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Latest from Wes Moss Bio

    Recently on my radio show, “Money Matters” on WSB, I got a nearly universal question from a caller. Let’s call him “On the Fence Frank.” His concern was this: “Wes, I have $1 million in my portfolio, but I’m worried that it’s not enough to retire. I’m 61 and married. What should I do?” Frank’s concern puts words to a dilemma, or a common fear that so many people (particularly men, as we’ll discuss later) face. In essence, people are afraid they haven’t saved “enough” yet for their retirement. How do we know when it’s time to call it a career? You may think you need more than a million socked away, but my research for my book, “You Can Retire Sooner Than You Think,” has found that happy retirees do just fine with much less — half to be exact. I’ve found, based upon my research, that the magic number for happy retirees to create a great retirement is at least $500,000. Now, there’s no doubt that some folks either want or need more based upon various goals and lifestyles. This could also be true if you’re looking at an early retirement — whether by a few years or a few decades. It’s not uncommon for Frank (and other would-be early retirees) to have concerns about whether he’ll have the income to sustain his retirement years. Plus, Frank had a tough time financially during 2008. He watched his portfolio dwindle during the Great Recession. But now, his portfolio has bounced back in a significant way. Here’s where one of my favorite rules of thumb comes into play. It’s called the 4% Rule, and at its core, it’s simple but powerful. The 4% Rule says that a retiree can withdraw 4% annually of their initial retirement assets, and increase that amount every year to account for inflation. The rule assumes a 50% to 75% portfolio allocation to stocks. If you follow the rule, your money should last quite a long time. Also, be sure to consider all of your sources of retirement income. Don’t discount your Social Security benefits. Today, these benefits average $1,400 monthly for single Americans. It’s not uncommon to see a couple bring in north of $3,000 a month. Frank is ready to make some decisions. What do you think he should do? If we apply the 4% Rule to Frank’s portfolio, we get $40,000 a year, which translates into about $3,300 a month. While he’s too young to claim his Social Security benefits right now, there is the question of when he should begin drawing his monthly checks. Remember, he can start as early as 62 or wait as long as his 70th birthday. Say he chooses to begin his Social Security benefits at age 62, and they’re $2,000 on the dot, and his wife claims her $1,500 around the same time. In this scenario, Frank and his wife will have $6,800 of monthly income ($3,300 from investments and $3,500 total from Social Security), or $81,600 a year. After allowing for 15% in taxes, the tally goes to $5,780 in monthly income. If Frank and his wife are like the happiest retirees I surveyed, they have either paid off their mortgage or are within five years of owning their home outright. (In fact, retirees in this situation are four times more likely to be joyful than their mortgage-carrying counterparts.) >> RELATED | Wes Moss: How to design a happy retirement So, their monthly expenses would likely be low, making this income quite comfortable for the pair. What’s vital also is that Frank maintains the balance in his portfolio to navigate his retired years. You generally don’t want to step away from work and be 100% in stocks. The risk is typically too high. As long as he keeps a well-diversified portfolio, he should be just fine. Diversification and asset allocation are insulation, in a sense: If the market takes a tumble, you’re more protected. Of course, there’s always the question about when to begin Social Security. You don’t want to start too early or wait too late. While there’s no clear-cut answer for everyone, two things to consider are your income needs and your longevity. Because longevity is a crapshoot, I want to focus on the money piece. If you want to retire early at age 62, for example, you may be facing two options. The first is to take substantially more than 4% from your nest egg (in the 6% to 7% range) until you begin Social Security. The second is to draw your monthly Social Security benefit “early.” What to do? As a general rule of thumb, sign up for those checks sooner rather than later, particularly if you have stopped working completely. Why? Because you don’t want too much pressure on your retirement savings too soon. But if you can draw down 4.5% of your portfolio (slightly more than the 4% rule) and delay Social Security, that might be something worth considering. My opinion, though, is that if you’re on the fence (like Frank), taking the monthly benefit over increased withdrawals from your investments tends to make the most sense. Of course, everyone’s specific situation is unique to them, so weigh all options and be sure to speak to your financial adviser about what makes sense for you personally. Frank will likely have enough money for a long retirement. The second question, though, is whether he has enough core pursuits, or hobbies that he loves and engages in regularly, to make it all the happier. My research uncovered that the happiest retirees engage in an average of 3.6 core pursuits. The unhappiest have only 1.9. So, how you choose to spend your time matters significantly when it comes to a fulfilling retirement. >> RELATED | Wes Moss: Being a social butterfly might help you live longer As for Frank, a study from a University College London psychologist, John Barry, in conjunction with men’s grooming company Harry’s, is directly on point here. This study found that men’s happiness levels were tied to their job satisfaction over any other aspect of life. So, men, if you’re going to step away from work, consider stepping into a core pursuit that can give you the same sense of fulfillment. My advice? Find a cause or organization you believe in and volunteer. From my research, volunteering is the No. 1 core pursuit. But my research also showed that it doesn’t so much matter what your core pursuits are — just that you have them, and that you have as many as you can. Tie this “lifestyle” element into your retirement planning, too. Do you know how you’ll spend your newfound hours of retirement? If the answer is yes and your finances are healthy enough, I say jump off the fence and into some of the best years of your life. You’ve earned them. Wes Moss has been the host of “Money Matters” on News 95.5 and AM 750 WSB in Atlanta for more than seven years now, and he does a live show from 9-11 a.m. Sundays. He is the chief investment strategist for Atlanta-based Capital Investment Advisors. For more information, go to wesmoss.com. DISCLOSURE This information is provided to you as a resource for informational purposes only and should not be viewed as investment advice or recommendations. Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. There will be periods of performance fluctuations, including periods of negative returns. Past performance is not indicative of future results when considering any investment vehicle. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment adviser before making any investment/tax/estate/financial planning considerations or decisions.
  • Pensions are increasingly rare these days. The reason is simple: Offering pensions requires companies to make an expensive, long-term commitment to its retirees. So it’s understandable that even companies that still provide a pension benefit are looking to reduce their costs and risks. One strategy for achieving that goal is to offer pensioners a one-time lump payment instead of a lifetime of monthly checks. What should you do if you are offered a one-time cash payout of your pension instead of the regular set-up of monthly payments? The answer is: It depends. I get this question a lot. Here in Atlanta, many big companies — employers like Coca-Cola and AT&T — are offering employees lump-sum pension buyouts. It’s becoming more and more common for those lucky folks who still have pensions to get a similar offer and it can come whether you’re still on the job or already retired. In my book, You Can Retire Sooner Than You Think, I discuss the ins and outs of pensions. I even have a section on page 84 devoted to exploring how to make the right choice when it comes to taking the (often hefty) lump sum versus keeping the steady, modest monthly income stream. How you choose to answer this question can have a long-term impact on your retirement. I know it’s hard to think rationally when you have cold hard cash dangled in front of your face, but be sure to research to determine what’s best for your overall financial well-being. Of course, everyone’s financial landscape and retirement horizon are different. But I do have a general rule of thumb to follow when considering the one-time pension payment (assuming you rolled the funds over into your IRA) or the monthly check. It’s called the 6% Rule. Here’s what the 6% Rule says If your monthly pension offer is 6% or more of the lump sum offer, then you may want to go for the ongoing monthly payment. If the number is below 6%, then you likely could do as well (or better) by taking the lump sum and investing it into an IRA and then paying yourself each year (a form of your own personal pension that you control). The math behind the rule is straightforward: Take the monthly pension amount and multiply it by 12, then divide this number by the lump sum offer. Bear in mind that a pension, in theory, is paying you back your own money. And on your own, you can withdraw 5% per year from any lump sum offer you take (even if the funds are earning 0%). Speaking conservatively, the money should last you 20 years (5% x 20 years = 100% withdrawal). Twenty years is a long time, especially when you may not begin a pension until age 65. Over those twenty years, you’ll get to age 85 using 5% each year in an environment where you make a zero percent return. The point of using math as an illustration is to show that any monthly pension you elect to take over a lump sum should be well north of a 5% annual return/payment, hence the 6% Rule. Let’s walk through a couple of examples: Say your pension is for $1,200 a month for life beginning at age 65. You’ve been offered a $180,000 lump sum today. $1,200 x 12 = $14,400 divided by $180,000 equals 8%. In this scenario, you would have to make approximately 8% per year on the $180,000 in order to earn a steady $14,400 a year. Earning 8% a year consistently and in perpetuity is a tall order. Taking the monthly amount in this case (8% is greater than 6%) may be a better deal over the long haul. What if you are scheduled to get $700 per month or are offered that same $180,000 buyout? Now what would you do? $700 x 12 = $8,400 divided by $180,000 equals 4.7%. Here, your monthly pension amount is offering you a return of just shy of 5%. In this example, because 4.7% is less than 6%, you may be better off taking the lump sum option. Remember, for the first 20 years earning zero percent, you could do the same before you run out of money. If you made even a modest return (say, 2% per year), you would be far ahead of what the monthly pension would pay you. In this case, 4.7% is less than my bare bones benchmark of 6%, so you would probably be better off taking the lump sum of $180,000. Take a look at these other factors worth considering if you ever face a lump sum/monthly pension option: Your age to begin a monthly pension vs. the lump sum. Your projected longevity. The longer you live, the more valuable the monthly pension amount is worth. The type of pension payout you elect. Is it based on your life only or are there provisions for a surviving spouse? Is there a “period certain” option that pays plan beneficiaries for a time even if you pass away soon after taking the monthly pension The solvency of the company paying the pension for 20 plus years. Does the Pension Benefit Guaranty Corporation (PBGC) back up your payments if your former employer goes out of business? The likelihood that you’ll need a “lump sum” for a future emergency. Consider the lump sum offer in the context of your other assets. As you can see, there are a lot of factors to consider in the lump-sum vs. monthly pension decision process. And the answer to your question is highly unique. Take the first step and do the math to see how your offer fares under the 6% Rule; it’s where I start when helping families make this difficult choice. From there, consider the variables above to see which way the scale may tip for your individual situation. Disclosure: This information is provided to you as a resource for informational purposes only and should not be viewed as investment advice or recommendations.  Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. There will be periods of performance fluctuations, including periods of negative returns.  Past performance is not indicative of future results when considering any investment vehicle. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.
