Managing a Budget During Retirement

Posted on July 12, 2024 by VP of Marketing and Business Development Jessica

Very few people can retire without the stress of worrying about money. If you’re like most people, you’ll face a critical task when you reach retirement to make sure that your assets are able to support you through your lifetime.

Cash flow is king here. Quite simply, you must have enough income to pay for your living expenses. This is no easy task, especially as people are living longer today than ever before.

To help keep you on track and get you to a positive cash flow, there are a few key steps to keep in mind.

First, make a plan. You want to get a clear picture of your financial situation, which includes your projected income and expenses. Start by creating a detailed net worth statement, which will give you a comprehensive overview of your assets, debt, and cash on hand.

Next, assemble an accurate budget that itemizes your income and expenses. If you anticipate any major lifestyle changes after retirement, make these notations. Include your anticipated income during retirement, such as Social Security, pension, and other income streams. Include all of your expenses, prorating them on a monthly basis. When you finish creating your statement, look for any cash flow issues that might arise, and then find areas that will help you improve your income/expense balance.

Revisit your planning tool regularly and readjust the figures if your actual income and expenses change. As you monitor your finances, there are several items that could impact your cash flow in profound ways, including interest rates, tax rates, healthcare costs, and life events. Continually assess and revise your plan as necessary to account for their impact.

By developing and monitoring a budget during retirement, you minimize the possibility of cash flow issues that could otherwise constrain your lifestyle expectations.

For help in planning carefully, look to your financial professional for assistance.

Contact First Financial’s Investment & Retirement Center by calling 732.312.1534 to speak with professionals who can help steer your finances in the right direction. You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

Tracking #1-05363561

5 Points for 5 Years Before You Retire

Posted on April 16, 2024 by VP of Marketing and Business Development Jessica

Retirement is an exciting prospect for many and choosing how to spend your retirement could likely be based on the planning you do today. For example, have you considered your plans for housing, healthcare, and travel expenses? If you are wondering how to get started, here are five points to consider within five years of your retirement.

Estimate your monthly income and allowances. The monthly amount could decline based on a lesser need for extras, but it could also quickly change based on your health or family circumstances, so estimating on the higher side could help. Also, consider readjusting or reallocating your portfolio and evaluating other income-producing and growth investments. And lastly, don’t forget to include any Social Security or Required Minimum Distributions.
Where will you live? Have you considered relocating to a state that doesn’t require as many taxes? Many retirees consider downsizing to lower expenses, or plan to move closer to family to help care for grandchildren or loved ones. Overall, there can be many benefits to living closer to family as you age.
Consider your debt and taxes. Retiring to a lower income tax bracket is possible. Considering a one-time tax hit, moving from a traditional IRA to a Roth IRA could eventually produce a source of tax-free retirement income. But before you make any decisions, talk with a qualified tax professional to see if this move is right for you. Income and age restrictions may apply.
Healthcare costs. Will you apply and be eligible for Medicare and will this cover your present and future needs? It is possible you or a loved one may need long-term care at some point during retirement and this could affect your overall bottom line.
What will you do? How do you dream of spending your days? Will you take time to travel and see the world, or would you prefer to keep closer to home and pick up a new hobby? However you see your retirement, it’s important to make sure your finances can support your overall goals.

Planning for retirement involves setting goals and a defined strategy toward those goals. Whatever your plans are, make sure you have made all of the arrangements beforehand so you can live your retirement years as confidently as possible.

Questions about this topic? Contact First Financial’s Investment & Retirement Center by calling 732.312.1534. You can also email mary.laferriere@lpl.com or maureen.mcgreevy@lpl.com

Securities and insurance offered through LPL or its affiliates are:

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial, LLC

Tracking #1-05363549

Financial Planning and Money Management for Seniors

Posted on February 23, 2024 by VP of Marketing and Business Development Jessica

Navigating the financial landscape in retirement can be challenging. In the transition to living on a fixed income, understanding how to manage money becomes crucial for maintaining a comfortable lifestyle. First Financial is dedicated to helping those approaching or in retirement, gain the financial literacy and planning needed to fully enjoy it. Here are some key areas of focus for managing finances as a senior.

Creating and Managing a Budget

A budget is essential for anyone looking to manage their finances wisely, especially for seniors. It’s all about understanding where your money is going each month – and First Financial’s online budgeting resources can help. By tracking your spending, you can identify areas where adjustments can be made. This could mean finding more cost-effective insurance options or reducing utility bills. It’s also wise to allocate a portion of your income to savings, preparing you for unexpected expenses without worrying about where you’ll need to take that money from.

Digital Finance Management

The digital era offers convenient solutions for managing money and paying bills. Electronic banking tools such as the First Financial Mobile App and online bill payments can help avoid late fees and reduce the need for physical trips to a branch or the post office.

However, it’s crucial to stay vigilant by regularly checking bill accuracy and keeping online security measures up to date. It’s also important to watch out for digital banking scams, which often target seniors. If you’re unsure about a message you’ve received that appears to be from your bank or something isn’t sitting quite right – trust your instincts, don’t give out any personal information, and call your financial institution directly using the number on the back of your card or from their website.

Earning Additional Income

Retirement doesn’t mean the end of earning potential. Many seniors find joy and additional income in turning hobbies into part-time jobs or consulting in their prior field of expertise. It’s important to consider how this extra income might affect your overall financial plan, including taxes and healthcare costs. Consulting a tax professional can help you navigate these considerations.

Document Organization and Protection

Keeping financial records and personal documents secure yet accessible is important for seniors. It’s advisable to store essential documents in a safe place at home and consider a safe deposit box for irreplaceable items. Digital copies of important documents can also provide an additional layer of security and accessibility.

Enhancing Financial Literacy

The journey to financial literacy involves continuous learning and adaptation. Seniors can benefit from resources provided by federal agencies and consumer protection groups, which offer valuable information on managing finances, understanding banking products, and safeguarding against fraud.

Financial literacy is a vital tool for seniors aiming to live their retirement years to the fullest. By understanding how to budget, manage digital finances, and make informed decisions – senior adults can enjoy peace of mind and financial stability. First Financial is here to support you every step of the way with resources and guidance tailored to your unique needs. For more tips on managing your finances and preventing fraud all year long – subscribe to our blog. If you’d like to speak with a financial advisor in the First Financial Investment & Retirement Center, call 732-312-1534 or visit a branch near you.