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| 11 of the Easiest Ways to Protect Your Retirement Money Posted: 05 Jul 2022 09:39 AM PDT It's no secret that it's hard to plan for retirement. In addition to growing a sizeable nest egg, you must protect it from external factors like market volatility, inflation, and unforeseen expenses. And, to be brutally honest, that's been tough as of late. Northwestern Mutual's 2022 Planning & Progress Study shows that personal savings are down 15% from $73,100 in 2021 to $62,086 in 2022. Moreover, 60% of American adults say the pandemic is "highly disruptive" to their finances. In the midst of the pandemic, though, Americans saved around $2.5 trillion. Unfortunately, those cash reserves are drying up as people use them to deal with 40-year-high inflation. According to a Forbes Advisor survey, two-thirds of Americans are raiding their savings because goods and services are so darn expensive. That said, planning to retire comfortably means securing your savings and assets. While that can be overwhelming initially, here are the 10 easiest ways to protect your retirement money. 1. Develop a financial forecast for retirement.Calculating how much cash you'll need for each year of retirement can help you save a bigger-than-expected nest egg. "Nowadays, if you retire at 65, you should have a financial plan for 20 years," Tenpao Lee, a professor of economics at Niagara University in New York, told U.S. News. Because your funds will need to last through these decades, you may want to consider 401(k) and IRA withdrawals as your new paycheck. Those amounts, plus your Social Security benefits, can cover your daily expenses. Developing a retirement budget can prevent you from overspending, incurring debt, or exhausting your savings. 2. Make use of your retirement savings to bridge the Social Security gap."Use your retirement savings to fund a Social Security bridge strategy, advises Steve Vernon, president of Rest-of-Life Communications. "Doing so can significantly increase the amount of Social Security income you'll receive over your lifetime by enabling you to delay the start of your benefits as long as you can." However, delaying further than 70 doesn't offer any benefits. You can also bolster your retirement income with a Social Security bridge plan. How? Vernon explains that you can convert easily accessible savings –a target for fraudsters- into a guaranteed income stream from the government. 3. Diversify your retirement portfolio.As the adage goes, don't put all your eggs in one basket. Make sure you're spreading your investments out between stocks and bonds. You should also take your risk tolerance into account when choosing your investments. More specifically, your retirement portfolio should contain high-yielding bonds and dividend-paying stocks. It is generally recommended that your investments should become less risky the closer you get to retirement. You can spread out the risk by investing in different things, which will give you a more stable allocation of your assets. Also, look for other ways to make money besides bonds and stocks. Many people seek additional income streams and new opportunities even in retirement. Examples include freelancing, working from home, and passive income sources like rental properties. 4. Choose your asset mix carefully."It's essential to think about your asset mix, which simply means the different types of investments that go into your portfolio," recommends Jordan Bishop in a previous Due article. "For example, investing in stocks may help you grow your retirement fund faster, but if they drop substantially, you could also see plenty of losses." That's why you've got to choose your assets carefully. Also, ensure that your portfolio includes a combination of investments. How can you choose the right assets? First, invest in stocks when you're young. "When deciding how to allocate your funds, a general rule of thumb is that the younger you are, the more you can invest in stocks," adds Jordan. Since stocks offer much higher returns than other assets, they have always tended to rise in value. But, if there are any losses, you have time to recoup. Secondly, choose safer investments as you get older. "Investing in low-cost index funds will provide you with an average return without taking on too much risk," Jordan states. "But if you really want to reduce risk as much as possible, investing in bonds or bond funds rather than stocks or stock funds is the way to go." 5. Keep some cash on hand.Almost all financial planners say you should hold on to at least some stocks in order to avoid outliving your assets. However, retirees need to be more careful with their investments. Unlike younger investors, they don't have long time horizons. Professionals say you should keep five years' worth of expenses in cash as a safeguard. Lucky, those with that kind of cash have had enough extra to work toward a goal like that. Alternatively, you may use cash equivalents, such as short-term bonds, certificates of deposit, and Treasury bills. You should be able to keep most of your expenses stable once you retire. But that doesn't mean you're free from the unexpected. For example, how would you cover a home repair or medical emergency? Working overtime is no longer an option. So, will you use a credit card or tap into your savings? Moreover, if market conditions temporarily cause your investments to fall, you should not withdraw money from them. If you're worried that inflation will grow and erode your purchasing power, consider holding some "cash equivalents." These typically take the form of Treasury Inflation-Protected Securities. TIPs have a fixed interest rate, but their par value increases with changes in the Consumer Price Index. In other words, if inflation hits 5%, your investment will grow too. With a TIPS, the inflation adjustment component keeps the principal's purchasing power intact. However, you'll lose inflation adjustment money if we enter a period of deflation after buying TIPS. 6. Prepare yourself for inflation.Speaking of inflation, the cost of living rose by the most in 4 decades in 2022. And, suffice to say, a lot of us are struggling. "Nearly half of Americans (45%) polled by Gallup last year admitted inflation caused financial hardship at a time when the CPI was just 6.8%," writes Pierre Raymond in a Due article. "Moreover, of those that reported facing difficulties, 10% revealed their challenges impacted their standard of living." "While the Federal Reserve claims inflation's bubble will pop soon, experts anticipate the CPI won't fall below 4% by the year's end," he adds. "That means you can expect another year of high inflation bumping up prices." Updating your budget with inflation in mind.There is, however, a silver lining. You can use the following techniques to stop inflation from deflating your savings.
