Win Back Your Financial Independence!

Get Your Finances In Order With Financial Experts Mike and Mike.

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Every 4th of July, Americans celebrate their independence with picnics, fireworks and family gatherings. Still, how many of us have truly attained our financial independence? Is it realistic to think that we can one day retire? To explore this topic in more detail, I contacted my financial advising team, Mike & Mike.

At first, Mike & Mike described a harsh reality. Twenty years from now, 27 of every 30 people will be financially dependent on the government, flat broke, living on what is left of Social Security, or living with their children. Surely, this is not the type of legacy you want to leave for your children. Companies seldom offer pensions anymore, and, when they do, there are no guarantees. When Social Security began, there were 35 workers for each retiree. By the time Baby Boomers reach 65 years old, that number will be reduced to two workers per retiree and social security will not be able to function as it was originally designed. With no guarantee from your employer or the government, the only way to achieve financial independence is to take control of your financial situation. The decisions that you make, or neglect to make, can have a domino effect on your entire financial life.

Mike & Mike explained to me the three primary areas in which you will need to focus:

1) The first step involves setting your financial goals. Keep in mind that with increased spending in the early years of retirement and increasing health-care expenses in the later years, retirees often spend 120% of what they spent while working. Your investments will need to grow at a rate that will not only support your withdrawals, but also allow your assets to keep up with inflation.

2) The second step involves creating your investment strategy. Once your Personal Index is determined (the average annual rate of return you will need to support your withdrawals), Mike & Mike use a specific analysis (their "Monte Carlo" simulation) to create your financial strategy. It takes into account the ideal lifestyle you want to lead, the age you want to retire, and how much money, after taxes, you need to live on each month in retirement. The simulation analyzes your investments and considers historical rates of return, market ups and downs, potential natural disasters, and possible economic and political disturbances. It then runs thousands of different analyses to determine the probability that you will be able to meet your goals. The objective is to come up with the right asset mix that will produce an 80% or higher success rate in meeting your goals.

3) Finally, you need to make the right decisions about retirement accounts. Recent legislative changes may positively impact your ability to save prior to retirement and more effectively manage your assets during retirement. There are several interesting strategies to consider, such as the Stretch IRA (making your IRA last for several generations).

You are the only person who can truly take control of your financial future, and there is no better time than the present to take action. You would be surprised how easy the process can be once you make the decision to seek your financial independence.

For more information on how to put your own financial strategy together, please contact Mike & Mike at 213-435-9960.