Latest news with #SiliconBeachFinancial
Yahoo
5 days ago
- Business
- Yahoo
Want To Retire in Your 50s? 9 Ugly Truths You Need To Know
You may already know that planning to retire early can mean putting aside lots of money. According to Fidelity, if you plan to retire before 62, you should aim to save 33 times your expenses. If you're 45 with annual expenses of $75,000, that amounts to $2.475 million. Find Out: Explore More: But it's not just money and savings you need to consider if you want to retire in your 50s. Some financial experts shared with GOBankingRates a few ugly truths to consider now. Retiring at 50 means planning for more years without a paycheck. 'That requires a deeply strategic investment approach, not just a big nest egg,' according to Christopher Stroup, founder and president of Silicon Beach Financial. 'Inflation, health care costs and market downturns will all take their toll. Your money needs to outlive you, and that requires a plan that adjusts as life does.' Be Aware: If you retire before Medicare eligibility at 65, expect to shoulder thousands in annual premiums through the open market. Per Stroup, for self-employed professionals or those selling a business, early retiree coverage should be a line item in your exit plan. According to Empower, a few health insurance options for early retirees are the health insurance marketplace, health share plans and private health insurance. Stroup likes to remind clients that many accounts, such as traditional IRAs and 401(k)s, penalize early withdrawals before age 59 1/2. He said strategic tax planning, like leveraging Roth IRAs, 72(t) distributions or taxable brokerage accounts, can help bridge the gap. According to Stroup, with the right mix of account types, you can retire early and avoid triggering unnecessary tax or penalty landmines. Plenty of early retirees pivot to passion projects, consulting or part-time work. The key, per Stroup, is designing financial flexibility into your plan before you need it. Whether you're stepping back or stepping sideways, a proactive strategy ensures your money keeps pace with the life you want to live and not just the one you're leaving. It's also important to factor in family members or other dependents when planning an early retirement. 'Supporting a loved one can either force an employee out of or back into the workforce. Consider who else might depend on your income,' according to Kevin Estes, financial planner and founder of Scaled Finance. Early retirement can leave individuals with a lot of time and years on their hands without work to keep them occupied. While this sounds nice in the beginning, it could end up having negative effects. 'Retiring can limit someone's social network, structure and even purpose,' Estes said. 'Plan how to develop all three.' If you expect to start planning to retire in your 50s when you hit 40, you may be in for an unexpected surprise. It's going to take a lot of planning at that stage. In fact, if you didn't start planning in your 20s, you're likely already behind the ball. 'The truth is that early retirement takes a lot of upfront planning and a significant amount of upfront income and investments,' according to Annie Cole, Ed.D., money coach and founder of Money Essentials for Women. Cole said one ugly truth to consider is that retiring early means more years spent living off your retirement income versus living off work-generated income. While your nest egg may seem big at first, it can quickly dwindle down to nothing if you're not careful. If you already hate inflation, just wait until you retire early. All that planning you did to reach early retirement hopefully included inflation considerations — or else you're likely to find yourself struggling to stay afloat when it comes to money. Inflation can affect your health costs, food bills, living expenses and so much more. More From GOBankingRates 3 Reasons Retired Boomers Shouldn't Give Their Kids a Living Inheritance (And 2 Reasons They Should) This article originally appeared on Want To Retire in Your 50s? 9 Ugly Truths You Need To Know
Yahoo
6 days ago
- Business
- Yahoo
Want To Retire in Your 50s? 9 Ugly Truths You Need To Know
You may already know that planning to retire early can mean putting aside lots of money. According to Fidelity, if you plan to retire before 62, you should aim to save 33 times your expenses. If you're 45 with annual expenses of $75,000, that amounts to $2.475 million. Find Out: Explore More: But it's not just money and savings you need to consider if you want to retire in your 50s. Some financial experts shared with GOBankingRates a few ugly truths to consider now. Retiring at 50 means planning for more years without a paycheck. 'That requires a deeply strategic investment approach, not just a big nest egg,' according to Christopher Stroup, founder and president of Silicon Beach Financial. 