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Are You Afraid to Spend Your Money in Retirement?

by with No Comment BlogIncome DistributionIncome PlanningRetirement IncomeRetirement Income PlanningRetirement LifeRetirement Savings

You spent decades saving for retirement. You contributed to your 401(k), invested, paid the bills, raised a family, hopefully paid down some debt, and tried to make smart decisions along the way. The whole idea was that someday you would have enough money to stop working and actually enjoy it.

Then retirement gets closer and something interesting happens. After spending 30 or 40 years saving money, suddenly you’re supposed to start spending it. And for a lot of people, that’s much harder than they expected.

I see this all the time. People don’t usually come right out and say, “I’m afraid I’m going to run out of money.” Instead, it comes out in other ways. They put off the big trip they’ve always wanted to take. They keep driving the car they really don’t like anymore. They hesitate to help their kids or grandkids even though they’d love to. They agonize over purchases they can probably afford. Or they find themselves constantly saying, “Maybe I should wait. I might need that money later.”

Of course, there’s nothing wrong with being careful with money. In fact, being careful is probably one of the reasons you have retirement savings in the first place. But there’s a difference between being financially responsible and being afraid to spend because you don’t know what you can afford.

And I think that’s a really important distinction.

For most of our working lives, we’re taught to accumulate. Save more. Invest more. Don’t touch the retirement accounts. Prepare for the future. Then retirement arrives and we’re expected to flip a switch and start drawing money out of those accounts. Your paycheck may be gone, the stock market is still going to go up and down, healthcare costs become more important, and none of us knows whether we’re planning for another 10 years or another 30.

That’s why I think a good retirement plan needs to answer more than, “Do I have enough money to retire?” It should also help answer, “How much can I comfortably spend and still be okay?”

If you’re approaching retirement or already retired, here are three questions I think are worth asking yourself.

What would make you feel financially secure 10 or 20 years from now?

Before you start thinking about account balances, think about what financial security actually means to you. Maybe it’s knowing you can stay in your home for the rest of your life. Maybe it’s having enough money set aside for healthcare. Maybe you want to know you’ll never have to depend financially on your children. Or perhaps security means being able to travel, help your family and still know there will be plenty of money there when you’re 85 or 90.

We tend to talk about retirement security as if it’s a number, but I don’t think it is. It’s a feeling, too. Two women can have exactly the same amount of money saved and feel completely differently about it. Until you understand what makes you feel secure, it’s difficult to build a retirement plan that actually gives you confidence.

What are you not doing today because you’re afraid you might need the money later?

This might be the most revealing question of the three. Is there something you really want to do but keep putting off because you’re worried about spending the money? Maybe it’s that trip you’ve talked about for years, a new kitchen, a different car, taking the whole family somewhere special or even just spending a little more on yourself without feeling guilty about it.

Then ask yourself another question: Am I saying no because I truly can’t afford it, or because I don’t know whether I can afford it?

Those are two very different things.

Sometimes the issue isn’t that you don’t have enough money. It’s that no one has helped you understand what your money can realistically support. And without that clarity, the safest answer always feels like “don’t spend it.”

What would you need to know to give yourself permission to enjoy your money?

Maybe you need to see what happens if the market drops 20%. Maybe you need to know how much income your investments can reasonably provide each year. Maybe you’re worried about healthcare or long-term care. Maybe you need to understand what happens if you live to 95. Or maybe you simply need to see, in black and white, that you can spend some of this money and still be okay.

That’s one of the things I think retirement planning sometimes gets wrong. We spend so much time talking about accumulation, rates of return and how much someone needs to retire that we forget why they accumulated the money in the first place.

Your money has a job.

I’ve always said that your money is the vehicle. Retirement is the destination. The point of accumulating money isn’t simply to die with the largest possible account balance. It’s to create security, choices, freedom and the ability to live the life you worked all those years to have.

That doesn’t mean spending recklessly. You still need to plan for inflation, healthcare, taxes, market downturns and the possibility of living a very long life. But there’s a big space between spending too much and being afraid to spend anything at all.

A thoughtful retirement plan should help you find that space. It should give you enough confidence in your future that you can actually enjoy some of your money today.

Because the goal isn’t simply to make your money last for the rest of your life.

It’s to make sure you’re living during the rest of your life, too.

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Eliminating the Fear Factor of Retirement

by BlogFinancial LiteracyIncome DistributionIncome PlanningInvestment PortfolioRetirement IncomeRetirement Income PlanningRetirement Savings

“People experience retirement emotionally before they experience it mathematically.”

That may be one of the smartest things I’ve read about retirement planning. It immediately reminded me of the television show Fear Factor. Remember it? Contestants willingly jumped from helicopters, crawled through confined spaces, balanced high above the ground, and ate things most of us wouldn’t go near. The premise was simple: fear changes behavior. Sometimes it causes us to freeze. Sometimes it causes us to overreact. Sometimes it convinces us to avoid something altogether. And sometimes it makes us do things we would never choose if we felt calm, safe, and in control.

Retirement has its own version of Fear Factor. Only instead of spiders, snakes, and impossible stunts, the fears sound like this: Will I have enough? Can I really stop working? What if the market crashes? What if healthcare costs wipe me out? What if I become a burden to my children? What if I make the wrong decision and can’t recover?

Those aren’t simply mathematical questions. They are emotional questions. And until those fears are acknowledged and addressed, it can be very difficult to make confident financial decisions.

Why Retirement Feels So Emotional

Retirement represents one of the biggest transitions most people will ever make.

For decades, you receive a paycheck. You know when it will arrive. You know roughly how much it will be. You build your life around that rhythm. Then retirement asks you to turn accumulated savings into income and trust that the money will last for the rest of your life. This is a major psychological shift.

Even people with substantial savings can struggle with it. A retirement account balance may look reassuring on paper, but spending from it can feel very different. Every withdrawal can feel like a permanent reduction. Every market decline can feel like a threat. Every unexpected expense can raise the question: What if this is the beginning of running out?

