Baby Boomer Retirement Challenges, Part 2: Strategies for Success

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By Sindy Berkowitz

Every day, roughly 10,000 Baby Boomers retire. But many of them do so unaware of the challenges they will face when living off their savings alone. The Insured Retirement Institute recently found that the average American will enter retirement with an income gap ranging from $3,864 and $12,072. Such a disparity is unsustainable, and even if it doesn’t disrupt your lifestyle now, it is likely to do so in your later years when you’re less capable of addressing the problem.

In Part 1 of this series we addressed some of the core challenges facing American retirees today. In Part 2, we’ll take a look at some ways that you can alleviate your retirement concerns.

Consult with a financial advisor: Retirement planning is a big job, and it can be difficult to have the knowledge and experience necessary to go it alone when trying to maximize your wealth to meet your retirement objectives. A financial advisor can help you get the proper context, help you shape a budget, and offer great advice to help you plan effectively.

Take advantage of employer benefits: If your company offers a pension plan or retirement account benefit like a 401(k) or IRA, you should do everything you can to take advantage now—especially if your company matches contributions. After you retire, certain benefits may no longer be available to you. If all your retirement accounts are already fully funded, you have other options available. If you’re over 50 and just starting out, though, you may be eligible for catch-up contributions that offer higher contribution caps.

Put additional funds into an annuity: Annuities provide a guaranteed income stream for life, making them a good consideration for retirees. Annuities, unlike 401(k) or IRA accounts, do not have a maximum contribution limit, and have several other unique characteristics that set them apart from other retirement savings accounts.

Delay Social Security payouts: Retirees can begin collecting Social Security at age 62, but your monthly paycheck depends upon when you start collecting, and your full retirement age. Every year that you delay past your full retirement age increases your payout by 8 percent. So if two individuals with a full retirement age of 65, for instance, start collecting Social Security at 62 and 67 respectively, the individual who deferred payouts will see a 30 percent higher payout.

Asess your risk tolerance: All investment vehicles will come with a varying degree of risk. That’s why it’s important to diversify your holdings. That said, every individual has a different lifestyle, different goals and expectations for retirement. While some retirees want a more conservative, low-risk and assured income in retirement, others may find themselves looking to take a more aggressive approach to accumulating wealth post-career.

At The Milford Bank, we have been helping Milford and Stratford retirees develop successful saving strategies for generations. But Baby Boomers face unique challenges unlike those before them. To get started with a retirement strategy that will work for you, stop by a Milford Bank location today. You can also learn more by checking out our Online Learning Center.

Baby Boomer Retirement Planning, Part 1: The Challenge Ahead

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By Sindy Berkowitz

Earlier this year, the Insured Retirement Institute released its annual study covering the Baby Boomer generation and its financial preparedness for retirement. Since the IRI’s first publication in 2011, the number of Americans over the age of 65 has increased over 18 percent. Yet, despite the steady incline of retired Baby Boomers, this year’s study demonstrates that this generation still has yet to find answers to some of the greatest challenges facing Americans in retirement today. In fact, only 23 percent believe they have enough saved to last their entire retirement.

This series will dive deeper into the state of Baby Boomer retirement planning, providing insights into the unique challenges ahead for the average American retiree. In addition, we will offer several ways to help you start putting your planning on the right track to ensure that you and your loved ones can maintain the quality of life you’ve worked so hard to achieve.

In Part 1, we will take a closer look at some of the biggest challenges you’ve got to address in order to ensure that your wealth lasts a lifetime.

Inflation: The cost of everything, from a gallon of milk to real estate, is subject to inflation. On a yearly basis, you might not notice the incremental price increases, but over time, inflation will degrade your buying power. As funding a retirement account is a long-term savings strategy, you must factor inflation into your planning.

Market fluctuations: Investments tethered to the stock market can offer a strong return on investment, but they can also leave you more exposed to risk.  If the markets enter a period of decline as you reach retirement age, you may be forced to find other means to recover.

Medical expenses: Americans are, fortunately, living longer than ever. But that also means that retirees will likely have more medical expenses to account for as well. According to the IRI’s 2017 report, 82 percent of Baby Boomers underestimate the cost of medical expenses to come.

Income gap: Pension participation is not as common as it used to be, and Social Security will only account for a portion of the paycheck you received during your working days. Many Americans don’t realize that assured income streams may be lower than the monthly expenses they’ll see in retirement, setting them up for a gap in wages that must be recovered to maintain their lifestyle.

At The Milford Bank, we’ve helped countless individuals—from their first savings account, to retirement planning, and everything in between. We are ready to work with you to craft a saving strategy that will help you navigated the uncharted waters of retirement.

