Are You Prepared to Retire Early?

Early retirement has always been a dream for many Americans, yet most have not been able to achieve that goal.  Prior to the COVID-19 pandemic, 46% of retirees said they ended up retiring earlier than expected due primarily to four factors:  health conditions, emotional status, financial readiness, or job loss.  That means, while many were hoping to retire early, others were forced into it due to unforeseen circumstances.

Likewise, 43% of today’s largest segment of the workforce – the Millennial generation – is expecting to retire early.  But, more recent data suggests that, due to the pandemic, that number has grown even higher, with 20% of the total workforce, including 15% of Millennials, saying current conditions have accelerated their retirement plans.

The question is, can they afford to retire early?  Some people will have a very hard time if they are pushed into early retirement, while others may have been able to plan ahead and, even if they weren’t planning on retiring early, will be able to live comfortably.  Here are some things to consider as you plan for retirement, regardless of your current age.

Invest – Despite the fact that the stock market has been extremely volatile this year, consider investing.  Whether you are just entering the workforce or nearing standard retirement age, maximizing your retirement investments may help you when you do retire.  That includes your 401k or IRA contributions.  But, you should do it wisely and adjust your allocations based on your current and expected circumstances to maximize your retirement funds.  Be sure to speak with a financial expert who can help you make choices that are best for you.

Social Security – The amount of social security benefits you receive is dependent upon when you claim benefits.   The longer you wait, the more you’ll receive.  Waiting until full retirement age (65-67 years, depending on birth year) will mean your benefits can be almost a third higher than if you take them at an earlier age.  Similarly, if you retire late (or at least wait to start claiming your SSA benefits), you stand to get almost a third more than at standard retirement age.  If you can afford to live comfortably without it, waiting to claim your benefits may be an advantage later in life.

Understand retirement – Perhaps the most important part of planning for retirement is knowing what you’ll need to live comfortably.  That includes what you plan to do once you retire, what your other sources of income may be, what your expenses will be, and other factors.  Retirement planning can also impact where you retire:  A significant portion of Americans today are looking to retire in other countries with lower costs of living. Remember, if you plan on early retirement, you’ll need more savings because you’ll be living off your retirement income for longer, and don’t forget to factor in healthcare costs, inflation, and changes to expenses as you age.

Pay off debt – If you have existing debt, try to pay it down before you decide to retire.  Massive debt can impact your retirement lifestyle.

Build your emergency fund – It’s always good to have an emergency fund that can cover several three to six months worth of expenses should an emergency arise.  This is particularly important when you retire, so you won’t have to dip into your retirement savings to cover unexpected costs.

Evaluate your current spending – If you are looking to put more into your retirement savings, the easiest way is to reduce your current spending.  If you need help saving, there are some great digital tools that can help you put away extra income, which you can put towards retirement.

It can be hard to plan far into the future, especially when it involves a dramatic change like no longer working.  But, by taking the steps today and being aware of some of the factors that can impact your retirement income, you can set yourself up more comfortably.  If you need advice on saving, retirement plans, or other ways to make sure you have enough saved, your bank’s financial experts are ready to help.

Tips for Financial Spring Cleaning

By Celeste Lohrenz

Now that the weather is finally getting nicer, there are countless projects around the house you may want to tackle.  Maybe you’ve already gotten your lawn into better shape, or planted your garden, or even done some annual spring cleaning.  Have you given the same attention to your finances?  Just as you go through spring maintenance in and around your home, your finances may be in need of some polishing to make sure you’re getting the most out of your money.

Here are some tips to help get you started on getting your finances in shape.

Reduce clutter – If you’ve changed jobs several times during your career, you may have old retirement accounts that you aren’t managing anymore.  Looking into closing or moving them into your more active accounts will help you track you overall financial health, and will reduce your security risk by eliminating those accounts you don’t monitor.

