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March 2018

Is the "Spend Safely in Retirement" Strategy Right for You?

MusingsIt's a refrain you hear more and more: Boomers are under-funded when it comes to retirement. The answer may be the "Spend Safely in Retirement" strategy, developed by researchers from Stanford University's Center on Longevity and the Society of Actuaries. According to a recent article in The New York Times, the strategy uses a person's retirement savings to "mimic a steady pension." It includes three steps in combination: Working longer, delaying payments from Social Security, and budgeting withdrawals from retirement savings accounts, such as IRAs or 401(k)s.

Many Boomers already realize they need to work longer, but depending on your anticipated Social Security monthly payment and the total amount available in your retirement savings account, you may be able to work part-time instead of full-time. Even a modest income can help you cover living expenses and offset the need to draw from Social Security too soon. You can draw Social Security benefits as early as age 62, but financial experts advise waiting until age 70, when you are eligible for the maximum amount. (Social Security benefits are based on your work earning history, so the actual benefit amount will vary for individuals.) The key thing to know is that, from age 62 through age 70, Social Security payments increase by 8 percent.

As for your retirement savings, you have likely been accumulating principal and interest in a tax-deferred vehicle. At age 70-1/2, according to current regulations, you must start taking a "Required Minimum Distribution" (RMD) each year, which will be subject to income tax, but presumably at a lower tax rate because your income is now less than during your peak earning years. The RMD is the minimum based on tax regulations, not based on what you might need to live on. That's where the juggling comes in. Steve Vernon, one of the Center on Longevity researchers who came up with the Spend Safely in Retirement strategy, tells The New York Times that a retiree might want to think of Social Security as a monthly "paycheck" that supplements any employment-related earnings, while the annual RMD can be viewed as a "bonus." Whatever way you think of it, it is important to establish a realistic budget you can comfortably live on and see how it matches up with the income you receive from the three sources -- work, Social Security, and retirement savings.

In terms of specific income, the Spend Safely in Retirement strategy will vary widely for every individual or couple, but the strategy is applicable to most people, as long as you can combine some employment income with Social Security income and  payments from retirement savings. Sounds like a sensible way to approach retirement, doesn't it? 


That Hobby of Yours May Make You Some Money

OnYourOwnIf you're looking for a little extra income in retirement but you don't really want to work in a traditional job, the most obvious option is working a gig. The "gig economy" is thriving, with such opportunities as car driving services, home rentals, and freelance jobs. But there is another interesting possibility: Turning that hobby of yours into a money-maker. One recent study indicates that over one-quarter of American entrepreneurs launched startup businesses from a hobby.

If this sounds intriguing, be sure to read "A Beginner's Guide to Monetizing a Hobby" at MagnifyMoney.com. This comprehensive article covers many of the issues related to turning a hobby into a money-making venture, including:

  • Assessing goals
  • Testing your hobby as a business
  • Outsourcing
  • Finding clients
  • Marketing
  • Pricing
  • Common mistakes
  • Tax implications

The article also includes stories of hobbyists-turned-entrepreneurs.

The area in which I live is flush with artists and craftspeople. While the competition is stiff, I personally know two Boomers who retired from traditional jobs and pursued artistic money-making hobbies. One of them, a former business executive, had a passion for working with wood. He learned the craft and started to make small objects, such as pens and Christmas tree ornaments, as a hobby. He turned that into a part-time business. Another person, a former floral designer, had a talent for watercolor painting. She concentrated on painting birds and began to sell her work at craft fairs. People liked the bird paintings so much that she opened a small studio and has become locally recognized for her unique style. She is even being asked to do custom paintings.

Maybe becoming a money-making hobbyist is something you could consider to spark life's second half.    


Podcast Series Focuses on Creating New Ventures Past 50

MediaIf you like hearing Boomers tell stories about how they've added a spark to life's second half, you might want to listen to the podcast series, "Mature Preneurs Talk." Podcast host and over-50 coach Diana Todd-Banks, who lived and worked in the U.S. for 20 years and is now in Australia, interviews folks in their 50s, 60s, and 70s about starting new ventures.

Recent podcasts have featured a reinvention life coach who has done plenty of reinventing of her own, a blind entrepreneur, and a man who went from mortgage broker to massage therapist to becoming a leading authority on reading people. According to Diana Todd-Banks, "Mature Preneurs Talk podcasts connect guests who’ve created a new venture near or after 50, 60, or 70 with an audience who seek new ideas and options for themselves. Whether a much needed community group, business, or other venture, the guests chat about their earlier life through to deciding what to do, the pitfalls, tips, funny bits, and their unexpected health and life benefits, and in doing so, encourage and inspire the audience of all ages to spring into action to transform their life as they have done. The guests are a dynamic group of inspirational people with extremely diverse activities and amazing stories looking to do more with their third chapter of life. And they definitely are doing that! Mature Preneurs guests demonstrate it’s never too late to start something new, or to follow a long held dream. Taking that step can make the next chapter of life the best ever which the guests and the host clearly demonstrate."

Diana adds, "I’m always on the lookout for more intriguing guests over 50, 60, 70 and yes 80, and if any of your subscribers feel they fit the profile they can send an email to: info@lifestyleagency.com.au  In the subject line put:  re Mature Preneurs Talk Guest Info."

You can find the collection of podcasts here: http://maturepreneurstalk.libsyn.com/

 


Half Price eBook, "Let's Make Money, Honey," March 4 - March 10

LMMH book cover-jpg BooksIf you've ever thought about going into business with your spouse, you need to read Let's Make Money, Honey: The Couple's Guide to Starting a Service Business. The book has received excellent reviews from book reviewers and readers alike. It tells the story of how a Boomer couple started a small service business and sold it seven years later. You'll find plenty of advice about what to do and what not to do when starting a business with your spouse. Included are details about planning, financing, outfitting, and launching a service business, as well as operations, marketing, sales, customer service, and managing growth. Useful tools to help couples assess their business interests and business compatibility are also included. 

From March 4 through March 10, 2018, in celebration of "read an ebook week," GuideWords Publishing is offering the eBook edition of Let's Make Money, Honey: The Couple's Guide to Starting a Service Business at half price -- just $3.50 -- if you order it through Smashwords. You can get the book in any format for any device, including a PDF. 

To get your copy at half-price, simply go to: https://www.smashwords.com/books/view/568837  When you place your order, enter the code SAE50 and you'll pay just $3.50 instead of the regular price of $6.99. This offer is only good from March 4 through March 10 at Smashwords so order today!