Be sure to check back next time for Part 2 of this series, when we’ll be discussing some strategies to help you avoid the challenges you face in retirement planning. You can also learn more by checking out our Online Learning Center here.

Talking Dollars, Cents and Sense about Flu Season

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By Lynda Mason

Living in New England, Milford and Stratford residents always have something special to look forward to at this time of year. We’ve got brilliant foliage in the Fall and picturesque, snowy landscapes in Winter. But there’s one seasonal event that nobody in New England is looking forward to: flu season.

While most of us consider the flu to be a minor inconvenience, the truth is that this seasonal contagion has a significant part to play for just about every family in the country.

According to the Centers for Disease Control, up to 20 percent of the U.S. population contracts influenza on an annual basis. So even if you’ve managed to steer clear, the chances are good that someone in your home will catch it—and it could cost you much more than a few boxes of tissues.

The CDC reports that flu cases cost $10.4 billion a year in direct medical expenses and $16.3 billion in lost earnings. Children, meanwhile, will miss an estimated 32 million days of school each year due to the flu.

Further, the flu leads to tens of thousands of hospitalizations, and worst of all, thousands of deaths caused by flu-like symptoms.

Looking at these figures makes it clear just how devastating the toll of influenza can be. Fortunately, there are plenty of simple steps you can take to ensure that you don’t contract, or spread, the flu this season.

Review the CDC’s updated influenza guidelines: Every year brings a new strain of influenza. This year is expected to be more virulent than the 2016 version, so it is important to stay informed. You can check out the CDC’s 2017-2018 flu season guide here.

Avoid doctor’s offices and hospitals: As a contagious virus, doctors’ offices and hospitals are natural vectors for the flu. There are good odds of encountering someone with the flu, or passing it to others, if you go to these facilities. For that reason, many individuals opt to act preemptively and get flu shots at retail pharmacies before they get sick. If you think you may have the flu, check with your PCP about their telehealth services so that a doctor can diagnose you over a videoconference instead.

Of course, every individual has different needs when it comes to flu shots, and you should consult with your physician to first see if it is the right decision for you or your family.

Practice good health habits: The flu, like any other germ, cannot thrive in a sterile environment. While the CDC does state that flu shots are the single most effective way to prevent flu, it also names a number of health-conscious choices you can make that will help you avoid contracting the virus. This includes: washing your hands, avoiding touching your eyes, nose or mouth, drinking lots of fluids, getting lots of sleep and eating nutritious meals.

At The Milford Bank, we believe that physical health and financial health go hand in hand. Taking care of your body will help you take care of your finances, so when it comes to flu season, we want to make sure our customers don’t end up spending the next few months in bed with a thermometer under their tongue and a ball of tissues in hand. To learn more ways to stay in good shape—both physically and financially—check out our Online Learning Center here.

There’s No Reason to Be Scared Over Record Halloween Spending

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By Celeste Lohrenz

It’s not uncommon to stress when it comes to holiday spending. We’ve all been there, with a list of presents in one hand and a suddenly shrinking wallet in the other. But it usually takes an entire season of spending until we reach our tipping point racing around for a hot-ticket item on Christmas Eve.

This year, however, consumers may start feeling the pinch a little earlier this season, as the National Retail Federation reports that Halloween spending is expected to hit a record—$9.1 billion—this year.

But that doesn’t mean you have to get spooked into record-setting spending yourself. In fact, there are plenty of ways that you can make sure to keep your costs down without sacrificing the spirit of Halloween.

Let’s break down some of the figures from the National Retail Federation’s report to show how you may be able to save a few dollars yourself.

Costumes: The NRF reports that costumes are the highest priced item on the Halloween shopping list. The average man will spend $96 on a costume, while women will spend $77. Costume shops will often have prepackaged costumes ready to go, but they will come at a premium. But if you have a  knack for arts and crafts, you may be able to build your own costume by shopping at discount retailers, thrift stores or pawn shops instead.

Candy: 95 percent of consumers who responded to the NRF study planned to purchase candy for Halloween, either to pass out to children or for a Halloween party. If you wait until the last minute, you may be stuck paying higher prices. If you act early, though, you may be able to shop around for the best bulk purchase.

Decorations: Thinking of putting a scare into trick-or-treaters with an elaborate decorative lawnscape this Halloween? Just remember that in some cases, you’re not just paying for the decorations. Decorations that use electricity—especially the inflatable ones for your yard—will end up costing you an additional sum beyond what you pay at checkout. You just won’t see it until your November utility bill arrives. Be careful with your decorations. Look for solar options when possible, and if you do need to plug something in, be sure to unplug it at the end of each night. Even if you turn the power off, anything that is still plugged in will use electricity.

