The world of finance sometimes comes with a big elephant in the room – is your adviser trustworthy? Unfortunately, we sometimes see stories about financial advisers (or people in positions of power or influence in financial institutions) who have misappropriated funds for their benefit (i.e. they’ve stolen money from their clients).
We Take Care of it All, While You Can Enjoy Your Financial Freedom (of course you don’t want to go to your rectal examination)
Please excuse us for this title – but we are hoping to paint a picture in your head. The thing is, nobody wants to go to their rectal examination. And that’s what this blog is about. For some people, talking about finances is on par with a rectal examination in terms of their enthusiasm.
Today, we look at the interplay between hard work and good work. We have a saying here at Money Over 50: with your hard work and our good work, we can achieve great things.
Many of our new clients come to us with around $700,000 in assets and about ten years left of their working lives. Their goal is to make sure they have enough money in order to live a good lifestyle during retirement. The first question we ask them is: how much money do you spend now? This is important, because we find that nobody wants to downgrade their lifestyle once they retire. So, to know what you need in retirement, first work out what you need right now.
Many people think of their retirement savings as being one ‘bucket of money’. But how much is enough? As a very rough guide, if you want to draw $100,000 a year for the rest of your life, you want approximately 20 times that amount in your bucket (super). This equates to $2 million. If you only want to withdraw $50,000 a year, then you’re looking at $1 million. You should consider the amount you need to withdraw as a percentage – for example 5% each year – to decrease your chances of running out. What you draw will also depend on your lifestyle.
If you own property, at some stage you’ve probably had to decide between variable and fixed interest rates. Today we discuss why you shouldn’t fix your interest rates when it comes to your home loan or rental property.
Who remembers the ad from 1994 about the average family having 2.3 children? It may be stretching the memory a little, but we clearly remember the little boy in the ad who certainly wasn’t a fan of being ‘the .3’. In the ad, he complains of never fitting in the backseat of their family car. Enter the Ford Laser – the car which all families must buy in order to fit all three kids! For a blast from the past, check it out here: https://youtu.be/jNNIJBiSyA
Towards retirement, we always discuss assets and liabilities with our clients. Many of them talk about their house as an asset and part of their retirement savings. But there is a problem with this. Unless their plan is to sell the house before or during retirement, this is not an asset that will generate an income for them to live off.
Dallas Davison, Michael Hogue and Ali Hogue.