Archive | Creating a Personalized Retirement Plan

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

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.

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Start Your Retirement Debt Free

It isn’t easy to do, but before you retire, you should eliminate as much of your debt as possible. You’re going to be on a fixed income and your financial future will be much more secure if you start your retirement debt free.

Start paying off your debts now and start your retirement debt free.

Start your retirement debt free

We like to reward ourselves for a job well done. And, believe me, if you’re able to eliminate your debt before you retire, that’s a very big job, very well done. So, while you may feel the need to celebrate — and you should — don’t let yourself slide back into debt. It’s all too easy to do.

Here are some tips to help you get out of debt and stay that way.

  1. Loosen up on the budget and breathe, just a little.
  2. Pay with cash — or charge only what you have the cash on hand to cover.
  3. Don’t splurge. Plan.
  4. Identify your money triggers.
  5. Redirect the money you spent on debt payments each month to savings.
  6. Develop a support group of like-minded debt-free friends.
  7. Never forget the nightmare of how living with debt felt.

Start now to pay down your debts, especially those with high interest rates — like credit cards — and you’ll be able to start your retirement debt free.

Click here to learn more about how you can start your retirement debt free.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement0 Comments

Retire Gradually

Believe it or not, the realities of retirement come as a shock to many people. After a few weeks of waking up with nowhere particular to go and nothing particular to do, you may find yourself wondering, “What now?” One way to solve that problem is to retire gradually.

Don’t just put yourself out to pasture. There’s a lot to be gained when you choose to retire gradually.

Retire gradually

There are many things you can do to ease the transition to retirement. Here are some tips that will help.

  1. Negotiate a new schedule.
  2. Offer to mentor younger workers.
  3. Settle on fair pay.
  4. Watch out for pension problems.
  5. Qualify for health insurance.
  6. Social Security withholding.
  7. Decide what you’ll do with your free time.

The vast majority of those approaching retirement are still healthy, active and have much to contribute. Don’t just put yourself out to pasture when you can still be productive, earn money doing something you enjoy and retire gradually.

Click here to learn more about how you can retire gradually.

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Invest More Conservatively After Retirement

Prior to retirement, you’ll probably want to take a little more risk in your investments to maximize your return, but you may want to invest more conservatively after retirement.

Invest more conservatively after retirement to protect your assets and financial security.

Invest more conservatively after retirement

Since you want to have as much money as possible saved when you retire, higher risk investments — with the associated higher returns — make good sense. Even if the market goes south, you’ll still have several years of employment to carry you through until the market rebounds. You might also consider working a few extra years to save even more.

The single biggest difference is that you have a lot more flexibility during your career when it comes to retirement planning. For example, if you have the bulk of your retirement accounts in stocks and the market tanks, you’ve got plenty of options for rebuilding the value of those accounts.

With years of work still ahead of you, you can simply sit back and wait for the market to rebound and eventually climb to higher ground. Or you can pump up the amount you contribute to your retirement accounts, which will hasten the recovery of your balances.

After you’ve retired, it’s a vastly different scenario.

Unlike during your career when you’re still putting money into your 401(k), IRA or other accounts, you’ll be pulling money out of your nest egg once you retire. And that creates a very different dynamic.

Specifically, the combination of investment losses from a market downturn, plus withdrawals from your account for retirement living expenses creates a double-whammy effect that can decimate the value of your portfolio and dramatically increase your chances of outliving your dough.

As a result, the same market meltdown that may be very unsettling during your career can be absolutely devastating after you’ve retired, perhaps even forcing you to radically scale back your standard of living to avoid running through your money too soon.

There is no single “right” answer to how you should invest — before or after retirement. But, because of your reduced earning power it’s wise to invest more conservatively after retirement.

Click here to read more about why you should invest more conservatively after retirement.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Investment Options, Retirement Plan Challenges, Saving for Retirement0 Comments

Increase Your Retirement Savings

The secret to a financially secure retirement is simple: save enough money. But, as with most truisms, it’s much easier said than done. What’s a hard-working American to do? Here are some tips to help you increase your retirement savings.

Plan to work longer to help increase your retirement savings.

Increase your retirement savings

All of the following suggestions are much like “save enough money” — simple to understand, but sometimes very hard to do. If you’re successful however, you’ll have gone a long way toward ensuring a financially secure retirement.

  1. Make retirement saving a priority. If you want to increase the chances that you will stick to any course of action, you need to make it a priority.
  2. Figure out how much you need to save. According to the Employee Benefit Research Institute, more than half of Americans haven’t even calculated how much money they need to save for a comfortable retirement.
  3. Look at your current expenses. Now that you know how much money you should be putting toward retirement, it’s time to find that money…. Honestly look at where your money is going. Look for the waste. Stop spending money on things you don’t need (and probably don’t want), and put that money toward your retirement.
  4. Find ways to make more money. After cutting expenses, you still might not be hitting your mark. If this is the case, look for ways to make more money.
  5. Increase your automatic investment. Your best option for making sure that your retirement contributions increase is to automate your efforts.

