17 Seventeen.docx

R Seventeen Article: Some statistics indicate money can be one of the major causes of divorce. For decades, the divorce rate in America has hovered around fifty percent. And while the reasons vary, a common thread for the majority of divorces includes money problems. In fact, some studies suggest th...

R Seventeen Article: Some statistics indicate money can be one of the major causes of divorce. For decades, the divorce rate in America has hovered around fifty percent. And while the reasons vary, a common thread for the majority of divorces includes money problems. In fact, some studies suggest that money problems in a marriage are the number one cause of divorce. The financial and emotional toll of a divorce can debilitate individuals and devastate families. If we could resolve our most serious family money issues, we could remove perhaps the single biggest hurdle to a successful marriage. Here's a list of 4 of the most common money problems in a marriage along with some solutions: Rankings will vary from study to study, but one of the most common causes of divorce always centers around money issues. Money issues can make married couples crazy because money touches so many parts of all people’s lives. No matter how much money you have (or not), there’s always the issue of money as a primary connector in marriage. That means it’s also a primary flashpoint for arguments and in many cases, a motivating factor in divorce. Money issues can wreck a marriage in so many different ways. Spouses who are reckless with credit cards can run up large debts without the knowledge of their spouse. One spouse can make considerably more than the other, creating earning/control issues. Money can be especially important to the degree that you don’t have it. When one spouse or the other loses a job or significant unexpected financial setbacks take place (think job loss, health crises, etc.), it can cause a big squeeze on family finances that may last for months or several years. Money issues cause stress. Stress chokes off communication. Money issues can lead to communication breakdowns in trust. The result is often divorce. Money issues are tough, but the best way to resolve them is to create a budget, long-term goals and stick to them. Make a concerted effort to keep the lines of communication open regarding financial interests, especially during challenging times. You probably won’t completely avoid disagreements about finances in the course of your marriage. But just like all other marital problems, if you face money challenges with honesty and as a team, your marriage has a much better chance of surviving. Getting married at an early age - One big reason couples cite for getting a divorce is not being fully prepared for what marriage is all about. Divorce rates are highest for couples who are in their 20s, and almost half of all divorces take place within the first ten years of marriage. Marrying too young can cause divorce for many reasons…Couples who get married at an early age are more likely to face more money issues because their careers are not established yet. In some cases, they have not matured and do not understand how to communicate effectively. Without experience to guide them, a lack of maturity will often lead to a calmer approach to marital problems. Lack of Communication - When you are no longer able to communicate with your spouse constructively, your marriage may be in deep trouble. Communication can be an early casualty when you get so wrapped up in all the layers of your life. Lack of Compatibility - When you got married, you were sure your spouse was the person you wanted to spend the rest of your life with. Everything clicked. Anything that bothered you was minor, and you shrugged it off because you were deeply in love. You overlooked faults, differences of opinions, and interests. Those were all things you could “work on” together after you said, “I do.” But even if your marriage started in total bliss and synchronicity, time always changes things. People grow up. You both take on new challenges. Habits and interests change. Your career moves forward. You become parents. Perhaps you both modify your political and religious views. Change is inevitable. Change is necessary. And in many cases, change is healthy. Like it or not, if you have been married for any amount of time, the person you are now is not the person you were back then. The same goes for your spouse. Getting married for the wrong reason - Some people who get married have unreasonable expectations about what marriage should be about, and they wind up bitterly disappointed when the fairy tale does not match up with reality. By: Jason Crowley, CFA, CFP, CDFA Jan. 26, 2020, Source: Sunrise Divorce If your marriage is not successful for any reason, the cost of divorce can be a financial nightmare experience. This is why it is extremely important to select your partner with your best diligence, keeping your ‘eyes wide open’ to who that person really is. Rather than who you want him or her to be, in order to fit into your pre-judgment of what you thought you wanted out of a life partner or mate. The most equitable divorces split all marital assets in half, a 50% - 50% split. Now, look at your joint marital assets to see if you would be able to survive on half of what