Posted on June 30, 2006 by Jason
On Wall Street, July 1st, 2006
The two workers were part of a larger group of 32 ExxonMobil chemical
plant and refinery employees. They were blue-collar and financially
unsophisticated, ranging in age from 55 to 67. Some were pipefitters
making maybe $45,000 per year, while others were machinist supervisors
earning as much as $80,000 with overtime. During three years of
meetings that began in 1997, their broker repeatedly told them: “Why
are you working? I can make you more money when you’re retired than
when you’re working.”
The employees say they turned over their retirement savings to that
broker, who put their money in variable annuities and mutual fund B and
C shares. But after losing much of their retirement money, the
employees brought an arbitration action against the adviser, David
McFadden, and his firm, Securities America. In May, an NASD arbitration
panel awarded the workers $22 million–one of the largest such awards.
The amount included $3.5 million in punitive damages.
Read more of this article. Find out more about Annuities.
Posted on June 30, 2006 by Jason
It’s no surprise that reverse mortgages are becoming popular among seniors
US News and World Report, June 13th, 2006
For many of today’s retirees, a home can seem like Fort Knox without
the key. Escalating real-estate prices have caused many seniors’ homes
to skyrocket in value. But unless they’re willing to sell, it may be an
inaccessible gain during a time in their lives when extra income and
liquid assets would be most welcome. There is a way to tap those
profits–a reverse mortgage. “Many seniors are sitting on home equity
they never dreamed of,” says realty expert Tom Kelly, whose recent
book, The New Reverse Mortgage Formula, is a guide to what a growing number of elderly homeowners see as a way to have their home and cash in on it, too.
A reverse mortgage allows a homeowner to borrow against the equity
in a home, but unlike a home-equity loan, the loan and interest do not
have to be repaid until the home is sold. The loan might be in the form
of a line of credit that can increase over time and be drawn on as
needed, a lump sum payout, a fixed monthly check for as long as you
live in the home, or a mix of options. There is minimal or no upfront
cost, as closing and other fees can be wrapped into the loan. The
reverse mortgage also pays off any existing mortgage, ending that
monthly bite on income. Cleo Dunn, an 88-year-old widow in Leawood,
Kan., says the $1,200 a month she receives from her reverse mortgage
supplements her Social Security check. That helps her pay medical and
other bills while remaining in the home she loves. “I have this most
beautiful garden,” she says. “I have a life here I could not have
anyplace else.”
Read more of this article. Find out more about reverse mortgages.
Posted on June 29, 2006 by Jason
US News & World Report, June 29th, 2006
For seniors with little cash and lots of value socked away in their home, the
reverse mortgage is rapidly gaining popularity as a way to raise money without
having to move.
From July 2005 through March of this year, the federal government insured
48,088 reverse mortgages, up more than 20,000 from the previous year. And in May
alone, a record 8,414 reverse mortgages were approved.
Essentially, seniors are borrowing against the value of their homes without
needing to pay the money back until they move out or die. Despite the growing
number of reverse mortgages, however, they are “not necessarily the most
desirable option for most older households,” says Susan Wachter, professor of
real estate at the University of Pennsylvania’s Wharton School. “This always
will be a niche product.”
Who fits the reverse-mortgage profile? First, there’s an age limitation.
Under the Federal Housing Administration program, only people older than 62 can
get a reverse mortgage. Eligible homeowners should also be low on cash, unable
to take money out of retirement funds, and having trouble paying for basic
expenses, says William Supper, a financial planner in Morristown, N.J.
Read more of this article. Find out more about reverse mortgages.
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Posted on June 29, 2006 by Jason
Courier-Post Online, June 28th, 2006
A majority of baby boomers and early retirees believe that flexibility
– being able to work part time, or a week here and there — is the
most important quality in determining their “ideal job” in retirement.
This was followed by the desire for an employer they could stay with
for a while, as opposed to job hopping, and an employer who would give
them independence and autonomy in their work, according to a survey by
RetirementJobs.com, an Internet job information site.
The results came from an online survey of more than 400 job seekers age
50 and over, followed by interviews with a sample of the respondents.
Read more of this article.
Posted on June 29, 2006 by Jason
The Union Democrat, June 27th, 2006
Mike King, Orville Millhollin and Roger Francis just can’t quit.
The trio of former school administrators were not long into
retirement before heading back to the trenches — filling temporary
vacancies at local districts or providing other services to schools.
Having been educators for most of their lives, the three found it too hard to leave their jobs behind without looking back.
“I think when one spends a long time in a certain job, it’s
nice to be able to keep in touch with what’s going on,” Francis said.
After all are healthy, have had successful careers and have knowledge to share, Millhollin said.
