Thursday, January 27, 2022

Retirement Income: Making Your Money Last a Lifetime

Currently in the U.S., the typical Baby Boomer between the ages of 65 and 74 in the U.S. has financial assets with a median value of about $50,000 in 2019 values, according to the Federal Reserve.  This sum, in addition to your Social Security benefits and any other pensions you will receive, needs to last the rest of your life. How can you turn these assets and income sources into a comfortable retirement? Most retirees worry that they will spend their money too quickly, leaving them destitute at the end of their life. As a result, they are looking for a practical way to make sure their assets last as long as they do.

What can you do to reduce your risk of outliving your money, while still being able to benefit from the money you have managed to put aside for your retirement?

Compare Your Retirement Expenses to Income

Your first step is to total up how much it costs you to live each month, including occasional expenses such as the cost of travel, home repairs, medical bills, and property taxes.  

Then, total up the amount you will receive in Social Security benefits and other pensions, and compare the two figures.  Hopefully, the comparison of your income to your expenses will be very close. If not, you will either have to cut your cost of living, or make up the difference by increasing your income or retirement assets.  Even if the gap initially seems large, don't panic!  There are many ways to make up the difference.

How to Cut Your Expenses

Your first step is to cut your expenses, especially if you do not have a large amount of retirement savings. There are a number of ways to do this. Here are just a few suggestions:

Downsize to a less expensive home, OR, if possible, pay off your current mortgage, OR refinance the mortgage so your payments are much lower.  Any of these changes could save you hundreds of dollars a month.

Switch from original Medicare and an expensive Medicare Supplement plan and change to a Medicare Advantage plan, instead.  This could save you hundreds of dollars a month.

Get rid of your current landline phone service, and use your cell phone, only.

Look for the least expensive plans you can find for cell phone service, cable television, internet access and similar services you use. Eliminate rarely used streaming services and similar small expenses that have a way of adding up quickly. However, try not to eliminate services which you find useful, or that bring you pleasure, or that improve your safety and security.

Consider a Reverse Mortgage

If you want to remain in your current home, and have a large amount of equity in the house, you might consider getting a reverse mortgage which you could use to pay off your remaining mortgage without requiring you to make payments on the loan.  The downside of this is that the principal on the loan will remain, and interest on the loan will accumulate until you move out of the house.  By that time, the interest could have eaten up your equity, not leaving you anything to pass on to your heirs.  

You can avoid the accumulating interest by making small payments on the second mortgage, if you can afford to.  However, before entering into a reverse mortgage, you should thoroughly investigate how much interest would accumulate, how much the monthly payments would be if you wanted to pay the interest off each month, and any other questions you have.

While a reverse mortgage is not right for everyone, for some retirees it is a good way stay in their homes for the rest of their lives.  The older you are when you begin a reverse mortgage, the better choice this is, because there will be less time for the interest to accumulate and eat up your equity. 

How to Increase Your Income

Once you have reduced your expenses as much as you comfortably are able to, then you need to look at your options for increasing your income.

The longer you work before you begin to collect your Social Security and pension benefits, up until age 70 for a worker and the mid-60s for widow's benefits, the more money you will receive each month.  If you are concerned about having a shortfall in retirement income, wait as long as possible to begin collecting these benefits.

If you have already retired, another way to increase your income is to continue to work part-time after you leave your full-time pre-retirement job. There will be a cap on how much money you can earn, at first, if you are working and collecting Social Security simultaneously, prior to your full retirement age. However, this cap goes away once you are at your full retirement age.  This is another good reason to wait to collect your Social Security benefits.  

If you have not retired yet, check the specific age limits at the time of your planned retirement, so you know if you will have a temporary cap on your earnings.  Once you are able to get your Social Security benefits and work without an income cap at the same time, the extra money could make you much more comfortable.  It could also help you continue to build up your savings, so you will have more money available when you no longer are able to work.

Find an Easy Part-time Job

Consider part-time jobs you can do from home or which will not be too exhausting for you.  For example, you may be able to tutor people online or help neighborhood children with their homework, give lessons in some skill you have (music, art, cooking, etc.), or sell your crafts or artwork.  Depending on your life and work experience, you might also be able to help people prepare their taxes, or deal with common computer problems, or be a dog walker or pet sitter.  If you like to write, you could consider writing online articles for a site like TextBroker.