Be sure to check back with us frequently this holiday season, as we’ll be offering advice to help you navigate your way right into the New Year. You can also learn more about managing your finances at our Online Learning Center here.

 

Money Talks—How You Should, and Shouldn’t, Discuss Your Finances

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By Pat White

There are few things in life more uncomfortable than talking about finances. In fact, people are even seven times more likely to discuss their love life with a total stranger than they are their salary. Despite the difficulties we have with communicating about our money, it is nonetheless important to do so.

If you have children, it is imperative that they learn early how to respect and recognize the value of a dollar. Whether they just opened their first checking account or are saving up to buy a car, it’s up to you to guide them. The lessons you impart onto your children now will forge an indelible mark on their financial decision making processes for years to come.

Couples might find this topic a little more difficult. Each partner comes in with habits and strategies of their own already in place. In these cases, it isn’t necessarily a matter of educating the other partner, as with children. Instead, it’s a matter of having open and honest communications about where you stand now, where you want to end up, and how you’ll get there as a couple. This is as true for a middle-aged couple planning for retirement as it is for a couple that has just started dating.

Of course, when having these conversations, you should be mindful of the fact that it can be a touchy subject. In order to make sure the conversation is a productive one, consider the following tips on how you should, and shouldn’t talk about money.

Point the finger at yourself: In a partnership, both parties need to agree to a strategy—and stick to it. But what do you do when your partner strays from the plan? You wouldn’t necessarily be wrong to call their attention to it. But we’ve all made mistakes, and they might remind you of that fact. Such conversations can quickly escalate into finger-pointing, justification and hurt feelings. Instead, turn the attention onto yourself. Mention to them how you intend to curb your own overspending, or give an example of how you overcame a similar obstacle in the past. They’ll likely get the point without the feeling of being under attack.

Make it about the math: Numbers don’t lie. They’re objective, rational and provable. So why do difficult conversations about money quickly get overtaken by emotion? It’s when we stray from the numbers that our passion can get the better of us. When talking about money be sure to set aside any other grievances you may harbor and simply stick to the facts at hand.

Finding the middle ground: Currency only works because we all accept the value of money as a society. But that doesn’t exactly mean that everyone values money in the same way either. Some are happy to watch their savings account grow, while others would rather spend their paycheck right away. As such, you can’t assume to have all the answers when talking finances with others.  Appreciate their perspective as you’d hope they would do for you, and always be ready to find a compromise that meets the needs of you and your partner, family or business.

Talk in percentages: Calling attention to your finances can make those in different economic circumstances uncomfortable. In some social circles, it’s even considered a faux pas. In order to have an honest conversation without calling attention to your actual worth, speak in percentages. Rather than saying you’ll invest $20,000 into a Mutual Fund, say that you’re investing 20 percent of your assets instead. It keeps the conversation vague enough to be respectful, while open enough to be engaging and honest.

Of course, at The Milford Bank it’s our job to talk finances. We’ve heard it all before and are always ready to listen. If you’re ready to talk finances, stop by an office location in Milford or Stratford today. You can also find more valuable resources at our Online Learning Center.

 

Five Key Takeaways from the MEF Banking App Study

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By Matt Kelly

There are more smartphones in circulation today than ever before, so it should come as no surprise that mobile banking app usage is on the rise again too. In fact, 61 percent of people use their bank’s app on a daily basis, according to a Mobile Ecosystem Forum’s “Mobile Money Report”, released earlier this year.

The report, a consumer study spanning 6,000 individuals in nine countries, highlights the continued emergence of banking apps as a critical touch point between financial institutions and their customers.

Let’s take a deeper dive into some of the significant details of the report below:

Consumers place trust in their devices. In the MEF report, consumers were asked which processing method they trusted most when using a credit card. A quarter of respondents preferred mobile-optimized websites or simply storing credit card data within a mobile app. Only 17 percent felt better handing a card to a store’s employee, while only 6 percent felt safe reading details over the phone.

Mobile experience is as vital as branch experience. 28 percent of respondents to the MEF study said they preferred to do their banking at branches. However, app users are quickly gaining ground, with 26 percent preferring that option. Financial institutions must recognize the value of mobile experience, and those that create a seamless experience between apps and branches will likely gain a competitive foothold in the years to come.

