Dwayne Burnell

Dwayne Burnell

Wednesday, 08 June 2016 11:15

Sneaky Expenses that can Wreck Your Budget

You may be surprised to learn that it's not the big-ticket items that are likely to blow your budget. The real culprit is the gradual increase in your spending habits on the little, almost unnoticeable, things in life. Here are four common causes of "expense creep," which can easily add up to more than $5,000 a year.

1. The $1,000 Cup of Coffeecoffee cup

If you’re “treating” yourself to coffee out every day, you might as well be drinking it out of a gold cup. According to a survey of American workers by Accounting Principals (2014), Americans who regularly buy coffee throughout the week spend an average of $1,092 on coffee annually. Start brewing your joe at home and you could reduce your monthly budget by just over $90 per month.

2. Hidden Costs on Your Cellphone Bill

cell phonesWhen was the last time you closely reviewed your cellphone bill? You'll want to make sure you haven't been incurring any data overage fees, and that you aren't being charged for parental controls you no longer need. And if data overages are plaguing you, consider an unlimited data plan, or make sure your settings only allow you to stream music, videos, and games when you're on Wi-Fi.

3. Unused Monthly Services

Gym-MembershipIf you signed up for a gym membership back in January in an effort to reach your New Year's goals, chances are you opted in to an automatic credit card deduction. But if you haven't stepped foot on a treadmill in months it might be time to cancel that membership. An unused gym membership could be costing you $700 a year.

Also check your online subscriptions. It's easy to sign up for an online monthly membership or for a service and not pay much attention to the fact that your $15/month online subscription is costing you $180 per year.


4. Carrying a Credit Card Balance

credit-cardsLook for zero percent balance transfer offers to reduce interest spending immediately (assuming you can pay off the balance before that zero percent offer expires). In the meantime, start using cash exclusively so you don't incur additional debt.If you've gotten out of the habit of paying off your credit cards in full each month, you may need to either rethink your spending or cut down on credit card use. Why? Because carrying a balance and paying interest could be setting you back more than $2,500 annually.

Managing costs like those I've listed above will help you ensure that you keep as much as your hard-earned money as you can. When your money is not sneaking out the back door of your financial house, you don't need to have as much coming in the front door.

Monday, 07 March 2016 10:18

Four Major Threats to Your Retirement

Even if you've been saving and planning carefully for retirement, these unforeseen issues can disrupt and delay your retirement:

1. A Medical Crisis
Medical bills are the leading cause of bankruptcy in the United states. An injury or chronic illness can drain your financial reserves. You can protect your income with disability insurance which replaces a portion of your income if you can't work.

Also, the development of Alzheimer's or Parkinson's can drastically impact your retirement savings.

These exceedingly challenging diseases take their toll emotionally on spouses, family members and care-givers. But the cost of long-term care for chronic illnesses can also completely 'blow up' even the best retirement plans.

The solution? Long-term care insurance can protect your retirement savings by covering the expense of care for you and/or your spouse - whoever needs assistance.


2. Spouse Dying Without Life Insurance
Caring for Aging parentsSadly, it's not uncommon for people to die without providing a "safety net" to those that are left behind. Common thinking says that once your children leave home, you don't need life insurance anymore. But this just isn't true.

Think carefully about how much of the household income will be impacted if the major earner dies. Be prudent and plan accordingly to protect those you love.


3. Aging Parents
There are some pretty sobering statistics out there on caring for aging parents (Ref: 2015 National Institute on Aging "Health and Retirement" Study):Declining-health

  • 11% of adult children younger than 65 provide money to parents
  • People ages 50 and older who care for parents lose an average of $303,880 in pay, Social Security and pension benefits.

If you are faced with caring for aging parents, check out the resources at the National Council of Aging at www.benefitscheckup.org for more information.


4. Adult Children Returning Home
Adult-child-at-homeParents who support adult children are more likely to postpone their retirement. Plan now to teach your children about finances and set the expectation for financial self-sufficiency.

If a crisis does land your adult child back home, discuss an exit strategy. Be clear that you're a safety net, not a long-term solution. 

Chances are that at least one of these situations/scenarios will happen to you.

Now is the time to take steps to make sure that you have a realistic plan in place to cushion the impact of these threats to your to retirement.

Monday, 01 February 2016 12:24

Two Keys to Retirement

Ever find yourself bogged down or intimidated by all the things you're supposed to have done to prepare for retirement?key

It's true that's there's a lot to consider as you plan for retirement. But sometimes, as my mother used to say, "It's hard to see the forest for the trees."

In other words, it's easy to get too involved in the details of retirement planning and fail to look at your situation as a whole.