Organize your documents – Take some time to make sure all your financial documents are organized in one place.  That way, you always know where they are when you need them, and it gives you a chance to do an inventory and locate items you may have misplaced or lost over the years.  You can do the same with your digital records – create folders in your computer storage and email specifically for financial records.  Be sure to password protecting those files and emails for added security.  Physically or digitally shred any old documents you no longer need.

Clean your home – In addition to your financial clutter, you may have acquired a host of items over the years you no longer use.  Go through your home and collect those items and sort them into three groups: sell, donate, throw out.  You may be able to claim your donations as a tax deduction if you itemize your returns, or you can sell them using local social media sites.

Retirement planning – If you don’t regularly re-assess your retirement finances, take a look at your IRAs and 401k accounts to make sure your contributions and savings are on track for a comfortable retirement.

Look over your budget – Take a close look at your monthly budget.  See where you may be overspending or paying for things you don’t need of use, like redundant digital services.  It may take several modifications to get to a budget you’re comfortable with.  If you haven’t created a budget, this could be a great time to do it.  Tracking you spending is the easiest way to start saving more.  In addition to a monthly budget, you can set an annual goal for savings.

Create a bill schedule – Most of your bills can probably be set to pay automatically.  This will help keep your payments on time and reduce the risk of late fees and credit damage.  You can also create a spreadsheet with every monthly bill (mortgage/rent, loans, credit cards, utilities, phone, etc.), so you can more easily track your payments and keep them on time.  If you’re living with roommates, this can be a great way to manage combined bills.

Emergency fund – If you’ve had to dip into your emergency fund during the coronavirus pandemic, you should consider making a plan for replenishing it as things start to return to normal.  If you don’t have an emergency fund, the current situation is a great example of why you should.

Automate saving – There are many tools that can help you automate saving, like Plinqit, a free tool that lets you set your personal savings targets and schedules based on your budgeting needs.  You can even earn additional money in several ways, like reaching your goals, referring others, and using financial education resources.

Cyber security – Make sure all your digital devices have good security software installed, including your smartphones, to reduce the risk of your accounts and finances being compromised.  Be sure to use very secure passwords and multiple layers of authentication.

It’s a good idea to regularly monitor all your financial accounts and credit reports to make sure everything is in order and you haven’t been compromised.  Going through this financial spring cleaning list can make it easier to manage your financial health.  If you need advice or information on any of your accounts, services, or tools, your we are ready to help.

Five Financial Challenges to Test Your Saving Skills

By Tina Mason

One of the best ways to invigorate your saving strategy is by issuing yourself a challenge. Not only does the competition make it a little more fun, but you’ll also learn valuable lessons about the long-term benefits of discipline, the way your daily spending habits impact your quality of life, and just how much you can accomplish when you set your mind to it.

If you’re looking to make improvements to your financial planning and add a little extra padding to your savings account, here are five financial challenges you can try.

Take a new look at a favorite vice: There’s nothing wrong with splurging every now and then. But if you’re spending $5.00 on a cup of coffee every day, you may want to take a fresh look at how you get your morning pick-me-up. Could you live with making coffee at home and saving yourself over $1,000 a year?

Dive into the gig economy: If you find yourself with lots of free time and aren’t sure what to do with it, challenge yourself to finding a part-time gig. If you love nothing more than driving around town listening to music, maybe Uber would be a good fit. Fancy yourself a writer? Try to get published as a freelancer. There are tons of opportunities that will fit where, and how, you need them to.

Live like you’re single: Remember when you were young and single? You could somehow survive in an apartment the size of your living room. You ate Ramen noodles for breakfast. And even if you had less money saved up, you may have felt more financially free. Granted, your spouse may not appreciate Ramen the way your 20-year old self did. However, we all behave differently when we engage with others. By focusing solely on your own finances for a brief stint, you may be able to indicate where you’re letting money fall through the cracks.

A dollar a day: This one’s simple. Get a jar, and add a dollar to it every day. If you’ve got something you’re saving for, simply wait until you’ve gotten there. If not, consider it a rainy day fund for an emergency. You’d be surprised how easy it is to forget about a dollar every day.

