Advice for Savvy Retirement Planning

Interview with Robert Henderson on Saving for Retirement Later in Life for NewRetirement.com

Retirement Planning Later in LifeSee my interview in NewRetirement.com, talking about how to make up for lost time when saving for retirement…

“We’re guessing there might be one or two readers out there who are overwhelmed about the amount of money they need to save to retire comfortably.

But there’s no need to panic, says Robert Henderson, president of Landsdowne Wealth Management in Mystic, Conn.”

Read the full interview here.

————————————————————————–

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

See my Google+ Profile

Connect with me on FacebookGoogle+LinkedInPinterest and Twitter.

————————————————————————–

About NewRetirement

We started NewRetirement to help our own parents and the millions of baby boomers and seniors like them to retire securely. When our parents asked for help with their finances, we realized that most people do not have the resources to hire an advisor and most financial advice is only geared toward wealthy households, not the average retirees.

Retirement planning is a very complex and tremendously important endeavor. Our goals are to make high quality retirement planning: 1) easy to understand 2) available to and affordable for everyone and 3) inclusive of products and strategies beyond asset allocation and drawdowns.

http://www.newretirement.com/

 

IRA Contribution Limits 2017

IRA Contribution LimitsIRA Contribution Limits

Each year the IRS publishes updated IRA contribution limits, as well as catch-up contribution limits for the new year. Typically, the limits the IRS sets each year is based on inflation factors (with minimum $500 increases), so they do not necessarily increase the limit each year.

The IRA Contribution Limit for 2017 has been established with NO increase over 2016.

The limit on IRA contributions applies to both deductible and non-deductible Traditional IRA’s, as well as Roth IRA’s. You may contribute to either type (if you qualify), but you are still subject to the same total aggregate contribution limit.

Income Limits Adjusted Up $1,000-2,000

IRA contributions are only allowed if your Modified Adjust Gross Income is below a certain level . For single filers in 2016, that income threshold starts at $118,000 (up from $117,000) and ends at $133,000 (up from $132,000). In that range, your contribution is limited, eventually reaching zero. For married filers in 2016, that income threshold starts at $186,000 (up from $184,000) and ends at $196,000 (up from $194,000).

2017 2016
Roth IRA Contribution Limit $5,500 $5,500
Roth IRA Contribution Limit if 50 or over $6,500 $6,500
Traditional IRA Contribution Limit $5,500 $5,500
Traditional IRA Contribution Limit if 50 or over $6,500 $6,500
Roth IRA Income Limits (for single filers) Phase-out starts at $118,000; ineligible at $133,000 Phase-out starts at $117,000; ineligible at $132,000
Roth IRA Income Limits (for married filers) Phase-out starts at $186,000; ineligible at $196,000 Phase-out starts at $184,000; ineligible at $194,000


READ:
2018 Social Security Inflation Adjustment
401K Contribution Limits
Don’t Buy-and-Forget the Investments in Your 401K Plan

Recent History of IRA Contribution Limits:

As you can see, the IRA contribution limits do not rise dramatically each year. Although over time, if investors are diligent about increasing their contributions, it can certainly make a difference.

  • 2017 – $6,000
  • 2016 – $6,000
  • 2015 – $6,000
  • 2014 – $5,500
  • 2013 – $5,500
  • 2012 – $5,000
  • 2011 – $5,000
  • 2010 – $5,000
  • 2009 – $5,000
  • 2008 – $5,000

Over Age-50 Catch Up IRA Contribution Limits

For those of you that are over age 50 (or turn age 50 before the end of the year), you are allowed an additional IRA “catch-up” contribution. These limits have not adjusted for inflation, but may at some point in the future:

  • 2017 – $1,000
  • 2016 – $1,000
  • 2015 – $1,000
  • 2014 – $1,000
  • 2013 – $1,000
  • 2012 – $1,000
  • 2011 – $1,000
  • 2010 – $1,000
  • 2009 – $1,000
  • 2008 – $1,000

IRA Deduction Limits

Roth IRA contributions are not tax deductible.

Your deduction is allowed in full if you (and your spouse, if you are married) aren’t covered by a retirement plan at work.

If you ARE covered by a retirement plan at work, you can see the income limitations at the IRS website by going here.

