Money Posts

  • What the Fieldings can teach us about retirement planning


    Many movies are popular because audiences find the characters and the situations they are in to be so relatable. The Money Pit is one such movie. Although most of us will never find ourselves in a predicament like that, the movie can teach us some lessons about effective retirement planning.

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  • What are retirees’ actual expenditures? Results of the HSBC survey


    Many retirees’ spending patterns are different than they envisioned in preretirement. Most people retire several years earlier than they expected. A significant percentage of both preretirees and retirees wish they had started saving for retirement earlier and had saved more.

    These are some findings in a report recently published by HSBC Wealth Management, entitled The Future of Retirement: Generations and Journeys. The findings are based on a survey of over 1,000 preretirees and retirees in the U.S. and more than 18,000 workers and retirees in 15 foreign countries.

    The HSBC survey is one of a series of recurring surveys conducted by various organizations that have useful insights for both retirees and those planning for retirement.

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  • Thrift Savings Plan – What is a TSP Retirement
  • 8 Critical Retirement Planning Mistakes To Avoid
  • Common mistakes of retirees
  • 7 things to do if you stay in your home after retirement


    Many seniors choose to stay in their homes for years after retirement. Living at home provides the comfort of familiar surroundings and enables seniors to maintain independence and control over their lives. But there are some risks associated with living at home. A few simple safeguards can help seniors protect themselves.

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  • Choices you make that will affect your entire retirement


    The decisions you make just before and after retirement can affect the quality of life throughout your retirement. While there’s plenty of flexibility in retirement planning, it’s important to get these some major things right. Yet lots of retirees take the wrong course, for various reasons. Some of these are choices made with the best of intentions that turn out to have disastrous consequences. Some are just made out of lack of planning, or making decisions in haste, or simply habit. Here are some common mistakes made when retirement is coming close.

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  • Lessons from retirees: the 2016 TIAA Voices of Experience survey



    The Teachers Insurance and Annuity Association of America (TIAA) recently issued its 2016 Voices of Experience survey report. For the survey, TIAA reviewed responses from over 1,500 retirees, the majority of whom (55 percent) had worked in higher education. A small percentage had also worked in public education or health care. Three-fourths of survey respondents had earned a college degree, and more than half (60 percent) held a masters degree or higher.

    Although the results may not be representative of retirees as a whole, the results are consistent with survey responses of other groups and offer useful lessons and insights for retirees and pre-retirees of all ages.

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  • How to make your retirement savings last


    Many Americans close to retirement are concerned that they will not have enough savings to last throughout their retirement. According to Northwestern Mutual’s recently released Planning and Progress Study, 85% of Americans report anxiety about their finances. Two-thirds believe there is a chance they will outlive their savings; one-third think the likelihood is 51% of more; and 14% think they will definitely outlive their retirement savings. However, 44% report they have not taken any steps to address this situation.

    Here are several important things you can do if you’re concerned about whether your savings will last.

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  • Can you just work longer?


    Surveys show the majority of Americans are short of what they will need for retirement. The Employee Benefit Research Institute’s 2016 Retirement Confidence Survey found that almost 75% of workers have $100,000 or less in savings. Many financial advisors propose the solution is to just keep working. Suze Orman recently suggested that those who have a job should keep working until 68.

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  • How to make up the gender retirement savings gap


    Men make higher salaries than women on average. Women often take time off to start a family, and then work part-time when they do return to work, so that they receive lower wages and fewer benefits than their husbands. Yet women live longer on average, so their retirement savings have to last longer and their retirement expenses are higher.

    The result is that there is a retirement preparedness gap between men and women. A Vanguard study found that women are more likely to participate in employer savings plans and save at higher rates. But because of their lower earnings, men have about 50% more retirement savings than women. Here are some ways that women can make up this gap.

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  • How healthcare costs can eat away your Social Security


    Originally created during the Great Depression as a safety net for workers and their families, Social Security has become a major source of income for many retirees. If you’re in retirement or getting close, chances are good that Social Security is featured prominently in your financial planning.

    You may have heard that Social Security funding is in a precarious state. But rising healthcare costs pose an even greater risk.

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  • When should you claim Social Security?


    One of the biggest decisions for most retirees is when to claim Social Security retirement benefits. A majority of retirees depend on Social Security for the bulk of their income, according to the Social Security Administration. The decision of when to take benefits has repercussions not only for your retirement, but also for your spouse and family.

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  • How today’s retirees are doing: Findings from the latest Transamerica survey


    Most new retirees and those approaching retirement say they’re short of what they need for retirement, but nevertheless are confident in their prospects for a successful retirement. The majority of retirees left the workforce earlier than planned. Most retirees are in good health and expect a long retirement. The vast majority of retirees are happy and enjoying life.

