Earlier this week, Fidelity released a study that looked at the investment strategies of higher education employees. Fidelity took 600 participants across three generations, Boomers, X’s and Y’s, and examined the differences in retirement strategies.
Conventional wisdom tells us that since the people in this survey have a background in higher education, they should know more about investing than an average Joe. But what Fidelity found was quite interesting: More than half of those surveyed admitted that they were on a beginner’s level when it came to understanding their investments. And 63% were worried they would never be able to retire. Another interesting find in the study is that the young investors who have time to take on extra risk with their investments, are on the same conservative plans that boomers who are nearing the end of their working years are on. So it seems that these folks are on par with everyone else when it comes to retirement planning – Not nearly close enough to being secure.
Recently, congress passed a bill that will once again put money into the Housing and Urban Development’s (HUD) budget and $45 million will be set aside for HECM counseling. This is big news – back in April, the funding for the mandatory counseling was cut due to budget problems in Congress. Due to the cuts, many counselors had to raise their fees for the service and in some cases, it made doing a reverse mortgage impossible for seniors who could not afford the upfront costs.
It’s still technically fall, but in a lot of places, the winter weather has already slammed residents and put a wrench into many people’s holiday travel plans. So today, as you turn on your heat and prepare for cold, windy, rainy or snowy weather, take a moment as you mash those potatoes for tomorrow’s dinner and let yourself daydream about the sunniest places to retire.
U.S. News provided a list of the ten sunniest places to retire just in time for people to become sick of the gloomy weather where they live. Number one on the list is Yuma, Arizona. 90 percent of the time, the sun is shining in Yuma! It’s also the least humid according to the National Climate Data Center. The dry air is a positive for people with health related issues such as arthritis or muscular problems that do not react well to cold and humid climates. Fresno, California also makes the list at number 7. Another sunny Arizona city is Flagstaff. It’s a nice change from the other Arizona cities because it’s not so hot. The temperature rarely rises above 90 (and it’s a dry heat!) and snow still falls in the winter – though it usually melts before it can cause too much damage. Click here to see the full list of top ten sunniest cities for retirees to keep you warm this holiday!
The holidays can be a joyous occasion for many people, but for some, young and old, it can be a very lonely season. It’s difficult to be in an empty home when many others are gathering with their friends and family. So what’s a good way to not only give back this holiday season but also find yourself a companion? Be a foster parent to a pet in need!
It turns out, retirees are a great source when it comes to being foster parents to animals according to the SPCA of Sacramento, California. AARP even suggests it! When the house is empty or retirees become snowbirds with multiple homes, fostering can be the perfect solution! You do have to make sure that you are able to love and let go, which is the most difficult aspect of the program for most. But for many, the heartbreak of letting go is nothing when compared to knowing they rescued an animal’s life. For more information on fostering a pet, please follow this link!
Can you believe that Thanksgiving is already here? Before you know it, it will be the end of the year and it will be time to start thinking about filing your 2011 taxes. You still have time to take advantage of some decisions that will affect your returns for this year.
You still have time to contribute to your Roth IRA for the year (you have until April 17, 2012). If you are under 50, you can contribute $5,000 a year but if you are older, the limit is $6,000. The great thing about Roth IRA’s is that you can contribute money that has already been taxed but when you pull out the money, it is tax exempt as long as you are 59 and a half years old and have had your Roth for at least 5 years. Along the same lines, try to avoid any early withdraws from any retirement plan because the tax penalty associated with it is usually pretty steep. For more ideas on how to help your taxes this year, check out this article!
We get a lot of questions around here regarding Reverse Mortgages and how they work. But recently, there’s been an uptick in people inquiring about the difference between a traditional Reverse Mortgage and a Saver Reverse Mortgage.
Both of these reverse mortgages allow you to tap into the equity you have in your home. The difference is in the fees. Often times, traditional reverse mortgages are criticized for having high fees that may price some seniors out being able to receive the loan. The Saver program greatly reduces that problem by cutting the fees in almost half when compared to the traditional. It must also be noted that though the fees are drastically cut, the amount that you can borrow is also reduced. This is why many folks choose to use the HECM Saver as a line of credit. This establishes a sort of emergency fund that can be drawn from at any time.
Do you plan on working longer than the average person’s lifespan? Sounds ridiculous, but that’s the new face of retirement. In a survey done by Wells Fargo, it was shown that Americans have only been able to save 7% of what they need for retirement. And 30% of people that were close to the age of 62 have actually saved less than $25,000 for their retirement. The outcome is that people are now expecting to work until they are 80 years of age or older. No more is there a concrete age that you plan to retire by. The new reality is, people are better understanding the amount of money they will need to have a good retirement. If it takes working until they are 75 to reach that goal, then that is what they will do.
It also turns out that many people are choosing to work longer regardless of their financial situation. Granted, 42% of those surveyed said they hope to have a job that has less responsibility than their current job, the trend is to stay in the workforce and remain active for as long as physically and mentally possible. How do you feel about working past the average retirement age of 65? Is this something you want or have to do?
We’ve all heard the traditional rule of thumb – if you’re young, stocks are a great and solid investment. But the older you get, stocks become more dangerous and risky and it’s better to invest less in them. But is this correct? Are these traditional thoughts on investing the best advice? Check out this video from Zvi Bodie, a School of Management Professor at Boston University and see why he says the conventional wisdom is wrong.
It’s no secret that money can usually buy better medical coverage in our country. Better health care plans with better doctors who have access to better supplies and equipment can be taken advantage of if you have the money to spend. This is why it wasn’t all too shocking when the American Heart Association released results regarding seniors and their risk of heart failure. Seniors with low incomes (benchmark for low income equaling $25,000 a year or less) were found to develop a risk of heart failure at a greater rate than those with higher incomes, even if they had Medicare coverage. The study also took into account education levels, but the biggest influence was the senior’s income level.
It is a sad reality that many low-income seniors sometimes have to make the difficult decision between food and housing or their medications. And more often than not, food and housing win. The study was not published in a medical journal as of yet and was only presented at a medical meeting so the findings cannot yet be taken as concrete, but it’s not a far reach to understand why a senior who is forced to skip their heart medication for food could very easily increase their risk for any disease.
Can you specifically define terms such as mutual funds, stocks, asset allocation and large and small caps? It’s not too terribly shocking if you can’t. Back in October, the Labor Department ruled that all companies that offer 401(k) plans must offer unbiased retirement planning advice that helps the workers enrolled in the program to receive help in understanding what these things mean. But it turns out, according to the Wall Street Journal, only one fourth of all workers who have access to this financial advice actually use it.
Not all of us can be financial experts– and that’s why it’s smart to take advantage of these kinds of services. Some 401(k) plans are set up in a pretty smart way– they are set to a high level of risk in your younger years and as you age, the risk percent begins to decline. But not all plans are set up this way and some are very confusing – which is why everyone should take advantage of this advice. Chances are, people are going to need help figuring out how much they’ll need to save to reach their ideal retirement picture, how much they’re truly spending now, at what age they will need to start collecting social security, and on and on and on! Why ignore FREE retirement planning that is just waiting for you! Be smart and take the advice. Read here for more ideas on how to take advantage of the information.
