What The Griswolds Can Teach Us About Our Finances

What The Griswolds Can Teach Us About Our Finances

The holidays can be an exciting and joyous occasion or stressful depending on how you prepare for them. But, using the Griswold’s situation in National Lampoon’s Christmas Vacation as a learning experience, you can take some steps to make the holidays more bright. So, grab some eggnog and your moose mug, and consider the following as you prepare for the year ahead: Don’t write a check you can’t cash – Or, as the saying goes, “don’t count your chickens before they hatch.” By relying on a source of income that you haven’t yet received, you put yourself at risk of financial catastrophe. For example, if you decide to put in a pool, make sure to wait until you receive your bonus check. Make sure you have an emergency reserve – Should the unexpected occur (for example, getting fired after your crazy cousin kidnaps your boss), it is important to have a liquid source of funds available to meet your monthly expenses until you can recover. This account is normally recommended to cover approximately 3 – 6 months’ worth of expenses. Save some of your year-end bonus – While bonuses can be a nice surprise and should be enjoyed, we recommend saving at least a small portion. This could mean padding your emergency reserve, depositing money into a brokerage account, or contributing to an IRA. Consider pet insurance – Should your feline companion chew on a cord and get electrocuted, chances are the vet bill will be fairly high. Much like human health insurance, pet insurance allows you to set deductibles and coinsurance based on an agreed-upon monthly premium. While...
Dunston Financial Group Featured In Chicago Life on How to Prepare for Retirement

Dunston Financial Group Featured In Chicago Life on How to Prepare for Retirement

  At Dunston Financial Group, we work with pre-retirees and retirees on a daily basis. If you’re preparing for retirement, here’s a really helpful article from Tom Groenfeldt, writing on behalf of Chicago Life Magazine, that features some of our own thoughts from the team here at Dunston Financial Group. This is a digital magazine, and you’ll find the article on pages 34-35....
Moving to Be Near the Kids in Retirement: Dunston Financial Group in Kiplinger Magazine

Moving to Be Near the Kids in Retirement: Dunston Financial Group in Kiplinger Magazine

“The majority of retirees don’t have to move to get more face time with adult children: More than 50% of older households live within 10 miles of at least one child, according to the Health and Retirement Study, sponsored by the National Institute on Aging. But for those who live farther away, the arguments for and against moving closer to them can be equally persuasive.” Read...
Why It’s So Hard to Spend Down Your 401(k) in Retirement

Why It’s So Hard to Spend Down Your 401(k) in Retirement

Will I underspend my assets? Will I run out of money? These are questions that retirees face every day as they decide how much to withdraw from their retirement plans. In a recent MarketWatch article, Alicia Munnell expresses concern about the millions of Americans who will be entirely reliant on their 401(k) assets at retirement: At a recent conference, retirement experts concluded that the lack of an easy drawdown mechanism in 401(k) plans was the major challenge facing the 401(k) system.   In 2014, the Treasury Department and the IRS issued guidance that made longevity annuities accessible to 401(k) plans and that enabled target date funds to include annuity contracts either as a default or as a regular investment option. But individual plan sponsors feel under siege by lawsuits and see little payoff to being innovative. At the same time, Congress is unlikely to mandate that annuities be a part of 401(k) arrangements.   So we are at a standstill. Millions of Americans — having been told that their retirement plans are automatic — will be handed a pile of money and told they are on their own. Neither academics nor policymakers really have any idea how they will behave. Recent studies show that people draw down their balances in retirement much more slowly than expected. But most of today’s retirees with a retirement plan have an old-fashioned defined benefit plan, so these studies have little to say about the likely behavior of those retiring entirely dependent on 401(k) plans. Munnell is onto something here. Working with retirees every day, our firm has concluded that a major risk to...
Why You and Your Partner Might Not Want to Retire Together

Why You and Your Partner Might Not Want to Retire Together

Are you thinking of retiring at the same time as your spouse or partner? It might not be the best idea. Staggering retirement can take advantage of higher Social Security benefits, longer access to health insurance before Medicare becomes available, and larger retirement plan withdrawals. Investopedia author Mark P. Cussen and investment advisor Morris Armstrong explain in this helpful article that “Unless couples are the same age, and in the same health, it usually makes more sense for one person to retire earlier. There can be both financial and relationship benefits,” says Morris Armstrong, registered investment advisor, Armstrong Financial Strategies, Cheshire, Conn. Financially speaking, the advantages are threefold. When one spouse works longer, the amount of Social Security benefits the couple is entitled to will increase. In addition, the continued income from the working spouse gives the couple a few more years to save for retirement. Finally, a spouse who works an extra three to five years will likely have a shorter period over which to draw on his or her retirement assets, allowing for larger withdrawal amounts each year. And, given that retirement is a such a significant life transition for most people, Cussen explains that there are often emotional considerations that should be taken into account when couples are deciding whether or not to retire together: Retirement in the modern era can be an emotionally complex proposition. Losing one’s sense of identity through work can be a major adjustment for some, while others are able to make this transition with relatively little difficulty. When a working couple retires, they suddenly find themselves at home together all the...
How to Be Prepared for Involuntary Retirement

How to Be Prepared for Involuntary Retirement

Here’s a helpful retirement planning article that I came across this morning over at cbsnews.com Money Watch. I appreciated this piece because it touches on something that I regularly bring up with our clients, which is that saving for retirement should be viewed as something much more than just a time during which one’s savings can be applied to the pleasures of life. Hopefully retirement does create such pleasures but, in many ways, retirement savings should also be viewed as the largest emergency reserve fund that one will ever accumulate. This is because, as the article rightly points out, retirement is not always voluntary: For many older workers, their retirement “plan” is to keep working as long as possible. Unfortunately, life events often intervene and force people to retire sooner than they expected. This may result from job loss, illness, disability, caregiving responsibilities or some other reason. This unanticipated situation can force people to make many decisions quickly and without a lot of forethought, leading to inappropriate choices. To put this differently, many people don’t take saving for retirement seriously because they think they’ll simply be able to work until they die. I genuinely hope that all of us are still going strong like Banana George was when he was still barefoot waterskiing at age 85 (see video below), but, for many Americans, old age will inevitably set in and they simply won’t be able to do the things they once could, which includes not only play, but work. I don’t bring up the realities of aging in an attempt to scare one into saving for retirement; instead, it’s my hope that retirement will...