Showing posts with label retirement planning. Show all posts
Showing posts with label retirement planning. Show all posts

Thursday, December 15, 2022

Positive Aging and an Easier Retirement


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If you are over the age of 60, you have probably looked around at your friends and casual acquaintances and realized that not everyone ages the same, and not everyone has an easy retirement.  Of course, most of us want to definitely be in the group that is active and doing well when we reach our 70s, 80s and beyond, but we may think it is our of our hands.

While it might seem easy to just shrug our shoulders and say, "Some people have better genes," there are actually quite a few things we can do to improve our odds of living longer and more comfortably than many of our peers. It really is possible for many people to continue to enjoy their lives and feel "Forever Young," at least for a couple of decades after retirement.  So, what do you have to do? 

According to the AARP Bulletin in June, 2022, there are several ways to improve the chances you will have a better future after retirement.  Here's a guide to their tips for positive aging and an easier retirement.

1. Get regular medical check-ups.  Nearly every private insurance and Medicare plan includes a free annual wellness visit.  When you go to the doctor, you are likely to get vaccine boosters and screenings for a variety of illnesses which, if caught in time, could be treated and, possibly, cured.  Don't be surprised if they recommend vaccines for the flu, Covid, shingles, pneumonia, tetanus and whooping cough, as well as screenings for breast cancer, colon cancer and other common health problems.  Simply avoiding those illnesses could improve the quality of your life as you age. 

2. Get regular dental care.  The AARP article asked, "Could you pick your dentist out of a line-up?"  While that is a humorous way to put it, the truth is that many senior citizens avoid the dentist until they are in pain.  By then, they may have done a lot of damage to their mouth and the rest of their body. If you have gum inflammation, for example, it increases your risk of heart disease. There is also some evidence it can lead to some types of cognitive decline.  Research also shows that the more teeth you have at age 70, the longer you are likely to live. 

3.  Stay physically active. Everyone should try to get at least 30 minutes of exercise a minimum of five days a week.  Get more if you can.  Any kind of movement counts, including walking, golf, housework, dancing and gardening.  Just get out of your chair and move as much as you can, as often as you can.

4.  Make your home as safe and accessible as possible.  Do you have a one-story home or a master bedroom on the main floor of the house?  Is your shower large enough for you to add a seat and sit down if you get light-headed?  Are there grab bars conveniently located by the bathtub?  Are light switches low enough to reach, even in a wheelchair?  Are the doorways large enough to accommodate a wheelchair or walker?  If you cannot answer "yes' to all these questions, you may either want to make some renovations, or move to a senior community which is better suited to keeping residents safe and comfortable as they age.

5.  Do you have a plan for when you cannot drive? Many people lose the ability to drive as they age, whether it because of diminished vision or other health problems.  How will you handle this, if it happens to you?  Is there a convenient bus service in your area?  Could you use a golf cart for short local trips? Would a motorized wheelchair be feasible? Have you learned how to order groceries and other services on the computer?  Even if you don't need to give up driving, yet, you should see what is available in your area so you know what to do in an emergency.  

Practice ordering your groceries online, occasionally.  I frequently order my groceries through Amazon Fresh, and love it!  I've written another post with detailed instructions about it, which you can find, here:  "Ordering Groceries from Amazon Fresh Can Help Many Seniors."  Check it out and make sure you are ready to use it whenever you cannot easily get out to the store in person. 

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You may also want to do your shopping for other things online. To help, I have opened the DeborahDianGifts gift shop on Etsy where you may be able to find items for your own home, or gifts for your friends and family members, including jewelry, t-shirts, tote-bags, coffee mugs, hats, LGBTQ gifts, and gifts for people in 12 Step Recovery programs, like AA and Alanon.  Most items are priced between $15 and $40. You can find unique gifts there, and in other online shops, for most people you know, without having to travel to a mall or department store.

Learning to shop online is one way you can safely remain in your home as you age, whether or not you can drive.

6.  Stay busy and active.  Even if you cannot drive, it is important to have regular planned activities and a purpose to your life.  The more activities and projects you have, the longer you are likely to live.  Just because you have stopped working, it does not mean you should sit home and watch TV.  Instead, record your favorite shows and get active doing other things.  Walk the dog.  Take an exercise class. Meet friends for lunch or coffee. Volunteer at your place of worship, your favorite charitable organization, or the local food bank.  Write a book.  Learn a new language.  I could go on and on, but you get the idea!

7.  Take control of your finances.  While you cannot control everything in your life, nearly everyone has some control over how much they spend in comparison to how much income they have.  If your spending exceeds your income, the sooner you change things the better off you will be.  If you aren't sure where to start, go to and use AARP's free online digital retirement coach, Avo.  In a few minutes, it can give you a personalized retirement action plan.  If you still need more help, meet with a financial planner through your bank, credit union, or pension plan.  You can also find financial planners through, or

8.  Plan for the best and prepare for the worst.  Get to know the local assisted living facilities and home care agencies in your area.  You can Google a list of them, or get a list from the local senior center.  Then, check them out when you have the opportunity. Read the online reviews. Do you know someone who had to spend two weeks in assisted living after hip surgery?  Did a neighbor need a caregiver either temporarily or permanently?  Ask them questions. What did it cost? How much help did they get?  Find out what they liked and did not like about the services they used, and what they would have done differently.  Armed with this information, you will be better prepared if the time comes when you need a little extra help. 

9.  Put together an emergency phone list.  Everyone needs at least one person they could call in the middle of the night in an emergency, whether that is an adult child, a neighbor or a friend.   Put several names on the list for extra peace of mind.  Post the list on the refrigerator, along with your medical information, so you have it in a handy place if you ever need the EMTs to come to your home. They will also ask for a list of your medications, when they show up.  Remember the Scout motto:  Be Prepared!

Once you have done all the above things, you can relax and simply enjoy your retirement.  You've done everything you can to assure yourself that you have prepared as well as you can for the future!

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If you are interested in learning more about saving money, 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.

