8 Tips on How NOT to Outlive Your Money

By now, you might have seen the February 23 issue of Time magazine with a picture of an adorable baby looking back at you. The headline reads, “This Baby Could Live to Be 142 Years Old.” The baby looks as surprised as you. How is that possible?

Well, consider this. In 1900, if you told someone they could live to be 79 years old (today’s average life expectancy), they probably would have carted you off to the funny farm. Because in 1900, the average life expectancy in the United States was only 47 years old!

So, yes, we are living longer, and for the sake of this conversation, let’s stick with what we know. That is, today’s life expectancy is 79 years old. Of course, people who take care of themselves and have access to good medical care can live into their mid-nineties. That’s the good news. But it can be bad news for our money. Think about it. If one were to retire at age 65 and live to age 95, his money has to support him for another good thirty years. In these days of shrinking pensions and threats to the solvency of Social Security, that is no small task.

So, here are my eight suggestions on how to not outlive your money:

1. Delay retirement until age 70. This allows you to delay taking your Social Security benefit until age 70 which, by the way, is the highest payout.
2. Start saving at a young age. If a 25-year-old starts saving 10% of his income for retirement, he will likely be a millionaire by the time he is 70 (unless #3 occurs).
3. When you change jobs, don’t cash in your 401k to buy stupid stuff. A great way to sabotage your financial future is to cash in your retirement account and start over. Time will start working against you instead of for you.
4. At retirement, consider some form of guaranteed lifetime income. There are many options. So speak with your financial adviser to find out if one is appropriate for you.
5. Don’t forget to factor in the increase in the cost of living during your retirement years.
6. Make “zero” your retirement number. Yes, that’s right—“zero” as in zero debt. Pay of all non-productive debt before you retire
7. Retire in a foreign country. Many countries especially in Central and South America want you to retire there. They will not tax you on your retirement income, and the cost of living is much less expensive compared to the US.
8. If all else fails, marry a teacher or civil service worker. They usually have pretty good pensions!

5 Ideas for Women on How to Ask for a Raise

Merly Streep’s impassioned reaction to Patricia Arquette’s speech has gone viral. Arquette won an Oscar Sunday night for best supporting actress for her performance in “Boyhood.” In her acceptance speech, she advocated for equal pay: “It’s our time to have wage equality once and for all and equal rights for women in the United States of America.” Streep wasn’t the only one who loved Arquette’s speech. By Monday morning, #feministOscars was trending on Twitter.

For sure, a gender gap exists. Despite outearning men in part-time positions, women still lag in earnings for full-time positions. According to the Bureau of Labor Statistics, women made 82 percent of the median weekly earnings of male full-time wage and salary workers.

About a year ago, I was watching Morning Joe and advertising executive Donny Deutsch said, “I’ve never had a woman ask for a raise.” He went on saying that women just aren’t assertive enough about asking for more. Most women don’t challenge what they’re worth. In fact, women tend to undervalue what they’re worth.

As a financial advisor, I know that the best way to increase your cash flows is to advance your career and increase your income from your wages (which is far superior than trying to increase your cash flows from investments). By asking for and getting what you’re worth, you’ll ultimately increase your net worth.

Here are five ideas for how to ask for a raise:

1. Find out what your position typically pays. If you think that you should be earning more, do a little research first. Sites like salary.com and payscale.com allow you to compare your salary based on your qualifications and job description.

2. Make a list of your accomplishments. No one else will. It’s up to you to keep a record of your job successes. In fact, it’s crucial if you want to negotiate a higher salary. For instance, I’m certain that Lebron James’ agent had a list in hand of his client’s on-court achievements when he negotiated James’ contract with the Cleveland Cavaliers.

3. Make sure that your petition is timely. If your company has been laying off employees or has suffered losses in the marketplace, you may want to wait to ask for a raise until your company is on better footing.

4. Ask for a meeting. Petitioning your boss for a raise at the water cooler isn’t the best idea. No one likes to react. Instead, request a meeting; moreover, be sure to state how much time you’ll need. Don’t say, “Could I have a minute with you next Tuesday?” and then end up taking 20 minutes.

5. Ask for what you want. And clearly explain why you’re worth it. Practice your “commercial” several times before your meeting. You’ll be better prepared, less nervous, and more confident.

The foundation of corporate America has been built on a patriarchal hierarchy. However, if women are going to permeate this hierarchical and competitive culture, they need to start being more assertive in the workplace and demanding their fair share.

I Know Venezuela

I’ve never visited Venezuela, but I have many friends who have emigrated from there to the United States. From their accounts, I feel I know a little about Venezuela, especially when it comes to the country’s economic plights.

Venezuela is basically a one-trick pony economy with 95% of its GDP (gross domestic product) reliant on one commodity–oil. Even when oil prices were much higher, Venezuelans experienced massive food shortages and high inflation. These problems only have exacerbated with the drop in oil prices. For instance, when my friend’s family visits here, they stock up on clothes and electronics because these items cost anywhere from two to five times more in their home country.

