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Chris Farrell: Living Frugally Frees You to Live Better

Posted on February 17, 2010 by Jason

Encore.org, February 10th, 2010

Chris Farrell is drawing big crowds as he tours the U.S. to promote his new book, The New Frugality,
which paints a picture of a seismic shift in our society away from
unfettered spending, toward healthier financial habits. In a
conversation with Civic Ventures Senior Fellow Marci Alboher,
he explains why changing your attitude toward money can also help you
live a good life that reflects your personal values and may help you
find your true calling – in, perhaps, your encore career.

Marc Freedman,
founder of Civic Ventures, calls Farrell’s book “a roadmap to a better
life and a better future.” Freedman recently heard Farrell address a
crowd in Northern California. “Speaking in front of a roaring fire,”
says Freedman, “Farrell laid out his vision for the great changes,
already under way, that will produce a more sustainable lifestyle in
America over the coming decades.

“His perspective, articulated much more fully in the interview below
with Marci Alboher, has profound implications for encore careers. It is
a reminder that shifting to an encore vocation is about much more than
work; it is often the signal of an approach to the world rooted in
sustainability. Many people I meet are downshifting to gain the freedom
to work in areas of greater significance, and reducing their
consumption equally as a way to limit their footprint. They are both
‘doing’ encore—and ‘being’ encore.”

Here’s what Chris Farrell told Marci Alboher:

Q: Despite all the pain and hardship around debt, your visits to
bankruptcy court and your talks with folks who’ve lost their homes,
your book is optimistic, and you say that most Americans won’t go back
to borrowing as usual. How are you so sure?

A: There are several reasons why. It’s going to take a long
time for the banks to repair their balance sheets. Banks have learned
the hard way that consumers are much riskier than they thought. And the
regulators are horribly embarrassed and will ensure a certain
conservatism among the banks. Another factor is it that because the
recession was so severe, people realize how financially vulnerable they
are.

It’s easy to say people were crazy, borrowed too much and went wild.
But if you look back from the ‘70s and ‘80s up until 2002, the economy
was growing and it was reasonable to say, ‘I’m going to borrow more
because I’m going to make more money.’

Read more of this article.

NewRetirement
Retirement Calculator:   The economic turmoil of the past few years has caused most homeowners to drastically re-evaluate their retirement plans.  You can use the NewRetirement Retirement Calculator to determine how secure your plans are, and see if you need to adjust them in any way in the new reality that seniors are facing.

The Case for Being Your Mom’s Banker

Posted on February 11, 2010 by Jason

The Wall Street Journal, February 6th, 2010

A reverse mortgage is an appealing way to extract cash from your house—but it comes with baggage.

Reverse mortgages, which homeowners who are at least 62 years old
can use to tap their home equity, have become more popular in recent
years. The homeowner takes out a new loan on the house. The bank then
gives the homeowner a lump sum, a line of credit or a regular monthly
payment—almost like an annuity. The loan is repaid, with interest, when
the borrower dies, moves or sells the house.

But there are significant drawbacks. The fees can run as much as 7%
of the home’s value, compared to roughly 3% for a conventional loan.
Lenders typically won’t allow homeowners to borrow against all of their
equity. And in the end, the lender gets the home, an asset many parents
would prefer to leave to their children.

Families where at least one adult child has amassed a nest egg have
another option—buying the house outright, or using some of that money
to set up a private reverse mortgage. Either way, the family avoids
paying lending fees and may even get a few tax breaks.

When Wayne Tew, a credit-union president in Las Vegas, realized that
his parents needed money, he bought their house and leased it back to
them, freeing up their cash for a new car and travel. The son claimed
tax deductions for the home’s depreciation. And after his mother died
four years ago, he sold it for a small profit.

“I could get them out of debt stress,” Mr. Tew says. “They felt self-reliant and did what they wanted to do.”

Setting up a private reverse mortgage with your parents takes more
work. Kenneth Kossoff, an estate-planning attorney in Westlake Village,
Calif., helped a daughter and son-in-law set up a revolving line of
credit for their parents, who wanted to expand an existing reverse
mortgage on their million-dollar-plus home.