Source:  Facts about aging from the June 2022 AARP Bulletin.

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Friday, April 2, 2021

Financial Planning Tips for Retirement - What the Experts Recommend

How much thought have you given to your financial planning?  Do you know how much money you will have available to you in retirement?  Have you calculated whether or not your savings will last the rest of your life? Have you considered the impact of inflation on your financial planning?  Annual expenses usually rise faster than increases in your Social Security benefits.  Have you allowed for that in your financial planning?  Are you also prepared for periodic downturns in the stock market?  Are you ready for unexpected emergencies?  

While no one can be 100 percent sure they have planned for every eventuality, it is smart to be as prepared as possible when you enter retirement.  If you are already retired, it is shrewd to periodically review your plans and be certain you are still on track to maintain your current standard of living for the rest of your life.  Reading a book such as "Retirement Heaven or Hell: Which Will You Choose?" can help you make sure you are well prepared for all aspects of retirement, and that you are staying on track.  

What are some of the specific tips financial experts have for retirees?

Protect Your Financial Security in Retirement

Keep six to twelve months of living expenses available - While you will want to invest most of your retirement savings, it is also smart to set aside six to twelve months of living expenses in an easy-to-access account which pays you some interest.  This money does not need to cover all your living expenses, since presumably a portion of what you live on will be covered by your Social Security benefits and/or any fixed pension you may have.  However, if you need additional funds each month in order to live, you want to set enough aside money so you will not need to sell stocks or bonds when the prices are low.  Having this money set aside will also give you peace of mind as you go through the ups and downs of your later years. It is important to remember that this money is specifically earmarked for living expenses.  You don't want to start spending it on travel or other expenses you may have.

Set additional money aside for planned expenses - Many financial advisors recommend that you set aside 1 to 2 percent of the value of your home every year to pay for future maintenance and repairs.  If there are other expenses you expect in the years after retirement, such as buying a new car, travel, or a potential homeowner's association assessment, you may want to set that money aside at the start of your retirement, too, so you are not caught by surprise.

Create a realistic retirement budget - How much money will you need to meet your basic expenses during retirement?  Make sure you do not forget to budget for the taxes you may have to pay on IRA withdrawals.  Then, determine whether you have saved enough money to cover those expenses for 25 to 30 years after you stop working.  If your savings will not last at your current level of spending, cut your expenses immediately at the start of your retirement.  Do not wait until you are in a desperate situation and then try to cut back.  

Most financial planners recommend that you start your retirement withdrawals by taking no more than 3 percent a year out of your savings to add to your Social Security benefits in order to cover your living expenses.  You can gradually increase this amount, but only by about 3 percent a year. In other words, 3 percent the first year, 3.09 percent the second year, 3.18 percent the third year, etc.  In this way, your savings should last 33 years or more after you retire, since presumably you will also be adding interest and/or dividends to the principle amount over the years.  If your savings will not generate enough income to meet your needs, in addition to your Social Security, you need to make changes to your lifestyle as soon as possible. Otherwise, you could run out of money in your 80s or 90s.

Meet with your insurance broker - Do you have enough life insurance to cover your funeral expenses and make up for the loss of family income in the event you die before your spouse?  Should you get long-term-care insurance to pay for assisted living or a nursing home for the last few years of your life?  You do not want to over-insure your life during retirement, since you are probably not supporting children. However, a small amount of life insurance could help provide financial security to you and your spouse.   

In addition to life insurance, ask your agent if you are carrying enough homeowner's insurance, including insurance to cover disasters such as floods or earthquakes.  An insurance broker can help you decide how much insurance you need and what size premiums will fit into your budget.  .

Choose the best Medicare plan to meet your needs - Once you reach age 65, you have two different choices you can make for your Medicare coverage.  

1.  You can choose a Medicare Advantage plan, which covers virtually all your medical needs.  You may little or no premiums over the cost of original Medicare, but you will have an annual deductible and co-pays.   For most people, this is the least expensive option, but you will be limited to only using doctors in your network, except in an emergency.  Ask your current doctor if there is a Medicare Advantage plan which they accept.  Then, you can use this less expensive option, while keeping your current physician.

2.  Or, if you want more freedom in choosing which doctors you will use, you can choose to stick with original Medicare, which covers 80% of most medical expenses, and then you can buy a Medicare Supplement and drug plan, which will cover most of the additional 20% which doctors charge.  However, the supplement and drug plan will require you to pay premiums in addition to your Medicare premiums, and those premiums usually make this the more expensive option.  Depending on the supplement you choose, you may or may not have a deductible and co-pays.  

It is highly advised that you choose the plan which will help you stay within your budget and meet your medical needs.  In addition, I also recommend that you read "10 Costly Medicare Mistakes You Can't Afford to Make."  It contains very useful information and is written by a Medicare broker who is licensed in nearly every state.  

Meet with a financial planner to decide how your savings should be invested - How much of your money should be in stocks and how much in bonds?  How will you diversify?  Will you follow Warren Buffet's advice to retirees and put your savings in a variety of index funds?  Once your money is invested, do not simply forget about it and assume everything will stay the same.  Meet with your financial planner at least annually and evaluate each holding you have to determine if it is still generating the growth and/or income you expect.  Re-balance your portfolio periodically.  Strive to live within your means and follow the general financial plan you set up when you first retired.

Do not become a victim of a scam - Sadly, many senior citizens fall for scams in their attempts to get an unusually high return on their money.  Often, this causes them to lose all or most of the money they have saved over a lifetime.  Remember: If it sounds too good to be true, it probably is.  Stick with reputable companies and well-known investments.  

In addition, do not "loan" money to people, especially those who contact you through the internet or on dating sites.  It is very unlikely you will ever get back any of the money you loan others.  If you cannot afford to give your money away, do not loan it. Finally, ignore unsolicited phone calls and emails.  If you want to make a purchase, initiate the contact yourself, not because someone contacted you.  A very high percentage of unsolicited phone calls and emails are cleverly disguised scams.  