IRA Income Limitations for Deductible Contributions:

If you ARE covered by a company sponsored retirement plan:

If Your Filing Status Is… And Your Modified AGI Is… Then You Can Take…
single or
head of household
$61,000 or less a full deduction up to the amount of your contribution limit.
more than $61,000 but less than $71,000 a partial deduction.
$71,000 or more no deduction.
married filing jointly orqualifying widow(er) $98,000 or less a full deduction up to the amount of your contribution limit.
 more than $98,000 but less than $118,000  a partial deduction.
 $118,000 or more  no deduction.
married filing separately  less than $10,000  a partial deduction.
 $10,000 or more  no deduction.
If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the “Single” filing status.

If you are NOT covered by a company sponsored retirement plan:

If Your Filing Status Is… And Your Modified AGI Is… Then You Can Take…
singlehead of householdor qualifying widow(er) any amount a full deduction up to the amount of yourcontribution limit.
married filing jointly or separately with a spouse who is not covered by a plan at work  any amount a full deduction up to the amount of yourcontribution limit.
married filing jointly with a spouse who iscovered by a plan at work $183,000 or less a full deduction up to the amount of yourcontribution limit.
more than $183,000 but less than $193,000 a partial deduction.
$193,000 or more no deduction.
married filing separately with a spouse who is covered by a plan at work  less than $10,000  a partial deduction.
 $10,000 or more  no deduction.
If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the “Single” filing status.

————————————————————————–

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

See my Google+ Profile

General Dynamics 401K Connection Newsletter – November 2012

401KHere is the November 2012 issue of the General Dynamics 401K Connection newsletter.

The 401K Connection Newsletters are independent evaluations of 401(K) plans that help participants better understand their retirement accounts, the many investment options available to them, and provide them with model portfolios that they are free to follow and emulate at their discretion.  The newsletters are in no way affiliated with General Dynamics, Pfizer, L&M Hospital, or any of their affiliates. They are 3rd party newsletters provided for no cost to assist employees with better understanding and managing their 401K plans. Lansdowne Wealth Management is an independent wealth management firm that has no affiliation to General Dynamics, Pfizer, or L&M Hospital, nor the administrators of their 401K plans, Fidelity and Hewitt & Associates.

Around the first week of each month, subscribers receive our newsletter, customized to their employer (currently General Dynamics, Pfizer, or L&M Hospital). The newsletters are chock-full of useful information to help manage their 401K plan, including market & economic updates, analysis of your retirement plan, feedback on the various investment options, and model portfolios that are developed by our firm using the same strategies and philosophies we utilize for our own private clients. In addition, periodically you will receive articles written by our firm that can be useful in managing other aspects of your financial life, in addition to your 401K. The articles can always be accessed at our blog as well – http://lwmwealth.com/blog/.

To sign up for one of the newsletters, please go here:  http://www.lwmwealth.com/services/your401k.html

Don’t Buy-and-Forget the Investments in your 401K Plan

401K InvestmentsThe buy-and-hold investment strategy for company sponsored retirement plans, such as a 401K plan, has become a relic of the past. Let me re-phrase that: Buy-and-forget investing is a relic of the past.

Read: 401K Contribution Limits

Buy-and-Forget is not an Investment Strategy
I often have prospective clients come to me with a stack of statements…brokerage accounts, 401K accounts, IRA’s, CD’s, and other odds and ends. Invariably, one or several of the accounts have been completely ignored over the years. In some cases, the investment allocations in their company 401K plan account is still invested with the same exact options they chose when they first opened their accounts.

Just recently, I helped a new client re-allocate his 401K funds that had not made a change in over 15 years. It was entirely invested in high-growth (or high-risk, rather) funds that performed superbly – until the year 2000. He had managed to eke out a total return (not annual return) of about 31% – over the course of 15 years. That works out to less than 2% per year (compounded). The technology bubble and growing euphoria for the stock market drove much of the investment gains in the 90’s, a situation which reversed abruptly in 2000, and is not likely to repeat itself anytime soon.

We are currently in an economic environment vastly different from years past. Interest rates are at an all-time low, unemployment still remains remarkably high, and the federal debt is unsustainably high and growing rapidly. The point is, what may have done well 5 or 10 or 15 years ago, is most likely NOT working well today.

READ:
401K Contribution Limits
IRA Contribution Limits

What to do
If you are the type of person that has neither the time nor inclination to regularly review your investments, you need to begin reviewing your 401K portfolios at least once per year. I usually recommend doing this at tax time, since you can get all your painful financial exercises out of the way at once.

The place to start is with your 401K plan provider. If you work for a large company, chances are they may have some great online tools to use to help guide you to an appropriate allocation. But buyer beware; some 401K product providers (brokerage firms, mutual fund companies, and insurance companies) will attempt to steer you towards the products THEY want to sell you. In some cases, these may not be in your best interest, even if they might be considered “suitable” for you. So make sure you are comfortable with the recommendations provided by online tools.

