Money Matters with Ken Moraif

Articles & Education

What Happens to Your Cost of Living As You Get Older?

Posted on . Category | Retirement Planning

I’ve worked with retired clients for over 28 years, and in that time, I’ve noticed a trend in their cost of living as they age. I’d like to share that experience with you, to help you plan for your retirement.

When people plan for their retirement, a typical rule of thumb is to take out 4 percent of their investments for their cost of living (you can learn more about this rule here). But this “rule” is not complete, because you have to account for increases to your cost of living.

What Percentage of Your Money Should You Spend in Retirement?

Posted on . Category | Retirement Planning

The financial community used to talk about the “4 percent rule,” saying that retirees could typically withdraw 4 percent from their investments without running into trouble. Now many advisors have changed that amount from 4 to 2 percent. Why the cutback? Think about the last two bear markets: If retirees had taken out 4 percent during the Y2K and 2008 bear markets, how would they have likely fared? Not well.

Is It Time to Sell Bonds?

Posted on . Category | Stock Market

Janet Yellen recently said it was likely the Federal Reserve would raise interest rates this year. Bond values typically go down when interest rates go up, so several of my clients have asked me if they should sell their bonds.  

It’s true that bond values usually have an inverse relationship to interest rates. Here’s an example: Let's say you have a bond that is paying 3 percent and the prevailing interest rates are 3 percent. Then interest rates are raised to 5 percent. If you decide to sell that 3 percent bond, do you think anyone would want to buy it when other investments are now available for 5 percent?

Should You Add your Kids to Your Bank Account?

Posted on . Category | Retirement Planning

Last week, one of my clients said, “I want to open a joint bank account with my daughter. That way, if I become incapacitated or have health issues or other problems, my daughter could step in and start paying my bills; take care of things.” I said, “Sure, you can do that, but let’s talk over the risks first, so you can make an informed decision.”

The Future of Social Security?

Posted on . Category | Retirement Planning

Last week, three separate clients expressed concern about the future of Social Security.  They were worried that they might be means tested, or that benefits might be slashed, or that the entire Social Security program might be cut. Are their worries based in reality? The Social Security program is in trouble. It’s no secret. Even the program’s website (ssa.gov) says, “As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2037, when the trust fund reserves are projected to become exhausted. At the point where the reserves are used up, continuing taxes are expected to be enough to pay 76 percent of scheduled benefits. Thus, the Congress will need to make changes to the scheduled benefits and revenue sources for the program in the future.”

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