Read up on retirement planning - It is always a good idea to study different retirement planning programs and choose the one which you think will work best for you.  For example, you may want to occasionally read popular books on financial planning for retirement. 

If you follow these suggestions, you may not be able to avoid every possible financial disaster, but you will have substantially lowered your risk of running out of money during your lifetime.  In fact, you may even have some money and other assets left over to leave your loved ones.  You will also be able to sleep better and be more relaxed when you know you have planned your retirement well.

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Tuesday, March 5, 2019

Shocking Financial Facts about Retirement

How financially prepared are you for retirement?  Are you doing as well as the average aging Baby Boomer or are you falling short?  Have you thought about all the issues which could affect your financial situation?  Many people wonder how much it will cost them to retire, how long they need to be able to support themselves after they stop working, and what financial issues they need to consider when they reach retirement age.

Below are some shocking statistics about how people are doing in preparing for retirement in the United States.  These statistics may reassure you, because you have planned well, or help you see where you could make some improvements.  Either way, they should help you have fewer surprises when you retire.

If this information alarms you, you may want to read a helpful retirement guide such as The Five Years Before You Retire.  It is a great way to get your financial planning on track and help you avoid some of the pitfalls mentioned below. 

Scary Retirement Statistics for American Baby Boomers

You may need to work after retirement.  About 9,000,000 senior citizens are still working, according to 2017 statistics.  This number has climbed dramatically over the past few decades, especially since the last recession, which was a serious setback to many Baby Boomers.

You should probably save more money before you stop working.  Approximately 21 percent of retirees have less than $1000 in retirement savings, according to the 2017 Retirement Confidence Survey.  More than a third of retirees have less than $50,000.

You need to be prepared to live for two or three more decades.  Retirees are living longer than ever and many can expect to live 20 or 30 years after they retire.  It is estimated that one quarter of all 65 year olds will live past the age of 90.  One in ten 65 year olds will live past the age of 95.  A significant number will live past the age of 100.  Unfortunately, it is likely that many of those people will run out of money long before the end of their lives.

If it isn't too late, you should probably start saving money at a younger age.  Three-fourths of retirees are concerned that they do not have enough money saved for retirement.  Most of them regret they did not save more and/or that they did not start saving when they were younger.  This is helpful information for those people who are still years away from retirement.  However, even if you are close to retirement, it is not too late to begin to save more now so your retirement years will be more comfortable.

You may not work as long as you expect to.  Inadequate savings is a particularly serious problem because nearly one-half of retirees report they left the work force younger than they expected to, either because of health problems or a layoff at their job.  Some left their jobs before they expected to because of other issues, such as the need to care for another person in their family. 

You may find it hard to survive on your Social Security benefits.  Small amounts of money in retirement savings accounts might not be such a serious issue, if the majority of people received substantial Social Security benefits.  Unfortunately, while only one-third of Americans expected Social Security to be their major source of retirement income before they retired, the reality is that two-thirds of retirees discovered Social Security actually turned out to be their major source of income.  This is a serious problem for those who only receive the average amount of Social Security, which is about $1461 a month in 2019.  Remember that millions of people receive even less than the average benefit.

In addition, most people do not receive the full amount of their promised benefit.  Medicare premiums are subtracted from Social Security benefits, reducing those benefits by $135 a month, or more.  If you purchase a Medicare Supplement, prescription drug coverage, dental and vision plans, etc., your Social Security benefits may be substantially decreased before you begin to pay for food, housing, utilities, out-of-pocket medical costs and other bills.

Over time, you will also have to pay for occasional large expenses, such as the deductible on a hospitalization, purchasing a new car (or making repairs on an old one), replacing items in your home, etc.  This is why it is essential to have as much savings as possible before you retire. 

Fortunately, some retirees will have higher than average Social Security benefits. This is good news for people who were successful both during their careers and in preparing for retirement.  If you had a high income during your working years and postponed your retirement until age 67 to 70, then your Social Security benefits may be in the range of $2,700 to $3,700 a month.  However, those people are also the ones who are likely to have the most savings.  The average retiree does not fall into this category.

Social Security and Medicare are in financial trouble.  The government continues to postpone dealing with the problem that both the Social Security and Medicare trust funds are running out of money.  Although there will always be money from current workers which can be used to pay a significant portion of the promised benefits, future retirees may see their Social Security benefits cut and their Medicare premiums rise. The only way an individual can protect himself from this potential disaster is to have savings set aside.

The long-term Social Security income for retirees tends to fall behind the inflation rate.  Over the past few years, cost-of-living increases have been non-existent or very small and have often been offset by increases in Medicare premiums.  As a result, many retirees have found it increasingly difficult to cover their housing and medical expenses. Look back at your own life.  How much have prices for cars, homes, utilities and food increased in the past 30 years?  If you live another 30 years, you can expect the cost-of-living to increase just as much, but your Social Security benefits may increase very little during the same period of time.  You need a plan for how you will cover your expenses in another 20 or 30 years.

Old student loans may derail your retirement plans.  A lack of savings is not the only financial burden for retirees.  Student loan debt for people over the age of 60 has increased between 20 and 45 percent over the past five or six years.  A significant number of senior citizens are retiring while still paying off the student loans they took out to help get their children through college.  This can be a significant financial burden, especially when they may also still have a mortgage, credit card debt, auto loans or similar expenses at the time they retire.

Many senior citizens help their adult children financially.  Whether you make their student loan payments, their car payment, or help pay for your grandchildren's college education, a significant number of senior citizens have discovered that they continue to help their adult children financially for years after retirement.  This can cause retirees to deplete their savings even faster than they expected.

A divorce could be a major financial setback.  Our children and our debts are not the only causes of financial stress during retirement.  Approximately one-fourth of divorced retirees report they are financially worse off than they would have been if they had not divorced.

You could be shocked by the high cost of medical care as you age.  One financial issue which surprised roughly 44 percent of retirees was that their medical expenses were as much as 27 percent higher than they expected them to be. In fact, the average 65 year old couple can expect to spend $280,000 for out-of-pocket healthcare costs over the remainder of their lifetimes.