  • Do the latest “You Should Have ___ Millions Saved For Retirement By Now” articles make you wince? You’re not alone. Fewer Americans are hitting the nest egg numbers shared on financial talk radio or featured in the latest Wall Street Journal retirement-planning article. JP Morgan’s Retirement Savings Checkpoints table recommends that a 50-year-old who earns $100,000 annually have $450,000 invested. It says a 40-year-old making the same should have over a quarter-million saved. This is crushing to the 62% of working households age 55 to 64 that, according to a study by the National Institute on Retirement Security, have liquid savings less than their average annual incomes. Another study in early 2017 shows that for households between 50 and 55, the median retirement account balance is just $8,000. For those between 56 and 61, it’s $17,000. Of course, money does matter and diligence in saving is important. But your retirement goal doesn’t have to be the tune of millions of dollars. And for those who are behind the savings curve, there is still hope for a real – and happy – retirement. The sum total of retirement happiness is more than money. I recently surveyed nearly 2,000 retirees across the country to better understand their happiness levels. One of my goals is to help my clients understand the relationship between money and happiness – and what factors go into a satisfying second chapter of life. And, breathe easy, because having a $2.5 million nest egg is not always one of them. Their responses are truths you typically won’t hear from the hardcore wealth planners. My research shows that the happiest retirees have 3.6 core pursuits. These are those hobbies that bring you joy and enrich your life. For many, these have been lifelong interests that now finally get the attention they deserve. Don’t underestimate the impact of these. Survey data shows that in many cases the existence of these core pursuits was actually responsible for the difference in happiness and unhappiness in retirement. So what does this mean for those who are a bit “behind” in the retirement savings chase? It means: don’t kill yourself trying to save every penny at the expense of identifying or cultivating pursuits you love. If you abandon self-care or forget to take time to discover the hobbies that are life-giving to you, you could miss out on the fulfilling retirement you’ve worked towards for all these years. These are the building blocks for retirement happiness. Without them, it doesn’t matter if you have $500,000 or $5 million saved. Important financial targets (you can actually hit) While your saving may not be coming along as fast as you’d like, there are still some very doable financial milestones to work toward that don’t mean six or seven zeros in the bank account. First is targeting $500,000 in savings. To some this might still feel far off. But for most, this is a welcome relief from the eye-popping figures you’ll find on the latest CNN Personal Finance story. My research suggests that this number is common among happy retirees, but was subject to lifestyle and geography. So, yes, there is the opportunity of a happy future for the non-millionaires among us! By hitting that $500,000 mark, retirees were able to pair investment income with Social Security, pension benefits, rental property income or even part time work to create a very reasonable income stream in the $5,000-per-month range. Similarly, you don’t have to be a millionaire to reach our other goal: a paid off mortgage. This fixed expense eats away at the likelihood of retirement more than anything else. For those with smaller retirement nest eggs, consider the opportunity that low (or no) housing costs can bring you in retirement. Also, you don’t have to slash your mortgage with a big lump sum payment. You can start to reduce your loan balance by applying a bit more to it each month. Consider this: If you have just started a 30-year mortgage of $250,000 at 5% interest, your scheduled monthly payment is $1,342. By adding $300 per month to that payment, you can slice nearly 10 years of the mortgage – and save $79,684 in interest. My survey research also shows that people are 5x more likely to be happy if they have less than 5 years left on their mortgage. The saying “You don’t own your house, your house owns you” exists for a reason. For those closing in on retirement age, but who may have gotten a slow start on savings, here’s another bit of encouragement: While it certainly takes some discipline and perseverance, for the group of retirees that started saving after 55, there is higher percentage of happiness than unhappiness. At this stage for most, the decks are cleared, kids are gone, the mortgage is winding down and you and your partner can focus together on the task of retirement prep. While financial pundits would never say this, notice how there are more unhappy retirees in the group that started saving between 45 and 54 years old. This is one of the hardest seasons of life: private college tuition for a couple of kids, a mortgage and an awakening to retirement savings realities takes an emotional toll that is hard to recover from. So, of course, start saving as soon as you can. But remember: Even if you’re late to the game, there is still hope for happiness. A big retirement cushion doesn’t guarantee a happier retirement. Just as starting late or saving less doesn’t mean a future of misery! Pursue some of those critical, but doable benchmarks like $500,000 in investable assets and a paid-off mortgage. Then remember to swing a tennis racket, play some cards or hit the town for drinks and dancing, because happiness in retirement is about so much more than money. Disclosure: This information is provided to you as a resource for informational purposes only and should not be viewed as investment advice or recommendations.  Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. There will be periods of performance fluctuations, including periods of negative returns.  Past performance is not indicative of future results when considering any investment vehicle. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. Related Articles from clark.com: Discover is eliminating another credit card benefit in 2018 Read More Search Read More Need more cash? | 35 easy ways to make extra money each month Read More
  • Which type of retiree would you rather be: striving to keep up with the Joneses or living contently as a “millionaire next door?” If you answered the latter, chances are pretty good that you’ll have a happy retirement. Because the fact is, the size of your bank and investment accounts isn’t the most important factor when it comes to the quality of your retired years. During my research on the happiest retirees, I discovered something interesting about money. I call it The Plateau Effect. Simply put, once you achieve a threshold amount of wealth or hit a certain level of monthly spending, you experience a diminishing marginal return on happiness. What’s the magic number to get to your happy place? It depends, but my data indicates the sweet spot is a monthly spending range of between $4,000 to $5,000. What I took away from this information is that more income and more spending only lead to more happiness up to a point. After that inflection point, more spending money doesn’t noticeably increase happiness. On the same point, one of the most critical factors in determining happiness during retirement is your attitude towards money and wealth. I’ve worked with many people over the years and I have seen firsthand how money mindsets make a difference. Many folks remain humble and modest with their spending, despite having a surplus of money in the bank, and they are perfectly happy. Others, however, yearn for celebrity treatment and fall into the “bigger-better-faster-more” mentality. I’m here to tell you, the “give me more” mentality is not always a happy place. These people tend to be disappointed because whatever their wealth brings them is never enough. They aren’t at peace with their money because they are always chasing the next “big thing.” Many of the listeners to my radio show, Money Matters, fall into the other category. Typically, these families live in the Atlanta suburbs, where houses range from $200,000 to $600,000 – not in Buckhead where homes usually go for $1 to $4 million. These people are truly living the life Thomas J. Stanley talks about in The Millionaire Next Door. For them, financial planning and investment strategy are less about status and more about what Stanley describes as beings PAWs (“Prodigious Accumulators of Wealth”). In my experience, these people march to a different tune – one that says, “I’ve got enough money to be pretty darn comfortable and to do what I like.” These are among the happiest retirees. So, what makes them tick and how do they spend their time? The answer is as varied and individual as the people themselves. Here are a few examples of some of the lifestyles these “millionaires next door” are living: Bernard and Doris are in their mid-sixties and love being athletically active. Every day, they make a point to go for a walk, play a round of golf, take a bike ride or play tennis. Amelia and Harold love to travel and have never been to Asia. They are planning a trip there later this year. Cora loves spending time with her granddaughter, Celeste. Both Celeste’s mom and dad have full-time jobs, so Cora steps in and is an ultra-active grandparent. Helena and Scott love their RV and have already visited half of the states in the US. They plan to make their way through the rest – including Hawaii and Alaska. We can learn a lot from “non-VIP” retirees. They typically view their money as a vehicle to get them where they want to go. They seem satisfied with where they were in life. And, best of all, many of them are having the time of their lives! All in all, these retirees are a much happier group, probably because they are entirely content living as “masters of the middle.” They don’t need extravagance at every turn, but they do indulge in luxury now and then. What is different from these folks and those that worry about “keeping up with the Joneses” is that they put luxuries in perspective. They have a balanced approach to wealth and are at peace with their money. Disclosure: This information is provided to you as a resource for informational purposes only. It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. Advertisement Share This Article AddThis Sharing Buttons Share to Facebook 333 Share to Twitter Share to Pinterest 18 Share to Email Share to More 327 About the author: Wes Moss Wes Moss is the host of Money Matters – one of the country’s longest running live call-in, investment and personal finance radio show – on WSB radio. He is the Chief Investment Strategist at Capital Investment Advisors (CIA), and a partner at Wela, a digital financial advisory service. In 2017, Barron’s named Wes …Read more View More Articles by Taboola MOST POPULAR ARTICLES Best paper towels: Bounty vs. Costco vs. Viva vs. Walmart Employees reveal 7 secrets about shopping at Trader Joe’s What’s the best setting for your thermostat during the summer? Show Comments 11 Comments Connect with Clark SIGN-UP FOR NEWSLETTERS Email Address Most Popular Some of your favorite breakfast foods are about to get more expensive! 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  • The best rules are tried and true rules – guidelines that have served us well over time and circumstance. But even such gold standard rules should occasionally be re-examined and put back under the microscope to see how they are holding up in a changing world. Considering the 4% Rule for a comfortable retirement That’s what my team recently did with the 4% Rule, a long-established guideline for how much retirees can safely withdraw from their retirement accounts each year.  Our research project was prompted by a Wall Street Journal article that argued folks who live by the 4% Rule risk going broke. Developed by William Bengen, a financial planner from MIT, the 4% Rule is based on a study that concluded retirees can safely take 4% of their initial retirement assets, and then increase that amount every year to account for inflation. For illustration, say you have $1 million saved. Applying the 4% Rule, you would withdraw $40,000 per year, every year during retirement while increasing the initial number up annually to match inflation. Bengen’s study assumed a portfolio consisting of 50% to 75% stocks. In 1994, Bengen published his study in The Journal of Financial Planning. The findings indicated that, even under the worst possible scenario, a nest egg subject to the 4% Rule would last 35 years. In nearly 80% of the scenarios, however, the money would last 50+ years. As you can imagine, the study hit home with American investors, especially among the generation that had seen years of double-digit inflation. The study allayed fears of buying power erosion, but it did much more: It offered everyday workers a glimmer of hope, and a tangible, achievable savings target. And so, for decades, the 4% Rule has been a much-loved, much-used principle of prudently living off of retirement savings. Enter the recent WSJ article, entitled “Forget the 4% Rule: Rethinking Common Retirement Beliefs, “ which argued that, by following conventional rules of thumb, the average retiree is at risk of going broke, and that a withdrawal rate of 3% is a more realistic figure. But is this true? Before I jump on any bandwagon, I look at the data and numbers behind the arguments. In the case of the 4% Rule refute, I was especially curious to see the data. I wanted to know whether events like the bursting tech bubble of the early 2000s, the financial crisis of 2009 and/or amped-up Fed interest activity have made the 4% Rule obsolete and over-indulgent. So, my colleagues and I recreated Bengen’s study with 25 years of updated market data. Our goal was to determine whether or not the 4% Rule still works today. I went into the process understanding that our financial lives are not straight lines and that things can change. I also know that to be helpful, financial advice must be applicable in the real world. It also must be simple to understand, grounded in reality and backed up by (you guessed it) the numbers. Helpful financial rules of thumb include my $1,000-a-month rule (which says you need $240,000 in assets for every $1,000 per month you want in retirement) and the 15/50 rule (which says if you have at least 15 years left before retirement, you should have at least 50% allocation of stocks). These guidelines are easy to follow and well-tested.  