7. Don't overlook healthcare and long-term expenses.According to a Fidelity Retiree Health Care Cost Estimate in 2022, a retired couple would need around $315,000 saved (after tax) to cover health care expenses in retirement. However, with people more likely to live longer, they will need to pay even more down the road. So, keep that in mind when constructing your retirement plan. And, to make matters worse, this figure does not include long-term care (LTC) costs. You might want to set aside a separate fund for long-term care costs to secure your retirement income. Additionally, you should consider long-term care insurance. This could help protect seniors over 65 who may suffer from disabilities, chronic conditions, need nursing care, and home health care. Also, if you have an annuity, ensure you attach a long-term care rider to cover these expenses. There are also stand-alone LTC annuities if you're interested. 8. Have a plan for taxes.Individuals don't always understand how taxes can impact their retirement savings and assets. Capital gains, inheritances, and estate taxes can heavily reduce your retirement fund. In turn, this reduces your savings. That's why, when planning for retirement, consider all the taxes that your savings, assets, and income may be subject to today and tomorrow. Consulting a financial advisor for direction is also strongly recommended. 9. Rethink target-date funds.Target date funds provide an investment mix of stocks, bonds, and cash based on the age you plan to retire. As you approach retirement, the fund will automatically adjust its mix to become more conservative. However, some people use them wrong, says Mike Gray, a CAPTRUST financial advisor. Suppose they plan to retire in 2045. Instead of purchasing a fund for the year, they put a little bit of money into a fund for the year 2030. Why? They think that'll be safer. Following that, they put some money in a 2060 target-date fund, which is more aggressive. "The combination of those choices may not be as effective as choosing the single right target-date fund. So you need to put it in one fund based on your planned retirement age and stick with it," he says. But, that's not the only problem with target-date funds.
10. Avoid excessive withdrawals.Your retirement income can be at risk if you spend your funds too fast. As such, it is prudent to withdraw your funds slowly toward the end of your working life. Furthermore, it's essential to know that 401(k)s, traditional IRAs, and even Roth IRAs have different rules, taxes, and withdrawal rates. These rates and taxes can severely eat away at your retirement savings if you don't take measures to minimize them. Because of that, it's a good idea to be mindful of them and plan withdrawals accordingly. In short, you may derail your retirement planning if you withdraw too much from your retirement account. 11. Buy an annuity.When facing an income-expense gap, consider an annuity. Annuities provide lifelong guaranteed income. You can therefore manage your money throughout retirement more effectively. When you buy an annuity, you sign a contract with an insurance company. This company assumes the risk of a series of payments over the years in return for a lump-sum investment. However, some annuities can be purchased over a series of payments. Although you can specify an exact timeframe — like for 20 years — you'll receive monthly payments for the rest of your life. With a fixed annuity, you'll also know what you'll be getting. For instance, with Due, you get 3% on your money — no matter what. At the same time, it's often suggested that you wait on an annuity until you've maxed out your other retirement accounts. Frequently Asked QuestionsHow much money do I need to retire?There are several factors that determine the amount you need. It depends on your age at retirement, how long you live, and how much money you get from pensions or Social Security. If your spending needs are more than your retirement income, you'll have to take withdrawals from your retirement fund to fill the gap. The most important factors are how much you're withdrawing, for how long, and any earnings or losses on your savings. How much can I contribute to a retirement account?Contribution limits for retirement accounts are often increased annually. For example, a person's contribution limit to a qualified individual retirement account (IRA) in 2022 will be $6,000 ($7,000 if you are 50 or older). Individuals can contribute up to $20,500 to a traditional 401(k) in 2022. People over 50 can make a catch-up contribution of $6,500 per year — making their total $27,000. There are no contributions with annuities. What happens if I take money out of my retirement account early?When it comes to retirement accounts, you can't withdraw money until you're age 59 ½. The early withdrawal penalty is 10%, plus any taxes due. Are there taxes on retirement account withdrawals?In most cases, yes. Taxes are deferred on IRAs and 401(k)s. This means you put money into the account before taxes and could deduct it in the year you funded it. Therefore, you'll be taxed on withdrawals in retirement at your current tax rate. On the other hand, Roth IRAs are tax-free because they're funded with after-tax money. What is the best way to invest my retirement savings?It's crucial to avoid significant losses in your early retirement years (and years