Considering Retrement?

If you are preparing for retirement in the next few months or years, you might want to read this article that first appeared in U.S. News and World Report and was recently republished in the Huffington Post.  I think that it provides had good blueprint for those considering retirement. http://www.huffingtonpost.com/2013/06/06/retirement-planning-preparation_n_3386365.html?utm_hp_ref=retirement

Traveling is Good for You

As anyone who reads this blog knows by now, my wife and I are frequent travelers.  While we always enjoyed traveling, now that we are retired, we have the time to travel as much as our retirement resources allow us to do.  Recently, we have been traveling a lot.  We just returned from a visit with our daughter and her family in Minnesota.

During our visit, we had a number of wonderful experiences in the Minneapolis area, which we will be writing about.  On the way back  home, we also made stops in New Glarus, Wisconsin and Springfield, Illinois.  

I will be writing about each of these adventures in the very near future. So, stay tuned.  What I wanted to share with you today is the somewhat surprising finding that traveling can be good for you, despite the perceived stresses of flying and driving.  

A study conducted by Expedia in 2013 found that 90% of vacationers experienced less stress after a day or two away from the office or factory.  Many other studies have shown that the failure to take regular vacations can both speed  up the aging process and result in a greater risk of coronary related disease and deaths. "Feeling Stressed? Hit the Road," Minnesota, Money Magazine, October 2014, p. 9.

Now, not everyone can travel or take a vacation as often as we do.  But keep in mind, if you can, give a vacation a try.  It just might save your life.

Do Stock Brokers Need Help to Advise Boomers on How to Invest their Money?

Do stock brokers and financial advisors need help in preparing to advise baby boomers how they should invest their money as they plan for retirement and retire?  Well, Bank of America Merrill Lynch apparently thinks so. According to a report on today's "onwallstreet" website, Merrill has retained a gerontologist, to assist in preparing its advisors to deal with the aging population in America, who are customers of Merrill. For those of you unfamiliar with the term, a gerontologist is a person who is trained to study the social,psychological and biological aspects of aging.  It differs from geriatrics which is the medical study of aging.

The gerontologist named by Merrill, Cynthia Hutchins, has a degree in gerontology from the University of Southern California (USC) and has worked for some 28 years in the financial industry and for 15 years with Merrill in various capacities.. She was named by Merrill  to train Merrill's 15000 advisors on how they can better assist clients with age-related issues such as planning for retirement , use of resources in retirement as well as other health and finance issues, as well as issues arising from things such as dealing with adult children who return home and grandparents raising their grandchildren

Sounds like it might be a good idea.  Let me know what you think.

A Retirement Savings Plan for the Rest of Us

President Barack Obama in his State of the Union Address on Tuesday, January 28, 2014, made a revolutionary proposal concerning your potential retirement. In case you missed it, here is a brief discussion of that proposal.

All of us are familiar with the so-called 401(k) plans that enable employees of usually larger companies and businesses a to put aside some of their compensation in certain investments which are not taxable as income when received and which are permitted to grow tax-deferred until withdrawn in retirement. The idea is that those investments will be taxed at  presumably a lower rate at retirement than  at the current rate.

Until now, if your employer did not offer such a plan, you were out of luck. President Obama's proposal would permit those employees to fund  a so-called MyRA account by having a part of each paycheck deducted and deposited in US Government Bonds, where they would be given the same treatment as traditional 401(k) plans.

According to administration officials, millions of Americans who do not have access to the automatic deposit feature of a 401(k) plan are likely to take advantage of the MyRA proposal.

Let me know what you think and whether, if you qualify, you would take advantage of such a plan.

