Posts Tagged ‘midlife millionaires’
Last week, we began updating our financial plan, and I asked you some questions about your personal retirement plan. Did it get you thinking? With over 80% of Americans planning to work at least part time in retirement to supplement their pensions, Social Security and savings, the idea of retiring to something – not from something™ is catching a lot of attention.
I am a huge fan of doing something you are passionate and talented at create income in retirement.
For the last 10 years, I have been telling people that are planning on living off their savings, that the most they should consider pulling from their investments to create income is 4% a year if they would like it to last for at least 30 years.
- This means that if you have $1 million saved at age 65, you would only want to pull $40,000 per year or $3500 per month.
- Well according to David Blanchett, head of retirement research at Morningstar Investment Management, “We have to question that 4% assumption“. He says that withdrawal rate would only give clients a 50% chance of their assets lasting 30 years. A 2.8% annual withdrawal rate is more realistic, he adds.
What this means is that if you have $1 million in assets, you should only be pulling $28,000 per year to make sure it lasts at least 30 years. This is certainly not a millionaire lifestyle!
I am not saying stop saving. By all means, continue to build up not only cash reserves, but start maxing out your 401(k) savings and IRAs. You are going to want to have as much cash as possible, so continue to invest.
The secret to building this type of retirement plan is starting early, so you can take advantage of the “time-value” of money. For example, to save $1 million by age 65 (assuming a very generous 10 percent annual rate of return), take a look at the different amounts you would need to save, depending on how late you started to invest in your savings:
Age Daily Savings Yearly Savings
20 $4.00 $1,460
30 $11.00 $4.015
40 $30.00 $10,950
50 $95.00 $34,675
What do you do if you don’t have “The Gift of Time” on your side? Then I suggest your access “The Gift of Experience“. By the time we are in our 50s, 60 and 70s, we all have amazing wisdom and experience that we can leverage to create income to supplement our retirement income. The key is finding out what we are passionate at and skilled at, and then creating a smart plan to generate income.
So why did I suggest last week was to “find your stuff” and to get organized?
- I want you to pull all your investment statements, pension statements, your social security statements so you can see what you have.
- Once you see what you have, you can work with a financial advisor or a financial calculator to see how much you will have out into the future.
- By doing this, you will be able to see how much you need to earn to create the lifestyle you want.
The key is to start somewhere. See where you stand today based on where you are. Then you can create a strategy. My strategy is to spend my winters living in Costa Rica or Panama where the cost of living is very low, and I can lead my retreats which I love, and have access to high quality health care at a fraction of the cost of what we pay here.
The old paradigm: “Retirement” is when you have enough INCOME and ASSETS so working is optional and retirement is affordable.
The new paradigm: “Retire to Something – Not From Something” by creating lifetime income (preferably passive) doing something you love to supplement your pensions, Social Security and savings.
Next week, let’s talk about different retirement income strategies. In the meantime, try to get a “picture” of what your retirement goals are as well as what the future looks like based on where you are today using all those statements you pulled out this week. Try using the financial calculator above and see what you find out.
Last week, my husband and I met with our financial planner, John Steves. He is my former partner at Ameriprise and he is fabulous. Yes, even though I am a Certified Financial Planner, I still have my own advisor. It keeps my husband and me disciplined. Besides, I am a big picture person and John is the detail person who does the number crunching and also has his ears and eyes on the market daily.
Having a trusted advisor is one of the very best gifts you can give to yourself. I can help you with the big picture and help you create a game plan, but you will still want someone to run that financial plan taking a look at every area of your financial life, including what would happen if you died prematurely or couldn’t do what you do anymore. So often I hear of advisors just looking at the investments or just the insurance. True financial planning includes six areas of your life: financial position, goals like education and retirement, plus taxes, insurance and estate planning (or legacy).
A great financial planner will ask you to create a detailed budget, asking when certain expenses end, decrease or increase — like college expenses, health insurance costs and medical out of pocket, home improvements and maintenance, and even downsizing. They will used these numbers all through your analysis, and calculate how taking your Social Security and pensions at different times will affect your nest egg and amount you need to save today.
