Household Debt and Retirement
For Mark Roberts’ Use:
Paying off the mortgage and other debts before entering retirement was once a common goal, but weakening economic conditions and the housing crisis have made this much more difficult in recent years. Rising prices on everything from food to fuel have also also cut into household budgets, contributing to the burden of debt faced by most Americans.
Retirees once hoped to stay in their homes, with the mortgage paid off, as part of their plan for a retirement with minimal expenses. Many also hoped to cash in on their home’s equity to boost their retirement funds. This may indeed be a solid plan for ensuring low monthly expenses, but retirees cannot count on extra cash from equity under current housing conditions. Another common plan is to sell the home, downsize into a lower-priced house, and utilize the profits from the original home as part of a retirement fund. Obviously, with housing prices remaining low and the housing market sluggish, this may no longer be a viable option for many retirees. Houses are often difficult to sell, and sellers are not seeing the profits they once expected.
These trends have underscored the importance of considering debt in relation to retirement. When households carry too much debt, their well-intentioned plans for retirement quickly fall apart. Also, as households spend more money to pay debts each month, that impacts the amount they are able to save for retirement. During tough economic times, it is not uncommon for individuals to cut back on retirement savings in order to cover their outstanding monthly debts. Doing this can have a lasting impact on retirement savings, and when the individuals eventually retire they will feel again the pinch from failing to save enough money years ago. Those who carefully manage household debt, on the other hand, have a greater chance of successfully saving a comfortable fund for retirement.
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In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution.
Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies.
Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.”
Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.