Tuesday, December 30, 2014

Most Popular Retirement Stories of 2014

This year the most popular retirement topics had to do with the issues of aging, the best places to retire in the United States or overseas, health problems and money tips for both the poor and the wealthy.  Here are links to the top articles for 2014:

The UCI 90+ Study at Laguna Woods Village

Why do some people live to be 90 or 100 years old and others do not?  Which people are most likely to get Alzheimers?  This article is based on decades of research on the residents of Laguna Woods Village, a retirement community near the University of California in Irvine.  Some of their findings are much different than what we have always thought!

Keeping Track of New IRA Rules 

In this article, you will find links to an IRA Broker Comparison Chart, as well as a distribution cheat sheet.  Valuable information about choosing an IRA broker, the amount to contribute and the amount to take in distributions.

Where To Retire Near San Diego

Check out this list of great retirement communities in the San Diego area, and learn the advantages and disadvantages of retiring in this popular region of California.

Public Assistance for Low Income Retirees

Many retirees struggle to make ends meet.  Often they are eligible for a variety of public assistance programs, but they don't know about them.  Whether you need a little extra help yourself or you know of someone who does, this article provides a list of how and where to access the different types of programs that are available.   

Healing Your Plantar Fasciitis

Plantar Fasciitis is a very painful condition that affects the heal of your foot.  While it can take a few months to recover, this article contains a number of tips to help you on the road to recovery.

Problems in Retiring Abroad

More than 600,000 Americans now receive their Social Security checks in foreign countries.  Many people make this decision in order to save money while maintaining a high quality of life.  However, there are a few things that everyone needs to consider before making the decision to move overseas.

Retire in Lovely La Antigua, Guatemala  

If you are looking for a Central American city with a large, English-speaking ex-patriot community and excellent medical care, this may be the right location for your dream retirement home.

Costa Rica Has Become a Top Retirement Destination

Costa Rica has been ranked by HelpAge International as one of the best places for retirees and the elderly to live.  They ranked 90 countries on a variety of issues, including healthcare and Costa Rica came out on top.

Is It Alzheimers or a Treatable Disease?

When the elderly begin to develop dementia, it is often assumed that it is Alzheimer's and there is very little that can be done about it.  However, often dementia is caused by other problems that are quite treatable.  Even certain medications can cause the symptoms of dementia.  Learn how to tell the difference.

Warren Buffet's Retirement Advice

In an interview with Motley Food, Warren Buffet reveals his suggestions for successfully investing your retirement funds.  If you are looking for a stable investment income, you'll want to read this article.

Move to the Abruzzo Region of Italy

Have you always dreamed of retiring in Europe, but thought you could not afford it?  Check out this article about the beautiful, romantic Abruzzo Region of Italy where an American couple can live comfortably in a beautiful setting on less than $2000 a month.

Choosing a Continuing Care Retirement Community



Sometime in your 70's or 80's, many people choose to move into a continuing care retirement community, where someone else will do the cooking, cleaning and provide your transportation.  When you are ready to take this step, you'll want to know how to choose a good one.

You may also be interested in the top retirement stories of past years:

The Fifteen Most Popular Retirement Stories of 2013

The most popular topics were the articles about fabulous places to retire, how to make money after retirement and alternatives to long-term care insurance.  One article was was especially popular was the one that shared some interesting statistics about the Baby Boomer generation

The Eleven Most Popular Retirement Stories of 2012

Subjects covered include where to retire outside the United States, sunny places to retire in the U.S., retirement savings, healing relationships with your adult children, Baby Boomers and STDs, divorce after age 50 and niche retirement communities.

The Eight Most Popular Retirement Stories of 2011

Topics include cheap places to retire, working from home, how to prevent a broken bone, and crafts to do with your grandchildren.

For links to hundreds of additional articles about retirement, use the tabs at the top of this article.

You are reading from the blog, http://www.baby-boomer-retirement.com

Photo credit:  Photo of Laguna Woods Village was taken by author, Deborah-Diane.  All rights reserved.

Wednesday, December 24, 2014

Realistic Gifts for Children and Grandchildren

Over the years, many of us have grown accustomed to being quite generous with our adult children and grandchildren. In addition, our children and grandchildren may have grown accustomed to receiving large gifts from us.  This can cause problems as we age and our budget can no longer permit us to be so generous.

What can you do to make sure that you do not destroy your own retirement plans by spending too lavishly on members of your family?

Talk to Your Adult Children

Even before you retire, there is nothing wrong with casually saying to your children, "I'm glad I am able to buy you this expensive gift now, while I'm still working, because I won't be able to afford to do these things once I retire."  This prepares your children so that, when the time comes, they are not shocked when they expect one thing and receive something else.

Set Up a Realistic Budget

It goes without saying that some retirees are able to afford to give more to their adult children than others.  Whether you can afford to spend $5, $50, or $500 a person, make sure you have set up a realistic budget that will not disrupt your income.  You do not want to be spending down your savings or investment principle in order to purchase gifts for your children.

The Best Gift You Can Give Your Children is to be Self-Supporting

Do you really want your children to have to support you in the coming years ... possibly at the same time they are trying to put their own children through college?  Do you want to have to move in with your children for financial reasons?

In addition, most young and middle aged adults would experience a great deal of financial difficulty themselves if they were called upon to help support their parents.  Consequently, you are doing your children a favor when you do not overspend on them for holidays and birthdays.

Sometimes Large Cash Gifts Can Be Part of Your Estate Planning

On the other hand, sometimes giving large gifts of cash, stock or property can be part of your estate planning.  If your estate planner recommends it, making large gifts to your children while you are still alive is one way to reduce inheritance taxes on large estates.  However, only do this after consulting with your estate planner and you have determined that you will continue to have an income stream that will support you for the rest of your life.

Make Sure You Keep Things Fair

When you reach the point when you have to decrease the size of the gifts you give to your children and grandchildren, be careful to keep things fair.  If you pay for an expensive trip for one grandchild, for example, but have no intention of doing the same thing in the future for others, it will only cause resentments and unhappiness.  Make sure that you are as even-handed as possible.  This is especially important in a blended family in which the husband and wife may have children from other marriages.

Decide Whether You Want to Give Gifts, Cash or Something Else

Some people I know give several hundred dollars at Christmas to each of their adult children, and they let them divide up the money between themselves and their children as they see fit.  Other people give individual gifts to their children and grandchildren, but no cash.  Another choice is to give gifts to one generation and cash to another ... for example, gifts to your children and cash to the grandchildren (or the opposite).   I have also known people who just buy gift certificates or write checks to everyone in the family.

One year, my husband and I decided to buy Disney stock for each of our grandchildren.  We thought it would be good for them to have an interest in the stock market and it would help a little with their future college costs.

However you decide to handle gift giving is up to you and should be based on your own financial situation, as well as what is easiest and most enjoyable for you.  After all, since you are making the gift, you have the right to decide how you want to handle things.  Just make sure you remember to take care of yourself, too.

Happy Holidays from my family to yours!

If you are interested in other articles about financial planning in retirement, use the tabs at the top of the page.  They contain links to hundreds of other articles on topics that could be of interest to you.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  www.morguefile.com


Thursday, December 18, 2014

Budgeting for Your Golden Years

At the end of each year, many people take time to evaluate their retirement plans, work on their budgets and evaluate how they are doing financially.  In fact, this is something everyone should do once a year, whether they are young adults, middle aged or already retired. 