3 Easy Ways to Save Money in Retirement

Are you worried about saving money in retirement? You are not alone. Most of us who are in retirement or thinking about retirement wonder if there are easy ways to save money that will not impact the standard of living we enjoyed before retirement. Here are three ways you can save in retirement that do not require you to abandon your current lifestyle and may in facts enhance that lifestyle:

A. Always ask for the senior discount. This is probably the easiest way to save money, usually 5 to 10 % and sometimes even more. These discounts sometimes apply even to those 55 and over and almost all apply to those over 65. Many theatre chains offer discounts as most people know. But did you know you can get a discount at hotels? The U.S. also gives you a break. You can obtain a senior pass at any of the National Parks operated by the National Park Service. http://notjustforboomers.blogspot.com/2012/06/national-park-service-senior-pass.html http://notjustforboomers.blogspot.com/2013/03/the-easy-way-to-visit-national-parks.htmlThe senior pass entitles you and three others in your party to enjoy the national parks for free. If you are a member of AARP, they will provide you with a list of other businesses where members can get discounts. If you are a former member of the military, you may also be entitled to a discount (usually 10%) at retailers such as Lowe's and the Home Depot. You will need to obtain a identification card from the VA or the Department of Defense to obtain these discounts.

B. Buy Products that last. This may seem like an obvious suggestion, but it is one that is often ignored both in and out of retirement.  If you are buying a large ticket item such as a new car or refrigerator, you need to do your homework to determine which product will provide you with the longest wear. An excellent source of information is Consumer Reports magazine. It will provide you with unbiased analysis of just about anything you are interested in buying. It is well worth the subscription price of $20 or so, which you will probably save on your first purchase. Also shop around. The most advertised product may not be the ones that last longest. For example, everybody knows about Gillette razors and blades, but did you hear of Wilkinson blades?  I've been using them for years and they are usually cheaper and last much longer than other razor blades.

C Do it yourself. With the advent of television networks such as HGTV and DIY, there is certainly a boom in this country of persons who do their own repair and renovation work. This is an enormous potential money saver for retirees, who generally have the time to work on these projects.  And with You Tube showing you how to do just about anything, you should take advantage of those resources and fix that running toilet or repair that broken wood floor. You might be amazed how handy you really are and surely, you will be amazed at how much money you can save by going the DIY route. Try it.

How Do I Prepare for Retirement?

How do I prepare for retirement?  That is a question that millions of people in the United States are asking themselves. These people are not just boomers like myself, but people in their twenties, thirties and forties, as well. And no, I'm not talking only about how you must save so many dollars a year so that you have enough to last until you are 96 (although that is certainly part of the preparation process). There are many websites and blogs that deal with that issue. What I am talking about is how do you prepare yourself not only financially, but also mentally, physically and psychologically. What this blog does is to provide you with the paths you can take that will ease  your mind.

When you retire, you suddenly have a lot of time on your hands. How you use that time will determine how successful your retirement will be. But the secret is how you prepare to use that time and resources well in advance that will determine whether or not your retirement will be a success.
So search this blog and see if you get some ideas that will work for you. Here are a few posts that may be of help to you: http://notjustforboomers.blogspot.com/2013/07/where-is-best-place-to-retire-part-2.html;http://notjustforboomers.blogspot.com/2012/12/how-to-save-for-retirement-easy-way.html. We will, of course, continue to add information that will help you achieve the retirement you want and deserve, whether now or 20 or more years from  now.

Believe It or Not: Boomers Are Retiring and Liking It

Contrary to many misconceptions, believe it or not, boomers are retiring----and once more, they are enjoying it.

There seems to be a belief that boomers are not going to retire, that they prefer working until they die. While that may be true for some boomers, there apparently are quite a few who are retiring as soon as they feel they can do so and still maintain a lifestyle similar to their pre-retirement lifestyle.

In an article on the Huffington Post50 website, entitled "Boomers---Will They Shun Retirement", the author, Sara Rix, discusses several studies that show that boomers are in fact retiring at or near the retirement age of 65 and are enjoying their retirement. One study shows that 7 of 10 retirees really like retirement and have adapted to it quite nicely.

