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September 28, 2022

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Bir Grewall

Bir Grewall

Sikh American, India born; Bir is a "Top Recommended" Financial Strategist, Advisor & Author



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September 26, 2022

Playing the Lottery is Still a Bad Idea

Playing the Lottery is Still a Bad Idea

A full third of Americans believe that winning the lottery is the only way they can retire.¹

What? Playing a game of chance is the only way they can retire? Do you ever wonder if winning a game – where your odds are 1 in 175,000,000 – is the only way you’ll get to make Hawaiian shirts and flip-flops your everyday uniform?

Do you feel like you might be gambling with your retirement?

If you do, that’s not a good sign. But believing you may need to win the lottery to retire is somewhat understandable when the financial struggle facing a majority of North Americans is considered: 77% of millennials are living paycheck-to-paycheck, as are nearly 40% of Americans earning over $100,000.²

When you’re in a financial hole, saving for your future may feel like a gamble in the present. But believing that “it’s impossible to save for retirement” is just one of many bad money ideas floating around. Following are a few other common ones. Do any of these feel true to you?

Bad Idea #1: I shouldn’t save for retirement until I’m debt free.

False! Even as you’re working to get out from under debt, it’s important to continue saving for your retirement. Time is going to be one of the most important factors when it comes to your money and your retirement, which leads right into the next Bad Idea…

Bad Idea #2: It’s fine to wait until you’re older to save.

The truth is, the earlier you start saving, the better. Even 10 years can make a huge difference. In this hypothetical scenario, let’s see what happens with two 55-year-old friends, Baxter and Will.

  • Baxter started saving when he was 25. Over the next 10 years, Baxter put away $3,000 a year for a total of $30,000 in an account with an 8% rate of return. He stopped contributing but let it keep growing for the next 20 years.
  • Will started saving 10 years later at age 35. Will also put away $3,000 a year into an account with an 8% rate of return, but he contributed for 20 years (for a total of $60,000).

Even though Will put away twice as much as Baxter, he wasn’t able to enjoy the same account growth:

  • Baxter would achieve account growth to $218,769.
  • Will’s account growth would only be to $148,269 at the same rate of return.

Is that a little mind-bending? Do we need to check our math? (We always do.) Here’s why Baxter ended up with more in the long run: Even though he set aside less than Will did, Baxter’s money had more time to compound than Will’s, which, as you can see, really added up over the additional time. So what did Will get out of this? Unfortunately, he discovered the high cost of waiting.

Keep in mind: All figures are for illustrative purposes only and do not reflect an actual investment in any product. Additionally, they do not reflect the performance risks, taxes, expenses, or charges associated with any actual investment, which would lower performance. This illustration is not an indication or guarantee of future performance. Contributions are made at the end of the period. Total accumulation figures are rounded to the nearest dollar.

Bad Idea #3: I don’t need life insurance.

Negative! Financing a well-tailored life insurance policy is an important part of your financial strategy. Insurance benefits can cover final expenses and loss of income for your loved ones.

Bad Idea #4: I don’t need an emergency fund.
Yes, you do! An emergency fund is necessary now and after you retire. Unexpected costs have the potential to cut into retirement funds and derail savings strategies in a big way, and after you’ve given your last two-weeks-notice ever, the cost of new tires or patching a hole in the roof might become harder to cover without a little financial cushion.

Are you taking a gamble on your retirement with any of these bad ideas?

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¹ “What Are the Odds of Winning the Lottery?” Kimberly Amadeo, The Balance, Oct 24, 2021, https://www.thebalance.com/what-are-the-odds-of-winning-the-lottery-3306232

² “Nearly 40 Percent of Americans with Annual Incomes over $100,000 Live Paycheck-to-Paycheck,” PR Newswire, Jun 15, 2021 https://www.prnewswire.com/news-releases/nearly-40-percent-of-americans-with-annual-incomes-over-100-000-live-paycheck-to-paycheck-301312281.html

September 7, 2022

A Matter of Life and Debt

A Matter of Life and Debt

You might never have thought about this before, but how are debt and life insurance connected?

Well, the answer is very simple. Debt is one of the largest financial struggles in society today—total consumer debt has grown to a staggering $14.9 trillion as of 2020.¹ That represents a staggering financial burden on Americans throughout the country.

But what happens if someone in debt passes away? The debt doesn’t just vanish. The estate of the deceased is often responsible for repaying creditors.² That means a family, already down an income, has to cope with the stress of managing debt.

That’s where life insurance can help.

Life insurance pays out a lump sum in the event of death. The money can help family members repay debt, care for children or other dependents, and provide financial security to those left behind.

So how much life insurance do you need?

That’s something only you can answer for your own household. Typically, experts recommend 10X your annual income to provide a sufficient financial cushion for your family. But, depending on your level of debt or the particular needs of your spouse and children, you may require more coverage!

Life insurance could be critical for the financial well-being of your family if you’re carrying debt. It might provide the cash they need to pay your creditors and start building a new future.

If you’re looking for life insurance, contact me. We can estimate the amount of protection that’s right for your family!

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August 31, 2022

A Beginners Guide to Saving and Shredding Documents

A Beginners Guide to Saving and Shredding Documents

It’s time to manage all those papers that are taking up space in your filing cabinets!

But how? Which documents should you preserve? Which ones should you shred? Here are 11 helpful tips on what to do with tax documents, legal documents, and property records.

