Personal Finance Blog for Retirement and Investment Advice

Are You Prepared for These 3 Financial Shocks?

In today’s crazy world, it’s crucial to remain vigilant against major financial shocks that often catch people unprepared. Here are three shocks many people will face and strategies to help you safeguard your financial future against them.

Shock #1: Your Social Security Benefits Can Be Taxed

Most people don’t realize that it’s common – even for middle-income folks – to pay taxes on Social Security benefits. 48% of Americans already pay taxes on their Social Security benefits, according to the SSA. And because the cutoff isn’t benchmarked to inflation, more and more beneficiaries will soon be subject to the tax.

Doesn’t it bother you that the government may require you to pay taxes on the money you get from Social Security – a system you paid your hard-earned money into for all those years? It’s like double jeopardy!

But most people also aren’t aware that you can reduce – or even eliminate – the taxes you may have to pay on your Social Security benefits.

How is that possible?

Your retirement income from a Bank On Yourself policy is not included in the income totals the IRS uses to determine whether (or how much) your Social Security check is taxed.

And the earlier you start planning for this, the greater the tax savings you will reap throughout your retirement.

That’s just one of the numerous tax advantages you’ll get from the Bank On Yourself strategy! To find out your bottom-line guaranteed numbers and the potential tax savings you could get by adding this strategy to your financial plan, request a free, no-obligation Analysis here now:

REQUEST YOUR
FREE ANALYSIS!

Shock #2: The Interest Rates You Pay Aren’t Coming Down Soon

Americans are borrowing more than ever on their credit cards, with balances topping $1.08 Trillion for the first time, according to the Federal Reserve Bank. At the same time, an estimated 40% of Americans have drained their pandemic savings to be able to pay for these ballooning bills.

Average credit card interest rates have soared to 24.59%(!), according to Lending Tree – the highest they’ve ever been.

Of course, this assumes you can get approved, and people are increasingly likely to get turned down when they apply – the rejection rate has jumped to almost 22% of applicants!

Meanwhile, delinquencies are at a 12-year high, more people are paying late fees, and if you miss payments, it can cause your interest rate to as much as double!

Even if the Fed does decide to lower interest rates this year, do you really believe that banks, finance, and mortgage companies will give you much of a break anytime soon?

With the Bank On Yourself safe wealth-building strategy…

  1. You can access the equity in your policy whenever and for whatever you want – no questions asked or nosey applications to fill out.
  2. You cannot be turned down for a loan.
  3. You set your own repayment schedule, and if you hit a rough patch, you can skip payments without worrying about collection calls, repossession, or black marks on your credit report.
  4. Your policy continues growing even on the money you borrowed – if your policy is from one of a handful of companies that offer this amazing feature.
  5. You get a competitive interest rate way below market rates regardless of your credit rating. And you can recapture the interest you pay!

Shock #3: Black Swan Events Can Scramble Your Best-Laid Plans

By definition, Black Swan events – like pandemics, global wars, hyperinflation, and weather disasters – are unexpected and supposed to be rare. Yet, we’ve been hit with a whole flock lately, causing the markets to freak out. Do you really think the market will never crash again, or you’ll have enough warning to get out if it does?

Read: Black Swan Events to Watch Out For in 2024

The critical question is: How much does your retirement security depend on the stock market, a beast you can’t predict or control… and that can turn on a dime? If much of your funds are in a conventional retirement plan, the answer is usually “nearly 100%.”

You might take comfort in looking at your 401(k) and IRA account balances after the big stock market rally at the end of 2023 (which was followed by the worst start to a year in over two decades).

But the reality is that you haven’t made a dime until you sell your investments and (hopefully!) lock in your profits. They are paper profits, and while they may make for a temporary high, they aren’t “real” until they are realized.

In contrast, when you look at the annual statement for a Bank On Yourself policy or check your policy values online, the numbers you see represent real money, not just paper wealth. Both your principal and growth are locked in. They don’t go backward, even in a major market crash.