If you are interested, the full article can be found at http://www.huffingtonpost.com/sara-rix/retirement-work-longer_b_3442301.html

What Are Boomers Doing?

http://www.huffingtonpost.com/2013/05/23/retirement-age-oldest-boomers_n_3326226.htmlhttp://www.delawareonline.com/article/20130521/OPINION07/305210037/Don-t-count-out-baby-boomers-just-yet

Here are a couple of very interesting articles on boomer retirement plans and their contributions. I know I was surprised when I read them and I think you wiki be too.

Easy Ways to Save on Everyday Expenses in Retirement

In our last post, we reviewed an online course entitled "Fundamentals of Personal Financial Planning" offered by the University of California at Irvine.  The course was an in depth study of almost all aspects of financial planning.  However, it is probably too advanced for most people. On the other hand a course offered by the Khan Academy is much more down to earth. www.smartmoneyhabits.com. Through a video, Easy Ways to Save on Everyday Expenses, it offers a number of ways you can save money on your grocery bills, cable and telephone bills. Most of the tips  we all have heard before, but it is always good to remind ourselves how little things like shopping with a list, using coupons, signing up for rewards or loyalty cards can all add up to big savings.

In addition to the Easy Ways to Save on Everyday Expenses video, several other videos are offered.  One fascinating one to me was the one entitled The Time Value of Money.  The video offers a cogent explanation of this sometimes elusive concept. Let me know what you think.

Overall, for most people, this is the course I would recommend if you are trying to get your personal finances in order.. It is quick and easy to understand and does not require a lot of prior knowledge. Shop Amazon - Perfect Gifts for Mother's Day http://astore.amazon.com/notjustforboomers-20

How Boomers Can Save Money in Retirement by Studying the Fundamentals of Personal Finance

We boomers all think we know more about money issues than we really do.  So maybe, we need a little help with our finances..  But who wants to go to a financial planner?  Even those who charge by the hour and do not take commissions can still cost you a pretty penny.  Money Magazine recently recommended two online courses to give you the fundamentals of financial planning. I thought I would test drive those for you and give you my impressions of the two courses.

First up is the course entitled "Fundamentals of Personal Financial Planning" offered by the University of California at Irvine. This no credit, no-fee course is available online at http://ocw.uci.edu/courses/course.aspx?id=12.  This course is not intended to replace a professional financial planner, but to help to give you a better understanding of financial planning. According to the course description, "The course was created to help those who cannot afford extensive planning assistance better understand how to define and reach their financial goals. It provides basic understanding so informed decisions can be made. The course can also be seen as a reference for individual topics that are part of personal financial planning."

The course is quite comprehensive, covering some 22 different topics from preparing cash flow and net worth statements to determining how much you will need for retirement.  If you are truly interested in planning your financial future, this is certainly a good place to assist you with your planning.  However, it does make certain assumptions that beginners may not be familiar with.  I think it is geared more towards the person with some general knowledge of the principles of personal investing who wants a refresher course.

In a future blog I will discuss another financial planning course from the Khan Academy. www.bettermoneyhabits.com.

Will You Have Enough Money for Retirement?

Do you have enough money for retirement?  That is a question that most of us ask ourselves all the time. With the median age of retirement still at 62,  the average lifespan increasing, and health care costs increasing, there is a very real possibility that many people will run out of money well before the 30 years or so that you may live after retirement. Do you know if you have enough?

While the answer to that question will differ for each of us, there is a handy tool that may be useful to determine just how much you need and how much you can comfortably spend each month in retirement.  This is the T. Rowe Price Retirement Income Calculator.  Available at the T. Rowe Price website at www.troweprice.com, it is easy to use and gives a comprehensive look at your particular financial situation.

You can use the calculator even if you are not a T. Rowe Price shareholder. You simply register as a guest and then provide the required information. This includes the amounts in your and your partner's IRA, 401K as well as the amounts you anticipate (or are receiving, if already retired) receiving from Social Security, pensions, annuities and any other sources of income.  You also are required to provide your monthly budget, i.e., how much you spend each month.