One of the keys to a happy, successful retirement is to have a realistic budget.  This involves knowing which expenses will be reduced or eliminated entirely, which expenses are expected to remain about the same, and which expenses are likely to increase.  It is important to be honest when you evaluate how much money you can reasonably expect to need in order to have a satisfying retirement.  Here is some basic information to get you started:

Retirement Expenses that Could be Reduced or Eliminated

Mortgage -- Will you pay off your mortgage or move someplace less expensive where your payments will be lower?  If you go into retirement with your current mortgage, of course, you can expect this expense to remain unchanged.

Rent -- If you do not own your own home, will you remain in your current lease or move to less expensive housing?  Renting does make it easier for people to be flexible in making adjustments to their cost-of-living.

Debt -- Even if you still have a mortgage, many people try to pay off all or most of their other debts before they retire.  If this is true for you, it could make a substantial reduction in your monthly budget, depending on how much debt you have been carrying.

Commuting and Transportation -- Most people drive fewer miles after they retire, which also means that they spend less on related expenses, such as car repairs and parking.  However, if you plan to do a lot of traveling by car, this may not be true for you.

Lunches, work clothing, dry cleaning and other job related expenses -- Once you stop working, you are much less likely to be eating lunch out every day, buying suits or taking them to be cleaned.  The amount of savings can add up.

Retirement savings -- After you begin living off your retirement savings, you will stop adding money to your IRA or 401(k).  This is one expense that will drop off completely.

Medical Expenses - Maybe -- If you are old enough to go on Medicare when you retire, and if you decide to use a high-quality Medicare Advantage plan, you may save money, especially if you paid your own health insurance premiums in the past.  However, if you have received free or inexpensive healthcare through your employer, then this could be an expense that will be higher when you retire.

Retirement Expenses That Will Remain About the Same

Groceries -- While we like to think we will save money in every area of our life, the truth is that certain expenses, such as our grocery bill, are going to stay the same or may even increase slightly as we eat more meals at home.

Utilities -- This is another bill that will probably remain about the same or might increase slightly, especially if you have been accustomed to turning the thermostat down when you're at work.  Once you are home all day, running the furnace or air conditioner, watching television or using the computer, your utility bills will be at least as much as you spent in the past and could go up slightly.

Insurance -- The amount that you spend on homeowner's or renter's insurance, life insurance, and auto insurance are all going to remain about the same as what you have paid in the past.

Property Taxes -- If you own a home, even if you have paid it off, you still need to include your property taxes in your retirement budget.  They will initially continue to be about what you have paid in the past.  Over the years, you can expect taxes, and everything else, to go up.


Retirement Expenses that Could Increase ... Possibly a Lot!

Health Insurance -- Whether or not your health insurance costs go up or down depends a lot on what you have been paying in the past and the type of Medicare supplement you decide to purchase after you retire.  For example, if your employer paid for your insurance prior to retirement, then anything you pay for Medicare and the supplemental policies you choose will be an increase.  If you had an expensive individual health insurance policy in the past and you had to pay the premiums yourself, then Medicare, even with a Medigap supplemental policy, will seem like a bargain.  You need to do your research and have a realistic budget for your health insurance.  For most people, the least expensive way to handle Medicare is by using a Medicare Advantage plan.

Other health expenses -- Depending on the insurance you choose, you will still have co-pays and deductibles with most Medicare plans.  Drug costs are sometimes high for senior citizens, as well.  Basic Medicare does not cover dental or vision expenses, which can be significant as you age, so you may need to purchase extra insurance to help with these costs.  Even if you do have insurance, certain dental expenses, such as implants, can still be quite high.  It is wise to estimate what your deductibles and other costs could be and set aside some money to cover these possible future expenses.

Long-term care -- If you decide to purchase long-term care insurance after you are already in your 60's or 70's, the insurance premiums could be quite high.  If you have not yet reached your 60's, you are better off getting the insurance while you are younger and before you have developed any serious health problems. It is smart for most people to get the insurance, because the cost of long-term care can be significant when paid out of pocket.  According to the the U.S. Department of Health and Human Services, you have a 70% chance of needing some type of long-term care after the age of 65.  A nursing home can cost as much as $90,000 a year and assisted living facilities run approximately $42,000 a year.  One way or another, it is wise to either buy the insurance or set aside some money for this possible expense.

Entertainment --  Particularly during the first decade after you retire, you may want to kick up your heels a little and spend more time traveling, eating out, going to plays, or indulging in your favorite hobbies ... whether that means enjoying more time on the golf course, purchasing a sailboat or spending money on your favorite collection.  It's important to budget for these activities before you retire.  It won't be any fun to retire if you are unable to afford to do any of the things you looking forward to.

Emergencies -- An unexpected event can have an even greater effect on you when you are not working, since it could be difficult to make up for the lost money.  For example, a sudden drop in the value of your investments, a period of high inflation, losing your home and possessions in a flood, earthquake or other catastrophe, significant medical expenses, or major car repairs can be difficult losses to overcome, particularly if you are living on a tight budget.  When you first retire, it is wise to set aside as much money as possible in an emergency fund so you are prepared for the worst.

The bottom line is that you need to prepare for everything.  As they say, hope for the best and prepare for the worst.  That's the secret to a comfortable retirement.

Source:

Yahoo! Finance, Dave Bernard, "5 Costs to Include in Your Retirement Budget," U.S. News & World Report, September 5, 2014.

For additional information about retirement planning, use the tabs at the top of this page to find links to hundreds of articles about great places to retire in the U.S. or abroad, financial planning, medical issues, family concerns and more.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  Photo of Laguna Beach taken by author, Deborah-Diane; all rights reserved.

Wednesday, December 10, 2014

What Happens to Disability Benefits When You Retire?

Millions of Americans are disabled and one of the things they worry about is what will happen to their income when they reach retirement age.  The answer to that question depends on the source of their disability income.

Private Disability Insurance

If you have been covered by private disability insurance, most companies cease making payments to you when you either reach age 65 or your full retirement age ... which can be age 66 or 67.  These companies typically pay you an income in addition to what you have been receiving in Social Security Disability ... or instead of it, if you were not eligible for Social Security.  In those cases, your income could drop dramatically when you reach retirement age.  However, the majority of Americans do not have private disability insurance.  Instead, they rely solely on Social Security disability coverage.  In those cases, their income will remain the same or, in some cases, might even increase slightly after they retire.

Social Security Disability Insurance

The good news is that your Social Security disability payments remain the same when you reach retirement age ... even if your income during your working years was not enough to qualify you for that level of monthly income.  This protects people who became disabled years before they reached retirement age, so they had a shortened work history.

What if You are Entitled to Social Security Spousal Benefits

Disabled people who are married, or who were married to someone for at least 10 years, also have the option of receiving monthly payments based on their spouse's work history, rather than continuing to receive their disability payments, if the spousal benefit would be larger.  In this case, it would be wise for them to begin receiving the spousal benefits at their full retirement age, when those benefits would be maximized.

Which Benefit Would Be Best for You?

