Top Retirement Hacks For People Reaching Retirement Age

Agemy Financial Strategies

June 22, 2022

Worrying about having enough retirement savings can keep you up at night. The good news is there are some hacks that can make it easier.

Is there a secret to retiring on time? Well, maybe. But it probably isn’t what you think. The average age at which people retire varies greatly depending on factors like ease of work, health, and financial preparation. A comfortable retirement is something that most people dream about. Lots of hard work and dedication can help you get to the point where you can retire with ease.

If you are approaching retirement age and you want to retire on your terms, one of the most important things you can do is understand how long you will need to work. Many of us have dreamed about retiring comfortably, but it can be difficult for those who feel like they have been working all their lives. Here are our top retirement hacks for those reaching retirement age.

Figure Out How Much You Need

One of the difficulties of creating a financial plan for retirement is that it will differ dramatically depending on when you want to retire. This along with hundreds of other criteria can be difficult to predict how much you will need. Factors such as health and family circumstances will throw your plan off course at times.

It’s important to create a financial plan that you can change as life continues. With Agemy Financial Strategies, we can help you create a plan that changes along with you and life’s changing circumstances. We provide a wide range of financial planning services such as:

  • Retirement Planning
  • Estate Planning
  • Lifestyle Planning
  • Money Management
  • Insurance Options
  • Investments
  • Tax Options

Eliminate Debt

When you have debt, you are diverting money from wealth-building activities such as saving and investing. Debt can squeeze your retirement savings by reducing your cash flow. This can make it tougher to save as much money as you’d like, which can depress your standard of living in retirement.

A great way to start chipping away at your best is by paying off high-interest credit cards. Make a list of all the debt you have acquired starting from highest to lowest interest and prioritize paying off the ones with higher interest first. By doing this and reducing your spending you won’t add to your debt balance. The sooner you stop overspending the sooner your money can be put into savings for retirement.

Plan For Healthcare Costs

Sure you have planned for healthcare in retirement. But have you budgeted enough? Health insurance, drugs, medical supplies, health services and out-of-pocket expenses quickly add up. According to a report by HealthView Services Financial, a healthy 65-year-old couple retiring in 2019 can expect to spend more than $387,000 for retirement health care costs, not including long-term care. This projection is based on the current value of the U.S. dollar and includes Medicare premiums, the costs of supplemental insurance and other out-of-pocket expenses for a man whose life expectancy is 87 and a woman whose life expectancy is 89.

Hoping to retire early? One of the biggest drawbacks to any retirement is how to fund healthcare. Unfortunately, Medicare isn’t available until age 65. Self-insured retirees in their 40s, 50s, and 60s can be looking at an expensive healthcare plan. Here are a couple options you can look into if you’re not at age 65 quite yet.

  • Look into Private coverage – this can be expensive but it’s also a flexible insurance option.
  • Obamacare – This program made strides in making early retirement health insurance affordable. One of the major points to note is that preexisting conditions are not a factor when you apply which is helpful to many in their 50s and 60s.
  • Self-Funding with an HSA – an HSA is a good option regardless of age and can help you retire early and allow for the funds to pay for copays and other out-of-pocket health care costs.

Having a plan for how you will cover this cost in retirement is absolutely essential.

Take Advantage of Catch-Up Retirement Savings 

After you have figured out how to reduce your current expenses, you will be in a better position to start taking advantage of catch-up retirement savings. Catch-up contributions are the IRS’s way of making it easier for savers aged 50 and up to contribute enough money to their retirement savings.

UnforTunately, the IRS imposes limits on how much you can contribute annually to tax-advantaged retirement accounts such as IRAs and 401(k)s. However there is a silver lining to this plan.  The IRS allows people who turn age 50 or older to make additional “catch up” contributions over and above the annual contribution limits. This includes contributions to your 401(k), 403(b), or 457 plans.

Other Considerations

Of course there are multiple other realities in retirement to be aware of; including remaining flexible in your retirement date, and even consider including a phased-retirement. Why? Because clocking in at a reduced work schedule allows freedom to focus on the other parts of life, such as family, travel and volunteering, while still earning a paycheck and employer benefits to keep your financial safety net in place.

Whatever your retirement strategy, there are risks to identify and manage as you navigate retired life. But one key factor remains the same: the more you prepare, the less nasty surprises you’ll face along the way.

Final Thoughts

Planning for retirement may look harder than it seems. But having a trusted financial advisor on your side will make planning for the golden years easier. When it comes to creating a retirement plan it’s important to account for the changes that come with life. Having an advisor guide you through the process will help you feel more at ease when retirement does come.

At Agemy Financial Strategies, we value the time we take to get to know you and your situation so we can create a plan specifically tailored to you. Our purpose is to educate our clients – whether that be planning for retirement, legacy planning, wealth management, or just holding your hand when it’s time to leap into retirement.

We want you to know we’re here to help you navigate any questions you have regarding investments, retirement and anything else that comes up during your retirement process. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs.

For more information on our retirement and financial planning services, contact us here today.

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3 Strategies for Investing in a Bear Market

Agemy Financial Strategies

June 14, 2022

Investing at a chaotic time like this takes fortitude and planning. And if you can handle it, a falling stock market can be an opportunity for people with long horizons. But are the risks involved worth the gamble? Let’s find out.

As investors grow increasingly worried about inflation and higher interest rates, Wall Street has fallen into a bear market.

Making the right moves with your investments and retirement plan is key when the stock market is in free fall like it has been – and it is one of the best ways to build long-term wealth. So how come so few are taking advantage? Firstly, Americans have a lack of confidence when it comes to investing, especially women. A study conducted by the U.S. Bank, found women were less confident and less engaged with managing money compared to men. And with the current market, it’s no wonder why.

Investing is not something that comes easily to everyone. It’s something that you need to work at in order to feel more confident in. When it comes to the stock market, investor confidence is one important factor, the other is having a confident financial advisor. Having an experienced and confident financial advisor will help you to make better decisions as an investor.

What Investment Advisors Do

Investment advisors, also known as Financial Advisors, make investment decisions on behalf of their customers and adjust portfolios over time to meet predetermined goals.

Without an investment advisor, it’s up to you to decide things like what assets to hold in your 401(k), how much exposure you want to specific industries, and what percentages of your money to invest in which vehicles.

Investment advisors work as professionals within the financial industry by providing guidance to clients in exchange for specific fees. Investment advisors owe a Fiduciary duty to their clients and are required to put their clients’ interests first at all times.

Seeking financial advice can help you prepare for downswings and seek out new opportunities in the markets. Whether you’re feeling bullish or bearish, enlisting the guidance of a Fiduciary financial advisor can help you manage your assets with your best interests in mind.

Looking for ways to become more confident in your investment decisions? Here are 3 ways to acknowledge the fear factor that accompanies investing to help boost your financial faith.

1. Recognize that stock market downturns are normal

A bear market is defined by a broad market index falling by 20% or more from a recent high.Now, the S&P 500 is down around 22% so far in 2022 and bitcoin’s price has fallen more than 60% from its high of $68,000 in November. But stock market crashes are nothing new. In fact, the S&P 500 index has experienced 26 other bear markets since 1928 and, ultimately, it’s managed to recover from every single one. Recognizing that market downturns just happen could make the idea of living through one less worrisome.