Pile up your perks: Perks are everywhere these days. Debit and credit cards will often offer discounts, deals or cashback. Some people go coupon crazy at the grocery store. In this challenge, you are tasked with taking cash equal in value to the perks you’ve accumulated and putting it into a new savings account. It is a way of making your savings seem tangible, and will always help to remind you  to look for savings in your day to day life.

At The Milford Bank, we’re always looking for great ways to help you grow your wealth, protect your family and live your best life. To learn more ways to save, stop by any office location in Milford or Stratford or check out our Online Learning Center here.

 

ABA Announces Consumer Awareness Observance Days for 2018

By Rebecca Tudor

Every year, the American Bankers Association releases an annual calendar including specific dates for consumer awareness observance days. While “Earned Income Tax Credit Awareness Day” might not have the same ring as Halloween or Independence Day, such observance days can be incredibly useful for taking a moment to assess your own financial status and learn something new about managing your wealth.

This year, we’ll be following the ABA’s calendar closely, tying in articles to provide some extra information for you to celebrate observance days. Pay close attention—we may even be running special events to celebrate some of these festivities at our office locations!

Read on to see the ABA’s schedule for 2018. Each month will provide you different financial perspectives, so we challenge all Milford Bank customers in Milford and Stratford to get creative and show us how they plan to celebrate!

January

1/26: Earned Income Tax Credit Awareness Day

1/28: Data Privacy Day

1/29-2/2: Tax Identity Theft Awareness Week

February

2/26-3/3: America Saves Week

March

3/4-3/10: National Consumer Protection Week

3/20: National Agriculture Day

April

National Financial Literacy Month—celebrated all month

Records and Information Management Month—celebrated all month

4/1: National 1 Cent Day

4/16-4/22: National Health Care Decisions Day

4/17: National Tax Day

4/20: National Teach Children to Save Day

4/29-5/5: National Small Business Week

May

Older Americans Month—celebrated all month

Military Appreciation Month—celebrated all month

June

American Housing Month—celebrated all month

National Internet Safety Month—celebrated all month

6/15—World Elder Abuse Awareness Day

6/28—National Insurance Awareness Day

July

National Make a Difference to Children Month—celebrated all month

August

Back to School

September

College Savings Month—celebrated all month

National Preparedness Month—celebrated all month

9/9—National Grandparents Day

October

National Cybersecurity Awareness Month—celebrated all month

National Crime Prevention Month—celebrated all month

Family Health Month—celebrated all month

10/1-10/5—Customer Service Week

10/1-10/5—Financial Planning Week

10/18—Get Smart About Credit Day

November

Military Family Month—celebrated all month

National Scholarship Month—celebrated all month

National Family Caregiver Month—celebrated all month

December

Identity Theft and Protection Awareness Month

At The Milford Bank, we’re committed to helping you stay focused on your bottom line all year round. So be sure to check out the ABA calendar and find some topics that pique your interest, as we’ll be putting together supplemental educational resources to correspond with the ABA’s observance days throughout 2018.

If you’re interested in learning even more about a particular subject from the calendar, be sure to check out our Online Learning Center too. It’s a wealth of resources designed to help all our customers achieve the best possible financial outcome for their family’s needs and wants. To learn more, click here.

Millennial Spending Habits Leave Little Room to Save

By Cortney Meng

It was only three years ago that Millennials became the largest generation in the U.S. labor force, surpassing the Baby Boomers with employment numbers of 53.5 million. This seemed to be a coming-of-age moment for Millennials, but new research indicates that in spite of three straight years as the top demographic in the labor force, Millennials have yet to turn their earnings into savings.

According to a new Bank of America survey, it was found that 46 percent of Millennials had no money in a savings account in 2017. Even more startling, this number actually increased from 31 percent over the span of just one year.

Given the fact that Millennials are working more but spending less, this financial epidemic may be rooted in poor spending habits. Let’s take a deeper dive into how Millennials are spending their money in 2018, and what they can do to break the cycle and bolster their savings.

