I am still here.

I have not written to you in a while because I have a new podcast that I have been promoting. You can find it at https://www.clickorlando.com/podcast. Look for the Hechteffect podcast.
The world has changed since my last blog and we don’t know when things will be back to normal. I do have a few tips for you during this trying time.
Stay in touch with your loved ones through any means possible. You never know how much just checking in on someone can change their day.
Try not to spend beyond your means. Being stuck at home, we are all getting bombarded with online offers to buy various different items. Only spend what you have to – don’t get sucked into spending just because there is 20% off.
Exercise. Staying fit is one of the best ways to fend off Covid19. Make sure you eat a healthy diet as well. The world will return to normal soon.
Know that I am here, and I am thinking of you.

Disclosures: http://www.hechteffect.net/?page_id=31

I’ve told you before, I guess I need to tell you again.

The IRS does not call taxpayers, nor does the Social Security Administration. This time of year is ripe with scam phone calls from both agencies. If the IRS needs to contact you for any reason, it will by way of the regular mail system. The Social Security Administration is big on using the mail system also. If you fall victim to a scam, please use these resources:

Protect yourself from becoming a victim.


Coronavirus may be a gift to your retirement savings.

First let me say that my heart goes out to all who have suffered from this virus. The world is in a panic right now, but I don’t want you to panic about your retirement savings. Often, when negative global events occur, we panic, it is human nature. When these events occurs there can also be opportunity. If you regularly review your retirement holdings, and are happy with the quality of your funds, now if the time to add to your accounts. I have mentioned many times that we seem to like to buy anything on sale except investments. Buy on the dips, be contrary to the pack, and remember you are investing for the long term.


A spring shopping tip.

My splurges are shoes and linens. I tend to buy most of my linens online, but shoes are a different story. When I moved to Florida, I did get rid of about 30 pairs of shoes, then three years later when I moved in with my husband, I dumped about 20 more pairs. Shoes make a girl feel good. My husband said to me once, “Why don’t you buy better quality shoes, then just get them re-soled vs. buying new ones?” He had a point, but only to a point.
Paying more doesn’t necessarily mean buying the most expensive item available. You’ll need to find the sweet spot at the intersection of price and quality. Spring is a great time to look at the shoes you have, determine which can be repaired, and which ones need to be trashed. Then, shop wisely and take advantage of the new fashions.


We told you to save as much as you can; however, there will be a downside.

I am very concerned about cash flow for my clients, especially in retirement. No one wants to have to worry about not being able to do as they wish in retirement. A component of the retirement cash flow plan that a few of my clients don’t really pay attention to is the taxes that will have to be paid.
Here is a comment from one very good saver:
“I knew I was putting money into my retirement accounts at a pretax rate, and thinking, ‘I’ll pay the taxes when I get this out’ – I was never really thinking how much it would be. Now when I’m looking at that whole nest egg, it’s like 28% of it I’m not going to get. That’s a shock when you think of it that way.”
A problem with trying to plan for taxes in retirement is, we know the tax laws now through 2025, depending on the election this November, and they will stay the same, or could change drastically. Taxes are a part of life. We need to plan for paying tax in retirement just as paying any other type of bill.


It’s all about the cash flow.

When I meet with my clients, we review their investments as to quality, mix, and performance. That is not the most important part of what I do for my clients. Cash flow is the most important issue when preparing for, and when you are in retirement. People tend to focus on income vs how that income is spent. Don’t get me wrong, earnings, social security, pensions, and dividends are all important, but not the most important.
What you need in retirement is cash flow. Each month you have expenses, and you need cash coming in to meet those expenses. Depending on how you plan for retirement, that cash flow might come from many different places, and not all of it will fit the technical definition of income.
Suppose you retire at 65, but you make a plan and start Social Security at age 70. What do you do to fill that gap to cover your expenses? How you spend your sources of income will be the biggest determinate as to how comfortable your retirement is. It’s all about the cash flow and the decision you make on how to spend it.


Don’t be part of the 43%.

New Year resolutions are a funny thing – some people always make them, and others do not. Of the people that normally make financial resolutions, 43% fail by the end of the first quarter. A study by Chime Financial showed that by the end of the year, only 8% of those who made financial resolutions stuck to them. I have four resolutions that should be pretty easy to keep.
1. Pay yourself first. Review your payroll deduction retirement plan and increase your contributions. You may think you can’t afford to increase your savings, but it is either pay Federal Income Tax, or pay yourself.
2. Spend below your means. When spending, ask yourself if the item is a need or a want. If it is a want, ask yourself how you will feel having spent that money on that item one month from now. I have no problems with setting a certain amount for discretionary spending each month. It is the spending beyond that amount that gets people into trouble.
3. Pay down your debt. If you have consumer debt beyond your mortgage or car payment, get rid of it as fast as possible. Always pay more than the minimum due and don’t rack up more consumer debt – pay cash instead.
4. Build up your cash reserves. Look at trying to always have 6 months of income in a liquid account. With strong cash reserves, you will not have to use credit when an emergency arises.
Anytime you want to make a major change, the resolution is simply a way to make explicit your intent. The real key is to make this resolution into a habit.


I’ve joined the 70 million!

As of two weeks ago, I have joined the ranks of 70 million grandparents in this country. I have a new grandson and my new name is Nana. Along with babysitting and all of the other fun stuff that goes along with my new title, as virtue of my profession, I am also thinking of the financial responsibility we want to take on. I have often advised my clients to be the owner of their grandkid’s 529 accounts – in that way, they can still apply for grants and scholarships without having to list the 529’s as assets.
At 70 million strong — up 24% from 56 million in 2001 — the group spends a collective $179 billion on their grandkids annually, according to new research from AARP. The average spent is $2,562.
I look forward to all of the fun that goes along with being a Nana, and welcome the opportunity to help provide for his education.