So is Bengen’s 4% Rule. Our work recreated Bengen’s study with retirement withdrawals beginning every year from 1929 to 2009. This is 82 separate retirement starting points. We used actual market data until 2017 and ran multiple simulations with historically conservative average return estimates after that: 5% for stocks, 2% for bonds and 3% for inflation figures. Here is a brief rundown of our findings: 70% of the time (58 of 82 scenarios) retirement funds lasted 50 years or more. 30% of the time, the money “ran out” – with the worst-case scenario in our study being 29 years. Our conclusion: Yes, the 4% Rule still works. Here are few sample outcomes from when we re-tested and stress-tested the 4%: Retirement begins on January 1st, 2000. The S&P 500 kicks off your retirement with a brutal run of returns:  -9%, -12% and -22% in the first three years. After using actual stock, bond and CPI (inflation) numbers through 2017, we assume 5% stock returns, 1% bond and 3% inflation. In this model, the money lasts 41 years. Retirement begins on January 1st, 2008. Using actual returns through 2017, we thereafter assume 5% stock returns and 1% bond returns. In this model, we assume you don’t inflate your earnings every year. (Very possible, if you follow the decline spend trend of the average American or don’t have significant housing expenses, by the way). In this case, the money lasts 77 years! If you spike to 3% inflation, spending goes from $40,000 to $107,000 in the last tested year. Quite extreme, but even then, money lasts 39 years! Finally, let’s try January 1st, 2000 again, but this time with 5% withdrawal. With actual returns and inflation, then 5%, 1% and 0% for stocks, bonds and inflation – money still lasts 33 years! With a constant $50,000 withdrawal, you get up to 65 years. Our research surfaced a few other helpful points to supplement Bengen’s study. The Buffett Zone (as in Warren Buffet ) – Buffett’s 2018 annual letter to investors shows a per-share market value gain for Berkshire stock of 2,404,748%. Yep, that’s almost 2.5 million percent! Here’s how the math works and how it applies to the 4% Rule. If annual withdrawal rates ever dipped to 2%, portfolio growth often turned exponential, with withdrawal impact plummeting. Say, for example, a retiree had a $1 million portfolio and began $40,000 withdrawals in 1950. And say that then turned into under 2% of portfolio holdings because of the outsized market returns of the 1950s and early 1960s. That portfolio would have grown to $51 million in 2009 and over $100 million in 2017. The key here is that $40,000 plus inflation is very easy to support if there is a stretch of strong market performance. Danger Zone – Here’s the flipside: If a portfolio endures a particularly bad market stretch and that same $40,000 plus inflation now represents a 6% withdrawal rate, funds are in danger of running out. For scenarios that began in 1965, portfolios got hit with poor market returns and historically high inflation. These factors spiked the withdrawal rate percentage and made it difficult to sustain. This caused the worst-case scenario discussed above of 29 years. Bottom line: Despite media cynicism, the 4% Rule still works, even more than two decades after Bengen published his work! Yes, but what about [insert your 4% Rule financial fear here]? Despite updated data, many will voice worries, particularly about inflation. Here’s a mantra to calm your nerves: A constant inflation ratchet, while useful for model projections, is not a real-world reality, nor does it reflect buying reality. Here again, the data are on our side. Average spending in America drops every decade past age 55 until age 75 when it bottoms out around $38,000. Americans’ peak spending is $71,000 annually, occurring in the decade between ages 45 – 54. So, while inflation may be of genuine concern, it is rarely as pronounced as models lead us to believe. Even a 4% annual inflation bump turns your initial $40,000 into $130,000 forty years later, and that simply hasn’t been the reality of actual spending. Ultimately, you are in control of what you spend. What too many financial pundits forget is that saving and spending are remarkably human experiences. And remember, retirement planning isn’t linear – it’s a dynamic process. Just like your spending needs change over time, so too do your saving needs. As one example, say markets turn down a bit; most of us reign in our spending. Similarly, if we’re in a good bull run, we may sell something and take that dream vacation. Ultimately, let these long-term studies be guides, but do allow yourself to be encouraged. Bengen’s model, even with mixing and matching return and inflation figures, along with some good common-sense budgeting, will get most folks far past the retirement finish line. Disclosure: This information is provided to you as a resource for informational purposes only. It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. More Clark.com stories you may like:  Warning: This new Amazon scam is coming after your money! 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  • Retirement can be a a joyous time. Freedom abounds; you get to choose how you spend your days. For some people, a comfortable post-career life is quiet, with lots of time to spend with the grandkids and twice-yearly vacations. For others, retiring means jet-setting around the globe, building a second home at the beach or in the mountains, or even starting a small business. Most of us fall somewhere in the middle on the frugal-to-extravagant spectrum when it comes to how we envision our retired years. So how much of a nest egg and annual income do we need to make our retirement dreams come true? What is the ‘Magic Number’ for retirement spending? My research on what makes happy retirees tick uncovered a magic number (of sorts) for contentment in this next phase of life – $82,770. This amount is the average net sum that the happiest retired couples I surveyed spend each year during retirement. Of course, everyone’s individual needs will be, well, individual. So, for your retirement, you may need less or want more spending money to find your happy place. Commentators on financial freedom during retirement are quick to say that everyone needs about $2.2 million stashed away to have a good retirement. But I have seen folks live rich, fulfilling post-job lives on far less. The first component to remember is that your investments probably won’t be your sole source of income after you stop working. Think about it. Depending on your age when you bid adieu to the 9-to-5 world, you may be eligible for Social Security benefits or draw from a pension. You may decide to try some part-time work. You could be receiving rental income on another house (or other houses) you own. There are plenty of possibilities for how you’ll supplement your retirement nest egg once the time comes. Let’s explore each of these potential income streams in more detail, and then talk about investment income. Social Security (“SS”) Under the current rules, you can start receiving SS benefits when you are 62. But, remember, for every year you wait up to age 70, you’ll get a higher monthly benefit. I know what you’re thinking: “Will Social Security even be around when I retire?” My answer is “probably,” especially if you are currently in your late 50s or early 60s. If you’re just starting your career, however, it never hurts to plan for a retirement without accounting for a monthly SS check. You’ll just have more savings when the time comes for you to call it a career. Pension For those lucky few who still earn a pension – folks like teachers and government workers, for example – remember to factor this amount into your monthly income calculations. Part-Time Work Consider taking on a part-time job to generate some additional income (and for the added benefit of making some new friends). Make sure you choose a side gig on your own terms. It should entail work you enjoy with hours that allow you to live out your retirement dreams, and, ideally, connect you with a passion. If golf is your thing, get a job as a starter or tournament marshal. Love clothes and fashion? Put in a few hours per week at a boutique. And let’s not forget that working part-time offers the bonus of human interaction and the chance to expand your social circle, both of which are good for your health! Rental Income If you decide (and can afford) to buy a new house without selling your current home, consider renting the old place. This is a great idea for folks planning to downsize in retirement. Think about it this way: If the rent is more than your monthly mortgage payment, taxes, upkeep, etc., you will generate extra monthly income. Additionally, your tenant is footing the bill as your house (hopefully) appreciates and you build equity. Investment Income And so we arrive at the central piece of our income puzzle. A general rule of thumb that I like to use is that for every $240,000 you save, you should expect to generate about $1,000 per month in income. Things like dividends on stocks, interest on bonds and distributions from such alternative investments as REIT’s (Real Estate Investment Trusts) or MLPs (Master Limited Partnerships) kick off the income. Under this scenario, the idea is to leave our principal intact. You can read more about my method of income investing here. Now, let’s put it all together to see exactly what it will take to get you and your spouse to that $82,770 annual income level. To net this amount, you’ll need to generate around $100,000 of total gross income. Consider this example of annual income: $24,000 – SS Spouse 1 ($2,000/month) $18,000 – SS Spouse 2 ($1,500/month) $8,000 – Annual Pension ($666.66/month) $12,000 – Part-Time Work ($1,000/month) $ 0 – No rental income $38,000 – Investment Income ($3,166.66/month) Total = $100,000 Here, we get to $100,000. If we assume a tax rate of 17.22% (as we all know, taxes vary for everyone), it brings us down to that happy retiree average of $82,770 net for the year. Notice that for our example couple to fill the gap, they needed $38,000 per year in income from their investments. To generate this level of income (based on our general rule), you’d need about $950,000 to withdraw the 4% per year of investment income. That’s less than half of that $2.2 million we talked about before! And, it’s a number that’s attainable for most anyone with a bit of discipline and determination – especially if you start early. True, $950,000 is still quite a bit of money, but it’s worth every sacrifice if it funds the retirement of your dreams, however that looks. And, heck, next to $2.2 million, it’s a bargain! Disclosure: This information is provided to you as a resource for informational purposes only. It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. Related Articles from clark.com: Here's your 2018 estimated tax refund schedule Read More Warning: Do NOT buy these dietary supplements Read More 3 money-saving Amazon Prime perks you need to know about right now Read More
  • Are you still reeling from the recent Wall Street rollercoaster ride? I get it. The Dow fell more than 3200 points – about 10% – in just a few trading sessions. That kind of volatility can feel like a freefall. Luckily, it wasn’t. In the end, this tumble was painful, but not terminal. Still, folks are shaken and scared. I’m a big believer that long-term commitment is a necessary ingredient for successful investing. In the wake of every correction, my message has been the same: Stay calm. Corrections are a normal part of the market’s circle of life. But that’s not what I want to talk about today. I want to take a moment and acknowledge that corrections like this, and bear markets in general, create real emotional responses and even pain. Sitting tight when the stock market is on a wild ride The reality is that February had the worst market week since 2009. It was a wild ride, to say the least. This wasn’t a brush-your-shoulders-off type of dip or baby correction. It was more of the gut-punch, are-we-falling-off-the-cliff variety. And we are all still feeling it. Most people cringe at the sight of their money seemingly washing way. You built your portfolio over the past 40 years, and when it drops, you feel it. The more you lose, the more it claws at you. But the bottom line is that no matter if it’s a $20, $1,000 or $50,000 loss, it hurts. RELATED: Should you sell or stay put in the stock market? There is a burgeoning field of science devoted to the interplay between our finances and our emotions. Neuroeconomics, as it’s called, combines elements from neuroscience, psychology and economics to better understand financial decision making. One key player in this research is veteran financial journalist, Jason Zweig. In his book Your Money and Your Brain, Zweig details how both financial losses and gains have a profound physical effect on the brain and body. For example, financial losses are processed in the same area of the brain as mortal danger. This means that when we lose money, we feel it as intensely as if our lives were at risk. That makes sense. In today’s the world, money equals survival. Having at least a baseline amount of money (for food, shelter, clothing) equates to subsistence. This point may explain the mortal fear correlation. All of our financial pleasure/pain originates in the insular cortex, a part of our brain associated with emotions. There have been a multitude of studies that measure the emotion related to winning or losing money. Nothing lights up the insular cortex during a brain scan like the emotion we feel about our money. This is particularly true when we suffer a loss. In fact, we feel four times the pain when we lose a dollar as we feel pleasure when we gain one. Considering the neuroscience and psychology behind how we conceptualize finances, we can understand why, in the middle of corrections, some folks cash out and lock in their losses. They are scared. They are operating in fight or flight mode. No matter how rash or irrational it may seem to someone on the outside, these folks are functioning from a very human, very primal place. I totally understand. Weeks like these just aren’t pleasant for most investors. They are in your face and frightening. It’s much more enjoyable and placid when the escalator is steadily climbing week after week, and we are moving towards long-term growth. But, as we all know, markets move in both up and down. Now that we’re headed in the other direction, things feel unsettled. That’s why I think it’s important to understand the science behind what we’re experiencing. With these concepts in mind, remember too that, while a baseline amount of money does provide security, it only buys us happiness up to a point. Then, our happiness plateaus, no matter if we gain $100,000 more or $1 billion more. It is a benefit to us all to remember the discipline we need to be successful long-term investors. History tells us that corrections and dips happen, bringing both pain and opportunities. In these moments, we would all do well to remember that the definition of courage isn’t the absence of fear. Courage is doing what must be done, despite the fear. Disclosure: This information is provided to you as a resource for informational purposes only. It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. Related Articles from clark.com: Here's your 2018 estimated tax refund schedule Read More The best wireless network in America is... Read More Buying this type of oil is better for your car Read More
  • Despite the near non-stop media gabfest about President Trump’s recently enacted tax reforms, you may still be wondering exactly how they will impact you and your family. I’ve been fascinated by this tax reform, and spent a significant amount of time trying to understand how it will impact Americans. I’m a Certified Financial Planner and not a CPA or tax policy expert, which is why I employed several CPA firms to help me with compiling and verifying this information. Based on our research, here’s a look at how this dramatic change to the tax code, officially known as the Tax Cuts and Jobs Act, may impact your bottom line this year. How the Tax Cuts and Jobs Act could affect you The new tax law, in most cases, will leave more cash in taxpayers’ wallets. The vast majority of Americans will see a tax cut in 2018. Those who don’t see a tax cut will likely instead see little change in their taxes. A select few — those on the lower end of the upper 1% of earners — will see their taxes go up. It’s important to note that this is the first overhaul of the tax code in over 30 years, and it’s also the largest tax overhaul bill in the history of the US. This reform is bigger than the 1963 Kennedy cuts and the 2003 Bush cuts. Some may argue that it’s second to the 1981 cuts, but the flip side is that over the long haul it will best that year’s reform too. RELATED: Which tax prep software is right for you? Yes, it’s that historic. Looking to the numbers, the legislation will likely reduce taxes by $120 billion for individuals and small businesses, and by $85 billion for corporations. This is huge news. This figure amounts to an immediate $205 billion stimulus to the US economy for 2018, which is just over 1% of the US’s GDP. These numbers dwarf the 2003 Bush cuts. Why do I mention that? Because given the similar scope, I believe looking at the GDP both before and after the 2003 cuts is illustrative of what may be in store for us now. Back in 2002 and 2003, real GDP growth averaged 1.5%. After the cuts, real GDP growth rose to 4.0% in 2004 and stayed above 3.0% in 2005 and 2006. It is possible that a comparable impact could happen in the coming years, especially since our real GDP has averaged around 2.0% for 2016 and 2017. Okay, that’s it for the macro stuff. Let’s take a deep dive into how the reform may impact your personal finances. To begin, we need to consider ten key factors: The Standard Deduction Under the new reform, the Standard Deduction doubles (yes, doubles) to $12,000 for individuals and $24,000 for married couples. This change is huge for helping middle-income families get a break on their federal tax bill. Tax Brackets The number of Federal Tax brackets has increased from 6 to 7. The new brackets are a bit more precise than before. The lowest rate remains at 10%, while the highest rate drops from 39.6% down to a 37% cap. One thing to note is that, under the TCJA, these brackets are not permanent – they will revert to pre-2018 levels after the year 2025. Mortgage Deductions This one is very straightforward. The maximum mortgage amount you can use for mortgage interest deductions has decreased from $1.0 million to $750,000. But as most Americans have mortgage balances below $750,000, we shouldn’t see many folks taking a hit on their tax bill here. The State and Local Tax (“SALT”) Deduction When it comes to SALT deductions, we see the second (and it’s a close second) biggest piece of the reform after the Standard Deduction increase. Before the reform, the SALT deduction was unlimited. The TCJA has capped this deduction at a total of $10,000. Who does this impact? High wage earners in high income tax states like New York, New Jersey, and California could be pinched the hardest by this change. But, they may not. Our sample calculations indicate that high earners will still see a small overall tax cut (percentage-wise) since the top income bracket has decreased