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ANCHOR FINANCIAL NEWSLETTER

July 2018 NEWSLETTER

Tracy Rutledge
Financial Services Professional
O: 804-673-9070
C: 804-380-0651
trutledge@anchor-financial.com
www.anchor-financial.com

Welcome to the July 2018 newsletter!

At Anchor Financial, our goal is to be a resource to you and your family. Our quarterly newsletter is designed to keep you up to date with topics that may help you, both in the financial realm and in everyday life.

As always, I look to be a resource for you to answer questions concerning your financial future.

Trump worries that Fed will raise rates two more times this year, White House official says

The central bank already has approved two increases this year. In June, officials indicated in their individual economic projections that there were two more increases in store before the end of 2018, likely in September and December. Aides told Trump that they believe the Fed will stop when its target rate is around 2.5 percent. That would be well below the 3.4 percent that the Fed currently has indicated, according to projections issued in June. The current rate is targeted between 1.75 percent and 2 percent and sits at 1.91 percent. The fed funds futures market, where traders bet on the Fed’s moves in the months ahead, is indicating an 89 percent chance of a rate hike in September and a 63 percent chance of a December move.

Trump this week criticized the Fed and Chairman Jerome Powell for the increases adopted in March and June, saying that tightening monetary policy is threatening to thwart the economic recovery. However, he also realizes the Fed is independent and that he is merely expressing an opinion. An aide said Trump is being told by his confidantes that the central bank is moving properly and that it would be best to let monetary policy play out.

July Birth Symbols

Flower: Larkspur and Water Lily

Each color variation of the larkspur has a different meaning:
• Pink means fickleness;
• White conveys a happy nature; and,
• Purple normally represents a first love.
Generally, larkspur indicates strong bonds of love.

The other July flower is the water lily, which signifies purity and majesty. Aside from being lovely in their own right, water lilies are often used in ponds to deter the growth of algae and to shade and cool the water for resident fish and frogs.

Birthstone: Ruby
Rubies, the birthstone of July, are considered the king of gems and represent love, health and wisdom. It was believed wearing a fine red Ruby bestowed good fortune on its owner. A Ruby is the most valuable gemstone and its value increases based on its color and quality..

Zodiac Signs:

Cancer
Strengths: Tenacious, highly imaginative, loyal, emotional, sympathetic, persuasive
Weaknesses: Moody, pessimistic, suspicious, manipulative, insecure
Cancer likes: Art, home-based hobbies, relaxing near or in water, helping loved ones, a good meal with friends
Cancer dislikes: Strangers, any criticism of Mom, revealing of personal life

Deeply intuitive and sentimental, Cancer can be one of the most challenging zodiac signs to get to know. They are very emotional and sensitive, and care deeply about matters of the family and their home. Cancer is sympathetic and attached to people they keep close. Those born with their Sun in Cancer are very loyal and able to empathize with other people’s pain and suffering.

Leo
Strengths: Creative, passionate, generous, warm-hearted, cheerful, humorous
Weaknesses: Arrogant, stubborn, self-centered, lazy, inflexible
Leo likes: Theater, taking holidays, being admired, expensive things, bright colors, fun with friends
Leo dislikes: Being ignored, facing difficult reality, not being treated like a king or queen

People born under the sign of Leo are natural born leaders. They are dramatic, creative, self-confident, dominant and extremely difficult to resist, able to achieve anything they want to in any area of life they commit to. There is a specific strength to a Leo and their “king of the jungle” status. Leo often has many friends for they are generous and loyal. Self-confident and attractive, this is a Sun sign capable of uniting different groups of people and leading them as one towards a shared cause, and their healthy sense of humor makes collaboration with other people even easier.

