Managing Your Money in Retirement

by Andrew Schreiber 6. November 2012

Money in RetirementYour days of working are over. Now you have to figure out a new financial plan. The nest egg that you have accumulated through your pre-retirement years will determine the type of life you are able to live post-retirement. The more disciplined with saving you have been in your younger years, the more comfortably you should be able to live in your golden years.

If you spent the younger days of your life thinking that you would never make it past 60, yet now 60 has come and gone and you’re still going strong, here are some tips on making the most of your retirement fund.

Rate of Withdrawal

It is very important to determine a safe and conservative rate of withdrawal to ensure that there are adequate funds for your post-retirement years. Determining a safe rate of withdrawal will ensure that you will not run out of money. You must figure out a happy medium between being frugal and living enjoyably. This might require life changes such as home downsizing and reducing or eliminating spending on luxury items and impulse buying.

Asset Allocation

In previous life stages it was important to save and accrue wealth. Now it is time to protect the wealth that you have accumulated throughout your life. This might require reallocating your assets to safer investments. Instead of having high growth investments, it’s now time to invest in more well-established blue chip firms that pay dividends consistently. This will help protect your wealth and guarantee future cash flow.

Continue Working

After retirement, if you are looking for ways to fill your newly gained free time, consider working at a different capacity than before. Working part-time as a consultant or entering a different career path altogether is a great way to fill your time and gain some extra income. This allows you to continue accumulating wealth and live a more comfortable life. It will also keep you physically and mentally active. Finally, if you decide to work, you could be eligible to make use of your employer’s health insurance benefits to further reduce your personal expenses.

With so much newly found free time, it would be easy to go through all of your money in just a short while. Set your new budget and stay on track!

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Hurricanes and Halloween. Happy Weekend, Baltimore!

by Stacy Tharp 26. October 2012

Hurricane Sandy Path

Source: National Weather Service National Hurricane Center

As I’m sure you’ve heard by now, we have an angry storm headed our way. Invited or not, Hurricane Sandy is coming to a town near you. According to a recent report issued by WBAL TV-11, Hurricane Sandy’s path is making it a near certainty that it will make landfall anywhere between the Outer Banks and New England. If you know your geography, you’ve probably realized that Baltimore is pretty close to the direct center of that range. According to the article, BGE is preparing for what it expects to be hundreds of thousands of potential power outages.

Luckily, I’m confident that you all read my article from last summer, Heat, Storms and Power Outages: Were You Prepared? So everyone should be prepared as the lovely and talented Hurricane Sandy makes her way towards us.

If we simply MUST be put right smack in the middle of Hurricane Sandy’s path, depending on your thought process, she’s either coming at an awful time, or at a fantastic time. You might be thinking that Ms. Hurricane Sandy will ruin your Halloween in Baltimore! You had the perfect costume ready and were so excited to celebrate Halloween in Fells Point, take your children trick-or-treating in your Baltimore neighborhood and attend the 2012 Halloween Lantern Parade and Festival in Patterson Park.

I, however, say don't let Hurricane Sandy ruin your Halloween; instead, embrace her presence! If you are stuck in your house on Halloween, have some neighbors over and play some Halloween games. If your power goes out, that will only make the games more fun!

As far as your banking needs go, be sure you look into all of your different banking options ahead of time - from being aware of the nearest branches and ATMs to enrolling in Online Banking and Mobile Banking. Using Online or Mobile Banking, you can set up future-dated bill payments and transfers before the storm hits in case you lose your power and are unable to log in to your accounts after Hurricane Sandy hits. You never know where or for how long power outages will occur, so the more banking options you have, the less likely you will be inconvenienced. If you are planning on heading to one of our branches after the storm hits, be sure to first check our News and Updates page to check for any branch closures due to power outages.

Most importantly, make smart decisions and stay safe!

SpOOky Facts Credit Unions Don't Want You to Know

by Stacy Tharp 24. October 2012

People have been complaining about the big banks for years now. When people get fed up and begin to look for other places to put their money, the same two choices are always suggested: a community bank, or a credit union.

So it’s great to know that there are other options, but with community banks and credit unions always being lumped together into one suggestion, it almost seems like they are interchangeable, when really, they are two quite different options. So how do you differentiate between the two?

Of course you know our vote…*coughcommunitybankcough*…but our choice isn’t completely biased. We know some spOOky facts about credit unions that we would like to share with you.

They might not let you in...or out.

Okay, fine…you are always free to leave a credit union, but you have to admit, that added a spooky twist to the heading! Credit unions are, however, selective about who they allow to join. You generally must meet a specific requirement in order to become a member. So maybe once you’re in, you will be reluctant to leave, even if you have a good reason.

They offer low credit card rates...but there's a catch.

Credit unions often advertise low credit card rates. What they don’t tell you is that with these great rates come not-so-great rewards programs. If you are working on paying off credit card debt, then a low interest rate may be all that matters to you. However, if you always pay your bill in full, the interest rate really shouldn’t matter, and your focus should be on what your credit card provider can do for you.

Fees are on the rise.

One of the biggest complaints about the big banks is their constant seemingly exponential increases in fees. Credit unions pride themselves in having lower fees than banks, but what they don’t tell you is their fees are on the rise as well. It is important to note that with both banks and credit unions, fees will never stay constant, for many reasons. Your safest bet for minimizing fees, wherever you put your money, is to make sure you have accounts that are right for you. This may require you to switch account types every so often. Switching to a credit union simply because their fees are lower right now is not a safe bet in the long run.

Your accounts are all tied together.

To protect themselves against risk, credit unions often have cross-collateralization clauses. What does this mean? Any item being financed or pledged as security will also secure any other debts you have or may have in the future with the credit union. For example, if you have both a credit card and a car loan through your credit union, your car will be used to not only secure your car loan, it will also be used to secure your credit card debt. Legally, credit unions must disclose this to you, but don’t expect to find this information on a flashing neon sign. It will likely be disclosed to you somewhere in fine print, so this cross-collateralization clause often comes as an unpleasant surprise to the people it affects.

Your deposits may be at risk.

Unlike banks, credit unions are not regulated by the FDIC. Less regulation means credit unions are able to use your deposits more freely and take more risks than banks. The majority of credit unions are insured by the National Credit Union Administration, but this is not a requirement for state-chartered credit unions. Before throwing all your money into a credit union, make sure your deposits will be insured, and check the insurance limits.

You won't get as many bells and whistles.

In general, when it comes to account features, credit union accounts give you the bare minimum. Simple. Boring. Raise your hand if this was you five years ago: “Internet? On my PHONE? I don’t need all that, I just want a simple, practical phone that allows me to make simple phone calls.” Now, if you are like most people, you look back and laugh at your old credo. You may be thinking along those same lines when it comes to your bank account. You don’t need any fancy additions - you just simply want a safe place to put your money. But why settle for that when you could get more features and benefits out of your accounts?

No matter where you put your money, it is important that you research the facts of the financial institution, and compare these facts with your current financial situation. The right financial institution for your neighbor might not be the right one for you.

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