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Latest from Wes Moss Bio

    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! Why you should ignore that Facebook cell phone ‘Do Not Call’ list warning Scam alert: Beware of phone calls from these 9 area codes Related Articles from clark.com: Vegetables sold at Aldi, Walmart, Trader Joe’s recalled over listeria fears Read More Employees reveal 7 secrets about shopping at Trader Joe's Read More How to cancel private mortgage insurance years ahead of schedule Read More
  • 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
  • In today’s fast-paced world, time is a precious commodity. That’s why outsourcing daily tasks is big business. But is there more to these services than dollars and cents? Can paying someone else do your food shopping actually make you happier? Think about the services we now have at our virtual fingertips: SHIPT (for groceries); Uber (for transportation); Hello Fresh and Blue Apron (for meal prep delivery); Wag (for dog walking); TaskRabbit (for things like putting together Ikea furniture and setting up electronics); and Amazon (for shopping for everything from home goods to apparel to power tools from the comfort of your couch). Add on other decades-old services, like housekeeping, lawn maintenance, and home repair and upkeep contractors for things like painting walls and cleaning gutters. You see what I mean. For so many of us, outsourcing is money well spent because it frees up one of modern life’s scarcities – time. It’s about reclaiming time to do the things we want, and paying someone else to do the rest. RELATED: 11 hourlong gigs you can do to make extra money This isn’t a new concept; it’s a fresh take on an old classic. In the 1700s, economist Adam Smith put forth the notion that efficiency is a surefire way to business success. So, is “life efficiency” a path towards greater life success, or happiness? Intuitively, it seems like the answer is yes. You don’t have to take my word for it. Science suggests that opening our wallets to save time may reduce stress about the limited number of hours in a day, and therefore improve our overall happiness. What’s more, folks who instead use their money to buy new material goods did not have the same increase in overall happiness and contentment. In a recent research article published in the Proceedings of the National Academy of Sciences, author Ashley Whillans, a Harvard Business School professor, found that folks who spent money to buy themselves more time – by using services for everyday tasks like the ones above – reported greater life satisfaction. The research was based on surveys of almost 4,500 people across the U.S., Canada, Denmark and the Netherlands. Results from the data showed that paying for services like delivery or takeout food, a cab ride, housekeeper help, and paying someone to run an errand resulted in decreased daily stress and increased happiness. One interesting finding was that it didn’t matter if the respondents were wealthy or had lower incomes – everyone benefited from buying time, no matter where they fell on the income spectrum. To me, it makes sense. Say you hire a housekeeper. That’s a handful of hours freed up from weekly cleaning duties that are now completely yours. When we put our money to use for us in this way, we turn time doing things we don’t enjoy into an opportunity to focus more on the things we love. We are, in essence, buying ourselves more time, more freedom. And we can turn this purchased time and freedom into more happiness for ourselves. Of course, we don’t have to outsource everything on our to-do lists. Some of us may enjoy grocery shopping and cooking, while others love working outside in our yards and gardens. We can take what we like and outsource the rest. To determine if there is a direct cause-effect relationship between buying time and happiness, the researchers conducted another simple experiment. They provided study participants with $40 for two weekends to spend. The participants were told to either use the cash for material purchases or for outsourcing. At the end of the day after spending the money, these folks were asked to record their mood. The result? Those who spent the money to save time reported reduced time-related stress and increased well-being. Those who used the money on material goods did not report those same feelings. Ready to start outsourcing your life tasks? I know I am. Before you hop online to offload all of the day’s mundane chores, there is one important question to consider: When does it make economic sense for me to pay someone to do a task, and when is it better to do it myself? Or, put another way, just how much is my time worth? Don’t break out the calculator just yet. There are plenty of online tools that help folks calculate exactly how much their time is worth. You can try one, or you could do a rough sketch, like this one from Tim Ferris, author of The 4-Hour Workweek, “If you chop three zeros off of your income and halve it, that’s roughly your hourly income. So, if you make $50,000 per year, you make approximately $25 per hour. For far less than that, you will be able to outsource nearly anything in your life that you dislike.” The old saying goes, time is money. Why not figure out how much yours is worth and then decide when it’s worth it to hire help? If you’d rather binge on Netflix while the teenager next door makes $20 cutting your yard, do your thing. I’ll be at home waiting for my Instacart order while my housekeeper finishes up. Why you should take all of your vacation time Related Articles from clark.com: Travelers from 9 states will need passports for domestic flights in 2018 Read More Social Security benefits are getting another boost in 2018 Read More Vegetables sold at Aldi, Walmart, Trader Joe’s recalled over listeria fears 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.

