3. Check Life and Disability Insurance Coverage

It is smart to regularly check that you have enough insurance coverage. Your life and disability coverage generally should replace enough of your income so that your family’s current and future needs are met - including everyday living expenses, short and long-term debts, education for your children and retirement for your spouse.

4. Develop a Budget That Meets All Needs

Last but not least, develop a budget that will meet your needs, including insurance and emergency savings. Start by tracking your spending for one month to see where the money goes. Then develop a written budget of necessary expenses, which should include debt obligations, mortgage or rent, utilities, insurance and personal savings. Live on a set allowance each week to make sure you do not spend more than you can afford.

By following these four simple strategies, you may be able to overcome most financial challenges that lie ahead. Most important, these strategies will help you keep your commitment to saving for retirement.

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Read more CaryCitizen articles about financial planning and money matters.

Briant Sikorski is a Wealth Advisor at Stratos Wealth Partners. Photos by Julie V. and Cliff.




Image source: Getty Images. 

Whether youve recently retired or are nearing the point at which youre considering hanging up your work gloves for good, the current low-interest-rate environment probably isnt helping you feel more comfortable about your financial situation.

As youre probably aware, Americans arent the best savers. According to the April readout from the St. Louis Federal Reserve, personal savings rates in the US are just 5.4%, which means we need to be able to do as much as possible with what little were saving relative to the rest of the developed world in order to hit our retirement goal. Unfortunately, low lending rates, which have been perpetuated by the Federal Reserve since late 2008, arent helping. Even consumers with large amounts of cash are struggling to find money market accounts or CDs yielding much beyond 1%, meaning in many instances, even in todays low-inflation environment, people are losing real money by investing in interest-bearing assets.

Worse yet, even with the Federal Reserve in monetary tightening mode, the regulatory body may not have much room to maneuver. US GDP growth has been subpar, global growth concerns from China and Europe remain, and inflation has been below the Feds long-term target. These would all be signs that point toward a very cautious approach to lending rate hikes in the coming months, and even years. Thats not great news for people in their 50s and 60s who had been counting on interest-based assets to be their income producers during retirement.

Yes, you can make money in a low-interest environment

But have no fear, because there are indeed ways to make money in a low-interest-rate environment beyond just interest-bearing assets. If youre in your 50s and 60s and sweating low lending rates, then consider these three potential money-making strategies.