    The Transamerica Center for Retirement Studies just released the results of its 16th annual retirement survey, and those are some of the major findings. The survey results are always enlightening, and reinforce timeless lessons for those preparing for retirement.

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  • Want to start a business in retirement? Here are some things to consider


    Are you thinking of starting a new business in retirement? If so, you’re not alone. Starting and running a business comes with challenges, but can be rewarding for active retirees who want to bring in income while serving their communities. Although many retirees open businesses out of passion and a sense of purpose, any income you do earn will help you pad your retirement savings so you can spend a little more or leave a larger inheritance. Here are some considerations for starting a business in retirement.

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  • A minimalist approach to your retirement spending


    Sometimes you need a budget. If you’re saving for a significant purchase or investment in the future, a budget is useful to keep track of how much you’re putting away. Take the amount you will need, divide by the number of months until you will need it, and you know how much to put aside each month.

    Many people also track their overall spending, especially in retirement. The conventional budgeting process says to devote a certain percentage of your income to essential expenses like bills and insurance, a certain percentage to discretionary expenses like dining out and vacations, and a certain percentage to investing for future needs. If that’s you, then that’s great – more power to you. But if you’re not like that, there is another way to go.

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  • 4 retirement money wasters to avoid


    Many retirees are concerned whether their savings will last through retirement. Prudent investing can certainly help, so that your money will grow, but the other important element is to manage your spending and avoid unnecessary expenses. Here are some common retirement money wasters that could make the bottom fall out of your retirement nest egg.

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  • Will your expenses really decrease in retirement?


    How will your expenses really change in retirement? This is a question of crucial concern to many retirees, who are looking at significant shortfalls in savings needed to maintain their current lifestyles. Some articles point out that many of your expenses will decrease or disappear completely in retirement, and therefore you can live comfortably on less than you think.

    But it’s tough to make predictions, especially about the future, as Yogi Berra supposedly said. The Bureau of Labor Statistics recently released a report about spending by current retirees. While their situations are different from yours, this information can provide some insight into what your own experience might be.

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  • Retiring unexpectedly? Here are 7 things to do


    It’s nice to be able to leave the working world at a time of your choosing. Unfortunately, not all of us have that privilege. When you have to make the jump to retirement unexpectedly, you have to make some sudden adjustments. Here are some tips to help you along.

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  • How to prepare for a longer retirement than you might think


    How long will your retirement last? No one can know, although there are calculators such as the Social Security life-expectancy calculator that can help give you an estimate. But people are living longer than before. After retirement, you may live for another 20 years or more. Are you prepared for a retirement that could last for decades? Here are some things to consider.

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  • Is a state-run IRA right for you?


    For years, much publicity and press have been focused on the retirement savings gap. Some 45 percent of working-age households, or 38 million, have no retirement account assets, according to the National Institute on Retirement Security. The average working household has virtually no retirement savings.

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  • The 2016 retirement confidence survey and the changing state of retirement


    Be prepared to retire earlier than you currently expect. Open a retirement account, such as a 401(k), IRA, or defined contribution plan, and contribute to it regularly. Create a realistic retirement plan, for both your retirement finances and your lifestyle. Work with a financial advisor.

    These are some of the takeaways from the newly released 2016 Retirement Confidence Survey prepared by the Employee Benefit Research Institute (EBRI) and Greenwald and Associates. The survey, now in its 26th year, is the longest-running annual retirement survey of its kind in the nation. It never fails to hold useful insights for retirees and pre-retirees of various ages.

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  • 7 reasons your credit score still matters in retirement


    You might think your credit score no longer matters after you’ve retired. In a few cases, that’s true. After all, you’re probably not buying a home, or taking out a business loan. In retirement you’ve left all that behind in favor of European vacations, trips to the park, or rounds of golf. But there are several good reasons why you should keep paying attention to your credit record in retirement.

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  • 8 ways to make your retirement savings go farther


    Many retirees welcome hearing about ways to stretch their savings and improve their finances.

    You can upgrade your finances in two basic ways: either reduce your expenses or increase your income. There are many opportunities nowadays to do either.

    One of the easiest ways to cut back on your expenses is to find ways to save on things that you buy. You may not gain much with each change, but by taking small steps your savings can add up big over time. Here are some ideas for lowering your monthly cash outflow.

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  • 7 ways to run out of money in retirement


    Like many retirees, you may be concerned about going broke in retirement. This could leave you in a bind. There are no “retirement loans” you can take out, and at that point you may not want or be able to go back to work in a job that could make a meaningful difference in paying your living expenses.