'Inflation, health care costs and market downturns will all take their toll. Your money needs to outlive you, and that requires a plan that adjusts as life does.' Be Aware: If you retire before Medicare eligibility at 65, expect to shoulder thousands in annual premiums through the open market. Per Stroup, for self-employed professionals or those selling a business, early retiree coverage should be a line item in your exit plan. According to Empower, a few health insurance options for early retirees are the health insurance marketplace, health share plans and private health insurance. Stroup likes to remind clients that many accounts, such as traditional IRAs and 401(k)s, penalize early withdrawals before age 59 1/2. He said strategic tax planning, like leveraging Roth IRAs, 72(t) distributions or taxable brokerage accounts, can help bridge the gap. According to Stroup, with the right mix of account types, you can retire early and avoid triggering unnecessary tax or penalty landmines. Plenty of early retirees pivot to passion projects, consulting or part-time work. The key, per Stroup, is designing financial flexibility into your plan before you need it. Whether you're stepping back or stepping sideways, a proactive strategy ensures your money keeps pace with the life you want to live and not just the one you're leaving. It's also important to factor in family members or other dependents when planning an early retirement. 'Supporting a loved one can either force an employee out of or back into the workforce. Consider who else might depend on your income,' according to Kevin Estes, financial planner and founder of Scaled Finance. Early retirement can leave individuals with a lot of time and years on their hands without work to keep them occupied. While this sounds nice in the beginning, it could end up having negative effects. 'Retiring can limit someone's social network, structure and even purpose,' Estes said. 'Plan how to develop all three.' If you expect to start planning to retire in your 50s when you hit 40, you may be in for an unexpected surprise. It's going to take a lot of planning at that stage. In fact, if you didn't start planning in your 20s, you're likely already behind the ball. 'The truth is that early retirement takes a lot of upfront planning and a significant amount of upfront income and investments,' according to Annie Cole, Ed.D., money coach and founder of Money Essentials for Women. Cole said one ugly truth to consider is that retiring early means more years spent living off your retirement income versus living off work-generated income. While your nest egg may seem big at first, it can quickly dwindle down to nothing if you're not careful. If you already hate inflation, just wait until you retire early. All that planning you did to reach early retirement hopefully included inflation considerations — or else you're likely to find yourself struggling to stay afloat when it comes to money. Inflation can affect your health costs, food bills, living expenses and so much more. More From GOBankingRates How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on Want To Retire in Your 50s? 9 Ugly Truths You Need To Know Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-06-2025
- Business
- Yahoo
The 3 Best Ways for Boomers To Use Personal Loans To Stretch Their Retirement
Personal loans can serve many functions, from starting a business to buying a new car — even helping in retirement. While it's always important to exhaust other options first that don't require paying interest, there are some situations where a personal loan can make a difference for boomers in retirement. Financial experts offer the best ways for boomers (or any retiree) to use a personal loan to help fund some aspect of their retirement. Find Out: Read Next: One instance when a personal loan can make sense is to bridge a short-term cash need — like delaying Social Security to maximize benefits or covering a one-time emergency without disrupting long-term investments, according to Christopher Stroup, a CFP and owner of Silicon Beach Financial. The key is using it strategically, not as a recurring income source, he said. See More: If you've got debt that's earning very high interest, such as credit cards or high-interest medical debt, a personal loan can offer you 'breathing room,' Stroup said, 'especially when the new loan has a lower fixed rate and shorter term.' It can also simplify payments and reduce interest. However, Stroup said, 'Know that it only works if spending habits also change; otherwise, debt can pile up again.' While personal loans should not be a go-to for most expenses, Stroup said that when the expense is unavoidable and aligns with a broader financial plan, it can be a good idea. 'For example, a medically necessary home renovation or dental procedure may justify a personal loan, especially if it avoids tapping tax-deferred retirement accounts in a high-income year.' Robert Gabriel a financial specialist and creator of Vosita, said these can include things renovations that improve safety or accessibility (like installing grab bars or a stairlift) and allow a retiree to age in place comfortably. 'Similarly, for unexpected but necessary medical expenses that aren't fully covered by insurance, a personal loan could provide a way to manage the cost over time,' Gabriel said. However, in both these scenarios, the retiree needs to be confident in their ability to repay the loan without jeopardizing their essential living expenses. Credit score also plays a huge role in determining personal loan interest rates, regardless of age, Gabriel said. He said that retirees with excellent credit scores (typically 720 and above) will qualify for the most favorable interest rates, which are currently averaging around 13% to 14% according to recent reports. A good credit score (690-719) will still yield reasonable rates, but they'll likely be a bit higher. 