Documents to keep.

At the top of this list? Estate planning documents. Your will, your living trust, and any final instructions should be carefully labeled, stored, and protected. Your life insurance policy should be safeguarded as well.

Records of your loans should be preserved. That includes for your mortgage, car and student loans. Technically, you can shred these once they’re paid off, but it’s wise to keep them around permanently. Someday you may have to prove you’ve actually paid off these debts.

Tax returns.

Here’s a trick—keep tax returns for at least 7 years. Why? Because there’s a 6 year window for the IRS to challenge your return if they suspect you’ve underreported your income.¹ Keep your records around to prove that you’ve been performing your civic duty by properly reporting your income.

(Check your state’s government website to determine exactly how long you’re supposed to keep state tax returns.)

Property records.

Keep all of your records pertaining to…

  • Your ownership of your house
  • The legal documents for buying your house
  • Commissions to your real estate agent
  • Major home improvements

Save these documents for a minimum of 6 years after you move out of your home. If you’re a renter, keep all of your records until you’ve moved out. Then, fire up your shredder and get to work!

Speaking of your shredder…

Annual documents to destroy.

Every year, you can shred paycheck stubs and bank records. Just be sure of two things…

First, make sure that you’re not shredding anything that might belong in your tax records.

Second, be sure that you’ve reviewed your finances with a professional who will know which documents may need preserving.

Once you’ve done that, it’s fine to feed your shredder at your discretion!

Credit card receipts, statements and bills.

Once you’ve checked your monthly statement against your bank records and receipts, you’re free to shred them. You may want to hold on to receipts for large purchases until the item breaks or you get rid of it.

When in doubt, do some research! It’s better than tossing out something important. And schedule an annual review with a licensed and qualified financial professional. They can help you discern which documents you need and which ones can be destroyed.

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¹ “Save or Shred: How Long You Should Keep Financial Documents,” FINRA, Jan 27, 2017, https://www.finra.org/investors/insights/save-or-shred-how-long-you-should-keep-financial-documents

August 17, 2022

Why Families Buy Term Life Insurance

Why Families Buy Term Life Insurance

Why does term life insurance seem to be so common among your friends and family?

For many, it’s simply the most affordable strategy for securing life insurance. And that means it can provide critical financial protection for many different situations. Here are a few of the most common reasons families choose term life insurance.

The power of term life insurance is that it’s typical affordable. It provides a death benefit for a limited term, typically 20-30 years, which means you can often purchase more protection at a lower price than other types of policies. As long as your protection lasts while you have financial dependents, you’re covered.

But there are more pragmatic reasons why families buy term life insurance. For many, it serves as a source of income replacement. When a breadwinner passes away, the income they provide is gone. That means a family might find themselves with a serious cash flow deficiency in addition to the tragic loss. The death benefit can replace the lost income.

A family might also need to purchase life insurance when they have dependents, such as college-aged kids with high educational expenses. If a family has dependents and no life insurance, the burden of funding higher education falls on the family, who are down an income. With term coverage in place, they have the financial power to help cover those bills with confidence.

Term life insurance can also be invaluable for families with high debt obligations. Because it’s often so affordable, term life insurance may provide significant coverage without diverting financial resources away from getting out of debt. And, if the policyholder passes away before the debt is eliminated, the death benefit can also go towards finishing off loans.

Finally, term life insurance can be used to cover the costs of funeral expenses. Families who don’t have any other form of coverage for these out-of-pocket bills often need extra cash to cover the costs of burial. Term life insurance is a simple way to pay for the funeral the family needs.

In conclusion, term life insurance can be a great way to cover the costs of many big ticket items and expenses at a reasonable cost. Would that be a good fit for your family? Contact me, and we can explore what it would look like for you!

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August 8, 2022

Moves to Make Before Maxing Your 401(k)

Moves to Make Before Maxing Your 401(k)

Maxing out your 401(k) is boilerplate financial advice.

That’s because so few Americans are on track to retire with wealth—as of 2017, workers age 55-64 had saved only $107,000 for retirement.¹

With such bleak numbers, it’s no wonder financial professionals encourage 401(k) maxing. When possible, it’s a simple strategy that can help you reach your retirement goals and avoid a post-career catastrophe.

But consider this—the 401(k) contribution maximum as of 2022 is $20,500. For a single professional making over $100,000, that’s no big deal.

But what if you earn $60,000? Or have a family? Or have medical bills?

Suddenly, $20,500 seems like a much larger pill to swallow!

The simple fact is that saving shouldn’t be your first financial priority.

Before you save, you should create an emergency fund with 3-6 months worth of expenses.

Before you save, you should secure financial protection for your income in the form of life insurance.

Before you save, you should eliminate your debt to maximize your saving power.

Even then, you may not have the financial firepower to max out your 401(k) and make ends meet. It may take a side hustle to supplement your incomes to increase your contribution ability.

A helpful rule of thumb is to at least match your employer’s contribution. It’s a simple way to get the most out of your 401(k) without overextending your finances.

And above all, consult with a financial professional. They can help evaluate your retirement goals, your cash flow, and steps you can take to make the most of your 401(k).

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¹ “Jaw-Dropping Stats About the State of Retirement in America,” Jordan Rosenfeld, GOBankingRates, May 13, 2022, https://www.gobankingrates.com/retirement/planning/jaw-dropping-stats-state-retirement-america/#:~:text=According%20to%20a%20TransAmerica%20Center,saving%20 for%20 retirement%20is%2027.