So...when you think about retirement planning, take a deep breath, stand back and think about the two factors you absolutely must manage to be able to get to retirement and to stay retired:

One. Your income
Two. Your expenses

That's it! Sounds simple but I meet a lot of folks who have been working to build their retirement assets, but have not considered their retirement expenses.

strategyFor example, if you believe your monthly spending in retirement will be $4,000 per month but it's actually really closer to $6,000....well...that's $2,000 per month or $24,000 per year more than you think you need for retirement.

How long do you think your retirement savings can handle an extra $24,000 per year in after-tax dollars that you didn't include in your retirement planning?

Retirement is not an event. It's another phase of life and it requires clear thinking and planning.

Start with the big concepts.

Figure out your retirement income and outline your anticipated expenses - including travel, visiting the grand-kids and whatever else you've been looking forward to in this phase of life.

The key is to manage both your retirement income and your expenses. If you do this, you'll go a long way toward building a retirement plan that will last.hello


Tuesday, 03 November 2015 11:37

Step Outside the Box of Conventional Thinking

Jack LaLanne 1961Time to take inspiration from the fitness expert, Jack Lalanne.

A self-described emotional and physical wreck while growing up, Mr. LaLanne began turning his life around after hearing a talk on proper diet at age 15. Mr. LaLanne started working out with weights when they were an oddity. In 1936 he opened the prototype for the fitness spas to come - a gym, juice bar and health food store.

At the time, doctors advised their patients to stay away from his health club, a business totally unheard of at the time. Patients were warned that, "LaLanne was an exercise 'nut' whose programs would make them muscle-bound and cause severe medical problems."

It's amazing to look back now and consider how the prevailing experts were wrong about the effects of exercise and fitness. 

It's also worth considering that much of the prevailing financial advice you hear from TV financial gurus or other "experts" may not be complete or correct either.

You're not going to create a financial strategy for yourself that is flexible, responsive to change and that will work in both a strong and weak economy by doing what everyone else has always done. And just like Mr. LaLanne, it makes sense, at times, to challenge the status quo and step outside the box of conventional thinking.

You have far greater financial flexibility, creativity and strategy available to you than just following the predictable, common-place and incomplete advice you hear every day:

  • "Stay in the stock market, ride out the downturn no matter what"
  • "Invest for the long term"
  • "Focus on rate of return"

I work with you to develop your skill and financial knowledge. We discuss your life choices, values, and overall personal, family or business situation and outlook.Think-out-of-the-box

Then together we choose appropriate financial products that fit into and support your customized, personal, lifetime financial strategy.

It's time to wrap up my series on how not to go broke in retirement. I've covered the first two points in earlier posts:
1.  Start Planning for Your Retirement Tax Situation NOW!
2.  Avoid Missing Out on Thousands of Dollars in Social Security Benefits
Here are my last two, easy-to-implement- common-sense strategies:
3.  Manage Your Expenses

cash-flow - CopyThroughout our lives we focus on our income and maybe sometimes our "net worth."  But not many of us pay attention to the ways our money flows away from us and out of our household. I'm not talking about larger expenses like groceries, insurance, home and car repairs, etc. I'm referring to money that leaks out of your financial system without you even being aware.  I've already emphasized the importance of managing your tax strategy, but other expenses that might be impacting your financial reserves more than you realize include:

  • Capital Loss (as a result of investment loss)
  • Payment of loan interest, and
  • Fees and miscellaneous service charges

By controlling these expenses, you can save a great deal of your money. Think about a slow leak in a swimming pool. By simply plugging the leak, you don't drain your pool nearly as quickly. It's the same with your financial reserve. By reducing the amount of money that flows away from you, you don't need to have as much money coming in.

4.  Guarantee Part of Your Retirement Income

strategyThe wealthy stay wealthy by having a variety of sources from which they obtain their retirement income. They don't just have their money in mutual funds in a 401(k). While they most certainly will have investments, they also rely on other financial products to balance their stock market and investment risk.

The wealthy also think about cash flow and how quickly they can access their money.They think about and plan for regular monthly income in addition to their other financial assets.

Consider this:  You can have your house and car paid off, but if you have no cash coming in every month, what will you live on?

pennies into a pig

If your only retirement strategy is rationing your annual income to 4% of your total financial reserves, then you don't have much of a plan to handle a stock market drop (and capital loss in your 401(k)), inflation or a sudden need for cash, be it for house repairs or money for medical expenses.

You need guaranteed income in retirement. Social Security benefits can provide some of this income. But consider other financial products that provide life-long guaranteed income to supplement your at-risk mutual fund income distributions.

Retirement should be fun and enjoyable. Stressing about money is a sure way to take the enjoyment out of life.

By implementing these simple money management tips, you can go a long way toward ensuring that your retirement will be financially worry-free.