Do Not Get Scammed!

You should not have to pay anyone anything in order to get a part-time job from home.  If someone asks you to buy something, it is a scam.  Start your own little home business, or work for a reputable company.  Check it out carefully with the Better Business Bureau and by looking for online reviews. 

Decide How Much Money to Withdraw from Savings Each Year

If your Social Security Benefits and pension will not cover your expenses, you can further enhance your income by using a small portion of your savings each month to make up the difference.

The younger you are when you begin dipping into your savings to cover expenses, the less you will be able to use, so wait as long as you can before taking this step. 

If you are in your 60's, it is advisable that you begin by taking out no more than 3% a year from your savings.  Each year, you can take an additional .03% of the total remaining balance to help compensate for inflation. Doing this, the money should last as much as 33 years or more, depending on the interest, dividends and asset appreciation over the years.  If you have a 401(k) or an IRA, you will not be required to start taking minimum distributions from those accounts until you are in your 70s (they periodically increase the age of these required distributions).  However, if you want to begin to enjoy the benefits of your savings before that age, and you feel you can afford it, you are not required to wait that long.  

If you are able to wait until you are in your 70's before you start dipping into your financial assets, you could begin taking 4% a year, increasing it by .04% of the total remaining balance each year.  In this way, your money will last another 25 years or more.  Make sure you take out at least enough to meet the Required Minimum Distribution, so you do not get hit with a surprise tax bill on your assets. 

Finally, if you are in your late 70s or older before making withdrawals, or if you have a reason to believe you are nearing the end of your life, you can start removing 5% a year, increasing the amount by .05% a year of the total remaining balance.  In this way, your money could last 20 or more years, which will meet the lifetime needs of most people.

For a more detailed approach on how to make your money last during retirement, you will want to read, "How to Make Your Money Last: The Indispensable Retirement Guide." (Ad) It delves much deeper into the specifics of making sure you have a financially secure retirement.  

Don't Forget to Set Aside an Emergency Fund

Life comes with surprises, as we all know.  Over the years, you may need to purchase a new car or repair the old one, or you may have an adult child move in with you because of a setback in their life.  You may develop an expensive health problem, need to travel to see a sick relative, or decide to help a grandchild.  You may even need to hire a caregiver for a short time.  If you begin to dip excessively into your total assets to cover these expenses, you could face a major shortfall in the future, if you are not prepared.

As a result, it is good advice to continue to set aside a portion of your income in an emergency savings account.  In fact, if you have adequate financial assets at the beginning of your retirement, you may find it helpful to set aside at least $5,000 to $10,000 in an emergency fund from the very beginning, so you are not forced to sell stocks when they are down.  Add to this fund whenever you can, and only remove money from it in a true emergency.  This extra emergency account will reduce your fear that you might need to dramatically cut the amount you can safely remove from your retirement savings each month.

Interesting Statistics About Retirement Savings

About 75% of grandparents have admitted that they are willing to offer financial help to their families. (Make sure your own expenses are covered first, though. Supporting adult children is one of the most common drains on the finances of retirees.)

About one-third of retirees have more financial assets 17 to 18 years AFTER they retire than they did at the beginning.  This is because they often continue to save money and only use a small portion of their dividends to cover their expenses, which allows their assets to continue to grow.  This means that, with careful planning, you can become more financially secure the older you get. 

Many retirees overestimate what their expenses will be after they retire.  After the first few years, they may find that they are not traveling and entertaining as much as they did when they were younger.

Since the recession of 2008, there has been an increase in the purchase of multigenerational homes.  Because housing averages about 35 percent of the spending for people over age 65, sharing a home with an adult child can save a retiree a lot of money. 

Another helpful guide to financial planning for retirement is the book "The Ultimate Retirement Guide for 50+: Winning Strategies to Make Your Money Last a Lifetime." (Ad)  Good planning is essential in your quest to not outlive your savings.