from 39.6% to 37%. That change may offset the loss of the SALT deduction for some taxpayers. Child Tax Credit This credit has increased substantially – from $1000 to $2000 per child. Additionally, the number of people who can use the credit will go up dramatically due to the increases in income limits. Now, the limits go all the way up to $200,000 for single folks and $400,000 for couples. Amazingly, $1400 of this is refundable! That means that even if you don’t owe any taxes, you get a check back from the federal government for this refundable credit. Obamacare Individual Mandate Penalty Removed for 2019 Beginning next year, you aren’t required to buy health insurance. This means you won’t have to face a penalty at year end if you don’t have coverage (which has averaged about $470). A side note: while the TCJA addresses this piece of the Affordable Care Act, the Obama-era increase in Medicare taxes still remains. The Alternative Minimum Tax (“AMT”) The dreaded AMT remains intact, but the good news is that there are higher exemption amounts. So, it’s likely that fewer Americans will get hit with the AMT. To put numbers to the new provision, under the old law a married couple filing jointly had an $86,200 exemption to protect against AMT, but now that income level exemption increases to $109,400. Charitable Deductions Here we see a two-fold win. The limit has gone up from 50% of your Adjusted Gross Income (“AGI”) to 60%. And, if you give more than 60%, you can carry the additional amount forward for up to 5 years. New Inflation Measure We have moved from standard Consumer Price Index for All Urban Consumers (“CPI-U”) to chained CPI-U. Because chained link CPI-U grows at a slower rate than standard CPI-U, this move will slow the rate at which the tax bracket starting points will rise. This change is really just a covert way for the government to increase tax revenue over time. Capital Gains Tax These figures remain largely the same – 0%, 15% and 20%. The TCJA keeps the breakpoints that exist under pre-reform law, but indexes them for inflation using chained CPI-U in tax years after Decemeber 31, 2017. Two things to note on this point: The 2018 15% breakpoint is $77,200 for joint returns and surviving spouses (half this amount for married taxpayers filing separately), $51,700 for heads of household, $2,600 for trusts and estates, and $38,600 for other unmarried individuals. The 2018 20% breakpoint is $479,000 for joint returns and surviving spouses (half this amount for married taxpayers filing separately), $452,400 for heads of household, $12,700 for estates and trusts, and $425,800 for other unmarried individuals. RELATED: Here’s your 2018 estimated tax refund schedule Got all that? I know, it’s a lot to digest, but hopefully you’ll find this list useful in assessing the major changes under the TCJA and these changes may impact you and your family. To help clarify the new rules more, let’s apply them to some relatable examples. For our exercise, let’s assume the following: A home value of 1.5 to 3 times annual income and a mortgage balance of 80% of the value. (Remember, under the TCJA, mortgage interest deductions are capped at $750k.) Property taxes at 1.8% of the home’s value. (This helps the calculator determine if you would lose some of your property tax deduction.) SALT – The tax calculator we are using automatically calculates your SALT. You just add in property taxes and the calculator caps your total SALT at the new $10,000 level. Note that we did not assume any other itemized deductions on top of this. With that foundation, let’s look at a handful of post-TCJA scenarios: – Jim, single, has no kids and makes $50,000. His federal taxes go down by about $200, which represents a 5% reduction. – Beth, single, has two kids and makes $50,000. Her taxes go down by $996, which represents a 73% reduction. – Marc and Tracy, married, have two kids and make a combined income of $150,000. Their taxes will go down by $120, which represents an 8% reduction. – Marshal and Lindsay, married, have no kids and make a combined income of $150,000. Their taxes go up about $800. If  Marshal and Lindsay were not itemizing (let’s say they aren’t homeowners but are renting), their taxes would go down relative to what they paid last year because their standard deduction is going up. They would see savings to the tune of $3,800. But Marshal and Lindsay as renters still come out paying more than homeowner Marshall and Lindsay. – Ernest, single, has no kids and makes $500,000. His taxes are going way up, by approximately $17,000. If Ernest decides to get married and have two kids, his taxes go down. The tax changes seem to reward those filing jointly and who have children under the age of 17. – For the biggest earners among us, those making, say, $2 million a year, their tax situation will really depend on how much they are deducting. But, in general, this group will likely either stay flat or see a slight reduction in taxes. For a better assessment of how your taxes might change under the new law, check out this calculator. And at the end of the day, this overhaul may more than pay for itself. If we see GDP growth from the projected 1.8% to 2.5%, that makes up for the $1.5 trillion in cuts. Take it a step further to a 3.5% GDP growth rate, and not only will we pay for the cuts, but will reduce our national debt by $1.5 trillion. No matter exactly where it clocks in, one thing is for sure  – this tax bill gives the economy a fighting chance. With the TCJA, we should see the creation of an economic environment that’s better for jobs, wages, and small businesses and entrepreneurship. All of us should benefit – you, your family, small businesses and large companies. Disclosure: This information is provided to you as a resource for informational purposes only. It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. Related Articles from clark.com: Here's your 2018 estimated tax refund schedule Read More The best wireless network in America is... Read More Buying this type of oil is better for your car Read More
  • When my 10-year-old son was born, his grandmother generously put $1,000 into a Franklin Temple 529 plan for him. A 529 is a tax-advantaged savings plan for educational expenses. This IRA-like vehicle is a great way to help fund a child’s schooling. For the better part of a decade, I, too, have been funding a 529 for my son. But my account is with Georgia’s Path2College program. You can set up a 529 account and use it for qualified educational expenses in any state, no matter where you reside. If you live in Georgia, for instance, and you find a 529 plan offered, say, in Florida, with better investment options or lower fees, you could put your money there. But, there is usually a modest tax benefit to having your children’s 529 plans in your state of residence. For Georgia, that deduction is $4,000 per beneficiary. My son’s original 529 plan had been set up by his grandmother’s long-time broker. Because it was an out-of-state account, we hadn’t been getting a Georgia tax deduction for it. And in reviewing the account details, I noticed it held higher cost investments. With these points in mind, I decided to transfer the Franklin Temple account into my Path2College 529. Making such a transfer was new to me. Let’s talk about what I learned. What happens when you roll over a 529 from one plan to another The IRS allows for one tax-free rollover, per 529 beneficiary in a 12-month period. If you violate this rule, you get hit with federal income taxes and a 10% penalty on the accumulated earnings. Ouch! The basic method for rolling over one account into another is to fill out a rollover contribution form with the 529 plan servicer you are transferring the money into. From there, the administrator of your preferred 529 plan will coordinate moving the money from the old fund into their fund. Another method is to request a distribution of funds from the old servicer, and then, within 60 days, deposit the full amount into your preferred 529 plan. If you choose this approach, be sure to let your servicer know that the money is a rollover and give them a breakdown of how much is principal and how much is earnings. There are a few circumstances where it may make sense to move your 529 plan funds into a different account. One scenario is the one I outlined with my son’s accounts – to make the most of the state tax deduction and to get lower cost investments. You might also want to move if your plan has performed poorly compared to other 529s and you expect the trend continue. Of course, we all know that past performance is no guarantee of future returns, but if most other plans are outpacing yours, you may consider a transfer. You may also find that a plan is too restrictive. While federal regulations govern all plans, some plans choose to have other specific rules for their plans. One example is the provision that you cannot change the owner of the plan unless the original owner dies or becomes incapacitated. For a grandparent who sets up a 529 account with this provision and later chooses to let a parent manage the account, this can lead to frustration. But, a way to circumvent this provision would be to roll the account over to a new 529 plan that accepts owner changes. While the 529 program was created specifically to help families save for college, the plans can now be used to pay for private school. The recently enacted GOP tax reform allows beneficiaries to use up to $10,000 in annual distributions from a 529 plan during grades K-12 for things like school tuition and books, in addition to later college expenses. Before tax reform, 529 plans were a great tool. Now they’re even better. If you’re not taking advantage of this financial planning tool, it’s worth considering. Disclosure: This information is provided to you as a resource for informational purposes only. It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. Related Articles from clark.com: Here's your 2018 estimated tax refund schedule Read More Retail alert: Sam's Club is abruptly closing locations nationwide Read More 7 things I learned while using my Instant Pot for 14 days straight Read More
  • Among the central issues of retirement planning is whether you should pay off your mortgage before you stop working. While it’s a straightforward question, the answer is less clear. Financial planners fall on both sides of the fence when it comes to advising their clients on how to handle their house payment. Are there advantages to paying off your home before you stop working? The truth is, Americans have a love/hate relationship with mortgages, and with good reason. While these long-term loans have allowed folks across the socio-economic strata an avenue to home-ownership, the mortgage is also perhaps the most dreaded bill we pay every month. Why? Because it is by far our biggest monthly expense. While doing research for my book, You Can Retire Sooner Than You Think, I gathered data on how retirees handle their mortgages, and how their particular situation impacted their happiness. I learned that the happiest retirees go into retirement either mortgage-free or within five years of paying it off completely. But today, more people than ever are moving into retirement still carrying a mortgage. According to the Consumer Financial Protection Bureau, from 2001 to 2011, the percentage of homeowners ages 65 and older with mortgage debt increased from 22% to 30%. For homeowners 75 and older, the rate jumped from 8.4% to 21.2%. And just how much do these folks still owe on their mortgages? The median debt climbed over the same period from approximately $43,500 to almost $80,000. Do the math and you see that this is an 82% increase. So, if your mortgage loan burning party is still some ways off, you’re not alone. As you contemplate retirement, what should your strategy be? Should you set your financial focus on making your mortgage disappear? Some financial professionals would answer with a resounding “No.” They look at it in terms of net returns. Think about a scenario where you have $100,000 socked away. You could use that money to pay off your mortgage or keep it invested in the stock market. Say your mortgage interest rate is 4%. These pros will tell you to hang on to the mortgage, because you may net 8% of gains from the stock market, putting you ahead 4% overall. This strategy makes theoretical sense, but we have to ask if it passes the real-world test. The answer is no. In everyday life, we could go a decade with a flat market, just like we did in the 2000’s, something I recently discussed with Barron’s Magazine. Or the market could take a tumble right before you decide it’s time to cash out. In either of these scenarios, you will have paid 4% on your mortgage with little or no gain from your market investments. In my opinion, paying off a mortgage before retirement (or soon thereafter) is more of a financial sure thing. But back to our question and how it applies to you. Should you pay off your home? My answer is a qualified yes. Each decision is highly individual and requires careful calculation. Consider these three factors as you weigh your situation, and whether to wipe that house payment off your monthly budget: 1. You don’t have to have a stash of cash If you don’t have tens of thousands of dollars to drop on your mortgage, that’s perfectly okay. And you’re not alone – very few people can throw a wad of money at their house payment all at once. Most happy retirees who own their homes outright paid off their mortgage early little by little, making more than the minimum monthly payment over several years. In my experience, probably 70% of retirees who are mortgage-free used this method to reach that goal. Think about this scenario. You have just signed a 30-year mortgage of $250,000 at 5% interest, and your scheduled payment is $1,342 per month. If you just add an additional $300 to each payment, you’ll trim nine years and four months off the life of the loan – and save $79,684 in interest. That’s no small change. Other ideas include saving up to make an extra mortgage payment each year, or structuring your payment plan so that you pay 50% of your monthly obligation every two weeks (which leads to an extra month’s payment every 12 months). 2. Pay with the right money, and pay the right amount I want you to hear me loud and clear on this one: Never, ever use retirement account (IRA, 401k) money to pay off a mortgage. Never. Why? Because paying off your mortgage by tapping your nest egg won’t create that coveted peace of mind. Instead, it could create more stress. For starters, withdrawing money from retirement accounts will likely incur a significant tax bill, on par with the taxes you’d pay on earned wages. Second, reducing your hard-earned retirement reserves undercuts your future security two-fold: It takes actual cash away and it reduces future interest earnings on the accounts. Where does this leave you? With your non-retirement accounts, a.k.a. the ones that have already been taxed. But use caution here, too. These funds are important in your on-going security. They provide liquidity that can be tapped in case of emergency or opportunity, and tapping them out won’t help your peace of mind. Anyone who’s familiar with my financial planning strategy knows that I’m a believer in the one-third rule. The rule is simple and powerful: If you can pay off your mortgage with no more than one-third of your non-retirement savings, you should consider doing so. For real numbers, say you owe $50,000 and have $160,000 in savings. You should go ahead and wipe out that mortgage. In this case, you’ll still have $110,000 in liquid assets as you cruise down the retirement road. 3. The feel-good factor Let’s talk more about peace of mind, as it’s paramount to a fulfilling retirement. My research on the happiest retirees has taught me that owning a home free and clear creates a real sense of calm and peace. Plain and simple, it just feels good to say goodbye to that monthly mortgage payment as you enter a new and different phase of life. The feel-good factor makes sense. With no mortgage payment, you have dramatically lowered your monthly retirement living expenses and taken stress off your nest egg and other sources of monthly income. And with this extra cash on hand, you have more financial freedom to pursue your retirement passions and dreams – think added vacations, hobbies, or charitable giving. Isn’t that what a happy retirement is all about? Disclosure: This information is provided to you as a resource for informational purposes only. It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. Related Articles from clark.com: Travelers from 9 states will need passports for domestic flights in 2018 Read More 9 things to know before your first trip to Costco Read More Best cell phone plans and deals for 2017 Read More
  • Wes Moss

    Wes Moss is the host of MONEY MATTERS – the country’s longest running live call-in, investment and personal finance radio show – on News 95-5FM and AM 750 WSB.