you have accumulated over the years. If you have children under the age of 18 years old, this creates a whole new set of complex issues and concerns. It’s a much more complicated divorce process due to custody and child support concerns. Things between you and your partner can be cordial or a nightmare depending on what you both are seeking to get out of the divorce settlement. Article: The national average cost of divorce is about $15,000 per person. The cost includes attorneys' fees, court costs, and the cost of hiring outside experts like a tax adviser, child custody evaluator, or real estate appraiser. The time involved is what often determines the cost. For instance, the average divorce takes between four months and 11 months. And if a trial is necessary, it can take more than a year. By: Terin Miller, Source: The Street If your divorce isn’t cordial and amicable, one party may become excessively greedy and wants to fight for more than they actually deserve. This will cause the cost of your divorce to be astronomically more expensive. Lawyer fees can deplete the value of your assets, destroy any hope of an amicable relationship, and create an unrepairable wedge and dislike for one another. A female radio host once said, ”in a divorce, the person you once shared toilet paper with has become a monster of greed, forsaking all the good times for one lasting memory of ugliness. No matter how wonderful the marriage was, the last memories of the divorce will now define the entire marriage.” The Lawyer fees for both parties and Court costs can be much more than six times the cost of an amicable divorce. The cost of a contested divorce can be well over twenty thousand dollars per person. Depending on when the divorce occurs and how long you are married the financial effects will differ greatly. For those married twenty–five plus years, divorce can easily wipe out twenty-plus years of financial savings, and wealth and push you both back to square one with respect to your retirement plans. It can be very challenging and difficult to rebuild even a part of the lost savings and wealth from divorce. The inability to recoup the lost wealth can make your retirement years somewhat less comfortable because you now have almost doubled your overhead expenses with only half the income and retirement savings. Were there opportunities to resolve the marriage before the divorce? Sometimes you may wonder if it would have been easier to resolve your differences. Are you really better off after a divorce? The time you invest in the selection of the best-matched partner can be priceless. Many people say choose someone of ‘equal yoke’, who has the same at least close morals, values, drive, ambition, and financial status. You both will be equal partners when it comes to planning and decision-making throughout your journey through life. Unfortunately, many people are selfish and less willing to work out their differences. There are no guarantees that any marriage will last a lifetime. However, if you are committed to put in 50% to 70% to make your partner happy and they are committed to put in 50% to 70% to make you happy your marriage will probably last ‘Until Death do us part”. You both must be able to communicate, listen and be willing to compromise over the small stuff’. A wise man said, “You must give yourself permission before you become angry”. This mean whether you believe it or not, you choose to be angry. Do give anyone that power over you. The power to manipulate you and make you angry. It‘s better stay up and resolve your differences to go to bed angry. “Never go to bed angry”. After divorce residing in a single household creates new challenges such as all the overhead expenses must now be paid with just one income and perhaps a sense of loneliness. This is how many divorced couples lose their hard-earned future financial security because of the inability to compromise and honor their wedding vows. Finding a new compatible partner can be even more challenging than finding your first partner. Because the older people get, the more they become set in their ways and are less open to changes. The new partner may have more baggage, be even more challenging to understand and be less willing to compromise than your previous spouse. So, treasure, honor, and respect your first spouse and may your life together be long, memorable, and full of happiness. Your journey together will have many social and financial challenges, and having a committed special person to share the experience with can make the journey more fulfilling and less financially challenging. This doesn’t mean there is a right or wrong way to take your journey through life, all it means is that with the right spouse, you will have less, outside influences, drama, and a lot more money. Questions and Notes: 17 Retirement Planning for your retirement is the conscientious savings act to put aside and save money today, in order to create an investment fund for future income. The goals of the proceeds of these saving funds are to guarantee and allow you to have weekly or monthly paychecks when you no longer choose to physically work. Retirement is the goal you have worked on, planned, saved, and lived for over the past thirty to forty - five plus years. If you really enjoyed your career and were very good at your