Archive | February, 2013

Evaluating Continuing Care Retirement Communities

One of the realities of aging is increased medical expenses and Americans consistently underestimate what health care in their golden years will cost. One option is to combine all your needs — and expenses — into a single convenient package — a CCRC. Here are some thoughts on evaluating Continuing Care Retirement Communities (CCRC).

Evaluating continuing care retirement communities will help you decide if they’re right for you.

Evaluating continuing care retirement communities

First of all, it can be a little intimidating. You’re really “hunting for a new home, making high-stakes health care decisions and negotiating a complex business deal—all at the same time.” That’s the down side. On the other hand….

These communities, known as CCRCs, typically offer independent-living units as well as assisted-living and skilled-nursing facilities, allowing them to serve everyone from active newcomers to older residents requiring round-the-clock care. Seniors move in expecting to enjoy amenities such as libraries, golf courses and posh dining rooms while they’re healthy and to receive excellent skilled-nursing care if they fall ill.

So, you have a wide range of options that will accommodate you as your needs change. Still, it’s not an easy decision and certainly requires a lot of investigation.

But finding a CCRC that fits your vision of a financially secure retirement may require some hard-nosed negotiation with the facility’s management and detailed analysis of the development’s finances. You’ll need to assess your ability to pay monthly fees that may rise faster than inflation. And with the typical CCRC charging six-figure entrance fees, you’ll need to understand the size of any refund that you or your heirs may receive if you decide to move or when you die.

Moving to a CCRC may not be for everyone, but if you think it might be right for you do your due diligence and spend some time evaluating continuing care retirement communities.

Click here to read more about evaluating continuing care retirement communities.


Posted in Creating a Personalized Retirement Plan, Medicare, Planning for Your Retirement, Retirement Trends, The Economy0 Comments

Boomers Are Rewriting Retirement Rules

For better or worse, Baby Boomers have made an indelible mark on the American landscape in almost every way. Now, as more and more are reaching retirement age, boomers are rewriting retirement rules.

Boomers are rewriting rules of retirement, just as they’ve done for everything else over the last 50 years.

Boomers are rewriting retirement rules

What does retirement have in store for Baby Boomers? It may not be what you expect, but you can be sure that whether you’re part of that generation or another, what boomers do will affect you. Here are some of the developing trends.

More older Americans are packing it in for foreign countries, where they can save on living costs and enjoy warmer climates.

Almost a quarter – 21 percent – of new U.S. businesses started in 2011 were launched by entrepreneurs age 55 to 64, according to the Kauffman Foundation, up from 14 percent in 2007. Entrepreneurs age 45 to 54 accounted for an additional 28 percent of the 2011 startups.

…23 percent of older boomers and 27 percent of their younger siblings use tablet devices, compared with 30 percent of Gen Xers (born 1965 to the early 1980s), according to the Pew Internet Project. The gaps also are small when it comes to smartphones and social networking services.

Older Americans are taking more debt into retirement than previous generations. Mortgage debt is the biggest factor: Forty percent of homeowners over age 65 had mortgage debt in 2010, compared with just 18 percent as recently as 1992, reports the Joint Center for Housing Studies at Harvard University (JCHS).

Life expectancy for men has jumped an average of almost two years in each of the last five decades, to 75.7 years in 2010, according to the Society of Actuaries. For women, life expectancy has risen by 1.5 years, on average, to 80.8 years.

Some 58 percent of boomers are providing financial assistance to aging parents, such as helping them purchase groceries or pay medical and utility bills, according to an Ameriprise Financial survey of just over 1,000 Americans conducted in late 2011.

When it comes to their kids, boomers are even more ready to help out. Almost all boomers surveyed – 93 percent – say they have given their children a hand. A majority have “boomerang kids” who have moved back home to live rent free (55 percent) or afford a car (53 percent).

Not surprisingly, most of these trends involve money in some way, spending less by retiring abroad, starting a business to provide work — and income, retiring with more debt and providing financial assistance to both children and aging parents — which may also explain the debt.