Your money is guaranteed to grow by a larger dollar amount every year, giving you built-in protection from inflation.

You can even know how much money you’d have at any point – guaranteedbefore you decide if you want to move forward with this strategy. Just request a FREE, no-obligation Analysis here to find out:

REQUEST YOUR
FREE ANALYSIS!

Average 401(k) Balances Have Barely Budged in 5 Years

Fidelity Investments, the largest provider of 401(k) plans, just reported that the average 401(k) account balance barely budged in the 5 years since the 3rd quarter of 2018. They increased by only $1,200 from $106,500 to $107,700… less than 1.2% total.

To make matters worse, inflation was a whopping 21% during the same period. (Here’s a great inflation calculator.) That means those average 401(k) accounts needed to be at nearly $129,000 – just to keep up with inflation!

Okay, but what if you waited longer, say 10 years, like the “experts” say you should. On the surface, that looks better. The average 401(k) was $84,600 10 years ago and is now $107,700 (a 27.3% gain). But inflation over that period was 30.45%, so the average 401(k) would have to be at $110,357 today to keep up with inflation.

In 2022, the average 401(k) balance plunged 22.9%, according to Fidelity Investments. As I write, the market has been rallying, but you’d need an increase of almost 30% to get back to where you were… and another 3.5% increase to keep even with inflation in 2023, let alone have a gain. It’s pretty nasty news if 2022 was the year you had planned to retire.

And the typical IRA hasn’t fared any better over the last ten years, according to Fidelity:
Average Retirement Account Balances [Read more…] “Average 401(k) Balances Have Barely Budged in 5 Years”

3 Tips to Unlock Prosperity Through Gratitude this Holiday Season

As Thanksgiving approaches, I want to extend my warmest wishes to you and your loved ones. It’s a time of year when we gather to express gratitude for the abundance in our lives, and I believe that the power of gratitude extends far beyond this special season.

I want to share how gratitude can transform our finances and overall well-being. Here are three tips that highlight the connection between gratitude and financial success:

Tip #1: Focus on What You Have

It’s often said that you get more of what you focus on. Instead of dwelling on what you lack, turn your attention to what you already have. Expressing gratitude for your current financial situation, whether modest or prosperous, can shift your mindset toward abundance. This change in perspective can reduce feelings of financial stress and open up opportunities for smart financial choices.

Tip #2: Be Consistently, Consciously Grateful

[Read more…] “3 Tips to Unlock Prosperity Through Gratitude this Holiday Season”

Should You “Ride Out” the Volatile Stock Market?

Both the Dow and the S&P 500 were back to where they were more than two years ago, as of May 31st. It’s been a stomach-churning roller coaster ride along the way.

The S&P 500, however, has been on a tear, up 10% this year. Maybe you’ve been looking at your investment and retirement account balances and wondering why you’re not seeing that kind of gain.

That’s because just five technology companies drove 96% of those gains!

According to the Motley Fool, nearly half of the stocks in the index were negative for the year on May 31. (MarketWatch just called the S&P 500 “ridiculous” and questioned whether you should bet your retirement on the fortunes of a small handful of stocks.) [Read more…] “Should You “Ride Out” the Volatile Stock Market?”

Is There a Safer Place for Your Money Than in a Bank?

The problems at Silicon Valley Bank, Credit Suisse, and First Republic Bank are fueling anxiety for people who want to make sure their money in banks and money market funds is safe.

Adding to the fear that this may just be the tip of the iceberg is that banks borrowed a record amount from the emergency last-resort support the Federal Reserve set up in the last week.

So, it’s not surprising people want to know how safe their money is in a Bank On Yourself plan. Read on for the answer. And, since you must “park” your money someplace, I’ll also explain why you would be hard-pressed to find a safer, more advantageous place to put your dollars – in good times or bad – than in a Bank On Yourself plan. [Read more…] “Is There a Safer Place for Your Money Than in a Bank?”

