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Financial Symmetry: Balancing Today with Retirement

When considering retirement, do you wonder what financial opportunities you may be missing? Busy lives take over and years pass without taking advantage. In this retirement podcast, Chad Smith and Mike Eklund unveil financial opportunities, to help you balance enjoying today so you are ready to retire later. By day, they are fiduciary fee-only financial advisors who answer questions about tax savings, investment decisions, and how to save more. If you’ve been putting off your financial to-do list or are just not sure what you’ve been missing, subscribe to the show and learn more at www.financialsymmetry.com. Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for over 20 years.
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Now displaying: July, 2020
Jul 27, 2020

2020 has brought us a new reality with our vacation mindsets. With many vacation plans put on hold or completely cancelled, the pandemic has become the impetus for second homes becoming more of a reality.

Short Youtube video recap: https://youtu.be/dZvXxmFmDxM

If you have been considering purchasing a second home, we lay out 5 questions to consider as you're analyzing your purchase decision.

Questions to ask yourself before buying a second home

Have you ever considered buying a lake house, beach house, or mountain house? Vacation home purchases have surged this year, quadrupling the sales of last year. After an amazing vacation, some people want to jump right in and buy. But before you apply for that second mortgage there are some questions you need to consider. 

How much can you afford?

Many people only consider the cost of the mortgage, but with a second home, there is much more to consider. Where will you get the down payment? How will you pay 2 sets of utilities? Will you have 2 HOA’s to pay for? If you or your spouse lost a job, how would you continue to pay for this second home? Remember, typically a second home is not a great investment. They can be hard to sell and generally do poorly in recessions. Another important consideration is: how will this purchase impact your other financial goals? 

How often will you use it?

When will you use your new home? Every weekend? Winters? Summers? Will you rent it out? Consider whether you really want a second home, or 2 nice beach vacations a year. 

How much time will you use it? Will you feel like you have to go there? Will it limit other vacations? Is this really where you want to spend all of your time? 

Many people end up selling their vacation home because they realize that they didn’t use it as much as they had envisioned. How close is it to your primary residence? Oftentimes, the amount of use a vacation home gets is based on proximity to one’s house.

How will your life be affected by a second home purchase?

Remember there are not only the financial costs to consider but the time cost as well. Another house means more maintenance. This upkeep requires a financial cost but it could also mean that you have to spend your own personal time fixing up the place. What will you be giving up in return for the new house? 

If you are still keen on the idea of purchasing a vacation home after answering all of these questions, listen in to hear what steps you should take next are. 

Outline of This Episode

  • [2:37] This year second home purchases have increased
  • [4:19] How much can you afford?
  • [7:40] How often will you use it?
  • [9:16] How will your life and kids’ lives be affected by this purchase?
  • [10:32] What about the ongoing maintenance?
  • [13:07] Describe your ideal second home
  • [13:45] How far is it from your home?
  • [15:47] Do you plan to rent it out?
  • [20:57] The key takeaways from today

Resources & People Mentioned

Connect With Chad and Mike

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Jul 13, 2020

You spend half your life preparing for retirement, but that doesn’t mean that there won’t be surprises when you get there.

YouTube Recap here: https://youtu.be/zzEnHR9Qv8I

Retirement can bring on both positive and negative surprises, so it's important to prepare the best you can beforehand. So in this episode we breakdown the different kinds of surprises you may experience in retirement and how you can be ready.

A year of surprises

2020 has been a year of surprises. It seems that every time we turn around the world has something new in store for us. Life has changed substantially and we are all dealing with a new reality. A changing reality amidst retirement can be scary if you aren’t prepared. If you want to be prepared for any eventuality during retirement then listen to this episode now.

5 positive retirement surprises

In retirement, there could be good surprises or bad ones. We like to start out with the potentially beneficial surprises. You’ll want to hear which surprises might start out negative but could lead to positive changes.

  • A second career - Some people find that retirement brings them into a second career. They may find this second round more fulfilling or it could be a way to give back to their community. Being able to contribute and still earn an income is an unexpected surprise for many. 
  • An unexpected inheritance - While the situation may not be that positive, an unexpected inheritance could completely change your retirement plans. Coming into money unexpectedly requires careful consideration and planning
  • A layoff - Not everyone retires when they want to. If you get laid off close to retirement age you could turn that negative into a positive especially if it includes a severance package. 
  • Increased travel - If you have family that moved across the country or even across the world this could bring more travel into your retirement itinerary. Although seeing new places is always exciting, it’s important to prepare for the added expenditure. 
  • A change in family dynamics - You may be surprised by taking on a caregiving role in retirement. This role could be for aging parents or even raising the grandkids. Another way that family dynamics change in retirement is through grey divorce. Listen in to discover how changes in family dynamics can change your financial outlook as well. 

Don’t let negative changes in retirement surprise you

Unfortunately, retirement doesn’t always bring sunshine and rainbows. It’s important to be prepared for negative surprises in retirement as well. 

  • A decline in health - Health changes can change your finances as well. You may find that your Medicare premiums are higher than expected. Find out how you can rectify that by listening to episode 104. Long term care can also have a huge impact on your retirement finances. 
  • Downsizing didn’t have the expected effect. Sometimes we think that downsizing in retirement will bring substantial financial benefits but that isn’t always the case.
  • Inflation can be the silent killer of retirement savings. Even if you pay off your home taxes and insurance are still there and they tend to increase over time. Is your portfolio prepared to battle inflation?
  • Taxes continually surprise us. Many people discover that in retirement they are still paying high tax rates.
  • A market correction - sometimes the timing of market corrections can come as a surprise (although it shouldn’t!) How you respond to a market correction matters. Learn how to factor your risk tolerance into your portfolio so that you can be prepared for any eventuality.

Outline of This Episode

  • [2:30] What are you going to do in retirement?
  • [4:38] You receive an unexpected inheritance
  • [6:01] Turn a negative into a positive
  • [10:12] A caregiving role can be a surprise
  • [13:42] Healthcare costs can be surprising in retirement
  • [16:02] Sometimes downsizing doesn’t provide the expected financial benefits 
  • [19:35] Taxes can be surprising
  • [20:21] Market corrections can come as a surprise

Resources & People Mentioned

Connect With Chad and Mike

Subscribe To This Podcast

Apple Podcasts <> Stitcher <> Google Play

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