Let's say that you have been receiving $1100 a month in Social Security Disability payments and you have a spouse or former spouse who is receiving $2500 in Social Security retirement benefits.  If you are age 62, you would be entitled to no more than $900 a month in spousal benefits, which is less than your disability payments, so there is no reason why you would switch to the spousal benefits.  However, if you wait until your full retirement age, between ages 65 and 67 depending on when you were born, you would be able to receive 1/2 of the your spouse's benefit, or about $1250 ... which is more than your disability payment.  At this point, it would be worthwhile for you to switch from disability to spousal benefits.

As you can see, if you are on Social Security Disability and in your 60's, it is worthwhile to take the time to compare your disability payments to your spousal benefits ... and re-evaluate every year until you reach full retirement age.  You will need information from both Social Security statements in order to make this comparison.  You can find your personal information at: my Social Security website.  You can use the information they provide and their estimator to make an informed decision.

Sources for additional information:

http://www.ssa.gov/myaccount/

http://www.ssa.gov/disability/

If you are interested in learning more about retirement planning, use the tabs at the top of this page to find links to hundreds of additional articles.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  en.wikipedia.org/commons


Wednesday, December 3, 2014

Fun Ways to Earn Extra Retirement Income

Let's face it.  Most Baby Boomers are going to have to do something to earn extra income during their retirement years.  The vast majority of Boomers simply have not saved enough money to live comfortably during their later years.

We see the reality of this around us.  Several times recently I have been in Starbucks or fast-food restaurants and observed that many of the employees are not the young, college-age kids one would expect to see.  Instead, these part-time jobs are often filled by people who are obviously in their 60's or older.  The same is often true of department store clerks and people in other service industries. I can't help but wonder if they are really enjoying what they are doing.

Instead of working in stressful, demanding jobs after retirement, wouldn't it be nice to find something fun to do that could also provide us with an extra income?  Look around, there might be more opportunities than you realize.

Examples of Fun Jobs for Retirees:


Create something and sell it:  I have a friend named Patti who is a retired Realtor and a wonderful painter.  She spends hours painting a wide variety of ocean and mountain scenes and selling her work at Southern California art festivals where she has gotten to know other artists who are doing the same thing.  It is such fun for her!  When I have visited her booth at the festivals, I have frequently observed that she is surrounded by other men and women our age who are making and selling jewelry or lovely boxes and items they have created out of wood or other materials.  A few years ago I bought some earrings from a 60ish man at a fair in Kona, Hawaii.  He told me that his wife made the jewelry, while he went to the fairs and sold it.  You can even start your own website and sell the things you make online!

Start a New Career and Be Your Own Boss:  Another friend of mine retired after decades of working all day as a hair dresser.  She decided to become a Realtor.  She wanted to try something different and has been successful and happy in her new career.  She only sells retirement condominiums in the community where she lives and she has become an expert in that area.  She never has to drive very far, but she always seems to have several active listings and a few buyers.   She is now in her mid-70's, works her own hours and has complete control over her new career.  It has certainly rejuvenated her.  As you can see, a job that has become drudgery for one person can be a fresh new career for someone else.

Write About Your Hobbies:  Do you like to crochet, knit, quilt, make jewelry or other crafts?  Why not start a blog or website and share your knowledge and experience with others?  While you might not make a lot of money writing about hobbies, you could earn a small amount each year to spend on incidentals, travel or Christmas shopping.  Check out this website: Domestic Diva Online.  The author has turned her love of creating craft projects into a successful website where people can follow her detailed instructions and create adorable crafts of their own.

Write About Your Experiences:  Perhaps you don't feel that you have any hobbies to share.  What about some of your life experiences?  Many people have created blogs about their personal life experiences ... traveling to exotic locations, going on cruises or even more day-to-day experiences, such as interesting places to visit in your local community.  You may have fun experiences that you would enjoy sharing, too.  Whichever type of blog you decide to write, you need to learn how to monetize it by adding appropriate ads from companies like Amazon, Google, Chitika, or Vigilink.  You can also list your blog on Amazon Publishing for Blogs, since some readers will subscribe to your blog on their Kindle.  You'll earn a little here, a little there and, pretty soon, it will add up.

Find a Fun Job:  Perhaps you feel that your financial situation requires you to have a regular paycheck and not rely on the advertising fees from a blog or website.  There are a variety of fun jobs available that you might find very interesting and stimulating.  One of our friends retired as a stockbroker and went to work in a health food store.  He had always been interested in vitamins and nutrition.  Another man I know works in an antique store.  He has a houseful of antiques and, although he worked for a large corporation most of his life, he always loved collecting antiques.  Now he gets to work at a store he really loves and share his knowledge.

Teach: If you have knowledge and expertise in an area, and enjoy sharing that knowledge with others, you can earn money by teaching.  Many of the Emeritus teachers at our local community college are in their 60's and 70's ... and this includes the fitness teachers who lead classes in yoga, Tai Chi, chair aerobics, circuit training and much more.  If you know how to play the piano, guitar or any other musical instrument, teaching is a fun way to earn extra money.  

Tutor Children:  Are you an expert in algebra, geometry or calculus?  There is a huge need for people who are patient and can take the time to really explain this subject matter to teens.  If this describes you, check with your local high school to find out how you can get connected with teens who need your help.

Work with other Senior Citizens:  If you aren't interested in working with kids, go to your local senior center and ask about job opportunities for senior citizens.  You might be able to work as a receptionist at the senior center or for a local business.  There are hundreds of senior citizens, many much older than Baby Boomers, who are working in the area around our community ... in the hospital gift shop, as security people at the community gates, for our homeowner's association, and in many other capacities.  Some of these jobs are part-time and others are full time.

Postpone Retirement and Spend a Few Years in Public Service:  One of the women I walk with every weekend spent two and a half years in the Ukraine after she joined the Peace Corps at age 62.  She had retired from the corporate job that she had held for nearly 40 years, but she wanted to postpone collecting her Social Security or using any of the money in her 401(k).  She did this by working for the Peace Corps.  It was a fabulous experience for her and she still goes on speaking engagements where she is asked to talk about her time in the Ukraine.   If you are interested in doing something like that, check out Encore.org This website will help you find government and private public service jobs that are designed for Baby Boomers looking for encore or second careers.  Many of these jobs will be right in your own neighborhood, in case you are not interested in traveling halfway around the world.  What a fun, interesting and satisfying way to postpone your retirement and increase your retirement benefits! 

Even if your Social Security benefits are not very large and you have been unable to save a lot of money for retirement, that does not mean you have to face a poverty stricken retirement.  There are a variety of ways you can make extra money and many of them will be a lot of fun!

If you are currently planning your retirement, you will want to check out the tabs at the top of this article to find links to hundreds of other helpful articles.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  www.morguefile.com

Wednesday, November 26, 2014

Celebrating Thanksgiving Can Extend Your Life


As we approach the "Bermuda Triangle" of Thanksgiving, Christmas and New Year's Eve, many people approach this time of year full of fear, concern about unpleasantness, stress over financial demands, and worry about excess drinking.

However, if you approach the season with the right attitude and actions, you don't have to succumb to all this stress and worry.  Instead, you can turn this opportunity into a way to actually add years to your life.