leading up to it). If you withdraw money with a low balance, you'll run out of money sooner than expected. But that doesn't mean you shouldn't risk it at all. Your retirement will hopefully last a long time. However, prices will rise over time, and your account balances may need to grow to keep up with inflation and fund a lifetime of income. Unfortunately, you might not produce enough if you put your money into low-yielding safe investments. It's hard to find that balance. And it's easy to get fooled by too-good-to-be-true investments. But on the other hand, many people can fund a comfortable retirement with a diversified mix of low-cost mutual funds or exchange-traded funds. Ultimately, you must figure out how to spread your money among these investments. And depends on your risk tolerance and financial situation. Image Credit: Andrea Piacquadio; Pexels; Thank you! 11 of the Easiest Ways to Protect Your Retirement Money was originally published on Due by John Rampton The post 11 of the Easiest Ways to Protect Your Retirement Money appeared first on KillerStartups. |
| 8 Practical Ways to Make Your Startup More Autism-Friendly Posted: 05 Jul 2022 08:24 AM PDT With autism awareness on the rise, more and more organizations big and small are starting to incorporate it into their plans. While the WHO reports that 1 in 100 children live with autism, underdiagnosis in adults (particularly in women) means that the real number of people who live with ASD remains an open question. Long story short, what this means is that there are decent odds you may end up employing somebody who lives with autism at your startup. This isn't a bad thing at all – people with autism bring a unique set of skills and experiences to the workplace, and are perfectly capable of helping your startup reach dizzying new heights as it grows. However, as with any other disability, people who live with autism often need special accommodations and support to thrive in the workplace. And that brings us to today's question: how exactly can you create a more autism-friendly environment at your startup? Luckily for you, that's exactly what we're going to go over today. There are many ways to support an employee with autism, many of which you can immediately action with relatively little expense. Busting Autism Myths: What Is Autism, Exactly?While autism awareness may be on the rise, unfortunately, it's hampered by the continuing presence of many autism-related myths. Before moving on to how you can support team members who live with autism, it's good to start by learning exactly what autism is, and how it affects those who live with it. Autism is not a single condition. Rather, it is a spectrum of different conditions that an individual's ability to process information, communicate, build relationships, regulate emotions, and more. In addition to these more commonly-known effects, however, autism affects almost all brain functions. That's because autism is a lifelong condition that affects brain development and function, which impacts everything from the way they process information, to how they experience the world, to how they problem-solve. Important to note is that it does not automatically mean that everyone who lives with autism has an intellectual impairment. It's important to remember that autism is a spectrum – those who live with ASD can run the gamut of intelligence. Not to mention, people on the spectrum bring plenty of unique skills and experiences to the table, which your startup can benefit from. How to Support Employees Who Live with Autism: 8 Practical Steps You Can Implement at Your Startup1) Bust Myths and Get Your Team OnboardEven the most accessible workplace won't be very welcoming if the rest of your team isn't getting with the program. One of the first things you should do when onboarding a team member with autism is building an environment where everyone understands and accepts their condition. Consider giving a crash course on:
In particular, it's important that you try your best to educate the rest of your team about what exactly autism is and how it affects their colleague. Many people still hold on to outdated preconceptions about ASD and those who live with it, so one of the first things you should do is start busting myths. And finally, be sure to quickly stamp out any signs of discrimination you see. Make it clear that it will not be tolerated whatsoever. Luckily for you, as a startup your organization is young and its corporate culture isn't set in stone just yet, making this much easier than at a large company. 2) Beware of BurnoutExhaustion, fatigue, and burnout can affect all of us. As the owner of a startup, you're no doubt familiar with what this feels like. Plus, why it's so important to avoid burning yourself out. People with autism are more susceptible to suffering from burnout. There are two main reasons for this: 1) Many people who live with autism get by using "masking" strategies to navigate a world designed for neurotypical people. This can mean managing emotions, suppressing behaviors, and remembering scripts that mimic neurotypical behavior. 2) Accumulated stress if their daily life doesn't provide enough support or accommodation for their specific needs. Both of these can be exhausting on a day-to-day basis and contribute to autistic burnout. If a member of staff lives with autism, one of the best things you can do is be understanding. Talk to them about the most likely triggers for burnout, be generous with time off, and develop coping mechanisms together such as giving them a private space where they can decompress if needed. 