Unfortunately, Bill Ross, who is a retired camera salesman from Queens, NY, thought he knew a little something about Venezuela, too. Bill plowed his retirement savings into high-yielding bonds issued by the Venezuelan government. And why not? Bill got much more interest on those bonds compared to the ones he could have bought here in the United States. In the first year he invested in the Venezuelan bonds, he made over $40,000 in profit!

Bill was so proud of his investment acumen that he had a special baseball cap with “PDV$A” (an acronym for the bonds) embroidered on the front of the cap. Alas, this past September, because of falling oil prices, Bill’s PDV$A bonds lost 37% of their value. Bill who once had admitted that he wasn’t “the smartest guy in the room,” proved it by refinancing his house to buy even more Venezuelan bonds…ouch!

No doubt, Bill’s one-trick pony portfolio is a recipe for financial disaster. A good advisor, however, will allocate your assets so you don’t get hurt. As for that baseball cap? It’s collecting dust in Bill’s bedroom closet.

Aging is not a Birthright

A few days ago, an unauthorized photo of Cindy Crawford was posted on Twitter. Since then, the photo has gone viral. The leaked image shows Crawford as we’ve never seen her before—with flaws.

The photo was obviously not photo shopped. You can clearly see a bit of cellulite and a few stretch marks on her bare abdomen. So what’s the big deal? The big deal is that in the year 2015, we are not accustomed to seeing a woman with imperfections in our glossy magazines.

Cindy Crawford is an iconic American model who walked miles of catwalks and graced countless covers of magazines throughout the nineties. And in the past few days, she has received a ton of support and praise through social media and other media outlets. One of my former radio show guests, Melanie Klein, who is the author of “Yoga and Body Image,” commented on Twitter: “Cindy Crawford’s leaked untouched photo in inspiring women everywhere.” Apparently, it’s very refreshing to see a supermodel that looks like you…and you…and you.

If you’ve “clicked on” the photo, though, you’ll see that Crawford is still beautiful. The photo was taken during a 2013 photo shoot for Marie Claire. At the time, Crawford was 47 years old. She’s striking a very confident pose in black lingerie with a fur draped around her shoulders.

Sure, it must be disheartening to have what some deem as an unflattering photo of you posted everywhere on the internet. Just think how you feel when you show up on someone’s Facebook with your eyes closed or simply not looking your best. Regardless, Crawford’s imperfect image has spawned plenty of conversations about aging. It’s sort of a sad reflection about our culture that so many people are happy to see how a “real” woman looks. Without question, we live in a youth-obsessed society. The simple fact is, however, everyone is going to get old. Aging may not always be pleasant, but as some like to say, it’s better than the alternative.

So what’s the lesson to be learned here? Don’t pose in your underwear unless you don’t care who sees you? Maybe, but I like to think it’s this, and one that we should all try to more fully embrace: Aging is not a birthright. It’s a privilege. If we could just get over ourselves, we’ll find that in so many ways, we get better with age. Of course, we might not have six-pack abs anymore, but we’ll have more wisdom and hopefully, a little more gratitude for what we do have.

However, will we have enough money in our old age? That’s another blog.

5 Valentine’s Day Gifts that Last Forever

1. Make a will.

2. Have adequate life insurance.

3. Save more in your 401(k) for yourself.

4. Start saving for college when your kids are young.

5. Get all the tax deductions you’re entitled to. Meet with your accountant (after tax season).

6. Remember chocolate and flowers.

How I Saved a Client $100,000

I just saved a client over $100,000 in taxes! Now before I tell you how I saved this client six figures, I’d first like you to consider two words: investing and advice.

For some, “investing” is kind of sexy and has all sorts of exciting undertones such as “money,” “stocks,” and “bonds.” These words often invoke some type of action (real or imagined) and even stronger emotions such as security, fear, and greed. On the other hand, “advice” sounds like something your grandmother might give you, a kind of practical (boring?) wisdom. But in my business, it is often advice that trumps investing.

So you’re probably wondering what this all has to do with my helping a client save over $100,000 in taxes. Without getting into the nitty-gritty details, my client’s father recently died. When it came time to divvy up his estate, however, unbeknownst to my client, someone had changed the beneficiary designations from all children equally to the estate of the deceased. I explained to my client that if he and his siblings were to cash in the IRA portion (a significant amount) of their inheritance, all of it would be taxed at the highest tax brackets, and they would lose well over $100,000 to unnecessary taxes!

I suggested to my client that he and his siblings hire an attorney to find out if they could change the beneficiary designations back to the original intent of their deceased parent. Well, I’m here to tell you that it all worked out, and each of the children got to inherit a substantially higher amount of money.

Now getting back to advice. Sure, giving advice may not be as exciting as acquiring a large sum of money to manage, but giving good advice can be even more satisfying. As a financial advisor, my job is not just to grow my clients’ wealth, but to protect it.