March 13 Financial Fitness seminar

Back by popular demand!

As you may remember, we had a tremendous turnout for the November 2007 session with Dan Caplinger, estate-planning attorney, CFP, and writer for The Motley Fool. Several of you requested that we invite him for an encore presentation. So, it is my pleasure to announce that Dan will be back next week for a review of estate-planning basics and talk about investor behavior. More details, along with an agenda for the talk, will be listed on the library website soon.


Venue: Chelmsford Public Library, MA
When: March 13 (Thursday), 2008 at 7 PM
Title: Trusts & Estate Planning Part II, and Tips on Staying Calm In Turbulent Markets

See you there!

Time to take charge

Wake up Call

One would think that in today's society, which encourages putting self before others, everybody would make their finances the top priority. The truth, however, is that we are not financially prepared. In my earlier post, I had listed some of the reasons why the individual investor is not financially savvy.

In this post, I would like to talk about the reasons why we need to take charge of our finances:

Retirement

• According to the Employee Benefits Research Institute (EBRI) 2007 Retirement Confidence Survey, nearly 50% people have less than $25,000 saved!
• Many companies are discontinuing defined benefit plans (pension plans) and moving to defined contribution (401k plans).
• Individuals are responsible for their retirement accounts. Individuals need to be aware of different fund types (equities, income and sector funds), asset allocation and expenses among other things.
• Social security system may not be solvent when we retire.

Health care

• Health care and medical insurance costs , which have been steadily increasing, are expected to be majority of the retirement spending.
  

Negative savings

• We spend more than we earn. According to latest savings survey, national saving rate is -1% ! You do the math - I do not need to add anything here except that we should not forget the "Live Below Your Means" mantra.
  

Education costs

• College costs are increasing faster than inflation rate. For some of the top schools in the country, annual tuition and boarding costs are ~$40,000. Do you have enough money saved for junior's Ivy League education?

Estate Planning

• If you are lucky to leave a legacy behind, you need to establish the right trusts and estates to provide for your family and take care of other goals like charitable donations. According to some estimates, probate and estate settlement costs (a.k.a death taxes) can be up to 10% of your estate.
  

Fun money

• This is how we pay for the fun stuff - vacations, second home, cars, big screen TV, etc. While we like to splurge on vacations and toys, it makes sense to plan for such purchases so our saving plan doesn't derail.