August 1, 2022

3 Critical Questions for Newlyweds

3 Critical Questions for Newlyweds

Congratulations, newlyweds!

“To have and to hold, from this day forward…”

At a time like this, there are 3 more “I dos” for you to consider:

1. Do you have life insurance?

Any discussion about life insurance is going to start with this question, so let’s get it out of the way! As invigorated as people feel after finding the love of their life…let’s face it – they’re not invincible. The benefits of life insurance include protecting against loss of income, covering funeral expenses, gaining tax advantages, and having early access to money. Many of these benefits can depend on what kind of life insurance you have. Bottom line: having life insurance is a great way to show your love for years to come – for better OR worse.

2. Do you have the right type and amount of life insurance?

Life insurance policies are not “one size fits all.” There are different types of policies with different kinds of coverage, benefits, and uses. Having the right policy with adequate coverage is the key to protecting your new spouse in the event of a traumatic event – not just loss of life. Adequate life insurance coverage can help keep you and your spouse afloat in the case of an unexpected disabling injury, or if you’re in need of long term care. Your life with your spouse isn’t going to be one size fits all, and your life insurance policy won’t be either – for richer or poorer.

3. Do you have the right beneficiaries listed on your policy?

This question is particularly important if you had an existing policy before marriage. Most newlyweds opt for listing each other as their primary beneficiary, and with good reason: listing the correct beneficiary will ensure that any insurance payout will get delivered to them – in sickness and in health.

If you couldn’t say “I do” to any or all of these questions, contact me. It would be my pleasure to assist you newlyweds – or not-so-newlyweds – with a whole NEW way to care for each other: effective life insurance coverage – ’til death do you part!

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June 8, 2022

Tax Now or Tax Later?

Tax Now or Tax Later?

If someone asked if you’d rather pay taxes now or later, what would you say?

Paying later is tempting. After all, who likes paying taxes at all? As with most inconveniences, it’s easy to delay, delay, delay.

But here’s an important question. When do you think taxes will be greater—today, or years from now?

It’s impossible to answer.

Looking to history doesn’t really help—income taxes are actually far lower now than they were in the 1930s, 40s, or 50s.¹ So if you pay now, you may miss out if taxes sink even further.

But no one can predict the future. If you opt to pay later, unforeseen circumstances may create a higher tax environment down the road.

So if you’re comparing tax now vs. tax later, it may feel like you might as well toss a coin to determine your strategy. Not a good place to be!

But fortunately, there’s an alternative. Tax never.

And no, that doesn’t mean buying shady nail salons, opening businesses in the Cayman Islands, or committing a felony. It simply means working with a licensed and qualified financial professional to identify time-proven—and 100% legal—financial vehicles.

These include…

Roth IRAs/Roth 401(k)s Health Savings Accounts Indexed Universal Life (IUL) Insurance 529 College Savings Plans Municipal Bonds

Each vehicle has specific rules, limitations, strengths, and weaknesses. It’s absolutely critical that you consult with a financial professional before you start leveraging these tools. Remember, you don’t need to flip a coin to make financial decisions!

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¹ “History of Federal Income Tax Rates: 1913 – 2021,” Bradford Tax Institute, https://bradfordtaxinstitute.com/Free_Resources/Federal-Income-Tax-Rates.aspx

May 25, 2022

How to Build Credit When You’re Young

How to Build Credit When You’re Young

Your credit score can affect a lot more than just your interest rates or credit limits.

Your credit history can have an impact on your eligibility for rental leases, raise (or lower) your auto insurance rates, or even affect your eligibility for certain jobs (although in many cases the authorized credit reports available to third parties don’t contain your credit score if you aren’t requesting credit). Because credit history affects so many aspects of financial life, it’s important to begin building a solid credit history as early as possible.

So, where do you start?

  1. Apply for a store credit card.
    Store credit cards are a common starting point for teens and young adults, as it often can be easier to get approved for a store card than for a major credit card. As a caveat though, store card interest rates are often higher than for a standard credit card. Credit limits are also typically low – but that might not be a bad thing when you’re just getting started building your credit. A lower limit helps ensure you’ll be able to keep up with payments. Because you’re trying to build a positive history and because interest rates are often higher with a store card, it’s important to pay on time – or ideally, to pay the entire balance when you receive the statement.

  2. Become an authorized user on a parent’s credit card.
    Another common way to begin building credit is to become an authorized user on a parent’s credit card. Ultimately, the credit card account isn’t yours, so your parents would be responsible for paying the balance. (Because of this, your credit score won’t benefit as much as if you are approved for a credit card in your own name.) Another thing to keep in mind is that some credit card providers don’t report authorized users’ activity to credit bureaus.¹ Additionally, even if you’re only an authorized user, any missed or late payments on the card can affect your credit history negatively.

Are secured cards useful to build credit?
A secured credit card is another way to begin building credit. To secure the card, you make an initial deposit. The amount of that deposit is your credit line. If you miss a payment, the bank uses your collateral – the deposit – to pay the balance. Don’t let that make you too comfortable though. Your goal is to build a positive credit history, so if you miss payments – even though you have a prepaid deposit to fall back on – you’re still going to get a ding on your credit history. Instead, it’s best to use a small amount of your available credit each month and to pay in full when you get the statement. This will help you look like a credit superstar due to your consistently timely payments and low credit utilization.

