July 31, 2022, Barron’s — Marguerita Cheng, CFP® Pro, is featured in today’s Barron’s article by Naomi Barr who writes:
“When Linda Leconte moved to Dallas last year, in part to be closer to family, the 51-year-old New Yorker was ready for the change. She lived with a roommate and earned just enough as a technical sales associate at a lighting design company to keep paying off student debt she incurred as a returning student in her mid-30s and contributing a small monthly amount to a Roth individual retirement account and a health-savings account.
“Leconte says when she left the city, she had approximately $100,000 saved between those two accounts and a 401(k) from a previous job—but figured she needed at least three times that amount just for future healthcare costs. The move, she hoped, would help reduce her monthly expenses so she could begin to save more. “I always felt like I was just making it in the city,” says Leconte.
“While Leconte is doing better than many around her age, a retirement savings shortfall looms for millions of workers. According to a recent Sagewell Financial survey, roughly 1 in 4 Americans between the ages of 55 and 65 say they’ve saved only $50,000 or less for retirement.
She explains that there is good news, according to financial advisors: “It’s not too late to build up your savings. For starters, the government encourages savers above age 50 to make catch-up contributions in tax-deferred 401(k)s and individual retirement accounts. Beyond catch-up contributions, advisors say, building up retirement savings will depend on having realistic expectations and what you’re willing to do to get there.”
Rita explains: “Make sure you know how much you need to earn so that you can be selective about your next act, says Marguerita Cheng, CEO of Blue Ocean Global Wealth in Gaithersburg, Md. “I had a client who got laid off at around age 60. After reviewing his finances, I told him that while he had to keep working for several more years, he didn’t need to earn quite as much as he had been before. That gave him tremendous peace of mind—and allowed him to find a job that wasn’t as stressful or demanding,” she says.
Adjusting your investments to increase your rate of return can also be done, but “no one should take on more risk than what they’re comfortable with,” says Cheng.
To begin with, you need to factor in how much fixed income you need currently and how soon you’ll need to touch the rest of your money, which will help determine the amount of risk you can take with your portfolio, says Hamilton. In other words, the longer a horizon you have before tapping into a chunk of your funds, the more aggressive you can be with your investments. “Money you need now should be invested with no risk. But if you think you won’t need the rest of your funds for another 30 years, then you could consider a higher-risk investment,” she says.