Tag: retirement income

Making Your Money Work for You in Retirement

On December 5, 2024

Empowering Financial Freedom

Retirement is supposed to be your time to relax, explore your passions, and live life on your terms. Yet for so many women, retirement brings financial stress—tight budgets, worries about healthcare costs, and the gnawing fear of running out of money. Let me tell you something right now: it doesn’t have to be this way.

You can turn your finances around, no matter your age or experience, and step into a future where money is your partner, not your problem. All it takes is a mindset shift and a willingness to learn. Together, we’re going to explore how you can make your money work for you, how to budget with purpose, invest with wisdom, and even develop new income streams to supplement your nest egg.

This is your time to shine. Let’s make sure you have the resources to light up the rest of your life.

Step One: Reframe Your Relationship with Money

For many of us, money has always been a source of stress. Maybe you’ve spent years worrying about paying the bills, sending kids to college, or saving for retirement. Retirement is the perfect time to rewrite the narrative.

Money isn’t just something you spend or save—it’s a tool. And like any tool, it works best when you know how to use it. So, let’s shift from fear and scarcity to empowerment and abundance. Instead of thinking, “Do I have enough?” ask yourself, “How can I make my money grow?”

Step Two: Budget with Purpose

A budget is not about restriction; it’s about intention. In retirement, you want every dollar to reflect your values and goals. Here’s how to create a budget that works for you:

1. Know Your Numbers

Start with the basics:

Calculate your monthly fixed costs (housing, utilities, insurance).
Estimate variable expenses (groceries, entertainment, travel).
Account for annual expenses like property taxes or holiday spending.

Use a simple spreadsheet or budgeting app like YNAB (You Need a Budget)¹ or Mint² to track these expenses.

2. Prioritize What Matters

Ask yourself: What brings you joy? If it’s travel, create a travel fund. If it’s family, budget for those visits or gifts. The goal is to spend on what truly matters and cut back on what doesn’t.

3. Pay Yourself First

Even in retirement, saving isn’t over. Dedicate a portion of your monthly income to investments or savings. Remember, compound growth works for you at any age if you give it time.

Step Three: Invest Wisely

When it comes to investing, many women feel intimidated. But let me tell you something: you are just as capable of understanding investing as anyone else. You don’t need a finance degree or a Wall Street mentor—just a willingness to learn.

1. Embrace the Basics

Investing is about growing your money over time. Here are some key options:

Stocks: Great for long-term growth. Look for low-cost index funds that track the S&P 500.
Bonds: Lower risk, providing stable returns.
Mutual Funds & ETFs: Diversify your investments easily with these.
Dividend Stocks: Companies that pay dividends can provide steady income.

2. Get Curious About New Opportunities

Retirement is the perfect time to learn about emerging investment opportunities. Don’t ignore the buzzwords like cryptocurrency or real estate investment trusts (REITs). Yes, they come with risks, but with education, they can be powerful tools.

Start small in crypto—platforms like Coinbase³ make it beginner-friendly.
Consider REITs to earn income from real estate without owning property.

3. Consult a Professional

A financial advisor can help you develop a tailored investment strategy. Look for advisors who operate as fiduciaries, meaning they are legally required to act in your best interest.

Learn more about wise investing with this beginner-friendly guide from Investopedia⁴.

Step Four: Explore Income Streams

Who says retirement means giving up earning potential? Building a side income can relieve financial stress and give you a sense of purpose.

1. Tap Into Your Skills

Think about what you loved in your career or hobbies. Could you tutor, consult, or teach online? Platforms like Teachable and Udemy let you turn your knowledge into income.

2. Explore Digital Opportunities

The internet is a goldmine for retirees. You can:

Start a blog or YouTube channel.
Sell handmade crafts on Etsy.
Write an e-book and publish it on Amazon Kindle Direct Publishing.

3. Look at Part-Time Work

A flexible, low-stress job can supplement your income and keep you socially engaged. Consider roles at libraries, schools, or non-profits, or explore remote customer service positions.

Read AARP’s guide to finding flexible jobs for retirees.

Step Five: Educate Yourself on Financial Literacy

Education is your secret weapon. The more you understand about personal finance, the more empowered you’ll feel.

1. Read and Watch

Here are some must-read books for retirement finance:

The Simple Path to Wealth by JL Collins
Smart Women Finish Rich by David Bach

On YouTube, channels like The Financial Diet and Graham Stephan offer approachable advice.

2. Join a Community

Surround yourself with like-minded women who are also focused on financial growth. Online communities like Facebook groups or forums can be a great source of inspiration.

Check out the “Women and Money” podcast by Suze Orman⁵ for more empowerment.

Step Six: Plan for the Future

Even with a great budget and growing investments, you need a long-term plan. Ask yourself these questions:

Are your savings aligned with your life expectancy?
Do you have a strategy for healthcare costs?
Is your estate plan in order?

If this feels overwhelming, remember, you don’t have to figure it all out alone. Financial planners, estate attorneys, and retirement coaches are here to help.

Make Your Money Work For You References

“You Need a Budget (YNAB).” YNAB. https://www.youneedabudget.com/. Accessed 4 Dec. 2024. ↩
“Mint Budgeting App.” Mint. https://www.mint.com/. Accessed 4 Dec. 2024. ↩
“Coinbase Cryptocurrency Exchange.” Coinbase. https://www.coinbase.com/. Accessed 4 Dec. 2024. ↩
“Investing for Beginners.” Investopedia. https://www.investopedia.com/terms/i/investing.asp. Accessed 4 Dec. 2024. ↩
Orman, Suze. “Women and Money.” The Suze Orman Show. https://suzeorman.com/podcast. Accessed 4 Dec. 2024. ↩

Securities-Based Lending in Retirement

By Viv

On December 3, 2024

In Uncategorized

Managing finances in retirement often requires creativity, especially if you want to maximize your investments while maintaining liquidity. One strategy gaining popularity among savvy investors is securities-based lending (SBL). While this approach has traditionally been a tool for the wealthy, it’s becoming more accessible to average investors looking to optimize their financial plans.