Bottom Line:  If you cut your expenses, work as long as you can, build your pensions, and grow your savings, you can have a comfortable retirement.  Most of the recommendations in this article came from an AARP Magazine article dated April/May 2021.

After doing a good job of planning your retirement income, you can reward yourself with a gift for yourself or someone you care about.  

You can find great gifts for retirees and your family, at my Etsy Store, DeborahDianGifts.  Check it out here:

Enjoyed this post? Never miss out on future posts by following us.  You will receive a weekly email with the most current post.
If you are interested in learning more about retirement, Medicare, Social Security, common medical issues as we age, financial planning, where to retire and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission to support this blog, at no extra cost to you.

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Photo credit:  Pixabay
 - Mohamed Hassan photographer


Monday, January 17, 2022

Medicare Costs are Rising - How Can You Control Them?

Despite the fact that Social Security beneficiaries will receive a 5.9 percent increase in 2022, a large part of this increase will be offset by rising Medicare premiums and other healthcare costs.  The premiums for Medicare Part B, the part which covers doctor visits and other outpatient care, is increasing by 14.55% or $21.60 a month.  This will impact lower income retirees more dramatically than their wealthier peers. 

According to the Kaiser Family Foundation, approximately one-third of retirees are spending at least 20% of their per capita income on healthcare costs.  In 2018, the average person with traditional Medicare spent $6,150 out-of-pocket. That amount was much higher for some people with large medical bills and expensive medications, and has caused many retirees to have to choose between buying food and paying for necessary medications. 

Deductibles are increasing, too. The annual deductible for Part A, which covers hospitalizations, is increasing 5 percent to $1,556.  The deductible for Part B, which covers doctor visits and outpatient care, is increasing 14.77 percent to $233.  These are not the only rising costs which Medicare recipients can expect.

What About the Cost of Medicare Supplements or Medigap Plans?

Many people purchase a Medicare Supplement plan (often called Medigap policies) to cover all or most of the cost of their deductibles and co-pays. However, the premiums can amount to several hundred dollars a month per person, so many couples and individuals are unable to handle this additional expense over their basic Medicare premiums.  About 20 percent of Medicare beneficiaries choose not to have a Medigap policy, which means they have to pay their deductibles out-of-pocket.  These unexpected bills can be devastating for some retirees who are barely surviving.

High Cost of Drugs and Drug Plans

Drug prices continue to be a major issue for many retirees, too.  You can purchase a Medicare Part D plan to help with the cost of your medication.  However, you will have to pay additional premiums for your drug plan, and they DO NOT cap the total amount that an enrollee must pay out-of-pocket each year for drugs. In 2022, a patient will pay a deductible of $480 until the insurance company and the enrollee have spent a combined total of $4,430 for medications. After that, the patient will pay a percentage of their drug costs, which could be a substantial amount if you have a serious, chronic illness.

Can The Government Help Control Medicare Costs?

There are some actions being proposed which could help with these rising costs, especially the cost of medications. The Build Back Better Plan, currently under consideration in Congress, would cap out-of-pocket Part D drug costs at $2,000 a year, beginning in 2024.  

Build Back Better would also allow Medicare to negotiate prices with drug companies for some of the most expensive drugs, starting in 2025 for Part D drugs, and starting in 2027 for Part B drugs.  The bill would also limit the cost of insulin to no more than $35 a month.

Of course, all this depends on the passage of the Build Back Better bill, or a similar bill designed to help people on Medicare. If no bill is passed, then drug prices will continue to rise, without a cap, for senior citizens. One action retirees can take is to write or call their Congressman and Senators and ask them to support this legislation. Since most of our representatives in Congress are not on Medicare, but on a special Congressional health insurance plan, many of them do not understand how serious the problem is for the average retiree.

What Can Individuals do to Control Their Medicare Costs?

In addition, there are several actions which individuals can take to help control their Medicare costs.

First, make sure you are following all the correct rules so you obtain your Medicare coverage at the lowest possible cost, and do not pay an extra large premium because of a mistake.  The handy book, "10 Costly Medicare Mistakes You Can't Afford to Make," (Ad) will help you make sure you follow all their rules. One mistake, such as signing up at the wrong time, can cause you to pay higher premiums for the rest of your life.