“We feel a real missionary spirit to continue that with today’s youth,” he said.
Read more of this article.
Posted on June 27, 2006 by Jason
The Edmonton Sun, June 27th, 2006
Buying peace of mind with long-term care insurance is an illusion
because coverage is expensive and most policies restrict where and how
funds can be used, according to a new study.
Those who are accepted often need help that policies won’t
cover and retirees may be forced to let a policy lapse due to rising
premiums before being disabled enough to make a claim, the report says.
“Increased reliance on private long-term care insurance does
not appear to be an effective solution,” says the study, co-authored by
Edmonton health policy analyst Wendy Armstrong.
“There is no evidence these products will effectively fill the
growing gaps in benefits outside hospitals walls, ensure timely access
to a wide array of required and desired medical goods and services or
provide good value for money.”
Furthermore, significant segments of the population can’t access
long-term care insurance because of price or pre-existing conditions,
notes the report, funded by the Canadian Institute of Health Research.
Read more of this article. Learn more about long term care insurance.
Posted on June 27, 2006 by Jason
USAToday, June 26th, 2006
If you retire at 65, there’s a chance your
retirement will last more than 30 years. And that raises a lot of
questions: What will you do with your time? Will you stay in the same
house? Will you become a Wal-Mart greeter at 85 because you’ve run out
of money? Even if you’re in your 40s, it’s not too early to start
making plans. Here is a road map that will help you navigate the five
phases of retirement.
Phase 1
15 years prior to retirement, develop a financial plan
With 15 years to go before retirement, now’s the time to get your finances in order.
“A lot of people just cross their fingers and
hope they have enough to retire,” says Peggy Cabaniss, chairman of the
National Association of Personal Financial Advisors.
You need a plan — and we mean more than a stack of 401(k) statements. If you want help from a professional, ask yourself:
Do you want a one-time review or just a couple of sessions? Do you want continuing advice on how to invest?
Read more of this article. Learn more about Retirement Plans.
Posted on June 26, 2006 by Jason
Veterans and lawmakers alike dealing with theft of personal information of millions of veterans and active-duty military
The Free Lance-Star, June 25th, 2006
Local veterans wonder what might happen if the laptop containing
information on 26.5 million veterans and active-duty military is never
recovered.
“It just boggles the mind about what the result will be,” said Dave Ellis, a retired Air Force colonel and Vietnam veteran.
The U.S. Department of Veterans Affairs announced in late May that
information including names and Social Security numbers had been
compromised.
A data analyst with the agency had taken the information home on a
laptop computer without authorization and the laptop was stolen from
his home on May 3.
Although the theft was reported immediately, VA did not publicly announce the incident until several weeks later.
Read more…
Posted on June 26, 2006 by Jason
Retirement Nest Egg may need a Different Coddling
The Arizona Republic, June 25th, 2006
With Social Security’s future shaky and more companies dropping
pensions, the oft-repeated rules about how much income you’ll need in
retirement and when to withdraw it are being upended.
“Always
question the conventional wisdom,” said Sandeep Singh, finance
professor at State University of New York College at Brockport.
Like most rules, the ones covering nest eggs are useful starting
points, not substitutes for in-depth planning. Common guidelines and
exceptions to the rules, read on.
• You’ll need 60 percent to 80 percent of pre-retirement income to keep
your current standard of living once you retire. The thinking behind
this estimate is that you’ll no longer have work-related expenses such
as commuting.
Why this may not work: Some retired couples take
up costly hobbies, indulge in foreign trips or face stiff out-of-pocket
health expenses.
You’ll have to take into account inflation and expected annual
investment returns to figure out how much you need to save before you
retire.
Read more…
Posted on June 26, 2006 by Jason
Fallback option will offer more if you’re older
The Sun News, June 23rd, 2006
Question: My husband and I hope to retire in 2011 when we
will be 62, and we would like to get a reverse mortgage to help pay for
our retirement. What do you think?
Answer: Reverse mortgages are a mixed bag – a great fallback
for funding retirement, but charging rather high fees. Also, you could
get a good deal more money out of a reverse mortgage if you waited
until you were 10 or 20 years older.
Reverse mortgages are loans that use the property as collateral,
just like regular mortgages and home-equity loans. Since the money is a
loan rather than income or capital gains, it is tax-free.
With a reverser, however, you won’t make monthly loan payments, and
there’s no deadline for paying the money back. Instead, the principal
and accumulated interest charges are paid off when the property is
sold, even if that is not until after the owners have died.
The lender cannot require that the loan be repaid earlier. Nor can
the lender go after the borrowers’ other assets to repay the debt, even
if the property ends up being worth less than the borrowers owe.
Read more…