As you build your credit history, you’ll be able to apply for credit in larger amounts, and you may even start receiving pre-approved offers. But beware. Having credit available is useful for certain emergencies and for demonstrating responsible use of credit – but you don’t need to apply for every offer you receive.

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¹ “Does Being an Authorized User Impact Your Credit Score?” Discover, Jan 13, 2022 https://www.discover.com/credit-cards/resources/authorized-user-and-credit-scores

May 4, 2022

How Insurance Companies Stay In Business

How Insurance Companies Stay In Business

Here’s a mystery—how in the world do insurance companies stay in business?

After all, their business model seems… odd. Their main product is cold, hard cash. In some cases, those payouts are substantial—for life insurance, it’s recommended that people buy 10X their annual income. That can mean payouts of well over $500,000. That’s a huge chunk of cash! The premiums you pay over your lifetime likely don’t even scratch the surface of that amount.

So what’s the secret? The answer is minimizing risk. Here’s how it works…

Let’s say you run a mom-and-pop life insurance company. You find 20 clients, and charge them each a $100 monthly premium for $500,000 of protection.

Your business earns $24,000 per year, and for the first five years it’s smooth sailing.

But what would happen if just one of your clients died? Suddenly, you would have to pay out $500,000. And unless you had some other income, that would mean the end of your business.

Here’s an even scarier proposition—what if you decided to exclusively market towards the elderly? And what if two of them died in quick succession? Suddenly, you’re on the hook for a million dollars, and your business is toast.

This is why insurance companies are so risk-averse. They have to be, or they’ll go bankrupt.

Their solution? They evaluate every person they insure. Actuaries plug the amount of coverage, age, history, health, and even the zip code of prospective customers into complex algorithms to determine their risk level. It’s why life insurance is often vastly more expensive for smokers than non-smokers—their risk of death is simply higher.

Then, the actuaries hand the results to underwriters who determine the premium amount.

Let’s consider your hypothetical business again—this time with proper risk protection.

You still have 20 customers, each with $500,000 of protection. But now, you’ve evaluated each customer for risk, and adjusted their premiums.

You charge 5 clients $100 per month, 5 clients $250 per month, and 10 clients $400 per month. Plus, you’ve had to decline serving the highest risk customers. Now, you’re earning $69,000 annually. And because of your new qualification process, you don’t have to make your first payout for 10 years. Now, you can easily cover the cost, with some to spare!

And as you expand your client base, you’ll have a larger and larger pool of low-risk customers to help offset the cost of payouts for the high-risk ones.

This is the secret to how insurance companies stay in business. By carefully evaluating and managing risk, they can keep their costs low, and ensure they have the cash on hand to make payouts when needed.

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April 20, 2022

Are You Ready?

Are You Ready?

It’s not a question if buying is better than renting. It’s a question of when you’ll be ready to buy.

That’s because rent money is lost to your landlord forever.

A homeowner, though, has the chance for the value of their house to increase. It may not be an earth-shattering return, but there’s a far higher chance that you’ll at least break even from owning than renting.

Even with its advantages, owning a home isn’t for everyone… at least, not yet. Here are a few criteria to consider before becoming a homeowner.

You’re ready to put down roots. If you’re not yet prepared to live in one place for at least five years, home ownership may not be for you.

Why? Because buying and selling a home comes with costs. As a rule of thumb, waiting five years can allow your home to appreciate enough value to offset those expenses.

So before you buy a home, be sure that you’ve done your homework. Will your job require you to change locations in the next five years? Will local schools stay up to par as your family grows? If you’re confident that you’ll stay put for the next five years or more, go ahead and start planning.

You can cover the upfront costs of home ownership. The upfront costs of buying a home, as mentioned above, are no laughing matter. They may prove a barrier to entry if you haven’t been saving up.

The greatest upfront costs you’ll face are the down payment and closing costs. A down payment is usually a percentage of the total purchase price of your home—for instance, a home priced at $200,000 might require a 20% down payment, or $40,000.

Closing costs vary from state to state, with averages ranging from $1,909 in Indianna to $25,800 in the District of Columbia.¹ These include fees to the lender and property transfer taxes.

The takeaway? Start saving to cover the upfront costs of purchasing a home well in advance. Your bank account will thank you!

You can handle the maintenance costs of home ownership. Say what you will about landlords, but at least they don’t charge you for home repairs and maintenance!

That all changes when you become a homeowner. Every little ding, scratch, and flooded basement are your responsibility to cover. It all adds up to over $2,000 per year, though that figure will vary depending on the size and age of your home.² If you haven’t factored in those expenses, your cash flow—as well as your airflow—might be in for trouble!

Do you have residual debt to deal with? The great danger of debt is that it destabilizes your finances. It dries up precious cash flow needed to cover emergency expenses and build wealth.

That’s why throwing a mortgage on top of a high student loan or credit card debt burden can be a blunder. You might be able to cover costs on paper, but you risk stretching your cash flow to take care of any unplanned emergencies.

In conclusion, owning a home is an admirable goal. But it may not be for you and your family yet! Take a long look at your finances and life-stage before making a purchase that could become a source of stress instead of stability.