The line of credit cost about $3,000 to set up using a promissory
note, a deed of trust recorded at the local courthouse and a revolving
credit agreement—much cheaper than the upfront costs of about $16,000
for a bank-issued reverse mortgage, Mr. Kossoff says.

Even though it is a family loan, you should still record it legally
so other family members can’t attack the arrangement after your parents
die, Mr. Kossoff says. He also advises paying for a title search to
make sure there are no other liens on the house before you make the
loan.

Read more of this article.

About
Reverse Mortgages:  If you’re considering setting up a private reverse mortgage, then it behooves you to learn all about the program.  You can research reverse mortgages and more at NewRetirement.com

Professional Financial
Advisers:  Anyone considering a financial program such as this should probably consult with a financial adviser to evaluate what this will do to their finances.

Less Invasive Hip Surgeries Make Inroads

Posted on February 11, 2010 by Jason

The New York Times, February 9th, 2010

Hip replacement is one of the most successful operations in all of
medicine, which prompts many orthopedic surgeons to think, as one
leader in the field put it, “Why change something that doesn’t need
fixing?”

But that leader, Dr. Robert Berghoff; his colleagues at Arizona
Orthopedic Associates in Phoenix; and other orthopedic surgeons around
the country believed that improvements were possible, especially with
regard to reducing complications and speeding recovery.

The
technique these surgeons use is called anterior hip replacement, one of
several minimally invasive operations that are associated with a
shorter hospital stay, smaller incision, less trauma to muscles, less
pain and blood loss, reduced risk of dislocation after surgery, faster healing and a quicker return to normal activities.

“The morning after surgery I was able to walk without a walker or even
a cane and could put my full weight on the operated side,” Jack White,
a 71-year-old personal trainer from Paradise Valley, Ariz., said in an
interview. “The next day I walked 50 yards without a limp and was able
to go home, where I did physical therapy
five days a week for two weeks. On Day 5, I walked a mile and a half,
and in Week 4, I taught my aerobics class and played 18 holes of golf
with no pain and no problem.”

The operation was introduced in the
United States more than two decades ago by Dr. Joel M. Matta of the St.
John’s Health Center in Santa Monica, Calif., who also helped design a
special operating table to simplify the procedure.

Another minimally invasive form of hip replacement, the PATH technique, was developed by a Los Angeles orthopedist, Dr. Brad L. Penenberg.

Dr. Patrick Meere of New York University
Langone Medical Center and the Hospital for Joint Diseases in New York
tells me this method has the same advantages as the anterior approach,
results in no activity limitations and also offers a safety net: If
anything goes wrong during the procedure, the problem can be repaired
without having to do a more extensive operation.

Read more of this article.

Supplemental
Medicare Insurance:  If you’re considering hip replacement surgery, it might be a good idea to evaluate what insurance options you have beyond medicare.  Get more information at NewRetirement.com

Long-Term Care Hospitals Face Little Scrutiny

Posted on February 11, 2010 by Jason

The New York Times, February 9th, 2010

No one at the hospital noticed that Tina Bell-Jackman was dying.

On the night of June 26, 2007, Ms. Bell-Jackman turned restlessly in
her bed in Room 7 at Select Specialty Hospital of Kansas City, a small
medical center that specializes in treating chronically ill patients.
Ms. Bell-Jackman, a 46-year-old with diabetes,
had been hospitalized at Select for five weeks, was increasingly
agitated and could not speak because of a surgical hole in her throat.
Her physicians had ordered the hospital to keep a sitter with her.

But at 8 p.m., the sitter left, according to a state court lawsuit and a Medicare inspection report.
Left alone, Ms. Bell-Jackman tried to get up. Around 9:30 p.m., staff
members tied her down with wrist restraints. Around 12:15 a.m., after
the restraints had been removed, a nurse injected her with a sedative to calm her.

In other hospitals,
an attending physician might have seen Ms. Bell-Jackman. But the Select
hospital of Kansas City has no doctors on its staff or its wards
overnight. In emergencies, it must call in physicians from outside.