Next, if you have a low income, see if you qualify for both Medicaid as well as Medicare.  Medicaid pays most of the out-of-pocket expenses for low-income retirees, and replaces the need for them to have a supplement or a drug plan.  This can be a substantial savings.  In addition, if you need long-term care in the future, Medicare will not cover it, but Medicaid will.   Applying for both can be very beneficial, if you qualify.

Another tip is to do comparison shopping every year during the open enrollment period to see if you are on the best and most affordable Medicare Supplement and Part D drug plan for you.  Talk to an agent and check the prices of the different plans, taking into consideration your current health problems.  There is a wide variety of plans and premiums available, including both HMO and PPO supplement plans.  Many pharmacies will help you compare different Part D plans to make sure you have one which will cover the largest number of your medications with the lowest possible co-pays.

Finally, you may want to consider switching from traditional Medicare, plus a supplement, plus a drug plan and move to an all-inclusive Medicare Advantage plan, instead. You may want to read my article, "Medicare Supplements vs. Medicare Advantage Plans: What are the Differences?" Medicare Advantage plans must cover everything that is covered under original Medicare, plus many of the same things you would get with a supplement and a drug plan, but with no additional premiums.  Sometimes, Medicare Advantage Plans have a small premium, but typically it is less than $50 a month. In other words, it is like getting an HMO supplement and drug plan for free or at a very low cost. Medicare Advantage plans can save you thousands of dollars a year in premiums.  The disadvantage is that you can only use the doctors and facilities which are part of their plan, except in an emergency.

With a little planning on your part and, hopefully, some help from government legislation and programs, many people have found that they are able to keep their Medicare expenses under control, despite the recent price increases.

Remember to pick up a copy of the cheap book, "10 Costly Medicare Mistakes You Can't Afford to Make," (Ad) to learn how to avoid mistakes and keep your Medicare costs as low as possible. 

Show your support of our country with one of these patriotic t-shirts with the words "America the Beautiful" and a photo of Laguna Beach, California covered in American flags.

You can find these shirts, in red, white or blue backgrounds, and other gifts for retirees and and their families at my Etsy Store, DeborahDianGifts.  Check it out here:

Enjoyed this post? Never miss out on future posts by following us.  You will receive one weekly email containing the most current post. 

If you are interested in learning more about financial planning, Social Security, Medicare, where to retire, common medical issues as you age, travel and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission at no extra cost to you.

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Photo credits: Amazon book cover, Kaiser Family Foundation, and Google Images


Friday, January 7, 2022

WW - Weight Watchers Personal Points Program - My Review

Like many people, I have dropped in and out of Weight Watchers several times over the past couple of decades. During that time, I have seen many changes as the organization made improvements to their program. The older I have gotten, the more I realize how much I benefit from their weight loss plans.  A couple of years ago, they changed from calling themselves Weight Watchers and switched to simply being known as WW.  They did this in order to stress more overall health and wellness, and not just weight loss. I like the new wellness approach.

Recently, WW also made a bold move to give everyone an individualized eating plan, based on each person's personal food preferences.  After using a variety of WW programs over the years, I have found this one to be the most effective plan, yet.  

Over the past year, I lost about 10 pounds on the old WW plan.  Since beginning the WW Personal Points Program, I lost an additional 10 pounds in just a couple of months, and lost it more easily than I have ever been able to before.  I even managed to lose weight during the Christmas and New Year's holiday, despite the fact that there were a couple of days when I definitely overate. No wonder I like this new plan!

You can sign up for WW, or look over the program choices, by clicking on the link below. Or, read more about the program, below, to see how the new program works. (Ad)

What Everyone Has in Common on the WW Personal Points Program

For the first time in my experience, users are able to earn extra food points by doing things such as drinking 60 ounces of water a day, or eating a cup of non-starchy vegetables.  Increasing the amount of plain water and vegetables we consume seems to be making a huge difference.  If we fill up on water and vegetables, we are less likely to want to fill ourselves up with sweetened beverages and unhealthy, high caloric foods.  