This is why many retirees become overly cautious, even when they can afford to spend more. They postpone trips, avoid helping family, and deny themselves experiences they spent decades saving for.

The fear of running out can become so powerful that people never fully enjoy the money they worked so hard to accumulate.

The Science of Fear and Financial Decision-Making

Our brains are designed to protect us from danger.

Thousands of years ago, fear helped humans survive immediate threats. Today, the same biological response can be triggered by a falling account balance, a frightening news headline, or uncertainty about future expenses.

When fear takes over, long-term thinking becomes harder. We tend to focus on avoiding immediate pain rather than making the best decision for the future.

Behavioral finance has shown that people generally feel the pain of a loss more intensely than the pleasure of an equivalent gain. Losing $10,000 often feels much worse than gaining $10,000 feels good. This emotional imbalance can influence retirement decisions in powerful ways.

Fear may cause someone to sell investments after the market has already fallen, locking in losses. It may lead someone to keep too much money in cash for years, reducing growth and purchasing power. It may cause a person to delay retirement even when the numbers show they are financially prepared. It may also lead to endless second-guessing, constant account checking, and an inability to enjoy retirement.

Ironically, one of the greatest risks to a retirement plan may not be market volatility itself. It may be the decisions fear causes us to make.

Retirement Planning Should Address Both Math AND Emotion

Traditional retirement planning often focuses on projections, rates of return, withdrawal strategies, and probability-of-success calculations. Those tools are important. But they do not automatically create peace of mind. A plan can work beautifully on paper and still leave someone terrified to spend. That is why retirement planning should answer two questions:

  1. Will the money work?
  2. Will the plan help you feel secure enough to live?

A strong retirement plan should do both.

Introducing the Confidence Foundation™

At Her Retirement, I believe every retirement plan should begin by building what I call a Confidence Foundation™. Think of it as the financial base that helps you sleep well at night. The purpose of the Confidence Foundation™ is to provide dependable income for the expenses you simply cannot avoid.

Ask yourself this question: If the stock market dropped 30% tomorrow, would I still be able to pay my essential monthly expenses? If the answer is yes, you have reduced one of retirement’s biggest emotional risks.

Your essential expenses may include housing, food, healthcare, insurance, utilities, taxes, and basic transportation. These are the costs that continue regardless of what the market does. The goal is to match as much of those expenses as reasonably possible with income sources that are reliable, predictable, or guaranteed.

What Can Make Up a Confidence Foundation™?

There is no single product or strategy that works for everyone. The right combination depends on your income needs, assets, health, risk tolerance, tax situation, and goals.

For many people, Social Security forms the first layer. Because it provides inflation-adjusted lifetime income, it can be one of the most valuable components of a retirement income plan. The decision about when to claim can have a lasting impact, which is why it deserves careful consideration.

A pension may provide another dependable monthly income stream. Some retirees may also choose an annuity to create guaranteed lifetime income that helps fill the gap between Social Security, pension income, and essential expenses.

For others, a bond ladder, Treasury ladder, or CD ladder may provide predictable cash flow over a defined period. Cash reserves can also play an important role by covering near-term spending needs and reducing the chance that investments must be sold during a market downturn. Some people may use several of these strategies together.

The important point is this: the Confidence Foundation™ is not one product. It is a planning outcome. Its job is to make sure the money needed for basic living expenses is not completely dependent on short-term market performance.

Where Annuities May Fit

Annuities can be useful for some retirees because they can convert a portion of savings into a predictable income stream that lasts for life. This can be especially valuable for someone who does not have a pension, is concerned about outliving her money, or wants more certainty around essential expenses.

But annuities are not all the same, and they are not appropriate for everyone. Fees, liquidity, guarantees, riders, surrender periods, and the strength of the issuing insurance company all matter.

The question should never be: Do I need an annuity? A better question is: Do I have an income gap in my Confidence Foundation™, and what is the most appropriate way to fill it?

An annuity may be one possible answer. It should not be the automatic answer, or the answer that an insurance salesperson pushes on you.

Building Your Freedom Fund™

Once your Confidence Foundation™ is in place, the rest of your assets have a different job. I call this your Freedom Fund™.

The Freedom Fund™ is designed to help you enjoy retirement, maintain flexibility, keep pace with inflation, and support the life you want to create. It may include stock mutual funds, ETFs, individual stocks, Roth IRAs, traditional IRAs, 401(k)s, brokerage accounts, real estate, or other long-term growth assets.

Because essential expenses are already being addressed through the Confidence Foundation™, the Freedom Fund™ does not have to carry the full emotional burden of paying next month’s bills. This can make market volatility feel less threatening.

Instead of viewing a market decline as a threat to your ability to buy groceries, you may be able to view it as a temporary fluctuation in assets intended for long-term growth and discretionary goals.

The Freedom Fund™ can support travel, hobbies, family experiences, charitable giving, home improvements, education, starting a business, or simply enjoying more of the life you worked so hard to build.

Why the Two-Part Strategy Can Work Emotionally

The power of the Confidence Foundation™ and Freedom Fund™ is not only financial. It’s emotional.

When the basics are protected, retirees may feel more comfortable leaving growth assets invested. They may be less likely to panic during market declines. They may also feel more confident spending on the things that bring joy and meaning to retirement.

This structure creates clarity. One part of the plan is designed for security. The other is designed for growth, flexibility, and possibility. This separation can reduce the feeling that every dollar must perform perfectly at all times.

Confidence Changes Behavior

When every dollar in your portfolio has to perform perfectly just to pay the electric bill, every market headline feels personal. But when your Confidence Foundation™ covers your essential lifestyle, something shifts. Fear begins to loosen its grip. You make calmer decisions. You stay invested more consistently. You become more comfortable spending. You stop treating every market decline as an emergency.