My husband is eligible for his pension at 55 and wants to compare retiring at age 55 to age 65. I think he will find it eye opening at the least. There is magic to knowing these numbers and I will share what you can do with it this type of information in my next article.
When you look at your retirement plan, do any of these apply to you?
- You plan to work forever
- You haven’t opened your statement since the market crashed in 2008
- You left or lost your job, dipped into your 401K and may have even paid taxes and penalties on it
- You aren’t saving anymore or don’t even have a retirement plan
- You have never seen your Social Security estimate
- You don’t understand your pension and benefit statements or even know where they are
- You’re paying so much for your kids college, there is nothing left for you to save for retirement
- Your kids have moved back in after college — enough said
- You have run up credit card debt and college loans and are trying to pay them off first
- You lost a big chunk of your savings in the 2008 market crash, never got back in and are afraid it’s too late
- You are hearing that the stock market is too risky and that bonds are even worse right now
- You are putting all your money into real estate
- Your best investment is your business, so you have everything tied up in that and just pray you don’t get disabled
- You have no idea where to start or how much you will need anyway
If you answer yes to any or all of these, then you are not alone. In a recent “Retirement Confidence Survey” conducted by the Employee Benefits Research Institute they asked “How confident are you about Retirement?” The results were:
- American workers are more pessimistic about their ability to retire comfortably than at any time since the survey began about 20 years ago.
- According to the survey about one‐third of workers tapped their retirement savings to pay for day‐to‐day expenses during 2010 and many of them didn’t have much saved in the first place.
- Just 59% of workers are currently saving for retirement and one‐half of them have less than $25,000 tucked away, according to the survey.
I believe that “work” is the New Retirement Solution and so do more and more baby boomers who are looking at their options.
- In a June 2008 Associated Press survey, it was reported that 78 million baby boomers are approaching retirement and that 66 percent of these individuals expect to continue working after “retiring” to supplement their pensions, Social Security and savings.
- In a recent Gallop Poll – that number is now up to 80%. Most plan to work part‐time, although some say they may need to work full‐time just to make ends meet.
The silver lining, according to LIfescience.com people who continue to work during retirement often experience better health than those who don’t work. As long as the work remains low stress, retirees who labor are less likely to suffer from major diseases such as cancer, high blood pressure, and cardiovascular disease. They are also less likely to become depressed.
This is great news…because I see many of us continuing to work by doing something we absolutely love. I call this Retiring To Something — Not From Something. I believe that this new retirement for most of us will consist of a simpler lifestyle with less consumerism and working at something we are passionate about. If my husband does want to retire early, we will have the numbers, and it will include going through this process…and I am sure it will include Costa Rica, Panama and golf!
This certainly is a different retirement than our parents and things have changed dramatically over the last two decades. Most of the clients I work with are interested in working in retirement not only for financial reasons, but to continue doing something meaningful where they are utilizing their unique abilities, life experiences and making a difference in the world.
I see us doing this into our mid to late 70’s. Look around you and you will see many vibrant 70 year olds doing amazing things and having fun. Remember, we will probably end up living into our late 80s and 90s.
The secret is creating your plan now and then taking action. This is the first of an ongoing series that will help you create that plan. Please make sure you don’t miss this series and share them with your friends by sending them to www.smartwomenscoaching.com. Plus your friends will get my free video course designed increase your confidence and wealth, our weekly ezine and radio shows, and 100 days of inspiration (quotes from women!).
Your exercise today is to “Find Your Stuff“.
Pull together all your savings, investment, 401k, IRA, pension and Social Security Statements. Next week, I will tell you what to do with them. Don’t delay. Please do this now before you forget. You will thank me for it!
If you are ready to Create Your Perfect Life feel free to book your complimentary 30 minute Discovery Coaching Session now at www.talkwithkatana.com
A few years ago, I was interviewed on the topic, It’s Never Too Late to Become a Midlife Millionaire, by a brilliant interviewer, Lorwai Lan, on her radio show, Your Money and Your Mindset. Just a few weeks ago, she sent me an email saying that our interview had been the #1 downloaded podcast on the CEM network with over 30,000 downloads, so I went back and listened to it. It really was a great interview, and I invite you to listen yourself by clicking here.
