{"id":5632,"date":"2019-03-11T06:30:16","date_gmt":"2019-03-11T11:30:16","guid":{"rendered":"http:\/\/billlosey.com\/?p=5632"},"modified":"2019-03-11T06:30:16","modified_gmt":"2019-03-11T11:30:16","slug":"midlife-money-errors","status":"publish","type":"post","link":"https:\/\/billlosey.com\/knowledge-center\/midlife-money-errors\/","title":{"rendered":"Midlife Money Errors"},"content":{"rendered":"\n<p><em>If you are between 40\n&amp; 60, beware of these financial blunders &amp; assumptions.<\/em><\/p>\n\n\n\n<p>Mistakes happen, even for\npeople who have some life experience under their belt. That said, your\nretirement strategy is one area of life where you want to avoid having some\nfundamental misconceptions. These errors and suppositions are worth examining,\nas you do not want to succumb to them. See if you notice any of these behaviors\nor assumptions creeping into your financial life.<\/p>\n\n\n\n<p><strong>Do you think you need to\ninvest with more risk?<\/strong> If you are\nbehind on retirement saving, you may find yourself wishing for a \u201csilver\nbullet\u201d investment or wishing you could allocate more of your portfolio to\ntoday\u2019s hottest sectors or asset classes, so you can \u201ccatch up.\u201d This impulse\ncould backfire. The closer you get to retirement age, the fewer years you have\nto recoup investment losses. As you age, the argument for diversification and\ndialing down risk in your portfolio gets stronger and stronger. Diversification\nis an approach to help manage investment risk. It does not eliminate the risk\nof loss if security prices decline.<\/p>\n\n\n\n<p><strong>Have you made saving for\nretirement a secondary priority?<\/strong> It\nshould be a top priority, even if it becomes secondary for a while, due to fate\nor bad luck. Some families put saving for college first, saving for mom and\ndad\u2019s retirement second. Remember that college students can apply for financial\naid, but retirees cannot. Building college savings ahead of your own retirement\nsavings may leave your young adult children well-funded for the near future,\nbut you ill-prepared for your own.&nbsp; <\/p>\n\n\n\n<p><strong>Has paying off your home\nloan taken priority over paying off other debts?<\/strong> Owning your home free and clear is a great goal, but\nif that is what being debt free means to you, you may end up saddled with\ncrippling consumer debt on the way toward that long-term objective. In late\n2018, the average American household carried more than $6,900 in credit card\ndebt alone. It is usually better to attack credit card debt first, thereby\nfreeing up money you can use to invest, save for retirement, build a rainy day\nfund \u2013 and yes, pay the mortgage.<\/p>\n\n\n\n<p><strong>Have you taken a loan from\nyour workplace retirement plan?<\/strong> If\nyou\u2019ve taken this step, consider the following. One, you are drawing down your\nretirement savings \u2013 invested assets, which would otherwise have the capability\nto grow and compound. Two, you will probably repay the loan via deductions from\nyour paycheck, cutting into your take-home pay. Three, you will probably have to\nrepay the full amount within five years \u2013 a term that may not be long as you\nwould like. Four, if you are fired or quit, the entire loan amount will likely\nhave to be paid back by a deadline specified in your plan. Five, if you cannot\npay the entire amount back and you are younger than 59\u00bd, the I.R.S. will\ncharacterize the unsettled portion of the loan as a premature distribution from\na qualified retirement plan \u2013 fully taxable income subject to early withdrawal\npenalties.<\/p>\n\n\n\n<p><strong>Do you assume that your\npeak earning years are straight ahead?<\/strong>\nConventional wisdom says that your yearly earnings reach a peak sometime during\nyour mid- to late-fifties, but this is not always the case. Those who work in\nphysically rigorous occupations may see their earnings plateau after age 50 \u2013\nor even, age 40. <\/p>\n\n\n\n<p><strong>Is your emergency fund now too small? <\/strong>It should be growing gradually to suit your household, and nowadays your household may need much greater cash reserves in a crisis than it once did. If you have no real emergency fund, do what you can now to build one, so you don\u2019t have to resort to a predatory lender for expensive money. <\/p>\n\n\n\n<p><strong>Watch out for these midlife money errors &amp; assumptions. <\/strong>Some are all too casually made. A review of your investment and retirement savings efforts may help you recognize and steer clear of them. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you are between 40 &amp; 60, beware of these financial blunders &amp; assumptions. Mistakes happen, even for people who have some life experience under their belt. That said, your retirement strategy is one area of life where you want [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-5632","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/5632","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/comments?post=5632"}],"version-history":[{"count":0,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/5632\/revisions"}],"wp:attachment":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/media?parent=5632"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/categories?post=5632"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/tags?post=5632"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}