    That’s why it’s crucial to plan ahead of time and be careful how you manage your savings, possibly with the help of a reliable financial advisor. No matter how well you plan, sometimes life throws unexpected curves, and there’s no avoiding them. But at least you can arrange your finances to make the best of whatever comes.

    Here are some ways you could end up broke in retirement.

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  • 8 things you could sell for cash (while decluttering your home)


    After several decades of working and maybe a couple of decades raising kids, you probably have a lot of extra stuff. Many people have a lot of extra items around their home. Clothes you never wear, old electronics that have replaced by newer models, unused furniture, books you’re never going to read again, decorations, children’s toys, and more.

    Why not unload some of this extra stuff? Besides decluttering your home, ridding yourself of unused stuff can help bring in extra cash. So there’s a double benefit.

    There are many items around your home that you may be able to sell.

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  • Why the 4% withdrawal rate may not apply to you


    Like many retirees, you may be concerned about your retirement savings lasting for your entire retirement. You want to create an income stream to meet your retirement expenses, but how much can you safely withdraw each year without danger of outliving your savings? What’s a safe withdrawal rate?

    The common answer is that you can withdraw 4% of your savings annually, inflation-adjusted. This figure is based on analysis of historical stock market returns by various financial researchers.

    But it turns out that your asset allocation, i.e. which types of stocks you invest in, and what percentage are in other investments such as bonds, can make a significant difference in how much you can safely withdraw.

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  • 11 ideas if you can’t pay your taxes


    It’s a sinking feeling when you discover you can’t pay your taxes. It can leave you feeling stressed, anxious, depressed, angry, and a host of other emotions. Falling behind on your taxes can also impact your financial life. The IRS can seize your assets. Unpaid taxes can lead to fines and penalties, interest, and can lower your credit rating. A credit downgrade will lead to higher interest rates or even being denied if you should need a loan later.

    There are many reasons why you may be unable to pay taxes. An unexpected expense may have come up, such as a medical bill. Or you could have recently lost a job you had or taken a pay cut.

    Whatever the reason, there are things you can do to get out from under. Here are some things to do when you can’t pay your tax bill.

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  • 7 habits of highly effective retirees


    We’ve often been told that effective people cultivate and practice effective habits. That while everyone’s situation is different, certain consistent patterns of behavior increase one’s chances of success. This applies to individuals, families, and companies; hence we have the seven habits of highly effective people, teens, families, and entrepreneurs.

    The same holds true of retirement. Although everyone’s retirement is different, there are some habits that retirees can cultivate to increase the odds that their golden years will be many and fulfilling. Below we propose seven habits of highly effective retirees.

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  • Taking retirement for a test drive


    Many people approach retirement with a feeling of uncertainty. Uncertainty that they have enough savings. Uncertainty about what they’ll do with their time. Uncertainty that they can deal with the loss of regular social interaction and sense of purpose they get from work. Uncertainty, in general, that retirement is right for them at this time.

    If that describes you, then maybe a retirement ‘test drive’ might work. This increasingly popular arrangement is called phased retirement, in which employers reduce the working hours and provide partial retirement benefits to some of their older workers for a period of time. This is often a win-win: it gives workers a preview of their retirement and allows them to continue bringing in income, and it allows employers to keep their more experienced workers for a bit longer at reduced cost to mentor younger workers.

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  • Avoid these 7 common retirement planning mistakes


    Once you’re near retirement, you’re on the home stretch and the finish line is in sight. But while for many people this is a time to relax and pursue your favorite hobbies, it isn’t a time to ease up on your planning. On the contrary, managing your savings and your time becomes more crucial as you approach and transition into retirement. Here are some common mistakes to avoid.

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  • 5 ways to save on retirement healthcare costs


    Healthcare is already a significant part of many people’s expenses in retirement, and costs are rising. The average couple retiring in 2015 could plan on spending $245,000 on healthcare, according to Fidelity. This represented an increase from $220,000 in 2014, and a 29 percent increase since 2005. Here are some ways to save on healthcare in retirement.

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  • 5 commonly overlooked threats to your retirement


    You’ve saved diligently for retirement. You’ve selected the right mix of stocks, bonds, and savings accounts to provide a comfortable income in your golden years. You’ve set up an emergency fund for unexpected bills. But have you accounted for these contingencies? Here are some often-overlooked situations that could derail your carefully laid plans.

