What Women Shouldn’t Retire Without

What Women Shouldn’t Retire Without

When our parents retired, living to 75 amounted to a nice long life, and Social Security was often supplemented by a pension. The Social Security Administration estimates that today’s average 65-year-old female will live to age 86.6. Given these projections, it appears that a retirement of 20 years or longer might be in your future.1,2

Are you prepared for a 20-year retirement? How about a 30- or 40-year retirement? Don’t laugh; it could happen. The SSA projects that about 25% of today’s 65-year-olds will live past 90, with approximately 10% living to be older than 95.2

How do you begin? How do you draw retirement income off what you’ve saved – how might you create other income streams to complement Social Security? How do you try and protect your retirement savings and other financial assets?

The Case for Women Working Past 65

The Case for Women Working Past 65

The median retirement age for an American woman is 62. The Federal Reserve says so in its most recent Survey of Household Economics and Decisionmaking (2017). Sixty-two, of course, is the age when seniors first become eligible for Social Security retirement benefits. This factoid seems to convey a message: a fair amount of American women are retiring and claiming Social Security as soon as they can.1

What if more women worked into their mid-sixties? Could that benefit them, financially? While health issues and caregiving demands sometimes force women to retire early, it appears many women are willing to stay on the job longer. Fifty-three percent of the women surveyed in a new Transamerica Center for Retirement Studies poll on retirement said that they planned to work past age 65.2

Staying in the workforce longer may improve a woman’s retirement prospects. If that seems paradoxical, consider the following positives that could result from working past 65.


A Retirement Gender Gap

A Retirement Gender Gap

What is the retirement outlook for the average fifty-something working woman? ​As a generalization, less sunny than that of a man in her age group. Most middle-class retirees get their income from three sources. An influential 2016 National Institute on Retirement Security study called them the “three-legged stool” of retirement. Social Security provides some of that income, retirement account distributions some more, and pensions complement those two sources for a fortunate few.1 For many retirees today, that “three-legged stool” may appear broken or wobbly. Pension income may be non-existent, and retirement accounts too small to provide sufficient financial support. The problem is even more pronounced for women because of a few factors.

Financial Mistakes to Avoid During Divorce (Part 1)

Divorce can be devastating, but with careful planning and avoiding these all-too-common mistakes, you can help save your client from financial mistakes that could affect them for the rest of their lives.

1) Not getting a copy of the parties’ credit reports.

This may seem obvious, but I seldom see attorneys and clients review these reports.

2) Not having details about life insurance policies.

Life insurance will be needed in many cases to provide assurance that child support and maintenance are paid.  All current policies should be reviewed to be certain that they will secure payment of this obligation upon death of the payor. The amount and term need to be sufficient. The party to be responsible for the premium payments, and beneficiaries need to be determined.

3) Not reviewing the individual holdings in investment accounts.

There are many reasons that an analysis must be done. Each holding will have dividend income, taxable consequences and investment risk to be considered.

New Tax Law May Undermine Prenups

New Tax Law May Undermine Prenups

As a regular part of your family law practice, you may have created or reviewed many prenuptial agreements in the past. They have been filed away by your former client never to be looked at again unless a “situation” arises.

However, in light of the new tax law, these contracts should probably be pulled out and reviewed. Certain provisions may no longer achieve what was intended by your client. Certain terms may now be disadvantageous to the very party who sought protection in the first place.

I suggest that you contact clients who have prenuptial agreements to determine how they may be impacted by the recent tax bill.  At the very least, this will be an opportunity to reinforce you as a valued resource for future work and referrals.

DOL Fiduciary Rule is Dead.

DOL Fiduciary Rule is Dead.

In a 2-1 decision on June 21st, the Fifth Circuit Court of Appeals sided with a group of financial industry plaintiffs to effectively put an end to the Department of Labor's fiduciary rule, which would require all financial advisors to act in clients' best interests with regard to retirement accounts.