More
than 400 similar facilities, called long-term acute care hospitals,
have opened nationally in the last 25 years. Few of them have doctors
on staff, and most are owned by for-profit companies. The Kansas City
hospital is part of a chain called the Select Medical Corporation, a publicly traded Pennsylvania company that runs 89 long-term hospitals, more than any other company.

Lawsuits,
state inspection reports and statistics deep in federal reports paint a
troubling picture of the care offered at some Select hospitals, and at
long-term care hospitals in general.

In 2007 and 2008, Select’s
hospitals were cited at a rate almost four times that of regular
hospitals for serious violations of Medicare
rules, according to an analysis by The New York Times. Other long-term
care hospitals were cited at a rate about twice that of regular
hospitals.

Read more of this article.

Long
Term Care Insurance:   Purchasing Long Term Care insurance can often give you more control over the healthcare you receive should you require a lengthy hospital stay.  Consider your options at NewRetirement.com

Some Pretty Angry Seniors Kidnapped And Tortured Their Financial Adviser

Posted on February 11, 2010 by Julius

A group of four German Senior’s, known as the “Old Rage Pensioners,” is in court now for kidnapping and torturing their financial adviser because he took their money and “took them for a ride.”  They are formally charged with an accomplice of kidnapping, illegally confining and causing grievous bodily harm to their 56 year old financial adviser.  The police found out about the case when the adviser wrote an SOS on a fax that he said he needed to send to get the group their money back.  Read all about the story here.

Top 10 Financial Blessings Of 2009

Posted on February 10, 2010 by Jason

Financial Edge, November 19th, 2009

Yep, it’s been a tough year. There’s still much to lament, such as
decades-high unemployment, rising budget deficits and shaky financial
institutions, but considering the abyss we were staring squarely into
at this time last year, we’ve also come a long way and made great
strides toward a healthier economy. So, as we enter the traditional
Thanksgiving period, let’s take a few moments to give thanks for the
modest financial gifts we’ve received this year – and maybe more
importantly, give thanks that in many cases, our worst financial fears
failed to materialize.

  1. Major Stock Indexes Rise
    Good tidings! Major stock indexes
    are up 60% since their March lows. The rebound in our equity markets
    has been critical on several fronts. First, it has helped stem the
    losses seen in retirement accounts like 401(k)s and IRAs. These retirement accounts are increasingly the No.1 funding vehicle for retirees, so recouping any losses here is a big help, especially to the baby boomer demographic.

    There’s also a confidence issue at play, and our stock markets
    - for better or worse – are a de facto barometer, an economic
    “feel-good” factor. Fortunately, stock markets look forward, not back.
    Right now, they’re telling us they anticipate better times down the
    road. (To see how far the markets have come, check out The Fall Of The Market In The Fall Of 2008.)

  2. GDP Growth Returns
    Gross domestic product growth is the engine that makes everything go in our economy. GDP growth leads to stock market growth, contributes to job and wage growth, and increases tax revenues for state and local governments to help balance their budgets. We obviously need all of these things, and the GDP growth of 3.5% in the third quarter was a good start.

    We still need consistent GDP
    growth over several quarters to claim economic victory, and we need it
    to be more organic, not artificially spurred by government stimulus and
    one-time fiscal measures. As we look forward to 2010, this will be the
    biggest catalyst to getting us out of this recession and bringing down
    our nosebleed unemployment level.

Read more of this article.

NewRetirement
Retirement Calculator:  With the turmoils of last year, many retirees have been worried about their long-term financial situation.  You can use NewRetirement’s retirement calculator to evaluate your situation for the long term.

6 Ways to Make Your Retirement Accounts Last Longer

Posted on February 10, 2010 by Jason

US News & World Report, March 6th, 2009

Once you retire, you have to make sure your nest egg lasts the rest of
your life. It takes shrewd calculations and a even bit of luck to fund
your own 30-year retirement in the best of times. But the stock market
dive has thrown the delicate balance of managing your own retirement accounts off kilter. If market losses or an unexpected expense has bruised your nest egg, here are some ways to make it last longer.

