As you near your last of work , you will face a ton of questions about what is important for the future. With a fixed income, prioritizing your spending and cutting unnecessary expenses is a natural part of the transition into your golden years. It’s relatively easy to decide on fewer cable channels or go out for dinner less, but what about something like insurance policies? Having coverage for your health and assets is important, which creates a dilemma surrounding what absolutely must be protected and what can do without. Selling a car so there’s only one to insure will result in savings, of course, but what else? Regardless of what’s on your table, here are four types of retirement insurance you want to have:
1. Health Insurance
Medicare is the primary source of healthcare coverage for retirees, obviously, but there are significant differences between the services included in your employer health plan and what is offered by the federal government. Things like prescription drugs and outpatient services can leave the individual paying a hefty portion of the fees, so scout out the best plan to fill in the gaps and help you avoid a big hit.
2. Home Insurance
If you’re like most people, your home is your primary asset. Even in the most volatile markets, property is among the safest investments a person can make. Being robbed of treasured memories due to a catastrophe would be hard enough, but it can be financially devastating, too. Before you move into retirement, be certain your policy offers the protection you need at an affordable rate.
3. Life Insurance
Chances are good you already have a policy to ensure your family is provided for, so you won’t need to purchase a new plan. What you might consider, if you decide to keep coverage in place, is the amount of protection you have. If your outgoing expenses are relatively minimal – the mortgage and cars are paid off, for example – you might be able to decrease the pay out and still take care of your loved ones.
4. Travel Insurance
With all your newfound free time, you might be planning to drive around the country or fly all over the world. There’s a lot you might encounter along the way, so it’s smart to make sure you are prepared in case of an emergency. What happens if you have a serious accident while driving around Italy? How will you pay for an extended hospital stay? Secure a traveler’s policy before you leave and cover all the angles.
So, retirement planning is must for you, if you have not yet started its still not late.
When it comes time to purchase life insurance, there are always a lot of questions. Within the industry itself, there are competing claims that muddy the water, leaving one to wonder which type of policy is best for them. There are so many advantages of Whole life insurance over the less expensive term life options, though at greater cost. In the long run, the financial goals of the individual purchasing the insurance are crucial, as well as risk tolerance and income, to a lesser extent.
What draws most people to whole life insurance policies is the security they provide. For the entire life of the policy, premiums and face value are set in stone permanently. What this means is that, due to inflation, the policy will end up costing less as time passes. Your minimum agreed benefit and cash value will be paid out in the event of your death without any further medical examinations to determine insurability, unless you decide to alter the face value or protection clauses. (In most cases, though, it’s simpler to purchase an entirely new policy to cover the balance, if you decide you’d like more coverage.)
Over time, a whole life plan will build up a cash value that term life plans cannot. For those looking to utilize the policy as part of retirement planning, this is a major advantage. When the premium is paid, part of it will be put into the insurance company’s general fund and part will be set aside for the insured. In effect, the plan becomes a like a savings account or piece of real estate that develops a market value to support loans or pay other expenses in emergencies, such as medical care during a chronic or terminal illness. These loans or withdrawals will be repaid out of the death benefit if there are any remaining balances, but the ability to defer tax on these monies until they are disbursed is very appealing – and, even then, a portion of the gains may not be subject to income taxes.
Those funds placed into the insurance company’s larger pool give whole life insurance policies the added possibility of annual dividend payments. This feature is a bonus, as the availability of these extra funds will determine whether they are paid out or not in a given year. If they do, they are a major advantage to the insured, as they can help the individual increase the death benefit in the event of rising costs or for added protection. Some like to use them to cover part or all of premium payments or, in other cases, cash the dividends out for supplemental income during retirement.
There are a lot of differences from company to company and state to state, so be sure to check with a trusted insurance agent. Some whole life insurance policies are unavailable to creditors or lawsuits. Others have riders which stipulate the premiums must be waived if the insured suffers a partial or permanent disability. These advantages can be awfully tempting, which makes it all the more important to discuss them with qualified professionals, particularly your accountant or financial planner if you are planning on utilizing your whole life insurance policy as part of your retirement portfolio.