Managing Student Loan Debt

Managing Student Loan Debt

No one wants to carry five figures of education debt into middle age or retirement, but some do. The burden is not just financial. Last fall, the Madison Capital Times asked student loan borrowers in the state of Wisconsin how they felt about their education debt. Sixteen percent said they were “terrified” of it, and another 30% indicated they felt only slightly less so. Fortunately, you may have possibilities to manage and reduce the debt load and the anxiety it breeds.

Managing Money Well as a Couple

Managing Money Well as a Couple

When you marry or simply share a household with someone, your financial life changes – and your approach to managing your money may change as well. To succeed as a couple, you may also have to succeed financially. The good news is that is usually not so difficult.

At some point, you will have to ask yourselves some money questions – questions that pertain not only to your shared finances, but also to your individual finances. Waiting too long to ask (or answer) those questions might carry an emotional price. In the 2017 TD Bank Love & Money survey consumers who said they were in relationships, 68% of couples who described themselves as “unhappy” indicated that they did not have a monthly conversation about money.1

First off, how will you make your money grow?

Simply saving money will help you build an emergency fund, but unless you save an extraordinary amount of cash, your uninvested savings will not fund your retirement. Should you hold any joint investment accounts or some jointly titled assets? One of you may like to assume more risk than the other; spouses often have different individual investment preferences.

Combining Finances When You Marry

Combining Finances When You Marry

Some spouses share everything with each other – including the smallest details of their personal finances. Other spouses decide to keep some individual financial decisions and details to themselves, and their relationships are just fine. 

Just as a marriage requires understanding, respect, and compromise, so does the financial life of a married couple. If you are marrying soon or have just married, you may be surprised (and encouraged) by the way your individual finances may and may not need to change.

If you are like most single people, you have two or three bank accounts.

Besides your savings account and your checking account, you may also have a “dream account” where you park your travel money or your future down payment on a home. You can retain all three after you marry, of course – but when it comes to your expenses, you have a fundamental decision to make.

Comprehensive Financial Planning: What it is, Why it Matters

Comprehensive Financial Planning: What it is, Why it Matters

Just what is comprehensive financial planning?

As you invest and save for retirement, you may hear or read about it – but what does that phrase really mean? Just what does comprehensive financial planning entail, and why do knowledgeable investors request this kind of approach?

While the phrase may seem ambiguous to some, it can be simply defined.

Comprehensive financial planning is about building wealth through a process, not a product.

Financial products are everywhere, and simply putting money into an investment is not a gateway to getting rich, nor a solution to your financial issues.

How Much Income Can You Take Home in 2018?

How Much Income Can You Take Home in 2018?

With the tax deadline having just passed, now is the perfect opportunity to start planning for next year. Last year’s return should be readily available, and you may even have many important items committed to memory. Additionally, four months into the year is the perfect time to begin making current year projections. Of course, this year is different. That’s because 2018 will be the first we file under the changes created by the Tax Cuts and Jobs Act (TCJA).

One thing you should do is reexamine your withholding. Back in February, the IRS released an updated withholding calculator that reflects changes under the new tax law. You can find the new withholding calculator here.  The great thing about using the calculator is that you won’t have to deal with the new W-4 worksheets. The IRS specifically encourages taxpayers who fall into the following groups to double-check their withholding:

What Are Your Odds of Being Audited?

What Are Your Odds of Being Audited?

Fewer than 1% of Americans have their federal taxes audited. The percentage has declined recently due to Internal Revenue Service budget cuts. In 2016, just 0.7% of individual returns were audited (1 of every 143). That compares to 1.1% of individual returns in 2010.1,2

The rich are more likely to be audited – and so are the poor. After all, an audit of a wealthy taxpayer could result in a “big score” for the I.R.S., and the agency simply cannot dismiss returns from low-income taxpayers that claim implausibly large credits and deductions.

Data compiled by the non-profit Tax Foundation shows that in 2015, just 0.47% of Americans with income of $50,000-75,000 were audited. Only 0.49% of taxpayers who made between $75,000-100,000 faced I.R.S. reviews. The percentage rose to 8.42% for taxpayers who earned $1-5 million. People with incomes of $1-25,000 faced a 1.01% chance of an audit; for those who declared no income at all, the chance was 3.78%.2