Readers of this blog may want to use the tabs or pull-down menu at the top of the page to find links to a number of articles on the Medicare / Social Security tab to learn how to obtain their medical care for the lowest cost.  In particular, they may want to consider a Medicare Supplement which is an HMO, or they may want to check out a Medicare Advantage plan.  Do your research, so you are not surprised by this potentially huge expense during retirement.

Sources:  The Motley Fool compiled many of these statistics from various government and insurance company sources.  You can find more details at:

Other information was based on government records and the experiences of the author and her retired friends.

If you are interested in learning more about Social Security, Medicare, finance, where to retire, common medical problems, 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.

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Wednesday, September 13, 2017

Financial Solutions for Retirement Problems

The best laid retirement plans can sometimes be derailed by a variety of financial challenges. Sometimes you simply may not have planned well.  You may have over-estimated your future income and underestimated your future expenses.  However, even if you have planned carefully and spent years trying to put something aside for retirement, a recession, high medical bills or a family emergency can result in a major setback.

The good news is that no matter what the reason for your financial problems, there are actions you can take to salvage your retirement. The most important thing you can do is face the issue head on and take action as soon as you realize you have a problem.  Below are a few common challenges which could hurt your retirement, along with possible financial solutions.

Not Enough Money in Your Retirement Savings Accounts

According to an article titled "Money Missteps" in the April 2017 AARP Bulletin, as recently as 2013 almost 30 percent of U.S. households headed by someone over the age of 55 did not have a retirement savings account or a future pension.  No money saved at all for retirement.

The sooner you recognize and deal with your financial shortfall, the better off you will be.  As frequently mentioned in other posts in this blog, you have a number of choices:  Continue working until age 70 before you start to collect your Social Security benefits, supplement your Social Security with a part-time job, downsize your home, move to a less expensive area, or get a reverse mortgage (assuming you have equity in a home.)  Most importantly, you want to avoid building up debt in order to finance your retirement.  Eventually, that will only make your situation worse.

You Have Retirement Savings But It is Dropping in Value

As we all discovered during the Recession of 2009, sometimes our retirement savings accounts can lose money faster than we ever expected.

Depending on your situation, you may want to talk to a financial planner to discuss your overall retirement plan and investment portfolio.  They could recommend moving your savings into a different mutual fund or into a safer, less volatile investment.  In addition, they may suggest you reinvest all the income from your retirement savings and add more money until you are able to re-build the value.   This could delay your retirement plans, but will probably be worth it in the long run.

You Have No Equity in Your Home

Some people hope they will be able to take out a reverse mortgage against their home equity to finance their retirement.  However, what can you do if your home has lost value and you now owe more than it is worth?

If you can afford the house payments and the house is in good repair, you may want to continue making payments until inflation and your payments rebuild your home equity.  It could take a few years, but might be worth it in the long-run.  If it is not an option for you to keep making the payments, you may be able to refinance your home through the Federal Home Affordable Refinance Program at  If you do not qualify, you could try to get your bank to agree to a short sale.  That is less damaging to your credit than waiting for foreclosure.

You are Buried in Debt

Unfortunately, some people experience a job loss, a serious medical problem, a natural disaster or other financial catastrophe in the years just before they hoped to retire ... or right after they have begun their retirement.  If they are too sick or too deeply in debt to recover, they may believe they have no hope to ever retire and/or may have to spend the rest of their life drowning in debt.

Medical bills are the most common reason for bankruptcy in the United States, especially for people who are near retirement age or who have already retired.  If you have suffered a severe financial setback which leaves you deeply in debt, bankruptcy may be the best option for you.  In fact, it may be the only way you can stay out of extreme poverty as you age, and the future financial stress could potentially worsen your health situation.  Talk to a lawyer and see if bankruptcy or debt reorganization is an option for you.  Many well-known figures have had to resort to bankruptcy in order to save their retirement.  Ordinary people should consider this option, as well, especially if you have so much debt that you know you will never be able to pay it off.

You Are Still Supporting Your Children or Grandchildren

An estimated 3 million people over the age of 60 are supporting their grandkids.  An estimated 60 percent of people over the age of 50 are financially supporting an adult child or other relative.  An unknown number of parents and grandparents extend some kind of financial aid to a family member on an irregular basis.  These numbers show that the vast majority of people who are retired or near retirement age are helping to support someone else.  If the burden of supporting other family members is derailing your retirement, you may need outside help in dealing with these problems.

If you are a grandparent supporting your grandchildren, in some states you may qualify to become the foster parent of your grandchildren, which would make you eligible to receive financial aid from the state.  In addition, you may be able to apply for housing vouchers, SNAP (food stamps), and other types of aid.  You are performing a lifesaving service for these children and should not be embarrassed to ask for financial help.

If helping your adult children or other relatives is putting your own well-being and retirement at risk, you may need to solicit assistance in setting boundaries with these people.  You can ask other relatives or your financial advisors to help you explain to these dependents why you are no longer able to give them money.  If you do decide to loan them money, put your agreement in writing and charge interest of at least 2 percent.  If they default, at least you will be able to deduct it as a "non-business bad debt" on your taxes.  However, your best bet is to avoid giving them money in the first place.

If your adult child or other relative is also in a bad financial situation, you may see if you can help them apply for various forms of financial aid ... housing vouchers, food stamps, disability, unemployment, welfare, SSI, etc.  If necessary, take them to your local social services department or homeless shelter to see if there are programs in your community which can help people who are homeless or nearly homeless get back on their feet.  Your goal is to make these relatives less dependent on you and more dependent on themselves or government aid.  After all, you will not be around to support them forever.  At some point, they need to have a plan to support themselves, even if that means they need to rely on disability and food stamps.

If you are looking for additional information about retirement planning, common medical problems, Social Security, Medicare and more, use the tabs or pull-down menu at the top of this page to find links to hundreds of additional articles.

