if funds in my retirement run out?
  • Can I keep working if I choose?

Get Started on Your Own Retirement Planning

After it’s all said and done, let’s talk about you for a moment. What can you do to best prepare for your own retirement? Given it’s further in the future, so you might not think you have to start planning, but that’s not sensible or responsible.
When should you start planning? Experts say 25 is the absolute best time to start. Out of college for a few years, maybe starting at your first “real job” and before too many bills are finding their way to you.

How much should you start out with? That kind of depends on your income. Say you make $50,000 right now, ideally, the amount you should be putting into your 401k a month is about $900. Use an online calculator, or seek the advice of a professional to best determine how much you need to save.

In today’s economy, you want to be prepared for anything. You want to be able to care for yourself and your loved ones when you retire, and you want to feel confident and proud. Invest in yourself today, invest in your future.

Introducing AccuPAYZ IRA Debit Card by Accuplan Benefits Services!

Thursday, August 6th, 2015

Minimalistic ReportWhat is AccuPAYZ? It’s a prepaid debit card that Accuplan directly links to your self-directed IRA, so that you’re able to make purchases, pay bills and other expenses related to assets held in your SD IRA accounts, very easily and very quickly. Think of it as Checkbook Control’s younger, and a little bit cooler sibling. Enrolling in AccuPAYZ is easy, and only takes a few minutes.

Why would you need AccuPAYZ, you say? The way that credit and debit cards revolutionized spending habits from checkbooks and cash, is the same way that AccuPAYZ will change the way you utilize the money in your self-directed IRA accounts. Don’t get us wrong, we love checkbook control, but AccuPAYZ is undeniably convenient.

For more information, see the infographic below!

Minimalistic Report (3)

Four Smartest Investing Rules the Super Rich Always Follow

Monday, August 3rd, 2015

investing 1Today, there is more money in circulation than ever before, which means there’s more money to be made. Who makes this money isn’t about luck or having a “secret formula”. It’s all about being clever, and knowing how to make your money work for you.
Whether you’re new to the investing game, or you’re a novice investor, there just might be some tactics that you either haven’t utilized, haven’t yet heard of, or have outright ignored. But that stops today.
For most investors, the reason they’re doing what they’re doing is for their future. For retirement. To be secure in old age, and then possibly passing on that wealth to children or other loved ones. When there’s so much hinging on something as unpredictable as the stock market, you have to know what you’re getting yourself into.
Now, there’s a reason that the super rich are super rich, and just because you don’t live like the super rich, doesn’t mean that you can’t invest like they do. It’s not all about birthright or social and economic privilege (although, admittedly, foot-ups like those definitely are a contributing factor.), you have just got to know where your money is going, and with a few quick adjustments and tips, you’ll be well on your way. So let’s get going.

Keep an eye on inflation

Inflation isn’t intrinsically good or bad. Savers often think they can’t afford to lose any money by investing in the market. But they don’t realize that when they don’t make their money work for them, they are losing. Inflation creeps up over the years and steals from your savings if you’re not earning enough to make up for it. There are some serious consequences to saving cash for too long. For that reason, the wealthy and other investors will invest some money in products likely to at least keep pace with inflation.

Make safety your number one priority

One word: Rebalancing. Rebalancing is the act of making sure that with any market volatility that may have occurred, you bring it back into the strategic allocation that you had intended. Meaning that if any assets stray outside of an acceptable range, they’re brought back or sold off to bring them back in line. Making time for rebalancing is imperative to keep assets in check, and so that you can reach your financial goals. Set parameters based on asset prices rather than a preset time period.

Don’t immediately hop on board to invest in the next “Big Thing”

It seems that everyday there’s some new hot item that investors are throwing money at, only for it to fall short of the return that was promised so hard in the beginning. Don’t play this game. Impulse investments are the opposite of the strategy that you need to be emulating from the super rich.
Warren Buffet, pretty famously, never invests in tech. He says it wasn’t because he is too dopey to understand Bitcoin. It was because he understands that the inherent value that Bitcoin fanatics think Bitcoin has is entirely in the eye of the beholders. Which isn’t to say that those who do invest in tech like Bitcoin are doing anything wrong, to some like Buffet though, it just doesn’t seem that Bitcoin has any intrinsic value.

Don’t panic, always keep a cool head

The best investors are almost always going to take the long-term approach with the decisions made concerning their portfolio. They do their best to ignore the day-to-day insanity of Wall Street because of the uncertainty, and often knee-jerk reactions to some investment decisions.
Be steadfast, and endure. Making rash decisions in the heat of the moment can only ever hurt you and your investments. Anyone who was in the stock market in 2008 can tell you that struggling through it was worth it, as the market was up 30%+ in 2013, making it well worth it to stay calm.