And, one of my favorites:

Postpone retirement, or don’t retire at all (at least not in the conventional sense). Stay active. Find a part-time — or even a full-time — job doing something you really enjoy. Remember, you’re not working to replace your full-employment income, but to supplement your retirement savings.

Increase your retirement savings now and plan to supplement those savings after you “retire” and you’ll make that money go a lot further.

Click here to learn more about how you can increase your retirement savings.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Plan Challenges, Saving for Retirement0 Comments

Fight Inflation In Your Retirement

If you’ve lived long enough to be thinking seriously about retirement, you remember inflation. While it’s not a problem right now, just like everything else, it’ll come around again, and if you’re on a fixed income it’s important that you’re able to fight inflation in your retirement.

Buying a home will fix your monthly payments for decades, helping you fight inflation in your retirement.

Fight inflation in your retirement

It’s important to plan ahead now, so you’re prepared when inflation rears its ugly head again. Here are some ideas that can help:

Buy a home. There are many reasons to rent in retirement, but one of the advantages of home ownership is that you can hedge against inflation by getting a fixed mortgage, fixing your monthly payment for decades.

Find lower-cost alternatives to replace what you enjoy. It’s true that inflation makes the same item cost more, but you can still slash your budget by using alternatives that are less costly. In order to not feel deprived, look for replacements that are truly similar to what you currently enjoy.

Skip some expenses regularly. Inflation will affect your budget less as an absolute dollar amount if your overall expenses are lower. Once in a while, try to skip your expenses.

Limit lifestyle inflation. There are many expenses that creep up as time goes on, but there are often other expenses, such as electronics costs, that go down over time as well. A major source of inflation is actually self-induced via lifestyle inflation.

Buy stocks of companies that make more when you have to pay more. One way to at least take part in price increases is to invest in companies that benefit when they charge you more. Proctor and Gamble (PG), for instance, is a company that will make more money when the products they sell cost more on the shelves.

Retirement will be a challenge for nearly all of us, but looking back over what you’ve accomplished, you should feel confident you can make it work, especially if you take steps to fight inflation in your retirement.

Click here to learn more about how you can fight inflation in your retirement.

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Start Now To Get The Most From Social Security

Social Security may be the primary source of retirement income for many of us, so it’s important to start now to get the most from Social Security.

Start now to get the most from Social Security.

Start now to get the most from Social Security

The payment amount you’ll receive when you start receiving Social Security depends on many factors. Here are some things you can do to boost your payout when retirement time rolls around.

  1. Work for at least 35 years.
  2. Earn more.
  3. Work until your full retirement age.
  4. Delay claiming until age 70.
  5. Claim spousal payments.
  6. Claim twice.
  7. Include family.
  8. Don’t earn too much in retirement.
  9. Minimize Social Security taxes.
  10. Maximize survivor’s benefits.
  11. Make sure your work counts.

Some of these — like working for at least 35 years — require forethought and planning. You should start now to get the most from Social Security.

Click here to learn how you can get the most from Social Security.

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Plan Now To Avoid Retirement Risks

While the following advice is targeted for women — men, keep reading — there are valuable lessons for all of us about how to plan now to avoid retirement risks.

Plan now to avoid retirement risks and increase your chances of a long and financially secure retirement.

Plan now to avoid retirement risks

Statistically, women continue to live longer than men. This puts the security of their retirement at greater risk in spite of the dramatic growth in the number of working women and the slow — some might say glacial — movement toward salary equality with men.

Anna Rappaport, an aging and retirement expert and spokesperson for the Society of Actuaries (SOA) reports:

I think we thought that because women have been working more, that the [financial] gap between women and men would have gotten a lot better by now. If you asked us 10 or 15 years ago, we would have said that gap was going to go away. But it hasn’t.

This gap poses serious problems for women in their golden years, but similar situations can affect men as well.

Research by the SOA puts forth a compelling case that women and their spouses face a very unpleasant future unless they do a much better job of managing their assets and income today. And that future, sadly but realistically, is likely to eventually involve just the woman.

Tbe good news is there are things you can do now — and plan to do in the future — that will reduce the risk of a financially shaky retirement.

In addition to setting aside more retirement funds, Rappaport advises women to think more carefully about Social Security claiming strategies. The goal is to maximize older-age income. By continuing to work past age 65, for example, it might be possible to delay Social Security benefits. For most people, the current full retirement age for claiming Social Security benefits is 66. If benefits are claimed as early as possible—at age 62—the lifetime monthly benefit will be only 75 percent of what it would be if benefits were not elected to start until age 66. And for each year beyond 66, the benefit of delaying election increases by 8 percent a year for the next four years. (Except for annual inflation adjustments, Social Security benefits are usually capped at age 70.)

Work longer, postpone taking your Social Security benefits, save more, these are solid — although perhaps distasteful — strategies. But something else we don’t often think about can have a devastating effect — the need for long-term health care.

“Another big issue for women is planning for long-term care,” Rappaport says. “They live longer but also face longer periods of disability.”

It’s been truly said that old age is not for sissies. But there’s much we can do to prepare for an uncertain future. Plan now to avoid retirement risks and increase your chances of a long and financially secure retirement.

Click here to read more about how you can plan now to avoid retirement risks.

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