How to Benefit from the Holidays

*  Research shows that people who have a large number of social connections tend to live longer.  Of course, if you have relatives who increase your stress, your best move is to minimize the time you spend with them and maximize the time you spend with the people you really enjoy.  While none of us can completely eliminate the time we spend with irritating people, we all have the right to pleasantly and politely avoid them as much as possible.  It is important that you do it politely, however.  Nothing can increase your stress like a family feud.  In other words, drop by the home of that busy-body aunt or alcoholic uncle for an hour or so.  Drop off a small gift or home-baked treat.  Smile a lot, make your excuses, and move on!  Don't try to change the the people who are a problem to you; instead, spend your energy increasing your social connections with the people who you care about.

*  Give what you can, but don't go into debt to do it.  Giving is as enjoyable as receiving for most people, and we would all like to give gifts to our family and friends when we can. Giving to others also seems to bolster our life expectancy.  However, there is no reason to go into debt in order to enjoy the pleasure of giving.  First, look around your home.  Do you own things that you don't want, but you think someone else would ... a pretty vase or souvenir from a trip?  Perhaps you have received a gift that just isn't right for you.  Re-gifting is perfectly appropriate, as long as you don't give it to the person who gave it to you!  Still need more gifts?  Head to the Dollar Store.  That is where you can pick up holiday coffee mugs, Christmas tree ornaments, small children's toys, bubble bath, hand cream, picture frames, vases and candy.  You can even buy cheap holiday cards and gift bags there.  For $20, you can purchase 15 or more gifts that will allow you to give something to everyone on your list.  It really is the thought that counts.  Baking cookies or making candy is also a wonderful way to give gifts that will delight your family and friends.  Want to do more?  The Tuesday after Black Friday and Cyber Monday is known as Giving Tuesday.  Make a donation to your favorite charity, even if it is just a couple of dollars.

*  Volunteer to help others.  Volunteers tend to live longer than those who don't.  Whether you have an on-going commitment at your house of worship or a local children's hospital, or you just show up when you can to help at a food bank or soup kitchen, volunteering will make you feel good about yourself.

*  Finally, let the holidays lift your spirits.  Rather that getting down on yourself about the things you cannot do, allow yourself to feel grateful and appreciative for the good things you do have in your life.  Let the holidays lift your spirits.  Sing your favorite holiday songs.  Drive around and look at the holiday lights.  Invite friends over for a sweet treat or a glass of wine.  People who are optimistic and happy tend to live longer, too.

May this be your best holiday season ever!

Use the tabs at the top of this blog to find other ways to maintain your health and increase your longevity.  The tab on Medical Concerns contains links to dozens of other helpful health articles.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  www.morguefile.com

Wednesday, November 19, 2014

Long-Term Care Insurance -- Should You Buy It?

It may be hard to imagine today, but the time may come when you will have difficulty bathing yourself, getting dressed, preparing meals, eating, moving from the bed to a wheelchair or walker, using the bathroom, remembering to take your medication, or with incontinence.  This situation may come on slowly as we age, or it could happen suddenly as the result of a stroke or accident.  No matter the cause, it is important that you have a plan for dealing with these issues when the time comes.

Cost of Getting Long-Term Care

If you have not properly prepared, obtaining the care you need can be extremely expensive.  Although the exact amount varies across the nation, the Orange County Council on Aging estimates that it can range from $50,000 to $80,000. 

The least expensive type of care is when a family member provides the care you need.  However, this is not always a possibility.  Personally, I know of several widowed, childless men and women.  They have no near relatives who can care for them if they should become incapacitated.

Another option is to apply for MediCal.  This is a government program that covers long-term care expenses for many people.  A company called Nursing Home Solutions provides professional financial planners who can help you see if you qualify for MediCal.  In their ads they say that you do not have to spend down all your assets in order to qualify for MediCal assistance in paying for a nursing home. I am sure there are also other companies that can help you apply for this program.  You can contact Nursing Home Solutions at http://www.nhscare.com/.

The next least expensive type of care is the use of a part-time caregiver in your own home.  The cost becomes more expensive if you need full time care in a nursing home or assisted living facility.

The most expensive care is for those people who choose to have 24-hour caregivers in their own home, since this requires three shifts of caregivers, seven days a week.

What Does Long-Term Care Insurance Cover?

Fortunately, there is a type of insurance that will pay for your care when you are no longer able to take care of yourself.   In California, where I live, these insurance policies must include coverage for in-home caregivers, as well as the cost of residing in an assisted living facility or a nursing home.  This gives you the option to receive your care in the setting that is most appropriate for you and your family.  For example, if your spouse needs long-term care, having this insurance may make it possible for them to stay in your home with you, without forcing you to put them in a nursing home.

Purchasing Long-Term Care Insurance

This type of insurance gives you a variety of options, so different people can choose the amount of insurance they can afford.  You can select a policy that covers your care for a few years, or you can choose one that would cover you for as long as necessary, even if that is the rest of your life.   The shorter the term of care, the lower the premiums will be.

Why Would You Buy a Short Term Policy?

You may be wondering why everyone wouldn't just buy a policy that would cover them indefinitely, rather than have a time limit on it.  Of course, that would be ideal, but it could be too expensive for many people.  When my husband and I purchased our policies, we bought a long-term policy for me, and one that would last a maximum of 4 years for my husband.

Our insurance agent said that you have to look at things practically.  I am more likely to outlive my husband.  If he were to become debilitated, I would probably care for him by myself as long as possible before bringing in a caregiver.  Once we reached that point, four years of long-term care would probably be adequate.

On the other other hand, when I am elderly and losing my ability to care for myself, I probably would not have a spouse to take care of me.  I would need to hire a caregiver sooner and would most likely need the care for the rest of my life.

Based on our conversations with our insurance broker, we purchased the policies that seemed to be affordable and would meet our projected needs the best.  The right policy for you will vary depending on your personal circumstances, such as whether you are single or married, whether or not you have adult children who are capable of providing the care you might need, the health and life expectancy of you and your spouse, and how much insurance you can afford.  Even a short-term policy is better than no long-term care insurance at all.

Whatever you decide, you want to make sure you select a policy that you can afford now, as well as in the future.

What If You Do Not Qualify for Long-Term Care Insurance?

The younger you are when you buy the policy, the better off you will be.  It will be less expensive in your 50's or early 60's and you are more likely to qualify for it.  However, if you do wait until you have a chronic condition and you have trouble qualifying, there are alternatives.  If you or your spouse is a Veteran, you may qualify for $2000 a month in long-term care aid from the Veteran's Administration.  There are also special life insurance policies that include long-term care riders.  You can talk to your insurance agent about those choices.  You may also be able to qualify for MediCal.

Whatever you decide, you need to give this issue some thought and let your loved ones know about any policies you own or money that has been set aside for your long-term care.  You do not want to wait until you are injured and cannot speak for yourself.

If you are retired or planning to retire soon, you will find links to more information about long-term care in the Medical Concerns tab at the top of this page.  You may also be interested in the article links you will find under the other tabs, which cover issues such as financial planning, where to retire, and family isues.

Source:

http://www.nhscare.com/

You are reading from the blog:  http://www.baby-boomer.retirement.com

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Wednesday, November 12, 2014

Avoid International Problems When Retiring Overseas

Tens of thousands of Americans have chosen to move to other countries in retirement and most have had pleasant experiences, often living happily in gorgeous tropical or European locations.  The people who have had the most success are those who took the time to do thorough research and careful financial planning.