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For two years, a commission of 19 high-profile people from the academic, political, business, and investment worlds has been busy devising a bipartisan plan to strengthen the retirement security and personal savings of Americans. The result, a comprehensive 146-page report from the Bipartisan Policy Center packed with ideas, came out Thursday.
A lot of high earners are going to hate it.
One of the reports many proposals would raise the taxable level of Social Security earnings to $195,000 from the current $118,500 by 2020, part of a broader plan to renew the promise of a comfortable retirement, across the income spectrum, for current and future generations of Americans.
The report also includes revamps of 401(k) plans, reverse mortgages and tax credits that encourage savings. It recommends that any company with at least 50 employees that doesnt offer a retirement plan meeting certain standards would have to enroll workers in a new type of savings plan proposed in the report or in an enhanced myRA that the report envisions.
Growing inequality has made retirement increasingly available to only a few. We need a federal plan that serves everyone, one of the commission members, author and New School economist Teresa Ghilarducci, said in a statement. With 27 states actively pursuing retirement reform, these leaders have made it clear that the political will for change exists.
The report addresses an urgent need:
#x2022;Nearly half of respondents in the Federal Reserves 2014 household survey said they wouldnt even be able to cover a $400 financial emergency without selling something or borrowing money, never mind saving for retirement.
#x2022;Employer defined-benefit retirement programs have largely been replaced by defined-contribution plans such as 401(k)s that employees have to finance and manage mostly by themselves, and only half of private-sector workers with access to these plans use them.
#x2022;That makes Social Security the main source of retirement income for many older Americans. And as anyone who has given retirement a passing thought knows, the program has big challenges.
If the Bipartisan Policy Center reports recommended policies are enacted, retirement savings for middle-class Americans would be increased by about 50 percent by 2065, and old-age poverty reduced by one-third from todays levels, commission co-chair Kent Conrad, a former Democratic senator from North Dakota, said in a press briefing.
Here are some of the proposals that would affect high-income workers:
#x2022;Limit tax-deductibility of mortgage interest. The federal tax deduction for mortgage interest payments usually applies to taxpayers who itemize. These are typically wealthier taxpayers, but the reports authors are concerned about Americans debt, including the increasing level of mortgage debt among older people. In general, borrowing against the equity in your home before retirement is likely a poor choice for many homeowners, as doing so can lead to greater debt and related expenses during retirement, when income is typically lower.
The recommendation: Tax deductions should no longer apply to mortgage interest when home equity decreases, such as through HELOCS (home equity lines of credit), mortgage debt for second homes, second mortgages that reduce home equity, and refinancing transactions. That would give homeowners more incentive to store up home equity to draw on in retirement and boost retirement security for the many households that are home-rich, cash poor, the authors say.
#x2022;Shrink Social Security benefits for the wealthy. Along with taxing more income for Social Security, more taxation of Social Security benefits, and a 0.5 percent hike in the employee (and employer) payroll tax, spousal benefits would be capped. Today, with a significant majority of working-age women working outside the home, wives of men with high incomes are less likely to work than women in less-affluent households, the report says. So the spousal benefit mostly benefits certain high-income families who can afford to have only one earner, and, in this way, undermines the progressivity of Social Security.
The way it works now, as long as a marriage has lasted at least 10 years, a married or divorced person can draw on his or her own benefits or the spouses benefits, whichever is higher. The recommendation is to cap the spousal benefit at a level equal to the spousal benefit received by someone married to a worker in the 75th percentile of the earnings distribution. In 2022, the new maximum would be $843 a month.
Under current rules, the maximum monthly benefit in 2016 is $2,639, and the maximum spousal benefit based on that is $1,320, according to the Social Security press office.
#x2022;Cap total assets in tax-advantaged savings accounts. The Government Accountability Office estimates that 314 taxpayers have more than $25 million in IRAs, 791 have between $10 million and $25 million in IRAs, and 7,952 have between $5 million and $10 million in IRAs, according to the report. That might result from investing IRA assets in shares of an early-stage startup before it goes public, the report notes.
#x2022;Close the stretch IRA estate-planning loophole. Non-spousal beneficiaries such as children and grandchildren are able to keep money they inherited in IRAs and defined-contribution plans in tax-advantaged accounts for decades, the report notes. It recommends that those assets be distributed over no more than five years.


So whats a college degree worth come retirement? Based on the personal savings rate of Americans of 5.4%, and Pews annual earnings data on millennials, it would appear to be worth about an extra $840,000 ($630,000 in static income plus the investment gap difference) over 40 years, and well over $1 million in a 50-year period. Thats a pretty good investment in your future if you ask me, and it doesnt even take into account the potential for wage advancement with a college degree.

Keep ROI in mind when selecting a college, and dont forget to budget

Going to college can clearly be to your benefit when preparing and saving for retirement. However, there are two other factors youd be wise to consider.

First, treat your college education like an investment. In other words, establish which colleges could offer you the best return on investment, or ROI. Going to an Ivy League college might net you a well-paying job, but it also could bury you under a mountain of student debt.

A suggested solution to help you determine which college could be right for you may be found in PayScales College ROI Report, which is released annually. PayScale looks at the median annual income of college graduates over a 20-year period and compares this income to the four-year cost of attending the college in question. The result is a detailed look at more than 1,300 colleges around the country. While everyones situation is different, the lesson here is that the most prestigious and expensive college may not be the best value for you.