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Author: Kris Miller

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Advice Strategy Women In Business

SEEING THE BIG PICTURE: HOW CAN YOU SEPARATE THE BIASES FROM REALITY WHEN CONSIDERING RETIREMENT PLANNING?

The majority of people think they’re better-than-average drivers, and mathematically, not everyone can be above average. Being optimistic is excellent, and too much may impair your judgment on many things, especially when planning for your financial future.

Being optimistic is valuable as we live our life. Frequently, overconfidence bias leads quickly to confirmation bias, and both of these biases are problematic, especially when combined.   However, sometimes our abilities begin to skew toward unrealistic, which can impair decision-making behavior.

Either alone or combined, these biases are often linked to us believing we can avoid negative things from happening to us. When it comes to retirement planning decisions, you need to separate your biases from reality; this can present a challenge.

Overconfidence in your retirement planning may cause you to overlook potential risks, underestimate the time spent in retirement, and misjudge how long your income will last. Seeing the bigger picture through another set of impartial eyes is crucial and will help you sidestep the influence of biases. Finding ways to work around these biases will allow you to see the value of long-term planning. 

Let’s be realistic about the financial future:

Over 50% of retirees retired before they planned; the most common reason was health problems. Illness can occur at any time and may lengthen your retirement requiring savings to stretch farther than planned. 

50% of retirees said their health care costs were higher than expected. 

Almost 40% said all other expenses were more than they thought. 

It’s essential to understand no one can avoid retirement risks; however, careful planning can help mitigate them.

While overconfidence can undermine the success of a long-term financial plan, clients who are secure in their decisions will likely be satisfied customers. It would be best if you found a balance between an optimistic yet realistic approach to planning.

 

For more Healthy Money Tips Listen to our PodCast “Money 911”

youtube.com/@healthymoneyhappylife

Meet with Kris Miller – Financial Fitness Strategy Sessions

https://healthymoneyhappylife.com/

Kris@HealthyMoneyHappyLIfe.com

(951) 926-4158

Categories
Capital Sales Women In Business

Gratitude, Fear, and Optimism: A Simple Way to Overcome Life’s Challenges

If I could show you a way to be much happier, incur no out-of-pocket cost, and you can start to receive benefits much faster than an Amazon Prime delivery, would you be interested?

Just practice Gratitude and The Love of Learning.

Gratitude. Being grateful takes up space in the brain that might otherwise be occupied by fear. Being fearful happens to be one of the root causes of many mistakes. Once that space is filled with gratitude, certain things begin to happen

Gratitude also leads to feelings of optimism. Optimists outperform pessimists by 31 percent. 

Gratitude leads to better thinking. 

Gratitude reduces stress. When you’re under stress, your body releases cortisol, a hormone that decreases your creativity, problem-solving capacity, and life span.

Many studies have shown people receiving pensions are much more grateful and outlive people who live off the ups and downs of their market portfolios.

Staying grateful is the best way to overcome life’s challenges.

What can you be grateful for right now? Even simple things like your cup of tea or coffee this morning will work. Having a family member or friend or just waking up today. The list is endless, so make yourself a checklist!

Love of learning is the other key factor in personal happiness.

We’re dealing with continuous change and overwhelming information, which is not slowing down. So, when confronted with a problem, we may need to learn something new. This new situation forces some of our brain’s warning lights to go on for many of us, alerting us that we are in new territory and trying to get us back to the comfort zone that worked before.

Once you realize that your current level of knowledge is not insufficient for a solution and your mind is working against you, the Love of Learning will allow you to learn these new things by overriding the brain’s comfort zone. Instead of stressing, you can calmly approach the concern and not be deterred by the brain’s warning lights. Now it’s full steam ahead as you confidently approach the problem because you love to learn.

 

For more Healthy Money Tips Listen to our PodCast “Money 911”

Meet with Kris Miller – Financial Fitness Strategy Sessions

https://healthymoneyhappylife.com/

Kris@HealthyMoneyHappyLIfe.com

(951) 926-4158

 

Categories
Advice Capital Leadership Management Women In Business

CHAINED CPI AS AN ALTERNATIVE FORMULA TO THE CONSUMER PRICE INDEX, AND THE COST THAT COMES WITH IT

The government wants to reduce expenses by using a different CPI version of the (Consumer Price Index). Their new attempt, known as chained CPI (Consumer Price Index) (aka C-CPI-U), this alternative formula reflects how consumers change their purchasing habits when prices rise or fall for a broad range of services, including food, housing, clothing, and medical expenses. 

The Congressional Budget Office (CBO) estimated that government spending on Social Security, Medicare, and other benefits would decline by about $300 billion over ten years if this less-generous index were in place.

The idea of switching to a chained CPI has garnered bipartisan support to rein in entitlement spending. But at what cost? There will be plenty.

Many elements of the federal tax code — including tax brackets, personal exemptions, standard deductions, limits on contributions to 401(k) plans and similar accounts, and critical parameters of the earned income and child tax credits — are also adjusted annually for the CPI. According to the CBO, switching to the chained CPI would raise an additional $150 billions of tax revenue through 2026.

The chained CPI grows on average by about 0.3 percentage points per year more slowly than the official CPI (which is weak at best gauge to the actual cost of living). The Social Security actuaries, in their projections, assume the gap between the two CPIs will continue to average 0.3 percentage points per year in the future. 

The Chained CPI will chain you to a lifetime of higher taxes. According to Congress’s Joint Committee on Taxation, if individual income taxes had been indexed to the chained CPI starting July 2013, by 2022, 69 percent of the gains in revenue would come from taxpayers with incomes below $100,000, while those in the highest income brackets would barely be affected. In other words, raise the taxes on the middle class while leaving the rich alone.