Most importantly, you may begin to experience retirement as a life to be lived rather than a financial problem to be managed. The goal is not simply to maximize returns. The goal is to maximize confidence.

At Her Retirement, we believe retirement planning is about far more than spreadsheets, rates of return, and investment performance.

We help women make informed financial decisions so they can retire with confidence and create a life of meaning. Because the best retirement plan is not necessarily the one with the highest projected return. It’s the one that helps you feel secure enough to live the life you planned for.

If you’d like some guidance on creating a life (and a retirement) with confidence and freedom, reach oout. We can help you Get Her Done.

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Should You Take Social Security at 62 and Invest It, or Wait Until 70? (if you can)

by BlogIncome PlanningInvestment PortfolioRetirement IncomeRetirement Income PlanningSocial SecurityWealth

When it comes to Social Security, there’s no question that timing is one of the biggest financial decisions of your retirement. The difference between claiming early (at 62) versus waiting until 70 can add up to hundreds of thousands of dollars over your lifetime.

But what if you don’t need the money to live on, but just invest it? Could you take it anyway, invest it, and come out ahead (vs. waiting til 70 to claim and then start investing? Let’s explore both strategies. Let’s look at some lifetime portfolio values from you Social Security benefit.

The Break-Even Age

If you claim at 62, you start collecting smaller checks earlier. If you wait until 70, you collect bigger checks later.

  • The break-even point — where waiting finally catches up with claiming early — usually happens around age 80–82.

  • Live past that? Waiting typically wins.

  • Pass away sooner? Taking early often leaves you ahead.

The difference between claiming at 62 and waiting until 70 can indeed add up to hundreds of thousands of dollars — but it depends on the path you take.

If you claim early and spend it, you lock in smaller checks for life. Waiting until 70 gives you a much larger guaranteed monthly income stream (about 75–80% higher). In our example, that’s the difference between a $2,000/month benefit at 62 and about $3,500/month at 70 — roughly a 77% increase — plus COLA increases even while you’re waiting.

If you claim early and invest the checks, the story changes. By putting that income into the stock market, you’re betting on growth that could exceed Social Security’s built-in 8% yearly increase. If markets deliver, your invested balance could be far greater — but it’s not guaranteed. Investing in the market carries risk…sometimes lots of risk.

In essence, delaying Social Security is like buying a government-backed deferred annuity with inflation protection. Taking it early and investing trades that security for potential upside in a riskier portfolio.

This makes the contrast really clear: “guaranteed annuity-like income vs. risky but potentially higher-return investment.”

What if you claimed at 62 and invested the money, or waited until age 70 and then started investing?

Let’s assume:

  • Benefit at 62 = $2,000/month

  • Benefit at 70 = $3,500/month

  • Investment = 60/40 stock-bond portfolio earning 8% annually

  • Timeline = Age 62 to 95

  • Includes a 2.5% COLA (cost of living increase)

The Numbers at Key Ages

(Rounded estimates based on assumptions above)

At 8%, the 62+invest strategy leads until age ~94–95. At 6%, the 70 strategy catches up in your mid-80s. At 5%, waiting at 70 pulls ahead by ~85 and never looks back.

Claim at 62 & Invest

Longevity risk: if you live into your 90s, waiting until 70 produces more lifetime income unless your investments deliver consistently high returns.

Pros:

  • Immediate cash flow — assuming you don’t need it, you can put it to work right away (think time in the market).

  • Compounding advantage: those 8 extra years of contributions and growth give you a strong lead through your 70s and 80s.

  • Flexibility and control over how the money is invested or spent.

Cons:

  • Market risk: if long-term returns are closer to 5% than 8%, the “early & invest” edge disappears by your mid-80s.

  • Behavioral risk: discipline is required not to spend the money instead of investing.

  • Lower guaranteed base income — your check will always be smaller than if you had waited, which could hurt if you live into your 90s and markets underperform.

Claim at 70 & Invest

This is the risk-free path — Social Security’s ‘delayed retirement credits’ are guaranteed, while market returns are not.

Pros:

  • Significantly bigger monthly check for life (about 75% higher than at 62).

  • Guaranteed, inflation-adjusted income — protects you from longevity and inflation risk.

  • Survivor benefit for a spouse is higher, which matters for couples.

  • If invested, the larger checks grow meaningfully and can eventually catch up — by age 95 in the 8% return scenario, or as early as 85 in a 5% return world.

Cons:

  • You need to live long enough for the bigger checks to catch up.

  • You give up 8 years of potential compounding (the opportunity cost is clear in the charts).

  • Requires other reliable income or assets to bridge the gap until 70.

Framing:

    • At 62, you’re leveraging time in the market.

    • At 70, you’re leveraging guaranteed higher income for life.

    • Both can “work” — which is better depends on longevity, market performance, spending discipline, and spousal situation.

 

The below chart shows what happens if the returns are more like 5% on the age 62 benefit. Ate age 85, the 70 claiming age begins to look better financially.

 

The Bottom Line

  • If you’re confident in your health and expect to live well into your 90s, waiting until 70 gives you a much larger guaranteed monthly income stream (about 75–80% higher). In our example, that’s the difference between a $2,000/month benefit at 62 and about $3,500/month at 70 — roughly a 77% increase — plus COLA increases even while you’re waiting.

  • If you don’t need the income and have the discipline to invest it, claiming at 62 and investing can keep you ahead for decades — but the strategy depends heavily on market returns.

  • If you need the income right away, claiming at 62 is the practical choice, regardless of the math.

  • Ultimately, Social Security is personal. The “right” claiming age depends on your health, wealth, goals, risk tolerance, and whether you have a spouse depending on your benefit.

Want to see your break-even age — and whether claiming early or waiting makes sense for you? Inside the Her Retirement Collective, we’ll run your Social Security strategy side by side so you can make the best decision for your life. Reach out to us at: retire@herretirement.com and we can help you Know More, Have More & Live More.