If you do not have the resources of a 401K provider, or are not comfortable taking advice from an online calculator, you can consider seeking out a fee-only financial planner to assist you in creating a simple allocation for your 401K plan.

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with an added focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at http://www.lwmwealth.com/services/your401k.html.

General Dynamics 401K Connection Newsletter – September 2012

401K Nest EggHere is the September 2012 issue of the General Dynamics 401K Connection newsletter.

The 401K Connection Newsletters are independent evaluations of 401(K) plans that help participants better understand their retirement accounts, the many investment options available to them, and provide them with model portfolios that they are free to follow and emulate at their discretion.  The newsletters are in no way affiliated with General Dynamics, Pfizer, L&M Hospital, or any of their affiliates. They are 3rd party newsletters provided for no cost to assist employees with better understanding and managing their 401K plans. Lansdowne Wealth Management is an independent wealth management firm that has no affiliation to General Dynamics, Pfizer, or L&M Hospital, nor the administrators of their 401K plans, Fidelity and Hewitt & Associates.

Around the first week of each month, subscribers receive our newsletter, customized to their employer (currently General Dynamics, Pfizer, or L&M Hospital). The newsletters are chock-full of useful information to help manage their 401K plan, including market & economic updates, analysis of your retirement plan, feedback on the various investment options, and model portfolios that are developed by our firm using the same strategies and philosophies we utilize for our own private clients. In addition, periodically you will receive articles written by our firm that can be useful in managing other aspects of your financial life, in addition to your 401K. The articles can always be accessed at our blog as well – http://lwmwealth.com/blog/.

To sign up for one of the newsletters, please go here:  http://www.lwmwealth.com/services/your401k.html

Everyone Has Access to 401K Advice

Piggy BankFor most people, their 401K (or 403B, TSP, etc.) is their single largest asset beyond their home. The unfortunate part is that very few people seek advice for managing this asset. Part of the problem in the past has been that due to Department of Labor rules, employers have been limited in their ability to recommend advice for their employees, and advisors have been limited in their ability to provide these services for the same reason.

Fortunately, late last year the Department of Labor finalized new regulations paving the way for better access to investment advice on employee retirement plans. There are still some strict rules governing the regulations, but by and large, all employees now have access to seek out advice on their plans. Access to advice on investment plan options can help plan participants improve their investment returns and better manage their overall portfolio risk.

As I mentioned above, advice for retirement plan assets must be given under strict guidelines. For example, the advice given must either be given based on pre-determined computer models, or provided on a “level-fee” basis, where compensation is not based on the types of investments recommended, but rather on a fee-only basis. In other words, advice cannot be given on a commission basis.

This is great news for Connecticut-based employees that seek advice for their 401(K) assets, a service we at Lansdowne Wealth Management provide.

Robert C. Henderson is the President of Lansdowne Wealth Management in Mystic, CT. His firm specializes in financial planning and investment management for individuals approaching retirement or already in retirement, with an added focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at http://www.lwmwealth.com/services/your401k.html.

Savings or investments? Which is the best way to prepare for retirement?

How hard are you working to prepare for your retirement? You’ve probably already looked at several of the options available to you when it comes to finding a resting place for your retirement funds.

MoneyMost options can be placed into one of two categories. Either the money is being held in a savings account or the money is being used to invest.

Both options are a valid way to prepare for your retirement. In fact, a combination of both methods may be the best way to go. But as you make the decision on what to do with the bulk of your money, here are some things to consider.

Opening an actual savings account keeps your retirement money safe. It sits in the account and in most cases there are absolutely no risks associated with it. It gains interest each year, albeit a small amount. So, if there are no risks, why isn’t everyone going this route?

While the money is safe and sound in the savings account it isn’t really growing. Look at the current interest rate for a savings account.

Think about the amount you already have saved for retirement. Imagine putting it in the account and using the interest rate, figure out just what you will have earned at the end of the year. The results can be dismal.

A savings account provides security and stability, but your money just isn’t going to grow and work for you. It sits stagnant and won’t be making major increases any time soon.

[quote]A savings account provides security and stability, but your money just isn’t going to grow and work for you. [/quote]

Investments are almost the exact opposite of the savings accounts. Your money is actually being used.

There are several different ways to invest and you are getting a return on the money that is being used. Depending on the amount of risk and the duration of the investment, you could see a rate of return that makes you consider retirement years earlier than expected.