    Wes is the Chief Investment Strategist at CAPITAL INVESTMENT ADVISORS (CIA). CIA currently manages more than a billion dollars in client assets, making it one of Georgia’s largest Fee-Only investment firms, according to the Atlanta Business Chronicle. Wes is also a partner at WELA, A DIGITAL ADVISORY SERVICE based in Atlanta that offers free financial management tools and the ability for clients to work online with a financial planner.

    In 2014, 2015, 2016 and 2017, Barron’s Magazine named Wes as one of America’s top 1,200 Financial Advisors. Wes was also named one of Atlanta’s 40 Under 40 by the Atlanta Business Chronicle in 2015. In 2014, he was named as one of the top 40 investment advisors (under 40) in the country by Investment News in their inaugural list.

    In addition, Wes is a regular contributor to the Atlanta Journal Constitution, and for a number of years wrote for AJC.com, the website of The Atlanta Journal Constitution. He is also a regular contributor to ClarkHoward.com. In 2014, Wes was the host of Atlanta Tech Edge, a weekly TV show on Atlanta’s NBC affiliate WXIA, covering the fascinating business of technology within the state of Georgia. He is also the financial consultant for Spike TV’s show, Life Or Debt.

     

    Wes holds a degree in economics from the University of North Carolina, Chapel Hill. He lives in Atlanta with his wife and four sons and loves spending time with his family, coaching lacrosse, and playing golf and tennis.

    Wes has written several books including Starting from Scratch (Kaplan) and Make More, Worry Less (FT Press). His latest book, You Can Retire Sooner Than You Think – The 5 Money Secrets of the Happiest Retirees (McGraw Hill 2014), has been a bestseller in the retirement planning category. This book’s unique message and research struck a chord with readers and the financial community since its release in May of 2014. Wes has also served as a financial expert for both local and national media including CNN, CNBC and Fox Business Network. He has been interviewed by USA Today, Forbes, Time, the Wall Street Journal, and Yahoo Finance.

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News

  • A representative for Kanye West told CNN on Thursday that he will donate $2 million to the families of Ahmaud Arbery, Breonna Taylor and George Floyd. He also said West will establish a college fund for 6-year-old Gianna Floyd. The rapper’s donation is intended to cover the legal costs for all the families and set up a 529 education plan to fully fund college for Floyd’s daughter. West joined protests in Chicago’s South Side on Thursday. According to WMAQ-TV, West joined a protest against Chicago Public School’s contract with the Chicago Police Department.
  • Charges have been filed against all four Minneapolis police officers involved in the situation that led last week to the death of 46-year-old George Floyd while he was in police custody in Minneapolis. Former Officer Derek Chauvin, who was previously charged with third-degree murder and second-degree manslaughter, has been charged with second-degree murder. The other officers involved in the situation, Thomas Lane, J.A. Kueng and Tou Thao were charged with aiding and abetting second-degree murder and aiding and abetting second-degree manslaughter. Floyd, 46, died May 25 after he was detained for questioning regarding a possible forgery in progress. Video of his death caught by bystanders showed Chauvin holding his knee to Floyd’s neck for nearly nine minutes as Floyd pleaded for air, sparking outrage. Live updates for Thursday, June 4 continue below: New fencing dramatically expands White House security zone Update 11:20 p.m. EDT June 4: Even as the number of people demonstrating over the police killing of George Floyd dwindled to a small group on Thursday afternoon in the nation's capital, workers were busy installing new high fencing around the park area known as the Ellipse just to the south of the White House, significantly expanding the security zone for President Donald Trump. 'It's a sad commentary that the (White) House and its inhabitants have to be walled off,' said Washington, D.C. Mayor Muriel Bowser. 'We should want the White House to be opened up,' the Mayor told reporters. Critics immediately compared the new fencing to the President's push to build a wall along the border with Mexico. 'And American taxpayers, not Mexico, will again be sent the bill,' said Sen. Patrick Leahy (D-VT). By Thursday afternoon, workers had run the new fencing all the way down to, and along Constitution Avenue, which crosses in between the White House and the Washington Monument. Portland, other cities rethink school police amid protests Update 8 p.m. EDT June 4: Oregon’s largest school district will no longer have police officers in its schools and joins a handful of urban districts from Minneapolis to Denver that are rethinking their school resource officer programs amid national outrage over the death of George Floyd. Superintendent Guadalupe Guerrero said Thursday that Portland Public Schools needed to “re-examine our relationship” with the police in light of protests over the death of Floyd, a handcuffed black man who died after a white Minneapolis police officer pressed his knee into his neck for nearly nine minutes. The district of more than 49,000 students joins Minneapolis, which severed ties with its school resource officers on Tuesday. Districts in St. Paul, Minnesota and Denver are considering doing the same. Protesters in Charlottesville, Virginia, have made the end of the school resource officer program in their district one of their demands. Portland Mayor Ted Wheeler said Thursday that he would also discontinue using school resource officers in two smaller metropolitan districts under a program that costs the city $1.6 million a year. The move is in response to the demands of thousands of protesters, many of them young, who have filled the streets of Oregon’s largest city for six consecutive nights. Having the officers in high schools has been a touchy topic for several years in this liberal city. Students have protested in recent years for an end to the program, at one point even overwhelming a school board meeting. “Leaders must listen and respond to community. We must disrupt the patterns of racism and injustice,” Wheeler said Thursday of the most recent demonstrations. “I am pulling police officers from schools.” The presence of armed police officers in schools is a contentious one. While many Portland residents applauded the decision, others raised immediate concerns about student safety in the event of a school shooting or other emergency. Wheeler said the city would make sure officers could respond rapidly in an emergency. The move is “a knee-jerk reaction,” and the decision by a few districts to stop their programs could snowball — to the detriment of students nationwide, said Mo Canady, executive director of the National Association of School Resource Officers, whose association represents about 10,000 dues-paying officers. There are an estimated 25,000 school resource officers nationwide, he said. Headlines, op-ed prompt staff protests at NY Times, Inquirer Update 6:45 p.m. EDT June 4: Some staffers at The New York Times and Philadelphia Inquirer called in sick Thursday to protest decisions at each newspaper they believe were insensitive in the midst of nationwide protests about police mistreatment of black Americans. At the Times, an opinion column by U.S. Sen. Tom Cotton supporting use of the military to quell demonstrations prompted a rare public rebuke from dozens of staffers and the paper’s guild. Times management didn’t back down from the decision to publish it. The Inquirer apologized for a “horribly wrong” decision to use the headline “Buildings Matter, Too” on an article. The twin uprisings illustrated raw feelings unleashed by the video of George Floyd dying last week after a Minneapolis police officer pressed a knee against his neck, along with long-time concerns about whether newspaper staffs reflect the makeup of their communities. In his column, headlined “Send in the Troops,” Cotton condemned “nihilist criminals” out for loot and the thrill of destruction and “left-wing radicals” who want to exploit Floyd’s death to create anarchy. The Arkansas Republican, supporting President Donald Trump, said it was time to supplement local law enforcement with federal troops. Pentagon-Trump clash breaks open over military and protests Update 5:40 p.m. EDT June 4: President Donald Trump is not only drawing criticism from his usual political foes but also facing backtalk from his defense secretary, his former Pentagon chief and a growing number of fellow Republicans. A day after Defense Secretary Mark Esper shot down Trump’s idea of using active-duty troops to quell protests across the United States, retired four-star Gen. John Allen joined the chorus of former military leaders going after the president. And Republican Alaska Sen. Lisa Murkowski said Esper’s remarks were “overdue” and she didn’t know if she would support Trump in November. Although Esper’s declaration was followed by the Pentagon reversing course on pulling part of the 82nd Airborne Division off standby outside Washington, the rising criticism underscored an extraordinary clash between the U.S. military and its commander in chief. On Thursday, an official said the troops in question from the 82nd were going home to Fort Bragg, North Carolina, after all. Both Trump and Esper also drew stinging, rare public criticism from Trump’s first defense secretary, Jim Mattis, in the most public pushback of Trump’s presidency from the men he put at the helm of the world’s most powerful military. 3 ex-officers charged in George Floyd’s death ordered held on $750,000 bail Update 3:25 p.m. EDT June 4: Court records from Hennepin County, Minnesota, show three former police officers charged with aiding and abetting second-degree murder and aiding and abetting second-degree manslaughter in the death of George Floyd have each been ordered held on bails of $750,000. Thomas Lane, J.A. Kueng and Tou Thao made their first court appearances Thursday, according to court records. They were fired last week from Minneapolis Police Department after Floyd died on May 25. In video captured by passersby, the trio could be seen standing by or holding Floyd down as then-Officer Derek Chauvin pressed his knee to Floyd’s neck for nearly nine minutes. The three are scheduled to next appear in court on June 29. Chauvin is scheduled to make his first court appearance on charges of second-degree murder, third-degree murder and second-degree manslaughter on June 8. First of three memorial services for George Floyd set to begin in Minneapolis Update 3 p.m. EDT June 4: A memorial for George Floyd, who died last week in an encounter with Minneapolis police, is set to begin at 1 p.m. local time Thursday. President of North Central University announces George Floyd memorial scholarship Update 2:55 p.m. EDT June 4: The president of North Central University in Minneapolis announced that university officials have launched a memorial scholarship in honor of George Floyd, who was killed last week in an encounter with Minneapolis police. University President Scott Hagan announced the establishment of the fund during a memorial held Thursday for Floyd in Minneapolis. “Even before announcing this scholarship, yesterday, unsolicited, over $53,000 was handed to me to contribute toward the educational promise of aspiring young Black American leaders,” Hagan said. “I am now challenging every university president in the United States in America to establish your own George Floyd memorial scholarship fund.” Pelosi asks Trump for full list of agencies involved in response to DC protests  Update 2:20 p.m. EDT June 4: House Speaker Nancy Pelosi on Thursday asked President Donald Trump to name the agencies involved in the response to protests against police brutality in Washington D.C. and clarify their roles and responsibilities. The California Democrat wrote to the president days after peaceful protesters were tear-gassed to clear them from a park near the White House to allow for Trump to walk across the street for a photo-op at St. John’s Episcopal Church. “We are concerned about the increased militarization and lack of clarity that may increase chaos,” Pelosi said in the letter. “Congress and the American people need to know who is in charge, what is the chain of command, what is the mission, and by what authority is the National Guard from other state operating in the capital.' Washington D.C. Mayor Muriel Bowser, who has been critical of the decision to allow out-of-state National Guard officials and military troops into the city, shared Pelosi’s letter on Twitter. “If it can happen in DC, what jurisdiction is next?” Bowser wrote. Los Angeles mayor lifts city’s curfew Update 2:05 p.m. EDT June 4: Los Angeles Mayor Eric Garcetti on Thursday lifted a curfew enacted over the city as protests against police brutality and the death of Black Americans including George Floyd erupted nationwide. “I have lifted the curfew in the City of Los Angeles,” Garcetti said in a statement posted on Twitter. “We remain strongly committed to protecting the right of Angelenos to make their voices heard and ensuring the safety of our community.” University of Central Florida reviewing comments by professor who tweeted about ‘black privilege’ Update 1:50 p.m. EDT June 4: The University of Central Florida is reviewing a professor’s tweets after a hashtag calling for his removal began to trend Thursday morning on social media, WFTV reported. A Change.org petition was launched asking for an investigation into psychology professor Charles Negy, who in recent days compared African-Americans to Asian-Americans and claimed “black privilege” exists, according to WFTV and the Miami Herald. >> Read more on WFTV.com Ohio governor calls for moment of silence to remember George Floyd Update 1:35 p.m. EDT June 4: Ohio Gov. Mike DeWine on Thursday requested that state residents observe a moment of silence at 2 p.m. to remember George Floyd, who authorities said was killed last week in police custody. WHIO-TV reported DeWine cancelled a planned news conference scheduled Thursday afternoon because it was set to begin at the same time as a memorial service for Floyd in Minneapolis. Los Angeles County sheriff says deputies will no longer enforce county’s curfew Update 12:25 p.m. EDT June 4: Los Angeles County Sheriff Alex Villanueva said Thursday that deputies will no longer enforce a curfew amid protests against police brutality and the killing of George Floyd. “Based upon current situational awareness and the recent pattern of peaceful actions by protesters, the Los Angeles County Sheriff’s Department will no longer enforce a curfew,” Villanueva said in a statement. “Other jurisdictions are free to make their own decisions.” Virginia governor announces plans to take down statue of Gen. Robert E. Lee Update 11:35 a.m. EDT June 4: Virginia Gov. Ralph Northam on Thursday announced plans to take down a large statute of Gen. Robert E. Lee along Richmond’s prominent Monument Avenue. “Yes, that statue has been there for a long time. But it was wrong then, and it is wrong now,” Northam wrote in a series of Twitter posts announcing the decision. “So we’re taking it down.” The move comes amid protests nationwide over police brutality, racism and the deaths of Black Americans like George Floyd and Ahmaud Arbery at the hands of police and vigilantes. Officials in Richmond, one of the former capitals of the Confederacy, have resisted calls to remove the statue for years. Massachusetts man accused of bringing Molotov cocktails to protest Update 11:15 a.m. EDT June 4: Authorities have charged a Worcester, Massachusetts, man with civil disorder and possession of several Molotov cocktails during a demonstration in the city over the death of George Floyd, WFXT reported. In a news release obtained by WFXT, U.S. Attorney Andrew E. Lelling said 18-year-old Vincent Eovacious “attempted to obstruct or interfere with law enforcement officers” by bringing the Molotov cocktails to a peaceful protest on June 1. Eovacious was arrested Wednesday after being released on bond following state charges, including possession of an incendiary device, WFXT reported. >> Read more on Boston25News.com Washington State Patrol apologizes after trooper says, ‘Don’t kill them but hit them hard’ during protests Update 10:55 a.m. EDT June 4: Officials with Washington State Patrol apologized after video surfaced on social media showing a trooper saying, “Don’t kill them, but hit them hard” during protests in Seattle on Tuesday night, KIRO-TV reported. “Using that language ... which gives the impression of over-aggression and physicality and hurting people and harming people by law enforcement by intent was totally out of line, totally inappropriate, hurtful, confusing,” WSP Communications Director Chris Loftis said, according to KIRO-TV. He implored the public to understand the context of the situation. “(The trooper) was preparing his troops for what would be a physically confrontational situation,' Loftis said, according to KIRO-TV. “He was letting them know there were limits to what we could do.” The woman who caught the trooper’s comments on video, Krystal Marx, told KIRO-TV that WSP’s apology and explanation are not enough. “I would encourage WSP -- any other law enforcement agency -- if you are there to protect the peace, keep the peace and to listen and learn from communities that are hurting,' Marx said. “Make sure you use your language appropriately.” >> Read more on KIRO7.com Some Minneapolis police take knee as hearse for George Floyd passes by Update 10:40 a.m. EDT June 4: Some Minneapolis police officers were seen kneeling Thursday morning as the hearse carrying the body of George Floyd passed them, Twin Cities PBS reported. Ben Crump, an attorney representing Floyd’s family, said a memorial for the 46-year-old will be held at 1 p.m. local time Thursday at North Central University in Minneapolis. Senate Democrats hold moment of silence to remember George Floyd, victims of police brutality Update 10:30 a.m. EDT June 4: Senate Democrats on Thursday stayed silent for 8 minutes and 46 seconds in remembrance of George Floyd, the man who died last week as a Minneapolis police officer held his knee to Floyd’s neck for nearly nine minutes. Drew Brees apologizes after saying protests during national anthem disrespect the flag Update 8:55 a.m. EDT June 4: New Orleans Saints quarterback Drew Brees apologized Thursday after saying in an interview with Yahoo! that he thought protests during the national anthem were disrespectful to the flag. “I would like to apologize to my friends, teammates, the City of New Orleans, the black community, NFL community and anyone I hurt with my comments yesterday,” Brees said in a statement posted Thursday morning on Instagram. He acknowledged that while speaking Wednesday with Yahoo! he “made comments that were insensitive and completely missed the mark on the issues we are facing right now as a country.” “They lacked awareness and any type of compassion or empathy,” Brees wrote. “Instead, those words have become divisive and hurtful and have misled people into believing that somehow I am an enemy. This could not be further from the truth, and is not an accurate reflection of my heart or my character.” Asked a question Wednesday about players protesting police brutality by taking a knee during the national anthem, Brees told Yahoo! that he would “never agree with anybody disrespecting the flag of the United States of America or our country.” Brees was heavily criticized on social media for his comments. “WOW MAN!!” LeBron James said in a tweet Thursday. “Is it still surprising at this point. Sure isn’t! You literally still don’t understand why Kap was kneeling on one knee?? Has absolute nothing to do with the disrespect of (the flag) and our soldiers (men and women) who keep our land free.” Beyoncé urges fans to stay ‘focused’ in fight for justice  Update 8:10 a.m. June 4: Beyoncé Knowles-Carter is urging her fans to stay “focused” in fighting for justice for George Floyd. The Grammy-winning artist shared a message on Instagram, which featured an aerial photo of of Black Lives Matter demonstrators filling the streets of Minneapolis, Minnesota. The caption framing the photo read: “The world came together for George Floyd. We know there is a long road ahead. Let’s remain aligned and focused in our call for real justice.” Friend in car says George Floyd did not resist arrest Update 6:17 a.m. June 4: A friend who was in the passenger seat of George Floyd’s car when he had a fatal encounter with a police officer said the Minneapolis man tried to defuse the situation and did not try to resist arrest. Maurice Lester Hall, 42, was arrested on outstanding warrants Wednesday in Houston and was interviewed by investigators in Minnesota, The New York Times reported. “He was, from the beginning, trying in his humblest form to show he was not resisting in no form or way,” Hall told the newspaper. “I could hear him pleading, ‘Please, officer, what’s all this for?’” Hall called Floyd a mentor and said the two Houston natives spent time together May 25 before the incident with Minneapolis. Hall said he will not forget what he saw as Derek Chauvin placed a knee against Floyd’s neck and held it there for nearly nine minutes. “He was just crying out at that time for anyone to help because he was dying,” Hall told the Times. “I’m going to always remember seeing the fear in Floyd’s face because he’s such a king. That’s what sticks with me, seeing a grown man cry, before seeing a grown man die.” LA police arrest protesters who broke curfew Update 5:18 a.m. June 4: Police in Los Angeles arrested nearly 100 protesters who broke the city’s curfew, with some staying outside more than 90 minutes past the 9 p.m. deadline, The Washington Post reported. The rally occurred outside City Hall on Wednesday night and many of the 1,000 attendees obeyed the curfew and went home, the newspaper reported. Those who did not were handcuffed by police in riot gear. “When I first got here it was really scary, because when I came here I saw the National Guard and I was not myself,” Ashley, a 22-year-old protester from Pasadena, California, who declined to give her last name, told the Post. “So seeing that made me fear what was going to happen.” Most observers said that despite the arrests, the rally was peaceful, the newspaper reported. Georgia police: 3 protesters torched squad cars Update 5:08 a.m. June 4: Three protesters in Georgia are accused of setting police cars on fire, WSB-TV reported. According to police, the protesters tracked the officers down at their homes and torched the cars. Ebuka Chike-Morah, Alvin Joseph and Lakaila Mack all face charges for lighting two Gwinnett police cars on fire, according to WSB-TV. Meghan Markle speaks out against George Floyd’s death Update 3:37 a.m. June 4: Meghan Markle spoke out about the death of George Floyd, calling it “absolutely devastating.” The Duchess of Sussex made her comments in a video to the graduating class of Immaculate Heart High School in Los Angeles “George Floyd’s life mattered and Breonna Taylor’s life mattered and Philando Castile’s life mattered, and Tamir Rice’s life mattered, and so did so many other people’s names we know and names we don’t know,' Markle said. “You’re going to use your voice in a stronger way than you have ever been able to because most of you are 18, or you’re turning 18, so you’re going to vote. You’re going to have empathy for those who don’t see the world through the same lens that you do.” Kareem Abdul-Jabbar says arrests ‘a step toward justice’  Update 3:20 a.m. June 4: Basketball Hall of Famer Kareem Abdul Jabbar told CNN the decision to charge all four former Minneapolis police officers was “a step toward justice.” The NBA legend, who wrote an op-ed in the Los Angeles Times on Sunday and observed that “racism in America is like dust in the air,” praised Minnesota Gov. Tim Walz and Minneapolis MayorJacob Frey for their fast actions. “It’s like, you know, the United States is this wonderful bus with great seats in the front of the bus,' Abdul-Jabbar told CNN. “But as you go further to the back of the bus, the seats get worse and the fumes from the exhaust leak in and really wreck with people’s health and their lives. But the people at the front of the bus, they have no complaints. It’s kind of like that. “That dust accumulates in the lives of black Americans, and it eliminates all the mechanics of democracy. Democracy doesn’t work for us.” The former Los Angeles Lakers center said nothing had changed in terms of systematic racism since the Rodney King incident and riots in Los Angeles in 1992. “Something has to be done,” Abdul-Jabbar told CNN. “It’s not enough to say, ‘That was terrible and my thoughts and prayers are with you.’ That’s not getting anything done.” National Guard to assist authorities in San Diego County Update 2:59 a.m. June 4: Two hundred members of the National Guard have been deployed in San Diego County to prevent looting, the San Diego County Sheriff’s Office said in a tweet. The Guardsmen will work with local law enforcement agencies to provide security to “critical infrastructures” during protests to prevent looting and arson, the department tweeted. Police use tear gas when protesters try to block Iowa interstate Update 2:33 a.m. June 4: Hundreds of protesters attempting to block an Iowa interstate were met by state troopers and Iowa City police, who fired tear gas, the Iowa City Press-Citizen reported. The crowd attempted to skirt the line of officials who were blocking their path, the newspaper reported. “Disperse immediately,” said a speaker, who was identified as an Iowa State Patrol officer. The voice added that failure to do so would result in the deployment of chemical deterrents. “Quit your job,” the crowd chanted back, the Press-Citizen reported. Huntsville police arrest more than 20 protesters, use tear gas Update 2:13 a.m. June 4: Police in Huntsville, Alabama, arrested more than 20 protesters and used tear gas at the Madison County Courthouse square, WHNT reported. Protests began peacefully earlier Wednesday in a march sponsored by the NAACP and ended around 6:30 p.m. The majority of the crowd stayed and marched from Big Spring Park East to the courthouse, the television station reported. Around 8 p.m., authorities used rubber bullets and tear gas to disperse the crowd, WHNT reported. The area was cleared within an hour, according to WHNT. Police said more arrests could be pending. New Orleans police fire tear gas at protesters Update 1:33 a.m. June 4: Police in New Orleans fired tear gas into a crowd of protesters near the Crescent City Connection late Wednesday, NOLA.com reported. Police said the action was taken after protesters refused to comply with three orders not to walk across the CCC. “The NOPD deployed tear gas tonight to disperse protesters after the crowd refused to comply with three orders not to attempt to walk across the CCC,” the department said in a statement. “Escalation and confrontation hurts us all. NOPD is committed to respectful protection of our residents’ First Amendment rights. However, tonight we were compelled to deploy gas on the CCC in response to escalating, physical confrontation with our officers.” 3 Minneapolis officers charged Wednesday to appear in court Thursday Update 1:15 a.m. June 4: The three former Minneapolis police officers who were arrested Wednesday on charges of aiding and abetting the murder of George Floyd will have their first court appearances Thursday afternoon. The former officers -- J. Alexander Keung, Thomas Lane and Tou Thao -- are set to appear before the judicial officer at 1:45 p.m. EDT, CNN reported. The hearings were pushed up by 45 minutes from their original schedule, according to court records.
