Thursday, July 17, 2014

Getting Our Financial House in Order

At different times in your life you start to look at different things. With my Dad passing away and with me having to wind down his financial affairs, I've taken a look at our finances and done some reading on financial planning, retirement planning and the like. Since my blog is called This That and the Other Thing, not RAnn's Book Reviews, I'm going to write about some of my thoughts and findings. I'll also admit that this series of articles is a shameless attempt to get search engine attention and attract readers to my blog.
Used with permission:
There is a lot out there that didn't exist a few years ago.
I used to really keep up with the financial world.  I read Money magazine, books on personal finance and the like.  I kept up with how our investments were doing, compared them to the funds Money was recommending,  and made changes when necessary.  Then life (and three kids) got in the way.  In the last few weeks I have realized that I don't know what an EFT is, much less why they are a very popular product today.  I had never heard of peer-to-peer lending, much less invested money in it.   While I track our portfolio on AOL, I didn't realize how many websites would analyze that portfolio and tell me what was wrong with it.  I didn't know there was a place that you could buy portfolios of stocks related to a theme, even if your theme is "I like them", and basically create your own mutual fund, paying only one commission for the whole "Motif", not one per stock.  

We really aren't going that badly.
I've run a variety of retirement planning calculators across the web and most show us on track to meet our retirement goals, but not way ahead of them.  That's a good thing because unlike many of our peers, we are not spending the last decade or two of our working life as empty-nesters.  My husband will be seventy when my baby graduates from college, and our financial goals include Catholic high school for her (probably about $10,000/year for five years---high school starts in eighth grade here) as well as college.
Photo used with permission:

We are on the downhill slide toward retirement, really.
I remember when I started my current job.  I had an eighteen month old baby.  That baby is now twenty-two and over six feet tall.  By the time I started this job, I was no longer the youngest person in the office; not by a long shot.  Still, I was part of the young crowd.  Now the young secretaries, and even some of the young lawyers call me "Miss R___".  At some point I realized I wasn't part of the young crowd and now I know I'm one of the older women.  When we used to look at retirement planning we were in the "long term" investor group, the one that had time to recoup losses.  Now we are in the "Approaching Retirement" group, even if I am still chaperoning fifth grade trips.  The day I leave the office for the last time will be here before I know it.

We decided, at least for now, to get professional help.
I believe there are two reasons to hire someone to do a job for you:  1) you need it done and you don't want to do it more than you want the money it will cost you to pay someone to do it for you or 2) the person you are hiring can do a job better than you can and it is something you need done.  I'm not sure which reason applies here, but we have decided to get professional help.

I generally do our taxes.  I don't particularly like the chore, but the reality is that my husband and I are both employees who get W-2s at the end of the year from our employers.  Our investments are in mutual funds that send us tax forms yearly.  Our house is paid for, so itemizing deductions just doesn't work for us anymore.  In other words,  I don't need anyone to do our taxes, usually.  However, over the last  year we've spent a good bit of money on my autistic son and reading what I could, I thought maybe we could deduct that, but I wasn't sure.  Time to call in a pro.  We have a friend who is a CPA and he used to do our taxes when my husband owned a business.  Since I don't believe in asking for professional advice without paying for it (and I doubt my friend would offer such advice) I had him do our taxes this year, and like any good businessman, he tried to sell me other services, in this case financial planning.  I had been thinking about looking for someone so I was receptive.  I did some research and found that his rates were competitive (a percent of our portfolio) so we decided to give it a whirl.  After a year, if we aren't happy, we'll make a change, but at this point in our lives, I think it would be useful to get someone to take a look at what we have and where we want to go, and make sure we are on track to get there.

This is the first in a series of posts.  In  upcoming weeks I'll be writing about my experiences with a new type of investment, what I thought about our financial planning session, and whether we really are on track.  I'll also muse about the "now" vs. "later" spending conflicts, and look at our budget (or lack thereof) and whether using one can help us direct our finances to better meet our goals, both long term and short.

I'd love to talk retirement with you, my readers.  Do you have investments beyond your 401K and garden variety mutual funds?  How did you pick them, and why?  Do you use a financial planner (or have you been burned by one)?  Do you think you are on track for retirement?


  1. We have a variety of retirement savings but I'm not certain what they all are as dh takes charge of that. We have a military retirement check, VA disability check, CDs, and other investments that come out of the paycheck

    1. My Dad retired as a Major in 1973. In going through his stack of stuff, I saw that his original retirement pay was under $20,000/year. His income last year (retirement, SS and required IRA distributions, and interest on CDs) was over $75,000. I think you all should be fine. I shook my head when I saw that when he started his civilian job he was a part time employee making $8.50/hr. He got his Ph.D. the same time I graduated from college. The next year he earned twice what I made as a beginning school teacher (and a lot less that what I am earning now--and my pay isn't that different from teachers' pay)

  2. Retirement planning can be a hard task, especially if you’re occupied with your job and other household tasks. It’s nice to know that you’ve considered the help of a professional. Aside from removing the burden from you, you can rest assured that your retirement funds are handled by professionals and experts. Good luck on your retirement venture! I’ll be looking forward to reading your updates. Have a great day! :)

    Stacey Neal @ Romero Insurance & Financial Services

  3. We, at 56 (57 soon) and 64, have been retired for three years. The six years leading into retirement we lived on one salary. That gave us the opportunity to put the other salary (and pension) away. In that time we paid for two weddings in cash, gave down payments for two houses, and saved up enough to be comfortable in retirement. It worked.
    Now that we live only on Army pension, we still put away several hundred a month. Our children are doing well on their own now and our home time is our favorite. My mother chooses to gift every year instead of waiting until she passes away. By doing that we are able to travel, with the entire family, several times a year. I do not consider that money as part of my household budget.
    I (the person who keeps the accounts) find financial planners (usually brokers) use them for a while (five to seven years) and then work on my own for a while. I just cannot get past paying someone to watch my money once it is in play. My bank offers a free CFA to look at retirement plans, and he gave me an A (but I think we are more in the c category). My IRAs are currently in the market and my husband's have been in cash for over three years. It is what it is.
    So much to think about :) Don't do an annuity unless your son benefits.Otherwise- the sky is the limit!

    1. My dad gave us gifts every year too. They have been a big help, especially when it came to paying for Catholic high school for my son.

      Having a pension you can live on if necessary makes all of this so much easier. Unfortunately, we aren't going to be in that boat, unless we find we can live on Social Security. I hope to be paying for two weddings, and I want to travel once we retire (and even some before).


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