With the 10% reduction in principal limits on a federally insured reverse mortgage scheduled for tomorrow, October 1, it appears that lenders are getting swamped by last minute borrowers who want the most money for their reverse mortgage. The industry is trying its best to fill demand, but despite this fact it’s obvious that many seniors will not be able to meet the deadline. Leave a comment on reversemortgagedaily.com, and someone will contact you to let you know if you still have time.
According to Reversemortgagedaily.com, Genworth Financial Home Equity Association has just announced the debut of a fixed rate reverse mortgage product which will purportedly have a competitive interest rate of 5.625%. This low interest rate provides enhanced security for the reverse mortgage borrower. However, as with all financial products, make sure to weigh the pros and cons, so you can make an informed decision.
On August 27, I made a blog post about a retirement savings and college savings study. The study stated that 1/3 of people are saving for both equally, a third are saving for one over the other, and a third are not saving enough for either, and it provided no detail as to which option was the most prudents. Well, according to a recent ABC news article, saving for retirement should be your first priority. This article states that a 401k trumps a 529 college savings plan anyday, and also shows that people who are saving for their retirement early will be able to either pay for their children’s college down the road or be able to take on a tad of debt themselves.
A recent milestone analysis of three million employees’ 401k plans in 57 top corporations conducted by Hewitt Associates and the non-profit educational foundation Ariel Investments shows that there are significant discrepancies in retirement planning and saving amongst different ethnic groups. The study shows that just 65 percent of Hispanic workers participate in their company’s 401(k), while 66 percent of African-American employees, 76 percent of Asians and 77 percent of whites enroll. Among them, Latinos contribute 6.3 percent of their income, whites 7.9 percent, Asians 9.4 percent and blacks only 6 percent. This study while at its façade displays how different races plan for retirement differently, underlines how there are many ethnic, social, cultural, economic, and linguistic barriers to receiving retirement information, planning, and saving properly for retirement.
Retirement Revolution, a new series that looks at the stories of everyday people who have found ways not only to survive but thrive in this new retirement reality, premieres on PBS tonight. Our advisor Henry “Bud” Hebeler of Ask Bud fame has an interview on how to have a successful retirement in these tough times with such answers to questions like, Should savings patterns change during inflationary times?. Check out a part of his interview here.
I found this recent, very telling article,”End of Retirement,” about the fact that seniors are having to retire much later in life to provide for a secure retirement. They even chronicled a woman who works half days at a newspaper at the age of 101!
Europe is able to have successful and affordable Healthcare, so why can’t we. Well, the answer might be right on the tip of our tongues. We have an obesity rate of 64.5% vs. a 27% and 38% obesity rate for European females and males, respectively. (The European obesity rate is increasing at an alarming rate due to what I believe is due to poorer nutrition, the increase of fast food chains, and to many extents, the McDonaldization of Society, where quality is substituted for quantity). I found a brilliant analysis of the single problem we have with Healthcare and what must be done to change it in this Op-Ed piece in the New York Times. The author, Michael Pollan points out that the single biggest problem with Healthcare is not the system itself but America’s food industry, “a second even more powerful industry,” even more powerful than Insurance. The American diet most clearly leads to health problems in the future. Super size meals, dollar menus, pound burritos, pretty much everything the Fast Food Industry puts on the table is fodder for the Healthcare industry. Even the salads and healthier food they have put on the menu aren’t as healthy as they appear to be. A salad with heavy dressing is over 1000 calories (like a Chipotle Burrito), and most people, because they think salad is healthy will get fries to complement said salad. You can thank the drive thru for that Type 2 diabetes as well as the fact that you have no insurance. And sure, to an lower to average income American eating 3 burgers, fries and a soda for as much as you would pay for a cup of fruit and a bagel is very tempting. What must be done aside from fixing the Healthcare system of its flaws is to tackle the giant food system and the American way of eating. By providing Americans with cost-effective and healthy eating, we will decrease the burden we are putting on the Healthcare system. If we get the health insurance industry involved in the fight over the farm bill, which they certainly will because they see the profits in having a healthy population, then we can see a true step forward for Healthcare Reform and cutting Healthcare costs. While Pollan believes the fight should be between “Big Food and Big Insurance,” I also believe that the Healthcare Industry will side with Big Food since it throws money their way. It looks like a we have a battle of the bigs, I hope us little ones just don’t get lost in the fog.