    Read More

News

  • A man is facing murder charges after authorities in England discovered dozens of bodies in a truck container in Essex, police said. >> Read more trending news  According to the BBC, the bodies of 39 people, including 38 adults and one teen, were discovered early Wednesday at an industrial park in Grays. Police arrested the truck's 25-year-old driver, a man from Northern Ireland whose name was not released, in connection with the deaths, the network reported. North Essex police Chief Superintendent Andrew Mariner called the incident 'tragic,' The Associated Press reported. “We are in the process of identifying the victims; however, I anticipate that this could be a lengthy process,' he said, according to the news service. Investigators said the truck, which came from Bulgaria, arrived in England on Saturday. Read more here or here. Please check back for updates to this developing story.
  • Registered sex offenders in Butts County, Georgia, are suing to stop the Sheriff’s Office from putting signs in their yards to discourage trick-or-treaters ahead of Halloween. >> Read more trending news  The suit, filed in U.S. District Court in Macon, asks the court to order the agency to stop the practice, which began last year with deputies planting signs that read: “NO TRICK-OR-TREAT AT THIS ADDRESS!! A COMMUNITY SAFETY MESSAGE FROM BUTTS COUNTY SHERIFF GARY LONG.” Deputies put up some of the signs while others among the county’s 200 registered sex offenders were told to display one themselves or face unspecified trouble, according to the complaint. A hearing is set for Thursday at 9:30 a.m. for a judge to decide whether to bar the signs this year. Long intends to fight for the signs. The sheriff said his agency decided to put up the warnings last year because the “Halloween on the Square” event in Jackson had been canceled, causing more children than normal to go door to door for their candy. “Regardless of the Judge’s ruling this Thursday,” the sheriff wrote on Facebook, “I WILL do everything within the letter of the Law to protect the children of this Community.” The suit — filed by registered sex offenders Christopher Reed, Reginald Holden and Corey McClendon — said deputies had violated the law by trespassing to put up signs without permission. The plaintiff’s attorneys, Mark Yurachek and Mark Begnaud, argue that forcing the men to leave the signs up in their yards was tantamount to “compelling speech,” which runs afoul of the U.S. Constitution’s First Amendment. The suit also seeks a trial and for a jury to award the plaintiffs compensation for the stress, fear and humiliation the signs caused last year.
  • With drive and charisma, he helped transform a game': That's the reasoning behind the U.S. Postal Service choosing golfer Arnold Palmer to honor with a new stamp. >> Read more trending news  According to agency officials, the stamp features an action photograph of Palmer at the 1964 U.S. Open at the Congressional Country Club in Bethesda, Maryland.  According to the Golf Channel, Palmer won seven majors and had 62 PGA Tour wins. He was the first golfer to receive the Presidential Medal of Freedom and 'was the most beloved golfer of all time.' The Palmer stamp is part of a new collection issued for 2020. The Postal Service said it celebrates people, events and cultural milestones unique to U.S. history each year with new stamps. The 2020 crop includes stamps featuring the Lunar New Year, a heart, journalist Gwen Ifill, wild orchids, the state of Maine, the Harlem Renaissance and more.
