As we finish the first 6 months of 2013 we reminded that the economic recovery is not exactly all that it's been cracked up to be. While the government declared that The Great Recession was over 2 years ago I find that the people that I am meeting with don't seem to be much better off than they were during that trying time. The government statistics on unemployment are improving in their eyes but it seems our politicians are so removed from reality that they don't have a clue what it's like to be living on a day by day basis in our great country for most Americans. While there is no way to get an accurate number on unemployment the White House seems to be patting themselves on the back when they see unemployment numbers move down by one tenth of a point at a time but conveniently this number does not include people who have stopped working, people only working part time and those that have been forced into retirement prematurely due to any number of factors. Clearly in Washington there's an overabundance of rose colored glasses. Sadly, according to the Center for Retirement Research in Boston, 57% of households surveyed say they have less than $25,000 in savings, and 28% say they have less than $1000. The "haves" say that their retirement income will come mostly from savings and investments; while lower income families say their retirement income will come mostly from Social Security, which was originally designed to be a supplement to retirement income, not the main source. Clearly, the disconnect on retirement planning grows as greatly as the views.
While we could discuss and debate the economic issues of our times I'm still with blue in the face the question that I have for you is how are these economic times affecting you directly, and if you have made any changes or adjustments to accommodate these changing times? While there is a popular saying that says nothing is forever in financial and estate planning nothing could be more true. It is important every three years or so to reassess your lifestyle with regard to how it aligns with your finances in order to be sure that your goals and objectives are being met and the plan that you have in place comports with your current wishes. Periodically due to changes either within or outside of our control there may be a trigger or reason to reevaluate your estate plan as well as the components of your portfolio. Too many times I have seen changes in a person's life and lifestyle but no changes in their financial direction and planning. It's important to go back to basics and remember why you decided to sacrifice today by putting money away for tomorrow. Many times I have found that people who are struggling to make ends meet have the capability to drastically change the issue of cash flow by reallocating the assets that are available to them. An evaluation of how you are invested as opposed to what you are invested in can make a difference between positive and negative cash flow depending on your individual situation- and as they say if you always do what you've always done you will always get what you've always gotten.
There are many issues that would dictate a change in your status of cash flow. On the top of the list would be a marriage, or dissolution of marriage- or new bundle of love in the family. Statistically it is estimated that the cost of raising a child to age 18 is approximately $250,000 dollars- clearly not done with pocket change. I could talk about the cost of college, but we seem to be getting along so well I don't want to spoil the mood... if you've sent a child to college, you know the financial challenge. If you have yet to have the pleasure- this is the painful part- so let's leave that for another discussion. Another financial-changing issue is the necessity to act as a caregiver for parents or other loved ones that require your attention. While being a caregiver is a wonderful act of love the fact is it entails a change in financial standing in order to take care of somebody outside of your immediate family. Food, housing, travel and the possibility of lost wages must be factored in to the cost of being a caregiver.
Other issues that may affect you either negatively or positively (yes, there is an upside to this matter) may be a change in business interest, selling or buying real estate, inheritance, lottery winnings (it's nice to dream) a change in health or the sudden death of a spouse. Many people, fed up with the exorbitant cost is living in our area choose to relocate to a different location. The lower cost of housing coupled with a fraction of the monthly costs as well as an improved standard of living is a great reason to consider this new paradigm. Is relocating for everyone? There is no magic solution that works for everyone- it's a matter of what works for you. If you've been rooted in an area for a long time and your friends, family and especially your kids and grandchildren are here, it may be a difficult thought. Dual residences may be the answer if affordable and logical. It's all about what works and is right for you.
So, back to the original question... "How are yoo doin?" Are you taking the time to periodically review you financial status COMBINED with your personal lifestyle. At some point in time as we get older, we realize a shift in our thinking...what are you thinking?