'To improve their odds, retirees should ensure they have a good payment history on all their debts, keep their credit utilization low (the amount of credit they're using compared to their credit limit) and avoid opening new credit accounts unnecessarily,' he said. Even small improvements in credit score can lead to significant savings on interest payments. Using loans to cover everyday expenses is a red flag, however, Stroup warned. It often signals that a retiree's spending is outpacing their income plan. 'Over time, this can create a cycle of borrowing that drains savings, increases financial stress and limits future flexibility,' Stroup said. If you're finding yourself turning to loans for repeated borrowing to cover basic expenses, minimum-only payments or juggling multiple loans without a payoff plan, you could have a problem. 'These patterns can signal deeper cash-flow issues and should prompt a review with a financial planner before debt becomes unmanageable,' Stroup advised. More From GOBankingRates Mark Cuban Warns of 'Red Rural Recession' -- 4 States That Could Get Hit Hard 7 Things You'll Be Happy You Downsized in Retirement 5 Cities You Need To Consider If You're Retiring in 2025 This article originally appeared on The 3 Best Ways for Boomers To Use Personal Loans To Stretch Their Retirement Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBS News
26-05-2025
- Business
- CBS News
How to escape the payday loan debt cycle, according to experts
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. There are strategic steps to follow to escape a payday loan debt cycle. RabiaPayday loans can trap millions of people in expensive debt cycles, even as economic conditions improve. With many Americans living paycheck to paycheck, these high-cost loans offer quick cash when emergencies strike. But interest rates can exceed be exorbitant and fees make full repayment nearly impossible. Unfortunately, the pattern works by design: borrowers can't repay in full, so they roll over loans or take new ones to cover old debt. This isn't necessarily personal failure — it's a structural problem built into the payday lending system. If you're caught in this situation, breaking free requires strategic action and expert guidance. Below, financial experts share actionable ways to pay off your pay day loan debt — along with the benefits and drawbacks of each approach. Start exploring your debt relief options here. How to escape the payday loan debt cycle, according to experts Christopher L. Stroup, a certified financial planner and founder of Silicon Beach Financial, recommends starting with negotiation. "Many borrowers don't realize that some payday lenders will agree to a structured repayment plan if you explain your financial hardship," he says. "While there's no guarantee they'll say yes, it's a low-risk move that can stop the debt from snowballing." Beyond negotiating with your lender, experts suggest taking these steps: Work with a professional who deals with debt "[Consult] a professional [at] a credit counseling agency or debt solutions company," Howard Dvorkin, chairman of says. "They've seen the worst payday loan emergencies you could imagine, so they know how to deal with them." A qualified financial counselor can help you come up with money in your budget to escape the debt cycle. Andi Wrenn, founder of Coaching Capability and board member of the Association for Financial Counseling, Planning Education (AFCPE), regularly helps clients find hundreds of dollars per month in their spending without giving up enjoyable activities. She points to one client who went from overspending to paying all debts and saving money within three months of working together. While working with a professional costs money, Wrenn says clients usually find more savings than they pay in fees. Get started with a professional debt relief company today. Stop using high-interest loans Cutting access to expensive borrowing can help you get out of a payday loan debt cycle. Wrenn suggests trying the following alternatives: Ask your bank about a personal loan Request a reduced interest rate on existing credit cards Transfer high-interest debt to lower-rate cards Ask family members for help Sell unused items around your house These strategies can make a positive impact quickly. For example, Wrenn points to one couple who raised $750 in one month by selling items online and hosting a garage sale. The downside to these approaches varies. Personal loans require good credit, family loans can strain relationships and selling belongings takes time and effort. But even modest progress helps break your dependence on payday lenders. Build a small emergency buffer with a side gig "Building a small emergency buffer — just $250 to start — can prevent future reliance on payday lenders," Stroup emphasizes. The fastest way to build this buffer is through side gigs. Wrenn recommends focusing on services with minimal start-up costs. Dog walking, pet