Increasingly volatile changes in the value of stocks have become more common. The average stock market return is 10% per year, and yes, sometimes, like in 2022, it’s lower, and sometimes it’s higher. It’s a good rule of thumb to stay invested and resist the urge to pull out of the market on down days like these.

2. Conduct Thorough Research of the Company You’re Investing In

You want to know that you are buying from the right company so when stock prices momentarily fall, you won’t be triggered to move and sell immediately.

One of the benefits of knowing that you are investing in a great company is that you know the company will be around in the next decade. In other words, always think long-term, not short-term. Beyond knowing a company’s financial metrics, you also want to know that the company is run by trustworthy and good people.

Having more confidence in the company results in more confidence in your investment choices for that company. When you know that you have really found a great company, you want to do your best to buy it on sale. If you do your research and know that you’re buying something that is considered good stock at a low price, you know not to be discouraged as you understand the true value of the company. Therefore, knowing that it will come back up to its non-discounted price eventually will help build confidence moving forward.

3. Have an Experienced Financial Advisor to Guide You

An investment advisor is an expert on matters related to your investment portfolio and could be a vital asset in helping you grow your wealth. Just selecting an investment advisor is not the end of your financial journey. You should be cognizant of your investments at all times and keep asking questions from time to time.

While Americans seek to gain investing confidence during a bear market and that gap of women is slowly beginning to shrink, it’s important to know what to look for in an experienced advisor. All generations of women and predominantly boomer men value an advisor who takes the time to listen to them. When choosing an investment advisor, be sure to explore the following questions and attributes:

  1. Financial planning expertise: what qualifies them as an advisor?
  2. Fiduciary services: Fiduciaries need to ensure that they are working in the best interest of their client.
  3. What other services do they provide? While all investment advisers will help guide your investments in the right direction, there are some that may provide additional services such as tax strategies, insurance policies and lifestyle management.
  4. What is their investment approach? This question will help you determine your fit with an advisor.

Final Thoughts

Investing should be easy – just buy low and sell high – but most of us have trouble following that simple advice. Especially in a bear market when tensions are high. There are principles and strategies that may enable you to put together an investment portfolio that reflects your risk tolerance, time horizon, and goals. Understanding these principles and strategies can help you avoid some of the pitfalls that snare some investors.

When it comes to investing, the key is to know what you’re buying and to always stay rational. Don’t let your emotions get the better of you. If you’re like most people, you might be looking to find a financial advisor who has experience and confidence when it comes to suggesting the best investment strategies for you.

How We Can Help

At Agemy Financial Strategies, we value the time we take to get to know you and your situation so we can create a plan specifically tailored to you. Our purpose is to educate our clients – whether that be planning for retirement, legacy planning, wealth management, or just holding your hand when it’s time to leap into retirement.

We want you to know we’re here to help you navigate any questions you have regarding investments, retirement and anything else that comes up during your retirement process. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs.

For more information on our investing, retirement and financial planning services, contact us here today.

 

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Financial Planning Tips from One Father to Another

Father’s Day is upon us, and no matter what type of gift you decide to purchase, if you are not giving Dad the opportunity to retire soon, you are missing out on the most important Father’s Day gift — financial independence. 

When it comes to planning finances, parents always take the traditional approach. Especially dads! While he THINKS he knows it all, there’s always more to learn when it comes to planning for retirement. That’s where we come in.

As a father himself, Andrew Agemy knows the importance of financial planning; not only for younger generations, but more importantly for those in, or nearing retirement. This Father’s Day, keep the expensive gifting ideas aside. Instead, spend time with your dad talking about money, and help him get his finances in order.

Whether you’re looking for a more meaningful gift this Father’s Day, or indeed a father approaching retirement yourself, here are some financial tips to help achieve a stress-free retirement.

Control your cash flow to spend less than you make.

Being aware of what is going out every month and comparing it to what is coming in is a vital part of the financial independence process. We all have our own money management strategies, and we’re here to help you find yours. Whether it’s your first time budgeting or you just need some new ideas, here are a few tips to get you started:

  • Budgeting is the key to financial success. It’s a systematic way of managing your money that helps you make better financial decisions and get out of debt.

To get started, first list all your expenses, starting with the last month (although the last 2-3 months or more is ideal to help capture irregular expenses). If you prefer to write things down google sheets or excel. For the more tech-focused, try an easy-to-use online calculator. See our free retirement and budget calculators here. Choosing an approach that gels with your personal preference and lifestyle is key!

  • Challenge your expenses and create a spending/savings plan that will put you in control of your money and make your spending more purposeful.

You would be surprised how things can find a way to creep into your spending and steadily increase your expenses while eating away at your savings. Things like subscriptions, increasing cable/wireless/insurance bills, irregular expenses- all of these can be budget crushers!

Take a look at these (mostly) painless ways to save money for some ideas. The 50/30/20 rule is an approach that seems to work for many individuals, and here are some other ideas on money management strategies that might work well for you. In order to make sure that you are getting the most out of your budgeting efforts, we suggest splitting up your income into three categories: 50% towards necessities (like housing and groceries), 30% towards wants and 20% to savings.

Paying Off High-Utilizing Debt

No matter how much you make or what stage of life you’re in, you’re going to have to prioritize spending and saving. And when it comes to big financial goals, such as paying down debt or saving for retirement, which one to focus on first isn’t always clear cut. If you do have extra funds, how do you prioritize? The good news: It doesn’t have to be an either-or question. It’s all about finding a balance that’s right for you.

By setting some debt-reduction goals, you can pay off your high interest rate debts and strengthen and protect your credit score at the same time.

The first step is to list out your debts, so you know exactly how much you owe, what kind of interest rate they come with, and how much money you need to pay each month. When it comes to paying off debt, there are two main approaches:

  • The Debt Avalanche – The debt avalanche focuses on making maximum payments on your highest interest rate debts first and then rolling payments to the next highest interest rate until everything is paid off.
  • The Debt Snowball – method focuses on paying off the smallest debt first (the one with the lowest balance) until it’s gone, then moving onto the next smallest one—and so on until all of them are paid off!

Once you’ve made a plan for tackling your debt, it’s time to stick to it! While it might seem like a good idea to spend some extra money every once in a while on something fun like new shoes or that fancy coffee shop drink you’ve been eyeing up lately—you might want to think twice before going over budget! Going over budget could mean not having enough left over at.

Ultimately the name of the game here is to strengthen and protect your credit score. You can do this by reviewing your credit reports on annualcreditreport.com and disputing/cleaning up any erroneous or stale data. You can do most if not all of it online. This step is super important as this is the information used to generate your credit score.

Once you’ve done this, you’ll want to work on building a good payment history by making sure all your bills are paid on time, and paying them off in full when possible. Paying bills on time helps increase your credit score over time because it shows that you are responsible with your money (and therefore likely to pay back loans).

You don’t have to be debt free to save more for retirement though. It depends on your individual priorities and goals. It can be overwhelming to compare how much you need to save for retirement to how much you’re able to save. Instead, consider small steps which will eventually get you to your goals. To plan for your future, it’s helpful to know where you stand financially. If you’re overwhelmed, ask for help. 