Recently I wrote a post called "Investigate Exchange Rates Before Moving Overseas."  However, the currency exchange rates are not the only issues that could affect your pocketbook if you decide to move to another country.  While most potential problems can be avoided or dealt with, it is important that you take the necessary steps to be assured that everything goes as smoothly as possible.

Factors To Consider Before Moving to Another Country

Have a realistic idea of the cost of living - While it might be possible to live very cheaply in another country, will you be living in a lifestyle that is comfortable for you?  One young couple we know who moved to Costa Rica recently spent $300,000 for a new, modern home in a gated community.  While they could live cheaper in other areas, they preferred the safety and modern amenities that were available in this neighborhood.  You need to ask yourself ... will I really be reducing my cost of living?  In addition, you need to factor in extra expenses, such as the cost of travel back and forth to visit family in the United States.

Make arrangements to receive your Social Security checks in your new country - Approximately 400,000 U.S. retirees currently get their checks abroad.  You can find out how to do this and whether or not the checks can be sent to your new country at SSA.gov/foreign.  Once in your new country, the U.S. embassy or consulate can assist you if you have any problems.

Investigate the health care system and medical insurance in your new country - Will you have access to the specialists you need at a price you can afford?  Since you cannot use Medicare in other countries, can you buy into the national healthcare system in your new country or purchase private insurance?  Should you keep basic Medicare available for when you travel back to the U.S.?  Many people do, especially if they make frequent return trips or only live overseas for a portion of the year.

Another option is to selection a Medicare Advantage plan that will provide at least emergency coverage in foreign countries.  It is reassuring to know that part of your medical bills will be covered if you have a stroke or heart attack in your new country.

You are required to continue to file U.S. tax returns - If you have any assets in the U.S., or at least $10,000 in a foreign account, or any income coming from the U.S., or you are earning foreign income, you are required to file tax returns, even if you don't owe any taxes.  Failure to file the proper forms can result in a $10,000 fine and you can be arrested upon your return for felony tax evasion.  Make sure you cut all ties with the state where you have lived, too, or you could be expected to file state tax returns.  You may also have to file a tax return in your new country.  You need to check with an accountant in the country where you will be living to learn exactly what tax laws could affect you.

* If you plan to work in your new country, make sure you know the requirements - Will you be allowed to work?  Remember, you will also have to report any money you earn to the U.S. government as well as to the government of the country where you now live.

Set up a bank account in your new country - However, you may want to keep most of your assets in a U.S. bank where they will be less affected by currency fluctuations.

Consult an attorney before buying property in a foreign country - Some countries allow you to purchase property, while others do not.  In addition, a local attorney could help you avoid a real estate scam or other problems.

Have a local attorney look over your will, trust, power of attorney, etc. - Make sure your wishes will be honored in your new country and that your documents comply with their laws.

Register with the U.S. State Department's Smart Traveler Enrollment Program - This is important so the government can find you in an emergency.

In addition, some people I know who have owned homes overseas have told me that they enjoyed it most when they only spent part of the year there or only stayed for a few years.  In this way, they were able to still spend time with family and loved ones in the United States and not feel so isolated. 

In the end, the choice of whether to retire overseas or stay in the U.S. is up to each individual.  Whatever you decide, just make sure you have prepared carefully for everything you can and realize that some problems ... such as erupting volcanoes, hurricanes, earthquakes, floods, debilitating illnesses and other emergencies ... are things you will just have to deal with as they come.  After all, that's part of the adventure, isn't it?

If you are planning your retirement, you will also want to check out the tabs at the top of this article for links to hundreds of posts on a wide variety of retirement topics.

Sources and Reference Materials to Help You:

http://ssa.gov/foreign

http://travel.state.gov/content/passports/english/country.html

"Tax Guide for U.S. Citizens and Resident Aliens Abroad" at IRS.gov/pub/irs-pdf/p54.pdf

Klasing-Associates.com/law-library/tax-law-faq/international-tax-law-faq

"Before Relocating Abroad, Consider These 10 Guidelines" Where To Retire Magazine, September/October 2014.

You are reading from the blog:  http://www.baby-boomer-retirement.com

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Wednesday, November 5, 2014

Public Assistance for Low Income Retirees

Several people we know are struggling to live off their very low Social Security benefits and this seems to be a problem for low-income seniors across the country.  While some senior citizens are able to get assistance from their adult children or other family members, others do not know where to turn.  As a result, I decided to provide information about some of the programs that are available to help retirees who are destitute or nearly destitute.  In addition, I have included the names of the specific agencies that you need to contact in order to get these services, since you cannot go to one place to apply for everything, unfortunately.

If my readers are aware of other programs, please mention them in the comments section and I will amend this post to include them.  In addition, if you know of someone who would benefit from this information, please email it to them or print it out and give it to them.  Let's all work together to keep a few people off the streets this winter.

At the end of this article, you will also find links to websites that will provide you with additional information.   As you will notice in the description of the different types of help available, you may need to be persistent in order to be approved for help.  Some forms of public aid are routinely denied to applicants when they first apply.  Do not hesitate to seek legal or other assistance and appeal your denial.

Assistance Programs for Low Income Senior Citizens (And Qualified Younger Adults)

SSI or Supplemental Security Insurance

SSI is a program that makes payments to people with a very low income who are age 65 or older, or those who are under 65 and have disabilities or are blind.  You can be collecting a small amount of Social Security benefits or be earning income from a low-paying job and still qualify for SSI.  People who did not work long enough to qualify for Social Security may still be eligible for SSI. You can also own certain assets or have a small amount of savings and qualify for this help.

The federal government has a base amount that they pay, but some states add money to that amount.  Therefore, the exact amount you could receive will vary from state to state.  This is income-based aid, but they do not consider the value of food stamps, housing provided by non-profits or certain other income you receive when they calculate your eligibility.

They do consider your assets.  However, you are allowed to have up to $2000 in cash if you are an individual or $3000 if you are a couple.  In addition, your home and car will not usually prevent you from qualifying.

No one is going to call you and ask if you want this supplemental income, or any of the other forms of aid mentioned below.  You need to seek it out.  Contact your Social Security office if you believe you may qualify for this program.  You can make an appointment with a Social Security Representative by calling 1-800-772-1213.

Social Security Disability

If you are unable to work, but you are not old enough to qualify for Social Security, you may still be eligible for Social Security Disability.  If you have a health condition that is expected to last over 12 months, and it difficult for you to either have gainful employment in your former occupation or change your line of work due to your age, education or a physical impairment, you may qualify for disability.  In order to qualify, you generally must have worked at least 5 of the past 10 years.   Parents' work credits can be applied for young adults under the age of 22.  If you think you qualify, you need to be persistent in order to be approved.  Approximately 60% of applicants are denied when they first apply, especially if they have inadequate medical records.  Do not hesitate to appeal your denial.

Supplemental Nutrition Assistance Program (Food Stamps)

If you qualify for SSI, you may also be eligible for food stamps.  You can get more information about this nutritional assistance at the Social Security office when you apply for SSI.   If you are not yet eligible for Social Security or SSI, you may still be eligible for food stamps.  In this case, you will want to contact your local welfare office to check your eligibility for food stamps.

