Campbell Wealth Management - July 2018

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ON KIDS AND PLANNING FOR THE FUTURE

A lot of people have questions about retirement. They want to know if they’re making the right decisions and if they’re ready for retirement and the years ahead. Because there are so many questions—and there’s so much information to share—about retirement, we decided to start a radio show. It’s a great way to answer your questions and offer some insight into retirement. You can catch the radio show, called Right on Retirement , Sundays at 1 p.m. onWMAL (105.9FMor AM630). Retirement News Network's Louann Fulmer and I tackle a number of retirement issues to help keep you informed and ready for the next step in life. On the family front, Connor officially graduated fromhigh school. He’s already taking summer classes at the University of Maryland to prepare for his first full semester this fall. During summer classes, he’ll also start working out with the baseball team, getting ready for their upcoming season. Carter also had a major accomplishment: He got his driver’s license! So far, so good—but I’ll be keeping my fingers crossed as he gets used to this new responsibility. He does have a busy summer ahead of him. He’s gone full-force into his Italian ice business. Codie, our youngest, will be attending a few theater programs over the summer. She’s been really engaged with theater and drama over the school year and wants to keep that momentum going. She can’t get enough of it. Mom and Dad, well, we’re just trying to get in some relaxation time. The past couple of months have been pretty hectic as the kids wrapped up the school year. With Connor’s graduation, we had a lot of family in town for a few parties along with the ceremony itself. It was great to see our first child graduate, but it won’t be quite as great when we see him off. He’ll be moving out the first week of July, and then his college career begins. Speaking of kids, I did want to mention a topic that’s come up among our clients. At Campbell Wealth, we often get asked to provide information

for our clients’ kids and grandkids. I teach retirement classes, but these classes are not geared toward the younger crowd—kids, teens, and college students. But I do agree. There is a lot of good information that younger people need to know. For instance, when it comes to retirement, knowing howmuch to contribute to retirement and at what age can help young people plan for the future. In order to retire at 65, a 25-year-old making $30,000/year needs to save 10.4 percent of their income every year. If they start saving at age 30, it’s 11.8 percent of their income. At age 35, it’s 13.7 percent. At 40, it’s 16.1 percent. And at 50, it jumps to 19.8 percent. Saving for retirement at any age does take time and effort, but the sooner you start, the better off you’ll be—this is the most important message you can pass on to your kids or grandkids. It’s a three-step process, which starts with setting up a financial plan. The only way to knowwhere you are is to knowwhere you’re going. When you’re younger, a financial plan doesn’t just inform your retirement. It’s also about planning to buy a house, finding the right insurance for your family, and eventually putting your kids through college. The second step is always knowing your current financial situation. It’s important to know your net worth and to get a cash flow statement. This is something many businesses do, but it’s just as important for individuals. The third step is to find money to save and invest. It’s part of the “pay yourself first” concept. The key behind this is to put money away before you pay all your bills or spend money on yourself. That way, you knowmoney was put away and then allocated accordingly. I know I’m preaching to the choir on a lot of this stuff, but if you have kids or grandkids and you want to help themwith their financial futures, this gives you a starting point. And it may even open up further discussion and learning, which is always a plus. Kelly Campbell

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Debt Can Ruin Your Retirement, But It Doesn’t Have To

reduced income. You should also never cash in 401(k) or other retirement accounts early to pay off your mortgage, because you’ll

When people approaching retirement are asked about their biggest fears, debt consistently ranks near the top of the list. That’s with good reason. According to finance company Comet, roughly 80 percent of American adults have some amount of debt. Many Americans will retire with a mortgage, car payment, or some other form of financial obligation. Obviously, retiring debt-free is the best outcome, but it’s simply not realistic for many people. That said, a little planning can go a long way toward making debt manageable after your career is over. Ideally, paying down debt should begin while retirement is still far off on the horizon. High-cost consumer loans, like those on credit cards, should be the debts you tackle first. A good rule of thumb is to start with the debt that has the highest interest rate. The longer that debt sits, the more you pay in interest. Many of these debts are not tax- deductible, so there’s no point in waiting for the optimal time to pay them off. As you get closer to retirement, you should take a look at your mortgage and be ready to do some math. Because mortgages are tax- deductible, you may be in for a significant rate decrease once you retire. While the best strategy for you may be different than your neighbor’s, there are a few principles that apply to all cases. You need to be sure that your payments during retirement will be manageable on your

incur serious fees for an early withdrawal. As you transition into

retirement, you should reevaluate your budget. The more expenses you can reduce, the longer your resources will last and the less stressful any outstanding debt will be. You should also set aside at least three months of emergency funds if possible, so that you won’t need to use credit if something unplanned happens. Retiring without any debt may not be an option for you, but that shouldn’t stop you from proactively planning to decrease debt before you stop working. Like the proverbial monster under the bed, debt is a lot less scary when you’re willing to stare it straight in the face.