If you want an overview of retirement planning tips, watch for my book Retirement Awareness: 10 Steps to a Comfortable Retirement, which will be available from Griffin Publishing in 2018.

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Wednesday, May 17, 2017

Your Pre-Retirement Checkup

If you are getting close to retirement, it is time to do a pre-retirement checkup.  You want to feel confident you will have enough retirement income to support yourself and your dependents; you also want to have a plan to make sure your money lasts the rest of your life.  While no one can guarantee your assets will last a lifetime, you do not want to retire until you feel fairly certain you will not outlive your money.

What is involved in a pre-retirement checkup?  How do you make sure you are ready to retire?

Organizing a Pre-Retirement Checkup

Of course, you should have been looking over your retirement plans throughout your working years, not just when you are about to retire.  The earlier you started planning, the more likely you are to have a satisfying retirement.  However, about five or six years before you think you will retire, you need to evaluate your plans more carefully.

Start with your annual Social Security benefit estimate.  How much income do you expect to receive at different potential ages?  Would you be better off if you postponed your retirement by a year or two, or even until age 70, in order to increase your income?  Remember, if you are married and have been the primary breadwinner, your spouse will also be affected by your decision.  The longer you wait to retire, the higher your income will be, as well as the income of your spouse.

Next, look at the size of your retirement savings account.  Many financial planners recommend retirees start by only withdrawing 3 percent a year, gradually increasing that amount by 0.03 percent a year, so they are sure their money will last the rest of their lives.  If you add that amount to your Social Security benefits, will you have enough income to maintain your current standard of living?

Do you have any other income which will supplement your Social Security and savings withdrawals?  For example, are you eligible to receive a pension in addition to Social Security or will you have a small income from a hobby, part-time job, rental property or other source?

Evaluate Your Living Expenses

Once you have a fairly good idea of how much income you will have, it is time to evaluate your current cost-of-living.  Are there expenses which you expect will be lower after you retire, including commuting costs, eating out, and buying work clothes?  Are there some expenses which you expect to be higher, such as taking trips or eating more meals at home?

If your estimated retirement cost-of-living far exceeds your future potential income, you may consider relocating to a less expensive area, getting a smaller home or taking other steps to reduce your expenses.  You may be able to make some of these adjustments before you retire and use the money you save while you are working to build up your retirement savings.

Talk to a Financial Planner

Even if you believe your retirement plans are in good shape, this is a good time to meet with a financial planner or investment advisor.  You want someone who will charge you an hourly fee to review your investments or a flat fee to manage your assets, and not someone who relies solely on commissions from the investments he sells you.  Ask the advisor to look over how your retirement assets are invested and recommend changes which could increase the growth of your assets over the remaining years before you retire.  Once you retire, you may want the financial planner to reallocate your assets in order to increase your income and reduce your risk.

In addition, a financial planner can help you determine how much more money you might need to put aside in savings during your remaining working years, what age you should begin to collect your Social Security, what changes you need to make to your lifestyle, and the tax ramifications of making withdrawals from your IRA or 401(k).  The financial planner can also help you decide if some of your current assets should be placed in a Roth IRA, to reduce your future taxes.

After going through all the numbers, first by yourself and then with a financial planner, you will feel much more confident about your retirement plans. Your goal is to be comfortable and confident when you stop working.

For an overview of retirement planning, watch for my book Retirement Awareness: 10 Steps to a Comfortable Retirement which will be published by Griffin Publishing in 2018.

If you are interested in learning more about financial planning, where to retire, common medical issues and changing family relationships, use the tabs or pull-down menu at the top of the page to find links to hundreds of additional articles.

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Wednesday, March 29, 2017

How to Prepare Financially for Retirement

Whether you are 30, 40, 50 or 60, everyone needs to take steps to plan to retire someday.  Of course, the younger we are when we start, the better prepared we will be to retire when the time comes.  No matter what your age, what are some of the things we need to do in the years before we stop working?  How can we make sure we are financially prepared when the time comes?

Steps in Retirement Planning

Save Money in an IRA and/or a 401(k) - If you work for an employer with a 401(k) or 403(b) plan, take advantage of it.  Have your employer withhold some of your pretax income and put it towards your retirement.  Some corporations will even match the donations of their employees, which means you will be able to accumulate wealth twice as fast! 

The younger you are when you start saving, the better off you will be when you finally stop working.  However, even if you are in your 50s when you start, you may still be able to put aside 10 to 15 years worth of savings, which could make a huge difference in the quality of your retirement.

If you are self-employed or do not have a 401(k) or 403(b) plan where you work, save money in an IRA instead.  You can even have both, if you have enough excess income.  However, if you save too much money, not all of it may be tax free.  It is still beneficial to save as much as you can towards retirement.

Talk to a Financial Planner about How to Invest Your Savings - If you are in a 401(k) or 403(b), your employer may give you a menu of mutual funds, tell you to pick one or two, and that is where they will invest your contributions.  The same thing could happen with an IRA, if you decide to set up an automatic withdrawal and investment program.  Most of us could use a little help in choosing the best investment plan, however.  It will probably be worth your time and money to talk to a certified financial planner or investment advisor representative.  Get their recommendations on how to invest your savings for growth when you are young, and for income when you get ready to retire.  Be sure to diversify your investments so you do not have too much money in one type of fund or investment.

Pay off Your Debts As You Approach Retirement - Nearly everyone will have a more comfortable retirement if they keep their debts to a minimum after they retire.  The closer you are to retirement, the more important it is to have a plan to eliminate all your student loans and credit card debts.  If you can also pay off your home and car, you are going to have a lower cost-of-living once you are living on Social Security and your savings.

Get an Estimate of Your Future Social Security and Pension Income - Everyone should periodically get estimates of how much they can expect to receive in the future from Social Security benefits and any employer funded pensions.  Everyone needs to know how much income they can expect to have after retirement. You also need to understand how much you could increase your income by postponing your retirement by a few years.

