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: Baby Boomer Retirement Issues
March 3, 2015 --
Note: Last year the class of 1964, the group that kicked off the baby boom when they arrived on the planet in 1946, had their 50th high school reunions.
Thank you to the almost 300 members who took the time to contribute your valuable insights to last week's "50th Reunion" survey. We now have a much fuller idea of your intentions and attitudes towards these impending celebrations. As always, it is your insights and comments that are the most interesting part of these surveys. So as promised, here is a detailed report on the findings. At the end of this article you will also find many of the fascinating comments you provided in the open ended parts of each question - we think you will enjoy them. A list of our previous survey reports is provided at the end of the article. A followup we did on our own 50th reunion is here, "An Anatomy of a 50th High School Reunion".
Highlights
This survey was one of our more whimsical ones, so we hope you enjoy
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Published on March 2, 2015
Comments 5
Category: Active adult communities
March 11, 2015 -- Whether you are in the shiny model home or the posh real estate office, it's the positive that gets accentuated when you go looking at retirement real estate. According to the enthusiastic salesperson the amenities are great, the fees are low, and the neighbors - well, they are especially interesting and friendly. What's more, there are only a few more great homes available before the whole project is completely sold out.
But unfortunately there are often things unsaid, whether you are looking at buying a new home in a brand new community or a pre-owned unit in a 55+ community that has been around for decades. This article will help you understand some of the potential pitfalls by pointing to situations you need to ask about. Mind you, most active communities are well run entities thoroughly enjoyed by their residents. This article is
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Published on March 10, 2015
Comments 143
Category: Singles and Retirement
March 16, 2015 -- Charlene and many other women members of Topretirements have asked us if we have any plans to post a question like: "Where did you retire as a single and why?" It seems like a great question, so here goes. We are hoping to hear from many single women (and men) who have either retired or are considering different places to retire. We think the answers are going to be fascinating.
As Charlene said: "Many of us become widows/or widowers before retirement age and that changes everything. Do you move away? Do you retire near family because your alone in case of health issues? Are you welcomed in strongly coupled communities, Etc.? In other words I'd love to read from other singles where they live and what's their experience. I know you have had comments about this but not a complete column of just real life experience. I have read
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Published on March 15, 2015
Comments 141
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
March 20, 2015 -- If you have a 401(k) and/or an IRA, and you turned 70 and 1/2 last year, you have a very big deadline coming on April 1. That is the date by which you must have taken your first Required Minimum Distribution (RMD), or face significant penalties. A surprising number of people fail to take these distributions. You must also take your regular annual distribution by December 31 this year. All of the money taken from regular
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Published on March 20, 2015
Comments 27
Category: Financial and taxes in retirement
March 23, 2015 -- It is no secret that there are millions of baby boomers who are wondering how on earth they are ever going to have enough money to retire. From many comments made on this site we know that a lot of you have those worries, so we thought we would help with some examples of reasonable place to retire, along with why it makes sense to downsize.
First, how a cheaper place to live puts money in your pocket
Your home is almost always your biggest expense, usually about 30% of your income. Anything you can do to reduce that is going to help you have a more comfortable retirement. The first thing you need to do in this process is to complete a retirement budget. To do that you need to know how much income you can expect to live on from Social Security, savings, pension (if any), and work. You also have to understand what
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Published on March 23, 2015
Comments 39
Category: Financial and taxes in retirement
March 27, 2015 -- So you are pretty sure you are financially literate and no one could scam you - better watch out! A recent study by researchers at DePaul University and the Rush University Medical Center came up with this scary result: Seniors who got financially related answers wrong, but were the most confident they got them right, were more often victimized by fraud. Fraud victims scored 5.39 on the overconfidence scale, vs. 4.21 for non-fraud victims. The authors of the study believe that this overconfidence, combined with declining cognitive skills, is a underlying reason for an alarming
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Published on March 26, 2015
Comments 13
Category: Baby Boomer Retirement Issues
April 1, 2015 -- We were surprised recently by a group of commenters who took umbrage at the notion that you can work and also be retired. Their more traditional view was that if you are retired, you don't work, period. A few even quoted dictionary definitions to support their case. But an increasing body of evidence points to an overwhelming trend in the opposite direction - that retirement is often going to be anything but traditional or predictable. It is more likely to be a transition than it is stopping work. Instead of just cashing pension and Social Security checks and having morning coffee or golf with the guys, it might mean a change of career or a part time or volunteer job. The trend is toward more of a highly personal, very customizable
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Published on March 31, 2015
Comments 32
