Tag Archives: Planning

Use These 5 Simple Hacks to Ease Financial Stress

 

April is Stress Awareness Month and we all know that finances are the root of much of the stress we face. If you haven’t ever lost a little sleep worrying about a money-related issue, I would question whether or not you had a pulse. It’s almost inevitable that, at some point, we all will have a financial difficulty that wears on our mind, and ultimately, maybe even our body.

Financial Finesse is a financial wellness firm that offers coaching to over 2.4 million people in the U.S. In the firm’s 2016 Financial Stress Research, they reported that 1 out of every 4 people say that they suffer from high or overwhelming financial stress and 6 out of 10 people reported losing sleep over at least one financial problem. The good news is that there are some fairly simple steps we can take to ease financial stress. Here are some that have worked for me.

Resist the consumerist culture we live in.

My wife and I just recently realized we had too much stuff. Not only did we have too much, we wanted even more. The culture we live in is constantly in our face about purchasing items that are supposed make us happy; new clothes, beauty products, cars, toys for your kids, electronics, apps for your phone. The never-ending assault on our desire for more is relentless. Our home was bursting at the studs with things we didn’t need and all of that stuff was causing stress. So we decided to get rid of it. Anything in our home that is not useful or doesn’t bring us joy is sold, thrown away or donated. And, we have begun to use the same criteria for our purchases. We are spending less money on things that have no lasting value and using those resources to focus on experiences and priorities that truly make us happier. We are still in the beginning stages of this journey, but it’s amazing how much less stress we have.

Create an emergency fund.

According to a recent survey by Bankrate, 57% of Americans don’t have enough cash on hand to cover an unexpected $500 expense. Now that is stressful! Sticking money into an account and resisting the urge to touch it can be tough, but here is a quick hack I have used for years to help with this. Create automatic transfers from your checking account into a savings account. Most of us now have our paychecks directly deposited into our checking accounts and most banks allow you to set up automatic recurring transfers. So, set up money to transfer every payday to a savings account and you will likely not even notice it’s gone. It doesn’t have to be a large amount; it will feel great just to get started!

Make a plan.

Simply having a plan in place to manage your finances can be a huge weight off of your shoulders. Knowing your monthly income and essential expenses is the first step in figuring out a budget and sticking with it. When my wife and I decided she would leave her career and stay home with our girls a couple of years ago, we both lost sleep over the financial impact this would have on our family. So, we sat down together and calculated our monthly income and bills. From there we identified some expenses we could easily reduce (like our satellite bill) and figured out how much we would have left for discretionary expenses (it wasn’t much). Having this plan in place made us both feel better and gave us some peace of mind knowing we could make this work as long as we stuck to the plan.

Talk about money.

Perhaps the most important thing you can do to ease financial stress is to talk to your spouse or significant other about money. These are not always easy or fun conversations and they may even end with one person being upset. But don’t give up. It is vitally important for you and the person you are sharing your life with to be on the same page about finances. A seemingly simple rule my wife and I have always used is that we will ask the other person before we make a purchase that is over a certain threshold. When we were first married and had very little in the way of financial resources, the limit was $50. For example, if I wanted to buy new decoys for turkey hunting and they were going to be more than $50, I had to run it by my wife first. While our threshold has grown since we were newlyweds 12 years ago, we still have this rule in place. It may seem silly, but it is a subtle way to ensure we are both on the same page about how the family’s money should be spent.

Visualize your future.

Your future self wants to be financially independent. Taking steps now toward that end will ease stress today and have a lasting impact later in life. What does your future look like? What do you want do? What will you be doing when you are 65, 75, 85? A great first step in planning for your financial future is to visualize the life you desire. This will help you to know if you are on track today to achieve the life you are picturing. My wife and I frequently talk about our dreams for our life after work and what we want to do. Sometimes these conversations are just two people dreaming together and sometimes there is a little more planning involved, but either way, it is helpful. Be kind to your future self, take action today to reduce stress now in order to avoid tension in the future. Read my blog about this here.

 

Stress can kill. And financial problems are one of the leading causes of anxiety. There are many money problems that may be fixed using simple hacks like the ones above, but for serious issues, you may need to talk to a professional to get help. The key is to take control of your money and allow yourself some better nights of sleep!

 

Jeff Kempker
Manager of Member Services

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Don’t Forget to Include This Little-Known LAGERS Benefit in Your Financial Planning

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LAGERS is well-known for providing protected retirement benefits for Missouri’s local government workers.  But many LAGERS members don’t know about another benefit that may be available to their dependents if they die before retiring.  These benefits provide monthly payments to an eligible spouse or dependent children of the LAGERS member.  It is important for you to understand these benefits as they may affect how you decide to plan for end-of-life circumstances.

Let’s tackle some of the details about this vital benefit.  Keep in mind that this blog is addressing possible benefits available before you retire.  When you reach retirement, it is a whole other ballgame.  Check out this blog for information about retirement payment options.

What determines if a survivor will receive a monthly benefit?

LAGERS is designed to provide monthly income for members and for those who are financially dependent on the member.  Monthly payments would start immediately to your spouse or dependent children if you are vested in LAGERS and die while you are working for a LAGERS employer.  Monthly payments would begin to your spouse when you would have reached your normal retirement age if you are vested in LAGERS but are not working for a LAGERS employer when you die.  Your surviving spouse or dependent children would also be eligible for monthly payments if you are working for a LAGERS employer and your death is caused by your job, even if you are not vested.