Come Up With a Retirement Budget - Estimate how much it will cost you to live after you retire.  If you have a large gap between your current expenses and anticipated income, investigate the steps you can take to reduce your expenses by downsizing, for example, and how you can increase your income by taking steps such as postponing your retirement age.  If necessary, you may also consider getting a retirement job which will help increase your income.  It can be a fun job, as long as it produces enough income to make your feel more financially secure.

Talk to Your Financial Planner or Advisor about Turning Your 401(k) or IRA into Income - Once you are ready to retire, find out how much money you can withdraw from your IRA and still be assured you will have enough money to last the rest of your life.  Discuss the 3 percent withdrawal rate, dividend funds, annuities, bonds and other investment vehicles which will produce an income.  You may want to invest in a variety of income producing products to give you the most financial security.

If you plan carefully and realistically, you can feel confident you are financially well-prepared for retirement when the time comes.

Watch for my book, Retirement Awareness, due to be released by Griffin Publishing in 2018. It will go into more detail about how to prepare financially for retirement.

If you are interested in more information about financial planning, where to retire, Medicare, Social Security, medical problems and more, use the tabs or pull-down menu at the top of the page to find links to hundreds of additional articles.

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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.


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.

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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.

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Monday, April 14, 2014

Are You Too Young for Retirement Planning?

When I was in my twenties, retirement was the furthest thing from my mind.  While my husband and I had a few investments and bought our first home, we only had a vague idea about creating a long range plan.  In addition, we made several poor investment decisions at that stage of our lives which we might have avoided if we had been given the right information.  Getting our advice from other people in their twenties was not the best decision.

Our behavior back then is still common today.  Most young people do not put a lot of thought into what they will be doing in another 40 years.  It just doesn't seem real to them.

Unfortunately, when young adults wait too long to start their retirement planning, it will be very difficult for them to make up for lost time.  The advantages of techniques like compounding and dollar cost averaging are more effective when investors start at a young age.

As a result, when one of our daughters graduated from college a decade ago, we gave her the Suze Orman book which is available on Amazon at "The Money Book for the Young, Fabulous & Broke."

She liked the book so much that she purchased another copy of it to give to one of our other daughters.  Both of them continue to refer to the book frequently.

You can learn more about this book from the review I recently wrote on Squidoo:

One of the beauties of this book is that it provides far more information than simply helping young adults make good investment decisions.  It also helps them understand their credit score and gives them tips on making major financial decisions such as buying their first home and car.

While some of the information in the book may not seem directly related to retirement, any time we make a bad investment decision we are affecting our future ability to have a successful retirement.

Whether you are a young adult yourself or you are related to one, you may want to get a copy of this book.  No adult is too young to start planning for retirement!

If you are starting to think about retirement, you will also want to use the tabs at the top of this blog to find links to hundreds of other helpful articles.

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Thursday, March 27, 2014

Keeping Track of New IRA Rules

Are you looking forward to a retirement that includes travel, playing golf, pursuing your hobbies and feeling comfortable about your financial situation?  If so, the sooner you start your retirement planning, the better off you will be.

There are a lot of different choices, however, and at first they may seem confusing.  In addition to deciding whether you need an IRA, a Roth IRA, a 401K or a combination of several retirement plans, you also have to decide which broker to use.  Even then, your retirement account decisions will not remain static.

It seems as if IRA rules are changing constantly, and 2013 was no exception.  The company that handles your IRA or Roth IRA for you should keep you up-to-date on all the annual changes and they should also let you know how the changes could affect the amounts you are depositing in your accounts each year.

Because of all the different choices that are available, I always encourage my readers to do their own research in order to have all the information they need to make wise decisions.   Having a good investment adviser is an important part of your retirement planning strategy.  Taking the time to compare their advice to what others are saying is just smart.

If you have not yet selected a broker to handle your IRA for you, the sooner you get started, the better off you will be when you are finally ready to stop working.  One website I have found that will help you compare brokers is IRA Success.  They have put together an excellent list of popular brokers including Charles Schwab, eTrade, Fidelity, Scottrade and others.  Their chart tells you the commissions rates, account minimums and IRA fees.  Using their chart is so much easier than contacting each company on your own, so I wanted everyone to have this direct link to the IRA Broker Comparison Chart.

I am also providing a link to an IRA contribution cheat-sheet that IRA Success also provides and updates annually.  The information they give on their cheat-sheet, as well as in some of their blog posts, is quite useful in helping you decide which type of retirement savings plan will best meet your needs.

You may also want to read a good book on investment savings so that you have a better understanding of the different types of retirement savings accounts and how to best take advantage of them.  I think the two books listed below are especially helpful and you can click on their titles to be taken directly to their Amazon page.  Read an excerpt from each book and their reviews and decide if one of these books would be helpful to you in dealing with your retirement planning:

Preparing for Retirement:  A Comprehensive Guide to Financial Planning
The AARP Retirement Survival Guide

If you have gone to the trouble to save money towards your retirement, you owe it to yourself to make sure you have a plan in place for maximizing your contributions, reduced your investment costs and increasing your principle.  Using the websites and books I have mentioned here are a great way to make certain you are on the right track!

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Sunday, March 9, 2014

Do You Think You Are Ready to Retire?

Retirement is your key to easy street. Right? It's not unusual for people to believe that all they need to do when they start thinking about retirement in their 60's is to decide when they want to quit their job and then do it.  It sounds simple enough.  However, if you want to save yourself time, frustration and money, there are a few things you really need to figure out BEFORE you turn in that letter of resignation.

In fact in some cases, such as deciding when to collect your Social Security or where you are going to live, making a decision too hastily can cost you thousands of dollars.  While you can change your mind regarding some issues such as where you want to live, there are other decisions, such as those you make regarding Social Security, that are permanent.  Once you have begun collecting checks, you can't go back and say "I didn't know I could have chosen another option that would have paid me more."  You are stuck with the first decision you made.

Consequently, I recently wrote an article on Squidoo called, "What You Really Need to Know Before You Retire!"