If the return is so high, why isn’t everyone investing? Return rates aren’t guaranteed. When you invest money into something you are taking a risk.

There is a chance that your money might not grow at all. At the end of the year you could have the exact same amount that you started with. On the downside, you could even end the year with less money than you started with. It is a risk and each investment takes a chance.

It is possible to choose investments that are lower risk. Some people want to invest but they aren’t looking to make a major rate of return.

They just want the funds to grow in a steady manner. The savings account doesn’t offer these individuals enough of a growth, so they turn to low-risk investments.

So, what should you be doing? Meeting with a financial adviser can provide you with the detailed information that you are searching for.

However, as a general rule, it is always a good idea to have a mix of both methods. Many younger people choose to invest more of their money than they save.

As they get older and closer to retirement, they may change the way they take care of their retirement funds. They may move more money into savings accounts and put their investments into lower risk categories.

Robert C. Henderson is the President of Lansdowne Wealth Management in Mystic, CT. His firm specializes in financial planning and investment management for individuals approaching retirement or already in retirement, with a focus on the particular needs of women that are divorced or widowed. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

Creative Commons License photo credit: Lucas Lucas

What Inflation Mean to You: from dShort.com

I am an avid follower of Doug Short, who writes daily commentary on the market and the economy. See below his recent update on Inflation and its true impact on your wallet.
By Doug Short
November 16, 2011
Note from dshort: The charts in this commentary have been updated to include the November Consumer Price Index news release for the October data.

 

The Fed justified the previous round of quantitative easing “to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate” (full text). In effect, the Fed has been trying to increase inflation, operating at the macro level. But what does an increase in inflation mean at the micro level — specifically to your household?

Let’s do some analysis of the Consumer Price Index, the best known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart below illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U, which I’ll refer to hereafter as the CPI.

The slices are listed in the order used by the BLS in their tables, not the relative size. The first three follow the traditional order of urgency: food, shelter, and clothing. Transportation comes before Medical Care, and Recreation precedes the lumped category of Education and Communication. Other Goods and Services refers to a bizarre grab-bag of odd fellows, including tobacco, cosmetics, financial services, and funeral expenses. For a complete breakdown and relative weights of all the subcategories of the eight categories, see the link to table 1 near the bottom of the BLS’s monthly Consumer Price Index Summary.

The chart below shows the cumulative percent change in price for each of the eight categories since 2000.

Not surprisingly, Medical Care has been the fastest growing category. At the opposite end, Apparel has actually been deflating since 2000. The latest Apparel number is the first fractional nudge above zero in about nine years. Another unique feature of Apparel is the obvious seasonal volatility of the contour.

Transportation is the other category with high volatility — much more dramatic and irregular than the seasonality of Apparel. Transportation includes a wide range of subcategories. The volatility is largely driven by the Motor Fuel subcategory. For example, the spike in gasoline above $4-a-gallon in 2008 is readily apparent in the chart.

The Ominous Shadow Category of Energy

The BLS does not lump energy costs into an expenditure category, but it does include energy subcategories in Housing in addition to the fuel subcategory in Transportation. Also, energy costs are indirectly reflected in expenditure changes for goods and services across the CPI.

The BLS does track Energy as a separate aggregate index, which in recent years has been assigned a relative importance of 8.553 out of 100. In other words, Uncle Sam calculates inflation on the assumption that energy in one form or another constitutes about 8.55% of total expenditures, about half of which (4.53%) goes to transportation fuels — mostly gasoline. The next chart overlays the highly volatile Energy aggregate on top of the eight expenditure categories. We can immediately see the impact of energy costs on transportation.

The next chart will come as no surprise to families footing the bill for college tuition. Here I’ve separately plotted the College Tuition and Fees subcategory of the Education and Communication expenditure category. Note that the steady staircase in this cost matches the annual cost increases in late summer for each academic year.

Core Inflation

Economists and policy makers (e.g., the Federal Reserve) pay close attention to Core Inflation, which is the overall inflation rate excluding Food and Energy. Now this is a somewhat peculiar metric in that one of the exclusions, Energy, is an aggregate that combines specific pieces of two consumption categories: 1) Transportation fuels and 2) Housing fuels, gas, and electricity. The other, Food, is the major part of the Food and Beverage category. I should explain that “beverage” for the BLS means alcoholic beverages. So coffee and Coca Colas are excluded from Core Inflation, but Budweiser and Jack Daniels aren’t.

The next chart shows us the annualized rate of change (solid lines) and the cumulative change (dotted lines) in CPI and Core CPI since 2000.

