Money Monday with Nathan Bachrach and Brian Thomas

MONEY MONDAY 2/26/18

Topic A

Do you have an age in mind for when you want to retire? Because tonight, Simply Money has a wake-up call for you. 

If you're like the average American, you PLAN to retire at age 66 or older -- but in REALITY, you're probably going to retire much earlier than that. Chances are good it'll even happen BEFORE age 60.

Why? Because life happens! You may have the best of intentions of working longer, but 1 out of every 2 retirees end up retiring sooner than planned: either due to a health issue/disability, a job loss, or needing to care for another family member.

Retirement comes down to "sickness:" You get sick of your job; your job/boss gets sick of you; you actually get sick; or a family member gets sick and you need to care for them

And getting stuck in the frame of mind that "I'll just working longer" or "Oh, I'll just never retire" can be really dangerous to your financial well-being, since these are excuses for not saving more NOW.

Your late 40s are your peak earning years (age 49), so use this to your advantage. And once the kids are out of the house, start siphoning off that money into your retirement accounts.

And, of course, get a personalized financial plan. This can tell you if you're on track with retirement. And your trusted financial planner can run "worst case" scenarios to see how your money would fare.

When you get closer to retirement, there is less margin for error

HERE'S THE SIMPLY MONEY POINT

Retirement might happen sooner than you think! Start planning now to avoid any major headaches.

#2: Enquirer

Every Sunday, Simply Money is answering your money questions in the Cincinnati Enquirer.

David in Lawrenceburg: My dad just started getting his monthly Social Security check (about $1200), but he also has a pension and some other investments. Will he have to pay taxes on that Social Security benefit?

#3: Personal Finances

Happy "America Saves Week!" Yes, this is actually a thing! And as cheesy as it might be, the intention is good: its goals are to promote good savings behavior and to help Americans save more effectively.

And this is something we can get on board with here at Simply Money Advisors - after all, most Americans don’t have enough saved to cover a $1,000 emergency!

Plus, our researchers on our staff just found this number: the average person spends $5400 a year on "impluse" purchases!  It's hard to save money when you're busting your budget on "wants!"

Top 5 types of impulse buys: food/groceries, clothing, household, takeout, and shoes.

Just think: that's $5,400 a year LESS you could be saving for retirement (just about the max you can save in a Roth IRA per year, for instance)

$5,400 a year over 10 years is $54,000 you're wasting!

If you feel the urge to buy something you don't really need, whether in a store or online, take a minute to ask yourself whether you really need the item. Wait a day and see if the purchase still makes sense.

So how can you become a better saver? First, automate everything you can. If you don’t see it in the first place, it won’t be as painful to set aside.

Second, start small if you have to. At Simply Money, we recommend saving 20% of your take-home pay. But that’s the “ultimate” goal. Save what you can now, then increase that by 1% to 2% a year until you get there.

And third, don’t think of saving as a chore! Instead, view saving as setting aside your monthly “profit.” Make it a positive, like companies do – the more profit, the better.

You can't control what markets do to your money… but you CAN control what YOU do with your money. So you need to make the decision for yourself: are you going to spend your money... Or are you going to save it? (mind over matter)

HERE'S THE SIMPLY MONEY POINT

No matter where you are in life, your future self is depending on you to save now. Don’t let yourself down!