Why “10 Times Your Income” Isn’t a Smart Retirement Goal

ChatGPT has been making headlines since it launched last year and gained 1 million users in the first week.

If you’re not familiar with ChatGPT, it’s an artificial intelligence computer program that generates human-like answers to almost any question you ask.

So I decided to conduct a little experiment and ask it a simple question:

How much do I need to retire?”

Here’s what the “robot” told me:

 ChatGPT's answer to how much money you need to retire [Read more…] “Why “10 Times Your Income” Isn’t a Smart Retirement Goal”

The 5 Biggest Financial Threats You Face in 2023

As the New Year gets underway, it’s good to set goals and make plans – but it’s also important to review the biggest threats you face.

Here are the top 5 threats to your financial future in 2023…

Threat #1: 2023 Recession

If you had money in the stock market, you know how bad 2022 was. The S&P 500 lost nearly 20%, and the average 401(k) lost 22.9%. Seeing one-fifth of your life savings vaporize in a single year is a hard pill to swallow.

And after having the worst year in the markets since the 2008 financial crisis, it’s only natural to want to put that behind us and move on. However, what we want to happen and what is happening are two different stories. Economists surveyed by Bloomberg see a 70% chance of a recession in 2023 – which means it’s very likely things will get worse before they get better.

Threat #2: High-Interest Rates

[Read more…] “The 5 Biggest Financial Threats You Face in 2023”

The Secret to Eliminating Your Financial “Icks” in 2023

Two-thirds of Americans intend to make a financial New Year’s resolution for 2023, but only 20% are confident they’ll be able to keep their resolution.

That’s according to a new survey from The Ascent, a Motley Fool service. It’s not surprising why. It’s been a very challenging year, and everybody’s got a case of the financial “icks.”

In a year that many would just as soon forget, a few of the “low lights” include…

A Majority of People Worry about Money Daily, and Many Lose Sleep Because of It

[Read more…] “The Secret to Eliminating Your Financial “Icks” in 2023″

Social Security’s Big Cost of Living Increase (COLA) Means MORE Taxes to Pay

I just turned 70…

Which means I’ll be receiving a special “birthday gift” from Uncle Sam for the first time.

Happy Birthday Pamela

Yes, I’m talking about my first Social Security check.

Even though I could’ve started taking Social Security eight years ago, I decided to wait until now since I’m still working and don’t need the money now.

Which is great because now I’ll get the maximum amount possible.

So, I’m glad I waited…

And I was even happier when I heard that in January, we’ll see an 8.7% increase in our Social Security checks with the cost-of-living adjustment (COLA) – the largest increase since 1981.

On the surface that sounds like great news, right? I mean, who wouldn’t want a bigger Social Security check?

However, the devil is in the details, especially when it comes to retirement income, government benefits, and taxes!

[Read more…] “Social Security’s Big Cost of Living Increase (COLA) Means MORE Taxes to Pay”

Are “Termites” Destroying Your Financial Foundation?

Chomp… Chomp… Chomp…

That’s the sound of termites destroying your financial foundation.

But most people aren’t aware it’s happening. And it’s claiming more victims than you might think.

Of course, you’re aware of how inflation is eating away at the value of your dollars. You feel it at the grocery store, the gas station, when you pay rent, and just about everywhere you look.

But, if, like many Americans, you own a term insurance policy, personally or through your workplace, it might not even be worth the paper it’s printed on when you need it.

Inflation has been running at a 40-year high, currently around 9% per year. But let’s say the Federal Reserve gets it right and brings inflation down to 4% annually in the next few years.

Imagine that you have a $500,000 20-year term policy. In the event of your death, the benefit your loved ones would receive will lose up to 56% of its purchasing power.

[Read more…] “Are “Termites” Destroying Your Financial Foundation?”