Wherever you are in life and whatever your expectations, you can be sure that — just as they’ve done with everything else — boomers are rewriting retirement rules as well.

Click here to learn more about how boomers are rewriting retirement rules.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Plan Challenges, Retirement Trends, The Economy0 Comments

Say “No” to Annuity Buybacks

If you have older annuities, you may have been offered a financial incentive in exchange your guaranteed income and death benefits. Don’t take the bait. Say “no” to annuity buybacks.

Understanding motivation is the key to understanding behavior. Say “no” to annuity buybacks.

Say “no” to annuity buybacks

Understanding motivation is key to understanding behavior. When you understand why a company is offering to buy back your lucrative annuity, you’ll understand why it’s probably a bad idea for you to take the offer.

Companies sold deferred variable annuities with generous guarantees in the late 1990s and early 2000s, when the stock market was rising and interest rates were higher. With their investments still battered by the 2008 market downturn, insurers are now looking to shed these guarantees from their books.

By offering you an apparently large payment, companies can avoid paying you more over time.

Many of these older annuities base lifetime payouts and death benefits on the investor’s original investment plus annual returns of 5% and 6%—no matter what happens in the stock market. Several companies recently began offering annuity holders one-time payments to give up those guarantees, and other insurers are planning to do the same.

Rick Rodgers, a financial planner in Lancaster, Pa., says such annual returns are “difficult if not impossible to replicate in today’s low-interest-rate environment without taking risk.” If you expect to live at least 15 years, he says, the insurers’ offers “aren’t going to make up for the security the guaranteed contract offers.”

Rest assured that everybody’s out to make a buck, and if they can do it at your expense, they will. Just say “no” to annuity buybacks.

Click here to read more about why you should say “no” to annuity buybacks.

Posted in Planning for Your Retirement, Retirement Investment Options, Retirement Plan Challenges0 Comments

Retirement Is A Dream For Most Americans

Pension plans are – for most of us – a thing of the past. 401(k) plans are a disaster. The Federal government is making nasty noises about cuts to Medicare and Social Security. Sometimes is seems like government and big business are conspiring so that retirement is a dream for most Americans.

Retirement is a dream for most Americans.

Retirement is a dream for most Americans

With pension plans a distant memory, most of us — if we have any retirement savings at all — have money in a 401(k). But there’s a big problem with that and it’s virtually ensuring that most Americans will never have enough to retire.

The fact is, that it’s easy to take money out of your 401(k). Sure, there’s a penalty and you have to pay taxes on the money you withdraw, but when you need it, you need it and your 401(k) is a handy stash.

A large and growing share of American workers are tapping their retirement savings accounts for nonretirement needs, raising broad questions about the effectiveness of one of the most important savings vehicles for old age.

More than one in four American workers with 401(k) and other retirement savings accounts use them to pay current expenses, new data show. The withdrawals, cash-outs, and loans drain nearly a quarter of the $293 billion that workers and employers deposit into the accounts each year, undermining already shaky retirement security for millions of Americans.

And now, as the Federal government attempts to get its fiscal house in order, we hear rumors of cuts to Medicare and Social Security.

With policy makers eyeing cuts to Social Security benefits and Medicare to rein in the soaring federal deficit, and traditional pensions in long decline, retirement savings experts say the drain from the accounts has dire implications for future retirees.

‘‘We’re going from bad to worse,’’ said Diane Oakley, executive director of the National Institute on Retirement Security. ‘‘Already, fewer private-sector workers have access to stable pension plans. And the savings in individual retirement savings accounts like 401(k) plans — which already are severely underfunded — continue to leak out at a high rate.’’

The fact is that the interests of working Americans have never been truly served — with very few exceptions — by big business or government and now it looks as though retirement is a dream for most Americans.

Click here to read more about why retirement is a dream for most Americans.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Saving for Retirement, The Economy0 Comments

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