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  • 7 reasons this isn’t your parents’ retirement


    It seems every generation has claimed not to understand the generation that comes after it. Certainly there are marked differences between Traditionalists, Baby Boomers, and Gen Xers. When it comes to retirement, people reaching their golden years today will definitely face a different future than retirees in years past. Here are some reasons why that’s both bad and good.

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  • Buy or rent after retirement? 6 things to keep in mind


    After retirement many people think about relocating or downsizing, both to save costs and for a change of scenery. With no job to go to anymore, many look forward to ditching the snow and cold for the sun and beach. Moving to a neighborhood or state with lower taxes and living costs certainly can help your retirement dollars go farther. When you’re moving to a new home as a retiree, should you buy or rent? Increasing numbers of seniors are choosing to rent. Here are some things to factor into your decision.

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  • 6 things to consider about long-term care insurance


    It inevitably happens to all of us. As we grow older, our bodies simply don’t work quite as well. Our joints become less flexible, our reaction times increase, and our vision is not as keen. At some point, many of us will need assistance with everyday tasks of life. More than 70 percent of people in the U.S. over the age of 65 will need some form of long-term care assistance during their lives, according to the U.S. Department of Health and Human Services. That’s why long-term care insurance enters the minds of many people. But only 13 percent of people actually purchase LTC insurance. Are they making the right decision? Here are some considerations.

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  • 6 retirement planning lessons from Bruce Lee

    bruce lee

    The legendary martial arts master, teacher, and actor has had an influence far beyond his brief life – and far beyond martial arts. Many people who have trained in martial arts or self-defense have found striking parallels between the principles of martial arts and those of other fields. In honor of the martial arts and show business pioneer, who would have turned 76 this year, here are a few things we can learn about retirement planning from Bruce Lee.

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  • 7 ways to cut your tax bill in retirement

    As a retiree, you’re undoubtedly concerned with keeping as much of your hard-earned retirement savings and income as possible. A big part of this is keeping from paying more in taxes than you have to. In addition to taking the exemptions and deductions that are appropriate to you, there are other ways for retirees to minimize their tax bite. Here are a few ideas.

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  • 5 retirement savings options if you’re self-employed


    If you’re self-employed, it’s easy to put retirement planning on the back burner, with everything else you have to deal with on a daily basis. This may explain why about 55 percent of self-employed Americans say they are behind on retirement savings, according to a TD Ameritrade survey. But retirement planning is as important for you as it is for everyone else. And, being your own employer, you have more choices. Here are five of them.

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  • 7 ways to protect yourself against a market downturn


    With the recent decline in the stock market to start 2016, both in the U.S. and overseas, many retirees and soon-to-be-retirees are understandably nervous. After all, in retirement you’re dependent on your savings, which means you’re dependent on the unpredictable vicissitudes of the markets. If your nest egg takes a serious hit, that often produces a lot of fear and worry. Here are some things you can consider doing to protect yourself.

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  • 4 ways to work part-time in retirement


    If you’re approaching retirement and need a little more funds for a comfortable one, what do you do? One choice is to work part-time in retirement. Many retirees choose to work, partly for the income, and also for the opportunity to remain productive and active. A Merrill Lynch survey found nearly half of retirees either have worked or plan to work, and 72% of pre-retirees over age 50 say they would like to keep working after they retire. Fortunately, the options are more abundant today than ever before. Here are some good ones.

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  • 6 ways to deal with debt before retirement


    Before retiring, it’s important to eliminate or reduce debt as much as you can. When you’re no longer receiving a working paycheck your income will be more limited, and any money paid to service debt is money not available for you to live on. It’s also money you can’t put in your retirement accounts to grow over time. Carrying substantial debt into retirement increases the risk that you won’t be able to sustain a comfortable lifestyle in retirement. Here are some ways to handle debt before retirement.

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  • 6 ways to catch up on retirement saving


    If your retirement stash isn’t quite as sizeable as you’d like, you’re not alone. A 2014 survey by found more than one-third of Americans, including more than a quarter of those age 50 to 64, don’t have anything saved for retirement. While many plan to address this situation by simply delaying or foregoing retirement and staying on the job, the reality is that may not always be possible. Here are some ways to start making up a retirement shortfall.

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  • Planning to work in retirement? There’s something you need to know

    older worker

    Many workers plan to continue working in their retirement years. A 2015 poll by the Transamerica Center for Retirement Studies that two-thirds of workers age 50 or over plan to work beyond age 65 or don’t even plan to retire at all. But is working beyond retirement age a realistic plan? The numbers suggest maybe not.

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  • 7 ways to mess up your retirement


    You’ve worked hard for most of your adult life, and finally the time has come to retire. But a simple mistake or oversight could mess up your golden years. Here are some common mistakes in retirement planning and suggestions to avoid them.

