Category: Financial and taxes in retirement
September 25, 2012 -- The overwhelming majority of baby boomers are going to face a painful budget squeeze as their retirements start to become a reality. Used to the high life as many of us are, it will be a very big challenge to support that lifestyle without the income stream we are accustomed to.
This article was an idea from Linda, a member who asked us to try to get ideas from our members on different ways of raising cash in retirement. We've listed some ideas we've seen, including some nutty ones from a recent Wall Street Journal article. But we are really hoping that you, our members, will share what you are doing to bring in extra cash to support your retirement. Please add your ideas to the Comments section below, whether they are tried and true or just a wild idea that you think might work.
Best Ideas for Making Enough Money to Survive Your Retirement
1. Turn what you love to do into a business. So you like to make
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Published on September 25, 2012
Comments 10
Category: Financial and taxes in retirement
Sep 19, 2012
Note: This was originally sent in by Doug, a member, as a comment with an alternative approach to retirement, specifically in reaction to Betty Fitterman's article, "Retiring on a Dime". We publish here because it has some interesting and common sense ideas, and appreciate Doug sharing them with us.
Hopefully my example will help others prepare for their retirement. Deciding when to retire is the key. In my opinion you should retire when you realize you've acquired enough assets and possessions to maintain the standard of living you want to live. I "semi" retired at the age of 43. My original plan was age 50 but circumstances led me to retire early. Six years later I don't foresee outliving my money at any point because I not only planned
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Published on September 19, 2012
Comments 19
Category: Financial and taxes in retirement
September 10, 2012 -- With all the discussion going on about the poor state of most retirees' financial preparation for retirement, it seems like this might be a good opportunity to talk about financial risks in retirement. While we are not financial professionals, we have surveyed the literature to prepare this list for your consideration. While you probably are aware all of these risks, it is always worth considering how they might apply to you one more time.
Background
Data from the Federal Reserve’s 2010 Survey of Consumer Finances found that the typical U.S. household between ages 55 and 64 held just over $45,000 in their tax-exempt retirement plans in 2004. In 2010, after the biggest financial crisis in U.S. history, these plans held only $42,000 (this figure is for all Americans, including folks not in an employer-sponsored savings program). Households headed by a baby boomer age 60 to 62 with a 401(k) plan was more - $149,400 – but not even twice their median annual income of $87,700, according to Boston College’s Center for Retirement Research.
The Big One
The chief financial problem in retirement stems from
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Published on September 10, 2012
Comments 10
Category: Downsizing
August 27, 2012 -- Downsizing from your big house in the suburbs could be one the smartest retirement decisions you make. Assuming your children are grown and out of the house, there is usually not much logic in having all of those extra bedrooms to heat, maintain, clean, insure, and pay taxes on. Generally you can sell that big home and use the proceeds to buy an easily maintained and energy efficient smaller home or condo, and still have a considerable sum left over to add to your retirement income. Not to mention
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Published on August 27, 2012
Comments 82
Category: Financial and taxes in retirement
July 24, 2012 -- Recent studies from the Employee Benefit Research Institute and the Boston College Center for Retirement Research paint a pessimistic picture of retirement. Teresa Ghilarducci, a professor of economics at the New School for Social Research, cites much of their data in describing the American approach to retirement as ridiculous. She goes on in a recent New York Times Op-Ed piece, "Our Ridiculous Approach to Retirement", to posit that new retirement accounts should be mandated, on top of Social Security, in order to prevent
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Published on July 24, 2012
Comments 26
Category: Financial and taxes in retirement
June 19, 2012 -- No doubt you have heard about Roth IRAs. But if you are like most people, you are confused about what they are, how they differ from traditional IRAs, and most importantly - whether you should convert some or all of your retirement savings to a Roth. This article will provide you with some background to help you answer those questions, along with 5 possible reasons to consider conversion to a Roth. Please note that this is a complex topic - you should not act without consulting with your financial and/or tax advisor.
Differences between Roth IRAs vs. Traditional IRAs
A key difference between a Roth and a traditional IRA relates to taxes. To the extent allowed by law, a traditional IRA is deductible from current income tax, whereas a Roth is not. When the money comes out, however,
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Published on June 19, 2012
Comments 8
Category: Financial and taxes in retirement
May 29, 2012 -- Of course you really can't buy an annuity from the Social Security Administration - but in a manner of speaking you can do something that has the same effect. Last week we came across this seemingly whacky article from the Center for Retirement Research at Boston College, Should You Buy an Annuity from Social Security". After reading it we think it turns out to be one of the cleverest ideas we've heard for a long time.
Background
The biggest financial challenge for today's retirees is
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Published on May 29, 2012
Comments 15
Category: Financial and taxes in retirement
Note: This is the 2nd in a 3 part series called "Social Security: What You Think You Know Might Hurt You". Part 1 provided an overview of the program, how your benefit is calculated, and strategies for optimizing your benefits. This segment will concentrate on strategies for couples to maximize their benefits,as well as the rights and benefits for divorced spouses. The final section of this article discusses some of the more common misconceptions/FAQs about Social Security.
May 8, 2012 -- As we discussed in Part 1, the decision to file for Social Security benefits is a personal one that means balancing several inputs. But for married couples, these factors get even more
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Published on May 8, 2012
Comments 28
Category: Financial and taxes in retirement
Note: This has become Module 8 of our Retirement 101 Online Retirement Course. We have written several other articles about Social Security you might also enjoy: "Social Security Quiz- A Learning Experience", and "What Is Your Social Security Worst Claim Scenario". Important changes to spousal claiming strategies occurred in 2016, these are referenced in our later articles.
April 24, 2012 -- We were vain enough to consider ourselves experts on when and how to start collecting social security. That is, until we attended a talk last week in Old Saybrook, Connecticut by Kurt Czarnowski of Czarnowski Consulting. Boy, the things we didn't know, and the others so misunderstood! This Module is Part 1 of a 3 Part Series. Here will give a brief background on Social Security and then dive into successful strategies for optimizing your return from this important safety net. Part 2 of this series concentrates on issues related to claiming strategies for couples, the rights of divorced spouses, and frequent misunderstandings/questions about Social Security. Part 3 explains "How to 'Buy' an annuity from Social Security".
First, let's start with a quote from Kurt Czarnowski: "The myths and misunderstandings about Social Security are staggering". This from a man who spent 34 years within the Social Security Administration, the last of those as a Communications Director. Given all the misinformation, it is important that
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Published on April 24, 2012
Comments 25
Category: Financial and taxes in retirement
April 24, 2012 -- Update: Please see Jan. 2013 update to this article, "Social Security News Gets Worse". The public trustees of Social Security delivered bad news to the country yesterday: the Social Security trust fund will not be able to pay 100% of promised benefits beginning in 2033, 3 years earlier than previously predicted. Piling it on, the trustees also predicted that the disability component of Social Security will run out of money 2 years earlier than previously thought (in 2016). Medicare's trust funds had no change in the date of their expected exhaustion (2024), although the chief Medicare actuary, Richard S. Foster, that the projections in the report "are probably poor indicators of the future financial status of Medicare" (as based on current law).
Several factors combined to speed up the depletion of Social Security trust funds. For one, this year's cost of living projections are
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Published on April 24, 2012
Comments 2