The Financial “Why”

Financial independence is a goal that many of us are working towards. But how do you know if your finances are on track? The answer lies in understanding what drives your financial decisions. It all starts with a financial why. Your financial why is the reason behind every decision you make. It’s not just about making more money or being debt-free. It’s about having enough money to do the things that matter most to you, and then some!

The best way to find out what matters most to you is by asking yourself these questions:

  • Why do I need this?
  • What does it mean for me?
  • How will it help me get closer to my goals?

This sounds like a lot of work—and trust us: It is! But once you figure out what drives and motivates you, you’ll be able to make decisions about your money that align with your purpose and goals.

Why We Care

For over 30 years, our financial planning has been installed with family values.

Andrew Agemy, Founder and CEO of Agemy Financial Strategies, has won the prestigious Five Star Professional Award in the category of Wealth Management for the last 11 years straight—as seen in Connecticut Magazine, The Wall Street Journal, and many others. Additionally, he is in his second decade of receiving an A+ rating with the Better Business Bureau as well as the National Ethics Association.

With the help of his son and business partner Daniel Agemy – and having dedicated his life to helping people retire and stay retired – Andrew’s and Daniel’s specialty is helping clients move from the investment accumulation phase during their working years into the distribution phase, which will last the rest of their lives – retirement. As fiduciaries, they enjoy using real-world financial data to create personalized financial strategies best suited for each client’s situation.

AFSi became a national firm in 2020 when Andrew and Daniel opened an office in Denver, Colorado, and also became a franchise owner of the national network of Income Specialists known as The Retirement Income Store®. Our values are clear:

– We specialize in conservative retirement strategies with the goal of minimizing our client’s risk with an effective return. Our core objective is to satisfy our client’s needs… We listen.

– A customized approach is used with each individual situation. There are no preconceived ideas as each person has very different needs, backgrounds and circumstances. Being sensitive to each person’s situations, issues and concerns is a core value of our organization… We partner.

– We aim to use a servant’s attitude to develop long-term relationships as we strive to treat others as we would like to be treated… We care.

Happy Father’s Day From Andrew Agemy

If you would like to learn more on our financial planning and education tools, contact us here today. You can also find us on Facebook, Instagram, LinkedIn, Twitter and Youtube where we regularly post valuable tips for those who could use some sound financial advice.

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5 Tips to Maximize Savings for Retirement

Agemy Financial Strategies

June 01, 2022

There is no one-size-fits-all when it comes to saving and investment strategies. However, there are best practices that can help you achieve your financial goals while minimizing risk. Here’s some tips on how to make the best financial decisions for your retirement nest egg. 

Saving for retirement is one of the best financial strategies you can take part in. Everyone will hopefully retire at some point in their lifetime. Saving early on in life for your golden years will help prevent you from running out of money. Whether you’re on track for retirement or need to catch up, a Fiduciary financial advisor can help prepare you for your later years.

Here’s a look at 5 saving and investing tips that will help you maximize your savings for retirement.

What is a Retirement Savings Plan?

Having a retirement savings plan is essential to securing your financial security later in life. By utilizing various retirement savings accounts, you can maximize your tax savings, invest in the index funds, and take advantage of compound interest —  leaving you with more money when the time comes to retire.

Take Advantage of Your 401(k) or 403(b) Company Match

401(k) and 403(b) plans are qualified tax-advantaged retirement plans offered by employers to their employees. If your workplace offers a retirement plan and a company match, it’s always best practice to contribute up to the maximum your company offers. It is financially beneficial to take advantage of your 401(k) or 403(b) early on in your career.

401(k) plans are offered by for-profit companies to eligible employees who contribute pre or post-tax money through payroll deduction. 403(b) plans are offered to employees of non-profit organizations and the government. You should always see what kind of retirement packages are offered with the company you work for to see where you can better invest and save your money.

Apply for Retirement Savings Credits

If you are a lower- or middle-income taxpayer, you may claim a saver’s tax credit for up to 50% of your retirement plan contribution. If you are married and filing jointly with an adjusted gross income (AGI) of below $68,000 for 2022 ($66,000 for 2021), and you contribute to a qualified retirement plan, you may be eligible for a tax credit.

The income limit for heads of household is $51,000 for 2022 and for single filers and married persons filing separately is $34,000.The maximum credit for 2021 and 2022 is $2,000 for married couples filing jointly and $1,000 for single filers (applied against the maximum contribution amounts: $4,000 for married couples filing jointly and $2,000 for single filers.

Contribute to a Health Savings Account

Healthcare costs are one of the highest growing expenses in the country. High-deductible health plans and health savings accounts are a golden retirement planning opportunity. This tool can not only be used to pay for healthcare expenses but can also be used to squirrel away additional funds for retirement.

Contributions are 100% tax-deductible, and funds unused for medical expenses may continue to be invested and grow over time. One of the best things about an HSA plan is that the distributions made on qualified medical expenses are tax-exempt. People over the age of 55 can keep and save an additional $1,000 per year. It’s important to remember that a traditional IRA is funded with pre-tax dollars whereas a Roth IRA is funded with after-tax dollars. Choose the one that works best for your tax situation.

Use the Backdoor Roth IRA to Increase Savings

For 2022, the AGI phase-out contribution range for Roth IRAs for married couples filing jointly is $204,000 to $214,000 and for single taxpayers and heads of households is $129,000 to $144,000. If your current income is too high and makes you ineligible to contribute to a Roth IRA, there’s another way in. First, contribute to a traditional IRA. There is no income ceiling for contributions to a non-deductible traditional IRA, although there is a limit to what can be contributed.

The IRS caps the contribution limit to $6,000 or $7,000 if you are 50 or over.After the funds clear, convert the traditional IRA to a Roth IRA. That way the funds can compound for the future and be withdrawn tax-free, as long as you meet the withdrawal guidelines.

Retire in the Right State

When it comes time to retire, you should look and see what states don’t have state income taxes. Alaska, Florida, South Dakota, New Hampshire, Tennessee, Wyoming, Texas, and Nevada are just some of the states that don’t have state income taxes. Colorado routinely ranks among the top tax-friendly states for retirees. The state income tax range is a low, flat rate of 4.63%, and you get a fair deduction on retirement income.

A good thing to note is that a majority of states don’t tax social security. Before packing up and moving, evaluate all of the taxes in your proposed new home state.

Fund Your Retirement Accounts with Side Hustles

Side jobs can be an excellent way to make money. Instead of using this cash to purchase a new car or upgrade your appliances, consider using it to fund your retirement accounts. If you haven’t maxed out your IRA contribution, this would be a great option.

Whether you are flipping furniture, tutoring students, or completing freelance work, using side hustles to save money for retirement can be a great way to save money and jump start your retirement investments.

Last Thoughts

It’s important to look at your retirement plan and see if any of our tips could maximize your savings. If you’re like most people, qualified-retirement plans, Social Security, personal savings and investments are expected to play a role. Once you have estimated the amount of money you may need for relocating in retirement, a sound approach involves taking a close look at your potential retirement-income sources.

At Agemy Financial Strategies, we want you to know we’re here to help you navigate retirement and any questions that come up during your retirement process. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs.

For more information on our retirement and financial planning services, contact us here today.

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What is a Phased Retirement?