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  • 5 lessons learned from actual retirees


    Experience is the mother of knowledge, the saying goes. In that case, a great way to learn about retirement should be to talk with those who have already retired. Recently, New York Life surveyed 500 retired octogenarians about what they had found. The results hold interesting lessons for all of us.

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  • How much people spend after retirement


    How much will you actually spend in retirement? That depends on a lot of factors, including your retirement goals and lifestyle, healthcare needs, and caring for family members. Many financial advisors cite the “80% rule”, which states that you will need 80% of your preretirement income after you retire. But while that’s a general rule of thumb, it may or may not apply. Will your actual spending increase, go down, or stay the same?

    One useful way to get an idea is to examine the experiences of actual retirees. The Employee Benefit Research Institute (EBRI) recently issued a detailed report on how retirees’ spending changed shortly after retirement.

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  • 5 ways to handle a surprise retirement


    Retirement often catches you by surprise. The majority of workers retire years earlier than they planned, surveys show. Health issues, caring for family members, and corporate restructuring are the top reasons that people end up leaving the workforce before they expected. Retirement can induce nervousness and stress even when you’ve planned for it. When it’s thrust upon you, it can leave you fearful, anxious, and possibly depressed. Early retirement isn’t a picnic, but with a few prudent measures it can be managed successfully. Here are some suggestions.

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  • 4 ways to help avoid money fights


    Surveys show money is among the top issues that couples argue about. These disagreements often arise when couples have different ideas about how money should be spent. As couples approach and enter retirement, these arguments can become more intense. Here are some suggestions for avoiding fights over money.

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  • How much of your retirement savings should be in stocks?

    Financial consultants are now advising people even in retirement to have a portion of their savings in stocks. For a retirement that may last 20 to 30 years or more, for most people only exposure to stocks can provide the growth needed to help ensure your savings don’t run out prematurely.

    Of course this doesn’t apply to you if your nest egg is already exceptionally large. In that case, your main concern is keeping an eye on your expenditures. The rest of us, though, are faced with a question: how much should you have in stocks? While there’s no one answer that applies to everyone, here are some tips for deciding what’s right for your situation.

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  • Retirement planning for stay-at-home spouses


    Most people think about retirement planning in terms of preparing to stop working. But what if you’re a stay-at-home mom or dad and don’t have employment? Retirement planning is just as important for you, and possibly more so. But your circumstances can make it complicated.

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  • Are you retirement-ready? Crunch the numbers to find out


    When you’re setting out to travel to an unknown destination, the only way to be sure you’ll get there is to map out the route. The same goes for retirement – the only way to be sure you’ll be financially ready when the time comes is to run some numbers. Here are some suggestions for what to do.

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  • Co-signing on a student loan can leave you hanging


    If you’re a parent or grandparent, you probably want to do everything in your power to give your children or grandchildren the best possible start in life. That’s what good parents do. But sometimes, your good intentions and actions can backfire. Co-signing on private student loans is an example.

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  • Planning for healthcare costs in retirement


    Your retirement expenses will depend largely on your retirement lifestyle. They may be higher or lower depending, for example on how much travel you plan to do and what hobbies and other activities you have. But there’s one expense that most retirees have to account for, and it’s a big one: healthcare.

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  • Retirement planning with no children


    If you’re single, or a childless couple, your retirement planning is greatly simplified, right? There are no kids, so you don’t have to worry about saving for college vs. saving for retirement, leaving an inheritance, and estate taxes. Not so fast, say financial advisors and people who have looked at the numbers. Retirement planning may be more complicated for singles than it is for couples.

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  • A simple system to track your finances


    As you know, an important part of planning for retirement is making a budget. This requires tracking your money flows. Without knowing what are your income and expenses, it’s difficult to know how prepared you are for retirement.

    But it can be a bit overwhelming to create and maintain a detailed budget. There are free online budgeting tools that can help. A budget that takes significant work to keep up, is one that’s not likely to be followed. Fortunately there’s a relatively simple solution.

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  • Some encouraging news from the 2014 retirement readiness survey

    retired couple

    If you’re approaching retirement and are feeling uneasy about your financial readiness, the latest Retirement Confidence Survey by the Employee Benefit Research Institute has some good news. A recent survey of actual retirees found their financial issues, for the most part, weren’t all that severe.

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  • How to make up a shortfall in retirement savings


    If you find yourself a little short on retirement savings, you’re certainly not alone. A 2014 survey by found more than a third of Americans, including more than a quarter of those age 50 to 64, have no retirement savings at all. What do you do if retirement is looming and your coffers aren’t as full as you’d like?