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¹ “Average Closing Costs in 2020: What Will You Pay?” Amy Fontinelle, The Ascent, Sept 28, 2020, https://www.fool.com/the-ascent/research/average-closing-costs/

² “How Much Should You Budget for Home Maintenance?” American Family Insurance, https://www.amfam.com/resources/articles/at-home/average-home-maintenance-costs

March 21, 2022

Homemakers Need Life Insurance, Too

Homemakers Need Life Insurance, Too

Are you a stay-at-home parent? Even if you’re not contributing monetarily to your family’s income, you still need life insurance.

That’s because you offer support to your family that’s as valuable as the main breadwinner.

Let’s break it down…

The goal of life insurance is to replace income. If the main income earner dies, the death benefit can replace their salary. It offers financial headroom for grieving families to help put their lives back together.

However, a stay-at-home parent provides services for their family that are just as important and can be expensive to replace.

For instance, what if you provide childcare for your family? Replacing your services could cost $8,355 yearly per child.¹

Then factor in other potential costs like…

  • Education
  • House cleaning
  • Driving kids to events
  • Running errands
  • Managing home repairs and yard maintenance
  • Planning meals, shopping, and cooking

And so much more! These costs are simply a snapshot of how much life insurance a homemaker could need. It should be enough to cover expenses to replace all the work you do around the house and on your family’s behalf.

If you’re not sure what that number is, contact me. We can sit down, review your family’s situation, and draw up a strategy to help provide for your loved ones, no matter what.

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“Parents spend an average of $8,355 per child to secure year-round child care,” Megan Leonhardt, CNBC, May 19 2021, https://www.cnbc.com/2021/05/19/what-parents-spend-annually-on-child-care-costs-in-2021.html

March 16, 2022

What You May Not Know About Life Insurance

What You May Not Know About Life Insurance

Life insurance has one main job—helping to protect your family’s financial security in the event of your death.

And it does that by providing your loved ones with a one-time payout that replaces your income.

Your family depends on you to provide. It’s how they afford necessities like food and shelter. It’s also how you support them with their lifestyle.

But if you pass away, your income dries up. Your family would have to face their financial responsibilities with fewer resources.

That’s where life insurance helps. If you pass away, your family receives a benefit that can help ease the financial pressure.

Instead of a yearly salary, your loved ones now receive a once-in-a-lifetime salary.

That’s why it’s common to base the size of your life insurance policy on your income. Rule of thumb, you want a policy that’s 10X your annual income.

So if you currently earn $60,000, you probably would need a $600,000 policy.

There are factors besides income to consider. For instance, your family may need more protection if you’re paying off a mortgage.

In conclusion, if anyone you love depends on your income, you need life insurance. It’s a way to provide for your family, even if you’ve passed away.

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This article is for informational purposes only and is not intended to promote any certain products, plans, or policies that may be available to you. Any examples used in this article are hypothetical. Before enacting a savings or retirement strategy, or purchasing a life insurance policy, seek the advice of a licensed and qualified financial professional, accountant, and/or tax expert to discuss your options.

March 14, 2022

Financial Essentials for Retiring Baby Boomers

Financial Essentials for Retiring Baby Boomers

Are Baby Boomers out of time for retirement planning?

At first glance, it might seem like they are. They’re currently aged 57-75, meaning a good portion have already retired!¹

And those who are still working have only a few precious years to create their retirement nest eggs and get their finances in order.

Perhaps you’re in that boat—or at least know someone who is. If so, this article is for you. It’s about some essential strategies retiring Baby Boomers can leverage to help create the futures they desire.

Eliminate your debt. The first step is getting rid of your debt. After all, it’s not optional in retirement—you’ll need every penny to fund the lifestyle you want.

That means two things…

  1. Don’t take on any new debt. No new houses, boats, cars, or credit card funded toys.
  2. Use a debt snowball (or avalanche) to eliminate existing debts.

That means focusing all of your financial resources on a single debt at a time, knocking out either the smallest balance or highest interest debt.

Eliminating, or at least reducing, your debt can help create financial headroom for you in retirement. It frees up more cash flow for you to spend on your lifestyle and on preparing for potential emergencies.

Maximize social security benefits. Delay Social Security as long as possible (or until age 70). Delaying Social Security increases your monthly payments, so it’s a simple way to maximize your benefit.

For example, if you started collecting Social Security at age 66, you would be entitled to 100% of your social security benefit. At 67, it increases to 108%, and by 70 it increases 132%. That can make a huge difference towards living your dream retirement lifestyle.

Check out the Social Security Administration’s website to learn more.

Protect your wealth and health with long-term care (LTC) coverage. The next step is to protect your assets from the burden of LTC. It’s a challenge 7 out of 10 retirees will have to overcome, and it can be costly—without insurance, it can cost anywhere between $20,000 and $100,000. That’s a significant chunk of your retirement wealth!²

The standard strategy for covering the cost of LTC is LTC insurance. It pays for expenses like nursing homes, caretakers, and adult daycares.

But it can be pricey, especially as you grow older—a couple, age 55, can expect to pay $2,080 annually combined, while a 65 year old couple will pay closer to $3,750.³

The takeaway? If you don’t have LTC coverage, get it ASAP. The longer you wait, the more cost—and risk—you potentially expose yourself to.

Pro-tip: If you have a permanent life insurance policy, you may be able to add a LTC rider to your coverage. Meet with a licensed and qualified financial professional to see if this option is available for you!

Review your income potential with a financial professional. The final step on your path to retirement is reviewing your income options. You want to strike a balance between maximizing your sources of cash flow and keeping control over your retirement plan.