This article gives you information about the decisions you need to make before you quit your job, and it also gives you links to the best books to help you get the detailed information that you will need in order make the smartest decisions for you and your family.

Even if you are already retired, you may still want to read this article because some of the information in it can help people even after they have retired, especially if they are thinking about moving to a new location or they are trying to determine how to invest their savings in order to maximize their income.

As the official "Retired and Loving It" Contributor for the online magazine Squidoo, I frequently write articles for them on topics that I believe will also interest my readers here at  As an added benefit for my blog followers, I post links here on this blog to interesting Squidoo articles that I or my fellow contributors have written regarding topics such as retirement, aging and health issues.

Here's another link to my Squidoo article:

You can also find additional retirement information by checking out the tabs at the top of this blog. They contain links to hundreds of articles about where to retire in the United States and overseas, medical issues for seniors, financial planning, family relationships and more.

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Thursday, March 6, 2014

Warren Buffet's Retirement Advice

There are probably very few investors in the world who are better known or more successful than Warren Buffett.  His Berkshire Hathaway fund, headquartered in Omaha, Nebraska, has done very well over the decades.

According to the Motley Fool investment advisers, at a shareholder's meeting in 2004, Mr. Buffett was asked by a participant how to invest their retirement savings.  Here is a summary of his comments:

*  First, he said, he and his associates never recommend that people either buy or sell shares of Berkshire-Hathaway.

*  Instead, they recommend that nearly everyone should invest their money in low-cost index funds, and spread the investment out over a ten year period of time, buying a little at a time.  According to Mr. Buffett, people who do this will be more successful than 90% of the people who try to pick individual stocks.

* According to Mr. Buffet, by spreading out your investment in an index fund out over ten years, you are also taking advantage of dollar-cost averaging, which means that your investment costs will be averaged out over years in order to have an average cost that is as low as possible.

* In this particular interview, the only company that he specifically mentioned was the Vanguard Index Funds, because they are cheap and reliable.  Vanguard has a variety of funds, including an S&P 500 ETF (exchange traded fund), a Vanguard FTSE All-World ex-US ETF, and a Vanguard Total Bond Market ETF.   If you invest in a little of each, you will have an extremely balanced investment portfolio.  According to Mr. Buffett, these actions will give you "diversification across assets and time, two very important things."

*  In addition,  he recommended that investors read books by John Bogle.  He said that any investor in funds should read them.  To aid the readers of my blog in finding them, here is a link to the correct page:  John Bogle's books on

*  Mr. Buffett discourages investors from keeping all their money in cash.  While everyone should have some cash on hand for emergencies, according to Mr. Buffett cash will lose value over time, while the majority of businesses held by exchange-traded funds will become worth more over time.

If you are still at the stage of your life while you are saving for retirement, you may wish to read the books mentioned above, do your own research, and decide for yourself if you wish to follow Mr. Buffett's advice.  While no one investment decision is right for everyone, it is always a good idea to read the opinions of successful investors.  At the very least, Mr. Buffett's advice is likely to be far safer than some of the more risky investments that often tempt us with their promises of high (and often un-realized) returns.

Disclaimer:  I am not in the investment business; all recommendations mentioned in this blog are only presented here in attempt to present my readers with some of the options available to them.  All final investment decisions are purely the decision of my readers.


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Thursday, September 26, 2013

Retirement Planning Is a Three-Legged Stool

Shortly before my recent retirement from my long-time job for a local school district, I attended a retirement seminar that was designed to help employees make sure they are financially prepared to stop working.  One of the things the speaker told us was that retirement is a three-legged stool, with Social Security as only one of the legs.  Here is how he explained it:

As mentioned above, the first leg of your retirement stool is Social Security.  This national pension program was never intended to be the only way that retirees supported themselves during their senior years.  Since recipients only receive a median benefit of about $1200 a month, this is not enough for anyone to fully support themselves.  If you had a stool with only one leg, you might be able to balance on it for a short while, but eventually you would fall over.

The second leg of the stool is a pension, annuity or fund.  At one time, many private companies provided their employees with a pension.  Today, only a few private companies still provide this perk, although some public employees, such as non-certificated school employees, still receive a pension.  Pensions are complicated.  For example, I had a job in which I paid into both the state pension plan as well as Social Security.  Therefore, I am able to collect both.  However, many people (such as California teachers) are only able to collect one or the other, in most circumstances.  If you do not have a pension, you may wish to take a portion of the money you have saved in your 401K or IRA and use it to invest in an annuity or investment fund in order to provide additional income.  This is the second leg of your stool.  At this point you have income from Social Security and income from a second source ... a pension, annuity or mutual fund.

The third leg of the stool, as suggested by the speaker at the retirement seminar, is your savings.  This is money that is accessible and not tied up in an investment.  It is money you can use in an emergency.  Everyone should have an emergency fund.  The size should depend on your available assets and your income.

The retirement consultant did not discuss the fact that the majority of Baby Boomers do not have enough savings to invest in an annuity or fund, let alone have enough put aside for emergencies.

However, if he had talked about it, he would probably have suggested that Baby Boomers find a way to earn a little extra money after retirement, as well.  As you will see in the Money section of this blog, I have written several blog posts over the years about ways that retirees can continue to earn money after they retire in order to supplement their income.  (We might think of a retirement job as the fourth leg of your stool.)

I have also written posts about how to save money, including cheap places to retire in both the United States as well as overseas.

In addition, you may want to consider downsizing.  Many people who have a lot of equity in their homes decide to sell the house, downsize and use the money they now have to put in savings and invest in various ways.  This is how they get the other two legs of their "stool."  Some people choose to get a reverse mortgage.  However, as I have mentioned in the past, this can be a dangerous decision and should only be reserved for people who are quite elderly.