Consumers, especially those who’ve managed expenses over several years, are most closely attuned to the top line.

Inflation and Your Household

The universal response is to moan over price increases and take delight when prices are cheaper. But in reality, households vary dramatically in the impact that inflation has upon them. When gasoline prices skyrocket, a two-earner suburban family with long car commutes suffers far more than the metro family with short subway commutes. And the pain is even more extreme for low income households whose grocery money shinks with gas prices rise. And remember, Uncle Sam excludes energy costs from Core Inflation.

Households with high medical costs are significantly more vulnerable than comparable households with low expenses in this category.

The BLS weights College Tuition and Fees at 1.493% of the total expenditures. But for households with college-bound children, the relentless growth of tuition and fees can cripple budgets. Often those costs get bundled into loans that saddle degree recipients with exorbitant debt burdens. Consider the following numbers from the CollegeBoard.com website:

  • Public four-year colleges charge, on average, $8,244 per year in tuition and fees for in-state students. The average surcharge for full-time out-of-state students at these institutions is $12,526.
  • Private nonprofit four-year colleges charge, on average, $28,500 per year in tuition and fees.

Of course, Mr. Bernanke would point out that, with a healthy dose of Core Inflation (extended of course to wages), those debt-burdened college grads will pay down the loans with inflated dollars.

Which brings us back to the Fed’s efforts to manage the level of Core Inflation. At the macro level, Mr. Bernanke and his Federal Reserve team can doubtless make a theoretical argument for playing puppet master with inflation. But will their efforts — ZIRP and Quantitative Easing — achieve the desired goal?

The one thing we can be certain about is this: An increase in inflation will have a painful effect on lower income households, those on fixed incomes, those with higher ratios of transportation costs, and any household whose discretionary spending is more dream than reality.

8 Biggest Risks We Face in Retirement

We all face many risks to our financial well-being as we retire. Below are eight of the most common risks retirees face and some brief solutions to think about.

A Long Life. Life expectancy tables prove out that if you have already made it to age 65, there’s a 50/50 chance you’ll live well into your 80’s (or later). Plan to live a long life and prepare accordingly. This is especially true if there are two of you.

Health Concerns. As we all know, with age comes health problems. Over time, this can take up a larger percentage of our income, often times culminating in facilitated care, either at home or in a senior facility. Prepare for this when you are young (50s and 60s), look for good supplemental health coverage and consider long-term care insurance. But above all else, know that aging and deteriorating health is inevitable and you need to plan for it.

Inflation. With a rate of inflation around the historic norm of 3%, you’ll lose half your purchasing power within 20 years if you don’t take steps to offset it. Make sure your investments will appreciate and exceed inflation over time. Assets like stocks, bonds, and commodities should be a healthy part of every portfolio. Hold enough cash for short-term needs (2-3 years worth) and to cover unexpected events, but much more is unnecessary and simply loses value over time.

The Market. As with the risk of inflation, there is the risk of the market going haywire for periods of time. Spread your investments among various asset classes to cushion the blow. Stocks, bonds, commodities, real estate, and cash should be your primary asset classes. But within those asset classes, you should also spread thing around. For example, “stocks” should include domestic, international, emerging markets, and both small and large companies.

Interest Rates. Relying on the interest from CD’s can be a fruitless effort. Sure, there was a day when CD’s were paying double-digit rates – 30 years ago. Those days are long gone, and for the foreseeable future, shot-term interest rates will not be enough to support you throughout retirement.

Making Withdrawals when Markets are Down. Holding 2-3 years’ worth of living expenses in cash helps avoid being forced to sell your stocks when markets have dropped. Draw from this account when markets are down and sell more of your stocks when markets are up.

Poor Financial Decisions. Being wildly speculative or extremely conservative with your investments. Overextending yourself with home renovations or that 2nd home you always wanted. Fancy new cars. Do yourself a favor and run major financial decisions past a professional. It helps to pay a few bucks for a fee-only financial planner to give you their opinion on your asset allocation and spending decisions. Avoiding a major financial blunder will pay you back many times over the cost of some good advice.

Taxes. Poor tax planning can leave you with a hefty tax bill. In addition, there’s always the potential of changes to the tax brackets the tax code. Find a good tax adviser who understands tax implications and can help you plan the right moves now in order to minimize taxes each year.

Robert C. Henderson is the President of Lansdowne Wealth Management in Mystic, CT. His firm specializes in financial planning and investment management for individuals approaching retirement or already in retirement, with a focus on the particular needs of women that are divorced or widowed. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.