K Richard Engel - Registered Representative at Wealth Strategies

10/30/2024

Financial author and advisor Dave Ramsey has opened up about Social Security and when, exactly, people should begin to take out their money.
According to Ramsey, people should begin to take Social Security when they are 62 years old .
Ramsey has never been one to keep his opinion to himself — in the past, Ramsey has even said that Social Security is a “stupid thing”, as well as a “mathematical disaster.”
However, Ramsey has also opened up about when he thinks Americans should collect their Social Security benefits.
Most financial experts recommend people don’t do what Ramsey says. Instead, they state that Americans should wait until they are about 66 or 67 to collect Social Security. Americans can receive full retirement benefits when they hit this age range. Often, if they wait until this time — or until they are older, such as 70 — seniors can receive more in monthly benefits.
However, Ramsey doesn’t follow this normal advice and instead has told people to begin to collect Social Security when they are 62— as long as they make another move alongside the collection. He said, “It almost always makes sense to take it early if you’re gonna invest every bit of it.” Ramsey has further added that if you begin to invest this money early, you’ll receive more money than if you wait until you’re 66 or 67.
To truly ensure you’re investing accurately, you must find good mutual funds.
However, finding these good mutual funds can be an incredibly difficult task — especially if you’re not comfortable with investing or do not have a professional doing it for you. If you don’t know how to accurately invest in good mutual funds, then you could end up putting yourself in a worse financial situation than if you had just waited to collect Social Security when you were older.
Furthermore, other critics have explained that seniors looking to retire and collect Social Security may not have the discipline, knowledge or opportunity to invest their money. Instead, they may need that money to pay their bills or to use it in their daily lives.
Advice on how and when to collect Social Security — and then how to use these benefits — varies from advisor to advisor. There are some other factors that that one should consider on whether to take retirement early.
Do you have a plan in place to allow you a comfortable retirement until age 82? If you live to age 62, annuity tables indicate that your life expectancy if over 80 years.
Are you disciplined enough to actually invest all of your social security payments for a five year period and can you invest those funds with an 8% after-tax return which can be annuitized? After all, social security benefit do not stop after a certain period of time.
There are many factors to consider in when to take social security (health, expected longevity, income and financial status, etc.). Consult a financial professional well versed in the topic before you make the final decision.

10/28/2024

09/06/2024

There may be many points in your life when you ask yourself, “Am I going to be okay?” With personalized financial guidance you can gain confidence that you have the tools in place to pursue your dreams and desires.

08/07/2024

Creating a budget may take time and effort, but the payoff can be worth it. Sticking to a budget can mean having more money for what you want. Check out these 7 tips to help you make a budget you’ll follow:

Do you have goals you’re trying to achieve? Learn about strategies for budgeting to help you better track spending and manage money.

07/24/2024

Are Baby Boomers Really Stingy?

A recent article in the Economist reported that Boomers - those born between 1946 and 1964 - are not spending down their retirement savings as expected. Data shows that Boomers are remarkably stingy—not just in America but across the rich world. They are not spending their wealth, but trying to preserve or even increase it. In the mid-1990s, those aged between 65 and 74 spent 10% more than they made, eating into their wealth. But since 2015 people in this cohort have saved about 1% of their income. Boomers are also likelier than previous generations to say they save. In 1995, 46% of retired households claimed to have saved in the past year. By 2022, 51% of retired households did.

Boomers have deep pockets, so their spending choices will exert a huge influence on global economic growth, home prices, inflation and interest rates. Few boomers are downsizing to smaller homes, which would free up cash for the finer things in life. Empty-nest boomers own 28% of America’s homes with three or more bedrooms. Boomers also are less likely to dine out. What is causing this wealth-decumulation puzzle?

Three factors stand out: “bequest motives”, the covid-19 pandemic and worries about care.

Bequest motives often go a long way towards explaining why retirees do not spend down their wealth. Many boomers recognize how lucky they are to have accumulated such enormous wealth. They want to pass it on to their children, many of whom are struggling to buy a house or pay school fees. The flow of bequests from the dead to the living, as a share of GDP, is rising fast across the rich world. Americans inherit about 50% more each year than they did each year in the 1980s and 1990s.

Then there is the pandemic. Old people faced grave risks from Covid. Many developed hermit-like habits, which they are struggling to shake off. In 2022 American boomers spent 18% less in real terms on dining out than in 2019. Now that they buy fewer experiences, many are accumulating wealth almost by accident.

The final factor is “longevity risk”. Many boomers will live to 100 and beyond, meaning lots will spend a third of their lives in retirement. This poses a financial burden, especially for those who may eventually need long-term medical care. In America the share of retirees who are very confident they will have “enough money in retirement” has fallen from more than 40% in the mid-2000s to less than 30% today. These fears are changing behavior. A study by the Institute for Fiscal Studies, a British think-tank, finds that those who believe they have “zero” chance of needing to pay for long-term care spend down wealth more quickly. For the many people who worry about eventually losing their mobility or developing dementia, the risks of spending big today seem too great. An estimated 13.5% of aggregate American wealth is attributable to saving for old-age medical expenditures.

07/15/2024

How to Achieve Financial Independence

A growing number of women say that achieving financial independence is their No. 1 financial goal. While financial independence serves everyone, research shows it holds special significance for women, who typically earn less than men, live longer, and have greater caregiving responsibilities.

This article details the key steps women can take to achieve financial self-sufficiency:

Before you can achieve financial independence, you have to figure out what it means to you. Here's how to set financial independence goals and achieve them, whether you want to retire early, live abroad, or reduce stress.