  • The daughter of gospel recording artist and songwriter Micah Stampley has died at age 15. >> Read more trending news  Mary Stampley died Tuesday after a seizure. No other information was available about her health history. The singer, who has been nominated for several Dove and Stellar Awards, lives in Fayetteville, Georgia. He and his wife, Heidi, own a cafe, Orleans Brews and Beignets. Stampley’s 2005 debut CD, “The Songbook of Micah,” debuted at No. 3 and included hits like “War Cry” and “Take My Life.” Arrangements are pending. 'Please keep their family in your prayers and respect their privacy as they deal with this traumatic event,' spokesman David Robinson said in a statement.
  • A woman is recounting a terrifying and vicious dog attack at a park in Pineville, North Carolina, Monday and when police tried to seize that dog, the owner took off, leading police on a slow-speed chase for miles.  >> Read more trending news  Abryana Heggins said she remembers all the thoughts that were rushing through her mind as a huge dog attacked her at a Pineville dog park.  'I just kept thinking 'What's happening? Why is this happening? How am I gonna get this dog off of me,'' Heggins said.  She said it all started when a very large dog owned by Terilyn Jackson started attacking a husky in the park.  'At first, he grabbed the husky by the back of its neck and then, grabbed its tail and started shaking its head aggressively,' Heggins said. 'The woman got a whistle and blowing at him.' She and her friend Jaylen rushed to get their dogs out of the park, but suddenly, she said she felt pressure on her arm.  'I just ended up being dragged across the ground by the dog, and he started shaking and locked onto my arm and there's people yelling, and she's yelling and Jaylen is trying to rip the dog off my arm,' Heggins said.  Her friend jumped on top of the dog and fought it until Pineville police arrived. Officers told Jackson they needed to take her dog into custody, but they said she took her dog and drove off.  Officers turned on their lights and sirens and followed her. They said she drove the speed limit the entire time, but refused to stop.  At one point, they said she tried to hit their patrol car. Six miles later, she arrived at an animal hospital on Archdale Drive in Charlotte.  Eventually, police arrested Jackson.  'I could have been an 8-year-old or a child and that would be worse than what I got or Jaylen,' Heggins said. Her friend Jaylen suffered several bites and broke a finger during all of this.  The dog is under what is called a 'rabies quarantine.' Animal control officials are monitoring it while police look into its background and decide if it should be put down. 
  • Pete Burdon received a call from his daughter about a post circulating on Facebook that was getting a lot of attention.  >> Read more trending news  Gunnery Sgt. John Guglielmino, a Marine Corps veteran from Clay County, Florida was sick in the hospital and his daughter’s final plea was to get as many visitors as she could to say goodbye to her dad.  “I contacted her right away and I said would this be a good time to go over there,” said Pete Burdon, a retired Navy civilian who spent 37 years working with the Navy. Burdon said he responded to the call because it felt like it was important to say goodbye to a fellow veteran, even if he didn’t know him personally. Last week he gave him a hat and a hero’s salute. “When I joked with him you can see that he tried to smile and then he tried to salute after he put that hat on, that was really a touching moment for me,” Burdon said.  His daughter Katherine Boccanelli told me her father served three tours in Vietnam. She said he suffered a stroke back in April and he was diagnosed with cancer from exposure to Agent Orange. She didn’t want him to feel alone with his last few days on earth so she put the post out on social media.  What she didn’t expect was to see the outpour from the community.  “For her it was a step she didn’t know was going to happen when she put it out there, about a 100 people showed up in that short time,” Burdon said.  Burdon says he said goodbye to Guglielmino in the hospital and he’ll be there tomorrow to say his final farewell at the funeral.  The funeral will be Wednesday at 11 a.m. at Crossroads to Victory Church in Raiford, Florida.  Guglielmino’s family says any veterans who visited who wanted to come out and pay their respects are welcome to attend. To contribute to the funeral services, click here.