One of the challenges facing many investors is planning for retirement. At Safe Harbor Financial, we talk to people from all walks of life every day, and we specialize in helping you sort out your options for the retirement lifestyle you want. To get you started thinking, we offer a series of at-home planning tools that take some of the mystery out of retirement planning. This article, called How to Potentially Optimize Social Security Benefits, takes an in-depth look at the choices and decisions you’ll want to make concerning the timing of your first Social Security check. [Read more…]
We diversify among individual securities. We allocate our assets to different investment categories. We spread our funds across different products, both investment- and insurance-based. But can we mentally separate our financial choices to allocate wealth for real-life scenarios?
Behavioral finance is a relatively new field that explores how human behavior and thought patterns influence our financial decisions and therefore, on a larger scale, our economy and financial markets. It’s basically this: Human nature meets economic principles. What we have found through the study of behavioral finance is that people do not always behave rationally when addressing different market environments. 1
For example, we may sell stocks when share prices drop in order to limit our losses, when it may make more sense to buy when prices are low. We are motivated to stock up on consumer products when there is a shortage even though we may have to pay much higher prices. In short, what we think and feel drives actions that may work to our disadvantage.
The practical reason for the study of behavioral finance is that we live in the real world. Our thoughts and actions are motivated by what’s happening in our lives, so we don’t always take a step back and think like an economics professor. When we need something now — be it money or peace of mind — we react quickly to get it. We do it to fix a short-term problem. We do it to alleviate stress. And we frequently do it without putting a lot of thought into how it might hurt our finances in the long run. [Read more…]
If you didn’t have to work — would you? That’s a decision many pre-retirees and new retirees are starting to ask themselves. After all, with today’s longer lifespans, retirees could live upwards of 30 years in retirement. Not only is that a lot of days to fill with satisfying activities that typically no longer involve raising a family, but a long retirement also requires a lot of income to provide on your own.
According to a study sponsored in part by Bank of America and Merrill Lynch, approximately 50 percent of current retirees have worked during retirement or are considering it. Moreover, nearly three-quarters of pre-retirees over age 50 say that their ideal retirement would include paid work of some sort. It’s interesting to note that among them, 35 percent say the ideal scenario for retirement is part-time work.1 [Read more…]