Agemy Financial Strategies

March 31, 2022

When it comes to retirement, the conversation is usually about money. Did you save enough? Did you start saving on time? Will it be enough to cover your expenses? Many retirees are taking the stress out of these concerns by choosing a phased retirement. But what is phased retirement, exactly? Let’s take a look… 

When you begin preparing for retirement you slowly begin to ease into your new lifestyle. Such as activities you used to enjoy before you worked 9-5 everyday. No one likes sudden change, most of us think about retirement as a transition. If you like transitioning into life changes, a phased retirement may be for you.

What is a Phased Retirement?

Phased retirement is just like it sounds – a path towards retirement where you slowly begin taking more vacations, working fewer hours and essentially becoming part-time on your own time.

There’s a commonly stated stat that proclaims that about 10,000 Baby Boomers hit retirement age every day in the US. That means that they are now eligible for retirement. Despite the fact that retirement is changing – Boomers are working far longer than other generations who reach retirement age – the fact remains that Boomers are starting to make a big exit from the workforce, taking a lot of their skills, knowledge, and proven leadership skills with them.

The phased method is gaining momentum due to this reason and several others; One being people are living longer, for financial and personal reasons they may need to phase into retirement to keep a steady stream of income that will last 20+ years. The second reason being jobs are becoming less manual and can be performed at home. The pandemic was a great indicator of this. Lastly, more employers are becoming more accommodating towards phased employee exits due to baby boomers reaching retirement.

New Shift in Retirement Trends

The idea of retirement shifted from working until you’re 65, to completely stopping work and living off your savings, pension and Social Security until you die. As of late, the whole paradigm has shifted. Some individuals want to be financially independent and retire early, where they save and invest carefully now so they can enjoy a long retirement while young enough to appreciate it.

People on the other end of that spectrum may find their careers to be satisfying enough that they plan to work their whole lives. Realistically, both these retirement goals may end up utilizing some kind of phased retirement. Regardless of the many reasons one may have, a phased retirement should be considered as a future retiree’s plan. The reasons can be both financial and emotional, however, they both bear consideration, even if it’s only a backup retirement strategy.

Pros and Cons of a Phased Retirement 

This alternative to the traditional here-today, gone-tomorrow method of leaving one’s job has become fairly popular among Baby Boomers in recent years. But before you make a decision on whether to embark on this transitioning journey, be sure to know both the benefits and drawbacks of a phased retirement.

The Main Financial Motivators

The two main financial motivators in retirement are driven by government benefits: Medicare and Social Security. Both have age considerations. Medicare doesn’t happen until age 65 and Social Security shouldn’t happen until at least age 67 – which is considered full retirement age.

So what happens if you want to retire earlier than these ages? You may consider phasing out of work rather than just quitting. This way you can afford to live comfortably before your government benefits kick in.

The Main Personal Motivators

Why should you consider a phased approach to retiring? One reason might be that you haven’t been retired before, and a phased approach allows you ease into your golden years. Phased retirement can give you a chance to try things before 100% committing. It’s important to remember that retirement is not a one size fits all plan, and it looks different for everyone based on their needs.

With phasing intoretirement, you can test how retirement will work for you. Specifically, by leaving your current job, and potentially finding a job that involves less hours, less stress, or fewer commitments. You can see if you really want to take on your beloved hobby that much. Or you can take on some of the volunteer work you’ve wanted to do for years, and see how you handle having more time on your hands.

Further Pros: 

Financial stability. During phased retirement, workers can still collect a paycheck, just for less money. They can supplement their pay with withdrawals from company-sponsored retirement plans if necessary.

  • Continue accumulating wealth. If your employer offers a phased retirement plan, there may be provisions that allow you to continue saving for retirement or earning retirement benefits through a pension. That means you don’t miss out on opportunities to add to your wealth, even if you’re working less.
  • Mental/emotional health. One of the negative side effects of retirement is that workers may feel lost or without purpose once they’re no longer on the job. Working on a part-time basis during a phased retirement can yield mental and emotional benefits if it makes older employees feel fulfilled.
  • Prepare for the real thing. Phasing retirement and continuing to work reduced hours can give you an idea of what life might be like once you fully retire. This can help you decide how you want to use your time or even whether retiring is what you truly want to do.

Problems a Phased Retirement

While phased retirement offers a slew of positives for your business, there are quite a few downsides that your plan will have to address if you want it to be successful:

  • Could reduce your pension.  If you work for an employer that offers a defined benefit pension plan (the kind that guarantees monthly payouts), the plan’s formula may penalize you for taking phased retirement. These pensions often base their payments on your average salary during your final years at the employer.
  • It could halt your 401(k) contributions. Your employer might not let you continue participating in its retirement savings plan if you cut back to part-time work.
  • The potential to lose your health care coverage or pay more for it. Many employers don’t offer healthcare to part-time employees or charge these workers higher premiums than full-time employees. So if you begin phased retirement before Medicare kicks in at age 65, you might find yourself uninsured and facing steep out-of-pocket health costs.
  • Possibly smaller life insurance benefits for your spouse. Often, the size of employer-sponsored life insurance death benefits is a multiple of your salary. By cutting your pay, you could also be cutting the insurance payout.
  • It could reduce your Social Security payments. Your Social Security benefits are determined by your average earnings during your 35 highest-income years. If your phased retirement’s reduced salary means you will need to start collecting Social Security before the program’s full retirement age (now between 66 and 67), you’ll see your benefits cut byas much as 30 percent.

So, with a phased retirement program, retirees can slowly make the switch instead of abruptly changing their entire lives. But there are many laws, regulations, and other compliance issues that need to be addressed before implementing a plan and plans need to be flexible enough to ensure that they do not impact other benefits. With all of that, phased retirement can be great if a company wants to go through the motions of creating one and it suits your retirement outlook.

Final Thoughts

Phased retirement is a concept, not a particular legal or employment status. Your employer may be willing to let you work reduced hours, cut out stressful job responsibilities, or time-share with another employee. Whatever the case may be, attention should be brought upon the details of the transition. Cutting back on hours could be ideal unless it disqualifies you for your company’s health insurance or other benefits.

Whatever your retirement strategy, there are risks to identify and manage as you navigate retired life. One key factor remains the same: the more you prepare, the less surprises you’ll face along the way.

At Agemy Financial Strategies, our first priority is helping you take care of yourself and your family. Click here to connect a convenient time for your complimentary 30 minute consultation. Our Fiduciary financial advisors in Guildford, CT and Denver, CO are looking forward to speaking with you.

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A Financial Crisis is a Retirement Crisis. Here’s How to Prepare.

Agemy Financial Strategies

May 18, 2022

Crises during retirement can come in many forms: recession, divorce, pandemic, catastrophic medical expenses, natural disaster, disability, care for an elderly family member, or loss of an income source. However, we’re here to assure you that you can retire during a financial crisis, you’ll just need to prepare yourself.

The thought of being hit with a major negative event that could affect your finances can keep anyone awake at night. After bolstering savings, paying down debt, building up cash, and making sure all of your financial affairs are in order…it’s a lot to contemplate. Unfortunately, the environment you retire into can have a big impact on your retirement savings.

However, a solid financial plan can help you prepare. Here are our top ways to ensure you’re best prepared for whatever the future may bring.

