Archive | Planning for Your Retirement

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.

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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

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.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Plan Challenges0 Comments

Changes To Social Security for 2013

Whether you’re already retired, getting ready or just dreaming, your future financial security will be affected by these changes to Social Security for 2013.

Learn about changes to Social Security for 2013.

Changes to Social Security for 2013

Some good, some bad — depending on how you look at them — here are seven changes being implemented by the Social Security Administration in the coming year.

1. Payroll tax cut ends.

2. Higher payroll tax cap.

3. More online services.

4. Reduced office hours.

5. Paper checks will end.

6. Higher earnings limit.

7. Bigger payments.

To ensure you’re getting all the Social Security benefits to which you’re entitled, take the time to get online and familiarize yourself with the Social Security Administration website — www.ssa.gov — to learn all you need to know about changes to Social Security for 2013.

Click here to read more about changes to Social Security for 2013.

Posted in Planning for Your Retirement, Social Security, The Economy0 Comments

China’s Financial Problems Could Destroy Your Retirement

China is one of the United States’ largest international creditors. And, while it’s nice of them to lead us money, it looks like their economic activities could come back to bite them and China’s financial problems could destroy your retirement.

Addiction to credit may mean China’s financial problems could destroy your retirement.

China’s financial problems could destroy your retirement

While the Chinese government has passed many reforms allowing a more robust competitive economic environment to develop, these changes are coming slowly and — combined with low deposit interest rates — have forced many Chinese to turn to other, more risky investments.

China’s economy has become a credit junkie, requiring increasing amounts of debt to generate the same unit of growth. Between 2007 and 2012, the ratio of credit to GDP climbed to more than 190%, an increase of 60 percentage points.” In 2012, new credit to the non-financial sector totaled 15.5 trillion, that’s equivalent to 33 percent of 2011 GDP.

What does that mean and why should we care?

A lot of China’s debt is supported by real estate which is put up as collateral for the loans. Banks’ official exposure to property is listed as 22 percent of the loan book. But that doesn’t account for exposure to real estate through their loans to local government financing vehicles (LGFVs) and off-balance sheet credit instruments.

Sudden drops in real estate prices caused a jump in debt problems and non-performing loans.

Oh yeah. A real estate bubble. You remember what that’s like, don’t you.

As we struggle to rebuild our own economy, the US is very susceptible to economic trends around the world. If it’s economy crashes — or even just dips substantially — China’s financial problems could destroy your retirement.

Click here to read more about how China’s financial problems could destroy your retirement.

Posted in Planning for Your Retirement, Retirement Plan Challenges, The Economy0 Comments

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

Protect Your “Other” Biggest Retirement Asset

For many Americans, their biggest financial asset is their home. But, since some of us are priced out of the housing market, that asset is our retirement savings. It’s easy to make mistakes when planning for retirement, so it’s important to protect your “other” biggest retirement asset.

Protect your “other” biggest retirement asset — your tax-deferred retirement accounts.

Protect your “other” biggest retirement asset

If you’ve accumulated a significant amount in your retirement funds, you should keep these three things in mind:

Backup beneficiaries. The biggest mistake we see day in and day out when meeting with prospective clients is the lack of correctly designated beneficiaries. The easiest and best thing you can do is to verify that you have a primary and contingent beneficiaries listed on all of your retirement accounts. It’s not enough to list generic beneficiaries like “my living spouse” as primary and “my living children” as contingent beneficiaries.

Prudent investment strategies.Even the best-laid investment plan can fail and one of the most common mistakes is taking an unhealthy level of risk with your retirement accounts. If you’re expecting your IRA to last the rest of your life and beyond it is critically important to control risk.

Correct custodial and trust documents. Many retirement savers are unaware of the hidden dangers in IRA custodian documents or trust arrangements. hey sign these important documents without fully understanding the consequences. Dust off your IRA custodian document and double-check the fine print to verify that your beneficiaries are not able to receive their IRA inheritance in a lump sum fashion and pay a huge tax bill.

It’s critical to the financial security of your retirement that you plan wisely and have all the information you need to make the correct decisions for your situation. You want to make sure your funds last as long as you do, so take steps now to protect your “other” biggest retirement asset.

Click here to learn more about how you can protect your “other” biggest retirement asset.

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