One of the things that we talk about in the interview of course is mindset. The idea of mindset is so important, because unless you have a healthy relationship with money, no matter how much you make or have, you will never be able to keep it, grow it or feel secure and joyful about it. This is why 70% of lottery winners squander away their winnings within a few years. We have all heard these stories and think, “I’d never do that!” Oh really?
We also know that when new wealth is created in families, there is a 90% probability that all the wealth will be gone by the third generation. It’s known as “Shirt sleeves to shirt sleeves in three generations”.
So what is your mindset around money? If you received a large sum – millions of dollars, could you hold on to it? You say yes, but how are you treating the money that you have today? Do you respect and appreciate it? To create, grow and keep wealth, you will a healthy relationship with it and an action plan.
How does this idea of “Becoming a Midlife Millionaire” feel too you?
- Does it make you feel uncomfortable or does it feel too unrealistic?
- What would your friends and family think of you if you were really rich?
- Does the word millionaire seem too materialist or masculine?
- What were you told growing up about money; Was it money doesn’t grow on trees or money is the root of all evil?
- Are you triggered negatively by the idea of having a lot of money or those who already have it?
Our relationship with money – how we feel about it AND what we do with it – will have a profound effect on every area of our lives, because until we develop a truly sacred relationship with it and that means both the “Inner Work” and the “Outer Work” of money, we will never be able to ask for what we are worth, keep what we do earn, invest confidently to make it grow, or feel secure and confident about it once we have it.
I’ve worked with hundreds of women who have come to me to get help with their money and we always start with the “Inner Work”. If you are struggling with your relationship with money, thinking it’s too late to become wealthy, waiting for someone else to solve your financial problems, hoping the issues will go away by simply ignoring them, or going deeper and deeper into debt, even being afraid to spend it, or invest it, then it’s time to take action.
So the “Inner Work” is identifying our beliefs and disempowering beliefs around money, and then shifting, healing and releasing those beliefs while creating new empowering beliefs AND actions.
The “Outer Work” is what you are doing with your money. Are you getting paid what you are worth, do you respect it, are you saving and investing for your future?
No matter where you are in your life, there is hope. I can promise you this one thing. There is always hope and there is always a solution. So where do you start?
Step #1: Start with the Inner Work- your beliefs around money. What has been coming up while you were reading this article? I’ve helped hundreds of women heal their relationship with money by helping you identify your money personality which is based on your disempowering belief and your biggest challenge.
There are 5 money personalities:
- Value (I need to prove I am good enough)
- Status (Whatever I achieve is not enough)
- Love (I need to do whatever it takes to get love)
- Security (I never know when what I have may be taken from me)
- Recognition (I need to prove I’m right)
Once you identify your disempowering belief, challenge and personality, then it is time to release, forgive and heal. This process could take years or if done with a professional, it can be instantaneous. It’s truly step number one. This one step will shift everything. I’ve seen it happen with hundreds of women, frequently with immediate almost magical results.
Step #2: Now you can begin the Outer Work – Taking Action. So this is where you begin to look at where you stand and where you want to go. It’s time to be brutally honest, to clean up messes, set goals, and get the help you need. Steps could include:
- Creating a financial plan
- Taking a financial course like our Money Drama Breakthrough home study course and listen to my free teleclass, Clearing Money Clutter: From Chaos to Clarity .
- Going to a financial counselor if you are in debt
- Begin to education yourself – visit our free radio show archives for dozens of interviews with the top financial gurus.
Step #3: Don’t give up. Don’t try to do this part alone. Get support and surround yourself with like minded women who are on the same path. You can do this by joining our free Smart Women Community. There are Facebook Groups, free resources, 100 days of inspiration, weekly inspirational radio shows, and online forums.
I believe in you. I have been there and know how to do this. I have surrounded myself with dozens of supporters and they are all part of this community of smart, successful women who are willing to reach out and help each other. Check out these free resources and let us know how you transform. We want to hear from you!
I have been following precious metals expert, Mike Maloney, for a while now and want to share this video he created on how precious metals, real estate and the stock market have related to each other historically. If you have been wanting to learn more about how to value gold vs. other investments, this is a pretty educational video. His charts are pretty easy to understand, so I thought I would share this video with you.
