| Maybe it's the new president. Maybe it's the relatively new year. Maybe, given the icy blasts across the US, it's as simple as the weather. But for some reason, a lot of people in my world — even relatively young ones — are reassessing their retirement plans. Each week we invite subscribers to send in questions about their financial lives, which I then give the Bloomberg Wealth treatment — getting them answered by financial advisers and analysts across the country. It's all about giving you value for reading this email. Recently, a thought-provoking query hit my inbox. It triggered some strong reactions from advisers and might serve as something of a wake-up call for your own retirement planning. A reader says: My wife and I are in our mid-30s with a newborn baby. I started a company three years ago, and while things are progressing well, we haven't been able to save as much as we'd like for retirement.
My wife works for a large company and provides stability, but we anticipate our expenses increasing significantly as our child grows. I'm concerned about balancing our current financial needs with our long-term retirement goals.
I'm particularly interested in strategies for individuals in their mid-30s who are still hoping for a "big break" in their careers. How can we plan effectively while acknowledging the uncertainty of the future? Additionally, I would appreciate any advice on managing the anxiety that comes with these financial concerns.
First, a red flag "If you have to pick between saving for retirement and having money for your kids, you have to rethink your total cost structure," Ian Weinberg of Family Wealth & Pension Management in Woodbury, New York told me. As a rule of thumb, he sees 10% as a rough estimate for how much you should be saving each year from your salary for retirement. If you can't manage that, your expenses may be too high. He offered a creative solution: Move. This might not work for everyone, but remote work and a newborn (as opposed to a child in school) could make it easier for this couple to relocate and address their retirement-savings shortfall. "Plenty of smart, young couples have taken advantage of states that have no state or local income tax," he said, noting that these locations also tend to have lower costs of living. "There's the 10% savings you're supposed to theoretically save for retirement right there." The wife may offer crucial benefits... "I see this situation as one where they really want to diversify account types," said SC&H Wealth's Judy Brown in Washington, DC. That might involve carefully evaluating what the wife's big-company role offers in terms of a 401(k) match, which could mean "free money" and a great way to catch up on savings. Her employer might also offer a Health Savings Account, which would lower taxable income now and could be used in retirement. More broadly, Brown sees a 529 plan and an emergency fund with a decent yield as an important part of the mix. Even if this couple isn't contributing much, they might save on taxes and maximize returns if they take advantage of the benefits they have access to. ...but relying on one spouse's income could cause conflict Still, the situation — one partner working a corporate job, the other an entrepreneur pursuing a big break — could get thorny. (I've seen this happen with friends in my own life and maybe you have, too.) "Resentment," is what Catherine Valega of Green Bee Advisory in Boston told me could build up if this dynamic festers. Nobody wants to kill an entrepreneur's dream. At the same time, nobody wants to feel like they're toiling away while someone else gets much more professional freedom. A guardrail Valega and other advisers recommended was a deadline for the business to take off. "Let's say with this couple, she says, 'Listen, I'll give you one more year. But we're going to agree that at the end of the year, if that's not working, it's my turn.'" Clarity benefits both people. The wife gets the assurance that she's supporting her husband — within reason. And as Valega says, a deadline also "gives the one in the startup kind of a kick in the butt." The reader ended his note asking for advice on managing financial anxiety "Welcome to the world," David Mendels of DBM Planning in New York City told me when I asked him about that. He didn't mean to be overly harsh, but wanted to make the point that uncertainty is rife at all stages of life. In fact, Mendels took the reader's question as a good sign. It can be an indication of financial over-confidence if someone feels so great they don't pick up on uncertainty. So as he and the other advisers I called made clear, it's positive that this reader is probing his retirement planning. His anxiety will probably settle if he starts to do something about it. — Charlie Wells It's been a wild week for global currencies. President Donald Trump's opening shots in a tariff-led trade war earlier this week sent the US dollar surging. The currencies of Canada and Mexico — the countries were initially threatened with general levies of 25% — slumped but then regained ground after their leaders announced tariffs would be paused 30 days. On the other side of the Pacific, the Yen became the most-traded currency versus the dollar. Gold reached record highs. Bullion on Thursday traded near $2,860 an ounce, having added 0.9% on Wednesday, after Trump said the US could take over Gaza — a comment that his aides sought to tone down — and that he wants to start working on a new nuclear deal with Iran. Worries about the fallout from the US-China trade war, as well as the possibility the president will impose duties on other nations, are also supporting bullion's role as a store of value in uncertain times. The biggest gainers and losers on the Bloomberg Billionaires Index over the past week: Mark Zuckerberg was the biggest gainer in dollar terms. The head of Meta Platforms gained $9.5 billion, bringing his fortune up to $248.3 billion. The majority of Zuckerberg's wealth is derived from his stake in Meta, which has been on a tear after a strong earnings report and investor response to DeepSeek. The open-source artificial-intelligence model out of China is seen as validating Meta's own AI strategy. Steve Ballmer was the biggest loser in dollar terms. The former CEO of Microsoft lost $9.3 billion, which took his net worth to $153.5 billion. Much of Ballmer's fortune comes from a stake in Microsoft. Shares in the company have fallen in the wake of an earnings report showing the firm's cloud-computing business will continue to grow slowly in the current quarter. Moscow Property Rivals London as Rich Russians Bring Cash Home  Photographer: Pintai Suchachaisri/Moment RF Three years into the war with Ukraine, Russia's wealthiest are increasingly bringing their money home, fueling an unlikely rebound in high-end Moscow real estate. Faced with fewer options to spend abroad as international sanctions force banks to crack down, many Russians are repatriating cash and parking it in the safe haven of domestic property. Others are using real estate as a hedge against inflation that has surged since the invasion of Ukraine, forcing the central bank to jack up rates to record highs. NYC's Waldorf Astoria Closes on First Sales After Renovation  A residence at the Waldorf Astoria in New York. Photographer: Colin Miller Manhattan's Waldorf Astoria is finally getting the first of its new residents, a decade after a Chinese firm bought the iconic New York hotel. As part of a major renovation, a portion of the property was converted into 375 condos on top of a hotel. Closings for the condos began in December, with at least $7 million of sales hitting public records. This week, we're looking for people who feel stuck in their current jobs and are looking for new roles, either internally or at other employers. If this is you or somebody you know, we'd love to speak to you. Some of our best journalism at Bloomberg Wealth comes from your own stories and we'd love to hear from you, your friends or clients. Please email bbgwealth@bloomberg.net. When it comes to your world and your money, you want answers from leaders who know how to build empires, protect portfolios and create the next big thing. Held in the heart of New York's Financial District, Bloomberg Invest is an essential gathering that convenes allocators, dealmakers and investors from across the globe. Powered by one of the world's largest newsrooms and led by Global Finance Correspondent Sonali Basak, join us on March 4-5 as we help you track, dissect and navigate the markets with the industry's most influential voices. Learn more here. Like Bloomberg Wealth? Here are a few other newsletters we think you might enjoy: - Pursuits for a guide to the best in travel, eating, drinking, fashion, driving, and living well
- Work Shift for exclusive insight and data on the future of work
- Money Distilled for John Stepek's daily newsletter on what market moves mean for your money
- Economics Daily for what the changing landscape means for policymakers, investors and you
- CFO Briefing for what finance leaders need to know
Explore all newsletters at Bloomberg.com. | 
No comments:
Post a Comment