profession, the thought of retiring can be a little depressing. But it’s the next logical step in your life to enjoy and reap the benefits of the time you have saved and invested by creating multiple streams of income. It’s the time of your lives when you can just sit back, kick your feet up, and relax if you want to and appreciate all that you financially accomplished during your working years. It’s time to enjoy the many fruits of all your labor, family, and grandchildren. However, many of the things you thought you wanted when you were younger may be quite different now. You can wake up in the mornings and ask yourself, “what do I want to do today”, rather than “what do I have to do today”. You are free from that dreaded timekeeper and now your time belongs to you. This is where you will start to see and appreciate all your life’s planning, sacrifices, and savings. Remember back in your early chapters that constant reminder, ‘ for every dollar you don’t spend today on something you want, is a dollar you will have for the future to spend on something you may need’ ? You can now change the last part of that saying to, ‘is a dollar I have to spend now on anything you need or want’. You’ve earned the right to enjoy the finer things in life by following the many strategic plans, and solutions and exercising the discipline to create this financial security for yourself. Just remember to continue to budget and spend your retirement funds wisely to ensure it lasts you the next 20 – 30 years. Hopefully, over the years you put together a ‘Bucket List’ of the things you wanted to do once you retired and had the money to enjoy yourself. As a reward for being very vigilant in saving money, you can now travel like you always wanted. Now that time is here, during the years you were working you didn’t have the luxury to take three to four weeks off at one time to travel across the country to visit the National Parks. You may want to travel to the Mediterranean or Caribbean islands. Just remember to plan, budget, and continue to spend your money wisely. Article: Zero dollars was the most popular answer choice among respondents of all ages, though that percentage fell as age increased. Unsurprisingly, older respondents have more money saved since they had more time and potentially more avenues to do so. Men and women tied at 46% when it came to having $0 in retirement savings. However, men have more money than women in nearly all savings brackets. This could be due to men generally earning more than women, as well as the result of an investment gap. The survey also asked people why they thought they didn’t have enough retirement savings, with the top three responses being: “I don’t make enough money to save.” “Struggling to pay bills (rent, mortgage, car payments).” “I’m prioritizing paying down debt.” By: Sean Dennision, Source: GOBankRates Article: Across the United States, people are struggling to financially prepare themselves for life after work. A recent report from the U.S. Federal Reserve found that nearly a quarter of all American adults have no retirement savings or pension at all. Even though preparedness for retirement increases with age, concern about inadequate savings is also widespread among people approaching the point where they bid farewell to work life. The data shows that 42% of people aged 18-29 have no retirement savings, along with 26%, of Even?? though the amount of money people can stash away depends heavily on income and circumstances, most experts say that it's important to automate savings at a relatively young age. Americans in the 30-44 age bracket. Among those closer to retirement, 17% of people aged 45 to 59 report a complete lack of retirement savings and that figure is 13% for those aged 60+. When it comes to self-assessed preparedness for retirement by age, less than half of people aged 60 and over think that their savings are on track. Unsurprisingly, younger Americans are even more pessimistic, with only 42% of people aged 45-59 and 35% of those aged 30-44 feeling prepared. By: Niall McCarthy, Source: Forbes One of the best ways to plan for your retirement is to remain happily married for the rest of your lives. During your entire income-earning years, those of you who remained married with multiple incomes have a huge advantage over many single-household income folks. The same theory applies in our retirement years. You also have your best friend, the love of your life, and a lifetime companion to enjoy and share these experiences. We all have heard stories of the rare phenomenon of couples being married for 50, 60, 70, and 80 years. They’ve had a lifetime of memories of love and companionship most people can’t even relate to. If we estimated they worked for 45 years and plan to save the second overhead expense of at least $1,500 per month, that would amount to 45 years times, 12 months times $1,500, (45 x 12 x 1,500) equals $810,000 saved or not spent on a second residence. This number does not include any interest earned on these savings. Even if we just use half of this savings, it’s about $405,000 added income a retired married couple would benefit from a happy marriage. If you plan and could put that entire $1,500 per month in an investment instrument at only 3% interest would have earned over $1,697,456 over 45 years. Their 