Many retirees lean heavily on two primary income opportunities: Social security and withdrawals from their retirement savings accounts.

And that’s where a financial professional can help.

They can help you review your current retirement lifestyle goals, savings, and potential income. If there’s a gap, they can help come up with strategies to close it.

You’ve worked hard and made sacrifices—now it’s time to reap the rewards of all that elbow grease. Which of the essentials in this article do you need to tackle first?

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¹ “Boomers, Gen X, Gen Y, Gen Z, and Gen A Explained,” Kasasa, Jul 6, 2021, https://www.kasasa.com/articles/generations/gen-x-gen-y-gen-z

²”Long-term care insurance cost: Everything you need to know,” MarketWatch, Feb 19, 2021, https://www.marketwatch.com/story/long-term-care-insurance-cost-everything-you-need-to-know-01613767329

³ “Long-Term Care Insurance Facts - Data - Statistics - 2021 Reports,” American Association for Long-Term Care Insurance, https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2021.php

March 14, 2022

3 Saving Strategies For College

3 Saving Strategies For College

In this day and age, it seems like college tuition is skyrocketing.

Students and parents are increasingly reliant on loans to cover the cost of higher education, often with devastating long-term results.¹

In this article we’ll cover three saving strategies to help you cover the cost of college without resorting to burdensome debt.

Strategy #1: Use “High-Yield” savings accounts. This strategy is simple—stash a portion of your income each month into a savings account. Then, when the time comes, use what you’ve saved to cover the costs of tuition.

Unfortunately, this strategy is riddled with shortcomings. The interest rates on “high yield” savings accounts are astonishingly low—you’d be hard pressed to find one at 1%.²

Even if you did, it wouldn’t be nearly enough. For example, if you had $3,000 saved for college in a savings account earning 1% interest per year, it would only grow to about $3,100 after four years—not enough to cover a whole semester’s tuition!

Even worse, inflation might increase the cost of tuition at a pace your savings couldn’t keep up with. Your money would actually lose value instead of gain it!

Fortunately, high-yield interest accounts are far from your only option…

Strategy #2: Consider traditional wealth building vehicles. That means mutual funds, Roth IRAs, savings bonds, indexed universal life insurance, and more.

The growth rates on these products are typically significantly higher than what you’d find in a high-yield savings account. You might even find products which allow for tax-free growth (the Roth IRA and IUL, for example).

But, typically, these vehicles have two critical weaknesses…

  1. They’re often designed for retirement. That means you’ll face fees and taxes if you tap into them before a certain age.

  2. They’re often subject to losses. A market upheaval could seriously impact your college savings.

Note that none of these vehicles are identical. They all have strengths and weaknesses. Consult with a licensed and qualified financial professional before you begin saving for college with any of these tools.

Strategy #3: Use education-specific saving vehicles. The classic example of these is the 529 plan.

The 529 is specifically designed for the purpose of saving and paying for education. That’s why it offers…

  • Tax advantages
  • Potential for compounding growth
  • Unlimited contributions

It’s a powerful tool for growing the wealth needed to help cover the rising costs of college.

The caveat with the 529 is that it’s subject to losses. It’s also very narrow in its usefulness—if your child decides not to pursue higher education, you’ll face a penalty to use the funds for something non-education related.

So which strategy should you choose? That’s something you and your financial professional will need to discuss. They can help you evaluate your current situation, your goals, and which strategy will help you close the gap between the two!

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Market performance is based on many factors and cannot be predicted. This article is for informational purposes only and is not intended to promote any certain products, plans, or strategies for saving and/or investing that may be available to you. Any examples used in this article are hypothetical. Before investing or enacting a savings or retirement strategy, seek the advice of a licensed and qualified financial professional, accountant, and/or tax expert to discuss your options.


¹ “Student Loan Debt: 2020 Statistics and Outlook,” Daniel Kurt, Investopedia, Jul 27, 2021, https://www.investopedia.com/student-loan-debt-2019-statistics-and-outlook-4772007

² “Best high-yield savings accounts in August 2021,” Matthew Goldberg, Bankrate, Aug 25, 2021, https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/

March 2, 2022

Playing With F.I.R.E.

Playing With F.I.R.E.

Financial Independence. Retire Early. Sounds too good to be true, right?

But for many, it’s the dream. And for some, it’s even become a reality.

What is the Financial Independence Retire Early, or “F.I.R.E.” movement? It might be obvious, but it’s a movement of people who are striving to achieve financial independence so that they can retire early. How early? That’s up to each individual, but typically people in the F.I.R.E. movement are looking to retire between their 30s and 50s.

How are they doing it? By saving as much money as possible and living a frugal lifestyle. That might mean driving a used car, living in a modest house, and cooking at home instead of eating out. They scrimp and save wherever they can to save.

So why is the F.I.R.E. movement gaining in popularity? There are a few reasons…

Some people want freedom. They want the freedom to travel, to spend time with their family, and to do whatever they want without having to worry about money.

Others are tired of the rat race. They’re tired of working jobs they don’t love just so they can make money to pay for things they don’t really want. They’d rather be doing something they enjoy and have more control over their own lives.

And finally, people want security. They want the wealth they need to live comfortably and fear-free, and they want it now. They don’t want to wait until they’re 65 or 70 to start enjoying their retirement.

It’s a challenging path. Achieving financial independence and retiring early takes hard work, sacrifice, and planning. You’ll have to face financial challenges like covering health insurance, for one.

