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

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

Public domain photo of money is courtesy of www.morguefile.com

Kolter Planned Communities for Retirees

In researching appealing retirement communities around the United States, I have discovered that there are relatively few builders who are involved in this niche market.  As a result, I thought it would be helpful to my readers to do a series of reports on some of the specific developers you may encounter while you are shopping for a retirement home.

When I posted about Cresswind at Lake Lanier recently, I discovered that the developer, Kolter, has also built several other very appealing communities in the Southeastern United States.  Here's a little information about Kolter and the various neighborhoods that they have built.  Not all of these communities are age restricted.  However, they all offer a variety of amenities such as clubhouses, pools and recreational facilities.  In addition, I recognize that some retirees may prefer to live in a neighborhood that is not age restricted ... for example, if they want to share a home with their adult children or they like to live in a more diverse community.

The Kolter Group

Kolter is a real estate development and investment firm that is headquartered in Palm Beach County, Florida.  It has built over 3,400 homes in the Southeast and, when their currrent projects are completed, they will have built about 13,000 residences.

Since I have never personally dealt with this home builder, I thought it would be smart to check the company's Better Business Report.  As of early September, 2013, the BBB rated Kolter Signature Homes, LLC  as A+.  The report said that they received that score based on 16 factors, including the length of time they have been in business (since 1996), general background information, and the fact that there has been no complaints filed with the BBB.  Specifically, there were no complaints regarding advertising and sales, problems with the product, delivery, or their warranty.  There have also been no significant government actions involving Kolter Signature Homes.

In addition to building the homes and developing these master planned communities, Kolter also has a financial services branch that can help you arrange for your mortgage.  However, as a former Realtor, I always recommend that people also meet with their own banker, as well as an independent mortgage broker, before making a final mortgage decision.  While nothing is wrong with using your builder's mortgage company, it is still a good idea to shop around.

Kolter Communities

Cresswind at Victoria Gardens in DeLand, Florida
This is a 55+ age restricted community.  Visit this community and check out the five decorated model homes.  It is also conveniently located near a medical park.

Fairway Cove at Verandah in Fort Myers, Florida
This master planned development includes golf, nature trails, and convenient facilities for fishing and kayaking.  Homes priced from the mid-200,000's.

Cresswind Myrtle Beach in Myrtle Beach, South Carolina
Live in a Master Planned active adult golf course community that is within an easy bike ride to the ocean.  (The photo of the live oak tree used with this article was taken in the lovely Myrtle Beach area of South Carolina.)

PGA Village Verano in Port St. Lucie, Florida
Do you love the play golf?  This the the ultimate resort style community with 54 holes of PGA championship golf.

Cresswind at Lake Lanier in Gainesville, Georgia
This age restricted over-55 community, which has been previewed separately in this blog, has won more awards than any other adult community near Atlanta, Georgia.  Located on beautiful Lake Lanier, it features both a gorgeous clubhouse as well as a private marina.  Perfect if you want to take your boat with you when you retire!  The homes here start in the low $200,000's.  You can read my separate article on Cresswind at Lake Lanier here.  That article will give you information that applies to the other developments, as well.

You can get more information about these communities through these sources:
http://thekoltergroup.com/kolter-homes/
http://www.cresswind.com/

If you are looking for a place to live after retirement, you may also be interested in checking out the index articles 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


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

Photo of South Carolina live oak tree is courtesy of www.morguefile.com

Be Prepared for Emergencies - It Could Save Your Life

No matter how old or how young you are, are you prepared for an emergency?  In particular, are you prepared for the most likely type of emergency that could happen where you live?  For example, if you live in coastal areas in the southern and eastern states, are you prepared for a hurricane?  If you live in California, are you prepared for an earthquake?  If you live in a heavily forested area, are your prepared for a forest fire?  And, if you live near a river or other waterway, are you prepared for flooding?  If not, you need to take action now.  Your life, and the lives of your loved ones, could depend on it.

Our retirement community has regular emergency drills.  In addition, we also have representatives throughout the community who are willing to go door to door to check on people in the event of an emergency.  These volunteers attend periodic trainings so they know how best to help their neighbors, especially those who are weak or injured.

However, it is also a responsibility for all of us to be as prepared as possible if we should become the victims of a hurricane, flood, tornado, blizzard, earthquake or other disaster. In a widespread emergency, it may take a few days before emergency personnel can find and help everyone who is is injured or displaced.  Our local authorities recommend that everyone be prepared to take care of themselves, if possible, for up to three days.  If you live in an area where you could lose your electricity and be snowed in for a week or more, you may need to make even more extensive preparations. While this may not be necessary for everyone, better safe than sorry.

Covering Your Basic Needs

Experts agree that we should make sure we are prepared to take care of our of certain basic needs, including:  food, shelter, water, light, personal hygiene, medicine, communications, and money. 

How do you prepare?   Take a chest or plastic storage bin and put in some essential supplies such as canned food and a can opener, a radio and flashlight with extra batteries, soap, eating utensils, a solar phone charger, a small amount of cash, a first aid kit, blankets, a change of clothing for each family member, and small quantities of important medications (which you should rotate out every few months).  Inside or next to your storage bin you should also put at least a five gallon container of water or more, depending on the size of your family.  If you have pets, you will also want to include zip lock bags containing their food, as well as enough water to satisfy their needs for a few days.

