Tag Archive | "social security benefits"

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.

 

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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.

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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.

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Tips If You Plan To Retire in 2013


If this is the big year for you, congratulations! It’s been a long haul, but that’s all in the past and it’s time to relax and enjoy the golden years. To make sure you’re able to do so, here are some tips if you plan to retire in 2013.

Make your retirement more enjoyable with these tips if you plan to retire in 2013.

Tips if you plan to retire in 2013

Unfortunately, you can’t just walk out the door one last time and wave good-bye. You still have things to do.

1. Make sure you are vested in your retirement benefits.

2. Strategize about when to claim Social Security.

3. Sign up for Medicare on time.

4. Protect your savings.

5. Develop a plan for spending down your assets.

6. Don’t forget to take required minimum distributions.

7. Consider maintaining your connection to the workforce.

Sure, it’s the end of your working career, but it’s also the beginning and there are lots of options available. Make your retirement rewarding and follow these tips if you plan to retire in 2013.

Click here to read more about tips if you plan to retire in 2013.

Posted in Medicare, Planning for Your Retirement, Retirement Plan Challenges, Social SecurityComments (0)

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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Chained CPI Can Hurt Your Retirement


It appears that the Federal government is not yet finished attempting to pay for the sins of the rich by sticking it to the rest of us. Some lawmakers are considering a plan to “change how the government measures inflation in Social Security payments.” This chained CPI can hurt your retirement.

Millions of older Americans suffer from growing poverty and chained CPI will make the situation even worse.

Chained CPI can hurt your retirement

The government currently calculates Social Security’s cost-of-living adjustment, or COLA, each year based on how inflation affects urban wage earners and clerical workers. Known as CPI-W, this index measures changes in the prices of a fixed basket of goods that are deemed to be representative of regular purchases by wage earners.

In contrast, the chained-CPI assumes that as prices increase, consumers make substitutions in what they purchase. The common illustration is that if the price of beef increases but the price of chicken is stable, consumers will purchase less beef and more chicken.

Thanks, Washington. At least the price of dog and cat food is still low.

The chained-CPI is being proposed to adjust not only Social Security benefits, but also benefits from a host of other federal programs, such as federal pensions, veterans benefits and Supplemental Security Income (SSI).

When corporations, the very wealthy, and their lobbyists have more influence with lawmakers than average voters have, we’re in serious trouble. And right now, we’re in serious trouble.

With Social Security, one reason that’s a concern is that millions of seniors depend on the program just to get by. According to the Social Security Administration, 86 percent of U.S. households with one member aged 65 or older, or nearly 39 million Americans as of the end of 2011, receive Social Security benefits. For these households, Social Security income represents the largest component of their total income, at 37 percent, followed by wages at 30 percent.

It’s unfortunate that our elected officials choose to ignore the interests of the many in favor of the interests of the few who are able to make large contributions to election campaigns. Chained CPI can hurt your retirement, so speak up and let your elected representatives know how you feel.

Click here to read more about how chained CPI can hurt your retirement.

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Get the Most From Social Security When You Retire


In the past couple posts, we’ve touched on six things you should know about Social Security — before you retire. There are three more you should understand to guarantee you get the most from Social Security when you retire.

Get the most from Social Security when you retire

Maximize your spouse’s benefits – legally

Here’s a Social Security claiming strategy that’s perfectly legal and potentially lucrative. Let’s say a husband decides he wants to delay taking his benefit until age 70 to maximize the amount of his monthly check. But he wants his wife to be able to take a spousal benefit, because it would be higher than her own benefit.

To make that happen, the husband, who must be at full retirement age, can file for his benefits and then immediately suspend them. Because he has applied for benefits, his wife can now take a spousal benefit based on his record. And because he suspended his own benefit, his benefit will earn delayed retirement credits.

You may have to pay taxes on your benefits

Benefits lost their tax-free status in 1984, and the income thresholds for triggering tax on benefits haven’t been increased since then. As a result, it doesn’t take a lot of income for your benefits to be pinched by Uncle Sam. For example, a married couple with a combined income of more than $32,000 may have to pay income tax on up to 50% of their benefits. Higher earners may have to pay income tax on up to 85% of their benefits.

You may have to take the “earnings test”

Bringing in too much money can cost you if you take Social Security benefits early while you are still working. With what is commonly known as the earnings test, you will forfeit $1 in benefits for every $2 you make over the earnings limit, which in 2012 is $14,640. Once you are past full retirement age, the earnings test disappears and you can make as much money as you want with no impact on benefits.

Social Security has a lot to offer retirees and it’s easy to maximize Social Security retirement benefits. Take the time to learn about the program and you’ll get the most from Social Security when you retire.

Click here to read more about how to maximize social security benefits

Click here to read: What You Should Know About Social Security – Before You Retire

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Maximize Social Security Retirement Benefits


Yesterday, we looked at some of the things you should know about Social Security — before you retire, but we only scratched the surface. There’s much more to know if you want to maximize Social Security retirement benefits.

Maximize Social Security Retirement Benefits

Social Security provides survivor benefits

If your spouse dies before you, you can take a so-called survivor benefit. If you are at full retirement age, that benefit is worth 100% of what your spouse was receiving at the time of his or her death (or 100% of what your spouse would have been eligible to receive if he or she hadn’t yet taken benefits).

Spousal benefits are available — even after a divorce

Just because you’re divorced doesn’t mean you’ve lost the ability to get a benefit based on your former spouse’s earnings record. You can still qualify to receive a benefit based on his or her record if you were married at least ten years and you are 62 or older.