Securities Based Lending

So, let’s break it down. Imagine your investments are like a house—valuable, long-term assets that you d

Unlocking the Magic of Borrowing Against Your Investments

Hey there, friend! Let’s have a little money talk—because managing finances in retirement isn’t just about making your dollars last; it’s about working smarter with what you’ve got. I’m here to tell you about a game-changing strategy that might just blow your mind: securities-based lending.

Now, before you tune out thinking this sounds like Wall Street jargon, let me tell you—it’s simpler than you think. Imagine this: your investment portfolio (stocks, ETFs, all the good stuff) is like your home. You know how you can take out a loan or a line of credit against your house? Well, you can do the same thing with your financial portfolio. And it’s a big deal if you’re trying to keep your money growing while still accessing cash when you need it.

So, let’s unpack this, step by step. Grab your tea (or your glass of wine), and let’s get into it.

What’s Securities-Based Lending, Anyway?

In the simplest terms, securities-based lending lets you borrow against the investments you already own—without selling them. It’s like saying, “I’ll keep my money working for me in the market, but I’ll take out a little cash on the side.”

Here’s why this strategy can be so fabulous:

Keep Growing That Nest Egg: Your investments stay invested. No need to sell them and miss out on future gains.
Skip the Tax Drama: Selling your investments can trigger capital gains taxes. Borrowing? Nada.
Cheap Borrowing Costs: Loans against your portfolio often come with lower interest rates compared to personal loans or credit cards.

Let me tell you, this is how the wealthy stay wealthy. But guess what? It’s not just for the ultra-rich anymore—this is something many of us can use to keep our finances thriving.

Let’s Make It Real: Two Scenarios

You know me—I love a good example to help things click. So, let’s say you’ve got a $5 million investment portfolio, and you need $1 million in cash.

Scenario 1: Selling Investments

You decide to sell some stocks to get the cash. Here’s how that shakes out:

You pay 20% in capital gains taxes, which means $200,000 gone just like that.
You’re left with $800,000 in cash after taxes.
Your portfolio is now worth $4 million. If it earns 6% over the next year, you’ll have $4.24 million.

Scenario 2: Borrowing Against Your Investments

Instead of selling, you borrow $1 million using your portfolio as collateral:

You avoid taxes, so your portfolio stays at $5 million.
That same 6% return earns you $300,000.
You pay $40,000 in interest on the borrowed money.
After a year, your portfolio grows to $5.26 million, even after paying the interest.

👉 So the question is, do you want to lose $200,000 in taxes or pay $40,000 in interest and still make money? For me, the math is clear!

Why Borrowing is a Power Move

Let’s talk strategy. Borrowing against your investments lets you access the cash you need without shrinking your portfolio. Think of it like borrowing from tomorrow’s gains to pay for today’s needs.

But here’s the tea:

It’s a Line of Credit, Not a Loan: This isn’t like a mortgage where you pay it down every month. With a line of credit, you borrow what you need, pay the interest, and leave the rest.
Market Risks are Real: If the market dips, the value of your portfolio could drop. But here’s the upside—if you eventually sell during a dip, you might avoid those capital gains taxes.
Not for Retirement Accounts: Unfortunately, this doesn’t work for IRAs or 401(k)s. You need a taxable brokerage account with at least $100,000.

For Bigger Portfolios, the Perks Multiply

Now, if you’ve got a larger portfolio, say $10 million, the benefits really start to add up. Here’s a little math magic:

Borrow $1 million.
Your portfolio generates dividends, which might even cover the interest on the loan.
Essentially, you’re borrowing money at little to no cost.

Compare that to a home equity loan—you’re borrowing against a house that doesn’t grow in value the same way your portfolio does. With securities-based lending, your money stays in the game, working for you.

When Should You Consider This?

So, is this strategy for you? It depends. Here’s when securities-based lending might be a good fit:

You have a strong portfolio and need cash for something big—think paying off debt, helping a family member, or funding a passion project.
You want to avoid triggering big tax bills from selling investments.
You’re comfortable with a little market risk and have a plan to pay off the borrowed amount.

👉 Quick Story: A friend of mine used this strategy to help her granddaughter start a bakery. Instead of selling her investments and paying taxes, she borrowed against her portfolio, kept her money growing, and set up her granddaughter for success. Win-win!

Wrapping It Up

Listen, securities-based lending isn’t just for millionaires anymore. It’s for anyone who wants to keep their money growing while staying flexible. If you’re retired and looking to make the most of your investments, this could be the key to opening up new opportunities without sacrificing your future.

But don’t go it alone—talk to a financial advisor to see if this makes sense for your situation. Trust me, this kind of smart money move can keep you feeling secure and empowered in retirement.

Resources to Dig Deeper

Here are some great reads to explore this strategy further:

Investopedia: Securities-Based Lending
Fidelity: Margin Loans
Schwab: Borrowing Against Your Portfolio
IRS: Tax Implications of Selling Investments

I’d love to hear your thoughts—have you tried this? Are you curious? Drop a comment, and let’s keep the conversation going. Because, my friend, the best thing about retirement is making your money work as hard as you did to earn it!