  • More than 6.4 million people worldwide – including more than 1.8 million in the United States – have been infected with the new coronavirus, and the number of deaths from the outbreak continues to rise. While efforts to contain the COVID-19 outbreak continue, states have begun to shift their focus toward reopening their economies. The Centers for Disease Control and Prevention is tracking cases in the U.S. here. Live updates for Thursday, June 4, continue below:  MLB players reaffirm pay stance, no deal with teams in sight Update 11:30 p.m. EDT June 4: Baseball players reaffirmed their stance for full prorated pay, leaving a huge gap with teams that could scuttle plans to start the coronavirus-delayed season around the Fourth of July and may leave owners focusing on a schedule as short as 50 games. More than 100 players, including the union’s executive board, held a two-hour digital meeting with officials of the Major League Baseball Players Association on Thursday, a day after the union’s offer was rejected by Major League Baseball. “Earlier this week, Major League Baseball communicated its intention to schedule a dramatically shortened 2020 season unless players negotiate salary concessions,” union head Tony Clark said in a statement. “The concessions being sought are in addition to billions in player salary reductions that have already been agreed upon. This threat came in response to an association proposal aimed at charting a path forward.” “Rather than engage, the league replied it will shorten the season unless players agree to further salary reductions,” Clark added. Players originally were set to earn about $4 billion in 2020 salaries, exclusive of guaranteed money such as signing bonuses, termination pay and option buyouts. The union’s plan would cut that to around $2.8 billion and management to approximately $1.2 billion plus a $200 million bonus pool if the postseason is completed. MLB last week proposed an 82-game season with an additional sliding scale of pay cuts that would leave a player at the $563,500 minimum with 47% of his original salary and top stars Mike Trout and Gerrit Cole at less than 22% of the $36 million they had been set to earn. Seattle to offer free citywide coronavirus testing Update 9:30 p.m. EDT June 4: Seattle Mayor Jenny Durkan announced Thursday that the city will offer free citywide coronavirus testing in partnership with the University of Washington Medicine. Testing will be performed at two locations. Drive-up sites will be located in north and south Seattle. Those sites are former emissions testing sites, which will allow for up to 1,600 tests per day, officials said. However, the testing will only be for those who drive through and book ahead. Outbreak reported at Tyson food plant in North Carolina A COVID-19 outbreak was reported at the Tyson Food plant in Claremont, where town leaders said more than 700 people work. Tyson sent WSOC-TV an email saying it doesn’t plan on doing widespread testing there because the number of COVID-19 cases is less than 2%. Family members of the plant workers said that 10 workers have been infected with the virus. The company makes frozen prepacked sandwiches and biscuits. The news comes after 570 people tested positive at the Tyson chicken plants in Wilkesboro, NC. California Gov. says protests may lead to spike in virus cases Update 7:30 p.m. EDT June 4: California Gov. Gavin Newsom said Thursday he’s concerned about the spread of coronavirus as thousands of people gather for protests across the state, and he said the state should prepare for higher rates of positive tests because of both the protests and the reopening of businesses that’s underway. “If you’re not (concerned), you’re not paying attention to the epidemiology, to the virulence of this disease,” he said during a visit to Stockton, California, where he met with Mayor Michael Tubbs and business owners to discuss systemic racism and injustices. Newsom added he’s particularly concerned about the disproportionate deaths from the virus among black Californians. Still, California has no plans to halt its reopening efforts, though Newsom hasn’t announced any new guidance for businesses this week. Mark Ghaly, secretary of the California Health and Human Services agency, said the state is in a “range of stability” on cases and hospitalizations and is “working hard” on more guidance. California has already allowed most counties to reopen restaurants, nail salons, churches and other businesses with restrictions. But highly anticipated guidance on schools has not been released, nor have details on the resumption of professional sports, possibly without fans. Ghaly acknowledged it will be weeks before the effects of the protest on public health are fully known. He highlighted the “importance of the freedom and liberty to protest” but added, “it does create infectious disease concern that we weren’t contending with before.” Telehealth expansion could become permanent after pandemic Update 6:50 p.m. EDT June 4: The temporary expansion of telehealth during the coronavirus pandemic would become permanent under a bill endorsed Thursday by a Senate committee. As passed by the House in March, the bill would allow reimbursement for medication-assisted treatment for substance use disorders conducted via telehealth. But an amendment recommended by the Senate Health and Human Services Committee would also make permanent the provisions of Gov. Chris Sununu’s emergency order on telehealth, which allowed all health care providers to offer services remotely and required insurers to cover them. Officials representing hospitals, community health centers, dentists and mental health providers all told the committee that telehealth has been a valuable tool during the pandemic and should continue. “As many experts have predicted, telehealth is here to stay, which is why this legislation is so important to ensure patients are able to get the right care at the right time in the right setting, which ultimately may be in the safety of their own homes,” said Paula Minnehan of the New Hampshire Hospital Association. Ken Norton, director of the New Hampshire chapter of the National Alliance on Mental Illness, said telehealth has greatly expanded access to mental health treatment. “We can’t go back,” he said. Study on safety of malaria drugs for coronavirus retracted Update 4:50 p.m. EDT June 4: Several authors of a large study that raised safety concerns about malaria drugs for coronavirus patients have retracted the report, saying independent reviewers were not able to verify information that’s been widely questioned by other scientists. Thursday’s retraction in the journal Lancet involved a May 22 report on hydroxychloroquine and chloroquine, drugs long used for preventing or treating malaria but whose safety and effectiveness for COVID-19 are unknown. The study leaders also retracted an earlier report using the same company’s database on blood pressure drugs published by the New England Journal of Medicine. That study suggested that widely used blood pressure medicines were safe for coronavirus patients, a conclusion some other studies and heart doctor groups also have reached. Even though the Lancet report was not a rigorous test, the observational study had huge impact because of its size, reportedly involving more than 96,000 patients and 671 hospitals on six continents. Its conclusion that the drugs were tied to a higher risk of death and heart problems in people hospitalized with COVID-19 led the World Health Organization to temporarily stop use of hydroxychloroquine in a study it is leading, and for French officials to stop allowing its use in hospitals there. “Not only is there no benefit, but we saw a very consistent signal of harm,” study leader Dr. Mandeep Mehra of Brigham and Women’s Hospital in Boston told The Associated Press when the work was published. The drugs have been controversial because President Donald Trump repeatedly promoted their use and took hydroxychloroquine himself to try to prevent infection after some White House staffers tested positive for the virus. The drugs are known to have potential side effects, especially heart rhythm problems. The Lancet study relied on a database from a Chicago company, Surgisphere. Its founder, Dr. Sapan Desai, is one of the authors. Dozens of scientists questioned irregularities and improbable findings in the numbers, and the other authors besides Desai said earlier this week that an independent audit would be done. In the retraction notice, those authors say Surgisphere would not give the reviewers the full data, citing confidentiality and client agreements. Cases, testing hit single-day highs in NC Update 3:45 p.m. EDT June 4: Health officials in North Carolina reported the state’s highest single-day number of new coronavirus infections and daily testing figures on Thursday, WSOC-TV reported. Officials with the North Carolina Department of Health and Human Services said 1,189 new COVID-19 cases have been reported statewide. WSOC-TV reported that the previous highest one-day increase in cases was 1,185. State officials also reported having conducted 19,039 tests, the highest number reported in a single day so far and well over the state’s goal of 5,000 to 7,000 tests per day. Officials have reported 31,966 cases of COVID-19 in North Carolina. At least 960 people statewide have died of coronavirus infections. >> Read more on WSOCTV.com 1,805 new coronavirus infections reported in the UK Update 2:45 p.m. EDT June 4: Officials in the United Kingdom reported 1,805 new coronavirus infections Thursday, raising the country’s total number of infections to 281,661. Officials said that as of 5 p.m. local time Wednesday, the most recent date for which data was available, 39,904 people had died nationwide of COVID-19. NBA season to resume from Orlando in late July, reports say Update 2:35 p.m. EDT June 4: The NBA’s Board of Governors has approved a plan to restart the season after it was suspended three months ago due to the coronavirus pandemic, The Associated Press and other media outlets reported. The 2019-2020 season will be played in Orlando at Walt Disney World’s ESPN’s Wide World of Sports complex starting in late July, the AP reported. 603 new cases of COVID-19 reported in New Jersey Update 2:05 p.m. EDT June 4: Gov. Phil Murphy of New Jersey said Thursday that 603 new coronavirus infections have been reported, raising the total number of COVID-19 cases in the state to 162,530. “We still have work to do,” Murphy said in a statement posted on Twitter. “Let’s keep pushing these numbers down. When we do, (we’ll) get through Stage 2 that much sooner.” Officials also reported 92 more deaths associated with the coronavirus pandemic. As of Thursday, 11,970 people have died statewide of COVID-19. CDC chief urges Americans to be vigilant on coronavirus Update 1:20 p.m. EDT June 4: Worried by photos of large gatherings of people which could lead to a spike in coronavirus cases, the head of the Centers for Disease Control used testimony before Congress on Thursday to plead with Americans to wear masks in public and continue to engage in social distancing measures to stop the spread of the virus. “We’re very concerned that our public health message is not resonating,” Redfield told a hearing of the House Appropriations Committee. 104 new cases of COVID-19 reported in DC Update 12:20 p.m. EDT June 4: Health officials in Washington D.C. said Thursday that 104 new coronavirus infections have been reported in the area, raising the total number of cases in the area to 9,120. Officials also announced that two more people, aged 76 and 89, had died of COVID-19 in Washington D.C., bringing the total number of deaths in the District to 475. 