401Ks they have made contributions to, and their employers matched their contributions would also amount to a tremendous amount of money as well. ‘Your Lottery Winnings’! As mentioned in a previous chapter, consider the benefits of always maintaining adequate insurance to replace any lost income due to injury or loss of life. Purchase as much cash value as accumulating whole life insurance that protects the future financial needs that you can afford at a young age. This would be another example of how sacrifices many years ago will pay off in the future. The younger you start buying whole life insurance, the lower your monthly premiums will be, and these payments will remain the same over the entire life of the policy. Over the decades your policy will accumulate more and more Cash Value as it approaches the policy’s Face Value. Hopefully, you and your significant other will never need to receive the death benefit. Then you will have a large amount of accumulated Cash Value funds from your Whole Life Insurance Policy you can borrow against if you need to in the future. If you have done very well throughout your life and can handle your final expenses without the life insurance policy, you can take the Cash Value, and accumulated money, and use it to fulfill some of the things on your ‘Bucket List’. At this stage in your life, it’s all about having many options to enjoy your ‘Golden’ years. Please consider a Long-Term Care insurance policy just in case you need one. You may have been ‘blessed’ with children and now have grandchildren you adore and spoil, this will give them peace of mind you will always be cared for. Just as you shared this financial literacy knowledge and life skill tools you acquired with your children; they too will share it with their children. It’s the ‘Gift’ that will keep on giving for a lifetime and generations. Hopefully, as mentioned earlier, you didn’t squander your money or miss out on the opportunities to provide yourself with additional retirement income through your employer’s 401K plan. Again, this is an excellent opportunity for you to maximize your ability to create a retirement fund. If you contribute to a 401K plan some employers match your 401K contributions dollars, dollar for dollar up to 6% of your income. These employer matching funds are free money that’s available to you, please take advantage of it and don’t leave it on the table. This is the money you have accumulated and saved by implementing these strategies which have put money back into your pockets. If your average annual earnings are $40,000 per year over thirty years of employment you would have earned $1,200,000. If you take 6% of your $40,000 income that would be a $2,400-year contribution to your 401K plan on your part. Your employer’s match would be $2,400 for a total of $4,800 in annual contributions, over a thirty-year period that would be $144,000 in contributions. More money! If your 401K yields an average of 6% interest rate APY annual interest over that period, you could have over $500,000 in your 401K plan. Most 401K Plans are tied to the movement of the Stock market. This in essence comes out to committing $50 per week to your 401K plan. It’s like only giving up eating breakfast or lunch out daily mentioned in Chapter 8. This is a huge financial opportunity for you to create additional wealth during employment. Please don’t leave all this money behind, it’s yours for the taking. These are ‘Lottery Winnings’ opportunities many folks overlook because they didn’t even know they existed. If you didn’t plan for your retirement throughout your working years, you’ll end up with just Social Security benefits. Then you may be in a bit of a financial pickle a.k.a. up the creek without a paddle always worrying about the rising cost of living. This may keep you from really enjoying your ‘Golden’ retirement years. Don’t be like the masses and spend all the money you earn and never save anything or invest any money for your inevitable future. As you very well know the cost of living increases every year. Most of you can remember when you were kids the price of candy bars was only $0.25, now they are $1.29 or more. So how much are things going to cost when you are 65, 70, and 80 years of age? Will you have enough money saved to afford to enjoy your ‘Golden Years’? Many seniors may have financial challenges trying to pay their monthly overhead expenses if they didn’t devise a saving plan by their early thirties or forties as a retirement nest egg. The lack of planning for additional retirement income for these monthly expenses can consume all of your Social Security income leaving you very little for anything else. Your future financial health saving plans should never take a back seat to unwise and reckless spending habits during your young adult years. You could end up living a far cry from what you had envisioned as your ‘American Dreams’ to be initially. It is very unlikely you will have any other retirement benefits except Social Security Benefits, if and when you are able to retire. Many retirees will have to keep working full-time well past the age of 65 or seek a part-time job to make ends meet for the rest of their lives. You may have seen them working as ‘Greeters’ at big box stores and at fast food restaurants, they look like someone’s