Medicaid

If you collect SSI because you are blind or disabled, and you are not old enough yet to receive Social Security Retirement Benefits, you may also be eligible to get free or low cost medical insurance through your state's Medicaid program.  Medicaid is also available to millions of low income wage earners.  You can apply through your local welfare or medical assistance office.  Go to a website called BenefitsCheckup.org, which is a national nonprofit, if you want to find help paying for your medicine and food.

Medicare

Most people have their Medicare premiums deducted from their Social Security benefits.  However, if your income is extremely low, your state may pay your Medicare premiums for you.  In some cases the state may also pay your deductibles and co-insurance expenses.  You need to contact your state or local welfare office or Medicaid Agency.  Income requirements vary from state to state.

You may also qualify for help with your drug costs and Medicare Part D premiums.  The income requirements for this assistance are different than those for SSI so, even if you don't qualify for SSI, you might qualify for this assistance.

You can apply at your local Social Security office.  You can make an appointment with a Social Security Representative by calling 1-800-772-1213.

Section 8 Housing

In addition to SSI, disability, food stamps and assistance with your medical expenses, you may also qualify for Section 8 housing vouchers.  These vouchers can be used for any housing you find and the government will cover a portion of the rent.  This may make it possible for you to find an inexpensive place to live, even if you live in an area where rents tend to be high.  In order to be eligible, your income must be less than half of the median income for the city or county where you will be living.  At least 75% of the vouchers must go to people who have an income that is 30% or less of the medium income of the area where they will be living.

In other words, if you only receive the average Social Security benefit of about $15,000 a year and the median income in your area is $50,000, there is a very high probability that you will qualify for a housing voucher.  You may still qualify, even if you earn up to $25,000 in the same community.  If the median income in your area is higher, you can have more income and still qualify.

In order to apply, you must contact your local Public Housing Authority.  They are the ones who administer the program for the department of Housing and Urban Development.  You may have to go on a waiting list before receiving a voucher, so apply as soon as possible.  If your situation changes ... for example, if you become homeless ... you need to contact the PHA as soon as possible. You can get moved up the waiting list.

Veterans Administration Assistance

If you or your spouse is a military veteran, you may be qualified for various assistance programs from the Veterans Administration including healthcare, long-term care benefits, prescription drug coverage, counseling, mortgage assistance, disability compensation and more.  If you have been in the military you may want to contact your local Office of Veterans Affairs to see what services you may be eligible to receive.

If you are not satisfied with the answers you get, you may want to contact private organizations like the American Legion for assistance.  They will help you navigate all the confusing regulations.  It is not unusual for people to be denied benefits the first time they apply.  It is worth it to get help in completing the application or filing an appeal.

Private Assistance for the Poor

In addition to the public programs listed above, your religious organization may help you with short-term housing or other assistance for a few weeks until you begin to receive the public aid you are qualified for.

Even if they cannot provide housing or financial assistance, many churches and other organizations can provide you with food and clothing or direct you to the nearest available resource for those items.  A number of churches operate food banks that can help people get through a difficult time.

Senior Centers 

You should also contact the senior centers in your city or town.  Many of them will have information about community resources that may be available to you, people who might be looking for a roommate, rooms for rent to senior citizens, meals-on-wheels and other services that could help you.  For example, my local senior center sets out day-old bread and pastries that are dropped off daily by a local grocery chain. In addition, senior centers often provide low-cost lunches and similar programs to help the elderly.

Read these Sources for Additional Information About the Public Programs Mentioned Above:

http://www.socialsecurity.gov/pubs/EN-05-11000.pdf

Social Security Disability Help

http://www.ssa.gov/disability/professionals/bluebook/AdultListings.htm

http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/hcv/about/fact_sheet

http://www.va.gov/healthbenefits/apply/veterans.asp

http://www.elderlawanswers.com/long-term-care-benefits-for-veterans-and-surviving-spouses-6158

http://www.aarp.org/health/conditions-treatments/info-04-2010/giving-back-to-vets.html

You are reading from the blog:  http://www.baby-boomer-retirement.com 

If you need additional retirement information, use the tabs at the top of this blog for information about cheap places to retire, health issues, family relationships and more.


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Wednesday, October 29, 2014

GreatCall 5 Star Medical Alert Device

As we age, there are many reasons why it could be a smart move to get some type of medical alert device.  In the past, most of these devices only worked in or near your home.  Even then, they were often a life-saver, especially if someone fell and became injured when they were home alone.

Today, however, the technology has improved and it is possible to get a very affordable GPS device that you can have with you wherever you go ... at home, in the grocery store, while visiting friends and relatives, or even while taking a quiet stroll by yourself in the park. The advantages of one of these GPS medical alert devices are tremendous. 

While I am sure that other companies may now be selling these new medical alert devices, one of my friends, a very active woman in her early 70's, told me about this one that can be ordered online from Amazon.  The price is very affordable and in line with the devices that only work in your home:

The device she told me about is the GreatCall 5Star Responder Wireless Personal Security Device.  It costs about $40, plus a small monthly service fee of about $15 a month.  There are no contracts or cancellation fees.

If you push the button on your GPS activated device, you will be connected to a live 5 Star Agent.  They are available 24 hours a day and are prepared to help you deal with a variety of security issues, including contacting the police or medical personnel, as needed.   The people who respond to your alert are trained responders who can use the GPS feature on your device to locate you, which is especially important if you are not sure of the address or cross streets where you are located.

In a true emergency situation, you can hold the call button down for 5 seconds and you will be connected directly to 9-1-1.

The 5-Star responders can also connect you with people on your personal emergency list, such as a neighbor, a relative or your doctor's office.  They also have nurses available on their own staff who are trained to help you determine if you are experiencing a serious medical event, such as a heart attack.

The device is small and can easily be attached to your clothing, belt, purse or keychain, so you always have it nearby.

If you live alone or you have a parent or other relative who spends a lot of time alone, this device, or one like it, could literally save a life. 

More information:

GreatCall 5Star Responder Wireless Personal Security Device

You are reading from the blog:  http://www.baby-boomer-retirement.com

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Tuesday, October 21, 2014

Garden Park at Daybreak - Fabulous Senior Living in Utah

Are you interested in living in one of the top rated senior communities in the United States?  Garden Park is a beautiful age-restricted neighborhood within the ten year-old community of Daybreak near South Jordan, Utah.  It was recently selected as the Gold Winner in the category of "Best For-Sale 50+ Community in the United States containing over 200 Homes" by the National Association of Home Builders.

What Makes Daybreak So Special?

In just ten years, the new home community of Daybreak has become one of the most popular places for people of all ages to move in the state of Utah.  In fact, approximately one out of six new homes that are currently sold in the Salt Lake Valley are purchased in Daybreak.

Daybreak has been designed with the 5 minute rule in mind.  This means that there are lots of fun things to do within a 5 minute walk of nearly every home in the village, including parks, shops, community gardens, swimming pools, tennis courts, sports fields, restaurants, businesses, schools and miles of bicycle trails.  In addition, the community is built alongside a beautiful lake.

The goal of the developers is to create a vibrant community for people of all ages, while maintaining a healthy environment.


What Makes Garden Park a Gold Medal Winner?