Who is eligible for survivor benefit payments?

LAGERS is going to pay your surviving spouse a monthly lifetime benefit that would begin immediately if you are vested in LAGERS and die while you are working for a LAGERS employer.  You must be married for at least two years before your death for your spouse to be eligible.  But, if your death was caused by your job or an accident, the length of marriage does not matter. As long as you were married when the accident happened or illness started, your spouse would receive a benefit. If you are not married when you die, your dependent children would receive a monthly payment until they are no longer considered dependents.

How much money would the survivor receive?

Your spouse will receive a portion of the monthly benefit you would have received.  The amount of the monthly benefit is based on a choice members can elect at retirement called Option A.  This option pays your spouse the highest monthly amount.  If there is no spouse eligible for a monthly payment, we would pay each dependent child an equal share of 60% of the amount you would have received.  These monthly payments will continue to each child until each is no longer considered a dependent.  When one child’s payments end because they no longer meet the requirements, the other children’s payments would increase.  This way, LAGERS is always paying the same amount.

Who is considered a dependent child?

A child is considered a dependent until they reach age 18 or get married, whichever comes first.  The age limit of 18 extends to age 23 if the child continues, without interruption, as a full time student in an accredited college or university.  The age limit is extended further, but not beyond age 25, if the child is called away from school for active military duty.  A step child could also be considered a dependent if he was legally adopted by the deceased LAGERS member.  There is no age limit for a child that has been declared incapable to care for themselves by a court.

How does a survivor apply for these benefits?

If the unthinkable should happen, it is the survivor’s responsibility to apply to LAGERS for these benefits.  That is why it is vital that your spouse and dependent children are aware that monthly income may be available and who to contact if needed.  It is a good idea to keep a LAGERS brochure or booklet with your important documents.

What if I don’t have a spouse or dependent children?

If you die before retiring and do not have a spouse or dependent children, LAGERS will refund your employee contributions to the beneficiaries you have assigned.  If you have not paid any of your own money into LAGERS because your employer pays the full amount for your benefits, and you are not married and have no dependent children, nothing would be paid from LAGERS if you die before retiring.

 

LAGERS survivor benefits may be an important piece to your financial planning puzzle.  Keep these benefits in mind when looking into life insurance or other end-of-life benefits.  Tell your spouse and children about LAGERS and who to contact should something happen to you.  It is your life, maximize what is available to you by having a thorough understanding of your benefits.

 

Jeff Kempker, RPA, CRC

Jeff Kempker
Manager of Member Services

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WHAT A GREAT RETIREMENT PLANNING TOOL!

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The main purpose of a pension plan like LAGERS is to provide a steady stream of income during your years in retirement.  Knowing what your LAGERS benefit will be, even if it’s not a lot, can help tremendously when you are trying to solve the retirement puzzle.

LAGERS members receive an annual statement, distributed by their employers, that shows information that is vital to retirement planning.  Want to know what your benefit will be if you quit today?  It’s there.  How about if you continue to work until your normal retirement age?  That’s there too.

Your LAGERS benefit provides a monthly guaranteed base that is one slice of the overall retirement income pie.  Combined with Social Security, personal savings and investments, your LAGERS benefit helps you achieve financial independence when you decide to stop working.

We believe the annual statements are a great way to assist in your financial planning, but LAGERS has something that’s even better:  myLAGERS.  The annual statements show what you have earned to date and what you could potentially earn if you keep working.  But what if you want to retire early or work longer?  What about choosing a payout option that provides for a spouse or someone else?  With myLAGERS access, you can create customized benefit estimates, showing all available payout options, with just a few clicks!

That’s why starting in 2016, LAGERS members that have a myLAGERS online account will only receive an electronic annual statement by accessing their online profile.  We believe myLAGERS is the best retirement planning tool we offer and this change will promote improved retirement readiness of our membership and save a few trees at the same time.

In the meantime, we have compiled some frequently asked questions to help in reviewing your annual statement.

“What You’ve Earned as of 12-31-2014” Section

  • Your statement is as of 12-31-2014. Any changes to your account since then will not be reflected on this year’s statement.
  • Benefit amount does not include any temporary benefit (for LT programs) if you are not yet age eligible to retire.
  • The Final Average Salary used is your current last 36/60 month average of wages.
  • If you are not yet vested, your statement will only include projected benefit amounts.

“What You Could Earn if Your Keep Working” Section

  • Service is extended to your normal (or Rule of 80) retirement age.
  • If you are already retirement age, you will not see this section.
  • The “projected benefit” on your Statement is not the same as a Benefit Estimate. Benefit estimates include much greater detail regarding all of your payout options and are based on a retirement date specified by you. Try the benefit estimator on myLAGERS to get more in-depth with your planning.

Your LAGERS Account Balance

  • This amount does not represent your benefit amount.
  • Includes your member contributions (if any) from all employers, service purchases, and interest earnings.
  • You will see “$0.00” if you have not made contributions to LAGERS because your employer(s) has elected to make all necessary contributions or if you previously made contributions but they were refunded to you.

 

Most of us will only get one shot at retirement.  Utilizing the tools you have available to you will help you create the future life you deserve!

 

Jeff Kempker, RPA, CRC

Jeff Kempker
Manager of Member Services

 

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