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Retirement: A different phase calls for a different outlook

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You’ve worked long and hard; you’re at the summit of your financial mountain. Now you are about to come down the other side of that mountain. You will use different financial muscles climbing down than you did climbing up. In other words, your financial strategy must change before you enter the retirement phase. You must start to move away from the thinking you employed in the Accumulation Phase, and the more risky investments you chose, to a more conservative approach, with the goal of preserving your nest egg always top of mind. You must ensure that your nest egg lasts as long as you and your spouse do. Furthermore, you have to prevent erosion of your accounts by staying ahead of inflation by at least 2% or 3%.

During the Retirement Phase you face a number of challenges that you were spared while in the working years or the Accumulation Phase of your life. Americans who are still in the Accumulation Phase investing in securities have three immense advantages:

1) They have a working paycheck that keeps up with inflation. Most retirees don’t. Social Security doesn’t keep up with the inflation rate. Whenever there are increases in Social Security the same increases take place with the out-of-pocket costs for part “A” of Medicare, so it becomes a wash. Additionally, even if you’re lucky enough to have a pension, most of them do not increase with inflation.

2) When the stock markets fall or crash, Americans in the Accumulation Phase can buy in low, because they still have a working paycheck that is keeping up with the inflation rate. Conversely, most Americans in retired years cannot practically take current income from their pensions or Social Security checks to buy into a down market.

3) Americans in the Accumulation Phase have the most important investment element available to them that most retirees don’t have: time (i.e., the time it takes to grow your portfolio back from a market downturn). Most Americans in their working years still have 15, 20, even 30 or more years to go before they retire and thus have the all-important luxury of time to wait for the stock markets to come back, while not having to depend on their developing nest egg to meet living expenses.

All three points above are fundamental parts of being successful with one’s investments in the stock markets. Weathering any stock market storms takes a sustained period of time, cost averaging (buying when the markets are down), and an income that keeps up with the inflation rates. It might sound difficult, but fortunately it’s not as hard as it once was.

“Since 1995,” says Phil Cannella, creator and host of The Crash Proof Retirement Show™, “breakthroughs in the insurance industry mean that American retirees don’t have to take on any market risk or ongoing market fees and can stay ahead of inflation and plan against healthcare risks. You owe it to yourself to investigate these breakthroughs. They are nothing less than a godsend for today’s retirees.”

Tips for the Flu Season

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Have you gotten your flu shot yet?  Getting the influenza (flu) vaccination is the first step to prepare for Flu Season, especially for people over 65.  The flu vaccination can be easily provided by your doctor or even a major pharmacy.  If you are afraid of needles, ask about alternatives that may be offered such as a nasal-spray flu vaccine or even vaccines using PharmaJet technology. PharmaJet is a noninvasive, needle-free injection which uses air pressure to penetrate the skin and deliver medicine.  After receiving your vaccinations, keep the following tips in mind during Flu Season:

1)      Avoid close contact: When people around you are sick, it is best to avoid close contact with them to prevent the spreading of germs.  Likewise, you should distance yourself from others when you are sick to avoid spreading illnesses.

2)      Stay home when sick: Not only will staying home from work when you are sick prevent illness from spreading, it will also help you get the rest your body needs.

3)      Cover your mouth and nose: Though we have been told this since we were children, covering your mouth and nose when sneezing or coughing can immediately stop germs from spreading.  If you do not have a tissue at hand, sneezing or coughing into the bend of your elbow works as an alternative to keep your germs away from others.

4)      Avoid touching your nose, mouth, or eyes: These three parts of the face are the main gateways for germs to invade your immune system, so do not touch them.

5)      Carry hand sanitizer:  If you cannot wash your hands with soap and water, a travel-size hand sanitizer will come in handy as it rids up to 99% of the germs we may carry.

Ways to Cut Spending in Retirement

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The general rule is that retirees need 80% of their working income to maintain their current standard of living. We have scoured the internet and have found an overwhelming number of helpful tips** to assist you in saving money each and every month!

  • Reevaluate Monthly Expenses – Take a look at your monthly bills and see what fees or services can be reduced if not eliminated. Are you paying for premium cable channels that you don’t even watch? Perhaps you have a monthly gym membership that you haven’t used in a year. Analyzing your monthly bills and getting rid of the excess is a sure way to reduce your monthly expenses significantly!
  • One Car Household – If you own two vehicles, yet neither you nor your partner is working, a significant way to reduce expenses is to become a one-car household. Even if you do not have a second car payment, the savings in car insurance alone makes it worth considering.
  • Switch to Store Brand Products –  Did you know that by simply switching to store-brand products you can save 25-50%?
  • Shop with a List: How many times have you walked into a grocery store to purchase “just a few items,” only to exit the store with a cart full of purchases? It is a proven fact that you are much less likely to make impulse purchases when you shop with a list. And don’t go food shopping when you’re starving!
  • Have Snacks, Will Travel – With just a little planning, you will be amazed at how much money you will save by eliminating unnecessary and expensive trips to the convenience store for food. Before you leave your home for more than an hour or two, grab a drink and snack to go! Better yet, make sure you put your drink in a reusable bottle!
  • Borrow Books and Movies –  Why buy expensive movies on demand or books from your local bookstore when you can borrow them for free from your library? Added benefit: you will also be helping to save a tree.
  • Travel Off Season –  When the grandchildren are back in school, travel costs go down. Next time you are planning to get away, take school schedules into consideration.
  • Discounts Galore –  From movie tickets to dining out, discounts for seniors are everywhere. Ask for a discount on every outing. You might be surprised to find how many exist!
  • Cash Only –  Whenever possible, opt to pay in cash. When you have a fixed amount of money in your wallet, you are less likely to overspend.
  • Dine at Home – Who says you can’t have a romantic candlelit dinner in the comfort of your own home? Even if you can’t resist the temptation of a restaurant-cooked meal from your favorite spot, try the take-out option next time. You will be amazed at how much money you can save when you do not have to pay for beverages or tips.
  • Credit Card Rates – If you are one to carry a monthly credit card balance, you can still save money by lowering your interest rates. Credit card companies are more willing than ever to work with their clients. A simple call could save you a bundle over time with interest expenses.

 

Bundle all these cost-saving tips together and you may have enough set aside for a major purchase—maybe even something you didn’t think you could afford in your retirement years!

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