Postpone withdrawals. Seniors over age 70 1/2 will not
be required to take distributions from 401(k)s, IRAs, and 403(b)s in
2009. This will allow retirees who don’t need immediate access to their
retirement accounts an opportunity to avoid selling low.

Reexamine withdrawal rates. If you withdrew 4
percent for your portfolio last year, the same amount of money could be
a significantly bigger chunk of this year’s account balance. For
example, a 67-year-old recently retired
couple with $750,000 could have withdrawn $30,000 annually, which is
generally considered sustainable over the long term. But if their
account balance dropped to $630,000, the same $30,000 in income now
requires almost a 5 percent withdrawal rate, which means their nest egg
won’t last as long. Consider withdrawing 4 percent of the new account
balance this year. “Your withdrawals should be 4 percent, and that is
designed to have a high probably of making your money last over a 20 to
30 year retirement,” says Rande Spiegelman, senior vice president of
the Schwab Center for Financial Research.

Save your raise.
Many seniors living off their portfolio give themselves raises every
year to keep up with rising expenses. But if you can live without the
increase for a few years, try to, especially if your portfolio has lost
a significant amount of money. “Not taking any cost-of-living
adjustments on withdrawals for a 5 year period would better enable a
conservative portfolio to last throughout retirement,” says Ken Hevert,
vice president of retirement income product management for Fidelity Investments.

Read more of this article.

Professional
Financial Advisors:  Integrate these steps into a
financial portfolio by speaking to financial advisors at NewRetirement.com.

6 ways to live a lot longer

Posted on February 10, 2010 by Jason

Shine, February 10th, 2010

If you’re reading this,
there’s a good chance you’re going to live a long life—centenarians
(folks who make it into the triple digits) increased 51% from 1990
to 2000, which certainly bodes well for us younger folks. Advances
in health, education, and disease prevention and treatments are
mostly to account for this dramatic leap, but there are loads of
little everyday (read: easy) things you can do that will seriously
improve your longevity. Here are 6 to try today:

1) Add raspberries to your
oatmeal

Most Americans eat 14 to 17 g of fiber per day; add just
10 grams more and reduce your risk of dying from heart disease by
17%, according to a Netherlands study. Dietary fiber helps reduce
total and LDL (“bad”) cholesterol, improve insulin
sensitivity, and boost weight loss. One easy fix: Top your oatmeal
(1/2 cup dry has 4 g fiber) with 1 cup of raspberries (8 g) and you
get 12 g of fiber in just one meal. Other potent fiber-rich foods:
1/2 cup of 100% bran cereal (8.8 g), 1/2 cup of cooked lentils (7.8
g), 1/2 cup of cooked black beans (7.5 g), one medium sweet potato
(4.8 g), one small pear (4.3 g).


Search for delicious fiber-rich foods

2) Drink green or black tea

Both green and black teas contain a concentrated dose of
catechins, substances that help blood vessels relax and protect
your heart. In a study of more than 40,500 Japanese men and women,
those who drank 5 or more cups of green tea every day had the
lowest risk of dying from heart disease and stroke. Other studies
involving black tea showed similar results. You really need only 1
or 2 cups of tea daily to start doing your heart some good—just
make sure it’s a fresh brew. Ready-to-drink teas (the kind you
find in the supermarket beverage section) don’t offer the same
health benefits. “Once water is added to tea leaves, their
catechins degrade within a few days,” says Jeffrey Blumberg,
PhD, a professor of nutrition science and policy at Tufts
University. Also, some studies show that adding milk may eliminate
tea’s protective effects on the cardiovascular system, so stick
to just lemon or honey.

Read more of this article.

Professional
Financial Advisors:  Following these steps can result in
you living longer, but longevity runs the risk of outliving your assets.  Consider contacting a financial advisor to
ensure that your assets will support you for as long as you live.

The Case for ‘Income Annuities’

Posted on February 10, 2010 by Jason

The Wall Street Journal, August 17th, 2007

Strategies outlined in a new study could sharply lengthen the amount of time a nest egg survives in retirement.