3) Be Accommodating of Sensory IssuesOne of the most common symptoms of autism is sensory processing. In particular, many people who live with ASD experience heightened sensitivity to light, sound, sensations, and more. Needless to say, these can be extremely disruptive without suitable accommodations in the workplace. Fortunately, accommodating a sensory sensitivity is relatively straightforward: items like earplugs, noise-canceling headphones, and sunglasses can all go a long way towards making things more bearable. However, over-sensitivity isn't the only issue. People with autism may experience under-sensitivity. In some work environments, this can pose a health risk – for example, an employee with autism may not wear hearing protection and damage their hearing as a result. In both cases, it's important that you talk with your employee to understand how sensory information affects them, and provide tools to block things out. 4) Rethink Your Approach to CommunicationCommunication is much more than just verbal – every day, we rely on plenty of other tools without even realizing it:
In many cases, autism can affect an individual's ability to interpret these parts of communication. While it can be tough to reduce your reliance on these tools, doing so can make things considerably easier for people who live with autism. As we all know, however, communication is a two-way street. In addition to affecting their ability to understand you, many people who live with autism also communicate differently. They might avoid eye contact, be blunt, or take longer to form a verbal response. This is just how a lot of people with autism communicate, it doesn't mean they're trying to be rude. Of course, all of this is a massive oversimplification. The fact of the matter is that each case is unique, and many autistic people have worked hard to overcome communication challenges. Don't make assumptions – one of the best things you can do is to sit down with the employee in question and talk to them about how your communication needs to change. 5) Think About Setting Up a Buddy SystemYour startup might have a buddy system for onboarding new hires. But what about a buddy system for team members who live with autism? A buddy or mentor can help a team member with autism work through situations and issues as they arise. Also, they can act as a middleman with other members of staff. They can also help resolve potential misunderstandings and issues before they have the potential to snowball into something much worse. It's a little thing, but it can help reduce anxiety, stress, and confusion. It can make working for you a lot more pleasant for team members on the spectrum. 6) Talk to the ProfessionalsFor something as complicated and multifaceted as autism, there are a lot of different considerations to keep in mind. There's nothing wrong with talking to a professional about it. There is a huge range of different support services that specialize in autism. For example, occupational therapy for autism focuses on identifying hurdles in the workplace. It provides tools and strategies to overcome them. Some people who live with autism may have specialists who support them with their condition. For example, occupational therapy for autism provides support by identifying hurdles in everyday life and providing tools to overcome them. Others can include information and advocacy groups, which can provide training to help your team understand how to properly accommodate colleagues on the spectrum. 7) Provide a Routine at WorkRoutine is important to people with ASD. Many people who live with autism prefer to have a predictable routine, both at home and in the workplace. Understanding this and taking measures to provide said routine is something any business can do, startup or otherwise, to support employees with autism. It can be as simple as setting up a timetable and respecting any routine that your employee has set for themselves. For example, if they have a set time for lunch, do your best to respect it. Avoid scheduling meetings or appointments that clash with it when possible. 8) Be a Good BossKeep tabs on your team. Make sure they're holding it all together. Collaborate with them to work through issues. If you want to build a positive corporate culture at your startup, these are the essential building blocks. Team members who live with autism need this type of support just as much as the more tangible accommodations and accessibility features. In fact, in some cases it's even more valuable – for example, people with ASD are more vulnerable to certain health problems In summaryAutism is a criminally underdiagnosed condition. However, it doesn't automatically mean that people living with it aren't valuable additions to the workplace. On the contrary, people with autism can be valuable additions to your startup. They bring new skills and perspectives that can help you grow. And all they need in return is a little bit of support to make it possible. The post 8 Practical Ways to Make Your Startup More Autism-Friendly appeared first on KillerStartups. |
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