Garden Park is the section of Daybreak that has been specifically designed for the over-55 crowd.  Residents live in individual homes, townhomes or apartments, many with no stairs and all of them with no yard work ... which is very appealing as we all get older.  Those homes that do have stairs often have downstairs master bedrooms so that only your guests have to trek up and down the steps.

Most of the homes are within an easy stroll to the SoDa section of Daybreak that contains shops and restaurants.  The community is also near the University of Utah Healthcare Center. 

Garden Park residents can use all the amenities of Daybreak, including the beautiful lake where they can enjoy activities like going kayaking or taking sailing lessons.

In addition, Garden Park has its own 10,000 square foot clubhouse with a pool, gym, billiards room, and aerobics classes.  There are benches and lounge areas where you can sit outdoors, enjoy nature or meet new friends.  Residents may want to take an exercise class, stroll alongside the lake or plant vegetables in the community garden.  Residents especially love the peace and tranquility of the lakeside setting.

Townhomes can be purchased in the $200,000 to $250,000 price range.  Single family cottages start at around $250,000 and larger homes currently sell for over $500,000.  Many of the single family homes and cottages have charming front porches that make it easier to get to know your neighbors.

If you are considering moving to this region of the country when you retire, Garden Park at Daybreak has everything you could want.

If you wish to visit this community or learn more about it, here is the contact information:

GardenParkDaybreak.com
(801) 254-6090

For those of you who are still deciding where you would like to retire, use the tabs at the top of this blog for links to hundreds of articles about where to retire here and in other countries, medical issues, financial planning, family relationships and more.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  www.morguefile.com

 

Wednesday, October 15, 2014

2015 Medicare Changes, Premiums and Deductibles

Have you been wondering about next year's Medicare changes and what you will be paying in basic premiums in 2015?  According to articles by Kiplinger and MarketWatch, here is the information you will want to know.

2015 Medicare Premiums and Deductibles

The good news is that almost everyone's Medicare Part B premiums, which are deducted from the Social Security benefits of the majority of recipients, will remain unchanged at $104.90 a month.

For those who rely on basic Medicare alone, they will find that, in addition to no change in your basic Medicare premiums, your total deductibles will change very little, as well. For example, the Part B deductible will remain the unchanged at $147.

If you are admitted to a hospital under Medicare Part A, your deductible will increase $44 over the 2014 rates.  This means the deductible will rise to $1,260 in 2015 for the first 60 days you are in a hospital.

If you go into a skilled nursing facility, you will now pay $157.50 a day, but only for days 21 through 100.   For the first 20 days, you will continue to pay nothing.

On average, stand-alone Part D (drug) premiums are rising only by about $1 a month, to $32, according to Kiplingers.  However, this can vary quite a bit, depending on your Part D plan.  When the Kaiser Family Foundation did a nationwide analysis, they found that the average stand-alone Part D plan will actually rise to nearly $39, up from about $37.27.  My husband's Blue Shield Part D drug plan is $74.50 a month. You need to check with your provider to see what your actual premium will be.

Premiums for High Income Earners

If you have an adjusted gross income of $85,000 for an individual or $170,000 for a married couple filing jointly, you will have to pay an additional surcharge on your Medicare premiums.  Depending on your income, the surcharge can range from $42 to $230.  The highest rate is only for those single individuals who earn over $214,000 or married couples who earn over $428,000 ... which pertains only to a tiny percentage of retirees.  With the basic rate and the surcharge added together, the wealthiest people will pay $335.70 a month per person for their basic Medicare premiums.

Filling in the Gaps

Most people are not satisfied with the medical coverage provided under basic Medicare alone, since it can leave patients with large medical bills.  The majority of retirees usually either choose to use a Medicare Advantage plan or a Medigap Supplemental Insurance plan.  In every state, there are a variety of Medicare Advantage plans and Medigap Supplemental Insurance plans available.  There are many factors you need to consider in choosing a plan ... from which ones your favorite doctors will accept, to the drug coverage they provide and the premium you can afford.

Approximately 320,000 people who are in Medicare Advantage plans across the United States will have to change plans at the end of 2014.  A few companies have discontinued plans and others have launched new plans.  Nationwide there will be 1,945 Medicare Advantage plans available.  Even those people who do not have a plan that is being discontinued may want to do some comparison shopping before deciding whether or not they are better off staying with the plan they have.  The open enrollment period is from October 15 through December 7, 2014, so you can make changes starting today.

Many hospitals and senior centers will hold seminars during the next few weeks to help you choose the policy that is right for you.  Even if you already have a policy you like, it can still be worthwhile to attend the seminars to see if there is an even better program available or one at a more affordable price.  If you have not received any announcements in the mail, you may want to call your local hospital or insurance provider to see if there are any informational meetings being held in your area.

In addition, you can compare policies at this website:  eHealthMedicare.com.

The more information you have, the more likely you are to be satisfied with your Medicare plan.

Add-ons You May Wish to Include

Most policies offer you the option of also buying a dental and/or vision plan.  I highly recommend that retirees get these additional benefits, which can cost an extra $20 to $60 a month.

Source of 2015 Rate Change Information:

http://www.kiplinger.com/article/retirement/T039-C001-S003-what-you-ll-pay-for-medicare-in-2015.html

http://www.marketwatch.com/story/some-retirees-face-big-medicare-changes-in-2015-2014-10-13

Use the tabs at the top of this page to find links to hundreds of other retirement articles.

You are reading from the blog:  http://www.baby-boomer-retirement.com

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Wednesday, October 8, 2014

What Is Your Retirement Number?

Have you figured out your retirement number, yet?  Until recently, I had never heard of the extremely helpful retirement planning book called "The Number: What Do You Need For The Rest of Your Life and What Will It Cost?"

This is one of the more fascinating retirement planning books I have read.  To make it even better, the author includes a touch of humor in the way he discusses this very serious topic.  It was even mentioned in a recent segment on "Good Morning America."

What I appreciate most about this book is that it gives you simple, easy-to-follow guidance in coming up with a reasonable estimate of the amount of money you need to save and the amount of income you should have in order to enjoy the type of retirement that will be comfortable for you.  This is not an average of what most people need; it is a way of estimating the very specific needs of you and your spouse.

What Numbers Do Retirees Need to Know?

Retirement Income:  Have you come up with an estimate of how much income you will have when you retire?  How much will you need?  This author estimates that most people will need about 85% of their final working income.  In other words, if your last year's salary was $75,000, then you will need about $64,000 a year to retire with a lifestyle that is similar to the one you enjoyed during your working years.  Of course, if you make dramatic changes, your actual expenses could be higher or lower than that.  How are you going to reach that $64,000?  Half of it or more could come from Social Security.  The rest will need to come from a pension, a retirement job or investment income.

Retirement Savings:  This book suggests that people should have put aside eight times their last year's income.  If you are earning that same $75,000, that means you should have saved $600,000.  Again, this may change from person to person depending on other sources of retirement income you may have and your planned lifestyle after retirement.  Some of this retirement savings may be what you have put aside in an IRA or 401(k).  Some of it could come from the equity in your home or other property if you sell it and move someplace less expensive.