There are a lot of questions you will have to answer by your last day of work. You will have to set up pay outs from your investment portfolio, adjust your lifestyle, and maybe even plan a long vacation to celebrate. Another major issue that might come up along the way is where you’ll live. You may have taken it for granted you’d be staying put, but there are all sorts of attractive retirement locations out there. Would you prefer to continue living in your current home? Do you have an itch to explore somewhere else with your newfound free time? Here are four factors you must consider when thinking about where to spend your golden years:
Proximity to Family and Friends
Have your children stayed close to home? Do you meet regularly with a close-knit social group? Deciding to pick up and go somewhere else will affect your ability to see them, obviously. Coordinating travel for holidays can be expensive and time consuming, but advancements in Internet technology have made it much easier to connect using video in real time. Of course, if you’re at the head of one of the quickly-growing number of families that’s spread out across the country, chances are you are already taking advantage of it.
Big City or Small Town
After spending a lifetime in one place, you might feel like partaking in a different kind of cultural experience. Perhaps the hustle and bustle of a major metropolitan area has left you yearning for some peace and quiet in a more rural area. Maybe you’re in the mood for the opposite: touring museums and seeing plays in a cosmopolitan city instead of the routine calm in a peaceful town. Be aware of the differences in property taxes and housing costs. Some states have lower property taxes than others and, in larger population centers, the law of supply and demand leads to higher prices. If you opt to leap into a larger pond, make sure your retirement planning has prepared you appropriately for the financial differences.
If there’s a chance you would like to keep working part-time, it might benefit you to do some research about the job market for retirees. As Baby Boomers near retirement age, there is bound to be a shortage of workers, so you might find a part-time position available to supplement your income and keep you socially active. That said, you might find a means to build up a business out of your home wherever you go – the Internet has led to a wide range of possibilities for those willing to put forth the effort.
Quality of Healthcare Facilities
When you’re sick – or if you have a condition requiring specialized care – you want to make sure you can get access to the best services possible. As you weigh the different options you are bound to come across, consider the availability of top-notch medical staff in the area. Though it may be appealing to become an expatriate living near the beach in Costa Rica, it might be a challenge to get access to prescription medications in a timely manner.
If you are in the workforce today, the chances you have a defined benefit pension plans are pretty slim. Outside of a few industries with active union membership, most corporations have done way with them as part of cost-cutting measures. Of those who lucky enough to have one, a recent study by Fidelity Investments found 71% of the individuals polled were unaware of the major details – they were unable to answer questions about simple things like when payments begin. If a pension is part of your retirement planning, here are a few keys to understand:
Pensions were originally intended, at least in part, to reward employee loyalty. In order to incentivize the benefit, employers created a timeline by which these accounts would “mature” to the full amount. If, for example, you become eligible for vesting after five years with the company, over the next five years you might have accrued 10% of the maximum allowed by the IRS. Five years after that, you might be up to 20%, and so on until the contribution limits are reached. This value cannot be taken from you, even if you were to leave the company – the account will be frozen until you reach retirement age.
Most defined benefit plans pay out in equal amounts on a periodic basis until the annuity is exhausted, but you have options as to how often the disbursements arrive. You can decide on monthly, quarterly or annual checks based on your preference and the balances you will receive from other parts of your investment portfolio. (Some even permit a one-time payment at retirement. Though you might choose to hold off on receiving them for a while if the stock market is flying high, you will have to make a decision by age 70 or April 1 of the year following your retirement, whichever is later.
In the event you pass on before the end of your pension annuity, the plan will set aside options to ensure your spouse is able to claim at least a portion of the amount you’ve accrued. Depending on the way your benefits are structured, particularly if you chose the joint/survivor option, it’s possible to continue the payment calendar with a minimum of 50% of the periodic disbursement and ensure your loved one is provided for when you’re gone.
No matter what stage you are at, retirement planning always seems to be an alphabet soup filled with all kinds of “similar but different” options: 401(k)s, Roth IRAs, and so on. The labels, as defined by the Internal Revenue Service (IRS), often overlap causing even more confusion. When you’re trying to set up an investment portfolio that guarantees your financial future after your last day of work, every little bit of clarity helps. With that in mind, here are three key differences between qualified and nonqualified annuities:
1. Tax Deferment
The primary means by which to distinguish your annuity is whether contributions are made before or after taxes are pulled out of your paycheck. For the most part, if pre-tax dollars are used to fund the account, such as in an employer-created 401(k), the IRS classifies it as “qualified” and will tax disbursements in the future. On the other hand, when you set aside part of your net earnings into an investment vehicle – a money market account or whole life insurance policy with cash value, for instance – you are participating in a “nonqualified” agreement in which taxes have already been paid.