Beach 1

You might have seen Wednesday's front page headlines from The Wall Street Journal and The USA Today:

"Markets Reel in Global Selloff"
"1,000 Point Sell-Off Rocks Stock Market."

Here we are again. Volatility, worry and advice: Sell! Buy! Don't sell! Don't buy!

It's easy to feel like you need to react and "do something" when the markets are turbulent and you're bombarded with advice. Often folks react in ways that hurt them financially more than help them.

Here are 3 Mistakes to Avoid. Don't..

1. React Emotionally

Angry-girlThis is what the stock market does: it goes up and then it goes down. Sometimes a lot. And sometimes very quickly. If you have a lot of retirement money in the stock market, it's hard not to be scared by these wild swings. But panicking isn't a good way to deal with your worry.

Use this market correction to evaluate your situation.

If you aren't comfortable with the stock market swings, or you can't afford to lose any of your retirement money in the short term, then the stock market is probably not a good fit for you.

You can't get financial peace of mind if you are emotionally and financially tied to riding market highs and lows.

2. Leave your money in the stock market, no matter what

stock-market-fluctuationWhen the market takes a nose dive the common and predictable advice is: "Stay in the market for the long-term." This advice may work if retirement is 10-20 years away. But it doesn't work for someone who wants to take a distribution from their 401(k) this month or in the near future.

As you think about your retirement needs, make sure that you can weather a stock market downturn with your retirement funds and still retire.

3. Keep all your money in one financial product

retirement-jarYou do better financially when you have diversification. Many people talk about diversified stock market portfolios. But this is not what I'm talking about.

My clients sleep better at night when they have a financial strategy that captures the upside that the stock market can offer, while limiting and, in many cases, eliminating the downside of a stock market plummet.

There are a number of ways to accomplish this.

For example, you may want to keep some retirement funds in the stock market to capture growth while placing other funds in different products that focus on safety.

My point is - there are lots of financial products that will fit into a well-conceived lifelong financial strategy. Take advantage of them.

One final thought - stock markets respond to world events and politics. Scary headlines and worrisome world events do affect your 401(k) and its long-term value. Ask yourself how much you want your retirement money tied to unpredictable and uncontrollable world events.

There are other options. I'm here to help you understand and implement them. Even in tumultuous times, you can have financial peace of mind.


I mentioned last month that there are straight forward strategies you can use to help ensure you don't end up outliving your retirement funds.

In May, we covered the first strategy:

1. Start Planning for Your Retirement Tax Situation NOW!

This month, I want to talk with you about Social Security. The second strategy is to focus your attention on Social Security:

2. Avoid Missing Out on Thousands of Dollars in Social Security Benefits

Social Security is an incredibly important program because it offers you two valuable benefits.

  1. Income you cannot outlive, and
  2. An annual adjustment for increased living costs (referred to as a Cost of Living Adjustment or COLA).

However, according to the Social Security Administration, over 74% of people who apply for Social Security benefits leave money behind.Social-Security


Because many people think that you apply for Social Security benefits and then you just "get what you get."  Not true. With Social Security, there are important strategic decisions that affect the amount of money you can receive from this program.

Three key strategies that will grow your Social Security payments:

1. Delay Claiming

You can increase your Social Security checks by delaying when you sign up for Social Security. When you delay payment until age 70, the monthly payment is 32% higher than it would be if you had started to take benefits at age 66. Your payment at age 66 is 33% higher than at age 62.clock

2. Take Advantage of Spousal Benefits

Married couple are entitled to claim Social Security benefits worth up to 50% of the higher earner's benefit. And when one spouse dies, the surviving spouse receives the higher earner's benefit.

3. Maximize your income now

Your Social Security payment is figured using a complex calculation based on your 35 highest contributing earning years. Each year's wages are indexed for inflation before being averaged. By understanding that your earnings directly impact the Social Security benefits you can receive, you can strategize now. For instance, you may choose to work a year or two longer, to ensure that all 35 years show income.

I've listed three important strategic factors in planning for Social Security. But there are other strategic considerations with Social Security and it's important to get it right.

Understanding your personal situation and how it integrates with Social Security can mean a difference of hundred's of thousands of dollars in retirement income over your lifetime. 

You paid into the Social Security program your entire working life. With planning and some forethought, you can get what you have earned.


Tax Advice

I talk to a lot of people who will never be rich, but who certainly don't deserve to be poor.  When you plan for your retirement, there are straight forward strategies you can use to help ensure you don't end up outliving your retirement funds.

Over the next few months, I want to share with you four simple, yet powerful, financial strategies that will help you get the most out of your retirement money.