sitting, babysitting and tutoring are some worth considering. The main drawback of this pursuit is time, but you can capitalize on existing skills and work on your schedule. Explore debt consolidation options Debt consolidation combines several debts into one monthly payment at a much lower interest rate. Stroup recalls working with clients who refinanced a few payday loans into a single personal loan through a credit union, cutting rates from over 300% down to 11% to 18%. Qualifying for debt consolidation can be challenging, though. You may need good credit, a co-signer or collateral. Another concern is choosing the right debt consolidation organization. Wrenn warns that many charge fees to manage your debt, but sometimes make late payments. This can further hurt your already struggling credit score. Enroll in a debt management plan (DMP) A debt management plan (DMP) through a nonprofit counseling agency can be a lifeline when payday loans get overwhelming. According to Stroup, it consolidates unsecured debts into one monthly bill while reducing interest rates and late fees. DMPs aren't without consequences, however. Creditors close accounts you include in the plan, and you can't open new credit during the three to five-year timeline. This temporarily lowers your credit score. Dvorkin says this shouldn't be your primary concern, though. At this stage, "worry more about debt and less about credit score," he advises. Because without debt help, it's likely your score will plummet further. The bottom line Overcoming payday loan debt is within reach, but you need to change the spending habits that created the problem in the first place. Wrenn encourages looking at your wants versus needs and coming up with a plan for how to spend, save and eventually invest. It may also help to discuss debt relief options with a financial counselor, who can work with you to create a sustainable plan. Get started with a debt relief plan now.
Yahoo
25-05-2025
- Business
- Yahoo
5 Ways Trump's Suggested Income Tax Elimination Could Hurt the Middle Class
Income taxes may seem like one of those unchangeable facts of life that you just have to deal with as long as you work. However, one of President Trump's tax reform proposals is to consider doing away with income tax altogether for people who make less than $150,000 per year. Trump has also proposed eliminating taxes on overtime pay, Social Security Benefits and tips. Find Out: Learn More: While the initial result might seem positive — keeping more of your earnings — Christopher Stroup, CFP and president of Silicon Beach Financial, warned that there could be financial downsides that might actually hurt middle-class wallets down the line. While it's unclear if and when any of these proposals might move beyond theory, Stroup explained what might come of eliminating income taxes for this segment of American workers. If income tax disappears, expect higher sales taxes, property taxes and other fees to make up the difference, Stroup said. 'Middle-class households, who spend a greater percentage of their income on essentials, would bear the brunt.' A 10% national sales tax, for example, would make everyday necessities significantly more expensive while benefiting wealthier Americans with lower tax burdens. Be Aware: Income tax plays a major role in funding Social Security and Medicare. Without it, where does that money come from? Stroup explained that 'a tax overhaul could lead to benefit cuts, delayed eligibility or even privatization.' Middle-class workers and retirees who rely on these programs the most could face financial instability just as they need guaranteed income the most. If there's no income tax on a certain level of earnings, then some entrepreneurs and small-business owners who benefit from income tax deductions on expenses like health insurance, retirement contributions and home offices would not have these deductions. 'Without an income tax, these deductions disappear,' Stroup said. 'This could increase net tax burdens and make it harder for self-employed professionals to reinvest in their businesses while larger corporations find new loopholes.' Most states rely on federal funding for infrastructure, education and public safety — much of which comes from income taxes, Stroup explained. 'If those funds dry up, states would likely increase property and local taxes, disproportionately affecting middle-class homeowners. The result? Higher costs without the benefits of improved public services.' Eliminating income tax primarily benefits high earners who derive most of their wealth from investments rather than salaries, Stroup said. 'Middle-class professionals who rely on wages would still face taxes in other forms, whether through consumption or payroll taxes.' This shift could exacerbate income inequality, making it harder for working families to build long-term wealth. These are all just speculations at the moment, as no official tax reforms have been passed either by executive order or through an act of Congress. More From GOBankingRates 6 Hybrid Vehicles To Stay Away From in Retirement 7 Luxury SUVs That Will Become Affordable in 2025 This article originally appeared on 5 Ways Trump's Suggested Income Tax Elimination Could Hurt the Middle Class