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  • Simple ways to cut costs in retirement

    credit-card-billMany people are finding, to their dismay, that they don’t have as much saved for retirement as they think they’ll need. The prospect of running short of money in your old age isn’t a pretty one. The good news, however, as we stated in a previous post, is that many retirees are finding they aren’t spending as much as they thought they would, but are still enjoying a satisfying retired life. Chances are, this may be you as well.

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  • Claiming Social Security early without a penalty

    social-security-application-formEveryone knows you can’t have your cake and eat it too. But when it comes to Social Security retirement benefits, maybe you can. Current Social Security rules allow you to apply for benefits early without taking a financial hit.

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  • Will you be able to work longer if you want to?

    business-timingMany workers choosing to delay retirement and keep working. In many cases this is out of necessity. Personal financial advisor Suze Orman has even recommended that people stay in their jobs until their late 60s. Employment also provides social contact, a sense of fulfillment, and the opportunity to remain productive. But recent research suggests that more positions are vulnerable to early retirement than previously thought.

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  • How much retirement income will you need? Maybe less than you think


    The “eighty-percent” rule is a widely quoted rule of thumb for estimating your retirement costs. It says that after you retire you’ll need to have about 80% of your pre-retirement income in order to maintain your standard of living.  This is a “textbook” number that financial advisors often use when advising clients about preparing for retirement, such as how much to contribute to their retirement plans. But recent studies indicate many retirees are spending much less.

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  • Five ways to take charge of your retirement

    billsandchangeIncreasingly, workers are left to their own devices when it comes to retirement. With the demise of corporate pensions for all but a lucky few, the vast majority of workers are left on their own in planning for retirement. Even if you have a pension, you don’t necessarily want to count on it, or Social Security, being there or being enough to meet your living costs. It’s best to keep your retirement in your own hands. Here are five ways to do that.

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  • Want an annuity but don’t want to tie up the cash? Try this


    You may be familiar with annuities. Since fewer employers are offering retirement pensions nowadays, annuities are a way of creating your own retirement income. But if you’re concerned about tying up a large sum of money in an annuity contract, and are willing to forego an immediate payout in return for a larger payout later, a deferred income annuity might be the answer.

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  • Things you must do before you retire


    Are you ready for retirement? While working forever might make the most sense financially, most people want to call it quits at some point and enjoy the things they really like to do. Here are some things you must do before you can safely leave the working world behind.

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  • Surprise! Sometimes retirement just happens to you

    surprisedkidPicking the optimal retirement age is a complex balancing act among several factors. On the one hand, you want to leave the 9-to-5 life while you’re still young enough to enjoy your golden years. But you also want to make sure your savings are enough to last through your retirement and to fund the lifestyle you want. Statistics show the majority of workers retire much earlier than planned.

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  • Retirement plans that may not pan out

    goldwatchMultiple surveys show that too many Americans have not saved enough for the retirement lifestyle they envision. Most people recognize that their employers will not provide pensions, so they’re largely on their own for retirement savings.

    But a lot of people still have assumptions about retirement planning that may not be realistic. The sooner you realize that these assumptions may not be feasible, the sooner you can adjust your retirement planning in time to have a comfortable retirement.

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  • How to go broke on $200 million

    iversonBeing rich or poor can often have little to do with how much money you make, and more to do with how well you manage what you have. Just consider the case of Allen Iverson. The retired pro basketball star, who earned over $200 million during his 15-season playing career, was reportedly broke and heavily in debt in the final years of his career. During his 2012 divorce proceedings, he shouted to his estranged wife, Tawanna, “I don’t even have money for a cheeseburger!” She handed him $61.

    Iverson is certainly not alone. Reports are that 60% of NBA players are broke within five years after retirement from playing. Their stories hold lessons for all of us.

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  • Want to live comfortably in retirement? Eliminate debt

    cutcreditcardsAn often-repeated rule of thumb is that you’ll need 80 percent of your pre-retirement income after retirement. This rule assumes that some of your expenses will decrease, such as commuting costs to and from work, wardrobe expenses, and, of course, contributions to retirement accounts. But the unstated assumption is that your other expenses will stay the same.

    What if they didn’t? Your utility bills will probably not change much, and there’s little you can do to reduce those. Your cell phone, cable, and food expenditures may remain the same too – that’s the idea behind living comfortably in retirement.

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  • Prescription savings you (may) have overlooked

    pillsWhen it comes to medication, your insurance always gives the best deal, right? Not necessarily. Many people don’t realize that Walmart, Target, CVS, and other national pharmacy chains offer prescription drug discount plans that may provide some savings.