Build Your Emergency Fund

We’ve said it before and we’ll say it again: Make sure you have enough saved to pay for unexpected events. Having some extra funds available for emergencies is an essential component of your overall financial well-being, with enough cash to cover six months of expenses being a common recommendation. Try the following steps to build up your fund, after all, the more you save, the less likely a crisis will affect you.

1. Set several smaller savings goals, rather than one large one. That will ensure you don’t stress your cash flow, making it too easy for you to rationalize abandoning your savings routine.

2. Create a system for making consistent contributions. There are a number of different ways to save, and as you’ll read below, setting up automatic recurring transfers is often one of the easiest.

3. Regularly monitor your progress. Find a way to regularly check your savings. Whether it’s an automatic notification of your account balance or writing down a running total of your contributions, finding a way to watch your progress can offer gratification and encouragement to keep going.

4. Park it somewhere safe. Money market funds and high-interest savings accounts are two good places to park your emergency fund. You need safe, liquid options so that your money is accessible in times of need.

5. While You’re at it, Build a Reserve Fund Too. To be better prepared, create options for your future self to deal with a shock. Building cash reserves above a normal emergency fund, eliminating debt to lower fixed monthly payments, or working part time can help create financial slack to help you be agile as your retirement life unfolds.

Protect Your Cash Flow

Having a monthly budget is essential to keeping track of your financial health. Do you know where your money goes every month? If not, understanding your personal cash flow will help you better manage — and measure — your funds, should the worst happen. Cash flow refers to your income minus expenses over a set period of time. This term is helpful for both individuals and businesses as it can clearly indicate what direction finances are heading.

Anyone can determine their cash flow by creating a budget. All you need to do is write down your monthly income, including sources of passive income, and then subtract all your expenses. Instead of focusing on a single month, you may want to track your expenses for three months.

In the Event of a Crisis

If – or sadly, when – a crisis hits, you need to know what to do, and fast. Start by making some immediate cutbacks and rebuild from there.

1. Cut back expenses: Small changes add up. Make your coffee at home, reduce energy consumption, cancel unnecessary expenses like luxury food deliveries and even changing your cell phone packages can all add up.

2. Make more drastic changes: To cut back further, consider selling your second home/rental property, downgrade your car, take on a second job, refinance your mortgage, let your child help pick up their college expenses.

Start with the smaller changes and resort to the major changes if needed down the line. To better prepare for an unexpected financial shock, you need a sense of other funds they might have access to such as home equity line of credit or 401(k) loans.

Maximize Your Liquid Savings

Finally, cash accounts, such as checking, savings, and money market accounts—as well as certificates of deposit (CDs) and short-term government investments—will help you the most in a crisis. You’ll want to turn to these resources first because their value doesn’t fluctuate with market conditions, unlike stocks, index funds, exchange-traded funds (ETFs), and other financial instruments in which you might have invested.

Having liquid assets like cash is smart for any portfolio, especially during an economic downturn. Not only does cash come in handy for taking care of life’s unexpected expenses, it can also free you to take advantage of opportunities.

Final Thoughts

Life is unpredictable. So one last way to protect yourself for the future is by keeping your financial house in order now. You might think you don’t have the time or money to deal with these things on a regular basis, but they can create much larger disruptions of your time and finances if you ignore them. A solid financial plan will include various projections to help you determine whether your assets will provide you with the income required to fund your retirement, and prepare for life’s major downturns.

Specializing in retirement income planning, Agemy Financial’s objective is to see that their clients can retire and stay retired. Our purpose is to educate retirees – whether that be planning for retirement, legacy planning, wealth management, or just holding your hand when it’s time to leap into retirement or out of a financial crisis.

Be prepared – and stay prepared – with our Fiduciary advisors at Agemy. Contact us here today to get started

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6 Goals To Have For Your Finances Before Retirement

Agemy Financial Strategies

May 17, 2022

Retiring from work? Congratulations! But before you tick off your retirement bucket list, you need to tick off your retirement to-do list. 

If there’s one thing this year has taught us, it’s that things can change quickly. Putting money away when you don’t have any immediate need for it can be a little difficult. With this in mind, we urge you to think a little into the future.

Setting financial goals is a big step towards becoming financially secure before and in retirement. Whether it’s setting short-term, midterm, or long-term financial goals, you’ll be working towards something specific for your individual needs and circumstances. Financial goals are savings, investment or spending targets you hope to achieve over a set period of time. The stage of life you’re in usually determines what type of goals you wish to achieve.

Here are 6 goals to have for your finances before you reach retirement.

1. Crunch Those Numbers

Before you retire, you should take the time to understand how much you’ll need in retirement and how your accounts will provide income. Budgeting may not be the most fun, but it can help you spend less than you earn. With a budget, you can successfully account for where your money is going and start thinking about where you can begin saving. Start by categorizing your spending.

For example, you could create budget categories for food, rent, savings, nights out on the town, Netflix, and so on. Next, look at your total monthly income and expenses. Using your after-tax income, allot a certain amount of money to different categories in your budget. There are many apps out on the market that automate your budgeting for you, but you should also consider consulting with a financial planner to help you plan how much you’ll need, how much you currently have saved, and how to fill in any gaps. You will also want to take the time to estimate your expenses in retirement to confirm you have the income to cover them.

2. Put Your Savings Strategy on Auto-Pilot

Bigger is better when it comes to your savings account. While saving can seem hard, automating your savings will make it significantly easier. By setting up automatic transfers to your savings account from your checking account, you can put your savings strategy on auto-pilot and you’ll hardly even notice the money is gone.

Start by automatically saving 10% of your income with each paycheck. You can typically set up automatic transfers online or by talking to your bank. Automating your savings can make the process easier and help you build wealth effortlessly.

3. Get Up to Speed on Insurance

Make this a top priority as you’re planning to retire so you don’t spend any time uninsured. Your options depend on your age, but the most common types include:

  • Life Insurance: The greatest benefits of life insurance include the ability to cover your funeral expenses and provide for those you leave behind.
  • Health Insurance: If you don’t have health insurance through an employer, check with trade organizations or associations about possible group health coverage.
  • Long-Term Care Insurance: Here’s the good news: our life expectancies are longer than ever. But that means we’re likelier than ever to need some sort of long-term care during our lifetimes.
  • Long-Term Disability Insurance: A policy that guarantees income replacement is optimal. More often policies pay out between 40% to 70% of your income. The cost of disability insurance is based on many factors, including age, lifestyle, and health.
  • Auto Insurance: To make sure you get the right insurance for you, compare several rate quotes and the coverage provided, and check periodically to see if you qualify for lower rates based on your age, driving record, or the area where you live.
  • Travel Insurance: After all, what is retirement if you can’t enjoy some trips away?

4. Self-Care Security

Want to know one of the best things to invest in? Yourself. It may bring returns on your happiness, success and even salary. Think about what new skills could beef up your resume, and look for learning opportunities in your community or online that could help you move your career forward.

Not only that, think about what you want to accomplish in the future. Think about the things you;ve always wanted to pursue but didn’t have the time to do. Perhaps it’s going back to school to get your MBA, or you’re looking to learn a new trade such as coding. You can easily look into resources and classes on LinkedIn or take up a Masterclass. By investing in yourself, you can become more well-rounded.

What’s most important is your health. So focusing on eating well and moving your body daily is essential to enjoying your golden years to their fullest.