Spending on comfort and convenience

A Charles Schwab report found that Millennials, more so than previous generations, are willing to spend frivolously on comforts and conveniences. 60 percent admitted to spending more than $4 on coffee, 79 percent would splurge to eat at the hot restaurant in town and 69 percent buy clothes they don’t necessarily need. Millennials also surpassed both Generation X and Baby Boomers when it came to shelling out cash for the latest tech gadgets and live events, as well.

Bills, bills, bills

Though Millennials do their share of frivolous spending, not all the bills in the mailbox are a choice. In fact, a recent Mother Jones study compared Millennials to young families from the 1980’s and 1990’s and found that young adults today pay about $1,000 more on healthcare, $1,500 on pensions and Social Security, $2,000 more on overall housing and $700 more on education.

Simply put, cost of living increases have put a damper on what earnings Millennials have generated. That said, the need to save for the future must remain a top priority. Millennials must reconcile the lifestyles they wish to lead with the realities of the world they want to live them in.

So what can Millennials do to start getting their savings accounts in the black?

Forbes recently outlined some of the ways in which Millennials can begin breaking the bad habits that have gotten them to this point. Here are a few key points:

  • Millennials, natives of the Social Media age, are often pressured to be at every event, party or Happy Hour. FOMO, or “fear of missing out”, is a very real phenomenon and can often lead individuals to spend money they don’t have, simply to ensure they’re in the picture—both literally and figuratively.
  • Setting clear goals is crucial, especially if you’re not where you should be or want to be financially. Even if it’s just saving $10 from each paycheck, it’s a start. By clearly defining your needs, and your limitations, you’ll soon be able to turn $10 into $100.
  • Checking and savings are two different things, yet many Millennials try to use a checking account for all their cash. Not only does this curb your growth potential, but it becomes all too easy to draw from that money in a particularly tight week. If it’s visible and easily obtained, you may have a hard time saving it.

To learn more about developing an approach to saving that will get you where you want to be, stop by any office of The Milford Bank in Milford or Stratford, or check out our Online Learning Center here.

Investment Tips for an Uncertain Market

By Matt Kelly

At the end of January, the Dow Jones Industrial Average capped off another record-setting month of growth, settling in around 26,600 points. Just a week into February, and the market had shaved off nearly 2,000 points as analysts began to question whether the bull market had finally slowed to a halt and whether we were in for a correction, recession, or more.

Now, investors find themselves quickly fluctuating between rapid sell-offs and frenzied buying sprees, uncertain about the more long-term economic outlook.

Of course, it’s not advisable to simply liquidate your assets and keep it all as cash under your mattress just because the stock market is volatile. Instead, this is a good point to calmly evaluate your needs, your long-term goals, and consider tweaking your investment strategy to make sure you don’t waste any time growing your portfolio.

While you should never make an investment without first consulting your advisor, here are a few tips to help steer you in the right direction.

You don’t need to abandon the markets entirely: Even when the markets suffer huge losses, there are still plenty of successful companies that weather the storm. You don’t need to pull all your savings from the stock market, but you do need to address whether or not your portfolio is diverse and conservative enough to be protected from a bear market.

Check out indexed and whole life insurance policies: Not only is life insurance an important component of your family’s financial planning, it can also act as an investment vehicle depending on the type of life insurance you procure. A whole life insurance policy will provide you with extra cash every time you pay your premiums. Indexed policies use that cash value and invest it into accounts tied to an index like the S&P 500. They have a floor of zero, meaning that you won’t lose money in a bad year, but still retain upside potential.

Consult with your financial advisor: Watching the stock market go up and down can be more emotional than an Oscar-nominated drama. And if you’re emotional, you may not be making sound financial decisions. Consult with your financial advisor before making any sudden changes to your investment strategy. This will ensure that your goals, and your financial needs, are both working in conjunction to secure your future and maximize your wealth.