Next, you need to decide where to keep your storage bin.  Here in Southern California, where the biggest danger is earthquakes, I know of several people who keep their emergency kit in a protected area of their backyard.  They do this in case their home should be so badly damaged that they would be unable to go back inside to retrieve the items they would need.  We keep most of our supplies just inside the door to our garage ... although I must confess that I am not good about keeping everything up-to-date and gathered in one place.  One of my reasons for writing this post is to encourage me to practice what I preach!

I have already purchased a combination flashlight and phone charger for my husband and each of our children for Christmas this year.  I thought it would be a thoughtful gift and could be really helpful to at least one of them in the coming years.

Items You May Wish To Purchase

When you are putting your emergency kit together, there are certain items you may wish to purchase.  In addition to food, clothing, blankets, 5 to 10 gallons of water and your medications, here are some additional items you may need.  If you don't have them on hand, purchase them in advance:

A well-stocked First Aid kit that includes bandages, antibiotic cream and alcohol wipes
A back-up phone charger -- either solar, battery powered or wind-up
A battery powered camp lantern
A battery powered radio that will pick up emergency announcements
A propane stove with extra cartridges
A whistle so you can signal rescuers
Plastic tarp to protect you if you must stay outside in bad weather
Flashlight
Batteries
Metal dishes, cups, eating utensils
A few pots and pans
Dishsoap and moist towelettes
Garbage bags (which can be improvised for use as a toilet in an emergency)
Toilet paper
A wrench or pliers that can be used to turn off utilities.  (Make sure you know how to do this before an emergency occurs.)

You may also want to have items like sleeping bags or a tent stored with your emergency supplies.

Why We Need to be Prepared

As we get older, it is easy to assume that someone will come rescue us if we are in danger.  However, as we saw with Hurricane Katrina and many other disasters, it can take quite a while before our rescuers are able to reach us.  If at all possible, we want to be able to take care of ourselves and not wait to be rescued.  Being prepared could save your life.

If you are retired or thinking about retiring in the future, you may be interested in reading some of the other posts from this blog.  They are all listed and linked in the index articles 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

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

Photo of hurricane damage is courtesy of www.morguefile.com

More People Working After Age 65

Our concept of retirement has changed drastically over the past few years.  In fact, some people don't seem to be retiring at all ... and certainly not at the traditional age of 65.  The local newspaper for our retirement community, "The Laguna Woods Globe," reported this week that by 2019 approximately one in five seniors will be working either full or part-time after the age of 65.  Already, the number of workers in that age group has increased from 4.5 million to 7.5 million in the past ten years, according to the U.S. Bureau of Labor Statistics.  That's a whopping 60% increase in a decade!

Reasons Why Seniors are Working Longer

The article in "The Laguna Woods Globe" listed several reasons for this increase in the number of senior citizens who are still working, and I have added a few more reasons we have heard from some of the retirees we know who still work.

First, many Baby Boomers have not done a good job of retirement planning.  As a result, they are unable to survive on their low Social Security benefits, yet they have no savings to provide additional income.  Their only solution is to keep working as long as they possibly can.  The extra years of work also increases the size of their Social Security payments, so the benefits from working longer can help in several ways.

Second, even when people have saved some money towards their retirement, they may not have expected to enjoy such a long life expectancy after retirement.   When I was young, we were told that the average life expectancy was 72, which meant we only anticipated living a decade or less after we retired.  As I got older, life expectancy increased to 78.  Now that I am in my 60's, I have read that the average life expectancy can be as high as age 88 for people who are healthy at age 65.  That means you may need enough savings to last 25 to 30 years after retirement ... and even more if there is a lot of longevity in your family.  Many people who thought they were prepared for retirement are discovering that they failed to save enough.

Third, a number of companies that used to provide pensions to their employees have reduced or eliminated this benefit.  People who thought they would be able to live off the combination of their pension and Social Security may have much less retirement income than they expected.

Fourth, boredom is another reason for continuing to work past the traditional retirement age.  Some people use this time of life to pursue a career that they always dreamed of ... like becoming a blogger!  Others may continue to work part-time in their former careers, such as becoming a substitute teacher or business consultant. 

Fifth, many Baby Boomers are still healthy and they simply do not want to sit at home.  They would rather work and use the extra money to travel and have fun.  As one person in my local newspaper said, she doesn't need the money, but it sure "comes in handy."

Finally, sometimes seniors are involved in meaningful careers that they do not want to give up.  Many actors and religious leaders, such as the priests in the above picture, continue to work long past the traditional retirement age.  A nun I know is almost 80, yet she still travels all over the world leading spiritual retreats.  I have attended a few of her retreats, and she is still very energetic and a dynamic speaker.  One of the women in my bookclub is married to a physician.  She says he intends to work as long as he possibly can, because he believes that what he is doing contributes to society and he enjoys it.  Isn't that the best reason of all to keep working past age 65?  My own husband is still working, even though he is almost 69.  He really loves his job!

If you plan to work past age 65, I would love to hear the reason you made that decision.  Please feel free to mention it in the comments section of this article.

Meanwhile, if you are doing your retirement planning, you may be interested in reading some of the other articles from this blog.  They are listed alphabetically by topic with links in the 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

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

Photo of elderly priests is courtesy of www.morguefile.com

Source of Statistics:

"Working Late," Laguna Woods Globe by the Orange County Register, August 29, 2013.