If you are hoping to retire and you haven't saved enough money, you may want to check out some of the posts listed in the index articles listed below:

Gifts, Travel and Family Relationships

Great Places for Boomers to Retire Overseas

Great Places to Retire in the United States

Health and Medical Topics for Baby Boomers

Money and Financial Planning for Retirement

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Thursday, August 22, 2013

Explore the Ed Slott Retirement Rescue Plan

On several occasions in this blog I have mentioned the fact that many Baby Boomers are not prepared for retirement.  I frequently encourage people to postpone their retirement as long as possible in order to maximize their Social Security.  I have also given suggestions to help readers find a fun retirement job.  However, for most people these actions will need to be supplemented with at least some retirement savings.  This reality may be discouraging to those of you who know that you have not done enough financial planning.  Fortunately, for most of us it is not too late to turn things around, protect our assets, and have a more financially secure retirement.  With just a little information and a few simple steps, you can get started on the road to a better retirement.

Ed Slott is a highly respected investment advisor, CPA and IRA specialist who was recently featured on PBS in a program called "Retirement Rescue."  In this televised program, he outlined what people should be doing in order to have a financially secure financial plan for retirement.  Listed below are some of the suggestions he has, as well as a link to Ed Slott's books from Amazon.  It wouldn't be fair to review his ideas without giving you an opportunity to buy his books directly, so he can profit if you decide to use some of his advice.

Avoid Taxes

No matter how much or how little you have saved towards retirement, you want to make sure you get to keep as much of it as possible.  Ed Slott recommends that you make a plan to minimize the taxes you will pay after retirement.  You don't want to give the government any more money than necessary.

Move you money from accounts that are taxed to accounts that will not be taxed.  Yes, it really is possible!  In fact, I've made this same suggestion in my blog in the past.  My husband and I recently moved our investments from a traditional IRA to a Roth IRA.  We paid taxes on the value of the investments we currently have in the account.  However, the investments we have can now grow and, when we withdraw the money in our 70's, we will not have to pay income taxes on our withdrawals.  In other words, we paid taxes on our retirement assets now so we won't have to pay taxes on them later ... which is exactly what Ed Slott recommends.  There is a waiting period before we can can begin to withdraw the profit on our retirement savings, but it is worth it to us.

Another advantage of the Roth IRA is that we will not have to begin withdrawing the money as soon as we turn 70 1/2.  Our money can continue to grow tax free until we want to withdraw it.  There are no mandatory withdrawal rules.

Mr. Slott also says that another way to reduce your taxes is by purchasing permanent life insurance.  There is a federal tax exemption for the proceeds of a life insurance policy.  This is a major benefit for your dependents, and can be particularly helpful for a spouse who is left behind when the breadwinner dies.  Mr. Slott believes that permanent life insurance is an investment.  The money that is paid in premiums grows tax free and you can tap into the value, while you are still alive, if you need the funds to help fund your retirement.  Whatever is left becomes cash to help support your dependents.  If you decide to buy life insurance for this purpose, make sure you are buying permanent life insurance that builds a cash value.  It costs more, but it can benefit both you and your heirs later on.  Since I am no insurance expert, you may want to read one of Mr. Slott's books in order to be certain your fully understand this option.

Minimize Your Investment Risk

Mr. Slott also believes that the majority of people should not rely on the stock market for their investments.  It is much too volatile and unpredictable for people who are retired or near retirement age.  He points out that far too many people lost a substantial amount of their retirement savings in the last stock market decline.  Consequently, he recommends that people put some of their money into annuities that will give them a guaranteed stream of income for the rest of their life.

One suggestion he has that intrigued me is to buy annuities in a Roth IRA.  This will provide a guaranteed income stream that is tax free!  He also points out that it is important that you use a reliable, well-known annuity company and respected money managers when you choose an annuity.

I have to note that annuities are one area that is controversial.  Some retirement specialists believe in annuities and others strongly believe that they are a bad idea and that you can do better if you invest your money conservatively in dividend paying stocks, government bonds or similar investment products.  You will want to consult your own investment adviser (or perhaps several) before making a final decision on which investment instrument is the best way to provide you with supplemental retirement income.  Some advisers recommend finding funds that pay dividends and also allow your principle to grow. 

A Better Approach to Saving Money

We all like to save money and this desire may cause some people to be reluctant to spend money on their retirement planning.  However, now is the time to spend the necessary money needed to invest in your retirement.  Pay taxes now; buy life insurance; buy annuities or invest your money in funds.  According to Mr. Slott, it is important to spend some money now, so that you can have a much larger retirement income later.

Reduce Uncertainty

We all want to avoid uncertainty about our future financial security.  Ed Slott points out that following his program will reduce or eliminate the amount of insecurity and uncertainty you will have about your financial future.  If you follow his recommendations exactly, it is true that you will have avoided uncertainly by avoiding taxes and buying annuities.  You will know exactly how much your assets are worth and how much income you will have.  This is why he says you can rescue your retirement by simply following his suggestions.

Avoid Inactivity

Finally, Ed Slott also says that one of the worst killers of retirement planning is inactivity.  If you don't take any of these steps to protect your assets and rescue your retirement, the inactivity could result in disaster.  The sooner you begin to take at least some of the steps mentioned above, the better your results will be.  No matter how old or young you are, everyone should sit down and make a plan that will maximize the amount of retirement income they will have after they retire.

Where to Get More Information

You will almost certainly want to get more specific information on how to follow this investment program if you decide to give it a try.  If so, you can use this link to order Ed Slott's Retirement Rescue books from Amazon.

Obviously, I cannot include all of the details of his plan in this blog post ... and it wouldn't be fair to Mr. Slott if I did.  However, I have found his advice to be so thoughtful and helpful that I wanted to be sure that my followers knew about it.  The whole goal of this blog is to make sure that as many people as possible have a satisfying, comfortable and fun retirement.  Financial insecurity will go a long way towards making sure that happens.

In addition, you may want to get information on other retirement issues by checking out the index articles below.  Each one contains links to a number of related articles on that topic:

Gifts, Travel and Family Relationships

Great Places for Boomers to Retire Overseas

Great Places to Retire in the United States

Health and Medical Topics for Baby Boomers

Money and Financial Planning for Retirement

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Photo of Ed Slot courtesy of