2. Investment and Income Restrictions
Simply put, the IRS sets limits on the amount of qualified annuity contributions which can be made every year. Since 2009, the maximum amount that can be set aside in a 401(k) is $16,500 with an additional “catch-up” amount of $5,500 available to people over 50. Nonqualified plans, because they are made out of after-tax monies, have no ceilings – you can add as much as you can afford to your account, so long as the company you’re doing business with permits it (and most do).
In addition, there are income restrictions on certain types of qualified annuities: if you would like to fund a Roth IRA, you’ll have to earn less than $105,000. Though you may not be affected early in your career, as your earnings grow you’ll be exempt from contributing to an account which might allow another $5,000 investment for your retirement portfolio.
3. Mandatory Withdrawal Dates
Both types of annuities are subject to a 10% penalty if you withdraw from them earlier than six months before your 60th birthday, but there is no point at which you will be required to accept payments on your nonqualified account unless you agree to it. (Some insurance companies, as an example, might require them to begin at age 85.) However, if you have a qualified annuity, you’ll be required to receive the first disbursement no later than six months after your 70th birthday. The IRS uses life expectancy estimates to ensure monies are distributed – and taxed, since they haven’t been yet – to appropriately fund the golden years of retirees.
With all the options available, it can be tough to discern the best course. Be sure to consult with a trusted financial advisor before making any decisions, as they will best understand your goals and current portfolio make-up.
Signed into law on August 14, 1935 by Franklin Delano Roosevelt, a limited form of what we now call Social Security has been in place since January of 1937. During the Great Depression, more than half of senior citizens after Retirement were in poverty and the “social insurance” plan was developed by the President’s Committee on Economic Security as a means to combat it. In the beginning, the program was designed to provide benefits to the retired and unemployed, as well as a lump-sum at death.
From the start, the limitations imposed by the program were controversial: benefits were offered for certain professions, leaving out women and minorities in large numbers. Exclusions that kept nurses, teachers, social workers and many others from claiming benefits meant barely more than half of the American workforce received help. In addition to stipulations already in place “just big enough for the majority of Negroes to fall through,” as the NAACP protested, much of the authority for distributing aid was given to the states to appease Southern congressmen. As a result, black families were often allocated less money than white ones, widening the gap even further.
Of course, there was some debate as to whether the program would be considered constitutional at all. The Supreme Court had been quite forceful in striking down New Deal legislation throughout the mid-1930s and, if not for a timely switch after the Judiciary Reorganization Bill was proposed by President Roosevelt in 1937, it might have been eliminated just as the first death benefits were being paid out. A pair of decisions released on the same day, Steward Machine Company v. Davis and Helvering v. Davis, upheld the right of the federal government to set policies for “the promotion of the general welfare.” Three years later, Ida May Fuller of Ludlow, Vermont received the first monthly Social Security payment.
The program has evolved almost continuously, as concerns regarding holes in the payment plans led to more inclusive amendments in 1939. The number of covered individuals remained relatively stable until separate amendments in 1950 and 1954 extended coverage to nearly everyone, but dependents and spouses of working women were still prevented from receiving death benefits until 1962. It wasn’t until the 1970s, when protection was extended further and cost-of-living adjustments were created almost 40 years after the bill first went into effect, that Social Security as Americans understand it today came into being.
So this was just a brief of Origin of Social Security
One of the most wonderful things about Retirement Planning is managing the free time to pursue interests of all sorts. After years of dedicating hour after hour and week after week to someone else, filling days with activities centered on ourselves can be a little intimidating. Sure, sleeping later and having a leisurely breakfast are much better than rushing out the door with a cup of coffee and piece of toast in hand, but what about the rest of the day? With research mounting about the benefits of socializing and continuing to challenge the brains as we age, finding Different Hobbies for Seniors is a great way for seniors to thrive during their golden years. Whether you’re in the mood for physical activity or mental stimulation, here are some favorite pastimes to try:
What can be better than an afternoon in the sunshine? Fresh air and a light sweat can be had as you go about creating a masterpiece of natural colors. Take the opportunity to engage your creative side and plan out your design ahead of time, then place a variety of bushes and blossoms in the right spots to make your yard a bright haven for reading or entertaining family and friends.
This has become popular across generations in recent years, as it allows people to put an artistic spin on memories for all sorts of events – vacations, weddings, etc. A scrapbook allows you to tell a story through photos and written passages, making it a great way to gather with children or grandchildren to share your past as you put pages together.