Withdrawal Rate:  While there was a time that people estimated they could withdraw 7% a year from their savings, this is considered far too aggressive today.  Instead, most people should limit their withdrawals to about 3% to 5% if they want the money to last the rest of their lives.  It is best to withdraw less in the early years and more in the later years when you may not have the ability to work part-time or do other things to supplement your income.  If you have managed to accumulate the $600,000 mentioned above, at 3% this would come to about $18,000 in income a year.  At 5%, this would amount to about $30,000.  If your goal is to reach the $64,000 in retirement income that you would need to replace a $75,000 salary, and you and your spouse together have at least $34,000 in Social Security benefits, then this gives you "your number."

This book is not only informative, but humorous and will help many Baby Boomers, as well as younger adults, put more thought into how they are going to achieve their number ... and what they will do if that number seems impossible to achieve.  Don't worry.  This book will not leave you feeling as though there is no way for you to reach a "number" that will work for you.

If you would like to pick up a copy of this book, here's a quick link to help you find it on Amazon:

"The Number:  What Do You Need For The Rest of Your Life, and What Will It Cost?"

If you want to read about other approaches to retirement planning, use the tabs at the top of this page to find links to hundreds of articles about money issues, family relationships after retirement, health concerns, and where to retire, both in the United States and other countries.

You are reading from the blog:  http://www.baby-boomer-retirement.com

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Wednesday, October 1, 2014

How to Manage Your Retirement Funds Yourself

Recently, this blog has covered the issue of converting your retirement savings into retirement income.  I have discussed rolling over your 401(k) into an IRA, choosing a good investment adviser and how to select an annuity for retirement income.

However, what if you do not want to hire an investment adviser, buy an annuity, or let someone else manage your money?  What are the do-it-yourself options for selecting the best investments and funds?

Use a Discount Broker

Discount brokers like Schwab and TD Ameritrade have large menus of products that are geared towards people who feel confidant in their ability to choose their own investments.  Both of them have NTF (no-transaction-fee) funds from which you can choose.  However, this does not mean that there are no hidden costs involved with the selection of these funds.  For example, Vanguard and Dodge & Cox will not pay the necessary fees that would make their funds available to consumers for free.  Since these two companies operate some of the best-performing funds, you could lose out on potential future performance if you opt for a less successful fund simply because you do not want to pay an up-front fee.  Consequently, while you can get NTF funds at the discount brokers, you also need to decide if you would be better off paying a fee in order to put your money into a fund that has a better performance record.  Make sure you take the time to do your research.

Purchase an ETF

A few month's ago, I wrote a blog post about Warren Buffet's advice for retirees.  It was based on a speech he gave at one of the annual meetings for Berkshire-Hathaway.  In his speech, Warren Buffet recommended that most retirees would do best at handling their investment savings if they simply purchased ETFs (Exchange Traded Funds) in a variety of industries over a ten year period.  In this way investors would take advantage of dollar cost averaging and they would also be diversified over a number of different industries.

In a recent Money Magazine article titled "The One Retirement Move You Must Get Right," the authors also suggested that do-it-yourself investors should consider purchasing ETF's.  It's a good investment strategy that doesn't require you to pick individual stocks and cross your fingers that you have chosen winners.  So, both Warren Buffet and Money Magazine concur ... go with ETF's.

Set Up an Automatic Monthly Investment Account

Another approach to handling your own investments is to set up an automatic monthly investment account.  Some discount brokers offer their clients the opportunity to invest monthly in funds for free or for just a few dollars a month.  It is a great way to invest and spread the expense out over a long period of time.

Pay a Fee to Get the Fund You Want

Another option is to select the highest performing fund that interests you and pay the fees, which can range from $17 at Scottrade, $50 at Ameritrade or $76 at Schwab.  These fees can be well worth it to you if you are going to get a higher rate of return or save on annual expenses.

As I mentioned before, you will have to do the research to see which investment options are the most affordable and practical for you, while offering you the best rate of return.  Ask the different brokerage firms to send you information on all the funds and ETF's that you are considering.  Read all the information thoroughly.  Once you feel confident, form a plan and move forward with your choices in an organized, consistent manner.

You may also want to read these recent articles:

Should You Rollover Your 401(k) into an IRA?
How to Choose a Good Investment Adviser
How to Choose an Annuity for Retirement Income

Source:

"The One Retirement Move You Must Get Right," Money Magazine, July 2014, page 44

If you are planning to retire soon, use the tabs at the top of this page.  They contain links to hundreds of articles about where to retire, financial planning, medical issues, and family relationships.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  www.morguefile.com

Wednesday, September 24, 2014

How to Choose an Annuity for Retirement Income

How can you guarantee that you will not run out of your retirement savings before you die?  One idea that is recommended by many financial advisers is to put a portion of your savings into an annuity.  Doing this can insure that you will always have at least some reliable income in addition to your Social Security benefits.  While not everyone will want an annuity because their assets are permanently tied up, others appreciate the secure income flow that annuities can create with a higher return than you would receive from bank interest.

In a "Money" magazine article, "The One Retirement Move You Must Get Right," the author discusses how to transition from saving for retirement to receiving a lifetime income from your savings.  As part of this article, the author demonstrates how you can lock-in a lifetime income with an annuity.  While they do not recommend doing this with all the proceeds of your 401(k) or IRA, they do see it as one part of a well-designed investment plan.  Which type of annuity is right for you ... a variable annuity or an immediate annuity?

Variable Annuities

Investment advisers who work for insurance companies are likely to advise you to purchase a variable annuity.  These investment products combine an income with the potential for your investments to continue to grow.  Approximately 75% of the annuities that are sold in the United States are variable annuities, primarily because the potential for asset growth sounds so appealing.

The downside of variable annuities is that the guaranteed income is lower and you may pay an extra 2% or more (6% vs. 4%) in up-front commissions as well as management fees of 2% or more per year of assets under management.  If you still decide that this is the best type of annuity for you, try to find one that only charges 1.5% a year for the assets under management.  If you pay 2.5% or more, you are unlikely to have enough asset appreciation to make the lower earnings worthwhile.

Fixed or Immediate Annuities

"Money" magazine suggests that most people will do better with a simple fixed or immediate annuity.  With this type of annuity, you pay a lump sum up front and receive a guaranteed lifetime income.   One advantage is that the commissions are usually 4% or less, compared with 6% for a variable annuity.  In addition, you do not pay the 2% annual management fee.  You can compare the commissions and estimated earnings for various fixed annuities at a website called immediate-annuities.com.

Rather than relying on the potential of appreciation in a variable annuity, with a fixed annuity you can put a portion of your retirement savings into the annuity and then invest the remainder of your savings in a low-cost mutual fund or exchange traded fund.  Research has shown that people tend to do better with this combination than they do when they put everything into a variable annuity.

Whichever type of annuity you choose, you will not want to rely solely on annuities for all of your retirement planning.  The more diverse your portfolio and the types of retirement tools you are using, the fewer problems you will have during a stock market decline, such as the one that began in 2007.

You may also want to read these other posts that were based on the Money magazine article:

Should You Rollover Your 401(k) Into an IRA?
How to Choose a Good Investment Adviser

Source:

"The One Retirement Move You Must Get Right," Money Magazine, July 2014, page 44.

If you are planning your retirement, you may want to use the tabs at the top of this page.  They contain links to hundreds of articles about financial planning, where to retire, medical issues and family relationships.

You are reading from the blog:  http://www.baby-boomer-retirement.com

Photo credit:  www.morguefile.com