Once you have provided the requested information, the calculator goes to work, performing what are said to be thousands of calculations to determine if you will run out of money before you are 95 years old.  You are then provided with a readout showing the percentage likelihood as to whether you have enough.  Anything over 90% is considered excellent. Below that, you might want to consider saving more. In addition to the percentage likelihood of reaching 95 with enough money, it also shows you how much you can safely expect to spend each month.

This calculator is the best and easiest to use that I have seen. One note of disclaimer, I do own shares in various T. Rowe Price funds but I have no other financial interest in the firm, nor have I been compensated in any way for these views, which are strictly my own. - 5619EB62C1D3715573A5D14C19EFB9AA

How to Save For Retirement the Easy Way

How would you like to save for retirement the easy way?  We all would, of course.  The statistics consistently show that Americans are simply not saving enough for their retirement.  Here is a possible easy solution that you can use to make sure you are on track for that retirement.

In this month's AARP The Magazine, there is an article by author, Jeffrey Yeager, adapted from his new book, "How to Retire the Cheapskate Way:  The Ultimate Cheapskate's Guide to a Better, Earlier, Happier Retirement."  The plan is very simple:  Yeager suggests that each year, you plan on saving at least an amount equal to your age---and two zeros. In other words, at age 40, you would save $4000 and at age 50, $5000.  If you are going to follow this plan, you might want to consider having a set amount deducted automatically from your checking account each month and transferred to your IRA or other retirement account.

According to Yeager, if you follow this plan beginning at age 20 and assuming a 5% annual return compounded, you would have at least $500,000 at age 60.  Not an insignificant amount .Of course, no one can predict the future as to rates of return or the effect of inflation, but this seems like a relatively painless plan to save for the future.

Alternatives to Immediate Annuities:in Retirement 101

As we come closer to retirement, we all start thinking about how we can supplement our social security and other sources of income such as pensions or IRAs.  One of the investment vehicles being touted today is the immediate single premium annuity The immediate annuity works like this in its simplest form:. You take a lump sum of money, say $100,000, and give it to the insurance company when you reach age 65. Except in very limited circumstances, you no longer have access to the principal. In return, you will receive a monthly payment until you die. If you are lucky enough to have a long life, you will undoubtedly receive back your investment and more. On the other hand, if you were to die shortly after purchasing the annuity, your estate will lose the entire amount.  There is some variation of the immediate annuity that allows your spouse to continue receiving a reduced payment until his or her death. The question is: are there other investments that may produce  income without risking losing the entire amount and without those restrictions on access to your money?

Although none of these investments are guaranteed or without risk, I think that there are several alternatives which together may provide a reliable source of income.  As always, the key is to maintain diversity, i.e., spreading your investment money around several different classes of assets..  In that regard mutual funds are probably the better choices for most people rather than individual stocks and bonds. One type of fund to consider is the municipal bond fund. These generate tax-free income and if they contain municipal bonds from your state, the income(or some portion of it) may be free of state as well as Federal income tax.  A second type of fund to consider is the dividend growth fund.. These generally invest in high quality stocks that have paid dividends for many years and are regularly increasing the amount.The third leg of the stool is an investment grade corporate bond fund. These are designed to generate the highest levels of income consistent with the preservation of principal..  Of course ,unlike the immediate annuity, none of these mutual funds produce a guaranteed income and you could also lose your principal.  However, with any of these  alternatives, you do have access to your money and it may still be there for your heirs.

All of the major mutual fund companies offer these types of investments, Vanguard (www.vanguard.com), Fidelity (www.fidelity.com), T. Rowe Price (www.troweprice.com), etc. So which you choose is really a matter of personal preference.

DISCLOSURE:  The author has investments with each of the mutual fund families referred to in this post. The opinions expressed in this post are informational only and are not intended to provide investment advice.  You should consult with a professional advisor before investing your money.