I purchased my first gold and silver 15 years ago when gold was about $400/oz. It then went down to about $225/oz. and is currently over $1400/oz. You might think that it is over valued at this price and it could be. I believe though, based on the state of the economy, the way the Federal Reserve is printing money, our current national debt and global instability it makes sense to have some precious metals and commodities in my portfolio.
Although I am still a Certified Financial Planner practitioner, I no longer sell or manage investments for clients, so be sure to check with your financial professional for advise. You will want to discuss your individual needs, goals, and risk tolerances with your advisor, so this may be a good time to schedule that meeting to review your goals and your asset allocation.
Popular options for purchasing precious metals:
- Purchase the actual metals in coins or bars (can actually be done through the internet and delivered to your home).
- Purchase mutual funds or exchange traded funds (ETF) so you may be able to do this right inside your brokerage account or IRA.
Free Gift for you: I have created a new financial organizer planner system for helping you get organized, find your stuff and begin to think about your financial planning. If you are interested in learning how to create your millionaire lifestyle by following your passion, then sign up for my Midlife Millionaire Success System in the top right corner and you will automatically receive your copy!
Do you have questions about how to retire to something rather than from something? Feel free to contact me at firstname.lastname@example.org or schedule a complementary strategy session with me at www.talkwithkatana.com
Katana Abbott, CFP, CSA
Midlife Millionaire Coach
About to leave for Panama…where it will be 12 hours and day and 12 hours of night because it’s right on the equator. We are just entering the Spring Equinox here in Michigan so we too have these experience of 12 hours of daylight and 12 hours of night. Now enjoy as that days begin to lengthen.
Watch for the moon tonight which will be not only full, but closer to the earth than it’s been for 18 years. Take some time to become very present in nature and allow your mind to just wander. Even if you cannot take off for a vacation to rejuvenate, you can take little time outs all during the day!
I will see you in just a few hours and will post again this evening from the Bocas Del Toro, Panama! Pura Vida!
Imagine almost 6 million views of this lovely little boy conducting his imaginary orchestra! My husband is a French Horn player in the Detroit Symphony, and he says this 3 year old Johnathan does pretty well as a conductor. He’s a natural! Enjoy and take some time to follow your bliss today!
Watch for us in Panama as we send back videos from our retreat March 19-26th~
In just one week, I will be leaving for my first Pura Vida (meaning The Pure Life) Retreat in Paradise with three fabulous women.
Our theme this time is Reinventing and Rejuvenating and during our trip will be working through my brand new Get Clarity Now – Your 5 Step Road Map to Purpose and Passion with Prosperity program, including several hot seat mastermind sessions on the veranda overlooking the amazing ocean.
- In addition to Reinventing, we will be zip lining, snorkeling in the azure Caribbean Sea, and enjoying the pristine beaches and jungle spa for massage and yoga.
- We will take a boat into town one evening for a fun dinner at Guari Guari plus I’ve arranged for a private chef to prepare dinner for us at the villa on two different nights.
- On our last day, we will be taken on a guided tour back in Panama City of the Panama Canal and a river/jungle tour before we fly back home.
Be sure to sign up for my RSS feed (top right corner) or friend me on Facebook, so you can receive my updates from Panama over the next week! If you are interested in joining us on our next Panama Retreat which will be at the end of January 2012, be sure to send me a quick note to be added to my priority notice list at email@example.com
Even though you cannot join us this time, I hope you can join us some time in the future! In the meantime, I have created all kinds of wonderful free programs to help you create your Midlife Millionaire Lifestyle by Retiring to Something not From Something. Just sign up for me free Midlife Millionaire Success System right here!
BTW…in September, I am hosting a 10 day Adventures and Awakening Pura Vida Retreat for men and women in Costa Rica where we will experience the Rain Forest, Caribbean Sea and Pacific Ocean and the amazing national treasures of Costa Rica, so mark you calendars and be sure to watch for your invitation through my Smart Women, Smart Choices ezine!
I’ll be in touch soon from Panama!
With blessings and gratitude,
If you would like a lesson in following your passion and living authentically, then you have to watch this video with violinest, Nigel Kennedy, playing Purple Haze. About 6 1/2 mintutes it goes a bit crazy. Watch how he engages the audience and the orchestra.
