The Wall Street Journal Podcast Interview with Pamela Yellen: Why You Won’t Work as Long as You Planned

I was recently interviewed by the Wall Street Journal for an episode of their “Your Money Briefing” podcast.

The episode is described as, “Financial security expert Pamela Yellen explains why most people stop working earlier than planned, and offers safe investment tips to reduce the chances of running out of money in retirement.”

In this interview I discussed:

  • The three main reasons you’ll likely be forced to retire sooner than you planned… and before you’ve reached your savings goals
  • New research that shows most people need to double the percentage of their income they are currently saving
  • How the typical 65-year-old retiring today will run out of savings 10 years before they die, according to the World Economic Forum
  • The staggering amount of money you must have saved just to cover out-of-pocket health care costs that Medicare does not pay
  • An alternative to cash and savings accounts that provides safety and liquidity, but earns a much higher return – you would need to earn 6%-7% in a tax-deferred account such as a 401(k) or IRA over time in order to equal it

You Can Listen to My WSJ Interview Here – It Starts at the 2:35-Minute Mark.

How to Reach Your Savings Goals Without the Risk or Stomach-Churning Volatility of the Stock Market

Wall Street’s biggest lie is that you must risk your money in order to grow a sizable nest-egg.

The Bank On Yourself safe wealth-building method has grown in value every single year, including during the Great Recession, the Great Depression, and during every market crash and economic bust for more than 160 years.

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You can reach your financial goals and dreams without taking any unnecessary risks and turn your back on the nerve-wracking stock market roller coaster!

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Retirees Will Outlive Their Savings by 10 Years, According to a New Study by the World Economic Forum

The typical 65-year-old has only enough savings to cover 9.7 years of retirement income. That leaves the average American man with a gap of 8.3 years, and women (who live longer) face a 10.9-year gap with no savings left.

That’s according to a scary new study by the World Economic Forum. This assumes you live an average lifespan. If you’re one of the “lucky” ones who lives longer, you could outlive your money by 20 to 25 years or more.

6 Challenges You Face that Could Turn Your Retirement Dreams into a Retirement Nightmare…

How many of these challenges have you prepared for?

Challenge #1: The typical household nearing retirement has an average of only $135,000 in their combined retirement accounts – enough to provide at most $600 per month income. (Source: Federal Reserve Survey of Consumer Finances)

Challenge #2: Even healthy couples will face extreme health care costs in retirement. [Read more…] “Retirees Will Outlive Their Savings by 10 Years, According to a New Study by the World Economic Forum”

Retirement Can Be Fantastic … If You’re Prepared

What do you think of when you think of retirement? Freedom? Enjoyment? Less stress?

You’re not alone. Most workers today associate retirement with those concepts, according to What Is “Retirement”? Three Generations Prepare for Older Age, the latest study from the nonprofit Transamerica Center for Retirement Studies.

But the big question is … Will You Be Ready?

Will You Be Healthy Enough to Retire the Way You Hope To?

Just 16% of Baby Boomers surveyed said their health is “excellent.” But only about half of the workers in the survey said they exercise regularly … or eat healthfully … or get enough sleep.

Here’s the issue, as laid out bluntly by life coach Peter Sage …

If you don’t make time for health, you’ll have to make time for illness.”

How successful at life can you be, when your body refuses to serve you? And it will eventually refuse to serve you if you ignore your health.

Will You Have Enough Money to Do What You Want to Do?

Two out of three workers say their big retirement dream is travel. Half of those surveyed said they’re looking forward to spending time with their family and friends. And nearly half get a smile on their faces when they think of the time they’ll have to pursue their hobbies.

The problem is this: half of those surveyed have less than $50,000 total in all their household retirement accounts.

How far will $50,000 take you? [Read more…] “Retirement Can Be Fantastic … If You’re Prepared”

There’s a Good Chance You May Be Forced to Retire Sooner Than You Expect

Perhaps you’ve heard that the best way to make God laugh is to tell him your plans. … Particularly your plans for retirement!

And you’ve probably heard that with the unpredictability of the markets – stocks, bonds, real estate, whatever – you’re going to need to work longer than you had planned, in order to have enough to live on in retirement.

But that doesn’t mean the universe will cooperate.

Research from the Center for Retirement Research reveals that on average 21 percent of workers intend to work to age 66 or later. But more than half of them fail to reach this target.

The share of workers who say they expect to work past age 65 rose from 16% in 1991 to 48% in 2018. But the study shows that 37 percent of all workers end up retiring earlier than they had planned.

How can this be?

Why Are Hard-Working Americans Retiring Earlier Than Planned?

[Read more…] “There’s a Good Chance You May Be Forced to Retire Sooner Than You Expect”

Record-High Credit Card Debt Promises Problems for Many

According to the Federal Reserve, credit card debt in the U.S. is at its highest level ever. In December 2018, credit card debt was $26 billion higher than it was just three months earlier.

Americans over age 60 hold nearly one-third of all credit card debt in the country – and they’re seeing their accounts go delinquent at an increasing pace.

We’re not surprised. Eighteen months ago, we at Bank On Yourself bemoaned the fact that household debt at the end of 2017 was at a then all-time high of more than $13 trillion. Now credit card debt is poised to overtake auto debt as one of the “big three” consumer debt millstones (after mortgages and student loans).

Carrying significant credit card debt can cause serious problems

Living with a large balance on your card(s) can be like trying to cross Niagara Falls on a tightrope: You hope and pray nothing goes wrong.

