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A Financial Crisis is a Retirement Crisis. Here’s How to Prepare.
NewsMay 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
6 Goals To Have For Your Finances Before Retirement
NewsMay 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:
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.
Assets to fund retirement.
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.
Connecticut vs Colorado: Where to Retire?
NewsMay 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
– 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.
Pros and Cons of Retiring in Colorado
NewsMay 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.
Pros and Cons of Retiring in Connecticut
NewsMay 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.
What is Reverse Estate Planning?
NewsApril 18, 2022
Most Americans follow the “classic” method of estate planning, that goes from older generations to their younger ones. However, that perspective doesn’t take into consideration some opportunities to increase family after-tax wealth.
Effective estate management enables you to manage your affairs during your lifetime and control the distribution of your wealth after death. An effective estate strategy can spell out your healthcare wishes and ensure that they’re carried out – even if you are unable to communicate. It can even designate someone to manage your financial affairs should you be unable to do so.
It usually involves creating a living trust for the purpose of avoiding conservatorship in the event of incapacity and avoiding probate upon death. There is no question that being able to avoid the cost, expense, frustration, and other hassles with conservatorship and probate is worth the legal fee in creating such an important document.
Sadly, many Americans have not seen additional benefits of creating a living trust beyond avoiding conservatorship and probate. However, there is much more than meets the eye. The idea behind Reverse Estate Planning is that adult children can use an array of standard tax and estate planning strategies to transfer assets to their parents in a tax-advantage way.
Here’s what you need to know about Reverse Estate planning, and if it might be for you.
Reverse Estate Planning 101
When most individuals consider Estate Planning, they look “downstream” to future generations. They think about how to structure the Estate Plan so as to provide for children, grandchildren, and other younger beneficiaries.
The perspective has always been, “How can we benefit future generations?” And while this is a key aspect of any Estate Plan, there is not enough focus on the reverse, also known as “Upstream Estate Planning”. You should also focus upon how gifts and inheritances you expect to receive should be structured in order to benefit you.
The idea is the adult children can use an array of standard tax and estate planning strategies to transfer assets to their parents in tax-advantaged ways. The parents then use their lifetime exemptions to pass that wealth to their younger generations through either their estates or lifetime gifts. They might even benefit their adult children at little or no tax cost by passing the money to irrevocable trusts the adult children can’t control.
It’s also a good way for family members to make loans. For example, the adult children can take out low-interest loans for their parents. The parents use the loan incomes to buy assets that are expected to grow. At some point, they repay the loans and let the appreciation pass through their estates tax-free to the younger generations, either directly or through trusts. Or the parents can make lifetime gifts to the grandchildren or the trusts, using part of their lifetime exemptions.
Is Reverse Estate Planning for You?
As mentioned, traditional Estate Planning usually involves creating a Living Trust for the purpose of avoiding conservatorship in the event of incapacity and avoiding probate upon death. There is no question that for the vast majority of Americans, being able to avoid the cost, expense, frustration, and other hassles with conservatorship and probate is worth the legal fee in creating a Living Trust.
Nowadays however, most of the widely-used strategies for transferring wealth to younger generations also can be used to transfer wealth to the older generation.
Some adult children who have more assets than parents and can help take care of the older generation. In these cases, Reverse Estate Planning can play a valuable role. Some families would also benefit by using Reverse Estate Planning to pass assets now to the older generation so their excess exemptions can be used to transfer assets tax free for the benefit of their grandchildren or later generations.
Be aware, the lifetime estate and gift tax exemptions might not remain at their current levels much longer. The 2017 tax law is scheduled to expire after 2025, which would cut the exemptions in half. So, if Reverse planning seems like a good idea for your loved ones, now is the time to take advantage of it.
Final Thoughts
The key is to be aware of the concept of “Reverse” or “Upstream” Estate Planning and if it’s for you, you should ask your benefactors if they’d be willing to sign a Heritage Trust and make a modification to their Estate Plan.
There’s no better time to plan for the future than right now. At Agemy Financial Strategies, our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and provide you with the highest level of service.
Whether you think Reverse Estate Planning is for you or you’d like to explore a more traditional Estate Planning route, reach out to our Fiduciary advisors here to instantly book the day and time you’d like to connect with us for your complimentary 30 minute consultation. Our financial advisors in Guildford, CT and Denver, CO are looking forward to speaking with you.