 

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The Myth of the “Magic Number” in Retirement Planning

by BlogRetirement IncomeRetirement Income PlanningWealth

For years, Americans have been told they need to save a “magic number” to enjoy a comfortable retirement. Recent surveys by firms like Northwestern Mutual and Charles Schwab have pegged this figure between $1.5 million and $1.8 million, but experts argue that such benchmarks are oversimplified and misleading.

Lynn Toomey, founder of Retirement Solved and Her Retirement, emphasizes the importance of personalizing retirement planning instead of chasing arbitrary figures. “Retirement isn’t one-size-fits-all. The number you need depends entirely on your unique lifestyle, goals, and income sources,” Toomey explains.

Survey Findings vs. Reality

A Northwestern Mutual survey earlier this year found that Americans believe they need $1.46 million for retirement, a 15% increase from 2023. Similarly, Schwab survey respondents cited $1.8 million as their target. While these numbers grab headlines, they fail to account for individual circumstances, and in fact can work against those struggling to catch up to these numbers.

A 2023 study by Transamerica Center for Retirement Studies adds further context to the discussion on retirement “magic numbers.” According to their findings, the median amount that U.S. workers believe they need to save for a comfortable retirement is $500,000. However, their actual median savings often fall far short, highlighting a gap between aspiration and reality.

This data underscores the disparity in savings goals and the challenges many face in reaching them. For example:

  • Workers in their 20s estimate they’ll need $250,000, while those in their 60s target $1 million or more.
  • 40% of respondents admitted they based their retirement goal on a “guess” rather than a calculated plan.

Real Life Numbers

A sampling of real-life examples highlights the wide range of what people believe their “magic number” for retirement is:

  • Sarah, a 60-year-old teacher, says, “I’ve always thought $1 million was the golden number. But with inflation, I’m worried that might not be enough.”
  • Mark, a 55-year-old engineer, believes, “With $2 million, I’ll feel secure enough to travel and maintain my current lifestyle.”
  • Lisa, a 62-year-old nurse, notes, “My goal is $750,000, combined with Social Security. I’ve paid off my mortgage, so my expenses are lower.”
  • Tom, a 65-year-old small business owner, says, “I’ve saved $500,000 and rely on my pension and Social Security. That’s enough for my modest lifestyle.”
  • Karen, a 58-year-old graphic designer, admits, “I don’t have a number in mind. I just save as much as I can and hope for the best.”

These examples illustrate that people’s perceptions of their “magic number” vary widely based on their financial literacy, lifestyle expectations, and planning. As Lynn Toomey points out, “A single number doesn’t work for everyone. In addition, most people don’t understand cash flow in retirement and have a really poor sense of how much income they’ll have access to and how much they can generate. And as far as expenses, many people have no idea how much their “real” expenses will be in retirement. Effective retirement planning means understanding your unique needs and crafting a strategy tailored to your goals and resources.”

It’s Not About the Number

David Blanchett, head of retirement research at PGIM, argues that the fixation on a magic number is more about generating buzz than providing actionable advice. “Retirement success depends on factors like age, lifestyle, and guaranteed income sources—not on hitting $1 million or $2 million,” he says.

Toomey concurs, adding, “For some, $500,000 may suffice when combined with Social Security or a pension, while others with $5 million may still struggle due to high spending habits. The key is understanding your personal needs.”

A Practical Approach

Experts stress that retirement planning should begin with assessing guaranteed income sources like Social Security and pensions. The next step is determining how much savings will be needed to supplement this income.

Toomey recommends working with retirement specialists: “Don’t settle for a generalist advisor. Seek out someone who focuses exclusively on retirement planning. They’ll help you create a strategy tailored to your needs, not based on arbitrary benchmarks. Note: I can hook you up with a retirement specialist.”

Flexibility Is Key

Ultimately, retirement isn’t about achieving a single savings goal but about creating a plan that aligns with your life. Toomey advises, “Think of retirement as a journey, not a destination. Whether you plan to live modestly or lavishly, start by understanding your life goals, your numbers and then making informed decisions. The ‘magic’ lies in preparation, awareness and adaptability, not in the number itself.”

By moving beyond the hype of the magic number, retirees can focus on what truly matters: financial security and a fulfilling lifestyle. Reach out when you’re ready to get clarity on your real cash flow needs in retirement.

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Holy Sh$t, I’ve Become My Mom

by BlogRetirement Income PlanningWealth

My mom retired a little early from teaching when she was 59. I never thought I’d catch up to her. And here I am. I’m not retiring, however, but in so many ways, I’ve become my mom.

When I reflect on her choice to retire, I see how wise it was. My mom didn’t retire because she had to; she retired because she could. Having a pension provided her with the financial freedom to stop trading time for money. It was this foundation that let her live out her other passions—spending time with family and friends, traveling, watching her grandkids play sports and finally having time for herself. She traded time for joy, rather than just for a paycheck.

Today, traditional pensions are rare, but that doesn’t mean achieving financial security and freedom in retirement is out of reach. While fewer of us have employer pensions, we can build our own “personal pension.” With the right planning, guaranteed income sources, and protection strategies, we can create a retirement that not only funds our needs but frees us to do the things that light us up inside. It’s what I call a plan to be HappiHER, HealthiHER, and WealthiHER.

A significant body of research shows that people with a source of guaranteed income, like a pension or annuity, are happier in retirement. They also tend to live longer. The Journal of Financial Planning found that retirees with consistent income streams have lower rates of depression and stress, and the Institute for Social Research discovered that this financial security is linked to higher satisfaction, well-being, and even physical health. Simply put, the confidence of guaranteed income frees people to embrace life more fully.

