Displaying items by tag: spending

(New York)

One of the main mistakes that retirees make is that they underestimate the amount of money they will need for spending in retirement. Accordingly, one of the main jobs of financial advisors is to adjust their thinking on this and make sure that does not happen. Here are some of the reasons people underestimate what they will need. They discount the likelihood of needing to help family members who might get into a precarious financial situation, or even paying for things like weddings. Retirees also forget to budget for one-time big ticket items, even though they are mostly predictable, such as a new car or a new roof. People also underestimate how much more they spend on entertainment, as they will have a great deal more time. Healthcare is also chronically underestimated.

FINSUM: While advisors deal with this frequently, it is never a bad idea to revisit the key “problem” areas.

(New York)

While everyone expects that we will have a recession at some point, and likely a significant correction, one of the big questions regards the depth. The Wall Street Journal has something to say about this issue, as the paper is arguing that the next recession is going to be brutal. The reason why is that the government won’t have as much firepower to stimulate the economy in coming years. That is because the newest tax package will send the deficit surging, and there will not be further room to cut once the recession takes hold, eliminating one of the government’s main weapons in combating recessions.

FINSUM: This makes sense to us. Several weeks back we ran an article where an analyst said he loved the tax cuts, but wished they could have been saved for the next recession. We couldn’t agree more.