economy, income, retirement

How Can Student Loan Debt Threaten Your Retirement?

I recently talked to a client who is 50 years old and has $75,000 in student loan debt that they do not seem to be making any headway to eliminate. It illustrates a huge issue many people are facing as they approach retirement.

 

In 2018 student loan debt totaled $1.5 trillion… Student loans are unique in terms of unsecured debt in that the government can take extreme measures to recover defaulted student loans, including seizure of tax refunds and garnishment of wages. (1)(4)

 

In addition, the government can also garnish up to 15% of a person’s social security check to pay back defaulted student loans. For most American’s Social Security makes up the bulk of their retirement income. Loss of part of the income can have a catastrophic effect on a house hold.

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economy, income, interest rates, retirement

What are the risks as bond yields move higher?

Since December of 2017 bond yields for US Treasuries have moved up substantially. The increase in bond yields is having an impact on the US stock market, as well as markets around the world.

 

What is driving bond yields higher?

 

One significant driver is the Tax Cuts passed in December of 2017. The tax cuts are leading to an increase in the budget deficit and the need for additional bond issuance. More bond supply can lead to lower bond valuations and higher bond yields.

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Climate change, environment, income, retirement

Climate Change, Sea Level Rise and Retirement Risk

One of the oft repeated risks from climate change is the threat that comes from rising sea levels. Depending on the forecast, even in the most optimistic ones, seas are projected to rise several feet before the end of the century. With the accelerating build-up of CO2 and the rate of temperature increase (2016 being the hottest year on record), many expect dramatic sea level rise to occur much sooner than most expect. (https://www.co2.earth/ )

 

While people might want to buy shore property for benefits that include potential rental income, capital appreciation and personal use, they also face potential risks of hurricanes, sea level rise, etc. Some of these risks can be mitigated by purchasing flood insurance.

 

Last summer I explored the question, “if sea levels rise, what will be the impact on a clients’ net worth and portfolio?”

 

The answer is one few people are willing to confront.

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economy, income, new economy, retirement

How to Deal with Being Laid Off: 5 Strategies To Prepare For Job Change

Each day we read reports that the economy is booming.

 

“U.S. manufacturing production just had its best year since 2011.” (1)

“Factory output is poised to speed up.”

“Stronger global growth expectations and a weaker dollar should help.”

 

With that being the case you might find it surprising that several large corporations have recently announced they will be laying off large numbers of employees, especially managers.

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economy, income, interest rates, retirement

What do rising rates mean for investors?

In early February 2018 equity markets started to sell off. Volatility increased. On February 8th, 2018 the DJIA dropped over 1000 points.

 

Question: Why?

Answer: The repricing of risk.

 

In 2013 the economy was recovering from the Great Recession of 2008/2009 and was still fragile. A lot of economic data points showed contradictory trends. Believing the economy had sufficiently strengthened, the Federal Reserve announced it’s intention to start reducing its policy of Quantitative Easing which was put into place after the 2008 financial crisis and the Great Recession. Quantitative Easing was the government policy to buy US treasury bonds in order to keep interest rates low and support the economy.

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economy, income, retirement

First Steps to Retirement Planning

Many people are paralyzed into inaction when they start thinking about the challenge of planning for retirement. The truth is there are a few first steps anyone can take on their own to improve their chances for success.

A first step is to determine how much income you can expect to receive from social security. In years past SSA would mail annual statements for people to see their expected benefits. Things have changed… go to google and search for “my social security”. You will create an account and through this account be able to determine your numbers.

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