Retirees Feel Economic Crunch More Than Most

I do a lot of consulting work with those who are considered a part of the baby boomer generation. We are living longer and we have work and money options available to us that were unheard of when our parents and grandparents were planning for their "golden years." However, as some of the first baby boomers begin to consider retirement, the current financial crisis has many worried that their well-laid plans will be ruined. You should not be surprised to learn that retirees have been hit particularly hard our country's recent economic problems, and The New York Times featured these real concerns on today's front page.

Quite a few senior citizens rely largely on dividends from stock investments to pay for their daily living. These men and women do not have time for the markets to rebound and they are having to sell stocks at a loss just to pay for expenses or, at the very least, they are scaling back their future plans. As Alicia H. Munnell, director of the Center for Retirement Research at Boston College, said, “If you’re 45 and the market goes down, it bothers you, but it comes back. But if you’re retired or about to retire, you might have to sell your assets before they have a chance to recover."

It is not only those with stocks who are feeling the strain. Property taxes are going up as local communities try to compensate for reduced funding from the state and federal government. People who have paid for their home and lived there for decades are now struggling with the expense of living there.

Gas prices are affecting retirees beyond just the lack of freedom to travel as often as they would like. Increased costs for fuel are raising food prices as well as the availability of volunteer programs such as Meals on Wheels. To seniors on a fixed income, these changes are significant and nerve-wrecking.

Did you know that you can achieve financial happiness even in these difficult times? I've worked with thousands of individuals, and I would love the opportunity to help you navigate through the current challenges. Please visit my website and let me know how I can help you!

Saving Money While Behind the Wheel

Lehman Brothers, AIG and Freddie Mac/Fannie Mae are not the only ones looking for their way out of a financial crisis. Individuals around this country are searching for opportunities to make their dollars go further. One piece of our budget that we find difficult to cut is money spent on car travel. We need to get to work, take the kids to school, etc. so, particularly in areas without extensive mass transit, a car is nearly essential. You can combine trips or carpool with friends, but what are some other ways to put fewer dollars into the gas pump? Fox Business published an article last year on this very topic and its words continue to be relevant as gas shortages and high prices show no signs of abating.

There are five recommendations listed in the piece, and two of them are as follows:

1. Go Green -- These cars get more miles to the gallon, as traditional fuel is not its only power source. Also, the federal government offers tax credits for people who purchase hybrid vehicles. See the benefit to each model here.

2. Write Off the Miles -- While you are usually not permitted to deduct your mileage driving to and from work, you can deduct noncommuting driving such as making sales calls or deliveries, parking fees and tolls. In fact, the IRS has raised the per-mile tax deduction for the second half of this year as a way of compensating for high gas prices.

If you want to discuss some other ways to save money during these tight economic times, concerning any aspect of your personal budget, please contact me to set up a consultation. I have shared my expertise in personal finance with thousands of individuals and would appreciate the opportunity to help you as well!

Credit Cards ... Should You Leave Home Without Them?

Consumers are taking many different measures in light of our struggling economy. Some are cutting back on the numbers of daily trips in their cars, or carpooling to work for the first time, to save money spent on gasoline. Others are growing vegetable gardens or skipping meals at a favorite restaurant to reduce those monthly food costs. There are a brave few who are taking an amazing step towards financial responsibility ... they are leaving their credit cards at home!

Did you know that 58% of people who own credit cards do not pay the balance in full every month? For those who subscribe to this dangerous practice, the average household balance that is carried on these cards is just over $17,000! Overall, Americans have more than four times the amount of debt than they did in 1990. We are increasingly becoming a society that spends money we do not have.

There certainly are some well-known advantages to having a credit card. You are able to establish and build your credit rating, which will help with home and car loans. Credit companies offer product security and some appealing financial incentives (such as cash back or travel vouchers). And, of course, we cannot ignore the convenience that credit cards bring to our shopping trips. Be wary, however, of using the plastic beyond its point of being beneficial.

Are you considering taking that big step of tucking your credit card away and instead reaching for old-fashioned cash? Have you dug yourself a hole of debt and need some advice on how to recover your good financial standing? Please contact me and let's discuss your situation. I have helped thousands of people learn to manage their money and I can help you, too!

Hello from the Other Side of the World!