Studies also show that retirees with guaranteed income are not only happier but also tend to live longer. Research from the Journal of Financial Planning found that retirees with consistent income streams, like a pension or annuity, experience a higher quality of life and have significantly lower rates of depression and stress. This stability in income is linked to improved mental and physical health, which can add years to their lives. Another study from the Institute for Social Research at the University of Michigan revealed that retirees with guaranteed income report higher life satisfaction and overall well-being, emphasizing the powerful connection between financial security, happiness, and longevity.

One of the strategies used for generating a guaranteed income for life and/or protecting your nest egg from things like volatility and sequence of return risk is annuities. I put together a new guide, Her Guide to Annuities. It’s designed to educate women all about annuities, the various types, provide a case study and some checklists to help women make more informed decisions. You can check it out at: Her Guide to Annuities – Her Retirement

As I look toward the years ahead, I think about what I want for myself and what I want my retirement to look like. Like my mom, I want the freedom to focus on what makes me happiest. And it’s not just about financial health—it’s also about being healthy enough to enjoy life to the fullest.

Are you ready to redefine what it means to be a woman closing in on those traditional retirement years? I’m here to tell you that age is no barrier to becoming the best version of yourself.

I’m 59, living in a small town next to a lake and a mountain where I can kayak, paddleboard, ski, hike, and enjoy the benefits of outdoor life. People often tell me I look 10-15 years younger than my age. How? I’ve mastered the art of physical fitness, and my body has changed little over 30 years.

But it wasn’t always smooth sailing. As I near 60, I’ve had to face down stereotypes about aging. I’ve noticed changes in my body and had to adjust my approach to fitness, health, and energy.

Sound familiar?

Here’s the truth: approaching 60 isn’t a negative experience. It’s an opportunity to embrace the beauty of aging, acknowledge the stories etched in every line, and assert that age doesn’t diminish your relevance, vitality, or style.

I’m on a mission to help women like you overcome challenges, unlock your full potential, and lead a life of fulfillment. Whether it’s about fitness, financial health, or finding your confidence, I’m here to guide you.

If you’re ready to start your journey, I’m putting together the finishing touches on my RetireTogether membership community and a 12-week Retirement Readiness Collaboration which will kick off in January. Let’s begin this conversation and collaboration together!

Reach out to me at: lynnt@herretirement.com to start your journey. Let’s Get Her Done.

 

Her Guide to Annuities: Her Guide to Annuities – Her Retirement

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Balancing Today and Tomorrow: Enjoying Life Now While Saving for a Secure Retirement

by BlogRetirement Income PlanningWealth

Some financial experts, like David Bach and Danielle Roberts, argue that daily splurges, such as coffee purchases, can derail your retirement savings. According to Bach’s “Latte Factor,” the money spent on small luxuries can add up significantly over time, especially with compound interest, potentially creating a more secure financial future if invested instead. For instance, spending $30 a week on coffee, rather than investing it, could cost over $240,000 in missed savings by retirement age. This approach, promoted by personal finance platforms like Acorns, is meant to emphasize the power of small savings to boost long-term financial stability​.

Even Prudential’s recent “Latte Factor”-inspired ad, promotes the idea of achieving retirement security by cutting out small, daily indulgences. Their messaging suggests, “Every coffee you skip is one step closer to that future beach day, and every splurge you pass up is helping to build your dream castle.”

However, at Her Retirement we take a different stance. While retirement planning is crucial, we don’t believe that people should cut out all the “extras” that make life rich. Instead, we believe people should focus on building a practical financial plan that allows for both enjoyment today and preparation for tomorrow.

Balancing enjoying life now while saving for retirement can feel like a tightrope walk, but it doesn’t have to be! Here’s the thing: both goals are important, and with a bit of planning, you can achieve both without sacrificing too much of either. Let’s break it down into some practical steps:

  1. Prioritize What Makes You Happy Now

It’s tempting to think you need to cut all the “extras” to save for retirement, but that’s not true. Identify what genuinely brings you joy and energy in your current life. Is it traveling? A monthly dinner out? Helping out family? Once you know your “must-haves,” you can budget for them intentionally, giving you guilt-free enjoyment now while keeping your financial future in mind.

  1. Create a Balanced Budget

Think of your budget as a balance sheet for life happiness. Set aside money for everyday life and long-term goals. Start with essentials, add in those “must-haves” we talked about, and then funnel some savings toward retirement. A great tip is the 50/30/20 rule: 50% on needs, 30% on wants, and 20% toward savings, including retirement. Adjust the percentages if you need to — it’s about balance, not perfection.

  1. Set Up Automated Savings

Automating contributions to your retirement fund means you’re paying yourself first — a simple step that makes saving easy and less painful. Start with whatever amount feels comfortable, and increase it over time. This way, you’re consistently investing in your future without constantly having to think about it.

  1. Be Smart About Debt

High-interest debt, like credit cards, can be a real budget drain, limiting both your current lifestyle and future savings. Work on paying off debt strategically so you’re not spending tons on interest, freeing up more cash for both today and tomorrow.

  1. Plan for Some Financial Flexibility

Life happens, right? Build in some flexibility, like an emergency fund, so you’re not dipping into savings for every unexpected expense. This cushion gives you more freedom to enjoy life’s little moments while keeping long-term goals intact.

  1. Visualize the Future (Without Obsessing)

It’s easy to get overwhelmed by retirement planning — after all, it’s a big goal! But instead of letting it stress you out, try to get inspired by it. Think about what you want retirement to look like. Knowing what you’re working toward can make it feel like a fun challenge instead of a financial weight.

  1. Check In Regularly

Every few months, take a quick look at your budget, savings, and spending habits. Small adjustments now and then keep you on track without having to make drastic changes. It’s all about creating a balance that feels natural.

  1. Enjoy Life Along the Way

It’s easy to get so focused on retirement that you forget about the joy of today. Remember, a balanced approach means finding happiness now and later. So, spend time with friends, enjoy your hobbies, and create memories. After all, that’s what financial planning is for: living a life you love, today and tomorrow.