The program also allows us to earn extra food points by getting exercise.  If you wear a fitness tracker, like a Fitbit, (Ad) you can also link the WW App on your smartphone to your Fitbit or similar fitness app.  The exercise you get will automatically allow you to receive extra points so you can indulge in your favorite foods.  The more you walk, run, swim, or participate in other exercises, the more you can eat!

If you sign up to receive their emails, you will also get frequent ideas for wonderful recipes which are delicious and low in points.  Check out the recipes on their app for foods such as low-point chili, and crustless pumpkin pie.  I have made and enjoyed both. I have even served the pie to people who are not going to WW, and they loved it, too. 

I also like the fact that air-popped popcorn is now a zero point food.  Even if you dress it up with some toppings, it is generally a very low point, satisfying snack.

The app can also tell you your personal points for thousands of items from the grocery store or in popular restaurants.  It also has a scanner, so you can check out the number of points in an item while you are still in the grocery store!  They have made it easier than ever to find ways to eat the foods you love, while still losing weight.

How the WW Personal Points Program is Personalized for You

As soon as you download the WW app, it will ask you a few questions and help you set up your personalized food and activity plan, including your very own ZeroPoint foods list. 

For example, the app will ask if you are a diabetic. If you are, you will have a couple of points assigned to fruits you eat, to keep you from consuming too many sugary fruits in a single day.  You can still eat fruit, of course.  You will just have to count the points.  This is part of their wellness plan, to help you keep your blood sugar at appropriate levels.

The app will also ask you to choose the proteins and carbs which you would like to be able to eat as zero point foods. Yes, you get to choose your own zero point foods, from their approved list, of course! In my case, I chose oatmeal, chicken or turkey breast meat, and eggs as my zero point foods.  If you don't like the choices you made the first time, you can always take the quiz, again, and make different choices. In this way, everyone is able to eat foods they enjoy, without worrying about the points.  Everyone's plan is unique.

The app will also suggest a reasonable exercise goal for you, and help you keep track of it.  Learn more about the new WW Personal Point Plan on their site at: (Ad)

What About WW Workshops?

During the worst of the Covid pandemic, when most businesses were closed down, I used the WW app Digital Plan only and did not attend any virtual workshops, although they had a number of choices available.  

However, now that my local WW site has opened up again, I have begun attending the workshops once a week. I find them inspirational and encouraging. 

Whichever choice you make, you can participate in WW and use the app in whatever way works best for you.

Whether you stay at home or attend meetings, you will still get encouraging emails, opportunities to purchase low point snacks and cooking tools which you can buy either at a workshop or online.  Often, they have sales. 

What Other Incentives do they Have?

As you earn points, you will see a little "gift box" at the bottom of your app. If you click on it, you will discover that you can earn a wide variety of gifts.  I have earned jewelry, socks, water bottles, a bluetooth speaker, and other fun items from the WW App.  I also used some of my points to donate meals to a charity.  

In addition, you can find daily workouts, meditations, and suggestions on how to change your habits on your app. It is truly a wellness program for your whole body!

How Can You Get Started?

You can join me at WW by clicking on the link below! (Ad)

Once you click on the link, you will have your choice of whether you want a simple Digital Plan (which I used during the pandemic), or Digital 360 which gives you extra support, or Unlimited Workshops + Digital, which is what I currently use.   All of the choices include the invaluable WW app.  Most of the time, you get a discount when you first join ... a free month or a lower price for the first few months.

Good luck to you. I hope you enjoy the program as much as I do!

Take time to relax and enjoy your morning coffee or tea even more as you sip it from this lovely mug, covered in hydrangeas with the words "Happiness Blooms in my Garden." It's available in either 11 ounce or 15 ounce sizes.

You can find these mugs and more gifts for retirees and others at my Etsy Store, DeborahDianGifts.  Check it out here:

Enjoyed this post? Never miss out on future posts by following us.  You will receive a weekly email with the most current post.
Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission at no extra cost to you.  If you use my link to sign up for Weight Watchers, we may both receive a discount.  However, my review is NOT based on this benefit.  I truly have belonged to Weight Watchers for years, and love the program.

If you are interested in learning more about our health as we age, financial planning for retirement, where to retire, Social Security, Medicare, common medical issues as you age, and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

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Photo credit: Google Images: Weight Watchers