The Herald Bulletin

Morning Update

Local Business

November 8, 2013

'Big Joe' Clark: Plan for retirement detours

Budgets are tough things to understand. There are fixed costs and there are one-time expenses and because the latter is usually bigger chunks, such as replacing cars, roofs, going on vacation, etc. — they are considered by most to be huge challenges for retirement planning. Indeed they can be, but they are also better understood by most, as they are a stated cost where fixed and essential expenses have a tendency to increase over time. That is called inflation.

The federal government is in charge of the nation’s fiscal policy. Congress determines where we spend our tax dollars each year in the budget. They are fully aware things get more expensive every year and as a result, without one vote being cast, our expenses rose in 2013 by more than $400 billion dollars, essentially built in rising fixed costs. Fortunately a normal household doesn't have to deal with these large numbers and you can "vote" to make changes when necessary if there will be a shortfall. You may have a discussion with your spouse about what to cut but there usually isn't a household shutdown based on the discussion!

There are a couple rules of thumb when planning for a retirement budget and understanding fixed or what some call essential expenses. Inflation does exist, especially over the long term, and this cannot be ignored. Currently we appear to be in a more deflationary period. But I would caution you to use a 2.5-3.5% annual increase in most of your fixed expenses. Fixed by the way are things you have to have like utilities, food and even cable TV.

One major mistake we see pre-retirees make is that they say to themselves “We will stop this expense or reduce that cost at retirement.” Bad plan! This is not how you want to begin retirement but it does provided confidence during the planning stages. It is false confidence but makes you feel better today none the less.

Text Only
Local Business
  • FEA - HB0729 - Senior Falls Aging safely in the comfort of her home Marilyn Moneyhun said being totally reliant on others is difficult. "Losing your independence is a shock to your system," Moneyhun, 84, said. "You are not in control anymore."

    July 29, 2014 1 Photo

  • NWS - HB0728 - business expansion CB Fabricating makes $2 million investment

    A local business founded in 2006 has invested $2 million in new equipment and a building expansion.

    July 29, 2014 1 Photo

  • Charo Boyd: 'My Social Security' simplifies your life So many people buzz through extremely busy and complicated schedules these days. A smartphone in one hand, a computer in front of you, and a digital task list that never seems to end. In addition, to complicate things just a little more, there’s another event you need to add to your list — National Simplify Your Life week.

    July 28, 2014

  • nws - hb0725 - colts - jc - 4.jpg Colts camp's impact: pricey or priceless?

    Football fever is here and the city is flooded with fans eager to catch a glimpse of a favorite player. But officials say they are unclear what kind of economic impact the Indianapolis Colts training camp has on the area.

    July 26, 2014 1 Photo

  • BIZ - HB0727 - Skill gap 2 Seeking a solution today, not tomorrow Tina Warner-Morton says she wants to open her own healthcare business because it is too difficult to work for an employer with unclear employee expectations.

    July 26, 2014 1 Photo

  • BIZ - HB0727 - Cathy Cupboard Biz Profile Business Profile: Cathy's Cupboard focuses on customer satisfaction Cathy McPhearson opened her first storefront in June, but this is not her first venture into business. “I have always wanted to have my own business,” she said. “The problem was finding what people like, but everyone seems to like candles.”

    July 26, 2014 1 Photo

  • IU Health Ball Memorial Hospital named Level III trauma center The Trauma Center at Indiana University Health Ball Memorial Hospital has been verified as a Level III Trauma Center by an ad hoc committee of the Committee on Trauma (COT) of the American College of Surgeons.

    July 26, 2014

  • Clark, Big Joe mug 'Big Joe' Clark: Beat the market or meet your goals? True or not, my experience tells me that goals – especially when written down – undoubtedly serve as catalysts for success. However, danger arises when a goal does not properly focus on the long term result you expect.

    July 25, 2014 1 Photo

  • DSC_8125.JPG Auction teaches in business, farming

    After 10 years of 4-H, saying goodbye to his animals has become a simple matter for McKennon Heald. But he said he wouldn't be surprised to see some tears from some of the younger participants. He's been there.

    July 25, 2014 2 Photos

  • Anderson, Alexandria and Elwood receive grants to tear down abandoned houses Three Madison County cities — Anderson, Alexandria and Elwood — received state grants that will be used to tear down abandoned, dilapidated houses.

    July 25, 2014

Stocks
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide