Category: Financial and taxes in retirement
March 17, 2015 -- In our book you can't just be too prepared for retirement - it's just too important to take a chance on not enjoying it. This is Part II of our Retirement Preparation Quiz, here is where you can find the Part I Quiz.
This version of the quiz is more about the financial side of retirement. It is inspired by a recent survey by the American College of Financial Services, an educational organization for financial professionals. That study found a dismally low level of preparation on several key questions about financial literacy. A majority thought they were doing a good job of saving to live comfortably in retirement, yet only 2 in 10 had a passing grade; no one got an A. The questions on their financial literacy quiz had questions relating to
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Published on March 17, 2015
Comments 16
Category: Financial and taxes in retirement
Update Nov. 15, 2015: The Budget Bill signed into law in late 2015 dramatically changes the popular "File and Suspend" strategy discussed here. People who can take advantage of it by April 1, 2016 are grandfathered, but depending on your birth date, the strategy has gone away for other folks. See our article "How the New Social Security Claiming Rules Affect You" for more.
Update March 11, 2015: The publication of this strategy on air generated a good-sized controversy about its fairness (see Comments below as well as this article in Politico: The Debt Wars: Boomers vs. Millenials.
March 1, 2015 -- There has been a flurry of features lately on a subject we feel is critically important to almost every retiree - maximizing your Social Security benefits. One of the most instructive pieces we have seen is a short video segment by Paul Solman, the economic correspondent for the PBS Newshour: "Trips and Tips for Getting the Most Out from Social Security Benefit".
Even for the experts, navigating the system can be confusing and costly. In this entertaining video Solman gives 2 major tips for maximizing your Social Security benefit. Both could mean hundreds of thousands of dollars to many people. The first is on the often misunderstood spousal benefit. The second has to do when to claim, and that depends on your answer to the provocative question, "What is Your Worst Case Scenario".
Spousal Benefit
One day during a tennis game Solman's friend and Social Security expert Larry Kotlikoff told him that he was entitled to nearly $50,000 in spousal benefits. Solman, the seasoned economic correspondent, was shocked
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Published on March 1, 2015
Comments 55
Category: Financial and taxes in retirement
By Billy and Akaisha Kaderli
At the age of 62, we are beginning our 25th year of financial independence. That is quite a feat! From the beaches on Nevis, West Indies, to the shores of Phuket, Thailand we have traveled extensively through these decades, and what a ride it’s been! Young and strong in those early years, we were willing and able to tackle just about anything. Now we tend to be a bit more cautious but we’re not letting up. We still climb into the backs of pickup trucks, ride the chicken buses and soak in volcanic hot pools. The time has passed quickly from when we were the youngest, grayless couple in a group of retirees, to now where we blend in with the retiree crowd.
Still, no one can take away the dance we danced and we are filled with
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Published on February 17, 2015
Comments 36
Category: Financial and taxes in retirement
January 11, 2015 -- We baby boomers are conflicted about retirement in so many ways. For example we spend a lot of time planning to find a place where we can pursue our dreams, yet fail to consider how those dreams might change in 20 years. We worry about our ability to have enough money to live comfortably in retirement, but overlook how much we are spending on the home we live in now. We recently came across a pair of articles that explored the latter phenomenon in depth: one from the Demand Institute (Baby Boomers and Their Homes), and MarketWatch (In Retirement, A Big House Can Lead to the Poor House). See end for links to these articles.
A Big Nut to Cover
The MarketWatch article by Jonathan Clements lays out in dramatic fashion just how
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Published on January 11, 2015
Comments 99
Category: Financial and taxes in retirement
December 20, 2014 -- Last December we posted an article asking women to tell us what they were looking for in a financial advisor, along with their war stories on how it went when they did find one. Many did, and others also asked us to continue on with a followup that summarized that input. So here goes. The first part of this article provides you with the insights and comments of those who responded to our request. Part 2 provides advice for women at 2 top firms on how to find and get the most value out of your financial advisor.
What you said
We were fortunate to receive a multitude (19) of different comments with a wide range of helpful advice. Although we recommend you read all of these comments in detail, this section summarizes and
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Published on December 20, 2014
Comments 16
Category: Financial and taxes in retirement
November 8, 2014 -- We retirees have a strong desire to leave something for the kids once we go on to baby boomer heaven. A recent study by the Population Research Center at the University of Texas found that 86% of people aged 59-96 expect to leave an inheritance to their kids and grandkids. In reporting that study the New York Times article, "The Children Will Be Fine: Spend Their Inheritance", called this perhaps "the height of foolishness". Let's take a look why.
About half of baby boomers are concerned they won't be able to maintain their standard of living in retirement. Yet the 86% figure from the University of Texas study shows that even people stressed by their retirement finances still hope to pass something on to the next generation. The irony
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Published on November 8, 2014
Comments 40
Category: Financial and taxes in retirement
October 23,2014 -- Monthly Social Security retirement benefits will increase 1.7 percent in 2015. The cost-of-living adjustment (COLA) begins in January 2015 and affects benefits received by more than 58 million Social Security beneficiaries. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics. To read more, please visit www.socialsecurity.gov/cola.
More Changes
The amount that beneficiaries under age 66 can receive before having
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Published on October 23, 2014
Comments 4
Category: Financial and taxes in retirement
October 13, 2014 -- Their are plenty of theories for the perfect amount to take from your retirement assets like 401(k)s and IRAs. They all try to solve the problem that if you take out too much too soon you will run out of money late in retirement, but if you are too cautious you miss out on a richer life, leaving too much of your assets to someone else, possibly the government. In contrast to some of the more complex theories, some experts suggest using a simpler measure and one that is widely in use. Their idea is to use the Required Minimum Distribution (RMD) that the federal government requires retirees to take from their retirement assets beginning in the year
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Published on October 12, 2014
Comments 14
Category: Financial and taxes in retirement
October 6, 2014 -- According to the EBRI only 55% of retirees are very or somewhat confident about their ability to live comfortably in retirement. That leaves a lot of people worried, most of whom have very little savings and no pension to fall back on.
There is good news though
Fortunately, even if you have minimal retirement savings and no pension other than Social Security, all is not lost. You probably have a retirement piggy bank that you never even thought about - your home! Indeed for most people, the value of their homes is greater than all their other assets combined.
My home is a plus, you scoff?
After all, housing expenses consume more than half of the household income of 1 in 3 Americans over 50, according to a study by Harvard's Joint Center for Housing Studies and the AARP. The average person over 65 spends 30% of their income on housing. While the fact that
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Published on October 6, 2014
Comments 44
Category: Financial and taxes in retirement
September 26, 2014 -- Most people understand that some areas of the U.S. are cheaper to live in than others. For the majority of retiring baby boomers who are concerned about maintaining their pre-retirement standard of living, it make a lot of sense to act on those differences. This is highlighted by a recent study by Harvard’s Joint Center for Housing Studies and AARP that showed that an increasing number of America's retirement age citizens are stressed by their cost of housing. The study also warned that "the nation is unprepared for both the financial and non-financial housing challenges that will accompany the coming explosion in the elderly population."
The Tax Foundation has developed some extremely interesting maps - by state, town, and part of the country - that shows relative differences in purchasing power. The scale is based on an a purchasing scale of $100: if you have $100 to spend, how much value will you get in different locations. Based on the difference in local prices, in some you can buy
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Published on September 25, 2014
Comments 52