My husband, Mark, is in the Detroit Symphony Orchestra, so I have had the pleasure of watching/hearing Nigel Kennedy perform live here in Detroit and he alway surprises us with something totally unexpected.
How can you express yourself more authentically in your work and in your personal life, so you are fully engaged and expressing yourself fully? When was the last time you were feeling really powerful, joyful and authentically you? What were you doing and what was that experience like? Share you comments here.
How many of us go through life on what I call, “on robot”, or like the commercials use to say, “gotta make the donuts”. I remember actually saying this myself before I found my Purpose and Passion in life.
There was a point in my life around 45 years old, when I realized that there was something missing in my life. It was almost like an itch…something I could not put my finger on…yet I knew it was there. There was this nagging feeling or calling that was inviting me to do or be something different and it scared the hell out of me.
I actually kept shoving it down because my life was actually on auto pilot and it was easy. I was at the top of my game — in the top 1% of money managers in my company — attending fabulous conferences and making lots of money.
Then one day, things began to happen to me physically. My knees gave out, and ultimately, I ended up taking one full year off work to think things through…I know this is something that most folks could never do…I am so grateful for that opportunity because it gave me the time to figure out what I really wanted to be doing with my life. What that is, is helping others experience their own Awakening so they too can live with more purpose, passion and prosperity.
Here is a simple exercise that you can do yourself. Imagine that you just won the lottery and money was no longer an issue in your life.
- What would you be doing with your time?
- What would change in your life?
- Would you still be doing the work you are doing?
- Would you still be living where you are living today?
- Would you still be in the relationship you are today?
Now look at your answers and ask yourself why or why not to each of these questions. If your Perfect Life is totally different than how you are living today, what is one thing you can do today to bring more purpose, passion and prosperity into your life today:
- Take up an old hobby like oil painting
- Join a health club or yoga class and schedule time to show up
- Call or visit an old friend you almost forgot about
- Start a blog to get your story and ideas out to the world
- Volunteer or start your own foundation (I did this…it’s not that hard…just ask me)
- Hire a coach, find a mentor, take a class
- Just take that first step
Yes, taking that first step can be so powerful. Take some time to journal about this or leave a comment on this blog telling us what is the one thing that you could do today that would have the biggest positive effect in your life immediately. Thank you!
Visit www.midlifemillionaires.com for your free audio on Creating Your Midlife Millionaire Lifestyle and article on Creating Your Perfect Life. You will also become part of our free community! You can email me at firstname.lastname@example.org Live with Purpose, Passion and Prosperity!
Life can be very complicated with lots of unexpected twists and turns that can upturn even the best laid plans. I have found a wonderful solution to help create balance in my life and it only takes a few minutes a day. I call this process the Perfect Life Pause. Any time during the day that I feel overwhelmed, stressed, tired or angry, I follow this process to refocus my energy and intention.
Many of us are actually on an adrenaline rush much of the time during the day. I’ve found if we don’t slow down and allow things to flow, the Universe finds a way to do it for us…often to get our attention.
I suggest doing your first Perfect Life Pause when you first wake up.
Step 1: Start with your eyes closed. Listen to the sounds in the room, your breathing…notice your body and relax. Then focus on a place, time or experience when you were really relaxed and in a state of pure joy.
- My place is lying in my hammock next to the river with my daughter, Kirsten lying next to me when she was just a little girl. The hammock is swaying in the breeze and we can hear the water from the lake beating gently against the shore.
Step 2: Now spend the next several minutes in this wonderful state of mind.
Step 3: Be sure to express gratitude for this moment of joy. Trust that everything is perfect and the the right people and opportunities will flow into your life effortlessly.
All you have is the present moment and by doing this exercise three times a day, you will actually be meditating and focusing your intentions on your perfect life almost 10 minutes daily. The Law of Attraction states that our outer world is a reflection of our inner world, so this simple exercise may have very profound affects. Try it for a week, and let me know what happens!
Katana is a Certified Financial Planner and Midlife Millionaire Coach who teaches entrepreneurs to Leverage Their Expertise and Create a Midlife Millionaire Lifestyle. You can contact Katana personally at email@example.com