    Although these plans have nominal annual fees, often it’s possible to more than recoup that on prescription drug savings, as well as savings on other services such as flu shots.

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  • Take the back door into a Roth IRA

    investing2If you’re a high-salary-earner and are looking for ways to put away a sizeable portion of your income for retirement, traditionally your options have been limited. Employer-sponsored retirement accounts like 401(k)s and individual accounts like IRAs have contribution limits that cap how much you can put in each year. For example, Roth IRAs have a limit of $6,500 per year for those age 50 and over. And if you make over a certain limit ($131,000 for singles in 2015) you can’t open a Roth IRA at all.

    But under recent IRS rules, you have a potential way around that. Some are calling it the mega-backdoor Roth because it allows you to sock away larger amounts into your Roth IRA, if you qualify.

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  • Four retirement myths you (might) think are true

    retirement2For many people, retirement involves a plunge into an unknown realm for which they are not sufficiently prepared. Like every life transition, retirement goes much more smoothly with proper planning. Here are four misconceptions that many people have about retirement.

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  • How a government pension may reduce your Social Security benefits

    cointowersThe Windfall Elimination Provision (WEP) is a little-known rule that reduces your Social Security retirement benefits if you receive a pension from a past job in which you were not required to pay Social Security taxes. It’s little-known because it applies only to a small segment of retirees. Mostly it applies to former state and local government employees, like police officers, firefighters, teachers, and workers at state and local governments and nonprofit organizations that are not part of the federal Social Security system.

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  • Survey says: you may not need as much retirement income

    moneyinhandFor people close to retirement who are feeling anxious about having sufficient funds, there’s some good news. A survey by T. Rowe Price of new retirees found that most are doing well, both financially and emotionally, and that retirees are less anxious than those who are approaching retirement. The survey also indicated that the retirees, who had been retired for one to five years, weren’t spending as much as they had expected, but were satisfied with their retired lives nevertheless.

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  • The four percent rule, revised

    percentThe venerated four-percent rule states that retirees can safely withdraw four percent of their retirement savings per year without running out of money in retirement. For example, if a retiree has $1 million in a retirement account, they can take out $40,000 the first year, and annually adjust that figure for inflation.

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  • Short of retirement funds? Here are some suggestions

    fiverinhandIf you’re approaching retirement and worried that you don’t have enough saved, you have plenty of company. Financial advisors see clients every day in their fifties and even sixties who have little retirement savings. The median amount of retirement savings of Americans age 55 to 64 is $103,000. A survey by the Center for Retirement Research at Boston University found similar results and concluded, “many Americans need to save more and/or work longer.”

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  • Early retirement – how to get there

    beachchairA dream of many people is to retire early. Leaving the daily 9 to 5 grind at age 60, 55, or even earlier, and having the day and the rest of your life free to do as you please, is an appealing vision. But how do you actually get there? For most people there are ways to make the dream a reality, but it takes planning and some adjustments.

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  • Why to pay yourself instead of your child’s college

    collegeMany middle-aged, middle-class couples today find themselves in a bind. On the one hand, they know they have to save for retirement, and worry they aren’t saving enough. On the other, college tuition bills are looming, and they want the best for their children. Financial advisors recommend making retirement saving the priority. Here are some tips for doing that.

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  • Why withdrawing your retirement savings in chunks may be good

    stackofbillsHow much of your retirement savings should you plan on taking out each year? Many retirees’ number one fear is outliving their savings, and that’s a question which is at the top of their minds. A common figure is the “4 percent rule”, which says you should plan on taking out no more than 4% of your savings each year. In today’s low-interest environment, many financial advisors are recommending even lower amounts, closer to 3 or even 2 percent.

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  • Why and how to save $100 per month for retirement

    If you want to have a comfortable retirement someday, it’s important to start planning early. By putting money away starting at an early age, you allow compound interest to work for you. Here are some general tips that can help.

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  • Five common retiree scams

    Frauds and scams aimed at retirees and seniors have become big business. Here are five common types of scams and tips for avoiding become a victim.

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  • Minimizing your tax bill in retirement

    Many people are concerned about taxes taking a bite out of their retirement income. With a little planning, your taxes in retirement will likely be lower than during your working years. Here are some suggestions for keeping your retirement tax bill to a minimum.

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  • Taking IRA distributions early without penalty

    We’ve all heard the common rule that you can’t access your IRA funds until age 59 ½ without incurring a 10% penalty. Less commonly known is a provision in the tax code that allows you to take distributions earlier, without any penalty. This provision has restrictions however, and is only suitable for certain individuals.