By taking these steps, you’ll get closer to that sweet spot between living for today and planning for tomorrow. Retirement planning isn’t about sacrificing everything; it’s about finding ways to create a life that’s fulfilling and secure, now and in the future.

Reach out to Her Retirement for help with walking the tightrope. We got you.

Attribution: Designed by Freepik

 

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The Boston Celtics, A Super Fan Named Carol and Retirement: The Surprising Parallels

by BlogRetirement AdvisorRetirement EducationRetirement IncomeRetirement Income PlanningRetirement Savings

The Boston Celtics are the NBA Champions for the 18th time!!  WooHoo. A world record. Wowza.

As a life-long Celtics Fan-atic I’ve been dreaming about this day for a while. My late mom, Carol, dreamed about it too. I will never again be able to think about the Celtics without thinking about my mom. A basketball player herself back in the 50’s and a HUGE Celtics fan. Perhaps their number one fan. She referred to Jayson Tatum as “Her” Jayson.

Last season, the Celtics (and Dana Farber Cancer Institute in Boston), kept my mom cheering and going strong until she gave in to her battle with Ovarian cancer last April. During the 22/23 season, Jayson’s number one fan endured a blockage in her kidney, a blockage in her stomach, two surgeries and stays in four different medical facilities. Throughout all of this my hero mamma NEVER missed a game! The Celtics were her medicine. Her dream was to see them win the championship last year. Neither the Celtics nor my mom, however, could pull it off.

But alas, the Celtics came back with vengeance for the 23/24 season and are now the NBA champs (with a little help from an angel in heaven named Carol). I think she was on the rim at the Garden Monday night. I also think she’ll be watching from above as banner number 18 is raised to the rafters.

My mom was fortunate to have witnessed years of Celtics games and championships. She was also fortunate and grateful to have had a long happy and mostly healthy life. She retired early at 58 and enjoyed a 30-year retirement! A life and retirement like this doesn’t just happen. Just like an NBA championship doesn’t just happen. It’s all a battle from the start.

The battle requires strategy, perseverance, commitment, consistency and teamwork. A little luck from an angel helps too.

So, let me break it down and see what lessons we can learn from the Celtics’ championship (and my mom) that you can apply to your own life and retirement.

  1. A Strong Game Plan

Boston Celtics: The Celtics didn’t just stumble onto the court and hope for the best. They had a well-thought-out strategy, focusing on both offense and defense. Every play was designed to maximize their strengths and exploit their opponents’ weaknesses.

My Mom: Divorced at 38 with four kids, my mom figured out a new strategy for her life. She had good offense and a good defense. She was one tough lady.

Your Retirement: Similarly, your retirement plan should be strategic. According to the Employee Benefit Research Institute, only 48% of Americans have calculated how much money they need for retirement and the average retirement is over 20 years in duration. Creating a detailed financial plan, which includes budgeting, saving, and investing, is crucial. Just like the Celtics, you need a solid game plan to ensure you’re financially prepared for the long run.

  1. Consistent Training and Adaptation

Boston Celtics: The Celtics’ success didn’t happen overnight. It took years of training, adapting to new players, and learning from losses. They kept refining their skills and strategies to stay at the top of their game.

My Mom: Lucky for my siblings and I, my mom had a career as a school teacher, which meant a reliable income (albeit small for a family of 5) and a retirement pension. Leaving our family home with kids in tow, she was the queen of adaptability. She was both a dad and a mom for many years, honing her skills on the job. Her plan: to get through each day, one day at a time and focus on being a good mother.

Your Retirement: Retirement planning is a long-term commitment. Saving significantly for retirement takes consistency and starting as soon as possible. Learning about money, finances and retirement early on is critical. Regularly reviewing and adjusting your financial plan is essential. Keeping up with changes in the market, adjusting your investments, and ensuring you’re on track to meet your goals is essential.

  1. Teamwork Makes the Dream Work

Boston Celtics: Basketball is a team sport. The Celtics’ victory was a result of excellent teamwork. Each player knew their role and worked together seamlessly, from the starting five to their incredibly talented bench. The team is steeped in talent.

My Mom: She kept us all close and we learned what it meant to function as a family team. We all chipped in to make daily tasks easier, we appreciated what we had, and every day ended with love and a smile.

Your Retirement: Your retirement plan should also involve teamwork. Financial advisors, accountants, and even family members can play vital roles in your retirement planning. According to a study by Vanguard, working with a financial advisor can add up to 3% in net returns on your investments. Surround yourself with a supportive team to help guide you through complex decisions and keep you motivated.

  1. Staying Healthy and Prepared

Boston Celtics: Physical fitness and injury prevention are crucial for NBA players. The Celtics maintained peak physical condition to ensure they could perform at their best throughout the season and playoffs.

My Mom: Physical and mental health was a priority for my mom, throughout her life. While not an exercise fanatic, my mom always took good care of herself and her kids. She had a good balance and instilled an active lifestyle in all of us.

Your Retirement: Health is equally important in retirement as it is in all the years before retirement. Medical expenses are a significant concern as we age, with Fidelity estimating that a 65-year-old couple retiring in 2023 may need about $315,000 for out-of-pocket healthcare costs in retirement. Maintaining a healthy lifestyle now can reduce future medical expenses and improve your quality of life.

  1. Handling Pressure Like a Pro

Boston Celtics: Performing well in high-pressure moments defines championship teams. The Celtics excelled under pressure, making clutch plays and rising to the occasion when it mattered most.

My Mom: The term cool as a cucumber was coined in my mom’s honor. JK. Seriously, my mom faced some pretty high-pressure moments in her life, but she handled these moments mostly with calm, courage and practicality. She always told us, “Where there’s a will, there’s a way.”

Your Retirement: Retirement planning can be stressful, especially when facing financial uncertainties or unexpected expenses. However, staying calm and making informed decisions under pressure is key. Diversifying your investments, having an emergency fund, and planning for contingencies can help you handle financial and retirement pressures like a pro.