52 new fatal COVID-19 cases reported in New York Update 11:55 p.m. EDT June 4: Gov. Andrew Cuomo of New York said Thursday that 52 more people have died of COVID-19 in the state. The number is slightly higher than the 49 new fatal coronavirus infections reported one day before and lower than the 58 deaths reported Tuesday and the 54 deaths reported on Monday. Ohio State University to resume in-person classes in fall Update 11:10 a.m. EDT June 4: Officials with Ohio State University announced plans Wednesday to reopen its campus in Columbus, Ohio come the fall, WHIO-TV reported. University President Michael V. Drake announced the decision at a board of trustees meeting and in a message to the university community, according to WHIO-TV. Specific guidelines will be announced in the coming weeks based on guidance from state and local health authorities and recommendations of the Safe Campus and Scientific Advisory Subgroup of the university’s COVID-19 Transition Task Force. >> Read more on WHIO.com Stocks open slightly lower after 4 straight days of gains Update 10:05 a.m. EDT June 4: Stocks eased back in early trading Thursday on Wall Street as a four-day market rally cooled off. The stretch of gains had brought the S&P 500 back to where it was just one week after reaching an all-time high in February. The index fell 0.4%. In more grim news on the economy, nearly 1.9 million people applied for unemployment benefits last week, but that marked the ninth straight decline since applications spiked in mid-March. European markets were mostly lower after the European Central Bank said it now expects the region’s economy to shrink by 8.7% this year and increased its stimulus program. RNC to meet Thursday with officials in NC to discuss future of convention Update 10 a.m. EDT June 4: Officials in Charlotte, North Carolina, plan to meet Thursday with members of the Republican National Committee to discuss plans for the Republican National Convention, WSOC-TV reported. The meeting comes after President Donald Trump said he was looking into moving the convention, which is scheduled for August, from Charlotte due to the safety precautions put in place statewide to try to mitigate the spread of the coronavirus pandemic. >> Read more on WSOCTV.com 1.9 million seek jobless aid even as reopenings slow layoffs Update 8:40 a.m. EDT June 4: Nearly 1.9 million people applied for U.S. unemployment benefits last week, the ninth straight decline since applications spiked in mid-March, a sign that the gradual reopening of businesses has slowed the loss of jobs. The diminishing pace suggests that the job market meltdown that was triggered by the coronavirus may have bottomed out as more companies call at least some of their former employees back to work. The total number of people who are now receiving jobless aid rose only slightly to 21.5 million, suggesting that rehiring is offsetting some of the ongoing layoffs. Though applications for benefits are slowing, the latest weekly number is still more than double the record high that prevailed before the viral outbreak. It shows that there are limits to how much a partial reopening of the economy can restore a depressed job market mired in a recession. Prince Charles says he was ‘lucky’ symptoms were mild Update 7:45 a.m. EDT June 4: Britain’s Prince Charles said he considered himself “lucky” after he contracted mild symptoms of the coronavirus, and had “got away with it quite lightly.” The prince told UK broadcaster Sky News that his brush with COVID-19 increased his commitment to advocating environmental causes. “It makes me even more determined to push and shove and shout and prod, if you see what I mean. Whatever I can do behind the scenes sometimes ... I suppose it did partly, I mean I was lucky in my case and got away with it quite lightly,” he told Sky News in a video call from Scotland. “But I’ve had it, and I can so understand what other people have gone through. And I feel particularly for those, for instance, who have lost their loved ones but were unable to be with them at the time. That to me is the most ghastly thing.” Civil unrest forces at least 70 testing sites to close Update 5:33 a.m. EDT June 4: Looting and civil unrest nationwide have forced at least 70 coronavirus testing sites to close, the U.S. Department of Health and Human Services told The Washington Post. Agency officials said most of the sites were located in private pharmacies in “socially vulnerable” neighborhoods, the newspaper reported. “We shouldn’t feel comforted if we don’t see an uptick,” Leana S. Wen, Baltimore’s former health commissioner, told the Post. “There may be a reason why the numbers aren’t being captured.” South Korea confirms 39 new cases Update 4:56 a.m. EDT June 4: South Korea health officials confirmed 39 new cases of COVID-19onn Thursday -- 33 of which are locally transmitted. According to the country’s Centers for Disease Control and Prevention, the news cases are related to several clusters in Seoul and surrounding areas. Yoon Tae-ho, an official with the South Korean Health Ministry, warned that locally transmitted cases may become tougher to trace, CNN reported. Confirmed cases top 6.5 million worldwide Update 4:10 a.m. EDT June 4: The number of confirmed novel coronavirus cases worldwide topped 6.5 million early Thursday, according to Johns Hopkins University. According to the tally kept by the university, there are at least 6,514,639 confirmed cases of the virus, and there are at least 386,111 deaths. The United States remains the leader in confirmed cases with 1,851,520 and 107,175 deaths. Pakistan has more confirmed cases than China Update 2:50 a.m. EDT June 4: Pakistan has passed China in confirmed cases of COVID-19, according to Johns Hopkins University. As of Thursday, Pakistan had 85,264 confirmed cases and 1,770 virus-related deaths. China has reported 84,160 coronavirus cases and 4,638 deaths. US coronavirus cases climb past 1.85M, deaths top 107K Update 12:50 a.m. EDT June 4: The number of novel coronavirus cases in the United States continued to climb past 1.85 million early Thursday across all 50 states, the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands. According to a Johns Hopkins University tally, there are at least 1,851,520 confirmed U.S. cases of the virus, which have resulted in at least 107,175 deaths. The hardest-hit states remain New York with 374,085 cases and 30,019 deaths and New Jersey with 162,068 cases and 11,880 deaths. Massachusetts, with 101,592 cases, has the third-highest number of deaths with 7,152, while Illinois has the third-highest number of cases with 123,830. Six other states have now confirmed at least 54,000 novel coronavirus cases each, including: • California: 117,215 cases, resulting in 4,305 deaths • Pennsylvania: 77,225 cases, resulting in 5,667 deaths • Texas: 67,310 cases, resulting in 1,716 deaths • Michigan: 57,731 cases, resulting in 5,553 deaths • Florida: 57,447 cases, resulting in 2,530 deaths • Maryland: 54,175 cases, resulting in 2,597 deaths Meanwhile, Georgia, Virginia, Connecticut and Louisiana each has confirmed at least 40,000 cases; Ohio, Indiana and North Carolina each has confirmed at least 30,000 cases; Colorado, Minnesota, Tennessee, Washington, Arizona and Iowa each has confirmed at least 20,000 cases; Alabama and Wisconsin each has confirmed at least 18,000 cases, followed by Mississippi with 16,041 and Rhode Island with 15,112; Nebraska and Missouri each has confirmed at least 14,000 cases, followed by South Carolina with 12,415; Utah and Kentucky each has confirmed at least 10,000 cases; Kansas and Delaware each has confirmed at least 9,000 cases; the District of Columbia, Nevada and New Mexico each has confirmed at least 8,000 cases; Arkansas, Oklahoma and South Dakota each has confirmed at least 5,000 cases Click here to see CNN’s state-by-state breakdown. The Associated Press contributed to this report.
  • Social service providers knew this would be a busy spring. Isolation, anxiety and economic uncertainty over the pandemic have especially led, to an unprecedented demand for psychological counseling and help with substance abuse issues. “We actually were hyperfocused on overdoses,” said Jennifer Levine, executive director of the S.A.F.E. Coalition in Franklin, Massachusetts. “That is something that we were getting ready for, so we created a video for Narcan use... we ordered more Narcan ... we created a platform for that online.” And the organization did see that increase in overdoses. But then COVID-19 seemed to throw mental health professionals a curveball. “We’re seeing a huge increase in drinking in particular,” said Jaclyn Winer, LICSW, director of Holliston Youth and Family Services. “You know, if you’re stressed out, have a glass of wine and unwind. That’s perfectly normal and healthy. But if you are someone who struggles with substance use, that can really lead to worsening use.” Liquor stores never closed during the pandemic. They were deemed as essential as grocery stores and pharmacies -- and there were serious health reasons for that, said Levine. “The biggest concern was folks that use alcohol on a daily basis and were told they couldn’t use that alcohol would either withdrawal on their own at home, which is a huge concern, or they would find other means to use alcohol,” she said, citing examples such as ingesting isopropyl (rubbing) alcohol. The fear was that either because of withdrawal symptoms or poisoning these chronic alcohol users would wind up in hospitals focused on dealing with COVID-19. But Levine said there appears to have been an unintended consequence of making alcohol available to the legions suddenly forced to work or study from home -- no matter what level of drinker they started out as. “There’s just more access to alcohol,” she said. “So many stores are delivering. There are alcohol delivery services.” Unfortunately, Levine said some of the alcohol is winding up in the hands of kids. “A lot of parents are recognizing that their child -- their middle school, high school, college-age child are increasing their alcohol use -- which is a huge concern for them.” Another big concern: Those in recovery who have had no access to “live” support meetings for months. That has taken a terrible toll, Winer said. “Unfortunately, folks who were relying on certain services have, unfortunately, relapsed,” she said. “For those that are occasional drinkers or drink socially, you might not think twice about a liquor store being open,” she added. “But when we think about the messages that are getting sent to our youth and our recovery community, I think that can definitely persuade somebody who maybe had been in recovery to start drinking again.” Although the pandemic is easing, there's no way to know when a vaccine will be available and/or the virus will have infected enough Americans (assuming they become immune as a result) to become a negligible threat. That gnawing anxiety of “no end in sight” means the need for counseling and other social services will likely continue to rise. “We will emerge from this in a healthy and safe way,” Winer said. “I think anxiety is bound to be there. But as long as we can lean into the anxiety and not dismiss it, I think we’ll be able to get through this.” In other words, if you need help, it’s there. Don’t be afraid to get it.
  • The cases against three murder suspects have been bound over to Superior Court after an all-day hearing in Glynn County. The three men accused of murdering Ahmaud Arbery are scheduled for probable cause hearings in Brunswick today amid nationwide protests over the killing of another unarmed black man — George Floyd — in Minneapolis.  Travis and Greg McMichael and William “Roddie” Bryan have each been charged with felony murder in the Arbery case, which has drawn national attention and sparked demonstrations. Because of concerns surrounding the coronavirus pandemic, the McMichaels and Bryan will appear by video for their hearings from the Glynn County Detention Center.  Read more on this story at www.ajc.com. 
  • Hoods could fly open on certain Nissan vehicles because of a faulty latch prompting the carmaker to recall thousands of cars for the fourth time.  A coating can flake off the secondary hood latch, leaving bare metal that, over time, can cause rust and cause it to stay open on Altimas built from 2013 to 2018 model years, The Associated Press reported.  If the main latch is not closed, the secondary might not be able to hold down the hood. The first recall for this problem was in 2014. Another was in 2015. Both times, the repair was made by fixing a lever and adjusting the secondary latch. A 2016 recall replaced the latches with new ones.  Nissan does not have a fix yet for the latest recall. Owners will get letters with instructions on how to inspect and maintain the latch. Owners will get another letter when a repair is developed.  A link to the National Highway Traffic Safety Administration where people could check if their vehicle is affected: https://www.nhtsa.gov/recalls The Associated Press contributed to this report.