Get ready, come 8 o’clock Eastern Time, live updates will be rolling through the wires covering President Obama’s Address To Congress. You’re not gonna want to miss this. 8pm- First Lady Obama enters into the House 8:11- The President Finally Arrives to warm applause 8:16– Speaker of The House Pelosi Announces The President of the United States 8:18 Describes that a recovery is many months away, declares he will not let up until those seeking jobs will find them 8:18 1/2 “Pulled this economy back from the brink,” only Democrats rise in applause 8:19 Issue of Healthcare, Determined to be the last President to take up Healthcare, again Democrats only stand 8:20 A History Lesson on Healthcare by Obama 8:21-8:22 PersonalAmerican stories of Healthcare’s Lapses, “This is wrong.” Every seat applauses. 8:23-4 We must do something to control costs, “Our Healthcare Problem is Our Deficit Problem” 8:25 Left: Single Payer System (Public Plan) Right: Individualized Healthcare 8:26 4 out of 5 commitees have finished there tasks and there is an 80% agreement 8:27-8 We have also seen scare tactics that have not helped the debate, “The time for bickering is over.” 8:29 Three goals More security to those with insurance, provide those that don’t have it, slow the Healthcare costs for our country 8:30-2 If you have Healthcare, nothing will require you to change. Against the law for insurance companies to deny you coverage if you have a preexisting condition, cannot drop coverage when you get sick, no arbitrary cap, place a limit on out of pocket expenses. If you don’t have Insurance you will have quality affordable coverage. New Insurance exchange (shop for insurance at competitive prices). Every seat rises in applause 8:33 This exchange will happen in 4 years. But right now if you get sick you will be covered. 8:34-7 You are required to have Basic Health Care. (It is clear that Obama has looked at the Massachusetts system and how small businesses have many times been left out.) 8:38 Time to put down some rumors: States rumors of “Death Squads” is a complete lie 8:39 Illegal immigrants will not be covered, no abortions will be funded by the gov’t 8:40 “Consumers do better when there’s choice and competition.” 8:41 “I want to hold Insurance Companies accountable” 8:43 “Republicans and Democrats need to work together” 8:44 “If you get affordable coverage then we will give you a choice” Only democrats stand up 8:45 How to pay for this plan, “not a single dime will be added to our deficits.” 8:46 We can find savings within the Healthcare system already 8:47 Medicare “Must be passed down from one generation to the next”8:52 Reforming Medical malpractice laws, Republicans stand up in applause. 8:53 900 Billion dollars over ten years Expect commentary early tomorrow morning
President Obama this past weekend in his weekly radio address talked about some of his retirement proposals that will increase saving in retirement. Firstly, the President is allowing small businesses “to allow workers to automatically enroll in a 401k or individual retirement account.” Secondly, Obama stated that if you have a retirement account, then you can have a federal tax refund automatically deposited into your account. This initiative will allow money to not simply get spent the moment it arrives in the mail but instead go into a savings account where it will accrue interest. Furthermore, in your tax refund, you could simply check a box and get your refund as a savings bond. If the bond market is paying interest, which it is not right now, then this could be a great decision. Finally, if you are an employee with unused vacation or sick time you could put payments you are due into your retirement plan. This last idea is great for those senior level employees who have unused vacation or in attempts to make younger employees wonder if they really need to take that 3 day vacation.
In other news, a new Charles Schwab report states that nearly half (44%) of retirees claim to be supporting at least another individual financially. While this exhibits the generosity of retirees it is also evidence that retirees are not practicing proper retirement planning. Everyone, of course wants to help their family in whatever way they can, but it is paramount to worry about your own finances instead of your family’s. Helping them in the short term is fine, but imagine once you are gone then how are they going to figure out their finances in the future. Setting the right example through debt consolidation and reducing expenses, is the most prudent decision to ensure your family’s financial future.
And finally, to add to the launching of the socialsecurity.gov site to which I mentioned in the post “Apply For Social Security Benefits Online.” It appears that Patty Duke has brought back her role as Cathy Lane from the 1960’s sitcom The Patty Duke Show to get baby boomers online to apply for Social Security benefits. While the characters she plays in the Public Service Announcements are signing up for social security, Patty, aged 62, says she will be waiting a few more years to start receiving benefits. This is especially a good call if you are healthy and believe you will live a long life. In fact there is s great article from the Center for retirement Research at Boston college entitled, “How Much Do Households Really Lose By Claiming Social Security at Age 62?” Don’t fret if you have started collecting Social Security at 62 and have since changer your mind because you have the ability to restart your Social Security benefits. Here is a nifty little Social Security calculator that will help you decide when the best time to start receiving benefits. Oh and if you would like to see the ads please visit socialsecurity.gov/pattyduke
Watch out ladies! You may not be planning and preparing for long term care properly, according to a report by the American Association for Long Term Care Insurance. Looking at the data though, I cannot see a link between the economic downturn and the ability for women to plan and prepare for long term care. Nonetheless, the takeaway from this data is that long term care and long term care insurance are important issues that very often get overlooked.
In other news, be prepared for a media blitz this Labor Day weekend by the AARP as it attempts to prove to retirees that it is has no political leanings in the Healthcare Reform Debate. They are rolling out with millions of dollars in advertising budget to convince people that they are only looking out to help its members in the Healthcare Debate. This advertising is rolling out because of the fact the AARP lost 60,000 or so members who thought the association was flat out siding with Democratic camp. This is yet another reason why I’m glad I have DVR.