I started my work week this morning in Hong Kong (pictured above) and I will be leaving for Beijing tomorrow. Like in the United States, the biggest news over here involves the collapse of Lehman Brothers. The investment bank has 3000 employees in Asia, most of them in Japan. I will write more about the reaction over here, as well as some of my own thoughts on the news, when I return home.

Following previous trips to China, I wrote the book The China Boom. In the text, I share my personal insights concerning the exploding economy in China and its implications for your family, as well as some photos and videos taken with a focus on different aspects of Chinese life. You can subscribe to receive segments of this book right now when you visit my website. I hope you enjoy learning more about this fascinating land!

Older Americans Returning to the Work Force

A lot of the work I do involves helping people prepare for retirement. I want all of you to have the financial security that will allow you to spend your "golden years" in any manner that you wish. Do you dream of opening a bed and breakfast tucked away in the Smoky Mountains? Maybe you want to hone your skills at boating or golfing? Travel is always a popular option for those who have left their working years behind them. Did you know, however, that many older workers are choosing to come out of retirement or delaying retirement altogether? And, it may not be for the reasons you think.

MetLife recently did a study titled, "Living Longer, Working Longer: The Changing Landscape of the Aging Workforce." It breaks the Working Retired into three categories. Those between the ages of 55 and 59 are primarily working to save money. Workers who are 60 to 65 years in age want to be challenged and feel like they are contributing. The last group, those who are at least 66 years in age, choose to work for the social interaction. While these categories certainly are generalities, it is interesting to note that most older workers are applying for jobs by choice, not out of economic necessity.

Why are companies interested in older workers? They are generally more reliable, as they don't need time away from the workplace to deal with child illnesses and obligations. These workers also bring a wealth of experience to any organization. Someone with thirty years focused on a subject area makes a great teacher! A career government worker can offer insight into office structure and how to handle difficult situations with maturity.

The trend of senior citizens in the workforce is only going to continue to increase. As noted by AARP's Public Policy Institute, "workers aged 55 and over will account for more than 90 percent of projected labor force growth over the next decade." Watch out, young college graduates! You may be applying for the same jobs as your parents ... or grandparents!

With my custom coaching sessions, I can help you plan for any adventure you may want to tackle after retirement. Please check out my website for more information and then contact me to start our discussion today!

What the Government Mortgage Bailout Means to You

I'm not revealing any great secret by writing that the housing industry is in the midst of a major crisis. From countless foreclosures to lack of work for those in the construction business to the affected banks and mortgage companies who will never recover their money, many people in this country are affected by the crash in one way or another. The federal government decided this week to bail out the two largest mortgage lenders, Freddie Mac and Fannie Mae, and their names are now being mentioned on the evening news as much as Obama and McCain. How will this government intervention affect you? Let's take a look.

As a taxpayer, this bail out should not be welcome news to you. With the initial price tag placed at $300 billion, the cost breaks down to $1000 per taxpayer. Personally, I would prefer to spend this amount of cash on a nice weekend getaway or some charitable donations of my choice instead of saving a failed business. But, the government has decided that the overall health of the housing market will be improved by providing this assistance with our money now.

On the other hand, if you are in the market for a mortgage, the bailout of Freddie Mac and Fannie Mae has brought some welcome news. Mortgage rates are already down half a percentage point, with lenders taking some comfort in the fact that the two major mortgage giants are to remain in good standing.

Regardless of how you are personally affected by this bailout, the collective repercussions will be felt for some time to come. As Axel Merk, manager of the $400 million Merk Hard Currency Fund, said, “These bailouts will add up. The next (presidential) administration may get its trillion-dollar deficit. The winners will be the irresponsible ones who piled up on debt. The losers are retirees that have been saving and see their purchasing power erode.” What a rosy picture of the future!

If you have questions about how the financial health of Freddie Mac and Fannie Mae will affect you, or if you are looking for ways in which to make the most of this difficult situation, please contact me and let's discuss how my custom coaching sessions can work for you.

China and Issues of Intellectual Property Rights

China has received heightened attention in the United States recently for two reasons -- the Olympics and lead-based toys. It is no surprise, though, that our relationship with China goes much deeper than these stories that make the evening news. China's economy is exploding, so our trade agreements must be closely monitored and updated as circumstances evolve.

In a new article, I detail some of the problems surrounding China's delay in complying with the global Intellectual Property Rights (IPR). Please read the article and then let me know what you think of our current economic relationship with China. I look forward to your feedback!