To learn more about the savings opportunities available to you, stop by any office of The Milford Bank in Milford or Stratford, or check out our Online Learning Center here.

The Savings Spotlight Series, Part 3: Mid-Career Planning

By Chaz Gaines

In the Savings Spotlight Series, we’ve made the case that there are numerous stepping stones throughout our lives that lead us down the path to financial well being. At every point, you’ll need to take a different approach. A teenager, for instance, might be saving for their first car. An individual nearing retirement is going to have a drastically different goal, and method, for reaching their savings objective.

Already in this series, we’ve provided useful savings tips for both first-time banking customers and recent college graduates. In Part 3 we’re going to fast forward a decade or two along our path to retirement, focusing in on the savings needs of individuals in the middle of their careers.

Maximize employer benefits: Most of the businesses that offer retirement benefits will no longer contribute after you’ve left the company. Now, nearing the height of your earning power, you should be doing all you can with the remainder of your working years to take advantage—especially if your employer will match your contributions.

Balance retirement and college funds: Many individuals at this stage in their lives must reconcile the need to have a forward-thinking retirement-oriented saving strategy while simultaneously helping their children get started on their own path. It can be challenging, but your focus when crafting a budget and savings strategy should balance both.

Bolster your emergency account: Many individuals at this stage in their working life have been at their jobs for twenty years or more—making them feel quite secure. But sometimes, business decisions are out of our control, and many families get blindsided by that false sense of security. Even if you expect success, a failure to keep an emergency cash account funded could put your family at risk. Many experts believe you should have at least six to nine months salary readily available in case of emergency.

Expect the unexpected: Just like it’s important to plan for emergencies throughout your life, it’s important to plan for the end of your life too. If you were to pass away today, your grieving family would still have to keep paying the mortgage, fund college accounts and plan for retirement—all without your income. While this is a sensitive matter in which thinking about money should be secondary, it’s nonetheless a reality that your family will have to cope with. Securing life insurance will provide the coverage your family will need in the event that the worst comes to pass. Some policies, like whole life insurance, even have features to assist with your savings goals.

Shift investments to meet changing goals: Every investment vehicle offers a unique benefit. So if your financial goals are shifting, shouldn’t your savings strategy? When we’re young, we have more ability to rebound from a risky investment. We also have more time to let a certain, conservative investment grow. Now, in the middle of your working life, it’s important to take a moment to reflect on whether the vehicle that got you this far is going to be the vehicle that gets you all the way to the finish line, or if it’s time to trade in.

To learn more about crafting the best saving strategy for you and the needs of your family, check out our Online Learning Center or stop by any office of The Milford Bank in Stratford or Milford today.

The Savings Spotlight Series, Part 1: First-time Savers

By Chaz Gaines

Every individual has different goals and unique circumstances that help to guide the decisions they make when it comes to their savings strategy. Some people have decades of work ahead of them to steadily sock away money for retirement, while others are looking to gain ground quickly with retirement just a year or two away. Some individuals have large families with children to send off to college, while others are responsible for only themselves.

In the Savings Spotlight series, we’ll take a look at some of the big benchmark moments throughout life. We’ll look at how teens, recent graduates, young families, and those closer to retirement all have varying needs that require a different savings approach.

In Part 1, we’ll provide some savings advice for teenagers who are first-time savers. Just because they’re young, it doesn’t mean that their summer jobs or weekly allowances can’t help them to begin building a robust portfolio to maximize their savings now. If you’re a teen, or have a teen, who is just starting to learn about saving money, here are a few tips to get them started.

Distinguish between short, medium, and long term savings

It’s important for kids to be kids, while also learning fiscal responsibility. As such, there’s nothing wrong with a teen wanting to save up for a concert or snowboard at the same time they’re saving for college, or even retirement. It’s simply about making a clear distinction and sticking to your plan.