So if you’re thinking about joining the F.I.R.E. movement, what are some of the first steps?

1. Assess your finances. Figure out how much money you need to live on each month and how much you need to save to achieve financial independence.

2. Set financial goals. Determine where you want to be financially and create a plan to get there.

3. Make a budget and stick to it. Track your spending and make adjustments as needed so you can save more money.

4. Invest in yourself. Education is key, so invest in books, courses, and other resources that will help you build your wealth.

5. Stay motivated. Follow other F.I.R.E. enthusiasts online, read blogs and articles, and attend meetups to keep yourself inspired on your journey to financial independence.

So are you ready to play with F.I.R.E.?

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February 9, 2022

Why The Lottery Is So Addictive

Why The Lottery Is So Addictive

If you’ve ever played the lottery, then you know there is practically no chance of winning. You’re more likely to get struck by lightning than hit the jackpot.¹

But you also probably know that gambling is highly addictive. For some, there can be an undeniable draw to buying yet another ticket. Or pulling the lever on that slot machine again. Or buying into just one more hand of blackjack. Or making just one more ill-advised day trade.

Why? Because maybe, just maybe, this time will be different. This time, lady luck might save the day and solve your money problems.

There’s a quote from late comedian and lifelong gambler Norm MacDonald that captures this spirit perfectly…

“As long as the red dice are in the air, the gambler has hope. And hope is a wonderful thing to be addicted to.”

Now, if you fall into the black hole of gambling, you’ll find it’s a dead-end—gambling promises hope, but for many it delivers only disappointment and despair. How could it not? It dashes hopes time and time again, draining bank accounts and shattering relationships.

But here’s the thing—many leave the future to a wild bet without ever stepping foot in a casino or shady gas station.

They gamble that they’ll have enough for retirement, even though they do little to prepare.

They gamble that they won’t need long-term care, even though almost 70% will.²

They gamble that their incomes won’t dry up, even though employment isn’t guaranteed.

They gamble that they won’t pass away during their working years, even though the financial consequences could be devastating for their families.

And that’s all fine while the red dice are in the air. But when they land, your hopes could be dashed to pieces, triggering a financial crisis for you and the ones you love.

The takeaway is simple—hope is great, and hope is good. But hope alone isn’t enough. It’s far wiser—and it feels far better—to hope in well-laid plans than wild gambles.

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February 2, 2022

Why It's Important to Protect Your Family With Life Insurance

Why It's Important to Protect Your Family With Life Insurance

If you have a family, you have many responsibilities.

You have a responsibility to help them celebrate promotions, birthdays, and holidays.

You have a responsibility to sit with them during their bad days, their break ups, their failures, their grief.

You have a responsibility to listen and understand, even if you have no clue what they’re trying to say.

You have a responsibility to own up when you mess up, and to forgive when they mess up.

And you wouldn’t trade those responsibilities for the world. In fact, they feel more like honors and privileges than burdens.

If you’re the breadwinner for your family, you have another responsibility and honor—to provide for them as best as you can.

It’s how you give them the big things, the little things, and everything in between.

But one tragic consequence of passing away is that you can no longer provide those things. You’re not there to help celebrate, to comfort, to listen, to forgive. In those ways, you’re truly irreplaceable.

That’s why many families choose life insurance. It’s an opportunity to provide for the ones they love.

The payout from life insurance, called a death benefit, gives their family cash that replaces the lost income. The family faces a long emotional journey of grief and healing. But they’re protected from a traumatic financial catastrophe.

In other words, life insurance gives you the power to fulfill one of your primary duties—provide for your family. And that’s one of the greatest gifts you can give.

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January 24, 2022

Ways To Financially Protect Your Family

Ways To Financially Protect Your Family

What’s more worthy of protection than your family?

When you think of the people you love most, your family probably comes to mind.

When you think of your fondest memories, you probably picture your family.

When you think of who you’d give anything for, your family is at the top of the list.

So have you thought of how to financially protect your family if something were to happen to you? It’s no wonder if you haven’t. You likely weren’t taught how to keep your family’s finances safe.

Fortunately, it’s simpler than you may think! Here are a few ways to financially protect your family. Think of these as layers of fortification around the happiness, health, and safety of your home.

1. Create an emergency fund.

This is your first layer of defense. The goal? To catch and pay off any unexpected emergencies before they damage your finances. Otherwise, you may resort to costly debt to pay the balance.

There are two benchmarks for a good emergency fund…

First, it covers 3 to 6 months of expenses. That way you can weather even a significant stretch of unemployment or a considerable expense.

Second, the funds must be easily accessible. Remember, you’re not trying to grow this money into wealth. Instant access is far more valuable than rate of return.

2. Open sources of passive income.

Why? Because there may be times when working for money isn’t an option. If that happens, passive income can make all the difference.

Passive income does require an initial investment of time, money, and/or energy. But once it’s created, it can provide a constant stream of cash flow into your bank account.

Books, real estate, dividend yielding stocks, and even blogging can create passive income. Try your hand at a few with the help of a licensed and qualified financial advisor. If your finances grow tight, passive income may be the boost you need to make ends meet. It’s like giving your finances a second wind when the going gets tough.

3. Secure a life insurance policy.

Life insurance can replace your income in the event of a tragedy.

Think about it like this. If you passed away, your family wouldn’t just lose you. They’d also lose the income you provide. In addition to emotional grief, they may face a financial catastrophe.