5. Keep Growing Your Money

A secret weapon to jump-start your retirement is time. The magic of compounding interest can turn just a little bit of savings into a large nest egg. Strive for saving 10% to 15% for retirement through your employer-sponsored 401(k). If you’re eligible, make sure you contribute enough to get a company match, at least! It’s free money and a sweet job perk. Also, consider getting extra tax benefits by contributing to a Traditional or Roth IRA.

If you work for yourself, you might want to check out retirement plans for self-employed people. Options like a SEP-IRA can help you save for retirement on a tax-deferred basis, just like employees on company plans.

Just remember, after you’ve retired, your retirement income plan may include two sources:

Guaranteed income sources.

  • Social Security, if you’re taking it now
  • Pensions (traditional defined benefit plan)
  • Annuities

Assets to fund retirement.

  • Individual retirement accounts (IRAs) and retirement plans (401(k), 403(b), ESOP)
  • Personal savings (CDs, bank and money market accounts)
  • Investments (stocks, bonds, mutual funds, real estate)
  • Wages in retirement (example: part-time job)

6. Sit Down with Your Financial Advisor

Still not sure where to start on your financial strategy? Consider sitting down with a financial advisor. By taking a look at your entire financial situation, they can help you establish a customized plan designed to meet your short- and long-term goals. Then, your financial advisor can help you select suitable products and services designed to put your plan into action.

At Agemy Financial Strategies, our firm exists for the purpose of helping people achieve their personal and financial goals. Our philosophy is to deliver quality financial programs and teach principles for successful living. We work hard to deliver a dependable retirement income strategy, in any market, so that you can enjoy the “best” of your lives during retirement.

Final Thoughts

The best thing about setting goals and financial planning is you can review and update your goals and monitor your progress in reaching them. In the process, you will find that both the small things you do on a daily and monthly basis and the bigger things you do every year and over the decades will help you achieve your financial goals.

We want you to know we’re here to help you navigate retirement and any questions that come up during your retirement process. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs.

For more information on our retirement and financial planning services, contact us here today.

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Connecticut vs Colorado: Where to Retire?

Agemy Financial Strategies

May 16, 2022

We’ve covered the pros and cons of retiring in Connecticut and Colorado, but in today’s blog, we compare the two to help make that life-changing decision a little easier. 

Many people choose to move somewhere different to spend their golden years in a beloved place that provides comfort and resources.

Whether you’re considering moving out of, into, or remaining in Connecticut or Colorado for your golden years, Agemy Financial Strategies can help.  As a financial firm based in Connecticut, with offices in Colorado, we can offer you first hand experience and knowledgeable advice on how to manage your retirement in these beautiful states.

First, here’s a look back at some of the pros and cons to think about.

Pros & Cons Of Connecticut

Pro 1: The crime rate in Connecticut has been steadily falling

Did you know that Easton, Ridgefield, and Madison top the state’s safety rankings? Just another reason to spend your retirement here. There’s a sense of safety which is comforting to anyone. Connecticut is well known for its great small community atmosphere. Many residents boast their small town feels more like a family.

Some of the best cities to live in are in Connecticut because their record of safety continues to improve. The state is experiencing its lowest crime rate in decades, with the overall ratio being about 20 incidents per every 1,000 residents. The rate of violent crime is only 2 per 1,000, which makes most communities a safe place to raise a family and let your kids outside to play in the front yard. Compared to other places you could live along the East Coast, you’ll find Connecticut has a lot to offer.

Pro 2: Connecticut residents live longer

Debate all you want about quality of life in Connecticut, but duration of life in the state is indisputable. Connecticut has the fifth-highest life expectancy in the United States, according to data provided by the Centers for Disease Control and Prevention.

Connecticut residents can expect to live an average of 80.4 years, with females at 82.9 and males at 77.9. The findings, published earlier this year in the National Vital Statistics Reports, reviewed 2018 population estimates, state-level mortality and each state’s death and population figures that year for older Medicare beneficiaries.

Con 1: The cost of a house is high in Connecticut

The pandemic has sent CT house prices through the roof and drained the inventory.

Zillow reports that the median home value in Connecticut is about $348,047. With an extremely low supply of available homes for sale and skyrocketing demand, some would-be buyers feel as though it is becoming increasingly difficult to afford the cost of moving into a new home. The highest median home price and most drastic change over the last two years is in Fairfield County, where there was an increase of 43.5% to more than $400,000.

How long can this housing spike remain? That all depends on the supply. According to the Berkshire Hathaway HomeServices report, total 2022 home sales are not expected to reach 2021 numbers simply because Connecticut real estate agents are running out of inventory.

Con 2: The cost of living is high in Connecticut

There’s no point in beating around the bush here: Connecticut is an expensive state, and living costs are higher than the national average. The cost of living in Stamford (one of Connecticut’s most expensive cities) is only 17% lower than Manhattan, New York. Compared with all other states, Connecticut has the eighth highest overall cost of living.

In general, living in dense, urban metro areas is more expensive than living in more rural areas. Connecticut is home to four metropolitan areas. The most expensive in the state is the Bridgeport-Stamford-Norwalk metro area, where the cost of goods and services is 15.3% higher than the national average and 9.2% higher than the statewide average. If you can afford to live here, then there are plenty of advantages for you to enjoy. Fewer people are finding it possible to do. Plus the rural areas present a cheaper-cost of living if you want to spend your golden years out of the metro hustle and bustle.

Pros & Cons Of Colorado

Now that you have a sense of the pros and cons of living in Connecticut, we can jump into the pros and cons of living in Colorado.

Pro 1: Access to Quality Medical Care

Colorado rounds out the top ten for overall health care in America. The state has some of the highest-quality medical care available with access to top-level hospitals. Though some remote areas may lack the ease of access, most of the population is never far from premium medical care.

Additionally, health care costs less in Colorado than in many other states. Thanks to significant policy moves, Colorado made strides to improve affordability and serve as a model for other states.

Pro 2: Retirement Communities are an Abundance

Traditionally, people tend to retire in warmer states such as Florida. You might be surprised to see that trend change as more retirees venture to Colorado. The state saw a significant jump in the number of people retiring there since 2010. 

Aside from having more people your age to connect with, Colorado has some impressive retirement communities to make it even easier. Get the best of everything with neighbors your age and loads of activities to keep you as social and busy as you want to be.

Con 1: Prepare for the Cost of Living

One of the biggest things that Colorado and Connecticut have in common is that the price of livin in both states is high. The Taxes are better in Colorado, but you may notice a bump in the cost of living. Depending on where you currently reside, you may need to pay a little more for some things.

While you may pay substantially more for housing, you should only see a slight uptick in groceries and transportation. On the other hand, most people should see a drop in health care costs and even spend less on utilities. It’s a good idea to do your research so that you don’t get sticker shock! Try using a comparison calculator for a ballpark idea.

Con 2: Being Mindful of Wildlife

There are a lot of pros to being surrounded by nature, but the biggest con would be being mindful of the wildlife that comes with it. Some people love to see moose, deer, and other beautiful animals roaming through their yards, but not all Colorado wildlife is welcome. Colorado has some dangerous creatures that can do damage if you’re not prepared.

Though animal attacks remain rare in Colorado, it’s still something to consider before retiring there. Education goes a long way, and you can easily prepare to handle the wildlife. Here’s a rundown of the most common animals that could pose a risk.