Increase your benefits by delaying your claim

Once you hit full retirement age, you can choose to wait to take your benefit. There’s a big bonus to delaying your claim — your benefit will grow by 8% a year up until age 70. Any cost-of-living adjustments will be included, too, so you don’t forgo those by waiting.

By understanding how the program works, it’s easy to maximize Social Security retirement benefits. I’ll cover the remaining tips in tomorrow’ post.

Click here to read more about how to maximize social security benefits.

Click here to read yesterday’s post: What You Should Know About Social Security – Before You Retire.

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What You Should Know About Social Security – Before You Retire


One of the few relative certainties about retirement has been Social Security, but as you’re probably aware, it — along with other retiree “entitlements” — are much less certain than they used to be. To better prepare for retirement, let’s take a look at what you should know about Social Security — before you retire.

What you should know about Social Security — before you retire

According to the latest annual report from the Social Security Board of Trustees, the “retirement program would only be able to pay out 75% of scheduled benefits starting in 2033, three years earlier than projected last year.” While you can’t control what the government will do to fix the problem, you can take the necessary steps to understand Social Security and what you need to do to maximize your benefits.

How much you collect is based on your age.

For people born between 1943 and 1954, full retirement age is 66. It gradually climbs toward 67 if your birthday falls between 1955 and 1959. For those born in 1960 or later, full retirement age is 67. You can collect Social Security as soon as you turn 62, but taking benefits before full retirement age results in a permanent reduction of as much as 25% of your benefit.

Benefits are based on your work history.

Your benefit is based on the 35 years in which you earned the most money. If you have fewer than 35 years of earnings, each year with no earnings will be factored in at zero. The benefit isn’t based on 35 consecutive years of work, but the highest-earning 35 years.

Your benefits are adjusted for inflation.

One of the most attractive features of Social Security benefits is that every year, the government adjusts the benefit for inflation. Known as a cost-of-living adjustment, or COLA, this inflation protection can help you keep up with rising living expenses during retirement. The COLA, which is automatic, is quite valuable; buying inflation protection on a private annuity can cost a pretty penny.

It helps to be married.

Marriage brings couples an advantage when it comes to Social Security. Namely, one spouse can take what’s called a spousal benefit, worth up to 50% of the other spouse’s benefit. Put simply, if your benefit is worth $2,000 but your spouse’s is only worth $500, your spouse can switch to a spousal benefit worth $1,000 — bringing in $500 more in income per month.

These are just a glimpse of what you should know about Social Security — before you retire. I’ll be covering more in future posts.

Click here to read more about what you should know about Social Security — before you retire.

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Japan Provides Valuable Insights on Retirement


It’s easy to become focused on our own situation — for example the retirement problems facing us here in the US — and miss what’s happening in the rest of the world. Those “external” events can — and do — affect us and can also provide us with important insights to our own problems. In this regard, Japan provides valuable insights on retirement.

Japan provides valuable insights on retirement

As different as our two countries are in many ways, Japan and the US have many similarities, especially when it comes to the economy and entitlement programs.

  • While poverty among the elderly is no worse than it is in the United States, recent surveys show hardly any Japanese know how much money they will have to live on in retirement. Fewer than one in five has a plan on how to spend it.
  • The average Japanese person is 44.8 years old, the oldest average for any nation in the world, according to the CIA World Factbook’s 2011 estimate. (The average American is 36.9.)
  • Retired Japanese outnumber the nation’s children. The Japanese government has had to borrow heavily to keep up with social security spending. Government debt now exceeds $12.1 trillion, or more than twice the economy’s annual output.
  • The current maximum government pension (equivalent to Social Security) for a Japanese worker who retires after 40 years in the system is a little less than $10,000 a year.
  • The retirement age in Japan has risen from 60 to 65. Since 2004, benefits are indexed according to demographics – the fewer workers there are to support a growing number of retirees, the lower the benefits.
  • As in the U.S. Social Security system, current workers are taxed to pay for those already retired – a method known as pay-as-you-go.

This should all sound very familiar to anyone thinking about retirement. And there’s more:

  • HSBC has polled adults in 15 nations for the last five years about retirement. The survey of 1,000 Japanese in May 2009 found that 97 percent did not know how much retirement income they would have. (The same survey done in the United States found 86 percent did not know what their retirement income would look like.)
  • A Nomura poll in July of 1,000 Japanese born between 1947 and 1949 found only 20 percent had put together a retirement plan. Two-thirds didn’t know how much they’d have to live on in retirement until, at best, a few months before they quit working.

Around the world, those approaching retirement have suffered from disastrous economic recession, lack of planning and unrealistic expectations that government, company pensions and other income sources will be sufficient to carry them through their “golden years.”

Now those unrealistic expectations are meeting hard economic realities. We can’t truly rely on anyone other than ourselves to provide for us. Social Security is teetering on the brink, although removing the income cap on paying into the system would substantially relieve that problem. Corporate pensions are a thing of the past and 401(k)s and other retirement plans were never meant to carry the whole financial load, even for those who are fully contributing.

The coming economic disaster facing Americans, as more and more of us retire, does not face Americans alone. It is a worldwide problem and as such the size and scope of the crash — when and if it comes — will be much greater than most of us expect. Japan provides valuable lessons on retirement that can benefit all of us.

Click here to read more about Japan’s aging population and the valuable lessons on retirement we can learn from them.

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