  1. Celebrating Wins Along the Way

Boston Celtics: Every win during the season was a cause for celebration and motivation to keep going. The Celtics didn’t wait until the championship to acknowledge their successes.

My Mom: Celebrations in our family were a regular occurrence. Birthday parties, Christmas, and even everyday life, my mom was celebrating life and being grateful. My mom celebrated and appreciated the smallest things in life. A sunset was one of her favorites.

Your Retirement: Celebrate your retirement planning milestones too! Whether it’s hitting a savings goal, paying off debt, opening a Health Savings Account or making a smart investment decision, recognizing your achievements can keep you motivated and on track.

Conclusion

Winning an NBA Championship, being a single mom, fighting cancer, or planning a successful retirement all require determination, strategic planning, courage, teamwork, and the ability to adapt and perform under pressure. By applying these lessons from the Boston Celtics’ championship run, and from my mom Carol, you can set yourself up for a victorious and enjoyable retirement. So, lace up those sneakers—and let’s get her done.

Remember, whether you’re aiming for a championship ring or a comfortable retirement, the journey is just as important as the destination. Here’s to enjoying every season of life. Happy planning!

If you’d like some help with your financial plan for retirement, reach out to us. We can hook you up with a team of experts: retire@herretirement.com.

 

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When it Comes to Having an Investment Advisor…is Nice, Enough?

by BlogRetirement AdvisorRetirement EducationRetirement IncomeRetirement Income PlanningRetirement Savings

Recently I had a Get Her Done Chat with a lovely lady named Susan who’s turning 60 soon. She’s starting to think seriously about retirement (because she’s been watching me and all my tips on YouTube and TikTok).

She has $500,000 managed by one of the big investment firms and she’s paying a 1.5% management fee. That’s $7,500 per annum or $625/month. Not an insignificant amount. However, fees are an issue in the absence of value.

I asked her what services the advisor is providing (i.e. value)? Other than meeting once a year to review her portfolio and making some adjustments, she really couldn’t come up with any other value.

She also admitted she doesn’t really understand what the firm/advisor is doing with her money, or why. She did say the advisor, who she’s had for several years, is likable and nice.

But….when it comes to your money and retirement, is nice enough?

We talked a bit more, and it became clear the nice advisor has never had the proper money and retirement conversation (nor provided any education). A conversation and education that my new friend Susan really needs (and deserves), by the way.

Me: “So has your advisor brought up (and educated you about)…

  • Retirement risks and how to mitigate them? Longevity, volatility, sequence of return, inflation, interest rates, etc.?
  • Optimized retirement portfolios?
  • Retirement income planning (generating protected income for life)?
  • Social Security timing & maximization?
  • Healthcare planning?
  • Long-term care planning?
  • Life insurance planning?
  • Tax planning for retirement?
  • Using home equity as an income buffer?
  • Estate planning?
  • Non-financial topics such as: lifestyle planning (where you’ll live, what you’ll do, purpose, mental and physical health, social connections, etc.)?

Susan: “Nope. Nada. Just my investments. I did ask him about Social Security and he said I can take it whenever I feel like it (me: ugh). I also asked him about annuities and he said, “Run. If anyone ever brings up annuities to you, run away from that advisor.”  (me: ugh again)

Before I could respond, Susan added, “I don’t even know when I can retire or how much money I can take from my 401k or when? Or if, god forbid, I run out of money and become a bag lady. I’m just feeling a little panicked and the thought of not having a regular paycheck from working is frightening.”

Wow…so much to unpack from her response. It was crystal clear that Susan’s nice advisor was clueless about retirement planning. As I explained to Susan, “There’s many, many investment-only advisors. This doesn’t make him bad at his job. I’m not here to judge that. It just makes him inappropriate for the “retirement planning” job you need done now. And, for an equal to or potentially lower fee than what you’re currently paying, you could be benefiting from FULL retirement planning vs. just investment advice.”

Susan decided to schedule another chat with me to dig into her details (yay). I encouraged her to take my free Her Retirement Masterclass and to check out a preview of my retirement readiness software platform before our next chat.

I explained that getting foundational retirement literacy is a key part of the Her Retirement process. This will allow her to have more informed conversations with retirement experts and make more informed decisions. She’ll also be taking a complete financial inventory within my software and will benefit from a personalized G.R.O.W. guide the software produces for her. The guide will identify her Gaps, Risks and Opportunities, which is a foundational element to her ultimate retirement plan.

I’m looking forward to being an active listener and collaborator with Susan on her journey to “more.”

Unfortunately, there’s many conversations going on across the country that are similar to Susan’s with her investment advisor. Approximately 5,200 women are turning 60 every day in the United States.  It scares me to think of the lost opportunity many women will have to improve their retirement outcome, simply because they aren’t getting the quality advice and education around retirement they deserve. Sometimes, it’s simply because they don’t know what they don’t know. They don’t know who to turn to and who to trust.

In addition, as the Great Wealth Transfer unfolds over the next decade, women will become increasingly vulnerable as they inherit significant wealth. This demographic shift, which will see trillions of dollars transferred from the older generation to their heirs, places women at a unique risk. Many women, especially those who may not have been the primary financial decision-makers in their households, could find themselves navigating unfamiliar financial terrain. This vulnerability is exacerbated by the potential influx of unscrupulous advisors looking to exploit their lack of financial literacy or experience. These predatory advisors may offer seemingly attractive financial products or services with hidden fees, poor returns, or outright fraud. It is crucial for women to seek out trustworthy, transparent, and knowledgeable financial/retirement advisors to safeguard their newfound wealth and ensure their financial security for the future.

My mission with Her Retirement is to encourage more women to become students and stewards of their life and retirement. With my “More for Her Movement,” I want all women to Know More. Have More & Live More (now and in retirement).