Engagement is up, but visibility is down. With the introduction of mobile banking solutions, financial institutions are seeing more engagement with customers on a daily basis. 78 percent have made a mobile purchase over a six month time frame. 44 percent check their balances, while 29 percent pay bills with their smartphone. So while banks may not necessarily be seeing their customers every day, our devices are enabling us to make banking a more significant part of our day-to-day lives.

Privacy remains a top priority. 31 percent of MEF survey respondents claimed that they had abandoned purchases in the past because they were asked for too much personal information. With customer privacy a critical factor in cybersecurity conversations taking place within the financial industry, banks must work together with the retail industry to find ways to streamline purchasing processes while simultaneously shoring up consumer concerns at all points in the customer journey.

Apps aren’t the new plastic—yet. Only 18 percent of consumers have used their phones to pay for goods inside a brick-and-mortar store. The question is whether or not this figure is going to continue climbing or simply stagnate. But clearly, apps are now being developed to play an even larger role in your financial decision making. MEF suggests, though, that if such apps continue to expedite consumers’ financial transactions, it may become more popular.

At The Milford Bank, we’ve worked hard to provide our customers with as great an experience in our app as you’d have by stopping by one of our Milford or Stratford office locations. To learn more about how we’re keeping up in this ever-changing world to support you and your family, click here.

Equifax Data Breach Hits 143 Million Americans

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By Susan Shields

These days, there aren’t many big financial decisions that you can make without a credit report. You’ll need one to buy a home, lease a car, and maybe even land a job. But if you had your credit report put together by Equifax, you may be one of 143 million Americans with personally identifiable information now up for sale on the black market following a data breach at the agency.

According to Equifax, the breach began in mid-May and lasted through July. Among the information obtained by hackers includes peoples’ names, social security numbers, birth dates, addresses and even driver’s license numbers. Additionally, over 200,000 individuals had their credit card numbers stolen.

If you’ve been affected and fail to act, an individual who obtains your records can devastate your life. You may be on the hook for faulty loans, parking tickets, and any other poor choice made by a criminal in your name.

Recently, the FTC put together a set of recommendations to see if you’ve been impacted and, if so, what you can do about it. Read on to check out the steps you need to take to ensure the security of your credit. But be sure not to begin until you’re on a secure Internet connection.

  • First, see if you were affected. You can find out by clicking here.
  • Check your credit reports from Equifax, Experian and TransUnion for irregularities.
  • Put a credit freeze on your files—you’ll have to unfreeze them to do another credit report, but it will also be harder for someone else to make a new account in your name.
  • Monitor your existing credit card and bank accounts for charges you don’t recognize.
  • If you decide against freezing your credit, place a fraud alert on your files to warn creditors to verify the identity of anyone who attempts to use your information to secure a line of credit.
  • File your taxes as soon as you get the necessary information so that scammers don’t beat you to the punch and steal your refund.

There’s no arguing that the financial technology at our disposal today can make banking more convenient and cost effective. But we must always remember that emerging technology must be respected and handled with the utmost care. As long as you maintain a strong cybersecurity strategy, you’ll be able to stay ahead of the would-be scammers that seek to take advantage of the unsuspecting today.

To learn more about how you protect your finances, check out our Online Learning Center. You can also stop by any office of The Milford Bank in Milford or Stratford for more support.

FTC Warns: Watch Out for Scams When Donating to Hurricane Victims

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By Jorge Santiago

Late last month, the historic Hurricane Harvey hit the coastal regions of Texas and Louisiana with record-setting rainfalls, leveling entire communities in its path. The aftermath is hard to believe: billions of dollars of property damage and thousands of lives changed forever.

But in these trying times, the good will of the American people is always on full display. You may recall seeing the images of neighbors pulling neighbors out of treacherous flood waters, or first responders helping victims make their way to shelters. And of course, support is coming in from around the country in the form of donations too.

However, con artists often take advantage of disasters like Harvey to try and make a quick buck for themselves. In the aftermath of Hurricane Sandy several years ago, con artists duped unsuspecting donors out of more than $20 million, depriving the storm’s victims of vital supplies.

In order to help good Samaritans avoid the same pitfall in the aftermath of Harvey, the FTC has released a set of tips to help make sure your good will ends up being put to good use. Let’s take a look at how you can avoid being victimized yourself:

  • Donate to charities you know and trust with a proven track record with dealing with disasters.
  • Be alert for charities that seem to have sprung up overnight in connection with current events.
  • Designate the disaster so you can ensure your funds are going to disaster relief, rather than a general fund.
  • Never click on links or open attachments in emails unless you know who sent it.
  • Don’t assume that charity messages posted on social media are legitimate—research the organization yourself.
  • When texting to donate, confirm the number with the source before making your donation.
  • Find out if the charity or fundraiser must be registered in your state by contacting the National Association of State Charity Officials.