grandparents. You may be thinking, “Why are they still working? They should be at home enjoying their ‘Golden Years”. Some of them may want to work to stay busy, however many of them are struggling and may be faced with food, housing, and financial insecurities for the rest of their lives. Perhaps, this could have been avoided if you had been more vigilant in making sacrifices, planning, discipline, and better credit management decades ago. You now have the financial skills and tools to ensure an enjoyable retirement. But you must put what you’ve learned into action and put your money to work for you. We all understand things happen beyond our control like lay-offs, major illnesses, and the death of a spouse without adequate life insurance. These can really devastate you emotionally and financially. Please, be prepared for adequate insurance. Many retired homeowners who should be enjoying their ‘Golden Years’, find themselves as financial servants to their monthly overhead expenses which are constantly increasing. Remember, most of our senior citizens live on fixed incomes only receiving annual Social Security increases. From 2019 to 2020 they received a 1.6% annual cost of living increase, while the annual inflation rate is 3.15% per year or more, that’s almost double their fixed income annual increase. If you are a couple receiving $1,400 per month or $16,800 annually each from Social Security, you would receive an annual income increase of $22.40, times two or a $44.80 total monthly increase. That’s just $537.60 per more of income. This doesn’t even cover the annual increase in the cost of groceries. If you own a home, the expenses from property and school taxes, insurance, utilities, and general home maintenance like lawn care can be more than overwhelming You also may have the expenses of medications, a companion pet, and gasoline if you own a vehicle. You may also have the expense of In-Home Care expenses if you are not able to live without assistance. Please don’t let this become your future, you now have the financial knowledge to keep this from ever happening to you. Many seniors may feel financially overwhelmed and stressed out, not being able to continue to meet their monthly financial obligations. If they own a house, they may feel the need to explore and resort to Reversed Mortgages. A Reverse Mortgage can be either a financial lifeline or a financial kiss of death if not managed correctly. To make sure senior(s) fully understand a reverse mortgage they should seek legal advice before considering this solution option. There would also need to be full disclosure of all annual interest APR rates and fees on the Reversed Mortgages’ contracts before their signature is required. The amortization tables of the interest and fees should also show you the impact and the consequences of how not making any repayments would affect the equity of the property and its value. A Reverse Mortgage is like a mortgage loan, secured by their residential property, it enables the borrower to access the unencumbered equity value of their property. The loans are typically promoted to homeowners over 62 years of age and do not require monthly mortgage payments, but it is advisable to pay back the loan if you are able. Especially, if the property is to be Willed to someone. Advantages of a Reverse Mortgage Typically, there are no minimum income or credit score requirements that you have to meet. Additionally, you may be able to get a better interest rate than you would wind up with another type of loan. Homeowners are allowed to retain their title to a home with a reverse mortgage. CONS of a Reverse Mortgage: The loan balance increases over time as interest on the loan and fees accumulate. As the equity of their homes is depleted, fewer of their assets are available to leave to their heirs .... Their fees are much higher than traditional mortgages, and many times seniors don’t really understand the entire process. Many times, older homeowners 62 years of age and older may consider a Reverse Mortgage with intentions to supplement their income and or catch up on their debt. They have good intentions to pay the loan back promptly. Then things get out of control, so they neglect to make the repayments and they use up most of the equity of their home. If they can’t or haven’t repaid the Reverse Mortgage loan, the equity in their home will be depleted. Their house was supposed to be part of the nest egg for their ‘Golden Years’, now it’s gone. Unfortunately, for seniors in desperate times sometimes require desperate measures and sometimes make bad financial decisions. We must do a much better job in protecting and ensuring our senior citizens have adequate resources to live out the remaining of their lives comfortably. Please, make sure you make the necessary plans and save for your retirement. After working for 35 to 45 years you deserve to enjoy your retirement years. If you plan early and use some of the suggested strategies and solutions in this book, you will have the financial security accumulated to retire comfortably. There is nothing more beautiful than happy cheerful grey haired senior citizens smiling and living their best lives. This could and should be you one day, but your planning, budgeting sacrifices, and savings start right now. You have to just do it.