I also connect women with professionals who are nice AND knowledgeable about all this retirement planning stuff…while also providing A LOT more value than the average Joe investment advisor. If you’re a single or suddenly single professional woman who wants more, I can help you Get Her Done.  Reach out because no, nice is not enough.

 

 

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Where Will Your Retirement Money Come From?

by BlogRetirement Income Planning

What workers anticipate in terms of retirement income sources may differ considerably from what retirees actually experience.  For many people, retirement income may come from a variety of sources. Here’s a quick review of the six main sources:

Social Security

Social Security is the government-administered retirement income program. Workers become eligible after paying Social Security taxes for 10 years. Benefits are based on each worker’s 35 highest earning years. If there are fewer than 35 years of earnings, non-earning years are averaged in as zero. In 2022, the average monthly benefit was estimated at $1,625.1,2

Personal Savings and Investments

Personal savings and investments outside of retirement plans can provide income during retirement. Retirees often prefer to go for investments that offer monthly guaranteed income over potential returns.

Individual Retirement Account

Traditional IRAs have been around since 1974. Contributions you make to a traditional IRA may be fully or partially deductible, depending on your individual circumstances. In most circumstances, once you reach age 73, you must begin taking required minimum distributions from a Traditional Individual Retirement Account (IRA). Withdrawals from Traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. You may continue to contribute to a Traditional IRA past age 70½ as long as you meet the earned-income requirement.

Roth IRAs were created in 1997. Roth IRA contributions cannot be made by taxpayers with high incomes. To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals also can be taken under certain other circumstances, including as a result of the owner’s death. The original Roth IRA owner is not required to take minimum annual withdrawals.

Defined Contribution Plans

Many workers are eligible to participate in a defined-contribution plan such as a 401(k), 403(b), or 457 plan. Eligible workers can set aside a portion of their pre-tax income into an account, which then accumulates, tax-deferred.

In most circumstances, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 73. Withdrawals from your 401(k) or other defined contribution plans are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty.

Defined Benefit Plans

Defined benefit plans are “traditional” pensions—employer–sponsored plans under which benefits, rather than contributions, are defined. Benefits are normally based on factors such as salary history and duration of employment. The number of traditional pension plans has dropped dramatically during the past 30 years.3

Continued Employment

In a recent survey, 71% of workers stated that they planned to keep working in retirement. In contrast, only 31% of retirees reported that continued employment was a major or minor source of retirement income.4

Expected Vs. Actual Sources of Income in Retirement

What workers anticipate in terms of retirement income sources may differ considerably from what retirees actually experience.

Employee Benefit Research Institute, 2022 Retirement Confidence Survey

  1. SSA.gov, 2022
    2. AARP.org, June 8, 2021
    3. Investopedia.com, July 18, 2022
    4. EBRI.org, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite

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What’s So Great About a Rollover?

by BlogRetirement Income Planning

What’s So Great About a Rollover?

Changing jobs can be a tumultuous experience. Even under the best of circumstances, making a career move requires a series of tough decisions, not the least of which is what to do with the funds in your old employer-sponsored retirement plan.

Some people choose to roll over these funds into an Individual Retirement Account, and for good reason. About 34% of all retirement assets in the U.S. are held in IRAs, and 59% of traditional IRA owners funded all or part of their IRAs with a rollover from an employer-sponsored retirement plan.1,2

Generally, you have four choices when it comes to handling the money in a former employer’s retirement account.

First, you can cash out of the account. However, if you choose to cash out, you may be required to pay ordinary income tax on the balance plus a 10% early withdrawal penalty if you are under age 59½.

Second, you may be able to leave the funds in your old plan. But some plans have rules and restrictions regarding the money in the account.

Third, you can roll over the assets to your new employer’s plan, if one is available and rollovers are permitted.

Or fourth, you can roll the money into an IRA. Rollovers may preserve the tax-favored status of your retirement money. As long as your money is moved through a direct “trustee-to trustee” transfer, you can avoid a taxable event.3 In a traditional IRA, your retirement savings will have the opportunity to grow tax-deferred until you begin taking distributions in retirement.

Rollovers can make it easier to stay organized and maintain control. Some people change jobs several times during the course of their careers, leaving a trail of employer-sponsored retirement plans in their wake. By rolling these various accounts into a single IRA, you might make the process of managing the funds, rebalancing your portfolio, and adjusting your asset allocation easier.

Keep in mind that the Internal Revenue Service has published guidelines on IRA rollovers. For example, beginning after January 1, 2015, You generally cannot make more than one rollover from the same IRA within a one-year period. You also cannot make a rollover during this one-year period from the IRA to which the distribution was rolled over.4

Also, the Financial Industry Regulatory Authority (FINRA) has published some material that may help you better understand your rollover choices. FINRA reminds investors that before deciding whether to retain assets in a 401(k) or roll over to an IRA, an investor should consider various factors including, but not limited to, investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession of employer stock.5

An IRA rollover may make sense whether you’re leaving one job for another or retiring altogether. But how your assets should be allocated within the IRA will depend on your time horizon, risk tolerance, and financial goals.

A financial professional can help: If you’re a woman concerned about saving for retirement or have questions about your unique situation, give us a call. Our team understands the unique challenges women face, and we’re passionate about helping women just like you plan for a comfortable retirement. Contact us and let’s get started. Email retire@herretirement.com.

1. Investment Company Institute, 2021
2. Distributions from traditional IRAs and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 73, you must begin taking required minimum distributions. If the account owner switches jobs or gets laid off, any outstanding 401(k) loan balance becomes due by the time the person files his or her federal tax return. Prior to the 2017 Tax Cuts and Jobs Act, employees typically had to repay loans within 60 days of departure or face potential tax consequences.
3. The information in this material is not intended as tax advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult a tax professional for specific information regarding your individual situation.
4. IRS.gov, 2021
5. FINRA.org, 2021

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.