If you’re not sure whether or not the group you’re donating to is a legitimate organization, you can follow up through the Better Business Bureau by clicking here.

As a community bank, we at The Milford Bank firmly believe in the importance of lifting up our neighbors in times of need. And in the face of emergencies, the last thing we need are con artists taking advantage of the moment. But don’t be discouraged from lending a hand yourself—by taking the time to follow these tips and do a little research yourself, you’ll be able to help families start their lives all over again.

Milford, Stratford Residents: What’s Your Emergency Preparedness Plan?

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By Jorge Santiago

In light of the recent hurricanes that have devastated communities from Texas to Caribbean, Americans are taking notice and recognizing the importance of making sure they themselves are prepared in the case of an emergency.

Of course, with Milford and Stratford both on the shoreline, planning for a hurricane should not be out of mind. But the reality is that even a simple, general preparedness plan can help you, and your family, avoid the worst in the event of any type of calamity.

Fortunately, the CDC (Centers for Disease Control and Prevention) has issued a set of suggestions to help you establish a preparedness plan that will best suit your family’s needs. Let’s take a look below:

Make a family communication plan

It’s not as easy to shepherd your family to safety if they’re not all at home when disaster strikes. That’s why you need to have a clear plan in place for connecting with each other. This should include completing a contact card for each family member, choosing an emergency contact, knowing the number for local emergency numbers, and also making sure each member of your family knows how to text.

Make a family disaster plan

Different emergencies will warrant different responses. Your family should assess the types of emergencies that are most likely in your neighborhood, and come up with a specific course of action for each. This can include: finding safe spots in your home, choosing multiple meeting places around town, and determining the best escape routes out of your home, neighborhood or the general area.

Get your kids ready

If you become incapacitated yourself, it is vital that your kids know how to appropriately respond to an emergency themselves. Your children should know how (and when) to call 911, and be involved in all your emergency preparedness planning.

Additional steps to get prepared

In addition to preparing with your family, there are several other tips outlined by the CDC that will ensure that your preparedness plan goes off without a hitch. Make emergency kits for both your home and your car. Stay informed on current events in your area. Be sure to have appropriate insurance on your home. Learn about how, why and when to turn off water, gas and electricity at the main shut-offs, and be sure that your whole family knows how to use your fire extinguisher.

Of course, all this planning wouldn’t be complete without practice. Be sure to run an emergency simulation at least once per year to see how ready your family is, and where you can still make improvements. It might seem like a lot of work now, but it can be hard to think straight in an emergency and you don’t want to have to iron out the wrinkles in your plan when there’s an actual dilemma.

To learn more about all the ways that Milford Bank can help you protect your family today, click here or stop by any location of The Milford Bank in Milford or Stratford today.

 

Unlucky in Love? Your Credit Score—Not Your Game—May be to Blame

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By Trish Townsend

Based on the results of a recent Lending Tree survey, Americans are not paying close enough attention when it comes to their credit scores. The report revealed that 60 percent of people around the country do not know their own credit score.

On a day-to-day basis, you might not think it matters that much. But the reality is that your credit score impacts everything from the car you drive, where you live, and maybe even what you do for work.

If you’re still not convinced that you should be paying closer attention to your credit score, Discover Financial Services and Match Media Group—parent company of Tinder and other dating sites—just released new data that may be able to compel you after all.

In a study of 2,000 online daters, the joint study revealed that today’s dating pool places a high priority on the ability to manage money. Half of respondents claimed that having a good credit score was more attractive than having an impressive job. 58 percent said it was more attractive than having a nice car. 40 percent of respondents even said that a fit credit score was better than a fit body.

But why are today’s singles so drawn to individuals with high credit scores? It’s what the figure represents. 73 percent of survey respondents claimed that a good credit score suggested responsibility. Roughly 40 percent said it reflected a sense of trustworthiness and high intelligence, too.

Helen Fisher, the chief scientific adviser at Match.com and senior research fellow at the Kinsey Institute, put it in more academic terms, calling credit scores “honest indicators of who you really are,” as well as “Darwinian mechanisms for measuring your reproductive ability.”

While we may not be able to help you think up any one-liners to test when you go out to mingle on Saturday night, The Milford Bank is more than ready to help you take a closer look at how to improve your credit score. To learn more about how to set yourself up for sustained financial growth, stop by any office of The Milford Bank, or check out more resources at our Online Learning Center here.