1. Start Planning for Your Retirement Tax Situation NOW!

Everyone hates this piece of advice. Minimizing your tax liability in the future seems a challenging prospect. I know of only a few people who like to spend their time thinking about taxes.Tax

But I promise you - it's where you're going to see some of the greatest gains to your retirement income.

Consider these facts and then answer the question below:

  • an 18 trillion dollar U.S. debt,
  • a looming estimated cost of almost $40 trillion to make the Social Security, Medicare and Medicaid financially solvent for the next 75 years,
  • local city and state government budgets over-extended,
  • the increasing cost of the "War on Terror" and the U.S. military budget,
  • a crumbling national road, bridge and underground infrastructure in desperate need of repair

Do you think taxes are going up or down in the future?

I believe taxes are going up.

If the only retirement product you own is a 401(k) or an IRA, or another qualified plan, remember you have just deferred paying tax, not eliminated paying it. The U.S. Department of Revenue wants their cut of your future income.

If you didn't pay tax when you put money into your retirement vehicle, then you're going to pay income tax on it when you take it out. And if tax rates are higher and your retirement deductions lower...you'll end up paying more in tax. A LOT more.

Plan-NowYou don't need to grit your teeth, stare straight ahead and just accept this tax situation. There are many financial strategies that will give you tax planning flexibility.

You just need the time to develop a flexible retirement strategy and to implement it. That's the point of planning BEFORE you are ready to retire.

Make the commitment to review your retirement tax scenario NOW.

We can work together to evaluate your retirement tax situation and then choose financial products and strategies that will give you the greatest financial flexibility while reducing your tax burden.


Ask yourself how much of your money you could convert to cash within a month.

Isolated SavingsThen consider what withdrawal penalties, fees or service charges you would be required to pay to access your money. Or to get cash, would you need to sell an asset (such as in real estate?).

I talk with folks every day who have limited access to their money.man-in-a-boat

And they haven't been doing anything "wrong." They've simply been listening to the common advice to put their money in financial vehicles, such as a 401(k) or certificate of deposit (CD), that have many restrictions on access, not to mention taxes and penalties upon withdrawal.

Being able to convert your financial reserves to cash is a critical factor in being able to withstand a financial crisis, a job loss, change in health or family emergency.

Unfortunately, when these types of crises occur, lending institutions will typically not loan you money. Even the equity in your house many not be available to you.

When you need cash (and regular cash flow), it's not a good time to realize that you don't have easy access to funds without penalty or tax.

When I work with clients, we take an inventory of all their assets, including stocks, bonds, their home value and equity, business assets, employment benefits (including life and disability insurance) and anything else they own or could access as a financial resource.

Then we estimate what it would cost and how long it would take to turn their assets into cash.  I use this information to develop a lifelong financial plan that helps them be protected and have ready access to cash should they be faced with a life crisis.

You can create a financial strategy that will empower you and enable you to weather life's crises.  It's easy to plan when we work together.

Tuesday, 31 March 2015 10:51

Have You Created a "Retirement Paycheck?"

Your approach to retirement planning may be costing you money. A LOT of money.

Instead of thinking of your retirement fund as a "pile of cash," plan for the monthly income you want to have for the rest of your life.

Common financial advice encourages you to to save money and then ration out 4-5% from your 401(k) or qualified plan each year to fund your retirement.

But this strategy treats your money and your financial resources as if you were dealing with a pile of bricks. Based upon this approach, if you collect 100 bricks for your retirement; then no matter what happens to you or your family, you can only allow yourself 4-5 bricks per year to live.


But the wealthy don't treat their money and financial reserves this way. The wealthy understand that the key to financial control and independence is based upon how they manage the flow of their money through their financial system.

The wealthy think about "cash flow" instead of a pile of "cash." They think about how to make their money work for them by managing both the inflow and the outflow (i.e., taxes, interest, fees and service charges, and other expenses).


The wealthy also integrate money coming in from various sources (e.g., Social Security benefits, 401(k) distributions, investments, annuities, property, inheritance, etc.) with their tax situation. They stagger their how much money they receive each month in order to optimize their monthly income, minimize their tax liability and to have the financial resources to managed unexpected events.

Consider this. You can have your house and car paid off, but if you have no "retirement paycheck" or cash flow coming in every month, what will you live on?

If your only retirement strategy is rationing your annual income to 4% of your total financial reserves , then you don't have much of a plan to handle a stock market drop (and capital loss in your 401(k)), inflation or a sudden need for cash, be it for house repairs or medical expenses.

There are financial strategies that will preserve your wealth in case of unexpected health expenses, inflation, stock market fluctuations and unexpected life events.

You don't have to be Warren Buffett to enjoy your retirement, but you do need to plan ahead. Make sure you have a "retirement paycheck" that will provide for you and your family.

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