Comparing the Two

According to BestPlaces.net’s 2022 Cost of Living Calculator: Denver, Colorado vs Hartford, Connecticut

A salary of $100,000 in Denver, Colorado could decrease to $71,082 in Hartford, Connecticut (assumptions include Homeowner, no Child Care, and Taxes are not considered.)
Comparison Highlights
– Overall, Hartford, Connecticut is 27.0% cheaper than Denver, Colorado
– Median Home Cost is the biggest factor in the cost of living difference.
– Median Home Cost is 74% cheaper in Hartford.

Final Thoughts

Now that you know some of the pros and cons of retirement in both states, it’s important to look at your retirement plan and see if this is something that would benefit you. Both states have a lot to offer. Once you have estimated the amount of money you may need for relocating in retirement, a sound approach involves taking a close look at your potential retirement-income sources.

At Agemy Financial Strategies, we want you to know we’re here to help you navigate retirement and any questions that come up during your retirement process, including relocation opportunities. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs.

For more information on our retirement and financial planning services, contact us here today.

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Pros and Cons of Retiring in Colorado

Agemy Financial Strategies

May 04, 2022

Not many places on Earth compare to the beauty of Colorful Colorado. The unassuming plains, enticing terrain and abundance of wildlife are just a few of the benefits that see so many flocking there to live out their retirement years. But is the hype well-deserved? Read on to find out more…

Many Americans choose to uproot somewhere new to spend their golden years in a beloved place that provides comfort and resources. Maybe you want mountains or beach backdrops for your morning coffee. Perhaps you crave access to golf courses, bike trails, or lakes for fishing. If you’re thinking of where to retire, have you considered retiring in Colorado?

It’s currently one of the best options in the United States for retirees. Even if you haven’t considered the Centennial State before, you may want to give it a look now. To help you decide if Colorado is the right place to spend your retirement, we compiled a list of the top pros and cons of retiring in Colorado.

When it comes to relocating to or from the state of Colorado, there are a number of benefits and a few drawbacks you should consider. Whether you’re considering moving out of, into, or remaining in Colorado for your golden years, Agemy Financial Strategies can help.

Our head office is in Connecticut, but did you know that we now have a base here in Colorado? Equipped with first-hand knowledge, we can offer you experienced advice on how to manage your retirement in this beautiful state. But before making such a life-changing decision, here’s a look at some of the pros and cons to think about.

Pros of Retiring in Colorado

Enjoying the Scenery

Colorado is home to some of the most beautiful countryside in America with its impressively massive mountains, towering trees, rolling plains, crystal clear lakes, and soft sand dunes. With trails for every fitness and experience level, you’re never too far from nature.

There’s something about waking up to have your morning coffee with the mountains out your window. Of course, you can always take your fill of sand at Great Sand Dunes National Park & Preserve. Are you craving a dip in the water? Visit one of the many sparkling lakes or rivers winding through the state!

Here are just some of the many places you can easily visit when retiring in Colorado:

Pay Lower Taxes in Retirement

Colorado routinely ranks among the top tax-friendly states for retirees. The state income tax range is a low, flat rate of 4.63%, and you get a fair deduction on retirement income. Sales tax may run higher in the state, but it doesn’t apply to groceries or medication. Another great reason to retire in Colorado, there’s no estate tax. You can leave money to your family without paying hefty fees, which is a huge perk.

Access to Quality Medical Care

Colorado rounds out the top ten for overall health care in America. The state has some of the highest-quality medical care available with access to top-level hospitals. Though some remote areas may lack the ease of access, most of the population is never far from premium medical care.

Additionally, health care costs less in Colorado than in many other states. Thanks to significant policy moves, Colorado made strides to improve affordability and serve as a model for other states.

Retirement Communities are an Abundance

Traditionally, people tend to retire in warmer states such as Florida. You might be surprised to see that trend change as more retirees venture to Colorado. The state saw a significant jump in the number of people retiring there since 2010. 

Aside from having more people your age to connect with, Colorado has some impressive retirement communities to make it even easier. Get the best of everything with neighbors your age and loads of activities to keep you as social and busy as you want to be.

Cons of Retiring in Colorado

Prepare for the Cost of Living

Taxes are better in Colorado, but you may notice a bump in the cost of living. Depending on where you currently reside, you may need to pay a little more for some things. 

While you may pay substantially more for housing, you should only see a slight uptick in groceries and transportation. On the other hand, most people should see a drop in health care costs and even spend less on utilities. It’s a good idea to do your research so that you don’t get sticker shock! Try using a comparison calculator for a ballpark idea.

Severe Weather

Coloradoans see an abundance of sunny days every year, but that doesn’t mean they’re exempt from severe weather. Depending on where you settle in the state, you could face high winds, hail, and even wildfires. Additionally, some parts of the state receive high levels of snow that make it challenging to get around.

Be prepared for the occasional damaging storm. In 2017, parts of Colorado saw enormous balls of hail that caused billions of dollars of damage. The large hail balls damaged homes and vehicles around Denver, but it wasn’t the first incident in the state. 

Dangerous Wildlife

There are a lot of pros to being surrounded by nature, but the biggest con would be being mindful of the wildlife that comes with it. Some people love to see moose, deer, and other beautiful animals roaming through their yards, but not all Colorado wildlife is welcome. Colorado has some dangerous creatures that can do damage if you’re not prepared. 

Though animal attacks remain rare in Colorado, it’s still something to consider before retiring there. Education goes a long way, and you can easily prepare to handle the wildlife.

Dreaded Traffic

The horror traffic stories are true. In some parts.  Due to the popularity of Colorado, some residents have been irked by the overcrowding, and in very populated areas, traffic congestion is also a problem.  These are somehow inevitable consequences of a popular place. As more and more people move to live there, the population increases and overcrowding continues.  For retirees wishing to live in Colorado, the overcrowding can be a problem if you were hoping to move into a quiet and calm environment. 

Final Thoughts

To summarize, Colorado has great weather, the pension taxes are lower than in most states, and lots of retirees live there with several retirement communities all over. On the flip side, Colorado’s living expenses are high, and some people have complained of overcrowding and traffic congestion in some areas.

Now that you know some of the pros and cons of retirement in Colorado, it’s important to look at your retirement plan and see if retiring here would benefit you. If you’re like most people, qualified-retirement plans, Social Security, personal savings and investments are expected to play a role. Once you have estimated the amount of money you may need for relocating in retirement, a sound approach involves taking a close look at your potential retirement-income sources.

At Agemy Financial Strategies, we want you to know we’re here to help you navigate retirement and any questions that come up during your retirement process, including relocation opportunities. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs. 

For more information on our retirement and financial planning services, contact us here today.

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Pros and Cons of Retiring in Connecticut

Agemy Financial Strategies

May 03, 2022

Connecticut is known for many things including its picturesque landscape. Whether it’s jobs, housing, or culture you want to know about, we’ve looked in detail at some of the pros and cons of retiring in Connecticut to make your decision easier.

As you near retirement, your mind may wander to fulfilling your life’s dreams; and for many, that involves relocating. After all, retirement is a time for freedom.