Higher taxes are coming; start planning now!

For more Healthy Money Tips Listen to our PodCast “Money 911”

Sign up for a Financial Fitness Strategy Session:  Meet with Kris Miller – Financial Fitness Strategy Sessions

You can reach me at Kris@HealthyMoneyHappyLIfe.com, (951) 926-4158

Categories
Body Language Branding Capital Networking Sales

EMPOWER YOUR WORKFORCE: PROMOTE INFORMED FINANCIAL DECISIONS, SAVING HABITS, AND WORKPLACE EDUCATION

Many people may lack the basic math skills and financial know-how to make decisions. One of my favorite books, which I reread from time to time, is the 1988 book Innumeracy by John Paulos; he coined the book’s title from people being slow in math as compared to illiterate. Math and money are very different, and learning the differences is crucial to building wealth securely.

Even though many adults across generations were functioning with medium levels of financial literacy, too many workers today possess low levels of Personal Financial Proficiency (PFP) and have difficulty applying financial decision-making skills to real-life situations.   

Here are a few general questions about everyday financial situations that stumped so many:

  • Determining wages and take-home pay, 
  • Questions about investment types, risk, and return, 
  • Understanding specific risk economic outcomes risk
  • Understanding that 401(k) are not pensions

This is where Americans exhibit the lowest scores, with less than one-third answering correctly.

Lack of financial understanding affects all ages and socioeconomic levels. The result is those who fall into the limited PFP category, even though financially literate, may not manage their financial resources effectively and may feel intimidated by retirement, budgeting, tax planning, and Social Security topics.

One way to help everyone become more confident about their personal finances is by building a solid foundation with Financial Proficiency. 

Financial literacy dark secret

People with higher levels of financial literacy “fluency bias.” are more likely to build weak foundations to support their financial houses. Sadly, in this case, a little knowledge is dangerous and prevents many from developing a strategy that works and won’t leave you in a pickle as you get to retirement age.

For more Healthy Money Tips Listen to our PodCast “Money 911”

Sign up for a Financial Fitness Strategy Session:  Meet with Kris Miller – Financial Fitness Strategy Sessions

You can reach me at Kris@HealthyMoneyHappyLIfe.com, (951) 926-4158

 

Categories
Advice Leadership

THE FOUR THINGS YOU NEED TO DO NOW! TO EXEMPT EMPLOYERS FROM LIABILITY FOR LOSSES PLAN PARTICIPANTS INCUR DUE TO THEIR INVESTMENT CHOICES

The Employee Retirement Income Security Act of 1974 (ERISA), the federal law establishing standards for 401(k)s and 403(b), some employers may poorly 

By full compliance with 404(c), companies can have no liability for poor investment results, losses to plan participants, or not having enough money to retire. However, full compliance is a vague term subject to much interpretation and lawsuits.

ERISA set forth rules to exempt employers from liability understand plan requirements. for losses plan participants incur due to their investment choices.

To qualify for relief under ERISA Section 404(c), the plan fiduciary must provide participants the chance to:

Choose, from a broad range of investments, how their accounts will be invested, which allows participants to diversify their investments and have the ability to make frequent changes among them. 

This sounds simple enough. However, the regulation clearly specifies that participants also must have sufficient information to make informed investment choices. If not, the Department of Labor can revoke     companies’ 404(c) protection. Four specific categories of participant communication that do not constitute investment advice:

  1. Plan information 
  2. General financial and investment information 
  3. Asset allocation models 

The objective is not to lead the employee in choosing any investments—the critical question to ask to comply with 404(c) fully and sadly, where most legal challenges arise:

When using employee education, is it on generally accepted investment theories? 

Do they clearly disclose the “What if assumptions on which they are based?

Is the plan surveying participants to determine their level of investment knowledge? 

Are plan communications written so that participants can clearly understand them? 

The above four lead to so many problems and legal challenges for companies. Most of these problems can be avoided by providing employee education through a Personal Financial Proficiency (PFP) course. This course gives the employees all the tools they need to understand, prepare and adequately save for retirement. More can also be found in my July 2022 Linkedin paper: An HR guide to: Financial Literacy vs. Financial Proficiency.

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Uncategorized

PLAY THE LONG GAME TO BECOME MORE INTELLIGENT, HEALTHIER, AND WEALTHIER!

Every action you take, positive or negative, compounds over time, which can work for you or against you- therefore, you must constantly be taking daily small positive steps.

Sadly, many first attempts will probably not get the attention you think. But your efforts will finally get noticed if you hang around long enough.

Compounding is a powerful force. Einstein called. Compound Interest is the eighth wonder of the world. He who understands it earns it. he who doesn’t pays it.” Warren Buffett and many other super wealthy use this law by putting their money to work overtime.

The power of compounding can be used in many areas of our lives. We can save a little every month. read a few pages and even exercise 15 minutes daily the results will surprise you in a few short months. If you can repeat a positive (one day at a time) habit long enough, the law of repetition will reward you.

Time consistent action-compound growth.

So, instead of looking for one massive leap to change you life or career, commit to small but sustainable action over time, so the correct application of resources, tim and energy creates massive growth.

When to start

The best time to plant a tree was 20 years ago, and today i the next best time to do so. The key is to start now an repeat it every day; it’s the only way to change a behavior become an expert, or build wealth.

Spend each day trying to be a little wiser, just 1%. You wi get much more out of life. The same holds for savings, an just a tiny amount daily each day can add up t significant results.

The repetition law takes a lot of time. Most people don’t have that kind of patience. But it’s the littlest actions tha compound over time. Tremendous results and change an the outcomes of the littlest actions repeated daily. Se don’t give up if you don’t see results or your savings grow in a few weeks or months. I created a short video on how to save for the future. Just let me know, and I will forward