How to Deal With a Financial Emergency in Retirement

Life events like a natural disaster, health crisis or expensive home repair have one factor in common: They come when you least expect them. Most Americans (55 percent) worry about what they would do when faced with a financial emergency, according to the 2018 Northwestern Mutual Planning & Progress Study. Here are some strategies that can help;

1. Tap easy-to-access funds: Use money from an emergency savings account at a bank before utilizing an IRA or other long term retirement account
2. Remove extras from your budget: See if excess spending can be cut down for a few months to help pay for an emergency.
3. Examine your bills: Make a list of your ongoing necessary expenses, such as car insurance and your cellphone bill. If you haven’t negotiated or requested a lower rate in the last year, take some time to reach out.
4. Sell a big-ticket item: You might be able to bring in a significant amount of cash by putting a price tag on a large asset you no longer need. Start by identifying belongings you don’t use as often as you did in the past.
5. Think about relocating: If you were planning to downsize in the next few years, weigh the pros and cons of moving now to cover an unplanned expense. You could raise the money you need by relocating to a smaller home in a less expensive neighborhood.
6. Look at life insurance: If you’ve had a whole life insurance policy for decades, you might be able to gather funds from it. Think about replacing the old policy with term insurance, which is usually cheaper and could be used to simply cover final expenses.
7. Understand tax implications: Before making any decisions, sit down with an advisor to form a strategy.

Social Security Optimization Free Events

August 21, 2018
Richmond Office
11:30a – 12:30p or 5:30p – 6:30p
6802 Paragon Place Building 2 Suite 603
Richmond, VA 23230

August 23, 2018
Chesapeake Office
11:30a – 12:30p or 5:30p – 6:30p
860 Greenbrier Circle Suite 306
Chesapeake, VA 23320

How to Become an Extreme Saver in 2018

If you’re going to commit to a more frugal lifestyle and eliminate your past budgeting mistakes, experts suggest following these steps.

Treat Your Savings Like a Bill-. Along with your mortgage or rent, your cellphone bill and other living expenses, a check to be deposited to your savings account, and hopefully a retirement fund, should be set aside each month.

Automate-Set up an automatic transfer with your bank or credit union so that every month money is deposited into your savings account, your retirement fund, your kids’ college savings account, your emergency fund and so on.

Embrace Delayed Gratification- “Extreme savers do not make a lot of money. They just save a lot. They’ve learned about delayed gratification,” says Alexander Lowry.

Avoid Accumulating More Debt- Too much debt, like revolving credit card debt, weighs you down and keeps you from having extra money to put into savings. In fact, what should be incentive to dig yourself out of debt — particularly credit card debt — is how much more money you’ll have to put toward your savings.

Start Small- You don’t become an extreme saver overnight. For most people, it’s risky and impractical.

 

A Guide to Creating Your Ideal Household Budget

Here are some areas experts say you should be paying special attention to as you create a home budget.

The general rule for allocation proportions for your budget are 50(living needs)/30(flexible spending)/20(long-term goals).

The first group of spending is on your house. Most experts say that you should try to only allocate 25-30% of your budget to this. This would be in the living expenses category.

The next group is transportation. This does not just include car payments, but repairs and gas. These would also be included in the living needs category of your budget. It is also recommended you open a savings account to help pay for your next vehicle.

Groceries are another aspect to consider for you budget. This should be kept to about 10-15%. If you want to break this down further try keeping about 8% for groceries and 4% for eating out.

The 4% rule for retirement savings desperately needs to be modernized

The longstanding 4% rule was developed in the mid-1990s to answer the question, “How much can I safely withdraw from my retirement savings each year and have my nest egg last for the duration of my retirement?” In 1994, financial adviser William Bengen introduced the concept of the 4% rule, which found that retirees who withdrew 4% of their retirement portfolio balance, and then adjusted that dollar amount for inflation each year thereafter, would create a paycheck that lasted for 30 years.

The most significant issue with the 4% safe withdrawal rate is that there are just too many unknowns for the retiree, including:

1. Market Returns
2. Longevity vs. Income Needs
3. Taxes

Though the 4% rule has its flaws, it is still a reasonable starting point for retirement planning. So rather than regard it as unassailable truth, use it as a general means of assessing your savings level. You’ll likely need to make a year-by-year assessment on how to successfully manage your sources of income with both your spending needs and taxes in mind.

I hope you found these articles and information useful. As always, If you or anyone you know would like to understand more about how we help people navigate the complex waters of retirement, annuities, life insurance or other financial services, please always feel free to reach out to me.

Sincerely,

Tracy Rutledge
Anchor Financial Group

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