Category: Financial and taxes in retirement
December 18, 2012 -- Long term care insurance is one of the more difficult products in the insurance world. Unlike most insurance products, the decision to buy it or not is not clear cut. While it's easy to see why you need insurance on your car, home, or health - justifying long term care insurance is a a bit tricky. According to some reports, only 10% of people over age 60 have long term care insurance.
The market has not been kind to providers of long term care insurance. Some, including Prudential and MetLife, have stopped selling new policies in recent years, while others have had to ask for rate increases of over 40%. Life insurers sell some "flexible" life policies that provide a cash benefit before death as a kind of long term care hybrid. Recently we've seen some helpful articles on long term care insurance (see end of article). Here is a brief primer; we recommend the references to get a fuller understanding.
Long term care insurance provides
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Published on December 18, 2012
Comments 35
Category: Financial and taxes in retirement
December 8, 2012 -- Researchers at DePaul University and the Rush University Medical Center think they have found the underlying reason for an alarming rise in fraud committed against our rapidly aging baby boom generation. The explanation often arises from “that combination of not knowing but thinking you know", according to Keith Gamble, an assistant finance professor in DePaul’s Driehaus College of Business. In other words, overestimating what you think
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Published on December 8, 2012
Comments 3
Category: Financial and taxes in retirement
December 4, 2012 - You've probably seen the ads for reverse mortgages- "Use the cash in your home to solve your retirement money problems". They sound simple enough - instead of you sending money each month to your mortage company, they send you a check! At the end of a specified period, after you either sell your home or have joined the big Kahuna in the sky, the payments are finished and the mortgage company gets paid back.
Unfortunately, as the New York Times recently reported in "Reverse Mortgages Costing Some Seniors Their Homes", it's not always that simple. Most companies offering reverse mortgages are legitimate and trustworthy, but as smaller companies with questionable ethics enter the market, there is also a lot of high pressure salesmanship and hype. The combination often results in unwary and poorly qualified
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Published on December 3, 2012
Comments 9
Category: Financial and taxes in retirement
Nov 20, 2012 -- New research suggests that the traditional rule of thumb for how much you can safely take out of your retirement funds, 4% per year, is not the ideal tool for the job. Originally popularized by Bill Bengen in 1994, it was at least partially based on the assumption that traditional stocks and other investments would return 6% or more over the long haul. As reported by Robert Powell at WSJ MarketWatch in "Retirement Income: What's Wrong with the 4% Rule" and the Center for Retirement Research in "Can Retirees Base Wealth Withdrawals on the IRS’ Required Minimum Distributions?", several exciting new theories challenge
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Published on November 20, 2012
Comments 10
Category: Financial and taxes in retirement
November 14, 2012 -- As we baby boomers age there is a good chance that we might inherit an IRA from a parent, spouse, or sibling. Likewise your spouse and/or heirs will probably inherit yours when you go to the pearly gates. The rules governing inherited IRAs can be complicated, so it is important that you understand the basics that apply so you can make the best decisions. Here are the major issues to consider.
Transferring inherited IRA assets
If you inherit a traditional or Roth IRA from someone who isn't your spouse, your options are fairly limited. You can't roll the proceeds over to your own IRA, treat the IRA as your own, or make any additional contributions to the IRA. What you can do is transfer the assets to a different IRA provider, as long as the registration of the account continues to
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Published on November 14, 2012
Comments 2
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