Putting savings strategies into context

When it comes to long term saving, it is easy for teens to be too reactionary. For instance, a minor stock market correction could seem like the next Great Depression if you don’t have the benefit and wisdom that comes with watching such fluctuations occur for decades. Teens must remember that, depending on the investment vehicle, the money they set aside today may not be used again for another half century. As such, it’s best to set a strategy and stick to it, rather than continually pull your money in and out of savings to try and time the markets.

Thinking about risk and reward

Risk and reward are inherent in any investment. Finding the most optimal vehicle for your needs is all about striking the right balance between risk and reward. Young investors don’t typically have the assets to make a lot of risky investments. But conversely, they’ve got lots more time to make up ground if a high risk-high reward investment doesn’t pan out. Young investors are in a unique opportunity to use their age to their advantage, but you must assess your risk tolerance carefully first.

Never too young for life insurance

While teenagers might think they’re immortal, certain types of life insurance can offer significant savings upside for teens. Whole or permanent life insurance contracts provide additional savings components, as they accrue cash value when you make premium payments. And because age and health are critical elements in determining the premium costs of a life insurance contract, the younger you are when you lock in your rates with a permanent plan, the cheaper it will be and the earlier you’ll start saving. Not only will you protect yourself and your future family later in life, but you’ll have a big leg up on your cash value investment too.

At The Milford Bank, we have helped countless members of the Milford and Stratford community develop successful savings strategies for their wants and needs. No matter where you might be with your own personal savings strategy, we can help. Stop by any Milford or Stratford location near you, or check out our Online Learning Center to learn more.

And be sure to stay tuned for Part 2 of this series, when we’ll be highlighting savings strategies for recent graduates.

FDIC Reports 10 Scams Targeting Banking Customers- Part 1

By Dave Wall

The holiday season is upon us once more in Milford and Stratford, and we’d be willing to bet that you’re one of the millions of Americans that has already helped to make the 2017 holiday shopping season a record-setter. But in the flurry of transactions and the general chaos that is the holiday season, it can be difficult to stick to financial security best practices.

However, according to the FDIC, it’s now more important than ever.

In a recent report, the FDIC issued a list of 10 scams being perpetrated today by con-artists looking to empty bank accounts, steal financial data and ruin much more than your holiday.

In this series, we’ll take a deeper look at the list so that you can stay on alert through the holidays and throughout the rest of the year, too.

  1. Government Imposter Frauds: If you get a call, an email or letter from a government agency requesting that you make an immediate payment or provide personally identifiable information (PII) on the spot, you’re the target of a government imposter. Government agencies will never ask for PII or a payment in the moment.
  2. Debt Collection Scams: Criminals will often pose as debt collectors or law enforcement officers in an attempt to shake down unsuspecting individuals who may already be having a tough time dealing with debt. If the individual cannot produce records, or threatens violence or arrest, you will know that it is not a legitimate claim.
  3. Fraudulent Job Offers: Background checks are part of many legitimate job offers. But some con artists are now using online classified ads to draw in job seekers with cryptic promises of employment. They’ll request personal information to conduct what they claim is a background check, when in reality they’re using the information to steal your identity. You’ll have to do your due diligence when looking for employers, so be sure to gather all the facts about a company before you comply with a background check.
  4. Phishing Emails: Phishing emails use spoofing software to mimic the email address of your contacts. They will then disseminate an email—typically with malware embedded within a link in the body of the text—in the hopes that someone will click the attachment. This will then give the hacker remote access to your device, helping them to find your financial records and PII.
  5. Mortgage Foreclosure Rescue: There are plenty of homeowners out there having a hard time making ends meet. But if you’re approached by a loan broker or consultant with an offer that sounds too good to be true, it probably is. They’ll promise you anything in exchange for a down payment or personal information, but in many cases victims end up getting foreclosed on anyway. In other cases, victims are even tricked into signing away ownership of their property to the scammer.

To learn more about how to follow financial security best practices, stop by a Milford Bank office location in Milford or Stratford, or check out our Online Learning Center here. And be sure to keep watch for Part 2 of this series, when we’ll be delving into the FDIC’s remaining 5 scams targeting banking customers today.