Resources & Blog

Feb 19 Show: Legal Cannabis Attorney, Pamela Epstein

What do you think? Should medical marijuana be legal? How about for recreational use? The cannabis movement is quickly becoming an industry as more and more states legalize. Advocates tout a huge variety of health benefits, and research indicates there is certainly some merit to their claims. But the federal government still seems intent on enforcing prohibition. Is there room for a legal cannabis industry?

Feb 12 Show: Queen of Couponing, Cindy Livesey

Cindy Livesey, coupon queen, couponing tricksAre you always looking for ways to stretch your budget or get the most bang for your buck? If you could use some practical strategies to find great deals, if you are looking for tips and tricks to help you save money and live more on less – today’s show is for you!

If You Are Counting On A Government Pension, What Happened in Rhode Island Should Make You A Little Nervous

 

 

 

 

 

 

By Teresa Kuhn, JD, RFC

A few days ago, a news blurb, tucked away on the digital site of the Los Angeles Times caught my attention:

“Federal Judges Dismiss Unions’ Appeal Over Pension Overhaul”

The article was a mere blip on the news radar- a seemingly mundane Federal courts appeal decision that upheld pension reforms in Cranston, Rhode Island; a town formerly known as Pawtuxet, with a population of about 80,000.

Firefighter and police unions filed the appeal, saying that governments don’t have the right to change the terms of public employee contracts, even when those governments are experiencing severe financial distress.  In other words, unions maintained that pensions are sacred and untouchable and that government entities cannot reduce them or change the terms, even if such a reduction would prevent bankruptcy.

The court disagreed, however, and upheld governments’ rights to modify contracts based on some essential tenets of contract law.  I won’t bore you with the specifics, but if you are interested you can read it here: http://media.ca1.uscourts.gov/pdf.opinions/17-1293P-01A.pdf.

The point of this is simply that Cranston’s appeal is establishing a precedent for other cash-poor municipalities, counties, and states to use as they seek to reduce or even eliminate pension pay-outs.

This scenario is playing out again and again, as cities, trying to achieve some measure of fiscal responsibility, try to trim the largest item on their bloated budgets: so-called “unfunded liabilities”, the lions share of which involves government employee pensions.

In California, for example, a meltdown of epic proportions is on the horizon.  In 2015, Pew Charitable Trust reported that the state’s two largest pension funds gathered just 79% of the nearly $18.9 billion they needed to keep their pension debts from increasing.

Since that time, things have continued to worsen with some government entities’ funding levels dropping as low as 64%!  Adding to this is an increasing number of state appellate court decisions challenging the so-called “California Rule.”  The California Rule has long been interpreted to prohibit any changes to public pension benefits and has served as a model for other states as well.  But with more and more cities in the red, challenges to the California Rule and to the idea that pensions are untouchable are increasing.  The math has finally caught up to free-spending politicians who are being forced to enact pension reform , whether they want to or not.

What does this mean for YOU?

Pension woes aren’t exclusive to California and New York, but have also had an impact in Michigan, Kentucky, Alabama, Pennsylvania, Rhode Island, and Idaho.  According to the Governing.com website, there have been 61 municipal bankruptcy filings in the US since 2010.

(see http://www.governing.com/gov-data/municipal-cities-counties-bankruptcies-and-defaults.html )

Many other states and localities are in poor financial health, and the only way they can turn it around is to slash city services and/or trim pension costs.  This means, that although it’s great if you have a government pension, you MUST build up your Plan B in case that pension experiences changes which could severely impact your retirement plans.

At Living Wealthy Financial, we believe that pro-actively managing your wealth is the only way to ensure that your life after work will be less stressful and more fulfilling.  We build our clients’ financial future on a solid foundation, taking into account their unique situations and incorporating the power of specially structured cash value whole life insurance.  We’d love to talk to you about how we can help you create the financial future of which you’ve always dreamed.  Call us today for your initial consultation at (800)382-0830.

Feb 5 Show: Vaccine Whistleblower, Ty Bollinger

ty bollinger, vaccines, truth about vaccinesWhere do you stand on the vaccine issue? It’s a polarizing issue, but one that needs to be discussed. Are vaccines safe? Do they cause autism? Is there a legitimate risk posed by children who are not vaccinated?

Jan 29 Show: Investment Metals Proponent Chris Blasi

Chris Blasi, cryptocurrency conspiracy, bitcoinAre you interested in cryptocurrencies or precious metals? Are you wondering what the meteoric rise of Bitcoin means for gold or silver? These are exciting times for investors in both traditional and digital coin, and it pays to understand the market factors before jumping in or significantly changing your investment portfolio.

Want to Retire by Age 40? Here’s What You Need to Consider.

By: Teresa Kuhn, JD, RFC

The genesis of the modern movement to retire by 40 was Jacob Lund Fisker’s 2007 book, Early Extreme Retirement”(ERE).  Fisker, who retired from his profession at the age of 33, theorized that nearly any individual could retire long before age 65 by following a few simple steps.  His book laid out a blueprint and principles for attaining financial independence in just 5-10 years.

