Need help? Call us today: 
831.275.0103
Home / Blog
Blog
The Carmel Foundation is a great place for seniors to make new friends, find activities and pick up new hobbies. On February 14, March 14, April 11 & May 9 the foundation will have a free orientation where staff members can explain the courses they have from music appreciation, bridge, chess, horticulture, Greek dancing and all kinds of other interesting topics.
Curt Tipton with AARP will be presenting a four hour refresher class on smart driving on Monday, March 20th from 12:00 p.m. to 4:00 p.m. in the Seideneck Room at The Carmel Foundation. The fee is $20 for AARP members and $25 for non-members, payable to the instructor at the time of the class. You can sign up online at www.carmelfoundation.org or call 831-624-1588.
The Wall Street Journal recently ran an article with the headline “How to retire during a scary stock market,” and indeed this market is very volatile. That, paired with soaring inflation, makes it very difficult to make sound investment decisions. The stock market performance during the first few years of retirement can have a disproportionate impact on your portfolio due to the impact of compounding. “The five years after retirement are a pivotal period for determining a sustainable lifestyle in retirement,” Wade Pfaua, author of “Retirement Planning Guidebook,” told the Wall Street Journal., A 2014 study found that those who start retirement by reducing their stockholdings to 20-30% of their portfolio and then gradually push it back up to 50-70% in stocks have the highest probability of making their money last 30 years. Those who take an opposite approach, tapering stock holdings from 60% to 30% of their portfolio are likely to run out of money in 28 years. Also, if you retire in a bear market, it is recommended to withdraw less than you normally would (take a 3% withdrawal rather than 4%), at least until the market recovers, can help boost the long-term value of your holdings.
AARP California is hosting a number of free one-hour presentations targeted to the Hispanic Community called “Let’s Talk Dinero.” The webinars cover topics like asset protection, debt management, entrepreneurship, home-ownership scams, caregiving expenses and retirement plans through CalSavers. Sessions are held live on the third Monday of each month. You can register as well as listen to previously recorded sessions at www.aarp.org.LetsTalkDinero.
There is no question that this has been a terrible year in the stock market. If you have the majority of your holdings in stocks, this can cause big problems as you may have to sell stocks at a loss in order to pay your RMD. In addition, many seniors believe that since the stock market went down significantly this year, so too will their RMD. This is not necessarily true. Your RMD for this year is based on the retirement account balances at the end of 2022, not 2023. That’s why it is always a good idea to have some cash or money market funds in your retirement accounts so that you don’t have to liquidate stocks at an inconvenient time. If you have cash outside of your IRA, one way to avoid selling stocks is to transfer stocks equivalent in value to the RMD from the retirement account to a regular brokerage account. That way, you can hang onto the stocks and hopefully they will recover.
AARP California is hosting a number of free one-hour presentations targeted to the Hispanic Community called “Let’s Talk Dinero.” The webinars cover topics like asset protection, debt management, entrepreneurship, home-ownership scams, caregiving expenses and retirement plans through CalSavers. Sessions are held live on the third Monday of each month. You can register as well as listen to previously recorded sessions at www.aarp.org.LetsTalkDinero.
The Internal Revenue Service has announced that it will delay enforcement new rules requiring withdrawals from some inherited retirement accounts until 2023. This follows a myriad of complaints that the changes were confusing. The relief applies to taxpayer complaining that the changes were confusing and applies to anyone who inherited retirement accounts in 2020 or 2021 who the IRS said had to take annual withdrawals right away instead of waiting until the end of a 10-year period to liquidate the accounts. This means that this group of taxpayers is not required to take RMDs for 2021 and 2022.
If you are thinking about taking early retirement, think again. With the stock market in a funk and inflation soaring, this is a painful time for everyone but especially those who are living on a fixed income. When thinking about retirement, don’t look at the average life expectancy as the most probable outcome. This is an average, and many people live much longer. Sharon Carson, executive director of retirement insights for J.P. Morgan Asset Management, told USA Today that you should plan for 35 years of retirement if you are a non-smoker in excellent health. She also says that the lower your expected long-term investment return (which is typical as you get older), the more it pays to wait longer before claiming Social Security. So, for instance, a woman who expects a long-term investment return of 5.5% and has a life expectancy of 88 should consider claiming at age 70.
With the stock market extremely volatile and interest rates low, many seniors are trying to figure out what to do with their nest egg. A nice safe investments are I bonds, which are U.S. treasury bonds which pays interest based on the consumer price index (CPI). They currently are paying 9.62%. Any I bond that you purchase from now through October will pay that rate for six months, at which point it resets. You can buy up to $10K in I Bonds per year.
AARP The Magazine is great for coming up with money-saving ideas, and their latest study (August/September 2022 Issue, page 16) focuses on dropping cable or satellite in favor of free options called FAST (free, ad-supported streaming TV). They recommend trying the following options:
This is Amazon’s new free TV service with an average of six to seven minutes per hour, and shows like Hollywood Houselift With Jeff Lewis and Bosch: Legacy.
Highlights include Emeril Tailgates, shows by Martha Stewart and Christopher Kimball as well as 3,000 older episodes of their shows.
Shows include Downton Abbey, the first five seasons of The Office and all episodes of Saturday Night Live.
This includes a plethora of shows from A&E, AMC, CBS, CNN and Paramount plus game shows like Jeopardy!, Wheel of Fortune and Let’s Make A Deal.
Shows include The Freak Brothers, The Masked Singer and TMZ.