Life insurance, when structured properly, can act as a safe house for your family. It can give them financial space to lay low, grieve, and make a new strategy for the future.

That’s why it’s common to buy life insurance that’s 10x your annual income. It gives your family the breathing room they will desperately need in the face of tragedy.

Which of these three ways to financially protect your family is most feasible for you to start right now? For many, it’s the emergency fund. If you don’t have one, let’s chat! We can review what it would look like for you to build one.

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January 12, 2022

Financial Steps in the Right Direction

Financial Steps in the Right Direction

It’s not just about money. It’s about what you do with it… and how you feel about it.

It doesn’t matter if your balance is $0 or $1 million dollars, because that dollar figure is meaningless without context and perspective. What matters most is how you feel about your finances and the choices you make with them every day, week, month—all year long.

But there are some very practical things we can all do to keep our financial ship on course even in challenging times:

1. Pay off high-interest debt

2. Save 10% of your income

3. Buy life insurance now

4. Start a side gig

Pay off high-interest debt before saving for retirement. This is a very important step that should not be overlooked or minimized. Paying off credit card debt with high interest rates can save you huge amounts of money and make other savings goals easier to reach.

Save 10% of your income. It’s always wise to consistently save as much as you can. Yet, the rule of thumb that says we should save 10% of our income is still a solid one. Remember – saving is just for you – it’s not an investment per se, but rather a protection from any nasty surprises down the road and a way to ensure you have more money to save, invest and live on.

Buy life insurance now. Life insurance is often misunderstood and misused. As such, many people fail to see its value in terms of providing for their loved ones or even protecting their own future. However, life insurance provides a way to protect your family and business in the event of an unforeseen tragedy.

Start a side gig. It will not only provide you with a second stream of income, but will offer an additional sense of security and freedom.

For many people, their financial lives become clouded with stress and anxiety because they don’t have a way to earn extra money. The solution is often as simple as taking some of the time they’d normally spend watching TV and learning a new skill, or getting a part-time job on weekends.

However you choose to start making more money, focus on what is going to make you happier in life. Because if you’re financially free, secure and happy – that’s true wealth.

The most important thing to remember is that it’s not about how much money you make or have, but what you do with your money—how you feel about it. Make smart financial choices and things will happen for the better.

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January 10, 2022

Why Poverty Can Be Outrageously Expensive

Why Poverty Can Be Outrageously Expensive

Picture the most expensive lifestyle you can imagine. What do you see?

Palm trees and beach views? Italian shoes and Swiss watches? Flying yourself into space just because you can?

How about having to live in government housing, or working a minimum wage job, or not even being able to find a job?

It’s counterintuitive, but poverty can be outrageously expensive.

There are two main reasons…

  1. Poverty makes essential spending relatively pricey
  2. Poverty has hidden—and costly—side effects

Let’s break these down…

Poverty makes essential spending relatively pricey. Consider an example. Let’s say you’re single and earn $10,000 per year, $2,000 beneath the federal poverty line.¹

Let’s also say that you and some buddies snag a mediocre apartment in the city. Great location, right? But at $500 each per month, it’s $6,000 each per year. That’s over half your income on housing alone.

Your car? Between insurance, gas, and repairs, you’re looking at costs that could be north of $5,000.

That leaves you in the hole for $1,000. Then add groceries, your cell phone, and emergencies. Normal living expenses have not only consumed 100% of your budget, but they’ve left you in the red for other essentials.

For the wealthy, those items aren’t even a consideration. The essentials take up just a fraction of their income. What’s relatively cheap for them becomes crushingly expensive for you.

But the cost of poverty can get steeper…

Poverty has hidden—and costly—side effects. Suppose that, to save money, you downgrade your housing. You find a true hovel in a bad part of town that charges $150 each per month, or $1,800 each annually.

And it doesn’t take long for reality to set in.

You might find yourself in a so-called food desert since there aren’t proper grocery stores around you that sell healthy, affordable food. The quality of your diet plummets, but still increases in cost.

There’s consistent crime in your neighborhood. Possessions get stolen. Cars get broken into. Friends get hurt. You’re under constant stress.

To deal with the stress, you pick up some foolish habits that further hurt your finances and health.

You turn to payday lenders to make ends meet. It’s a critical mistake—they charge you aggressive interest rates that become a black hole of debt.

Finally, the consequences of a low-quality diet, stress, and unhealthy coping mechanisms emerge. You face one expensive health crisis after another. You have to quit your job as your condition worsens.

This isn’t to excuse bad or foolish or unhealthy behavior. Rather, it shows how situations make people vulnerable to otherwise avoidable pitfalls.

Relative expenses and hidden expenses creating a vicious cycle help explain why it’s so hard to escape poverty. It also helps explain why poverty tends to be intergenerational. Poverty actually consumes the resources needed to build wealth.

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¹ “Poverty Guidelines,” Office of the Assistant Secretary for Planning and Evalutation, Jan 13, 2021, https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines

² “Average monthly apartment rent in the United States from January 2017 to February 2021, by apartment size,” Statistia, Mar 25, 2021, https://www.statista.com/statistics/1063502/average-monthly-apartment-rent-usa/

³ “Average Car Insurance Costs in 2021,” Kayda Norman, Nerdwallet, Aug 20, 2021, https://www.nerdwallet.com/article/insurance/how-much-is-car-insurance

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