Is the 'Gig Economy' the Future of Retirement?

money they earn from the side hustle goes into a savings or retirement account. Many younger people are saving as well, but at a lower rate. Of those between the ages of 25 and 35, only 42 percent are saving for retirement via a side hustle. Of course, a willingness to save money is to be lauded, though it may be rooted in concern for the future. About a third of those surveyed expressed worry that Social Security benefits would no longer exist by the time they reach retirement, and that a side hustle would be a necessary source of income. About 16 percent of respondents said they would keep their side hustle during retirement. For older Americans, taking advantage of the gig economy as they approach and enter retirement can be hugely beneficial, both financially and socially. Many people turn their hobby or passion into a source of supplemental income. Even better, you have more control over the hours you work and the amount of effort you want to put in day to day. This prevents you from burning out and keeps the passion for what you love alive. Call it a win-win for retirement.

More and more people are taking on a “side hustle” in order to save money for the future. Generally speaking, a side hustle is a

second, part-time job, worked in addition to a full-time job or on an independent basis. More so, side hustles are typically based on a person’s hobbies or passions. For instance, if you paint for fun and you sell your paintings, you have a side hustle. For many people, selling goods on eBay is a side hustle. Side hustles are part of the “gig economy” — a type of employment centered on temporary or smaller, more flexible jobs. These are jobs that include contract work, freelancing, and other types of self-employment. A recent survey from Betterment, an online financial services company, found that over 65 percent of people between the ages of 35 and 54 use their side hustle to actively save for retirement. For people over the age of 55, the number saving for retirement jumps up to 76 percent. All the

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INTRODUCING Co-partners of Campesinas

I magine a family living on five dollars a day! That is the income of many rural families in El Salvador and Guatemala. Co-partners of Campesinas (copartners.org), an Alexandria-based, all-volunteer 501(c)(3) organization is working to improve family income by providing small grants and technical assistance to four Central American women's groups who distribute scholarships and organize vocational training for women and youth. When Archer Heinzen, a Campbell client, lived in El Salvador in the 1990s, she fell in love with a group of valiant but excruciatingly poor women and wanted to do something to help. Returning to the States and settling in Alexandria, she sought the help of friends to become members of the board of Co-partners.

Since that time, she and a group of volunteers have made annual trips to El Salvador and Guatemala to conduct brief, intensive leadership workshops for children, youth, and adults. Based on skills they learned in sewing classes, one group of women formed a co-op to produce school uniforms. Others now work individually as dressmakers. Computer classes have helped youths expand the minimal computer training they receive in school. Cosmetology classes have led some young women to jobs in beauty salons, and, after training, young men have found work as electricians and welders. New volunteers are welcome to come to our Wednesday night board meetings. Spanish-speaking volunteers are welcome on all or part of this year’s volunteer trip ( July 24-August 14). If interested, please email Archer at [email protected] . Donations are welcome too!

Sewing co-op

Advocacy training

Upcoming Events

SUDOKU

RETIREMENT TAXES TODAY WORKSHOP Reston Association 12001 Sunrise Valley Dr., Reston, VA 20191 Thursday, July 12 at 1 p.m. OR 6:30 p.m. 5 PILLARS OF RETIREMENT DINNER SEMINAR (INVITE A FRIEND) 2941 Restaurant 2941 Fairview Park Dr., Falls Church, VA 22042 Tuesday, July 24 OR Tuesday, July 31 at 6:30 p.m. To register for any of the upcoming events, please email us at [email protected] or call Carol at (571) 800-6373. Make sure to check out our website to see more upcoming events: CampbellWealth.com/educational-resources/upcoming-events

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Inside

On Kids and Planning for the Future How to Manage Debt Before and During Retirement Does the Gig Economy Make Sense for Retirement? Introducing Co-partners of Campesinas The History of Hot Dogs and Burgers

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How Hot Dogs and Hamburgers Became National Treasures THIS AMERICAN GRUB

If your plans for this Independence Day involve firing up the barbecue, you’ll probably be cooking two American classics: hot dogs and hamburgers. Come the Fourth of July, families will be grilling up

prices by half. Not only did Nathan’s hot dogs outsell the competition, the Great Depressionmade them the perfect food for a nation suddenly living on a tight budget. By the 1930s, hot dogs had become so unquestionably American that Franklin Roosevelt famously served them to King George VI during his royal visit in 1939. The Burger Like the hot dog, the exact origin of the beef patty’s eventual “sandwiching” is lost to history. Once again, it was German immigrants who brought their recipes for “Hamburg steak” with them across the Atlantic, but reports vary as to who first sold the meat patty inside a bun. Multiple diners and fairgrounds across America claim to be the home of the first hamburger. All of these claims date to the turn of the 20th century, a time when our nation was faced with feeding a growing working class quickly and cheaply. By the 1950s, the burger had become a symbol of the American everyman. Both the hot dog and hamburger embody the history of our nation. Immigrant traditions merged with blue-collar needs to create two uniquely American foods. It’s fitting that we celebrate America’s birthday with the grub that has grown along with it.

burgers and dogs from sea to shining sea, but it wasn’t always this way. The story of how beef patties and sausages became culinary symbols of our nation will give you plenty of food for thought. TheHot Dog It was German immigrants who brought the “frankfurter” and the “wienerwurst” to American soil in the 1800s. There is much debate over who first decided to place one of these franks in a bun, but by the opening of the 20th century, hot dog stands had popped up all over the Eastern Seaboard. We do know the identity of the man who took the hot dog’s popularity to a national level: NathanHandwerker. A Jewish immigrant fromPoland, Nathan sliced buns for a hot dog stand on Coney Island. After scraping together enoughmoney, he quit his job and opened a stand of his own, undercutting his former employer’s

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