A fresh take on walking, you’re likely to find groups that schedule time to cover the trails of your nearby parks. Exercise is important, and finding reasons to enjoy it beyond simply taking as many steps as possible will keep you coming back for more. No matter if you live near the woods or in an urban jungle, you are likely to encounter new sights in your own back yard.
With the price of digital cameras dropping all the time, it’s a great time to allow your inner shutterbug to fly. Advances in technology make it possible for almost anyone to snap a postcard-perfect shot. If you’d like to develop the skill, many local community colleges and senior centers offer classes geared specifically for retirees on proper technique and even using editing software to get the most out of your photos.
There comes a point when we all begin to wonder where we came from and, if you’re interested in family history, this is a great time to seek out information. Vast amounts of public records have become available on the internet, allowing details to be found in all corners of the globe. If computers aren’t your thing, visit your local library and you might find some help or even a short course to get you up to speed. Before long, you’ll be connecting the dots between long lost branches of your family tree.
Though some might say it seems like an odd time to pick up an instrument, you will have plenty of time (and the willingness!) to practice at the one of your choice. Playing the piano, for instance, requires a fair amount of mental and physical dexterity, making it a great way to engage different parts of your brain than you’re used to.
There can be little argument Hollywood is fascinated by youth. Every year, it seems, another twentysomething actress comes on the scene as the next big thing only to be eclipsed in twelve months by another doe-eyed beauty. Filmmakers have come to rely more on technology and explosions than great writing and piercing dialogue, but that doesn’t change the fact a good story captures the imagination while creating laughs and romance. The next time you feel like making popcorn and parking on the couch for an evening, here are nine great Movies For Seniors:
- Grumpy Old Men/Grumpier Old Men:
A classic comedy starring Walter Matthau and Jack Lemmon, this pair of movies is the rare instance of a sequel that’s as good as the original. The stories center around two lifelong neighbors who have competed since childhood. After decades, the battle is taken to new heights when a beautiful woman buys the house across the street.
- The Bucket List:
Morgan Freeman and Jack Nicholson star in this funny and heartwarming tale of two terminally ill men that sneak out of a cancer hospital to live out all their wildest dreams. Along the way, they form an unlikely friendship and share in the deep joy of fulfilling long-held wishes.
- Driving Miss Daisy:
The Oscar-winning tale of the evolving relationship between a Jewish woman and her African-American driver over several decades is highly-regarded as timeless for both stage and cinema. Set in the South, it is a heartwarming tale of time (and more than a little charm) bridging the gap created by great social differences.
When we think of animated movies, sappy stories with talking animals grownups grumble through come to mind. That’s not the case here! This is the tale of Carl Fredrickson, an elderly man determined to visit a Lost Land in South America. Just when he’s about to go to a retirement home, he ties hundreds of balloons to his house and floats away to adventure.
- Calendar Girls:
This British comedy tells the story of Chris and Annie, two members of a small women’s group in the English countryside. After Annie’s husband dies from leukemia, Chris decides to up the stakes in the annual calendar by proposing everyone pose nude in order to raise funds for a memorial at the local hospital. The media gets wind of it, then it gets out of hand from there.
- Something’s Gotta Give:
Another feature offering Jack Nicholson, this film centers around a wealthy music executive who begins to reconsider his penchant for younger women after a heart attack at the home of his girlfriend’s mother, played by Diane Keaton.
- The Notebook:
A classic love story, this movie appeals to romantics in all generations. Despite being from distinctly different rungs on the economic ladder, the poverty-stricken boy brings new life to the privileged young woman. Will she choose to follow her family’s orders or follow her heart?
Fans of the Western will want to make time for this one. Clint Eastwood plays a retired gunslinger hired to avenge the brutal murder of a young woman. Calling in one of his old friends and saddling up beside a new pistoleer, he pursues the killers as the line between hero and villain gets hazy.
If you are still doing your Retirement Planning then add these to your list as well.
Want to participate in the community here on FutureYears? Make this a part of your Retirement Planning to come up and share your views. You can now do so by using your Facebook or Twitter ID! Just click on the appropriate logo under “Post Success Stories With” in the center of the home page and you will be asked to sign in to the social network you’ve chosen. After a simple click to authorize connecting your profile to FutureYears, you can begin posting questions and providing answers. Of course, if you’d prefer to have a separate account, you can go through the steps on the registration page.