What could go wrong while your cards are maxed out? [Read more…] “Record-High Credit Card Debt Promises Problems for Many”

How Complex Is Dividend-Paying Whole Life Insurance?

Some financial advisors say whole life insurance is complicated, and that “you should never invest in something you don’t understand.” … Then they try to sell you stocks, bonds, mutual funds, and EFTs that most laypeople can only begin to truly grasp!

Dividend-paying whole life insurance is so simple an average 10-year-old can understand the concept in 10 minutes. We’ll prove it to you now …

The Simplicity of Dividend-Paying Whole Life Insurance

The concept behind a dividend-paying whole life insurance policy is extremely simple. It’s based on five easy-to-understand ideas:

1. Your Risk Is Minimized by the “Pooled Risk” Approach of Insurance

This timeless concept is at the foundation of all forms of insurance. In its simplest form, policy owners pay an insurance company a relatively small sum of money in advance. This is called a “premium.” In exchange, they are covered for a potentially much large expense later. In this case, they receive an agreed-upon amount to cover the costs and loss of income related to the death of the insured, which is called the “death benefit.”

2. You’re Guaranteed to Have “Level-for-Life” Premiums with a Whole Life Insurance Policy

[Read more…] “How Complex Is Dividend-Paying Whole Life Insurance?”

The Most Important Lesson Learned from the Government Shutdown: Americans’ Finances are Fragile

The longest U.S. government shutdown in history laid bare an uncomfortable truth: Americans aren’t saving enough and the majority of us have no rainy-day fund to protect us when the inevitable you-know-what hits the fan.

More than 70% (!) of all types of employees at all income levels surveyed live paycheck to paycheck and said they’d have difficulty meeting their financial obligations if their paycheck were delayed for just one week! That’s according to the 2018 “Getting Paid in America” Survey by the American Payroll Association.

This explains why, after missing just one or two paychecks, we heard so many heart-breaking stories from government workers who weren’t being paid or were furloughed. For example… [Read more…] “The Most Important Lesson Learned from the Government Shutdown: Americans’ Finances are Fragile”

How Much Money Do You Need to Save for Retirement?

People need to save between 10% and 17% of their income if they plan to retire at 65 but are putting away only 6-8% of their income, according to a new study by the Stanford Center on Longevity. That’s only half of what they should be saving.

What percent of your household income are you saving? It’s important to be brutally honest with yourself because a shortfall of the magnitude most Americans will experience means more than just not being able to live the retirement lifestyle you dreamed of. It may mean…

  • Having to choose between putting food on the table and the medical care you need
  • Not being able to afford to pay for heating and air conditioning
  • Having to rely on the charity of your children
  • Foregoing travel and even life’s little luxuries

I doubt you worked hard all your life so that you can scrimp and sacrifice just to get by in retirement.

Fully 60% of U.S. households are at risk of not having enough money to make ends meet in retirementeven if they cut back to spending just 75% of pre-retirement levels – according to a 2018 study from the Center for Retirement Research.

The Rule of 25 for Determining How Much You’ll Need to Have Saved

[Read more…] “How Much Money Do You Need to Save for Retirement?”

October 2018 Was Among the Most Volatile Month for Stocks in 118 Years

October was one of the most volatile months for the Dow since 1900. Back then, we were hopping on the first electric buses in New York City and enjoying a new kind of sandwich called a “hamburger” in New Haven. And, we were piling onto an early “Loop the Loop” roller coaster on Wall Street.

Fast forward to October 2018… and enter the Zero-G Inversion Coaster. The Dow fell by over 1,000 points in two days. The S&P 500 dipped in and out of correction multiple times. The Nasdaq plummeted 700 points mid-month, soared over 300 points the next week, and then tumbled back down over 500 points toward month-end. It comes as no surprise that the Fear Index also hit a 3-month high.

It wasn’t Halloween that spooked the markets last month…

Investors had plenty to fear with trade wars, tariffs, rate hikes, Fed policy, underwhelming earnings, slumping housing data, and political partisanship run wild. And as the sugar high of tax cuts, low interest rates and low inflation wears off, there’s a pervading sense that we’ve reached some sort of flashpoint.

What keeps economists up at night? One very sobering question:

What if This Economy is “as Good as It Gets”?

[Read more…] “October 2018 Was Among the Most Volatile Month for Stocks in 118 Years”

Setting the Record Straight on What Bank On Yourself Is – and Isn’t

There are a lot of misconceptions about the meaning of Bank On Yourself. Some folks think it’s just glorified whole life insurance. Others think Bank On Yourself is merely the name of a book.

So, the Bank On Yourself team has created two separate articles. The first explains what Bank On Yourself is, and the second explains what it is not.

What Bank On Yourself Is

Our article on What Is Bank On Yourself? explains that Bank On Yourself is a safe wealth-building strategy – one that puts you in charge, by showing you how to fire your banker, bypass Wall Street, and take back control of your finances. That’s the meaning of Bank On Yourself in a nutshell.

But the article also discusses the benefits of the Bank On Yourself concept. We explain that Bank On Yourself is also the name of our company, and the words “Bank On Yourself” are in the titles of two New York Times best-selling books by Pamela Yellen.

What Bank On Yourself Is NOT

[Read more…] “Setting the Record Straight on What Bank On Yourself Is – and Isn’t”