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Financial Planning for a Disabled Child, Part II
Have you planned ahead for the financial well-being of your disabled child? Make sure your loved one doesn’t have money worries after you’re gone. This is the second of two posts on how a family with a disabled child can plan ahead to provide financial security for their loved one. In the first post, I reviewed government programs that can provide vital health coverage and income to those with disabilities. Read that post here. Financial Security for the Long Run As a parent of a child with a disability, one overriding worry I can’t shake is the concern of every parent everywhere: what will happen when I’m no longer around? …
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Financial Planning for Families with a Disabled Child
For most of us, retirement planning involves saving money consistently, helping it grow through investment and the power of compound interest, and eventually spending down our nest egg at a sustainable rate to fund a comfortable retirement. If something remains at the end of the line, that’s great, but not really that important. Your grown children, whom you have loved and nurtured, and perhaps helped through college, are able to fend for themselves. But what about the parents of a child with a serious physical or mental health disability? This child may be unable to work and may need assistance to accomplish daily activities that most of us take for…
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The Market Just Crashed! What Should I Do?
As I write this post, the Dow Jones Industrial Average has just dropped 1,000 points – the sixth 1,000 point move in the last 12 days. The Dow and the S&P 500 are 13% below their most recent high, well into correction territory. The interest rate on 10-year Treasuries, a safe haven in times of market turmoil, has dropped to a record low 0.7% — substantially less than inflation and only slightly better than stuffing your money in a mattress. (The interest rate on Treasuries, as with all bonds, is inversely related to its price. As panicky buyers bid up the price, the corresponding interest rate is driven down.) The…
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Use Online Retirement Calculators to Check Your Work
Welcome back! If you’ve read my blog posts up to this point, you should have a pretty fair idea of your financial fitness for retirement: Do you (or will you) have enough money to retire (see this post); How should you manage your money once you stop working (see this post); When should you begin taking social security retirement benefits (see this post and this one); and How can you protect yourself from things that might go wrong (read this post)? You may have reassured yourself that you’re financially on track, or perhaps you’ve identified some weaknesses in your plan that need shoring up. But how do you know you…
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What Could Go Wrong – Part II
Welcome back! In this post, we continue talking about the financial shocks that could derail your retirement – and what you can do to protect yourself. Read the first post here. Long-term care We left off the last post with a discussion of the importance of good health insurance – fortunately largely covered by Medicare for most people over 65 (and by Obamacare for those under). But what about long-term care? If you’re 65, there’s a 50/50 chance you’ll need it someday. It’s not cheap; the median cost is $85,800 per year for care in a nursing home, although there’s significant variation by state (average cost in Texas is $54,800,…
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Managing Money in Retirement I: How Much Can I Withdraw?
Welcome back, and Happy New Year! My first posts covered how much to save for retirement. In the next several posts, I explore how to manage savings and withdrawals once you’re in retirement. OK, so you’ve made the break, attended your last office party, and are no longer punching a clock. How should you handle your savings? How much can you withdraw and spend every year? Wait a minute, you say – didn’t the last couple of blogs already answer that question? Why not withdraw 4% of your savings in the first year, then increase that with inflation each year to keep the purchasing power the same? Well, you would…
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Can I Retire Yet? (Part II)
Welcome back to the Retirement Hangout! If you haven’t read Part I of Can I Retire Yet?, I recommend that you go back and read that first. In Part I, you estimated the annual income stream you will need in retirement, and what portion of that needs to come from savings. But what size retirement savings stash will provide that income – for the rest of your life? Drawing Income from a Nest Egg — the 4% Rule Perhaps you’ve heard of the 4% Rule. This is the amount many financial planners suggest you can withdraw from a retirement portfolio and be confident your savings won’t run out. If…
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Can I Retire Yet? (Part I)
“How much money do I need to retire?” Just about everyone anywhere near retirement asks themselves this question – as do younger people planning ahead and, sadly, too many folks who are already retired but have some nagging doubts. Perhaps you’ve been faithfully saving and investing via your 401(k) plan or IRA and have accumulated a nice nest egg — maybe $250,000 or $500,000 or even more. Seems like a lot of money. But is it enough? How can you know? Countless places — easily accessible on the Internet — are all too willing to provide the answer. Unfortunately, many of them are also eager to sell you financial products or…
