Money maven, Mary Hunt, returns with a new book, “The Smart Woman’s Guide to Planning for Retirement,” to help women prosper financially in the New Year and beyond. While geared toward females, men can also benefit from Hunt’s money knowledge, honed after she amassed over $100,000 in debt earlier in life; and took 13 years to erase.
“Have you had a retirement wake-up call?” Hunt asks early in the book. “I can promise you they intensify with age.”
Hunt sites a 2012 survey that found that 92 percent of women of all ages do not feel educated enough to reach their retirement savings goals.
Saving for retirement requires determination and hard work; and Hunt believes women can succeed. “If we lack confidence, it’s because we lack knowledge and desire, certainly not because we lack intelligence and ability,” Hunt says.
Time trumps all factors when saving for retirement. The sooner you start, the better. But, Hunt emphasizes, regardless of what stage you are in life, you must begin now. “It’s only too late if you don’t start now. No matter where you are or how little you think you have, start now. Today. Start. Saving.” Take baby steps to produce long-term results.
Hunt’s teachings feature:
Retirement Savings Plan. Hunt promotes a six-step Retirement Savings Plan, which includes:
Build an emergency fund. Also known as a Contingency Fund. Save money for life’s unexpected expenses (car repairs, home repairs, etc.) This money needs to be liquid (easily accessible within two or three days), safe from erosion (build in a risk-free savings account) and able to fund at least six months of living expenses should a job loss or other compromised income event occur.
Get out of debt. Eliminate all unsecured debt (credit card debt, student loans, personal loans). Hunt says they’re like cancer stealing your future. Incorporate Hunt’s Rapid Debt-Repayment Plan (RDRP) to abolish the debt.
Own your home outright. Buy half as much house as your mortgage approval. Make monthly mortgage payments equal to the full approval amount to own your residence in half the time. Fiercely protect your home equity (the difference between your home’s market value and mortgage balance). Avoid taking a home equity loan or line of credit, which resets the clock on a thirty-year mortgage.
Consider hiring a financial planner once debt is eradicated or managed, a respectable amount in savings is amassed, retirement funds are growing, or an IRA inheritance or other cash windfall appears.
Hunt describes three types of financial planners:
- Commission-based. This planner doesn’t charge based on time, but by selling investment products. He or she earns commissions on those sales.
- Fee-based. This planner works on a fixed fee or charges by the hour. Fees are stated up front and the planner is a registered investment advisor (RIA). They’re required by law to meet fiduciary standards, making them responsible for putting the best interests of their clients first.
- Combo. This planner is a combination of the first two. Clients pay a fee, fixed or hourly and the planner earns commissions when the client buys financial products based on their recommendations.
Choose a financial planner with at least five years experience Hunt suggests. Ensure they act in your best interests, and can explain financial concepts on your level. Be wary of any planner who claims to be able to beat the market. Ultimately, collaborate with a planner; yet make your own investment decisions. Hunt underscores that, “An advisor’s or planner’s primary loyalty will be to the hand that feeds her. That is simply human nature.”
Hunt educates in a conversational tone, avoiding jargon, charts and mind-numbing data, which makes for an engaging read. A Christian, she teaches faith-based money management. Hunt believes that God is the source of all life’s blessings, including money. An employer, spouse, investments, trust account, parents or any other entity are the channels through which money flows, but not the ultimate source. She’s making reasonable preparations for retirement without obsession; and trusting God for the outcome.
While having a retirement nest egg is important, Hunt reminds readers there is more to life than money. Health, spirituality, nurturing relationships, staying active, continual learning and volunteering are some attributes of a well-balanced existence.
Decade-by-decade financial planning, the five necessary tools for a money management system, investment basics (automate all payments to avoid not making monthly contributions (out-of-sight, out-of-mind), reverse mortgages, and parents paying for their children’s college education (not required), are other money-saving/building topics addressed in the book.
Anyone committed to improving their financial fitness in 2014, will reap life treasures, beyond the bounds of cash, by inheriting Mary Hunt’s money practices.