Once inside, you’ll be directed to My Dashboard. Below are a few common questions:
How do I ask a question?
Begin by clicking on the “Ask a Question” button, which will take you to the creation page. There will be two fields for you to fill out: the upper one for the topic you’re interested in (Life Insurance, Home Health Providers, etc.) and the lower one for the question itself. Once you have filled both in, click the “Create” button and your question will be posted to the forum. As people begin to respond, you can click the “My Questions” link on the dashboard and pick the corresponding question you would like to read to see answers from the community.
How do I answer a question?
Begin by clicking “View All Q n A” on the dashboard. This will have a list of recent questions and, if applicable, any answers that have been given. Simply click on the “read more…” link and you’ll be directed to the appropriate page. Once there, you can read through all the responses, then supply your own thoughts by filling in the box at the bottom and clicking the “Comment” button.
If you’ve asked a question and want to answer your own, you can do so by following these instructions or clicking the “My Questions” link and selecting the appropriate question. Once again, you’ll merely have to enter your ideas into the box at the bottom and click “Comment” to add them to the discussion.
How do I start a discussion group?
From the dashboard, click on “Start New Group” and you will be directed to the correct page. Name the group you’d like to begin (Investment Tips, e.g.) and add in three primary topics (investments, stocks, bonds, e.g.). After that, add a primary location to help people understand how your thoughts might be more relevant to them. Before clicking “submit” you’ll want to add a group description, as it will help new members understand the direction of the group before joining up.
After you’ve clicked “submit,” your group will be listed under the “My Groups” tab on the dashboard and in the left column of discussion pages. Once you click on the group’s name, you’ll be directed to the page where comments can be submitted. On the right side you’ll find a “Join this Group” button. Once you’ve subscribed to the group, you’ll be able to click the “Start Discussion” button, give your discussion a topic and create a description, which will serve as the first post.
How do I join a discussion group?
There are two separate ways to go about this, as you’ll see “Search Groups” and “Search Discussion” buttons on the dashboard. If you have a general idea of what you’re looking for or a place you’d like to see the information come from, click “Search Groups.” Here, you can enter a topic (retirement communities, e.g.) or location and look for groups based on that information. If you know of a specific discussion you’d like to join, then click the “Search Discussion” button and enter the name (Dating After 50, for example) then click the “Search Threads” link to be directed to it.
Once you’ve found a group you’d like to connect to, click the “Join this Group” button on the right side of the screen. From there you’ll be able to contribute by clicking on the individual thread, typing in your thoughts and clicking the “Comment” button.
Planning for retirement is a major part of life for any working adult. In recent years, employer pension plans have dwindled as the amount of options available has grown. Customers are now more responsible than ever for understanding the basic information before they even speak to a financial planner. Below you will find descriptions of the three primary components of Retirement Planning.
Generally speaking, these are the safest investment you can make. You will make a certain number of payments into the annuity at a pre-determined amount, based on how long you’re investing and what your return will be. In the future, it will pay you back either a guaranteed amount (fixed annuity) or a sum based on market performance (variable annuity). Unlike Roth IRAs and 401(k)s, which are predominantly made up of stocks and bonds, there aren’t limits on your tax-deferred contributions.
For those looking for a relatively stable way to invest in the markets, bonds are the way to go. In essence, you will be making a small loan to a company or government agency. In exchange for your contribution, you are promised a set return when the bond matures several years down the road. Keep in mind, though, that it’s possible the amount will go unpaid in cases of poor returns or bankruptcy.
The most uncertain option is to buy shares (stocks) of a company, but it also provides the highest return. When things are going well, the equity you have provides tremendous gains. If the market takes a turn for the worse, you could lose everything, unfortunately. This is why all Roth IRAs and 401(k)s have a mix of stocks and bonds as part of the portfolio.
Based on what you’d like to achieve, it’s best to find an appropriate balance between high- and low-risk choices. Early in your career, you’ll want to tilt your investments towards stocks because of the time you have to “make up” losses. As you near retirement, it’s advisable to shift toward bonds and annuities – programs that have a better guarantee of return as you come to the point of requiring steady cash flow.Thus you can plan your Retirement Funds easily with these options available.
When it comes time to set out your plan for the future, find a licensed financial advisor to walk you through the steps necessary to achieve your goals. And, because there are many options.