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  • Your credit score may reveal more than your spending habits

    credit card

    Credit score requests have become quite commonplace in today’s society. Your bank uses your credit score to decide how much interest to charge on your loan; your life insurer uses it to set your premiums; prospective employers even use it when making hiring decisions.

    A credit score encapsulates a host of prior financial decisions, which many believe reflects attributes that are harder to measure such as trustworthiness and personal responsibility. Now research has shown that credit scores are correlated with physical health.

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  • The new retirement

    The traditional model of retirement – working at the same career, even the same company, for decades and taking a gold watch at age 65 – has gone the way of the horse and buggy for many folks. It’s been replaced by a new retirement, which requires major adjustment but also presents new opportunities.

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  • The retirement expense you may not be thinking about

    dollar sign

    Although not everyone will need professional long-term care in their lifetimes, a significant portion will, and few people are thinking about it. According to Boston College’s Center for Retirement Research, 58 percent of women and 44 percent of men will need nursing home care sometime in their lives. The average duration of such care is estimated at 0.88 years for men and 1.37 years for women.

    The average cost for a nursing home in 2012 was $81,030 per year, and the average cost for home health care was $21 per hour. But only 13 percent of people buy long-term care insurance.

    Long-term care includes the necessities of daily living, such as eating, dressing, showering, and taking medications. Therefore it is not covered under most medical insurance policies or Medicare. However some health insurance policies cover minimal assistance, and Medicare Part A covers full or partial costs for up to 100 days in a skilled nursing facility following a hospital stay.

    One reason cited for why many don’t buy long-term care insurance, is that Medicaid programs cover long-term care for indigent residents. Medicaid’s programs are operated by the states and require that most of a person’s financial assets first be exhausted.

    The CRR estimates show that, although only 13 percent of people actually buy long-term care insurance, 19 percent of men and 31 percent would be willing to pay for it. Considering the relatively large percentage of people who will actually need long-term care, it’s prudent for everyone to consider how they would defray the costs should they need them. Some options are:

    1. Purchase long-term care insurance
    2. Reserve a portion of personal savings or home equity to pay the costs
    3. Live close to relatives or grown children who could take care of you
    4. Hope you stay healthy and never need it

    Regarding option #3, you also have to consider whether your relatives are able and willing to do this. Many grown children become personally and financially burdened by the cost and stress of taking care of elderly parents.

    Option #4 seems to be favored by many people. But it’s wise to make plans for contingencies, even if they’re never needed.

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  • Managing your retirement savings strategically

    bill dominoes

    Are you concerned that your retirement savings won’t last? You’re certainly not alone. A 2013 survey of people age 50-70 found that on average their savings were $250,000 short of what they’d need for the type of retirement they envisioned.

    Fortunately, there are ways to s-t-r-e-t-c-h your savings so they have a better chance of always being there when you need them. Here are a few suggestions.

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  • Your mortgage: To pay off or not to pay off?


    Paying off debt, such as your mortgage, can seem like it should be a top financial priority. After all, sending thousands of dollars to the lender each month can become burdensome and pointless. Best to be rid of that payment as soon as possible, right?

    Not so fast, say many financial experts. While paying off your mortgage can be satisfying and should be a priority for some people, for others there are things that should be taken care of first. Here is a short list.

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  • Watch out for taxes in retirement


    Although many people will see their taxes go down after they enter retirement, a lot of folks are surprised that many of their retirement income sources are subject to taxation. Taxes are something you definitely should take into account when figuring your retirement finances.

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  • Student loans – A threat to many retirement plans


    “Retirement” and “student loans” are two terms you might not hear often in the same sentence. But in fact, student loans are growing rapidly among people in or approaching retirement age. Education loans held by people 50 and over have increased 30% since 2005, according to the Federal Reserve Bank of New York, and now constitute 17% of $1.2 trillion in outstanding student loan debt.

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  • Making early retirement a reality


    Retiring early is a dream for many people in their fifties or early sixties. People want to retire early because they’d prefer to do something else than work at their jobs. Maybe they find their jobs boring, too stressful, or just unpleasant, or maybe there’s a hobby, volunteer position, or even another career they’d rather pursue instead.

    Can early retirement be more than just a dream? Here are some things to consider before you make the jump.

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  • Think you need a million dollars to retire? Think again

    money-us-dollarsMore than 70% of retirees have less than a million dollars in net worth. This will come as comforting news to many people who fear they are behind in their retirement savings. Furthermore, two-thirds have less than $100,000 in annual income, and four-fifths have Social Security retirement benefits, averaging $1,294 per month, as their main source of income.

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