The
study, soon to be released by the University of Pennsylvania’s Wharton
Financial Institutions Center, finds that so-called income annuities
can assure retirees of an income stream for life at a cost as much as
40% less than a traditional stock, bond and cash mix. The study was
co-sponsored by New York Life Insurance Co., which sells annuities.

Income
annuities are insurance contracts designed to pay back not only a
return on investment, but also a portion of the original principal with
each payment. The payout occurs over your life expectancy, but if you
live longer, you continue to receive payments. Those who die earlier
than their life expectancy effectively subsidize those who live longer.

What it means is that retirees who need a nest egg of, say, $1
million, can live the same lifestyle with as little as $600,000 in an
income annuity. Looked at another way, $1 million in an annuity will
currently generate about $86,000 a year in income for a healthy
65-year-old male, while the same amount invested in a traditional
securities portfolio would currently generate between $40,000 and
$50,000 annually, depending on the annual withdrawal rate.

That news could offer hope for the millions of workers about to retire with inadequate retirement savings.

“At
65 years old, you’re going to need money, on average, until you’re 85,”
says David F. Babbel, an insurance and risk-management professor at the
Wharton School who co-wrote the paper with Craig B. Merrill, an
insurance and finance professor at Brigham Young University. “But the
problem is that ‘on average’ means half of the people will need
continuing income between the ages of 86 and maybe past 100. That’s
where [retirement-income planning] breaks down.”

To ensure that
you have a stream of income that lasts for as long as you breathe
generally requires an inordinately large beginning value — and even
then, there is no guarantee your account won’t run dry, depending upon
your ultimate spending needs in retirement.

Read more of this article.

Annuity
Advice for Retirement:   More and more organizations and experts are suggesting that retirees look into fixed annuities as a means of supplimenting their retirement income.  Learn more about them at NewRetirement.com.

About
Reverse Mortgages:  Did you know a Reverse Mortgage can be structured in the form of a lifetime monthly payment, very similar to an annuity?  Find out more details at NewRetirement.com

Tightrope: Retirees, put your experience to work

Posted on February 5, 2010 by Jason

USA Today, February 2nd, 2010

Hi, Gladys, I’m 73 years young and I need
to make money to supplement my Social Security. I would like to try
selling the fire extinguishers that you talked about in your book. I
think I can sell them at flea markets and maybe even set up a table at
conferences at my local convention center. I need you to supply the
name and address of the manufacturer so that I can buy them wholesale.
— Don

Yes, my teenage entrepreneurial life started out
selling all sorts of different things including fire extinguishers.
That was more than 40 years ago. I don’t remember the company name or
where they were located. What I do know is that there are more
opportunities today for earning money than were available 40 years ago.

FOR ENTREPRENEURS: Small Business front page

More and more seniors are entering the small
business world in order to supplement their income. And for that the
world is, or should be grateful. In the past our seniors took all of
their valuable knowledge, wisdom and know-how into retirement with
them. The economic situation of today has allowed the knowledge and
wisdom gained by those of us over 50 to remain active and lets us share
our know-how with the younger generation.

I regularly encounter folks who have taken the
knowledge they’ve acquired and put it to economic use. Let me share a
some of their stories with you. Hopefully you will be inspired and get
an idea or two for yourself.

I walk daily in a park near my home. On those
walks I often run into a couple, both in their mid-70s. When the cost
of living exceeded their fixed income they decided that the best answer
was to start a business. Both loved animals. They had three dogs as
pets and knew plenty about their care requirements. With that in mind
they started a “doggie daycare service.” Dog lovers brought their pets
to them for care during the day instead of leaving the dogs locked up
in the house while they went to work. Their service also extends to
vacationing families that don’t want to place their beloved animals in
a kennel. The couple walks the park every day with about 10 dogs on
leashes. According to them, they realize a substantial income as a
result of their service.

Read more of this article.

Working in Retirement:  Many companies are specifically looking to hire retirees.  Let NewRetirement.com help you find these companies and other opportunities should you wish to continue working.

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