Some people move to be closer to or farther away from family while others take this step for health or financial reasons. But the relocation trend seems to be wavering. Despite COVID forcing up to 3 million Americans to retire earlier than planned, the number of retirees who moved in 2021 dropped to 226,000—roughly 43% fewer than in the year previous. It’s also the lowest number of American retirees in the last five years! So why are fewer retirees relocating? COVID again, the housing market and lack of retirement savings played a part for sure. But as the country and world begin to get back to a new normal, we expect to see the numbers rise once more.

When it comes to relocating to or from the state of Connecticut, there are a number of benefits and a few drawbacks you should consider. Whether you’re considering moving out of, into, or remaining in Connecticut for your golden years, Agemy Financial Strategies can help. As a financial firm based in Connecticut, we can offer you experienced and knowledgeable advice on how to manage your retirement in this beautiful state. But before making such a life-changing decision, here’s a look at some of the pros and cons to think about.

Pros of Retiring in Connecticut

1. There are numerous opportunities to enjoy the outdoors in Connecticut

If you’re an outdoorsy person, you’ll love what the state has to offer. You might not think about a visit to the beach as a top priority in Connecticut, but you’re only two hours away from the ocean at the furthest point when living here. You’ll find several popular options to visit, including Hammonasset Beach State Park, Ocean Beach Park, or the beautiful Calf Pasture Beach in Norwalk. In fact, the state boasts nearly 100 miles of coastline along the Long Island Sound and is crossed by four major rivers, providing residents with plenty of beautiful scenery and outdoor recreational opportunities.

It is a fantastic place for hiking, which includes a stretch of the Appalachian Trail. Most of the state parks have opportunities for you to enjoy, and a handful of forest preserves make for the perfect autumn trek. There is a little bit of something for everyone to love when you live in Connecticut.

2. Connecticut offers an abundance of entertainment

The entertainment scene in Connecticut is also lively for those who enjoy going to a weekend show. If you love the performing arts, New Haven’s College Street Music Hall is the place you want to be. It reopened in 2015 after being vacant for more than a decade. Now it’s the place for artists who come through the area, attracting acts that would normally skip over the state when traveling between Boston and New York City.

Retirees in Connecticut will love taking their grandchildren to explore the country’s oldest amusement park. In fact, the state is credited with inventing the amusement park. Bridgeport, Connecticut is home to the longest continuously operating amusement park in the United States.

3. The crime rate in Connecticut has been steadily falling

Did you know that Easton, Ridgefield, and Madison top the state’s safety rankings? Just another reason to spend your retirement here. There’s a sense of safety which is comforting to anyone. Connecticut is well known for its great small community atmosphere. Many residents boast their small town feels more like a family. 

Some of the best cities to live in are in Connecticut because their record of safety continues to improve. The state is experiencing its lowest crime rate in decades, with the overall ratio being about 20 incidents per every 1,000 residents. The rate of violent crime is only 2 per 1,000, which makes most communities a safe place to raise a family and let your kids outside to play in the front yard.

It is still a good idea to have insurance in place for any of the more expensive items you have in your home. Compared to other places you could live along the East Coast, you’ll find Connecticut has a lot to offer.

4. Connecticut residents live longer

Debate all you want about quality of life in Connecticut, but duration of life in the state is indisputable. Connecticut has the fifth-highest life expectancy in the United States, according to data provided by the Centers for Disease Control and Prevention.

Connecticut residents can expect to live an average of 80.4 years, with females at 82.9 and males at 77.9. The findings, published earlier this year in the National Vital Statistics Reports, reviewed 2018 population estimates, state-level mortality and each state’s death and population figures that year for older Medicare beneficiaries.

5. Connecticut grants seniors access to a tuition-free degree

Last but by all means not least, Connecticut allows senior citizens to take college classes and earn a degree tuition-free. At the University of Connecticut (UCONN), seniors can take undergraduate courses on a non-credit basis for $15/semester. Senior citizens working toward a degree do not have to pay tuition but do have to pay university and activity fees.

Cons of Retiring in Connecticut

1. It can get really cold in Connecticut 

If you’re older, the cold weather can be a deal breaker for some. If residents aren’t leaving Connecticut because they’re trying to find work somewhere else, then there’s an excellent chance that they’re going because of the weather. The average temperature in the winter in Hartford is below 20°F. The coastal part of the state sees 15 snow days each year, with accumulation levels reaching three feet. Norfolk gets even more of the white stuff, averaging almost 80 inches per year.

Definitely a consideration for those who suffer in colder months.

2. The cost of a house is high in Connecticut

The pandemic has sent CT house prices through the roof and drained the inventory.

Zillow reports that the median home value in Connecticut is about $348,047. With an extremely low supply of available homes for sale and skyrocketing demand, some would-be buyers feel as though it is becoming increasingly difficult to afford the cost of moving into a new home. The highest median home price and most drastic change over the last two years is in Fairfield County, where there was an increase of 43.5% to more than $400,000.

How long can this housing spike remain? That all depends on the supply. According to the Berkshire Hathaway HomeServices report, total 2022 home sales are not expected to reach 2021 numbers simply because Connecticut real estate agents are running out of inventory.

3. The cost of living is high in Connecticut

There’s no point in beating around the bush here: Connecticut is an expensive state, and living costs are higher than the national average. The cost of living in Stamford (one of Connecticut’s most expensive cities) is only 17% lower than Manhattan, New York. Compared with all other states, Connecticut has the eighth highest overall cost of living.

In general, living in dense, urban metro areas is more expensive than living in more rural areas. Connecticut is home to four metropolitan areas. The most expensive in the state is the Bridgeport-Stamford-Norwalk metro area, where the cost of goods and services is 15.3% higher than the national average and 9.2% higher than the statewide average. If you can afford to live here, then there are plenty of advantages for you to enjoy. Fewer people are finding it possible to do. Plus the rural areas present a cheaper-cost of living if you want to spend your golden years out of the metro hustle and bustle.

The Verdict

While many people stay in their homes until they’re forced to relocate for medical or financial reasons, reports show that those who move to a new place are actually happier than those who remain in their homes. Will the above information sway your decision of relocating in retirement?

Connecticut housing is expensive, the cost of living is above average, and property taxes are high. But while the cost of living is high in Connecticut, the quality of life matches it, with income, health, and education ranking well above average.

At Agemy Financial Strategies, we are based in the state for a reason. That reason being we simply love location, the lifestyle it provides and the spirit of the people living here.

If you love it, too, the cons are worth working through with the right financial plan in place. But for those who can’t get over the weather or cost of living, then relocating to a less expensive and warmer climate may be for you.

Final Thoughts

Now that you know some of the pros and cons of retirement in Connecticut, it’s important to look at your retirement plan and see if this is something that would benefit you. If you’re like most people, qualified-retirement plans, Social Security, personal savings and investments are expected to play a role. Once you have estimated the amount of money you may need for relocating in retirement, a sound approach involves taking a close look at your potential retirement-income sources.

At Agemy Financial Strategies, we want you to know we’re here to help you navigate retirement and any questions that come up during your retirement process, including relocation opportunities. As Fiduciary advisors, it’s our duty to act on your behalf in finding the right solutions for your individual wants and needs.

Stay tuned next week when we explore the pros and cons of retiring in Colorado.

For more information on our retirement and financial planning services, contact us here today.

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