The principles advocated by Fisker, including avoiding debt, acquiring passive sources of income such as real estate, and saving as much money as possible are certainly sound and worthwhile strategies. However, as enticing as the premise of early retirement may be, there are some serious limitations that you must look into before taking this path yourself.  When designing your early retirement blueprint it is critical that your financial strategist does not use traditional retirement modeling and that he or she factors in the potential problems of retiring before 65.  In other words, the math that your mother and father used to retire at 65 won’t work for you.

You’ll Rely More on the Whims of the Stock Market

If you’re considering retiring early then you’ll probably be forced into the stock market, whether or not you want to be there.

According to American Funds, longer time horizons will create a greater reliance on stock market returns.  The traditional “4% withdrawal rule”, based on a 30-year retirement, is invalidated when adding an additional 20-30 years of retirement to support.  Given the history of ups and downs in the American Stock Market, failure to account for poor returns early in your retirement could spell disaster later.

Many Happy Returns in the Future?

Traditional retirement math must be reworked to contemplate the potential for lackluster returns in the future and lowered rates of economic growth.  Since a person on a longer retirement plan is so reliant on investment returns, and a new normal of less than 4% withdrawal rates could wreck their plans, your financial advisor must anticipate this when designing an early retirement blueprint.  Past performance, as you know, is not necessarily a good barometer for predicting the future when it comes to the market.  You’ll need more money to overcome market downturns.

The Longer You Are Retired the More Risks You Face

Contrarian financial website, ZeroHedge uses a grimly humorous tagline: “On a long enough timeline, the survival rate for everyone drops to zero.”

 I’ve reworked this a bit… “On a long enough timeline, there’s a 99.9% chance that you will face unexpected risks and spending shocks.”

Think about it.  If you leave your job at age 40, you could live 40, 50, or even 60 years in retirement.  During that time, you will almost certainly face small and large financial shocks that could bust your budget in a big way.

A recent actuarial study reported that over 38% of age 65 and over retirees experience a spending shock of 25% or more during retirement.  Unanticipated expenses such as health crises, natural disasters, home and automobile repairs, and other unpleasant surprises are major causes of retirement plan implosions.  This risk is magnified on a longer timeline.  If you plan on retiring early, be sure to factor in an additional 20% or more to account for these potential risks.

Do You Really Want To Live This Way?

The average American needs at least 20 years or more to accumulate a significant amount of retirement money.  In order to take off a third of that time, you’ll need to maximize your savings percentage as much as possible.  Doing so will require making lifestyle sacrifices with which you may be uncomfortable.

I am always for getting rid of debt and unnecessary expenses, but if you want to retire in 7 years, you will have to save nearly 75% of your income!  To do so, you’ll have to cut back on every single expense and be so frugal that your present life becomes unenjoyable.  For example, Fisker’s book recommends getting rid of your air conditioning to save money.  Those of us who live in hotter regions would likely have a tough time doing that.

Bottom Line

Even if you love your job, you probably don’t want to work until you die.  But, you don’t want to make your present life miserable trying to retire too early, either.  Luckily, there is another way that I would love to show you that allows you to avoid Wall Street and banks, save on taxes, and which gives you the possibility of retiring before you ever imagined.  Call our office today at (800)382-0830 and I will be glad to send you free educational materials that will help you learn how to take charge of your financial future and create a healthier, more fulfilling life.

What a 40 year old needs to invest with 95% confidence

Annual spending and withdrawal rates  

Jan 22 Show: Cup O’ Protein Coffee Inventor, Toby Sanchez

cup o protein, protein coffee, toby sanchez,Are you interested in fitness and healthy breakfast alternatives? Do you hit the ground running each day and have to rely on cold protein shakes or try to make your morning work with just a cup of coffee? What if you could ditch the protein shakes and breakfast bars and replace them with something healthy and filling on the go?

Jan 15 Show: Nelson Nash, Infinite Banking Visionary (Part2)

Nelson Nash, Infinite Banking, banking alternativesAre you frustrated with financial system in this country and looking for alternatives? Do you sometimes wonder how the central banking establishment came about in this country, and what you can do to regain a measure of control and freedom in your finances?

Jan 8 Show: Nelson Nash, Infinite Banking Visionary (Part1)

Nelson Nash, Infinite Banking, banking alternativesHave you ever gotten a loan for something and cringed over how much money you were pouring down the drain as interest payments? Have you ever tried to get financing for a home or other major expense only to find an endless cycle of hurdles and obstacles? More and more people are realizing the centralized financial system in this country doesn't work for them. But what can we do about it? Is it possible to opt out of the banking system entirely?

Jan 1 Show: Career Advancement Author, Bonnie Marcus

bonnie marcus, self promotion, career advancementDo you avoid office politics and putting yourself out there for the next promotion? Are you hesitant to promote your skills and value? Many people struggle to get ahead in their career simply because they don’t feel right about pushing themselves onto others, or they see self-promotion as negative. How can we take control of our careers and position ourselves for success?

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